M. Guyot appears to think that in the community as a whole too much saving can be put into the form of "fixed" capital and too little into circulating capital, and that such a condition of affairs will bring depression. "Fixed capital," he says, "cannot be utilised if there is no available circulating capital. Ships and railways are useless if there are no commodities for them to convey; a factory cannot be worked unless there are consumers ready to buy its products. If, then, circulating capital has been so far exhausted as to take a long time replacing, fixed capital must meanwhile remain unproductive, and the crisis is so much the longer and more severe."[173] To this there are two sufficient answers. The prevalence of low prices for goods of various kinds as well as for plant in a time of depression, the general glut of goods which forms one phase of the depression proves that the crisis does not arise from storing too much saving in plant and too little in goods. Where there exists simultaneously a larger quantity of plant, raw material, finished goods, and labour than the industrial society can find use for, no assertion of maladjustment, either as between trade and trade, country and country, fixed and circulating capital, will afford any explanation. Secondly, M. Guyot gives away his entire position by admitting "a factory cannot be worked unless there are consumers ready to buy its products." A "consumer" here can logically only mean one who buys finished goods for personal use, and if this be generally applied it amounts to a clear admission that under-consumption is the reason why there appears to be a glut of capital, fixed or other. FOOTNOTES: [146] _Contemporary Review_, March 1888. [147] _Report on Industrial Depressions_, Washington, 1886. [148] Report, pars. 61-66. [149] Report, par. 106. [150] _Contemporary Review_, July 1887. [151] _Contemporary Review_, March 1888. [152] _Report of the Commissioner of Labour_, Washington, 1886, pp. 80 to 88. [153] D.A. Wells, _Contemporary Review_, August 1887. [154] Lord Playfair, in the _Contemporary Review_, March 1888, gives a number of interesting illustrations of recent economies in transport and manufacture. [155] _Statist_, 1879, quoted Bowley, _England's Foreign Trade in the Nineteenth Century_, p. 80. [156] _Essays in Finance_, vol. i. p. 137, etc. [157] For the view that over-consumption is cause, see Appendix II. [158] "What is annually saved is as regularly consumed as what is annually spent, and nearly in the same time too; but it is consumed by a different set of people." (_Wealth of Nations_, p. 149_b_, McCulloch.) "Everything which is produced is consumed; both what is saved and what is said to be spent, and the former quite as quickly as the latter." (_Principles of Political Economy_, Book I., chap. v., sec. 6.) [159] An able analysis of the nature of "paper savings" is found in Mr. J.M. Robertson's _Fallacy of Saving_. (Sonnenschein.)