The answer depends on some of the exact details of the situation, but generally it's going to be a high-capacity machine gun (if the investigators have access to these, but some of them do have prices for 1920), if you're targeting a single, large target.
For example, Disposable Joe surprises a ghast at close range with his Vickers .303 Machine Gun and empties the magazine into it (yes, all 250 bullets). This takes a single round. Each volley can consist of up to 7 bullets, so up to 36 volleys can be fired, with the last consisting of 5 bullets, except that the gun is likely to malfunction before then.
First volley:
On hit: 11 damage per bullet * 3 = 33 damage
On impale: 44 damage for the bullets that 'merely' hit + 27 damage per bullet for the remaining 3 = 125 damage.
Average: 0.0225 × 125 + 0.45 × 33 = 38.55
Cumulative Odds of malfunction: 2%
Second volley, there are penalty dice:
Average: 17.6625
Cumulative total: 56.2125
Cumulative odds of malfunction: 5.8808%
And so on...generally, you're still adding damage, at least until the odds of a malfunction start going way up. On the other hand, 6-ish percent isn't nothing, and the Browning auto rifle may be a better choice if you think 3 volleys is enough and you don't mind changing the mag the next round (or grabbing your second, loaded Browning...) Various factors can come into play: same scenario with Dagon, you have 6 points of armor, but a large build, which means bonus dice:
First volley
On hit: 5 damage per bullet * 3 = 15 damage
On impale: 81 damage
Average: 0.2775 × 81 + 0.84 × 15 = 35.0775
Second volley
Average: 0.15 × 81 + 0.6 × 15 = 21.15
Cumulative total: 56.2275
The fact that that's basically the same as the last answer is a coincidence but apparently being big will cancel out about 6 points of armor in this situation. Anyway, full automatic fire gets worse against multiple targets, but is still deadly. Against a cluster of targets, a 75mm field gun is going to be the most effective, for the first round (fire rate of 1 per 4 rounds). Incidentally, it looks like hand grenades actually have a fire rate of 1 per 2 rounds, not 2 per 1, unless that's a typo (I have the 7th edition Keeper Rulebook, but not the Investigator's Guide).