History - Wall street Crash and Depression

Why did the Wall Street Crash happen ...

• 60% of families could not afford consumer goods.
• The people who were consuming bought their products by Hire Purchase.
• The Rich people owned everything they wanted.

Laissez-faire ...

• Federal governments policy "laissez-faire", which was to have minimal involvement with economic affairs.

Overproduction ...

• By 1929 US industry was running out of customers.
• Everyone who wanted a fridge or freezer now had one - the market was saturated.
• Due to this there were many goods left over, resulting in a loss of money.

Speculation ...

• Many people were encouraged to buy shares, based on confidence that the value of them would continue to rise. - however they fell.
• Bought shares "on the margin", paying 10% and the rest through profit.

29th october 1929 ...

• There was no-confidence, no shares were being bought.
• People who had shares tried to sell them quickly.
• Banks sold their shares to cover up losses.