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How Did Black Tuesday Lead To The Great Depression

1500 Words6 Pages

How would it feel to lose all of your money overnight? Many people had the get rich get quick mindset. Many inexperienced investors flooded the market seeking fortune. This led to people investing all/ or most of their money into the stock market expecting a profit. Black Tuesday was the leading cause that lead to the Great Depression in the late 1920’s.

In the early 1900’s the stock market was a great way for people to make educated decisions to invest in companies.
“The stock market is specifically designed to facilitate the purchases and sale of certain goods. Instead of selling food, and supplies, the stock market provides a venue for trade in companies, ventures, and other investments through the buying and selling, bonds, mutual funds, …show more content…

This is a great way for businesses to receive investments to expand their companies. When the stocks rose to an all time high people began to sell. The value of the stocks went down, and people began to panic, so they sold their stocks quick. This caused the stocks to continue down. Companies tried to persuade the public not to sell, but to instead buy. This tactic worked temporarily, but later stock values continued to drop. The stock market crash of 1929 eventually led to the cause of the Great …show more content…

Many educated businessmen saw the crash coming, and the public did not listen to the warnings.
Lastly, when work began dropping off, stocks oddly continued to rise. This caused an unstable share price, and when people began to sell, everyone panicked to sell what stocks they had.
A mix of new inexperienced investors in the market, and a decreasing industrial production led to the downfall of the New York stock exchange.

What if the stock market crash of 1929 was stopped? Some people knew that the stock market was going to crash, and tried to warn the public, but to no avail.
“As early as March 1929 a few financial experts warned that banks were making too many loans for stock speculation (the buying and selling of stock without regard for its actual value or the strength of the individual company).("Causes of the Great Depression.")”
Firstly, banks were focusing on making a profit with the new interest in buying and selling stocks. They gave people loans to make these investments, and expected the money back in return with the addition of interest.
Additionally, banks tried to get in on the money that the stock market brought. After the stock market crash, people could no longer repay the bank for the money they

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