CHAPTER V 
THE EMERGENCE OF A NEW CON- 
STRUCTIVE POLICY 
Because of the long-continued industrial and commercial 
depression in the United States, together with the accom- 
panying impoverished condition of Great Britain and 
Europe, industrial leaders and financiers were stimulated 
to the consideration of new policies and principles for 
rehabilitating economic conditions. As the result, an en- 
tirely new conception as to determining wages was soon 
accepted and put into practical operation. 
After the year 1922 it became evident to students of 
business conditions that there were no markets abroad for 
American products, and that there would be no foreign 
demand for some time, with the exception of that created 
by the purchasing power of credits extended by this coun- 
try, either open or in the shape of formal loans. It was, 
therefore, apparent that prosperity in the United States 
was dependent upon increasing the purchasing power in 
the domestic market, so that the people might absorb manu- 
factured and agricultural products in larger quantities. 
Obviously, purchasing power could not be rapidly increased 
unless wages and incomes were also increased. It was 
the contemplation of these facts that finally led to the 
practical application of an entirely new theory of wage- 
determination. 
New DEFINITIONS OF “NORMALCY” 
Up to 1922 the burden of all business discussions, as 
well as of political debates bearing upon financial and 
industrial problems, was the constantly reiterated decla- 
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