Page:Stabilizing the dollar, Fisher, 1920.djvu/120

66 in a business crash, after which there is a long fall causing an industrial depression, followed by another climb to the next crash. Yet the rank and file of business men do not realize the close connection between these cycles of trade and the instability of the dollar. Briefly, the process is this: when prices rise, great profits are made because, as we have seen, the "profiteer" or stockholder wins without effort from the bondholder and from the employees on salary or wages. His easy profits lead him to "extend himself" until, when interest charges, rents, salaries, and wages do catch up, his prosperity ceases, he gets caught in debt, becomes a bankrupt, and involves others in a chain of bankruptcies.

A general crisis or even panic may ensue. In fact, a crisis is defined by Juglar as the culmination of an upward price movement,—that is, of a downward movement in the purchasing power of the dollar. Such crises have followed the exaggerated prosperity which often comes shortly after a war—for instance, after the Napoleonic Wars (in 1818), the Crimean War (in 1857), the Civil War (in 1866), and the Franco-Prussian War (in 1873). Then when prices fall the "fixed charges" are felt as a most serious drag on business and a depression of trade follows.

Yet it seldom occurs to business men that business thus staggers about because the dollar staggers.

11. Resentment and Violence

There may be persons' who, at this point, are inclined to make the smug observation that what we don't know we suffer we don't really suffer. But we cannot take so easy-going a mind cure. On the