A crowd of investors gather outside the New York Stock Exchange on "Black Tuesday"—October 29, when the stock market plummeted and the U.S. plunged into the Great Depression.

Photograph by Pacific & Atlantic Photos, Inc., courtesy Library of Congress

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  • On October 29, 1929, the United States stock market crashed in an event known as Black Tuesday. This began a chain of events that led to the Great Depression, a 10-year economic slump that affected all industrialized countries in the world.

    The 1920s had been a time of wealth and excess in both Europe and America, and stock prices had risen to unprecedented levels. This encouraged many people to speculate that the market would continue to rise. Investors borrowed money to buy more stocks.

    As real estate values declined during the late 1920s, the stock market also weakened. When stock prices started to slide on October 29, people rushed to sell their stock and get out of the market, which drove prices down even further. This cycle led to more and more “panic selling,” until the stock market fell to its lowest point since the 19th century.

  • Term Part of Speech Definition Encyclopedic Entry
    affect Verb

    to produce a change.

    decline Verb

    to reduce or go down in number.

    economics Noun

    study of monetary systems, or the creation, buying, and selling of goods and services.

    encourage Verb

    to inspire or support a person or idea.

    excess Noun

    extra or surplus.

    Great Depression Noun

    (1929-1941) period of very low economic activity in the U.S. and throughout the world.

    industrialize Verb

    to develop large-scale factories and plants (industry).

    investor Noun

    a person or organization that gives money in order to gain a future advantage.

    panic Verb

    to suddenly feel very nervous, afraid, or overwhelmed.

    speculate Verb

    to consider or guess.

    stock market Noun

    place where partial ownership of companies, goods, and services (stocks, bonds, and securities) are bought and sold.

    unprecedented Adjective

    never before known or experienced.

    wealth Noun

    amount of money or other valuable materials.