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The Academy of Political Science of Columbia University in its annual 

meeting in January, 1930, held a post-mortem on the Crash of 1929. 

Vice-

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President Paul Warburg was to have presided, and Director Ogden 

Mills was to have played an important part in the discussion. However, 

these two gentlemen did not show up. Professor Oliver M.W. Sprague 

of Harvard University remarked of the crash:

"We have here a beautiful laboratory case of the stock market’s 

dropping apparently from its own weight."

It was pointed out that there was no exhaustion of credit, as in 1893, 

nor any currency famine, as in the Panic of 1907, when clearing-house 

certificates were resorted to, nor a collapse of commodity prices, as in 

1920. What then, had caused the crash? The people had purchased 

stocks at high prices and expected the prices to continue to rise. The 

prices had to come down, and they did. It was obvious to the 

economists and bankers gathered over their brandy and cigars at the 

Hotel Astor that the people were at fault. Certainly the people had 

made a mistake in buying over-priced securities, but they had been 

talked into it by every leading citizen from the President of the United 

States on down. Every magazine of national circulation, every big 

newspaper, and every prominent banker, economist, and politician, 

had joined in the big confidence game of urging people to buy those 

over-priced securities. When the Federal Reserve Bank of New York 

raised its rate to six percent, in August 1929, people began to get out 

of the market, and it turned into a panic which drove the prices of 

securities down far below their natural levels. As in previous panics, this