Causes Of The Stock Market Crash Of 1929 Essay
The crash
In the fall of 1929 the economy experienced one of the most devastating stock market downturns ever recorded. At the time the economy seemed to be prosperous and many investors felt the market was invincible and enjoyed their economic good fortune; it was a feeling that would soon be replaced with despair as an event unprecedented in scale and well beyond the imaginations of even the savviest investors loomed.
The 1920s
After World War 1 the United States experienced a period of sustained economic growth and prosperity largely due to recovery from wartime devastation and postponed spending. This economic growth bolstered consumer confidence resulting in an increased demand for consumer goods such as the newly introduced radios …show more content…
Stock prices soared to record heights and many thought it would last forever: People from all walks of life invested everything they could to brokers hoping to strike it rich in the markets. The hysteria to invest was so great that some people liquidated all of their assets, mortgaged their homes and borrowed from banks to put more cash into the stock market. To many the future prospects for America seemed without end, even President Calvin Coolidge’s 1928 State of the Union address noted that America had never "met with a more pleasing prospect than that which appears at the present …show more content…
In the first few minutes of trading alone, thousands of blocks of shares exchanged hands as sellers sold stocks for a fraction of their original value. Hopes for a quick recovery were lost as sellers outnumbered buyers ten to one.
Trades were happening so quickly they couldn’t be reflected quickly enough to understand how much money they were losing. Rumors of investors committing suicide spread across the trading floor and although they weren't true, they helped drive prices down even further. The carnage seemed unending, as desperate brokers called in margins. When investors couldn't pay their margins, their stocks were sold, and investors could do nothing more than watch their fortunes instantaneously disappear into thin
In the fall of 1929 the economy experienced one of the most devastating stock market downturns ever recorded. At the time the economy seemed to be prosperous and many investors felt the market was invincible and enjoyed their economic good fortune; it was a feeling that would soon be replaced with despair as an event unprecedented in scale and well beyond the imaginations of even the savviest investors loomed.
The 1920s
After World War 1 the United States experienced a period of sustained economic growth and prosperity largely due to recovery from wartime devastation and postponed spending. This economic growth bolstered consumer confidence resulting in an increased demand for consumer goods such as the newly introduced radios …show more content…
Stock prices soared to record heights and many thought it would last forever: People from all walks of life invested everything they could to brokers hoping to strike it rich in the markets. The hysteria to invest was so great that some people liquidated all of their assets, mortgaged their homes and borrowed from banks to put more cash into the stock market. To many the future prospects for America seemed without end, even President Calvin Coolidge’s 1928 State of the Union address noted that America had never "met with a more pleasing prospect than that which appears at the present …show more content…
In the first few minutes of trading alone, thousands of blocks of shares exchanged hands as sellers sold stocks for a fraction of their original value. Hopes for a quick recovery were lost as sellers outnumbered buyers ten to one.
Trades were happening so quickly they couldn’t be reflected quickly enough to understand how much money they were losing. Rumors of investors committing suicide spread across the trading floor and although they weren't true, they helped drive prices down even further. The carnage seemed unending, as desperate brokers called in margins. When investors couldn't pay their margins, their stocks were sold, and investors could do nothing more than watch their fortunes instantaneously disappear into thin