Pre-print, Working paper: This paper is the eleventh chapter of a book forthcoming in January 2007 under the title Histoire du marché financier français au 19 ème siècle (a history of the French capital market in the 19th century). He discusses the macroeconomics of the great depression of the late 19th century from the point of view of the capital markets. He discusses the thesis of a crowding out of private investment by the government and suggests the organization of financial markets had more responsibility in the misallocation of funds to the most productive uses.