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 relation
 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 intersection
 of the moving-average curves in 1903 and again in 1910.
That business depression should accompany, the excess of indebtedness
 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 misinterpretation.


Iv 10)