America - Wall Street Crash

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  • Created by: James
  • Created on: 02-06-10 12:42

During the boom the Wall Street stock market also boomed, the prices of shares rose dramatically and people thought these would continue to rise encouraging speculation. People borrowed money from th banks to buy shares. However this all depended on prices of share increasing, if they decreased people would owe money. By the end of the 1920's the US economy was suffering from over-production, demand for consumer goods was decreasing and tarrifs on international trade made it hard to export goods, the burden of hire-purchase debt was becoming worrying. Some investors who were experienced began to sell shares as they thought prices were bound to fall.

Black Thursday (24th October 1929) 13million shares were sold due to a lack in confidence. The share prices fell and this caused people to panic. Desparate investors sold thier shares to cut thier losses, but it left thousands bankrupt the stock market didnt stop falling for 3 years. By 1932 share prices were 1/5 of what they were in 1929.

The stock market crash caused an econmic disaster. Thousands of people lost everything and firms and banks went bust, Unemployment rose peaking 13million in 1933. Production fell as people had less money to spend on goods and falling production meant…


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