Black Thursday – The Wall Street Crash of 1929

Street scene on Black Thursday, Oct. 24, 1929,
the day the New York stock market crashed  © Bettmann/Corbis

The Wall Street Crash of 1929, also known as the Great Crash and the Stock Market Crash of 1929, began in late October 1929 and was the most devastating stock market crash in the history of the United States. The crash signaled the beginning of the 10-year Great Depression that affected all Western industrialized countries, in Germany also referred to as the “Weltwirtschaftskrise”.

The optimism and financial gains of the Wall Street stock market were shaken on “Black Thursday“, October 24, 1929, when share prices on the New York Stock Exchange (NYSE) abruptly fell. On this very day, the crash started with a market loss of 11% of its value at the opening bell on very heavy trading.

There are many theories concerning the causes of the Great Depression. There are for instance the monetarists, believing that mistakes by authorities led to the decrease of money supply. In order to the monetarists, these facts caused a recession and later the Great Depression. Theories by the famous economist John Maynard Keynes are part of the demand-driven theories, meaning that the reduction on consumption due to a lack of confidence led to deflation. People tended to keep their money out of the markets, the prices dropped and therefore the demand dropped as well.

The causes of the Great Depression are still highly discussed, but however, finding a perfect answer does not change the effects and what the people had been through in this period. For once, the bankers became the presumably most unpopular people, in contrast to the bank robber heroes such as Bonnie and Clyde. The Depression hit the people around the globe. In Germany, it is seen as one of the factors that led the political system towards extremism, and the rise of the Nazi Party. The unemployment rate increased to more than 30%, which was highly used by Hitler in his propaganda speeches. In the United States hundreds of thousands found themselves homeless and more than 5000 banks had failed. The government passed several acts, like the Federal Home Loan Act to increase home construction and reduce homelessness.

Recovery set in at most countries in 1933 and most people believe that the Depression has ended with World War II, because of the War reducing unemployment and the massive spending in war nearly doubled the economic growth rates in the United States.

 At yovisto you can learn more about the Stock market and financial markets in the lecture of Prof. Robert Shiller from Yale University on ‘Corporate Stocks‘.

References and further Reading:

Facebooktwittergoogle_pluspinteresttumblrFacebooktwittergoogle_pluspinteresttumblr

One comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Relation Browser
Timeline
0 Recommended Articles:
0 Recommended Articles: