THE CAUSE OF THIS DEPRESSION AND RECOVERY PROCESSES - Economic Theory Seduced by the Money Complex

Sep 21, 2026

Uploaded by Patrick

Albert W. Russel analyzes the causes of economic depression and the conditions for recovery, expanding on N. Johannsen’s thesis about how excessive savings over expenditures reduce purchasing power and trigger downturn. The paper argues that a balanced budget at this time would slow recovery, threatening government credit more than deficit increases. It further critiques conventional economic assumptions, contrasting “money economy” views with a “credit economy” approach to simplify and address current problems.

LanguageEnglish

CategoryResearch & Report

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Pages29

Reading Time1 h 13 min

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Through the Presidents

The Cause of This Depression and Recovery Processes

Economic Theory Seduced by the Money Complex

97-84100-17Russel,Albert W. The cause of this depression and recovery….Cleveland 1933 # COLUMBIA UNIVERSITY LIBRARIESPRESERVATION DIVISION BIBLIOGBAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED-EXISTING BIBLIOGRAPHIC RECORD Reproductions may not be made without permission trom Columbia UniversityLubraries. RESTRICTIONS ON USE: TECHNICAL MICROFORM DATA FILM SIZE: 35mREDUCTION RATIO: 9:/ IMAGE PLACEMENT:IA DATE FILMED: 128/97INITIALS: TLM TRACKING\#: MsH2465I FILMED BY PRESERVATION RESOURCES,BETHLEHEM,PA. 32 ## Through the Presidents omee 2.THE CAUSE OF THIS DEPRESSION ANDRECOVERY PROCESSES 308 Z 3ox373 # THE CAUSEOF THIS DEPRESSION ANDRECOVERY PROCESSES ALBERTW.RUSSEL 1890 East 107ch Street Cleveland,Ohio March,1933 C3/AA3391,4 THE CAUSEOF THIS DEPRESSION ANDRECOVERY PROCESSES Y In 1928 there was published and distributedin this country a pamphlet entitled,"ADepres-sion Imminent”by N.Johannsen of Stapleton, L.I,in which he predicted in an amazing waywhat has happened since.His deductions werebased on principles which he advanced in a bookpublished in 1908,"A Neglected Point in Con-nection with Crises."He reasoned that the ex-cess of savings accumulation over the expendi-tures of those savings for new capitalenterpriseswould impair purchasing power to an equiva-lent extent,with consequent decline in business,employment,values,etc.,and would precipitateus into the depths of a depression.During thepast several years,Hobson,Foster,Keynes,Chase,and several others,have observed,in-dependently of Johannsen,the evil effect of ex-cessive savings,but,generally speaking,theyhave overlooked the far-reaching importanceof the implications of this theory.Economistshave almost entirely ignored Johannsen,al-though it is claimed herein that he made a dis-covery of an economic priniciple,the signifi-cance of which is far more important to human Suly welfare than all the discoveries of our physicalscientists and astronomers. This paper takes up and amplifies Johann-sen's thesis,and extends its implications to ourexisting problems and particularly to the ques-tion of a balanced budget.Attempt is madeto demonstrate that the decline in business ac-tivity has gone to a point where inflationaryand deflationary forces are in balance and atechnica condition has arrived wherein businessis sensitive to inflationary influences,as it hasnot been since the downward movement began.It is contended that the accomplishment of abalanced budget at this particular time wouldretard recovery more than any other single step,andthat the credit of the government would beput more into jeopardy by a balanced budgetthan by an increase in deficits.Argument insupport of this contention follows prevailingbusiness practices within the experience andknowledge of business men ingeneral. # EcoNOMIC THEORY SEDUCED By THEMONEY CoMPLEX The difficulties encountered in any economicdiscussion,and particularly concerning thethesis of this paper,center in a lack of a commonpoint of view.Much study and analysis of theinconsistencies and controversies of our econ-omists have brought to light the fact that certain fundamental premises which they takefor granted are untenable.Economists gener-ally look upon our economic system as one of“money economy”and thereby imply thatmoney is the most significant factor in businesslife.They observe that credit has largely super-seded money,but they treat it as a form ofmoney and discuss its workings in terms ofmoney theory.Credit in its nature and its proc-esses in exchange operations is so different frommoney that no single theory can consistently beapplied to both.A conception of our systemas one of credit economy in which credit,thedominant factor in business,is treated as analternate and independent facility forexchange,provi

FAQs

What thesis does the paper expand regarding depression and recovery?

It amplifies Johannsen’s thesis that excessive savings accumulation over spending impairs purchasing power and precipitates a depression.

Why does the paper argue against a balanced budget at this time?

It contends that achieving a balanced budget would retard recovery and place government credit in greater jeopardy than increasing deficits.

How does the paper critique conventional economic theory?

It argues that economists treat the system as a “money economy,” but money theory cannot consistently explain credit operations; it proposes a “credit economy” view for a more logical solution.

Sep 21, 2026

Uploaded by Patrick