Ludwig von Mises Institute

Great Depression

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The Great Depression was the longest and most severe economic depression ever experienced by the Western world.[1]

Prelude[edit]

In the forty years 1890 to 1930, the population of the United States doubled, the value of farm property increased three and a half times, pig iron production four and a half times, exports five times, coal production five times, and freight traffic five and a half times, but commercial bank deposits increased over seventeen and a half times. Thus, while the gold stock had increased proportionally with the increase of industrial production, the expansion in bank credit had far outstripped both and had thus been at the expense of a thinning gold reserve. The monetary gold stock available to support and redeem this tremendous amount of bank liabilities that was being created, which had been 25.3 per cent of total note and deposit liabilities of banks in 1865, and 23.9 per cent in 1880, steadily dropped under the pressure of the public upon the banking interest for more and more credit, standing in 1900 at 20.4 per cent, in 1910 at 14.2 per cent and in 1930 at 10.4 per cent. Such had been the diminution of reserves that by the decade 1920-1930, banking was being conducted "on a shoestring." In 1900 the ratio of vault cash to deposit liabilities of commercial banks had dropped to 14.8 per cent, and in 1910 to 12.7 per cent—vault cash in those years being respectively $706,302,000 and $1,366,164,000.[2]

From June 1914 to January 1920, when demand deposits grew by 96.9 percent, time deposits rose by 126.1 percent. In the great boom of the 1920s, that started after the recession of 1920–21 (a short recession, thanks to the budget cutting and lowering of taxes by Warren Harding[3]), total demand deposits rose from 1921 to 1929 by 36.5 percent. Time deposits in banks expanded in the same period by 75.9 percent. The great boom of the 1920s (also called "Roaring Twenties") was largely fueled by credit expansion going into time deposits. The greatest expansion of time deposits came in Central Reserve Cities (New York and Chicago), where the Fed’s open market operations were all conducted, as opposed to Reserve Cities and Country Banks. As acknowledged by Federal Reserve officials, time or savings deposits were then, for all practical purposes, equivalent to demand deposits and should be paid on demand in case of a run on a bank.

With the passage of the Federal Reserve Act, President Wilson appointed Benjamin Strong to the most powerful post in the Federal Reserve System, Governor of the Federal Reserve Bank of New York. He made quickly this position dominant in the System and decided on Fed policy without consulting or even against the wishes of the Federal Reserve Board in Washington. Strong was the dominant leader of the Fed from 1914 until his death in 1928. He pursued an inflationary policy, to finance the war effort for WWI, connected to the interests of the House of Morgan. Another motivation was the attempt to prop up the Bank of England in the 1920s, when it returned to the gold standard with an overvalued pound. To prevent the loss of gold to the States, its governor Montagu Norman secretly convinced Strong to inflate in order to help England. The expansion ended only after Strong's death and the Great Depression followed soon after. In 1928 Strong admitted that "very few people indeed realized that we were now paying the penalty for the decision which was reached early in 1924 to help the rest of the world back to a sound financial and monetary basis" - that is, to help Britain maintain a phony and inflationary form of gold standard.[4]

The inflation was also motivated by a desire to help American exporters (particularly farmers), by stimulation of foreign lending. At the same time the U.S. turned to a sharp protectionist policy with the Fordney–McCumber Tariff of 1922. In the foreign lending boom, other countries were hampered in trying to sell their goods to the United States, but were encouraged to borrow dollars. The government did not have any peacetime authority to interfere with loans, but did so illegally. In 1921, President Harding and his cabinet conferred with several American investment bankers, at the instigation of Secretary of Commerce Hoover, to be informed in advance of foreign loans, so that the government "might express itself regarding them". The bankers agreed. Hoover commented that even bad loans helped American exports and provided a cheap form of relief and employment. Later Hoover demanded from bankers, that foreign loans would be inspected by agents of the Department of Commerce. Both requests were mostly ignored. While admitted to be legally unenforceable, it was all in the name of "national interests".[5]

Housing bubble[edit]

An outlet for the excessive credit created by the banking system was in financing an urban real estate boom in the U.S. During the decade 1920-1930, people were moving in a constant stream into the cities; the population of the sixty-three metropolitan zones (cities of 100,000 or more plus adjacent counties) rose from 46,491,000 to 59,118,000, or from 44 per cent of total population to 48 per cent. Seventy-four per cent of the increase in total population during the decade occurred in the metropolitan areas.

A huge building boom followed, the Federal Reserve Board index of building contracts awarded, 1923-1925 taken as 100, rising from 63 in 1920 to 122 in 1925, and 135 in 1928. This boom occurred chiefly in skyscraper offices and expensive apartment house developments, whose notes were more readily marketable, rather than in the modest single family accommodations. The result was that when the era had passed the slums still existed. In New York City, for instance, where at least four skyscrapers were built in these years with the only object, apparently, of surpassing the record for the world's tallest building, from a quarter to a third of the population, say 1,800,000 persons, still occupied houses that had been outlawed thirty-three years earlier by the Tenement House Act of 1901.[2]

Predictions[edit]

The Great Depression was predicted by several Austrian economists:

  • In Austria, economist Ludwig von Mises saw the problem developing in its early stages and predicted to his colleagues in 1924 that the large Austrian bank, Credit Anstalt, would eventually crash. He wrote a full analysis of Irving Fisher’s monetary views, published in 1928, where he targeted Fisher’s reliance on price indexes as a key vulnerability that would bring about the Great Depression, concluding: "because of the imperfection of the index number, these calculations would necessarily lead in time to errors of very considerable proportions."[6]
  • F. A. Hayek published several articles in early 1929 in which he predicted the collapse of the American boom. Felix Somary, who like Mises was a student at the University of Vienna, issued several dire warnings in the late 1920s.
  • In America economists Benjamin Anderson and E.C. Harwood also warned that the Federal Reserve policies would cause a crisis, and like Somary, they were largely ignored.[7] Albert H. Wiggin summed up in 1931 that the "depression has been prolonged and not alleviated by delay in making necessary readjustments."[8]

The Crash[edit]

Main article: Wall Street Crash of 1929

The great boom of the 1920s began around July, 1921, after a year or more of sharp recession, and ended about July, 1929, when the production and business activity began to decline, although the famous stock market crash came in October of that year. Herbert Hoover, an avid proponent of interventionism became President. Characteristic for him were "voluntary" measures that the government desired, with the implicit threat that if business did not "volunteer" properly, compulsory controls would soon follow.[9]

After the stock-market crash, Hoover began a series of conferences with big business and labor leaders, telling them that cutting wage rates (the standard response in previous depressions) would be disastrous, because then the workers wouldn't make enough to buy the products.[10] This "liquidation" of labor would only deepen the depression by reducing their "purchasing power". Leading industrialists pledged to maintain wage rates, expand construction, and share any reduced work,[11][12][13][14][15][16][17] to fulfill Hoover's request that "the first shock must fall on profits and not on wages".[18]

At the same time, the Federal Reserve expanded rapidly and lowered its interest rates. Its member banks expanded their deposits in the last week of October 1929 alone by 10%, mostly in New York. Hoover praised the Fed for the saving of shaky banks and restoring confidence.[11] The depression should be over in a few months. A large public works program was also initiated.[19][20]

Hoover promised the farm bloc to support farm cooperatives and prices and established the Federal Farm Board (FFB). It would make all-purpose loans to farm cooperatives at low interest rates and establish "stabilization corporations" to control farm surpluses and bolster farm prices. Its board was dominated by representatives of these farm cooperatives. To combat falling prices, it made loans to farmers to keep wheat and cotton off the market and later started to buy the surpluses. For a while, prices were held up and farmers increased production, only to find that prices would fall even more. As America held wheat off the market, it lost its former share of the world’s wheat trade. The farmers were urged to decrease their acreage, while the government still promoted reclamation projects to increase farm production. The surpluses of wheat accumulated and prices fell to such a degree, that the FFB decided to dump wheat stocks abroad, resulting in a drastic fall in market prices. The attempts to keep up the price of cotton, wool, livestock, etc. failed as well. A "Farm Holiday" was declared to stop production, The movement soon turned to violence and failed to stop the falling farm prices. but succeeded to avoid some foreclosures of its members.[21]

In 1930, the Smoot–Hawley Tariff was passed, despite objections of many economists and industrial leaders. Hoover originated a higher tariff on agricultural products to help farmers, but it was raised on many other products. Many other countries have retaliated with their own tariffs and foreign trade declined significantly. (From 1929 to 1932, U.S. imports from Europe decreased from $1,334 million to just $390 million, while U.S. exports to Europe decreased from $2,341 million to $784 million. Overall, world trade decreased by some 66% between 1929 and 1934.[22]) Also, to relieve the unemployment problem, and to help keep wage rates up, the President effectively banned further immigration into the United States.[23]

In Europe[edit]

In Europe, the crisis began in earnest with the Boden–Kredit Anstalt, the most important bank in Austria and Eastern Europe. It had to merge with the Oesterreichische–Kredit–Anstalt after rescue attempts by its government and other banks. When Austria declared a customs union with Germany in March 1931, the French government feared this development and several French banks suddenly insisted on redemption of their debts from both countries. The bank collapsed. After more rescue attempts the Austrian Government voted a $150 million guarantee to the bank, but by this time was its credit worthless, and Austria soon declared national bankruptcy by going off the gold standard. Later, Germany, England, and most other European countries renounced their obligations and went off the gold standard as well. While the impact on United States was not very large due to the lowered international trade, it certainly did not help, neither did the many loans granted to prop up foreign banks.[24]

1931, "The Tragic Year"[edit]

The crisis worsened in the US in 1931. Production continued to fall drastically, as did prices and foreign trade, and unemployment ran up to almost 16 percent of the labor force. The Federal Reserve Board (FRB) index of manufacturing production, which had been 110 in 1929 and 90 in 1930, fell to 75 in 1931. Hardest hit, in accordance with Austrian cycle theory, were producers’ goods and higher order capital goods industries, rather than the consumer goods’ industries. Despite attempts to inflate, bank deposits and the aggregate money supply fell sharply, particularly at the end of the year. The British abandoning of the gold standard, bank failures abroad and the growing number of failures at home, caused a growing loss of confidence by Americans in their banking system. The wages were also beginning to fall, first secretly, then openly by the end of 1931.[25][26][27][28][29]

The gross national product fell from $91.1 billion in 1930, to $76.3 billion in 1931. Total government receipts fell from $13.5 billion to $12.4 billion, but total government expenditures rose from $13.9 billion to $15.2 billion, in federal, rather than state and local, spending (federal expenditures rose from $4.2 billion in 1930 to $5.5 billion in 1931). In the middle of a great depression when people needed to be relieved of governmental burdens, the dead weight of government rose from 16.4 percent to 21.5 percent of the gross private product. From a modest surplus in 1930, the Federal government so ran up a huge $2.2 billion deficit in 1931.[24]

Direct relief was just about the one sphere where President Hoover seemed to prefer voluntary to governmental action. The Red Cross opposed a bill, in early 1931, that would grant it $25 million for relief, declaring that it would "to a large extent destroy voluntary giving". Many private charity organizations, philanthropists, and social workers had the same views. Governmental unemployment relief was seen to have a role in creating and perpetuating unemployment in Britain (the "dole"). It was attacked by many business leaders, including Henry Ford, the leaders of the National Association of Manufacturers and the Chamber of Commerce, and former President Coolidge.[24]

The Davis-Bacon Act was signed by President Hoover in 1931. It mandated that prevailing (union) wages be paid by the Federal Government for public works projects. It has been argued that the Davis-Bacon Act was a Jim Crow law, since its intent [30] and its effect [31] was to prevent lower-paid, non-unionized black laborers from competing against higher-paid, unionized white laborers. Hoover promoted and supported the legislation, as he believed that "[t]he very essence of great production is high wages...because it depends upon a widening range of consumption only to be obtained from the purchasing power of high real wages...." [32]

1932, The Hoover New Deal[edit]

In an atmosphere of crisis, President Hoover called for more drastic measures, including more government aid and loans. With a $2 billion deficit during annual year 1931, Hoover felt that he had to do something to combat it and chose to increase the taxes. The Revenue Act of 1932 was one of the greatest increases in taxation ever enacted in the United States in peacetime. Many wartime excise taxes were revived, sales taxes were imposed on gasoline, tires, autos, electric energy, malt, toiletries, furs, jewelry, and other articles; admission and stock transfer taxes were increased; new taxes were levied on bank checks, bond transfers, telephone, telegraph, and radio messages; and the personal income tax was raised drastically as follows: the normal rate was increased from a range of 1½ percent–5 percent, to 4 percent–8 percent; personal exemptions were sharply reduced, and an earned credit of 25 percent eliminated; and surtaxes were raised enormously, from a maximum of 25 percent to 63 percent on the highest incomes. Furthermore, the corporate income tax was increased from 12 percent to 13: percent, and an exemption for small corporations eliminated; the estate tax was doubled, and the exemption floor halved; and the gift tax, which had been eliminated, was restored, and graduated up to 33⅓ percent. The postal rates were raised as well.

Despite the drastic increase in tax rates, total Federal revenue for 1932 declined because of the deepened depression—itself partly caused by the increase in tax rates. Total Federal receipts, excluding government enterprises, declined from $2.2 billion in 1931 to $1.9 billion in 1932; including government enterprises, Federal receipts fell from $3.4 billion to $3 billion.

Total government receipts fell from $12.4 billion to $11.5 billion. As a result, the huge Federal deficit continued despite a drop in government expenditures in 1932: Federal expenditures falling from $5.5 billion to $4.4 billion, and aggregate government expenditures falling from $15.2 billion to $13.2 billion (all numbers including government enterprises). Of the $1.7 billion in total government deficit, the bulk of it — $1.4 billion — was in the Federal government account. The state and local governments were forced to cut back their expenditures to near the level of their dwindling receipts. One of the most ominous projects for Federal spending during 1932 was a Congressional move for a huge $2 billion veterans bonus, to be financed by an issue of new currency. It was its final defeat in the Senate in June that did most to defeat a general clamor for much larger government spending.

Meanwhile, however, President Hoover himself was beginning to have doubts about one of his favorite policies: public works. In a conference at the end of February, Hoover admitted that his public works program, which had nearly doubled Federal construction since the start of the depression, had failed. It was very expensive, costing over $1200 per family aided, it was unavailable to the needy in remote regions and to those who were unable to perform such labor, which was, after all, unskilled make-work. By May, Hoover had openly reversed his earlier position. As a result, Federal public works only increased by $60 million in 1932, to reach the $333 million mark. Public works was not to come really to the fore again until the Roosevelt administration.

Holding firm to his interventionist belief that the downward pressure on wages must be resisted [32], Hoover signed the Norris-Laguardia Act into law on March 23, 1932. It banned "yellow-dog" contracts, removed federal courts’ authority to issue injunctions against labor disputes, and provided greater ease for workers to organize[33][34]; a landmark victory for organized labor.

If Hoover eagerly embraced other forms of intervention, he gave ground but grudgingly on one issue where he had championed the voluntary approach: direct relief. Governor Franklin D. Roosevelt of New York led the way for state relief programs in the winter of 1931–1932, and he induced New York to establish the first state relief authority: the Temporary Emergency Relief Administration, equipped with $25 million. Other states followed this lead, and a bill was introduced for a $500 million federal relief program. The bill was defeated, but, with depression deepening and a Presidential election approaching, the administration all but surrendered, passing the Emergency Relief and Construction Act of July, 1932 — the nation’s first Federal relief legislation. All in all, total public relief in 120 of the nation’s leading urban areas amounted to $33 million in 1929, $173 million in 1931, and $308 million in 1932.

One thing Hoover was not reticent about: inflation. The administration first cleared the path for the program by passing the Glass–Steagall Act in February, which (a) greatly broadened the assets eligible for rediscounts with the Fed, and (b) permitted the Federal Reserve to use government bonds as collateral for its notes, in addition to commercial paper. At the end of February, 1932, total bank reserves had fallen to $1.85 billion. At that point, the FRS launched a gigantic program of purchasing U.S. government securities. By the end of 1932, total reserves had been raised to $2.51 billion. This enormous increase of $660 million in reserves in less than a year is unprecedented in the previous history of the System. If the banks had kept loaned-up, the money supply of the nation would have increased by approximately $8 billion. Instead, the money supply fell by $3.5 billion during 1932, from $68.25 to $64.72 billion at the end of the year, and with the bank deposit component falling by $3.2 billion. Until the second quarter of 1932, the nation’s banks had always remained loaned up, with only negligible excess reserves. After, the banks accumulated excess reserves, and it is estimated that the proportion of excess to total bank reserves rose from 2.4 percent in the first quarter of 1932, to 10.7 percent in the second quarter. By the fourth quarter of 1932, excess reserves were estimated to a double of 20.3 percent of total bank reserves.

During the 1920s, a typical year might find 700 banks failing, with deposits totaling $170 million. In 1930, 1350 banks failed, with deposits of $837 million; in 1931, 2,293 banks collapsed, with deposits of $1,690 million; and in 1932, 1,453 banks failed, having $706 million in deposits. This enormous increase in bank failures was enough to give any bank pause—particularly when the bankers knew in their hearts that no bank (outside of the nonexisting ideal 100 percent bank) can ever withstand a determined run. Consequently, the banks permitted their commercial loans to run down without increasing their investments. Inflation by the government was turned into deflation by the policies of the public and the banks. The American economy reached the depths of depression during 1932 and 1933, and yet it had begun to turn upward by mid-1932. It is not far-fetched to believe that the considerable deflation of July 1931–July 1932, totaling $7.5 billion of currency and deposits, or 14 percent, was partly responsible for the mid-summer upturn.[35]

As the Depression got worse and people lost their confidence in the banks, they decided to take custody of their cash. Seeing people in large numbers pulling their money out of banks — money the banks had promised to provide on demand — President Hoover blasted them for their "traitorous hoarding." He organized an antihoarding drive and delivered a radio address (transcript, pdf) in which he pleaded with the public to stop hoarding (i.e., to stop converting their bank deposits into cash).[36]

The reaction to this growing insistence of the people on claiming their rightful, legally-owned property, was a series of vigorous attacks on property right by state after state. One by one, states imposed "bank holidays", thus permitting the banks to stay in business while refusing to pay virtually all of the just claims of their depositors (a pattern that had become almost traditional in America since the Panic of 1819).[37]


Nominal paychecks fell much more slowly during the early years of the Great Depression than the general price level (wholesale prices fell by 10 percent in 1930, by 15 percent in 1931)[24] - and those who kept their job experienced a higher increase in real (inflation-adjusted) wages, than during the Roaring 1920s![38] And so has unemployment reached record highs during Hoover's first and only term. When FDR went back on the US government's promise to redeem dollars for gold, the Federal Reserve could flood the economy with new dollars, the prices began to rise again. Because wage rates were not allowed to fall to their new, market-clearing level, inflating the currency has paradoxically reduced unemployment.[39]


The Fed has expanded bank reserves in the 1930s. Panicking at the inflationary potential, it doubled the minimum reserve requirements to 20 percent in 1938, sending the economy into a tailspin of credit liquidation. The Fed, ever since that period, has been very cautious about the degree of its changes and changed bank reserve requirements fairly often, but in very small steps, by fractions of one percent.[40]

After 1933, Federal Reserve Notes and deposits were no longer redeemable in gold coins to Americans, their gold was confiscated and exchanged for Federal Reserve Notes, which became legal tender; and Americans were stuck in a regime of fiat paper issued by the government and the Federal Reserve.[41]

Tax revolt in the USA[edit]

There has been a widespread opposition to real estate taxes in cities across America and some Americans were in fact not paying their taxes. The movement declined quickly, some scholars acknowledge certain influence, but ultimately declare it a failure.[42] Others consider it a resounding success, however.

President Hoover's massive tax increase bill that passed into law as the Revenue Act of 1932, with many new taxes. The most burdensome taxes for many Americans, however, was the property tax. Property taxes required taxpayers to make an explicit tax payment of significant size from which they could not evade without losing what was often their most significant piece of property and wealth. The property taxes have risen in the decade before the Depression; throughout the 1920s, the general property tax accounted for over 90 percent of taxes levied by all cities over 30,000 in population. One reason for this dependence was that alcohol revenue from sales taxes and licenses had "dried up" due to prohibition. The burden of taxes increased significantly, even if tax rates remained the same. Another source of taxpayer ire was that the real wages of public employees rose nearly 12% between 1929 and 1933.

Tax delinquency increased from its normal rate of 10% to more than 30%. Tax protest organization formed quickly and spontaneously in rural regions in response to tax authorities selling the land of farmers. Estimates placed the number of taxpayer organizations at between 3,000 and 4,000 organizations nationwide.

The tax limitation movement was effective in several states in establishing cuts and limitations on property tax rates. The second success, which was both more important and far less obvious, was the passage of the 21st Amendment that repealed alcohol prohibition. The legalization of alcohol sales in most states provided federal, state, and local government with increased tax revenues to offset cuts in property taxes while simultaneously providing a drastic decrease in the price of alcohol and in effect granting the American public a type of tax cut. Income tax revenue fell 60% from 1930 to 1933 placing a severe financial constraint on Congress. The search for an alternative revenue source led to the conversion of F.D.R. from a "dry" to a "wet" and resulted in the 1932 Democratic party platform to call for Repeal in order to provide "a proper and needed revenue." Revenue shortfalls made Repeal possible and the alcohol tax provided 13% of all federal revenue by 1936.[43][44]

1933, end of Hoover's term[edit]

Seeking reelection, Hoover boasted of his many interventions with the economy. In his acceptance speech for the Presidential renomination he said:

"We might have done nothing. That would have been utter ruin. Instead, we met the situation with proposals to private business and to the Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put that program in action."[45]

After the election of Roosevelt, as the new Presidential term approached, dark rumors circulated about the radicalism of Roosevelt’s advisers, and of their willingness to go off the gold standard. Consequently, not only did gold "hoarding" by foreigners develop momentum, but even gold hoarding by domestic citizens. For the first time in the depression, American citizens were beginning to lose confidence in the dollar itself. The loss of confidence reached its apogee in February, 1933, the month before the Roosevelt inaugural. In that one month, the monetary gold stock fell by $173 million, and money in circulation increased by the phenomenal amount of $900 million, the reflection of domestic loss of confidence. Money in circulation totaled $5.4 billion at the end of January, and $6.3 billion by the end of February. $700 million of this increase was in Federal Reserve notes, and $140 million in gold coin and gold certificates.

The Federal Reserve did its best to combat this deflationary pull on bank reserves, but its inflationary measures only served to diminish confidence in the dollar still further. Total money supply fell from $64.72 to $61.61 billion over 1933, and all or more of this fall took place in the first half of the year. Bank failures skyrocketed during this period. The number of commercial bank failures increased from 1,453 in 1932 to 4,000 in 1933 (most of which took place in the first quarter).

The reaction to this growing insistence of the people on claiming their rightful, legally-owned property, was a series of attacks on property rights by state after state. One by one, states imposed "bank holidays" by fiat, permitting the banks to stay in business while refusing to pay virtually all of the just claims of their depositors. The bank holiday movement began in earnest with the proclamation of an eight-day holiday on February 14, 1933, by Governor William Comstock of Michigan. This precipitated the bank runs and deflation of the latter part of February and depositors began an intense scramble to take their money out of the banks. Many national banks, which had worked hard to keep themselves in an at least relatively sound position, did not want to use the special privilege of bank holiday, and had to be coerced into doing so.

By March 4, every state in the Union had declared a bank holiday, and the stage was set for President Roosevelt’s dramatic and illegal closing of all the banks. President Roosevelt closed down all the banks throughout the nation for an entire week, from March 6 to 13, with many banks remaining closed even longer. Restrictions against so-called "hoarding" were continued afterward, and much hoarded gold returned to the banks following a Federal Reserve threat to publish a list, for full public scorn, of the leading "gold hoarders."

Mr. Hoover left office in March, 1933, at the very depth of the greatest depression in American history. Production had fallen by more than one-half: industrial production had been at an index of 114 in August, 1929, and then fell to 54 by March, 1933. Unemployment was persisting at nearly 25 percent of the labor force, and gross national product had also fallen almost in half. Hardest hit was investment, especially business construction, the latter falling from about $8.7 billion in 1929 to $1.4 billion in 1933. The index of non-durable manufacturing production fell from 94 to 66 from August, 1929, to March, 1933—a decline of 30 percent; the index of durable manufactures fell from 140 to 32, in the same period, a decline of 77 percent. In durable goods industries (e.g., building, roads, metals, iron and steel, lumber, railroad, etc.) it was estimated that their total employment fell from 10 million in 1929 to 4 million in 1932–1933, while employment in consumer goods industries (e.g., food, farming, textiles, electricity, fuel, etc.) only fell from 15 million to 13 million in the same period. Stock prices (industrials) fell by 76 percent during the depression, wholesale prices fell by 30 percent, and the total money supply declined by one-sixth.

Wage rates were kept very high during the first two years of the depression. By 1932, however, with profits wiped out, the pressure became too great, and wage rates fell considerably. Total fall over the 1929–1933 period, however, was only 23 percent - less than the decline in wholesale prices. Therefore, real wage rates, for the workers still remaining employed, actually increased. While real average hourly earnings rose, actual hours worked in industry fell drastically during the depression. Weekly hours averaged over 48 in 1929, and fell to less than 32 by mid-1932. In no previous depression had hours worked fallen by more than 10 percent. This was a form of reduced employment caused by the high-wage policy. As a result, average weekly earnings fell by over 40 percent during the depression, and real weekly earnings fell by over 30 percent. But hardest hit were the unemployed, the percentage of whom rose to 25 percent by 1932–1933, and reached 47 percent in selected manufacturing industries. The fall in man-hours combined with the fall in average hourly earnings caused a truly precipitate drop in total factory payrolls - the base of the very "purchasing power" that the policy was supposed to sustain.[46]

The New Deal[edit]

Main article: New Deal

Roosevelt's Campaign[edit]

Under the Democratic platform of 1932, which Franklin D. Roosevelt endorsed, contained several subsidies and regulations, but it hardly embraced the enormous expansion in federal power that FDR would achieve. The very first plank called for "an immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagance to accomplish a saving of not less than twenty-five per cent in the cost of the Federal Government."[47] Subsequent planks demanded a balanced budget, a low tariff, the repeal of Prohibition, "a sound currency to be preserved at all hazards," "no interference in the internal affairs of other nations," and "the removal of government from all fields of private enterprise except where necessary to develop public works and natural resources in the common interest." The document concluded with a quote from Andrew Jackson: "equal rights to all; special privilege to none."

FDR's campaign reflected that platform. He accused Herbert Hoover of "reckless and extravagant spending," and he further denounced the Republican incumbent for believing "we ought to center control of everything in Washington as rapidly as possible." Even when he called for interventions in the economy, he generally couched his words in the old liberals' language of equal treatment rather than the new liberals' vision of enlightened central planning. In his famous Forgotten Man speech of April 1932 (see transcript), the Democratic candidate pointed to the wave of foreclosures sweeping the nation. Noting that Hoover had created a "two billion dollar fund...put at the disposal of the big banks, the railroads and the corporations of the Nation," FDR averred that the government should "provide at least as much assistance to the little fellow as it is now giving to the large banks and corporations." Once in office, the new administration did indeed repeal Prohibition, and it eventually lowered some trade barriers as well. By the time of FDR's death, the federal bureaucracy's power had grown so enormously that Hoover was widely remembered as the last apostle of laissez faire.[48]

Roosevelt both promised to abolish the disastrous policy of alcohol prohibition (which was probably as important as anything else in securing his election), and thundered against Hoover’s overspending:[49]

I accuse the present Administration of being the greatest spending Administration in peace times in all our history. It is an administration that has piled bureau on bureau, commission on commission, and has failed to anticipate the dire needs and the reduced earning power of the people. Bureaus and bureaucrats, commissions and commissioners have been retained at the expense of the taxpayer.

Now, I read in the past few days in the newspapers that the President is at work on a plan to consolidate and simplify the Federal bureaucracy. My friends, four long years ago, in the campaign of 1928, he, as a candidate, proposed to do this same thing. And today, once more a candidate, he is still proposing, and I leave you to draw your own inferences.

And on my part I ask you very simply to assign to me the task of reducing the annual operating expenses of your national Government.[50]

Policy[edit]

A principal feature of New Deal economic policy was government-sponsored industrial cartels (the National Recovery Act); agricultural cartels (the Agricultural Adjustment Act); and labor cartels (the Norris-LaGuardia and Wagner Acts). The purpose of any cartel is to restrict output and raise prices. Lower levels of production leads to higher unemployment, which is exactly what the NRA and AAA did.

The NRA was almost identical to the Italian corporatist system that existed at the time. In Italy each trade or industrial group was organized into a government-controlled "corporative" association that had the power to plan production and pricing. In the U.S. the NRA organized each industry into federally-supervised trade associations called "Code Authorities" which could also limit output and set prices. The antitrust laws were explicitly set aside.

Over 700 industrial codes were created and were rigorously enforced by thousands of government code enforcers who, "could enter a man's factory, send him out, line up his employees, subject them to minute interrogation, take over his books on the instant." A hapless New Jersey tailor named Jack Magid became nationally famous after he was arrested, convicted, and imprisoned by the code police for the "crime" of pressing a suit of clothes for 35 cents when the Tailors' Code fixed the price at 40 cents. The NRA was ruled unconstitutional by the U.S. Supreme Court on May 27, 1935.[51] A study of the Act noted that "the licensing provision, giving the president the power of life or death over business enterprises, is the ultimate weapon of enforcement and the capstone of the powers granted to the president ... the most extraordinary extension of presidential power in American history." The Supreme Court's decision has noted, that 'fair competition' is not defined in the law and could be a convenient designation for whatever set of laws that is proposed and the president may approve. It ruled that NIRA was "an unconstitutional delegation of legislative power."

But after Roosevelt's court-packing threat of 1937, the justices succumbed to whatever creative definition of fairness that Congress or federal agencies chose to proclaim. For instance, in 1942, Congress passed the Emergency Price Control Act, which created an Office of Price Administration. The OPA had sweeping power to set or strike down prices in any industry or activity that it considered to be "defense-related" — a vague term that could have encompassed practically the entire national economy. The act contained no substantive guidelines for the administrator's decisions but merely required prices that "in his judgment will be generally fair and equitable."[52]

Effects[edit]

The Roosevelt administration also orchestrated various price-fixing schemes in labor markets, principally for the benefit of unions. Payroll taxes to finance Social Security and Unemployment Insurance programs increased employers' wage bills even further, which also reduced the level of employment. According to an econometric estimate, government-mandated payroll cost increases added nearly 1.2 million people to the unemployment rolls by 1938.

The unemployment rate during the 1933-1940 period averaged about 18% and was as high as 28.3% in March of 1933. By the end of 1938, on the eve of World War II, the U.S. unemployment rate still hovered at just over 18 percent and was higher than it was in 1933, President Franklin D. Roosevelt's first year in office. This occurred despite (or rather, because of) six years of unprecedented levels of government intervention into the U.S. economy. The American recovery was slower than in most European nations; by 1937 Great Britain's unemployment rate had declined to 10.3 percent.

Herbert Hoover's Reconstruction Finance Corporation was greatly expanded by Roosevelt, but its effect was to make capital markets less efficient, thereby prolonging the Depression even further. As explained by RFC director Jesse Jones in his autobiography, Fifty Billion Dollars, "The law specified that we should lend only where the borrower could not get the money from others on reasonable terms." That is, only to uncreditworthy borrowers. Guided by this directive, Jones and the RFC redirected billions of dollars in valuable capital to politically-connected but economically-questionable businesses. "We even loaned money to [the owners of] a drove of reindeer in Alaska," Jones boasted. The RFC was abolished in the 1955 under a cloud of corruption and scandal.

Roosevelt's public works programs may have been an economic failure, but they were a resounding political success as they provided virtually unlimited opportunities for political patronage. In 1939 a special U.S. Senate Committee on Campaign Expenditures investigated the programs and found that in many states workers were required to sign a pledge to vote Democratic and, in some cases, to make campaign contributions, as a condition of employment. Businesses that sold supplies to the government were in some places required to make campaign contributions to the Democratic party in return for the contracts. The New Deal was largely a legalized shake-down operation.[51][53]

Roosevelt's billions, adroitly used, had broken down every political machine in America. The patronage they once lived on and the local money they once had to disburse to help the poor was trivial compared to the vast floods of money Roosevelt controlled. And no political boss could compete with him in any county in America in the distribution of money and jobs.[54]

As Henry Morgenthau, the secretary of the treasury and one of the most powerful men in America, said before the Democrats on the House Ways and Means Committee in 1939[55]:

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong...somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises....I say after eight years of this Administration we have just as much unemployment as when we started....And an enormous debt to boot!"

During World War II[edit]

The recovery from the Great Depression in the United States is usually associated with the advent of World War II, a period when real GDP appeared to increase phenomenally and the rate of unemployment fell almost to zero. A more detailed view produces a different picture, with large government "make-work" programs at first and military employment during the war - but a very slow actual recovery. When using hours worked as measure of employment, only in 1941 total work hours exceed the 1929 value (by 3 percent), with the population vigorously engaged in mobilization for war.[56]

Private investment had fallen significantly. Gross private investment plunged from almost 16 percent of GDP in 1929 to less than 2 percent in 1932; recovered to 13 percent in 1937 before falling again in the recession of 1938; and as late as 1941 stood at only 14 percent. During the war years, private investment ratios ranged from 3 to 6 percent. From 1946 through 1950 they ranged from 14 to 19 percent and averaged 16 percent — the same as in 1929. In 1929, when gross private investment was $16.2 billion, net investment was $8.3 billion. Net investment fell precipitously to $2.3 billion in 1930 and then became negative during each of the following five years. For the eleven-year period of 1930 to 1940, net private investment totaled minus $3.1 billion. Only in 1941 did net private investment ($9.7 billion) exceed the 1929 amount. During the 1930s, private investment remained at depths never plumbed in any other decade for which data exist.

One hypothesis is, that the New Deal prolonged the Great Depression by creating an extraordinarily high degree of regime uncertainty for the investors. Given the unparalleled outpouring of business-threatening laws, regulations, and court decisions, the oft-stated hostility of President Roosevelt and his lieutenants toward investors as a class, the political climate could hardly have failed to discourage some investors from making long-term commitments. There also exists a great deal of direct evidence that investors felt extraordinarily uncertain about the future of the property-rights regime between 1935 and 1941. Historians have recorded countless statements by contemporaries to that effect; in the years just before the war most business executives expected substantial weakening of private property rights ranging up to "complete economic dictatorship". The possibility that the United States might undergo an extreme regime shift seemed to many investors in the late 1930s and early 1940s not only possible but likely.[57][58]

Price controls[edit]

The Office of Price Administration (OPA) controlled virtually all prices. Federal price controls weren’t restricted to goods directly related to the war effort, like armor plate or chemicals needed for explosives, but were essentially universal. All important consumer goods were price controlled. Rents were especially tightly controlled. All told, about 650 separate price controls were in effect during the war years.

Moreover, these controls were not mere requests, but were strictly enforced. Failure to obey the price regulations was a crime. Between February 1941 and May 1947, the OPA instituted 259,966 sanctions on violators of price regulations, including 13,999 Federal criminal prosecutions and 5,127 local criminal prosecutions.[59] During the period 1941-1945, the federal government seized under Presidential authority (and, in effect, temporarily nationalized) 73 industrial plants.[citation needed]

There was strong public support for the war against the Axis powers, so most people were predisposed to accept any measures the federal government declared to be essential for ultimate victory. Even during the war, though, public support for price controls was lukewarm. Many people had trouble with the idea that granting Federal bureaucrats power to set prices was necessary for military victory. For example, in November 1943, when patriotism was running very high, a Fortune magazine poll found that only 29.4 percent of respondents thought that the Office of Price Administration was doing a good job; 30.8 percent rated its job as "poor," 24 percent "medium," and 15.8 percent didn’t know. In other words, at the height of the Second World War, over 70 percent of respondents did not think that the OPA was doing a good job.[59]

Additional evidence of weak public support for price controls was the thriving black market for price-controlled and rationed goods. Naturally, because open violation of price regulations was illegal, "official" data on the size and scope of this activity is hard to come by. But there are indications that the black market was substantial. For example, in 1944 alone, the OPA found 338,029 separate violations of its regulations, and prosecuted 9,260 people (the remainder of the cases receiving some lesser penalty).[59] Food, clothing, gasoline, consumer durables, and even apartments were readily available on the black market.[60]

After-war recovery[edit]

Predictions[edit]

It was widely believed during the latter part of World War II that substantial unemployment would develop after the war.[61] A review of forecasts by Michael Sapir confirmed the fact that many economists believed a severe recession or depression was coming. The impact of curtailed government outlays on the levels of income and employment in the private economy should be drastic, with projections speaking of over eight millions unemployed. Actual developments have been drastically different and unemployment was not higher than 2.75 million.[62]

The thought of a rapid reduction in government military spending provided nightmares to some Keynesians. Hansen, writing in 1943, said: "When the war is over, the government cannot just disband the Army, close down munitions factories, stop building ships, and remove all economic controls." Yet that is precisely what the government did (although it took a year to remove most controls).

Despite the pessimistic concerns of economists and politicians, most of the news around the time of the Japanese surrender was upbeat with regards to the reconversion process. The faster-than-expected discharge of soldiers led some forecasters to revise their estimates of unemployment upward. For example, on September 1 Business Week predicted GNP in 1946 would be 20 percent below the 1944 levels and that unemployment would peak "closer to 9,000,000 than 8,000,000." The 9,000,000 figure represented about 14 percent of the projected civilian labor force. By end of September 1945, Business Week was revising its estimate of unemployment for the end of 1945 down to 4.0 to 4.5 million from 6.0 million.

Still, even in December 1945 economists were predicting that "depression is just around the corner." Robert Nathan predicted six million unemployed by the spring of 1946, implying an unemployment rate of 10 percent. Veteran Department of Labor economist Isidore Lubin decided, in Business Week's opinion, to "play in safe," predicting a wide range; six to nine million unemployed.[61]

Recovery[edit]

Unemployment rates remained below four percent, far below the normal peacetime rate in the twentieth century, either before or after 1946. The substantial price controls which were in effect in 1944, were essentially abandoned by 1947.

By the end of the first quarter of 1946, the process of reconversion was largely completed. Nearly seven million persons had left the armed forces, and government spending had fallen well over 90 percent of the way from the wartime peak to what would be the postwar low in 1947.

The federal budget deficit on a national income accounts basis in 1944 was some $54.5 billion, equal to 25.8 percent of GNP. That would be the equivalent in 1990 (in relation to GNP) of a deficit of about $1,400 billion, or 5.7 percent of GNP. By 1947, the federal budget was in surplus by $13.4 billion, or 5.7 percent of GNP. The equivalent would be well over a $300 billion surplus. Among other things, the government in pursuing this extraordinary contractionary fiscal policy fired roughly 20 percent of the total labor force. All of this had little impact on unemployment.

The prices rose during the war (1941-1946) by an estimated 46 percent. By contrast, the prices rose an estimated 13 percent from 1945 to 1948, which is still a substantial inflation rate, but far less than during the war.[61]

Explanation[edit]

Within a year of the war's end, it was clear that the pessimistic predictions were spectacularly wrong. The postwar prosperity was attributed to "pent-up demand", for goods that couldn't be obtained during the war. However, consumption increased only modestly. From the peak of military activity in the second quarter of 1945 to the trough of the mild downturn in the first quarter of 1946, government purchases of goods and services fell an extraordinary 67.5 percent, or $65.7 billion. Over the same period, consumption spending rose but $14 billion, barely 20 percent of the fall in government spending. Investment spending rose a more robust $21.6 billion, and net exports by $9.8 billion, but collectively the increases in demand fell about $20 billion short of decline in government spending, leading money GNP to fall a rather sharp 10 percent.

Instead, labor supply and real wages have been adjusted downward. For example, millions of women voluntarily decided to withdraw from the labor force and working hours have been commonly reduced. Rising profits, and the anticipation of future increases, stimulated investment spending (the only truly robust major component of aggregate demand). Relative price adjustments brought about what Keyensians perceived to be an increase in aggregate demand, rather than the other way around.[61]

See also[edit]

References[edit]

  1. Encyclopædia Britannica. "Great Depression", Encyclopædia Britannica Online, referenced 2010-06-12.
  2. 2.0 2.1 Elgin Groseclose. Money and Man, 1934, p.209-210. Referenced 2011-03-24.
  3. Thomas E. Woods, Jr. "Warren Harding and the Forgotten Depression of 1920", First Principles, Fall 2009 issue of The Intercollegiate Review. See also the video. Referenced 2009-10-11.
  4. Murray N. Rothbard. "The Mystery of Banking" (pdf), Chapter XVI: Central banking in the United States IV: The Federal Reserve System, p.235-246, referenced 2009-10-03.
  5. Murray N. Rothbard. "America’s Great Depression" (pdf), 5. The Development of the Inflation, p. 137-167, referenced 2009-11-17.
  6. Ludwig von Mises. "The Causes of the Economic Crisis, and Other Essays Before and After the Great Depression", collection of works reposted from 1923 and 1928. Referenced 2011-01-12.
  7. Mark Thornton. "Mises vs. Fisher on Money, Method, and Prediction: The Case of the Great Depression" (pdf), p.13-15; December 2006. Referenced 2011-12-13.
  8. Murray N. Rothbard. America's Great Depression, Chapter 9, referenced 2011-01-11.
  9. Murray N. Rothbard. "America’s Great Depression" (pdf), 5. The Development of Hoover's Interventionism: Unemployment, p. 188-189, referenced 2009-11-20.
  10. John T. Woolley and Gerhard Peters, The American Presidency Project [online]. Santa Barbara, CA. Available from World Wide Web: http://www.presidency.ucsb.edu/ws/?pid=22005.
  11. 11.0 11.1 John T. Woolley and Gerhard Peters, The American Presidency Project [online]. Santa Barbara, CA. Available from World Wide Web: http://www.presidency.ucsb.edu/ws/?pid=22023.
  12. "Credit President With Pledge to Keep Wages Up", The Telegraph-Herald and Times-Journal, November 21, 1929.
  13. "Agree To Keep Wage Level Up", Sarasota Herald-Tribune, November 22, 1929.
  14. "Conferences Please Hoover", The Gettysburg Times, November 22, 1929.
  15. "No Hard Times, Hoover Assures Wage Earners", Lewiston Evening Journal, November 23, 1929.
  16. "All Citizenry Asked To Help Progress Plan", The Tuscaloosa News, November 25, 1929.
  17. "Hoover's Plan To Help Trade Gets Approval", The Miami News, November 26, 1929.
  18. Herbert Hoover, The Memoirs of Herbert Hoover: The great depression, 1929-41, (New York: Macmillan, 1952) 44-45.
  19. Murray N. Rothbard. "America’s Great Depression" (pdf), 8. The Depression Begins: President Hoover Takes Command, p. 209-217, referenced 2009-11-21.
  20. John T. Woolley and Gerhard Peters, The American Presidency Project [online]. Santa Barbara, CA. Available from World Wide Web: http://www.presidency.ucsb.edu/ws/?pid=22468.
  21. Murray N. Rothbard. "America’s Great Depression" (pdf), The New Deal Farm Program, p. 217-237, referenced 2009-11-21.
  22. U.S. Department of State. Smoot-Hawley Tariff, referenced 2009-11-22.
  23. Murray N. Rothbard. "America’s Great Depression" (pdf), 9. 1930, p. 239-256, referenced 2009-11-22.
  24. 24.0 24.1 24.2 24.3 Murray N. Rothbard. "America’s Great Depression" (pdf), 10. 1931—"The Tragic Year", p. 257-284, referenced 2009-11-27.
  25. ""THE PRESIDENCY: The Pledge", TIME, April 13, 1931.
  26. "INDUSTRY: Next: Wages?", TIME, April 13, 1931.
  27. "LABOR: When Winter Comes", TIME, August 10, 1931.
  28. "LABOR: Deflated", TIME, October 5, 1931.
  29. "LABOR: Rail Dickers", TIME, November 9, 1931.
  30. Walter Williams, "Congress' insidious discrimination", Jewish World Review (March 12, 2003), accessed 2011-02-01.
  31. David Bernstein, "The Davis-Bacon Act: Let's Bring Jim Crow to an End", Cato Institute Briefing Papers (January 18, 1993), accessed 2011-02-01.
  32. 32.0 32.1 Herbert Hoover, The Memoirs of Herbert Hoover: Volume 2, The Cabinet and the Presidency, 1920-33, (New York: Macmillan, 1952) 108.
  33. "Norris-Laguardia Act (1932): Major Acts of Congress", accessed 2011-02-01.
  34. "LABOR: Yellow Dog's End", TIME, March 21, 1932.
  35. Murray N. Rothbard. "America’s Great Depression" (pdf), 11. The Hoover New Deal of 1932, p. 285-320, referenced 2009-11-27.
  36. George F. Smith. "The Virtue of Hoarding", Mises Daily, posted on October 09, 2009, referenced 2009-11-18.
  37. Murray N. Rothbard. "America’s Great Depression" (pdf), 11. The Hoover New Deal of 1932, p. 325-326, referenced 2013-04-12.
  38. Lee E. Ohanian, "What - or Who - Started the Great Depression?", NBER Working Paper No. 15258 (August 2009). Free copy online here
  39. Robert P. Murphy. "The Gold Standard and the Great Depression", Mises Daily, posted on October 30, 2009, referenced 2009-11-18.
  40. Murray N. Rothbard. "The Case Against the Fed" (pdf), How the Fed Rules and Inflates, p. 144, referenced 2010-03-23.
  41. Murray N. Rothbard. "The Case Against the Fed" (pdf), The New Deal and the Displacement of the Morgans, p. 131-132, referenced 2010-05-10.
  42. David T. Beito. Taxpayers in Revolt - Tax Resistance during the Great Depression (pdf), referenced 2010-06-15.
  43. Mark Thornton and Chetley Weise. The Great Depression Tax Revolts Revisited. (pdf), Journal of Libertarian Studies, Volume 15, no. 3 (Summer 2001), referenced 2010-06-15.
  44. Mark Thornton and Chetley Weise. The Success of the Great Depression Tax Revolts (pdf), referenced 2010-06-15.
  45. Herbert Hoover. "Address Accepting the Republican Presidential Nomination", August 11, 1932. The address was carried over the National Broadcasting Company and the Columbia Broadcasting System radio networks. This is a transcript taken from a sound recording of the address. Referenced 2010-06-20.
  46. Murray N. Rothbard. "America’s Great Depression" (pdf), 12. The Close of the Hoover Term, p. 321-337, referenced 2010-06-20.
  47. John T. Woolley and Gerhard Peters. "Democratic Party Platform of 1932", June 27, 1932, from The American Presidency Project [online]. Referenced 2010-06-20.
  48. Jesse Walker. "The New Franklin Roosevelts", April 10, 2008. Referenced 2010-06-20.
  49. Tom G. Palmer. "After the Welfare State" (pdf). "Bismarck's Legacy", p. 41. Referenced 2013-01-15.
  50. Franklin D. Roosevelt. [http://www.presidency.ucsb.edu/ws/index.php?pid=88392 "140 - Campaign Address on Agriculture and Tariffs at Sioux City, Iowa", September 29, 1932. Referenced 2013-01-15.
  51. 51.0 51.1 Thomas J. DiLorenzo. "A New, New Deal", Mises Daily, October 1998, referenced 2010-06-20.
  52. James Bovard. "Cutthroat Competition and Dead Chickens", The Future of Freedom Foundation, April 1999. Referenced 2010-06-20.
  53. William L. Anderson. "The Curse of Good Government", Mises Daily, December 2009, refers to the spending of New Deal money. Referenced 2010-06-20.
  54. John T. Flynn. "The Roosevelt Myth" (pdf), p. 65; 1948. Referenced 2010-06-21.
  55. Burton Folsom Jr. "New Deal or Raw Deal?: How FDR's Economic Legacy Has Damaged America", an excerpt from the book. Referenced 2010-06-21.
  56. Robert Higgs. "A Revealing Window on the U.S. Economy in Depression and War - Hours Worked, 1929–1950" (pdf), The Independent Review, v. 14, n.1, Summer 2009. Referenced 2010-06-21.
  57. Robert Higgs. "Regime Uncertainty - Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War" (pdf), The Independent Review, Vol, I, No. 4, Spring 1997. Referenced 2010-06-21.
  58. Robert Higgs. "Regime Uncertainty in the 1930s: A New Deal Insider’s Account", The Beacon, blog of the The Independent Institute, Jun 29, 2009. Referenced 2010-08-15.
  59. 59.0 59.1 59.2 Hugh Rockoff, "Drastic Measures: A History of Wage and Price Controls in the United States", New York: Cambridge University Press, 1984, p. 95, 143, 163. See preview. Referenced 2012-12-01.
  60. Gary Anderson. "The 1946 Voter Revolt Against Government Regulation" (pdf preview), The Freeman, February 1991. Referenced 2012-12-01.
  61. 61.0 61.1 61.2 61.3 Richard K. Vedder and Lowell Gallaway. "The Great Depression of 1946" (pdf), The Review of Austrian Economics, Vol. 5, No. 2 (1991): 3-32. ISSN 0889-3047. Referenced 2011-08-21.
  62. Michael Sapir. Part IV: Review of Economic Forecasts for the Transition Period (pdf), chapter from the book Studies in Income and Wealth, published 1949. National Bureau of Economic Research, summary page. 2011-08-21.

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