Stock Market Crash of 1929

Extracted Attributes

• Location

  New York Stock Exchange, United States

• Key Causes

  Widespread speculation in stocks, low interest rates on bank deposits, overinflated shares, growing bank loans, agricultural overproduction, declining consumer purchasing power, panic selling, stocks purchased on margin, higher interest rates, negative media

• Start Date

  1929-10

• Market Response

  Stock exchanges implemented measures to limit panic selling

• Alternative Names

  Great Crash, Wall Street Crash of 1929

• Legislative Response

  Banking Act of 1933 (Glass-Steagall Act), US Securities Legislation (1930s-40s)

• Immediate Consequence

  Loss of confidence in the U.S. banking system

• Long-term Consequence

  Start of the Great Depression

• Preceding Economic Period

  Roaring Twenties

• Duration of Market Decline

  October 1929 to July 1932

• Market Value Loss (peak to trough)

  Approximately 90%

Timeline

• The 'Roaring Twenties' period begins, characterized by industrial expansion and widespread speculation in stocks. (Source: summary, wikipedia)

  1920-01-01

• More experienced shareholders begin selling their holdings, causing stock prices to stall and then fall, initiating panic. (Source: summary, wikipedia)

  1929-09

• Black Thursday: A record 12.9 million shares are traded on the New York Stock Exchange, marking a sharp decline in prices. (Source: summary, wikipedia)

  1929-10-24

• Black Monday: The Dow Jones Industrial Average (DJIA) plunges nearly 13% in heavy trading. (Source: web_search_results)

  1929-10-28

• Black Tuesday: Approximately 16.4 million shares are traded, and the market continues its significant decline. (Source: summary, wikipedia)

  1929-10-29

• The Stock Market Crash of 1929 triggers a rapid erosion of confidence in the U.S. banking system and marks the beginning of the Great Depression. (Source: summary, wikipedia)

  1929-10-29

• The stock market decline halts, having lost approximately 90% of its pre-crash value. (Source: summary, wikipedia)

  1932-07-08

• Congress passes the Banking Act of 1933 (Glass-Steagall Act), separating commercial and investment banking. (Source: summary, wikipedia)

  1933-06-16

• The US Securities Legislation of the 1930s-40s begins to be enacted, influenced by the crash. (Source: summary, related_documents)

  1930-01-01

• The Great Depression, which began with the crash, is generally considered to have ended. (Source: summary, wikipedia)

  1939-09-01

Wall Street crash of 1929

The Wall Street crash of 1929, also known as the Great Crash, was a major stock market crash in the United States which began in October 1929 with a sharp decline in prices on the New York Stock Exchange (NYSE). It triggered a rapid erosion of confidence in the U.S. banking system and marked the beginning of the worldwide Great Depression that lasted until 1939, making it the most devastating crash in the country's history. It is most associated with October 24, 1929, known as "Black Thursday", when a record 12.9 million shares were traded on the exchange, and October 29, 1929, or "Black Tuesday", when some 16.4 million shares were traded. The "Roaring Twenties" of the previous decade had been a time of industrial expansion in the U.S., and much of the profit had been invested in speculation, including in stocks. Many members of the public, disappointed by the low interest rates offered on their bank deposits, committed their relatively small sums to stockbrokers. By 1929, the U.S. economy was showing signs of trouble; the agricultural sector was depressed due to overproduction and falling prices, forcing many farmers into debt, and consumer goods manufacturers also had unsellable output due to low wages and thus low purchasing power. Factory owners cut production and fired staff, reducing demand even further. Despite these trends, investors continued to buy shares in areas of the economy where output was declining and unemployment was increasing, so the purchase price of stocks greatly exceeded their real value. By September 1929, more experienced shareholders realized that prices could not continue to rise and began to get rid of their holdings, which caused share values to stall and then fall, encouraging more to sell. As investors panicked, the selling became frenzied. After Black Thursday, leading bankers joined forces to purchase stock at prices above market value, a strategy used during the Panic of 1907. This encouraged a brief recovery before Black Tuesday. Further action failed to halt the fall, which continued until July 8, 1932; by then, the stock market had lost some 90% of its pre-crash value. Congress responded to the events by passing the Banking Act of 1933 (Glass–Steagall Act), which separated commercial and investment banking. Stock exchanges introduced a practice of suspending trading when prices fell rapidly to limit panic selling. Scholars differ over the crash's effect on the Great Depression, with some claiming that the price fluctuations were insufficient on their own to trigger a major collapse of the financial system, with others arguing that the crash, combined with the other economic problems in the U.S. in the 1920s, should be jointly interpreted as a stage in the business cycles which affect all capitalist economies.

Web Search Results

• Stock Market Crash of 1929 | Federal Reserve History

  Home > Federal Reserve History > Time Period: The Great Depression > Stock Market Crash of 1929 Mitchell, the president of the National City Bank (now Citibank) and a director of the Federal Reserve Bank of New York.6 In October, Mitchell and a coalition of bankers attempted to restore confidence by publicly purchasing blocks of shares at high prices. Second, when stock market crashes occur, their damage can be contained by following the playbook developed by the Federal Reserve Bank of New York in the fall of 1929. Differences of opinion also existed among the board of directors of the Federal Reserve Bank of New York and between leaders in New York, Washington, and other cities.

• Wall Street crash of 1929

  By1929, the U.S. economy was showing signs of trouble; the agricultural sector was depressed due to overproduction and falling prices, forcing many farmers

• The Stock Market Crash of 1929 and the Great Depression

  # The Stock Market Crash of 1929 and the Great Depression 3. Timeline of U.S. Stock Market Crashes 1. Stock Market Crash of 1929 1. Stock Market Crash of 1987 There were many causes of the 1929 stock market crash, some of which included overinflated shares, growing bank loans, agricultural overproduction, panic selling, stocks purchased on margin, higher interest rates, and a negative media industry. ## Why Did the Stock Market Crash of 1929 Cause the Great Depression? The stock market crash of 1929 caused the Great Depression because everyone lost money. "Stock Market Crash of 1929." 3. Timeline of U.S. Stock Market Crashes 1. Stock Market Crash of 1929 1. Stock Market Crash of 1987

• Global Depression - International Monetary Fund (IMF)

  | | credits | | | The Great Depression Arrives | | By the end of the decade, economic and financial troubles had spread around the world. But one country’s exports are another’s imports, so these policies, adopted by many countries at the same time, only succeeded in drastically decreasing world trade and worsening the depression. The organizers sought agreement on: * Restoring the gold standard * Reducing tariffs, import quotas, and other barriers to trade * General international coordination of economic policies Unfortunately, the conference failed.

• Stock Market Crash of 1929: Definition, Causes, and Effects

  * Stock Market Crash of 1929 1. Stock Market Crash of 1929 2. What Caused the Stock Market Crash of 1929 1. Stock Market Crash of 1987 3. What Caused Black Monday: The Stock Market Crash of 1987 The stock market crash of 1929 began on "Black Monday, Oct. 28, 1929, when the Dow Jones Industrial Average (DJIA) plunged nearly 13% in heavy trading. The stock market crash signaled the Great Depression, where 15 million Americans lost jobs, and half of the country's banks failed by 1933. "History of Financial Crises, The Stock Market Crash of 1929." 2. What Caused the Stock Market Crash of 1929 3. What Caused Black Monday: The Stock Market Crash of 1987