CHAPTER III

CAUSES OF THE PANIC

WHAT were the causes of the panic of 1929?
That the stock market crash was “primarily precipitated
 by foreign liquidation” is the view expressed
by John S. Sinclair in the New York Times of
October 27th. This liquidation accompanied the socalled
 Hatry Panic on the London Stock Exchange,
which resulted in a deeper fall of the London stock
price level—45.4 per cent from August 30th to
December 27th, according to the British index—than
occurred on the New York Stock Exchange between
the high point on September 7th and the bottom of
November 13th. Few realize today that the
greatest fall of stocks in British history, comparable
only with the Baring Panic of 1890, preceded and
was an actuating cause of the American panic, and
that a coincident fall in Paris and Berlin accompanied
 the British liquidation. It began with the
failure of the banking house of Clarence Hatry in
August, followed by his arrest in September and
subsequent conviction for a gigantic forgery of stock
certificates. This started the British liquidation in
London and in New York. Barron's W eekly of