Picture: Investors rush to Wall Street to sell their shares, but the system cannot keep up with the demand.
October 24, 1929
After years of economic success, The US faces a financial crisis. On Thursday, the Dow Jones, which measures the value of the American stock market (Wall Street, New York), fell by a whopping nine per cent in just one day.
Economists believe an initial drop was caused by investors losing faith in their investments and selling their shares. This caused ‘Panic Selling’ by other investors who wanted to quickly get rid of their shares before a further drop in price occurred. The more prices fell, the more shares were sold, and the further prices dropped. This vicious circle continued until closing, at which time 12.9 million shares had been sold.
Investors and Governments around the world are all hoping that the US market will make a strong recovery, as many countries, including Britain, are relying on their financial system to help those still recovering from the Great War.
“Socio-Economics History Blog.” SocioEconomics History Blog. Qotd.org, n.d. Web. 02 May 2013.