72 W. G. Langworthy Taylor 



of delivery, on the other. Accordingly, there exist two kinds of 

 credit, one which lengthens with the roundaboutness of the proc- 

 ess, and one which shortens with the rapid delivery of goods. 

 The latter is the more spatial and the more employed in set-off ; 

 the former the more temporal, and the more presented for liquida- 

 tion. But they are intimately allied : if the temporal credit cease 

 to exist, production ceases ; there are no goods for sale, hence 

 spatial credit ceases also. Either kind of credit affects the gen- 

 eral level of prices. Mere bulling of the market for certain r oods, 

 say iron, may cause an inflation. But the usual and more potent 

 cause of inflation is to be found in the temporal credit connected 

 with the launching of industrial enterprises. This sort of credit 

 most powerfully affects prices. So far as mere exchange is con- 

 cerned, of course, the level of prices is of little significance. So 

 long as goods are produced, the set-off system can operate, for it 

 is purely a matter of exchange, and the static philosophy teaches 

 correctly that the number of counters employed in exchange is a 

 matter of indifference. 



This is the normal, dual, time-space mechanism of credit in 

 recent environments. The lengthening of the time-norm lends 

 to them their psychic aspect. With onward rush of credit-stimuli, 

 marked by pauses and renewed currents of ever greater inten- 

 sity, a disproportion of the stimulation of credit to the productive 

 capacity of technical apparatus and, in a less degree, to customary 

 consumption, ensues. There is a hypertrophy of the nervous sys- 

 tem of industry. The main result is a general fall of future 

 values. They finally cease to be dealt in. This is a painful mat- 

 ter for the persons chiefly interested in them. Having cast in 

 their economic lot with speculative production, they must now 

 pass through a process of liquidation corresponding in severity 

 to the disapproval which their enterprises may have met at the 

 hands of the general conjuncture. Nor can anyone escape some 

 share in the general liquidation ; the principle of the social mind 

 is again invoked. The most conservative citizen, the one least 

 implicated in speculation, finds his property unsalable. Income 

 is equally affected, since income is only realized through exchange. 

 The exchange process, which is assumed to run itself in many 



72 



