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 IV. The Threat to Business

Collection:: Economics Books

The Threat to Business 61 But the threat to business most feared, namely, the twenty-six billion deflation in listed paper values, so full of sound and fury, signifies little. It is now more universally recognized that in the fall of paper values there had been merely a transfer of wealth, not a destruction of any physical wealth, even if there were a lowered valuation. This is because the crisis, unlike the 1920 crisis was not a violent fall of an inflated commodity price level. Business stoppage and unemployment could hardly follow a stock panic, because such a case wipes out profits and substitutes losses, and no concern can afford long to run at a loss. But such a loss could hardly follow a stock panic. It is true that there was danger from the panic to business in the huge transfer of security holdings from one set of owners to another set from the poorer to the richer, which might in some measure deplete the purchasing power of consumers of the middle class. But the slump in stock prices destroyed no physical assets. As stock prices gradually rose from the panic bot- tom it was found that, to a large extent, the crash in prices had robbed thousands of Peters to pay a very few Pauls. There were the same factories in all the centers of industry producing the same line of goods, with a difference, so far as could be ob- served, that there was now a new set of shareholders. By the transfer there would be some dislocation in demand for goods. The sanguine buyer of stocks at the old high prices would no longer own the

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