Comparing Economies With Last Century

I particularly like James Flanigan’s column (“U.S. Economic Picture Is a Contradictory Collage,” Oct. 10), perhaps because I agree with his thesis that we’re in for a deflation such as occurred late in the 19th Century.

However, I disagree that the deflation started after the Civil War. Using interest rates to support my view, the deflation’s beginning coincided with the driving of the last spike at Promontory Point, Utah--the end of the great railroad building era. According to Sidney Homer’s “A History of Interest Rates,” interest rates peaked about 1871 and went into a decline that lasted into 1898, which is about when the internal combustion engine and goodness knows what else appeared on the scene.

I also disagree with Flanigan’s statement, “Unemployment--now at 6.7%--is low compared to the past.” May I refer him to “Out of Work,” a major study of unemployment and its causes, by Vedder and Gallaway, published this year. Their data indicate that the current 6.7% is above average. They also imply that unemployment will continue to stay at this level or higher.

JOHN RUSSELL HOLMES

Pasadena