The Black Tuesday

Essay by chinamike530High School, 10th grade December 2006

download word file, 7 pages 5.0

On "Black Tuesday," October 29, 1929, a total of sixteen million shares of stock were traded on the floor of the New York Stock Exchange. In the next few weeks, more than thirty billion dollars disappeared form the American economy, this event is the biggest stock market crash in American history known as the Great Crash. The Crash of 1929 ended many people's dream of becoming wealthy, and millionaires had become paupers overnight. Those people who believed in the strength of the American economy and invested their life savings had lost everything they had. The American economy has weakened and the unemployment skyrocketed, also the Great Depression had begun.

During the 1920s, people are highly confident in business field because of the benefits which post war has brought them. For those rich people they all had the common desire of making money, and for poor people they all had a common dream of becoming wealthy and living a standard life.

People believe that investment in stocks is a good way to "get-rich-quick" and it is a shortcut to achieve their dreams. Therefore, people took the high risk and invested everything they have buying stocks, they were expected of making high-risk investments in hopes of getting high gain. "Stock prices continued to rise during the summer of 1929, and many Americans believed anyone could get rich speculating in the stock market. Consequently, people from all walks of life continued to trade in the market despite efforts by the Federal Reserve Board to cub speculation (29 Gerdes)." In order to attract less-wealthy investors, stockbrokers encouraged a practice called buying on margins, which allows investors to purchase a stock for only a percentile of its price from ten percent to fifty percent depend on your income, and borrow the rest. As...