Wall Street Crash of 1929
It happened in the New York Stock Exchange on Tuesday October 29, 1929, now known as Black Tuesday. Bank failures followed, resulting in businesses closing. This caused worldwide panic, which started the Great Depression. Stock prices did not reach the same level until late 1954.
The crash signaled the beginning of the 10-year Great Depression that affected all Western industrialized countries. Countries imposed high tariffs and otherwise restricted imports. International trade declined.Soup kitchens were the place to go for food for many people. The Depression ended in the United States with the start of American mobilization for World War II at the end of 1941.
"At the turn of the 20th century, stock market speculation was restricted to professionals, but the 1920s saw millions of 'ordinary Americans' investing in the New York Stock Exchange. By August 1929, brokers had lent small investors more than two-thirds of the face value of the stocks they were buying on margin – more than $8.5bn was out on loan".
The amount of money out on loan was more than the entire amount of currency circulating in the U.S.A at the time. When a stock price declined below the amount of borrowed money, the owner had to sell to pay the debt. This caused prices to decline more. Years later, regulations limited the use of debt in this way.[source?]
- Black Tuesday Black Tuesday -America's Story
- Bone, James. "The beginner's guide to stock markets". The Times. London. Archived from the original on May 25, 2010. Retrieved January 29, 2012.
The most savage bear market of all time was the Wall Street Crash of 1929–1932, in which share prices fell by 89 per cent.
- Perrin, Olivier (23 July 2011). "LES GRANDS CHOCS DU XXE SIÈCLE (3) - En 1929, six jours de panique à Wall Street annoncent le pire, à venir" [THE MAJOR SHOCKS OF THE 20TH CENTURY (3) - In 1929, six days of panic on Wall Street announce the worst, to come] (in French) (3) (Le Temps SA ed.). Geneva: Le Temps. ISSN 1423-3967. OCLC 38739976. Archived from the original on 25 February 2019. Retrieved 25 February 2019.
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- Facing the facts: an economic diagnosis. Retrieved 2008-09-30.