How Far Was Speculation Responsible for the Wall Street...

How far was speculation responsible for the Wall Street Crash? Speculation was one of the main factors for the Wall Street Crash. There were other reasons for the Wall Street Crash but everything is connected. The Wall Street simply over-heated; between 1924-29 the value of shares rose 5 times. The Wall Street Crash was a horrible consequence for the Americans. People that lived in America thought they were doing so well because of the roaring twenties. People could afford almost everything they wanted, they could go out and spend money and buy many consumer goods. As the Wall Street Crash came people’s lives changed a lot and they couldn’t afford to do anything. Speculation was a trend in the late 1920s. Many people became†¦show more content†¦For example an industry was making a vast amount of refrigerators, families in America bought refrigerators but after they bought one they didn’t buy anymore because they didn’t need it. As there were such vast amounts of consumer goods there was no one left to buy t hem. As there was no one that could buy these consumer goods the prices fell. America wasn’t exporting its goods and wasn’t importing any. There were ‘protective tariffs’ and these tariffs lead to not having any export or import. America was becoming isolated because America only wanted the goods that were made in the country to be sold. Another important factor was that banks made a decision not to support share prices. Banks themselves were involved in speculation and they did nothing to hold it back. American banks had lent $ 9 billion for speculating in 1929. Everyone was buying shares and selling them when the prices had gone down. Not only rich people but poor people as well. There were too many shares on the market and no one could buy them. The main problem was that there were so many shares on the market and there wasn’t enough demand for them. There was corruption between the banks and the brokers what this basically meant was that some greedy people were making money of innocent people and they were another factor for the Wall Street Crash. One thing that was very vital was confidence. People needed to trust banks and if there was confidence the prices will keep on rising andShow MoreRelated Black Thursday Stock Market Crash1342 Words   |  6 PagesIn early 1928 the Dow Jones Average went from a low of 191 to a high of 300 in December of 1928 and peaked at 381 in September of 1929. 1929Â…) It was anticipated that the increases in earnings and dividends would continue. (1929Â…) Price to earnings ratios rose from 10 to 12 to 20 and higher for the markets favorite stocks. (1929Â…) Observers believed that stock market prices in the first 6 months of 1929 were high, while others saw them to be cheap. 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