PREFACE
To pursue any close inquiry into the causes of trade depression and its accompanying unemployment at such a time as this will appear to most persons an otiose proceeding. It seems self-evident that a long destructive war, followed by a not less destructive peace, and a failure to repair the machinery of trade and finance, must involve just such a period of low production, poverty and suffering, as the world is now experiencing. This explanation is easy, interesting and convincing. But though it holds some obvious elements of truth, it is not sound. It does not go to the root of the matter. The economic experiences of the war and peace have greatly aggravated the burden of this trade depression, and have imparted some special features to its distribution, but they cannot rightly be held responsible for its causation.
In 1914 all the signs of a cyclical depression were present, a hectic prosperity of trade, with a high level of prices, large profits, and in most countries, especially in Central Europe, a dangerous expansion of credit. Economists predicted an early collapse, financial and industrial. The war stopped this depression, postponing its action for seven years.
How? By an immense and continuous artificial stimulation of consumption. While the producing power of the world was reduced by the withdrawal
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