How THE BOOM BEGAN.
It is often difficult, too, when a boom has passed, or is , dying down, to determine precisely the nature of its origin.. • I _think, _howev2r, that in_ the tease. ,ok certain phases' of the latest wave of Stock Exchange aetivity, it may be said that in the first place speculative appetite was stimulated by the chances of capital appreciation rather than of dividend income. To some extent this tendency may have been prompted by the prolonged and great pressure of taxation;for while dividend income is taxed, increment in capital, value escapes. Moreover, starting from the post-Armistice period almost everything from A to Z on the Stock Exchange had fallen to a very low level in. price, and, indeed, the very beginning of the movement in capital appreciation was in Government securities themselves, for it must not be forgotten that the 5 per cent. War Loan, for example, which now stands at well over 100, was at little more than 80 some seven years ago. From Gilt-edged securities the movement spread to the second rank of investment stocks, and then when the upward movement in that direction was checked by the fairly high value of money and the evident likelihood of its being maintained for a considerable period, the speculative investor turned his attention to wider fields and activity in the industrial section was quickened by the fact that in many directions new industries sprang up, such as artificial silk and some of the concerns catering for amusements, and it is new industries with their possibilities rather than assured modest prospects which captivate the speculative public. Moreover, in some of these new industries phenomenal profits were attained, followed, in many instances, by big bonus share issues. The great rise in these shares acted as an advertisement, and quickened the appetite for industrials generally, and the public taste was then quickly catered for by the company pro- moter, with the result that there was a perfect avalanche of prospectuses, to which, for the most part, an eager response was given.
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