Monday, October 29, 2012
The exuberance of the 1920s began to unravel on October 29, 1929 – Black Tuesday – when investors lost billions of dollars on the New York Stock Exchange. Tickertapes failed to cope with the trading of more than 16.4 million shares (a record). The Twenties’ excess had lured people to speculate in the market on margin with borrowed money, so that by 1929, two out of every five dollars in bank loans went to stock purchases. Loans totaled $8.5 billion – more than the entire amount of currency circulating in the U.S. Consumer goods increasingly were bought on credit. From their peak on September 3, stock prices began to slide on a lack of confidence, and the Crash fed an ongoing, slow-motion economic collapse. By 1933, nearly half of U.S. banks had failed and unemployment approached 30 percent of the workforce.