The stock market crash of 1929, also known as the Great Crash, was a major American stock market crash that occurred in the autumn of 1929. The crash was preceded by a period of phenomenal growth and speculative expansion, which led to a glut of supply and dissipating demand, and helped lead to the economic downturn as producers could no longer readily sell their products. The crash was caused by many factors, including overinflated shares, growing bank loans, agricultural overproduction, panic selling, stocks purchased on margin, higher interest rates, and a negative media industry. Additionally, billions of dollars were drawn from the banks into Wall Street for brokers’ loans to carry margin accounts, and people sold their Liberty Bonds and mortgaged their homes to pour their cash into the stock market. The period of rampant speculation, where people bought stocks on margin, not only lost the value of their investment, but they also owed money to the entities that had granted the loans for the stock purchases. The Federal Reserve also tightened credit by raising the discount rate from 5 percent to 6 percent in August 1929.

Historians still debate whether the 1929 crash sparked the Great Depression or if it merely coincided with bursting a loose credit-inspired economic bubble. However, the stock market crash of October 1929 led directly to the Great Depression in Europe, and when stocks plummeted on the New York Stock Exchange, the world noticed immediately.