By Nate Treloar & Sam Danker
Black Tuesday was the most catastrophic stock market crash in U.S. history that occurred during the Roaring Twenties, when the price of stocks completely collapsed. It was the worst day in the history of New York Stock Exchange as well.
Black Tuesday occurred on October 29, 1929. The effects on the stock market of that day, called the Great Depression, lasted through 1954.
March 1929- Dow dropped, but bankers assured investors that everything was fine
September 29, 1929- Hatry case caused panic
October 24, 1929- Black Thursday
October 28, 1929- Black Monday
October 29, 1929- BLACK TUESDAY
On the day, the Dow lost 90% of it's value, and sent the country into despair. Caused the citizens of the U.S. to lose trust in Wall Street. The unemployment rate rose to 25%, wages fell 42%, economic growth fell 50%, and world trade dropped a drastic amount of 65%. After the crash, the amount of goods and services produced by American companies fell drastically. There were thousands of foreclosures, mostly banks and farmland. Companies became barely worth 10% of their former value. Rural families and farmers couldn't sell their goods because the people who bought them didn't have money to buy them anymore. By 1932, more than 30 million people couldn't find a job. This economic meltdown lasted a solid decade. Black Tuesday attributed hugely to the Great Depression and destroyed confidence in the economy.
Black Tuesday/ Market Low
Graph showing Black Tuesday and the Market Low.
Percentages of Loss
Graph showing the percentages fallen in the days leading up to Black Tuesday and the crash.
Newspaper article headlining the stock market crash.
Why it happened. (Causes)
In the days leading up to the Crash, the market was already jittery. Brokers were scared because of the Hatry case, which was when the Clarence Hatry's company lost billions when people found out it was using fake collateral to buy United Steel. The Dow had already dropped 20% from it's September 3 high. As stock prices dropped on Black Tuesday, many began to panic but didn't know how bad it would actually become. The tickertapes couldn't even keep up with the falling stock prices. On the floor of the stock exchange, it was pandemonium. Buyers and sellers were shouting and screaming and often fell to the floor when the got news about another stock price.
The actual market crash itself took place on Wall Street in New York, and the effects rippled throughout the country and eventually, the world.
# of People Impacted
Many people and their families were devastated by the economic impacts of Black Tuesday and the Great Depression. The unemployment rate rose to 25%. In 1932, it was reported that 25,000 families were wandering about the country trying to find some form of employment, food, and shelter and 250,000 homeless teenagers roaming America by freight train, all as a result of the events of Black Tuesday.
Who was involved?
The crash was more or less caused by speculators, or people who saw a chance of striking rich by buying stocks and ignoring what consequences would follow. Another group of people who would be at fault are the people who bought on a margin, as they didn't have the means to fully pay for what they bought, and hoped the the stock would go up. Instead, it went down, and they were even more in debt than when they started.
In conclusion, Black Tuesday was the biggest crash of the stock market in history and was responsible for an astronomical amount of people to lose their jobs, and for the employment rate to plummet. The effects lasted for almost thirty years.