ere necessitated by a law as
absolute as that which brings to the ground a structure overhanging its
centre of gravity. It was one of your fictions that the government and
the banks authorized by it alone issued money; but everybody who gave a
dollar's credit issued money to that extent, which was as good as any
to swell the circulation till the next crises. The great extension of
the credit system was a characteristic of the latter part of the
nineteenth century, and accounts largely for the almost incessant
business crises which marked that period. Perilous as credit was, you
could not dispense with its use, for, lacking any national or other
public organization of the capital of the country, it was the only
means you had for concentrating and directing it upon industrial
enterprises. It was in this way a most potent means for exaggerating
the chief peril of the private enterprise system of industry by
enabling particular industries to absorb disproportionate amounts of
the disposable capital of the country, and thus prepare disaster.
Business enterprises were always vastly in debt for advances of credit,
both to one another and to the banks and capitalists, and the prompt
withdrawal of this credit at the first sign of a crisis was generally
the precipitating cause of it.

"It was the misfortune of your contemporaries that they had to cement
their business fabric with a material which an accident might at any
moment turn into an explosive. They were in the plight of a man
building a house with dynamite for mortar, for credit can be compared
with nothing else.

"If you would see how needless were these convulsions of business which
I have been speaking of, and how entirely they resulted from leaving
industry to private and unorganized management, just consider the
working of our system. Overproduction in special lines, which was the
great hobgoblin of your day, is impossible now, for by the connection
between distribution and production supply is geared to demand like an
engine to the governor which regulates its speed. Even suppose by an
error of judgment an excessive production of some commodity. The
consequent slackening or cessation of production in that line throws
nobody out of employment. The suspended workers are at once found
occupation in some other department of the vast workshop and lose only
the time spent in changing, while, as for the glut, the business of the
nation is large enough to carry any amount