The Stock Market Crash 
S 
That was why brokers’ loans for a time continued to 
increase, because with each sale by a foreign holder, 
those who bought applied for loans to carry the sur- 
plus supply of securities that had not yet found 
definite lodgement. 
“Undigested” Securities 
The brokers’ underwritings of new stocks or bonds 
now became an essential factor in the expansion of 
brokers’ loans. The newly underwritten securities 
began to pile up, to remain “undigested,” that is, not 
disposed of for permanent investment. Also, much 
of the money paid in to Investment Trusts by inves- 
tors in return for certificates was in cash or lent in 
the market, and not yet invested in stocks. After 
the crash began this money waited for the market to 
touch bottom. The Financial Chronicle of October 
12th showed that $649,000,000 in new investment 
trust shares—1I am not certain how these new “trusts” 
are classified—were offered by syndicates during Sep- 
tember; that this was added to $707,000,000 offered 
during July and August, bringing the total issues dur- 
ing the first nine months of 1929 to $2,239,000,000. 
The bulk of these offerings was not absorbed. They 
were carried along on borrowed money—or pur- 
chased outright with other securities, carried on 
margin in order to provide the funds—creating a 
New situation in the money market. Stock flotations 
in 1922 and 1923 had risen to about five billions a 
year. By 1927 and 1928 the five billions became ten 
billions yearly. But for the first half of 1929 they