How far was over-speculation responsible for the Wall Street Crash?
There were many underlying problems and factors which connected together and lead to the Wall Street Crash in 1929, causing the depression which in turn caused many problems for America and sent waves across the rest of the world.
Over-speculation was one of the main factors which lead to the Wall Street Crash. During the 1920s more Americans invested and bought more shares. As they did so, prices kept rising which meant their profits did too. This lead to confidence and Americans just wanted to invest more money in order to gain more profit. When shares stopped rising at the same rate in 1928 due to companies not selling many goods and their profits decreasing, people were less willing to buy shares and confidence dropped. Nonetheless, once this minor downturned was over, greed took over and Americans returned to speculating as prices rose. This failing to see the warnings of upcoming failure and assuming and speculating too much meant that in the running up to the Wall Street Crash, Americans were unable to see it coming.
The decisions and choices that m=bankers made when faced with the result of over-speculation also affected the stock market, the reaction of the people and ultimately the devastation of the Wall Street Crash. This short term cause was controlled by the moves that the American bankers made. In addition to them, the actions of large shareholders also affected the decisions that others made; when big shareholders began to sell their shares, others followed and despite bankers’ efforts to put money into them and save the stock market, this failed to work. The uncertaincy and lack of preparation when it came to controlling the market meant that investors were extremely concerned as to what would happen to their money. This in turn led to the mad rush to sell shares as a last option.
Despite the idea that the boom of the 1920s was a prosperous period for all, it did...
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