In 1932, the Pecora Commission was established by the U.S. Senate to study the causes of the crash. The U.S. Congress passed the Glass–Steagall Act in 1933, which mandated a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities.
The Roaring Twenties, the decade that led up to the Crash,[4] was a time of wealth and excess. Despite caution of the dangers of speculation, many believed that the market could sustain high price levels. Shortly before the crash, economist Irving Fisher famously proclaimed, "Stock prices have reached what looks like a permanently high plateau."[5] However, the optimism and financial gains of the great bull market were shattered on "Black Thursday", October 24, 1929, when share prices on the New York Stock Exchange (NYSE) collapsed. Stock prices plummeted on that day, and continued to fall at an unprecedented rate for a full month.[6]
The Wall Street Crash of 1929 (October 1929), also known as the Great Crash, and the Stock Market Crash of 1929, was the most devastating stock market crash in the history of the United States, taking into consideration the full extent and duration of its fallout.[1] The crash signaled the beginning of the 12-year Great Depression that affected all Western industrialized countries[2] and that did not end in the United States until the onset of American mobilization for World War II at the end of 1941.
Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.
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