Today on October 24th 1929, US markets plummet by 11%, kickstarting the “Great Crash” and a decade of profound economic depression.
The Wall Street Crash of 1929 began on “Black Thursday” (October 24) when traders at the New York Stock Exchange began a mass sell off at the opening bell. Only a month before, the London Stock Exchange had crashed when the UK’s largest investor, Clarence Hatry and his associates, were arrested for fraud and forgery. Fear and doubt quickly spread overseas, as American investors started losing confidence in the markets. People began to wonder, could the stock market continue to go up forever?
Several leading Wall Street bankers, including the heads of Chase National, Morgan Bank, and National City Bank, met that day and agreed to intervene. They began buying massive amounts of US Steel and other blue chip stocks at above market prices. This strategy had worked in the past, and the markets recovered slightly the following day; however, the gains on Friday only proved to be temporary. On Monday morning, many investors had lost confidence and completely pulled out of the market. The Dow Jones dropping another 13%. The next day, known as “Black Tuesday”, the panic had reached its peak. 16 millions shares were traded with an additional 12% drop in market value.
The “Roaring Twenties” had come to a sudden and devastating end. The Great Crash had a lasting effect around the world, as every stock market (except Japan) went into a downward spiral. Almost 30,000 American businesses went bankrupt within three years, leaving 15 million of workers unemployed. The Great Depression that followed lasted over ten years, and proved to be worst economic downturn in the history of the industrialized world. - 2 months ago