to what we all, I suppose, feel to be the really big problem, to
unemployment which is not special to particular industries or districts,
but which is common to them all, to a general depression of almost every
form of business and industrial activity. General trade depressions are
no new phenomenon, though the present depression is, of course, far
worse than any we have experienced in modern times. They used to occur
so regularly that long before the war people had come to speak of
cyclical fluctuations, or to use a phrase which is now common, the trade
cycle. That is a useful phrase, and a useful conception. It is well that
we should realise, when we speak of those normal pre-war conditions, to
which we hope some day to revert, that in a sense trade conditions never
were normal; that, at any particular moment you care to take, we were
either in full tide of a trade boom, with employment active and prices
rising, and order books congested; or else right on the crest of the
boom, when prices were no longer rising generally, though they had not
yet commenced to fall, when employment was still good, but when new
orders were no longer coming in; or else in the early stages of a
depression, with prices falling, and every one trying to unload stocks
and failing to do so, and works beginning to close down; or else right
in the trough of the depression where we are to-day; that we were at one
or other of the innumerable stages of the trade cycle, without any
prospect of remaining there for very long, but always, as it were, in
motion, going round and round and round.

What are the root causes which bring every period of active trade to an
inevitable end? There are two which are almost invariably present
towards the end of every boom. First, the general level of prices and
wages has usually become too high; it is straining against the limits of
the available supplies of currency and credit, and, unless inflation is
to be permitted, a restriction of credit is inevitable which will bring