During the 1920’s, the American economy was prosperous giving rise to an affluent society. Many nightclubs and entertainment places opened their doors and did well. It was also known as the ‘flapper era’ with new and more risqué fashions, music and dances. Life for many was good.
On December 31, 1920, the Dow Jones Average closed at 71.95.
On December 31, 1921, the Dow Jones Average closed at 81.1.
On December 30, 1922, the Dow Jones Average closed at 98.73.
On December 31, 1923, the Dow Jones Average closed at 95.52.
On December 31, 1924, the Dow Jones Average closed at 120.51.
On December 31, 1925, the Dow Jones Average closed at 155.81.
On December 31, 1926, the Dow Jones Average closed at 157.2.
On December 31, 1927, the Dow Jones Average closed at 202.4 and many investors were basking in their newfound invested wealth.
On December 31, 1928, the Dow Jones Average close at 300.0 for the first time in history. Hundreds of thousands of Americans were now investing their hard-earned money in the stock market with dreams of becoming rich and prosperous. Many businessmen also invested heavily in the rising stock market.
On September 3, 1929, the Dow Jones Average closed at a then whopping 381.17. A large number of investors began selling stocks in order to reap their investment gains.
On September 30, 1929, the Dow Jones Average closed at 343.45, a drop of around 10%.
On October 23, 1929, the Dow Jones Average closed at 305.85, a total drop since September 3 of 19.8%. More and more investors began selling their stocks in fear of losing all their money.
On October 26, 1929, the Dow Jones Average closed at 298.97 and more investors sold their stocks.
On October 28, 1929, the Dow Jones Average closed at 260.64, a drop since September 3 of 31.6%.
On this day, October 29, 1929, the Dow Jones Average closed at 230.07 after investors made a run on the Stock Market, selling their stocks faster than the market could stand, resulting in the day being referred to as Black Tuesday. The massive sell off was so overwhelming that many ticker-tapes were delayed by over an hour or more.
The run on the stock market had cost investors around $30 billion or equal to over $422 billion in today’s value. As a result, millions of Americans began trying to withdraw their savings from the banks forcing many banks to close their doors. Hundreds of businesses could no longer find any bank willing to give them credit and were subsequently forced to lay off thousands of people or close their doors altogether.
Millions of Americans found themselves out of work and little to no savings due to the collapse of so many banks. The result was the Great Depression which transformed America from a land prosperity to a land of economic destruction and ruination in just a few months. The economic collapse of America soon spread to Europe and the rest of world.
The Black Tuesday run on the stock market and subsequent collapse of so many banks, led to many new laws enacted by Congress in hopes of avoiding the same thing from ever happening again.
Sources for the above includes: Black Tuesday; Black Tuesday; Stock Market Crash of 1929; Stock Market Crashes; The Crash of 1929; Black Tuesday: Definition, Cause, Kickoff to Depression; Black Tuesday October 29th 1929 Revisited?; Daily Closing Value of the Dow Jones Average