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The Great Depression

The New York Stock Exchange six months after the crash.

A RECENT statement by Mr. Justice Brandeis has been widely quoted. "The people of the United States," he said, "are now confronted with an emergency more serious than war. Misery is widespread, in a time, not of scarcity, but of overabundance. The long-continued depression has brought unprecedented unemployment, a catastrophic fall in commodity prices and a volume of economic losses which threatens our financial institutions."

The economic losses both of the World War and the present depression, in their full volume and extent, are incalculable, but it is not only of such losses that Mr. Justice Brandeis was speaking. The gravity of the present situation lies not merely in the widespread suffering, vast as that is, but in the questions it excites concerning the fundamental strength and character of our economic structure and in the series of decisions which must be made, indeed are now in process of making. These decisions are much more difficult than those of war. In war the chief problem is clearly set and calls for immediate action, unifying in its effect. In such a depression as this the problem is infinitely complex, decisions are beset by doubt, action seems always too late or has effects contrary to what were expected, and disunion and disruption have spread as each centrifugal force, seeking to strengthen itself, weakens the whole. War stimulates the full expansion of productive energy, but the deep depression cripples every economic process and discourages even the most sanguine business leaders. There are many confusing prescriptions offered from all sides. But no one, however skilled, really knows the character of or the specific cure for what some practitioners diagnose as a wasting disease.

Whether or not a phenomenon regularly recurring, though at unequal intervals and with varying intensity, may properly be called a disease is questionable. A continuous succession of wave-like fluctuations, each with its phases of rising business activity, boom, recession and depression, may more properly be regarded as the result of the normal functioning

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