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NameDateIntellectual Devotional American History Reading: Stock Market Crash of 1929. Please use this reading on United States Stock Market Crash of 1929 to answer the reading comprehension questions on the worksheet that accompanies it.On the morning of Thursday, October 24, 1929, the Dow Jones Industrial Average crumbled. Stocks had gone up virtually without interruption since World War I (1914-1918), but the day that became known as Black Thursday wiped out billions of dollars in investments in a few hours. By lunchtime, the first suicides of speculators had been reported. The market actually regained some of its value in the afternoon of Black Thursday, but then the next day the slide resumed. The following week, amid increasingly panicked trading, the market lost 13 percent on Monday and another 12 percent on Tuesday. By 1932, when the market bottomed out, the Dow had lost almost 90 percent of its value.The five days of the stock market crash of 1929 were perhaps the single most traumatic events in the economic history of the United States up to that point. Compared to other crashes like the Panic of 1837 or the Panic of 1873, the losses on Wall Street in October 1929 were far greater in magnitude and affected almost every sector of the market. Additionally, during the prosperous 1920s, many average Americans had invested their savings in stocks, making the impact much more real and devastating for them than previous downturns had been.Economists continue to debate the exact cause of the crash. In essence, analysts agree that the overheated market of the 1920s had pushed speculative stocks to unsustainable levels. The stock bubble had been fueled by unrealistic expectations and easy credit; when stocks collapsed, the banking industry was left holding millions of dollars in worthless loans. As a consequence of the crash, the entire banking industry was nearing insolvency by 1933.The stock slide destroyed public confidence in the markets and wiped out the life savings of many Americans. Whether Black Thursday “caused” the Great Depression, however, is a matter of some dispute; the crash may have only reflected the same underlying economic forces that would cause the mass unemployment and business losses of the 1930s. The crash eventually led the United States Congress to impose stricter regulation on Wall Street. Stocks would not return to their pre-Black Thursday levels until the mid-1950s.Additional Facts The biggest one-day percentage decline in stock market history was October 19, 1987, when the market fell by more than 20 percent.At the time of the 1929 crash, stock market information was transmitted by the ticker tape machine; trading volume during the crash was so heavy that the machine often fell hours behind.Under current New York Stock Exchange rules, trading is halted if the Dow declines more than 10 percent, a measure designed to cataclysmic collapses like the 1929 crash.Adapted from: Kidder, David S., and Noah Oppenheim. The Intellectual Devotional: American History: Revive Your Mind, Complete Your Education, and Converse Confidently about Our Nation's Past. New York: Modern Times, 2007. ................
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