ich
marks the completion of one cycle and the commencement of a new one.

Good vintage years on the continent of Europe, and droughts in India,
recur every ten or eleven years, and it seems probable that commercial
crises are connected with a periodic variation of weather, affecting all
parts of the earth, and probably arising from increased waves of heat
received from the sun at average intervals of ten years and a fraction.
A greater supply of heat increases the harvests, makes capital more
abundant and trade more successful, and thus helps to create the
hopefulness out of which a bubble arises. A falling off in the sun's
heat makes bad harvests and deranges many enterprises in different parts
of the world. This is likely to break the bubble and bring on a
commercial collapse.

Generally, #a credit cycle#, as Mr. John Mills of Manchester has called
it, will last #about ten years#. The first three years will witness
depressed trade, with want of employment, falling prices, low rate of
interest, and much poverty; then there will be perhaps three years of
active, healthy trade, with moderately-rising prices, a reasonable rate
of interest, fair employment, and improving credit; then come some years
of unduly-excited trade, turning into a bubble or mania, and ending in a
collapse, as already described. This collapse will occupy the last of
the ten years, so that the whole credit cycle will, on the average, be
as follows:--

|---------------------------------------------------------------|
| YEARS. |
|---------------------------------------------------------------|
| 1 2 3 | 4 5 6 | 7 8 | 9 | 10 |
|----------- |----------- |--------- |-----------|--------------|
| DEPRESSED | HEALTHY | EXCITED | _Bubble._ | _Collapse._ |
| | | | | |
| TRADE. | TRADE. | TRADE. | | |
|----------- |----------- |--------- |-----------|--------------|

#It is not to be supposed that things go as regularly as is here
stated;# sometimes the cycle lasts only nine, or even eight years,
instead of ten; minor bubbles and crises sometimes happen in the course
of the cycle, and disturb its regularity. Nevertheless, it is wonderful
how often the great collapse comes at the end of the cycle, in spite of
war or peace or other interfering c