The Almost Aristocracy
By way of scene-changing: In the fall of 1921 the national economic picture reversed itself in sixty days. The postwar depression abruptly ended, and a new and more durable boom replaced it. With one accord the familiar economic barometers all began to rise. The recovery was officially smiled upon and encouraged by the Federal Reserve System, which, beginning in 1921, progressively reduced its discount rate from the postwar peak of 7 percent all the way to 3 percent by 1924. The discount rate, through its influence on the interest rates charged by banks and other private lenders, tends to determine whether credit is hard or easy to get for everyone from the giant corporation to the home-buyer in need of ...