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Information In the 1920s things were really rocking in the US and around the world The rapid increase in industrialization was fueling growth in the economy and technology improvements had the leading economists believing that the up rise would continue During this boom period wages increased along with consumer spending and stock prices began to rise as well Billions of dollars were invested in the stock market as people began speculating on the rising stock prices and buying on margin The enormous amount of unsecured consumer debt created by this speculation left the stock market essentially off-balance Many investors caught up in the race to make a killing invested their life savings mortgaged their homes and cashed in safer investments such as treasury bonds and bank accounts As the prices continued to rise some economic analysts began to warn of an impending correction but the leading pundits largely ignored them Many banks eager to increase their profits began speculating dangerously with their investments as well Finally in October 1929 the buying craze began to dwindle and was followed by an even wilder selling craze The Great Depression was the worst economic slump ever in US history and one which spread to virtually the entire industrialized world The sock market crash was the start of an economical downturn Numerous people bought their stocks on margin They also purchased stock with borrowed money When there was a drop in the stock market some panicked and sold their stocks for much less then they were originally worth When people bought their stocks on margin they only had to pay 10 The stock became worthless and people went in to debt because they had no money to the banks Consequently industries such a farming mining textiles and construction to have financial problems Therefore businesses were not able to pay their debts hundreds of banks failed Many depositors withdrew their money savings millions of people lost their
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