How was the Stock Market Crash of 1929 was a major cause of the Second World War?
Answer：
THe Stock MArket Crash compounded the problem of buyer confidence. If the public were not sure if they would be employed, they were not likely to buy consumer goods.
Most historians say that the Stock Market Crahs only made a bad economic situation worse – it was not the primary cause of the depression.
Much of the problem with the Stock Market Crash was the policy of “buying on margin”. Poeple borrowed large amounts of money from the bank to buy stock and consumer goods thinking that when their stock went up, they could pay off their loans and still enjoy a profit.
This and the problems of overproduction led to many bank failures as the banks could not recover all the money they had leant to the general public. Larger banks were reluctant to lend money to help people get through the Depression as they were unsure if people could pay them back.
Most historians say that the Stock Market Crahs only made a bad economic situation worse – it was not the primary cause of the depression.
Much of the problem with the Stock Market Crash was the policy of “buying on margin”. Poeple borrowed large amounts of money from the bank to buy stock and consumer goods thinking that when their stock went up, they could pay off their loans and still enjoy a profit.
This and the problems of overproduction led to many bank failures as the banks could not recover all the money they had leant to the general public. Larger banks were reluctant to lend money to help people get through the Depression as they were unsure if people could pay them back.
Posted: August 11th, 2010 under US Stock Market.
Tags: stock market crash