The 1929 Stock Market Crash
“The only thing we have to fear is fear itself.” President Roosevelt had hit home with this enduring line from his first inaugural address. Despite the conventional belief that economic irresponsibility was what caused the stock market crash of 1929, what truly caused the economic turmoil was the fear of speculation itself. So powerful was the growing economy that even world powers such as England held investments in the New York Stock Exchange. Economy in the 1920s had seen unprecedented growth that made the unnatural advances in the stock market actually rather feasible, if not probable. Led by the public utility sector, the U.S. economy soared in the 1920s. So great was the change that the people speculated that the stocks in 1929 were overpriced. However, even professionals of the era agreed that the stocks were worth investing in, and did not speculate that the stock market was a house of cards moments from tumbling down. What astounds me is the very system of the stock market. The concept of purchasing stock on margin and making profit is parallel to literally picking money from a money tree. Had the people not lost faith in this colossal venue of economic opportunity, I am curious of what the outcome and legacy of it all would have been. Just as Harold Bierman Jr., the author, pointed out, the concept of this international number game – one in which economical, but political, historical and social influences play a large part – is a concept that I find riveting.
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