Was the Wall Street Crash a turning point?

Learning objective – to examine the short term causes of the Wall Street Crash and its immediate impact. I can describe the short term impact of the Wall Street Crash and say why it happened in 1929. Grade D I can explain the short term impact of the Wall Street Crash and why it happened in 1929. Grade B I can explain and analyse why the Wall Street happened in 1929 and its short term impact. Grade A/A*

Starter – Throw the 12 sided dice once and record the number you have thrown. Read the content sheet and summarise it in the number of words you have thrown.

Where is Wall Street? Wall Street is in Manhattan, New York. It is the home of the New York Stock Exchange – one of the most important trading centres of the world.

What are stocks and shares? Stocks and shares are certificates of ownership in a company. Investors invest money to buy shares in a business which they then receive a proportion of the profits the business makes.

What are bull and bear markets? Bull markets are periods when share prices are rising. This happened throughout the 1920s Bear markets are periods of falling share prices. This happened from 1929 to 1933.

How did overproduction lead to the Wall Street Crash?

What impact did share speculation have? Because there was a Bull Market throughout the 1920s, people thought that buying shares was a quick way to make a profit. Because shares were brought to make a quick profit this led to shares and businesses being over-valued. Up to 25 million Americans brought shares in the 1920s Shares were made easy to buy as people were allowed to buy shares ‘on the margin’. This meant you could buy a share by paying 10% of the shares value and paying the remainder later. This gave businesses a false sense of its value – by 1929 $8.5 billion had been borrowed to buy shares.

What impact did rising British interest rates have? The late 1920s saw British investors turn to US businesses rather than British ones to make money. The government was concerned about this lack of investment so the Bank of England raised interest rates to attract investors. Raising interest rates aims for people to save and invest money. This rise in October 1929, saw a rush of British investors wanting to sell their shares in US businesses leading to a fall in share prices.

What happened in Wall Street in October 1929? Thursday 29th October 1929 – A rush of people wanting to sell their shares. This flooded the stock market. By the end of the day 13 million shares had changed hands. The total value of shares fell by millions of dollars.

What happened in Wall Street in October 1929? Monday 28th October 1929 – The rush continued and 9 million shares changed hands.

What happened in Wall Street in October 1929? Tuesday 29th October 1929 – The rush pushed the stock market to the brink of collapse as a further 16.3 million shares changed hands – many for next to nothing. The total losses on that day exceeded $10 billion.

Main task From what you have learnt, add 10 more words to the list you made summarising the Wall Street Crash. Put a cross beside your original words. In your exercise book, create a word cloud made up of the words you have chosen. Your original words should be bigger than the others. To make your word cloud, you should decide on its shape – this should be an image or symbol that summarises the Wall Street Crash.