• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

What factors were responsible for the Wall Street Crash?

Extracts from this document...


1. What factors were responsible for the Wall Street Crash? There was no single factor responsible for the sudden plummet in values on the US stock market, known as Wall Street. It was more a culmination of two or three major events or problems that built up over time, were not addressed so were able to nurture and course a fatal disaster for America in 1929. The American economy had been doing very well after a boom in 1920, thus the period was called the 'Roaring Twenties' giving an air of riotous fun loud music and wild enjoyment with 'everyone' having a good time because of all the money splashing around. However, after so many years of good living and good business the US public had everything they wanted so they stopped. They stopped purchasing products, they stopped borrowing but above all they stopped purchasing shares. ...read more.


They didn't even have to pay the full price of the shares, they could buy 'on margin' where they only have to pay 10% of the share and can borrow the rest. Women became heavily involved in speculation. Female shareholders owned over 50% of the Pennsylvanian Railroad, which consequently became known as the 'petticoat line'. It wasn't only individuals speculating, banks became caught up in the rush to make a lot of money, quickly. During the economic boom of the 1920s, investment on the stock market was very popular. As more and more shares became available more and more people bought them resulting in the number of shareholders going from 4million in 1920 to 20million in 1929, although only 1.5million were big investors. Around 600,000 of the rest were speculators. Through most of the 1920s the rise in share prices was steady but in 1928 speculation really took hold and the prices rocketed. ...read more.


To compensate for these losses, companies tried high-pressure advertising, spending nearly �3 billion on magazine advertisements. This did nothing unfortunately, with workers wages not rising and prices not falling demand kept decreasing. To relieve the stress on the US stock market, some of the excess products might have been exported to Europe but after so many years of American tariffs Europe had introduced its own meaning the industries would have had little return on their sales after paying the taxes and certainly not enough to stop the crash. I think the factor most responsible for the Wall Street Crash is the stupidity of the American government at that time. If they had kept a closer eye on the state of the economy, the stock market and the general buying state of the US public they could have realised that a fall would be on the way and could have done something to stem it. Rather than being a stand off government, disaster could have been averted. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. How far was Speculation responsible for the Wall Street Crash?

    The investors started to lose their confidence that the value of their shares would increase. Hence, they were less interested in buying the shares. Since they bought shares on the margin, they wanted to sell them at a good price(Before they fell down to a drastic extent)


    To overcome this problem the industries exported their goods internationally. The other countries especially the European countries were still affected from the war and their industries were not yet fully operational. The Fordney-McCumber tariff of 1922 kept foreign goods out but this prevented Europe from making profits, which they needed to buy American goods.

  1. What were the causes of the Wall Street Crash

    Also countries also owed the USA huge amounts of money in war loans and were struggling to pay them back. With the number American people being poor, and the American economy at a very high, people started speculating and thought that companies prices would go up and then they could

  2. wall street crash

    The fall in share prices also made it difficult for companies to raise the money needed to keep their companies going. Within a short time, 100,000 American companies were forced to close and as a result many workers became unemployed.

  1. What factors determine the extent to which a business is socially responsible?

    Perceptions is basically whether or not a company can get away with being irresponsible, and whether their activities will go unnoticed. PR is the way that the community and the other stakeholders see the company. This is in effect if they can hide any irresponsibility and promote their responsible acts further than their irresponsibility is criticised.

  2. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    Tesco?s expand its business by building & setting up new stores/ outlets. But without confidence Tesco might be scared to move out of town or build new stores, this could result in loss of profit or this will result in them losing a per cent of the market.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work