Customer Reviews

The Crash and Its Aftermath: A History of Securities Markets in the United States, 1929-1933 (Contributions in Economics and Economic History)

5 star:		(2)
4 star:		(2)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

Wigmore stresses that the Great Depression was not solely attributable to ill-advised monetary policy, but was primarily due to instabilities in the US economy. The 1929 stock market crash was the culmination of the speculative excesses of the 1920s: according to Wigmore, stock prices peaked at 30 times earnings and reached levels in excess of 400% of aggregate book value while return on equity was only about 16.5%. Wigmore studies the performance of the US banking system, and analyzes the measures the US government employed to address the crisis, such as the establishment of the Reconstruction Finance Corporation and the promulgation of the National Industrial Recovery Act. Exacerbating and prolonging the Depression were singularly unfortunate policy choices, such as the enactment of the Smoot-Hawley Tariff Act which seemed tailor-made to widen the disparity between US and overseas markets. Anyone interested in the monetarist-Keynesian debate as to how the Depression began or in the emergence of bureaucratic sprawl created in the wake of the New Deal will find this volume insightful.

Wigmore is a financial professional who has created a magnificent work of scholarship. Twelve years in the writing, written about 20 years ago, it makes for amazing reading after the Crash of 2008. An essential book for any serious student of the Great Depression and the history of financial markets.

This is a rather dry and verbose but also careful and thorough financial and economic history.
I particularly like his explanation of why there was a banking crisis in 1933. Most other authors seem confused about this crisis, but Wigmore explains how the hints that Roosevelt planned to devalue the dollar, combined with a system under which bank deposits were tied to paper dollars but could be withdrawn as gold, made it safer to hold gold than to leave one's money in a bank.

I believe this is one of the definitive works on the Great Depression. The author went to great pains to compile all the available economic metrics of the period. He then proceeds to analyze the relevant events and policy decisions within an economic and geopolitical context. I don't need to add more; I agree with all the previous reviews. For a student of the Great Depression, this tome is worth the price of admission and more.