Reasons For The Wall Street Crash
In 1929 the Wall Street crash ended the economical boom and marked the start of the depression. The Wall Street crash was when share values fell dramatically this happened due to a number of reasons and in this essay I shall try and explore the main reasons for this.
Overproduction was one of the main reasons for the Wall Street crash. During the boom businesses were overproducing which meant that they were making more than they were selling. This was because also due to the new way of manufacturing. Production lines were most commonly used which meant that they factories could make more product in a shorter amount of time and during the boom this was a good thing as the demand for products was great but as early as 1926 the demand for goods was decreasing but business kept producing as they had been as they thought that the demand would rise again but it didn’t as many people that could afford the goods had bought them earlier on and they didn’t need any more. Not everyone had benefitted from the boom and the groups that were poor could not afford the luxuries. Even farmers had been overproducing which meant that even food prices went down and so even farmer couldn’t make a profit. A drop in sales and product values meant that businesses had to fire many workers and many farmers lost their which mean that many people had less money to spend.
After the First World War America introduced the idea of isolationism which meant that America had little to do with foreign policies this lead to the introduction of the Fordney McCumber tariff this meant that their was a tax on all foreign product which meant that the prices for these goods went up and so American product were cheaper. The tariff had helped America in the boom but as a result of the tariff many countries had put tariffs on American goods. American could then not sell their products to over countries which meant that the value of their products was reduced even more. ...
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