As mentioned in the last post, Ben Graham contributed to the 1933 Senate hearing Investigation of Economic Problems. His letter was titled “Sounder Money and Better Business.”
I read it the other day to see what he had to say. It’s all economy stuff. So you won’t find wise words on investing, markets, or behavior. But if you have an interest in the Great Depression and a grasp the problems plaguing the U.S. at the time, you might find this interesting too.
Here’s Graham’s take on the problem:
…the plan attacks directly the central paradox of the depression, namely, poverty caused by superabundance, by transforming our surplus of commodities from a cause of national disaster into a source of national strength…
General overproduction has been termed a theoretical impossibility, but it has proved also a practical and disastrous actuality. This has been due to the failure of effective purchasing power to keep pace with increasing production…
Under present conditions, when production in general outstrips consumption, the whole economic mechanism is thrown out of gear. Deflation and depression are the only remedies. The adjustment is always painful, sometimes protracted, and in this instance almost fatal.