THE THEOBY OF HODERy WELFARE 191
claimed the larger and livelier attention from students, as it ia also the more picturesque phenomenon. An industrial crisis is a period of liquidation, cancelment of credits, high discount rates, falling prices and " forced sales," and shrinkage of values. It has as a sequel, both severe and lasting, a shrinkage of capitalization throughout the field affected by it. It leaves the business men collectively poorer, in terms of money value ; but the property which they hold between them may not be appreciably smaller in point of physical magnitude or of mechanical efficiency than it was before the liquidation set in. It commonly also mvolves an appreciable curt,ailment of industry, more severe than lasting ; but the effects which a crisis has in industry proper are commonly not commensurate with its consequences in business or with the importance attached to a crisis by the business community. It does not commonly involve an appreciable destruction of property or a large waste of the material articles of wealth. It leaves the community at large poorer in point of market values, but not necessarily in terms of the material means of life. The shrinkage incident to a crisis is chiefly a pecuniary, not a material, shrinkage ; it takes place primarily in the intangible items of wealth, secondarily in the price rating of the tangible items. Apart from such reratmg of wealth, the most substantial immediate effect of a crisis ia an
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extensive redistribution of the ownership of the industrial equipment, as noted in speaking of the use of credit.
The play of business exigencies which lead to such a period of liquidation seems to run somewhat as follows : Many firms have large bills payable falling due at near dates, at the same time that they hold bills