What Caused The Stock Market Crash In The 1930's

The Stock Market Crash was the one of the most substantial events to happen in America during the 1930’s and in all of American History. “The Great Crash”, as it is called by many, changed the way American stock market was run and the American way of life. This pushed new rules and regulations to be put into place that we could not do without today. The Stock Market crashed eighty percent in less than two weeks, leaving most stocks worth nearly nothing of what they used to be worth. The stocks fell because they were worth so much that everyone decided to sell out and make back more money than they originally put into the market. The people who decided to wait and see where their investments would go in a few months or years, lost virtually all of their money in a matter of weeks. They lost all that they had invested their lives savings in, those stocks only had twenty percent of what they previously had. The banks pumped the money that the people were depositing straight back into the market without any protection in case the market had its falling out. This caused a massive inflation into the
market causing even more people to sell their shares. The unregulated price and sell rate caused a collapse when everyone wanted to sell out their stocks. This great stock market crash helped banks see that they need to be more careful on their spending and their saving. The crash helped the bank insurance agency get established and prepared. The FDIC (Federal Deposit Insurance Agency) was put in place to protect the Americans hard earned money from any crashes or financial crises. The banks are now regulated on how much money that can spend and loan out at one time and place. This is the agency that helped protector America for many years and helped us stay afloat for many years. This agency not only helped protect Americans, but the FDIC also provided 1,400 jobs during the thirties and over 7,000 jobs today (FDIC).
The protections that we now have in all of our markets are in place because of this “Great Crash”. There was no cap on how much you could sell at one time. It would be like a restaurant selling a dish to eight people when they knew they only had four dishes left of food. These people were lying to the people, and telling their clients that no matter what that they would make big money back (Jeffries). When the crash started the people wanted all of their money back at one time, which they could not get. Today there is a limit on how much money you can take out at one time, they will make you put in an order and process that over a time. The companies after The Crash are more careful on how many share of their companies actually sell and let people buy at one time and place. People were losing their whole life.
Poverty affected millions of Americans after the first few weeks of the crash and for the next decade. Many Americans lost everything they owned and had no source of income. An abundance of Americans lost their houses and essentially their whole life and life style, some even lost their families. People started killing themselves because they had lost all of their money and their houses in the market (Galbraith. Stock.). People just like today would buy the house of their dreams and take a loan but when they could not pay the bank back they were forced to foreclose. All of a sudden people could not pay to go to the doctor and they would die of diseases they could not pay to take care of themselves. The stock market crash in its entirety was one of the main causes for the Great Depression.
The one percent of people in the upper classes pay was 650% greater than the eleven percent of the people in the lower to mid-lower classes pay (Arensen). In their time much like our own there was a one percent, but their one percent lost all of their money too. The one percent of the people who fueled all of the small businesses in America ran out of money. This pushed the small business out of business and caused the people to run out of money. Imagine all of the small business in your town closing. The prices of all goods and services would run through the roof and make everything unbelievably expensive. Today the market of goods is protected from the raising of the prices. Through the thirties these laws and regulations were being written and put together to protect
America. The Market Crash of 1929 was one of the most substantial events to ever happen in America. This event shaped America into the country and the super power that it is today.