Stock Market Crash



SMC.png
Panicked New Yorkers flood Wall Street, home of the New York Stock Exchange, on Oct 29, 1929. People wanted to sell their stocks and take profits before prices dropped further.






During the Roaring Twenties, the stock prices of successful companies rose. A stock market index, the Dow Jones Industrial Average, increased over six fold from Aug, 1921 to Sept, 1929. Nevertheless, in the summer of 1929, the economy was contracting and the stock market prices declined.[1] Many individuals who invested in the stock market began selling their stocks to make profits, further dropping the prices.[3] On Nov 13, 1929, having dropped by 48%, the Dow closed at 198.60.[2] The stock market crash was an important event because it signaled a flaw in the laissez-faire economic system. The stock market crash was, directly and indirectly, a result of lacking government intervention in the economy – a principle that is in favor of classical liberalism.






Reference

1. "Measures to Minimize Market Disruption." Risk Institute. N.p., n.d. Web. 18 Mar. 2012. <http://riskinstitute.ch/135000.htm>.
2. "Timeline: The Crash of 1929. American Experience. WGBH | PBS." PBS: Public Broadcasting Service. N.p., n.d. Web. 18 Mar. 2012. <http://www.pbs.org/wgbh/americanexperience/features/timeline/crash/2/>.
3. "Evolution of Modern Liberalism." Perspectives on ideology. Edmonton, Alta.: Alberta Education, 2010. 205-206. Print.