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I like this commentary in the epilogue of Robert Patterson's "The Great Boom and Panic" p.246 The stock market craze that ended in disaster in 1929 was a misdirection of energy and hopeful expectation. The dreams of wealth evoked by rising stock prices made speculation too tempting for many mortals to resist. The deliberate influence of credit by the monetary authorities- men who should have understood their responsibilities and known better-and their reluctance to deflate when the boom began to get out hand encouraged perhaps a million people to buy stocks on margin , and some millions more to buy them outright, for the most part at unrealistically high prices. Being in the market was not wicked, nor was it pure folly. Age-old human nature was reacting as it apparently always had under similar conditions. The belief in a NEW ERA, free of panics and depressions, was adhered to and proclaimed by so many of the nations leaders, intellectuals, and men of affairs that the common man, well-to-do or poor , had little basis for any other opinion. The mass-psychology aspect of it all was due,in part at least, to an indoctrination from the highest levels of academic, financial, and social life. Once again, in the 20's , a speculative boom reflected the nationwide belief in a personal and national destiny of wealth-in keeping with the American tradition that faith and will to believe must lead on to success. When so many looked to the stock market for this wealth, the belief became largely a gamblers illusion. But that same conviction, when it caused the application of common sense to productive activity in the world of reality-and not the world of brokerage accounts, stock quotations, ticker tape, tips, and margins-has helped to make America great and rich and powerful; and it can continue to do so. |
