America's Money Machine

158 PART III/DEBACLE OF AN IDEA
tion Company-but a few days later the announcement of the receivership
of A. L. Fuller Company which was involved in Manhattan Supply
touched off a mass of selling which carried with it market leaders like U.
S. Steel and General Motors.
Again recovery set in, and William C. Durant, one of the more picturesque
and spectacular figures of the era, announced that in his opinion
the country was "drifting [sic] into a so-called bull market unprecedented
in magnitude, which will extend over a period of many years to comegood
securities will sell higher than ever before in the history of this
country." He went on to say that "money is so plentiful that it is almost
a dt·ug on the market, with a prospect that in the very near future the
present rate for time money will be considerably reduced." 1
By September, the stock market was again wildly bullish. In one day
Commercial Solvents rose 16 points, General Motors was being bid
higher and higher; another stock shot up 19 points. On September 15 the
Times reported, "Paying no attention to anything but a further fractional
lowering of Stock Exchange money rates, yesterday's stock market repeated
many of the extravagancies which have distinguished recent trading....
With what even Wall Street for a moment described as a tinge
ofrecklessness, several selected stocks were driven up 7, 8, and 10 points
apiece, with advances of 30 to 50 points numerous elsewhere. . . ."
Serious questions were now beginning to trouble the press regarding
the speculative nature of the market, but the consensus was that it was
all justified by sound prosperity and basic values. The New York Times
fairly reflected current sentiment when it argued:
The extravagant rise of the New York stock market, in the Civil War
paper-inflation days, is too remote to be recalled; but many people will recall
that in 1923, by the Frankfurther Zeitung's compilations, the combined stock
exchange prices of active German shares rose from 376,685 in January to
22,987,500 in October. That was a fairly respectable achievement in the way
of inflation; but it had to be considered, even on the Berlin Bourse, in
relation to other markets. The German index number of commodity prices,
for instance, based on 100 for 1913, had risen from 43,223 in September,
1922, to 36,200,000 in September, 1923. This, like the rise on the stock
exchange, was attributed, not to "credit inflation" but to the fact that the
currency's gold value had depreciated at such a rate that, whereas 4 1/2
German marks would once have bought a dollar, the price got to ten billion
marks in the Autumn of 1923 and to eight trillion shortly afterward.
The Durants of Berlin in 1922 and 1923 were entirely warranted in
prophesying a "bull market ofunprecedented magnitude," which was never