It cannot be expected, however, that financial crises, in the sense of general readjustments of prices downward from time to time, ever can be completely abolished.  There will always be changes in general industrial conditions calling for reevaluation of the existing sources of income; and in this process there will always be a tendency to rhythmic swing like that of a river, which carries the stream of prices now on this side of the valley, now on that.  But this fluctuation of general prices surely can be so greatly moderated in magnitude and in evil results as to make the word “crisis” almost a misnomer.  It is toward the attainment of this irreducible minimum of uncertainty and disaster in business that efforts should be directed.

[Footnote 1:  On the way these affect private profits see Vol.  I, pp. 340, 341 (and references there given in note), 348 ff. and 361 ff.  There are thus good reasons for discussing crises in connection with profits, as well as with money and banking.]

[Footnote 2:  See Vol.  I, pp. 51, 154, 300-302.]

[Footnote 3:  See below, ch. 15, sec. 5, on the tariff legislation at this time.]

[Footnote 4:  See ch. 8, sec. 1.]

[Footnote 5:  See ch. 6, sec 5.]

[Footnote 6:  See diagram of business failures 1890-1914, in Vol.  I p. 364.]

[Footnote 7:  In the first annual report of the United States Commissioner of Labor is given a long catalog of theories that have been suggested, many of them quite fantastic.]

[Footnote 8:  See Vol.  I, ch. 38, on Abstinence and Production.  Believers in the glut theory usually condemn efforts to encourage frugality among the masses, calling it the “fallacy of saving.”]

[Footnote 9:  See Vol.  I, ch. 37, secs, 6 and 9.]

[Footnote 10:  See e.g., Vol.  I, pp. 271. 335, 365 367.]

[Footnote 11:  See Vol.  I, p. 304.]

[Footnote 12:  See above, ch. 6, on the standard of deferred payments.]

[Footnote 13:  See note on tariff legislation and business crises, end of ch. 15.]

[Footnote 14:  In both cases there is what is called in statistics a high degree of correlation (viz., .719 and .800), indicating that there is that percentage of probability that there is some causal relation between the two sets of figures.]

[Footnote 15:  See above, ch. 9, secs. 5, 6, 8.]

CHAPTER 11

INSTITUTIONS FOR SAVING AND INVESTMENT

Sec. 1.  The nature of saving.  Sec. 2.  Economic limit of saving.  Sec. 3.  Commercial bank deposits of an investment nature.  Sec. 4.  Investment banking.  Sec. 5.  Savings banks in the United States.  Sec. 6.  Typical mutual savings banks.  Sec. 7.  Postal savings plan.  Sec. 8.  Advantages of the postal savings plan.  Sec. 9.  Collection of savings and education in thrift.  Sec. 10.  Building and loan associations.  Sec. 11.