1 The "cycle" of eialtation, crisis, and depreaafon ha» frequently been deacribed. Perbapa as effective a deacriptioa aod ftakiyau m aaj la tliat ot Tugau-Baranuniiky, HandeUlcriien, cbap. VIII.
characterization are neceasary to fit the immediate present. These will be indicated presently.
In brisk times the use of credit is large ; it may be as a cause or an effect of the acceleration of business ; most commonly it seems to be both a cause and an e£Eect. No appreciable business acceleration takes place without an extension of credit, at least in the form of contracts of purchaae and sale for future performance, if not also in the form of loans. In times of protracted depression the use of credit seems on the whole to be somewhat restricted, at least such is the current apprehension of the case among business men. Still, it cannot confidently be said that seasons of protracted depression are due solely to an absence of credit relations or to an unwillingness to enter into credit relations, A comparison of the course of interest rates, e.g., does not warrant the generalization that the readiness with which loans can be negotiated need be appreciably different in brisk and in dull times.^ The readiness with which contracts of purchase and sale are negotiated is appreciably greater in brisk times than in times of depression ; that, indeed, is the obvious difference between the two.
Of the three phases of business activity, depression, exaltation, and crisis, the last named has
Cf., howerer, Cuwl, »Oiii Kiiser ocb DUigft Tider," £ IMftkr(«. »ol. VL Ho. 2, pp. 69-78.