Many Americans predicted that a crash was going to happen but they were not taken seriously. Most people believed that the USA was too wealthy to have a crash. But they were wrong.
On Black Thursday the share prices fell dramatically, when the doors opened big companies fell. Rumours were a part of it; one rumour went about that 11 top shareholders who had lost fortunes had committed suicide. Brokers who sold shares on the margin had borrowed money from banks. Banks demanded repayment of their money; the brokers asked their companies for the money, which was only obtainable through selling shares. More shares were sold. On Tuesday 29 a huge 16million dollars of shares were sold. The crash finally did come. It resulted in 12 million UN-employed (20% of the workforce), 20,000 companies went bust, 1616 banks closed down, 23,000 people committed suicide and 1/20 farmers were evicted. These figures show us the huge affect it had on the USA.
Effects on Britain
In Britains major industry’s like ship building, coal, steel and textiles there was massive unemployment. Shipbuilding was very badly hit as orders for new ships dried up. As world trade fell, no new ships were needed for importation and exportation of goods. As ships used coal for energy, the coal industry suffered as well. Steel needed for building the ships was not need, in effect reduced demand. India and Japan began to produce goods like cotton, textiles and wool more cheaply. Cotton and wool were affected by the development of man made fibres, such as dacron and rayon. These materials were much cheaper, they were easier to wash and they lasted longer.
Nations like South Wales, the North East around Newcastle, central Scotland and the Northwest in Lancashire and Cumbria were affected, as these were the main industries. The worst affected towns were places like Maryport, Whitehaven, Abertillery and Merthyu, Tydfil, but the best known was Jarrow. Unemployment here reached 80% at one point.
Other Countries Affected
- Chile suffered a lot as they relied on trade. Copper brought in the most money, and nitrates were affected.
- Belgium suffered from people taking coal from the streets. And 60% were unemployed.
Germany was the most effected out of them all! The Treaty of Versailles had ordered Germany to pay reparations; they agreed and borrowed the money from the USA called the Dawes Plan. But this was eventually replaced when it was replaced with the young plan. By the end of 1932 UN-employment rose to 600, 000. This made the chances of the nazi party and Hitler higher to get into power. He posed as Germanys ‘last hope’; people were so desperate that they listened more to Hitler. He posed that he would sort out Germany. The Wall Street crash gave Hitler a second chance, if it didn’t crash then Hitler may not have come to the Chancellor of Germany.
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