The Wall Street Crash


The Wall Street Crash

The Wall Street Crash

- In 1929 the value of shares on the New York stock exchange on Wall Street collapsed.

- Many businesses in the USA went bankrupt.

- This led to mass unemployment which caused the USA to slip into an economic depression.

- Millions of families went hungry and could not afford the rent on their houses.

- The streets were filled with people desperately searching for work, shelter and food.

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Key events from 1929

Key events from 1929

3rd of October 1929  - Gustav Stresemann dies

24th of October 1929 - 'Black Thursday' in Wall Street Crash

                     - busiest day ever in selling shares on the   

                       stock exchange

                     - Huge falls in share prices

29th of October 1929 - 'Black Tuesday' in Wall Street Crash

                     - More massive falls in share prices

                     - Panic selling with investors selling for

                       anything they could get

From 1929 onwards    - The Great Depression in Germany

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What was the Great Depression?

What was the Great Depression?

Definition - a long-lasting downtown in the economy that results in unemployment and problems such as difficulty in borrowing money and high interest rates.

Causes of the Great Depression in Germany

- The Wall Street Crash

- Economic depression in the USA

- Germany was required to repay its loans from the USA



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Economic Crisis (1929-32) - The Great Depression

The Wall Street Crash

  • October 1929 - share prices fell on Wall Street stock exchange
  • Falling shares meant people's investments fell in value
  • People began selling their shares in the hope of saving their money
  • Black Thursday - October 24th 1929 - 13 million shares sold on the stock exchange
  • Panic selling sent prices even lower
  • Shares worth $20,000 in the morning were worth $1,000 in the evening
  • Investors lost $4,000 million in a week
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Economic effects

Economic Effects

  • Banks - major investors in shares - suffered huge losses
  • German banks lost so much, people feared they couldn't pay out money in bank accounts
  • People rushed to get their money back - some banks ran out of cash
  • German/American banks needed the return of money they'd lent to businesses
  • German companies were dependant on these loans
  • German industrial output fell and unemployment rose
  • Worldwide depression disaster for export industries
  • High unemployment = domestic demand for goods fell too
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Social and Political effects

Social and Political Effects

  • The middle classes lost savings, their companies or their homes
  • Workers became unemployed
  • People demanded political action - Weimar government failed them
  • 1930-32 - Chancellor Heinrich Bruning
  • He suggested:

- raising taxes to pay the cost of unemployment benefit

- reducing unemployment benefit to make payments more affordable

  • Right-wing parties, the middle classes and the wealthy opposed higher taxes
  • Left-wing parties and the working class opposed lower benefits
  • The coalition of parties which Bruning's government depended on collapsed in 1930
  • Government (Bruning) could only govern by decree. He relied on 44 decrees in 1931 and 66 in 1932
  • Unemployed roamed the streets; some joined the private armies of political parties
  • Violent clashes became common
  • Bruning lost control of the Reichstag and resigned in 1932, leaving a dangerous power vacuum for a new leader to step into
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