Why did the stock market fall during the great depression?
The Stock Market crash was the signal that the Great Depression had begun. There was over speculation in the Stock Market, which was not regulated. Many Americans purchased stock on credit. This was known as margin buying. Many businesses that were listed on the Market were not checked out by brokers and many were not worth what they were valued at on the Stock Market. There were no government regulations so a company could claim whatever wealth it wanted. A lot of the companies only existed on paper and many who invested in the stock market did not check to make sure the company was legit. This was a period when everyone thought the Stock Market would continue to climb but beneath the surface of this false boom time were events that were causing the economy to crumble.
