By Harold Bierman
Trying to demonstrate the true motives of the 1929 industry crash, Bierman refutes the preferred trust that wild hypothesis had excessively pushed up inventory industry costs and ended in the crash. even if he recognizes a few costs of shares corresponding to utilities and banks have been overpriced, moderate reasons exist for the extent and elevate of all different securities costs. certainly, if shares have been overpriced in 1929, then they're much more overpriced within the present period of astounding development in inventory costs and funding in securities. The motives of the 1929 crash, Bierman argues, lie in an adverse choice via the Massachusetts division of Public Utilities coupled with the preferred perform referred to as debt leverage within the Nineteen Twenties company and funding area.
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Additional info for The causes of the 1929 stock market crash
Obviously, the National City Bankâ s offer to lend at 16 to 20 percent did not cause this drop. Â Â Mitchell was a board member. Miller did not at all want to have lunch with Mitchell, nor did he want to meet with him. After much persuasion from George Harrison, and after Miller called Governor Young, Miller went to the meeting (we assume he also went to lunch). On Friday, March 29, Congress announced that an inquiry would take place. The New York Times right-hand headline (March 30, p. â â It was not clear whether Congress was more upset about stocks going up, the existence of speculators, or the thought that Mitchellâ s bank stopped the price decline.
On October 26, 1930 (p. â â It is interesting that an Englishman of the political left fired the first successful shot against the speculators that the American right was targeting. The stock market fell on October 3 and October 4, but almost all reported business news was very optimistic. The primary negative news items were the statements by Snowden and Mellon regarding the amount of speculation in the American stock market. The market had been subjected to a barrage of statements throughout the year that there was excessive speculation and that the level of stock < previous page page_54 next page > < previous page page_55 next page > Page 55 prices was too high.
The New York Times (p. Â Â weakening of margin accounts making it necessary to sell, which further depressed prices. While the 1929 financial press focused extensively on broker loans and margin account activity, the Snowden statement is the only significant unique financial news event on October 3. The October 4 issue of the Wall Street Journal (p. â â Also on October 4, the New York Times had a major editorial on Snowdenâ s speculation orgy comment. On Sunday, October 6, the Times (p. â â The Times editor obviously thought there was excessive speculation and agreed with Snowden.