The stock market crash - and after

Bibliographic data

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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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter III. Causes of the Panic

Collection:: Economics Books

48 The Stock Market Crash—And After selling stocks.” But it was the dilatoriness of the Senate, not the need of a higher tariff, that hurt business. Undigested Securities Mr. Kent presents a most interesting view of the situation in his comment upon the proportion of national income that went into brokers’ loans during 1929. He figures that 914 per cent of the national income is the normal amount available for new securities and increased savings deposits, and that something over five and one-half billion dollars was “all that could be utilized for investment purposes.” He goes on to state that the new security issues of the first three quarters of 1929 amounted to nearly eight and one-half billion, or $2,800,000,000 more than the five and one-half billion which he calculates as available from national income during this period. This amounted to 20 per cent of the national income, as contrasted with the “normal” of 914 per cent. Hence, he concludes, new securities had been created and issued more rapidly than the public could absorb them. The only way they could do so was by over- extending themselves. But in this calculation Mr. Kent may not have taken account of the securities issued by investment trusts. These securities were not really new, but merely old securities in the form of new certificates. The same may be said of the multiplying mergers of 1929; every investor in a merger reduces his investment in the constituent companies exactly as much as he increases it in the merger. The same

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