The Great Depression | World Economic Crisis Between Two World Wars The Great Depression The Great Depression was the biggest economic crisis in history. It started in the United States in 1929 and lasted for about a decade. It led to poverty, hunger and unemployment all over the world. Causes The decade after World War I was called the “ Roaring Twenties”. It was a time of rebuilding after a great war. Many European countries didn’t have enough money. They had to pay a lot back to the USA because the Americans helped to win the war. Above all, Germany was weak because it had lost the war. At the same time industries started producing many goods. People bought new inventions , like automobiles, radios and other household goods, but the normal worker didn’t have more money than before. Consumers had to take out loans so that they could buy the things that they didn’t have the money for. Stock market crash Many people also bought stocks. For a few years the value of stocks went up quickly. This made people invest even more money because they thought they would become rich very quickly. However, in September 1929 stock prices began to fall and on October 29, 1929 they completely collapsed.

This day is known as Black Tuesday, the day the stock market crashed. After this day stocks were worth very little, sometimes even nothing at all. Many Americans lost all the money they had. Banks collapsed too because the people who had borrowed money were not able to pay it back. Factories and companies had to close because a large part of the population could not buy goods any more. They had to send most of their workers home. By 1932 about 13 million Americans, one fourth of all workers, were out of work. Those who kept their jobs had to work for little pay. At that time the USA had no system to help the poor. There was no money for the unemployed and most of them had to wait in breadlines to get food. Unemployed march during the Great Depression Global effects of the economic crisis The crisis in the USA quickly spread to other countries around the world. Many European countries that traded with America tried to protect their own economy. They put taxes on imports which made foreign goods more expensive. They wanted people to buy the goods that their own country produced. New Deal In 1932 the Americans elected a new president , Franklin D. Roosevelt , a Democrat.

He created a new programme to help America and called it The New Deal. The government started creating jobs and brought many people back to work. End of the Depression The end of the depression came with the beginning of World War II . In Europe the people of many countries were also looking for new leaders. In Germany a large part of the population supported Adolf Hitler and the Nazi Party . They promised people work and gave them jobs, especially by making more and more weapons. The depression in Germany ended by 1936. After the attack on Pearl Harbour in 1941 , America entered the war. This ended the Great Depression in the USA.

attack =to use weapons against someone in a war breadline =to wait in lines to get some food borrow = to take money from someone and then give it back to him collapse = to become lower very quickly completely =totally consumer = person who buys something create = make crash = to lose value very fast decade = ten years depression = time when factories close down and many people are poor and out of work economic =financial, about money and business elect = to vote for factory = a building in which machines and other things are produced foreign = from another country household goods = everything that can be used in the house industry = large companies invention = a new useful machine pay = the money you get for working population = the people who live in a country poverty = the situation of being poor produce = make protect =guard, defend roaring = loud and noisy ; the Roaring Twenties were a period in which life was very exciting and interesting spread =to move form one place to another stock = when you buy a very small part of a company stock maket = place where stocks or shares of a company are bought and sold support = to help someone take out a loan = to borrow money from a bank or someone else trade = to buy and sell goods unemployment = when you have no

 job value =how much something is worth weak = not very strong weapons = things that you make for war, like guns, bombs etc..

Topics Great Depression Updated February 26, 2016. What Was the Great Depression? The Great Depression, which lasted from 1929 to 1941, was a severe economic downturn caused by an overly-confident, over-extended stock market and a drought that struck the South. In an attempt to end the Great Depression, the U.S. government took unprecedented direct action to help stimulate the economy. Despite this help, it was the increased production needed for World War II that finally ended the Great Depression. The Stock Market Crash After nearly a decade of optimism and prosperity, the United States was thrown into despair on Black Tuesday , October 29, 1929, the day the stock market crashed and the official beginning of the Great Depression. As stock prices plummeted with no hope of recovery, panic struck. Masses and masses of people tried to sell their stock, but no one was buying. The stock market, which had appeared to be the surest way to become rich, quickly became the path to bankruptcy. And yet, the Stock Market Crash was just the beginning.

continue reading below our video 10 Best Universities in the United States Since many banks had also invested large portions of their clients' savings in the stock market, these banks were forced to close when the stock market crashed. Seeing a few banks close caused another panic across the country. Afraid they would lose their own savings, people rushed to banks that were still open to withdraw their money. This massive withdrawal of cash caused additional banks to close. Since there was no way for a bank's clients to recover any of their savings once the bank had closed, those who didn't reach the bank in time also became bankrupt. Unemployment Businesses and industry were also affected. Despite President Herbert Hoover asking businesses to maintain their wage rates, many businesses, having lost much of their own capital in either the Stock Market Crash or the bank closures, started cutting back their workers' hours or wages. In turn, consumers began to curb their spending, refraining from purchasing such things as luxury goods. This lack of consumer spending caused additional businesses to cut back wages or, more drastically, to lay off some of their workers. Some businesses couldn't stay open even with these cuts and soon closed their doors, leaving all their workers unemployed. Unemployment was a huge problem during the Great Depression.

From 1929 to 1933, the unemployment rate in the United States rose from 3.2% to the incredibly high 24.9% -- meaning that one out of every four people were out of work. The Dust Bowl In previous depressions, farmers were usually safe from the severe effects of a depression because they could at least feed themselves. Unfortunately, during the Great Depression, the Great Plains were hit hard with both a drought and horrendous dust storms, creating what became known as the Dust Bowl . Years and years of overgrazing combined with the effects of a drought caused the grass to disappear. With just topsoil exposed, high winds picked up the loose dirt and whirled it for miles. The dust storms destroyed everything in their paths, leaving farmers without their crops. Small farmers were hit especially hard. Even before the dust storms hit, the invention of the tractor drastically cut the need for manpower on farms. These small farmers were usually already in debt, borrowing money for seed and paying it back when their crops came in. When the dust storms damaged the crops, not only could the small farmer not feed himself and his family, he could not pay back his debt.

Banks would then foreclose on the small farms and the farmer's family would be both homeless and unemployed. Riding the Rails During the Great Depression, millions of people were out of work across the United States. Unable to find another job locally, many unemployed people hit the road, traveling from place to place, hoping to find some work. A few of these people had cars, but most hitchhiked or "rode the rails." A large portion of the people who rode the rails were teenagers, but there were also older men, women, and entire families who traveled in this manner. They would board freight trains and crisscross the country, hoping to find a job in one of the towns along the way. When there was a job opening, there were often literally a thousand people applying for the same job. Those who weren't lucky enough to get the job would perhaps stay in a shantytown (known as "Hoovervilles") outside of town. Housing in the shantytown was built out of any material that could be found freely, like driftwood, cardboard, or even newspapers. The farmers who had lost their homes and land usually headed west to California, where they heard rumors of agricultural jobs.

Unfortunately, although there was some seasonal work, the conditions for these families were transient and hostile. Since many of these farmers came from Oklahoma and Arkansas, they were called the derogatory names of "Okies" and "Arkies." (The stories of these migrants to California were immortalized in the fictional book, The Grapes of Wrath by John Steinbeck .) Roosevelt and the New Deal The U.S. economy broke down and entered the Great Depression during the presidency of Herbert Hoover. Although President Hoover repeatedly spoke of optimism, the people blamed him for the Great Depression. Just as the shantytowns were named Hoovervilles after him, newspapers became known as "Hoover blankets," pockets of pants turned inside out (to show they were empty) were called "Hoover flags," and broken-down cars pulled by horses were known as "Hoover wagons." During the 1932 presidential election, Hoover did not stand a chance at reelection and Franklin D. Roosevelt won in a landslide. People of the United States had high hopes that President Roosevelt would be able to solve all their woes. As soon as Roosevelt took office, he closed all the banks and only let them reopen once they were stabilized.

Next, Roosevelt began to establish programs that became known as the New Deal . These New Deal programs were most commonly known by their initials, which reminded some people of alphabet soup. Some of these programs were aimed at helping farmers, like the AAA (Agricultural Adjustment Administration). While other programs, such as the CCC (Civilian Conservation Corps) and the WPA (Works Progress Administration), attempted to help curb unemployment by hiring people for various projects. The End of the Great Depression To many at the time, President Roosevelt was a hero. They believed that he cared deeply for the common man and that he was doing his best to end the Great Depression. Looking back, however, it is uncertain as to how much Roosevelt's New Deal programs helped to end the Great Depression. By all accounts, the New Deal programs eased the hardships of the Great Depression; however, the U.S. economy was still extremely bad by the end of the 1930s. The major turn-around for the U.S. economy occurred after the bombing of Pearl Harbor and the entrance of the United States into World War II . Once the U.S. was involved in the war, both people and industry became essential to the war effort.

Weapons, artillery, ships, and airplanes were needed quickly. Men were trained to become soldiers and the women were kept on the homefront to keep the factories going. Food needed to be grown for both the homefront and to send overseas. It was ultimately the entrance of the U.S. into World War II that ended the Great Depression in the United States. The Stock Market Crash of 1929 | The Stock Market Crash of 1929 By Jesse Colombo (This article was written on July 17th, 2012) America’s Stock Market Crash of 1929 was a powerful market crash that started in October of 1929 after the Roaring Twenties economic “bubble boom” finally popped. America experienced an era of great peace and prosperity during the 1920s. After World War I, the so-called “Roaring Twenties” economic and cultural boom was fueled by industrialization and the popularization of new technologies such as radio and the automobile. Air flight was becoming common as well.

The Dow stock average soared throughout the Roaring Twenties and many investors aggressively purchased shares, comforted by the fact that stocks were thought to be extremely safe by most economists due to the country’s powerful economic boom. Investors soon purchased stocks on margin, which is the borrowing of stock for the purpose of gaining financial leverage. For every dollar invested, a margin user would borrow nine dollars worth of stock. The use of leverage meant that if a stock went up 1%, the investor would make 10%. Unfortunately, leverage also works the other way around and amplifies even minor losses. If a stock drops too much, a margin holder could lose all of their investment and possibly owe money to their broker as well. From 1921 to 1929, the Dow Jones rocketed from 60 to 400, creating many new millionaires. Very soon, stock trading became America’s favorite pastime as investors jockeyed to make a quick killing. Investors mortgaged their homes and foolishly invested their life savings into hot stocks such as Ford and RCA. To the average investor, stocks were practically a sure thing. Few people actually studied the finances and underlying businesses of the companies that they invested in.

Thousands of fraudulent companies were formed to hoodwink unsavvy investors. Most investors never even thought a crash was possible – in their minds, the stock market “always went up.” How the Stock Market Crash of 1929 Happened In 1929, the Federal Reserve raised interest rates several times in an attempt to cool the overheated economy and stock market. By October, a powerful bear market had commenced. On Thursday, October 24th 1929, a spate of panic selling occurred as investors began to realize that the stock boom was actually an over-inflated speculative bubble. Margin investors were being decimated as large numbers of stock investors tried to liquidate their shares to no avail. Millionaire margin investors went bankrupt almost instantly when the stock market crashed on October 28th and 29th. During November of 1929, the Dow sank from 400 to 145. In just three days, over $5 billion worth of market capitalization had been erased from stocks that were trading on the New York Stock Exchange.

By the end of the 1929 stock market crash, a staggering $16 billion worth of market capitalization had been lost from NYSE stocks. To make matters worse, many banks had invested their deposits in the stock market, causing these banks to lose their depositors’ savings as stocks plunged. Bank runs soon occurred when bank patrons tried to withdraw their savings from banks all at the same time. Major banks and brokerage firms became insolvent, adding more fuel to the stock market crash. The financial system was in shambles. Many bankrupt speculators, some who were once very affluent, committed suicide by jumping out of buildings. Even bank patrons who had not invested in shares became broke as $140 billion of depositor money disappeared and 10,000 banks failed. The 1929 stock market crash was beneficial for some speculators, however. Jesse Livermore correctly predicted the crash and shorted stocks to profit from the decline, earning him over 100 million dollars. Joseph Kennedy, President John F. Kennedy’s father, sold his stocks before the 1929 stock market crash and kept millions of dollars of profit.

Kennedy decided to sell his stocks because he overheard shoeshine boys and other novices speculating on stocks, leading him to believe that the stock market had been experiencing a speculative bubble. The stock market crash of 1929 led to a major economic crisis known as the Great Depression. The Depression lasted from approximately October 1929 until the late-1930’s. Mass poverty became common and many workers lost their jobs and were forced to live in shanty towns. Former millionaire businessmen were reduced to selling apples and pencils on street corners. One-third of Americans were living below the poverty line during the Great Depression. The Dow Jones finally surpassed its 1929 high, a full 26 years later in 1955. The Roaring Twenties and the stock market crash of 1929 was similar to any other speculative bubble and subsequent crash. The classic pattern of extreme euphoria and irrational expectations will always lead to devastating financial crashes. Other Stock Market Crash of 1929 Resources: The Great Depression Reading Comprehension - The Great Depression Develop your reading skills.

Read the following text and do the comprehension questions The Great Depression The Great Depression was a severe worldwide economic depression in the decade preceding World War II. In most countries the depression started in about 1929 and lasted until the late 1930s or early 1940s. It was the longest, most widespread, and deepest depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can decline. The depression originated in the U.S. Economic historians usually attribute the start of the Great Depression to the sudden devastating collapse of US stock market prices on October 29, 1929, known as Black Tuesday;[9] some dispute this conclusion, and see the stock crash as a symptom, rather than a cause, of the Great Depression There were multiple causes for the first downturn in 1929 but the real causes are still unclear. Historians emphasize structural factors like major bank failures and the stock market crash.

In contrast, some economists point to monetary factors such as actions by the US Federal Reserve that contracted the money supply, as well as Britain's decision to return to the Gold Standard at pre–World War I parities. The Great Depression had devastating effects in virtually every country, rich and poor. Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most. Some economies started to recover by the mid-1930s; in many countries the negative effects of the Great Depression lasted until the start of World War II The Great Depression started in the 40s. a. The causes of The Great Depression are not evident. a. The Great depression had equal devastating effects on both agricultural and industrial sectors. a.

Economic recovery started during world war II. a. Black Tuesday: Definition, Cause, Kickoff to Depression Black Tuesday: Definition, Cause, Kickoff to Depression Search the site Black Tuesday: Definition, Cause, Kickoff to Depression The Worst Day in Wall Street's History By Kimberly Amadeo Updated December 23, 2016 Definition: Black Tuesday was October 29, 1929. Investors traded a record 16.4 million shares and lost $14 billion on the New York Stock Exchange . (That's $194 billion in 2016 dollars). It was the fourth and worst day in the stock market crash of 1929 . It was the worst day in the history of Wall Street. It started the Great Depression because it signaled a complete loss of confidence in the U.S. financial system. What Happened? The moment the opening bell rang, the Dow Jones Industrial Average fell 8 points to 252.6. Panicked sellers were shouting "Sell! Sell!" so loudly that no one heard the bell ring. In a half hour, they sold three million shares and lost $2 million.

As the day wore on, the Dow fell to 212.33. The ticker tape that announced stock prices was hours behind. That meant investors didn't know how much they were losing. They frantically called their brokers. When they couldn't get through, they sent telegrams. Western Union said its volume tripled that day. Back then, traders physically wrote orders on pieces of paper. There were so many trades that the orders backed up. Traders just stuffed them into trash cans. Fistfights broke out, and one trader collapsed. He was revived and put back to work. The NYSE board were afraid that they would worsen the panic if they closed the market. The prominent banks of the day tried to stop the crash. Morgan Bank , Chase National Bank, and National City Bank of New York bought shares of stock s. They wanted to restore confidence in the stock market . Instead, the intervention signaled the exact opposite. Investors saw it as a sign that the banks had panicked. When the market closed at 3 pm, it had lost 11 percent of its value, closing at 230.7.

(Source: The Crash of 1929 , Time Magazine, October 29, 2008.) For more, see Timeline of the Great Depression . What Caused Black Tuesday? Part of the panic that caused Black Tuesday resulted from how investors played the stock market in the 1920s. They didn't have instant access to information like they do today. Stock prices weren't on the computer. Instead, they were shown via a ticker tape machine. This machine printed stock prices on a strip of paper. As share prices dropped on Black Tuesday, panic ensued because no one knew how bad it was. That's because the ticker tapes literally could not keep up with the pace of falling stock prices. It was pandemonium on the floor of the stock exchange. Buyers roared and screamed. Some collapsed onto the ground when they got bad news about a stock price. Crowds formed outside of the New York Stock Exchange. The police were called to keep order. The other reason for the panic was the new method for buying stocks , called buying on margin . Investors could place huge stock orders with only 10 percent or 20 percent down. They used the money they borrowed from their brokers.

When stock prices fell, the brokers called in the loans. Many people found their entire life savings wiped out to pay off the loan. Some of them realized what fools they had been. In despair, they jumped out of windows. The Roaring Twenties was over. New York hotel clerks would cynically ask their incoming guests, "You want a room for sleeping or for jumping?" Impact: How Black Tuesday Helped Cause the Great Depression Black Tuesday was the last day of the stock market crash. During that time, the Dow dropped 25 percent, and investors lost $30 billion. That was ten times more than the 1929 Federal budget, and more than the United States had spent on World War I. Stock prices continued to fall. They hit their 1929 bottom on November 13. By then, more than $100 billion had disappeared from the American economy. In today's terms, that was worth $1.3 trillion. The Dow didn't regain its pre-crash high until November 23, 1954. Black Tuesday's losses weren't enough to cause the Great Depression . They did, however, destroy confidence in the economy.

In those days, people believed the stock market was the economy. What was good for Wall Street was thought to be good for Main Street. That loss of confidence created a run on the banks. People withdrew all their savings. The banks didn't have enough cash on hand and were forced to close. When they reopened, they only gave savers ten cents for every dollar. There was no Federal Deposit Insurance Corporation to insure people's savings. Investors abandoned the stock market and started putting their money in commodities . Gold prices soared. At that time, the U.S. was on the gold standard and promised to honor each dollar with its value in gold. As people began turning in dollars for gold, the U.S. government began to worry it would run out of gold. The Federal Reserve thought it would come to the rescue by increasing the value of the dollar . How did it do this? By raising interest rates , which reduced liquidity to businesses. Without funds to grow, companies started laying off employees. That created a vicious downward economic spiral that became the Great Depression. For more, see Effects of the Great Depression .

Statistics The Great Depression of 1929: Causes and How It Ended The Great Depression of 1929 Search the site The Great Depression of 1929 What Happened During the Great Depression of 1929? Updated December 23, 2016 What Was The Great Depression of 1929? The Great Depression of 1929 was a worldwide depression that lasted for ten years. Its kickoff in the U.S. economy was “ Black Thursday ," October 24, 1929. That's when traders sold 12.9 million shares of stock in one day. It was triple the usual amount. Over the next four days, stock prices fell 23 percent. That was the stock market crash of 1929 . For more, see When Did the Great Depression Start? Unemployment Reached 25 Percent The height of the Depression was 1933. By then, unemployment had risen from 3 percent to 25 percent of the nation’s workforce. Wages for those who still had jobs fell 42 percent.

Economic output, as measured by GDP , was cut in half, from $103 to $55 billion. That was partly because of deflation . Prices fell 10 percent each year. Panicked government leaders passed the Smoot-Hawley tariffs to protect domestic industries and jobs. As a result, world trade plummeted 65 percent as measured in dollars. It fell 25 percent in the total number of units. For more, see Effects of the Great Depression . Life During The Depression The Depression caused many farmers to lose their farms. At the same time, years of erosion and a drought created the “ Dust Bowl ” in the Midwest, where no crops could grow. Thousands of these farmers and other unemployed workers looked for work in California. Many ended up living as homeless “hobos” or in shantytowns called “ Hoovervilles ," named after then-President Herbert Hoover. For more, see Timeline of the Great Depression . What Caused It? According to Ben Bernanke , the past Chairman of the Federal Reserve , the central bank helped create the Depression. It wrongly used tight monetary policies . Bernanke highlighted several key Fed mistakes: The Fed began raising the Fed Funds rate in the spring of 1928.

It kept increasing it through a recession that began in August 1929. That's what caused the stock market crash in October 1929. When the stock market crashed , investors turned to the currency markets . At that time, the gold standard supported the value of the dollars held by the U.S. Government. Speculators began trading in their dollars for gold in September 1931. That created a run on the dollar. The Fed raised interest rates again to preserve the value of the dollar . That further restricted the availability of money for businesses. More bankruptcies followed. The Fed did not increase the supply of money to combat deflation. As investors withdrew all their dollars from banks , the banks failed. That created more panic. The Fed ignored the banks' plight. It destroyed any remaining consumers’ confidence in banks. Most people withdrew their cash and put it under their mattresses. They further decreased the money supply . The Fed did not put enough money in circulation to get the economy going again. Instead, the Fed allowed the money supply to fall 30 percent. What Ended the Great Depression of 1929? In 1932, the country elected Franklin D. Roosevelt as President.

He promised to create federal government programs to end the Great Depression. Within 100 days, he signed the New Deal into law. It created 42 new agencies designed to create jobs, allow unionization, and provide unemployment insurance. Many of these programs, such as Social Security , the Securities and Exchange Commission ( SEC ), and the Federal Deposit Insurance Corporation ( FDIC ) are still here today. They help safeguard the economy and prevent another depression. (Source: " The New Deal , " Roosevelt Institute. ) Many argue that World War II, not the New Deal, ended the Depression. However, if FDR had spent as much on the New Deal as he did during the War, it would have ended the Depression. From 1932, when FDR launched the New Deal, to 1941, when Japan attacked Pearl Harbor, spending increased the debt by $3 billion. In 1942, defense spending added $23 billion to the debt, and $64 billion in 1943. For more, see U.S. Debt by President . In fact, WWII had its roots in the Depression. Financial stress made Germans desperate enough to elect Hitler as President in 1933.

If FDR had spent enough on the New Deal to end the Depression before Hitler rose to power, World War II might never have happened. Could a Great Depression Happen Again? A depression on the scale of that in 1929 could not happen the same way. Central banks around the world, including the U.S. Federal Reserve, have learned from the past. They are more sophisticated in using monetary policy to manage the economy. (Source: “ Remarks by Governor Ben Bernanke at the H. Parket Willis Lecture in Economic Policy ”, The Federal Reserve Board, March 2, 2004. FDR Library Web Site.) But monetary policy can't offset fiscal policy . The sizes of the U.S. national debt and the current account deficit could trigger an economic panic. That would be difficult for monetary policy to affect. No one knows since the current U.S. debt level is unprecedented. For more, see Could the Great Depression Happen Again? Continue Reading Stock market crashes - Oct 29, 1929 - HISTORY.com Stock market crashes Publisher A+E Networks 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 stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression. During the 1920s, the U.S. stock market underwent rapid expansion, reaching its peak in August 1929, a period of wild speculation. By then, 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 weak agriculture, and an excess of large bank loans that could not be liquidated. 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 companies and leading bankers attempted to stabilize the market by buying up great blocks of stock, producing a moderate rally on Friday. On Monday, however, the storm broke anew, and the market went into free fall.

Black Monday was followed by Black Tuesday, in which stock prices collapsed completely. After October 29, 1929, stock prices had nowhere to go but up, so there was considerable recovery during succeeding weeks. Overall, however, prices continued to drop as the United States slumped into the Great Depression, and by 1932 stocks were worth only about 20 percent of their value in the summer of 1929. 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. It would take World War II, and the massive level of armaments production taken on by the United States, to finally bring the country out of the Depression after a decade of suffering.

Related Videos Stock Market Crash of 1929 - Facts & Summary - HISTORY.com Stock Market Crash of 1929 Stock Market Crash of 1929 Author Stock Market Crash of 1929 URL A+E Networks Introduction On October 29, 1929, Black Tuesday hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression (1929-39), the deepest and longest-lasting economic downturn in the history of the Western industrialized world up to that time. Google 1929 Stock Market Crash During the 1920s, the U.S. stock market underwent rapid expansion, reaching its peak in August 1929, after a period of wild speculation. By then, 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. Did You Know? The New York Stock Exchange was founded in 1817, although its origins date back to 1792 when a group of stockbrokers and merchants signed an agreement under a buttonwood tree on Wall Street. 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 companies and leading bankers attempted to stabilize the market by buying up great blocks of stock, producing a moderate rally on Friday. On Monday, however, the storm broke anew, and the market went into free fall. Black Monday was followed by Black Tuesday (October 29), 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. 1929 Stock Market Crash and the Great Depression After October 29, 1929, stock prices had nowhere to go but up, so there was considerable recovery during succeeding weeks. Overall, however, prices continued to drop as the United States slumped into the Great Depression, and by 1932 stocks were worth only about 20 percent of their value in the summer of 1929. 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. Relief and reform measures enacted by the administration of President Franklin D. Roosevelt (1882-1945) helped lessen the worst effects of the Great Depression; however, the U.S.

economy would not fully turn around until after 1939, when World War II (1939-45) revitalized American industry. Tags Brief History of The Crash of 1929 - TIME Follow @TIME Seventy-nine years ago this week, the New York Stock Exchange experienced the worst financial panic the country had ever seen. There have been more crashes since  with bigger numbers and bigger losses  but nothing quite rivals the terror and devastation of Black Tuesday: October 29, 1929. When President Calvin Coolidge delivered his 1928 State of the Union address, he noted that America had never "met with a more pleasing prospect than that which appears at the present time." Americans had a lot to be proud of back then: World War I was thoroughly behind them, radio had been invented, and automobiles were growing cheaper and more popular. Sure, the disparity between the rich and the poor had widened within the past decade, but Americans could now buy goods on installment plans  a relatively new concept  and families could afford more than ever before.

Stocks were on a tear: between 1924 and 1929, the Dow Jones Industrial Average quadrupled. At that time, it was the longest bull market ever recorded; some thought it would last forever. In the fall of 1929, economist Irving Fisher announced that "stock prices have reached what looks like a permanent plateau." ( See pictures of the stock market crash of 1929. ) Unsurprisingly, this exuberance lured more investors to the market, investing on margin with borrowed money. By 1929, 2 out of every 5 dollars a bank loaned were used to purchase stocks. The market peaked on September 3, 1929. Steel production was down, several banks had failed, and fewer homes were being built, but few paid attention  the Dow stood at 381.17, up 27% from the previous year. Over the next few weeks, however, prices began to move downward. And the lower they fell, the faster they picked up speed. In the last hour of trading on Thursday, Oct. 23, 1929, stock prices suddenly plummeted.

When the closing bell rang at 3 p.m. people were shaken. No one was sure what had just happened, but that evening provided enough time for fear and panic to set in. When the market opened again the next day, prices plunged with renewed violence. Stock transactions in those days were printed on ticker tape, which could only produce 285 words a minute. Thirteen million shares changed hands  the highest daily volume in the exchange's history at that point  and the tape didn't stop running until four hours after the market closed. The following day, President Herbert Hoover went on the radio to reassure the American people, saying "The fundamental business of the country...is on a sound and prosperous basis." And then came Black Monday. As soon as the opening bell rang on Oct. 28, prices began to drop. Huge blocks of shares changed hands, as previously impregnable companies like U.S. Steel and General Electric began to tumble. By the end of the day, the Dow had dropped 13%. So many shares changed hands that day that traders didn't have time to record them all.

They worked into the night, sleeping in their offices or on the floor, trying to catch up to be ready for October 29. As the story goes, the opening bell was never heard on Black Tuesday because the shouts of "Sell! Sell! Sell!" drowned it out. In the first thirty minutes, 3 million shares changed hands and with them, another $2 million disappeared into thin air. Phone lines clogged. The volume of Western Union telegrams traveling across the country tripled. The ticker tape ran so far behind the actual transactions that some traders simply let it run out. Trades happened so quickly that although people knew they were losing money, they didn't know how much. Rumors of investors jumping out of buildings spread through Wall Street; although they weren't true, they drove the prices down further. Brokers called in margins; if stockholders couldn't pay up, their stocks were sold, wiping out many an investor's life savings in an instant. So many trades were made  each recorded on a slip of paper  that traders didn't know where to store them, and ended up stuffing them into trash cans. One trader fainted from exhaustion, was revived and put back to work. Others got into fistfights.

The New York Stock Exchange's board of governors considered closing the market, but decided against it, lest the move increase the panic. When the market closed at 3 p.m., more than 16.4 million shares had changed hands, using 15,000 miles of ticker tape paper. The Dow had dropped another 12%. In total, $25 billion  some $319 billion in today's dollars  was lost in the 1929 crash. Stocks continued to fall over subsequent weeks, finally bottoming out on November 13, 1929. The market recovered for a few months and then slid again, gliding swiftly and steadily with the rest of the country into the Great Depression. Companies incurred huge layoffs, unemployment skyrocketed, wages plummeted and the economy went into a tailspin. While World War II helped pull the country out of a Depression by the early 1940s, the stock market wouldn't recover to its pre-crash numbers until 1954.

Question: What started on October 29, 1929 and lasted for a decade?
Answer: Great Depression