Wall Street Crash 1929

The Wall Street Crash refers to the stock market crash that occurred on October 29, 1929, when share prices on the New York Stock Exchange collapsed, leading eventually to the Great Depression. The day, and by extension the event, is also known as Black Tuesday. However, the days leading up to the 29th ("Black Thursday", "Black Monday") had also seen enormous stock market upheaval, with panic selling and vast levels of trading interspersed with brief periods of recovery.

Related Topics:
Stock market - October 29 - 1929 - New York Stock Exchange - Great Depression

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The crash followed a speculative boom which had taken hold in the late 1920s, which had led millions of Americans to invest heavily in the stock market.

Related Topics:
Speculative - 1920s

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

This investment drove share prices up to artificially high levels, the rising share prices encouraged more people to invest, as they hoped the shares would rise further, thus fueling further rises, and creating an economic bubble. The banks lent heavily to fund this share-buying spree. On October 24, 1929 (with the Dow Jones Industrial Average market index at 381.17), the bubble finally burst and panic selling set in. Thirteen million shares were sold in the space of one day, as people desperately tried to dispose of their shares before they became worthless.

Related Topics:
Share - Economic bubble - Bank - Dow Jones Industrial Average

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Over the following few days another thirty million shares were sold, and share prices collapsed, ruining millions of investors.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The banks who had lent heavily to fund share buying found themselves saddled with debt, which caused many banks to fail.

Related Topics:
Debt - Fail

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

While millions of people lost their savings, businesses lost their credit lines and were forced to close, causing massive unemployment.

Related Topics:
Credit - Unemployment

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The crash dramatically worsened an already fragile economic situation, and was a major contributing factor to the Great Depression. There is a good deal of controversy among economists and historians about the nature of that contribution, though. Some hold that political over-reactions to the crash, such as in the passage of the draconian Smoot-Hawley Tariff Act through the US Congress, caused more harm than the crash itself.

Related Topics:
Great Depression - Smoot-Hawley Tariff Act - US Congress

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

After the experience of the 1929 crash, stock markets around the world instituted measures to temporarily suspend trading in the event of rapid declines, so as to prevent such panic sales. As a result, later stock market crashes, such as the crash of 1987 (Black Monday), have never been quite as severe as that of 1929.

Related Topics:
1987 - Black Monday

~ ~ ~ ~ ~ ~ ~ ~ ~ ~