During the 1920's shares value rose. Consumer spending was at an all-time high as peoples' incomes grew, and they bought new products like washing machines and vacuums or cars. October 30th, 1929, Wall Street crahsed. Investors stopped buying and began trying to sell. The selling spread as people panicked, fearing they better sell quickly or face having to sell later, when share prices were even lower. Companies values tumbled as investment dried up and people sought to get rid of their shares.
With no investment, companies ran out of cash and began to close or lay off workers. Businessmen lost their fortunes and the unemployment rate soared - in 1933 it stood at 25%.