There is a famous photo of a worried crowd standing in front of the Subtreasury Building on October 29, 1929. The people were cognizant of the significance of the crash and apprehensive about their future prospects. Frightful as they were, few could have predicted the severity or duration of the imminent depression. America had had severe economic collapses before—such as that of 1893—but this one would be unprecedented.
The economy had overheated from too much growth fueled by speculation. For example, there was a boom-and-bust in the Florida real estate market in the mid-twenties. But that was tame compared to the speculative frenzy on Wall Street. Many people bought stocks "on margin," which was a kind of credit. It was an unsound practice based on the illusion that the market would continue its climb. By the time of the crash, the market did not reflect the sluggishness that already existed in construction and consumer spending.
Historian Howard Zinn believed the income inequality contributed to the economic collapse. Too much wealth—much of it derived from frenzied growth in the price of stocks—was concentrated at the very top. Ninety percent of the population did not own any stock. (Some financial analysts say the same things about the country in 2020.)
The panic on Wall Street caused mass unemployment, and the government response was ineffective. President Herbert Hoover did not do enough to help the suffering American people.