What Happened on Black Tuesday

On Tuesday October 29th, 1929, Wall Street witnessed a 13% decline in the Dow Jones, an episode that became known in financial mythology as “Black Tuesday.” It is generally recognized that Black Tuesday was the beginning of the Great Depression. Between early September and the end of October 1929 the market lost a total of 40% in less than 8 weeks. In reality Black Tuesday was just the end of the beginning of the crash on Wall Street. As you can see from the graph below, the market continued to fall for several years after Black Tuesday. By the end of the slide some pundits conjectured that the market might actually go to zero. From its high of 386.10 in September ’29 to its low of 40.60 on July 29, 1932, the market had lost a total of 89%! Three phrases — Black Thursday, Black Monday, and Black Tuesday — are commonly used to describe this collapse of stock values. All three are appropriate, for the crash was not a one-day affair. The initial crash occurred on Thursday, October 24, 1929, but it was the catastrophic downturn of Monday, October 28 and Tuesday, October 29 that precipitated widespread alarm and the onset of an unprecedented and long-lasting economic depression for the United States and the world. The stock market collapse continued for a month.

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