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To: Mike M2 who wrote (142)	4/1/2001 7:41:08 PM
From: JF Quinnelly	Read Replies (1) of 443

Thanks, Richebacher is always interesting. I don't see the big conflict between the Austrians and the monetarists that he does. I think there's truth in both schools. IMO you can divide the Depression into two events. The first, the market collapse, I see as being predicted in Austrian theory by the prolonged credit expansion of the 20s. The second, which mutated a bad market crash into the Depression, was the ensuing collapse of banks. I don't think the collapse of the banks was a necessary result of the market crash. I think the Fed could have acted to protect the banking system, by suspending convertability, purchasing the assets of problem banks, and a few other tools to provide liquidity at the start of the crisis. One problem was that much of the banking crisis occurred during the interregnum between Hoover's loss and FDR taking office. Hoover didn't think he could take the drastic action he felt was necessary to prop up the banks. He sent urged FDR to make a public statement to calm down the bank runs, but FDR chose to wait until he took office.

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