![]() ![]() Aimed at Students studying across AS/A2 or equivalent.On Tuesday 29th October the market slumped again, when 16 million shares were sold. Speculators panicked at the thought of being stuck with huge loans and worthless.The banks tried to shore up the market again, but on Monday there were heavy selling theīanks realised it was hopeless and stopped buying shares.On Thursday 24th October 1929, nearly 13 million shares were sold in a panic, and prices.There were losses of confidence in March and September (when the economist Roger Babsonįorecast a crash), but the banks papered over the cracks by mass-buying of shares to help the.The Senate Committee set up to investigate the Great Crash found that there was a corruption and ‘insider-trading’ between the banks and the brokers.one was set up to developĪ South American mine which did not exist), but people still bought them, because theyĮxpected to make a profit in the bull market. Some firms which were not sound investments floated shares (e.g.Speculators borrowed $9bn for speculating in 1929. The shares, hoping to pay back the loan with the profit they made on the sale). Many people were buying shares ‘on the margin’ (borrowing 90% of the share value to buy.Speculation: Many people became speculators – 600,000 by 1929.Share prices rose way beyond what the firms they were shares were worth only speculation.Between 1924-29 the value of shares rose 5 times.Historians are fairly much agreed why the Wall Street Crash of 1929 happened.Market into a crash by desperately trying to get rid of their shares before they fall any further. Speculators fuel a bull market by gambling on future price rises, but they can turn a bear. ![]() A ‘bear market’ is one where prices are falling.These people are called ‘speculators’ and in 1929 about 600,000 of the 1.5 million shareholders were active speculators.When there is a ‘bull’ market (when share prices are generally rising) people buy shares solely hoping to make a profit.If a firm is doing well, the value of its shares rise, and people can sell them for more than they bought them. In America in 1929 about 1.5 million people owned shares.Companies sell shares as a way of raising money, and they attract buyers by giving them a share (hence the name) of the profit at the end of each year (this is called the ‘dividend’).Why did the USA fall into depression in 1929? ![]()
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