Black Tuesday and the Crash of 1929
On October 29, 1929, orders to sell stocks poured into the New York Stock Exchange so quickly that the machines reporting prices could not keep up. By the end of the day, traders had exchanged more than 16 million shares, a record at the time. Prices had plunged, fortunes had shrunk, and many Americans were struggling to understand what had happened.
The day became known as Black Tuesday. It was a dramatic moment in the stock market crash of 1929, but it was not the whole story of the Great Depression. That economic disaster developed over years and had several causes.
A market on the rise
A stock is a share of ownership in a business. Stock prices can rise when investors expect a company to earn more money. Prices can also rise when people believe other buyers will pay more for the shares later.
During much of the 1920s, the U.S. economy grew, and many stock prices climbed. Americans bought new products such as cars and household appliances, while businesses expanded production. Rising stock prices drew more investors into the market, including people who hoped to make quick profits.
- investors:
- People who put money into something in the hope of earning more.
- profits:
- Money gained after costs are paid.
- confidence:
- A feeling of trust that something will go well.
- volume:
- The amount of something, such as the number of shares traded.
- downturn:
- A period when economic activity declines.
- deposits:
- Money placed in a bank for safekeeping.
- lending:
- Giving money to someone with the expectation that it will be repaid.
- prolonged:
- Continuing for a long time.
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Main Idea
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Preview questions from this passageShowHide
- 1How did borrowing on margin make a falling stock price especially dangerous?
- 2How could a broker's demand for more money contribute to further price declines?
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About this explanatory article passage for Middle School
“Black Tuesday and the Crash of 1929” is a explanatory article reading passage about The 1929 stock market crash, written for Middle School. It takes about 6 minutes to read (888 words) and comes with an interactive quiz and a printable worksheet with comprehension questions and an answer key.