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Black Thursday kicked off the stock market crash of 1929. Stock prices immediately fell 11%. Wall Street bankers bought stocks, so only 2% was lost by the time the market closed.
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Herbert Hoover became president. His laissez-faire economic policies did little to stop the Depression.He believed a free-market economy would allow the forces of capitalism to fix any economic downturn. As a result, he lowered the top income tax rate from 25% to 24%
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Hoover signed the Smoot-Hawley Tariff Act, which raised taxes on 900 imports.5 It originally was supposed to help farmers but ended up imposing tariffs on hundreds of other products. Other countries retaliated, setting off a trade war. As a result, international trade began to collapse.
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created
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Dow reached a closing record of 381.7. The stock market would not return to its pre-crash high for the next 25 years.
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Stocks gained 1% on Friday but lost 1% during a half-day of trading on Saturday.
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On Black Monday, stocks prices fell 13%.
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On Black Tuesday, the market lost another 12% as a record 16 million shares were traded. When banks intervened this time, they worsened the panic.
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The stock market hit bottom and began trading sideways.
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The unemployment rate was still just 3.2%. Since unemployment is a lagging indicator, it hadn't started to worsen yet. There were more than 650 bank failures in 1929, part of a trend of such failures throughout the 1920s. As banks failed, it reduced the money supply because there was less credit available. That meant each dollar was worth more.