INDEBTEDNESS FROM 1900 TO 1913 161 
must be reiterated that this period is merely one of several 
phases in our history where identically the same effects are to 
be discerned. 
Another, and perhaps more important, consideration in rela- 
tion to business cycles is revealed by the graph (Fig. XIV) which 
£m 
25 
wy : 
. IMPORTF™' 
+1 
PEBIT 
CREDIT 
ir SPATE PNAS 
— — - — rset 
i902 1904 1906 1908 791 0 z 912 1914 
Fra. XIV. CAPITAL LOANS AND THE BALANCE OF INDEBTEDNESS, 
1901-13 
Smoothed 5-year moving-averages of loans and of excess of debits 
Aner eredits shown heavy. 
concludes the survey of the period. The precarious poise of 
national finance, when either normal productivity or the 
customary flow of capital falls away, is exposed by the inter- 
section of the moving-average curves in 1903 and again in 1910. 
That business depression should accompany, the excess of in- 
debtedness over capital borrowings is no mere coincidence. 
Effect follows cause with logical precision ; and the main facts 
stand out too starkly from the picture to admit of misinterpre- 
tation. 
Iv 10)