"Ignorance lies at the bottom of all human knowledge, and the deeper
we penetrate the nearer we come to it - for what do we truly know, or
what can we clearly affirm of any one of those important things upon
which all our reasonings must of necessity be built, time and space,
life and death, matter and mind."
2. The Search Begins
In September of 1929, just a few weeks before the world we knew
disappeared in miles of ticker tape and crashing stock prices, I was
hired by the Department of Commerce as Chief of Industrial
Marketing. Later I became the Chief of Current Statistics too.
Finally I was promoted to Chief Economic Analyst. Talk about being
where the action is. Let me tell you, / was there!
In 1931, as a heartbroken President Hoover watched the country he
loved falling apart before his eyes, I was assigned the task of
discovering why a prosperous and growing nation had been reduced to
a frightened mass of humanity selling apples on street corners and
waiting in line for bowls of watery soup. Why did depressions
happen? As liaison officer with economists both inside and outside
the government, it was my task to find the answers.
I consulted many economists - and nearly everyone had a different
theory to explain our economic sickness. It was almost as if you
were ill and one doctor said you had gout, the next said you had
cancer, a third diagnosed your trouble as leprosy, and a fourth said
you had athlete's foot! If doctors disagreed about illnesses in this
way, you would not have much faith in doctors. Economists
disagreeing as radically as they did, I lost faith in economists,
for none of them knew the answer.
Cycles Enter My Life
Then one day I met a man who knew he didn't know the answer.
was Chapin Hoskins, the Managing Editor of Forbes. He too had
despaired of learning from economists why depressions happen. But he
reasoned logically that if he couldn't discover "why," perhaps he
could at least learn "how." He began to study the behavior of
prices, production, and other measures of economic activity.
In the course of his studies Hoskins noticed that every three months
there was a slight upsurge in the bank debits of certain cities. In
these cities, every three months, checks totaling larger amounts
were drawn. He had discovered a cycle!
Before we proceed let me be sure you understand the word.
comes from a Greek word for "circle." Actually, the word » cycle
means "coming around again to the place of beginning." It does not,
by itself, imply that there is a regular period of time before it
returns to the place where it started. When there is such a fairly
regular period of time, the correct word to use is "rhythm," from
another Greek word meaning "measured time." As we mentioned, the
tides are rhythmic; your heartbeat is rhythmic; so is your
A cycle, when we refer to one, will usually mean a cycle
with rhythm (see Figure 1).
Getting back to our friend Hoskins: He didn't know "why" bank debits
had this three-month cycle. He didn't need to know why. Every three
months it happened. It was worth taking into account as a
probability in trying to assess the future.
Presently Hoskins observed that in some instances every third one of
his three-month upsurges in bank debits was larger. He had
discovered a nine-month cycle. Some things had this nine-month cycle
without having the three-month cycle. His interest increased when he
discovered that there were even longer cycles.
The most important of
these seemed to be about forty-one months in length.
was so regular and had repeated itself so many times that it did not
seem to him to be the result of chance. His study of behavior was
becoming even more fruitful than he had dreamed, for he had
discovered the possibility of predicting when things would be high,
when they would turn downward, when they would be low, and when they
would turn upward again!
Hoskins accumulated a great quantity of data. Then he began to make
forecasts based on his observances. These forecasts came true. The
possibility had become an actuality! Here, indeed, was something of
In those days, even as now, you could find hundreds of individuals
willing to help you select "hot" stocks, tell you how the stock
market would act next month, and even read tomorrow's Dow-Jones
closing averages in tea leaves - all for a fee, of course. Men of good
sense laughed at them then, just as they do now.
But no one laughed at Chapin Hoskins, for this genius, a member of
the Board of Directors of the American Management Association, had
impeccable credentials. Westinghouse Electric's Executive
Vice-President was also a member of the board. He followed closely
the forecasts made by his brother board member, and finally he
engaged Hoskins on a two-year retainer to teach Westinghouse all
that he knew about cycles.
Furthermore, he assigned his chief
designing engineer to Hoskins and hired two professors from Cornell
to review the Hoskins techniques. Something was finally being done
In 1937, on the strength of his contract with Westinghouse, Hoskins
started up in business as an analyst for industrial companies. I
joined him as an associate. My job was to go out and sell firms on
the benefits we could provide by helping them to forecast their
future sales, production, cost of raw materials, etc., through the
application of the cycle theory. I would sell the accounts; Hoskins
would do the forecasting.
The arrangement reminded me of the story
of the hod carrier. The hod carrier said that he had a fine job; all
he had to do was to carry bricks up six stories and the man up there
did all the work.
Chapin Hoskins and I started in business on March 1, 1937. I'll
never forget our first day together. I had just purchased a few
shares of stock and mentioned it to Hoskins along with my hope that
I would reap great profits when the stock went higher.
"It won't go any higher," he said. "Sell everything you have at
once. We are within a week of the top. If I had just a little more
courage, I'd go short with everything I've got."
Sure enough, within a week the market did reach a top and the
disastrous decline of 1937-38 had begun.
Later that year, in August, the market started upward again. I was
in the office of a famous investment counselor, a man who handled
millions of dollars for his clients. I heard him tell one of them,
"The decline is over. Buy heavily."
I knew from what Hoskins had
taught me about cycles that the worst part of the decline was still
I tried to convince the counselor of this but he wouldn't
listen. I've often wondered if he didn't later wish he had! From
August 1937 to April 1938 the Dow-Jones Industrials fell from 184 to
113, a decline of 39 percent.
Chapin Hoskins and I succeeded. Eventually we had more business than
Hoskins could handle. Our clients included such large companies as
Botany Worsted, Consolidated Edison, and Lehman Brothers. Soon I
began to do some of the research, counseling, and forecasting, and
my interest in cycles reached a new height.
I began to spend more
and more time at the libraries, reading everything I could find on
The Meeting at Matamek
One memorable library visit set my future course irrevocably on the
trail of the great cycle mystery. I came across a transcript by
Professor Ellsworth Huntington of Yale University of a conference
that had been held in 1931 in Matamek, Quebec, on the north shore of
the Gulf of St. Lawrence.
About the time when I had been anxiously interviewing economists to
discover the cause of our Great Depression a Boston financier named
Copley Amory had organized an international conference on biological
cycles that was held at his summer estate in Matamek.
the world's leading biologists assembled to compare notes about
cycles in wildlife.
As I read the transcript of their findings, a
strange excitement took hold of me, for I learned a fact known to
every sportsman, namely, that game is sometimes plentiful and
But what impressed me was that the periods of
abundance, and of scarcity, often came at amazingly regular time
The Search Party Is Formed
I discovered something else on that fateful day when the transcript
of the Matamek Conference came to my attention.
I learned of the
cycle work that had been done by C. N. Anderson of the Bell
Telephone Laboratories. Anderson had discovered that sun-spots act
as if they were influenced by a variety of cyclic forces similar to
those that Hoskins and I had been discovering in business figures
and also to those that the biologists had discussed at Matamek.
Cycles in business! Cycles in wildlife! Cycles on the sun! And, in
many instances, these cycles had the same length and went up and
down together. Now here was something basic, something fundamental,
something more profound than I could envision. For if two or ten or
a hundred separate and seemingly unrelated things fluctuated in
cycles of identical wavelength and turned at about the same time, it
was unlikely that they were as unrelated as might first be supposed.
Either some of them were causing the others to behave that way, or
something hitherto unknown and unsuspected was causing all of them
to go up and down together. Do you see the mystery, the excitement?
A detective story on a cosmic scale!
I saw at once that we were confronted with a basic scientific
problem that could be solved only by linking together economics,
biology, and astronomy - and perhaps several other sciences as well.
The problem had to be attacked on a broad front.
I set to work at once. On October 23, 1940, I organized the
Foundation for the Study of Cycles. I wrote to Copley Amory, the
chairman of the committee of biologists, and to Ellsworth
Huntington. Mr. Amory came to see me and was as surprised to learn
about the economic and astronomical cycles as I had been to learn
about the biological ones. He agreed that the problem needed to be
attacked as a whole.
He approved of the idea of a Foundation for the
Study of Cycles and agreed to become chairman of our board of
Mr. Amory and I then reorganized the permanent committee set up at
Matamek; its members were elected as the board of directors of the
* The original board of directors consisted of the following
persons: UNITED STATES OF AMERICA: Charles Greeley Abbot, Secretary,
Smithsonian Institution; George Baekeland, the Bakelite Corporation;
The Hon. William Cameron Forbes, Chairman of the Board of Trustees,
Carnegie Institution of Washington; Hon. Alanson Bigelow Houghton,
Chairman, Corning Glass Works, Chairman, Institute for Advanced
Study, Princeton University; Ellsworth Huntington, Professor of
Geography and Climatology, Yale University; Wesley Clair Mitchell,
Director, National Bureau of Economic Research, Professor of
Economics, Columbia University; Harlow Shapley, Director of the
Observatory, Harvard University; and Copley Amory, Chairman of the
CANADA: Hon. Charles Camsell, Commissioner of the Northwest
Territories, Canadian Government; Frank Cyril James, Principal and
Vice Chancellor, McGill University.
GREAT BRITAIN: Hon. Patrick Ashley Cooper, Governor, the Hudson's
Bay Company; Charles Sutherland Elton, Director, Bureau of Animal
Population, Oxford University; Julian Sorrell Huxley, Secretary,
Zoological Society of London.
Mr. Amory presented the Foundation with a check for $500, and we
were afloat. I was "hired" as the director, and it has been my
privilege, with the help of our members, to keep the Foundation
afloat for the past thirty years.
The Foundation for the Study of
Cycles is now affiliated with the University of Pittsburgh, and its
headquarters are located at 124 South Highland Avenue, Pittsburgh,
In this book you will learn of our successes, our
failures, our hopes, our doubts, our frustrations, and our progress.
Putting the Pieces Together
Suppose that one day while digging in your back yard you came across
some bits of stone that were so regularly shaped that they could not
easily have been formed that way by chance.
further, that some of these pieces fitted together as if forming
part of a larger pattern.
You would be quite excited, wouldn't you?
"I have stumbled across
some magnificent old mosaic," you might say.
Every evening, weather permitting, you would be in your yard,
digging and screening dirt.
You would bring all the little stones
into the house, scrub off the dirt, and rinse them carefully. Some
pieces you would discard because they were obviously just stones;
some pieces would unquestionably be part of the mosaic; others you
might not be sure about.
The good pieces and the pieces you could not be sure about you would
save. You would put them on a table and you would try to fit them
together wherever you could. Some you would place to one side since
they would not fit any of the pieces you already had. Soon a pattern
would begin to take shape.
You would become more and more excited.
"What a stupendous discovery!" you would say. "I am really on the
track of something big!"
So it is with the study of cycles.
We dig them up, scrub them, rinse
them, shine them, and put them on the table. Some are so regular
that there seems to be no question that they are significant. With
others we cannot be so sure. Some fit together with other pieces.
Some do not fit at all. And, most exasperating of all, some almost
fit - but not quite.
It is impossible to count how many pieces of the cycles mosaic we
have found to date. In 1946, when Life magazine was planning an
article on cycles, their editors asked me to give them a list of all
the rhythms I had ever heard about. Although the list I eventually
sent them was neither complete nor authoritative (and contained many
rhythms that were controversial or unsubstantiated), I managed to
Eighteen years later the Foundation published a catalog listing only
the alleged cycles in economics - commodity prices, stock prices,
agriculture, building construction, real estate, manufacturing, etc.
The catalog contains 1,280 cycles.
Because small keys can unlock great doors, we at the Foundation have
treated every hint of a possible cycle with great respect and
deference. No "stone" we uncover is tossed aside as irrelevant, for
we believe we are assembling far more than a mosaic.
The Five Cathedrals
You may remember the story of the two stonemasons. When asked what
they were doing, the first said,
"I am surfacing a piece of stone."
The second answered,
"I am building a cathedral."
Although it has "surfaced" many stones since its birth in 1940, the
Foundation for the Study of Cycles believes it is building a
cathedral - several of them, in fact.
CATHEDRAL NUMBER ONE - the Advancement of Human Knowledge
We are doing our part toward learning how the universe functions,
for we are discovering evidence of hitherto unsuspected forces.
Learning how the universe functions is, to my mind, the noblest
activity of the human race. It is, literally, reading the word of
CATHEDRAL NUMBER TWO - the Elimination of War
There is little hope of eliminating war for yourself, your children,
or your grandchildren. But - hopefully - you will have
greatgrandchildren. It is for them we are building.
Wars come in cycles. That is, the number of international battles
tends to pulsate at reasonably regular time intervals. Wars act as
if they were stimulated by regularly recurring cyclic forces.
These forces are presumably external to human life, for even when
the rhythm of war is disturbed, it returns to the old pattern. And
the rhythms are much the same as those we find in animal life and
other aspects of nature.
As part of the problem of eliminating war we must understand these
rhythmic forces and how they operate. But even before we do, it is
of great benefit to know when the next international "situation" can
probably be expected.
CATHEDRAL NUMBER THREE - the Elimination of Depressions
Only by understanding the forces that cause depressions can we ever
learn to control them. There is a growing mass of evidence that
depressions recur at rhythmic time intervals.
So far as they have
been studied, all the various aspects of depressions - curtailed
production, business failures, unemployment, financial collapse-act
as if they are influenced by rhythmic forces, the nature of which is
still unknown. Until we learn what these forces are and how they
operate any true science of economics is impossible.
But until we
solve this mystery our limited knowledge of cycles can help throw
some light on probable future economic fluctuations of a disastrous
CATHEDRAL NUMBER FOUR - the Elimination of Disease
As yet only a small amount of cycle research has been done in this
area, so the importance of cycle knowledge in the elimination of
disease has not been determined.
However, anyone who has suffered
from the flu bug in the last few years may be interested to learn
that there is evidence that even this little monster visits us in
cycles - in spite of the development of "wonder" drugs.
CATHEDRAL NUMBER FIVE - Accurate Weather Forecasting a Year or More in
How wonderful it would be if farmers could know in advance when to
expect droughts, late frosts, or rainy harvests. What savings in
seed and heartache there would be.
Our foresters would also rejoice in such foreknowledge. So would our
mariners, our hydroelectric companies, our flood control experts,
our military leaders - even our football, baseball, and racing fans.
Other fields could be named, for there are thirty-six different
aspects of science where a knowledge of cycles is important.
Foundation's main purpose is to bring together the stones and rocks
from all these various fields and raise an altar to the glory of God... and to the benefit of his children.
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