The stock market crash - and after

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Monograph

Identifikator:: 1815583320

URN:: urn:nbn:de:zbw-retromon-204544

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The stock market crash - and after

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1930

Scope:: XXVI, 286 S.; graph. Darst

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIII. Flight from Bonds to Stocks

Collection:: Economics Books

Flight From Bonds to Stocks 217 Conversely, funded indebtedness is absent, or the restriction of such indebtedness as compared with total paid-in capital, so that bondholders and share- holders are both protected. Also, there has been comparatively little borrowing of banks, the invest- ment trusts, Mr. Robinson says, “having only in exceptional cases exceeded the limits of prudence in the use of short-term credits.” He finds that many leading funds and companies were in reasonably liquid position at the time the most serious price de- clines started. Many had been strongly fortified late in October by a relatively high proportion of call loans and cash items. Of the public financing to a total of $2,440,000, 000, reported by the Commercial and Financial Chronicle for “investment trusts and trading and holding companies” during the first ten months of 1929, it is stated that over 9§ per cent was in stocks. Mr. Robinson observes that the greater part of all this capital was ‘“‘obviously raised for finance, trad- ing, and holding companies, rather than for invest- ment trusts.” For this reason he warns against the easy habit of lumping together such radically differ- ent companies, funds, and common law trusts. When they are properly defined, it will be found that in- vestment trusts proper weathered the panic in much better condition than the speculative pools and indi- vidual operators, chiefly through their steady reliance upon the principle of diversification and skilled scru- tiny in making and changing their investments.

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