Key learning points

1. Speculation led to increases in private debt and shares became overvalued.
2. American goods were overproduced in the US but tariffs made them too expensive for European markets.
3. Share prices collapsed during the Wall Street Crash, ruining many speculators and shareholders.
4. 659 banks collapsed in 1929.
5. Bank failures hurt millions of Americans, including those who had not traded in shares.

Keywords

• Stock market - a stock market is the place where investors can buy and sell shares in companies

• Speculation - speculation is when investors purchase shares, often with borrowed money, in the hope of selling them off in future for a profit

• Tariff - a tariff is a government tax on foreign-produced goods sold in a country

• Shares - some companies sell shares in order to raise money; people who own shares in a company receive part of the company’s profits

• Export - an export is a good which a country sells abroad

Common misconception