A Brief History
On October 24, 1929, the New York Stock Exchange suffered the catastrophic day of losses known as Black Thursday, the day that for all intents and purposes started the Great Depression. Also known as The Great Crash or The Crash of ’29, this was the most significant stock market crash and economic event in the history of the United States, so enormous in scope that it plunged the entire industrialized world into a decade long depression.
Digging Deeper
The 1920’s in the United States was a time of excitement and prosperity. Women could vote, Prohibition went into effect, movies became common, voice radio entertained people in their own homes and millions of people invested in a stock market that seemed like the only direction was up. This investment was largely made on “spec,” short for speculation, where the investor did not really put up money, but on paper bought the stock and sold it at a profit before his payment was due, allowing people to make money even though they did not personally have the money to invest. This “house of cards” so to speak was bound to fail.
The US Federal Reserve Commission warned of the dangerous nature of excessive speculation months before the crash, but like Cassandra, the Fed was doomed to be ignored. Throughout the summer of 1929 there were ominous hints of trouble, with auto and steel production declining, construction slowing, and personal and corporate debt piling up because of easy credit with low interest rates. The entire country was getting dangerously under capitalized. The Dow Jones Industrial Average stock indicator peaked on September 3, 1929 (at 381.17), causing some prognosticators to crow about a rosy future and others to warn of an impending crash. The London Stock Market crashed on September 20, 1929, and a sell off began in the US, driving stock prices down. The mixed messages from “experts” resulted in some US gains, and the market fluctuated wildly.
By October 24, 1929, at the opening bell of the stock session, the NYSE lost 11% of its value immediately upon the open. The unprecedented heavy trading overwhelmed stock tickers, and people received reports of market conditions hours late. The massive sell off triggered panic selling, which was partially stemmed by financiers pouring money into the market, buying up major stocks to prop up the stock market. This resulted in something of a rally that partially continued on Friday, October 25, 1929, but on the following Monday, October 28, 1929 now known as Black Monday, things had regressed to more panic selling resulting in a loss of 13%. The following day, not surprisingly known as Black Tuesday, the market lost another 12%. The record volume on Black Tuesday was not matched for 40 years.
The market fluctuated for the next few months, but the damage was done. So many people and companies were ruined that the Great Depression would not end until World War II firmly planted the United States as the world’s only industrial giant not ravaged by the war. Historians and economist debate the reasons for the crash and the results rather enthusiastically to this day, and there is much disagreement on the hows and whys of this disaster. Apparently not a heck of a lot was learned, because in 2008 we suffered another giant stock market economic catastrophe that we are still suffering for.
Question for students (and subscribers): Will we ever learn? Give us your opinions on this subject in the comments section below this article. Note: If black ink means profit, and red ink means loss, why do we not call these terrible days Red Thursday, Red Monday, etc? Just wondering…
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Historical Evidence
For more information, please see…
Tabuteau, Pierre. The black Thursday – Economics and Political Consequences: October 24th 1929. 2015.
<span class="dsq-postid" data-dsqidentifier="14826 https://www.historyandheadlines.com/?p=14826">94 Comments
I didn’t realize that the NYSE lost 11% of it’s value almost immediately after it opened. That is an astonishing amount to lose and showed that it effected the company greatly.
I can’t imagine being someone who had money invested in the market. I can’t even begin to imagine the panic that it induced or how I would have tried to calm myself down about what to do.
I would be devastated to lose all of my savings during the stock market crash. It would be hard to recover after such a huge loss.
I’m curious to know why it was referred to as “Black” Thursday…
My great grandfather was alive during the depression and the day before the market he saw it coming and pulled all of his money out of the stock market and the banks. He tried to tell his then girlfriend who would become his future wife to do the same and she didn’t believe it would happen and she lost everything luckily one of them didn’t lose everything.
A loss like many of these people would probably be the end of my life.
I believe that black was used to imply a negative association. I occasionally will hear someone refer to negative events as Black Thursday.
Many people killed themselves when they lost all their money, perhaps that is why it is “black” instead of “red.” Many experts are predicting another downward market turn like 2008 and I have not yet fully recovered from that one. I feel sorry for President Elect Trump, I think he will have his hands full.
My great grandmother was alive during the time of the Great Depression. She was very young at the time, in about 10th grade. She actually dropped out of high school to start to find a job to help support her family. She told m grandma that she got a job at the grocery store, and that she would work an entire week and spend all of her money on a couple boxes of pasta to help feed her family.
I’m still amazed that stocks can have such an effect on not just the US but everyone. But then again we are all interlinked in some way.
I am glad that we have regulations today so this will hopefully never happen again.
It would be incredibly tragic having your trust in stocks and the market crashing. A lot of people relied on that money to live on.
I still view investments in the stock market as risky, but to make an investment with money that they did not actually have is very irresponsible and the outcome after the stock market crashed does not surprise me.
I have such a mix of emotions reading about “Black Thursday”. On one hand, there is the sadness I feel for average Americans who invested what little they could in stock trading. On the other hand, though, there is the amazing strength and diligence of the US to come back from such a financial tragedy.
The stock market is a risky business. You would think that after the first crash we would have learned our lesson but apparently not.
confidence in the stock markets is a pretty safe bet but even if you hide it in your mattress, if the stock market crashes it doesn’t mean a thing because that money is worth nothing.
Im scared something like that may happen now and days, with our new president he should know what to do. I hope , when trump got into office the stock exchange had started to already decrease a little. Lets not hope for depression again!!!!
Especially with the recent election, I think that it is very important that we not let history repeat itself. It is important to pay attention to the stock market, and not let that crash as well.
I am still amazed that our country was able to get out of the Great Depression and do a complete 360 towards the right direction. Our economy will never be perfect but I am glad it is where it is now. Let’s just hope history does not repeat itself.
My grandparents lived through the Great Depression and said they had to live on very little for such a long time. What happened in 2008 just shows that history can repeat itself. Many of my relatives were forced to put off retirement just to gain back some of the loss in their retirement funds, I know I lost a huge chunk!
One thing that really stood out to me is when the author talked about the market crash of 2008. This just goes to show that history can repeat itself and that a few mishaps can lead to a downfall in the economy. I am very disappointed to learn that the crash of 2008 still negatively affects thousands of Americans today.
The Great Depression was such a powerful moment in history that I hope to never see again. I am beginning to learn more and even start to invest into the stock market and to put so much time and trust into investing money and have it all just crash is absolutely terrifying. I hope that our new president can help to repair our funds and debt that we do have, rather than cause another crash.
My grand parents always talked about the Great Depression. I remember them always saying that history always repeats itself. This is evident in the article.
It’s crazy to think that just one day turned a country with a booming economy to one of “great” depression.
We so often hear about the industrial revolution and all of the good that came from it. This article reflects on what happened with the crash of the industrial revolution, and the huge impact it had on the United States, so much so we refer to it as the Great Depression.
It is crazy to think that the economy could get so bad, but unfortunately it has happened and can happen again. It would be hard growing up in a time like this.
It is crazy to think that one day the country was fine and the next it was the start of the Great Depression.
Advances in transaction was the main reason that caused the Great Depression. It happened several times globally when people repeating the process of loan money from the back that they couldn’t pay off.
The economic crisis was a serious disaster. It is unbelievable that the huge amount of money could disappear from the market just by a few days.
A class I took a few years ago talked a lot about the Great Depression. I can’t believe the amount of struggle that many Americans went through.
It surprises me how fast the money was gone. Here today and gone tomorrow.
It is breath taking how day by day the country saw the great depression coming and there was nothing anyone could do to stop it.
Interesting to learn that there was a Black Monday and a Black Tuesday. Why it is not called Red Monday, I have no idea.
The panic was what really set the Great Depression in motion but it was unavoidable due to human nature.
I can’t imagine what it would’ve been like to live in this time
It’s so sad learning about the Great Depression and what the American people had to struggle through.
Being impacted by the recession makes me glad I wasn’t alive in the Great depression. Even the people that were well-off were greatly affected and that usually never happens. I don’t even want to think about how majorly it affected the lower and middle class.
It is hard to imagine just one day can affect so many people financially, leaving them in such a ruin which was practically impossible to get out of.
The Great Depression had to be so hard to live through with so little. The week that started with “Black Monday” had to be a very nerve wracking week for America.
This was such a difficult time for them, especially with the little money and resources that they had.
It is scary to think that the entire economy can explode and go into the ground due to just the stock market.
As always, history can repeat itself. It will be interesting to see an all Republican controlled government and where it will lead our economy since it has led to the two largest market declines in history.
It’s crazy how things can change so drastically from one day to the next. Hopefully this doesn’t happen again with everything our country is going through now since the recent election.
The stock market has a high amount of power on the American economy, but then again it kind of is the economy.
I think we have learned at least a little bit. While our economy is not the greatest right now, we have not had another serious depression since then.
If anyone is interested in art you guys should look up paintings and photographs from the 20th century Great depression. I have studied a few of them and they are pretty nice.
It’s unfortunate that these crashes caused people to suffer, I remember talking to my Grandmother about the stock market crash. She told me to save my money in a box.
I remember the crash of 2008’s affects on my family’s finances being hard, I couldn’t even imagine what it must of been like to have witnessed the Great Depression.
I agree it was rough then and wow what it would have been like in the great depression.
My grandparents hid money because of the crash. The Great Depression left a lasting fear in many who lived through it.
I think the the black and red analogy has a lot to due with computers and the way spread sheets recognize negative balances. But when talking of something of gloom outside of a spreadsheet the term black is more related to gloom or bad day than the color red.
It’s terrible to see and live through a depression. Towns across the nation are ruined and jobs are lost.
It was bad and ashamed a lot of people lost their jobs. What bad times.
It was bad times back then and what was sad is there were warning signs from the Federal Government and no one took it into consideration.
The vast majority of Americans are oblivious to the stock market as it has no tangible effect on there day to day life, or that’s what they think. It’s scary to think that the market can basically shut down the country..
It’s sad to see so many people that were effected by putting their money into what they thought is something that would help them.
Playing the stock market is a legal way of gambling. Its hit or miss unless you really do your research or have someone do it for you. Its not something everyone gets into.
I agree with Jason that stock market is a legal way of gambling, but I also blame the stock market because they sell stocks has a way to become rich and the average person that work all there lives put there life saving into it, just to lose it all. Companies play with the numbers to sell there stocks and most people don’t see it until it to late.
The 1920s was a very interesting period of time for American history. The decade began well with such things as the ratification of the 19th amendment in 1920. The decade of the 1920s did not end so well, with the great stock market crash occurring in 1929.
The crash market was a horrible incident that occurred. It’s crazy to think that something like this can happen again
It is interesting how Black Thursday in our nations history is such a horrible day and how now people get excited about Black Friday. Besides that side not it truly was a horrible day in history. One question that pops in my mind is weather or not WWII pulled us out of the great depression or would we have come out of the depression without it?
It is a shame that this is something that proves that history repeats itsself. The stock market crashing in 2008 should never of happened after the Crash of 1929.
It was probably called black because it was a dire time for many Americans. Thankfully World War II helped the American economy, healing the wounds of Black Tuesday quickly, unlike the great recession of 2008, that America is still recovering from.
It seems like things were so new in this era that people threw caution to the wind. I don’t think they possessed that “too good to be true” frame of mind. They saw a way to make money and they invested in it to the point of making it fluctuate wildly until it crashed. As many people have commented, you would think that the same situation would never happen again after the occurrence of 1929.
As mentioned in the reading, it sad that U.S. still did not learn it’s lesson after suffering another depression in 2008. Another reason why history is so important, those that do not learn from the past are doomed to repeat it. Unfortunately, it took a world war to bring the U.S. out of a depression. What is even more unfortunate, a war could not bring the U.S. out of depression in 2008. The reason of not rebounding is more than like do to the amount of outsourcing the U.S. does.
I didn’t ever really know why the Great Depression happened. This article was very informative and hopefully it gives the United States a lesson on having this not happen anymore. I didn’t realize that the United States also had a depression in 2008 either.
I remember the stock marketing crashing in 2008 and the affects it had on so many people. Putting money into stocks is very risky, but it could also provide great benifits
Its funny how people are so similar about the day BLACK FRIDAY and get so excited about shopping and having great deals on that day, while Black Thursday in our nations history is such a horrible day.
The crash of ’29 put the United States in depression for about 10 years. Its scary to see almost 80 years later a similar incident occurred. In 2008 the stock market crashed causing a recession here in the United States.
Sometimes I wonder what would happen today if the Stock Market crashed again.
I think there is definitely the possibility of the stock market crashing again, it may not be soon but could definitely happen. It’s interesting how we have Black Friday a day of shopping at super sale prices and everyone loving it and having fun. When Black Thursday was one of the most awful days that had happened in the market and America.
Americans seem to always have a problems spending more money than they have, and then they wonder why they loose everything, and go “belly up”.
” History repeats itself” is a phrase that is commonly stated. In this case history, did repeat in 2008 with the stock market crash. We as society should learn from the past and try to stop repeating the things that failed in the past. Things such as what led to the stock market crash or even the housing market crash in 2006.
It always amazes me those people that have no idea what a budget is. If you don’t spend more money than you are bringing in, you stay out of debt. Easy peasy.
I know next to nothing about the stock market but I had previously learned about the “Black Thursday” crash that would lead to the Great Depression.
I remember slightly hitting on the stock market crash in 2008 in a class I took in high school leading to the Great Depression. Nevertheless I believe this will happen again in my lifetime because as stated by others history repeats itself and this is one thing that has happened a few times.
Just as others have said, history has and will continue to repeat itself. Business owners and those contributing to the stock market need to learn to be more conscience about these situations and possibly the next crash won’t be so terrible. I honestly don’t know much about the stock market but I don’t like seeing it crash, that’s for sure!
The stock market fluctuates. There will be ups and downs, it the nature of the beast. The Great Depression was obviously a different situation, but I could definitely see it happening again. America isn’t so good with money.
I did not know much about the crash when it happened and growing up and learning more and more about the stock market has help me grasp what went on. This will happen again and I hope it is not so horrific!
When people are purchasing things on “credit” and hoping to sell and make a profit before time comes to pay up, it seems plausible to assume the outcome is not going to be positive. Unfortunately we did not learn from such a catastrophic event decades ago. Though I am no speaking specifically to the stock market, this is what is happening to all around us to several people in their own individual situations.
From 1929 to 2008 nothing was learned. Is it true that history repeats itself? I’ve always wanted to ask a historian this question.
Dear Robin,
There are certainly “similar” events that seem to repeat, but they generally are not exactly the same. There often are some significant differences. With that said, there still are a lot we can learn from the past that give us some insights into how things could potentially play out.
Sincerely,
Dr. Zarzeczny
I guess I never really knew how the crash exactly happened. I speculated that it had to have been a mass selling of stock shares. Its unfortunate knowing that many lives were lost to suicide because of this when money is not the only thing that matters.
Our economy is in debt and hopefully our new president will be able to help with that.
When I first looked at the picture of the trading floor of the New York Stock Exchange in 1930, I got an eerie feeling. The Great Depression was a horrifying event for our country. Even though we experienced a similar economic impact in 2008, I could not imagine an entire decade long depression. I oftentimes think people do forget what has happened in the past; because people do seem to forget, they are bound to make the same mistakes and will have to live with the consequences.
When it comes to greed, some people will do anything they can to try to get rich. It is only a matter of time before the “house of cards” comes tumbling down.
Hopefully, we do not experience this crisis again, although we did come close in 2008. We really need to work on debt as a nation and on personal debt. Fingers crossed my student loans are paid off sooner, rather than later!
I can’t imagine experiencing this crisis with a family, and trying to support them. What a scary time that must have been, and to think we were close in 2008.
This is a scary topic. I have retirement money in stocks. I don’t even look at it. I don’t care if we have a crash… I just let it sit and hope for the best. I also have a savings account though, it doesn’t offer as much potential for return, but the money is federally backed and it’s good to have an accessible safety net. The key in stocks, as I understand, is to diversify, invest in many countries and different corporations.
I can’t imagine how scary this would have been for those involved. I hope we never have to experience an incident like that again.
This would be a very difficult event for those with a family to support. It is scary to think that this is always a possibility.
I really hope this doesn’t happen again! Hopefully our country will be out of debt sooner than later!
This is was an interesting article by showing depreciate of stock. When people putting their money into stock, they should aware of the potential danger in the mount their put.
It was the most significant stock market crash and economic event in the history of the United States, it looked like it was similar between Chinese economics problem. Last year, I remembered many people lose all their money because of the stock, they can not accept the reality and suicide
Where potential to earn money without money is there so will be risk. I have investments that seem to stay the course at least. A friend of mine watches his go up and down by 5K on the regular. I could not handle that kind of stress.