Wall Street Crash of October 1929

(noun)

The event that marked the start of the Great Depression, when the New York Stock exchange dropped by 40% on October 29, 1929.

Related Terms

Examples of Wall Street Crash of October 1929 in the following topics:

  • The Great Depression

    • The Great Depression was the result of an untimely collision of negative economic factors that began with the Wall Street Crash of October 1929 and rapidly spread worldwide.
    • Economists still dispute how much weight to give the stock market crash of October 1929 as a cause of the Great Depression.
    • Many academics see the Wall Street Crash of 1929 as part of a historical process called boom and bust.
    • Senate to study the causes of the Wall Street Crash.
    • A crowd gathers on Wall Street following the stock market crash on October 29, 1929.

  • Hoover's Efforts at Recovery

    • These statements came mere months before the Wall Street Crash of October 29, 1929, which opened a chapter of American history that would redefine an impoverished society.
    • A strong proponent of balanced budgets who was unwilling to run a deficit to fund welfare programs, Hoover carried his idea of rugged individualism into the Great Depression that followed the crash, insisting that the federal government should not interfere with the American people during the economic crisis.
    • In 1929, Hoover authorized a program of Mexican repatriation with the stated intention of combating rampant American unemployment, reducing the burden on municipal aid services, and removing people who were considered usurpers of American jobs.
    • Reed Smoot in April 1929, shortly before the Smoot-Hawley Tariff Act passed the House of Representatives.
    • President Herbert Hoover, depicted in a March 1929 political cartoon, took up a number of federal initiatives intended to reverse the economic damage caused by the Wall Street Crash of 1929 and the Great Depression that followed.

  • Wall Street Crash of 1929

    • The Wall Street Crash of 1929, also known as the Great Crash and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout.
    • However, the one-day crash of Black Monday, October 19, 1987, when the Dow Jones Industrial Average fell 22.6%, was worse in percentage terms than any single day of the 1929 crash.
    • The Wall Street Crash had a major impact on the U.S. and world economy, and it has been the source of intense academic debate from its aftermath until the present day.
    • Many academics see the Wall Street Crash of 1929 as part of a historical process that was a part of the new theories of boom and bust.
    • Discuss the causes and consequences of the 1929 Wall Street crash

  • Conclusion: Cultural Change in the Interwar Period

    • The Wall Street Crash of 1929 and the severe financial collapse that followed began a period of general economic and social slump not known in the United States before or after and whose name, the Great Depression, is insufficient to describe the widespread suffering endured by its citizens.
    • On October 24, 1929, known as Black Thursday, the value of common stock and shares in the U.S. market dropped by 40% and a massive economic collapse.
    • This period of high spirits came to a loud climax with the Wall Street Crash, and while the Depression of the 1930s marked a low point for America in many ways, it still managed to produce some positive cultural changes.
    • As a direct result of the Wall Street Crash of 1929 and the Depression, the 1930s involved a widespread culture of Escapism in which Americans attempted to find innovative and inexpensive forms of entertainment that diverted attention from the hardships of everyday life.
    • A crowd gathers on Wall Street outside the New York Stock Exchange after the market crash of October 29, 1929.

  • Securities Market Institutions

    • The U.S. government passed the Glass–Steagall Act of 1933 to separate the functions of commercial and investment banking.A commercial bank is a standard bank that accepts deposits and makes loans.Many countries, such as the European Union, Great Britain, and South Korea do not legally separate commercial and investment banking.Then the U.S. government repealed parts of the Glass-Steagall Act in 1999 and allowed U.S. investment banks to branch into commercial banking and insurance, so they could compete internationally.Unfortunately, the largest commercial and investment banks in the world teetered on bankruptcy during the 2008 Financial Crisis.Consequently, many government leaders across the world are debating to enact similar laws to the Glass-Seagall Act.
    • Process of issuing new stock is called underwriting.Underwriting lowers information costs.Investment bank guarantees a stock or bond price to the corporation.Then the investment bank sells the new stock or bond for a higher price.Greater price reflects the investment banker's profit.Furthermore, investment banks may work together, which we call syndicates.Oneinvestment bank acts as the manager and retains part of the profits while other investment banks help sell the new securities.
    • Financial analysts compile market indices that measure broad movements in a financial market.Most popular and the oldest stock market index used today is the Dow Jones Industrial Averages, otherwise known simply as the "Dow" or "the industrials. " The Wall Street Journal invented the Dow in 1882, and it calculates the Dow by a weighted average of 30 representative stocks of New York Stock Exchange.The Dow includes Coca-Cola, IBM, Proctor & Gamble, and Exxon.Analysts at the Wall Street Journal adjust the Dow for corporate mergers, corporate bankruptcies, and stock splits.Another popular market index is Standard and Poor's 500 (S&P 500).Standard & Poor's index includes 500 stocks that are listed on the Stock Market Exchange.We list the major stock exchanges in the world in Table 1 along with their market indices.
    • A stock market, occasionally, experiences a rapid drop in stock prices, which precipitate a stock market crash.A stock market crash means a dramatic drop in stock prices during a short time period.Unfortunately, a stock market crash bankrupts investment companies, insurance companies, pension funds, and commercial banks.Although commercial banks are not directly involved with the stock market, they may have granted loans to investors who cannot repay.Finally, a stock market crash in one market can trigger another stock market crash, even a stock market located in a foreign country.
    • Stock market crash became the prelude to the Great Depression.In 1929, the stock market crashed on October 24, October 28, and October 29.Afterwards, the unemployment rate peaked at 26% in the United States.Moreover, the New York Stock Exchange crashed on October 19, 1987.The Dow Jones fell by 508 points (or 27.8%) in one day, the largest loss in U.S. history.However, the United States did not enter a recession because the Federal Reserve came to the rescue, providing emergency loans to the financial institutions.Then the United States experienced a stock market crash in March 2000, which triggered the 2001 Recession.Many people call this the dot-com crash because stock value for many internet companies became worthless overnight.Finally, the U.S. experienced the 2007 Great Recession, which became the most severe recession since the Great Depression.Your author calls this the 2008 Financial Crisis, when pandemonium struck the financial world.

  • Harding's Policies

    • The act raised tariffs in America in order to protect factories and farms, although the tariffs established in the 1920s have historically been viewed as a contributing factor in the Wall Street Crash of 1929.
    • On February 27, 1922, Harding implemented the first of a series of Radio Conferences headed by Secretary of Commerce Herbert Hoover.
    • In a speech given on October 26, 1921, in segregated Birmingham, Alabama, Harding made a case for African-American civil rights, making him the first president to openly advocate black political, educational and economic equality during the 20th Century.
    • Cohen of New Orleans, Louisiana, whom he named comptroller of customs.
    • Harding had previously spoken out publicly against lynching on October 21, 1921, and he expressed his support for Congressman Leonidas Dyer's federal anti-lynching bill.

  • The Culture of the Roaring Twenties

    • Ever-growing crowds surged into new movie theaters, and filmmaking was revolutionized in the second half of the decade as sound synchronized motion pictures, or "talkies," replaced silent films between 1927 and 1929.
    • The first talking film, The Jazz Singer, was released in 1927, followed by the first all-color all-talking feature, On with the Show, in 1929 .
    • The Museum of Modern Art opened in Manhattan on November 7, 1929, nine days after the Wall Street Crash.
    • Scott Fitzgerald published some of the most enduring novels of the Jazz Age, including This Side of Paradise, The Beautiful and Damned, and The Great Gatsby.
    • Erich Maria Remarque's novel All Quiet on the Western Front, was published in 1929.

  • "Black Monday" and the Long Bull Market

    • On Monday, October 19, 1987, the value of stocks plummeted on markets around the world.
    • The Dow Jones Industrial Average fell 22 percent to close at 1738.42, the largest one-day decline since 1914, eclipsing even the famous October 1929 market crash.
    • Unlike its performance in 1929, the Federal Reserve made it clear it would ease credit conditions to ensure that investors could meet their margin calls and could continue operating.
    • Partly as a result, the crash of 1987 was quickly erased as the market surged to new highs.
    • Swings of more than 100 points a day occurred with increasing frequency, and the circuit-breaker mechanism was triggered on October 27, 1997, when the Dow Jones Industrial Average fell 554.26 points.

  • Changes in Agricultural Production

    • Hoover advocated the creation of a Federal Farm Board, which was dedicated to the restriction of crop production within domestic demand, behind a tariff wall, and maintained that the farmers’ ailments were due to defective distribution.
    • The Hoover plan was adopted in 1929, before the October 29 stock market crash.
    • This was a direct cause and effect in terms of farmers migrating to urban areas even before the economic devastation of the Great Depression that came after 1929.
    • Haugen in 1929.
    • President in 1929.

  • Historical Returns: Market Variability and Volatility

    • Historical analysis of markets and of specific securities is a useful tool for investors, but it does not predict the future of the market.
    • However, an investor who looked at this graph in early 1929 and made the decision to invest because s/he would be guaranteed to make money was in for a shock when the market crashed in October 29, 1929.
    • Past performance is not a guarantee of future performance.
    • Inherent in all markets is something called "systemic risk. " Systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group, or component of a system.
    • These types of interlinkages are a cause of the overall market variability and volatility.