Kv 
Introduction 
rather than appraising such a disaster in terms of 
praise and blame, an unemotional assessment of it in 
terms of cause and effect might yield much in public 
benefit by way of preventing the recurrence of such 
crises. 
Intimations of the Panic 
“Hindsight” is always clearer than foresight. 
Looking backward now and putting the events of the 
panic in perspective, we find that there were definite 
foreshadowings of its coming. As early as April 18, 
1929, the National City Bank of New York said in 
a special circular: “If the rate of credit increase rises 
above the rate of business growth, we have a condi- 
tion of inflation which manifests itself in rising prices 
in some departments of the business structure, over- 
confidence, excessive speculation, and an eventual 
crash.” 
This statement was followed by an analysis that 
notes a yearly increase in the total volume of busi- 
ness in this country, taking business in all its forms, 
at a fairly uniform rate of 4 per cent; and that for 
the year 1928 the total production and the exchange 
of goods in the United States increased over 1927 
at a rate somewhat below this, or about 3 per cent. 
As against this growth of business and production, 
the statement measured the growth of credits—s3.1 
per cent for the year 1928. This did not appear to 
be greatly in excess of the normal growth of business 
requirements. But the statement added: 
“Taking account of the extraordinary growth of