Controversy 1- Wall Street Crash Flashcards
What are the features of uneven distribution of wealth?
Rich got richer, poor got poorer.
Average industrial wage:
$1158 in 1919
$1304 in 1929
Number of millionaires rose from 7,000 in 1914 to 35,000 in 1928
During the 1920s, 40% lived below the poverty line
Real wages of workers increased by 12% between 1921 and 1929
Corporate profits jumped by 62%
Features of the Rural poverty…
Farmers,
Role of government,
Agricultural business
Features of the ‘Get rich quick’ schemes…
Florida land boom
Stock market speculation
Features of the banking schemes…
Federal reserve boards
State banks
Cycle of international debts features…
Loan repayments e.g. Dawes plan
U.S. Involvement abroad
Slow down in the economy features…
Small businesses
Construction industry
Falling domestic demand
What were the problems of old industry?
Had grown from the 19th century technology, powered by coal and steam.
New emerging energy sources e..g oil meant that coal prices fell and wages were cut, followed by labour disputes.
Synthetic fibres lessened demand for cotton affecting southern plantations
Motor cars challenged the dominance of railways.
What were the problems of the stability of employment?
Fluctuating demand for goods meant there was unstable employment.
Robert and Helen Lynd survey surveyed 165 families from jan- sept 1924 to find 73% of workers had been unemployed at some stage and, of these, 43% for over a month.
What were some of the problems for farmers?
Farming debt rose from $3.2 billion in 1910 to $8.4 billion in 1920
Interest charged at $574 million annually
In Mississippi, out of 5,250 there were 3,500 foreclosures value of farmland fell 30% between 1920-1929
Who waS Charles Ponzi?
Conman involved in the Florida Land Boom
People looked at brochures, giving 10% of the cost.
What were the issues of Ponzi’s get rich quick schemes?
People didn’t know what they were actually buying
Things were bought on credit
Suffered from environmental disasters e.g. 1926 hurricane killing 400, leaving 50,000 homeless
What was speculation?
Speculating on the market, tied to on the margins purchasing.
People would put down 10% of the total cost, many took loans in order to purchase the stocks.
Because of this, women now owned 50% of the Pennsylvania railroad, hence named ‘petticoat lane’.
Demand for shares were at an all time high:
Union Carbide shares- shares at $145, by September $413
What were the events of the Wall Street crash?
23rd October- stock prices fell by 20%
24th- selling began rapidly, driving stock prices down, known as “Black Thursday”
Worsening relations, communication was down
Following Monday, further fall in stock prices
No bankers arrived to buy stock
$30 billion was lost in the next few weeks
What were the problems in the economy before 1929?
Uneven distribution of wealth Rural poverty 'Get rich quick' schemes Banking schemes Cycle of international debt Uneven distribution of wealth
