5 Steps to a 5 AP US History 2016 by Daniel Murphy

Author:Daniel Murphy
Language: eng
Format: epub
Publisher: McGraw-Hill Education
Published: 2015-03-17T16:00:00+00:00

Stock Market Crash

The prices of stock crested in early September 1929. The price of stock fell very gradually during most of September and early October. Some investors noted that some factories were beginning to lay workers off; whispers were heard around Wall Street that perhaps the price of stock was too high, and that it might be good to sell before prices began to fall.

The first signs of panic occurred on Wednesday, October 23, when in the last hour of trading, the value of a share of stock dropped, on average, 20 points. On October 24 a massive amount of stock was sold, and prices again fell dramatically. Stockbrokers told nervous investors not to worry; Herbert Hoover announced that the stock market and the economy “is on a sound and prosperous basis.”

A group of influential bankers and brokers pooled resources to buy stock, but this was unable to stop the downward trend. Prices fell again on Monday, October 28, and on the following day, Black Tuesday, the bottom fell out of the market. Prices fell by 40 points that day; it is estimated that total losses to investors for the day was over $20 million. Stockbrokers and banks frantically attempted to call in their loans; few investors had the money to pay even a fraction of what they owed.

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