STOCK MARKET CRASH OF 1929

also called The Great Crash, American economic disaster that precipitated the Great Depression, an approximately 10-year economic slump affecting all the Western industrialized countries. During the mid-to-late 1920s, the stock market in the United States underwent rapid expansion, reaching a peak at the end of August 1929. Prices began to decline in September and early October, but speculation continued. On October 18 the stock market began to fall precipitately. The first day of real panic, October 24, is known as Black Thursday; on that day a record 12,894,650 shares were traded. Though a number of major banks and investment companies bought up great blocks of stock in a successful effort to stem the panic that day, their attempts soon proved to be in vain. The panic began again on Black Monday; on Black Tuesday (October 29) 16,000,000 shares were traded, and prices on the stock market collapsed completely. The reasons for the collapse of the stock market are many and complicated. Among the more obvious indications are a period of rampant speculation, the proliferation of holding companies and investment trusts (which, by nature, create debt), and a multitude of large bank loans that could not be liquidated. See also Great Depression.