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.
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