Page:The Economics of Unemployment.djvu/64

it is not possible for the later manufacturers to get under full way. The recovery of the fundamental and instrumental trades, with the assistance of bank-made purchasing power, is quicker than would otherwise be possible, for it causes a larger proportion of the aggregate purchasing power of the community to be applied at these stages of production in the purchase of increased quantities of materials and labour at rising prices. As these increased supplies of instrumental goods flow into the later manufactures, the anticipated revival is realised there also, and growing quantities of goods, financed with bank-made money, are supplied to merchants in fulfilment of contracts at prices which continue to rise and enable good profits to be made. Merchants, having thus made provision for increasing stocks to meet an anticipated recovery of effective demand for commodities on the part of the consuming public, take their toll in the reviving trade, straining their credit in order to enable them to do the largest amount of it.

Now the part thus played by confidence and credit is manifest. They have brought into play an increased quantity of purchasing power, and, by directing it to the stimulation of the different processes of industry in proper order, have swelled the great stream of employment and production, turning out increased supplies of goods to meet an increase of effective demand coming from consumers, whose incomes, derived from rising profit and wages, have risen by the time the trade revival has put increased supplies into the retail shops and who can therefore afford to raise their consumption. Thus put, it may appear