Effects of the Wall Street Crash

• The value of shares in the American stock market collapsed in October 1929. The money German banks had lost in their share investments panicked Germans into thinking their bank accounts would be wiped out.
• Banks like the German Civil Servant Bank went bust as so many people queued to withdraw their savings. In desperation both US and German banks started demanding loans paid to German businesses which lead to many cutting back production.
• This banking crash now led to unemployment as businesses started reducing costs by sacking workers.
• With less money in their pockets, this growing number of unemployed could afford to buy less, cutting business profits even further and leading to further unemployment
• Unemployment rose from 1.3 million in September 1929 to over 6 million by the end of 1932