It has generally been established that the stock market crash in October 1929 was the beginning, and even the cause, of the Great Depression. ... When the stock market crashed, some banks made the crisis worse by calling in loans that borrowers were unable to pay. ... Another explanation for the Great Depression points to movements in the stock of money3. The Federal Reserve was concerned about the rising speculation on the Stock Exchange, fearing that a stock market crash would destabilize the economy. ... Therefore, funds that had formerly gone overseas now went into the market. ...

• Word Count: 1109
• Approx Pages: 4
• Grade Level: Undergraduate

The Great Depression Starting in the summer of 1929 and continuing over the course of the next four years, financial markets, labor markets, and goods markets all virtually ceased to function. ... Herbert Hoover, who had just been elected President, backed this idea and together they set out to bring down the stock market. In an attempt to bring down equity prices the Federal Reserve sought to keep banks from extending loans that would be used to buy stock money. ... Even after the near crash on March 26, 1929 the Federal Reserve policy continued to suffocate the market by restricting ...

• Word Count: 1299
• Approx Pages: 5
• Has Bibliography
• Grade Level: Undergraduate

Stock prices had risen more than fourfold from the low in 1921 to the peak reached in 1929. From 1928 - 1929, the Federal Reserve had raised interest rates in hopes of slowing the rapid rise in stock prices. ... By the fall of 1929, U.S. stock prices had reached levels that could not be justified by reasonable anticipations of future earnings. As a result, when a variety of minor events led to gradual price declines in October 1929, investors lost confidence and the stock market bubble burst. ... The stock market crash reduced American aggregate demand significantly. ...

• Word Count: 1664
• Approx Pages: 7
• Has Bibliography
• Grade Level: Undergraduate