On September 3, 1929, the American stock market rose to an all-time high. Six weeks later, at the closing bell on October 29, the New York Stock Exchange lay in ruins, the result of history's greatest stock market disaster. In that period of time the market had lost $30 billion, the equivalent of almost half the national debt. The most critical day was "Black Thursday" (October 24), in which desperate investors in a wild panic began dumping their stocks in an effort to salvage what they could. Attempting to reassure the investing public, a group of prominent bankers, led by J. P. Morgan, pooled more than $200 million, using it to buy stocks. For a few days, the strategy worked, but on "Black Tuesday" (October 29), panic-selling of stocks occurred on a massive scale, dwarfing the decline of the previous Thursday. By mid-November, the loss had mounted to more than $30 billion. Three years later, the figure had risen to $75 billion. People who had been riding high in the "boom market" found themselves back at the starting line. Newspapers began to be filled with daily accounts of suicides. The dizzying ride of the 1920s had come to an end.

The collapse of the market was the culmination of years of a stock market boom fueled by rash speculation in which large numbers of investors had bought "on margin," paying only a portion of the full price of the stock, gambling money they didn't have. But the crash itself would not have been so significant if the economy had been basically sound. In the boom years of the 1920s, the nation's industries had responded to the demand for consumer goods by increasing production and building more factories. As production outstripped consumption, inventories of unsold goods rose to a dangerously high level. Meanwhile agricultural prices plunged, leaving farmers destitute. The crash exposed not simply the foolishness of the stock market but also the decayed state of the national economy.

Fifty-eight years later, in October 1987, the stock market experienced a similar sharp decline. This time, however, the fundamentally sound economy withstood the excesses of Wall Street, allowing for a significant recovery in a relatively brief time. However, the full markets of the 1990s experienced a "soft landing" recession at the turn of the new century. . .

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