The great Wall Street Crash just previous to the Great
Depression of the 1930s has become a part of North American legend. People
speak of the crash, its causes and its consequences, with great authority,
although few people actually understand the fundamentals that led to the crash,
and fewer still the intricacies involved in it. This article will detail a
short review of the crash, analyse some of the myths evolving out of this
period in American history, and also answer some questions such as why the crash
happened, and if something like it could happen again.
The crash began on October 24, 1929 and the slide continued
for three business days, ending on October 29 1929 (as we can see, the crash
did not occur in the ‘30s, as many people believe). The first day of the crash
is known as Black Thursday, and the last day is called Black Tuesday. The crash
began when a rush of nervous spenders panicked and rushed to sell their shares-
over 13 million stocks were sold on that first Thursday. In an attempt to halt
the slide, several bankers and businessmen gathered and tried to rally the
numbers by buying up blue-chip stocks, a tactic that had worked in 1909. This
was to prove only a temporary fix, however. Over the weekend, while the stock
markets were closed, the media added to the fear of investors as the published
the wrap-ups to the week. By Monday, a fearful populace, nerves on edge due to
the reports, were waiting to liquidate. Again, industrial giants and other
businesses tried to halt the panic by demonstrating their faith in the system
by buying more stock, but the slide would not stop. The market did not recover
its value until almost a quarter of a decade later.
As with any legend, the Wall Street Crash of 1929 carries
with it several mythical misconceptions. To start with, the Crash did not lead
to the Great Depression. In fact, many financial analysts and historians are
still not sure to what degree the Crash even contributed. The economic
forecasts were poor before Wall Street fell, and it was poor people who could
not even afford to think about stocks that were the most affected by the
Depression. For these people, poverty was mostly caused by very poor farming
conditions. There was also not the onslaught of suicides that is commonly
referred to- a few investors did succumb to depression, but their numbers are
generally agreed to have been very small indeed- enough to count on one hand.
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