THE economic revulsion in the United States is still too recent to allow an exact determination of its consequences, and for that reason, its underlying causes cannot be thoroughly analysed at the present time. The crisis and panic which appeared during an early stage of the reaction may be taken, however, as a sufficiently distinct problem for separate examination, which can be studied with a reasonable measure of completeness from the material already at hand. At the outset it will be of advantage to make a more definite distinction than has been customary between fluctuations in business activity and the crises and panics which have frequently accompanied the transition from prosperity to depression. During the eighteenth and the greater part of the last century it would be difficult to find an instance of a period of decided trade reaction which began without sudden and Violent disturbance, but in some countries, notably in France and Great Britain, recessions in business activity during the last forty years have come about with a noteworthy diminution of strain, sudden collapse, and general destruction of credit, even the crisis of 1890 being, properly speaking, a crisis averted. In the United States, on the other hand, crises have been no less frequent, and there has been no alleviation in their sudden and disastrous consequences. Crises are commonly ascribed to unsound conditions which have developed during years of business activity, but this is more properly' an explanation of fluctuations in trade, unless we assume that crises occur when conditions are extremely unsound, and that with only moderately unsatisfactory conditions depression may come without sudden disturbance. In accord with this View many writers have called attention to the highly speculative character of business in new No. 71.---V0L. XVIII.:B B

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