A business man has a certain amount of capital. If he makes his “turn over” once a year, he gains, say, ten per cent. profit; if he can make the “turn over” twice a year, he gains twenty per cent. He sees the business ahead, and so he goes into debt. And of course this step gives an impulse to the business of the man who manufactures his machinery, and to the man who raises his raw material, and to the railroads which handle both. The effect of that condition, prevailing throughout a whole community, is to accelerate enormously the industrial process; under it the capital of the community becomes, exactly as in the case of the railroads, not the actual definite cost of the instruments of production existing, but an altogether hypothetical thing, a function of anticipated earnings. So it is that you have a “boom”—a period of furious and fevered activity, in which everyone sees fortunes springing up about him; and then comes some disturbing factor, which suggests to a number of men the advisability of realising on their expectations; and a chill settles upon the community, and there is a wild rush to collect, and the discovery is made that most of the anticipated profits are not in existence. There is one more consideration which has to be touched upon before we are prepared to consider the concrete problem in America. The process which has been outlined is an industrial one; events have been pictured here as they would take place in a community given altogether to manufacturing, mining, and transportation. But as a matter of fact we have not only to reckon with thirteen billions a year of manufactured products, but also with four billions a year of farm products. The importance of this new element lies in the fact that the ownership of the farms is still largely in the hands of the masses; which means that once every year the process we have been picturing is stayed while the American people get rid of four billion dollars of spending money, which comes to them outside of and independent of the wage-fund. Thus, strange as it may seem, abundant crops tend to mitigate an “overproduction” crisis, while a failure of crops would do more than anything else in the world to precipitate one. With these facts in mind we are now in position to interpret our recent industrial history. We have generally had our hard times in America at ten year intervals, with especially severe crises at twenty year intervals. We had our last severe attack in 1893, and we were due to have one of the lesser sort in 1903. What happened then was very interesting to watch, in the light of the views just explained. In the early winter and spring of 1904, the avalanche was well under way. Here, for instance, is an item clipped from the Chicago _Tribune_ in April of that year: