This year is the 90th anniversary of the stock market crash on Oct. 29, 1929, that helped to plunge the world into the Great Depression.
According to history.com, the U.S. stock market experienced rapid expansion in the 1920s. By 1929 “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 struggling agricultural sector and an excess of large bank loans that could not be liquidated.”
Stock prices started to decline in September and early October. By Oct. 18 the fall started and on Black Thursday, Oct. 24, a record 12,894,650 shares were traded.
From The Patriot on Oct. 24:
“The widely held theory that the stock market had hit bottom in the heavy selling of last Monday was rudely jolted today in an additional flood of liquidation. Beginning rather mildly, the movement gathered force steadily throughout the day and attained steam-roller proportions in the last hour. It appeared to constitute an utter and hysterical rout of the marginal speculative element, with the majority of the trading public dominated solely by the desire to get out at any price.”
Bankers tried to stabilize the market by buying blocks of stock on Friday but by Monday “the market went into a free fall. Black Monday was followed by Black Tuesday, in which stock prices collapsed completely and 16,410,030 shares were traded 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.”
Crowds panic in the Wall Street district of Manhattan due to the heavy trading on the stock market in New York City on Oct. 24, 1929. (AP Photo)AP
The Patriot reported:
“The stock markets of the country tottered on the brink of panic today as a prosperous people, gone suddenly hysterical with fear, attempted simultaneously to sell a record-breaking volume of securities for whatever they could bring.
The result was a financial nightmare, comparable to nothing ever before experienced in Wall Street. It rocked the financial district to its foundations, hopelessly overwhelmed its mechanical facilities, chilled its human blood with stark terror.”
People gather on the sub-treasury building steps across from the New York Stock Exchange in New York on "Black Thursday," Oct. 24, 1929. Thousands of investors lost their savings in the worst stock market crash in Wall Street history on Oct. 29, 1929, after a five-day frenzy of heavy trading. Too much speculation with borrowed money had inflated market values unrealistically. Huge buying orders, hastily erected by powerful financial interest, finally checked the most frantic sell-off experienced by the securities markets. The Great Depression followed thereafter. (AP Photo)AP
On Oct. 29 The Patriot reported that “Wall Street was alive with workers and ablaze with light tonight. In every brokerage office the order has gone down the line that every employee from junior partners to switchboard girls and messenger boys must be prepared to work all night, so that the tangled affairs of the financial sector, resulting from the busiest day of trading in the street’s history, might be set in order before the beginning of another day on the stock exchange.”
Restaurants normally open to just serve lunch, brought in extra food and got ready to send out meals to the overtime employees.
Stock brokers are seen at the stock exchange in New York, USA, Friday Oktober 25, 1929 as panic shares selling continues from the previous day. It was the day the stock exchange crashed and broke loose a world wide recession and financial crisis and thus was termed 'Black Friday'. (AP Photo/Str) --- Broker in der New Yorker Boerse waehrend des Boersenkrachs, der die Weltwirtschaftskrise einleitete ('Schwarzer Freitag') am 25. Oktober 1929. (AP Photo/Str)AP
Hotels had no rooms, one hotel put an extra 100 beds and cots in the hallways and parlors.
On Oct. 30, 1929, The Patriot reported that that the market had closed “in a substantial rally, accompanied by increasing stabilization today after proving to Wall Street that the apparently impossible can happen.”
In describing what happened, the reporter used words such as “sickeningly” and “wildest nightmare.”
“The lowest quotations on the session constituted the sharpest average loss the market has ever experienced in a single day. Even with losses, scaled down by the afternoon rally, the next decline at the close was approximately equal to that of the preceding day.
Crowd gathering on Wall Street in New York after the Wall Street crash late October 1929. (AP Photo)AP
It is estimated to have cut at least $15,000,000 from the aggregate market valuation of all securities. In the total declined since Sept. 3 shrinkage of stock values is conservatively placed at $50,000,000,000 in the most drastic securities deflation in the history of the world. What Wall Street once referred to with pride as the “Coolidge Bull Market” and later the “Hoover Bull Market” is thus revealed to have been the most expensive luxury to which the American people have treated themselves since the war. Tonight, as on Monday evening, the financial district again was asking: “Is it over?”
While the stock market rallied, prices continued to drop and “the United States slumped into the Great Depression,” according to history.com.
After 2,000 jobs are made available for park improvements and repairs, about 5,000 unemployed people gather outside City Hall in Cleveland, Ohio, Oct. 9, 1930 during the Great Depression. (AP Photo)AP
“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 America’s banks had failed and unemployment was approaching 15 million people, or 30 percent of the workforce.”
The economy didn’t recover until World War II “revitalized American industry.”
People line in Times Square and 43rd Street to recieve sandwiches and a cup of coffee in New York City on Dec. 8, 1930 during the Great Depression. (AP Photo)AP
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