On This Day in History: October 29

The 1929 Stock Market Crash

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In October of 1929, the bear took the bull by the horns and drove it right into the fucking ground. That was actually a thing they did in California in the 19th century, having fights between grizzlies and bulls. The grizzly often won, and with the stock market crash of 1929, it was bear markets that destroyed the bull of the roaring 20s.

--On This Day in History, Shit Went Down: October 29, 1929--

Those fights wiped out California grizzlies, and also inspired the terms bear and bull markets on Wall Street. During the 20s things were very bullish. If you’re an investor, that’s good. It means stocks are on the rise. The Dow Jones index that measures stock performance increased six-fold between 1921 and 1929. Due to speculation, many regular working-class folk who knew little of investing wanted to get in on it and purchased stocks “on margin.” That means they were buying stocks on credit, putting down as little as 10% of the stock’s value. Such credit purchasing was one of the things that contributed to the crash. Another contributor was that people were just too pollyannish; they believed the stocks were worth more than was realistic. Yet another reason for the crash was a sharp cut in interest rates by the government in August of 1929, which cooled investor enthusiasm. There was also an agricultural recession affecting the country’s economy.

And then, the panic selling.

The first big crash was on October 24, with the market losing 11% of its value. The mass volume of trading delayed the ticker tape, so many brokers didn’t know what stocks were actually trading for. The trading floor was in a panic. October 28 saw more panic selling as investors faced “margin calls,” which translates to the lender saying to the borrower “your stock ain’t worth shit fucking pay me.”

On October 29, 1929, shit went down, and so did the stock market.

Some rich folks, including the Rockefellers, tried to bolster the market by buying up stocks to show faith in the investments, but it was too late. There was a mild recovery, because stock prices were so low, they had nowhere to go but up. But by 1932 most stocks were worth about a fifth of what they had been in the summer of 1929.

The stock market crash was a major contributor to the Great Depression of the 1930s. Those hardest hit were Black people because companies had a “last hired, first fired” policy regarding Black employees. One thing the Depression did was help bring about an end to prohibition, as it was felt that legalizing alcohol would help stimulate the economy.

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