In the United States financial disasters have occurred in 1814, 1819, 1825, 1837-1839, 1857, and 1873. Those of 1837 and 1873 seem to have been the most serious in their effects; but this field, so far as scientific study is concerned, has not been fully worked, and much remains to be learned about these crises in the United States. The crisis of 1873 was due to excessive railway-building. It was testified(244) concerning the New York banks in 1873 that “their capital needed for legitimate purposes was practically lent out on certain iron rails, railroad-ties, bridges, and rolling-stock, _called_ railroads, many of them laid down in places where these materials were practically useless.” Under the effects due to swift communication by steam, but especially to the electric telegraph, modern credit is a very different thing from what it was fifty years ago. Now, a shock on the Bourse at Vienna is felt the same day at Paris, London, and New York. A commercial crisis in one great money-center is felt at every other point in the world which has business connections with it. Moreover, as Cherbuliez(245) says: “A country is more subject to crises the more advanced is its economical development. There are certain maladies which attack only grown-up persons who have reached a certain degree of vigor and maturity.” § 4. Influence of the different forms of Credit on Prices. It does not, indeed, follow that credit _will_ be more used because it _can_ be. When the state of trade holds out no particular temptation to make large purchases on credit, dealers will use only a small portion of the credit-power, and it will depend only on convenience whether the portion which they use will be taken in one form or in another. One single exertion of the credit-power in the form of (1) book-credit, is only the foundation of a single purchase; but, if (2) a bill is drawn, that same portion of credit may serve for as many purchases as the number of times the bill changes hands; while (3) every bank-note issued renders the credit of the banker a purchasing power to that amount in the hands of all the successive holders, without impairing any power they may possess of effecting purchases on their own credit. Credit, in short, has exactly the same purchasing power with money; and as money tells upon prices not simply in proportion to its amount, but to its amount multiplied by the number of times it changes hands, so also does credit; and credit transferable from hand to hand is in that proportion more potent than credit which only performs one purchase.