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Samuel Zhang

Ms. Heinle

English 2

15 April 2024

Securities

In the thrilling world of finance, the stock market acts as a stage where fortunes rise and

fall in the blink of an eye, reflecting the uncertainty that grips us all. The stock market crashed in

1929, and while the market was crashing, many people, in fear, rushed to sell their stocks which

led to further economic chaos. Mass hysteria is when a large number of people react to fear in

ways that are irrational. This shared fear then affects the group, leading them to think and behave

irrationally. This was evident in the stock market crash of 1929, which was driven by fear.

Similarly, the Salem witch trials were also an event caused by mass hysteria. The witch trials

were started by teenage girls who had to act crazy and accuse others of witchery in fear of

getting in trouble. The Crucible was written by Arthur Miller, about the Salem witch trials. It

serves as an allegory for the Red Scare and McCarthyism of the 1950s. Its purpose was to show

the similarities between the Salem witch trials and the red scare, and to warn others of what mass

hysteria is capable of doing. Human nature plays a significant role in mass hysteria. When

people get scared or unsure about something, they often look to others for guidance. This can

make everyone in the group act the same way, even if it's not the smartest thing to do. It can

make people do things they wouldn't normally do because they're caught up in the moment. Mass

hysteria as seen in the Salem witch trials and the stock market crash of 1929 inflicted many

troubles such as societal pressures, concerning economic practices, and the split of numerous

families.
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During the unpredicted market crash, people started to panic sell their leveraged equity

positions in fear of continued loss, which caused severe damage to the economy. During the

years running up to 1929, the stock market returned over 120 percent. This incredible return

attracted hundreds of thousands of investors thinking that it would be a way to make “easy

money”. Investors were so confident that the markets would continue to go up, that they either

took loans out or used their house as collateral to buy more stock. In the case that the market did

crash, tens of thousands of Americans would lose everything. Gale, a global provider of research

and digital learning resources, explains the concerning economic practices that were being

implemented leading up to the crash, “they began "buying on margin", which involved making

riskier investments without cash reserves to protect against any potential loss.” (“Stock Market

Crash of 1929”). Gale explains just one of the many concerning economic practices going on

during that time. Buying on margin is risky because it can potentially make your account go into

the negatives. Since so many investors were careless and had no hedge or protection, if the

market did crash, it would wipe out the accounts of tens of thousands of Americans clean.

Investors were blinded by greed which costed them a fortune. Furthermore, in the article, The

Stock Market Crash of 1929, the author explains the impact of the crash and what it had on

society, “There were, however, ripple effects of this sharp economic downturn, which quickly

extended into rural areas and worsened an already dangerous situation there.” (Lange). The stock

market crashed over 12 percent which caused thousands of investors that were buying on margin

to lose most of their capital. The effects of the stock market crash were significant, which is why

it is important to understand the causes.

Societal pressures greatly impacted the extent of the stock market crash. Back when the

markets were making new highs, investors experienced something called “FOMO”, or fear of
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missing out. When they saw others making tons of money off the stock market, they wanted in

so they put tons of money in the markets without doing proper research. Another cause of the

stock market crash was over speculation. People were so convicted that the stock market would

go up, that they started to take out loans. The amount of people over speculating was so

tremendous that, “if the over speculation was not stopped, the stock market would collapse,

generating a national depression.” (Burg). Burg explains the true magnitude of overspeculation

that fomo has created. Investors’ conviction that the stock market would continue to increase that

would eventually lead to their downfall. Although overspeculating played a part in the crash,

there was another vital factor that really fueled the sell off in the market. Burg stated that,

“government officials' comments about speculation created unease and may have caused many

investors to withdraw funds from the market, triggering declines in stock prices” (Burg). Even

though there was optimism that the stock market would recover during the first wave of the sell

off, the official’s comments caused dormant fears to be unleashed. This contributed majorly to

the severity of the crash. By looking at the stock market crash and how mass hysteria contributed

to it, we can connect it to other instances where mass hysteria played a significant role in

historical events.

The market crash of 1929 and The Crucible are deeply intertwined. Fear relates both

events together. In "The Crucible," fear led to irrational accusations of witchcraft and the

breakdown of trust within the community. Similarly, fear played a significant role in the stock

market crash, since investors in fear of greater losses, panicked and sold their stocks, which

worsened the economic downturn. This shared element of fear demonstrates its profound impact

on human behavior and its ability to escalate conflicts into mass hysteria. This loss of confidence

reflects the fear that gripped society during the stock market crash, mirroring the atmosphere of
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distrust and suspicion in The Crucible. In The Crucible, Reverend Hale exclaims, "The Devil is

precise; the marks of his presence are definite as stone" (1.1.753-4). This quote reflects the

atmosphere of fear and paranoia in Salem, where anything different from societal norms is

immediately attributed to supernatural forces. Reverend Hale highlights the irrationality and

hysteria that grip the community, as individuals become consumed by the fear of unseen threats

and perceived malevolence. This fear of the unknown contributes to the escalating tensions and

accusations of witchcraft that tore the community apart. The same fear can also be seen in the

market crash. Lange reported that, “But even highly respected economists, businessmen, and

bankers were caught up in a frenzy of speculation in stocks, and ignored some subtle clues.”

(Lange). In both events, everyone faced the repercussions, whether accused of witchcraft or

experienced financial losses, regardless of their social status or job. Mass hysteria can have great

effects if not identified and solved.

Mass hysteria as seen in the Salem witch trials and the stock market crash of 1929

inflicted many troubles such as the split of numerous families, concerning economic practices,

and societal pressures. The societal pressures during times of crisis can lead individuals to act

irrationally, exacerbating the effects of mass hysteria. Additionally, concerning economic

practices such as speculative trading contribute greatly to the destabilization of financial markets.

Furthermore, the splitting of families as observed in both historical contexts, highlights the

personal toll of mass hysteria, causing emotional and social distress. As long as people continue

to experience fear and uncertainty, events related to mass hysteria will keep happening.
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Works Cited

Burg, David. “Fateful Year on Wall Street: 1929.” Great Depression, Facts On File, 2005.

American History,

online.infobase.com/Auth/Index?aid=17212&itemid=WE52&articleId=209351.

Accessed 18 March 2024.

Lange, Brenda. “The Stock Market Crash of 1929.” The Stock Market Crash of 1929, Updated

Edition, Chelsea House, 2017. American History,

online.infobase.com/HRC/LearningCenter/Details/2?articleId=358550. Accessed 18

March 2024.

Miller, Arthur. The Crucible. Penguin Publishing Group, 2003.

“Stock Market Crash of 1929.” Gale U.S. History Online Collection, Gale, 2022,

https://go.gale.com/ps/retrieve.do?resultListType=RELATED_DOCUMENT&searchTyp

e=ts&userGroupName=bell43390&inPS=true&contentSegment=&prodId=UHIC&docId

=GALE%7CYHUTWY359380826&it=r. Accessed 13 March 2024.