exhibiting a fall in prices, though the degree of the fall shown in each case may vary. The economic theory of supply and demand may, then, be used to establish the connection between cause and effect; for, if the supply of a commodity declines while the demand for it increases, a rise in its value, and a fall in the value of articles compared with it, become inevitable. Such has been the position of gold during the last twenty years. It may be noticed that the possibility of a plurality of causes increases the likelihood of the action of some common cause; for, under the conditions, we cannot expect the apparent effects of this cause to be immediate or universal. The presence of counteracting or modifying circumstance, of opposing or contributory causes, will delay in some cases a process accelerated in others, will minimise here an effect which is accentuated there. The apparent change due to the cause is only likely to be general and not universal, to be gradual and not immediate. The assertion that a fall in prices, if due to an alteration in the available supplies of the standard metal, should be immediate and universal cannot be sustained when economics, penetrating beneath superficial appearance, reveals the interaction of different causes; and, if the testimony of index-numbers points to a general change, it is no sufficient answer to affirm that it is not universal. On grounds of economic reasoning we should expect a slower movement of retail than of wholesale prices, of the prices of articles of minor than of those of more general consumption, of wages than of prices generally. The mention of wages suggests another point neglected in some current discussions, but brought by economic reasoning from obscurity into prominence. It is sometimes asserted that the fact that wages have not fallen is a proof that monetary causes have not produced the fall of prices. But, apart from the known tendency of wages to move more slowly than prices, such an assertion overlooks the possibility of a simultaneous change in distribution. Economic reasoning points to the probability of such a change in favour of the wage-earner, and to the effect that it would produce; and statistical evidence corroborates that reasoning. If such a change be proceeding, we should expect wages to rise, and the fact that they are stationary tends to prove, not to disprove, the existence of a monetary cause of the fall of prices. A failure to give explicit recognition to this possibility is due to neglect of the plurality of causes, and is akin to another argument sometimes advanced. This maintains that, if it can be shown that the country has progressed, or not receded, in wealth, in the development of trade and manufacture, in the prosperity of the mass of the community, it is thereby proved that the fall of prices has wrought no injury. But it may be answered that the progress might have been greater in the absence of the fall, and other forces may have prevented the cause in question from producing its full effect. Here, again, economic reason ing may aid in discerning what is invisible to the unassisted eye. Few truths, indeed, are slower to receive, and more likely to lose, popular recognition than those which lay stress on the mutual action of different causes. We are told, for instance, that the fall of prices is due to circumstances connected with improvements in the production and transportation of commodities; and it must be admitted that such a common cause is not, like particular causes affecting individual commodities, eliminated in the general average of the index-numbers. But the one common cause-that of improvements in production-does not exclude the operation of the other-that of a change in the available supplies of gold. Taking a broad view of the whole century, it would certainly seem that the movement of improvement has set steadily in one direction, but that the movement of prices has first declined, and then advanced, and then declined again. It is possible that the movement of improvement may have been accelerated and retarded at different times; but the change in the movement of prices, which requires ex 1 An index-number may be briefly described as a mode of showing the average change in prices by comprising in one grand total the percentages of rise or fall shown in the recorded prices of certain selected typical commodities. 2 Cf. the investigations of Sir Robert Giffen in England, of M. Leroy-Beaulieu in France, and of other inquirers in other countries. planation, is not a variation of degree, but a reversal of direction. And this reversal coincides with similar changes in the available supplies of the standard metal. If the disturbances in America at the beginning of the century, with the known diminution in production, were followed by a fall, if the Californian and Australian discoveries of the middle of the century were accompanied by a rise, and if the notorious extraordinary demands since 1873, statistically computed by Sir Robert Giffen,' coming on a supply which until the past few years was diminishing, coincided with a fall again, it seems impossible to doubt that, although improvements in production and transportation may have been contributory causes, an important influence has been exerted by the monetary supplies. With the aid of the economic telescope and microscope forces too remote or obscure to be detected by the naked eye are thus brought within the range of ordinary vision; and the action of the standard metal on prices is one of those forces, for, in Jevons's language, it is insidious, slow and imperceptible.' Such is the guidance which, as it seems to me, economics is able to offer; and in this question of the currency, as in the others of which we have treated, it is surely not destitute of practical import, for the detection of a monetary cause of the fall in prices is so far an argument for the adoption of a monetary remedy. Such guidance also, I believe, economics can furnish on many other questions coming to the front; and, in offering this, it cannot be accused of an excessive or defective estimate of its claims to popular recognition. I am convinced that, as the years elapse, its aid will be sought with increasing urgency, and that it will discharge, with a fuller consciousness of its high prerogative, its important but difficult mission of seeing for itself, and disclosing to others, the unseen. The following Papers were read : 1. Comparison of the Rate of Increase of Wages in the United States and in Great Britain, 1860-1891. By A. L. BOWLEY, M.A. The basis of the calculation is the Senate Report on Wholesale Prices, Wages, and Transportation, 1893, with which is compared the author's estimate of the change of average wages in the United Kingdom, published in the Journal of the Royal Statistical Society, June 1895. On examination it is found that the final wage tables of the Senate Report do not rest on sufficient data, that no account is taken of the relative importance of different occupations or of the different levels of wages, and that the figures for many of the industries included are based on very slender information. The industries for which the data appear on analysis to be sufficient are selected, and the average wages in these industries reworked for certain years directly from the original table of wages. By this means the relative wages for these selected trades are found, on a method more correct than in the Report, for the years 1860, 1871-3, 1879-80, 1883, 1886, and 1891. These relative wages are compared individually and collectively with the corresponding figures already found for the United Kingdom; and it is seen that money wages have followed very much the same course in both countries, rising to a maximum in 1873, falling till 1880, and then rising till in 1891 the level of 1873 is again reached. Wages in the wool-trade follow a different course, and do not make much progress in England, whereas in the States they increase rapidly after 1873. To estimate the relative change in real wages, it is necessary to find indexnumbers formed on the same plan for both countries. This is done in three ways: Sauerbeck's numbers are first compared with similar numbers for the States; secondly, they are grouped and weighted, and compared with weighted numbers given in the Senate Report; while a third series is found from certain wholesale prices compiled and grouped in the same Report. After discussion, the second of In evidence given before the Gold and Silver Commission, and, more recently, before the Commission on Agriculture. these series is chosen; the relative money wages are corrected by these indexnumbers, and results are deduced from the relative real wages so computed. It is now found that, in the limited area of industry considered, real wages have increased continuously in the United Kingdom, till they stand more than seventy per cent. higher in 1891 than they did in 1860; while in the States real wages rose with the same rapidity till 1873, were checked, and finally fell in 1880, and then rose rapidly till in 1891 they were nearly sixty per cent. higher than in 1860. These conclusions must not be taken to represent industry in the States or in England as a whole, since it has not been possible to include agricultural wages. 2. Bimetallism with a Climbing Ratio. By HENRY HIGGS, LL.B. FRIDAY, SEPTEMBER 13. The following Papers were read: 1. The Normal Course of Prices. By WILLIAM SMART, M.A., LL.D. What course may prices be expected to take in a period of normal industrial activity? Practical men, seeing that, in one or two well-known trades, reduced material and freights, improved machinery, centralisation, and gigantic production sum up a lower cost of production, generalise this, and assume that a steadily falling level of price is inevitable as the expression of reduced cost. But, on looking through money price to exchange values, it becomes obvious that reduced cost takes effect in increase of supply, and that prices come down only in default of corresponding increase of demand. What is usually forgotten is that every change in supply means a change in demand, the two being different aspects and names for the same goods. (1) Every increase of supply (reduction of price) of any article calls out a new demand for it, and prevents the fall in price being proportional to the fall in cost. The present congestion of capital and labour conceals this; because manufacturers can just now get both at low rates, we unconsciously assume that there could be indefinite production of any article without increase of cost. (2) Every increase in the total product of industry is a new demand for goods generally, just as truly as would be a chance discovery of sovereigns in an old drawer. Suppose A products and B products represented the national output. So long as A and B increased simultaneously and harmoniously, there would be indefinite increase of both supplies without fall of exchange values. If now the same capital and labour doubled A product, while B product remained constant, the exchange value of every A would, in terms of B, fall to one half. If subsequently B products experienced the same increase, every A would again rise in terms of B. Recognising that no two articles have equal elasticity of demand, and that this subsequent rise of price and its extent cannot be foreseen, the essential fact remains that every particular increase of supply is increase of general demand. This being so, reduction of cost, which is the real characteristic of prosperity, will find expression now in falling price, now in rising price; the falling price being due to increased supply of the particular article, the rising price being expression of the increased supply of other articles. Conclusion: that, so far as the late fall in prices is general, it cannot be due to causes inside the production process; and this seems to point to a contraction of the universal commodity in which all goods (and all costs) are named. Corollary that if manufacture—that is, the employment of the masses-is to remain subject to steadily falling prices, the manufacturer will require to find some new means of paying himself for his work. Otherwise he will find it in speculation or in combination to sustain price artificially. 2. A Proposal for a System of International Money. By W. A. SHAW. 3. The Gold Standard. By HON. GEORGE PEEL. 4 The Menace to English Industry from the Competition of Silver-using Countries. By R. S. GUNDRY. Although England has had a single gold standard since 1816, all other countries continued to use either silver alone or both metals linked together, as full legal tender money, till 1873. Down to that year, therefore, gold and silver served equally as international money. The demonetisation of silver, which began with Germany's adoption of a gold standard, has entailed a gradually increasing divergence in the relative value of the two metals. The value of gold necessarily rose in response to increased demand, and the price of all commodities (as measured in gold) fell. The price of silver fell with the rest, and is now 30d. an ounce, instead of 60d., at which it stood so long as the French mints were open to coin it at the ratio of 15 to 1. But though silver may appear in Europe to have shared the general fall. the position is different if we turn to the East. The standard there is silver, and its purchasing power over commodities has remained approximately stable. To an Indian, or a Chinaman, or a Japanese, his silver money represents the same value that it did twenty years ago. The English farmer who wants a sovereign has to give two sacks of wheat where one used to suffice; but the Indian ryot who wants a rupee has to give no more of his produce than before, and his rupee will buy in turn as many of the necessaries of life as it would a generation ago. The effect has been to encourage the importation of foreign produce into England, and to render increasingly difficult the exportation of English industrial products to the East. It is an error to suppose that the great fall in wheat, for instance, has been caused by competition in the United States. The American farmer, on the contrary, is suffering nearly as we do ourselves. The root of the evil lies in differences of currency. As a sovereign, which used to be worth only ten rupees, will now buy eighteen, and each rupee retains its purchasing power, it follows that a sovereign will buy nearly twice as much Indian wheat, and the price of English corn had to fall accordingly. The close of the Indian mints disadvantaged India in turn by lifting her currency above the silver level, and she is being undersold by Russia. The Lancashire manufacturer who wishes to sell his goods in Asia is confronted by the converse difficulty. As the Chinaman's dollar represents, to him, unchanged value, he is not disposed to give more silver for his yarn or cloth than before. But whereas the dollar used to be worth 4s., it is now worth only 2s. ld.; so that the English manufacturer who used to get, say, (2) 10s., now gets 58. 3d. The effect has naturally been to check trade. The proportion of total exports of British and Irish produce taken by silver-using countries since 1876—when the currency changes had had time to take effecthas been stationary. It was 20·67 per cent. in 1877 and 20·85 per cent. in 1894, having never been above 21.90 in the interval. The export of cotton yarn from England to China and Japan is less now than it was in 1876, while the export from India has enormously increased; though there has been a falling off in her case also since the close of her mints (in 1893) disturbed-by imparting a fictitious value to the rupee-the silver level on which the trade had grown up. The additional blows dealt to silver and the increasing strain thrown on gold by that measure and the repeal of the Sherman Act disabled the English manufacturer still further. The gold price of silver fell another 10d. He was obliged to raise the price of his goods in order to ensure an adequate gold return, and the Chinaman restricted his demand. The import of cotton goods into China in 1894 was less by 4,000,000 pieces than in 1892. Nor does the harm end here. The conditions which handicap English labour advantage the Asiatic and encourage him to manufacture for himself. As the local value of the Japanese yen, for instance, has not changed, whereas it has come to represent 2s. only, instead of 48., to the English manufacturer, the latter is obviously at an enormous disadvantage in the competition. The result is that not only is Japan now manufacturing many things which it used to buy from us but, having satisfied its own requirements, is beginning to export. It is beginning to export cotton goods to China and the Straits at prices with which we cannot compete. It already supplies Singapore with half the coal used at its wharves, to the detriment of Wales and Australia. It supplies, not only to China, but to the Straits, and even to India, numerous minor articles which we used to send when the dollar represented 48., but which we cannot supply for 28. And what has been going on in Japan is beginning in China, where cotton mills are being erected in turn. This competition is only in its infancy; and we have here the obverse of the picture of cheap prices upon which advocates of the gold standard love to dwell. They may be pleasant for the consumer, but how about the producer? They may be good for the creditor, but how about the debtor who has to produce two hundred sacks of wheat to repay the 100l. which he borrowed when it represented one hundred sacks? The advantage, to the hypothetical labourer, of being able to buy a loaf for 2d. instead of 4d. is obvious, if he retains his former wage; but how about the man whose wages have been reduced, or whose occupation has been lost through the change of arable land to pasture or by the close of a Lancashire mill or a Cornish mine? If low prices be a supreme good, to be pursued at the cost of transferring English industries to the East, we have only to persevere in the boycott of silver which is ruining agriculture and saddling Lancashire with a handicap too heavy to be borne. But it is well to realise that all this means loss of work; and to the workman who has less wages or no work cheap prices may seem a questionable boon. The close of the mints against silver has practically divided the world into two halves-one of which is prospering on a stable and abundant silver currency, while the West is suffering from financial stress and from hindrance to its commerce with the East. An agreement to join other nations in resuming the free coinage of both metals at a fixed ratio would relieve us from these disabilities by re-establishing parity of exchange, and replace our farmers and manufacturers on even terms with the rest of the world. 5. On the Preservation of the National Parochial Registers. The early parochial registers of births, marriages and deaths in England and Wales and in Ireland are still located in the several parishes to which they relate. This exposes them to the many risks contingent to the numerous and varied forms and places in which they are kept; often to the mercy of careless or incompetent custodians; and, on account of their being so widely scattered, renders them practically inaccessible for either statistical or general or special historical purposes. The valuable information they contain is accordingly almost entirely lost to the country. This could easily be remedied by the adoption of the method which has been followed in Scotland. There, by an Act of Parliament, in 1854, the custodians of such parish registers were required to send them to the General Register House at Edinburgh, where, under the care of the Registrar-General, they have been carefully gone over, strongly bound, and are now preserved in uniform order in fire-proof and damp-proof chambers. They are open daily for inspection to those interested on the payment of certain fees, and when for purely literary work, gratis. The passing of a similar Act of Parliament for England and Wales and for Ireland, by which the present custodians of parish registers in these countries shall be required to send all such registers (in the case of England and Wales) to the Record Office or to Somerset House in London, and (in the case of Ireland) to Dublin Castle, or other safe repository in Dublin, would secure the same benefits to the rest of the British Isles as Scotland now enjoys. Besides, the registers |