The really important relation between immigration and crises is much less conspicuous but much more far-reaching. It rests upon the nature and underlying causes of crises in this country. These are fairly well understood at the present time. A typical crisis may be said to be caused by speculative overproduction, or overspeculative production. Some prefer to call the trouble underconsumption, which is much the same thing looked at from another point of view. Professor Irving Fisher has furnished a convenient and logical outline of the ordinary course of affairs.[321] In a normal business period some slight disturbance, such as an increase in the quantity of gold, causes prices to rise. A rise in prices is accompanied by increased profits for business men, because the rate of interest on the borrowed capital which they use in their business fails to increase at a corresponding ratio. If prices are rising at the rate of two per cent annually, a nominal rate of interest of six per cent is equivalent to an actual rate of only about four per cent. Hence, doing business on borrowed capital becomes very profitable, and there is an increased demand for loans. This results in an increase of the deposit currency, which is accompanied by a further rise in prices. The nominal rate of interest rises somewhat, but not sufficiently, and prices tend to outstrip it still further. Thus the process is repeated, until the large profits of business lead to a disproportionate production of goods for anticipated future demand, and a vast overextension of credit. But this cycle cannot repeat itself indefinitely. Though the rate of interest rises tardily, it rises progressively, and eventually catches up with the rise in prices, owing to the necessity which banks feel of maintaining a reasonable ratio between loans and reserves. Other causes operate with this to produce the same result. The consequence is that business men find themselves unable to renew their loans at the old rate, and hence some of them are unable to meet their obligations, and fail. The failure of a few firms dispels the atmosphere of public confidence which is essential to extended credit. Creditors begin to demand cash payment for their loans; there is a growing demand for currency; the rate of interest soars; and the old familiar symptoms of a panic appear. In this entire process the blame falls, according to Professor Fisher, primarily upon the failure of the rate of interest to rise promptly in proportion to the rise in prices. If the forces which give inertia to the rate of interest were removed, so that the rate of interest would fluctuate readily with prices, the great temptation to expand business unduly during a period of rising prices would be removed. It may well be conceived that there are other factors, besides the discrepancy between the nominal and real rates of interest, that give to business a temporary or specious profitableness, and tend to encourage speculative overproduction.