THE POSTWAR DECADE, THE DEPRESSION, AND THE NEW DEAL
Introduction. In previous chapters dealing with particular phases of the country's economic development since 1860, the account was brought down to date for the sake of providing continuity in the treatment of each topic and making clear the evolutionary trend. But this method of treatment, it was pointed out, was an unsatisfactory one for such a period as that of the first World War where a real understanding of the course of events required a discussion of the period and its economic problems as a unit. This was done in Chaps. XLII and XLIII.
Although the general course of economic developments in the period since the war has never been so completely dominated by one fundamental factor as was the war period, it may still be urged that the unprecedentedly severe depression that broke in 1929 has had such an overwhelming repercussion upon the economic life and thought of this generation and the problems created by it are still so pressing that a survey of the period as a unit with especial reference to these problems will prove of value, and will help to clarify the interrelationships of the developments in the particular fields previously described. This will involve a consideration of such trends in the postwar decade as were factors in the depression and also in the New Deal program--an independent factor in the situation but one which reacted upon, and was in turn reacted upon by, the depression in a powerful manner.
It should be kept in mind in connection with the account that follows that the phenomenon of the business cycle is an extremely complex one which economists have only rather recently begun to study in a systematic and thorough manner and about which we have much to learn, since there is still lack of agreement on many points among theorists. While some stress one factor and others another in the complicated sequence of causal relationships that tend to generate booms and depressions, there is at least a fair agreement as to various factors or sets of conditions that play some part in the process. Though an adequate account of the depression of 1929 will require a better perspective and more study than are at present available, we can at least describe the more important developments responsible for its generation, outbreak, and subsequent course.