A Brief History of the Early days of the Foundation For The Study Of Cycles ( FSC )

There was a  Foundation for the Study of Cycles, there was a “committee.” The Foundation is actually the outgrowth of the permanent committee set up at the First International Conference on Biological Cycles, held at Matamek, Canada, in 1931

Circa 1941

More than seventy-five years ago, a young economist from Harvard, along with some of the world’s top scientists, set out to unravel a mystery.

Young Harvard economist, Edward R. Dewey, was Chief Economist for President Herbert Hoover at the beginning of the Great Depression. President Hoover assigned to him the task of helping to determine the causes of the Depression.

On January 1941, the Foundation for the Study of Cycles was incorporated in Connecticut, dedicated to discovering the mystery behind cycles. Since then, the Foundation has been working to shed light on this mystery.

The Depression… but not the only one

Dewey discovered this wasn’t the first time the U.S. economy suffered a depression. In fact, it had done so with some regularity.

After seeking out the opinions of economists, he realized the only answer they could give him were conflicting opinions with very little insight. Repeatedly, Dewey was led to the door of cycles.

Cycles synchrony

While conducting some research at the Stamford library, Dewey encountered a report on biological Cycles. As he read the report, he realized that the Cycles biologists had identified in nature, were in fact, identical in both length and timing to those he had described in business and stocks. The implications of this discovery were to change his life, along with the lives of many others who would follow him.

The Foundation’s mission: Finding CAUSE

Edward R. Dewey wasn’t so interested in using cycles to predict the stock so much as he was fixated on the higher goal of discovering the cause of cycles, which he suggested was a force “Out There.”

Foundation membership

Over the years, the Foundation developed a strong readership subscribing to their monthly Cycles magazine for $12.50 per year. The Foundation’s membership was dutifully attended to by Mrs. Gertrude Roessle, membership manager, who played a strong role in the Foundation for more years than even Dewey had.

Public “reaction” to cycles

Dewey noticed a peculiar reaction from people when he discussed cycles with them… a reaction that seemed to combine amusement, skepticism, and a certain suppressed fascination. As Dewey put it, “Cycles get people. Pro or con, the idea engages strong emotions. One of our greatest problems is to keep people’s thinking about our work on a level-headed plane.”

First formal cycle studies

Cycles were formally studied scientifically prior to Dewey’s arrival, but only dates back to the nineteenth century. In 1847, Dr Hyde Clarke of England, published a paper attempting to correlate economic events with astronomical data—very much like what we have accomplished with our Project Zarathustra.

In 1862, Clement Juglar reported on a nine-year economic rhythm that he recognized in Western Europe and the United States. This became known as the Juglar cycle. And, in 1892, Eduard Bruckner suggested there was a 35-year weather cycle operating in Europe, which many meteorologists claim is still operating. In the mid-20s, N.D. Kondratieff documented a 56-year cycles in wholesale prices later to be called the “Kondratieff Wave.”

By the time the Foundation was established, efforts to understand all types of cycles were stepped up in the U.S., as people attempted to explain the Depression.

Cycles, cycles – Everywhere

Since the time of its founding, the Foundation has documented almost 6,000 cycles ranging from earthquakes and sunspots, to barometric pressure and temperatures, to lynx populations in Canada.

A healthy compromise

Dewey admitted that “The activities of the Foundation are a compromise between the desires of most of our members… and our own desires.” He ran a survey at that time to find out which element of cycles research most interested the Foundation’s readership. It turned out to by 874 of the 1,108 (79%) that responded were primarily interested in stock market and other business and finance cycles. No surprise that a recent survey we conducted in 2010 indicated the same. Little has changed it would seem.

So, while we are a research organization interested in all the ways cycles impact our world, and with our primary purpose being to discern and make predictions from the underlying cause of cycles – much of our research centers around stock markets. This is due to two reasons: 1) Our membership is primarily interested in market cycles; and 2) Of all data, financial data is in the greatest abundance.

A book is published

In 1944, Dewey collaborated with E.F. Dakin on a book titled, Cycles, the Science of Prediction. In this, they focused on four key economic cycles: Kondratieff’s 50-60 year cycle; Juglar’s 9 year cycles; an 18 and 1/3 year cycle mostly applying to real estate activity; and a 3 and 1/2 year stock price and business activity cycle. It became a best-seller. The most accurate cycles, however, were found to be ones in specific industrial segments, rather than broader ones.

Sunspot speculation

One of the more stubbornly popular economic cycle theories at the time involved sunspots. However, in 1959, after much research, Dewey declared, “I don’t believe that sunspots as such have any effect on the stock market.”

Some notable board members during this period

Copley Amory – Chairman of the Board

Charles Greely Abbot – Smithsonian Institute

Harold Elmer Anthony – American Museum of Natural History

George Baekeland – The Bakelite Corporation

Honorable Charles G. Dunes – Chairman of the Board, City National Bank and Trust Company of Chicago

Honorable W. Cameron Forbes – Board of Trustees, Carnegie Institute
and Life Member of the Corporation, Massachusetts Institute of Technology

Daniel Trembly McDougal – Former Director, Dept. of Botanical Research, Carnegie Institute

Harlow Shapley – Director of the Observatory, Harvard University

Julian Sorrell Huxley – Director General of the United Nations, Educational, Scientific and Cultural      Organizations

Wesley Clair Mitchell – Founder of the National Bureau of Economic Research (NBER)

A “Letter from the Director”

To finish off this brief history of the early days at the Foundation, here is a portion of the “Letter from the Director” written by Dewey in the inaugural issue of Cycle smagazine in 1950

The Driving Force

In Notes for an Autobiography, Albert Einstein, speaking of wonder, said “…. as a child of four or five years….my father showed me a compass. That the needle behaved in such a determined way did not at all fit into the nature of events which could find a place in the world of cause and effect connected with direct ‘touch.’”

“This experience made a deep and lasting impression upon me. Something deeply hidden had to be behind things.”

Something of Einstein’s wonder and curiosity came over me, when as a boy, I first saw iron filings on a sheet of paper conform to the ‘lines of force’ of a magnet held underneath.

It is this same “determined way” in which many phenomena fluctuate with rhythm that tells us that something deeply hidden has to be behind things. It increases our wonder when we see a number of phenomena all fluctuating with the same wave-length, and with turning points coming at or about the same time. These behaviors arouse our curiosity in regard to what are the deeply hidden “somethings” involved. It is this curiosity that drives forward the student of cycles, – this curiosity and a compulsion that makes it impossible for him to put down his task until he has solved at least a part of the riddle.