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Speculation And The Great Depression

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Speculation And The Great Depression
Speculation was a form of gambling on the stock market, speculators bought only 10% of the original value of stocks and bought the rest with borrowed money from banks. These speculators did not hold on to their shares for very long and would sell a soon as their stock value increased. These speculators kept borrowing more money so they could buy more shares and sell them when prices had gone up again. There were many firms, which were not safe investments, which floated shares, but people still bought them anyways, they expected for prices to naturally rise. There were 600,000 speculators in 1929. The American economy was doing very well. It was doing so well that they were more share buyers than sellers and the value of shares was rising.
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