Comparing The Stock Market Crash Of 1929 And The Great Depression

The impact of the Stock Market Crash of 1929 and the Great Depression had an enormous effect on the economy and took a large toll on the people, as arguably the worst times this country has ever suffered through based on the widespread levels of poverty and death that occurred. The largest factor in the beginning of the Great Depression was the Stock Market Crash, but how did the crash ever take place to begin with? In the 1920’s also known as the Roaring Twenties, life was good, the U.S. was, “...nearer to the final triumph over poverty than ever before in the history of the land. The poorhouse is vanishing from among us.” said President Herbert Hoover. Many new inventions had come out and companies were bringing in money fast. What companies and people did not realize, however; was that once a large number of people had their products, less people would need them, and the demand would go down. Many companies kept producing lots of products, but eventually not as many were needed, making them worth less, and the value would soon start to go down. …show more content…
Stocks were rising to very high prices, in fact, too high prices. The price tags on stocks of some companies was becoming unrealistic. People were no longer paying attention to what their company sold, or many other important details, and began to buy carelessly and invest in companies that, upon further inspection, may have looked at as spurious, and not worth what some said. People also began to make these purchases with money they borrowed from the banks. The idea was that they could later pay the banks back with the money they