Causes of the Panic 53 
York on November 22, 1929, that the public by bid- 
ding up the price of securities, “ignored yield and 
earnings in the belief that the country’s growth 
would increase the equity and boost the price” of 
shares of sound enterprises. No doubt their enthu- 
siasm led them, as Professor Hollander asserts, to 
make no allowance for business recession, for specu- 
lative manipulation, or foreign disturbance. 
My own impression has been and still is that the 
market went up principally because of sound, justi- 
fied expectations of earnings, and only partly because 
of unreasoning and unintelligent mania for buying. 
The reasons for this view will be elaborated later. 
Chief Cause in Unsound Credit Situation 
The very soundness of these prospects led to an 
unsound credit situation, that is, to general over- 
extension of margin accounts. Bear raiders cleverly 
took advantage of this situation, selling “short” in 
large blocks, many of these stocks which had been 
unloaded upon the market and thrown into weak 
hands, thus precipitating distress selling and panic. 
An authority on the New York Stock Exchange, 
whose name is withheld, is disposed to assign to the 
raiders a causal 16le, but not one of supreme impor- 
tance. He says: 
“I do not agree with some commentators as to 
the comparative importance of bear raiding in the 
break this fall. Undoubtedly, bear raiding was a 
factor in the decline. Yet the results of the Stock 
Exchange investigation into this question have shown