Wall Street Crash of 1929

Cause: In the late 1920s, hundreds of thousands of investors contributed to a speculative bubble in the stock market. Many went into debt to purchase stock, resulting in more than $8.5 billion in debt throughout the nation—more money than was in circulation at the time.
When the market turned bearish on October 24, 1929, investors panicked, causing a massive selloff that tanked the stock markets and contributed to the Great Depression of the 1930s.
To demonstrate confidence in the market, the Rockefeller family and the heads of major banks bought large quantities of stock. This move didn’t stop the panic. During the week of October 24, the market lost a total of $30 billion, more than the United States had spent on World War I.
The stock market crashed caused businesses to close, mass layoffs, and a rash of bankruptcies. An international run on the dollar resulted in increased interest rates, driving out around 4,000 lenders.Action: After an investigation, Congress passed the Glass-Steagall Act of 1933 (now repealed), mandating a separation between investment and commercial banks. They believed this would avert another dramatic panic sale. It didn’t—the Dow fell 22.6% in 1987—but, to date, the Great Depression that followed the 1929 crash hasn’t been repeated.
Moral of the story: Don’t panic. Many scholars now say that the 1929 crash didn’t cause the Great Depression, but certainly contributed to its severity. Public panic only makes situations worse than they already are