The Stock Market and Wall St. Crash

Question 1

In 1920s by what per cent on average did share prices go up by?

Answer 1

300%

Question 2

What was ‘Buying on the Margin’?

Answer 2

Borrowed money to buy shares, confident they could sell them on for a good profit, therefore paying back the loan with interest.

Question 3

What did confidence in the stock market and business mean for many ordinary Americans?

Answer 3

Ordinary Americans felt they could invest on the stock market and make a quick profit

Question 4

How were banks involved in the stock market?

Answer 4

• They allowed people to loan money using their homes as guarantees
• Banks invested on the stock market with people’s savings
• Banks loaned out more money than they had (they were so confident loans could be paid back)

Question 5

In what month in 1929 did some investors start to worry and started to sell their shares on the stock market?

Answer 5

September

Question 6

On 29th October 1929 how many shares were sold at the Wall Street Stock Exchange in New York?

Answer 6

13 million

Question 7

Share prices in radio were worth 505 cents on 3rd September 1929. How much were they worth by 13th November 1929?

Answer 7

28 cents

Question 8

What happened as many flocked to sell their shares?

Answer 8

• Share prices fell, more wanted to sell shares, no one wanted to buy so share prices fell even further

Question 9

How much money did the Vanderbilt family lose from the Wall St. Crash?

Answer 9

$40 million (despite losses still remained extremely rich)

Question 10

What happened to banks as a result of the Wall St. Crash?

Answer 10

• recalled loans from investors, if they couldn’t pay evicted from homes
• some banks went bankrupt as they could not pay their debts