The Rise Of Australasia

Chapter 873 - 652: Stock Market Crash (Requesting Monthly Tickets!)

As the end of June 1926 approached, stocks had become a topic of lively conversation across the entire United States.

From capitalists and dignitaries to peddlers and workers, and even the ubiquitous vagrants on the streets, many were discussing the soaring stock prices.

Merely investing 100 dollars could yield an income of more than 10 dollars a day, such an exaggerated net profit!

Moreover, the value of stocks kept compounding, and once the value of the stocks held reached an exaggerated figure, the profits from the stock appreciation became an unimaginable number.

In fact, a clear problem with stocks was already apparent by then: if everyone was making money, who was losing it?

Even with stocks, there has to be a balance; if everyone entering the market is making money, where is that money coming from?

However, it was obvious that, apart from some well-connected and powerful capitalists, everyone else was blinded by such earnings and simply couldn’t contemplate whether there was a problem behind it all.

Because everyone was afraid of being left behind, their fear was that if they gave up on these earnings, others would seize their opportunity, taking away their chance to become rich.

Starting at the end of June, stocks in various industries kept rising, no longer limited to real estate.

Almost all industrial stocks were on the rise, and anyone entering the stock market could make a handsome profit without seeing any news of stocks performing poorly.

Under such circumstances, all enterprises kept reporting profitable news, adding momentum to the rise of their stocks.

Under Britain’s deliberate control, the London Stock Exchange’s rise was no longer so wild. This allowed the New York Stock Exchange to surpass London’s in a short period and become the holy land for stock speculators worldwide, thanks to the Crazy May.

Indeed, the public’s frenzy over the stock market was not without panic, but Andrew Mellon, the then-Finance Minister, made a bold assurance to the public after the end of Crazy May, stating there was no reason to worry about the New York Stock Market, that the climax of prosperity would continue, and that any situation was controllable by the American Government.

It was precisely because of the government’s declaration that the American people chose to believe that the current rise of the stock market was normal.

But was the American Government’s assurance valid? Perhaps not.

On July 14, 1926, after the day Westerners generally find ominous, the 13th, American stock traders thought they would welcome a day of great harvest.

But unexpectedly, the New York Stock Market fell by 3% as soon as it opened, and within one day, it plunged by a crazy 11%, reducing the traders’ assets and income by more than a tenth.

What was even more unexpected for the traders was that this day was just the beginning, the start of a complete stock market collapse.

Because it was a Thursday, this day was dubbed "Black Thursday" by American stock traders. It became an example shunned in stock trading circles and a cautionary tale for speculators.

If the news before July 14 was about the stock market surges everywhere, then the news after July 14 was all about the New York Stock Market’s drastic fall.

Starting from July 14, over three days, the American Stock Market’s trading index fell by 37%, with a staggering volume of 69 million share transactions.

In those three days, less than 22 million dollars flowed into the stock market, while over 103 million US dollars flowed out, proving the panic of small investors who began to frantically prepare to abandon their stocks and exit the market.