48 The Stock Market Crash—And After
selling stocks.” But it was the dilatoriness of the
Senate, not the need of a higher tariff, that hurt
business.
Undigested Securities
Mr. Kent presents a most interesting view of the
situation in his comment upon the proportion of
national income that went into brokers’ loans during
1929. He figures that 914 per cent of the national
income is the normal amount available for new
securities and increased savings deposits, and that
something over five and one-half billion dollars was
“all that could be utilized for investment purposes.”
He goes on to state that the new security issues of
the first three quarters of 1929 amounted to nearly
eight and one-half billion, or $2,800,000,000 more
than the five and one-half billion which he calculates
as available from national income during this period.
This amounted to 20 per cent of the national income,
as contrasted with the “normal” of 914 per cent.
Hence, he concludes, new securities had been created
and issued more rapidly than the public could absorb
them. The only way they could do so was by overextending
 themselves.
But in this calculation Mr. Kent may not have
taken account of the securities issued by investment
trusts. These securities were not really new, but
merely old securities in the form of new certificates.
The same may be said of the multiplying mergers
of 1929; every investor in a merger reduces his
investment in the constituent companies exactly as
much as he increases it in the merger. The same