Organigrama

Honelako gehiago

The Great Recession Mind Map (period 2)

by Kris Bunce

Canada and the world 2

by Modaser Mojadiddi

Mindmap

by Admin Admin

Finance

by Eloy Rodriguez

How far was speculation responsible for the Wall Street Crash?

An important factor of the Crash were the Speculators.

This were people who contributed by buying the shares of a company in the Stock Market with the money they got from loans and sold them at a higher price as soon as the price had risen.

After the Crash, the USA entered into the biggest economic depression the world had ever seen.

The share prices were sometimes lower than what they have been paid for or even lower than the loans.

This was seen as the biggest failure of American history.

There were some cases, where banks were also speculating since they lent money to speculators.

American banks had lent $ 9 billion for speculating in 1929.

In many opportunities, this money belonged to ordinary people who saved their money for “rainy days” in the bank.

Speculators were ruined and were left unemployed, homeless and in bankrupt.This caused the investors to not return money to their banks.

People lost trust in banks and there were around 500 banks in bankruptcy, one of them, the USA Bank in New York.

Not only rich people but poor people as well. There were too many shares on the market and no one could buy them.

The main problem was that there were so many shares on the market and there wasn’t enough demand for them.

Speculators obtained millions of dollars during these times by doing that. Women were also involved in Speculation. ic

Many times money which was invested, had been taken from banks as loans.

This successful process suffered a collapse in 1929 when people lost confidence.

They did not continue believing the share’s prices would rise and consequently, they stopped buying and everybody lost.

The Stock Market is where people buy and sell shares of a company.

These people are called investors and they invest their money in order to make the company profit.

The Stock Market was an easy way to get rich because anyone could buy shares, watch their value rise and finally sell them at a higher price.

In 1929 there was a presidential election and the USA was still booming.

Hoover was elected, he was a republican who said the US was a perfect country with almost no poverty.

Everything went good but six months after the election, there was a Crash in the Wall street stock market which led to a long and devastating depression of the US economy.

The prosperity of the 1920s was completely lost and there were many social, political and economical dispairs.

Jhon Edgar Hoover