urer finds it impossible to pay the interest
on his borrowed capital; whereupon his frightened creditors hasten to
withdraw their funds. Production is suspended, and labor comes to a
standstill. Then people are astonished to see capital desert commerce,
and throw itself upon the Stock Exchange; and I once heard M. Blanqui
bitterly lamenting the blind ignorance of capitalists. The cause of
this movement of capital is very simple; but for that very reason an
economist could not understand it, or rather must not explain it. The
cause lies solely in COMPETITION.

I mean by competition, not only the rivalry between two parties engaged
in the same business, but the general and simultaneous effort of all
kinds of business to get ahead of each other. This effort is to-day
so strong, that the price of merchandise scarcely covers the cost of
production and distribution; so that, the wages of all laborers being
lessened, nothing remains, not even interest for the capitalists.

The primary cause of commercial and industrial stagnations is, then,
interest on capital,--that interest which the ancients with one accord
branded with the name of usury, whenever it was paid for the use
of money, but which they did not dare to condemn in the forms of
house-rent, farm-rent, or profit: as if the nature of the thing lent
could ever warrant a charge for the lending; that is, robbery.

In proportion to the increase received by the capitalist will be the
frequency and intensity of commercial crises,--the first being given, we
always can determine the two others; and vice versa. Do you wish to know
the regulator of a society? Ascertain the amount of active capital; that
is, the capital bearing interest, and the legal rate of this interest.
The course of events will be a series of overturns, whose number and
violence will be proportional to the activity of capital.

In 1839, the number of failures in Paris alone was one thousand and
sixty-four. This proportion was kept up in the early months of 1840;
and, as I write these lines, the crisis is not yet ended. It is said,
further, that the number of houses which have wound up their business
is greater than the number of declared failures. By this flood, we may
judge of the waterspout's power of suction.

The decimation of society is now imperceptible and permanent, now
periodical and violent; it depends upon the course which property takes.
In a country where the property is pretty evenly distrib