It is in such times of optimism that people take their savings out from under their mattresses and out of banks and invest it. In the 1920s, many invested in the stock market.
I think the main reason for the stock market crash was because the 1920s were years of such freedom and lashing out, people had no care to think about what they were doing. Credit was a new concept, so many had no idea how it worked. It was the new, cool thing to participate in. The 1920s was also a time period where many wanted to prove their abilities with their looks. Looking nice came from having money. So, when people were given the opportunity to buy stuff without having the money first hand, they went crazy. They were not thinking realistically, and I think that is one of the main reasons the stock market failed.