The Stock Market Crash Of 1929
by Takara Alexis

When the stock market crashed in 1929, it didn't happen on a single day. Instead, the stock market continued to plummet over the course of a couple of days setting in motion one of the most horrible periods in the history of the United States.

The most significant events started on Black Thursday, October 24, 1929. On that day, nearly 13 million shares of stock were traded. It was a record number of stock trades for the U.S. and marked the end of an upward trend on stock expenses. On Black Thursday, the stock prices dropped so fast, the stock ticker could not keep up. As the day carried out, the stock ticker lagged behind, failing to show the most up to date stock costs.

On the following day, Friday, October 25, many of the nation's largest bankers met to decide what they could do about the circumstance. Among the attendees were the heads of Morgan Bank, Chase National Bank, and National City Bank. The bankers finally decided to purchase a number of U.S. Steel shares above market price.

In those days, the stock market traded 6 days a week rather than 5. The bankers' move led to a small rise in stock cost on Saturday, October 26. But over the weekend many investors lost faith in the stocks and decided to sell their shares. When the markets reopened on Monday, October 28, 1929, another record number of stocks were traded and the stock market dismissed more than 22%. The situation worsened yet again on the infamous Black Tuesday, October 29, 1929 when more than 16 million stocks were traded. The stock market ultimately lost $14 billion that day.

In the years leading up to the stock market crash of 1929, the stock market had acquired a lot of popularity as a way of making money. Because stocks prices had been on the rise, they gained the reputation of being a safe way to invest. Many investors believed stocks were their ticket to riches.

Even after Black Tuesday, stock prices continued to fall until November 23, 1929 when there was a limited period of stabilization. Though it appeaed like the worst was over, there was more decline to come. After that, the stock market continued to fall until it reached its lowest point on July 8, 1932.

The stock market crash devastated the American economy because not only had individual investors put their money into stocks, so did businesses. When the stock market crashed, businesses lost their money. Consumers lost their money too, because many banks had invested their money without their permission or awareness.

The Great Depression came shortly after. Even though the stock market crash of 1929 was one of the contributors to The Depression, it was not the only cause. Companies had begun to overproduce consumer goods, but demand for those items didn't go up at the same rate. Prices of those goods began to fall, but once the stock market crashed, few people could afford to buy products.

In 1930, Hoover signed the Smoot-Hawley Tariff, which increased the tariff amount on items that were imported. Foreign nations answered by boycotting American products. This severely hurt American producers who were in dire need of sales.

After the stock market crash of 1929, the government took several measures to prevent a similar crash from occurring. The Securities and Exchange Commission (SEC) was created on October 1, 1934 to regulate stocks, bonds, and other commissions. The Federal Deposit Insurance Corporation (FDIC) was also created to insure consumers' deposits in FDIC-enrolled financial institutions. The Federal Crop Insurance Corporation (FCIC) was established to insure crops planted by farmers.

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