wall st crash

• What happened to the value of shares during the 1920s?

  their share value consistently rose
• What does speculation mean?

  buying shares in the hopes that their value will rise so they can be sold for a profit
• what was "buying on the margin"?

  people borrowed money from the banks to buy shares in companies to a 90% loan value. pay the loan back and make a profit
• what type of people were "Buying on the margin"?

  ordinary people, businesses and investors
• people thought that buying and selling shares would always make them profit because in the 1920's the value of shares had always gone up
• the value of shares began to drop because:

  • companies overproduced on consumer goods and sales decreased
  • peoples confidence in the market began to decline
  • people panicked and sold shares because they began to think that the share values were too high
• people who had "bought on the margin" panicked and sold their shares. The money wasn't theirs and they had to repay the majority back to the bank. they needed to sell before the value of their shares became less than what they owed the bank
• The value of US companies rapidly collapsed as investors desperately tried to sell their shares for any price that they could get.
• In just four trading days, the market lost nearly what fraction of it's value?

  half
• What date did the Wall St Crash happen?

  Tuesday 29th October 1929
• the wall st crash is often referred to as black Tuesday
• What percentage of his wealth did John D Rockerfeller lose?

  80%
• which famous British Politician lost money in the Wall St Crash?

  winston churchill
• hoover claimed "prosperity is just around the corner"
• hoover cut taxes to try and encourage people to buy goods to help the economy
• the crash had destroyed peoples confidence which was crucial for the economy and future prosperity
• In 1929, how many banks had failed?

  659
• with so many banks closing, people began to withdraw their savings
• With people keeping hold of any money they had, banks could not lend money out
• Between 1928 and 1933, industrial and farm production fell by 40%
• Between 1928 - 1933 wages fell by 60%
• By 1933, how many people were unemployed in the USA?

  14 million