A Gripping Account of Wall Street’s Greatest Catastrophe: The Stock Market Crash of 1929 (2001)

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The Wall Street Crash of 1929, also known as Black Tuesday, began on October 24, 1929, and 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 fallout. About the book: https://www.amazon.com/gp/product/0195158016/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0195158016&linkCode=as2&tag=tra0c7-20&linkId=2585e8bbd5dcb2a63a549c121a5dc3ab

The crash signaled the beginning of the 10-year Great Depression that affected all Western industrialized countries.

On September 20, the London Stock Exchange officially crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery.[9] The London crash greatly weakened the optimism of American investment in markets overseas.[9] In the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery. Economist and author Jude Wanniski later correlated these swings with the prospects for passage of the Smoot–Hawley Tariff Act, which was then being debated in Congress.[10]

On October 24 (“Black Thursday”), the market lost 11 percent of its value at the opening bell on very heavy trading. The huge volume meant that the report of prices on the ticker tape in brokerage offices around the nation was hours late, so investors had no idea what most stocks were actually trading for at that moment, increasing panic. Several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor.[11] The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank of New York. They chose Richard Whitney, vice president of the Exchange, to act on their behalf.

With the bankers’ financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As traders watched, Whitney then placed similar bids on other “blue chip” stocks. This tactic was similar to one that ended the Panic of 1907. It succeeded in halting the slide. The Dow Jones Industrial Average recovered, closing with it down only 6.38 points for the day. The rally continued on Friday, October 25, and the half day session on Saturday the 26th but, unlike 1907, the respite was only temporary.

On October 29, William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks to demonstrate to the public their confidence in the market. But, their efforts failed to stop the large decline in prices. Due to massive volume of stocks traded that day, the ticker did not stop running until about 7:45 p.m. that evening. The market had lost over $30 billion in the space of two days which included $14 billion on October 29 alone.

Economists and historians disagree as to what role the crash played in subsequent economic, social, and political events. The Economist argued in a 1998 article that the Depression did not start with the stock market crash.[40] Nor was it clear at the time of the crash that a depression was starting. They asked, “Can a very serious Stock Exchange collapse produce a serious setback to industry when industrial production is for the most part in a healthy and balanced condition?” They argued that there must be some setback, but there was not yet sufficient evidence to prove that it will be long or that it need go to the length of producing a general industrial depression.[41]

But The Economist also cautioned that some bank failures are also to be expected and some banks may not have any reserves left for financing commercial and industrial enterprises. They concluded that the position of the banks is the key to the situation, but what was going to happen could not have been foreseen.[41]

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. According to economists such as Joseph Schumpeter, Nikolai Kondratiev and Charles E. Mitchell the crash was merely a historical event in the continuing process known as economic cycles. The impact of the crash was merely to increase the speed at which the cycle proceeded to its next level.

Milton Friedman’s A Monetary History of the United States, co-written with Anna Schwartz, advances the argument that what made the “great contraction” so severe was not the downturn in the business cycle, protectionism, or the 1929 stock market crash in themselves – but instead, according to Friedman, what plunged the country into a deep depression was the collapse of the banking system during three waves of panics over the 1930–33 period.

https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

Comments

George Carlin says:

I had the good fortune to have Dr. Klein as a Prof for several history courses at the U of Rhode Island from 1967 through 1970. Dr. Klein was articulate, insightful, and challenging in the classroom. That was an eye-opening, wonderful time in my life.

PrisonEarth says:

There were certain regulations put in place after the 1929 crash designed to prevent another crash and they worked for many years. Then in 2003 President Bush decided it would be a good idea to remove some of these regulations, and of course in 2008 the same thing happeded again. Then, like a dictator Bush took the public's money and gave it to the big banks. Bush used Socialism to save the American economy that he almost destroyed.

BrotherWoody1 says:

["!eXpCmwR9XB3YoO1E0XY1g9UjpXQCAAAAPFIAAAAIKgEfVYvWQSksSek5mLbFfpwlE3aDNQviakpPcxNrOHQVbYHIVGpuSCGvKh9tUpKY2mmJQ707CMp461tXWQI4xSEQKJ_DT_qHZ3-fbQZCt1HzTSDlotydX7CYsKILx4QaZKi_iCiKxqpZLZ95Cseer3YzqT3jxnj5_nHOOgrp5fWMh-R9n9Swmipr9O2DCuYIQOpF7sNW4_NyS7oQPsSaNKEnA4k-_2CuZZ585CGuTtbXTa7oXbkdsHqA-Lew3JBPSmEE_XKowdTZnZ9M7HglOEycMEAsprYEyzDRGnUhI0V1jkByvpWrwUMFT1cFYIGXu1uOQphNjsUdpAqtOkPwQMlINRaHzl6t_z2xrPnM87bjH4zXNLSwRgvvkBZCTcwcNU0","Very interesting & absorbing, especially, in regard to markets today, hedge funds, the repeal of Glass-Steagall & the FED's total management & manipulation of the US economy. Plenty of people have made a lot of money on Wall St. that's now excluded most average, individual investors. Does the big money with nano-second trades negate the old capitalist cliche: "A rising tide raises all boats"?  I think it does in today's shameful, market gambles with other people's money. Entire pensions have been "borrowed" & lost by these virulent & rapacious jackals. nThanks for posting this one. I got a lot more out of it then I thought I would.nThanks too for all your vids. 2001 is great year to revisit again because the best & the brightest then are often still the best & the brightest now—same goes for the worse & dimmest. Cheers!",[[[null,null,1]],null],false]

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