Definition: Black Tuesday occurred on October 29th, 1929. The Dow Jones Industrial Average lost 12% of its value, which was not remarkable in and of itself. However, this stock market crash occurred despite attempts by the prominent bankers to stop a decline that began a week earlier. The stock market lost $14 billion on Black Tuesday. Total loss for the week was $30 billion, ten times more than the Federal budget.
The crash signaled the loss in confidence in the U.S. financial system. The prominent bankers of the day - Morgan Bank, Chase National Bank, and National City Bank of New York - had to intervene, as the Federal Reserve was busy raising interest rates to protect the dollar. The banks bought shares of stocks in an attempt to restore confidence in the stock market. However, the banks' intervention signaled other investors to continue to sell, creating continued panic.
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Black Tuesday signaled the beginning of the Great Depression of 1929.
