In the late 1920s, the Canadian economy was strong. Many export industries and other diversified corporations and companies were growing and earning money. People bought shares of the companies, called stock. Stocks were traded and bought in the Toronto Stock Exchange. By 1929, more than 10 million shares a year were traded.
On October 24, 1929, stock values dropped or became worthless rapidly. This started the most severe economic depression in North American history—the Great Depression. Today, that day is still remembered as Black Thursday. Black Thursday
In the late 1920s, prices in the Toronto and the New York Stock Exchanges soared up, becoming very valuable. For example, in 1928, the price of a common share of the Dupont stock went from $310 to $525. The rising stock values encouraged people to buy stocks in hope of making large profits when the stock exchange increased in the future. Even though experts predicted that the stock prices might fall, people didn’t listen. So many investors threw their money into the stock exchange that the plan backfired. Instead of increasing in value, the share prices crashed, becoming worthless. When the stock market crashed on Black Thursday, millions of people lost all of their money.
Effects on People
The Great Depression affected not only the rich and middle-class investors, but the people who hadn't invested as well. Banks and businesses had also bought stocks, and many lost so much money that they had to close. Between January 1930 and March 1933, about 9,000 U.S. banks failed. The bank failures wiped out the savings of millions of people. In Canada, no Toronto Stock Exchange members defaulted on their obligations to clients, but the Depression inflicted financial hardship on Canadians nonetheless.
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