The Reasons Behind The Stock Market Crash Of 1929

1390 words - 6 pages

In October 1929, the world watched in horror, investors panicked, and brokers were bewildered as stock prices plummeted lower than ever before. Fright and confusion were visible in the eyes of traders, and Wall Street was a scene of complete and utter chaos. This disastrous market crash quickly put an end to a decade of prosperity, and became the beginning to a dark and regrettable era in Canadian history (Bierman). Black Tuesday is remembered by all of us as the start of the Great Depression (Tiscali Reference). On October 29 1929 alone, thousands of investors traded 16 million shares of stock away, and the Dow Jones Industrial Average dropped a whopping 12% (Tiscali Reference). Previously during the year, stock prices had been the highest they had ever been, and in the course of only 4 months, Canadian stocks lost over $5 billion (Government of Canada). With a surplus of sellers and only a handful of buyers, stock prices fell far below the prices paid for them, and shareholders lost billions within hours (Aaseng 69). The crash was undoubtedly one of the worst economic events in history, but what exactly was its cause? Investors, the government, and economic events are all to blame. The stock market crash of 1929 was unavoidable and occurred as a direct result of market speculation, lack of government intervention, and economic slippage.

Black Tuesday and the devastating events leading up to it was largely the fault of everyday investors. The market is greatly influenced by our view of it, and the confidence we have in the stocks that are available (Sparknotes). The most important and most evident reason for the great stock market crash was the excessive amount of market speculation during the prosperity of the roaring twenties (Aaseng, 26). As companies were booming with inflated income from rampant consumerism, the stock market seemed like the ideal way to earn money (Aaseng, 27). At the time, people could make up to $90 000 in a matter of weeks (Aaseng, 31)! The demand for stocks rose and their prices, along with those of consumer goods inflated well above normal. The potential for disaster in the stock market was especially high because many uninformed investors who had unrealistic expectations saturated the market buying shares on margin (Everything2). Once these investors inevitably lost money and couldn't repay their loans, a chain of debt was triggered from them, to their brokers, to the bankers (Everything2). Speculation fever hit overseas investors and opened yet another window for catastrophe. After WWI devastated Europe's economy, Canada loaned them money for rebuilding their industries. With the success of the stock market however, loans were pulled out of overseas countries and put into the...

Find Another Essay On The Reasons Behind The Stock Market Crash of 1929

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

1478 words - 6 pages Comparing the 1929 Market Crash and the Current Position in the Stock Market 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...

Cause of the crash in stock market

2367 words - 9 pages 1. Introduction1.1 Black MondayThe 1987 stock market crash stands out as one of the most remarkable financial events of the 20th century, perhaps since the emergence of our capitalist system several centuries ago. What makes it remarkable is:1) The historic extent to which markets fell, an unprecedented 23%, and that they did so...

Stock Market Crash as the Cause of the Great Depression

1201 words - 5 pages What Was the Exact Cause Of The Great Depression? The United States Great Depression leads many people to believe different stories about what actually caused it. The Stock Market Crash in October of 1929 is often referred to as the beginning of the Great Depression, but did it actually cause it? The answer is that it was the spark that lit the flame of the Great Depression. The Great depression was a financial decline that started in 1929...

Stock Market Crash & The Great Depression

2207 words - 9 pages In the 1920's three pro-business presidents occupied the White House and U.S. businesses appeared to be doing well. The Stock Market was an indicator of this national prosperity. In reality under consumption was a becoming a problem and many products went unsold. Much purchasing was being done on credit and many stock purchases were made "on margin". Another indicator that things weren't as good as they seemed was that bank foreclosures were...

The Stock Market Crash Began the Great Depression

1531 words - 6 pages Investing millions a year, stock investors never thought the system would fail, but one day, it all went away. The stock market crashed leaving millions without work. The Stock Market’s Crash began the Great Depression and America would reap havoc for many years. The stock market is a great way to buy part of a company & gain or loose money depending on how the company is making money buy buying a share. “The stock market is owning a small...

stock market crash

641 words - 3 pages The Stock Market crash of 1929 has been looked at as the greatest symbol of depression is our countries history. Although the Stock Market crashing had a huge effect on the beginning of the Great Depression, there are still factors to consider when looking for a source to blame. It’s hard to put responsibility on the stock market for something so huge and disheartening. The Great Depression is seen as a slippery road downward, not a sudden jolt...

Chronicles the history of the American Great Depression. Discusses causes of the stock market crash. Details the events of Black Thursday. Describe the effect of the crash on the country.

2656 words - 11 pages The Great Depression:A Time of Struggle, Survival and ReformI. Black ThursdayA. October 24, 1929B. First day of panicC. Investors sold stock fastII. Causes of CrashA. 1924 to Black Thursday bull market kept prices upB. People thought stock was a get rich quick...

The Stock Market

1077 words - 4 pages The Stock Market The stock market plays a significant role in the health of the economy; the economy has to be strong for a country and its citizens to prosper. In 1929 over a period of two weeks 30 billion dollars disappeared from the U.S. economy, this was the event that started the greatest period of human hardship of the twentieth century known as the great depression. On October 19,1987 the Dow Jones industrial average plunged almost a...

The History of the Stock Market

1099 words - 4 pages The History of the Stock Market In the beginning, there was no real stock market. However stock exchanges did take place in smaller groups and corporations. This all took place during the 1700's where stocks were already around for a long time before that but it wasn't really popular in the United States. Stocks originally started as auctions where traders called out names of companies and the shares available. There was a auction that...

Parallels Between The Causes Of The 1929 Wall Street Crash And The Current Credit Crisis

1283 words - 5 pages The purpose of this essay is to explore the parallels between the underlying factors which led to the 1929 Wall Street Crash and the present Credit Crunch. The 1929 Wall Street crash was caused by weaknesses in the US economy. After WW1 the USA experienced a decade of economic growth generated by the levels of mass production and industrial growth during the war years. This along with the popular culture of success (the Jazz and party scene)...

The Crash of 1929 and the Depression that Followed: Was it Avoidable?

1708 words - 7 pages "No one can possibly have lived through the Great Depression without being scared by it. No amount of experience can convince someone who has lived through it that the world is economically safe." - Isaac AsimovThe Great Stock Market Crash of 1929 and the Depression that followed is perhaps one of the most memorable and unforgettable...

Similar Essays

The Stock Market Crash of 1929.

915 words - 4 pages "Wall Street Lays an Egg!" That's what the front page of Variety Newspaper said on the morning of October 30, 1929, as it summed up the biggest stock market crash in American history. Let me tell you a little about that... First of all, how many of you own stock or shares on Wall Street?(Pause.) All, or most of you, probably don't. Well, work with me and picture for a minute that you do. Picture that you've invested your entire life savings...

The Stock Market Crash of 1929

1346 words - 5 pages Black Tuesday was Tuesday, October 29, 1929. This was the day the New York Stock Exchange crashed. This was the single largest crash in the country. Black Tuesday hit Wall Street as investors traded 16 million shares in one day on the New York Stock Exchange. Black Tuesday wiped out thousands of investors and billions of dollars were lost. Black Tuesday was an event leading up to the stock market crash. As a result numerous Americans lost all to...

Stock Market Crash of 1929 Essay

1105 words - 4 pages The United States signaled a new era after the end of World War 1; an era of hopefulness when many people invested their money that was under the mattresses at home or in the bank. 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...

The Stock Market Crash Essay

962 words - 4 pages “There were no smiles. There were no tears either. Just the camaraderie of fellow-sufferers. Everybody wanted to tell his neighbor how much he had lost. Nobody wanted to listen. It was too repetitious a tale” (The New York Times, World History Book). The stock market crash was only one of many contributions leading up to the Great Depression. There were many economic and societal conditions that worsened throughout this time. Luckily...