e
money from John Smith, and if he refuses to pay, each owner has a claim
upon the previous owners.

CHAPTER XIV.

CREDIT CYCLES.

#87. Industry is Periodic#. Everybody ought to understand that trade
varies in activity, from time to time, in a periodic manner. #A thing is
said to vary periodically, when it comes and goes at nearly equal
intervals# like the sun, or rises and falls like the tides. Now, in
industry, as Mr. William Langton pointed out twenty years ago, there are
tides almost as regular as those of the sea. Shakespeare says truly--
"There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune."

Some of these tides depend upon the seasons of the year; business is
more active in the spring and summer, and falls off in winter. It is
comparatively easy to borrow money in January, February, March, June,
July, August, and September; October and November are particularly bad
months; the rate of interest then often runs up rapidly, and the
bankruptcies in these months are more numerous than at any other time of
year. April and May are also dangerous months, but in a less degree. Men
of business should always bear these facts in mind, and, by being
prepared beforehand, they may escape disaster.

There is also a much longer kind of tide in business, which usually
takes somewhere about ten years to rise and fall. The cause of this tide
is not well understood, but there can be no doubt that in some years
men become confident and hopeful. They think that the country is going
to be very prosperous, and that if they invest their capital in new
factories, banks, railways, ships, or other enterprises, they will make
much profit. When some people are thus hopeful, others readily become so
too, just as a few cheerful people in a party make everybody cheerful.
Thus the hopefulness gradually spreads itself through all the trades of
the country. Clever men then propose schemes for new inventions and
novel undertakings, and they find that they can readily get capitalists
to subscribe for shares. This encourages other speculators to put forth
proposals, and when the shares of some companies have risen in value, it
is supposed that other shares will do so likewise. The most absurd
schemes find supporters in a time of great hopefulness, and there thus
arises what is called a bubble or mania.

#88. Commercial Bubbles or Manias.# When the schemes started during a
bubble begin to be carried ou