The Wall Street Crash of October 1929 and the Depression

Question	Answer
Short-Term Causes of the Crash	Many people bought and sold shares to make quick profits, relying on the fact that they would keep on increasing. They were speculators, not investors - meant that they artificially inflated prices. Companies were forced to pay out profits to shareholders instead of re-investing and Americans bought 'on-the-margin'.
Long-Term Causes of the Crash	Overproduction in agriculture and consumer goods drove prices down the rich were very rich and the poor became very poor there was foreign competition which reduced demand for American goods.
Effects of the Crash	People went bankrupt due to: their worthless shares, their inability to pay their mortgages, their savings lost when the banks collapsed and farmers also lost a lot of money. Confidence fell dramatically - people stopped spending. 11,000 banks stopped trading between 1929 and 1933. Demand fell, so did supply, and so did jobs.
President Hoover's Response to the Crash	Thought that 'prosperity is just around the corner' - angered Americans who blamed him. Stilled believed in 'rugged individualism' so blamed Americans - lived in shanty towns aka 'Hoovervilles'. 'Bonus Army' of 1932 - wanted to get their bonus of 1945 but were shot at by troopers on Hoover's orders. But between 1929 and 1933, he set up the Reconstruction Finance Corporation (RFC) and tried to export more but failed.

Resource summary

	Created by sagar.joban about 11 years ago