August of 1929 was marked by international prosperity and complacency. Different nations agreed that their economies were in an upward swing to variant degrees. The United States boasted their booming economy. The productive, 'roaring twenties' had installed a trust in technological development that encouraged hope in persistent, steady growth.
The shock came on October 24, 1929. Black Thursday. Since the third of September, stock prices had been gradually eroding. They began to oscillate dramatically in the days prior to the crash. During the week between October 24th and 29th, as the stock market continued to slip, reality rapidly consumed world-wide optimism. Investors lost confidence in the market, and declared the economic boom dead. The crash was a symptom, not the essential cause, of the Great Depression. Economic cycles were already decending from their zenith earlier in 1929. Europe's production had been lagging, and in the United States there had been warning signs, such as the problems in the agrarian sector, which were ignored. The collapse of the markets caused broad reactions in the population. It triggered a reversal in attitudes and behavior which would determine the social, political, and economic developments through the next decade.Dimensions of the Crisis
The Crash catalyzed a stock-market crisis that sank the banking system immediately. The banks had speculated with their customer's deposits. As the stock markets crashed, people lost trust in banks and demanded to cash in their accounts. As the panic escalated, some banks were forced to shut down for days, some for good.
Consequently, the depression strangled one business after another. Estimates show that during the years between 1929 and 1932, world wide losses of capital and unused labor resources accrued to about 200 Billion Gold-Dollars, which equals the national wealth of the United States at the time.
One quarter of global wealth was destroyed within four years, global production was cut in half. One quarter of the workforce was laid off during the depression, and film became the only growing industry. It offered people an opportunity to escape the harsh reality of the Great Depression.