The crash in stocks in 1929 is the most famous stock market crash in United States history. In early March of 1928 the Dow Jones was at a low of 191. In less than a years time, the Dow Jones had rose to a high of 300 in December and then peaked about a year later at 381 in September of 1929. Stock holders and eager investors saw the stocks to continue to rise, and most thought of the booming economy as a great chance to invest money. Some speculators and stock holders thought the stocks were over priced. This anticipation continued to increase stocks. Dividends ratios rose from a meager 10 or 12 to a high 20 and even higher for the market more popular stock companies. It seemed too good to be true for some lucky stock holders. The Dow Jones began to drop on October 3, 1929 and continued to drop throughout October.(Background 2).
The night of Monday October 21, 1929 numerous Dutch and German calls came in over night to New York to sell the next morning. These sales were made in anticipation of the stock market to drop as it had been the last week. As the word spread of the sales of the larger stock companies, more companies joined. On Tuesday morning corporations and out of town banks called in over $150 million of call loans. Wall Street was in a heavy panic before the New York Stock Exchange was even open.(Morris 7).
Stock holders saw the dramatic decrease in stock values began to sell. This lowered the stocks even more and created a snowball effect. As more stock holders sold their stocks to save what money that had, the stocks values dropped which caused more customers to sell. On a normal day at the New York Stock Exchange around 750 to 800 members were on the floor. On October 24, 1929 there were over 1100 members on the floor as the stock market opened. Extra telephone staff were required due to the increase in sell orders . After a long day of chaos the Dow Jones closed at 299.
