Man of the moment

In a system of production, where the entire continuity of the reproduction process rests upon credit, a crisis must obviously occur -- a tremendous rush for means of payment -- when credit suddenly ceases and only cash payments have validity. At first glance, therefore, the whole crisis seems to be merely a credit and money crisis. And in fact it is only a question of the convertability of bills of exchange into money.

But the majority of these bills represent actual sales and purchases, whose extension far beyond the needs of society is, after all, the basis of the whole crisis. At the same time, an enormous quantity of these bills of exchange represents plain swindle, which now reaches the light of day and collapses; furthermore, unsuccessful speculation with the capital of other people; finally, commodity-capital which has depreciated or is completely unsaleable, or returns that can never more be realised again.

The entire artificial system of forced expansion of the reproduction process cannot, of course, be remedied by having some bank give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values.

Incidentally, everything here appears distorted, since in this paper world, the real price and its real basis appear nowhere, but only bullion, metal coin, notes, bills of exchange, securities. Particularly in centres where the entire money business of the country is concentrated does this distortion become apparent; the entire process becomes incomprehensible; it is less so in centres of production.

-- Karl Marx, Capital (Vol III, Part V, Chapter 30, Section 1).

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