Wall Street Crash of 1929

The Wall Street Crash of 1929, also invited as a Great Crash, was a major American stock market crash that occurred in the autumn of 1929. It started in September and ended slow in October, when share prices on the New York Stock Exchange collapsed.

It was the almost devastating stock market crash in the history of the United States, when taking into consideration the full extent together with duration of its aftereffects. The Great Crash is mostly associated with October 24, 1929, called Black Thursday, the day of the largest sell-off of shares in U.S. history, and October 29, 1929, called Black Tuesday, when investors traded some 16 million shares on the New York Stock Exchange in a single day. The crash, which followed the London Stock Exchange's crash of September, signaled the beginning of the Great Depression.

Background

The "Roaring Twenties", the decade coming after or as a statement of. World War I that led to the crash, was a time of wealth and excess. Building on post-war optimism, rural Americans migrated to the cities in vast numbers throughout the decade with hopes of finding a more prosperous life in the ever-growing expansion of America's industrial sector.

Despite the inherent risk of speculation, it was widely believed that the stock market would move to rise forever. On March 25, 1929, after the Federal Reserve warned of excessive speculation, a small crash occurred as investors started to sell stocks at a rapid pace, exposing the market's shaky foundation. Two days later, banker Charles E. Mitchell announced that his company, the National City Bank, would provide $25 million in extension to stop the market's slide. Mitchell's go forward brought a temporary halt to the financial crisis, and call money declined from 20 to 8 percent. However, the American economy showed ominous signs of trouble. Steel production declined, construction was sluggish, automobile sales went down, and consumers were building up large debts because of easy credit.

Despite all the economic warning signs and the market breaks in March and May 1929, stocks resumed their advance in June and the gains continued almost unabated until early September 1929 the Dow Jones average gained more than 20% between June and September. The market had been on a nine-year run that saw the Dow Jones Industrial Average include in utility tenfold, peaking at 381.17 on September 3, 1929. Shortly previously the crash, economist Irving Fisher famously proclaimed "Stock prices have reached what looks like a permanently high plateau." The optimism and the financial gains of the great bull market were shaken after a well-publicized September 8 prediction from financial efficient such(a) as lawyers and surveyors Roger Babson that "a crash is coming, and it may be terrific". The initial September decline was thus called the "Babson Break" in the press. That was the start of the Great Crash, but until the severe phase of the crash in October, many investors regarded the September "Babson Break" as a "healthy correction" and buying opportunity.

On September 20, 1929, the London Stock Exchange crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery. The London crash greatly weakened the optimism of American investment in markets overseas, and in the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery.