Prosperity and Depression
Appendix I
The “reference cycle curve” gives for each country for the years 1880 or 1890 to 1931 a diagrammatic picture of the general fluctuations in business activity as described by W. L. THORP in the volume Business Annals (1926, National Bureau of Economic Research; continued in the National Bureau News Bulletin, No. 43, September 1932). This verbal account has been expressed in visual terms by assigning a numerical value to the main characteristics cited for each year, as follows:
Exceptional prosperity. . . . . . . + 3
Prosperity. . . . . . . . . . . . . . . . . + 2
Mild prosperity.. . . . . . . . . . . . + 1
Mild depression . . . . . . . . . . . − 1
Depression. . . . . . . . .. . . . . . . . − 2
Deep depression. . . . . . . . . . . . − 3
Revival (Recession) preceding level + (−) 1
Each year is indicated on the curve by a point, the level of which is intended to represent the average activity during the year. In cases where a reversal of the situation occurred during the first half of the year, the level is determined by the situation prevailing after the turning-point. If the reversal occurred during the second half of the year, the situation before the turning-point has been held decisive. The other indices are described below, country by country:
UNITED STATES OF AMERICA
Industrial Production.
1880-1920: Index of the volume of mining output, E. E. DAY, Review of Economic Statistics.
1899-1920: Index of the volume of manufacturing output. E. E. DAY, ibid.
1920-1935: Federal Reserve Board indices of industrial production: general index and group index for mining.
Employment in Manufacturing Industries.
1899-1923: Professor P. H. DOUGLAS’ index, The Theory of Wages.
1919-1935: Bureau of Labor Statistics index.
UNITED KINGDOM
Industrial Production.
1880-1931: HOFFMANN’S index. Weltwirtschaftliches Archiv, September 1934.
1927-1935: Board of Trade index.
Employment.
1880-1925: Percentage of employment (= 100 – the percentage of unemployment) among trade-unionists. Abstract of Labour Statistics.
1926-1935: Idem, among compulsorily insured workers. Abstract of Labour Statistics.
General Business Activity.
1880-1913: Miss D. S. THOMAS’ index. Journal of the American Statistical Association, March 1926.
1924-1935: The Economist index (The Economist, July 25th, 1936), deviations from trend.
GERMANY
Industrial Production.
1880-1913, 1925-1935: Index of the Institut für Konjunkturforschung, Vierteljahreshefte zur Konjunkturforschung, Sonderheft Nr. 31, 1933. Konjunkturstatistisches Handbuch, 1936.
Employment.
1904-1932: Percentage of employment (= 100 – the percentage of unemployment) among organised workers. Statistisches Jahrbuch für das Deutsche Reich.
1931-1935: Idem, based on the percentage of registered unemployed to workers under Health Insurance. International Labour Office.
FRANCE
Industrial Production.
1898-1913, 1919-1935: Index of the Statistique générale de la France. Annuaire statistique de la France.
SWEDEN
Industrial Production.
1913-1935: Index of the Kommerskollegium. Kommersiella Meddelanden.
Employment.
1911-1935: Percentage of employment (= 100 – the percentage of unemployment) among trade-unionists. Statistisk Arsbok.
CANADA
Industrial Production.
1919-1935: Index of the Dominion Bureau of Statistics. Monthly Review of Business Statistics.
Employment.
1915-1935: Percentage of employment (= 100 – the percentage of unemployment) among trade-unionists. The Canada Year-Book.
AUSTRALIA
Employment.
1906-1935: Percentage of employment (= 100 – the percentage of unemployment) among trade-unionists. Official Year-Book of the Commonwealth of Australia.
General Business Activity.
1880-1922: Yearly index of Roland WILSON. The Economic Record, 1930.
Note.—With the exception of the United States, all employment indices are corrected for trend: the currently available labour supply is taken as equal to 100 and the fluctuations shown are relative thereto. In the case of the United States, the fluctuations in employment are related to the employment (not the available labour supply) of a given base period, 1923-1925.
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2 See pages 266 and 267.
