Why Did The Stock Market Crash

The stock market crash of 1929, which is consider mostly of the beginning of the U.S great depression, was an event that modeled the setting of the 1930s politically, socially. In the 1920s, the U.S. stock market underwent a popularity of stock trading. By the time it reached its peak in August 1929, the U.S economy wasn’t stable enough to handle the rapid expansion of stock market. On October 29,which is Black Tuesday, hit Wall Street when thousands of investors traded 16,410,030 shares on the New York Stock Exchange in a single day, left thousands of people in debt and lower purchase of good. The Stock Market Crash was mainly caused by economy imbalance and structural failure which include false vision of the economy, bad payment habits and

In 1920s, with the rise of stock investigation and rapid growth in loans and back credits, economy class of people consider stock as the fastest way to get rid of poverty. At first, most people believed investing in the stock market was a solid investment. The stock market seemed an infallible investment in the future with the mood of the country exuberant after world war one. From 1921 to 1929, the Dow Jones rocketed from 60 to 400, created many new millionaires in the country. Very soon, It became a place where everyday people go and truly believed that they can become rich. Since 1922, the New York Exchange had continuously gone up, with the fast going speed of nearly 20% each year. The innovation of investment called buying on margin, which people only needs to pay about 10% of the value of the shares and borrow rest of it from the stockbrokers, allows those people don’t have the enough savings for investment to buy the outright of stock. Therefore enabled more money was to be put in to the share and highly increased its value. Stock prices then bobbled up and down throughout 1925 and 1926 as more and more people jumped in, followed by a strong upward trend in

Next month, The Dow had already fallen 20% from its September 5 high. On Tuesday of the week of stock market crash, The New York Times headlines enlighten the panic with articles talking about buying on margin. Wednesday, The Washington Post headlines mentioned "Huge Selling Wave Creates Near-Panic as Stocks Collapse," while The Times warned "Prices of Stocks Crash in Heavy Liquidation." These reports sparked people’s panic. Finally, the Black Thursday, October 24th 1929, a spate of panic selling