But the stock market crash was nothing to laugh about. It destroyed much of the money that Americans had saved. Even worse, it caused millions of people to worry and lose faith in the economy. They were not sure what to expect tomorrow. Business owners would not spend money for new factories or business operations. Instead, they decided to wait and see what would happen.

This reduced production and caused more workers to lose their jobs. Fewer workers meant fewer people with money to buy goods. And fewer people buying goods meant less need for factories to produce. So it went. In short, economic disaster.

FAITH LAPIDUS: Why did the stock market crash? One reason, people had been paying too much for stocks. Everyone believed that prices would go higher and higher forever. People paid more for stocks than the stocks were worth. They hoped to sell the stocks at even higher prices.

It was like a children's balloon that expands with air, blowing bigger and bigger until it bursts.

But there were other important reasons. Industrial profits were too high and wages too low. Five percent of the population owned one-third of all personal income. The average worker simply did not have enough money to buy enough of all the new goods that factories were producing. Another problem was that companies were not investing enough money in new factories and supplies.

There were also problems with the rules of the stock market itself. People were allowed to buy stocks when they did not have the money to do so.