It is really astonishing what a hold the fear of a possible panic has upon the minds of many investors. The memory of the events of 1907 has undoubtedly operated greatly to lessen the volume of speculative trade from that time to the present (April, 1912). Panics of equal severity have occurred only a few times in the entire history of the country, and the possibility of such an outbreak in any one month is smaller than the chance of loss on the average investment through the failure of the company. Yet the specter of such a panic rises in the minds of the inexperienced whenever they think of buying stocks. “Yes,” the investor may say, “Reading seems to be in a very strong position, but look where it sold in 1907—at $70 a share!” It is sometimes assumed that the low prices in a panic are due to a sudden spasm of fear, which comes quickly and passes away quickly. This is not the case. In a way, the operation of the element of fear begins when prices are near the top. Some cautious investors begin to fear that the boom is being overdone and that a disastrous decline must follow the excessive speculation for the rise. They sell under the influence of this feeling. During the ensuing decline, which may run for years, more and more people begin to feel uneasy over business or financial conditions, and they liquidate their holdings. This caution or fearfulness gradually spreads, increasing and decreasing in waves, but growing a little greater at each successive swell. The panic is not a sudden development, but is the result of causes long accumulated. The actual bottom prices of the panic are more likely to result from necessity than from fear. Those investors who could be frightened out of their holdings are likely to give up before the bottom is reached. The lowest prices are usually made by sales for those whose immediate resources are exhausted. Most of them are taken by surprise and could raise the money necessary to carry their stocks if they had a little time; but in the stock market, “time is the essence of the contract,” and is the very thing that they cannot have. The great cause of loss in times of panic is the failure of the investor to keep enough of his capital in liquid form. He becomes “tied up” in various undertakings so that he cannot realize quickly. He may have abundant property, but no ready money. This condition, in turn, results from trying to do too much—greed, haste, excessive ambition, an oversupply of easy confidence as to the future. It is noticeable in panic times that a period arrives when nearly every one thinks that stocks are low enough, yet prices continue downward to a still lower level. The result is that many investors, after thinking that they have “loaded up” near the bottom, find that it was a false bottom, and are finally forced to throw over their holdings on a further decline.