October 24, 1929 is in the history books as a black day. The shares, which had been in value for years, were now falling rapidly. Panic broke out. One day, an economic crisis ensued and people didn't know what to do to turn the tide. They didn't expect a crisis either. Thanks to the industrial revolution, people in America had become accustomed to a good, strong, growing economy.
Still, they could have seen it coming. Since 1924, an average of two banks a day went bankrupt in America. Nor had Europe emerged from the First World War unscathed. England and Germany had borrowed a lot of money from America to buy war submarines, for example. Germany in particular had borrowed a lot of money.
After the war, almost all countries had more debt than they could afford. The debts were paid through borrowed money. Companies borrowed money. On this black Thursday in 1929, no one in America could get more money. Yet a lot of panicked people asked for all their savings and loaned money back. But not everyone could get their money back. Within two months, $40 billion had gone up in smoke. Everyone had thought all along that the money really existed. But they were just loans and no one had collateral. So this money never came back.
America immediately stopped lending money and asked for all the money borrowed back. Germany had borrowed a lot of money from America. It had been fined a sky-high after the First World War. They had been designated as the culprit of the war and had to pay. But they couldn't do that when America turned off the money tap. In 1930, the first banks closed in Germany. More and more factories started laying off their workers.
The trade fell silent. No country had any money left to import goods. But because no one imported anymore, the countries could no longer export. And so they couldn't make any more money. The whole economy was sniveling. The crisis only got worse. It was the biggest economic crisis in history.
On a Saturday in March 1932 there were new price falls on Wall Street. (The U.S. money trade) Everyone wants to sell their shares at all costs. Thousands of shares are sold for only a fraction of their original value. The American people hurriedly take the savings books out of the drawer and run to the bank to collect their money. But the vaults are empty. The banks are demanding money from WallStreet. But there's no more money anywhere.
The era that has now arrived is what we call the crisis years. In America, President Roosevelt had come up with a plan to deal with the crisis. In 1933 he intervened in the economy. He gave unemployed people benefits. But the crisis was unstoppable.
Thanks to the high unemployment rate in Germany, many houses no longer had a breadcrumb. They also ran out of wood to warm the house. The people in this era saw the future bleakly. Something had to change. Many people wanted a strong leader who could turn the tide. No wonder they believed Hitler's stories. He promised them work and a new future.