Causes and consequences of the Wall Street Crash
- Created by: bethreeves
- Created on: 16-10-14 11:33
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- Causes and consequences of the Wall Street Crash
- Causes:
- There were too many goods being made and not enough people to buy them.
- Farmers had produced too much food in the 1920s, so prices for their produce became steadily lower.
- There were too many small banks - these banks did not have enough funds to cope with the sudden rush to take out savings (Autumn 1929)
- Too much speculation on the stock market. The middle class had a lot to lose.
- America had lent huge sums of money to European countries. When the stock market collasped, they suddenlt recalled those loans. This had a devastating impact on the European economy.
- The collaspe of European banks caused a general world financial crisis
- Consequences:
- From late 1929 to 1930, around 700 banks closed. By mid 1932 around 5000 banks had folded, losing over $3 billion of deposits.
- The price of goods continued to fall. From 1929 to 1931 industrial production dropped by a third. Wages fell and workers were laid off.
- 9% of workers, about 4.7 million, were unemployed by 1930. by 1933 a quarter of the workforce, about 13 million were unemployed.
- The depression caused poverty which led to undernourishment
- Thousands were homeless. Some of them built shanty towns to live in. These were nicknames Hoovervilles after President Hoover.
- Many moved to seek work. Some fathers abandoned their families to search for work.
- Marriages were delayed and the birth rate fell.
- Causes:
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