What Caused the Stock Market Crash of 1929—And What We Still Get Wrong About It

By the end of Thursday, Oct. 24, 1929, the New York Stock Exchange had rebounded from the 10% dip that the market had taken earlier that day. But then stocks plummeted again the following Monday, Oct. 28, and Tuesday, Oct. 29, saw similar drops. The stock market would continue to tumble for the next few weeks.

“For so many months so many people had saved money and borrowed money and borrowed on their borrowings to possess themselves of the little pieces of paper by virtue of which they became partners in U. S. Industry,” TIME wrote of the mood on that first frightening day. “Now they were trying to get rid of them even more frantically than they had tried to get them.”

In retrospect, the Wall Street crashes of late October 1929 — now known as Black Thursday, Black Monday and Black Tuesday — have often been seen as the beginning of what would become the Great Depression. But just as there was a lot of confusion back then about what was going on, there is still confusion about the effect Black Thursday had on the economy in the years that followed. For the 90th anniversary of Black Thursday, TIME spoke to financial historian Richard Sylla, a Professor Emeritus of Economics and the former Henry Kaufman Professor of the History of Financial Institutions and Markets at New York University Stern School of Business and Chairman of the board of the Museum of American Finance in New York City.

TIME: What actually happened on Black Thursday?

SYLLA: Black Thursday was interesting because the market crashed during the day, but by the end of the day it came back — because of an intervention by the bankers to protect their wealthy clients, as well as to try to counter the panic. The buying was done by Richard Whitney, who represented a pool of money from people like the House of Morgan. [They thought] there’s panic selling, but they can stop the panic by going in and buying stock. So he started buying left and right, and he reversed the crash and restored the market to almost pre-Black Thursday levels. But when stocks fell more than 10% on both the following Monday and Tuesday, the market crashed without coming back. In about two weeks’ time, stocks lost about a third of their value.