Wall Street Crash of October 1929 Essay

Wall Street Crash of October 1929 Essay

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Wall Street Crash of October 1929

The roaring twenties saw a great deal of prosperity in the United States economy. Everything seemed to be going well as stock prices continued to rise at incredible rates and everyone in the market was becoming rich. Two new industries: the automotive industry, and the radio industry were the driving forces of this economic boom. These industries were helping to create a new type of market that no one had ever seen in history. With the market continuously increasing and with no foreseeable end, many individuals were entering the market because they saw the market as a sure fire way to get rich quickly. The rising prices of stocks and the large increases in trading created the speculative market that would eventually crash. On Monday, October 28, 1929, New York seemed to be the primary focus of the entire world. During that week in October, the bottom of the New York stock market fell out, an event that would lead the world into the greatest depression it has ever seen to date. Many individuals including those in the Federal Reserve Board saw the crash as a healthy thing that would bring all speculative trading to an end, and bring stock prices down to “realistic” levels. Following the crash the Fed followed a contractionary policy, which does not encourage expansion. Although that type of policy did need to be implemented prior to the crash, the decision to implement contractionary policy after the crash at best can be considered a questionable decision. The unstable financial situation of the United States that lead to the great crash can be attributed to the lack of leadership and action of the Federal Reserve in the financial world during the roaring twenties.

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...31 Oct. 1929

9. “Stocks Up Again on Flood of Buying; Discount Rate Cut Here and in London; Back to Normal, Reserve Board Finds.” The New York Times 1 Nov. 1929

10. “Brokers See End of Stock Hysteria.” The New York Times 1 Nov. 1929

11. Herbert Hoover, The Memoirs of Herbert Hoover (New York: Macmillan, 1952)

12. L. V. Chandler, Benjamin Strong, Central Banker (Washington DC: Brookings Institute, 1958)

13. “Behind the scenes with the Federal Reserve Board,” World’s Work (June 1929)

14. Excerpts from the Hamlin Diary -

15. Appendix 1: can be found at www.duke.edu/~wem3/ click on work stuff then under HST104

16. Appendix 2: can be found at www.duke.edu/~wem3/ click on work stuff then under HST104

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