Stock market crash of 1929 essay sample

 

 

In the period of active investment and rampant economic growth, no one expected such a dramatic fall of the stock market. In the 1920s, its expansion caused a fierce speculation. Employment and production were high, which did not quite correspond with the actual demand. Large banks were in excess and they could not be liquidated. As soon as companies revealed that their shares did not cost as much as people had paid for them, investors withdrew. Some 16million shares were traded in a single day on October 29, 1929. From this point on, America ran into the Great Depression.

 

The primary reason for the Wall Street crash was a mass panic. A lot of people lived with a dream of making a fortune on their investments, like once fathers of the industries did. Everyone invested in any business that promised high returns without thinking how much these companies really cost. As the value of shares has fallen by 90%, investors rushed to sell every share they had. But no one wanted to buy shares anymore. Plenty of people who put all their money in shares ended up in debts or unemployed. Things did not get better until World War II revived the US economy.