The first reason that had helped contribute to the stock market crash of 1929 was the huge misdistribution of wealth. The rich 5% elite was controlling the economy as well as about 25% of the nations income. Low wages, horrible working conditions and tremendous hours remained the same, as labor unions were completely ineffective during this time period. Because wages and prices weren't changing, as was the output per worker was, the rich were only getting richer. Since they were the big spenders, they basically decided which direction the economy was going.

The second reason was the fact that the unstable United States economy was part of an unstable world economy. As America prospered in the 1920's, Europe struggled to rebuild itself from the devastation of the war. America throughout the 1920's, with its booming e

Since the greed of the speculators for money was so strong, they were buying stock "on margin" to try and make quicker and larger profits. In short, this meant that they were purchasing stocks with other peoples' money. All that the investors had to do was put down 10 percent of their money to buy the stocks. This would work if their stock went up, but if the stock that they had purchased had gone down they would be in great debt. The speculators would have no way to pay off their loans, and wouldn't have any hope.

conomy, helped Europe by lending them millions of dollars. The loans given out by the United States were expected to be paid back by the foreign allies. However, what was really misunderstood by the United States was that the foreign allies were in no shape to repay any loans that had been taken from the Untied States. In addition to that, there was a lot of corruption involved with many overseas loans such as in Latin America and Peru. In light of all this, investors of course realized the danger and in turn simply stopped giving loans out. This created a negative effect for farmers who now had a smaller export market and for bondholders.

Stock speculation was a major way to get wealthy. People would see others that were prosperous from playing the market. There were many people who would put all of their money on a stock, and hope it went up. Stocks were being bought and sold rapidly, which also helped inflate them, c

Some common words found in the essay are:
America Peru, Causes Crash, stock market, crash 1929, money investors, foreign allies, bull market, companies form, price stock, stock prices, stocks bonds, fear greed,
Approximate Word count = 982
Approximate Pages = 4 (250 words per page double spaced)