Stock Market Crash of 1929

[Name of writer appears here]

[Course name appears here]

[Professor 's name appears here]

[Date appears here]

Stock Market Crash of 1929

The year 1929 stands out as the most significant year of the decade of the 1920s . In the minds of most people the year 1929 marks the crash of the stock market , the beginning of the Great Depression , and the end of a ten-year period of prosperity that exceeded anything the United States had ever known

On Black Thursday , October 24 , 1929 , the stock market (New York Stock

br Exchange ) fell 34 points , a 9 percent drop for the day . The trading volume was approximately three times the normal daily volume for the first nine months of the year . There was a selling panic . But the series of events leading to the crash actually started before that date

It is important that we more fully understand the causes of the 1929 stock market crash and correct some of the widely held misconceptions If stock prices were too high because of speculative buying , and the crash was inevitable , then the lesson to be preached is simple , if not easily executed . One should not invest in stocks if stock prices are too high . The conventional wisdom is that speculation was the cause of stock prices being too high . The common viewpoint was that the United States stock market was too high

But if the conventional view of history is not correct and if U .S stocks were not universally too high , then what did cause the great crash ? The stock market index hit a high of 386 in September 1929 , and by November it had dropped to 230 , a drop of 40 percent . By the time the crash was completed in 1932--and thanks to the oncoming of the real economic depression--stocks had lost in excess of 70 percent of their value . The results of the crash were devastating to individuals and to nations . The crash helped bring on the depression of the thirties and the depression helped to extend the period of low stock prices , thus "proving " that the prices had been too high

THE 1929 MARKET

The 1929 stock market , for many reasons , was like a large boulder on the top of a hill . Given enough pushes to get it started , the boulder will roll down the hill , accelerating as it goes . We want to consider why the market was in such a sensitive position and what factors acted to start its downward fall . We will find that there were many contributing factors leading up to the crash . Each of them is small taken individually , but together they helped create the right situation for the debacle

Even those observers who thought the market was too high were not d with the severity of the crash . Thus Keynes (Moggridge 1992 ,

br 480 ) in a letter to his wife Lydia (October 25 , 1929 ) wrote "Wall Street did have a go yesterday . The biggest crash ever recorded . I have been in a thoroughly...