©1998,1999 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080
American Bankruptcy Data from When They Started Collecting It
Industrial and Commercial Failures, 1871-1959
Source - various years of the Statistical Abstract of the United States.
Note the peak in 1915 before the US entered the Great War - could this reflect a goading factor?
The figures go year by year across the chart - for example,
1870s|1870 |71 |72 |73 |74 |75 |76 |77 |78 |79.
2nd line (if any) is rate per 10,000 concerns in business for decade on line above.
2nd figure (italicized) indicates a new way of counting bankruptcies was introduced.
Then there's a decline to less than a third from 1915 to 1919 as war and influenza sucked up the labor surplus, but then a meteoric near-quadrupling from 1919 to 1922 as the "boys came home" en masse from the War and tried to get jobs, thus depressing wages, spending, and markets.
There's a one-fifth downward correction in 1923 as new technology from wartime production seeps into civilian production and enjoys a fleeting curiosity factor from the consumer base. But then, as the technology's work-saving effects swamp piecemeal reductions in the workweek and shift decisively from work-saving to job-killing, consumer strength falters and there's a steady six-year rise to shatter the 1922 bankruptcy record in 1928, the year before the Crash.
1929 finds a small downward correction, less that a twentieth, as luxury markets take off, buoyed by the stock boom of astronomically concentrated wealth (hey, ordinary people weren't getting and it had to go somewhere, right?). But then, the stock boom falters too as people glimpse, through the fog of happytalk, the grotesque outlines of a gargantuan imbalance of productive over consumptive capacity, and the bankruptcies immediately start breaking records again every year till 1932.
After that, there's a decline, possibly because, after all the business mergers in the Roaring '20s and early 1930s, there were fewer businesses left to declare bankruptcy.
Notice also how low bankruptcies went in the 1940s when, as in World War I, there was a low labor surplus due to World War II and a high spirit of cooperation due to a common external enemy, the Axis.