CROWDS STOCK MARKET CRASH
AP file
People gather on the sub-treasury building steps across from the New York Stock Exchange in New York in October, 1929. Thousands of investors lost their savings in the worst stock market crash in Wall Street history.
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updated 11/4/2004 12:13:12 PM ET 2004-11-04T17:13:12

"Black Tuesday," Oct. 29, 1929, wiped 10% off the value of U.S. common stocks and seared a place in America's financial psyche.

Even today, the popular image of "the panic" is of bankrupted fat-cat investors throwing themselves to their deaths from windows high above Wall Street.

The bubble the Great Crash burst was ripe for the popping. The speculative run up in stock prices was the last hurrah for the heady years of Jazz Age America. Few on that day could have guessed what the global consequences would be thanks to a series of spectacular policy mistakes in its aftermath: the Great Depression of the 1930s that took a World War to end.

This special report looks at Oct. 29, 1929, and the weeks immediately following through the eyes of contemporary reports. We reprint 11 articles from Forbes magazine's three issues following the Great Crash.

The magazine's founder, B.C. Forbes, wrote four. They are perceptive about what had led up to the crash and the way markets — and more precisely market participants — work. At the time, most serious observers thought the cause of the crash to be widespread abuse of securities markets by insiders and inadequate disclosure of financial data by companies, two themes that echo down the decades to today.

Forbes' pieces were also written before the Federal Reserve raised interest rates precipitously, triggering the recession that Congress helped turn into depression by passing the Smoot/Hawley trade bill that kicked off global tit-for-tat trade protectionism.

As John Maynard Keynes wrote in 1930, the world was "... as capable as before of affording for every one a high standard of life ... But today we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand."

Historian John Steele Gordon provides the historical context in which to put our contemporaneous accounts in his essay, The Day the '20s Died.

Forbes chief operating officer, Timothy C. Forbes, talks about Forbes magazine, the Roaring '20s and The Great Crash in a video clip that includes footage from the era including some of his grandfather, B.C. Forbes.

Charles M. Jones, associate professor of finance and economics at Columbia Business School, talks of the lessons of 1929 for financial markets today in a video interview.

Meanwhile Peter Kang and David Ng of Forbes.com's Markets Desk transport themselves back to those days to imagine what they would have written if they were filing two of our standard features today, "Eye On Stocks" and "Faces In The News," for Oct. 29, 1929.

© 2012 Forbes.com

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