Okla-homey
10/29/2007, 06:08 AM
October 29, 1929: Stock market crashes
http://aycu35.webshots.com/image/33434/2002563278087355246_rs.jpg (http://allyoucanupload.webshots.com/v/2002563278087355246)
78 years ago today, Black Tuesday hits Wall Street as investors trade 16,410,030 shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors, and stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression.
http://aycu21.webshots.com/image/33380/2002510523992711262_rs.jpg (http://allyoucanupload.webshots.com/v/2002510523992711262)
Folks milling about on Wall Street in shock. Suicides spiked in November of 1929.
During the 1920s, the U.S. stock market underwent rapid expansion, reaching its peak in August 1929, a period of wild speculation. By then, production had already declined and unemployment had risen, leaving stocks in great excess of their real value.
Compounding the problem, many investors bought shares on credit, and when the market crashed, brokers called in those debts. People couldn't pay them because they didn't have the cash. That exacerbated the problem and led to a run on the banks.
As you know, banks don't keep enough cash on hand to give back every dollar on deposit. A lot of it leaves the vault in the form of loans because earning interst on loans is how banks make a profit. Thus, if everyone hits the teller window and demands all their money on deposit, the bank has no choice but to close and a lot of people leave empty-handed. Compounding the problem was widescale defaults on loans because people lost their jobs when employers went under. In short, it was a ginormous mess.
http://aycu08.webshots.com/image/32647/2002504918192165863_rs.jpg (http://allyoucanupload.webshots.com/v/2002504918192165863)
Among the other causes of the eventual market collapse were low wages, the proliferation of debt, a weak agricultural sector, and the excess of large bank loans that could not be liquidated as mentioned above.
Stock prices began to decline in September and early October 1929, and on October 18 the fall began. Panic set in, and on October 24--Black Thursday--a record 12,894,650 shares were traded. Investment companies and leading bankers attempted to stabilize the market by buying up great blocks of stock, producing a moderate rally on Friday.
http://aycu09.webshots.com/image/32128/2002528831131439669_rs.jpg (http://allyoucanupload.webshots.com/v/2002528831131439669)
On Monday, however, the storm broke anew, and the market went into free fall. Black Monday was followed by Black Tuesday, in which stock prices collapsed completely.
http://aycu28.webshots.com/image/30147/2002571340988607492_rs.jpg (http://allyoucanupload.webshots.com/v/2002571340988607492)
After October 29, 1929, stock prices had nowhere to go but up, so there was considerable recovery during succeeding weeks. Overall, however, prices continued to drop as the United States slumped into the Great Depression, and by 1932 stocks were worth only about 20 percent of their value in the summer of 1929.
The stock market crash of 1929 was not the sole cause of the Great Depression, but it did act to accelerate the global economic collapse of which it was also a symptom.
http://aycu14.webshots.com/image/33013/2002566964607948012_rs.jpg (http://allyoucanupload.webshots.com/v/2002566964607948012)
This famous photo of Oklahoman Florence Owens Thompson and her children was taken by Farm Security Administration photographer Dorothea Lange in Nipomo, California, in March of 1936. The family arrived in the Pajaro Valley later that day, hoping to find work picking lettuce.
By 1933, nearly half of America's banks had failed, and unemployment was approaching 15 million people, or 30 percent of the workforce. It would take World War II, and the massive level of armaments production taken on by the United States, to finally bring the country out of the Depression after a decade of suffering.
http://aycu15.webshots.com/image/32014/2002503709287977791_rs.jpg (http://allyoucanupload.webshots.com/v/2002503709287977791)
http://aycu35.webshots.com/image/33434/2002563278087355246_rs.jpg (http://allyoucanupload.webshots.com/v/2002563278087355246)
78 years ago today, Black Tuesday hits Wall Street as investors trade 16,410,030 shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors, and stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression.
http://aycu21.webshots.com/image/33380/2002510523992711262_rs.jpg (http://allyoucanupload.webshots.com/v/2002510523992711262)
Folks milling about on Wall Street in shock. Suicides spiked in November of 1929.
During the 1920s, the U.S. stock market underwent rapid expansion, reaching its peak in August 1929, a period of wild speculation. By then, production had already declined and unemployment had risen, leaving stocks in great excess of their real value.
Compounding the problem, many investors bought shares on credit, and when the market crashed, brokers called in those debts. People couldn't pay them because they didn't have the cash. That exacerbated the problem and led to a run on the banks.
As you know, banks don't keep enough cash on hand to give back every dollar on deposit. A lot of it leaves the vault in the form of loans because earning interst on loans is how banks make a profit. Thus, if everyone hits the teller window and demands all their money on deposit, the bank has no choice but to close and a lot of people leave empty-handed. Compounding the problem was widescale defaults on loans because people lost their jobs when employers went under. In short, it was a ginormous mess.
http://aycu08.webshots.com/image/32647/2002504918192165863_rs.jpg (http://allyoucanupload.webshots.com/v/2002504918192165863)
Among the other causes of the eventual market collapse were low wages, the proliferation of debt, a weak agricultural sector, and the excess of large bank loans that could not be liquidated as mentioned above.
Stock prices began to decline in September and early October 1929, and on October 18 the fall began. Panic set in, and on October 24--Black Thursday--a record 12,894,650 shares were traded. Investment companies and leading bankers attempted to stabilize the market by buying up great blocks of stock, producing a moderate rally on Friday.
http://aycu09.webshots.com/image/32128/2002528831131439669_rs.jpg (http://allyoucanupload.webshots.com/v/2002528831131439669)
On Monday, however, the storm broke anew, and the market went into free fall. Black Monday was followed by Black Tuesday, in which stock prices collapsed completely.
http://aycu28.webshots.com/image/30147/2002571340988607492_rs.jpg (http://allyoucanupload.webshots.com/v/2002571340988607492)
After October 29, 1929, stock prices had nowhere to go but up, so there was considerable recovery during succeeding weeks. Overall, however, prices continued to drop as the United States slumped into the Great Depression, and by 1932 stocks were worth only about 20 percent of their value in the summer of 1929.
The stock market crash of 1929 was not the sole cause of the Great Depression, but it did act to accelerate the global economic collapse of which it was also a symptom.
http://aycu14.webshots.com/image/33013/2002566964607948012_rs.jpg (http://allyoucanupload.webshots.com/v/2002566964607948012)
This famous photo of Oklahoman Florence Owens Thompson and her children was taken by Farm Security Administration photographer Dorothea Lange in Nipomo, California, in March of 1936. The family arrived in the Pajaro Valley later that day, hoping to find work picking lettuce.
By 1933, nearly half of America's banks had failed, and unemployment was approaching 15 million people, or 30 percent of the workforce. It would take World War II, and the massive level of armaments production taken on by the United States, to finally bring the country out of the Depression after a decade of suffering.
http://aycu15.webshots.com/image/32014/2002503709287977791_rs.jpg (http://allyoucanupload.webshots.com/v/2002503709287977791)