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.
Billions of dollars and a number of precious lives were lost. But what we particularly think about Stock Crashes and how does it affect to common lives. The stock markets crashes and its affects are interrelated. The term stock crash came in to English Dictionary around 200 years ago. There was a first stock market crash in the history of economy and in early industrialization era, in the year 1878.
1929 Stock Market Crash On October 3, 1929 The Dow Jones started to drop from a recent high of 381. The average of the Dow Jones then kept dropping throughout the week of October 14. The night of Monday October 21,1929, margin calls were heavy, and numerous Dutch and German sell calls came in overnight for the Tuesday morning opening. On Tuesday morning, out-of-town banks and corporations called in $150 million of call loans, and Wall Street was in a panic before the New York Stock Exchange opened. On October 24, 1929, people began selling their stocks as fast as they could.
Of course, following “Black Thursday,” the more well-known “Black Tuesday” ensued as a result of this. Between Black Monday and Black Tuesday, the market lost 24% of its value, and investors bought and traded over 28.9 million stocks. These stocks, now worthless, were used as firewood for some investor’s homes. The Dow Jones Company is perhaps the greatest example for this crash. Dow Jones started at 191 points at the beginning of 1928, then more than doubling to 381 points by September 1929.
The Great Depression was the biggest and longest lasting economic crisis in U.S history. The Great depression hit the united states on October 29, 1929 When the stock market crashed. During 1929, everyone was putting in mass amounts of their income into the stock market. For every ten dollars made, Four dollars was invested into the stock market, thats forty percent of the individual's income (American Experience). during 1929 the stock market was the best way to make money, most of american population invested in the stock market, and back then the government assured people it was the best time to buy houses since the stock market was booming.
On October 23rd the market declined by four billion dollars and if the events of the 29th did not happen then the 23rd would have gone done in history as the major stock market event. The events of the 23rd were dwarfed by the proceedings of the morning of the 29th when it was said that within a few hours of the stock market being open that day, the prices had fallen so low that they wiped out all of the gains that have been made in the entire previous year. Since the stock market was viewed as an indicator of the American economy, the public’s confidence in the economy was shattered.
Large corporation owners and wealthy investors tried to fix the dilemma by buying large pieces of stock but the market had officially crashed and the American people had lost 14 billion dollars in that single day and that value would only increase until November 13th when the market reached its all time low (Nishi, 2001). As the Great Depression grew in severity, America needed a new leader. They needed someone who would guide them to a path of renewal and relief. That leader was elected in 1932 and his name was Franklin D. Roosevelt. Born Jan... ... middle of paper ... ...d as a community.
The stock market is where you buy or sell stocks in a company. A stock market crash is when stocks take a big decline in the DOW ( Dow Jones Stock Average). In the nineteen twenties the DOW hit an all time low with a decrease of ninety percent. The reason why the stocks fell were because twelve point nine million dollars in stocks were sold on just one day. That’s three times the amount sold on any other normal day.
When traders buy stock, they were buying from the company and a stake in the company. On October 24, 1929, (a.k.a. Black Thursday) the stock market fell 9% and five days later the market fell an unprecedented 17.3%. About 29 million shares of stock changed owners causing, at the time, the biggest stock market crash in the history of the United States. In the decade before the crash, America was thriving and production was soaring.
Although this day is considered the trigger to the massive economic fallout, the American and global economies had been in turmoil for six months prior to Black Tuesday, and many other factors contributed to what’s known as the worst economic crash in modern history. With few regulations on the stock market in the years leading up to the Great Depression, investors were able to buy stocks on margin, only requiring them to put down ten percent. This caused for wild speculation, and many people funneling their life savings into the stock market, which led to artificially high prices. After Black Tuesday, many people began to believe that the banking system in America was going to fail. Thousands flocked to the banks to withdraw their money.