Causes and Consequences of the 1929 Wall Street Crash

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  • Causes and Consequences of the 1929 Wall Street Crash
    • Causes
      • the collapse of land prices in Florida
      • too many goods being made and not enough people to buy them
      • Farmers producedtoo much food and the prices of their crops gradually decreeased
      • too many small banks - these banks did not have enough funds to cope with the sudden rush to take out savings,
        • this happened in the Autumn of 1929
      • Too much speculation on the stock market - the middle class had a lot to lose and they had spent a lot on what amounted to pieces of paper.
      • Wall Street Crash of October 1929 was a massive psychological blow
      • America had lent huge sums of money to European countries. When the stock market collapsed, they suddenly recalled those loans.
        • This had a devastating impact on the European economy.
      • The collapse of European banks caused a general world financial crisis
    • Consequences
      • On 24 October, 12.8 million shares were sold
      • Thousands of people saw their fortune, or any money they had in the bank, disappear
      • On 29 October 1929, 16 million shares were sold at very low prices.
        • The Stock Market New York in had collapsed.
      • Investors lost their money in the Crash and could not pay their debts.
      • Many banks closed, ordinary people lost their savings
        • people lost all hope for the future
      • People could no longer buy consumer goods like cars and clothes
      • workers were made redundant, other workers' wages was cut and unemployment rose to very high levels
      • The great depression of the 1930's began


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