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Abstract

This dissertation seeks to investigate both the short and long term causes of the 1929 Wall Street Crash in order to determine what factor is primarily responsible. It will show that the debates surrounding the causes of the Crash have been heavily shaped by the early interpretations of 1930s economist Irving Fisher and 1950s economist John Kenneth Galbraith. The primary viewpoint put forward by these economists suggests that during the roaring 1920s a ‘bubble of speculation’ formulated in the New York Stock Market, whereby the market became overcrowded by novice speculators, which consequently made it unstable.

Through analysing the primary interpretations of Fisher and Galbraith, this dissertation will demonstrate that since then secondary literature from authors who support the bubble theory fails to diverge enough away from these original key texts. Although this authorship provides the bubble theory with social historical context, taking into consideration factors like class and gender, it overwhelmingly downplays the role that American government financial bodies, specifically the Federal Reserve, played in orchestrating and controlling the bubble and also in failing to prevent the crash of the market. 

In 1963 economists Milton Friedman and Anna Schwartz introduced an interpretation which acknowledged the role of the Federal Reserve in the Crash, however, it has been neglected to some extent by supporters of the bubble theory. Although there is a separate, smaller body of literature which analyses the Federal Reserve’s role in the creation of the speculative bubble, it often concludes that the Federal Reserve Bank is to blame. By contrast, this dissertation will strongly conclude that primary responsibility for poor financial regulation during this period, which significantly contributed to the Crash in 1929, lies with the Federal Reserve Board.

Course: History - BA (Hons) - C1087

Date Deposited: 2021-07-27

URI/permalink: https://library.port.ac.uk/dissert/dis13706.html