A NEW RECORD OF CAPITAL ISSUES
CYCLE I, which covers the five years immediately following the Civil War, is most unsatisfactory as a subject for business cycle analysis. When the war came to an end in the spring of 1865, the return of peace was immediately followed by an abrupt and severe depression which was of exceptionally short duration. Cycle I begins in that depression in December of 1865. The depression was followed by a short period of prosperity which had run its course by the end of 1866, and which does not appear to have included the downturn of the cycle as had most previous definite prosperity periods.
The prosperity of 1866 was followed by four years during which the fluctuations of business activity above and below the computed normal level appear to have been of smaller amplitude than during any other four consecutive years in our business history. During those years from 1866 through 1870 the changes in bond prices, in stock prices, and in interest rates were small. The unusually vigorous prosperity which preceded the long depression of the 1870's did not get under way until 1871.
These exceptional conditions are shown in Diagram 3 on page 22 which covers the 21 years from the beginning of 1864 to the end of 1884. The first three years of this period were shown in the previous diagram, and are repeated in this one. This diagram differs from the two preceding ones in that the section at the bottom showing changes in interest rates and bond yields is really an added diagram with the heavy line just above it serving as the base line of the main diagram.
After careful consideration of the usual characteristics of the post-war Cycle I, decision was reached to consider its downturn as