Question

What caused the October 1929 stock market crash?

Answer 1

The Wall Street Crash of 1929 was the greatest stock market crash in the history of the United States. It happened in the New York Stock Exchange on Tuesday October 29, 1929, now known as Black Tuesday. The crash started the Great Depression and stock prices did not reach the same level until late 1954.

Answer 2

The correct answer is falling stocks purchased on credit.

During the 1920's, citizens were able to buy stocks on credit.This meant that they could pay a small percentage down (10%) and receive a loan for the other 90% from the bank. This worked well throughout the 1920's, as stocks continually climbed in price. However, when stock prices started to fall this helped lead to the collapse of the entire stock market. Citizens could not pay back their loans to banks and banks lost money the invested in the stock market as well.