America's Great Depression (57 page)

344

America’s Great Depression

business, general government
and
government enterprise, as $1.02

billion for 1931–32. The average of the Department of Commerce figure of Federal government (general) purchases from business for 1931 and 1932 is $.54 billion. We may therefore estimate the expenditure by Federal
enterprises
on goods from business as $.48

billion for 1931–32.

On the state and local level, Fabricant estimates a total of $4.08

billion spent by government and government enterprise on business products in 1931–32; the average of 1931–1932 for general state and local government purchases from business is $3.48 billion (Department of Commerce). This leaves as the estimate for 1931–1932 of purchases of government enterprises, state and local, from business at $.60 billion.

Unfortunately, Fabricant presents no figures for any other years for our period on the state and local level. For Federal purchases from business, Fabricant estimates the total, for government and government enterprise, at $.88 billion for
fiscal
1929. Now, unfortunately, we have no data for 1928; using calendar year 1929, therefore, we obtain $.36 billion as the Department of Commerce estimate for Federal government (general) purchases. Subtracting this from the Fabricant figure, we obtain a rough estimate of $.52 billion for the purchases of Federal enterprises from business during 1929.

To extrapolate these sketchy figures into estimates of federal, and state and local, government enterprises for each of these years is certainly arbitrary, but it would just as certainly be
more
arbitrary if we simply ignored the problem altogether, and permitted government enterprises to remain partially ensconced in the private sector. We will therefore assume that, for each of our years, Federal enterprises spent $.5 billion on the products of business, while state and local enterprises spent $.6 billion. Our estimates for the expenditures of government enterprises are then as follows in Table V.

The grand total of expenditures for government and government enterprises for these years is therefore as follows in Table VI.

What were governmental receipts during these years? Here we may take the Department of Commerce data, adding to them for both federal and state and local, “interest received.” As for government
Appendix

345

TABLE V

EXPENDITURES OF GOVERNMENT ENTERPRISES

($ billions)

Purch.

Income

Purch.

Total

Income

from

Orig.

from

Expend.

Orig.

Bus.

State &

Bus.

Govt.

Fed.

Fed.

Local

S. & L.

Enterp.

1929

0.6

0.5

0.2

0.6

1.9

1930

0.6

0.5

0.2

0.6

1.9

1931

0.6

0.5

0.2

0.6

1.9

1932

0.5

0.5

0.2

0.6

1.8

TABLE VI

EXPENDITURES OF GOVERNMENT AND GOVERNMENT ENTERPRISES

($ billions)

State

Federal

and Local

Total

1929

5.2

8.8

14.0

1930

4.4

9.1

13.5

1931

3.4

9.0

12.4

1932

3.0

8.5

11.5

enterprises, we may simply and roughly assume that their receipts balanced their expenditures, and estimate them in the same way,
except
that we know from the Department of Commerce the current surplus of state and local government enterprises, which we may add to the receipt figure. Total estimated receipts of government and government enterprise are presented in Table VII. It might be thought that, to arrive at the highest aggregate figure of government expenditures or receipts for any year, we simply total federal and state and local receipts, and the same for expenditures, and see which one is the higher. This is not correct, however. Whenever we have independent centers of governmental
346

America’s Great Depression

TABLE VII

RECEIPTS OF GOVERNMENT AND GOVERNMENT ENTERPRISES

($ billions)

State

Federal

and Local

Total Govt.

1929

5.2

8.8

14.0

1930

4.4

9.1

13.5

1931

3.4

9.0

12.4

1932

3.0

8.5

11.5

activity, the deficits and surpluses of these centers do
not
cancel each other in their impact on the private economy. Suppose hypothetically, that, in a given year the Illinois state government has a fiscal surplus of $200 million, while New York has a deficit of $200

million. If we are interested in a figure for the governmental impact of New York and Illinois states combined, we do
not
simply aggregate receipts and expenditures and compare them. For Illinois’s surplus taxes drain the private sector, and New York’s deficits also drain the private sector. The ideal step, therefore, is to take each state’s and each locality’s receipts or expenditures, whichever is the higher, and add up each of these
higher
figures, along with the higher figure for the Federal budget, to estimate the total fiscal impact of all level of government. With the data we have available, we can only do this for state and local on the one hand, and Federal on the other.5

Now, at last, in Table VIII, we are ready to estimate the fiscal

“depredations of government” for Federal, and for state and local authorities (including government enterprises), and compare them to the data for private product.

We see here, in stark relief, the record of the enormous increase in the fiscal burden of government during the depression, from 5Because, in our figures, state and local governments are already lumped together, our estimates will, from this standpoint, considerably
underestimate the
fiscal burden of government on the private sector.

Appendix

347

TABLE VIII

GOVERNMENT AND THE PRIVATE PRODUCT

($ billions)

Gross

Net

State

Total

Private

Private

Fed.

& Local

Govt.

Prod.

Prod.

Depred.

Depred.

Depreds.

1929

99.3

90.7

5.2

9.0

14.2

1930

85.8

77.3

4.4

9.7

14.1

1931

70.9

62.7

5.5

9.7

15.2

1932

53.3

45.7

4.4

8.8

13.2

Private Prod.

Private Prod.

Remaining (Gross)

Remaining (Net)

1929

85.1

76.5

1930

71.7

63.2

1931

55.7

47.5

1932

40.1

32.5

State

Fed.

& Local

Total Govt.

Depreds.

Depreds.

Depreds.

% of GPP

% of GPP

% of GPP

1929

5.2

9.1

14.3

1930

5.1

11.3

16.4

1931

7.8

13.7

21.5

1932

8.3

16.5

24.8

State

Fed.

& Local

Total Govt.

Depreds.

Depreds.

Depreds.

% of MPP

% of MPP

% of MPP

1929

5.8

9.9

15.7

1930

5.7

12.5

18.2

1931

8.8

15.5

24.3

1932

9.6

19.3

28.9

1929 to 1932. The percentage of Federal depredations on the private product rose from approximately 5 percent to 8 percent of the
348

America’s Great Depression

GPP, and from 6 percent to 10 percent of the NPP; state and local depredations rose from 9 percent to 16 percent of the GPP, and from 10 to 19 percent of the NPP. Total government depredations rose from 14 percent to 25 percent of GPP, and from 16 percent to 29 percent of NPP, not far from double the burden!

Index

Abbott, Charles Cortez, 130, 161

American Acceptance Council, 128,

Abbott, Charles F., 278

155

Abbott, Edith, 251, 271

American Association for Labor

Acceleration principle, 60–68

Legislation, 176, 193–94,

Acceptances, See Federal Reserve

196–97, 202, 250

System

American Bankers’ Association, 244

Achinstein, Asher, 251

American Bar Association, 176

Addams, Jane, 194

American Construction Council,

Addis, Charles S., 179

195

Agricultural Adjustment

American Cotton Association, 222

Administration, 280

American Council of Agriculture,

Agricultural Credits Act of 1923,

225

122, 221

American Council on Education,

Agriculture

179

exports of, loans to, 121–22,

American Economic Association,

129, 138–39, 142, 147, 153,

248

156, 159, 165, 219–21,

226–27, 241, 258, 271,

Committee on Purchasing

299–300, 322

Power, 174

farm holidays, 235

American Engineering Council,

prices, 147, 153, 158–59, 171,

196, 300

181, 191, 222, 227, 239, 248,

American Farm Bureau Federation,

315

179, 217, 223, 225, 228, 241,

Agriculture, Department of, 217,

310

222, 225

American Farm Economic

Alabama, 301

Association, 179

Aldrich, Winthrop W., 140, 149,

American Federation of Labor,

181, 262

174–75, 195–96, 198, 200,

Alexander, Magnus W., 306, 309

213–14, 241, 244–45, 266,

Amalgamated Clothing Workers,

281–82, 294, 308, 310, 319

282

American Gas Association, 212

349

350

America’s Great Depression

American Home Economic

Bancroft, Hugh, 269–70

Association, 244

Bank credit, See Banking; Credit

American Institute of Architects,

Bank of International Settlements,

244

240, 258, 260

American Iron and Steel Institute,

Bank of Belgium, 145

200

Bank of England, 144, 146, 150,

American Legion, 319

153, 155, 156, 162, 258–60

American Railways Association, 212

Bank of France, 144, 152, 154, 175,

American Statistical Association,

258–59

179

Bank of Italy, 145, 152

American Wheat Growers’

Bank of Poland, 145

Association, 225

Banking

Anderson, Benjamin M., 46, 76,

bank holidays, 325–28, 330

101, 123–24, 131, 153, 156,

160, 186, 239, 249, 257, 296,

bank runs, 15, 21, 25, 55, 88,

326

97, 304, 325–26

Andrews, John B., 193–94, 196, 250

demand deposits, 87–89, 91,

97–102, 113–16, 160, 258,

Angell, James W., 313

261, 302, 304–05, 324–27,

Angly, Edward, 268, 326, 330

330

Argentina, 231, 242

fractional-reserve banking, 15,

Arizona, 247

21, 24–25, 27, 34, 326, 329

Associated General Contractors of

“free” banking, 27

America, 197, 294

mortgages, 90, 276, 317

Atkins, Willard E., 252, 311

Panic of 1819, 325

Austria, 152, 175, 257–60

Panic of 1837, 186

Austrian theory, See Mises, Ludwig

von

reserves, 21, 26, 97–98, 99–103,

105–08, 111–14, 123, 160,

Avery, Sewell, 264

214, 240, 261–62, 302, 305,

Aydelotte, Frank, 311

324

Ayres, Leonard P., 175, 277, 311

time deposits, 87–90, 97–102,

114–16, 160, 325

“wildcat” banking, 27

Bacon–Davis Act, 268

see also
Credit; Federal Reserve

Bailey, W.J., 156

System

Baker, Newton D., 174, 273, 290

Banking School, 76–78

Baker, Ray Stannard, 197

Bankruptcy laws, 187, 243, 274,

Balch, Emily Green, 251

285–86, 318–19, 323

Balderston, C. Canby, 311

Barnes, Julius, 212, 229

Balfour, Arthur, 175

Barnett, George E., 311

Ballantine, Arthur, 330

Barrett, William J., 335

Index

351

Baruch, Bernard M., 197, 225,

Brand, Charles J., 225

227–28, 273, 279, 280, 296

Brandeis, Louis D., 189, 279

Bassic, V. Lewis, 81

Breckenridge, Sophinisba P., 251

Baster, A.S.J., 130

Bresciani-Turroni, Costantino, 23

Bault, William J., 264

Brewster, Ralph Owen, 197–98

Beard, Charles A., 278

Brissenden, Paul F., 251, 265, 292

Beard, Mary, 197

Britain, See Great Britain

Beck, James M., 290