Causes Of The Wall Street Crash Flashcards
What % of American families lived below the poverty and how much was their income? What did this show?
60% families below the poverty line, income of less than $2,000 a year, shows the boom did not impact everyone
What was one reason why there was a falling demand for consumer goods?
By 1929, most who could afford a car had one
What happened to farming after WW1?
The demand fell
After WW1, what did the price of wheat per bushel fall to?
$2.5 to $1 per bushel
By 1928, how many farmers were living in poverty?
Half of all farmers
What is an example of an old industry which went into decline?
Demand for coal fell as electricity and gas were more widely used
What did the lowering of tariffs do to the cotton industry?
Suffered due to foreign competition
How was the regulation of banks in the 20’s and how many banks were there?
Banks were not well regulated and there were 30,000 banks as a result
Why did shares not rise as quickly in 1928?
Companies were not selling as many goods
By 1929, what % of the purchase price of shares was borrowed and what did this create?
75%c created artificially high prices
How did loss of confidence cause the depression?
Autumn 1929, some experts started selling their shares heavily before their value fell even further which caused small investors to panick and rush to sell their own shares
What was the value of stocks in 1925 compared to 1929 and what was this an example of?
1925: $27 billion, 1929: $87 billion, over speculation
How did overspeculation cause the depression?
Shares were overinflated so when there was a crash there was no money to pay back the shareholders
Black Thursday
Thursday 24th October 1929
