Even as the economy faltered, Americans remained upbeat. Hoping for even bigger slices of the economic pie, Americans speculated wildly in the stock market on Wall Street. Between 1924 and 1929, the values of stocks listed on the New York Stock Exchange increased by more than 400 percent. Buying stocks on margin—that is, putting up only part of the money at the time of purchase—accelerated. Some people got rich this way, but those who bought on credit could finance their loans only if their stocks increased in value. A Yale economist assured doubters that stock prices had reached “a permanently high plateau.” Former president Calvin Coolidge declared that, at current prices, stocks were a bargain. But President Hoover observed, “The only trouble with capitalism is capitalists. They’re too damned greedy.”

Finally, in the autumn of 1929, the market hesitated. Investors nervously began to sell their overvalued stocks. The dip quickly became a panic on October 24, the day that came to be known as Black Thursday. More panic selling came on Black Tuesday, October 29, the day the market suffered a greater fall than ever before. In the next six months, the stock market lost six-sevenths of its total value.

It was once thought that the crash alone caused the Great Depression. It did not. In 1929, the national and international economies were already riddled with severe problems. But the dramatic losses in the stock market crash and the fear of risking what was left acted as a great brake on economic activity. The collapse on Wall Street shattered the New Era’s confidence that America would enjoy perpetually expanding prosperity.