CAUSES OF WALL STREET CRASH

  • Created by: allybongo
  • Created on: 29-05-19 13:44
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  • Causes of the Wall Street Crash
    • Overproduction
      • Demand fell
      • Workers were laid off
      • More goods being produced than could be sold
    • Land speculation
      • Florida
      • Land values rose
      • People invested in new resorts and developments
        • Demand and values fell, especially in Florida when a hurricane destroyed developments
    • The bull market
      • People bought shares on credit, 'buying on the margin'.
        • If stock market collapsed- would have to keep paying for valueless shares
      • Unregulated
        • Insider dealing- make prices rise and fall artificially
          • Left gullible investors with worthless stock
    • Weakness in the banking system
      • Federal reserve banks monitored and regulated entire banking system
        • Acted in own interests rather than the whole nations
      • Small local banks- unprotected from collapse

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