Stock market crashes on Black Tuesday
Black Tuesday hits Wall Street as investors trade 16410030 shares on the New York Stock Exchange in a single day.Billions of dollars were lost wiping out thousands of investors and stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading.In the aftermath of Black Tuesday America and the rest of the industrialized world spiraled downward into the Great Depression.During the 1920s the U.S.
stock market underwent rapid expansion reaching its peak in August 1929 a period of wild speculation.By then production had already declined and unemployment had risen leaving stocks in great excess of their real value.Among the other causes of the eventual market collapse were low wages the proliferation of debt a weak agriculture and an excess of large bank loans that could not be liquidated.READ MORE Here Are Warning Signs Investors Missed Before the 1929 CrashStock prices began to decline in September and early October 1929 and on October 18 the fall began.
Panic set in and on October 24Black Thursdaya record 12894650 shares were traded.Investment companies and leading bankers attempted to stabilize the market by buying up great blocks of stock producing a moderate rally on Friday.On Monday however the storm broke anew and the market went into free fall.
Black Monday was followed by Black Tuesday in which stock prices collapsed completely.After October 29 1929 stock prices had nowhere to go but up so there was considerable recovery during succeeding weeks.Overall however prices continued to drop as the United States slumped into the Great Depression and by 1932 stocks were worth only about 20 percent of their value in the summer of 1929.The stock market crash of 1929 was not the sole cause of the Great Depression but it did act to accelerate the global economic collapse of which it was also a symptom.
By 1933 nearly half of Americas banks had failed and unemployment was approaching 15 million people or 30 percent of the workforce.It would take World War II and the massive level of armaments production taken on by the United States to finally bring the country out of the Depression after a decade of suffering.READ MORE What Caused the Stock Market Crash of 1929