Page:Walter Renton Ingalls - Wealth and Income of the American People (1924).pdf/190

168 travagantly and bid up our markets for consumption goods. The period of 15 months—from the spring of 1919 to the middle of 1920—was the most disgraceful in the economic history of the United States. Extravagance in living and inefficiency in working were dominant factors. Conditions were at their worst at the middle of 1920, when Europe’s credit became exhausted and there began in our markets the great decline, conforming to the law of supply and demand and not to the quantitative theory of money or the ideas about inflation that had led many people to think that prices would never come down.

During this period (1915–1920) almost everybody was having a good time. The standard of living was raised to a scale never before attained. Large classes of people entered upon the enjoyment of luxuries that previously had been within the means of but few. The country was supposed to be growing very rich, though how that could be happening while it was prosecuting an immensely costly war nobody paused to inquire. Indeed, some scholarly estimates appeared to show that a great increase in wealth was being made. However, it is possible to obtain a pretty clear idea of just what happened, and in fact to construct a national balance sheet, by a combination of my figures for the national wealth with those of the National Bureau of Economic Research for gross income and the estimates of capital accumulation which Prof. David Friday gives in his book on “Profits, Wages and Prices,” all of which data fit together in a distinctly impressive way. Professor Friday’s estimates of capital accumulation since 1912 are as follows: