ollowed great speculation,
especially in the direction of railroad building on an unexampled
scale after the war. The blow, when it fell, was intensified by the
relative contraction of currency then in progress, leading to the
return to a specie basis and lower prices.[5] The crisis of 1884,
a comparatively slight one, occasioned (rather than caused) by the
discussion of the money question, was followed by some years of
noticeable depression. The years 1889 to 1892 witnessed prosperity,
only slightly interrupted in 1890, that culminated in a crisis in May,
1893 (likewise generally explained as due to the unsettled state of
our monetary system), followed by a period of great depression lasting
until 1897. A rapid growth of business was checked but little in 1900
when a crisis occurred in Europe, especially severe in Germany. In
November, 1902, began in America what has been called "the rich
man's panic" of 1903 in which for a year many securities were sold
by holders because European creditors were recalling their loans.
American business, however, slackened but little, altho building
operations were somewhat checked. General prices, which had been
moving upward since 1897, remained almost unchanged in 1903 and
1904, and then continued going upward until 1907. In the period from
September to November of that year occurred a severe crisis both in
Europe and in America. The industrial depression following this was
marked in 1908, slowly growing less. The crisis at the outbreak of the
war in August, 1914, was quite exceptional, being due to the sudden
demand of Europe upon New York for funds. Within a couple of months
it was over and soon prices were again rising as the result of large
exports of merchandise followed by gold imports.

Sec. 6. #A business cycle#. Let us now sketch in broad outline a business
cycle, bearing in mind that this series of changes does not repeat
itself with unvarying regularity, but that it is fairly typical in
the modern business world. The period leading up to a crisis is one
of relative prosperity; then occurs a crisis in which prices fall,
at first rapidly, and afterward for a while going slowly lower. When
prices are at the lowest point many factories are closed, and much
labor is unemployed. Let us start at that point. Conditions are worse
in some industries than in others. General economy and great caution
prevail; few new enterprises are undertaken. For those persons having
available fun