DEAD WARS THAT STILL BITE

Evening Post, Volume CXII, Issue 117, 13 November 1931, Page 6

DEAD WARS THAT STILL BITE

While President Hoover was pointing lo the still abundant evidence of the "backwash of the war," humble reconstructionists put a pick into a buried Ypres shell and paid the penally. Thus war can slay, physically and economically, more than a dozen years after. There is, however, noLhing unprecedented in the financial after-effects of war. "A specialised paltern of business activity following all great wars" has been noted, and it takes the form of "a primary and a secondary post-war depression," The Cleveland Trust Company, in reviewing the present secondary depression, has taken the trouble to analyse the evidence in its "Business Bulletin," with- the following result: —

The peak of commodity prices of the war of 1812 came in 1815, and the secondary depression was ushered in ten years later by the panic of 1825. In the American Civil War the peak of prices came in 1864, and the .first full year of the secondary post-war depression was 1874. After the World War the peak of commodity prices was in 1920, and the first full year of the secondary depression was 1930.

The "specialised pattern" of postwar business seems to be marked by (1) a price-peak, from which farms profit first, and are the first to be inflated; (2) a price-fall (primary depression) , in which farm commodities fall first, causing farmer depression; (3) after a period of false city prosperity, partly helped by cheaper farm produce, the general (secondary)^-' pression arrives, and inflated cities then take their medicine, ten to fourteen years after "peace."