Disasters Badge 2005 Black Tuesday by Taliesin Disaster:  Black Tuesday and Stock Market Crash When and where occurred:  Tuesday, October 29, 1929 in New York What happened:  Stocks began to fall in value. There was so much credit and so little equity and real money that many personal and corporate fortunes vanished in the space of 24 hours. This crash led to the Great Depression. Impact:  After World War I the United States became commercially involved with the Allied powers for the first time, and there was a great demand for American products, especially farm products. This change in America's way of doing business was not reflected in its financial markets which didn't recognize this and change their way of doing business. During the great economic expansion of the 1920s, stocks increased greatly in value. Unemployment almost disappeared, and everyone seemed to have money. Brokerage firms wanted to sell more stocks, so they began selling "on margin" which meant that the buyer only paid part of the cost of the stock and "borrowed" the rest against the value of the stock which was assumed to go up. For a while they did go up. Remember the story of "The Emperor's New Clothes"? Well, Black Tuesday was much the same. When people heard that others were selling stocks, they hurried to sell theirs, too. Stocks hadn't been purchased with real money, and there wasn't enough real money to keep the Market afloat. Banks failed, farm prices collapsed, businesses and factories closed. Black Tuesday was the beginning of an economic crash that didn't hit bottom for three years. The Great Depression lasted ten years and affected the lives and outlook of an entire generation. It was a turning point in Twentieth Century economic policy and history. There are many web sites about Black Tuesday and the Great Depression. Here's one. Visit the 20th Century Guild: |Guild Home|   |Current Activities|   |Badges Gallery|   |Sound Off Archives|   |Members Gallery|   |Roster & Points|   |Guild Leaders|   |Earn Points|   |Join Guild|   |Have Fun|   Credits: Backgrounds courtesy of Gramma Hugs. Graphic images in badges courtesy Clip Art Connection. Copyright © 2005 by Daphne Schor. All rights reserved.