Monday, March 24

Discussed in class on March 24 was the Great Depression.  Most notably the days leading up to the Great Depression ultimately culminating into the day of infamy known as Black Tuesday.  Black Tuesday was the day that marked the beginning of the long ten years of the Great Depression, when the stock market could no longer be saved.  The Federal Reserve Banking System of the time had twelve banks spread out across the country.    Black Tuesday was the day when Wall Street realized that the stocks could no longer be saved and that money was quickly leaving the stock market floor and a few days later the banks lost their money too and re-discount which is defined as a way of providing financing to a bank or other financial institution.  The Federal Reserve of the United States which had at the time of the Great Depression had twelve branches all of which lost some if not most of their funds and therefore could not loan money to the smaller banks.  The Consumer Durables Revolution that occurred before the Great Depression was a time that Americans were buying and stocking up on electronics and appliances for their homes, such as telephones, refrigerators, cars, etc.

The fact that after the stocks failed many were in fear for the money that they had invested into the market.  A giant rush to the banks began as everyone was scrambling to pull their money out of the bank.  Rediscount, a term which means a way of providing financing to a  bank or other financial institution, became non-existent during the years of the Great Depression.  The problem was that naively people were investing money in paper, essentially they were stocks but with nothing to show for their purchase but a piece of paper millions of shares, stocks, and money promises became worthless. 

Below is a clip from the stage version of the popular story Auntie Mame starring Bea Arthur.  It is brief but shows the reaction of some to the day the stock market crashed.

Auntie Mame