s. In addition,
starting from the beginning of 1929, the interest rate charged on broker loans rose tremendously. This policy reduced the amount of broker loans that originated from banks and lowered the liquidity of non financial and other corporation that financed brokers and dealers.
5. The statements of public officials led to the growing belief that stock prices were too high, and once prices began to fall, those statements greased the slide, in effect, for the crash. In this regard, perceptions are very important in the rise and fall of the market. Hoover himself, just elected, declared that stocks were priced too high, and gave the impression he was going to be active in controlling the stock market. He was not active, however, and the market crashed, in part because of his statements.
Galbraith seems to feel the "speculative orgy" is a particularly American condition: "No one can doubt that the American people remain susceptible to the speculative mood---to the conviction that enterprise can be attended by unlimited rewards in which they, individually, were meant to share."
In other words, Galbraith is essentially saying that that blind self-interest on a national scale was at the heart of the 1929 crash. In comparing the 1929 crash with other crashes, Galbraith destroys one of the many myths associated with the l929 crash, nam
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