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The USA 1918-1939

The Wall Street Crash and The Great Depression Revision

How far was Speculation responsible for the Wall Street Crash
During the 1920s the Economy in America was booming One of the reasons for this was the rise in share prices, the share prices rose because there was high demand for shares When you buy shares you own a part of a business, and people should treat it like that, but in the 1920s speculators didnt
they just wanted to make money quickly happening

People, including President Hoover got used to the prices of shares rising and rising, they just assumed it would keep
People were so CONFIDENT that they began buying on the margin which meant using borrowed money from the banks
to buy shares. People ususally bought shares for about 10% of the price by using bank loans as long as the prices rose they could pay the bank back

By 1928 the American economy was showing signs of slowing down this made some people realise that the economic
boom had been fuelled by debt. Eventually debts have to be repayed and if the economy stops growing they cant be.

So who was to blame the banks for lending money too easily or the businesses and investors for too many loans

What impact did the Crash have on the American Economy

Black Thursday 24th October 1929 ticker tape running one hour late Lots of money lost Banks bought shares to try
and give people confidence

Black Tuesday 29th October 1929 16 million shares traded during the day $10 000 million dollars lost in 24 hours This had a very bad impact because people who had bought shares on the margin had lost their monet so they couldnt
1929 = 1.6 million unemployed 1930 = 4.3 million unemployed 1931 = 8 million unemployed 1932 = 12.1 million unemployed In 1932 the average value of shares was around 1/5 of what it was in 1929 after the crash

afford to pay banks back, this meant that the banks lost their money to the only place your money was safe was in your wallet!

What were the Social Consequences of the Wall Street Crash

High Unemployment rate Families lost their homes Families were split up

USA not a welfare state so the unemployed had to rely on charity

People had to wander the streets looking for food, work or housing Shanty towns (Hoovervilles) were built from scrap metal and people were staying in tents on wasteground in the cities

Relief funds were running out by 1932 June 1932: Relief funds in Philadelphia were cut off to 50 000 families

What were the Social Consequences of the Wall Street Crash The Bonus Marchers
Summer 1932: Ex-First World War Vetrans went to the Whitehouse to protest to President
Hoover to get the War bonuses that they had been promised at the end of the war early. They were supposed to get it in 1945 but they wanted it now

Around 25 000 vetrans gathered

Hoover refusd to discuss it with the men. The government seen them as a revolutionary threat so ordered the army to get rid of them Hoover lost a lot of support from the public because of his actions in the summer of 1932.

Why was President Hoover Unsuccessful in dealing with the effects of the Crash
He believed that the Government should stay out of matters as the Republicans had done for the
last 12 years during the prosperus 20s he thought that everything would right itself.

When he realised that it wasnt going to right itself he took the following steps: He pleaded with employers to keep wages low but steady and not to make workers redundant He set up the Reconstruction Finance Commision to make loans to businesses that were in
trouble because the banks couldnt

He encouraged cities to launch publics works programs for the unemployed The Federal Farm board bought surpless crops to cut down on overproduction. He approved the Hawly-Smoot Tariff which placed higher taxes on imports, the rest of the

world responded by upping their tarrifs on American goods. So they could sell even less abroad.

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