Causes of the Wall Street Crash

Reason for Collapse of Wall Street On October 24, 1929, several shareholders began to lose confidence and decided to sell, thinking that the stock price would not continue to rise forever. On that day panic began and a lot of stocks were sold. It was called Black Thursday. Crash accident on Wall Street is ongoing. On Tuesday, 29th October, many stocks were sold, teletype writers could not catch up, stock prices continued to fall, people lost huge amounts of money and were destroyed.

Summary and definition: The Wall Street stock market crashed on 29th October 1929 (Tuesday) due to large stocks and stock panic selling. There were many reasons why Wall Street crashed in 1929, such as optimism optimism, excessive self-confidence of the 1920s, economic prosperity of this age. The rise of American consumerism brought over production of consumer goods. It is achieved by a loose credit scheme. The stock market boom and "long cattle market" brought the equity broker's financing to "buy stock" to buy shares. The decline in consumer goods demand in the United States and the uneven distribution of wealth are also important reasons for the collapse of Wall Street as well as weaknesses in the US banking system.

Cause of Wall Street Collapse Fact 8: Reason - Excess Production: Companies and factories are responding to growing demand for new consumer goods. The advancement of technology, manufacturing machinery, and the adoption of innovative systems such as assembly lines resulted in soaring production, which brought over production of consumer goods. The collapse of Wall Street leads to fact 9: Reason - Unequal distribution of wealth: the disproportionate wealth distribution of the 1920s caused a stock market crash. 40% of middle class Americans prosper during the economic boom. The other 60% of Americans are poor and they work hard to make a living. Most domestic farmers suffer serious overproduction crisis. By the end of the 1920s, wealthy people bought what they wanted, and the rest could not afford new luxury. The market was quickly depleted, producing too many products, but very few people earned enough money to purchase.

The collapse of Wall Street leads to fact 4: Reason - Easy Credit: Americans want new labor saving equipment and new car for advertisement. By purchasing goods with credit installments, the concept shifts from traditional value avoiding debt. Americans who used to be "frugal and prudent" once adopted a modern philosophy of "live now, pay later." The crash of Wall Street crash resulted in fact 5. Reason - stock market boom: With the booming American industry, the company's share of the Wall Street stock market is also growing. Stock prices are rising year by year, and investors are profitable. The stock price of the long cattle market in the 1920s soared from an average of 50 dollars per share in 1922 to 350 dollars per share in 1929. Investors do not have to worry about whether they have a prospect for the company they invest or for the future.