Causes of the Wall Street Crash Essay

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Causes of the Wall Street Crash

On 24 October 1929, some shareholders began to lose confidence and believing that the prices of shares could not continue to rise forever, decided to sell. A panic began, and so many shares were sold on that day that it became known as Black Thursday. The Wall Street Crash was under way. By Tuesday 29 October so many shares were being sold that the teleprinters could not keep up, share prices continued to fall, and people lost vast sums of money and were ruined.

Causes of the Wall Street Crash -------------------------------

The reasons that led to the Wall Street Crash can be put into two main categories:

* Those to do with the overproduction of
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* Too many people thought that share prices could only go up, which encouraged them to invest more than they could afford in the stock market.

* Banks did not have enough money in reserve to help businesses that were in trouble. This was because they had lent too much money but now the banks were facing difficulties because people could not afford to repay their loans.

Exam tip

Try to group reasons together and, where possible, show how one event led to another. If you can show this technique in your exam it will get you higher marks.

Outcomes of the Crash ---------------------

The Wall Street Crash brought the Roaring Twenties to an end and led to a Depression in America. What effect did this have on American society?

Here are some examples of how times changed after the Wall Street Crash.

1. President Hoover and the belief in prosperity

2. The growth of shanty towns

3. Food shortages

4. Farming

5. Franklin Roosevelt - a new President

Read on to find out the reasons for these changes and what their effects were on society.

President Hoover and the belief in prosperity

Herbert Hoover became President in 1928. When the Wall Street Crash happened he tried to reassure Americans that it was just temporary and
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