News from this day in 1930: “the decline is nearing its end”


From the site News from 1930:

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National City Bank notes epidemic of bank failures, and that “processes of deflation operate in a vicious circle” but is nevertheless optimistic: “obviously this sort of thing has to come to an end some time, and by the very nature of the circumstances the turn comes … [when] everything looks the blackest.” Business decline has lasted about 15 months and is 35% below peak; this is as severe as any decline in past 50 years, warranting “a strong assumption that the decline is nearing its end.” Local banks were clearly overextended in many parts of the US, leading to some inevitable collapses, but overall banking system is “exceedingly strong” with banks having little indebtedness to the Fed. and over $7B of paper usable for rediscount there.

Remember, this was 1930, not 1931 or later. I can’t help but read this hoping the parallels are just superficial.

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