The stock market crash - and after

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Monograph

Identifikator:: 1815583320

URN:: urn:nbn:de:zbw-retromon-204544

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The stock market crash - and after

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1930

Scope:: XXVI, 286 S.; graph. Darst

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XII. Relief in Seven Years of Stable Money

Collection:: Economics Books

Relief in Seven Years of Stable Money 187 is because the people could not only buy goods with a dollar, but because they had more dollars in their income. We do not often have such an expansion of com- modities at reduced prices as has been recorded dur- ing the past few years. This expansion has taken place in the greatest burst of speed American indus- try ever attained. But the reduction in prices was warranted, for the most part, by an equal or greater reduction in unit costs. Had there been a reduction in prices such as that from May, 1920, to June, 1921, when the dollar rose rapidly in buying power, from 40 to 70 pre-war cents, there would have been no such expansion of American industry as the last six or seven years have witnessed, but a repetition of the collapse of industry that took place in the 1920-1921 period. For when prices fell in the summer of 1920 below the level of cost, profits ceased and losses were in- curred, factories shut down, workers were turned away by hundreds of thousands, continued purchas- ing power was reduced and “hard times” came on. Such were the evils of deflation. The evil of inflating the currency is about as great as the evil of deflating it. A workingman who, in 1896, had put $100 into a savings bank found, in 1920, that his principal, plus compound interest at 41% per cent, amounted to about $300. On the face of it he had his principal back and in addition $200 of profit, or accumulated interest. This $200 seemed a genuine reward of thrift. But it was an illusory

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