ABSTRACT
The increasing budgetary deficits and the growing weight of fixed indebtedness of which so much has been heard in the past few years, are difficulties of this kind. These difficulties may rightly be described as consequences of the fall of prices. It is sometimes thought that the coming of depression is due to a shortage of gold. In order that business may remain stable it is said it is necessary that prices should not fall. A fall of 40 per cent in gold prices in four years is an event without precedent. In popular discussion, people often speak as if this were, not only a symptom, but actually the cause of the slump and its various attendant difficulties. The fall in profitability in many lines of industry due to changed relations, or anticipations of changed relations, between supply and demand is one of the most conspicuous features of the beginning of all downward fluctuations of this nature.
