Prevention of the Stock Market Crash

Topics: Wall Street Crash of 1929, Stock market, Stock market crash Pages: 2 (735 words) Published: December 1, 2013

Prevention of the Stock Market Crash

The end of World War I heralded a new era in the United States. It was an era of enthusiasm, confidence, and optimism (Rosenberg). It is in such times of optimism that people took their savings out from under their mattresses and out of banks and invested it in the stock market. With everyone’s money in the market, the 1929 stock market crash took a heavy toll on everyone. This crash was a shattering event that went on to shape this country. Even though the market crash was nearly a hundred years ago, its prevention is still heavily debated today (The First Measured Century). Many experts will state that nothing could have been done to prevent the crash. That it was inevitable. On the other hand, another group of experts disagree. I feel that if people's high speculation was controlled, banks planned better, or the stock market had regulations, then the horrible 1929 crash could have been prevented.

During the 1920's, high speculation ran wild among the American people. The stock market was a newer concept at this time and people didn't understand all of the niches in it (Colombo). Buying on margin was a perfect situation for the common man. The common man would pay 10% of however much he was planning on buying; the stockbroker would then come in and pay the difference (Stock Market Crash of 1929). This made the common man feel like he was playing in the big leagues with the big brokers of the time (Stock Market Crash of 1929). The catch was when the stock started to fall, the common man had to pay the broker for their losses. When the market turned for the worse in 1929, enormous numbers of people were now owing brokers money and were unable to pay off the debt (Stock Market Crash of 1929). Another problem that went with speculation during this time was people’s ideology on the stock market. People, not really knowing all the risks of the market, put all their money into it (The First Measured Century). Most...
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