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

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XVI. The Hopeful Outlook

Collection:: Economics Books

rT d ™ 2 Q | ma 4 n §] n t Fy — y g 3 The Hopeful Outlook 263 have been discounted further and further into the future. The consequence is that the average justi- fiable price-earnings ratio has risen. For the reasons enumerated in this book it will hardly return to the old level so long as there is still a prospect of rapid future increases in earnings. But even so, in most of the comparisons of 1929 with 1928 as to the average price-earnings ratios, there is seen a decline in those ratios preceding the stock market panic. This indicates that, with the exception of two or three months immediately pre- ceding the panic, the market was not much, if any, overinflated. Panic Might Have Been Avoided Had there been no such piling up of margin accounts as the totals of brokers’ loans revealed, incidental in some degree to the issuance of nearly eight and one-half billions worth of new securities during the first nine months of 1929, there would probably have been no panic. Or, had there been no Hatry failure, which pre- cipitated a panic and consequent fall in prices on the London Stock Exchange to a deeper bottom than on the New York Stock Exchange, thus occasioning the immense withdrawals of funds of British holders from the American stock market, it is quite arguable that there would have been no American panic. The increase in the brokers’ loan account during the early stages of the American crash gave some meas- ure of the selling by British holders, with the con-

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