They both tend to grow together, if you begin from a period of depression.

In such periods credit is bad, and industry unemployed; very generally provisions are high in price, and their dearness was one of the causes which made the times bad.

Whether there was or was not too much loanable capital when that period begins, there soon comes to be too much.

Quiet people continue to save part of their incomes in bad times as well as in good; indeed, of the two, people of slightly-varying and fixed incomes have better means of saving in bad times because prices are lower.

Quiescent trade affords no new securities in which the new saving can be invested, and therefore there comes soon to be an excess of loanable capital.