The Wall Street Crash

Question 1

What were the main causes of the wall street crash?

Answer 1

• speculation

- weaknesses in the U.S. economy

Question 2

What role did speculation have in the wall street crash?

Answer 2

Big role. Americans saw the stock market as a quick and easy way to get rich. Many Americans bought shares. Speculators buy shares then sell them quick for more money. Buy loans for shares then pay back and still make profit. Women were heavily involved. 1929 - 9 billion lent to speculators. CONFIDENCE. more buyers than sellers. Confidence was lost and market crashed.

Question 3

What role did weaknesses in the U.S. economy have in the wall street crash?

Answer 3

Big role. Downturn began in 1926. traditional trades were failing. Unequal wealth distribution and banking issues. boom years caused strain in industries. Overproduction. companies tried high pressure advertising. by 1929 weaknesses were showing. Tuesday 29 October 1929 13 billion shares trying to be dumped.

Question 4

What were the economic consequences of the wall street crash? Money loss examples:

Answer 4

• Vanderbilt family lost $40 million
• Rockefeller lost 80% of his wealth [$40 million left]
• Politician Winston Churchill lost $500,000
• Singer Fanny Brice lost $500,000
• comedians Groucho and Harpo Marx lost $240,000 each

Question 5

What were the economic consequences of the wall street crash?

Answer 5

The people who lost money were those who had been the main investors and buyers. This meant people lost buying confidence and many companies went bankrupt because they could not repay loans. Hoover cut taxes, production began to rise in 1931. huge banking crisis, 659 banks failed in 1929. no more trust in banks and savings were withdrawn. no one bought anything. more unemployment and wage cuts. devastating spending reduction. most serious economic depression the world had ever seen. by 1933 there were 14 million people unemployed and 5000 bankrupt banks.

Question 6

Spiral on the economic consequences of the wall street crash

Answer 6

wall street crash -> the banking crisis -> business failures or contraction -> wage cuts and unemployment -> reduced spending