On the Crises of 1837, 1847, and 18^7 3 



which it comes into operation as we proceed from a period of 

 prosperity to one of depression.^ For this purpose the following 

 headings will be found convenient : 



1. Changes in the permanent environment, or long-time causes. 



2. Occasions, or short-time causes. 



3. Trade movements. 



4. Financial operations. 



By changes in the permanent environment, or long-time causes, 

 we mean those alterations in the environment that are of a lasting 

 nature, i. e., those which survive the crisis. Railways constructed 

 previous to the crisis and remaining in use for years afterwards 

 come under this heading. Permanent extension of crop areas 

 also comes under this class. Occasions or short-time causes are 

 those forces which apparently cause the crisis. They are of short 

 duration. In fact, they spring into existence during the period 

 of speculation and perish with the crisis. Excess of railways and 

 crop areas beyond the needs of the times, wars, crop failures, 

 etc., fall under this heading. Strictly speaking, however, wars 

 and crop failures should not be contrasted with long-time causes, 

 as they are not characteristic of crises and are not so fundamental 

 as the other kinds of occasions. The trade movements are in- 

 ternational movements of merchandise, gold, and securities. Here 

 it is the purpose to study not so much the general as the particular 

 movements, or rather changes in the normal movements resulting 

 from and indicative of the operation of either long-time causes or 

 occasions or both. In considering financial operations, we pass 

 from the materialistic environment to the highest psychic realm 

 in economic activity — that of banking, private and government 

 financiering, etc. The forces here in action are given a stimulus 

 by the movements in the material environment, and in turn they 

 react upon it, so that the actions and reactions form a complete 

 circuit. We shall treat first the permanent environmental 

 changes of each crisis. 



^We have taken the ideal way. A crisis movement may actually stari 

 within a financial operation, or a trade movement, the permanent environ- 

 ment being acted upon later. 



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