Either the enterprise proves successful and justifies by the commodities it produces, or the services] it renders, the expectations formed of it; in this case all will he well, the receipts will be used to redeem and extinguish the credits, and the promoters will deserve well of their country by their foresight and enterprise in opening up new and hitherto unutilized sources of wealth. Or, on the other hand, the money which should have been spent in opening up the mines, in reclaiming the land, or in paving for the machinery and labour, is diverted to other purposes, is fraudulently wasted in the personal expenditure of the promoters, or sunk in experiments from which, as from a dry well, nothing issues; in this case the credits remain unredeemed, and instead of facilitating (as legitimate credits which are based on actually existing commodities do) the production and consumption of the wealth of a nation, they hang like added millstones around its neck. Or, as a third possibility, the undertaking is completed, the goods turned out in quantity and quality corresponding to the promises held out in the prospectus, but the consuming public from some sudden revulsion of feeling, or caprice of taste or fashion, will not have them at any price, or only at a price insufficient to pay the expenses of the undertaking; in this case the result will be the same as in the former, the credits either wholly or in part will remain unredeemed, and instead of helping on the circulation of the rest of the commodities on the wheel will obstruct and clog its movement.

But the main reason why financial crises of national magnitude can only occur in connection with credits issued on the faith of new enterprises not yet begun or completed, is that there is no scientific function or mechanism as yet existing for their control, such as is performed by the great dealers and financiers on the axle who are responsible for the punctual delivery both in amount and quality of the commodities actually on the wheel, - always barring, of course, accidents and disasters which are in the hands of fate and are not subject to human control. And the consequence is that all these new industrial ventures, the realization of whose promise lies in the future, are in the absence of any central organized mechanism to control them, liable to surround themselves with paper credits swollen in amount and bulk, by the wind and rumour of what they are going to do, from the dimension of paper bags to that of balloons. And should the enterprise prove to be a 'wild-cat' scheme or South Sea bubble, and especially if a number of such have been let loose on the public at about the same time, it only requires some big banking house or great commercial firm heavily loaded with these paper liabilities to collapse, owing to its failure to meet its engagements, for all the innumerable minor bubbles attached to the mammoth one to collapse also.

And so great is the interconnection of the credit system with its continuous electric chain or belt surrounding the ring of commodities on the wheel, that once started, the collapse of the bubble credits will paralyse the sound ones as well; and both in turn will paralyse for the time being the fixed capital engaged in production, and stop the running of the wheel. Indeed should the financial crisis extend so far that even the Bank of England should be compelled to suspend payment, not a mill or a factory from John o' Groats to Land's End but would come to a standstill as if a bolt had struck it. Praeternatural suspicion would have taken the place of excess of confidence, no man could trust to his neighbour's solvency, and the bankers and financiers on the axle, who had abdicated their functions and retired to their tents when the speculative mania was at its height, now that the crash had come would emerge again to take up their normal position at the helm; but unfortunately only to aggravate,the calamity instead of helping to mitigate it. For now that the paper credits had burst and collapsed, there would be nothing left as a medium of exchange but the gold and silver, which in amount is at any time but a small fraction of the existing paper credits.

This being the property of the financiers themselves, they would not part with it on any but the most ruinous terms, on penalty of being themselves swept into the genera] whirlpool of bankruptcy. And so by locking up the gold in their vaults at the very time when it is most wanted to liquidate the sound and legitimate credits which all this time have been circulating with the illegitimate, like the wheat with the tares; - unless the Government came to the rescue by pledging its own credit in which everyone has confidence, for the ordinary commercial paper credits in which for the time being no one dares trust. the stagnation in the wealth production of the nation would continue until it worked wholesale ruin all around. For the production of wealth being dependent on the fixed capital, the closing down of any large part of that capital for a week or a month, would, with the millions of families depending on it, be a very serious calamity. Fortunately there is one form of fixed capital whose operations can never be altogether suspended by the caprice or folly of men, and that is the soil itself, which will go on producing its fruit in season whatever befall: indeed but for this, a collapse in financial credits would not only bring irretrievable ruin to many homes, but actual starvation as well.