CHAPTER XIII 
FLIGHT FROM BONDS TO STOCKS 
A potent reason for the long bull market rising 
to the plateau of stock prices of 1923-1930, is that 
there has been a material change during this period 
in the estimate of the public as to the risk of invest 
ing in common stocks. Whether this change is 
justified or not, the change has occurred. Only a 
few years ago a bond was regarded as far safer than 
a stock; a stock, in other words, as far unsafer than 
a bond. 
Prior to 1923 most investors thought that bonds 
were safe. They forgot that the dollar was not 
safe, and that the fixed dollar return from bonds 
might at any time shrink in purchasing power. In 
Germany people had lost 9g per cent of their prin- 
cipal and interest on bonds through forgetting that 
the mark was not safe under the influence of the 
“money illusion.” I have analyzed this illusion in the 
preceding chapter. In truth, the “safety” of bonds 
proved during the war a delusion and a snare. It is 
only since the tragic downfall of stocks in the crash 
of 1929 that bonds again afford a contrast on the 
side of safety. 
Sometimes, when the dollar was steady, bonds 
raf