After the stock market crash of November, 1929

A SUPPLEMENTARY CHAPTER TO THE PSYCHOLOGY OF SPECULATION
ISSUED IN 1926
BY HENRY HOWARD HARPER
PRIVATELY PRINTED
BOSTON—MDCDXXX
THE TORCH PRESS CEDAR RAPIDS IOWA
By way of comment on the great speculative epidemic that spread over the country and indeed throughout the world the past five or six years, it may be observed that stock speculation, once considered a hazardous business, came to be generally regarded as a safe, dignified and profitable occupation. Of a certainty it became general, if nothing else. From a once precarious game of chance, to be indulged in only by daredevils and millionaires, it became so simple and well safeguarded that anyone with a little capital could in a short time double it and quadruple it. It was contended that inasmuch as we had successfully passed the twenty-year cycle in which, according to precedent, stock market panics are wont to occur, such disturbances had been relegated to history, and the Federal Reserve System obviated any possibility of their recurrence. This belief pervaded all classes from millionaires to house servants, and eventually the entire community became inoculated with the speculative germ. It got to be the principal topic of conversation in the clubs, cafes, hotel lobbies, on the street, and any place where two or more people were congregated. The many thousands of brokerage offices throughout the country were jammed to the doors by eager onlookers and participants who devoted themselves exclusively to the market from the opening to the close. Office boys, elevator men, manicures, hotel waiters, hairdressers, cab drivers, and even rural farmers initiated themselves into the game and discussed mergers, split-ups, stock dividends, and all such subjects in high finance with more profuseness and profundity than was ever displayed at a bankers’ convention.
Indeed for years it looked as if stocks could only go one way—up. Therefore the whole speculative fraternity arrayed itself on the up-side; and it actually happened that vast numbers of traders who had formerly bought stocks to sell at only a point or two profit, now accumulated them to keep indefinitely. The trading element, emboldened by one success after another, concluded that we were in a new era—that the stock market millennium had become a reality. In travel we advanced from the stage coach to the automobile and the aeroplane; from the slow sailing craft to the ocean greyhound. The radio and the telephone had linked the whole universe together in conversation, and in the art of creating wealth the old-fashioned slow-moving process of conservatism had become as obsolete as the stage coach. These facts were all too obvious to be disputed. And to prove there was simply no limit to modern inventions the stock market, backed by the new investment trust scheme, supplied a new financial vehicle without any reverse gears. It was fast and easy riding, the sensation was thrilling, and it required neither skill nor experience to operate. In 1924-6 during the try-out period of this marvellous get-rich-quick machine there were many skeptics who doubted its safety and efficiency; but confidence gradually increased and one after another became convinced, until eventually the whole populace clambered aboard.