This lead to the biggest stock market crash in our history. The misdistribution of wealth and the stock market crash caused the economy to plummet (Modern). The stock market was bigger than ever in the 1920’s. Prices reached levels that people never dreamed of. At one point when the market was roaring in September 1929 forty percent of stock market values were pure air.
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.
On October 24, a record 12,894,650 shares were traded. Investment companies and leading bankers attempted to stabilize the market by buying up great blocks of stock. On Tuesday, the stock prices collapsed completely” ("Stock Market Crashes"). Thousands of people were invested in these stocks and they lost millions of dollars because of the crash. The Stock Market Crash triggered a banking crisis, business failures and trouble overseas.
This speculation and the resulting stock market crashes acted as a trigger to the already unstable U.S. economy. Due to the misdistribution of wealth, the economy of the 1920's was one very much dependent upon confidence. The market crashes undermined this confidence. The rich stopped spending on luxury items, and slowed investments. The middle-class and poor stopped buying things with installment credit for fear of loosing their jobs, and not being able to pay the interest.
Of course, following “Black Thursday,” the more well-known “Black Tuesday” ensued as a result of this. Between Black Monday and Black Tuesday, the market lost 24% of its value, and investors bought and traded over 28.9 million stocks. These stocks, now worthless, were used as firewood for some investor’s homes. The Dow Jones Company is perhaps the greatest example for this crash. Dow Jones started at 191 points at the beginning of 1928, then more than doubling to 381 points by September 1929.
Stock Market Crash causes The Great Depression The stock market crash, one of the most miserable times in the history of the United States stock market. Well, the stock market had many investors who lost most of their money either by the banks or the stock market. The stock market crash caused the Great Depression by making investors and companies lose majority of their money. The Great Depression was the worst unprofitable 10 years in history. This worst time period lasted from 1929 to 1939 and it began after the stock market crashed in 1929.
One of the major causes of the Great Depression was the stock market crash in October of 1929. Every day Americans were buying into the stock market. Some winning big and others not so much. "Nearly thirty million people were associated with the stock market in some way" (The Great Depression, History). That number kept on rising and rising everyday.
The new deal was necessary because in October 1929 the stock market in America had fallen deeply. This caused the American economy to collapse. The Wall Street crash occurred because share dealers thought that the stock market could not rise forever. So some of the rich stock holders sold there shares thinking that the prices were at its highest. Many other stock holders were worried and more and more people started to sell.
On the following Tuesday the stock market fell and the market was not able to get back up. This day is forever known as “Black Tuesday,” and the official start of the Great Depression. The speculation and the resulting stock market crash acted as the trigger for the already unstable United States economy. Due to the maldistribution of wealth and the unstable economy of the 1920’s, the nation headed into a decade of trouble. In response to its economic difficulties, the United States set up even higher trade barriers with other nations, causing more trouble within the nation.
A few low and middle class American’s wanted to participate in the market so they sought out loans from banks. Banks were more than obliged to give loans as long as they had collateral to offer the bank. Unfortunately, banks were accepting stocks as collateral from loaners. Little did the banks know that the Crash of 1929 would lead them to bankruptcy and cause a major loss for their clients. Banks were left with useless stocks and were unable to function properly as they did not have money to give to clients and the clients did not have money to pay back