1929 Stock Market Crash

1929 Stock Market Crash

The great crash of 1929 threw the United States economy into a downward spiral. Companies went bankrupt, people lost everything, and the words, jobs and hiring was almost removed from American society. The stock market is a long-term investment, giving higher profits than any other investment class. One must consider bear markets. Bear markets are a recession or a low/bad time in the stock market. There are also bull markets, or a high/good time in the stock market. In 1929 investors were not prepared for a bear market and when it came they panicked. During the “roaring twenties” our country prospered tremendously. “The nation’s total realized value rose from $74.3 billion in 1923 to $89 billion in 1929.” This so-called “Coolidge prosperity” wasn’t shared by all Americans. Henry Ford at this time brought in $14 million dollars while the national average income was only $750 dollars. The cause for this large unequal distribution on wealth between the rich and middle class was because of production increases. As factory workers started producing more in the 1920’s factory owners cashed in, but still paid the works almost nothing. As the unequal amount of wealth between the rich and the middle class slowly began to make the economy unstable. Total demand must equal total supply for an economy to be stable. The supply and demands did not meet in the 1920’s, because of the growing wealth differences. More and more goods were produced but no one was buying them because the average American could not afford them. The economy came to depend on two tings to survive before 1929, credit sales, and luxury spending. Since most Americans did not have the money to purchase luxury items or items needed for survival the idea of buying now and paying later caught on very fast. An artificial demand arose from this type of credit and it only prolonged the inevitable crash. Social classes weren’t the only ones to see an economic dif…


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