Black Tuesday: The 1929 Stock Market Crash
If you’re looking for details and insight into exactly what happened on that fateful day in American history known as Black Tuesday, then keep reading to fully understand and comprehend the events that occurred that day. The Stock Market had it’s most significant drop in history at the time and caused widespread panic throughout the United States. Everyone wanted to sell their stock, which only made the stock prices drop even more causing panic with the American people and their financial institutions.
It’s not easy to describe the 1929 Stock Market crash without realizing what type of state the U.S. was in beforehand. Everyone had good lives and things were cheap and living was easy, but people became too comfortable in their luscious lifestyles. Most hadn’t been saving for bad days and others simply worked day by day just because their could and life was simpler that way. Either way, when the bad news came in October people weren’t prepared and didn’t know what to do. It was all out panic.
The 1929 Stock Market crash was simply caused by over-confidence in the market. People were investing more and more into empty companies and new companies that couldn’t back their financial obligations. Money was starting to be taken for granted in regards to investments and people literally just threw their money at anything that looked remotely promising. It was a rude awakening for the American people, but it was much needed to prevent further financial damage.
When the Stock Market actually crashed on Black Tuesday in October, people started to panic and quickly. It only took a few days for the bank runs to happen and that literally cleared out all of the money the banks had on hand. Their wasn’t enough gold reserves to account for all the paper money in circulation, which caused massive inflation. People were literally burning barrels of money just to keep warm; paper money meant nothing during the Great Depression.
If you didn’t know about the 1929 Stock Market crash before reading this article, you should have a pretty good idea of the causes and effects after reading this article. It was caused by over-confidence in the market and lack of intelligent investment decisions by the American people.
The Main Causes of the Great Depression
If you want to learn more about the Great Depression and its causes then you will want to follow along with this article. Specifically we will talk about the Stock Market crash, the decline of foreign trade, and the failure of the American financial institutions. After reading this article, you should be able to list and describe the main causes of the Great Depression.
One of the main causes and the beginning of the Great Depression was the Stock Market crash that the U.S. was not at all prepared for. October 29th, 1929 is known as Black Tuesday because that is when the U.S. Stock Market took a hard decline in just one day. This was mainly caused by the lack of consumer confidence in American businesses and as soon as the market crashed, people began to panic and sell their stocks in companies, which only hurt the market even more. Because of this, people stopped borrowing money because they worried that they wouldn’t get it back and lead to hurt American businesses even more. The Stock Market crash of October 1929 was the worst in American history and was a pivotal beginning of the Great Depression.
Another main cause of the Great Depression was the decline of foreign trade. The United States began to import more than they were exporting and this caused a steep decline in manufacturing. Where America was once a country of manufacturing and creating, it became a country of importing goods and caused a loss of jobs. In just 3 years between 1929 and 1932, foreign trade dropped by over 70%, unemployment increased by 607%, and the American debt skyrocketed because it was bringing in more goods then it could ship out.
Finally, the backbone of the Great Depression was that the financial institutions failed because they were not ready or prepared to such a great financial disaster. Bank runs were prevalent and because people failed to have trust, the banks literally ran out of money and people couldn’t get any of the money they had placed in the banks. A precursor to this was that the banks were lending too much money in the first place that they didn’t have. Then when people wanted their money back, the banks didn’t have it. This was one of the deeper causes of the Great Depression, but it is what led to all of the modern banking regulations we have today.
There were many causes of the Great Depression, including the Stock Market crash of 1929, the decline of foreign trade between 1929 and 1932, and the failure of the American financial institutions. All of these three things were the main causes, and the fact that they happened altogether proved too much for the United States. Now you should know more about the causes of the Great Depression and will be able to handle any conversation that arises!
List of Ironic & Interesting Facts of the Great Depression
This list will be continually updated with interesting or ironic facts about the darkest period in America’s history.
Facts of the Great Depression
- Monopoly became popular during the Great Depression because people enjoyed the idea of becoming rich (at least in their imagination).
- Chain letters began in 1935 as a get-rich-scheme and the post offices had to hire extra help to take care of all the extra mail.
- One sheep farmer realized that he would not make money with his sheep and instead of watching them starve to death he killed them and threw them into a canyon.
- In 5 years nearly 750,000 farms were lost through bankruptcy or bad crops.
- The Great Depression wasn’t actually caused by the Stock Market crash, but rather the massive amount of bank runs that ensued after news of the crash spread throughout America.
The Great Depression Facts-Reasons And Factors Responsible!
As we all know that the great depression was a crisis which affected not only the Unites States of America but all the countries of the world, though it originated in America. If you look at the great depression facts you will know that though the market crash on the 29th October 1929 triggered this situation, this problem was building up for at least 6 months before that date. The market crash on the ‘black Tuesday’ was the result and not cause of the depression. The market crashed because it was not able to cope up with the problems and issues in the economic system of the country. Though it is not possible to list all the reasons and the contributing factors for this depression, many economists have talked about following reasons which may have caused or influenced this economic crisis.
Though there are different opinions of many people, we can conclude at a few points which were possibly responsible for the problem which affected the whole world. Some people think that the weak banking system in the country was responsible for this economy crash as they invested more than the capacity in the schemes or projects which ultimately resulted in to this situation. Whereas some people blame the authorities controlling the monetary matters of the country who made big mistakes while making the economic policies for the country.
Some people think that over production in the various industries in the country resulted in the cash crunch and it ultimately lead to the economy failure. If we go through the great depression facts we can see that this failure of the economic stability could also be due to the deflation and the many debts of the country which finally took their toll. There is another reason which is inflation of money which affected the price of assets as their price and the price of the capital goods was increased. Whatever the reasons and the influencing factors we have to admit that this crisis broke the very back bone of the economic system in not only the United States of America but many other countries of the world. President Roosevelt was very much responsible for the recovery of the United States as he tried many programs so that the common people can have jobs and food and shelters over their head. Various relief work programs played a crucial part in making the employment available to the youth of the country that is people between the 18 years to 25 years of age. The Empire State Building and The Golden Gate Bridge was built up through this program only. With such initiatives from the government, the country started recovering from this situation slowly but steadily.