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Causes And Effects Of Black Tuesday

Good Essays
October 29th, 1929, was the start of possibly the worst time periods in the history of United States, and has since been know as “Black Tuesday”. This was the day one of the biggest stock market crashes the U.S. has experienced. Prior to the crash, almost everyone was partying and having a good time spending all of the money they earend in the Wall Street stock market. Real Estate was high and so were stocks, and over the last decade citizens had been investing more money than they had hoping the stock would continue to rise. This era was known as the “Roaring Twenties” During Roaring Twenties, the U.S. was thriving off of the stock market as prices kept on going up and up, and many believed it would continue, but some were skeptical. Because…show more content…
The crash has started; everyone began selling because the earnign ratio was so high, but no one was buying. The more that was sold, the less the value, and bankers had to buy the stocks as they fell to try and slow them down before they hit rock bottom. The root cause of this was Dow Jones Industrial, one of the leading companies to invest in at the time. Because of their fall, many Americans lost money, everyone was trading. The market sold 12.9 million shares lost $5 billion dollars, and this was all over the course of one day. The panic was high, but was lowering because of the work of the bankers, but it was too late to save the market. Come the end of the following Monday the market has dropped down 2.6%, the biggest one-day decline in U.S. history. The morning of Tuesday, October 29th, 1929, Dow Jones Industrial opened at 252.6, following the previous closing of 260.64. Due to the small dip from last week, people believed their stock was in danger, and wanted to sell their shares while they could still gain profit, so when the banks began to suddenly start selling, everyone want to get what they could before it was too late. Back then, the only way to find out the value of stock was through a slow ticker tape machine that would receive numbers and print them…show more content…
Many had unknowingly lost all of their money. To add insult to injury, many brokers even called in loans, forcing some to use their entire life savings on to pay them off. Upon seeing the news, some investors jumped out of windows because they had lost all hope of recovery. As for everyone else, they yelled, roared, fell to the floor; the police were called into the stock exchange to keep control. By the end of the day, Dow closed at 212.33, 16.4 million stocks had been traded, and a total of $14 Billion dollars were lost, 185 billion in today 's money. All of the gains from 1929 had been lost in one day. While the initial drop isn 't as devastating as it sounds, it did put the market on a do wards spiral for the coming years. Over the next four days, the market dropped 25% (30 Bil), ten times the federal budget, and more than what was spent during WWI. By November 13 of the same year, the market hit its lowest for a total loss of $100 Billion, which translates to about $1.3 Trillion in today 's market. From October 1929 to July 1932, 89% of the market had been
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