USA: end of prosperity Flashcards
what is over production?
fewer products were being sold
this was caused by companies over producing products that american’s couldn’t afford to buy
they couldn’t sell their products in other countries to due high taxes
sales then fell and jobs were lost
why did consumer demand fall?
american’s couldn’t afford to buy and some manufacturers didn’t see the limit to what could be bought so they overproduced
USA couldn’t sell abroad due to high tariffs on foreign goods
banks had lent money to several European countries that found it hard to repay the loans back
what happened to property values?
people borrowed money heavily in order to keep and sell when value had risen
land value fell leaving homes and people bought worth a lot less than they had paid for it
what was overspeculation?
share prices did not rise as companies were not selling as many goods so fewer people bought shares
prices then rose again and greed took over
what did the availability of easy credit do to the economy?
made t easier to buy goods
worked well as long as prices were rising
prices fell and most of the money used to buy shares was borrowed
how much of the money used to buy shares was borrowed?
75%
what was panic selling?
experts started to sell their shares and then other small investors panicked and investors lost a lot of money
what happened on Saturday 19th October 1929?
3.5 million shares traded prices fell
what happened on Monday 21st October 1929?
6 million shares traded. prices continued to fall
what happened on Black Thursday 24th October 1929?
stock market fell 11% in value and 13 million shares were traded, more than 3 times as usual
what happened on Friday 25th October 1929?
bankers pumped money into the stock market and there was a slight rally in prices
what happened on Monday 28th October 1929?
panic returns and share prices fall dramatically
what happened on Black Tuesday 29th October 1929?
worst day ever. 16 million shares traded
what was the fall in share prices known as?
the wall street crash
what were the long term causes of the wall street crash?
overproduction
falling consumer demand
land and property values dropped
