the wall street crash
DESCRIPTION
The Wall Street Crash. 29th October 1929. Presentation by Mr Young. The Roaring 20s. (Rep) Government policy of laissez faire . US industry had been boosted by the war. Protectionism - import duties raised (1922). Mass production: cars, radios, refrigerators. - PowerPoint PPT PresentationTRANSCRIPT
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The Wall Street Crash
29th October 1929
Presentation by Mr YoungPresentation by Mr Young
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The Roaring 20s1. (Rep) Government policy of laissez faire.
2. US industry had been boosted by the war.
3. Protectionism - import duties raised (1922).
4. Mass production: cars, radios, refrigerators.
5. Higher Purchase - people could buy on credit. There is massive consumer spending.
Confidence!!Confidence!!
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The Roaring 20s
• Farmers DID NOT prosper new machines produced more which lowered prices.
• The black population DID NOT prosper farmers laid them off, given low paid jobs and lived in slums.
• Recent immigrants DID NOT prosper they were given low paid jobs and lived in slums.
• Workers in old industries DID NOT prosper
they were given low paid jobs and lived in slums.
•Prohibition saw a rise in crime: bootleggers & gangsters.
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Background• With more money to spend people invested on the
stock market.
• President Hoover’s aim: “a chicken in every pot and two cars in every garage”.
BUT
• 50% of American families earned less than $2000 a year
• American Industry was producing too many goods
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Shares & the Stock Market
• Companies borrow money to pay for equipment or staff etc
• Investors get a share of the profit the company makes
• ‘Shareholders’ can sell their shares on the stock market.
• This is based in Wall Street, New York• Prices can change every day according to
how well the company is doing.• Prices can also change no matter how the
company is doing this is called Speculation
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Speculation
• American industry booms, price of shares move up
• Investors sell their shares at higher prices and make huge profits
• Get Rich, Quick!!
• More people invest, pushing prices higher
• People buy “on the margin”
• Let’s get RICH!!!!RICH!!!!
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Speculation
20 million shareholders by summer 1929
Prices reach an all time high
Experts start to worry
Profits Fall
Car and Steel Production falls
People start to SellSell
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Crash!
• Sat 19th Oct - 3.5 million shares sold. Prices fall
• Sun 20th Oct - “Stocks driven down as wave of selling engulfs market”
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Crash!
• Mon. 21st Oct - Over 6 million shares change hands. Prices fall then rise in the afternoon. There are still buyers on the market
• Tue 22nd Oct - Prices begin to rise
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Crash!
• Wed 23rd Oct • 3 million shares sold in the last hour of trading• Margin buyers told to find more cash
• ‘Black’ Thursday
• 13 million shares sold
• No buyers found
• Panic!!
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Crash!
• Fri 25th Oct - Top bankers decide to support market
• Banking firms buy millions of shares for more than they are worth
• Sat 26th Oct - President Hoover “The fundamental business of the country, is on a sound and secure basis”
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Crash!
• Mon. 28th Oct - Massive selling• 3 million shares sold in the last hour of trading, 9
million sold in total• Banks stop supporting prices• Tuesday 29th OctTuesday 29th Oct• 16 million shares sold• No buyers found• Ticker tape machines break due to pressure, many
are ruined before they can act
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CRASH!!!
C R A S H ! ! !
What’s happened to our shares???
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Re-Cap
Overproduction
Stocks of unsold goods
Demand falls
Profits Fall
People start to sell shares
Panic.
CRASH!!CRASH!!
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Consequences
• Fred Bell was a wealthy businessman before the Wall Street Crash. He became one of the many unemployed men who tried to make a living by selling apples in the street
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CONSEQUENCES2.
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1929 1930 1931 1932 1933
Number ofUnemployed(million)
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CONSEQUENCES
• Thousands of small businesses go bust.
• Banks closed.
• People bought less : more of the above.
• Suicides.
• The Great Depression
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Your Task
1. Split into three groups
2. Each group must produce a report about the consequence of the Wall Street Crash
3. Each group must present their report in Room B108 on Wednesday 14th February
4. Each presentation must take no more than 10 minutes
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Your Task
Group 1Group 1
Look at the effects of the crash in the American cities
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Your Task
Group 2Group 2
Look at the effects of the crash in the American countryside
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Your Task
Group 3Group 3
Look at the international effects of the crash