Black Tuesday Research Paper

The Roaring Twenties was the loudest on the New York Stock Exchange. Share prices rose to unprecedented heights. When prices were at their peak in 1921, economist Irving Fisher proclaimed “stock prices have reached, what looks like a permanently high plateau” (Richardson). On October 29th, 1929, Black Tuesday hit Wall Street as investors traded over 16 million shares on the New York Stock Exchange. Over Billions of dollars were lost, wiping out many investors. The effects of Black Tuesday made the industrial world spiral downward into the Great Depression, the longest-lasting economic downturn in the history of the Western industrialization period (History.com Staff). During the 1920s, the US Stock Market went under expansion, reaching the

The epic boom ended in a catalytic bust. On Black Monday, the Dow declined nearly 13 percent and on Black Tuesday the market dropped nearly 12 percent. By November, the Dow had lost almost half its value. This downfall kept happening until 1932, when the Dow closed at 41.22, eighty-nine percent below its peak. The Dow did not return to its pre-crash heights until November 1954” (Richardson). On Black Tuesday, the New York Times headlines fanned the panic with articles about margins sellers, short-selling and the exit of foreign investors. The press reported the stock market drop in newspapers and everyone was worried about the massive declines in the stock market. By Black Thursday, panic had set in for the worst stock market crash in history (Amadeo). When the Stock Market crashed, this caused all companies the lose value and many people were unemployed. With the businesses closed, people out of work and other factors, the United States were driven into a Great Depression. The economic Great Depression would last throughout the 1930’s. The Depression slowly started to recover throughout the 1940’s

It was believed that it would take over thirty years for the Stock Market to go back to normal (DeGrace). The Stock Market back then was very similar to how it is today. Certain regulations on the stock market purchases, during the Great Depression, made investors by stocks on margin, with the only requirement being putting down ten percent. In other words, they could buy one hundred dollars worth of stock for a simple ten dollar investment, and if that stock went up by merely ten percent, they would have doubled their investment. “This leveraging led to wild speculation, with people cashing in their life savings to funnel money into the stock market, which led to artificially high prices. Stock market regulations were put in place during the Great Depression to prevent the same catastrophe from repeating in the financial markets, but several years later, Americans aimed a similar greed toward the housing market” (Croft Communications). Millions of people bought homes they couldn’t afford, with money they didn’t have. They took out large loans and weren’t able to pay them back to their banks. Work