Great Depression and the Stock Market Essay

Decent Essays

In the 1920's, the economy of the United States dramatically increased. World War I had ended and leftover products, like steel, could now be sold to consumers. Big buisnesses, like General Motors, took over small companies, causing production to double. Inflation was non-existent and the unemployment rate was as low as it had ever been. The economy was booming, and it showed no sign of slowing down in 1929.
However, the United States was about to recieve a huge shock when the stock market suddenly took a turn for the worst and crashed, leading to the Great Depression. This crash would become a major event in U.S. history due to the disastrous effects that followed it. In 1923, Calvin Coolidge became president of the …show more content…

At the age of 25, he took over a carriage making company in Flint, Michigan. Under his leadership, the company prospered and Billy went onto buy the Buick Motor Company in 1904. He later added three more motor companies to it, Pontiac, Cadillac, and Oldsmobile, creating General Motors. After going into debt and having to sell General Motors in 1910, he started a new motor company called
Chevrolet, which success led to him regaining General Motors. Even though he went back into debt in
1920, Billy Durant made more profit from the stock market that anyone else in the decade. He sparked interest in stocks for Americans and was one factor leading to the economic boom. The whole idea behind the stock market is that money is needed to buy items like machines and builings, called capital. Corporations pay the capital by selling stocks, or parts of their company, to investors. The investors now share in the profit of the company and can exhange or buy more stocks in the stock market. In the 1920's, the major stock market was the Manhattan, New York Stock Exchange on Wall
Street. Stock investors would pay the membership fee, which rose as the stock market grew, and go to Wall
Street to buy and exchange stocks. The stock market grew so popular, it was featured on the front pages of newspapers, with news of people who had struck it rich at Wall Street. The "American Dream" became unrealistic, and was replaced by dreams of

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