The United States has experienced recessions before. If a recession is particularly deep and long lasting it is called a depression. The worst U.S. depression was The Great Depression. The Great Depression began with the stock market crash. In 1929 Black Tuesday affected Americans nationwide. Before the stock market crashed it reached a record high on September 3rd 1929. After that the stock market began a slow but steady decline. Although there were small rallies of increased value, the decline continued through September and October. By the end of October fear and apprehension began to mount among all investors. As more and more brokers demanded their money with margin calls, values continued to drop. The market was riddled with instability. Real estate values had been steadily declining and the market began to see periods of high selling volume. It was also during this time that the Smoot-Hawley Tariff Act was being debated in the U.S. Congress. It was suggested, in hindsight, that this act might have been part of the catalyst that started the crash due to fears of retaliatory tariffs being placed on U.S. goods being exported to different parts of the world. In fact, many prominent economists and businesspersons including Irving Fisher and Henry Ford visited with U.S. President Herbert Hoover and requested that he veto the act, calling it “an economic stupidity.”
The stock market crash of 1929 spanned a four-day period that is historically referred to as Black Thursday, Black Friday, Black Monday and Black Tuesday. Facts point toward the crash beginning on Thursday, October 24, 1929 after a long period of wealth and prosperity during which many economists postulated that the market had reached a permanent plateau and would be able to sustain the trend in high stock prices. Black Tuesday, 1929, by definition, is considered the beginning of a tumultuous time period in the stock market’s history that resulted in the Great Depression.
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