CHAPTER III 
CAUSES OF THE PANIC 
WHAT were the causes of the panic of 1929? 
That the stock market crash was “primarily pre- 
cipitated by foreign liquidation” is the view expressed 
by John S. Sinclair in the New York Times of 
October 27th. This liquidation accompanied the so- 
called Hatry Panic on the London Stock Exchange, 
which resulted in a deeper fall of the London stock 
price level—45.4 per cent from August 30th to 
December 27th, according to the British index—than 
occurred on the New York Stock Exchange between 
the high point on September 7th and the bottom of 
November 13th. Few realize today that the 
greatest fall of stocks in British history, comparable 
only with the Baring Panic of 1890, preceded and 
was an actuating cause of the American panic, and 
that a coincident fall in Paris and Berlin accom- 
panied the British liquidation. It began with the 
failure of the banking house of Clarence Hatry in 
August, followed by his arrest in September and 
subsequent conviction for a gigantic forgery of stock 
certificates. This started the British liquidation in 
London and in New York. Barron's W eekly of