there is a permanent reason why mostly they will act together. They both tend to grow together, if you begin from a period of depression. In such periods credit is bad, and industry unemployed; very generally provisions are high in price, and their dearness was one of the causes which made the times bad. Whether there was or was not too much loanable capital when that period begins, there soon comes to be too much. Quiet people continue to save part of their incomes in bad times as well as in good; indeed, of the two, people of slightly-varying and fixed incomes have better means of saving in bad times because prices are lower. Quiescent trade affords no new securities in which the new saving can be invested, and therefore there comes soon to be an excess of loanable capital. In a year or two after a crisis credit usually improves, as the remembrance of the disasters which at the crisis impaired credit is becoming fainter and fainter. Provisions get back to their usual price, or some great industry makes, from some temporary cause, a quick step forward. At these moments, therefore, the three agencies which, as has been explained, greatly develop trade, combine to develop it simultaneously. The certain result is a bound of national prosperity; the country leaps forward as if by magic. But only part of that prosperity has a solid reason. As far as prosperity is based on a greater quantity of production, and that of the right articles as far as it is based on the increased rapidity with which commodities of every kind reach those who want them—its basis is good. Human industry is more efficient, and therefore there is more to be divided among mankind. But in so far as that prosperity is based on a general rise of prices, it is only imaginary. A general rise of prices is a rise only in name; whatever anyone gains on the article which he has to sell he loses on the articles which he has to buy, and so he is just where he was. The only real effects of a general rise of prices are these first it straitens people of fixed incomes, who suffer as purchasers, but who have no gain to correspond; and secondly, it gives an extra profit to fixed capital created before the rise happened. Here the sellers gain, but without any equivalent loss as buyers. Thirdly, this gain on fixed capital is greatest in what may be called the industrial implements,' such as coal and iron. These are wanted in all industries, and in any general increase of prices, they are sure to rise much more than other things. Everybody wants them; the supply of them cannot be rapidly augmented, and therefore their price rises very quickly. But to the country as a whole, the general rise of prices is no benefit at all; it is simply a change of nomenclature for an identical relative value in the same commodities. Nevertheless, most people are happier for it; they think they are getting richer, though they are not. And as the rise does not happen on all articles at the same moment, but is propagated gradually through society, those to whom it first comes gain really; and as at first everyone believes that he will gain when his own article is rising, a buoyant cheerfulness overflows the mercantile world. This prosperity is precarious as far as it is real, and transitory in so far as it is fictitious. The augmented production, which is the reason of the real prosperity, depends on the full working of the whole industrial organization of all capitalists and laborers; that prosperity was caused by that full working, and will cease with it. But that full working is liable to be destroyed by the occurrence of any great misfortune to any considerable industry. This would cause misfortune to the industries dependent on that one, and, as has been explained, all through society and back again. But every such industry is liable to grave fluctuations, and the most important the provision-industries to the gravest and the suddenest. They are dependent on the casualties of the seasons. A single bad harvest diffused over the world, a succession of two or three bad harvests, even in England only, will raise the price of corn exceedingly, and will keep it high. And a great and protracted rise in the price of corn will at once destroy all the real part of the unusual prosperity of previous good times. It will change the full working of the industrial machine into an imperfect working; it will make the produce of that machine less than usual instead of more than usual; instead of there being more than the average of general dividend to be distributed between the producers, there will immediately be less than the average. And in so far as the apparent prosperity is caused by an unusual plentifulness of loanable capital and a consequent rise in prices, that prosperity is not only liable to reaction, but certain to be exposed to reaction. The same causes which generate this prosperity will, after they have been acting a little longer, generate an equivalent adversity. The process is this: the plentifulness of loanable capital causes a rise of prices; that rise of prices makes it necessary to have more loanable capital to carry on the same trade. £100,000 will not buy as much when prices are high as it will when prices are low, it will not be so effectual for carrying on business; more money is necessary in dear times than in cheap times to produce the same changes in the same commodities. Even supposing trade to have remained stationary, a greater capital would be required to carry it on after such a rise of prices as has been described than was neces sary before that rise. But in this case the trade will not have remained stationary; it will have increased certainly to some extent, probably to a great extent. The "loanable capital," the lending of which caused the rise of prices, was lent to enable it to augment. The loanable capital lay idle in the banks till some trade started into prosperity, and then was lent in order to develop that trade; that trade caused other secondary developments; those secondary developments enabled more loanable capital to be lent; and that lending caused a tertiary development of trade; and so on through society. In consequence, a long-continued low rate of interest is almost always followed by a rapid rise in that rate. Till the available trade is found it lies idle, and can scarcely be lent at all; some of it is not lent. But the moment the available trade is discovered the moment that prices have risen - the demand for loanable capital becomes keen. For the most part, men of business must carry on their regular trade; if it cannot be carried on without borrowing 10 per cent. more capital, 10 per cent. more capital they must borrow. Very often they have incurred obligations which must be met; and if that is so the rate of interest which they pay is comparatively indifferent. What is necessary to meet their acceptances they will borrow, pay for it what they may; they had better pay any price than permit those acceptances to be dishonored. 793 PHILIP JAMES BAILEY. BAILEY, PHILIP JAMES, an English poet, born at Nottingham, April 22, 1816. His father was the editor of "The Nottingham Mercury." The son, after training at schools in Nottingham, entered the University of Glasgow in 1831; two years afterward he began the study of law, and was called to the English bar in 1840. He had in the meanwhile devoted himself to literature rather than law. His first poem, "Festus," was mainly written before he had completed his twentieth year, and was published in 1839. Few poems have ever excited such immediate attention; and there were not wanting then, and for years afterward, critics who saw in the author of "Festus" the man who was to be the great poet of the age. In later editions, "Festus" was increased to about three times its original length. Subsequent to "Festus" Mr. Bailey put forth several other poems, the principal of which are: "The Angel World" (1850); "The Mystic" (1855); "The Age: A Colloquial Satire" (1858); and "The Universal Hymn" (1867). LIFE. (From "Festus.") FESTUS. Man hath a knowledge of a time to come; His most important knowledge; the weight lies Nearest the short end, this life; and the world Depends on what's to be. I would deny The present, if the future. Oh! there is And all A life to come, or all 's a dream. LUCIFER. May be a dream. Thou seest in thine, men, deeds, May not, then, all this world be but a dream Of God's? Fear not. Some morning God may waken. The value of a thought cannot be told; But it is clearly worth a thousand lives Like many As if mere life were worth the living for. LUCIFER. What but perdition will it be to most? FESTUS. Life's more than breath and the quick round of blood; It is a great spirit and a busy heart. The coward and the small in soul scarce do live. We live in deeds, not years; in thoughts, not breaths; We should count time by heart throbs. He most lives Who thinks most, feels the noblest, acts the best. To those who dwell in Him, He most in them, It is the dead win battles; and the breath Their country's arms, for more, their country's heart. The rapid and the deep; the fall, the gulf, In one day, than a creeping century Of sameness. But youth loves and lives on change, Yet some will last to die out thought by thought, Like lamps upon a gay device of glass, Through dust and mold. Can they be cleaned and read? |