Shilling is wrong to look at the 1930's as a decade. The money supply data is available in table form month by month in Friedman & Schwartz's A Monetary History of the United States, published under the auspices of the National Bureau of Economic Research, and in database form on the NBER website. (Free!)
nber.org
The contraction in money stock from October, 1929 to April, 1933, was sharp - 30%. April, 1933 was the trough. Commercial bank deposits fell by 42%.
I did read Shilling's book, and got some useful information from it, but as you can see, his handling of statistics is not very rigorous. He can't have actually read Friedman & Schwartz, or he wouldn't have made that mistake.
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The legislation enacting the Federal Reserve system was adopted in December, 1913. The impetus was the Panic of 1907, in which J.P. Morgan acted as the lender of last resort. The Federal Reserve, however, did not believe it was their obligation to keep insolvent banks from failing, nor banks which were not in the Federal Reserve system. In fact, the Federal Reserve deliberately contracted credit by $700 million from December, 1929 to June, 1930 (at the time the money stock was roughly $55 billion.) |
