The Wall Street Crash and the Depression

Question 1

When did Hoover come into office?

Answer 1

March 1929.

Question 2

When did Wall Street crash?

Answer 2

October 1929/.

Question 3

What was the most important reason for the crisis?

Answer 3

Overproduction.

Question 4

What was the boom of the 1920s based on?

Answer 4

The increased sale of consumer goods.

Question 5

What percentage of Americans earned 33% of the country’s income?

Answer 5

5%.

Question 6

What percentage of Americans lived on less than $2000 p.a. ?

Answer 6

60%.

Question 7

What did this low income mean?

Answer 7

There was less disposable income.

Question 8

Why couldn’t companies sell abroad?

Answer 8

The tariffs had left oversea buyers with too little income to buy anything and they had no inclination to but from America even if they could.

Question 9

By summer 1929 what was showing?

Answer 9

Weaknesses in the economy as car sales slowed down for the first time.

Question 10

What did the slow down in car sales do?

Answer 10

Lowered morale as the boom had started with the car industry, it exemplified prosperity.

Question 11

What else slumped?

Answer 11

Steel production.

Question 12

What dropped by 10 points?

Answer 12

The Dow Jones.

Question 13

In the 1920s what was an attractive option for ordinary people?

Answer 13

Investments in the stock market.

Question 14

In 1920 how many stockholders were there?

Answer 14

4 million.

Question 15

How many stockholders were there in 1929?

Answer 15

20 million.

Question 16

Who were most of the investors?

Answer 16

Speculators, people who did not plan to keep their shares for any length of time and who confidently expected to sell for profit within a matter of weeks or months.

Question 17

What is buying on the margin?

Answer 17

Borrowing money to buy shares, selling them quickly at a profit, paying back their loans and netting a profit.

Question 18

Why did American banks lend $9 billion in 1929?

Answer 18

They were confident that shares would continue to rise in value.

Question 19

What happened in October 1929?

Answer 19

A panic set in, those who had bought on the margin became desperate to sell, so prices continued to fall.

Question 20

What was the vicious circle?

Answer 20

A crisis of overproduction led to a crisis of confidence. Businesses couldn’t sell goods so they cut prices and stopped making things. Sacked workers or cut their hours. Under employment. Fewer people buying thing. Less things made so fewer people with jobs.

Question 21

What did General Electric fall from to?

Answer 21

316 to 283.

Question 22

How did US steel fall?

Answer 22

205 to 193.

Question 23

To try and avert a greater crisis what happened?

Answer 23

6 of New York’s richest bankers intervened, spending $40 million each to buy shares to bolster confidence.

Question 24

When it didn’t work what happened?

Answer 24

Dow Jones lost 43 points.

Question 25

What rose as a result of the crisis?

Answer 25

Bankruptcy rates as did the number of suicides.

Question 26

What did the lack of confidence lead to?

Answer 26

Banks began to fail with severe implications for ordinary Americans.

Question 27

In 1929 how many banks closed, as people withdrew their savings?

Answer 27

659.

Question 28

By 1930 how many banks closed?

Answer 28

1352.

Question 29

By 1933 how many banks closed?

Answer 29

4004.

Question 30

What did people do with their money?

Answer 30

They stashed it in safe deposit boxes or kept it at home.

Question 31

What did this lack of interest in the stock market lead to?

Answer 31

Companies were forced to lay off workers.

Question 32

From 1928 to 1933 what did industrial wages fall by?

Answer 32

40%.

Question 33

What did the average wage fall by?

Answer 33

60%.

Question 34

By 1933 how many unemployed people were there?

Answer 34

14 million.