onomies of the foundational transport industries have deeply
affected the whole commerce and manufacture of the country, and have
played no inconsiderable part in bringing about the general fall of
prices by lowering the expenses of production and stimulating an
increased output.

Excessive production of transport-machinery, especially of railways,
has played an important part as an immediate cause of modern trade
depression. The depression beginning in 1873 and culminating in 1878
is described as having its origin "in the excessive lock-up of capital
in the construction of railways, especially in America and Germany,
many of which, when built, had neither population to use them nor
traffic to carry; in the wild speculation that followed the German
assertion of supremacy on the Continent; in the exaggerated armaments,
which withdrew an inordinate amount of labour from productive
industry, and over-weighed the taxpayers of the great European
nations; and in over-production in the principal trades in all
European countries."[155]

Mr. Bowley points out that "after each of the great railway booms of
the century, for instance in England about 1847, in America before
1857 and 1873, in India in 1878, and on the Continent in 1873, the
collapse has been very violent; for the materials are bought at
exaggerated prices; the weekly wage during construction is enormous;
no return is obtained till the whole scheme, whose carrying out
probably lasts many years, is complete."

A great deal of this railway enterprise meant over-production of forms
of transport-capital and a corresponding withholding of current
consumption. In other words, a large part of the "savings" of England,
Germany, America, etc., invested in these new railways, were
sterilised; they were not economically needed to assist in the work of
transport, and many of them remain almost useless, as the quoted value
of the shares testifies. It is not true, as is sometimes suggested,
that after a great effort in setting on foot such gigantic
enterprises, a collapse is economically necessary. If the large
incomes and high wages earned in the period prior to 1873, when
capital and labour found full employment in these great enterprises,
had been fully applied in increased demand for commodities and an
elevated standard of consumption, much of the new machinery of
transport, which long stood useless, would have been required to
assist in forwarding goods to maintain the ra