In the late 1920's the United States was the richest country in the world. After World War I, the rest of the world was largely in debt to U.S. banks. The Brits, French, and even the Germans owed us. I'm talking about billions of dollars. So, basically what we have here is pretty much everyone in America was profiting from it. One brand new thing that people were starting to use was credit! With credit you could buy something now and pay it off later. People began to buy things they couldn't before, such as cars and radios. Henry Ford made it easier when he began production on a cheap vehicle called the Model T. Paying with credit became a large part of our culture. So, when the stock market finally crashed people were largely already in debt.
During this time, the stock market was becoming a large gambling game that supposedly made everyone rich. Even the president bought stocks. When people did, a popular method called buying on margin was used. It's when someone would buy a stock and 90% of it would be bought with a bank loan. Since it seemed like the market was only on the up-and-up they would be selling for double the price they bought it from. When the crash it, people lost thousands.
That's all I can remember for right now, I'll add if anything pops to mind. Cheers!
