The New York bankers in an heroic attempt to save
brokers from forced sales on a collapsing market reduced their margin for loans from 50 to 25 per cent. Such a landslide, by which the shares of companies not in them- selves in any distress lost a third or a half of their nominal yalue in a few hours, could hardly happen in London. The speculative mania in America is the result of easy credit. Here the necessity of immediate payment is a very steadying influence. Some repercussion from events in New York is being felt on all the Stock Exchanges of the world. All over America the brake will be put on instalment purchase. And as the chastened Americans will not be able to spend money so freely as before, the exports from Europe may be seriously checked. But it is not unreasonable to hope that in the end the advantages will be greater than the disadvantages. Much of the gold which has been steadily flowing across the Atlantic may return to London.
* * * *
Previous page
