To What Extent Did The Stock Market Crash Of 1929

It has been argued that the stock market crash of 1929 was the worst financial catastrophe that the United States has ever seen. Prior to the crash during the 1920s society as a whole was experiencing some of the most prosperous times that had ever been experienced throughout the history of the United States. The era definitely earned its nickname the Roaring Twenties. Throughout these well-to-do times, there was a wealth of money, optimism, and excitement. However, all good things must come to an end. It was on an eerie day Oct 24, 1929, in New York City the epicenter of the crash, where it all came crashing down. There was a feeling of suspicion that was clamoring about and panic was in the air. During this time, there were very few explanations

It has often been said that the best way to forge into the future is to first learn from the mistakes of our past. Many experts believe that those very lessons have since prevented the United States from going into another financial crises of that magnitude. When recognizing the economic factors that triggered the stock market crash of 1929 there are many conclusions that one could arrive at. Of the many conclusions that can be drawn, there often ends up being three root causes that have been echoed throughout history, those being the loose credit policies of that era, inflated stock market prices and the maldistribution of wealth that were the most significant factors of this time that lead to the tsunami of

The vast majority of the American society were touting that these profitable days were here to stay. The individuals that were investing in the stock market were investing as much money as they could because they did not want to miss the chance at the historic gains the market was having. In the year prior to the stock market crash of 1929, the Dow Jones Industrial Average soared over forty-eight percent, one of the largest gains in the history of the index (Blumenthal). The growing interest in stocks led many to flock to the market, this included lower wage and middle-class Americans that wanted to reap the rewards of these massive gains. Another reason for the growing interest in stocks and the enormous gains were largely due to the loose credit policies of the time period. During this time an individual that wanted to purchase stocks didn’t need large amounts of cash to buy their favorite stocks, they could instead buy the stocks “on margin”. The interested investor would put up a small percentage of their funds which equated to usually ten or twenty percent of the overall stock purchase and would borrow the rest from a stock broker. The stock broker would assume less risk because if the stock fell below the amount that was borrowed the broker would usually sell the stock, leaving