The Great Stock Market Crash of 1929
The Great Stock Market Crash of 1929, also known as Black Thursday, was the most devastating stock market crash in the history of the United States. It occurred on October 24th, 1929 and marked the start of the Great Depression. The crash was caused by a combination of factors, including a period of economic instability, a weak stock market, a period of over-speculation, and the use of leverage in the stock market. In the days leading up to the crash, stock prices had been steadily increasing, but on the morning of October 24th, the market suddenly began to fall. By the end of the day, the Dow Jones Industrial Average had dropped 11.5%. The effects of the crash were felt around the world. Banks failed, businesses closed, and millions of people lost their life savings. It would take over 25 years for the stock market to recover from the crash. Here are some of the key events that led to the crash:
- A period of economic instability: In the years leading up to the crash, there were signs of economic instability. The price of goods was rising, wages were stagnant, and unemployment was high.
- A weak stock market: The stock market had been weak for some time before the crash. The Dow Jones Industrial Average had dropped from 381 points in September of 1929 to 305 points in October.
- A period of over-speculation: Many investors had been buying stocks on margin, meaning they borrowed money to buy stocks. This created an artificial demand for stocks, which drove prices up even further.
The crash of 1929 was a major turning point in American history. It led to a period of economic hardship and suffering that would last for many years. It also changed the way people viewed the stock market, and led to a greater emphasis on regulation and oversight.Resources: