XX 
Introduction 
The public utilities stocks reached such a height 
that the average yield was only 3 per cent. Allied 
Chemical & Dye, one of the “blue chips,” was sell- 
ing so that the yield was only 134 per cent, and there 
were other stocks higher priced than that, and with 
correspondingly smaller yields. In many companies, 
the common stocks had lower yields than the bonds 
in those same companies. 
Now with all these facts before us, we are tempted 
to conclude that such an advance in stock prices was 
thoroughly unsound, if not that deflation should go 
on until the level of 1926 should again prevail, or 
even that of 1913. Based on such a diagnosis, the 
prognosis would show the business of the country to 
be in a very bad way. 
During the rise of the market, brokers’ loans 
reached the unprecedented total of more than 
$8,000,000,000, and of this total $3,000,000,000 
were cut off within a few weeks. Investment trusts, 
genuine and so-called, had become the fashion. 
They had absorbed $3,000,000,000 of investors’ 
money, $1,000,000,000 of it during the rise of the 
market in 1929. They had had a rapid mushroom 
growth, rising from under 200 in number in January, 
1929, to 400 or more by the time of the panic. 
The Federal Reserve Board had issued its warn- 
ing of an inflated stock market back in March, 
1929, with a resultant shutting off of stock market 
credit that at once precipitated a near-panic. This 
was alleviated through the action of Charles E. 
Mitchell, Chairman of the National City Bank of