Understanding the Great Stock Market Crash of 1929

The Stock Market Crash

As the fabulous Roaring Twenties came to an end, The Great Depression soon arrived, from the rapid expansion from the early twenties, to a devastating economic downturn, The Great Stock Market Crash of 1929 came as a shock to millions. During The Stock Market Crash many people suffered because this one major event in history crumbed America. While it appeared to be a total surprise to the people, the great crash was expected because, the Federal Reserve saw rising prices in early September, after World War I everyone spent money, and people put their whole life savings into stocks.
The craziness began on Black Monday with the market beginning to close, once Black Tuesday hit many stock investors were in a panic. In the early 1920’s, the American economic policy was laissez faire which led up to an uneven

distribution of wealth, the poor get poorer, and the rich stay rich. “Black Tuesday, investors traded over sixteen million in shares, billions of dollars were lost” (“History”). The Federal Reserve spotted prices dropping as early as October, they thought that the economy could and would fix itself. Even though prices remained constant for over a decade, on October 24th, everything changed. “Prices began to decline in September and early October” (“American History”). Everyone was in a rush to invest their savings in securities which they could sell at a profit for later. As a result of The Great Depression, over thirty billion dollars were lost in one day. October 24, 1929. “This was the biggest economic crash in the modern world” (“Wall Street”).
After World War I, everyone was spending money that they couldn't during the war because of rationing issues. As the war was ending there was no need for mass production of war supplies and women were no longer needed in the workforce. This time people were spending money that they did not have, and the government was tightening up on credit. Nobody was making money because of the drastic unemployment rate, and very low wages. “The United States was influenced by many outside people, trying to look for help in other countries and asking for advice.” (“Economic Help”). The citizen’s were buying on margin; which means a buyer would put money down only a little and then borrow money from a broker, and this lead to many people going into major debt. This financial boom occurred during an era of optimism, Herbert Hoover said that the economy would fix itself, but it took a longer time than anyone expected. “2.5% growth rate in the first few days, then soon developed to 5%” (“Economics Help”). Later The Great Depression was the biggest economic collapse in the modern industrial world. Taking almost ten years to get back to a “normal”.
During the Great Depression, people put their whole life's savings into stocks, and even though it seems like a risk now, people thought it was a good idea back then.

“The Stock Market Crash was the most devastating in history. After World War I it was a period of peace and the crash interrupted it.” (“The Wall Street”). The public demanded deposits from the banks and as they were handing the cash over little did they know it was leading to less money in circulation. Companies closed down because of deflation and low demand while others laid off over half of their workers. As the unemployment levels increased, properties were repossessed and citizens started mortgaging their houses and selling everything just to get through the depression with their own home. Post war time the United States was booming, with the trade from Germany and Europe. The 1920’s turned out to be a decade, which lead America into the depression. As more and more people invested their money, the stock prices raised. “A multitude of large bank loans that could not be liquidated, and an economic recession that had begun earlier in the summer.” (“American

History”)
The Great Depression lasted over a decade, and production of everyday products plummeted. Unemployment soared, families suffered and even marriage rates were falling fast. The Great Depression was by far the longest and deepest downturn in history. The depression lasted ten years, but many argue it lasted longer. This huge economic downturn was one of the most memorable and most talked about events in history. The stock market crash was expected because many people saw it coming because of higher prices, after World War I everyone spent money, and people invested all of their money into the stock exchange.