Industrial Depressions

Author : Geo. H. Hull
Publisher :
ISBN 13 : 9781534610743
Total Pages : 302 pages
Book Rating : 4.6/5 (17 download)

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Download or read book Industrial Depressions written by Geo. H. Hull and published by . This book was released on 2016-06-09 with total page 302 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mr. Hull, who is a practical iron man and at the same time a keen analyst and a most interesting and perspicacious writer, believes that in the production of iron and not in the production of gold lies the key to the mystery of industrial depressions whose fundamental cause is the North Pole of all economists. He works out his theory with relentless logic, studying at length and minutely all the purely trade depressions of the past 100 years, as distinguished from financial panics, analyses all the causes which have been alleged to account for them and finally reduces the plausible causes to one, high prices-particularly high prices for construction material, of which iron is the leader. He divides construction work into two classes, investment construction, such as additional houses, stores, factories, railroads, terminals, ships, docks, tunnels, etc., from which the investors expect to derive additional income, and necessity construction, which includes repairs, replacements and such new construction as is made necessary by the growth of population. It is not maintenance and repairs to existing property which produces a boom; it is the great volume of new and additional construction made chiefly for investment, which greatly increases the permanent wealth of the country and lifts its wealth producing capacity to a new level. The material for this investment construction is contracted for long in advance of the time of delivery and at low prices. As the time of delivery of a large part of this work arrives, the demands of necessity construction help to produce a congestion of orders for delivery within a given time and the combined demands of investment and necessity construction force prices to an abnormal level. At that point investment construction halts, for far-seeing investors realize that they can obtain better investments for their money in some other line than construction work, and they wait for a fall in prices. Necessity construction is not sufficient to absorb the material and labor available and depression follows. Mr. Hull traces the course of the iron trade in all periods prior to industrial depressions and produces a pretty convincing basis for his theory from the figures of the past. His remedy is the inauguration by the national government of a system of collecting and publishing monthly all pertinent information in relation to the existing volume of construction under contract and all pertinent information in relation to the capacity of the country to produce construction materials to meet the total demand. If we could always know just how much steel and iron were contracted for to be delivered within any given period, we could make reasonably sure that capacity would keep pace with the demand and there would not occur the congestion which now produces abnormal prices and in turn a cessation of investment construction, disorganizing the iron industry and by its effects on other industries producing industrial depressions. The vast amount of analytical work which Mr. Hull has done in preparing the ground for the statement of his theory makes his book of great value even to those who may refuse to accept his deductions; while the appendices, tables, charts, etc., with which he illustrates his arguments are alone worth the price of the volume. Business men as well as students of economics will find the book one of permanent usefulness. -Moody's Magazine, Vol. 13 [1912]