America's Great Depression
Murray N. Rothbard
Contents
Introduction to the Fifth Edition.........................................................xi
Introduction to the Fourth Edition..................................................xvii
Introduction to the Third Edition....................................................xxv
Introduction to the Second Edition.................................................xxxi
Introduction to the First Edition....................................................xxxv
Part I: BUSINESS CYCLE THEORY
1 THE POSITIVE THEORY OF THE CYCLE.........................3
Business cycles and business fluctuations............................................4
The problem: the cluster of error........................................................8
The explanation: boom and depression...............................................9
Secondary features of depression: deflationary credit contraction...................................................................................14
Government depression policy: laissez-faire.....................................19
Preventing depressions......................................................................23
Problems in the Austrian theory of the trade cycle.....................................................................................29
2 KEYNESIAN CRITICISMS OF THE THEORY..................37
The liquidity “trap”...........................................................................39
Wage rates and unemployment.........................................................42
3 SOME ALTERNATIVE EXPLANATIONS Of DEPRESSION: A CRITIQUE....................................................55
General overproduction....................................................................56
Underconsumption............................................................................57
The acceleration principle.................................................................60
Dearth of “investment opportunities”...............................................68
Schumpeter’s business cycle theory...................................................72
Qualitative credit doctrines...............................................................75
Overoptimism and overpessimism....................................................80
Part II: THE INFLATIONARY BOOM: 1921–1929
4 THE INFLATIONARY FACTORS...........................................85
The definition of the money supply...................................................87
Inflation of the money supply, 1921–1929........................................91
Generating the inflation, i: reserve requirements.............................95
Generating the inflation, ii: total reserves......................................101
Treasury currency.............................................................................116
Bills discounted................................................................................117
Bills bought–acceptances.................................................................126
U.S. government securities..............................................................133
5 THE DEVELOPMENT OF THE INFLATION................137
Foreign lending................................................................................137
Helping Britain................................................................................142
The crisis approaches.......................................................................159
6 THEORY AND INFLATION: ECONOMISTS and THE LURE OF A STABLE PRICE LEVEl.........................169
Part III: THE GREAT DEPRESSION: 1929–1933
7 PRELUDE TO DEPRESSION: MR. HOOVER AND Laissez-Faire................................................................185
The development of Hoover’s interventionism: unemployment...........................................................................188
The development of Hoover’s interventionism: labor relations.............................................................................199
8 THE DEPRESSION BEGINS: PRESIDENT HOOVER TAKES COMMAND...................209
The White House conferences........................................................210
Inflating credit.................................................................................214
Public works.....................................................................................216
The New Deal Farm Program........................................................217
9 1930.................................................................................................239
More inflation..................................................................................239
The Smoot–Hawley Tariff...............................................................241
Hoover in the second half of 1930...................................................243
The public works agitation..............................................................250
The fiscal burdens of government...................................................253
10 1931—“The Tragic Year”.................................................257
The American monetary picture.....................................................260
The fiscal burden of government....................................................263
Public works and wage rates............................................................264
Maintaining wage rates....................................................................267
Immigration restrictions..................................................................270
Voluntary relief................................................................................271
Hoover in the last quarter of 1931...................................................272
The spread of collectivist ideas in the business world.....................277
11 THE HOOVER NEW DEAL OF 1932..................................285
The tax increase...............................................................................286
Expenditures versus economy..........................................................288
Public works agitation......................................................................292
The RFC..........................................................................................296
Governmental relief.........................................................................300
The inflation program.....................................................................301
The inflation agitation.....................................................................308
Mr. Hoover’s war on the stock market.............................................316
The home loan bank system............................................................317
The bankruptcy law..........................................................................318
The fight against immigration.........................................................319
12 THE CLOse OF THE HOOVER TERM..................................321
The attack on property rights: the final currency failure................323
Wages, hours, and employment during the depression...................330
Conclusion: the lessons of Mr. Hoover’s record.............................336
APPENDIX: GOVERNMENT AND THE NATIONAL PRODUCT, 1929–1932...................................................................339
INDEX.............................................................................................349
Tables
Table 1: Total Money Supply of the United States,
1921–1929.........................................................................92
Table 2: Total Dollars and Total Gold Reserves............................94
Table 3: Member Bank Demand Deposits.....................................98
Table 4: Demand and Time Deposits............................................99
Table 5: Time Deposits.................................................................100
Table 6: Member Bank Reserves and Deposits............................102
Table 7: Changes in Reserves and Causal Factors . . .
1921–1929................................................................................109
Table 8: Per Month Changes in Reserves and Causal
Factors . . . 1921–1929..............................................................110
Table 9: Factors Determining Bank Reserves
July–October 1929....................................................................166
Table I: National Product.............................................................341
Table II: Income Originating in Government.............................342
Table III: Private Product.............................................................342
Table IV: Government Expenditures...........................................343
Table V: Expenditures of Government Enterprises.....................345
Table VI: Expenditures of Government and
Government Enterprises..........................................................345
Table VII: Receipts of Government and
Government Enterprises..........................................................346
Table VIII: Government and the Private Product......................347
