The Great Depression - Innocent Mistake or some thing entirely different?

So we all know about the Great Depression and how one of the main parts was the Stock Market Crash. We also know that the Stock Market Crash happened because of overzealous investors investing more into companies than they were worth. This of course resulted in inflated stock prices, which resulted in people being afraid of a crash, which resulted in people selling off all their stocks, which ironically enough, resulted in  ... a crash.The crash then resulted in everyone losing tons of money.

So all this seems relatively straight forward, but to me there seems to be one strange thing about all this. At the time of the founding of the Stock Market, there must've been many intelligent people who understood how the economy worked. Of course there were many such people, otherwise they wouldn't have been able to create the stock market.

So we have all these smart people, they make the stock market, and suddenly everybody's buying stocks and then then the prices inflate. What's strange to me, is what caused all these people to suddenly invest? Wanting to be able to make extra money is often called the reason for this. However, I don't think that that many people could've all been wanting to gamble money on the stock market at the same time. Most people couldn't afford risks like that.

So this means that there had to have been some other kind of motivation. This was most likely the smart people who had founded the stock market, after all, what's the point of making it if people don't use it? However, the question arises, couldn't they foresee what would happen if too many invested too much? It seems a relatively simple matter.

I believe that these smart people were more than smart enough to foresee the possible consequences of the stock market, yet they still decided to promote it.This means that they must've had some kind of motivation to persuade others to buy stocks, and I think this motivation was money
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As creators of the stock market, these smart people (as I will continue to refer to them), had first-hand access to stocks and stock information. In fact, due to the low amount of knowledge people had about the stock market back then, the smart people could've easily manipulated it.

So what these smart people did was what's known now as an illegal pyramid scheme. They purchased certain stocks before anyone else could. Since this would've happened just after the recession, prices would have been low. They then promoted the heck out of the stock market, as a tool to safely and easily make money from home. People started buying stocks because they were listening to these smart respected people. Stock prices inflated an insane amount.

This is where it gets interesting. The smart people who's stocks are now worth a lot tell everyone not to sell their stocks because they can still continue going up.- Irving Fisher famously proclaimed, "Stock prices have reached what looks like a permanently high plateau."^{[6]- wikipedia} Meanwhile, they themselves secretly sold their stocks because they foresaw the crash. They escaped the market with thousands upon thousands of dollars in profits and left everyone else to sink.

Once the common folk found out about this sale, an avalanche began. They all started following lead and sold off their stocks. This is what ultimately caused the crash. In one day, the Dow lost 12% of it's value, a record amount. This day became known as Black Tuesday.

So what we see now is that in reality, not everyone lost because of the crash. Those who were poor, the common folk, the majority of people lost a lot of money. However, the rich smart people gained thousands of dollars and became richer than ever.

In the beginning, the stock market was nothing more than a well-planned scam. Who knows, maybe the same is still true today...