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