The stock market crash - and after

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Monograph

Identifikator:: 1759941719

URN:: urn:nbn:de:zbw-retromon-137382

Document type:: Monograph

Title:: Compte rendu des travaux de la Chambre Syndicale pendant lʹannée 1926

Place of publication:: Marseille

Publisher:: Soc. Anonyme du Sémaphore de Marséille

Year of publication:: 1927

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Documents Annexes

Collection:: Economics Books

Speculation and Brokers’ Loans 223 of which brokers’ loans constituted 7 per cent during the five years ended with 1928. But during the first nine months of 1929, brokers’ loans rose by $1,700,000,000, or by about 20 per cent of the value of new issues, of which the total was $8,419,000,000. Here was a striking increase in loans from 7 per cent of new security issues during the five years pre- ceding 1929, to 20 per cent during the first three quarters of 1929. Overextension of Credits On the assumption that national income during these three quarters was $58,500,000,000, Mr. Kent finds that an abnormal amount of this national in- come went into brokers’ loans. He figures that 915 per cent of income is the normal amount available for new securities and increased saving deposits, and that $5,557,500,000 was “all that could be utilized for investment purposes.” But the new security is- sues during the first three quarters of 1929 amounted to $8,419,000,000, or $2,811,000,000 more than this $5,557,500,000 available from income. More- over, $2,884,000,000 was involved in the “rights” for the total of new securities issued during this in- terval, swelling the total to $11,303,000,000 for the first nine months of 1929, or 20 per cent of the national income during that period. Inasmuch as brokers’ loans rose by $1,700,000,000, Mr. Kent estimates that the balance must have come from abroad and from the addition which brokers’ loans made against securities.

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