October 29, 1929 (Black Tuesday) marked the greatest stock crash in American history and is considered the official beginning of the Great Depression, a financial disaster that would leave one quarter of the American workforce unemployed and spread joblessness to Europe as well. The Great Depression was also a contributing factor to causing World War II, as frustrated unemployed Italians and Germans put dictators in power in Italy and Germany.
In the decade leading up to Black Tuesday, the stock market did quite well, and people would often borrow money to buy stock with the intention of paying it back when the stock price increased. This is called buying on margin. When stock prices plummeted in 1929 and it appeared as though they would stay down, banks called in their loans, forcing many people to file bankruptcy. Banks were not required to have reserves of liquid capital and many had loaned money to buy stocks, meaning they had to close. Without federal banking insurance under FDIC, many people who never owned stock lost their life savings when their banks closed.