Introduction. 
871 
best but an^irregular and fragmentary outline. It is as con¬ 
nected with the larger subject of the theories of crises that the 
work contained in this paper has been attempted, and in fol- 
lowing]the development of these theories, it has come about that 
so large a part has been devoted to banking legislation, and that 
in connection with this the presentation centers about the priv¬ 
ileges of the Bank of France and the Peel Bank Act of 1844. 
It has been said that every question has its legislative side, 
and this side it is which, very often in the history of discus¬ 
sions on crises, has occupied the minds of the writers in whose 
memories the events described were still fresh, to the exclusion 
of almost every other consideration. The business machinery 
which has been wrecked is considered as the origin of disturb¬ 
ance 1 and whatever laws have created or maintained that ma¬ 
chinery are suspected and condemned as erroneous and defective. 
Proposals for new laws and for revisions and improvements of 
every description appear in plentiful crops after every severe com¬ 
mercial panic. A specific cure, a simple addition to, or change 
of, legal provisions is often all that is prescribed to rectify 
what is conceived of as a specific abuse. 
As an economic crisis always involves the serious disturb¬ 
ance of the mechanism of exchange 2 we find that many discus¬ 
sions have centered themselves upon the provisions governing 
the currency at the particular time and place concerned. The 
evil effects of a depreciated paper money are evident in the ex¬ 
periences of Austria in 1873. 3 The inflexibility of the system 
1 Bowen has enumerated two theories of commercial crises. One theory 
explains them from the mismanagement of banks and an unnecessary 
expansion of the currency. The second regards the banks as passive 
and finds the characteristic feature in a great extension of the system 
of credit. The first view he rejects. “American Political Economy,’? 
3d ed„ 1863, p. 437. 
2 “ D’ailleurs, une crise commerciale est toujours une crise monetaire 
puisque c’est la reduction de la reserve metallique des Banques qu i 
donne le signal de l’explosion.” Say’s “Dictionnaire,” Art. “Crises Com- 
merciales” by Juglar, § 2 
3 “JDieFrage nach den Geldkrisen mit alien ihren Folgen in Oester. 
reich die Valutafrage zum ersten Ausgangspunkte habe, dass die Geld- 
frage in der Valutafrage liege und dass das Mittel dagegen nur in der 
Herstellung der vollkommen freien Geldbewegung zwischen Oesterreich 
25 
