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The Roaring Twenties

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According to the S&P Dow Jones Indices, the Dow Jones industrial average increased from 914 to 5423 during the Roaring Twenties. The explosive expansion of U.S. industries caused prosperity of the stock market. The rising share prices encouraged hundreds of thousands of people, who were unprofessional, to invest heavily in New York Stock Exchange. In 1920s, when investors bought a huge amount of stock, they could only pay 10% by themselves and borrow the rest from their brokers. Before the stock market crashed, more than two-thirds of the face value of the stocks was borrowed from brokers. However, when the boom of American economy ended, the share price went down rapidly and the brokers called in the loans. Most of small investors withdraw

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