132 Transactions. — Miscellaneous. 



This table is illustrated graphically in Plate XI. of 

 Art. VIII. It gives an increase in prices from 1896 to 1900 

 in the ratio of 61 to 75, or an increase of nearly 23 per cent. 



Index numbers are compiled by different investigators in 

 different ways and from different data, but they agree to a 

 very considerable extent. The most numerous set of observa- 

 tions is that which Dr. Falkner has compiled in the inquiry 

 on wholesale prices from 1890 to 1899, recently published 

 in the "Bulletin of the Department of Labour," U.S.A. In 

 these observations the index number for all articles shows a 

 decline from about 102 in 1890 to about 81-5 in 1897, but 

 then, again, a rise to about 92 in the first two months of 

 1899. 



A similar conclusion is reached by Dr. Conrad, who com- 

 bines Soetbeer's observations of Hamburg prices, and various 

 other independent indications concur in placing the turn of 

 the tide in prices beyond doubt. This increase of prices has 

 been generally recognised, but in the Press and by popular 

 opinion the war seems to have been the favourite attributed 

 cause, and almost all conceivable hypotheses but the true one 

 have been brought forward ; and this cause is likely to be of 

 comparative permanence and have an increasing force. 



It is true that a fall in prices again set in towards the end 

 of 1900, but a rise in prices due even to a permanent increase 

 in the gold- supply can scarcely be expected to be continuous. 

 One year may see an enormous output of gold, and the next 

 year may see prices smaller than those previously ruling. A 

 collapse in credit may temporarily counteract or more than 

 counteract the influence of the expanding currency. And this 

 may happen frequently, and perhaps the more frequently 

 because the general tendency of prices to rise gives an impulse 

 to business and encourages speculation. But the low prices 

 when credit is small and the higher prices when credit is 

 good will fluctuate about a mean which is continually rising, 

 just as in the case of the ocean the depth at a given point may 

 vary according to whether we have there the crest of a wave 

 or the bottom of the trough between the waves, although the 

 tide may be rising at the time and the average depth continu- 

 ally increasing. And two observers on the sea-beach may 

 form very different estimates of how far the tide has risen 

 while watching the ebb and flow of the breakers, though they 

 may agree, and there may be no doubt, that the tide has 

 risen. 



An instance of this irregularity in the rise of prices is 

 thus described by Professor Marshall : " An expansion of 

 credit coincided with the influx of precious metals consequent 

 on the discovery of the Californian and Australian mines, and 

 increased the upward tendency of prices. But in 1857 there 





