Page:The Economics of Unemployment.djvu/86

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THE CAUSE OF FLUCTUATIONS
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had passed away, would easily and advantageously be absorbed in the rising markets.

There is, however, one obvious qualification to this economy. Its validity turns upon the proportion of wages to profits in the application of such credits to our industries, whose activity is thus stimulated. If the public credit, thus applied to this stimulation of our export trades were to pass into profits in a proportion equalling or exceeding the normal rate prevailing at such a time, that would imply not only a less immediate absorption of the unemployed but an earlier recurrence of the next period of over-trading and congestion of the markets.

In fine, the ultimate effect of credit, regarded as a means of stimulating trade and employment, will depend upon its influence upon the distribution of the general income. It will be favourable according as it increases the proportion of the general income passing to the wage-earners or to public bodies to be spent in demand for commodities or the financing of non-industrial services.

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