Bolsa Crack 1929

Crash de 1929 en un periódico de Brooklyn.

El crash de 1929 es el mas famoso en la historia económica. Seguramente porque a diferencia del crash de 1987, el de 1929 fue acompañado por la gran depresión económica en Estados Unidos y acabó contagiándose a Europa.

En esa época con el patrón oro y tras la primera Guerra Mundial, Estados Unidos era el país más saneado, seguido de Francia que gracias a fijar un tipo de cambio bajo en relación a la cotización del oro, su economía prosperaba y su banco central acumulada cada vez más oro. En cambio Gran Bretaña, justo lo contrario de Francia en la fijación de su tipo de cambio con el oro y Alemania, que había perdido la guerra y debía pagar unas indemnizaciones elevadísimas, sufrían graves problemas económicos.

En este contexto, transcurren los meses previos al gran crash de 1929. Los Estados Unidos vivian una burbuja especulativa en bolsa. La FED, con disensiones internas entre la FED de New York y el resto era débil y no tenia la autoridad para tomar decisiones relevantes para parar la especulación mediante endeudamiento de gran parte de la población norteamericana. La economía había prosperado aprovisionando a Europa en la primera Guerra Mundial.

Este es el relato de lo ocurrido en los meses previos según el libro de Liaquat Ahamed Los señores de las finanzas Lords of Finance: The Bankers Who Broke the World , el mejor libro de la historia sobre bancos Centrales. Unas semanas atrás escribí sobre la reunión secreta para crear la FED. Este es su relato sobre el crash. En abril de 1929 se retomaron otra vez negociaciones en Paris entre países para determinar las indemnizaciones de guerra a pagar por Alemania. Los teutones creían que podrían rebajar lo ya firmado por ser inasumibles por una economía destrozada, pero Estados Unidos no perdonó sus prestamos de guerra a Gran Bretaña y Francia, y estos tampoco no cedieron ante los alemanes. Solo un mes más tarde, Alemania pedía a Suiza un préstamo para pagar a sus funcionarios:

Alemania se encuentra en situación tan difícil que entabló incluso negociaciones con el misterioso Ivan Kreuger que rondaba por la escena financiera en la época de entreguerras amasando fortunas gracias a sospechosos tratos con los gobiernos. Kreuger se dedicaba solamente a la fabricación de algo tan simple y tan poco amenazador como cerillas. Podía obtener créditos en Nueva York con condiciones mejores que los gobiernos europeos. Controlaba las tres cuartas partes de la producción mundial de cerillas. Apuntalaba las finanzas de los gobiernos más necesitados de crédito de todo el mundo, obteniendo a cambio el monopolio de l venta de cerillas.

A medida que estados Unidos subía sus tipos de interés para frenar la especulación bursátil en una economía boyante y Nueva York actuaba como un imán, atrayendo dinero de todos los rincones del planeta, todos los países de Europa, excepto Francia se esforzaban por evitar que su oro se fugase al otro lado del atlántico con subidas de tipos de interés. Alemania ya estaba sumida en la recesión. subió los tipos de interés al 7,5. Con la continua erosión de los precios de las materias primas, la subida de los tipos de interés mundiales trajeron las primeras señales de desaceleración mundial. Había empezado en 1928, en los principales productores de materias primas: Australia, Canadá y Argentina. A principios de 1929, Alemania y Europa Central estaban ya en recesión.

Mientras tanto, el mercado de valores de Estados Unidos se negaba a prestar atención a la subida del precio del dinero en todo el mundo y a los primeros signos de desaceleración en el extranjero. En junio de 1929, rompió al alza. Mientras llovían informes sobre beneficios empresariales excepcionales, el Dow Jones seguía subiendo. En junio subió 34 puntos y en julio otros 16.

A estas alturas el carácter del mercado se había vuelto casi totalmente especulativo. .la atención se concentraba día a día en una lista de empresas cada vez más reducida y ya no estaba liderada por las que producían grandes beneficios las General Motors del mundo. En lugar de ello se codiciaban desaforadamente las acciones de empresas con glamour, como Montgomery Ward, general Electric. o Radio Corporation of America. Así mientras el nivel de mercado seguía subiendo rápidamente, alcanzando su pico en septiembre, la mayoría de acciones individuales habían alcanzado su punto máximo a finales de 1928, o como mucho, a principios de 1929. De hecho, el 3 de septiembre de 1929, el día en que el Dow Jones alcanzó su máximo valor, solo 19 de las 826 empresas que cotizaban en la Bolsa de Nueva York alcanzaron su máximo histórico. Casi una tercera parte habían caído al menso un 20 por debajo de su valor máximo.

Durante esos meses, la mayoría de grandes operadores vendieron sus posiciones. Las afirmaciones de los especuladores sobre lo que hicieron en 1929 y cunado lo hicieron no han de tomarse al pie de la letra. La gente raramente dice toda la verdad acerca de sus proezas amorosas o de sus carteras de inversiones.

El 8 de agosto de 1929, después del cierre del mercado, el New York FED anunció que iba a levar su tasa de descuento del 5 al 6. Al día siguiente el Dow cayó 15 puntos en medió del frenesí, el mayor desplome de la historia del índice en un solo día.. Sin embargo de repente el mercado se dio cuenta que los especuladores habían obtenido tranquilamente grandes beneficios pagando tipos mucho mayores en el mercado de los préstamos a intermediarios. En un día se recuperaron todas las pérdidas.

Durante las tres semanas siguientes, el Dow Jones subió otros 30 puntos. .Incluso Europa había entrado en la vorágine. El vizconde Rothermere declaró Solo en Londres, Paris, Berlín, Bruselas y Ámsterdam se compran a diario muchos miles de acciones norteamericanas para enviar dinero a Nueva York tan rápido como el cable lo permite. Wall Street se ha convertido en una bomba de succión tan colosal que es esta vaciando el mundo de capital. .

A finales de julio, el banco de Inglaterra había perdido 100 de sus 800 millones de dólares en oro y en agostos septiembre 45 mill. más que pasaron principalmente a estados Unidos. Desde 1927, el flujo de entrada de dinero en Francia no había disminuido, si bien ahora en su mayor parte lo hacia en forma de oro en lugar de Libras Esterlinas tenía 1.200 mill. en oro y otros 1.200 mill. en divisas.

Las relaciones entre Gran Bretaña y Francia se habían deteriorado gravemente y . Norman Montagu el prestigioso gobernador del Banco de Inglaterra advirtió a sus colegas directores de que grandes zonas de Europa, incluida Gran Bretaña, saldrían del patrón oro.

El miércoles 4 de septiembre de 1929 había terribles atascos de tráfico y grandes retrasos en las estaciones de tren. A las dos en punto de la tarde del 5 de septiembre, los teletipos anunciaron que el economista y estadístico de Masachusetts, Roger Babson durante su conferencia economía nacional había declarado: Repito lo que dije a estas alturas el año pasado y el anterior: que mas tarde o temprano se producirá un crack. .y será terrible. Aquella tarde el Dow cayó un 3.

Tras la pesimista predicción de Babson, el New York Times pidió a Irving Fisher, profesor de economía de Yale y el más prestigioso economista de la época, que le replicase. Declaro que Los precios de las acciones no son demasiado altos y no van a experimentar nada parecido a un crack y la bolsa se recuperó.

El cronista oficial de los ciclos económicos en UA, el National Bureau of Economic Research, una asociación sin animo de lucro fundada en 1920, declararía, si bien muchos meses  después que, que aquel agosto había tenido lugar el comienzo de la recesión.. peor en septiembre nadie era consciente de ello. la mayor parte de indicadores económicos automóviles, ferrocarril y prod. Acero continuaban siendo excepcionalmente sólidos.

Todos los cracks anteriores habían venido precedidos de algún tipo de conmoción interna que había afectado a la psicología popular en el crack de 1873, en el de 1893 o en el de 1907. El viernes 19 de septiembre de 1929, el imperio del financiero británico Clarence Hatry se desplomó de repente, provocando a sus inversores cerca de 70 mill. de dólares de pérdidas. La clase dirigente de la City de Londres se mantenía a una prudente distancia del judío Hatry expresión de Morgan Grenfell a sus socios de JP Morgan. .Hatry acabó por recurrir a un pequeño fraude. falsificando bonos municipales como garantia de prestamos adicionales. Hatry, al final confesó sus delitos ante la fiscalía y fue detenido. El Banco de Inglaterra temiendo que la libra estuviera en peligro elevó los tipos de interés al 7,5, y el mercado cayó otros 17 puntos. Dado que muchos inversores británicos que habían perdido dinero con Hatry se vieron obligados a liquidar sus acciones en USA el Dow se vio sometido a cada vez más presión, cayendo 20 puntos más durante la semana del 30 de septiembre hasta situarse a 325. En el lapso de dos semanas había perdido los beneficios de los dos meses anteriores. La semana del 7 de octubre, sorprendió a todo el mundo recuperando 27 puntos a niveles de 350, algo menos del 10 por debajo de su máximo histórico.

El martes 15 de octubre, el economista y experto en bolsa Irving Fisher, durante un discurso que pasará a la historia por inoportuno abandonó su habitual cautela al declarar las acciones han alcanzado lo que parece un límite permanentemente alto, el aumento de la prosperidad nuevas fusiones, nueva gestión científica, nuevos inventos.

El mercado volvió a hundirse de nuevo, cayendo 20 puntos la semana siguiente y otros 18 los primeros tres días de la otra. Volvía  a situarse a 305, tras perder aproximadamente el 20 de su valor desde el punto máximo alcanzado en septiembre.

El miércoles 23 de octubre, cuando menos se esperaba, una súbita avalancha de órdenes de venta, cuyo origen era un auténtico misterio, hizo bajar el mercado 20 puntos durante las dos ultimas horas de operaciones bursátiles. Al día siguiente, conocido al poco tiempo como el jueves negro, se dieron los primeros signos de verdadero pánico.  El mercado abrió estable, con pocos cambios de precio pero, alrededor de las 11 de la mañana, se vio sorprendido por un aluvión de órdenes de venta  procedentes de todo el país. Durante la hora siguiente, los principales índices cayeron un 20, mientras que RCA la acción de moda se desplomó mas del 35. La interrupción de las comunicaciones en el país a causa de las tormentas agudizó la sensación de pánico

La gente se agolpó cerca de la Bolsa, delante de las oficinas de JP Morgan Crash de 1929.

Los rumores acerca de la turbulencia del mercado se extendieron rápidamente por la ciudad y, a mediodía, una multitud de diez mil curiosos atraídos por el tufo de la desgracia se habían reunido en la esquina de Broad y Wall Street, justo enfrente de la bolsa enfrente de JP Morgan. Un poco después del mediodía, los barones de Wall Street –Charles Mitchell, del National City Bank; Albert Wiggin, de Chase; William Potter, de Guaranty Trust, y George Baker, del Firts National- se abrieron paso entre la multitud congregada ante la puerta principal de J.P.Morgan Co, en el numero 23 de Wall Street. Al cabo de tan sólo veinte  minutos, salieron con aire circunspecto y se alejaron sin hablar con los periodistas. Unos minutos mas tarde, salió Thomas Lamont y dio una improvisada rueda de prensa en el vestíbulo de mármol de Morgan. Con aspecto serio y gesticulando distraídamente con sus quevedos mientras hablaba empezó diciendo: Ha habido un pequeño problema de ventas en la Bolsa. .aquella frase sería objeto siempre objeto de burla que diferencia la actuación de este ejecutivo de JP Morgan, con la de John Pierpont Morgan de 1907 que salvó al mercado.

Lo que no se anunció fue que los seis banqueros habían acordado crear un fondo común que sirviese de colchón y sostener el precio de las acciones. A la una y media de la tarde, el presidente de la Bolsa, Richard Whitney, hermano del socio de Morgan George Whitney y él mismo accionista de la compañía, avanzó con un paso seguro por el abarrotado vestíbulo de la Bolsa y colocó una orden de compra de 10.000 acciones de U.S. Steel, 205,5 puntos por encima de su última venta. A continuación fue de un puesto a otro, esparciendo ordenes de compra igualmente enormes de acciones de primera línea, por un total de entre 20 a 30 millones de dólares.

Continuará la próxima semana. .

Academics see the Wall Street Crash of 1929 as part of a historical process that was a part of the new theories of boom and bust.

A stock market crash is a sudden dramatic decline of stock Mr. Robert Prechter s reversal proved to be the crack that started Wall Street Crash of 1929.

Crisis del 29 o Gran Depresión CRACK DEL 29 CAUSAS Sobreproducción stoks Bajada de precios Especulación en la bolsa Jueves Negro Dia: 24 de octubre Jueves negro.

Wall Street Crash and Black Tuesday redirect here. For the British vocal group, see Wall Street Crash group. For other uses, see Black Tuesday disambiguation.

Crowd gathering on Wall Street after the 1929 crash

The Wall Street Crash of 1929, also known as Black Tuesday October 29, 1 the Great Crash, or the Stock Market Crash of 1929, began on October 24, 1929 Black Thursday, and was the most devastating stock market crash in the history of the United States, when taking into consideration the full extent and duration of its fallout. 2 The crash signaled the beginning of the 10-year Great Depression that affected all Western industrialized countries. 3

The Dow Jones Industrial Average, 1928–1930

The Roaring Twenties, the decade that followed World War I and led to the Crash, 4 was a time of wealth and excess. Building on post-war optimism, rural Americans emigrated to the cities in vast numbers throughout the decade with the hopes of finding a more prosperous life in the ever growing expansion of America s industrial sector. 5 While the American cities prospered, the overproduction of agricultural produce created widespread financial despair among American farmers throughout the decade. 5 This would later be blamed as one of the key factors that led to the 1929 stock market crash. 6

Despite the dangers of speculation, many believed that the stock market would continue to rise forever. On March 25, 1929, after the Federal Reserve warned of excessive speculation, a mini crash occurred as investors started to sell stocks at a rapid pace, exposing the market s shaky foundation. 7 Two days later, banker Charles E. Mitchell announced his company the National City Bank would provide 25 million in credit to stop the market s slide. 7 Mitchell s move brought a temporary halt to the financial crisis and call money declined from 20 to eight percent. 7 However, the American economy showed ominous signs of trouble: 7 steel production declined, quantify construction was sluggish, quantify automobile sales went down, quantify and consumers were building up high debts quantify because of easy credit. 7 Despite all these economic trouble signs and the market breaks of March and May 1929, stocks resumed their advance in June and the gains continued almost unabated until early September 1929 the Dow Jones average gained more than 20 between June and September. The market had been on a nine-year run that saw the Dow Jones Industrial Average increase in value tenfold, peaking at 381.17 on September 3, 1929. 7 Shortly before the crash, economist Irving Fisher famously proclaimed, Stock prices have reached what looks like a permanently high plateau. 8 The optimism and financial gains of the great bull market were shaken on September 18, 1929, when prices on the New York Stock Exchange NYSE abruptly fell a few days after a well publicized warning from financial expert Roger Babson that a crash was coming. The initial September decline was thus called the Babson Break in the press.

On September 20, the London Stock Exchange officially crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery. 9 The London crash greatly weakened the optimism of American investment in markets overseas. 9 In the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery.

On October 24 Black Thursday, the market lost 11 percent of its value at the opening bell on very heavy trading. The huge volume meant that the report of prices on the ticker tape in brokerage offices around the nation was hours late, so investors had no idea what most stocks were actually trading for at that moment, increasing panic. Several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. 10 The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank of New York. They chose Richard Whitney, vice president of the Exchange, to act on their behalf.

With the bankers financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As traders watched, Whitney then placed similar bids on other blue chip stocks. This tactic was similar to one that ended the Panic of 1907. It succeeded in halting the slide. The Dow Jones Industrial Average recovered, closing with it down only 6.38 points for the day. The rally continued on Friday, October 25, and the half day session on Saturday the 26th but, unlike 1907, the respite was only temporary.

The trading floor of the New York Stock Exchange in 1930, six months after the crash of 1929

Over the weekend, the events were covered by the newspapers across the United States. On October 28, Black Monday, 11 more investors facing margin calls decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38.33 points, or 13.

The next day, Black Tuesday, October 29, 1929, about 16 million shares traded as the panic selling reached its crescendo. Some stocks actually had no buyers at any price that day air pockets. The Dow lost an additional 30 points, or 12 percent, 12 13 14 15 The volume of stocks traded on October 29, 1929 was a record that was not broken for nearly 40 years. 13

On October 29, William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks to demonstrate to the public their confidence in the market, but their efforts failed to stop the large decline in prices. Due to the massive volume of stocks traded that day, the ticker did not stop running until about  p.m. that evening. The market had lost over 30 billion in the space of two days which included 14 billion on October 29 alone. 16

Dow Jones Industrial Average on Black Monday and Black Tuesday 17

After a one-day recovery on October 30, where the Dow regained an additional 28.40 points, or 12 percent, to close at 258.47, the market continued to fall, arriving at an interim bottom on November 13, 1929, with the Dow closing at 198.60. The market then recovered for several months, starting on November 14, with the Dow gaining 18.59 points to close at 217.28, and reaching a secondary closing peak i.e., bear market rally of 294.07 on April 17, 1930. The following year, the Dow embarked on another, much longer, steady slide from April 1931 to July 8, 1932 when it closed at 41.22 its lowest level of the 20th century, concluding an 89 percent loss rate for all of the market s stocks. For most of the 1930s, the Dow began slowly to regain the ground it lost during the 1929 crash and the three years following it, beginning on March 15, 1933, with the largest percentage increase of 15.34 percent, with the Dow Jones closing at 62.10, with an 8.26 point increase. The largest percentage increases of the Dow Jones occurred during the early and mid-1930s. In late 1937, there was a sharp dip in the stock market, but prices held well above the 1932 lows. The market would not return to the peak closing of September 3, 1929 until November 23, 1954. 18 19

The crash followed a speculative boom that had taken hold in the late 1920s. During the later half of the 1920s, steel production, building construction, retail turnover, automobiles registered, even railway receipts advanced from record to record. The combined net profits of 536 manufacturing and trading companies showed an increase, in fact for the first six months of 1929, of 36.6 over 1928, itself a record half-year. Iron and steel led the way with doubled gains. 20 Such figures set up a crescendo of stock-exchange speculation which had led hundreds of thousands of Americans to invest heavily in the stock market. A significant number of them were borrowing money to buy more stocks. By August 1929, brokers were routinely lending small investors more than two-thirds of the face value of the stocks they were buying. Over 8.5 billion was out on loan, 21 more than the entire amount of currency circulating in the U.S. at the time. 16 22

The rising share prices encouraged more people to invest; people hoped the share prices would rise further. Speculation thus fueled further rises and created an economic bubble. Because of margin buying, investors stood to lose large sums of money if the market turned down or even failed to advance quickly enough. The average P/E price to earnings ratio of S P Composite stocks was 32.6 in September 1929, 23 clearly above historical norms. 24

Good harvests had built up a mass of 250,000,000 bushels of wheat to be carried over when 1929 opened. By May there was also a winter-wheat crop of 560,000,000 bushels ready for harvest in the Mississippi Valley. This oversupply caused a drop in wheat prices so heavy that the net incomes of the farming population from wheat were threatened with extinction. Stock markets are always sensitive to the future state of commodity markets, and the slump in Wall Street predicted for May by Sir George Paish arrived on time. In June 1929, the position was saved by a severe drought in the Dakotas and the Canadian West, plus unfavorable seed times in Argentina and eastern Australia. The oversupply would now be wanted to fill the big gaps in the 1929 world wheat production. From 97 per bushel in May, the price of wheat rose to 1.49 in July. When it was seen that at this figure the American farmers would get rather more for their smaller crop than for that of 1928, up went stocks again and from far and wide orders came to buy shares for the profits to come.

In August, the wheat price fell when France and Italy were bragging of a magnificent harvest, and the situation in Australia improved. This sent a shiver through Wall Street and stock prices quickly dropped, but word of cheap stocks brought a fresh rush of stags, amateur speculators and investors. Congress had also voted for a 100 million dollar relief package for the farmers, hoping to stabilize wheat prices. By October though, the price had fallen to 1.31 per bushel. 25

Other important economic barometers were also slowing or even falling by mid-1929, including car sales, house sales, and steel production. The falling commodity and industrial production may have dented even American self-confidence, and the stock market peaked on September 3 at 381.17 just after Labor Day, then started to falter after Roger Babson issued his prescient market crash forecast. By the end of September, the market was down 10 from the peak the Babson Break. Selling intensified in early and mid October, with sharp down days punctuated by a few up days. Panic selling on huge volume started the week of October 21 and intensified and culminated on October 24, the 28th and especially the 29th Black Tuesday. 26

The president of the Chase National Bank said at the time We are reaping the natural fruit of the orgy of speculation in which millions of people have indulged. It was inevitable, because of the tremendous increase in the number of stockholders in recent years, that the number of sellers would be greater than ever when the boom ended and selling took the place of buying. 27

In 1932, the Pecora Commission was established by the U.S. Senate to study the causes of the crash. The following year, the U.S. Congress passed the Glass–Steagall Act mandating a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities.

After the experience of the 1929 crash, stock markets around the world instituted measures to suspend trading in the event of rapid declines, claiming that the measures would prevent such panic sales. However, the one-day crash of Black Monday, October 19, 1987, when the Dow Jones Industrial Average fell 22.6, was worse in percentage terms than any single day of the 1929 crash although the combined 25 decline of October 28–29, 1929 was larger than October 19, 1987, and remains the worst two day decline ever.

The American mobilization for World War II at the end of 1941 moved approximately ten million people out of the civilian labor force and into the war. 28 World War II had a dramatic effect on many parts of the economy, and may have hastened the end of the Great Depression in the United States. 29 Government-financed capital spending accounted for only 5 percent of the annual U.S. investment in industrial capital in 1940; by 1943, the government accounted for 67 percent of U.S. capital investment. 29

Further information: Causes of the Great Depression

Crowd at New York s American Union Bank during a bank run early in the Great Depression

Together, the 1929 stock market crash and the Great Depression formed the largest financial crisis of the 20th century. 30 The panic of October 1929 has come to serve as a symbol of the economic contraction that gripped the world during the next decade. 31 The falls in share prices on October 24 and 29, 1929 were practically instantaneous in all financial markets, except Japan. 32

The Wall Street Crash had a major impact on the U.S. and world economy, and it has been the source of intense academic debate historical, economic, and political from its aftermath until the present day. Some people believed that abuses by utility holding companies contributed to the Wall Street Crash of 1929 and the Depression that followed. 33 Many people blamed the crash on commercial banks that were too eager to put deposits at risk on the stock market. 34

The 1929 crash brought the Roaring Twenties to a shuddering halt. 35 As tentatively expressed by economic historian Charles P. Kindleberger, in 1929, there was no lender of last resort effectively present, which, if it had existed and were properly exercised, would have been key in shortening the business slowdown s that normally follows financial crises. 32 The crash marked the beginning of widespread and long-lasting consequences for the United States. Historians still debate the question: did the 1929 Crash spark The Depression, 36 or did it merely coincide with the bursting of a loose credit-inspired economic bubble. Only 16 of American households were invested in the stock market within the United States during the period leading up to the depression, suggesting that the crash carried somewhat less of a weight in causing the depression.

Unemployed men march in Toronto

However, the psychological effects of the crash reverberated across the nation as businesses became aware of the difficulties in securing capital markets investments for new projects and expansions. Business uncertainty naturally affects job security for employees, and as the American worker the consumer faced uncertainty with regards to income, naturally the propensity to consume declined. The decline in stock prices caused bankruptcies and severe macroeconomic difficulties including contraction of credit, business closures, firing of workers, bank failures, decline of the money supply, and other economic depressing events.

The resultant rise of mass unemployment is seen as a result of the crash, although the crash is by no means the sole event that contributed to the depression. The Wall Street Crash is usually seen as having the greatest impact on the events that followed and therefore is widely regarded as signaling the downward economic slide that initiated the Great Depression. True or not, the consequences were dire for almost everybody. Most academic experts agree on one aspect of the crash: It wiped out billions of dollars of wealth in one day, and this immediately depressed consumer buying. 36

The failure set off a worldwide run on US gold deposits i.e., the dollar, and forced the Federal Reserve to raise interest rates into the slump. Some 4,000 banks and other lenders ultimately failed. Also, the uptick rule, 37 which allowed short selling only when the last tick in a stock s price was positive, was implemented after the 1929 market crash to prevent short sellers from driving the price of a stock down in a bear raid. 38

Economists and historians disagree as to what role the crash played in subsequent economic, social, and political events. The Economist argued in a 1998 article that the Depression did not start with the stock market crash. 39 Nor was it clear at the time of the crash that a depression was starting. They asked, Can a very serious Stock Exchange collapse produce a serious setback to industry when industrial production is for the most part in a healthy and balanced condition. They argued that there must be some setback, but there was not yet sufficient evidence to prove that it will be long or that it need go to the length of producing a general industrial depression. 40

But The Economist also cautioned that some bank failures are also to be expected and some banks may not have any reserves left for financing commercial and industrial enterprises. They concluded that the position of the banks is the key to the situation, but what was going to happen could not have been foreseen. 40

Academics see the Wall Street Crash of 1929 as part of a historical process that was a part of the new theories of boom and bust. According to economists such as Joseph Schumpeter, Nikolai Kondratiev and Charles E. Mitchell the crash was merely a historical event in the continuing process known as economic cycles. The impact of the crash was merely to increase the speed at which the cycle proceeded to its next level.

Milton Friedman s A Monetary History of the United States, co-written with Anna Schwartz, advances the argument that what made the great contraction so severe was not the downturn in the business cycle, protectionism, or the 1929 stock market crash in themselves - but instead, according to Friedman, what plunged the country into a deep depression was the collapse of the banking system during three waves of panics over the 1930–33 period. 41

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U.S. Industrial Stocks Pass 1929 Peak, The Times, November 24, 1954, p. 12.

Broad Facts of, Ilsa Crisis. The Daily News Perth, Western Australia: National Library of Australia. November 1, 1929. p. 6 Edition: Home Final Edition. Retrieved November 22, 2012.

Lambert, Richard July 19, 2008. Crashes, Bangs Wallops. Financial Times. Retrieved September 30, 2008. At the turn of the 20th century stock market speculation was restricted to professionals, but the 1920s saw millions of ordinary Americans investing in the New York Stock Exchange. By August 1929, brokers had lent small investors more than two-thirds of the face value of the stocks they were buying on margin – more than 8.5bn was out on loan.

Facing the facts: an economic diagnosis. Retrieved September 30, 2008.

Shiller, Robert March 17, 2005. Irrational Exuberance, Second Edition. Princeton University Press. Retrieved February 3, 2007.

Doug Short April 3, 2013. The Stock Market s Valuation Rarely Gets This High. Business Insider.

Grain Plunges. The Courier-Mail Brisbane, Qld: National Library of Australia. October 26, 1929. p. 19. Retrieved November 22, 2012.

Wild Selling. New York Panic.. The Sydney Morning Herald Sydney, NSW: National Library of Australia. October 26, 1929. p. 17. Retrieved November 22, 2012.

Second Crash. The Sydney Morning Herald Sydney, NSW: National Library of Australia. October 30, 1929. p. 17. Retrieved November 20, 2012.

Selective Service System. May 27, 2003. Induction Statistics. In Inductions by year from World War I Through the End of the Draft 1973. Retrieved September 8, 2013.

a b Hyman, Louis December 16, 2011. How Did World War II End the Great Depression.: Echoes. Bloomberg. Retrieved August 25, 2015.

Paulson affirms Bush assessment, The Washington Times

Scardino, Albert October 21, 1987. The Market Turmoil: Past lessons, present advice; Did 29 Crash Spark The Depression.. The New York Times.

a b Crashes, Bangs Wallops Financial Times

Jameson, Angela August 10, 2005, Pyramid structures brought down by Wall Street Crash The Times, Retrieved March 17, 2010

Death of the Brokerage: The Future of Wall Street National Public Radio

Kaboom.and bust. The crash of 2008 The Times

a b The Market Turmoil: Past lessons, present advice; Did 29 Crash Spark The Depression. The New York Times

Practice has plenty of historical precedents Financial Times

Funds want uptick rule back Financial Times

Economics focus: The Great Depression, The Economist September 17, 1998

a b Reactions of the Wall Street slump, The Economist November 23, 1929

Panic control The Washington Times

Bierman, Harold March 26, 2008. Whaples, Robert, ed. The 1929 Stock Market Crash. EH.Net Encyclopedia. Santa Clara, California: Economic History Association. Retrieved May 13, 2010. 

Brooks, John. 1969. Once in Golconda: A True Drama of Wall Street 1920–1938. New York: Harper Row. ISBN 0-393-01375-8.

Galbraith, John Kenneth. 1954. The Great Crash, 1929. Boston: Houghton Mifflin. ISBN 0-395-85999-9.

Klein, Maury. 2001. Rainbow s End: The Crash of 1929. New York: Oxford University Press. ISBN 0-19-513516-4.

Klingaman, William K. 1989. 1929: The Year of the Great Crash. New York: Harper Row. ISBN 0-06-016081-0.

Reed, Lawrence W. 1981 2008. Great Myths of the Great Depression. Midland, Michigan: Mackinac Center.

Rothbard, Murray N. 2000. America s Great Depression PDF 5th ed.. Auburn, Alabama: Ludwig von Mises Institute. ISBN 978-0-945466-05-5. Retrieved May 13, 2010. 

Salsman, Richard M. The Cause and Consequences of the Great Depression in The Intellectual Activist, ISSN 0730-2355.

Part 1: What Made the Roaring 20s Roar, June 2004, pp. 16–24.

Part 2: Hoover s Progressive Assault on Business, July 2004, pp. 10–20.

Part 3: Roosevelt s Raw Deal, August 2004, pp. 9–20.

Part 4: Freedom and Prosperity, January 2005, pp. 14–23.

Shachtman, Tom. 1979. The Day America Crashed: A Narrative Account of the Great Stock Market Crash of October 24, 1929. New York: G.P. Putnam. ISBN 0-399-11613-3.

Thomas, Gordon and Morgan-Witts, Max. 1979. The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929. Garden City, New York: Doubleday. ISBN 0-385-14370-2.

Konecny Ladis, Stocks and Exchange – the only Book you need 2013, ISBN 9783848220656, stock crash 1929–1932 chapter 15

Media related to Wall Street Crash of 1929 at Wikimedia Commons

The Crash of 1929, American Experience documentary

Retrieved from https://en.wikipedia.org/w/index.php.title Wall_Street_Crash_of_1929 oldid 700507280

Categories: 1929 in economics1929 in international relations1929 in the United StatesEconomic bubblesGreat Depression in the United StatesRoaring TwentiesStock market crashes.

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