266 The Stock Market Crash—dnd After

Other Factors Apart from Justifying Causes
It is also possible that had there not been certain
other factors quite unassociated from the fundamental
 justifying causes of the long bull market, that
operated with the momentum of long and short-term
swings in the October-November crash, the crash
might have been prevented.
There was the downward turn in the business
trend resulting in a rather rapid decline in the average
 of wholesale prices during the summer of 1929;
but this was not so great as the 19277 down-turn had
been, and it could not alone account for the panic.
There was the tax on capital gains, discouraging the
active selling of stocks to take profits and encouraging
 the buying of new securities by the help of
loans instead of by the proceeds of sales of stocks.
There was the sudden increase of a billion dollars’
worth of new securities by the investment trusts,
with a lag in their reinvestment of the proceeds in
the stock market. Finally, there was the “boom”
enthusiasm which during the three months preceding
the panic, to a considerable degree, ignored yields
and earnings in its extravagant belief in the future
growth of business. This enthusiasm doubtless had
its hold upon intelligent speculators who had substantial
 grounds for their optimism as well as upon
the “lunatic fringe’ that always attends the performances
 of rising markets.
It is not altogether unlikely that there were other
facts and situations now unknown or hidden, which