WHY DID THE WALL STREET CRASH HAPPEN IN 1929? The Wall Street crash which happened on 29 October 1929 was one of the most depressing events in the history of America. This happened because people lost their wages b 60%, 14 million people were unemployed by 1933, banks went bust and also US trade slipped from $10 billion to $3 billion. The Wall Street crash happened due to some reasons: one reason was, the Americans were buying consumer goods on credit, especially cars and houses they did this because, they didn’t have enough money, and therefore if they get the money they will be able to pay. Another reason was that speculation was rife, because people believed the stock market was easy so 20 million Americans invested but only 1.5 million people had serious knowledge of the market.
Rich people already had the goods, and the poor couldn’t afford them, meaning the market suffered. As a result of this factories made cuts in staff and output, thus leading to even greater falls in the market as people had less to spend. Also the wealth in the country was very unevenly distributed. As mentioned previously, around 50% of the population were on or below the poverty line of $2000 a year. The worst affected groups were farmers, farm labourers, workers in old industries, Black Americans and new immigrants.
There are many factors to Hitler’s success. The impact of the Depression was certainly one of them. When the American financial market crashed, it hit particularly hard for the Germans. Germany had taken many loans from America but when the financial market crashed, Germany was unable to take any more loans or pay America back. Because of this inability to repay, businesses started to close down because the loans were rapid and little trade was taking place.
This is due to de-industrialisation as the regions mining industries have now long gone and they now depend highly on tourism. The flood, in short term affected Boscastle considerably, Shops that survived the impact and bombardment of the water were too flooded to open and had to be repaired. This on average for buildings and houses cost in between £15,000 - £30,000 and the total cost of the flood was £50 million! This caused a big dip in the local economy had to pay out for all the damages without getting much money put in! And also due to the shops closing, the people ended up loosing there jobs.
Around August of 2007, banks become afraid to loan money out due to the fact that they did not want to suffer from losing money yet again. “This led to the $700 billion bailout, and bankruptcies or government nationalization of Bear Stearns, AIG, Fannie Mae, Freddie Mac, IndyMac Bank, and Washington Mutual. By December 2008, employment was declining faster than in the 2001 recession.”(useconomy.com). With so many foreclosures on houses, many americans were either homeless, or had bought a cheap apartment to keep them from being homeless. Because of the recession, and bad economic, many Americans have no jobs, and barely have a house.
The value of taxes on items also decreased. Revenues gained from new development were also decreased, leading to the unemployment rate. Although the 2007-2009 recessions had many hardships the economy will recover. The unemployed workers still feel the effects of this recession. It was devastating and painful to them and their families.
Unit 6 terms & names pt.1 &2 Pr.5 Part 1 • Over production – Making too many products without enough consumers, one of the five causes of the great depression during the 1920’s. • Foreclosure – towards the end of WW1 due to the over production of food many farmers land was foreclosed (the process of taking possession of a mortgaged property) • Buying on credit – as a result of economic problems many Americans used credit to live beyond their means. (buying now and paying later) • Buying on margin – Borrowing money to pay for stocks • Black Tuesday – A day in 1929 when the stock market crashed (lost value) • Great depression – A global economic depression that spread throughout Europe, Asia, and Latin America. • Bank Failures
So this meant peasants didn’t get a lot of land, which became more of a problem because to aid industrialisation, a policy of export and starve was introduced. This meant that peasants had to sell as much grain as possible to survive, which although increased exports enormously, caused many peasants to starve and live in terrible conditions. This caused peasant’s standard of living to decrease and because export and starve was a government policy, some began to oppose the tsarist regime. Many peasants moved to cities and became workers. These workers were also crippled but enlightened by industrialisation meaning that again opposition increased.
Even though the stock market began to recover some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression. Throughout the 1930’s over 9,000 banks failed. Bank deposits were uninsured and therefore as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans. This worsened the situation leading to less and less expenditures.
Farmers had an especially hard time during the Great Depression because many of them had taken out loans to pay for more equipment. Agriculture was great in the beginning of the Great Depression. So great, that farmers bought more land and equipment on credit to support the growing sales. They overproduced and used bad practices, which resulted in topsoil that was exhausted and eroded, unable to sustain