affecting their supply and demand, ought to have exhibited evidence, in a decline of prices, of the influence of the scarcity of gold, if any such had been exerted; but they not only do not, but the drift of the evidence deducible from their price-experiences is rather in favor of the position recently taken by some economists, that gold in recent years, in place of becoming scarce for purposes of exchange, has really been more abundant.

The record of extreme changes in prices by reason of circumstances that are acknowledged to have been purely exceptional, is also most instructive, and removes not a few commodities from the domain of any controverted economic theory respecting monetary influences. Thus, from 1862 to 1870, cotton, owing to war influences, ruled so high-from 70 to 800 per cent in excess of normal prices-that its inclusion in computations, with a view of determining any average of prices, or generalization of causes affecting prices during the years mentioned, would, without proper allowance, completely vitiate any conclusions.

War and interruption of traffic on the Upper Nile have increased the prices of "gum-Arabic," and of the drug "senna" in recent years more than 100 per cent. The prices for French and other competing light wines and brandies are much higher than the average for 1866-'67, because the phylloxera has so impaired the production of French vineyards that France now imports more wines than she exports. "Cochineal” and “madder" have greatly declined in price since 1873, because their use as dye-stuffs has been to a great extent superseded by equivalent and cheaper coloring-materials derived from coal-tar; and within a very recent period the discovery of a method of cheaply preparing a chemical preparation from cloves, having all the flavoring qualities of the vanilla-bean, has already diminished the demand, and bids fair to greatly impair the price of this heretofore scarce and costly tropical product. Certain animal products, notably entering into commerce, have rapidly advanced in price in recent years by reason of a rapid diminution in the number of the animals affording them, as buffalo-horns, ivory, and whalebone, which latter product has increased in price from 32 cents per pound in 1850 to 85 cents in 1870, and $3.50 in 1886.

An agency which has been most influential in recent years, in occasioning a decline in the price of commodities, which has acted universally, which is entirely the outcome of new processes, construction, and machinery, and has no connection whatever with matters pertaining to currency or standards of value, has been the reduction in the cost of transportation or distribution. Its influence has also necessarily manifested itself very unequally, occasioning the greatest pricereductions in the case of articles-like cereals, meats, fibers, ores, and all coarser materials-in respect to which transportation constitutes the largest element of cost at the place of consumption; and least in the

have exhibited no tendency to decline in price, but rather the reverse. A given amount of gold does not now buy more, but less, of domestic service and of manual and professional labor generally than formerly; does not buy more of amusements; not more of hand-woven lace, of cigars, and of flax, which are mainly the products of hand-labor; of cut-glass, of gloves, of pictures, or of precious stones. It buys notably less of hides and leather, which are the sequences of cattle-growing, which in turn involves time, and for which, in point of economy, large sections of the earth are not adapted; of horses, and most other animals; of pepper; of cocoa, the cheap production of which is limited to a few countries, and requires an interval of five years between the inception and maturing of a crop; of malt liquors, eggs, currants, and potatoes; and also of house-rents, which depend largely upon the price of land, and which in turn is influenced by fashion, population, trade, facilities for access, and the like.

How little of change in price has come to the commodities of countries of low or stagnant civilization, that have remained outside of the current of recent progress, is strikingly illustrated in the case of a not unimportant article of commerce, namely, the root sarsaparilla; which, with a gradually-increasing demand, continues to be produced (collected and prepared) in Central America, by the most primitive methods, and, without any change in the conditions of supply, save, possibly, some greater facilities for transportation from the localities of production to the ports of exportation. Thus, in the case of Honduras sarsaparilla, at New York, which is the principal distributing market of the world, the average price for the best grade is reported as identical for the years 1881 and 1886; while for the "Mexican," the average reported for 1881 was eight cents per pound, and for 1886, with much larger sales, from seven to eight and a quarter cents.

All the evidence, furthermore, tends to show that there has been very little decline in recent years in the prices of such of the commodities of India as constitute her staple exports, which can not, as will be hereafter shown, be clearly referred to agencies entirely disconnected with any influence assumed to have been occasioned by any increase in the purchasing power of gold due to its absolute or relative scarcity.*

Now, all of the commodities referred to, including labor and personal service, and many others which might be specified, whose condition in recent years has not been materially influenced by changes

* According to Mr. Robert Giffin, in his testimony before the British Commission, "On the Changes in the Relative Values of the Precious Metals," 1886, the general result of a comparison of India prices submitted to the Commission "On Trade Depression," shows a fall of only two per cent in 1880-'84, as compared with 1870-'74, or with the period immediately before the fall in silver:

"The general conclusion appears to me to be that the effect of the present relations between gold and silver have not told appreciably on prices in India, or on the relative progress of her import and export trade."-Testimony of Sir LOUIS MALLET, late UnderSecretary of State for India, Trade Depression Commission, 1886.

affecting their supply and demand, ought to have exhibited evidence, in a decline of prices, of the influence of the scarcity of gold, if any such had been exerted; but they not only do not, but the drift of the evidence deducible from their price-experiences is rather in favor of the position recently taken by some economists, that gold in recent years, in place of becoming scarce for purposes of exchange, has really been more abundant.

The record of extreme changes in prices by reason of circumstances that are acknowledged to have been purely exceptional, is also most instructive, and removes not a few commodities from the domain of any controverted economic theory respecting monetary influences. Thus, from 1862 to 1870, cotton, owing to war influences, ruled so high-from 70 to 800 per cent in excess of normal prices-that its inclusion in computations, with a view of determining any average of prices, or generalization of causes affecting prices during the years mentioned, would, without proper allowance, completely vitiate any

conclusions.

War and interruption of traffic on the Upper Nile have increased the prices of "gum-Arabic,” and of the drug "senna" in recent years more than 100 per cent. The prices for French and other competing light wines and brandies are much higher than the average for 1866-67, because the phylloxera has so impaired the production of French vineyards that France now imports more wines than she exports. "Cochineal" and "madder" have greatly declined in price since 1873, because their use as dye-stuffs has been to a great extent superseded by equivalent and cheaper coloring-materials derived from coal-tar; and within a very recent period the discovery of a method of cheaply preparing a chemical preparation from cloves, having all the flavoring qualities of the vanilla-bean, has already diminished the demand, and bids fair to greatly impair the price of this heretofore scarce and costly tropical product. Certain animal products, notably entering into commerce, have rapidly advanced in price in recent years by reason of a rapid diminution in the number of the animals affording them, as buffalo-horns, ivory, and whalebone, which latter product has increased in price from 32 cents per pound in 1850 to 85 cents in 1870, and $3.50 in 1886.

An agency which has been most influential in recent years, in occasioning a decline in the price of commodities, which has acted universally, which is entirely the outcome of new processes, construction, and machinery, and has no connection whatever with matters pertaining to currency or standards of value, has been the reduction in the cost of transportation or distribution. Its influence has also necessarily manifested itself very unequally, occasioning the greatest pricereductions in the case of articles-like cereals, meats, fibers, ores, and all coarser materials-in respect to which transportation constitutes the largest element of cost at the place of consumption; and least in the

case of articles-like textiles, spirits, spices, teas, books, and similar products-where great values are comprised in small bulk. The investigations of Mr. Atkinson show that, had the actual quantity of merchandise moved by the railroads of the United States in 1880 been subjected to the average rate per ton per mile which was charged from 1866 to 1869, the difference would have amounted to at least $500,000,000 (£100,000,000), and perhaps $800,000,000 (£160,000,000), more than the actual charge of 1880. Comparing 1865 with 1885, Mr. Atkinson further shows that, taking a given weight of goods to be moved from Chicago to New York, one thousand miles, by the New York Central Railroad, 58 per cent of the original value was absorbed in transportation and depreciation of the currency in the former year; while in 1885 only 20 per cent was so absorbed the charge per ton per mile having fallen from 3:45 cents in 1865 to 68 of a cent in 1885.

The fall in price for the carriage of commodities by sea has also been as remarkable as the decline in the cost of carriage by land. Freight, on the average, between Calcutta and England had experienced a decline of about 50 per cent in 1885 as compared with 1875. In the case of India wheat transported to England via the Suez Canal, the decline in freights was from 71s. 3d. per ton in October, 1881, to 27s. in October, 1885, or more than 63 per cent. Between 1873 and 1885 the tolls and pilotage on the Suez Canal were reduced to the extent of about 33 per cent.

Freights from New York to Liverpool declined, from 1880 to 1886, as follows (maximum and minimum): On grain, from 91d. to 1d. per bushel; on flour, from 25s. to 7s. 6d. per ton; on cheese, from 50s. to 158. per ton; on cotton, from d. to d. per pound; and on bacon and lard, from 45s. to 7s. 6d per ton. Subsequently, prices recovered somewhat, but by no means to the extent of the rates current in 1880 and preceding years.

It is not, however, to be concealed that numerous economists and statisticians of high repute-Mr. Sauerbeck and others-are nevertheless of the opinion that, allowing all that has been claimed for the influence on prices occasioned by reduction of cost through increased and cheapened production and distribution, the decline in recent years is too great to be "simply explained away" by these agencies. But these authorities have specified no commodities, the analysis of whose production and price-experiences in recent years furnish any sufficient foundation for such a general conclusion; and it is interesting to note how the experiences of the few, which at first thought would seem to indicate the sensible influence of "other" agencies, on analysis prove to the contrary. Thus, in the case of wool, Messrs. Helmuth, Swartze & Co., of London, the best recognized authorities on this commodity, in their annual circular for 1887, after admitting the great increase in the production of wool in the years from 1860 to

1886, nevertheless claim that consumption has at the same time increased to such an extent, that the general assumption of an excessive production of this commodity has not been warranted, and in truth has "but slightly exceeded the ordinary growth of population, and that, therefore, other influences must have been at work to cause the great decline in its price which has characterized the course of events during recent years." But to this it may be replied, that when the supply of any commodity exceeds by even a very small percentage what is required to meet every demand for current consumptionspecially in the case of a staple commodity like wool, whose every variation in supply and demand is studied every day, as it were microscopically, by thousands of interested dealers and consumers-it is the price which this surplus will command that governs and fixes the price for the whole; and as this can not be sold readily-as under such circumstances no one buys in excess of present demand, and all desire to dispose of accumulated stocks-the result is a decline of prices, in accordance with no law, and which will be more or less excessive, or permanent, as opinions vary as to the extent of the surplus and the permanence of the causes that have occasioned it.*

Another illustration to the same effect is afforded in the case of silk, which, according to accepted English statistics, has notably declined in price, comparing the average rates of 1867-77 with those of 1885, without anything like a corresponding increase in supply. Hence the inference would seem warranted, that some other agency than increased and cheapened production had occasioned the decline in price, and that the case was one which affords support to the goldscarcity theory. But a careful examination of all the involved circumstances discloses the fact, that within recent years materials other than silk-more especially the "ramie " -fiber-largely enter into the composition of silk fabrications-in the case of the cheaper silks of extensive consumption to the extent of even 60 per cent and that other methods of adulterating silk, formerly but little known, are now extensively practiced; all of which is equivalent to increasing the supply of silk for manufacturing, far beyond what commercial reports respecting the supply of the fiber would indicate.

Such, then, are the leading and admitted facts illustrative of the nature and extent of the extraordinary and most extensive decline in prices which has occurred in recent years, and which has been the most apparent and proximate (but not the ultimate) cause of the period of economic disturbance which, commencing in 1873, still exists, and seems certain to last for some time longer. Such, also, is a

* The estimates of Messrs. Helmuth, Swartze & Co., were that the wool product of the world increased from 1871-'75 to 1886-or during a period of from eleven to fifteen years-35 per cent; while the increase in the world's consumption of wool from 1860 to 1886-a period of twenty-five years-was from 2:03 pounds to 2.66 pounds per head, or in the ratio of 30 per cent.