ipl-logo

How Did The Stock Market Crash Of 1929

772 Words4 Pages

The Stock Market Crash of 1929, also known as the Great Depression, was the result of many economic factors. The most important being various economic imbalances and structural failings.

It started in the 1920’s where there was a rapid growth in bank credit and loans. At the time, people had been encouraged and motivated by the strength of the US’s economy that they thought very little could go wrong. This led to people borrowing more and more money in order to buy shares having the thought that they would end up making a profit. Firms also began taking out more loans in order to expand. After some time went, many people began to have piles of debt which made them question how much of a one way bet the stock market really was. This change in confidence in the stock market was what ended up causing so many people to quickly sell all their shares in the …show more content…

The fact that such a large amount of people began selling their shares all at once is what in turn led to the crash of the market. It was especially bad for a lot of investors who bought shares on the margin and to the banks and other investors who lent money to those buying on the margin. Because buying shares on the margin had lead to many “margin millionaires” that made enormous amounts of profit by buying shares this way and watching their prices go up; this left many investors exposed when prices fell. It lead to these “margin millionaires” being wiped out w for all they had when the market fell.

We can say that one of the main reasons for the Stock Market crash of 1929 can be blamed on peoples over excitement and false hope in the market. A few years before 1929 the Stock Market was like the new gold rush, everyone was trying to get in it and

Show More
Related

Summary Of Only Yesterday By Fredrick Lewis Allen

1071 Words | 5 Pages

In September of 1929 Allen explains that the stock market crashes for the first time then rebounded, but by the end of October, the market was officially broken. The stock market crash made the Americans who invested into the Bull Market in left them empty-handed. The decline of the stock market caused the entire United States economy to slip into the Great Depression which lasted for approximately 10 years because many Americans lost money they initially invested. However, the during the time of the instability of the stock market Allen explains that Americans thought the market would rebut itself. In fact, the Harvard Economic Society hypothesized that the stock market would not suffer in a “business depression,” however, the Society did not realize that Great Depression was in the future.

Read More

How Did Americans Grow During The Roaring Twenties Dbq

1053 Words | 5 Pages

Leuchtenberg sad, “There was no single cause of the crash and ensuing depression,” [Doc2]. Many things as stated earlier contributed to the crash, such as overexpansion of credit, goods, industries and rising rates of unemployment. Many Americans saw the Stock Market as an easy way to create wealth by buying stocks cheap, usually at a margin, and selling for a higher price, hopeful to profit. Buying on margin was the act of paying some money on a stock, but loaning the rest from a bank who expected would be paid back when profit was made. Stocks became more expensive to the point where nobody wanted to buy them because of their extreme price.

Read More

Great Depression Dbq

468 Words | 2 Pages

The immense stock crash in October 1929 was one of the many causes of the Great Depression. Banks were putting an abundant amount of money into the stock market, and could not keep up with the fast demand. The value of our currency dropped, thus leading to us losing more money, and many Americans were unemployed, plus low wages. As a way for America to make a profit, they put taxes on other country's products to protect American industries. American citizens were furious at the banks for losing their money not being able to pay them back.

Read More

Great Depression Dbq

884 Words | 4 Pages

Due to many people using banks to lend them money in order for them to buy stocks they got into debt. Many investors were unable to pay their loans causing banks to fail. In a New York Times edition in October 29, 1929 (Document 3) it states, “ Stock Prices Slump $14,000,000,000 In NationWide Stampede To Unload Bankers To Support Market Today.” Many banks lent money to speculatory stock investors.

Read More

Essay On The Great Depression Dbq

1068 Words | 5 Pages

The stock market crash of 1929 began a time period called The Great Depression. The Great Depression was an era of major unemployment and buisness faliure that lasted until 1939 with the help of President Franklin D. Roosevelt’s New Deal which implemented a framework that could protect American’s interests

Read More

Black Tuesday During The Great Depression

1084 Words | 5 Pages

People at the time wanted to make money the fastest way possible and to do that many used over speculation and buying on margin in the stock market. Over speculation means to buy a stock that is risk so you could make a large profit when you sell it and buying on margin means to buy shares of a stock with borrowed money so it would be repaid when the shares are sold. The stock market crash of 1929 was just the beginning of the Great Depression. It occurred when the stock market became overbought and overvalued.

Read More

How Did The Stock Market Crash Lead To The Great Depression

135 Words | 1 Pages

Before the Stock Market crash of 1929, America went through a decade of prosperity and social change known as the Roaring Twenties. New fads and numerous inventions emerged throughout our country. Many people bought on credit and as a result, our economy flourished. However, many Americans failed to realize this would be one of the underlying causes leading to the Great Depression. For instance, “Most people bought, but many couldn’t afford to pay the full price all at once.

Read More

How Did The Stock Market Crash Lead To The Great Depression Essay

160 Words | 1 Pages

It was one of the most economic crisis that ever happen in the history of our nation. The 1929 Stock Market crash was a result of various economic disparity and structural failings. It all started, when

Read More

How Did The Great Depression Affect The Economy Of The 1930's

1096 Words | 5 Pages

Many industries had also begun overproducing their goods and selling them at a loss. This led to the stock market crashing in 1929. The market will drop almost 90% over the next six months. Everyone rushed to withdraw their money from the banks in fear of losing it. Unfortunately, the banks didn’t have the money, and this caused even more panic.

Read More

How Did The Stock Market Crash Affect The United States?

209 Words | 1 Pages

The Stock Market crashed suddenly as a result of Americans abrupt interest in buying stocks. Prospective buyers did not have to pay the full price of a stock in order to purchase it. The practice of "buying on margin" started, it allowed a person to acquire stocks by buying the

Read More

How Did Speculation Cause The Great Depression

177 Words | 1 Pages

Speculation was a huge factor in causing the stock market crash of 1929 as it meant that people were to buy stocks of large risks and regular people were able to buy stocks that they couldn’t afford by being able to borrow large amounts of money from banks. Secondly, individual manipulation of the stock market was a significant factor in causing the depression as the wealthy would buy a large amount of shares, increasing the stock price and selling all the shares. This caused an unfair distribution of wealth as the rich stayed rich and the poor stayed poor. This problem was solved by issuing the Emergency Banking Crisis in 1933 and Security Exchange Commission in 1934. The Securities Exchange Commission provided a framework which tacked speculation

Read More

What Caused The Great Depression

1007 Words | 5 Pages

But in 1929, that bubble had burst and stocks just went downhill from there. In 1932 and 1933, they hit rock bottom, stocks decreased about 80% from their highs in the late 1920s. This had pinpoint effects on the economy. Demand for goods declined because people felt poor because of their losses in the stock market. The wall street stock brokers invested a lot in stocks which seemed promising but later came to bite them back.

Read More

What Caused The Great Depression Essay

660 Words | 3 Pages

“Stock prices continued to fall, and on July 8, 1932, the market hit its lowest point during the Depression.” (americaslibraries.org) It was due to the failure of the stock markets that people started to lose their jobs and go deeper into debt because they could not pay back the loans that they had borrowed from the banks. It is easy to see that the stock market was a major factor as to why the stock market crashed but, others believe that is was due

Read More

What Caused The Great Depression Research Paper

780 Words | 4 Pages

There began to be a gradual decline in prices and the stock market ruptured. On October 24, 1929, the infamous “Black Thursday” took place, where stock holders went on a panic selling spree. Things then went from bad to worse, stock prices went down 33 percent. People stopped purchasing goods and business investments decreased after the crash. In the fall of 1930, the first of four major waves

Read More

Essay On The Causes Of The Great Depression

828 Words | 4 Pages

The Stock Market Crash of 1929 was not so much a cause of the Great depression, but the event that kicked it off. The Great Depression started with the Stock Market crash of 1929, and was caused by many problems politically, economically, and socially. The social trends and attitudes of the late 1920s led to two important problems that turned out to be a major cause of the Great Depression. Over Speculation was a big problem because of people 's social attitudes of the time.

Read More

More about How Did The Stock Market Crash Of 1929

Related Topics

Open Document