The 1929 stock market crash was a breakdown of stock prices that led to the worst economic declines in the United States. One of the causes of the event was the speculation on the stock market. Business owners had profits on new technologies and could speculate excess money, changing the Stock Exchange from a securities market into a gaming-house (Schlesinger, 1957). In response to good tariff news, stock prices increased, and those who invested in the stock market became rich (Beaudreau, 2019). From October 23 through October 31, “a total of nearly 70.8 million shares were traded” (Klein, 2001, p. 325). However, people took too many loans to speculate on stock prices, which led to a financial collapse. Other reasons for the stock market crash were low wages, a struggling agricultural sector, and an excess of bank mortgages that could not be liquidated.
The Great Wall Street crash contributed to a huge global financial collapse. Banks lost millions of dollars because depositors withdrew all their money simultaneously. Moreover, banks foreclosed on personal loans and businesses, and those who relied on investment returns suffered the most. People were forced to pay back their loans even when they had no money. The Great Depression was another consequence of the stock market crash, although it was not the sole reason. People lost their jobs, and the luckiest ones had their salaries cut (The History Room, n.d.). Many people became homeless and jobless, which led to the soup kitchens and bread lines. Many industries, including the car industry and building construction, fell because there were no buyers. Some business owners committed suicide because their businesses went bankrupt, and some of them died early due to those tragic events (The History Room, n.d.). Wages were low and working hours long, leading people to starvation and exhaustion.
References
Beaudreau, B. C. (2019). The stock market boom and crash of 1929 was not a bubble: A book of readings. Cambridge Scholars Publishing.
Klein, M. (2001). The stock market crash of 1929: A review article. The Business History Review, 75(2), 325-351. Web.
Schlesinger, A. M. (1957). The crisis of the old order, the age of Roosevelt 1919-1933. Houghton Mifflin Company.
The History Room. (n.d.). The Wall Street Crash [Video]. YouTube. Web.