These were the popular explanations, but there were deep-seated causes which had worked to bring about the existing conditions. The crisis was world-wide and was felt most in the countries where there was a gold standard. In 1890 the world's supply of gold available for monetary use was hardly $4,000,000,000; in 1907 it was more than $7,000,000,000. Along with this went a rapid rise in the average price of commodities in gold-standard countries. Bank deposits in the United States in 1907 were three times as great as they were in 1897. Amidst all this prosperity there were forces which were bound to bring a reaction and among the most important of these was the demand for capital for conversion into fixed forms. Ready capital was also lessened relatively by the great losses experienced as a result of the Spanish-American War, the Boer War, the Japanese-Russian War, the San Francisco earthquake, and the Baltimore fire. These losses, which amounted to $3,000,000,000, came at a time when the world was just entering upon a period of great industrial activity and needed all its capital. Much capital was absorbed in the construction of railroads, industrial plants, development of foreign industries, etc. These conditions brought about a tightening of money rates in Europe and American financial centres; consequently rates of interest went up. Commercial paper which brought three to three and one-half per cent in New York in 1897 brought seven per cent in 1907. [Illustration: Line of people waiting in front of the bank.] The panic of 1907. Run on the Knickerbocker Trust Company, 34th Street and Fifth Avenue. Closely allied to this movement was the increase in the number of securities issued by industrial concerns. A few resourceful men, in order to do away with the evils of unrestricted competition, devised a remedy in the form of mergers. Others of less capacity but greater daring saw opportunities for money-making, and a craze for mergers and for the incorporation of private enterprises swept over the country. By 1907 there were at least $38,500,000,000 worth of securities in existence. The natural result was speculation. When investors began to fear the soundness of the securities a collapse of credit was due.