The stock market
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During the 1920s, the stock market became the focus of popular interest. Along with Prohibition and baseball, it was the subject of conversation at private meetings throughout the nation. To many, it seemed a perfect reflection of a new industrial America--especially to investors who spent much of their spare time following the market and who were able to buy stock on margin, or credit, for as little as 10 percent in cash. About one-third of the nation's more than three million stockholders were playing the market on margin, and people at dinner parties kept telling stories about average working class people who had kept a close watch on the market, bought on margin, and became millionaires (Friedrich 54). To others in the country, the stock market was a symbol of the dangerous frivolity of the time. Neither was true. Instead, the great bull market, the increased public interest, and the use of credit and leverage, appeared to fit the people's demands for a larger share in the progress made during the decade. That there were abuses and distortions cannot be denied, but neither can one conclude that the bull market should not have taken place, or that investor enthusiasm was unjustified (Sobel 155). It took the market 25 years to recover from the Great Crash of October 29, 1929, when it dropped an unprecedented 12% in a single day (Dreman 214). In 1929, the economy and corporate earning power were disintegrating in the face of the rapidly approaching Great Depressi
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ng forced Britain to go off gold and let the pound sink--but also to go out of the international bailout business. From then on countries that could not meet their debt service charges simply defaulted, and the slump turned into a decade of deflation and depression (Bladen 357).
The Great Crash was preceded by stock prices plunging following months of frenzied purchases. However, they rebounded in 1930 (Pennar 57). What many people did not notice before the crash was that while the leading stocks kept climbing, many others did not. Celanese, for example, had dropped from 118 to 66 since 1927, Philip Morris from 41 to 12. The speculators also did not seem to notice that the allegedly sound economy had started slowing. By October of 1929, the Federal Reserve index of industrial production had dropped from 126 to 117 since June of that year. Home building had been declining for several years, and farming had been in trouble since the early 1920s (Friedrich 55).
As 1929 came to a close, President Hoover promised a tax cut, recommended public works, called a series of conferences with business leaders, and declared that the country had now re-established confidence (Friedrich 55). Of course, his prediction did not come true.
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Some common words found in the essay are:
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Approximate Word count = 1681
Approximate Pages = 7 (250 words per page)
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