Wall Street Crash

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Reasons for the Crash

  • Speculation- stocks could be bought on "credit"
  • Market saturated- credit meant that everyone could take part
  • Overproduction- efficient industry, too much to sell
  • Trade- Europe placed high tarriffs on US goods (because of Forndey-McCumber Law)
  • Poverty- farmers, black Americans, immigrants and industry workers were still poor
  • Small Banks- did not have resources to cope with panic after crash
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Events of the Crash

  • 19th October- heavy trading, prices fell
  • 21st October- prices fell, rose again as people bought
  • 22nd October- prices rose slightly
  • 23rd October- heavy trading in cars spread to others, people tried to sell all, people tried to pay back credit
  • 24th October- Black Thursday, prices dropped, panic
  • 25th October- Top bankers met and decided to support stocks, prices steadied, even rose
  • 26th October- President Hoover gave speech
  • 28th October- Heavy trading, prices dropped
  • 29th October- Buyers not found, values lost, panic
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Consequences of the Crash

  • Loss of $30billion in 1 week
  • 20,000 companies bankrupt- 1,616 banks, by 1933 wages fallen by 60%, production by 40%
  • 12 million people out of work- 12,000 a day, by 1933 unemployment risen to 25%
  • 1 farmer in 20 evicted
  • 23,000 people committed suicide in 1 year
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