Slides detailing the cause of the Wall Street Crash of 1929 and its economic and social impact. Suitable for teaching a grade 11 class.

1. The Causes of the Wall Street
Crash of 1929 and its economic
and social impact.
T.M NGOBESE

2. What were thereasonsforthe Wall Street Crashin
1929?
Workers’ wages did not increase even though production did, while the prices of products failed
to decrease.
Electrification of the production process meant that some workers had to lose their jobs, this
decreased the unemployment rate and number of people that cannot afford to buy goods.
Food prices were dropping, farmers were producing too much.
The price of shares on the Wall Street Stock Exchange collapsed. This triggered the collapse of
the American economy and the Great Depression.

3. Buyingandsellingsharesonastockexchange.
Companies can sell shares on the stock exchange in order to raise money. This money can be
used to expand the business in order to yield more profits.
When the company makes large profits, shareholders get large dividends.
This attracts more potential buyers in the company, thus increasing the value of the company,
due to a high demand to buy into the company. This increases the buying price of the shares.

4. Buyingshares‘onthemargin’.
Speculators bought shares that they never intended to keep for long. They bought shares and
sold them as soon as the price increases.
Speculators either bought shares ‘on the margin’ or borrowed money to buy shares.
This meant that the value of the shares were based on the people’s willingness to buy that
share, as opposed to the company’s real value.

5. Panicsetsin.
Financial experts warned that this false prosperity brought by speculation would not last,
speculators ignored them.
Prices began to drop and panic set in. Confidence is important for successful speculation.
Investors began to lose confidence in the market.
Investors sold their shares while the prices were still high. Share prices dropped. Shareholders
dumped 13 million shares and the value of the New York Stock Exchange fell by 50 per cent.

8. OthercausesoftheGreatDepression.

9. Cont…
Overproduction
Underconsumption
Importtariffs
UnequalDistributionof Wealth

10. Overproduction
• Companies were making more
goods than people could buy.
• Consumer Crisis, consumers lost
all their money and could not buy
any more goods.
• Stockpiles meant that factories
had to produce less, leading to
many workers losing their jobs.

11. ImportTariffs
• European countries imposed tariffs
on American goods, making them
more expensive to buy.
• Americans found it difficult to sell
their products abroad.

12. UnequalDistributionof
WealthandUnder-
Consumption.
• Another view claims that the
Depression was caused by the fact
that people were too poor to
afford goods. Not under-
consumption.
• Productivity increased by 43%,
industrial profits 72% and wages
only 8%.
• American wealth was unevenly
distributed.

13. References
Sabri, M. (2010) Wall Street Crash: 1929 & Great Depression. Available from SlideShare at
https://www.slideshare.net/mhs_pk/1929-wall-street-crash?qid=b8cfd75f-8522-4dad-b990-
994d61420373&v=&b=&from_search=1 (Accessed 24 August 2021)
Steenhausen, D. (2012) Causes of the Great Depression. Available from SlideShare at
https://www.slideshare.net/dsteenhausen/causes-of-the-great-depression-powerpoint (Accessed 24 August 2021)
RCSDIT. (2013) Great Depression PPT Presentation. Available from SlideShare at
https://www.slideshare.net/RCSDIT/great-depression-ppt-presentation (Accessed 22 August 2021)
Portman, J. (2007) What Caused the Wall Street Crash? Available from SlideShare at
https://www.slideshare.net/mrjportman/what-caused-the-wall-st-crash (Accessed 21 August 2021)
Kumar, A. (2009) The Great Depression 1929. Available from SlideShare at https://www.slideshare.net/ashishih/1929-ppt
(Accessed 20 August 2021)