The 1920s was a clip of peace and great prosperity in the United States. There was an addition of industrialisation and there are new engineerings such as wirelesss and cars. The airflight was going widespread and because of these new inventions and engineering. the economic system benefited ( Stock Market Crash. n. pag. ) .
Many investors rushed and bought many portions and everyone thought that the stocks were safe and there was so an economic roar. There were about 400 millionaires immediately created from 1921 to 1929 ( Stock Market Crash. n. pag. ) .
There were six grounds why Americans invested in the Stock Market. The lifting stock dividends were viewed by the people as an easy manner to acquire rich. There was an addition in personal nest eggs. At this clip. money in the Bankss are available in a lower involvement. there was so an easy money policy in Bankss.
While the companies choose to put their over-production net incomes to new production. the Americans were encouraged to purchase more stocks. The deficiency of stock market ordinance turned the stock market in a pyrammid game. There were no restrictions and purchasers are free to purchase more and more stocks. The last ground was the Psychology of ingestion. The Americans believed that they were populating in prosperity. therefore. they became optimistic ( Schultz. n. pag. ) .
In September 29. fluctuation of stocks began and the analysts thought that it was all impermanent but On October 24. 1929. the people of America who owns stocks started to dump their portions and this thought of selling stocks continued until Monday. October 28 and eventually. the undermentioned twenty-four hours. the “Great Crash” began ( Schultz. n. pag. ) .
While most people and economic experts view the stock market clang of 1929 as the cause of the “Great Depression” . the 1929 stock market clang was a consequence of a decelerating economic system. The America consumers’ desire expensive points like refrigirator. wirelesss and cars went down and most Americans were satisfied in what they have.
In return. this actions of the consumers affected the copmpanies who produced these merchandises and the over-production which happened earlier that twelvemonth. The companies who invested more on mills and machineries lost their net incomes because the consumers were already satisfied. They instead place their money in stocks than have new points in their house and this resulted to a slow economic system which led to an unstable stock market.
Schultz. Stanley K. American History 102: American Civil War to the Present. retrieved May 8. 2008. hypertext transfer protocol: //us. history. wisc. edu/hist102/lectures/lecture18. hypertext markup language
“Stock Market Crash of 1929” . Stock Market Crash. ( 2006 ) . retrieved May 8. 2008. hypertext transfer protocol: //www. stock-market-crash. net/1929. htm
“1929 Stock Market Crash” . retrieved May 8. 2008. hypertext transfer protocol: //www. angelfire. com/co/pscst/stock. hypertext markup language