Wall Street Crash - Causes Flashcards Preview

History : Year 13 > Wall Street Crash - Causes > Flashcards

Flashcards in Wall Street Crash - Causes Deck (16)
Loading flashcards...
1

UNEVEN DISTRIBUTION OF WEALTH:
What was the income distribution across America (1929)?

North East: $921
Far West: $881
South East: $412

2

UNEVEN DISTRIBUTION OF WEALTH:
What groups did not experience prosperity?

Farmers
Black Americans
Sharecroppers
Italian Immigrants
Women

3

UNEVEN DISTRIBUTION OF WEALTH:
Was employment stable?

No - employment could be unstable

4

STABILITY OF EMPLOYMENT:
What did benefits and welfare look like?

There were very few benefits for unemployed families

5

STABILITY OF EMPLOYMENT:
How much power did labour unions have?

Labour Unions had very little influence, and many workers were not allowed to join them anyway. Union membership fell during the 1920s leaving workers without any legal protection and very few rights

6

INSTABILITY OF GET-RICH-QUICK SCHEMES:
Who was Charles Ponzi?

A former vegetable seller that conned thousands of people out of their money by promising a 50% return on their investment within 90 days. Took advantage of people's greed.

7

INSTABILITY OF GET-RICH-QUICK SCHEMES:
What did many Americans spend their credit on?

Investing in speculative ventures which lost a lot of their money.

8

LAND SPECULATION:
What was the Florida land boom?

1) In the early 1900s Florida was relatively underdeveloped, but the climate made it appealing for the middle classes… led to the land boom
2) People began to invest in unseen and unbuilt developments (with the hope to then sell properties on at a profit). Often purchased on credit.

9

LAND SPECULATION:
What was the population in Florida in 1920 and 1925?

1920 - 968,000
1925 - 1.2 million

10

LAND SPECULATION:
What led to the Florida land boom coming to an end?

1) Demand began to trail off 1926 - there were scandals of made up property developments
2) 1926 Hurricane left 150,000 homeless
3) Hundreds were bankrupted leaving the land boom collapse and hundreds of unfinished properties

11

STOCK MARKET SPECULATION:
What was the bull market?

Easy credit meant people could buy stocks and shares “on the margin” (only paying part of the price) - this demand to buy shares was the bull market

12

STOCK MARKET SPECULATION:
What was stock market speculation?

Increasingly people bought stocks and shares not to invest in a company but on speculation - when stock prices rose people would quickly sell making a quick profit

13

WEAKNESS OF THE BANKING SYSTEM:
Who did the banking system prioritize?

They did not act in the best interest of the nation but in their own self-interest

14

WEAKNESS OF THE BANKING SYSTEM:
Did banks have government monitoring?

no - banks had to regulate themselves with no government monitoring

15

CYCLE OF INTERNATIONAL DEBT:
What did the 1922 Fordney McCumber Tariff do?

Made the international debt worse as it increased the price of American goods meaning that America could not trade with Europe

16

OVERPRODUCTION + SLOWDOWN:
What were the three signs of the economy slowing down?

1) problems in small business - 3 in 4 businesses failed
2)The construction industry - by 1926 boom in the industry began slowing down
3) Falling domestic demand - the market was flooded with goods that could not be sold