This is due to the fact mentioned above, that final low prices are the result of necessities, not of opinions. In 1907, for example, every one of good sense knew perfectly well that stocks were selling below their value—the trouble was that investors could not get hold of the money with which to buy. The moral is that low prices, after a prolonged bear period, are not in themselves a sufficient reason for buying stocks. The key to the situation lies in the _accumulation of liquid capital_, which is most quickly evidenced by a rapid recovery of the excess of deposits over loans in the New York clearing house banks (excluding the trust companies, in which loans are more varied). This subject, however, takes us outside our present field. It is to a great extent because the last part of the decline in a panic has been caused not by public opinion, or even by public fear, but by necessity, arising from absolute exhaustion of available funds, that the first part of the ensuing recovery takes place without any apparent reason. Traders say, “The panic is over, but stocks cannot go up much under such bearish conditions as now exist.” Yet stocks can and do go up, because they are merely regaining the natural level from which they were depressed by “bankrupt sales,” as we would say in discussing dry goods. Perhaps the word “fear” has been overworked in the discussion of stock market psychology. It is only the very few who actually sell their stocks under the direct influence of the emotion of fear. But a feeling of caution strong enough to induce sales, or even a fixed belief that prices must decline, constitutes in itself a sort of modification of fear, and has the same result so far as prices are concerned. The effect of this fear or caution in a panic is not limited to the selling of stocks, but is even more important in preventing purchases. It takes far less uneasiness to cause the intending investor to delay purchases than to precipitate actual sales by holders. For this reason, a small quantity of stock pressed for sale in a panicky market may cause a decline out of all proportion to its importance. The offerings may be small, but nobody wants them. It is this factor which accounts for the rapid recoveries which frequently follow panics. Waiting investors are afraid to step in front of a demoralized market, but once the turn appears, they fall over each other to buy. The boom is in many ways the reverse of the panic. Just as fear keeps growing and spreading until the final crash, so confidence and enthusiasm keep reproducing each other on a wider and wider scale until the result is a sort of hilarity on the part of thousands of men, many of them comparatively young and inexperienced, who have “made big money” during the long advance in prices.