What was the long term cause of people who were in deep debt from buying stocks on margin throughout the 1920s were then unable
to walk away from the stock market because they needed a big payoff to cover their debts. This led to the Crash because people continued to play the stock market throughout the 1920s without
putting enough cash into it to create real value.
During the mid- to late 1920s, the stock market in the United States underwent rapid expansion. It continued for the first six months following President Herbert Hoover’s inauguration in January 1929. The prices of stocks soared to fantastic heights in the great “Hoover bull market,” and the public, from banking and industrial magnates to chauffeurs and cooks, rushed to brokers to invest their liquid assets or their savings in securities, which they could sell at a profit. Billions of dollars were drawn from the banks into Wall Street for brokers’ loans to carry margin accounts.
