I there is a discrepancy between the accepted capitalization and the actual eaming-capacity.' But the two differ even at this point in that, in the case of inflation, the discrepancy is not felt until the cHmax, when a widespread realization of the discrepancy brings on an abrupt readjustment, in the crisis
I which follows inflation ; whereas in a period of depression the sense of this discrepancy and the
' protest against it is the most striking circumstance of the case. The discrepancy between capitalization and eaming-capacity in a period of speculative movement comes of an inflation of capitalization ; whereas in time of depression the discrepancy ia due to a shrinkage of eaming-capacity, — both capitalization and eaming-capacity being, of course, counted in terms of money values. A speculative movement offsets or checks the trend to depression whenever it occurs ; and for some appreciable time past, such speculative movements appear to have been the only force which has from time to time broken the otherwise uninterrupted course of business depression. Under the regime of a perfected
- In the OBBe of *■ speculative inflation,
■ wh
■ Che
cap' = ; — > cap" = — — -~.
In the fonner case tbti current capital iisati on duriog Inflation, being C&p', exceeda the bona Ada capita! value an proved by eventg, cap ; white in the case of depression the nominal capital, beingcap', eiceedt the CBpltalizalion warranted b; current eaming-capacity, cap".