What Were the Causes and Consequences of the Wall Street Crash?

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  • Created on: 20-02-15 15:56
What Were the Causes of the Wall Street Crash?
a) Speculation on the stock market, b) Unequal distribution of wealth, c) Overproduction, d) Banks were unregulated, e) High import tariffs on American goods, f) Brokers provided expensive loans.
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a) Describe Speculation
Many Americans + banks joined the speculation [buying + selling shares quickly to make money]. People began buying on the margin. When companies started to fall in value --> panic selling began
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b) Describe Unequal Distribution of Wealth
Rising profits were not passed on to workers --> so most people were too poor to spend
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c) Describe Overproduction
Industry was producing more than people wanted to buy = prices fell.  Agriculture had struggled through the 1920s with overproduction. Many farmers had gone bankrupt.
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d) Describe Banks Were Unregulated
They were unstable and gambled depositors’ money on the stock exchange.
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f) Describe Brokers Provided Expensive Loans to Enable Investors to Buy Shares
When the stock market crashed, investors could not pay bavk their losns.
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Other cards in this set

Card 2

Front

a) Describe Speculation

Back

Many Americans + banks joined the speculation [buying + selling shares quickly to make money]. People began buying on the margin. When companies started to fall in value --> panic selling began

Card 3

Front

b) Describe Unequal Distribution of Wealth

Back

Preview of the front of card 3

Card 4

Front

c) Describe Overproduction

Back

Preview of the front of card 4

Card 5

Front

d) Describe Banks Were Unregulated

Back

Preview of the front of card 5
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