What was the problem with purchasing stocks by buying on margin?

Buying on margin makes purchasing stocks even more risky because if the value of the stock goes down you have to repay the difference to the creditor. Ièll give an example to explain a bit better. You run a bank that is buying on margin at a rate of 33 to 1 (you have borrowed 33x more than you own). If you were to invest all of your leveraged capital into a stock even a 3% fluctuation (loss) would cause your company to be bankrupt, since 3% loss x 33 = 99% (of the total value of your company). Also if you were to gain money you are also paying the interest on your investments so your gains are reduced. I hope that helps.