y became the central financial center of the United States. After that the New York Stock Exchange became the number one trading center. The reason for this being that its members focused on buying securities of larger corporations. At that time all the smaller stocks of smaller companies were handled on the streets of downtown New York City. In 1908 these brokers formed the New York Curb Agency which is now known as the American Stock Exchange. It was renamed to this in 1953. During the 1920’s millions of Americans began investing in stocks for the first time. They heard about how rich people were getting by investing so they all decided to do it. Many new investors entered the stock market using borrowed money. Stock market prices rose steadily as inflated market demand outpaced increases in the capital value of businesses. Investors began to realize that a large imbalance existed between stock prices and the amount of money needed to back them up, and began to sell. On October 29, 1929, great numbers of people tried to sell their stocks all at once. This created chaos in the accounting of stocks and for brokers. The New York Stock Exchange and other exchanges prices dropped so dramatically that this event became known as the crash of 1929. Millions of investors lost their savings in the crash and many were deeply in debt since they could not repay the money that they had borrowed from banks to buy the stocks. During the following years of the crash, most investors refused to put money into stocks. They were in fear of another crash and losing their money. Without exchanges and companies making money, many businesses failed and others needed to lay off workers because they could not afford to pay them. The lack of investment was one of the main causes of the Great Depression of the 1930’s , which was an economical crisis which left millions out of work and led to widespread poverty all throughout the United States. This la...
