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 one knew that there were no real grounds for confidence. The Franco-Prussian war had, also, while it lasted, produced a period of false and feverish prosperity in England. It was succeeded by great political changes in Germany which, together with the war indemnity, led to a sudden and unfounded expansion of speculation, amounting to a mania. Germany undoubtedly stands face to face with a new political and industrial future, but she has postponed it by a headlong effort to realize it at once. In France, too, the war was followed by a hasty, and, as we are told, unwise extension of permanent capital, planned to meet the extraordinary demand of an empty market. In England the prosperity of 1870–1872 has been followed as usual by developments of unsound credit, bad banking, and needless investments in worthless securities.

Here then we have, in a brief and inadequate statement, circumstances in all these great industrial nations peculiar to each, yet certainly sufficient to account for a period of reaction and distress. We have also before us great features of change in the world's industry and commerce which must ultimately produce immeasurable advantages, but which may well, operating with local causes, produce temporary difficulty; and we have to notice also that the local causes react through the commercial and credit relations of nations to distribute the evil.

It is not surprising, under such a state of things, that some people should lose their heads and begin to doubt the economic doctrines which have been most thoroughly established. It belongs to the symptoms of disease to lose confidence in the laws of health and to have recourse to quack remedies. I have already observed that certain phenomena appear in every great social movement which are calculated to deceive by apparent inconsistency or divergence. Hence we have seen the economists, instead of holding together and sustaining, at the time when it