In early 1928 the Dow Jones Average went from a low of 191 to a high of 300 in December of 1928 and peaked at 381 in September of 1929. 1929…) It was anticipated that the increases in earnings and dividends would continue. (1929…) Price to earnings ratio’s rose from 10 to 12 to 20 and higher for the market’s favorite stocks. (1929…) Observers believed that stock market prices in the first 6 months of 1929 were high, while others saw them to be cheap. (1929…) On October 3rd, the Dow Jones Average began to drop, declining through out the week of October 14th. (1929…) On the night of Monday, October 21st, 1929, margin calls were heavy and Dutch and German calls came in to sell overnight for the Tuesday morning opening. (1929…) On Tuesday morning, out of town banks and corporations called in $150 million of call loans, and Wall Street was in a panic before the New York Stock Exchange opened. (1929…) On Thursday, October 24th, 1929, people began to sell their stocks as fast as they could., sell orders flooded market exchanges. (1929…) This day became known as Black Thursday. (Black Thursday…) On a normal day, only 750-800 members of the New York Stock Exchange started the exchange. (1929…) There were 1100 members on the floor for the m
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(1929…) This day the Dow Jones Average would close at 230. Although, the interest rate was reduced between March 1930 and September 1931, it was raised twice in late 1931. (1929…) Why People Invested in the Stock Market During 1929, people invested in the stock market for 5 major reasons. It is also unlikely that the crash of the market would have been large enough to lead the US economy into the depression and to sustain the downward spiral in business activity. (1929…) Government Regulations After the Crash Before the crash investors were not protected at all from fraud, hype and shoddy stocks. These kinds of statements encouraged investors to believe that the market would continue to be strong, which could be one of the causes of the crash. Investors has high expectations that they would receive large returns in a few months, so they could pay the balance and have money left over in return. The cause of the depression cannot be linked to one individual or even a group of people. (1929…) The Dow Jones Average closed at 299 that day. Investors began buying on ‘margin’ or buying stock on credit. (1929-1931) At one point in the crash tickers were 68 minutes behind.
Approximate Word count =
1268
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5 (250 words per page double spaced)
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