Book contents
- Frontmatter
- Contents
- Preface
- Prologue: The vision of a new era in the 1920s
- 1 The ingredients of a model of a new economics
- 2 Challenges to the new economics of the 1920s
- 3 The new economics at center stage in 1929
- 4 Activating the stabilization model in late 1929 and 1930
- 5 Preliminary readings of the results of the stabilization strategy
- 6 The unraveling of the first official model in 1931
- 7 Shifting course in late 1931 and early 1932
- 8 Renewing the offensive in February and March 1932
- 9 The economists and their views on policy for 1932
- 10 Official model II as shaped in May 1932 and the aftermath
- Epilogue: Transition to the New Deal – continuities and discontinuities
- Notes
- Selected bibliography
- Index
4 - Activating the stabilization model in late 1929 and 1930
Published online by Cambridge University Press: 19 October 2009
- Frontmatter
- Contents
- Preface
- Prologue: The vision of a new era in the 1920s
- 1 The ingredients of a model of a new economics
- 2 Challenges to the new economics of the 1920s
- 3 The new economics at center stage in 1929
- 4 Activating the stabilization model in late 1929 and 1930
- 5 Preliminary readings of the results of the stabilization strategy
- 6 The unraveling of the first official model in 1931
- 7 Shifting course in late 1931 and early 1932
- 8 Renewing the offensive in February and March 1932
- 9 The economists and their views on policy for 1932
- 10 Official model II as shaped in May 1932 and the aftermath
- Epilogue: Transition to the New Deal – continuities and discontinuities
- Notes
- Selected bibliography
- Index
Summary
On September 3, 1929 the Dow–Jones industrial index of common stock prices reached a new all-time high at 381. This was more than double its level in early 1929, and, as it happened, the record established was to stand for the next twenty years. Serious slippage in stock values occurred in early October and the trend was downward throughout most of the month. Even before the panic conditions of “Black Thursday,” October 24, and “Black Tuesday,” October 29, it appeared that the long-anticipated readjustment had begun. Interpreting its scale and significance was another matter. Interruptions in the upward momentum of the bull market had occurred before, most recently in December 1928 and in March 1929, and had shortly thereafter been reversed. It was not implausible to argue that a similar “technical reaction” was now underway and that the forward momentum would soon be resumed.
After the October erosion had begun (though before Black Thursday, October 24), Hoover observed in private conversation that he had “noted with satisfaction the break and decline in stocks,” but that he had been “dubious about doing anything for fear that more harm than good might result.” On October 25 (the day after the first major panic on the New York Stock Exchange), Hoover had a different reading of the situation available to him.
- Type
- Chapter
- Information
- From New Era to New DealHerbert Hoover, the Economists, and American Economic Policy, 1921–1933, pp. 78 - 91Publisher: Cambridge University PressPrint publication year: 1985