In 3–5 sentences, explain 2 causes and 2 effects of the stock market crash of 1929.
Stock prices plummeted 40% in late October 1929 when the market collapsed. The 1929 stock market crash was not a one-day event. As a result, the stock market continued to fall for a few days, setting in motion one of the most devastating periods in American history.
On October 24, 1929, on the dreaded "Black Thursday," a series of dramatic events began. Nearly 13 million shares of the stock were traded on that particular day. J.P. Morgan and a few other bankers attempted to save the banking system with their own money, which resulted in an all-time high number of stock trades in the United States. They didn't make it. On Saturday, October 26, their company's stock price rose slightly as a result of their action. Many investors, however, lost faith in the stocks over the weekend and decided to sell their holdings.
Another record number of stocks were traded on Monday, October 28, 1929, when the markets reopened, and the stock market fell more than 22%. On the infamous Black Tuesday, October 29, 1929, when more than 16 million stocks were traded, the situation worsened again. The stock market suffered a $14 billion loss on that particular day.
When the stock market crashed, not only did individual investors put their money into stocks, but so did corporations. Businesses suffered financial losses as a result of the stock market crash. Many banks invest customers' money without their permission or knowledge, resulting in customers losing money.
Even after the stock market crash, politicians and business leaders continued to make optimistic predictions about the country's economy. Confidence dwindled as the Depression worsened, and many people lost their entire savings. New York Stock Exchange stocks were worth only a fifth of what they had been in 1929 when the market peaked. Companies went out of business, factories shut down, and banks went bankrupt. The farm's income dropped by half. Nearly one-fourth of the population of the United States was out of work by 1932.
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