The Great New York Stock Market crash 80 years ago

Lloyd Rajaratnam Devarajah

The decline in the stock prices went on for about three years and the total losses for this period was estimated at a whopping $ 60 billion.

This record decline, not only ended America’s Post-World War I (1914-1918) economic boom but the beginning of the great American Depression.

After this Stock market collapse, a number of investors who incurred heavy financial losses were reported to have committed suicide. Many others affected, had declared themselves virtually bankrupt.

Some companies closed down whilst others retrenched large sections of their workforce, to survive. This resulted in mass unemployment in various parts of the U.S., especially in the industrial cities.

Franklin Delano Roosevelt who suffered from polio of his legs and learned to walk with leg braces and a walking stick, was elected America’s 32nd President on the Democratic Party ticket in 1932, after promising major economic reforms and to solve the acute unemployment crisis, in the wake of the 1929 financial crash.

President Roosevelt proclaimed the “New Deal” and effectively introduced the use of public funds for relief and public works. He also greatly expanded the controls of the central Government over business and by imposing various taxes, produced a redistribution of earnings on a very big scale, after the Great Depression.

Because of his successful achievements especially in the economic sphere since the 1929 Stock Market crash, President Roosevelt’s popularity soared, resulting in him being the only incumbent to serve four terms as President, until his death in early 1945. Now, they are permitted to serve only two terms.

Financial experts state that the U.S. economic crisis that began in September 2008 was “Comparatively a minor one”, as far as America was concerned, to that of the crash of 80 years ago. But the last year’s crisis had a devastating snow-balling effect on several other countries.

The impact of the American Depression of the 1930s, was not much felt in the other countries, as the tentacles of the U.S. economy, had not yet reached them, as now.

When the American economic meltdown started in September 2008, the repercussions reverberated into the economy of many countries, as hey had developed strong trade links with the U.S.

The exact date of the beginning of the New York Stock Market crash on October 29 1929, is deeply etched in my memory, as my birthday falls on October 12 and I was born 17 days earlier to the collapse.