Causes of the Wall Street Crash Flashcards

1
Q

Why did crop prices fall?

A

Overproduction

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2
Q

Why did demand in factories begin to fall?

A

It was difficult for unemployed farmers to get jobs so a huge number of people couldn’t buy consumer goods

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3
Q

When did the building industry start failing?

A

1926

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4
Q

What industries were in trouble in the 1920s?

A

Farming, coal, textiles and iron

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5
Q

What did the production line cause an increase in? Demand for what was struggling to keep up?

A

Production

Buying expensive cars and consumer goods

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6
Q

What caused a fall in share prices?

A

By the end of the 20s, many firms were struggling to sell the goods they made

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7
Q

Why couldn’t American companies sell abroad in Europe?

A

They had put up tariffs in response to American tariffs and Europeans wouldn’t pay for expensive American imports

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8
Q

What attitude meant that wages remained low so workers couldn’t afford goods?

A

Laissez faire

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9
Q

Most Americans earned less than how much?

A

$2,000 per year

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10
Q

What % of the population had such low wages that they couldn’t afford to buy consumer goods?

A

60%

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11
Q

What % of the country owned 33% of the wealth?

A

5%

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12
Q

By when did shares cost more than they were worth?

A

October 1929

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13
Q

What kept rising?

A

Share values

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14
Q

What did some investors do when companies didn’t make much money?

A

Sell their shares and take the profits

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15
Q

What did the selling of shares when companies stopped making as much money cause?

A

A fall in prices so more people tried to sell their shares

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16
Q

Why did people lose all their money when they tried to sell all their shares?

A

The only buyers wouldn’t pay much

17
Q

How much did banks lend to people to buy shares in 1929?

A

$9 billion

18
Q

In 1929, how many people were gambling on shares?

A

20 million

19
Q

What was buying on margin?

A

Investors could pay 10% of price of shares while the bank would lend 90%

20
Q

How would the money lent by banks be paid back?

A

Share profits

21
Q

Why were banks using investors’ money?

A

People borrowed to buy shares

22
Q

What was the Petticoat Line?

A

50% of shares in the Pennsylvania Railroad were owned by women

23
Q

Why couldn’t people pay the money of their shares back to the bank?

A

The prices of their shares fell

24
Q

On Monday 21st October what happened due to there being so much trading?

A

The ticker which tells people changes in share price fell behind by 90 mins

25
Q

When was the busiest trading day?

A

Thursday 24th October

26
Q

When did banks intervene to buy stocks?

A

Thursday 24th October

27
Q

What happened when banks intervened?

A

Confidence returned, prices stabilised

28
Q

When was it made clear that banks had stopped supporting share prices?

A

Monday 28th October

29
Q

When was the massive stock fall when people sold for whatever price they could get?

A

Tuesday 29th October