The 1920s roared with innovation and optimism: Radios, refrigerators, and automobiles transformed daily life, and easy credit fueled an era of unrestrained speculation. But beneath the glitter lay deep financial fragility. When the market crashed in 1929, the collapse exposed the nation’s economic fault lines and ushered in the Great Depression. This book seeks to establish a causal relationship between the two seismic events by using newly unearthed Aggregate U.S. Corporate Balance Sheet data from 1929 – 33 from U.S. Treasury archives as evidence.

The narrative opens with a vivid portrayal of 1920s American life and key government figures. It then examines the crash and Depression through Keynesian and Monetary economic theories. While both offer insights, the authors note, neither fully explains the Depression’s depth. It then highlights MIT economist Dr. Peter Temin’s assessment, which integrates these theories suggesting the Depression began in the “real economy” (Keynesian) before spreading to the financial sector (Monetary). The authors posit that Dr. Temin had a credible hypothesis, but not adequate evidence for support.

The narrative then provides original analysis, focusing on leverage and speculation as triggers for the crash, followed by de-leveraging and reduced spending, which lowered aggregate demand, causing economic contraction and deflation. Complex concepts like leverage, margin debt, and banking failures are explained clearly without losing rigor. The analysis draws on primary data such as stock market trends and bank insolvency records, making the cause-and-effect argument compelling.

While the focus on debt and speculation provides a compelling through-line, it also narrows the lens. Broader factors such as Federal Reserve policy and international trade disruptions (like the Smoot-Hawley Tariff Act) receive limited attention. The heavy reliance on statistics can feel repetitive, but the empirical rigor offers a refreshing counterpoint to more theoretical histories.

Ultimately, this is a meticulous, data-grounded study that will appeal to serious readers of economic history – less a narrative of personalities than a forensic reconstruction of causes.

Also available in paperback.