Causes of the Panic 
Reserve inflation of a peculiarly objectionable 
type.” 
15 
Bear Tactics and Outside Calling of Loans 
The Chronicle assigned yet other causes to 
the panic: 
“The latter part of September, however, some 
of the large groups of operators, having accom- 
plished their purpose in carrying prices to new 
extremes, began unloading their holdings, and this 
had the effect of weakening the market . . . but 
after the decline had been going on for several 
weeks, there came an entirely new development, 
namely, the calling of loans on a huge scale, not by 
the banks themselves, but by the mongrel crowd of 
outside lenders.” 
The first was doubtless true; stocks passed from 
strong to weak holders. The second, the withdrawal 
of funds in many cases came from the banks first, 
which caused outside lenders and brokers to call 
their loans. It soon lost most of its significance 
in the fact that by this time the demand also fell 
off; if the supply of funds had been cut off more 
than the demand, money rates would have risen 
and they did not. 
Margins Not Figured Scientifically 
A series of causes of the panic was described by 
Fred I. Kent, Director of the Bankers’ Trust Com- 
pany of New York in his address before the Ameri-