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Birth of the Great Depression: Causes of the 1929 Stock Market Crash

In: Historical Events

Submitted By lorenp912
Words 2808
Pages 12
Loren Pilon
Paventi
SUNY US History
March 11th, 2013
Birth of the Great Depression: Causes of the Stock Market Crash of 1929 It was a time of great economic growth in the United States after World War I. The economy was growing rapidly, fueled by industrialization and the rapid development of new technologies such as the automobile, electricity, telephone, aviation and radio. Many people and businesses began investing in the stock market at this time. The stock market is the organized trading of stocks. The owning of stocks gave people partial ownership of a company while infusing cash into the company. In return, people earned money on their investment as the company grew. The stock market provides financial support required by large business to establish and expand their enterprises. This in turn allows companies to grow and increase employment, provide a community tax base, and other financial benefits for the people and the economy. In the 1920’s the stock market boomed. During the 1920’s people were enthusiastic and more willing to take risks. They brought this attitude to the stock market, causing stock prices to increase exponentially. However, the severely overpriced and unaffordable stocks and willingness of the people to carelessly invest their money lead to one of the darkest days in U.S. history: October 29th, 1929. This is the day the stock market crashed, known in infamy as Black Tuesday. The stock market crash of 1929 was caused by numerous flaws in economic policies and actions taken by banks and investors. This major collapse would eventually be a key factor in the Great Depression. The end of World War I was an exuberant time around the world. The economy was strong and most everyone was enjoying life. The twenties were a decade where people had money to spend, and weren’t scared or hesitant to spend it, because they believed they would only

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