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Wall Street Crash

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Wall Street Crash c/w The Wall Street Crash was caused for a number of reasons. There were many long term and short term causes which combined and led to the crash. For example: Speculation was a medium term cause as it had been around for quite a while but this led to the "Babson break" which was a trigger cause. The "Babson break" was a trigger cause because it instantly disrupted one of the most important factors in the stock market, confidence Many people believed that the stock market was an easy and quick way to get rich, they were correct. Many Americans decided to invest in the stock market, there had only been four million share owners in 1920 but by 1929 there were around twenty million shareholders. Around 600,000 people were speculators, they were gamblers. ...read more.


This caused many people to panic and sell their shares as soon as possible, this resulted in share prices to plummet. Speculation was one of the most important causes to the Wall Street Crash, as it shattered millions of peoples confidence in investing in the stock market. In spite of all this the banks had a chance to rekindle confidence among people and stabilise the share prices. This was done as top banks all gathered together and bought huge amount of shares at high prices. This caused a small amount of confidence to return for a few days. Unknowingly this triggered a huge lack of confidence among people as they knew that something was definitely wrong in order for banks to support the share prices, this caused many people to sell their shares. A day later the banks stopped supporting the share prices due to an index loss of 43 points which caused even more people to sell, this was chaos for the American economy. ...read more.


By 1929 the majority of Americans that could afford these goods had already bought them. These weaknesses were beginning to show, when car sales were slowing and in June 1929 the official figures for industrial output showed a fall for the first time in four years. This caused Speculators on the American stock exchange to become nervous which resulted them in selling their shares. Usually, industries would have exported its surplus goods to foreign countries but people in Europe also couldn't afford American goods. In addition, after nine years of American tariffs, Europe had put up its own tariffs in order to protect its industries. Protectionism and tariffs were a long term cause to the wall street crash as they had been around for a long time, they prevented industries exporting their surplus goods to other countries which left industries with goods nobody wanted. This devalued their business as money was being wasted on goods which nobody was willing to pay for. ...read more.

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