The Stock Market Crash Summary

Garrison Keillor tells a story in a classic Lake Wobegon episode of his memories of hot summer days working in the garden. He would be outside all day sweating, miserable, and hot, wishing that they could have air conditioning. He also recalls how his mother used to tell him to make the best of his situation because life was what you made it. He took his mother’s words to heart, and passed the time throwing tomatoes at his sister. During the stock market crash of 1929, however, the public and government definitively did not make the best of their situation. In reality, the public overreaction, gigantic loss of money, and failure of the government to react to the stock market crash of 1929 continuously worsened the already falling situation.
The stock market is supposed to be buying and selling shares of a business. Therefore, if a business does well, it’s stock should do well, and if a business does poorly, it’s stock should do poorly. However, at this point in time people were buying and selling stock according to what stock was being bought. Consequently, once a stock started being sold everyone would sell it. Figure 1 shows one the enormous amount of losses of stock on October 24 and the days after. It should be well known to everyone the old saying ‘what goes up must come down,’ and that is exactly what happened here. The reader sees that in the months before Black Thursday, the date of the crash, the price of stock skyrocketed. The unprecedented, euphoric rise in stock was just too good to be true. So when the price hit the ground, it went down hard. Even though there was a small comeback when the people realized that it had not affected the business world, it was the beginning of a depression. According to the New York Daily News, the total loss was over $3 billion. In addition, some of the most active stocks lost hundreds of thousands of dollars, and even some of the more conservative stocks lost almost 40% of their total value (Trader). Although $3 billion would be a significant amount to lose now, in today’s currency that would be worth well over $42 billion. As a result, this drop was not only the worst
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"Stock Market Crash of 1929." Gale Encyclopedia of U.S. Economic History, edited by Thomas Riggs, 2nd ed., vol. 3, Gale, 2015, pp. 1269-1271. U.S. History in Context, link.galegroup.com/apps/doc/CX3611000866/UHIC?u=whea73603&xid=bd4b1120. Accessed 26 Apr. 2017.
Trader. "Black Thursday: Stock Market Crash Causes Chaos and Panic in 1929." New York Daily News, 23 Oct. 2915, www.nydailynews.com/news/national/stock-market-crash-caos-panic-1929-article-1.2400089. Accessed 26 Apr.