profits are low, perhaps business is carried on at a loss, but
factories, workshops, mines, railways, etc., are in active operation;
wages may be reduced, but there is plenty of employment. It is when
this congestion of goods has clogged the wheels of the industrial
machine, retarded the rate of production, when the weaker
manufacturers can no longer get credit at the bank, can no longer meet
their engagements, and collapse, when the stronger firms are forced to
close some of their mills, to shut down the less productive mines, to
work short hours, to economise in every form of labour, that
depression of trade assumes its more enduring and injurious shape.
The condition now is not that of an increasing glut of goods; the
existing glut continues to block the avenues of commerce and to check
further production, but it does not represent the real burden of
over-supply. The true excess now shows itself in the shape of idle
machinery, closed factories, unworked mines, unused ships and railway
trucks. It is the auxiliary capital that represents the bulk of
over-supply, and whose idleness signifies the enforced unemployment of
large masses of labour. It is machinery, made and designed to increase
the flow of productive goods, that has multiplied too fast for the
growth of consumption. This machinery does not continue in full use, a
large proportion of it is not required to assist in producing the
quantity of consumptive goods which can find a market, and must of
necessity stand idle; it represents a quantity of useless forms of
capital, over-supply, and its unused productive power represents an
incomparably larger amount of potential over-supply of goods. Economic
forces are at work preventing the continuation of the use of this
excessive machinery; if it were used in defiance of these forces, if
its owners could afford to keep it working, there would be no market
for the goods it would turn out, and these too would swell the mass of
over-supply.

[Illustration: GENERAL FOOD PRICES.]

[Illustration: MINERAL PRICES.]

Sec. 6. The general relation of modern Machinery to Commercial Depression
is found to be as follows:--Improved machinery of manufacture and
transport enables larger and larger quantities of raw material to pass
more quickly and more cheaply through the several processes of
production. Consumers do not, in fact, increase their consumption as
quickly and to an equal extent. Hence the onward flow of produ