Black Tuesday 1929

The stock market crash of 1929 spanned a four-day period that is historically referred to as Black Thursday, Black Friday, Black Monday and Black Tuesday. Facts point toward the crash beginning on Thursday, October 24, 1929 after a long period of wealth and prosperity during which many economists postulated that the market had reached a permanent plateau and would be able to sustain the trend in high stock prices. Black Tuesday, 1929, by definition, is considered the beginning of a tumultuous time period in the stock market’s history that resulted in the Great Depression.

Events Leading up to Black Tuesday 1929

Prior to the crash, the market was riddled with instability. Real estate values had been steadily declining and the market began to see periods of high selling volume. It was also during this time that the Smoot-Hawley Tariff Act was being debated in the U.S. Congress. It was suggested, in hindsight, that this act might have been part of the catalyst that started the crash due to fears of retaliatory tariffs being placed on U.S. goods being exported to different parts of the world. In fact, many prominent economists and businesspersons including Irving Fisher and Henry Ford visited with U.S. President Herbert Hoover and requested that he veto the act, calling it “an economic stupidity.”

The initial sell-off that began the crash started on Thursday and Friday, however, it wasn’t until Monday and Tuesday that the catastrophic damage was done. Initially, Richard Whitney, the President of the New York Stock Exchange, with the backing of several of the most prominent banks, purchased large amounts of U.S. Steel stock at higher than market value. He then proceeded to purchase smaller amounts of other normally stable stocks. The hope was that by showing faith in these industries, that the sell-off would slow down and perhaps even halt, much like it had during the Panic of 1907.

The gamble might have worked, however, over the weekend, the press had time to cover what was happening on Wall Street and more people were able to see events unfold. The availability of this information caused people to panic and begin selling off their stocks over the course of Monday and Tuesday. After Black Tuesday, the world saw a continued decline in the market that finally reached its lowest point on July 8, 1932. Recovery took over 20 years, during which time the world became embroiled in another World War. The market did not see pre-1929 levels again until November 23, 1954.

Black Tuesday 1987

Black Tuesday, 1987, was surrounded by similar circumstances and took place on October 19th and 20th in 1987 when worldwide markets crashed and saw a record decline that took several years to recover from. Both days are called Black Monday and Black Tuesday, respectively. The disparity in the dates actual dates is due to time zone differences in New Zealand and Australia. The market in New Zealand was hit especially hard and lost nearly 60% of its value. Australia was a bit more fortunate, however a loss of nearly 42% should certainly not be considered small.

Black Tuesday, facts surrounding it, and the ensuing depression in 1929 and economic recession in 1987, remain a dark spot in the world’s economic past.