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

The Hopeful Outlook 265 Finally, when the long bull market asserted itself in the high levels of 1927-1929, the Reserve Sys- tem still wished to prevent an exodus of gold back from Europe to the United States; it kept the redis- count rate low, partly for this purpose and partly to maintain ‘“‘easy money” for business. This easy money encouraged speculation, despite the efforts to discriminate against brokers’ loans. The Reserve authorities tried in vain, when specu- lation was in full swing, to discourage it by discrim- ination against brokers’ loans at quarterly periods, when the “bootleg” lenders, to get cash for their quarterly dividends, withdrew their loans tempora- rily from the market. Perhaps a once-for-all sharp increase in the rediscount rate two years ago might have hurt business to some extent then, but it might have prevented the overgrowth of brokers’ loans, and might have prevented the market crash later. This is not the first instance of how the age-long prejudice against high interest rates has done harm. But, of course, it is easy to be wise after the event and to criticize what was done. The Federal Re- serve System has, in general, acted with great wis- dom and even in this particular problem of the stock market we must not forget that it kept the banks liquid and strong so as to prevent tight money and bankruptcies when the crash came. In that emer- gency the whole banking machinery of the country from the Federal Reserve Board down to the mem- ber banks worked splendidly.

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