Tag Archives: Great Depression
Thursday the 24th October 1929, known as Black Thursday, is generally accepted as the first day of the Wall Street Crash. The day saw panic selling of shares on the New York Stock Exchange on an unprecedented scale, with over 12.8 million being sold and the market’s value plummeting by 11%. The market didn’t return to its pre-crash level until 1954.
Signs of an impending crisis had been identified many months before the crash, with the Federal Reserve warning on the 25th March of the dangers of speculation on the stock market. The warning coincided with a slowing down of the American economy, but investors continued to purchase stocks that gradually pushed the market to a peak of 381.17 points on the 3rd September.
However, in late September many of the larger investors began to sell their shares, and by the middle of October the market was in freefall as more and more people began panicking about the plummeting prices. Although Black Thursday was the first day of large-scale panic selling, the losses were dwarfed by those the following week when around 16 million shares were sold. Within just a few days of trading, $30 billion dollars had been wiped off the stock market. This was the Wall Street Crash. Although the scale of panic selling did slow down, the market continued its downward trajectory for over 2 years, finally reaching an all-time low on the 8th July 1932. By that time the effect of the Great Depression had crept around the world, acting as a catalyst for the world war that was to follow.
On the 8th July 1932, the Dow Jones Industrial Average – a key indicator of the value of America’s biggest companies – fell to its lowest point during the Great Depression that began with the Wall Street Crash. From its high of 381.17 on September 3rd 1929, the Dow plummeted by almost 90 per cent to 41.22. The last time it had closed that low was in June 1897.
The spectacular collapse of the Dow reflected the issue at the heart of the Great Depression – the panic selling of US stocks that wiped out private investors and many of the companies they had invested in. This had a knock-on effect outside the stock market, where those very companies were forced to lay off workers. In Cleveland, 50 per cent of the city’s workers were unemployed by the end of 1932. The downward economic spiral was eventually reversed, but the Dow itself didn’t return to its 1929 high point until 1954.
The response of American President Herbert Hoover to the economic crisis was not viewed favourably by ordinary American people. He gave numerous radio speeches in which he attempted to reassure them that things would improve. Although he never actually said, “prosperity is just around the corner” his speeches suggested it. But things continued to decline and shanty towns, known as Hoovervilles, appeared around the country as people moved from place to place in search of work. Protesting war veterans were attacked by the army. And, with promises of a ‘New Deal’ Franklin D Roosevelt went on to defeat Hoover in the 1932 presidential election.
For more detail on the rise of Hitler, please see these expanded podcasts:
The podcast begins in 1919 with an introduction to Hitler’s early attitudes and him taking control of the National Socialist German Workers Party (who became known as the Nazis). An overview is then given of the actions of the SA/Stormtroopers before describing how the hyperinflation of 1922-23 led Hitler to use his violent supporters to launch the Munich (or Beer Hall) Putsch, which resulting in Hitler’s imprisonment during which he wrote Mein Kampf. This coincided with the ‘Stresemann Period’ of German history, which is described in greater detail in the Weimar Germany revision podcast.
The episode then goes on to explain how, following his release from prison, Hitler changed his tactics to use legal means to gain political power. The period of the Great Depression led to increasing support for the now well-organised Nazi party which culminted with the appointment of Hitler to the position of Chancellor. An explanation of how Hitler consolidated his power is then given – the Reichstag Fire which led to the Enabling Act; the Night of the Long Knives through which Hitler removed opponents including Ernst Rohm; and finally Hitler taking the title of Fuhrer following the death of President Hindenburg.
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