In late October 1929 – just a few days before Halloween – investors in New York City began to panic. Stocks that they had bought at high prices began to drop. More and more investors sold their stocks at whatever price they could get. Over two days, the value of companies being traded on the stock exchange fell almost 13 percent on Monday and another 12 percent the next day. That day became known as “Black Tuesday.” Fortunes were wiped out. The stock market had crashed.
All across the country – and all around the world – people paid attention to the news closely. Some investors killed themselves. Millions of people from all over the world who owned stocks waited helplessly as stock values crashed.
Bob Aden’s father in Nebraska was one of thousands of owners of General Motors stock. He had borrowed money against the family car to buy a few shares. The stock went up for a while and then dropped well below what he paid for it. Bob says, “There were slim pickings around the dinner table.”
LeRoy Hankel (right) still remembers the crash vividly. He was 19 years old and living in York County, Nebraska, in 1929. He didn’t own any stock, but remembers, “there was people jumping out of two-story, three-story buildings in New York. That’s what we heard anyway.”
For Carla Due (right below), the stock market crash had a very personal impact. She had just emigrated to Nebraska from Denmark a few months before the crash. Her family had bought a farm but were waiting to move on it. After the crash and the ensuing Depression, land values dropped to less than half of what they had been. Their farm was no longer worth what they still owed on the land.
The stock market downturn continued for at least three years. By the time it was over, the average value of companies in the Dow Jones Industrials Average had dropped almost 90 percent – from a high of 381 to a low of 41. In other words, companies were worth barely more than 10 percent of their former value. Jobs were hard to find.
Farmers and rural residents felt the stock market crash as well – people and companies that used to buy food and other agricultural products no longer had the money to buy much of anything. The crash, along with other factors, produced an economic slowdown that lasted over 10 years and became known as “the Great Depression.”
Since the 1930s, there have been several stock market crashes and periods of economic slowdown. But there has never been another “Great” Depression.See how other stock market crashes compared with the 1929 crash in this “Then & Now” feature.
Written by Bill Ganzel of the Ganzel Group. First written and published in 2003.