1932-7-8 Dow Jones falls to lowest point during Great Depression - HiPo > .
Signs of an
impending financial crisis had been identified many months before the crash. For example, on
25 March the
Federal Reserve had
issued a stark warning of the dangers of speculation on the stock market. This warning coincided with a
slowing down of the American economy, but
investors continued to purchase stocks that gradually pushed the market to a
peak of 381.17 points on 3 September.
By
late September many of the larger investors had begun to grow
nervous at the continued growth of the markets and started to sell their shares. By the
middle of October the market was in
freefall as more and more people began
panicking about the plummeting prices.
Black Thursday saw selling of shares on the New York Stock Exchange on an unprecedented scale. Over
12.8 million shares were sold on that one day alone which resulted in the
market's losing 11% of its value.
Although
Black Thursday was the
first day of large-scale panic selling, the losses were dwarfed by those the
following week when around
16 million shares were sold. Within just a few days of trading,
$30 billion dollars had been
wiped off the stock market. This was the
Wall Street Crash.
Although the
scale of panic selling did slow down, the market continued its
downward trajectory for over 2 years, finally reaching an
all-time low on 8 July 1932. By that time the effect of the
Great Depression had
crept around the world, acting as a
catalyst for the Second World War that was to follow. The market didn’t return to its pre-crash level until
1954.
On
8 July 1932 the Dow Jones Industrial Average, which is a key indicator of the value of America’s biggest companies, fell to its lowest point during the Great Depression.
The spectacular collapse of the Dow reflected the issue at the heart of the Great Depression. The panic selling of US stocks had wiped out private investors and many of the companies they had invested in. This had a knock-on effect outside the stock market, where those very companies were forced to lay off workers. In Cleveland, 50 per cent of the city’s workers found themselves unemployed by the end of 1932. The downward economic spiral was eventually reversed, but the Dow itself didn’t return to its 1929 high point until 1954.
The response of American President Herbert Hoover to the economic crisis was not viewed favourably by ordinary American people. He gave numerous radio speeches in which he attempted to reassure the population that things would improve. Although he never actually said ‘prosperity is just around the corner’ his speeches suggested it. But as the economic situation continued to decline, shanty towns known as Hoovervilles appeared around the country as people moved from place to place in search of work. Protesting war veterans in need of work were even attacked by the army.
With promises of a ‘New Deal’ Franklin D. Roosevelt went on to defeat Hoover in the 1932 presidential election and remained President until his death in 1945.
The
Wall Street Crash of 1929, also known as the
Great Crash, was a major American
stock market crash that occurred in the fall of 1929. It
started in September and ended late in October, when
share prices on the New York Stock Exchange collapsed.
It was the most devastating stock market crash in the
history of the United States, when taking into consideration the full extent and duration of its aftereffects. The crash, which followed the
London Stock Exchange's crash of September, signaled the
beginning of the Great Depression.
What Caused the 1929 Stock Market Crash?: The
stock market crash of 1929 – considered the worst economic event in world history – began on
Thursday, October 24, 1929, with skittish investors trading a record 12.9 million shares. On
October 28, dubbed “Black Monday,” the Dow Jones Industrial Average plunged nearly 13 percent. The market fell another 12 percent the next day, “
Black Tuesday.” While the crisis send shock waves across the financial world, there were numerous signs that a stock market crash was coming. What exactly caused the crash – and could it have been prevented?
On
October 29, 1929, Black Tuesday hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression (1929-39), the deepest and longest-lasting economic downturn in the history of the Western industrialized world up to that time.
