History WALL STREET CRASH

Black Thursday

24 October 1929 - the start of the Wall Street Crash, characterized by a dramatic drop in stock prices.

Consumer Goods

Goods that are used as an end in themselves and not for the production of other goods, e.g. vacuum cleaner, fridge, and radio.

Great Depression

A prolonged economic downturn, beginning after the Wall Street Crash, that affected the whole world.

On the margin

Buying shares by borrowing money in order to afford the purchase.

Shares

Financial stakes in a company or business, representing ownership.

The stock market

A central marketplace where shares are bought and sold.

Wall Street Crash

The economic downturn on the American stock market in 1929.

Overproduction in agriculture

When farming techniques improved but demand dropped, leading to excess food supply and declining prices.

Buying on credit

Purchasing goods with borrowed money, creating debt for consumers.

Negative equity

When house prices fall below the amount owed on the mortgage, resulting in financial loss for homeowners.

Fordney-McCumber Tariff Act

Legislation that imposed taxes on American goods sold to European countries, impacting trade.

Economic downturn

A decline in economic activity characterized by reduced consumer spending and increased unemployment.

Panic selling

A rapid sell-off of shares by investors in response to market fears, leading to further price declines.

Realization of the economy's precarity

Awareness among investors about the unstable nature of the economic situation leading to market crashes.

Laissez-faire policies

Economic policies of minimal governmental interference in business affairs.

House price fluctuations

Changes in the market value of residential properties over time, impacting owner equity.

Stock market value in 1925

$27 billion, indicating the economic growth of the 1920s.

Stock market value in 1929

$87 billion, demonstrating the excessive growth that preceded the crash.

Reduction of consumer purchase ability

Decreased capacity for consumers to buy goods due to economic decline and unemployment.

Investors' loss of hope

The psychological impact of the stock market crash, resulting in a lack of confidence in economic recovery.

Share price inflation

The increase in stock prices to unrealistic levels due to rampant buying before the crash.

Financial experts' warnings

Predictions made by analysts about the slowing economy before the stock market crash.

Unemployment rate by end of 1929

2.5 million Americans were without jobs, demonstrating the severe impacts of the Great Depression.

High levels of redundancies

Widespread job losses leading to increased unemployment during the economic downturn.

Role of small banks in the crash

Many lacked the resources to handle mass withdrawals during the financial crisis, leading to closures.

Consumer goods surplus

Excess supply of products with insufficient demand, resulting in falling prices.