Black Thursday: Wall Street Crash Begins in 1929

Panic hit the New York Stock Exchange trading floor on the morning of October 24, 1929, when a cascade of sell orders overwhelmed buyers and sent prices into free fall. By noon, the ticker tape was running an hour and a half behind actual trades, meaning investors across the country had no idea what their holdings were worth. Crowds gathered on Wall Street. Police were dispatched. The great crash had begun. The boom that preceded it had been extraordinary. Stock prices had roughly quadrupled between 1924 and September 1929, fueled by easy credit, margin buying, and a national conviction that the market could only go up. Brokers lent speculators two-thirds of the purchase price of shares; by autumn, more than $8.5 billion was outstanding in broker loans, exceeding the total amount of currency in American circulation. Factory workers, taxi drivers, and schoolteachers had entered the market alongside professional traders, many buying on margin they could not cover if prices fell. The first cracks appeared in early October. Utilities stocks declined sharply, and several prominent economists issued warnings. On Black Thursday, nearly 13 million shares changed hands, a volume record that would stand for years. At midday, a group of leading bankers including J.P. Morgan's Thomas Lamont and National City Bank's Charles Mitchell pooled resources and began buying blue-chip stocks in a coordinated effort to halt the slide. The intervention temporarily stabilized prices, and the market recovered some losses by the closing bell. But the calm was illusory. The following Monday and Tuesday would bring far worse selling, with the Dow Jones Industrial Average losing nearly 25 percent of its value in two days. Black Thursday was the tremor before the earthquake. Within three years, American stocks would lose roughly 89 percent of their peak value, thousands of banks would fail, unemployment would reach 25 percent, and the Great Depression would reshape the American economy, government, and society for a generation.