What You Didn’t Know About Black Tuesday And The Start Of The Great Depression

You probably remember from high school history class that the Great Depression of the 1930s was caused by the stock market crash of 1929, but did you know that the stock market didn't crash in a day's blast? This happened over a period of four days, culminating with Black Tuesday, the worst day in stock market history. Here's what you didn't know about Black Tuesday.

What is stock market?

Ideally, business owners have access to an unlimited supply of cash that they store in a Scrooge McDuck-like vault, but most have to fund new ventures through more traditional means. They sell shares, owning a small percentage of the company, as a way to obtain investment dollars and expand their business. The stock market is like an auction house for buying, selling and trading these shares, the value of which is determined by the value of the company. If a company is doing well, the value of its shares goes up. Investors make money by identifying businesses with potential for growth in the stock market, buying their shares when the price goes down, and selling them at a profit when the value of the shares rises. Since the stock market is essentially a market for different companies, it is the U.S. market. inextricably linked to the economy.

What was the 1929 Stock Market Crash?

In October 1929, the stock market began to decline after a long period of impressive gains, and investors panicked as their shares fell in value. He tried to sell his shares before they became worthless, flooding a market with very few buyers moving around. October 24, 1929, known as Black Thursday, marks the beginning of the four-day collapse of the stock market that ended on October 29, 1929, or Black Tuesday.

What happened on Black Tuesday?

On Black Tuesday, investors sold a record 16.4 million shares at a loss of $14 billion, or about $206 billion in today's money. Altogether, investors lost $30 billion in the four-day collapse, which was the U.S. war on World War I. spending and nearly 10 times the federal budget of 1929. It was so bad that the stock market didn't rebound to its pre-crash numbers. Until 1954, a quarter of a century later.

What was the Great Depression?

After the stock market crash, individuals saw their net worth go down and businesses were forced to close their doors. Economic panic prompted banks to withdraw their loans, demanding immediate repayment at the risk of foreclosure. When money-strapped families could not pay off those loans, they had to give up their homes and vehicles, but that too was not enough to save the banks. They too went out of business, taking people's life savings with them. The lack of companies left in business meant that many people suddenly found themselves unemployed, with only a few job opportunities to turn around.