If confidence abounds, people readily invest in the representatives of property - stocks and bonds - and this creates a strong demand and a high price. On the other hand, if confidence be shaken, people prefer cash or its representative - bank balances - of certain value to securities of uncertain value, and they are slow to convert the former into the latter; and thus the demand is less than the supply, and the price obtained is consequently lessened.

When conditions are panicky, new issues of securities cannot be sold at all, and the holders of old issues become so anxious to convert them into bank balances of stable value that prices fall far below intrinsic value, and then it is "bargain day" in the credit world. Many rich men hold their reserves for such occasions, which constantly recur, and they grow richer by so doing.