The Great Depression was the most significant and damaging economic downturn ever seen and remains the worst in world history, with its effects being felt around the world, particularly a Europe still in the process of recovering from the effects of the First World War.

Its roots lie in the stock market crash in October 1929, the center of which, was the New York Stock Exchange on Wall Street. 

A young boy stands in the middle of the Dust Bowl during the Great Depression. Circa 1935.

FSA/Getty Images; Ryan Stennes

A widening gap

​The USA’s economic growth had seen the rapid expansion of the stock market as more and more Americans – rich or poor – put their savings into stocks. However, in reality, economic growth in the US was starting to stagnate with production slowing, low wages and increasing consumer debt. This meant the prices of the stocks was actually much higher than their actual value. Even when the US entered a mild recession though, stock prices continued to rise. This resulted in a huge gap between the price of the shares and their actual monetary value.

Graph depicting the build up and aftermath of the Wall Street Crash.

Panic steps in

​Inevitably, this situation eventually led to some investors realising the vulnerabilities that existed in the system and they suddenly starting to sell their shares. This sparked off a stampede of other people selling off their shares as well - a record 16 million were traded on October 29th - now referred to as ‘Black Tuesday’.

Billions of dollars were lost, wiping out thousands of investors. Panic selling intensified to such a point that some stocks could not be sold at any price. Millions of shares ended up as worthless, sending many Americans into destitution. 

Many victims of the Wall Street Crashed found themselves suddenly plunged into destitution.

The human cost

​However, contrary to popular myth, there was not a spate of stockbrokers committing suicide by throwing themselves out of their office windows. One positive note on an otherwise disastrous day.

​However, while no suicides apparently occurred in the immediate aftermath or vicinity of the crash, in the days, weeks and months that followed - and as the realities of financial destitution increasingly set in - sadly some people did resort to taking their own lives.

  • Chicago real estate investor C. Fred Stewart asphyxiated himself with gas in his kitchen.
  • John Schwitzgebel shot himself to death inside a Kansas City club.
  • Civil engineer Carl Motiska doused himself with gasoline and lit himself on fire. His wife also died trying to save him.
  • St. Louis stockbroker John Betts killed himself with poison.
  • Wellington Lytle left the following suicide note in his Milwaukee hotel room: “My body should go to science, my soul to [Secretary of Treasury] Andrew W. Mellon and sympathy to my creditors.”

The Wall Street Crash affected those from all walks of life.

The media, grasping the seriousness of the situation, were quick to report on the disaster.

A loss of confidence

The crash resulted in a lack of confidence in the stock market which resulted in less businesses spending, production slowing, a reduction in investment and wages dropping. This plunged many in the US into debt and unemployment. At its height, 15 million Americans were unemployed, and half the country’s banks had folded. Furthermore, the effect spread out beyond the US and across the Atlantic into Europe which soon started to suffer the effects.

Hectic scenes outside Federal Hall in Wall Street during the Crash.

Hulton Archive /Getty Images

Comparison of stock market losses throughout various financial crisis. The Wall Street Crash was the most serious for the USA by a sizable amount.

The government steps in

The Crash, and ensuing Great Depression, forced the US government to try and restart the economy and help its victims. This was a slow process though and the recovery efforts did not start to effectively have an impact until 1933 – the height of the depression.

From this point, recovery started to gain pace although it was hampered by a lack of powerful industries which could help drive economic growth, compared to the previous decade which had seen the economy driven by the auto, electrical and construction industries.

Young runners and messengers from Wall Street brokerage firms huddle around a hard-to-obtain edition of a newspaper on Black Thursday, Oct. 24, 1929, as news of the crash begins to spread.