Page:Walter Renton Ingalls - Wealth and Income of the American People (1924).pdf/237

Rh Market prices reflected that thought. At the height of the boom in industrial stocks the quotations of many of them were in no degree commensurate with estimated current earnings and it was believed that they were conservative just because of this fortification of reserves. Yet even with 1920 that theory began to be exploded, and exactly for the reason that the surpluses were economically fictitious, as has been shown by my analysis in this chapter. Any other deduction would be out of harmony with the history and present situation of the securities market. What has proved to be the misconception about this is a part of the tragedy of Wall Street.

With a gross national income of 33 to 34 billion dollars in 1912–1914 we used to spend about 28 billion dollars for living expenses and save about five billion, out of which we provided the new houses, railways and other essential things needed by the people. Roughly, about 10 per cent of our expenses were for government—Federal, State and municipal. As a people we had gone in for automobiling and theatrical amusements to what then seemed to be an alarming extent, but now looks ridiculously moderate. We spent rather a large sum annually on alcoholic drink. These were perhaps our great extravagances.

In 1919 the national income had risen to 66 billion dollars. This was not because of increased physical production, but rather was it attributable to inflation in prices. The 1919 production in dollars was a little short of twice that of 1913. The index numbers of commodity prices had about doubled. The 1919 production in tons was a little less than what it was in 1913. In terms of 1913 dollars it was a little more.