The 1929 Wall Street Crash, also known as “Black Tuesday,” “the Great Crash,” or “the Crash of 1929,” was a significant decline in the value of American stocks that occurred in the late 1930s. It began in September and came to an end when share prices on the New York Stock Exchange crashed in the middle of November.<\/p>\n\n\n\n
The Stock Market Crash of 1929 occurred on October 29, 1929, when Wall Street investors transacted roughly 16 million shares on the New York Stock Exchange in a single day. The loss on that day was in the billions.<\/p>\n\n\n\n
The Great Depression, the deepest and longest-lasting economic downturn in the history of the Western industrialized world up to that point, began as a result of that incident, also known as “Black Tuesday,” which sent America and the rest of the industrialized world spiraling downward.<\/p>\n\n\n\n
When the full scope and duration of the effects are considered, it was the most devastating stock market crash in the history of the United States.<\/p>\n\n\n\n
The crash, which came after the September crash on the London Stock Exchange, marked the start of the Great Depression.<\/p>\n\n\n\n
So in this article, we look at the history of Black Tuesday and its economic importance in the United States. <\/p>\n\n\n\n
On October 29, 1929, known as “Black Tuesday,” there was a sharp decline in the stock market, with the Dow Jones Industrial Average (DJIA) being particularly hard hit due to high trading volume.<\/p>\n\n\n\n
Since panicked stockholders were frantic and wanted to sell their shares they were forced to sell three million shares in a half-hour and made a $2 million loss.<\/p>\n\n\n\n
Stock price announcements were delayed by several hours on the ticker tape. Because of this, investors were unaware of their losses. They called their brokers in a panic. They sent telegrams when they had trouble getting through. <\/p>\n\n\n\n
According to Western Union, the number of telegrams sent that day tripled. Orders were physically written on pieces of paper back then by traders. The orders were backlogged due to the volume of trades. They were simply thrown into trash cans by traders. Fistfights started, and the NYSE board members were reluctant to close the market because doing so might have exacerbated the panic.<\/p>\n\n\n\n
The leading banks of the day made attempts to halt the crash. Shares of stock were purchased by Morgan Bank, Chase National Bank, and National City Bank of New York.<\/p>\n\n\n\n
They aimed to boost market confidence once more. The intervention, however, gave the exact opposite message. Investors saw it as proof of a bank panic.<\/p>\n\n\n\n
Therefore, one of the biggest one-day drops in stock market history occurred when the DJIA dropped 12%. The panic sell-off, which effectively brought an end to the Roaring Twenties and ushered the world economy into the Great Depression, saw the trading of more than 16 million shares.<\/p>\n\n\n\n
The way stock market players in the 1920s manipulated the market contributed to some of the panics that led to Black Tuesday. They didn’t have immediate access to information as we now do on the internet.<\/p>\n\n\n\n
A ticker tape machine printed stock prices onto a strip of paper. The ticker tapes were unable to keep up with the rate at which share prices were falling. Because nobody knew how bad it was, panic set in.<\/p>\n\n\n\n
On the stock exchange floor, there was utter chaos. Customers screamed and roared. When they learned bad news about the price of a stock, some fell to the ground. Crowds gathered in front of the NYSE. To preserve order, the police were called.<\/p>\n\n\n\n
The new technique for purchasing stocks, known as “buying on margin,” was the other factor contributing to the panic. <\/p>\n\n\n\n
The stock market was booming a month before the crash as a result of the significant overseas demand for American goods following World War I. When the Dow Jones Industrial Average, a benchmark used to measure market performance, reached 381 points, the market had reached its peak.<\/p>\n\n\n\n
Many people “bought on margin” because they were overconfident that the market would keep expanding. Purchasing on margin entails using primarily borrowed funds to buy shares. People had excessive market confidence, which made borrowing loans comfortable for both banks and borrowers.<\/p>\n\n\n\n
Therefore, investors could place large stock orders with just 10% to 20% down. They made use of the cash they lent to their brokers. <\/p>\n\n\n\n
The brokers called in the loans when stock prices dropped. Many people discovered that repaying the loans consumed all of their life savings.<\/p>\n\n\n\n
Additionally, the manufacturing and agricultural sectors overproduced goods. There was an oversupply because factories produced more goods than there was a need for, which resulted in lower prices. This caused losses for numerous businesses, which in turn caused their share prices to fall.<\/p>\n\n\n\n
Republican presidents’ laissez-faire economic philosophies served as the backdrop to all of this. The market can correct itself, and government regulation will only impede economic growth, according to the laissez-faire economic theory, so the government shouldn’t get involved in the market.<\/p>\n\n\n\n
“Black Tuesday” occurred on October 29, 1929, when investors transacted approximately 16 million shares on the New York Stock Exchange in a single day.<\/p>\n\n\n\n
This caused thousands of investors to lose everything after losing billions of dollars. With some stocks having no buyers at any price, the panic selling reached its peak.<\/p>\n\n\n\n
The Dow dropped another 30.57 points, or 11.73%, for a two-day total loss of 68.90 points, or 23.05%.<\/p>\n\n\n\n
On October 24, 1929, “Black Thursday” occurred, marking the start of the Stock Market Crash of 1929, the worst stock market crash in American history. The market lost 11% at the start of the day. By the time the trading day was over, 12.9 shares had been traded, a record low.<\/p>\n\n\n\n
Black Thursday also signaled the start of the Great Depression, which lasted from 1929 to 1939, as well as the end of a bull market that lasted for ten years.<\/p>\n\n\n\n
Wealth and excess were prevalent themes in the 1920s. The U.S. stock market experienced rapid growth throughout the decade and reached its peak in August 1929, at the height of the Roaring Twenties.<\/p>\n\n\n\n
The exodus of foreign investors and significant speculative activity, however, caused price declines by the fall of 1929, which made investors lose faith and cause panic selling. Stocks became overvalued as a result of rising unemployment and declining production.<\/p>\n\n\n\n