The Wall Street Crash Flashcards
0
Q
What was Black Thursday
A
24th October 1929, 13m shares sold
Confidence in shares lost
Some lost 3/4 of value
Prices continued to fall for years
1
Q
Steps in Buying shares
A
- buy shares, company uses that money
- successful, people want shares, price goes up
- shareholder sell and make profit
- not successful, sell shares, price goes down
2
Q
Knock-on effect of loss of confidence
A
Falling prices
Losses by brokers and private investors
Pressure on banks
Bankruptcy of larger corporations, closure of banks
3
Q
What did the fall in share prices cause?
A
High unemployment Early 1920's: People borrowing to buy shares Share prices increases Overproduction
1928/29:
Difficulties selling goods
Sell shares
Production stopped/ High unemployment
October 1929
No money
4
Q
What efforts were made to get the market back up
A
Leading financiers pooled $240m, used to buy shares – restore confidence and stop panic
Failed, panic selling led to further falls
People withdrew money from banks, banks went bankrupt
5
Q
What were the underlying economic problems
A
Unequally distributed wealth Overproduction Unregulated banks Expensive loans Barriers to trade
