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 1920's. Many people became speculators - there were 600,000 by 1929. Speculation was a form for gambling; it meant that many people were buying shares but they didn’t keep these shares for long. They borrowed more money so they could buy more shares and then sell them when the prices had gone up again. Some firms, which were not safe investments, floated shares, but people still bought them. They expected to make a profit out of them. The American economy was doing very well and as it was doing so well there were more share buyers than sellers and the value of shares was rising. There were other factors that helped cause the Wall Street Crash and these factors are all connected. There was poor distribution between rich and poor. The problem was that the rich people were making millions but the poor were making nothing. There was also mal distribution of wealth, which led to the Wall Street Crash. A major cause of the depression was the inequality of wealth in America. There were some extremely rich people, and huge numbers of extremely poor people – the top 5% owned a third of the wealth, while 40 per cent of the population were living in poverty. There was barely any middle class and that was a problem in America because it was not fair that some people were...
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