The stock market crash of 1929, also known as the Great Crash, was the most devastating stock market crash in the history of the United States, taking into account both the extent of the decline and the length of the resulting bear market.
The crash began in September 1929, and it was caused by a combination of factors, including economic downturns in other countries, overvaluation of stocks, and a lack of regulation in the stock market. Many investors had bought stocks on margin, meaning they had borrowed money to purchase shares and were now facing margin calls as the market began to decline.
As stocks began to fall, investors panicked and began selling their shares in large numbers. This caused a self-perpetuating downward spiral, as the selling led to even lower stock prices, which in turn led to more selling.
The stock market crash of 1929 was a major contributor to the Great Depression, which lasted from 1929 to 1939 and was characterized by high unemployment, widespread poverty, and a decline in industrial production.
The United States government attempted to intervene in the economy through a number of policies, including the Emergency Banking Act and the National Industrial Recovery Act, but these efforts ultimately failed to bring about a recovery. It was not until the United States entered World War II in 1941 that the country finally emerged from the Great Depression.
The US Government intervened by creating the Securities and Exchange Commission (SEC) to regulate the stock market and protect investors. The stock market was not fully restored until 1954.
The Great Crash had a significant impact on the country and the world economy and it has become a symbol of the dangers of speculation and the need for government regulation. It is a reminder of the importance of economic stability and the need for sound economic policies to prevent future financial crises.