The 1929 Stock Market Crash
Thursday, October 24th, 1929 has the incredulous honor being called Black Thursday. It was on this day that the New York Stock Exchange crashed, and with it ended the "Roaring Twenties", and initiated the Great Depression. It has been widely speculated in books and magazines, but what really happened on that day? What events led up to the fateful day? What were some warning signs, and what could be done to have stopped it? In the 1920s, things were really unstable in the US and around the world. With the rapid increase in industrialization, which fueled the economy, combined with the many technological improvements had leading economists believing the growth would continue. During this inflation period, wages increased along with consumer spending, and stock market prices were on the rise. Most people wanted to take advantage of the rising prices, which put billions of dollars into the stock
Many investors wanted to make a lot of cash, so they decided to invest their life savings, mortgage their homes, and cashed in their "safer" investments like bonds, and bank accounts. Bose, Mihir The Crash, 1988, Bloomsbury Publishing Limited, London 2. By the end of 1929, the NYSE had dropped by fifteen billion dollars. In late October 1929, the buying craze slowly decreased, and the selling of stocks was even crazier. The Crash of '29 did not even cause the great depression. The following Monday the realization of what had actually happened started to sink in. Many of the banks and companies that had invested large amounts of money in the stock market were bankrupt, or near it, by the falling prices. The amount of dollars put into the stock market created unsecured consumer debt and left the market unbalanced. Stock Market Crashes and Speculative Manias, 1996, Edward Elgar Publishing Limited, Cheltenham 4.
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