The Stock Market Crash

The Stock Market Crash


There was an economic boom in the United States during the 1920’s. The decade was nicknamed “the Roaring 20’s” because of the prosperity of the era. Many Americans were rich or trying to get rich. Buying and selling stocks was one action that people participated in to gain wealth and power. Many Americans suffered when the ignored warning signs of the major economic crash in 1929 and continued with their reckless investing in the stock market. The stock market always had a reputation for being risky. During the 20’s some investors began to get rich. As more people began getting money from investing, more Americans started thinking it would be a good idea to be involved with the stock market. The price of stocks went up with the increased interest in the market. Soon, everyday people were talking about and investing in the market. The stock market became a fad that was spreading across the nation. The stock market kept getting more and more popular. Economist Irving Fisher stated, “Stock prices have reached what looks like a permanently high plateau” in the summer of 1929. September 3, 1929 the stock market reached its highest point. About two days later it started to drop again. Throughout September and into October the price of stocks frequently went up and down (Rosenberg). The stock market made sense in the beginning of the economic boom. For five years after the 1920-21 recession. the rise in stock prices was normal. Corporations were earning more so stocks naturally went up too. Soon the stock market became independent of the economy. Some stock prices went beyond reason. These special stocks were called “glamour stocks.” One of them was


the Radio Company of America, or RCA. Their price went from $2.50 in 1921 to $85.00 in 1927 (McDonnell 408). In 1928 and 1929 there were people who wanted to slow the market down. They believed it was out of control. The Federal Reserve System raised interest rates in an attempt to fix the...

Similar Essays