28 October 2005

This Day In History

1929 The Great Crash of 1929

October 29, 1929, is a day like no other in Wall Street history. Black Tuesday, the day of the Great Crash, was a day of frenzied, panic-fueled trading, as investors struggled desperately to avoid financial ruin. When the dust settled, sixteen million shares had been sold on the New York Stock Exchange. Stock prices had plummeted and the nation was sent spiraling toward the Great Depression. It wasn't supposed to happen this way. During the three-year bull market that had kicked off in 1927, the nation's economy was booming, convincing even some of the most cynical souls that America's economy was a powerful machine, capable of spreading wealth and prosperity to the farthest reaches of the land. But, by the fall of 1929, the capitalist engine had begun to sputter. Steel and automobile production was waning, while the rest of the economy showed signs of decline. The Bull Run, which had been built out of the smoke and mirrors of over-extended credit, was on the verge of collapse, as investors were increasingly hard-pressed to pay back their loans. A few days before the crash, a coterie of wealthy financiers tried to stave off disaster by snapping up stocks. Unfortunately for the millions of Americans devastated by the crash, the move proved to be fruitless.

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