The Stock Market Crash of the 1930's.
In the 1920's many people invested in the stock market. The stock market is how companies raise money to grow larger. It sells shares of stock, a piece of the company. A person who buys the share is buying a part of that company. The people holding shares can make profit if the company makes money or loss money if the company does not do well. Many people borrowed money from loan companies to buy stocks, in the early 20's the prices of most socks went up and up.
When the soldiers returned to the United States after World War 1. They found more money available and new products to spend it on. Things such as cars, record players, appliances such as washing machines and refrigerators, canned food, ready made clothes, movies and radios. Others began investing in the stock market. In 1920 Warren G. Harding was elected president. His campaign saying was "return to normalcy" after the war. Congress voted in a tax on good from foreign countries. Coolidge would do nothing to control how the money was being spent by business. People openly broke the law, judges were and police became corrupt because they took bribes from people. Other changes were many chain stores grew, women began wearing short dresses and smoking cigarettes in public, sports became popular and people enjoyed silly entertainment.
In the late 1920's problems began to show. American companies were making more goods that American buyer wanted. Employees were laid off. As people lost their jobs they were not able to pay their debts. They could not pay back the loan companies. Many were forced to sell their homes and farms. The people who had stock tried to sell them. A panic set in. Soon everyone wanted to sell their stock at the same time. On October 29, 1929 the stock market hit its lowest point. .
Another season for the crash of the stock market was that banks were investing their money in the stock market.
