TWO DECADES OF DOUBTS ABOUT MONEY
The business and financial records of the 20 years beginning with 1883 and continuing through 1902 are shown in Diagram 4 on page 31. The first two years are repeated from Diagram 3. The 20 years included in the diagram cover all of the five cycles from L through P, and most of Cycle Q. The downturn of business which preceded the depression of 1884 has already been reviewed in the last chapter. The upturn from the depression came in September of 1885. It was preceded by a downturn of interest rates, followed successively by upturns in bond prices, in stock prices, and in security listings.
Cycle L got under way in September of 1885. It had a double top and its decisive downturn came in November of 1887. Its downturn was preceded in conventional fashion by an advance in interest rates followed in succession by declines in bond prices, in stock prices, and in security listings.
In the following upturn, which came in July of 1888, and introduced Cycle M, the conventional pattern was not complete. The upturn of business was preceded by a downturn of interest rates, and by upturns of bond and of stock prices, but not by an advance in security listings, which instead of increasing kept on declining for eight months after business had turned upward. It is interesting to note that business did not continue to advance. It moved upward for six months and then turned and declined for five more until it had dropped to just below the computed normal level.
By that time security listings had been moving upward for three months. It would be illuminating and valuable to have a better insight into the reasons why the pattern of business recovery in 1888 and 1889 makes it appear as though business had made a