The stock market crash of 1929 and the preceding depression are undoubtedly the most economically memorable events of the 20th century. Although there are many different theories as to who or what caused the crash, author John Kenneth Galbraith impressively backs up his theories through his novel The Great Crash: 1929. He points out that the five key reasons for this disaster were bad distribution of income, bad corporate structure, bad banking structure, questionable foreign loans, and weak economic intelligence.
             On December 4, 1928, in his State of the Union Address, President Coolidge talked about the economic success of the country. "There was much good about the world of which Coolidge spoke... The rich were getting richer much faster than the poor were getting less poor. " According to Galbraith, there was a high employment rate as well as production. "Wages were not going up much, but prices were still stable. " People had high hopes that everything was going to get even better because of the success in the market. The Idea of getting rich quickly without having to do much rapidly caught on, causing the market to sky rocket. Often times, people would buy stock on margin. This is when the buyer is loaned a portion of the investment price (up to half of the total price) hoping that the stock will go up. Eventually investors would have to pay off their debt, but if the stock rose then the investor would have nothing to worry about. Because of this, there was a lot of "fake money" circulating through the market not backed up by the US gold standard. By buying on margin, the buyer gets full right to the stock but avoids the risks and "burdens" of ownership.
             By October of 1929, the stock market was at its climax, and was headed for a downward slope. Everyone started selling their stocks, but no one was buying them. The market continued to worsen through 1932.
             In 1929, "the five percent of the population with the h...