Wall Street Crash

• What was one of the long-term causes of the crash related to agriculture?

  Overproduction and underconsumption in agriculture
• Why did the demand for grain fall in America?


  Due to Prohibition and changes in tastes in food
• How did European agricultural production affect American farmers?

  Europeans grew their own crops, reducing demand for American food
• What was the consequence of overproduction in agriculture?

  It led to falling prices
• How many farmers lost their farms in 1924?

  600,000 farmers
• Who were often evicted from farms in the South during this period?

  Sharecroppers, who were mostly black Americans
• What was a significant issue with consumer goods by the end of the 1920s?

  There were too many unsold consumer goods in the USA
• What led to the supply of consumer goods outstripping demand?

  Mass production methods
• Why could many people not afford consumer goods?

  Because those in agriculture and traditional industries were on low wages
• What was the effect of layoffs on consumer goods demand?

  It reduced demand for goods even further
• What was the purpose of the Fordney-McCumber Tariff Act of 1922?

  To impose tariffs on American goods in Europe
• How did the Fordney-McCumber Tariff Act affect trade?


  It made American goods too expensive to buy in Europe
• What financial practice did many Americans engage in during this period?

  Buying goods on hire purchase
• What happened to house prices after 1926?

  House prices fell
• What was a consequence of falling house prices for homeowners?


  Some Americans owned houses worth less than what they paid for them
• What does laissez-faire refer to in the context of the economy?


  A policy of minimal government intervention in the economy
• How did the laissez-faire policy affect banks and the stock market?

  There were not enough safeguards, leading to instability
• What was a significant issue with banks in America during this period?

  Banks were not regulated
• What was the situation with small banks in America?

  There were many small banks that were unstable
• What happened to many banks before the Wall Street Crash?

  Many banks had already closed
• What was the consequence for customers when banks closed?

  Thousands of customers were left with no money at all
• Buying shares on credit

  Throughout most of the 1920s, people continued to buy shares on credit because they were making profits from them. Between 1927 and 1929 there was a buying frenzy, pushing the value of shares up to unrealistic prices. Banks also became involved in speculation on the stock market. They used savers’ money to invest in shares, and lent money to stockbrokers and speculators.
• What was the state of the economy before 1929?

  The economy was very unstable.
• What event marked the end of the "Roaring Twenties"?

  Events in 1929 brought the "Roaring Twenties" to an end.
• Who became President in 1929?

  Herbert Hoover.
• What did people expect Hoover to do regarding tariffs?

  People thought he would increase tariffs.
• How did Hoover's tariff promise affect the stock market initially?

  It boosted trading in shares and pushed prices up further.
• What happened when the Senate blocked Hoover's tariff plans?

  People began selling their shares, causing prices to drop sharply.
• What did experienced investors know about the American economy in 1929?

  They knew the American economy was slowing down and that shares were over-valued.
• What was the consequence of investors' lack of confidence in September 1929?

  They began selling shares in large numbers, causing prices to drop further.
• What significant event occurred on 24 October 1929?

  12.8 million shares were sold on Black Thursday.
• What was the outcome of the stock market on 29 October 1929?


  The collapse of the economy was complete, with 16 million shares sold at a fraction of their price.
• What happened to thousands of people who had invested in shares or had money in the bank after the crash?

  They saw their fortune disappear.
• What does "buying on the margin" refer to in the context of the stock market?

  It refers to borrowing money to buy shares, which put investors in great trouble after the crash.
• What was the final outcome for the stock market in New York after the events of 1929?

  The stock market in New York had collapsed.