38 WORLD-POWER AND EVOLUTION 



conditions throughout the rest of the eighties. Next, bad health 

 in 1891 is the sign for the relatively poorest business ever done 

 upon the New York clearing house from 1870 to the Great War. 

 Of course the low state of business in 1894 and for the next few 

 years was due to the panic of 1893. But why did the panic occur 

 just after a period of peculiarly bad health — the worst during 

 the period under observation? Why, too, did the panic of 1873 

 come just after a period of bad health, the severity of which was 

 next to that of 1893? 



A similar line of reasoning applies to E, which shows the vari- 

 ations in the prices of all commodities. It is based on Falkner's 

 figures from 1870 to 1889, and those of the Bureau of Labor from 

 that time onward. Like all the curves in this chapter it does not 

 indicate the absolute changes. Instead of this it shows the fluc- 

 tuations from the level that would exist if certain permanent 

 tendencies, such as the improvements in manufacturing and 

 transportation, or the decline in the value of gold, worked steadily 

 without interference from other factors, such as the weather. The 

 resemblance of the curve of prices to that of health is remarkable. 

 The chief difference is that when the prices once fall they do not 

 recover again so quickly as does health. Notice how the low prices 

 corresponding to the poor health of 1872 continue for four years. 

 Similarly those corresponding to the sickness of 1881 last two or 

 three years, while those attending the bad period of 1891 con- 

 tinue still longer. Another point should be noted. The price 

 curve has been shoved back four years instead of three as in the 

 case of the New York clearing house. In other words, general 

 prices do not change quite so quickly as does the amount of bank 

 clearings in New York. 



If anyone objects to using general prices as a measure of the 

 conditions of business in general, the national banks can be used 

 as a yardstick. The fluctuations in the deposits in such banks 

 are shown in curve F of Figure 4. Here we have essentially the 

 same fluctuations as in the curve for prices. The two most promi- 



