The Causes andConsequences of the StockMarket Crash of 1929VUS10.b
The United States emergedfrom WW1 as a global power.The stock market boom andoptimism of the 1920’s weregenerated by investmentsmade with borrowed money.When businesses failed, the stocks losttheir value, prices fell, productionslowed, banks collapsed andunemployment became widespread.
SpecificCauses: Business was booming, butinvestments were made withborrowed money (overspeculation). Excessive expansion of credit Business failures led tobankruptcies Bank deposits were investedin the market Banks lost the money whenthe market collapsed.
The Crash!October, 1929
Consequences Clients panicked, attemptingto withdraw their moneyfrom banks – but there wasno cash to give them. No new investments in thebanks. Banks collapsed andfortunes were lost!