Black Tuesday 1929: Stock Market Crash — Reading Comprehension

The Stock Market Crash of October 29, 1929, known as Black Tuesday, marked a turning point in American and world history. On this day, stock prices on the New York Stock Exchange collapsed dramatically. Investors, both wealthy and ordinary, rushed to sell their shares, but there were few buyers. As panic spread, the value of stocks plummeted. The crisis did not happen overnight, however. Several key factors combined to create the economic disaster that became the Great Depression.

One major cause of the crash was excessive speculation. During the 1920s, many Americans believed that stock prices would always rise. People borrowed money to buy stocks, expecting quick profits. This risky behavior, called buying “on margin,” meant that if prices dropped, investors could not repay their loans. Banks, in turn, faced huge losses. As one worried banker wrote in 1929, “We have allowed a mania of speculation to sweep the country.” This quote shows how some experts recognized the dangers, even as most people hoped for easy wealth.

The crash also revealed deep inequalities in the American economy. While some business leaders and wealthy investors enjoyed great prosperity, many workers and farmers struggled with low wages and debt. When the market collapsed, the effects rippled quickly. Factories closed. Millions lost their jobs. Many families lost their homes and savings. Rural communities, already suffering from low crop prices, faced even greater hardship. The government at first did little to help, believing the crisis would soon pass. President Herbert Hoover claimed, “Prosperity is just around the corner,” but his optimism was not shared by those facing unemployment and hunger.

The impact of Black Tuesday went far beyond Wall Street. Banks failed as people rushed to withdraw their savings. Businesses went bankrupt. The crisis spread to other countries, contributing to a global economic collapse. Students should note that not all Americans experienced the crash in the same way. Bankers and stockbrokers felt personal losses and reputational damage. Working-class families faced homelessness and hunger. African Americans and immigrants, already facing discrimination, often suffered most during the downturn.

In response, some leaders called for stronger government action. Eventually, the federal government intervened with new policies to regulate banks and the stock market, hoping to prevent future crises. These changes reflected a debate: Should the government protect citizens from economic risk, or should individuals be responsible for their own fortunes? The crisis also sparked new social movements, as workers and farmers demanded relief and reform.

Historians still debate the causes and solutions to the 1929 crash. Some argue that a lack of regulation made the crisis inevitable. Others point to global factors, such as the collapse of world trade. What is certain is that Black Tuesday changed the nation’s economic policies and reshaped American attitudes toward risk, security, and government responsibility.

Interesting Fact: On Black Tuesday, over 16 million shares were traded—a record at the time that would not be broken for decades.

When did Black Tuesday occur?

What was one main cause of the crash?

Who was president during the crash?

Why did banks fail after the crash?

What did some leaders want after the crash?

How did the crash affect rural communities?

Black Tuesday started the Great Depression. True or false?

What is 'speculation' in the passage?