34 The Stock Market Crash—dAnd After 
Linking of Commercial and Investment Banks 
Mr. H. Parker Willis, editor of the New York 
Journal of Commerce, ascribes to the big com- 
mercial banks, which had organized speculative pools 
in the form of investment companies, a causal re- 
lation to the crash. I am informed by a country 
banker in Connecticut that there was a tendency 
among small banks to copy the big banks in the or- 
ganization of these investment pools which helped 
swell the wave of speculation through the country. 
The big banks, of course, used the funds of 
their stockholders in speculation under intelligent 
guidance; the little banks could have no such expert 
guidance. But in either case there was abuse. The 
commercial banks are supposed to conduct their 
operations under close public regulation, but by 
means of affiliated investment companies, joined as 
closely as Siamese twins, they have been enabled to 
act irresponsibly, as is evidenced by the fact that 
these companies publish no statements and are held 
to accounting by no public body. 
Overvaluation of Common Stocks 
That the prime cause was serious overvaluation 
of common stocks that had previously been under- 
valued is the opinion of Mr. Carl Snyder, of the 
Federal Reserve Bank of New York. In cor- 
respondence with me Mr. Snyder says, referring to 
the war inflation of commodity prices: 
“The long-sustained rise in the level of commodity