The stock market crash - and after

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Monograph

Identifikator:: 1815583320

URN:: urn:nbn:de:zbw-retromon-204544

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The stock market crash - and after

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1930

Scope:: XXVI, 286 S.; graph. Darst

Digitisation:: 2022

Collection:: Economics Books

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

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIV. Speculation and Brokers' Loans

Collection:: Economics Books

228 The Stock Market Crash—dAnd After York Central stock was selling around $65 a share. It was paying § per cent dividends, and at the mar- ket price the yield was nearly 8 per cent. After 1920, capital was accumulated, gold was pouring in and enlarging the basis of credit. By the middle of 1922 time loans on mixed stock exchange collateral were down to 44 per cent and call loans much of the time lower. The average renewal rate on call loans for the whole year 1924 was 3.1 per cent. “The public is quick to take advantage of such an opportunity as that to borrow money on a 3 or 4 per cent basis and carry New York Central stock on a 7 or 8 per cent basis. That was the first impetus to the stock market. And when a market gets well under way it travels on its own momentum. It is able of itself to attract support. Of course, such movements go too far. More people do things be- cause other people are doing them than because they know the reasons, and that is progressively so of a bull market. The market had occasional back-sets in 1925 and 1026, but on the whole gained confidence on the recoveries, until in the fall of 1927 something happened.” That something was the withdrawal of the half billion dollars gold to Europe. Mr. Roberts shows that the New York City banks withdrew their sup- port of the growing account of brokers’ loans and were not responsible for its growth from October, 1927, to 1929. The high interest rates of the call loan markets attracted funds from

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