posted on Sep, 4 2012 @ 12:06 PM
Originally posted by poet1b
reply to post by hawkiye
How many depressions did we have in the 1890ties? These problems weren't just regional.
The Mises Institute puts out pure propaganda.
Here is a link on the depressions of the 1890s.
This is a joke link right? The so called panic of 1890 lasted about 3 years and as due to a push for central/national banking and a lot of fiat money
replacing gold receipts. The New York subtreasury changed a longstanding practice of settling its clearinghouse balances in gold. Instead around
August 1890, it started using the old greenbacks and the newer treasury notes of 1890 ( the national banking act was successful and a precursor to the
Federal Reserve Act). As a result, these paper currencies largely replaced gold paid in customs receipts for foreign and other investment in New York.
See Friedman and Schwartz, Monetary History, pp. 106, n. 25.
It was nothing like the great depression and very limited to the big cities. the GDP still increased wages rose and production still increased
despite the inflation and prices falling. Even the Keynesians who wrongly call this a depression will tell you it was nothing like the great
Along with the establishment of a national bank There was also a push at monoplizing industry and
"During the 1890s, in the new field of large-scale
industrial corporations, big-business interests tried to establish
high prices and reduced production via mergers, and again, in
every case, the mergers collapsed from the winds of new com-
petition. In both sets of cartel attempts, J.P. Morgan and Com-
pany had taken the lead, and in both sets of cases, the market,
hampered though it was by high protective tariff walls, man-
aged to nullify these attempts at voluntary cartelization...
It then became clear to these big-business interests that the
only way to establish a cartelized economy, an economy that
would ensure their continued economic dominance and high
profits, would be to use the powers of government to establish
and maintain cartels by coercion. In other words, to transform
the economy from roughly laissez-faire to centralized and coor-
A history of Money and Banking. Rothbard pgs 185
So once again we have government intervention causing the problems. Still they were a sunday picnic compared to the Great Depression and the
recessions we have had since.
Orthodox economic historians have long complained about
the “great depression” that is supposed to have struck the
United States in the panic of 1873 and lasted for an unprece-
dented six years, until 1879. Much of this stagnation is sup-
posed to have been caused by a monetary contraction leading to
the resumption of specie payments in 1879. Yet what sort of
“depression” is it which saw an extraordinarily large expansion
of industry, of railroads, of physical output, of net national
product, or real per capita income? As Friedman and Schwartz
admit, the decade from 1869 to 1879 saw a 3-percent-per-
annum increase in money national product, an outstanding
real national product growth of 6.8 percent per year in this
period, and a phenomenal rise of 4.5 percent per year in real
product per capita. Even the alleged “monetary contraction”
never took place, the money supply increasing by 2.7 percent
per year in this period. From 1873 through 1878, before
another spurt of monetary expansion, the total supply of bank
money rose from $1.964 billion to $2.221 billion—a rise of 13.1
percent or 2.6 percent per year. In short, a modest but definite
rise, and scarcely a contraction.
It should be clear, then, that the “great depression” of the 1870s
is merely a myth—a myth brought about by misinterpretation of
the fact that prices in general fell sharply during the entire
period. Indeed they fell from the end of the Civil War until 1879.
Friedman and Schwartz estimated that prices in general fell
from 1869 to 1879 by 3.8 percent per annum. Unfortunately,
most historians and economists are conditioned to believe that
steadily and sharply falling prices must result in depression:
hence their amazement at the obvious prosperity and economic
growth during this era. For they have overlooked the fact that
in the natural course of events, when government and the bank-
ing system do not increase the money supply very rapidly, free-
market capitalism will result in an increase of production and
economic growth so great as to swamp the increase of money
supply. Prices will fall, and the consequences will be not depres-
sion or stagnation, but prosperity (since costs are falling, too)
economic growth, and the spread of the increased living stan-
dard to all the consumers."
Friedman and Anna Jacobson Schwartz, A Monetary History of the
United States, 1867–1960 (New York: National Bureau of Economic
Research, 1963), pp.33–44. On totals of bank money, see Historical
Statistics, pp. 624–25.
146S.B. Saul, The Myth of the Great Depression, 1873–1896 (London:
edit on 4-9-2012 by hawkiye because: (no reason given)