How Did The Stock Market Crash Cause The Great Depression

During the 1920s, the United States Stock Market underwent rapid expansion, marking a decade of increasing conveniences for the general public and generating a nationwide attitude that positively transformed the American people. In contrast, this economic boom later precipitated a worldwide collapse of share values and triggered economic decline with catastrophic levels of unemployment, poverty, self-doubt, and bank failures. The far-reaching recession in the stock market led to a universal loss of confidence not only in many American families and entrepreneurs, but also contributed to large amounts of social pressures that numerous businesses and farms encountered as a nation. As a result, the Stock Market Crash of 1929 altered a generation not only through financial means, but also reversed America’s attitude that was prevalent during the 1920s – a thriving period of economic prosperity, social change, and mass production of technology, goods, and services.

Prior to this economic downturn, an era of optimism, opulence, and relative happiness classified as “The Roaring Twenties” created a potential future that

Paying shares were sold regardless of low prices. As a result, a tremendous smash caused the stock market to lose a high number of valuable points (“What Caused the Stock Market Crash…”). Five major factors can be considered for the market’s eventual collapse: a readjustment of prices to a lower level, unanswered margin calls, foreign liquidation on a massive scale, the development of apprehension among stock holders, and an impressive hammering at the market by bearish traders (Becoming Modern). In addition, a drop in stock values may be ascribed primarily to a loss of reliance on the market; thousands of ramifications to the market and numerous factors served to add to the market’s quota of pressure (“Stock Prices