The Stock Market Crash of 1929

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The United States signaled a new era after the end of World War I. It was an era of hopefulness when many people invested their money that was under the mattresses at home or in the bank into the stock market. People migrated to the prosperous cities with the hopes of finding much better life. In the 1920s, the stock market reputation did not appear to be a risky investment, until 1929.First noticeable in 1925, the stock market prices began to rise as more people invested their money. During 1925 and 1926, the stock prices vacillated but in 1927, it had an upward trend. The stock market boom had started by 1928. The stock market was no longer a long-term investment because the boom changed the investor’s way of thinking (“The Stock Market Crash of 1929”). The Stock Market Crash of 1929 was a mass hysteria because of people investing without any prior knowledge and the after effects that eventually led to the Great Depression. 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... ... middle of paper ... ...earch Complete. Web. 28 Mar. 2014. Kennedy, David M., Lizabeth Cohen, Thomas Andrew Bailey, and Thomas Andrew Bailey. The American Pageant: A History of the Republic. 12th ed. Boston: Houghton Mifflin, 2002. Print. Klein, Maury. "The Stock Market Crash Of 1929: A Review Article." Business History Review 75.2 (2001): 325. Academic Search Complete. Web. 28 Mar. 2014. "Stock Market Crash Of 1929." Stock Market Crash Of 1929. N.p., n.d. Web. 28 Mar. 2014. . "Stock Prices Slump $14,000,000,000 in Nation-Wide Stampede to Unload; Bankers to Support Market Today." New York Times 29 08 1929, n. pag. Web. 29 Mar. 2014. "Timeline." NYSE, New York Stock Exchange About Us History 2008 Specialists Are Transformed into Designated Market Makers (DMMs). N.p., n.d. Web. 29 Mar. 2014. .

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