Wall Street Crash Flashcards
What changed in September 1929?
Many people already had the product so companies were over producing meaning that industries started cutting back on production so people worry share prices are too high and begin to sell
What happened on the 24th of October 1929?
13 millions shares were sold and prices fell massively as no one wanted to buy shares
At the lowest point in 1933 how much value had the stock market lost?
83%
Why banks went bust during Wall Street crash?
They speculated money on the stock market that they couldn’t afford to lost
Loaned money that couldn’t 100% be payed back
Why did over speculation cause the crash?
People would buy ‘on the margin’ meaning they would borrow money to buy shares and wait for the share to be worth more than the debt to make a profit but when prices dropped they couldn’t do this
Why did poor distribution of wealth cause the crash?
Once the rich had the product they didn’t need it so there was less demand so companies over produced so companies lost money, share prices went down, people were sacked
Poorer people couldn’t afford products
Why did overproduction cause the crash?
Industry produced more than people wanted so manufacturers reduced production and layed off staff
Why did unregulated banks cause the crash?
Gambled depositors money on the stock exchange so when prices dropped people want their savings and they don’t have it
Why did share prices begin to drop?
Confidence in share prices was lost so everyone was selling shares and no one was buying
Why did trade barriers cause the crash?
Americas surplus goods were no longer being sold in Europe which led to overproduction… ect
Why did High important tariffs cause the crash?
Countries outside the US put import tariffs on American goods which meant they were too expensive so people didn’t buy them
