Section:GDN BE PaGe:22 Edition Date:081004 Edition:01 Zone:
Sent at 3/10/2008 19:53
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22
The Guardian | Saturday October 4 2008
23
The Guardian | Saturday October 4 2008
How the Guardian reported the 1929 crash
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Reporting on ‘Black Thursday’
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The day after ‘Black Tuesday’
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PHOTOGRAPHS: BETTMANN/CORBIS; AP; REUTERS
Wall Street
crash
The view
from 2008
How it began
‘Black Thursday’
The bull market on Wall Street began in
1923 and led to an unprecedented period
of share trading. However, by 1929 there
were signs of instability. On September 3
the Dow Jones Industrial Average reached
its peak, closing at 381.7.
On September 5 the economist Roger
Babson, right, gave a speech saying
‘Sooner or later, a crash is coming, and it
may be terrific’. He had predicted a crash
for years but this time the market fell.
The bubble finally burst on October 24
1929. A then record of 13m shares were
traded and newspapers reported losses as
high as $5bn. Bankers poured money into
the market and President Herbert Hoover, pictured above, reassured Americans
that business was sound.
22.6
The percentage
by which the
market fell on
Monday October
28, the highest
one-day decline in
American history
‘Black Monday’
‘Black Tuesday’
On October 28, European newspapers
were reporting that some brokers
believed the worst was over. But when
the American markets opened, they went
into freefall, and the contagion spread
around the world. ‘Black Monday’ saw
huge falls in the US stock market.
‘Black Tuesday’ continued the losses
as investors tried to sell all their stocks
at once. The market recorded $14bn in
paper losses. The volume was so great
that tickers could not keep up. By the end
of the day the market was down more
than 12%, another large drop. Millions of
people lost their savings
16.4
Millions of shares
sold on October
29. In the week
that followed the
market lost
30%
of its value
Battle to save the market
300
Dow Jones
Industrial
Average
200
100
0
Jul
SOURCE: DOW JONES
Aug
Sep
Oct
Nov
Dec
America’s financial elite tried to rescue
the market — members of the Rockefeller
family and William C Durant of General
Motors bought large quantities of stocks
to demonstrate their confidence in the
market but the move could not stem the
tide.
The market hit new lows in November,
but it was not until July 1932 that it
reached the lowest point of the Great
Depression, down 89% from its peak.
124
The number
of banks that
collapsed, with
liabilities of
more than
$50m
The consequences
The crash led to higher trade tariffs as
governments tried to shore up their
economies, and higher interest rates in
the US after a worldwide run on US gold
deposits. In American unemployment
went from 1.5 million in 1929 to 12.8
million —or 24.75% of the workforce —
by 1933, a pattern replicated around the
world. It took 23 years for the US market
to recover.