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Article: Stock Market Crash of 1929
- Article from:
- Gale Encyclopedia of U.S. Economic History
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STOCK MARKET CRASH OF 1929
During the 1920s increasing numbers of Americans became interested in Wall Street and in buying stocks. A prospective buyer did not have to pay the full price of a stock in order to buy. Instead the practice of "buying on margin" allowed a person to acquire stock by expending in cash as little as ten percent of the price of a stock. The balance was covered by a loan from a broker, who was advanced the money by his bank, which, in turn, accepted the stock as collateral for the loan. Credit was easy, and the Federal Reserve System did little to restrict the availability of money for stock investment.
But mindful of the run of the bull market and the practice of ...