USM Open Source History Text: The World at War: World History 1914-1945

The Great Crash in Global Context

October 30, 1929, the New York Times: 
Stock prices virtually collapsed yesterday, swept downward with gigantic losses in the most disastrous trading day in the stock market's history. Billions of dollars in open market values were wiped out as prices crumbled under the pressure of liquidation of securities which had to be sold at any price. 
The yesterday referred to by the New York Times was Black Tuesday, October 29, 1929, when the New York Stock Exchange lost 11.7% of its total value. This Tuesday followed a Monday during which the market lost 12.8%. This rapid fall of around 25% in two days ushered in a long period of economic depression and wiped out billions of dollars of wealth in the United States. By 1932, the stock exchange had hit its bottom - down 89% from its peak value in 1929. It was a truly astonishing collapse of what had been the strongest, most expansive, richest, and most versatile economy ever seen in the world. The United States economy would not fully recover until the government spent vast sums of money for its mobilization effort to enter and fight World War II, though notable periods of progress marked the era of the New Deal.

I will first summarize the main features of the Great Crash of 1929, emphasizing the global nature of the economic collapse. By the era of the First World War, the world’s economy was truly a global one and the United States was its leading player. We will speak, therefore, of the Great Crash as a global economic slump, primarily between the years of 1929 and 1932.

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