Black Thursday Stock Market Crash Essay -- American History, Great Dep

In early 1928 the Dow Jones Average went from a low of 191 to a high of 300 in December of 1928 and peaked at 381 in September of 1929. 1929Â…) It was anticipated that the increases in earnings and dividends would continue. (1929Â…) Price to earnings ratio's rose from 10 to 12 to 20 and higher for the market's favorite stocks. (1929Â…) Observers believed that stock market prices in the first 6 months of 1929 were high, while others saw them to be cheap. (1929Â…) On October 3rd, the Dow Jones Average began to drop, declining through out the week of October 14th. (1929Â…) On the night of Monday, October 21st, 1929, margin calls were heavy and Dutch and German calls came in to sell overnight for the Tuesday morning opening. (1929Â…) On Tuesday morning, out of town banks and corporations called in $150 million of call loans, and Wall Street was in a panic before the New York Stock Exchange opened. (1929Â…) On Thursday, October 24th, 1929, people began to sell their s tocks as fast as they could., sell orders flooded market exchanges. (1929Â…) This day became known as Black Thursday. (Black ThursdayÂ…) On a normal day, only 750-800 members of the New York Stock Exchange started the exchange. (1929Â…) There were 1100 members on the floor for the morning opening. (1929Â…) Furthermore, the exchange directed all employees to be on the floor since there were numerous margin calls and sell orders placed overnight, extra telephone staff was arranged at the member's boxes around the floor. (1929Â…) The Dow Jones Average closed at 299 that day. (1929Â…) On Tuesday, October 29th, 1929, the crash began. (1929Â…) Within the first few hours , the price fell so far as to wipe out all gains that had been made the entire previous year. (1929Â…) This day the Dow Jones... ...cial reports were reliable. After the crash, the Securities and Exchange Commission (SEC) was established to law down the law and to punish those who violated. (1929Â…) Also during the crash 4,000 banks failed, for the simple fact that the banks ran out of money. Four years later, congress passed the Glass-Steagall Act, which essentially banned any connection between commercial banks and investment banking, to ensure that is would never happen again. The Federal Reserve and other banking regulators have softened some of the Act's separation of securities and banking functions by letting banks sell certain securities through affiliated companies. (1929Â…) Bibliography 1. c Black Thursday: The 1929 Stock Market Crash. www.letsfindout.com. 2. 1929 Stock Market Crash. www.arts.unimelb.edu. 3. 1929-1931. Annals of America. Encyclopaedia Britannica Inc. Volume 15: 32-39