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324 THE COMMUNIST

credit needs fell far short of utilizing these credit resources to the utmost and they were available in consequence for stock market and other speculative use, including a real estate boom which reached its high spot in Florida in 1926.

With the development of the stock market boom there came a rapid increase in the volume of credit used for the purpose of buying securities, that is, credit with securities as collateral. The following figures give some indication of this growth.

[[9 column format]]
---|---|---|---|---|---|---|---|---
   | Total Brokers Loans Unit $1,000,000 1926 | Total Brokers Loans Unit $1,000,000 1927 | Total Brokers Loans Unit $1,000,000 1928 | Total Brokers Loans Unit $1,000,000 1929 | Brokers Loans for Account of Others Unit $1,000,000 1926 | Brokers Loans for Account of Others Unit $1,000,000 1927 | Brokers Loans for Account of Others Unit $1,000,000 1928 | Brokers Loans for Account of Others Unit $1,000,000 1929

   | 1926 | 1927 | 1928 | 1929 | 1926 | 1927 | 1928 | 1929

Jan. | 3,126 | 2,778 | 3,802 | 5,408 | 585 | 741 | 989 | 2,434

Apr. | 2,467 | 2,866 | 4,062 | 5,477 | 528 | 806 | 1,245 | 2,839

July | 2,607 | 3,096 | 4,232 | 5,841 | 646 | 877 | 1,744 | 2,992

Oct. | 2,698 | 3,392 | 4,701 | 6,498 | 726 | 963 | 2,048 | 3,602

Of particular interest in the growth of security collateral loans was the growth of that part of them designated in the returns of the Federal Reserve System as "Loans for Account of Others." These "others" who have money to lend for stock market use include corporations, individuals and foreign banks - in other words all other but domestic banks. As the pace set by security prices and new issues became ever more dizzy, the demand for collateral loans (i.e. call loans) raised the interest rate on that type of loan appreciably above the commercial rate. Corporations discovered that it would be more profitable to lend their surplus cash funds at call than to invest them in increased production facilities. American capitalism was led to the conclusion that it could increase its profits more by diverting its money capital into the stock market in the form of call loans than by permitting it to remain in the processes of capitalistic production or circulation where surplus value, the only source of profits, is respectively created and realized. In other words, American capitalism, as a whole found it "possible" it increase its profits without increasing surplus value. (4) The obvious insanity of such a conclusion is evidence enough of the parasitism
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(4) "Two natures, the, are immament [[immanent]] in the credit system. On one side, it develops the incentives of capitalist production, the acchmulation [[accumulation]] of wealth by the opprapriation [[appropriation]] and exploitation of the labor of others, to the purest and more colossal form of gambling and swindling, and reduces more and more the number of those who exploit the social wealth. On the other side, it constitutes a transition to a new mode of production. It is this ambiguous nature, which endows the principal spokesmen of credit from Law to Isaac Pereire with the pleasant character of swindlers and prophets." (Our emphasis E.B.) Marx, Capital, Vol III, P. 522.