chapter  Chapter XIX
19 Pages

Pressure, Crisis, Panic

ByRobert E. Wright, Richard Sylla

Industrial derangement is considered mainly in its tendency to make commerce and manufacture press upon banking, and thereby to affect the terms on which bankers lend. Diminish capital and workmen lose employment, businesses have to be wound up, farms remain unlet, factories work on half time or close altogether. The remedy for a high rate of interest, owing to an expanded trade, is a further importation of gold to be made into coins; and for a high rate, owing to speculative high prices, a return to lower prices. The arrival of money from other places, the curtailment of engagements to other countries, and the diminution of consumption, all take time to produce their effects. The importation of money from other countries is unfortunately requisite, in the case of bank failures on. a grand scale. In mitigation of the pressure caused by these failures a supply of notes and coins as loans may be beneficial until the gold arrives.