THE MAKING OF A NATION 176 - Stock Market Crash of 1929

THE MAKING OF A NATION - January 17, 2002: Stock¹ Market Crash of 1929

By David Jarmul
VOICE 1:
THE MAKING OF A NATION -- a program in Special English by the Voice of America.
(Theme)
The election² of Republican³ presidential candidate⁴ Herbert Hoover in nineteen-twenty-eight made Americans

more hopeful than ever about their future.

 

In March nineteen-twenty-nine, Hoover rode down Pennsylvania Avenue in Washington in the
rain to become the new president. "I have no fears for the future of our country," he told the
cheering crowd. "It is bright with hope."

Herbert Hoover seemed to have just the right experience to lead the nation to new economic
progress. He had training in engineering⁵, business, and national leadership. He understood
economics⁶ and had faith in the future of private business.

VOICE 2:

The clearest evidence of the public's faith in the economy is the stock market. And the New York Stock
Exchange reacted to the new president with a wild increase in prices. During the months after Hoover's election,
prices generally rose like a rocket. Stocks⁷ valued at one-hundred dollars climbed to two-hundred, then three-
hundred, four-hundred. Men and women made huge amounts of money overnight⁸.

Publications¹⁰ and economic experts advised Americans to buy stocks before prices went even higher. Time and
again, people heard how rich they could become if they found and bought stocks for companies growing into
industrial giants.

"Never sell the United States short," said one publication⁹. Another just said, "Everybody ought to be rich. "

VOICE 1:

A number of economic experts worried about the sharp increase in stock prices that followed Hoover's election.
The president himself urged stock market officials to make trading more honest and safe. And he approved a
move by the Federal¹¹ Reserve Board to increase the interest charged to banks.

However, both efforts failed to stop the growing number of Americans who were spending their money wildly on
stocks.

Some experts pointed¹² to danger signs in the economy during the summer of nineteen-twenty-nine. The number of
houses being built was dropping. Industries were reducing the amount of products that they held in their factories.
The rate of growth in spending by average Americans was falling sharply¹³. And industrial production,
employment¹⁴, and prices were down.

These experts warned that the American economy was just not strong enough to support such rapid growth in
stock prices. They said there was no real value behind many of the high prices. They said a stock price could not
increase four times while a company's sales stayed the same. They said the high prices were built on foolish
dreams of wealth, not real value.

VOICE 2:

But the prices went still higher. Buyers fought with each other to pay more and more for company stocks. The
average price of all stocks almost doubled in just one year.


It seemed everybody was buying stocks, even people with little money or economic training.

A clothing salesman got advice from a stock trader visiting his store and made two-hundred-thousand dollars.
A
nurse learned¹⁵ of a good company from someone in the hospital. She made thirty-thousand dollars. There were
thousands of such stories.

By early September, the stock market reached its high point of the past eighteen months. Shares of the
Westinghouse company had climbed from ninety-one dollars to three-hundred-thirteen. The Anaconda Copper¹⁶
company had risen from fifty-four dollars to one-hundred-sixty-two. Union Carbide jumped from one -hundred-
forty-five to four-hundred-thirteen.

Life was like a dream. But like any dream, it could not last forever.

VOICE 1:

In September, nineteen-twenty-nine, stock prices stopped rising.

During the next month and a half, stock prices fell, but only slowly. Then suddenly, at the end of October, the
market crashed. Prices dropped wildly. Leading stocks fell five, ten, twenty dollars in a single day. Everyone
tried to sell their stocks. But no one was buying. Fear washed across the stock market. People were losing money
even faster than they had made it.

VOICE 2:

The stock market collapsed¹⁷ on Thursday, October twenty-fourth, nineteen-twenty-nine. People remember the day
as "Black Thursday," the day the dreams ended.

The day began with a wave of selling. People from across the country sent messages
to their stock traders in New York. All the messages said the same thing: Sell! Sell the
stocks at any price possible! But no one was buying. And so down the prices came.

The value of stock for the Montgomery Ward¹⁸ store dropped from eighty-three dollars
to fifty in a single day. The R-C-A radio corporation¹⁹ fell from sixty-eight dollars to
forty-four ... twenty-four dollars in just a few hours. Down the stocks fell, lower and
lower.

Several of the country's leading bankers met to discuss ways to stop the disaster. They
agreed to buy stocks in large amounts to stop the wave of selling. The bankers moved quickly. And for two days,
prices held steady.

But then, like snow falling down the side of a mountain, the stocks dropped again. Prices went to amazingly low
levels. One business newspaper said simply: "The present week has witnessed the greatest stock market disaster
of all time.
"

VOICE 1:

The stock market crash ruined thousands of Americans. In a few short weeks, traders lost thirty-thousand-million
dollars, an amount almost as great as all the money the United States had spent in World War One.

Some businessmen could not accept what had happened. They jumped from the tops of buildings and killed
themselves. In fact, one popular joke of the time said that hotel owners had to ask people if they wanted rooms
for sleeping or jumping.

But the stock market crash was nothing to laugh about. It destroyed much of the money that Americans had
saved. Even worse, it caused millions of people to worry and lose faith in the economy. They were not sure what
to expect tomorrow. Business owners would not spend money for new factories or business operations. Instead,
they decided²⁰ to wait and see what would happen.

This reduced production and caused more workers to lose their jobs. Fewer workers meant fewer people with
money to buy goods. And fewer people buying goods meant less need for factories to produce. So it went. In

''On Margin²¹'' by James
Montgomery Flagg
(Library of Congress)

short, economic disaster.

VOICE 2:

Why did the stock market crash. One reason, people had been paying too much for stocks. Everyone believed that
prices would go higher and higher forever. People paid more for stocks than the stocks were worth. They hoped
to sell the stocks at even higher prices.

It was like a children's balloon that expands with air, blowing bigger and bigger until it bursts.

But there were other important reasons. Industrial profits were too high and wages too low. Five percent of the
population owned one-third of all personal income. The average worker simply did not have enough money to
buy enough of all the new goods that factories were producing. Another problem was that companies were not
investing²² enough money in new factories and supplies.

There were also problems with the rules of the stock market itself. People were allowed to buy stocks when they
did not have the money to do so.

VOICE 1:

Several government economic policies also helped cause the stock market crash of nineteen-twenty-nine.
Government tax policies made the rich richer and the poor poorer. And the government did little to control the
national money supply, even when the economy faced disaster.

The stock market crash marked the beginning of the Great Depression -- a long, slow, painful fall to the worst
economic crisis²³ in American history. The Depression would bring suffering to millions of people. It would cause
major political changes. And it would be a major force in creating the conditions that led to World War Two.

We will look at the beginning of the Great Depression in our next program.

(Theme)

VOICE 2:

You have been listening to THE MAKING OF A NATION, a program in Special English on the Voice of
America. Your reporters have been Harry²⁴ Monroe and Rich Kleinfeldt. Our program was written by David
Jarmul. The Voice of America invites you to listen again next week to THE MAKING OF A NATION.

Email this article to a friend
Printer Friendly Version

1 stock   

n.存货，储备；树干；血统；股份；家畜；adj.存货的；平凡的，惯用的；股票的；畜牧的；vt.进货，采购；储存；供给；vi.出新芽；进货

参考例句：

• The shop takes stock every week on Friday mornings.这家商店每星期五早晨盘点存货。
• Experts have forecast an upturn in the stock market.专家已预测股票市场价格有上升趋势。

2 election   

n.选举，选择权；当选

参考例句：

• There is no doubt but that he will win the election.毫无疑问，他将在竞选中获胜。
• The government will probably fall at the coming election.在即将到来的大选中，该政府很可能要垮台。

3 republican   

n.拥护共和政体的人； adj.共和政体的，（Republican）共和党人，（Republican）共和党的

参考例句：

• Some families have been republican for generations.有些家庭世代都支持共和党。
• A third candidate has entered the contest for the Republican nomination.第三个候选人已经加入角逐共和党提名的行列。

4 candidate   

n.候选人；候补者；投考者，申请求职者

参考例句：

• Voters like a candidate who has the common touch. 投票者喜欢那些平易近人的候选人。
• The local newspapers dressed up the candidate as a boxer.当地报纸把那个候选人描绘成一个拳击手。

5 engineering   

n.工程，工程学，管理，操纵

参考例句：

• The science of engineering began as soon as man learned to use tools. 人类一学会使用工具,工程科学就开始了。
• It was the first great engineering works in the world. 这是世界上第一家大型的工程工厂。

6 economics   

n.经济学，经济情况

参考例句：

• He is studying economics,which subject is very important.他正在学习经济学，该学科是很重要的。
• One can't separate politics from economics.不能把政治与经济割裂开来。

7 stocks   

n.（树木等的）干( stock的名词复数 )；公债；家系；家族

参考例句：

• The manager wants to clear off the old stocks in the warehouse. 经理想把仓库里积压的存货处理掉。 来自《简明英汉词典》
• They want to unload the stocks on the market. 他们想把股票在市场上抛售掉。 来自《简明英汉词典》

8 overnight   

ad.前一天晚上，一夜间 a.前一天晚上的

参考例句：

• She stayed overnight in the hotel. 她在旅馆过了一夜。
• Our success is not won overnight. 我们的成功不是一夜之间得来的。

9 publication   

n.出版，发行；出版；公布，发表

参考例句：

• They don't think this article is suitable for publication.他们认为这篇文章不宜发表。
• The government has delayed publication of the trade figures.政府已将贸易统计数字延后公布。

10 publications   

n.发表( publication的名词复数 )；公布；出版；出版物

参考例句：

• The related publications are far too numerous to list individually. 相关出版物太多，没法一一列举。 来自《简明英汉词典》
• A detailed list of our publications is available on request. 我们的出版物有一份详细的目录备索。 来自《简明英汉词典》

11 federal   

adj.联盟的；联邦的；(美国)联邦政府的

参考例句：

• Switzerland is a federal republic.瑞士是一个联邦共和国。
• The schools are screaming for federal aid.那些学校强烈要求联邦政府的援助。

12 pointed   

adj.尖的，直截了当的

参考例句：

• He gave me a very sharp pointed pencil.他给我一支削得非常尖的铅笔。
• She wished to show Mrs.John Dashwood by this pointed invitation to her brother.她想通过对达茨伍德夫人提出直截了当的邀请向她的哥哥表示出来。

13 sharply   

adj.锐利地，急速；adv.严厉地，鲜明地

参考例句：

• The plane dived sharply and rose again.飞机猛然俯冲而后又拉了起来。
• Demand for personal computers has risen sharply.对个人电脑的需求急剧增长。

14 employment   

n.雇用；使用；工作，职业

参考例句：

• A large office requires the employment of many people.一个大办事处需要雇用好多人员。
• The state of employment in this city is improving.这个城市就业状况正在改善。

15 learned   

adj.有学问的，博学的；learn的过去式和过去分词

参考例句：

• He went into a rage when he learned about it.他听到这事后勃然大怒。
• In this little village,he passed for a learned man.在这个小村子里，他被视为有学问的人。

16 copper   

n.铜；铜币；铜器；adj.铜(制)的；(紫)铜色的

参考例句：

• The students are asked to prove the purity of copper.要求学生们检验铜的纯度。
• Copper is a good medium for the conduction of heat and electricity.铜是热和电的良导体。

17 collapsed   

adj.倒塌的

参考例句：

• Jack collapsed in agony on the floor. 杰克十分痛苦地瘫倒在地板上。
• The roof collapsed under the weight of snow. 房顶在雪的重压下突然坍塌下来。

18 ward   

n.守卫，监护，病房，行政区，由监护人或法院保护的人（尤指儿童）；vt.守护，躲开

参考例句：

• The hospital has a medical ward and a surgical ward.这家医院有内科病房和外科病房。
• During the evening picnic,I'll carry a torch to ward off the bugs.傍晚野餐时，我要点根火把，抵挡蚊虫。

19 corporation   

n.公司，企业&n.社团，团体

参考例句：

• The company has gone into partnership with Swiss Bank Corporation. 这家公司已经和瑞士银行公司建立合作关系。
• The inflation did the corporation up. 通货膨胀使这个公司破产了。

20 decided   

adj.决定了的，坚决的；明显的，明确的

参考例句：

• This gave them a decided advantage over their opponents.这使他们比对手具有明显的优势。
• There is a decided difference between British and Chinese way of greeting.英国人和中国人打招呼的方式有很明显的区别。

21 margin   

n.页边空白；差额；余地，余裕；边，边缘

参考例句：

• We allowed a margin of 20 minutes in catching the train.我们有20分钟的余地赶火车。
• The village is situated at the margin of a forest.村子位于森林的边缘。

22 investing   

v.投资，花费( invest的现在分词 )；授予；（把资金）投入；投入（时间、精力等）

参考例句：

• He was timid about investing money. 他不敢投资。 来自《现代英汉综合大词典》
• Europe also caught the excitement of investing in American railroads. 欧洲人对投资美国铁路也极感兴趣。 来自英汉非文学 - 政府文件

23 crisis   

n.危机，危急关头，决定性时刻，关键阶段

参考例句：

• He had proved that he could be relied on in a crisis.他已表明，在紧要关头他是可以信赖的。
• The topic today centers about the crisis in the Middle East.今天课题的中心是中东危机。

24 harry   

vt.掠夺，蹂躏，使苦恼

参考例句：

• Today,people feel more hurried and harried.今天，人们感到更加忙碌和苦恼。
• Obama harried business by Healthcare Reform plan.奥巴马用医改掠夺了商界。