The Student Room Group

a level history 20 marker essay help

can someone suggest how to improve this essay I'm struggling?

'The bull market was the most significant reason for the Wall Street Crash'

In this question the bull market could be defined as the share prices going up . The bull market led the public to feel less confident in the American economy, so the nation lost its prosperity which led to the Wall Street Crash-the biggest depression in the world. I will be arguing that the bull market was/ wasn’t the most significant reason judging based on the impact the whole of America, employment and people’s confidence.

Some people would agree with this statement because of America's overconfidence. Many people were affected. Firstly, many Americans, even middle-class Americans, replied to the bear market as they were fascinated by getting rich quickly. For example, the share prices went from $32 billion to $64 billion as people would buy on the margin not caring about the consequences. This led to the collapse and then later the Wall Street crash as many people overlooked the signs that the bull market wasn’t everlasting even though a small population of people had a strong feeling it would happen as they knew America had many periods of the bear market and nothing is everlasting. When the bill market collapsed suddenly, banks went bankrupt causing people to share sales panic for them to be able to afford necessities and business were affected so businesses had to lay off people as an attempt to survive causing the unemployment rate to increase. This highlights how people’s desperation and selfishness led to the nation's downfall because the Americans were motivated to continue the get rich scheme because they live in a capitalist society therefore the American Dream/rugged individualism in order to feel accepted as well as knowing they won't be getting financially support from the government because the government adopted the laissez faire to increase competition between companies. On the other hand, Americans were only overconfident as they thought it was the quickest way to reach the American dream making them financially illiterate. Maybe because people over hyped the market so all they had to do was put money into the market and expect money so it was like gambling. Overall, America's overconfidence was the most significant as most people who took part were uneducated and was fascinated by getting rich so everyone was affected when it crashed leaving the public to panic and for business to lose money and causing unemployment to skyrocket. Although many people enjoyed investing into the bull mart to be achieve the American dream, the bull market lasted for around a decade and there was no backup plan for how American could become easily rich as nothing last forever leaving them to do anything to not be deeply affected meaning that the bull market had more consequences then benefits

Some people would disagree because of overproduction. Another example is through the Mc Fordney-McCumber tariffs causing there to be a limit in US trading as other countries need to protect themselves especially European countries as they were recovering from the WW1 and were paying off debts or reparations. The tariffs also led to overproduction as farmers’ crops decreased in value as it wasn't needed internationally but couldn't sell it in the USA, so farmers kept on growing more crops through mass production making their crops values to decrease in price. In addition, America had the unequal it’s distribution of wealth thanks to the rugged individualism and the laissez faire government, like how the top 5% had 30 of the nation’s income whereas the button 40% had around 12.5% of the nation wealth as the riches exploited the poor knowing they had lack of free to speak out. This meant that overproduction was inevitable as not everyone could afford to buy products despite the hire purchase scheme so America couldn't buy all of their products thanks to the lack of spending power from the whole country. Therefore, employees lost their jobs as the demand for products decreased and the wealth America produced decreased as people lost their confidence to spend their hard-earned money eventually leading to the wall street crash. However, people would argue with this point saying since the rich owned around 30% of the wealth, they could have brought the products to show off their wealth or even to invest in it to possibly increase their wealth to boost the economy and maybe encourage other American citizens to do the same.

Another reason why people would disagree is because of the US banking system. The banking system during the 1920s banks would lend their money to people easily so many people took advantage of that in activities like on the automobile, stock market. The banks mainly gave out call loans which was one of the problems used. They didn't think about what to do whenever the country was financially struggling so when the bull market crashed, call loans exposed many borrowers into bad debts meaning they couldn't pay back. This highlights how weak and unstable the US banking system was since many loaners couldn't pay back debt so 5,000 banks went out of business. The banks relentlessly handing out call loans could have been prevent damaged if all banks were forced by the government to join the federal reserve board because the board set out regulations to stabilise the banking system but of all us banks joined, and the remains handed out loans to highly unstable businesses and investing in share speculation and property investments. This shows how the US banking system as the government had to leave the laissez faire policy to strengthen and try solving the problem. The fact that the banks impacted everyone as nearly used the banks to get loans to improve their lifestyles, but the banks were being irresponsible but lending out their loans to anyone and investing into something risky highlights how reckless and careless as they are responsible for making sure that money is used correctly so they it benefits them and the borrower to grow the economy.

To conclude the bull market wasn’t the most significant cause of the wall street crash as although many Americans overlooked the problem because of their lack of financial education and overconfidence the bank should have taken the responsibility of preparing to overcome the market when it drops in values, but they were busy handing out loans to individuals and risky businesses as well as investing into share speculators making people to panic and lose confidence in the economy.

Quick Reply