Question

Why did the stock market crash in 1929?

Answer 1

http://history1900s.about.com/od/1920s/a/stockcrash1929.htm
See if this helps.

Answer 2

The Stock Market Crash of 1929 devastated the economy and was a key factor in beginning the Great Depression. The end of World War I heralded a new era in the United States. It was an era of enthusiasm, confidence, and optimism. A time when inventions such as the airplane and radio made anything seem possible. A time when 19th century morals were set aside and flappers became the model of the new woman. A time when Prohibition renewed confidence in the productivity of the common man. It is in such times of optimism that people take their savings out from under their mattresses and out of banks and invest it. In the 1920s, many invested in the stock market.

The Stock Market Boom

Although the stock market has the reputation of being a risky investment, it did not appear that way in the 1920s. With the mood of the country exuberant, the stock market seemed an infallible investment in the future.

As more people invested in the stock market, stock prices began to rise. This was first noticeable in 1925. Stock prices then bobbed up and down throughout 1925 and 1926, followed by a strong upward trend in 1927. The strong bull market (when prices are rising in the stock market) enticed even more people to invest. And by 1928, a stock market boom had begun.

The stock market boom changed the way investors viewed the stock market. No longer was the stock market for long-term investment. Rather, in 1928, the stock market had become a place where everyday people truly believed that they could become rich. Interest in the stock market reached a fevered pitch. Stocks had become the talk of every town. Discussions about stocks could be heard everywhere, from parties to barber shops. As newspapers reported stories of ordinary people - like chauffeurs, maids, and teachers - making millions off the stock market, the fervor to buy stocks grew exponentially.

Although an increasing number of people wanted to buy stocks, not everyone had the money to do so.

Answer 3

The short and dirty explanation is that there was too much speculation on the market. Many thought it would keep going higher and higher, but when a mini-crash occurred, people began to panic. A series of other factors caused many other investors to flee the markets, selling their stock, and destroying the value that they had crashing the system.