2o8 



THE TKOPICAL AGRlCtfLTURIST. (SiPfuMBtn t, 1885. 



THE FALL IN PRICES. 



Mr. GiffHn, in the able pnper which he h.is contrib- 

 uted to this month's Contemporary on Trarie De- 

 pressioD, leaves us in one perplexity. If hi? theory, 

 which Is also Mr. Goschen's, as to the fall in prices 

 is correct — and of its correctness in the main we 

 have no doubt — we do not see why the fall sliould 

 not go on till a range of prices has been reached un- 

 heard of in our time. He maintains, and, as we 

 think, proves, that what is called the "depression" 

 in trade, is in a grfat degree imaginary. There has 

 been a decline in the amount of business done by 

 the nation, hut it is comparatively trifling, a mere 

 fluctuation, such as has repeatedly occurred, and much 

 less severe than that which followed 1SG6. The foreign 

 trade of the country has declined by six per cent, 

 the goods trafBo of the Railways by about one and 

 a half per cent, and the production of pig-iron by 

 ten per cent, but the remaining reductions are nearly 

 Ira perceptible. There is no reason, as regards the 

 general volume of business done, for the existing out- 

 cry, which is due almost exclusively to a different 

 cause. There has been a fall in prices which has 

 as'ounded, and, in some oases, ruined, the oldest 

 calculators, and which apparently proceeds from some 

 general and far-reaching cause, and which all over the 

 world has brought values down to a figure previously 

 unknown. The following table shows in a way every 

 one can understand the range, the continuousness, and 

 the extent of this fall in the great articles of con- 

 sumption : — 



Prices of Leading Wholesale Commodities in January 

 1873, 1879, 1883. and 1885, Compared. 



1873. 1879. 1883. 1885. 



Scotch pig-iron, perl ton.. .1273 433 47s 8d 41s 9d 



Coals, per ton 30s 193 17s 6d 18s 



Copper, Chili bars, per ton £91 £57 £65 £48i 



Straits tin, per ton ...£U2 £61 £93 £71\ 

 Wheat, Gazette average, 



per qr. .. .i5s:lia 393l7d 40s 4d 348 lid 



— red 'spring, at New York 



per bushel.. ..SI. 70 $1.10 $1.18 9Ic. 



Flour, town made, per sack 47b fid 37s 3Rs 32s 



— New York price, per bl.....'?7.65 $3.70 $4.30 $3.25 

 Beef, inferior, per 8 lbs... 3slnd 2b lOd 4s 4d 4s 



— prime, small, per 8 lbs Ss3d 4s 9d 6s 53 4d 

 Cotton, mid. upland, ^ lb. lOd 6gd 5 ll-16th8 6d 



•Wool, per pack £23 £13 £12 £11 



Sugar. Manilla niusraT^cwt 21s Cd 16s 16s 6d 10s 



Coffee, Ceylon, Kood red .. 80s 6ns 78s Od 71s 



Pepper, black Malabar ;t*lb. 7d 4id 6«d Sd 



Saltpetre, foreign, per cwt. 29s 19s 19s 1.533d 



A fall like this, as Mr. Giffen points cut, frightens 

 even experienced dealers, who, though thoy expect 

 fluctuations, are not prepared for catastrophes ; and 

 by raising the impression that calculati< n is futile, 

 embitters and depresses them even more than their 

 loepes do. They feel as if fate were against them, 

 and actually, in some tr^ides— notably cop|ier— refuse 

 to make calculations, declaring publicly that some, 

 thing has happened to copper, aud that their ex- 

 perience is of no value. Moreover, though Mr. Giffen 

 doe? not mention this, the fall dismays the classes 

 most able to proclaim their (.ufferings aloud. The 

 country suffers nothing from it, for tlie distributor 

 and consumer reap between them the whole b refit ; 

 but the prorlucers feel as if the heavens h.id snddenlv 

 been overcast. Every owner of ar.ihle land, every 

 tropical planter, every holder of minirg propr-rty, aud 

 evf'i-y wool-grower has become poorer, "tun to a 

 ruinous extent, and stes no prospect except cf be- 

 coming poorer still. Take, as two well-known il- 

 Instiations, the position of mea who hold shares in 

 Australian sheep-rnns, or in the smaller copper-mines. 

 The former have been docked of half their receipts. 

 the la'ter of all, for the fall in copper has pa"fed 

 the point at which profit is obtainable. Natur.illy 

 all these (rlasses cry aloud, swell the volume of the 

 dealers' complaints, and declare that the country, 



it 



which is quite unhurt, is rapidly progressing towards 

 ruin. There has been in truth a vast transfer of 

 property to the multitude at the expense of pro- 

 prietors, and they cannot endure|the process. Every 

 man who wants copper get^ it at half the price he 

 paid in '73 and while he is silent, or perhaps even 

 ignorant — for the coppersmith pockets much of the 

 dilfererce — the seller of copper cries with alarm. 



The facts are unmistakeable and tot denied, but 

 there is argument as to their explanation. One theory 

 is over-production, and no doubt in some trades there 

 has been over-prcduction ; but this cause alone could 

 not produce so general a fall. " There is no reason" 

 says Mr. Giffrn, " to suppose that the multiplication 

 of commodities relatively to the previous production 

 has proceeded at a greater rate since 1&73 than in 

 the twenty years before that. Yet before 1873 prices 

 were rising, notwithstanding the multiplication of 

 commodities ; and since that date the tendency has 

 been to decline." There must, therefore, be some 

 other cause ; and Mr. Giflfen finds it, as Mr. Goschen 

 found it, in the appreciation of gold owing to the 

 diminished production of the metal, and to i's nearly 

 universal adoption as the currency of the European 

 peoples. The world has absorbed in thirteen years 

 £200,000,000 of gold, and the annual production now 

 scarcely repairs waste, even if with the increased 

 quantity of coin liable to attrition it does quite re- 

 pair it. There is, in fact, a " strain " upon the metal, 

 which it can scarcely bear, — a competition for it 

 which steadily raises its price as expressed in com- 

 modities, and which, for one curious result, has al- 

 most arrested the coinage of gold at the British Mint. 

 For the ten years ending 1870, the Mint coined 

 £.^,000, 000 a year, in 1871, nearly £10,000,000 ; and in 

 1872, £15,' 00,000 ; but since that year the average has 

 been £1,500,000 only. There is, in truth, too little 

 gold for the increasing business done ; and as it is 

 the un versal standard in Europe and North America 

 the "shrinkage of values" in I^urope aud North America 

 has been universal, aud has made all men not living 

 on fixed incomes or on wages, perceptibly less rich. 



So far, we understand Mr. (Tiffen and agree with 

 him, though we might argue that he underrates the 

 effect of quicker communications in reducing price ; 

 but we do not understand why he stops iiere. Why 

 shi uld not the demand for gold go on until it is, 

 fay, twice as dear as it is, and all prices fall away 

 when expressed in gold to half their present amount? 

 The demand for currency is over, perhaps, though we 

 are not sure of that, a Eussian oemand being quite 

 conceivable : but population increases, the productim 

 of commodities increases, the business of the world 

 increases, and the new multitude of transaciicns have 

 all to l)e paid for in gold. The production of gold, 

 however, not only does not increase but diminishes, 

 till it is doubtful whether, supposirg no increase of 

 demand, the regular supply would be sufiicieut to repair 

 the regular waste. Gold is used-up, like everything 

 else, and the waste in mere ;'ttrition has only this 

 year perplexed an-1 nnnoyed the British Treasury. 

 Why, then, should not the process go on. and tiie 

 sovereign, which uowpurchaS'S two-thir B of a quarter 

 of wheat, be able, say in lOUO, to purchase a whole 

 quarter, thus fining the producers of wheal by some 

 30 per cent ol their apparent receipts? Thcie is no 

 reason to expect a new supply of gold, and no leason 

 to believe, as Mr. GiflVn remarks, tliot paper will 

 relieve it proportionally more than it has hitl-.erto 

 done. If the use of clieques and b.Tuk-nntes could 

 stop the demnnd tor gold, it ought to liave done it 

 already, and it has not done it ! the truth being 

 that such use of paper is not a substitute, but only 

 a relief. The amount of paper employed increases 

 w:th the volume of business, but it does not assume 

 a new proportion to that bueinees. The strain upon 



