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What were the causes of the wall street crash?

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Introduction

HISTORY COURSEWORK#2 What were the causes of the wall street crash? DOMAIN3. To comprehend, interpret, evaluate and use a range of sources as evidence in their historical context. 1. Study Source B. What can you tell from this source about US stock markets in the 1920's? (4 marks) Source B shows that from 1925 until late 1929 the price index went up because investors were confident that share price would rise. This market is called the bull market.. The steep line shows that the economy has had an increase in prices. From late 1929 to mid 1931 the prices of the stock fell amazingly. The boom that says "The Crash" we can infer it as a big deal has exploded, that there has been a catastrophe. The line changes completely its direction to the other side (downwards). Investors began selling a lot their shares to pay off their loans. It means that this second part of the line represents that it was a bear market. Also we can infer that the second line is much more steeper than the first one meaning that in less time the same amount of shares were sold. The price index for the late 29's was approximately 24 and by a few years later it went down to 0 or 1. This shows that before the 1939's the system of everybody buying shares was working really well in the stock market, helping a lot the U.S. ...read more.

Middle

(4 marks). Source B is a graph which only represent values and data but not any kind of explanation and Source K does for example when it says "anybody could buy shares and they could be bought `on the margin' ". A way in which B supports K is when it says in K: "The economic boom in the 1920's came to a sudden end in October" or "but in October 1929 things began to change because in source B there is a big change in the line of the graph as it goes to the other side, downwards. Concluding with this question I could say Source B supports Source K only in factual terms but not in explanation as showed before. 5. Read Sources H and J. Is one of these sources more reliable than the other about the causes of the crash? (8 marks). Although it is understandable why H is a primary source (1928 by a business man) we can also identify that J is secondary as it was written almost 30 years later of the crash. Despite this could make source H more reliable than J, I believe that although it could be classified as a primary source, this text (source H) is strongly biased and could give us a wrong interpretation of the real facts and situation of the moment, as he is interpreting in someway his opinions. ...read more.

Conclusion

The same happens with source J. They are saying it was because other reasons besides panic like "profits were plunged into the stock market producing a runaway speculation" although there were other reasons the main reason for source J is bad economics, therefore disagrees with the statement. Source K affirms it was because inexperience and not because of panic, by saying: "anybody could buy shares and they could be bought on the margin" exactly the same as source H, so it also disagrees. The opposite happens with source L because there is a part which says "In the panic many Americans lost their heads". This shows there was panic and because of it a lot of people were doomed. (agrees). M isn't blaming panic as well as K but this source blames "The Coolidge Hoover "New Era" of prosperity" which is another reason besides panic so this disagrees, again, with the thesis. N and P disagree with the thesis of panic because one talks blames depression and the other politicians and businessmen which are totally in the other way of panic. Concluding with this question I could see there were more on the disagree side than on the agree one, because of different reasons besides panic for example sources E, J, H, K, M have completely different points about the causes of the wall street crash so if you see again the resting sources which are about four, but all of those four agree it was because of panic, therefore I think (in general) the sources support this view: "The Wall Street Crash was mainly caused by panic". ...read more.

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