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THE WALL STREET CRASH OF 1929, image, image, image, image - Coggle Diagram
THE WALL STREET CRASH OF 1929
In 1929
the Wall Street stock market
in New York collapsed
This was the beginning
of a major
economic crisis
leading to the
Great Depression
of the 1930s
Speculation on the stock market and excessive bank credit:
during the period of prosperity,
companies + individuals
bought shares in companies on
the Wall Street stock market
because they offered
guaranteed profits
To buy
shares
both
people
obtained credit or loans
from the banks
companies
houses
machinery
land
When companies
that sold shares
on the stock market
began to have problems
the shareholders wanted
to sell their shares
On 24 October 1929
thirteen million shares
went up for sale
which caused share value
to fall dramatically
due to oversupply
This was the
Wall Street Crash
Agricultural overproduction:
during the war
the American agricultural system
had increased its production
This had been possible
due to
the cultivation
of more land
to send large quantities
of food to Europe
the mechanisation
of agriculture
such as:
the tractor
harvester
threshing machine
After the war
European countries
began to produce their own
agricultural products again
but the level of
American agricultural production
was maintained
mainly wheat
The result
was a surplus
of production
which caused
prices to fall
The situation
was made worse
by the increase in
unemployment
due to
factories closing
the demand
farmers were ruined
for agricultural products
decreased
food
raw materials
used to make products
The increasing demand
for shares led to a rise in share prices
which caused stock market speculation:
shares were bought
in order to make
quick profits
despite the fact
that the share value
did not reflect the real value
of the companies
which were bankrupt
or in financial crisis
The stock market crisis
spread to banks
became a financial crisis
Banks found themselves
without liquidity
access to money
because the investors
who could not
sell their shares
did not have the money
to pay back their loans
people tried to withdraw
their savings
from the banks
to avoid losing them
Industrial overproduction:
during the WWI
American industry
had increased production
in order to supply
Europe
After the war
European industry
started to recover
European countries bought
less from the
United States
American industry
did not reduce
levels of production
The result
was that the number of
products available
supply
was greater
than the number of
products that were sold
demand
The unsold products
accumulated
in warehouses
stocks
Companies
lost money
some even had to
close down
Unemployment rose
so people had less money
to buy consumer goods
As a result
consumption decreased
even further
The banks collapsed
of 23000 banks
5000 closed
millions of citizens
were ruined
