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Welcome to our padlet where you will be learning about the stock market crash of 1929 and it's effects and some videos regarding it and our thoughts along with it.

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The video explains what the crash of 1929 was in a more simple and cartoony way for people to understand. Talking about how the crash was so big that minutes into the opening of the day stocks plummeted by 11% and brokers in Chicago and California were using information that was 4 hours old.

I chose this video as this was a simple approach at giving the basic info about the crash and not just information being thrown at you.

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The 1929 Stock Market Crash - Black Thursday - Extra History

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Wikipedia gives us first initial impressions about the stock market crash in 1929, what it was how it happened. Starting in September and ending in November, in around 2 months the stocks collapsed and in our viewpoint it is crazy to think that this started the great depression in a time when America was blooming and claiming to be at their highest. The after effects were more shocking as it started the great depression and effects were seen until years later.

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The Wall Street Crash of 1929, also known as the Great Crash or the Crash of 29 was a major American stock market crash that occurred in the autumn of 1929. It started in September, when share prices on the New York Stock Exchange (NYSE) collapsed, and ended in mid-November.

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This website covers the incident again but also talks about how the incident was handled, such as how there were still leaders who told investors to still but stocks at high prices, and as we know now the strategy and the effort failed. We also think and the website mentioned that banks were trying to stop this kind of buying before the crash happened, lenders did not hear the advise from banks and the stocks plummeted.

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The Roaring Twenties roared loudest and longest on the New York Stock Exchange. Share prices rose to unprecedented heights. The Dow Jones Industrial Average increased six-fold from sixty-three in August 1921 to 381 in September 1929. After prices peaked, economist Irving Fisher proclaimed, "stock prices have reached 'what looks like a permanently high plateau.'"

The epic boom ended in a cataclysmic bust. On Black Monday, October 28, 1929, the Dow declined nearly 13 percent. On the following day, Black Tuesday, the market dropped nearly 12 percent. By mid-November, the Dow had lost almost half of its value. The slide continued through the summer of 1932, when the Dow closed at 41.22, its lowest value of the twentieth century, 89 percent below its peak. The Dow did not return to its pre-crash heights until November 1954.

Chart 1: Dow Jones Industrial Average Index daily closing price, January 2, 1920, to December 31, 1954. Data plotted as a curve. Units are index value. Minor tick marks indicate the first trading day of the year. As shown in the figure, the index peaked on September 3, 1929, closing at 381.17. The index declined until July 8, 1932, when it closed at $41.22. The index did not reach the 1929 high again until November 23, 1954. (Source: FRED, https://fred.stlouisfed.org (graph by: Sam Marshall, Federal Reserve Bank of Richmond)

The financial boom occurred during an era of optimism. Families prospered. Automobiles, telephones, and other new technologies proliferated. Ordinary men and women invested growing sums in stocks and bonds. A new industry of brokerage houses, investment trusts, and margin accounts enabled ordinary people to purchase corporate equities with borrowed funds. Purchasers put down a fraction of the price, typically 10 percent, and borrowed the rest. The stocks that they bought served as collateral for the loan. Borrowed money poured into equity markets, and stock prices soared.

Skeptics existed, however. Among them was the Federal Reserve. The governors of many Federal Reserve Banks and a majority of the Federal Reserve Board believed stock-market speculation diverted resources from productive uses, like commerce and industry. The Board asserted that the "Federal Reserve Act does not ... contemplate the use of the resources of the Federal Reserve Banks for the creation or extension of speculative credit" (Chandler 1971, 56).

The Board's opinion stemmed from the text of the act. Section 13 authorized reserve banks to accept as collateral for discount loans assets that financed agricultural, commercial, and industrial activity but prohibited them from accepting as collateral "notes, drafts, or bills covering merely investments or issued or drawn for the purpose of carrying or trading in stocks, bonds or other investment securities, except bonds and notes of the Government of the United States" (Federal Reserve Act 1913).

Section 14 of the act extended those powers and prohibitions to purchases in the open market.

These provisions reflected the theory of real bills, which had many adherents among the authors of the Federal Reserve Act in 1913 and leaders of the Federal Reserve System in 1929. This theory indicated that the central bank should issue money when production and commerce expanded, and contract the supply of currency and credit when economic activity contracted.

The Federal Reserve decided to act. The question was how. The Federal Reserve Board and the leaders of the reserve banks debated this question. To rein in the tide of call loans, which fueled the financial euphoria, the Board favored a policy of direct action. The Board asked reserve banks to deny requests for credit from member banks that loaned funds to stock speculators.The Board also warned the public of the dangers of speculation.

The governor of the Federal Reserve Bank of New York, George Harrison, favored a different approach. He wanted to raise the discount lending rate. This action would directly increase the rate that banks paid to borrow funds from the Federal Reserve and indirectly raise rates paid by all borrowers, including firms and consumers. In 1929, New York repeatedly requested to raise its discount rate; the Board denied several of the requests. In August the Board finally acquiesced to New York's plan of action, and New York's discount rate reached 6 percent.

The Federal Reserve's rate increase had unintended consequences. Because of the international gold standard, the Fed's actions forced foreign central banks to raise their own interest rates. Tight-money policies tipped economies around the world into recession. International commerce contracted, and the international economy slowed (Eichengreen 1992; Friedman and Schwartz 1963; Temin 1993).

The financial boom, however, continued. The Federal Reserve watched anxiously. Commercial banks continued to loan money to speculators, and other lenders invested increasing sums in loans to brokers. In September 1929, stock prices gyrated, with sudden declines and rapid recoveries. Some financial leaders continued to encourage investors to purchase equities, including Charles E. Mitchell, the president of the National City Bank (now Citibank) and a director of the Federal Reserve Bank of New York.In October, Mitchell and a coalition of bankers attempted to restore confidence by publicly purchasing blocks of shares at high prices. The effort failed. Investors began selling madly. Share prices plummeted.

A crowd gathers outside the New York Stock Exchange following the 1929 crash. (Photo: Bettmann/Bettmann/Getty Images)

Funds that fled the stock market flowed into New York City's commercial banks. These banks also assumed millions of dollars in stock-market loans. The sudden surges strained banks. As deposits increased, banks' reserve requirements rose; but banks' reserves fell as depositors withdrew cash, banks purchased loans, and checks (the principal method of depositing funds) cleared slowly. The counterpoised flows left many banks temporarily short of reserves.

To relieve the strain, the New York Fed sprang into action. It purchased government securities on the open market, expedited lending through its discount window, and lowered the discount rate. It assured commercial banks that it would supply the reserves they needed. These actions increased total reserves in the banking system, relaxed the reserve constraint faced by banks in New York City, and enabled financial institutions to remain open for business and satisfy their customers' demands during the crisis. The actions also kept short term interest rates from rising to disruptive levels, which frequently occurred during financial crises.

At the time, the New York Fed's actions were controversial. The Board and several reserve banks complained that New York exceeded its authority. In hindsight, however, these actions helped to contain the crisis in the short run. The stock market collapsed, but commercial banks near the center of the storm remained in operation (Friedman and Schwartz 1963).

While New York's actions protected commercial banks, the stock-market crash still harmed commerce and manufacturing. The crash frightened investors and consumers. Men and women lost their life savings, feared for their jobs, and worried whether they could pay their bills. Fear and uncertainty reduced purchases of big ticket items, like automobiles, that people bought with credit. Firms - like Ford Motors - saw demand decline, so they slowed production and furloughed workers. Unemployment rose, and the contraction that had begun in the summer of 1929 deepened (Romer 1990; Calomiris 1993).

While the crash of 1929 curtailed economic activity, its impact faded within a few months, and by the fall of 1930 economic recovery appeared imminent. Then, problems in another portion of the financial system turned what may have been a short, sharp recession into our nation's longest, deepest depression.

From the stock market crash of 1929, economists - including the leaders of the Federal Reserve - learned at least two lessons.

First, central banks - like the Federal Reserve - should be careful when acting in response to equity markets. Detecting and deflating financial bubbles is difficult. Using monetary policy to restrain investors' exuberance may have broad, unintended, and undesirable consequences.

Second, when stock market crashes occur, their damage can be contained by following the playbook developed by the Federal Reserve Bank of New York in the fall of 1929.

Economists and historians debated these issues during the decades following the Great Depression. Consensus coalesced around the time of the publication of Milton Friedman and Anna Schwartz's A Monetary History of the United States in 1963. Their conclusions concerning these events are cited by many economists, including members of the Federal Reserve Board of Governors such as Ben Bernanke, Donald Kohn and Frederic Mishkin.

In reaction to the financial crisis of 2008 scholars may be rethinking these conclusions. Economists have been questioning whether central banks can and should prevent asset market bubbles and how concerns about financial stability should influence monetary policy. These widespread discussions hearken back to the debates on this issue among the leaders of the Federal Reserve during the 1920s.

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Gary Richardson

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On Black Monday, October 28, 1929, the Dow Jones Industrial Average declined nearly 13 percent. Federal Reserve leaders differed on how to respond to the event and support the financial system.

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This website talks in more depth about how the crash affected Canada, we know how the crash affected the whole world as countries are connected in one way or another through trade tourism etc. But among the most hit countries was Canada, even though the stocks crashed in 1929, unemployment rate would reach 20% in the next 5 years.

I chose this website because this has more in depth information about how the crash hit Canada.

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Gallery 3: Modern Canada ⟶ Sovereignty and Prosperity ⟶ The Great Depression Following the New York stock market crash in October 1929, Canada sank into 10 long years of economic and social despair. The New York stock market collapsed in the fall of 1929, as stocks lost 39 per cent of their value, or 10 times the U.S.

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This website also talked about how the crash affected Canada, the talk about something i did not find on other websites how the liquidation records were set in Montreal and Toronto to a record high at that time when they sold 500,000 and 330,000 shares respectively, which is 13 times more than was was the average at that time.

We chose this website as it has very particular numbers on shares and company that we were not able to find otherwise, they even mention how the 50 most active Canadian stocks were reduced to half of their value, also the website name is The Canadian encyclopedia which means they specialise in Canadian information.

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The wheat glut of 1928 threw the Winnipeg Grain Exchange into a spiral, triggering a depression in Canada's economy.

It began to take shape on 24 October 1929, Black Thursday. "Stock Speculators Shaken in Wild Day of Panic," shouted the front page of the next day's Toronto . The New York Stock Exchange, the accompanying stories reported, had experienced massive declines in wild trading, with a record 12.8 million shares sold. Thousands of accounts were wiped out before leading bankers and industrialists intervened to halt the slump. The dread extended to the Toronto markets, the Globe declared, and "rocked" share prices there. In Montréal, forced selling ran rampant, and practically every stock finished the day down.

"The biggest crash ever recorded," lamented the famed British economist John Maynard Keynes, whose own investments were entirely gone by the end of the year ( see Keynesian Economics).

Tuesday, 29 October - or Black Tuesday - was worse still. On Wall Street, 16.4 million shares were sold, almost 4 million more than Black Thursday's unprecedented totals. The New York Times industrial average plummeted, eliminating a strong year's gains, and the investment giant Goldman Sachs Trading Corporation was reduced to 58 per cent of its worth the night before.

Credit: Library and Archives Canada/C-020594.\r\n

In Toronto and Montréal, liquidation records were set. Horrified investors clogged the financial districts, while employees in the exchanges and the brokerage houses worked themselves to near-collapse in an attempt to corral the paperwork. The Canadian Annual Review of Public Affairs reckoned that "never before the 1929 crash had amounts that ran into billions of dollars been lost on the Canadian Stock Exchanges in so brief a period of time." In Montréal, some 500,000 shares were sold (5 times the usual amount); in Toronto, 330,000 were sold (13 times the usual).

"The singular feature of the great crash of 1929 was that the worst continued to worsen," wrote Canadian-born economist John Kenneth Galbraith in his seminal book The Great Crash 1929 (1954). The markets jumped back to life, but briefly. The setbacks returned and they persisted.

From the peak of the bull market in 1929 to mid-1930, the 50 most active Canadian stocks diminished on average to well under half their market value. Shareholders in International Nickel and Imperial Oil lost more than $500 million each, those in Canadian Pacific Railway over $60 million.

Standard Oil of New Jersey's John D. Rockefeller, the Bill Gates of his day, was caught up in the turmoil. On 13 November 1929, yet another disastrous day for the markets, he put his family's money behind a guarantee that his enterprise's shares would not fall below 50. In early 1932, the price was 20.

Historians and economists debate the importance of the Great Crash. Some claim that it brought on the Great Depression that blighted the 1930s across the industrialized world; others scarcely mention it in their narratives of the decade-long economic ordeal, an international phenomenon with many origins and explanations.

The economic downturn seemed moderate enough when Conservative leader R.B. Bennett hit the election trail in 1930. But Bennett was able to use it to good effect to defeat William Lyon Mackenzie King's Liberals, who'd been in power for nearly a decade and were reluctant to acknowledge the crisis brewing in Canada.

Six months after the election, Prime Minister Bennett realized that the country was in a severe economic depression. The low point came in 1933, when national output and exports - crucial then as now to the Canadian economy ( see Economic Indicators) - were down a third from late 1920s levels. Farms of the West were in crisis ( see Drought). Nearly a third of the workforce was unemployed.

The rich and well-stuffed Bennett was the butt of cruel jokes and the symbol of everything Canadians loathed. Though he tried to turn the tide, establishing the Bank of Canada and presenting his New Deal for social service reform in 1935, it was too little too late. In the next election, Canadians ousted Bennett.

The economy struggled back, yet very slowly, and a late 1930s recession interrupted the upward trend ( see Business Cycles). In 1939, there were still hundreds of thousands of Canadians on what passed for financial relief, with monthly rates for a family of five varying from $60 in Calgary to $19 in Halifax. This was before the rise of the welfare state in the ensuing decades.

Year upon year of economic woe set peoples against one another in a global depression that left few markets unscathed. In response, governments heaped on the tariffs, wanting to protect themselves and punish others ( see Protectionism). Democracies turned in on themselves, selfish and frightened. Capitalism had apparently failed, and its opponents were in fashion. Territory-hungry dictatorships flourished ( see Fascism). In this respect, the Second World War was a child of the Great Depression. Then, in a twist of fate, the economic prosperity of war ended Canada's Depression.

( See also Economic History.)

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The following article is an editorial written by The Canadian Encyclopedia staff. Editorials are not usually updated. In late October of 1929, terror seized th...

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The image describes how a Canadian is sleeping on a cot during the tough times, we even see the poster that says sleeping problem, temporarily solved.

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Image from a newspaper titled "Black Thursday" representing the day the crash happened. Huge crowd of people seen on the wall street.

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We wanted to include real footage of the stock market crash that displayed the chaos, panic among the people which an article fails to make the readers feel, we were not able to conclude how original the video is but even if it is a compilation of news and images that we see on the internet it depicts the chaos perfectly, there is even a reporter speaking of the news in the background.

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1929 Stock Market Crash Start of Great Depression

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This small video debunks the myth which was very prominent during the time of the crash, during the crash the internet was not a thing and people believed word of mouth and newspapers more, one such rumor that was widely spread was stock brokers jumping off building when the crash happened, while suicide rates did go up during the depression era this myth was not the cause for it.

This was due to the death of a German chemist who accidently fell through a hotel window.

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Did Stock Brokers Jump off Buildings during the 1929 Stock Market Crash?

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We could not find much videos that in particularly talked about the stock market crash in Canada but this one video highlights why it happened in Canada. Too many bad credit and people buying on margin resulted in a fall off the economy when the investors saw that the stock market is declining, too much selling of stocks, started a chain reaction which led to bank failures and the great depression as we know it.

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What caused the stock market crash in 1929 Canada?

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1. What did you learn about your topic that surprised you the most?

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1. What did you learn about your topic that surprised you the most?

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The one thing that surprised us the most was how the effects of one single event had started the great depression era and how it lasted for over 10 years in certain countries mainly America, U.K and Canada. The effects were so big that they never really recovered from it and as far as we know the end of the great depression was followed by world war 2 which means the countries failed to put an end to it and bounce back into blooming economy.

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2. Provide a real-life example of how this topic is relevant or interesting for you.

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2. Provide a real-life example of how this topic is relevant or interesting for you.

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This topic is interesting because this was not the first time nor the last time that stock market had collapsed, we saw it again in 2008 which led to recession again. And in todays time there is no hiding from the fact that we are heading into yet another one in Canada as we are already seeing inflation on the rise, this was also interesting as this can help us get ready if something like this occurs again.

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3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on ?

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3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on ?

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I feel if i had to pass on the knowledge that I have on the topic is history tends to repeat itself, but in today's time living on one source of income might be too risky to not make investments or be too afraid of the stock market, i would pass on that we should invest not only in stock market but if another opportunity comes our way and not be too afraid.