There is one fact, however, which throws around credit, as around so
many others of the influences by which our lives are shaped, a
frightful mystery. Its very strength helps to work ruin. The more we
believe in our fellow-toilers, and the more they do to warrant our
belief, the more we encourage them to work, the more we excite their
hopefulness; and out of this hopefulness come "panics" and
"crashes." Prosperity breeds credit, and credit stimulates
enterprise, and enterprise embarks in labors which, about every ten
years in England, and every twenty years in this country, it is
found that the world is not ready to pay for. Panics have occurred
in England in 1797, 1807, 1817, 1826, 1837, 1847, 1857, and there
was very near being a very severe one in 1866. In this country we
have had them in 1815, 1836, 1857, and 1877, and by panics we do
not mean such local whirlwinds as have desolated Wall Street, but
wide-spread commercial crises, affecting all branches of business.
This periodicity is ascribed, and with much plausibility, to the
fact that inasmuch as panics are the result of certain mental
conditions, they recur as soon as the experience of the previous one
has lost its influence, or, in other words, as often as a new
generation comes into the management of affairs, which is about
every ten years in the commercial world both in England and here.
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