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Canada during the 1920s -The Stock MarketFor many people in the 1920s, the stock market seemed and easy way to get rich quickly. People in all walks of life gambled on the stock market. Rich business tycoons invested in shares, but so did their chauffeurs and the typists in their offices. Feelings of confidence where high during this time. It was not necessary to have a lot of money to play the stock market. You could buy stocks on credit, just as you could by a car or a washing machine. All that you needed was a small cash down payment, usually 10 percent (this was called buying on the margin). This over extension of credit is what led to the collapse of the American Stock Market, which had tremendous affects throughout the world. The economy in Canada in the 1920s was closely linked with that of the United States. In those years, we bought 65% of our imports from the Americans. Forty percent of our exports were sent to the United States. It had replaced Britain as our largest trading partner, and source of funds for the investment in Canadian Industries. It was not surprising that when the American economy got sick, Canada also suffered. Terms: BLACK TUESDAY Portfolio: On Tuesday, October 29th, Wall Street's New York Stock Exchange experienced an unprecedented wave of panic selling of stocks. An earlier sell-off on the previous Thursday, "Black Thursday," combined with Tuesday's sales led to a collapse in stock prices and the loss of many American fortunes. Stock: Share: A few investors who lost all their money jumped to their deaths from office buildings. Others gathered in the streets outside the Stock Exchange to learn how much they lost. Bull Market: Bear Market: The Great Crash marked a turning point between the optimism of the 1920s, the Roaring Twenties, and the pessimism of the 1930s, the period of the Great Depression. Stock Split: Dividend: After the crash, the American economy was a dead beast with many banks failing, as people ran to them to withdraw their savings. Without Federal Deposit Insurance, nonexistent then, many hardworking people lost all the money they had deposited into the bank. Buying On Margin: Stock Ticker: During the 20s a self-perpetuating cycle was created: standardized mass production led to better machinery in factories, which led to higher production and higher wages, which led to more demand for consumer goods Which led back to more standardized mass production