Stock Market Crash

The 1920's were a time of great prosperity and growth for Americans. This time period even got the nickname "The Roaring Twenties." Americans were high in spirits, and times were changing. During this time, Americans were getting wealthy and having fun doing so. They started to invest their money in the stock market. Then on one day in 1929, the market crashed and set many people to the poor house. This day would become to be known as Black Tuesday, October 29,1929.

In the early months of 1929, the market was reaching record highs. The economy was booming, and there seemed to be no worries for the country. In September of 1929, the Dow Jones Industrial Average reached its all time high. It rose to 381.17 points, the pre-depression high (U.S. News & World Report 32). Everything seemed to be going so well for our country.

On Thursday, October 24, New York's Stock Market crashed precipitously. On that day, 12,894,650 shares of stock changed hands, according to the official figures (Faber 150). Although this is not known in history as the day the market crashed, it starts to tell the story of how the economy

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There were several factors that caused this devastation. Most of the reasons were by the American people themselves. People were starting to experience great wealth. They thought that if they invested in the Stock Market they would get more money. This was the first problem, people who didn't know about the stock market were investing their money into it. Now that so many people were investing, stock prices rose to prices that were higher than what the company was really worth. Americans began to realize that they were paying too much

When the market crashed, people weren't the only ones hurt. Banks had to close down as well. People didn't trust the banks anymore, so they started to withdrawal their money. The banks couldn't give all the money back to the people, because they didn't have enough currency. Americans began to hoard their money in mattresses, the walls of their houses, tin cans buried in their yards, anywhere but in the banks (Farrell 21). Since people hoarded their money, there was no more money in circulation.