Impacts of the Wall Street Crash-1929

Impacts of the Wall Street Crash-1929

1. Economical

   • Banks were also big investors and lost lots of money
     • People feared they would lose their money
       • Middle class rushed to get savings back --> banks ran out of money
   • Banks needed back money they had loaned to businesses
     • Loss of money led to companies reducing operations or closing
       • Industrial output fell and unemployment rose
   • Banks needed to print more money to compensate for loss
     • Hyperinflation

2. Political

   • Chancellor Brüning's proposals ( increase taxes +reduce unemployment benefits) were very unpopular
     • Coaltition govr. after Stressmann's death collapsed in 1930 and 1933
       • Chancellor could only rule with useless decrees --> no solution to problems
   • Support of extremist groups like the Nazis and Communists grew

3. Social

   • Middle class lost their savings as money was de-valued
     • Some lost their companies or their homes
   • Unemployment rose from 1.3 million in Sept. 1929 to 6.0 million in Jan. 1933
   • Unemployed roamed the streets: chaos and disorder
     • Some joined the private armies of political groups (ex:SA)

4. What?

   • October 1929: Share prices fell
     • USA had to take back 800 million marks from Dawes Plan

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