On Tuesday 29th October the Wall Street Crash caused a cataclysmic chain of events which affected nearly every country across the globe.
This economic depression occurred as a direct result of the impact of a stock market crash on Wall Street in October This would end up being one of the key reasons for the subsequent financial crash. Speculation was rife with people jumping onto the fever of economic optimism that was sweeping the nation.
This led to an enormous increase in borrowing in order to purchase the stock in the first place. This figure was significantly larger than the amount of money actually circulating in the country at the time. By the buying and borrowing cycle proved too much and the returns on the share prices began to fall.
The immediate reaction was for many to start selling their shares. Before too long, this collective sense of panic led to large scale withdrawal: people were subsequently forced into an untenable situation, unable to repay loans. The economy was teetering on the edge and it was only a matter of time until it fell into economic freefall.
In , this is exactly what happened. The Bank went out of business on June 30th The Great Depression started in the United States causing an enormous reduction in the worldwide gross domestic product, which fell in the period from to by fifteen percent. The impact was widespread and the most severe depression ever experienced in the western world, causing high levels of unemployment for years afterwards. It proved to be not only an economic catastrophe but also a social one.
