During the 1920s, the stock market was transformed from a playground for the wealthy into common fodder for America. Fueled by the increasingly common belief that Wall Street offered a sure road to prosperity, more and more people devoted their attention, and pocketbooks, to the markets.
America's burgeoning media industry encouraged this trend: Ladies Home Journal declared that "Everybody Ought to be Rich" and counseled its readers to funnel $15 a month into common stock.
But, rather than set aside cash for investments, many Americans simply borrowed money to fund their dreams of getting rich. The nation's newfound faith in the markets was built on a mountain of margin trades and tenuous loans.
Though it wasn't readily evident at the time, disaster was in the offing. Banking officials made a few precautionary moves in hopes of stemming the credit frenzy and, on this day in 1932, the Federal Reserve announced a ban on bank loans for margin trades.
However, the move couldn't prevent the inevitable. In the fall of 1929, the markets suffered their famous crash, badly shaking the nation's faith in Wall Street.
Source: History.com
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