Paper: INDUSTRIAL ACCIDENT AND COMPENSATION STATISTICS C. H. Verrill, U. S. Employees' Compensation Commission, Discussion: Powers Hapgood, Bureau of Industrial Research, New York City A. W. Whitney, National Workmen's Compensation Service E. E. Watson, Consulting Actuary, Columbus, Ohio3 2:00 P. M. SEVENTH SESSION (Joint meeting with the American Statistical Association)* General Topic: THE NATIONAL INCOME Paper: PARETO'S LAW Fred R. Macaulay, National Bureau of Economic Research, New Paper: THE CORPORATE SURPLUS AS AN ELEMENT IN THE NATIONAL Oswald W. Knauth, National Bureau of Economic Research, New Discussion: David Friday, Michigan Agricultural College W. F. Ogburn, Columbia University G. P. Watkins, Federal Trade Commission, Washington, D. C. 4:30 P. M. MEMORIAL TO FORMER PRESIDENT HENRY C. ADAMS Brief Addresses by President Hollander and Professors Ely, Seligman, Cooley, Dixon, Friday, and Sharfman 8:00 P. M. Joint Session with the American Association of University President's Address: THE AIMS AND ACCOMPLISHMENTS OF OUR 9:00 P. M. SMOKER, at the William Penn Hotel, tendered by the Uni- FRIDAY, December 30 9:00 A. M. BUSINESS MEETING (See report on page 204.) 10:00 A. M. EIGHTH SESSION (Joint meeting with the American Po- Paper: THE SOCIAL AND ECONOMIC INTERPRETATION OF THE FOUR- Robert E. Cushman, University of Minnesota Paper: THE BASIS OF AN INTER-AMERICAN POLICY Peter H. Goldsworth, Director of the Inter-American Division of the American Association for International Conciliation3 PAPER: THE ECONOMIC BASIS OF FEDERATION IN CENTRAL AMERICA Harry T. Collings, University of Pennsylvania Paper: PATRIOTISM AND INTERNATIONALISM® Herbert A. Miller, Oberlin College 'Did not furnish manuscript. 'Papers printed in the Publications of the American Statistical Association. "Published in the Michigan Law Review. 'Published by the American Sociological Society. THE CRISIS OF 1920 IN THE UNITED STATES: A QUANTITATIVE SURVEY BY WARREN M. PERSONS In November, 1918, our industries were straining to meet war demands; the government was regulating foreign trade, building ships, running the railroads, and issuing bonds; and commodity prices had reached a level more than twice that of 1913. Upon the ending of the war many careful observers predicted a collapse of prices and disorganization of industry. During the first three or four months after the Armistice security prices did recede somewhat, commodity prices fell about 5 per cent on the average, and business was dull, but there was not a collapse. In the spring of 1919 an enormous foreign demand for goods and post-war buying of our own population combined to start an unprecedented rise of commodity prices and a tremendous upswing in business activity. The rising tide of business in 1919 was first preceded and then accompanied by rising stock prices. The expansion of business and the increase of prices were facilitated by low money rates. The continuance of low commercial rates throughout 1919 was made possible, directly, by the policy of the Federal Reserve Board in holding rediscount rates on a level with the rate on Liberty bonds and, indirectly, by the financial requirements of the government which dictated this policy. In November, 1919, following six months of rapidly expanding business, the federal reserve banks increased the rediscount rates slightly. The change in rates was significant not in itself but because it indicated a change of federal reserve policy. The only immediate effect of the rates was a break in security prices, a break inaugurating a bear market which was to continue through 1920 and the first half of 1921. During the autumn and winter of 1919-20 business expansion continued at a feverish pace and commodity prices increased month after month at an unprecedented rate. It was not until May, 1920, when the index of the Bureau of Labor Statistics reached 272, that the upward movement was checked and a downward swing definitely inaugurated. Meanwhile the federal reserve banks had increased the rediscount rates bit by bit until the maximum rate of.7 per cent was attained in June. The crisis of 1920, like every other crisis, caught the great majority of business men unprepared. Purchasers were doubling and trebling orders with the object of securing deliveries of the normal amounts, sellers were boosting prices, expanding operations, and enlarging inventories. Salesmen in nearly all lines were confident that flush times would continue indefinitely. The statement of a clothing manufacturer made late in May is quite typical of the general attitude of the time. He said "price cutting in clothing is mistaken and nothing short of a nation-wide cataclysm could prevent prices next autumn averaging 30 per cent above those of spring," and that "increased production alone can bring down costs and retail selling must be governed by initial costs." The cataclysm came The cataclysm came and with it the adjustment of costs to selling prices instead of selling prices to costs. WHOLESALE PRICES The prices of cattle, hides, pork, and cottonseed oil culminated in the autumn of 1919, and the price of silk in New York began to decline in January, 1920. Corn, cotton, sugar, and wheat turned downward in April and May, textiles began their decline in June, while iron, steel, and bituminous coal did not culminate until late in the year. The decline in general commodity prices during the thirteen months ending with June, 1921, was sharpened beyond all precedent. The situation is shown by Chart 1. The index of the Bureau of Labor Statistics fell from 272 to 148, or 46 per cent; Bradstreet's fell from $20.87 to $10.62 or 49 per cent; while the index based upon ten leading commodities, chosen because they are varied in nature, important in industry and unusually sensitive in price, fell from 277 to 107, or 61 per cent. The drastic decline in commodity prices revealed by these figures means that the business houses and banks of this country have been subject to great financial strain. Although there was no breakdown in credit, the drastic fall of commodity prices caused the failure of a large number of business concerns and forced others into the hands of their bankers. Another index that shows what happened to one class of prices in 1920 is the Aberthaw index of building costs. The cost of constructing a standard reinforced concrete factory building on July 1, 1920, relative to the cost in 1914 was 265. Since that date there has been a steady decline to 153 on December 1, 1921. |