In the 1920's, new technology and growing opportunities made many people of the 1920's optimistic about the future. There were huge surges of population growth in northern cities, more people had more money than any other time previously, and a sense of national pride became part of the American zeitgeist. This led to an increase in investment as huge economic growth made it easy for even the everyday citizen to get interested in wall street.
With the stock market doing so well, it almost became inevitable that at some point big stock holders might want to secure the fortunes they have amassed. Also in relation to lots of other factors, major tycoons started to sell their stocks and this selling resulted in many others starting to do the same as prices dip and the stock market goes down. Eventually, the large amount of people selling and trying to get out compared to those willing to invest now as things were on a downward trend led to a huge stock market crash. This turn from the beginning of the 1920's marked the change from economic prosperity and optimism to the start of the Great Depression that would plague the country for the next decade.
Corinne McCabe
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ReplyDeleteIn addition to the stock market crash that you explained in your post, bank failures caused by risky loans and investments, underconsumption caused by debt, loss of jobs caused by overproduction, high tariffs caused by the Hawley-Smoot Tariff Act, and high interest rates caused by the Federal Reserve were factors that led to the Great Depression.
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