The Stock Market Crash of 1929

The stock market crash of 1929 was a culmination of 3 days, Black Thursday, Black Monday, and Black Tuesday. If a single day had to be pin pointed most would agree that it was October 29th 1929. The market would continue to fall untill it bottomed out in July of 1932. Black Thursday was October 24th 1929, Black Monday was October 28th 1929, and Black Tuesday was October 29th 1929.

Warning Signs

By early 1929, people across the United States were scrambling to get into the stock market. The profits seemed so assured that even many companies placed money in the stock market. And even more problematically, some banks placed customers' money in the stock market (without their knowledge). With the stock market prices upward bound, everything seemed wonderful. When the great crash hit in October, these people were taken by surprise. However, there had been warning signs.

On March 25, 1929, the stock market suffered a mini-crash. It was a sign of what was to come. As prices began to drop, panic struck across the country as margin calls were issued. When banker Charles Mitchell made an announcement that his bank would keep lending, his reassurance stopped the panic. Although Mitchell and others tried the tactic of reassurance again in October, it did not stop the big crash.

By the spring of 1929, there were additional signs that the economy might be headed for a serious setback. Steel production went down, house construction slowed and car sales declined.

At this time, there were also a few reputable people warning of an impending, major crash, however, as month after month went by without one, those that advised caution were labeled pessimists and ignored.

Rise and Fall

From June through August, stock market prices reached their highest levels to date. To many, the continual increase of stocks seemed inevitable. When economist Irving Fisher stated, "Stock prices have reached what looks like a permanently high plateau," he was stating what many speculators wanted to believe.

On September 3, 1929, the stock market reached its peak with the Dow Jones Industrial Average closing at 381.17. Two days later, the market started dropping. At first, there was no massive drop. Stock prices fluctuated throughout September and into October until the massive drop on Black Thursday.

Black Thursday - October 24, 1929

On the morning of Thursday, October 24, 1929, stock prices plummeted. Vast numbers of people were selling their stocks. Margin calls were sent out. People across the country watched the ticker as the numbers it spit out spelled their doom. The ticker was so overwhelmed that it quickly fell behind. A crowd gathered outside of the New York Stock Exchange on Wall Street, stunned at the downturn. Rumors circulated of people committing suicide.

Black Monday - October 28, 1929

Although the market had closed on an upswing on Black Thursday, the low numbers of the ticker that day had shocked many speculators. Hoping to get out of the stock market before they lost everything, they decided to sell.

Black Tuesday - October 29, 1929

Known as the worst day in stock market history. There were so many orders to sell that the ticker quickly fell behind. People were in a panic, they couldn't get rid of their stocks fast enough. Since everyone was selling and nearly no one was buying, stock prices collapsed.

Rather than the bankers rallying investors by buying more stocks, rumors circulated that they were selling. Panic hit the country. Over 16.4 million shares of stock were sold - a new record.

The Stock Market Crash of 1929 occurred at the beginning of the Great Depression. Whether it was a symptom of the impending depression or a direct cause of it is still hotly debated.

Stock Market Crash 1929