Wall Street: 40 Years After the Crash

Report Outline
Problems of Stock Market in 1969
Crash of 1929: Causes and Effects
Regulation of the Securities Business
Special Focus

Problems of Stock Market in 1969

Extent and Causes of Decline of Stock Prices

Forty years have elapsed since Black Thursday, Oct. 24, 1929, the day the great stock market crash began. The memory of 1929 haunts millions of stock traders in the present year of declining market prices and other Wall Street problems. Although the confidence of investors recovered long ago from the disastrous events of 1929, the notion lingers that another such crash may not be altogether impossible. For Wall Street, so surfeited in prosperity for so long, the past year has had a chastening effect.

The year began with speculation by financial writers as to how soon the Dow-Jones industrial average, perhaps the best-known barometer of prices on the New York Stock Exchange, would reach the long-awaited 1,000 mark, a symbolic capstone to the bull market of 1967 and 1968. But, instead of rising, prices went down with only brief interruptions from the historic high of 985 in December 1968 to a 1969 low—thus far—of 801.96 on July 29.

The 18.6 per cent decline in the Dow average was the fourth biggest in the past 20 years, and it lasted longer than the six-month average duration of eight previous major market slumps. Paper losses incurred by late summer were reckoned in some quarters to have reached $100 billion—losses shared by many of the estimated 26 million Americans who own stock directly and by 100 million others who do so indirectly, through pension funds and in other ways.