Causes of Wall Street Crash
- Created by: Jasmin
- Created on: 04-05-13 15:52
View mindmap
- Causes of Wall Street Crash
- SPECULATION
- 1921 onwards Stock Market did well as American businesses were sucessful
- Speculation began increasing
- People no longer investing in company as thought it was strong
- Investing with hope that price of shares would rise
- People who could not really afford it became involved
- Began buying stocks and shares with borrowed money (on the margin)
- Frantic buying helped to push up share prices
- Small investors not able to pay back loans to bank if prices fell
- Banks were largely unregulated - unstable
- Brokers provided expensive loans to enable investors to buy shares
- Banks were largely unregulated - unstable
- Small investors not able to pay back loans to bank if prices fell
- Frantic buying helped to push up share prices
- 1929 experts started to sell shares heavily as worried about weaknesses in economy and high share prices, small investors panicked
- Saw fall in prices - rushed to sell own shares
- Led to complete collapse
- Investors lost millions of dollars
- Led to complete collapse
- Saw fall in prices - rushed to sell own shares
- Began buying stocks and shares with borrowed money (on the margin)
- WEAKNESSES IN US ECONOMY
- Poverty
- Farmers
- New immigrants (given lowest - paid jobs)
- Blacks (discriminated against. Many lived in poverty in rural areas)
- Workers (wages very low)
- Overproduction
- New mass production - more made than consumed - those who can afford goods brought them
- Umemployment increased
- Other countries couldnt afford to buy US goods
- Trade
- European countries couldnt affors US goods as owed US money in war loans - struggling to pay back, US gov put high tariff on imported goods - isolationism
- Trade
- Trade
- European countries couldnt affors US goods as owed US money in war loans - struggling to pay back, US gov put high tariff on imported goods - isolationism
- Poverty
- Consequences of Wall Street Crash
- Banks bankrupt
- People lost money
- Hoover cut taxes to encourage people to buy goods
- Farming decreased
- SPECULATION
Comments
No comments have yet been made