Stock market boom in the 1920s

Author: Smusensurce On: 23.06.2017

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The bubbles that built America - The s (3) - wixequj.web.fc2.com

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British Broadcasting Corporation Home. This comment by Will Rogers, the great American humorist and wit, summed up the situation of the American people during the Great Depression of the s. Mass unemployment, bankruptcy, poverty, despair, shantytowns, people uprooted from their homes - this was the state of America at the time. The massive collapse of share prices on Wall Street in October has often been seen as one of the main causes of the Depression.

American Economy in the s: Consumerism, Stock Market & Economic Shift - Video & Lesson Transcript | wixequj.web.fc2.com

It certainly had an impact on the crisis which followed. The terrifying fall in share prices dealt a massive blow to American business confidence.

Thousands of shareholders were ruined, businesses collapsed and bankruptcies reached record levels. It would be years before investors recovered confidence in American economic growth. However, it can also be argued that the Crash on Wall Street was more of a symptom, than an actual cause of the Depression. Other factors also contributed to the Depression. The boom of the s was based on credit. People borrowed huge sums of money, expecting to repay it easily, because they would continue to earn good wages.

stock market boom in the 1920s

When the Stock Exchange collapse came, they were unable to pay their debts and the consumer boom came to a dramatic end.

The fall in demand for goods led to huge lay-offs from factories. The number of people unemployed and without incomes increased rapidly. During the s huge numbers of banks had opened in response to the demand for hire purchase credit. Because of the laissez faire policies of the government, the reliability of these banks was never checked.

The banks happily loaned out huge amounts of their investors' cash, expecting to make big profits. When the crash occurred, panic-stricken investors demanded their money back.

Many banks lacked resources to fulfil these obligations and as a result large numbers of banks collapsed, adding to the economic crisis. Towards the end of the s the boom times were coming to an end anyway. People had bought what they needed. The American market had become saturated with consumer goods.

As confidence slipped and consumers began to try and save money, sales figures went down. The economic crisis worsened.

Foreign countries had set up tariff barriers against imports from the USA, in response to similar policies from the US government.

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As a result, it was virtually impossible for the USA to increase exports overseas, leading to further falls in production and increased unemployment. America in the 's script. Scottish Qualifications Authority History resources, including Past Papers, Arrangements Documents and Marking Instructions. You're using the Internet Explorer 6 browser to view the BBC website.

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This page has been archived and is no longer updated. Find out more about page archiving. BBC Radio 1 BBC 1Xtra. History Boom and bust. Page 1 2 3. The nation that drove to the poorhouse in an automobile Will Rogers This comment by Will Rogers, the great American humorist and wit, summed up the situation of the American people during the Great Depression of the s.

The Wall Street Crash The massive collapse of share prices on Wall Street in October has often been seen as one of the main causes of the Depression. Credit The boom of the s was based on credit. Banking crisis During the s huge numbers of banks had opened in response to the demand for hire purchase credit.

Saturation of the market Towards the end of the s the boom times were coming to an end anyway. Protection Foreign countries had set up tariff barriers against imports from the USA, in response to similar policies from the US government. Now try a Test Bite.

Historic Stock Market Crashes, Bubbles & Financial Crises |

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