The 1929 Wall Street crash wiped out roughly 90% of stock market value by 1932 and triggered the worldwide Great Depression.
Key Facts
- Black Thursday shares traded
- 12.9 million shares
- Black Tuesday shares traded
- 16.4 million shares
- Market value lost by July 1932
- ~90%
- Market bottom date
- July 8, 1932
- Crash start date
- October 24, 1929 (Black Thursday)
- Key legislation passed
- Glass-Steagall Act 1933; Securities Exchange Act 1934
By the Numbers
Location
Cause → Event → Consequence
During the 1920s, industrial expansion and speculation drove stock prices far above their underlying value. Overproduction in agriculture, low consumer purchasing power, and easy credit encouraged broad public participation in stock markets. By September 1929, experienced investors recognized that prices were unsustainable and began selling, causing share values to stall and then decline sharply, triggering widespread panic among other investors.
Beginning on Black Thursday, October 24, 1929, a record 12.9 million shares were traded on the NYSE as prices collapsed. Leading bankers attempted to stabilize the market by purchasing stocks above market value, producing a brief recovery, but on Black Tuesday, October 29, some 16.4 million shares were traded in a further frenzied sell-off. The decline continued until July 8, 1932, by which point the market had lost approximately 90% of its pre-crash value.
The crash eroded confidence in the U.S. banking system and cascaded into the worldwide Great Depression, which lasted until the United States entered World War II. Congress responded by passing the Banking Act of 1933, the Securities Act of 1933, and the Securities Exchange Act of 1934, creating the SEC and establishing disclosure regulations while prohibiting insider trading and market manipulation. Stock exchanges also adopted trading suspensions to limit future panic selling.
Economic Impact
The crash destroyed roughly 90% of NYSE market value by July 1932, collapsed public confidence in banks, and triggered the Great Depression, prompting sweeping financial regulation including the creation of the SEC.