On October 29, 1929, a decade of glamor, glitter, and progress came to a sudden end with a massive financial crash. With Black Tuesday's fall of the New York Stock Exchange came a number of destructive ramifications—from bank closures to soaring unemployment rates—which all paved the way for the decade-long Great Depression.
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In the lead up to that fateful day, American stock prices had started falling after a long period of abnormal highs—most significantly when the London Stock Exchange crashed on September 20 of that year. But it wasn't until October 24, 1929, now called Black Thursday, that full-blown panic began to sweep through Wall Street.
Over the next few days, the Dow Jones Industrial Average would continue its swift decline, while fearful traders sold stocks at damaging volumes. As a result, prices changed too quickly for the ticker to record, leaving everyone with outdated and useless information. Several prominent bankers aimed to restore calm by buying up blue-chip stocks, though their actions only had a temporary effect. The worst was yet to come.
And on October 29, come it did. The desperate trading of roughly 16 million shares, a record-breaking number, led to the loss of billions of dollars and the official collapse of the New York Stock Exchange. Today, it's known as Black Tuesday—an inciting incident of the Great Depression. But how exactly did this happen? The end of World War I created a hunger for expansion, which, in turn, grew into an obsession with wealth and excess. Thus, the 1920s were “the Roaring 20s”, as the U.S. became the world's leading financial power; new technologies came into play, and Western stock prices rose to unprecedented levels. With such a successful economy, it was impossible not to feel that the worst days were well and truly over.
It was the perfect environment for a credit boom—and, eventually, a shocking amount of debt—which also allowed overconfident consumers to buy stocks “on margin” (paying for just a small percentage of the value). Combined with overproduction, a flawed banking system, and a failing agricultural sector, a catastrophe like Black Tuesday was practically inevitable.