Four days prior to the big crash, the Republican President of the United States, Herbert Hoover, said, “The fundamental business of the country … is on a sound and prosperous basis.”
Americans at the turn of the 20th Century were known (and reviled) for their passions for speculating, trading, leveraging, and hedging. Walter McDougall’s history of the U.S. from 1929-1877, Throes of Democracy, credits Charles Dickens’s character Martin Chuzzlewit for speaking for foreign visitors when he wrote of American conversation as:
…barren of interest, to say the truth; and the greatest part of it may be summed up in one word: Dollars. All their cares, hopes, joys, affections, virtues, and associations, seemed to be melted down into dollars. … Men were weighed by their dollars, measures gauged by their dollars; life was auctioneered, appraised, put up and knocked down for its dollars.”
By 1929, the stock market had been on a nine-year run that saw the Dow Jones Industrial Average increase in value tenfold, peaking on September 3, 1929. But episodes of fraud, forgery, rumor, and panic led to a huge slide in the market. On “Black Tuesday”, October 29, 1929, about sixteen million shares were traded amid rumors that U.S. President Herbert Hoover would not veto the pending Smoot–Hawley Tariff Act. Due to the massive volume of stocks traded that day, the ticker did not stop running until about 7:45 p.m. that evening. The market had lost over $30 billion in the space of two days which included $14 billion on October 29 alone.