This website uses cookies to provide a rich user experience. Please consult our Cookie Policy to learn about what cookies this website uses, or to control the cookies you receive. You need do nothing if you are happy to receive cookies.
Look and Learn History Picture Library License images from £2.99 Pay by PayPal for images for immediate download Member of British Association of Picture Libraries and Agencies (BAPLA)

The Wall Street Crash ushered in the Great Depression

Posted in America, Anarchy, Famous news stories, Historical articles, History, Labour Party, Politics on Tuesday, 10 December 2013

Click on any image for details about licensing for commercial or personal use.

This edited article about the Depression first appeared in Look and Learn issue number 486 published on 8 May 1971.

Unemployed marchers, picture, image, illustration

Unemployed British marchers during the Depression

Wall Street’s Stock Exchange where grave-faced men of business dealt in millions every day was like a madhouse. Telephones shrilled, messengers rushed in and out, ticker tapes chattered – all unheeded. The share prices they showed were hopelessly out of date before they received them. Millions were being lost every minute. The crowd groaned in despair. Dupont, one of the greatest American companies was named. Its value had dropped again. It was now half yesterday’s. Worse, Trans America had lost 840 million dollars and stopped trading. Other names told the same story. The brokers were stunned!

The hypnotised trance lasted only a moment; then the crowd broke. Hundreds of men scurried hither and thither. Some to a telephone to pass on the news, some to seek buyers, others believing the indicator board was way behind, sought more information. Pandemonium resumed. Others did nothing. They either sat, or walked slowly like zombies, unable to believe their fortunes of a month before had vanished, as if stolen. That day, 29th October, 1929, a number of them committed suicide. They were ruined, everything they had worked for had gone in the worst financial disaster of the century, the Wall Street Crash, when the American business world ran out of money and stopped.

The crash reverberated around the world. Its impact no longer measured in terms of money lost but in jobs lost. Without buyers for their goods, manufacturers went bankrupt, or nearly so, and could no longer pay wages. Millions were unemployed. Economists call this kind of drop in trade a depression, but this downturn lasted so long and was so bad it came to be called the Great Depression or Slump.

It was a few months before it had an effect on Britain. When it did it was as disastrous as elsewhere. Nine months after the bank crash in New York, unemployment here doubled to two million. It crept up to two and a half million by December, 1930. In Germany the effect was far worse. In 1933, the darkest year of the whole grim business, there were 6 million out of work.

Irresponsibility is one word that could well describe the cause of the Wall Street crash. Because America’s economy was booming after the First World War, even foreigners were eager to invest their money in anything American. To oblige them, speculators began setting up companies that on paper were worth millions. An example might be real estate. Huge office blocks were built to be let at enormous profits – if the boom continued. When it didn’t the owners were left with no money and a brick and mortar pile thousands of miles away.

Before the crash investing on the Exchange had become as common as saving through a bank. All over America, ordinary people had begun to invest, and while prices were high they were happy. But when one of the regular downturns in trade occurred, thousands of these amateur investors were frightened. They panicked and sold for what they could get. The effect snowballed and the slide in prices began.

The wave of selling spread further and faster till it careered on out of control. The smash, when it came, wiped out savings as well as fortunes.

America’s economy and that of the rest of the world slowly picked up over the next few years. New industries such as cars and electrical goods proved their worth and money eventually began to circulate between trading nations again.

Leave a comment

You must be logged in to post a comment.