This day…..81 years ago was dubbed “Black Thursday” – generally regarded as the start of the Great Crash of 1929. During the 1920’s, US share prices had gone mad, as investors piled in – many of them buying shares for just a few dollars down and borrowing the rest of the price.
It was all fine so long as stocks kept climbing, but in September 1929, they began to stall. Thursday, 24 October was the first real day of panic, with a record 12.9 million shares traded. As the market began to fall, banks and investment companies piled in, buying huge blocks of shares to try to hold the line.
But even they did not have the money to stave off the inevitable. October 28, “Black Monday”, saw the market fall by 12%, and it was followed by a similar fall on “Black Tuesday.” Politicians fell over each other in the rush to proclaim that there was no problem, but this was actually the beginning of the Great Depression, which overhung the world’s economy for a decade, and blighted millions of lives.
Last week, the governor of the Bank of England, Mervyn King, warned that Britain faces a grim decade was we try to recover from the banking crisis.