Free Sample Essays > United States History
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13
Wall street crash: Cold war and Black america
Causes of the Wall Street Crash
The reasons that led to the Wall Street Crash can be put into two main categories:
· Those to do with the overproduction of goods.
· Those to do with money and the stock market.
Reasons linked to overproduction that led to the Wall Street Crash:
1. Companies were producing too many goods.
2. American goods could not be sold abroad because other countries had put tariffs (taxes) on them to make them more expensive.
3. When the demand for goods began to fall, workers' wages were cut and some workers became unemployed, which meant that they could no longer afford to buy the new consumer goods.
4. Farmers could not afford to buy the new consumer goods.
Reasons linked to money and the stock market that led to the Wall Street Crash:
· People were allowed to borrow too much money and they could not afford to pay it back.
· People had taken out loans or invested their savings in the stock market, but there were too few controls on the buying and selling of shares.
· The US President had not taken any notice of what was going on; he just left the businesses and banks to themselves.
· Advertising and hire purchase agreements were not controlled, and this encouraged people to spend more.
· Too many people thought that share prices could only go up, which encouraged them to invest more than they could afford in the stock market.
· Banks did not have enough money in reserve to help businesses that were in trouble. This was because they had lent too much money but now the banks were facing difficulties because people could not afford to repay their loans.
Exam tip
Outcomes of the Crash
The Wall Street Crash brought the Roaring Twenties to an end and led to a Depression in America. What effect did this have on American society?
Here are some examples of how times changed after the Wall Street Crash.
1. President Hoover and the belief in prosperity
2. The growth of shanty towns
3. Food shortages
4. Farming
5. Franklin Roosevelt - a new President
Read on to find out the reasons for these changes and what their effects were on society.
President Hoover and the belief in prosperity
Herbert Hoover became President in 1928. When the Wall Street Crash happened he tried to reassure Americans that it was just temporary and that 'prosperity is just around the corner'. Although things showed no signs of improving, he was reluctant to help those affected by the Depression.
Unemployment rose, homelessness increased, and soup kitchens and bread queues became a [next page]