What Caused the Wall Street Crash?


Quick Answer

The Wall Street Crash of 1929 was caused by a serious decline of stock value that year, which resulted in millions of shares being sold by the stockholders who wanted to prevent any greater loss of money. The day of the collapse was later named Black Tuesday.

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Full Answer

The decline of the value of stocks began in the first weeks of September 1929 and continued throughout October, until the whole exchange market finally collapsed on Oct. 29, or Black Tuesday. The factors that influenced the crash of the market were multiple, but they mostly concerned the production of goods. In 1929, the production had already surpassed the demand for produced goods. There was a decline of food prices that was the direct consequence of lack of demand. As soon as people started selling their shares and withdrawing money, the banks, which were mostly small, were unable to withstand the events.

The collapse of the Wall Street exchange market was preceded by an economic boom named the Roaring Twenties, which was followed by 10 years of poverty and high unemployment rates that are known as the Great Depression. The stock market crash is considered to be one of the main triggers of that period.

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