Das Minenwesen in Argentinien

The stock market crash - and after

Bibliographic data

Monograph

Identifikator:: 1014451132

URN:: urn:nbn:de:zbw-retromon-29111

Document type:: Monograph

Author:: Hauthal, Rudolf http://d-nb.info/gnd/116549769

Title:: Das Minenwesen in Argentinien

Place of publication:: Berlin

Publisher:: Süd- und Mittel-Amerika-Verlag G.m.b.H.

Year of publication:: 1912

Scope:: 1 Online-Ressource (27 Seiten)

Digitisation:: 2018

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

38 The Stock Market Crash—And After by their holding of stocks at the height of the market. For years the tax law on capital gains had dis- couraged the taking of profits on securities because their holders were unwilling to sell and pay the tax liabilities incurred; instead, they made new stock purchases, as occasion proved favorable, on borrowed money. The resultant rapid piling up of margin accounts during 1929 put the market in bad techni. cal position, making it vulnerable to bear attacks. Thus the capital gains tax operated to prevent outright selling and buying of stocks. It stimulated holders to enlarge their margin accounts because their own funds were locked up in held securities, thus subjecting them to the risks that finally over- threw the market. Nobody profited by this situation. The banks were burdened with the frozen credits of their cus- tomers, in the loans on collateral which they had taken over. The entire body of security holders suffered panic decline in the prices of their securities. The government reaped no revenue from the tax on securities, rather, it suffered losses in its income tax account because of the gigantic deflation of the market. A special warning on this subject was issued by the National City Bank of New York, as far back as April of 1929. This statement found in the capi- tal gains tax a root factor in the overextension of borrowings on the stock exchange which had led to a vulnerable credit situation. It said: “If one could check up on the people leaning on

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