Explain the process of rediscounting here referred to. In just what way did the rediscounting operations relieve the call money market? Do you consider that this use of the rediscounting facilities provided by the Federal Reserve System was in accord with sound banking principles? Was it the best possible use of the rediscounting mechanism? For suggestions see the "New York Times" of December 5, 1916, under the heading "Financial Markets." CHAPTER 10 CRISES AND INDUSTRIAL DEPRESSIONS REFERENCES. _Dewey, D. R._, Financial history of the United States, 4th ed., 1912. Ch. X. _England, Minnie T._, Promotion as the cause of crises. Q. J. E., 29: 748-767. 1914-1915. *_Hamilton_, Readings, 91-93, 93-95, 95-98. _Hobson, J. A._, Evolution of modern capitalism. Ed., 1912. Ch. 7. _Jones, E. D._, Economic crises. 1900. _Juglar, C._, and _Thom, C. W._, A brief history of panics and their periodical recurrence in the United States. Ed., 1916. *_Materials_, 391-396. _Mitchell, W. C._, Business cycles. 1913. _Moore, H. L._, Economic cycles: their law and cause. 1914. _Nelson, S. A._, The A B C of Wall Street. 1900. _Patterson, E. M._, The theories advanced in explanation of economic crises. A. A. A., 59: 133-147. 1915. *_Phillips_, chs. XXVIII, XXIX. *_Source Book_, 138-156. _Sprague, O. M. W._, The crisis of 1914 in the United States. A. E. Rev., 5: 499-533. 1915. _United States Bureau of Labor_, Annual report for 1886. QUESTIONS. 1. What is a financial crisis? An industrial depression? 2. Describe the trade, banking and price conditions which obtain just preceding, during and immediately following a crisis. 3. State clearly and explain the movement of prices of stocks, bonds, mortgages, land, commodities generally, wages and interest rates on long time and short time loans, before, during, and after a crisis. 4. Tabulate for a series of years covering periods of prosperity and depression, the prices of stocks, bonds, real estate, and of some commodities. 5. What economic changes occurred in your own community in the panic of 1893-94, or in the years 1903-04, or in 1907-08? 6. Is it possible that the amount of all goods produced shall be in excess of the community's power of consumption? 7. "As the average American can produce far more than he can consume, it has been proved repeatedly that as long as the sale of his products is confined to the home markets, over-production is certain to be a natural consequence of every prolonged period of activity. For half a century, therefore, with regularly recurring seasons of surplus production, there came those inevitable commercial crises which emphasized with increasing force the necessity for foreign markets." (This passage is taken from a reprint of a speech of a congressman.)