Black Thursday/ Wall Street Crash Flashcards
What is the Tariff?
The american government introduced new taxes on foreign goods that meant less foreign countries were buying USA goods.
Factories also started to mass produce more goods that were actually needed (radios, cars, fridges) meaning that the value of these goods dropped. Companies therefore made less money.
What happened on Thursday 24th October 1929?
Rumours spread that businesses would lose profits (in 1929).
13 million shares were sold, and a further 16 million were sold the following Tuesday.
The average value of a share dropped by 40%.
Share holders lost 8000 million dollars over 4 days.
This became known as Black Thursday.
What was the Wall Street Crash?
Wall Street was a street in New York where all the major banks in america were.
The crash happened as a result of Black Thursday.
Many Americans had taken out loans from banks to buy shares with the intention to pay back the loan/ keep the profits from selling their shares.
These people only got half the borrowed money back and could not pay back the bank.
Due to the amount of people who had been lent money, the banks went bankrupt.
659 banks in New York went bankrupt.
