The Crash of 1929

668 Words2 Pages
bulb-icon

Recommended: causes of stock market crash 1929

The stock market crash of 1929, also known as Black Tuesday, was the largest crash to that date the market fell a total of $2 billion dollars in just 30 minutes (Thomas 73) with over 16 million stocks sold (74). This event single handedly cause thousands of families and businesses to go bankrupt in a matter of minutes, making this one of the most disastrous events of the twentieth century. Over time there were many signs of a crashing economy and many diverse causes. Some of the many causes of Black Tuesday are Giving loans to people who couldn’t pay the loans off, that the federal reserve couldn't control the huge market, and that the market grew too large too fast.
A group of investors stood together one of them named John Jacob Raskob and many more investors were selling short (Klingaman 32). He decides that he can make some money and seem like more of a philanthropic person by getting people rich, but first he had to convince them that stock prices would rise indefinitely (31). One thing Raskob did to convince people, was he released in a press interview that using Raskob as a broker; you could put 15 dollars into a stock with him over 40 years you could multiply your money by almost 27 times (33). Raskob famously says “I have all the money I want and now I want to help a lot of other people make some” decides to make a business in which you only have to pay a down payment and 15 dollars a month and people took advantage of this (32). Although the average wage was only 25 a week, so for a family it is very difficult to pay 15 dollars every month (33). This then causes people to sell stock which causes a drop in the market. When Raskob saw this happening, he immediately liquidated his stocks, and so did many other peop...

... middle of paper ...

...e the causes, but only a few of the causes have been discovered, and they are that the stock market got too large too fast, the Federal reserve made bad choices, and a select group of businessmen trusted people to take money who could not pay the money back.

Works Cited

Allen, Frederick Lewis. “Fruitless Efforts of the Federal Reserve Board.” The Crash of 1929. ed., Gerdes, Louise I. San Diego: Greenhaven Press. 42-46
Hall, Thomas E. and J. David Ferguson. “The 1920’s: A New Era of Prosperities.” The Crash of 1929. ed., Gerdes, Louise I. San Diego: Greenhaven Press. 22-28
Klingaman, Wiliam K., “Everybody Ought to be Rich.” The Crash of 1929. ed., Gerdes, Louise I. San Diego: Greenhaven Press. 28-41
Thomas, Gordon and Max Morgan-Witts. “October 29,1929: The Day the Bubble Burst.” The Crash of 1929. ed., Gerdes, Louise I. San Diego: Greenhaven Press. 66-77

Show More
Related

  • America, the Great Depression, and The Cinderella Man

    1787 Words  | 4 Pages

    In October 1929, the United States stock market crashed due to panic selling. This crash started a rippling effect that contributed to a world wide economic crisis called the Great Depression. This crash was such a shock because of the economic expansion of the 1920’s when the Dow Jones average reached an all time high of three hundred eighty one. The year 1928 was a time of optimism and the stock market had become a place where everyday people truly believed that they could become rich. People everywhere were talking about the market and newspapers were reporting stories of ordinary people such as chauffeurs, maids, and teachers making millions off the stock market. People who didn’t have the money bought on margin. The stock market was booming and the excitement about the market caused a lot of over speculation. People ignored the small signs of the impending crash until Black Thursday, October 24, 1929. Four days later the stock market fell again.

    Read More

  • Comparing the 1929 Market Crash and the Current Position in the Stock Market

    1022 Words  | 3 Pages

    During the 1920's, the North American economy was roaring, but this decade would eventually be put to a stop. In October of 1929, the stock market began its steepest decline to this date in history. Many stock market traders and economists believe and pray that it was a one-shot episode never to be repeated. On the other hand, many financial analysts and other economists believe that the current stock markets are in place to repeat the calamitous errors of the 1920's. In this paper, I will analyze the causes of the crash and discuss the possibilities of it re-occurring.

    Read More

  • The Great Depression in "Cinderella Man"

    1586 Words  | 4 Pages

    The stock market crash of 1929 is the primary event that led to the collapse of stability in the nation and ultimately paved the road to the Great Depression. The crash was a wide range of causes that varied throughout the prosperous times of the 1920’s. There were consumers buying on margin, too much faith in businesses and government, and most felt there were large expansions in the stock market. Because of all these...

    Read More

  • The Great Depression, Annotated Bibliography

    878 Words  | 2 Pages

    This article is about the circumstances that led to the collapse of the economy in 1929. It relates to my research proposal because I am evaluating historic events that led to the financial crisis of 1929. The article discusses how deflation played an important role in expanding the depression, and how the Gold Standard, a monetary system in which a country’s government allows its currency unit to be freely converted into fixed amounts of gold and vice versa, was an extremely bad decision because it caused the dollar to lose its value. This source was informal because it discusses prehistoric events that led to the crash of and I love how the article discusses that the Federal Reserve played a key role in the failure of the stock market. The Federal Reserve supports any war the United States is involved.

    Read More

  • The Great Crash 1929 Book Review

    1608 Words  | 4 Pages

    Cooke, Lorne. "Review: The Great Crash 1929 by John Kenneth Galbraith." The Journal of Finance. 11. no. 1 (1956): 100-101. http://www.jstor.org/stable/2976547 (accessed October 4, 2011).

    Read More

  • The Major Causes Of The Stock Market Crash Of 1929

    1130 Words  | 3 Pages

    This means while organizations could create products at a fast pace the customers did not have the cash to purchase them in light of the fact that they were not making almost enough in wages because of the way that work was overlooked consistently. This overflow of products made organizations burden up on unsold merchandise and significantly hurt their income, prompting the diving of their stocks. The uneven appropriation of riches that happened in the 1920 's was one of the real reasons for the stock exchange accident of

    Read More

  • Roaring Twenties Essay

    978 Words  | 2 Pages

    By 1929, the U.S. economy was in serious trouble despite the soaring profits in the stock market. Since the end of WWI in 1918, farm prices had dropped about 40% below their pre-war level. Farm profits fell so low that many farmers could not pay their debts to the banks; in turn this caused about 550 banks to go out of business. The nations illusion of unending prosperity was shattered on Oct. 24 1929. Worried investors who had bought stock on credit began to sell it. A panic developed, and on October 29, stockholders sold a record 16,410,030 share. By mid-November, stock prices had plunged about 40%. The stock market crash led to the Great Depression, the worst depression in the nation’s history (until…2014 ☺). It was a terrible price to pay for the false sense of prosperity and national well being of the Roaring Twenties.

    Read More

  • The Stock Market Crash of 1929

    1275 Words  | 3 Pages

    During 1928, the stock market was common among any class of the roaring twenties. Ordinary people talked about, and many made millions off the stock market. People watched other people invest their money and gain more profit hence, increasing other’s trust in the stock market. Many people did not have money to pay the total prices of stocks; people bought stocks “on margin”, meaning that the buyer would put down some of his own money, but the rest the buyer would borrow from a broker. Thus, the buyer borrowed about 80-90 percent of the cost of the stock and only 10-20 percent of his money (“The Stock Market Crash of 1929”). This way of investing money was very risky. At times, brokers issued a “margin call.” In this case, the buyer had to pay back the money he borrowed earlier. Most ordinary people bought...

    Read More

  • Women and New Deal Programs

    1194 Words  | 3 Pages

    Schultz, Stanley K., and William P. Tishler. "The Crash and the Great Depression." American History 102. 1999. Board of Regents of the University of Wisconsin System. 17 Oct. 2011 .

    Read More

  • 1929 Stock Market Crash

    1392 Words  | 3 Pages

    On Tuesday, October 29th, 1929, the crash began. (1929…) Within the first few hours, the price fell so far as to wipe out all gains that had been made the entire previous year. (1929…) This day the Dow Jones Average would close at 230. (1929…) Between October 29th, and November 13 over 30 billion dollars disappeared from the American economy. (1929…) It took nearly 25 years for many of the stocks to recover. (1929…)

    Read More

  • The Great Depression

    915 Words  | 2 Pages

    October 29th, 1929 marked the beginning of the Great Depression, a depression that forever changed the United States of America. The Stock Market collapse was unavoidable considering the lavish life style of the 1920’s. Some of the ominous signs leading up to the crash was that there was a high unemployment rate, automobile sales were down, and many farms were failing. Consumerism played a key role in the Stock Market Crash of 1929 because Americans speculated on the stocks hoping they would grow in their favor. They would invest in these stocks at a low rate which gave them a false sense of wealth causing them to invest in even more stocks at the same low rate. When they purchased these stocks at this low rate they never made enough money to pay it all back, therefore contributing to the crash of 1929. Also contributing to the crash was the over production of consumer goods. When companies began to mass produce goods they did not not need as many workers so they fired them. Even though there was an abundance of goods mass produced and at a cheap price because of that, so many people now had no jobs so the goods were not being purchased. Even though, from 1920 to 1929, consumerism and overproduction partially caused the Great Depression, the unequal distribution of wealth and income was the most significant catalyst.

    Read More

  • The Stock Market Crash

    882 Words  | 2 Pages

    There wasn’t just a single action or event that sparked the stock market crash. It was a series of bad judgements and choices made by the consumers, over looked by expenses and the era they had just experienced full of wealth and prosperity. Nobody saw this coming, or could even suspect this of happening. Consumers continuously invested in the stock market, leading to over speculation, poor government policies and and all around an unstable economy. Large investors catching wind of a bad outlook and future in the stock market, pulled their money out of the market and went straight to the banks. Because of the crash and its aftermath which revealed serious flaws in American economy, it led up to the Great Depression. The crash caused over 5,000 banks to close and for the many who invested their money only in banks, it was devastating crisis. Farmers started facing tough times when unemployment rates rose. Nobody had the money to pay for the food leaving farm prices dirt cheap, which meant lower income...

    Read More

  • The Great Depression Research Paper

    2275 Words  | 5 Pages

    ] This catastrophic event is caused by the accumulation of a large scale of speculation by not only investors but also banks and institutions in the stock market. Though the unemployment rate was climbing during the 1920s and economy was not looking good, people on Wall Street were not affected by the depressing news. The optimism spread from Wall Street to small investors and they were investing with the money they don’t have, which is investing on margin as high as 90%. When the speculative bubble burst, people lost everything including houses and pensions. The main reason ...

    Read More

  • Review of "SInce Yesterday"

    784 Words  | 2 Pages

    Frederick Lewis Allen’s book tells in great detail how the average American would have lived in the 1930’s. He covers everything from fashion to politics and everything in between. He opens with a portrait of American life on September 3, 1929, the day before the first major stock market crash. His telling of the events immediately preceding and following this crash, and the ensuing panic describe a scene which was unimaginable before.

    Read More

  • Stock Market Crash Essay

    679 Words  | 2 Pages

    The banks wanted their money from the brokers. The brokers wanted their money from the customers. The only way most customers could get the money was to sell the stock, and selling the stock depressed the market even more, increasing pressure all along the line. (Judith S. Baughman, Victor Bondi, Richard Layman, Tandy McConnell, and Vincent Tompkins)

    Read More

More about The Crash of 1929

Open Document