History - Wall street Crash and Depression

Great depression and wall street crash

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Wall Street Crash

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.
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Wall street crash

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.
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