Black Tuesday hits Wall Street as investors trade 16,410,030 shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors, and stockholders were behind hours because the machines couldn’t handle the huge volume of transactions. In the aftermath of Black Tuesday, America and the rest of the industrialized world plunged into the Great Depression.
During the 1920s, the US stock market expanded rapidly, reaching its peak in August 1929, a period of savage speculation. By then, production had already fallen and unemployment had risen, leaving stocks well above their real value. Other causes of the possible market collapse include low wages, the proliferation of debt, weak agriculture and an excess of large bank loans that could not be liquidated.
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Stock prices began to decline in September and early October 1929, and on October 18 the fall began. Panic set in and on October 24 – Black Thursday – a record 12,894,650 shares were traded. Investment firms and major bankers attempted to stabilize the market by buying large blocks of stocks, producing a moderate rally on Friday. On Monday, however, the storm broke again and the market entered a free fall. Black Monday was followed by Black Tuesday, when stock prices collapsed completely.
After October 29, 1929, stock prices had nowhere to go but up, so there was a sizable rally in the following weeks. Overall, however, prices continued to decline as the United States collapsed in the Great Depression, and by 1932 stocks were only worth about 20% of their value in the summer of 1929. The Crash The 1929 scholarship was not the only cause of the crisis. Great Depression, but it acted to accelerate the global economic collapse of which it was also a symptom. By 1933, nearly half of America’s banks had gone bankrupt and unemployment was approaching 15 million people, or 30% of the workforce. It would take World War II and the massive level of arms production taken by the United States to finally pull the country out of the depression after a decade of suffering.
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