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Section II (National Study): USA 1919-1941
Quick questions on The Wall Street Crash of 1929: HSC Modern History USA
12short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is margin?Show answer
Brokers' loans (the credit financing margin purchases) rose from 1 billion dollars in 1920 to 8.5 billion by September 1929. Margin requirements were 10 per cent; a small fall in stock prices wiped out leveraged positions.
What are investment trusts and holding companies?Show answer
Pyramided structures like Samuel Insull's utility empire and Goldman Sachs Trading Corporation magnified gains and losses. The Insull empire collapsed in 1932 owing investors around 3 billion dollars.
What is black Thursday, 24 October 1929?Show answer
12.9 million shares traded (around three times normal volume). Prices fell around 11 per cent at the open. A bankers' pool led by Charles Mitchell of National City Bank stepped in around midday and stabilised the close, with the Dow down only around 2 per cent.
What is black Monday, 28 October 1929?Show answer
The Dow fell 13 per cent in a day. The bankers' pool did not return.
What is black Tuesday, 29 October 1929?Show answer
16.4 million shares traded (a record that stood until 1968). The Dow fell another 12 per cent. Around 14 billion dollars of paper wealth was destroyed in two days, around 30 billion dollars over two weeks.
What is the slide?Show answer
The Dow fell from 381 on 3 September 1929 to 198 on 13 November 1929 (around 48 per cent), then rallied to 294 by April 1930, then fell continuously to its low of 41 on 8 July 1932. Total decline from peak to trough was around 89 per cent. The 1929 peak was not regained until 1954.
What is the real economy?Show answer
Industrial production fell around 46 per cent from 1929 to 1933. Real GDP fell around 30 per cent. Investment collapsed from around 16 per cent of GDP to around 4 per cent.
What is the banking system?Show answer
The American banking system had over 25,000 banks, mostly small, unbranched, and state-chartered. Around 9,000 banks failed between 1930 and 1933, mostly in the rural Midwest and South.
What is policy?Show answer
The Hawley-Smoot Tariff (17 June 1930), Hoover's signature trade measure, raised average tariffs to around 60 per cent. Over 1,000 economists signed a public letter opposing it. Around 28 countries retaliated.
What is q1?Show answer
Source A is the New York Times front page for 30 October 1929. Using Source A and your own knowledge, explain the immediate causes of the Wall Street Crash. [5 marks]
What is q2?Show answer
Evaluate the extent to which the Wall Street Crash was the cause of the Great Depression. [25 marks]
What is q3?Show answer
Compare the views of Milton Friedman and Charles Kindleberger on the causes of the Great Depression. [10 marks]