THE ECONOMIC DISTURBANCES SINCE 1S73. 9 



semer-steel rails, which commanded £4 55. in Great Britain in 1886, 

 sold in Belgium in June, 1887, for £3 16s. ; sugar, which was thought 

 to have touched the lowest possible price in July, 1886 — 2'92 cents 

 per pound in New York (for fair refining in bond), sold in July, 1887, 

 in the same market, for 2"37| cents ; Western (United States) cream- 

 ery butter which brought 27j cents in November, 1886, declined 

 to 19 cents in July, 1887 ; while sulphate of quinine, which sold 

 in 1885 for 25. Qd. per ounce (60 cents), in 1887, owing to continued 

 cheapening in the production and transportation of cinchona-barks 

 and improvements in manufacture, by which more quinine can be 

 made in from three to five days' time than could, a year or two ago, 

 be produced in twenty by old processes, sells for Is. d>d. (40 cents), 

 and one of the largest of the world's manufacturers of quinine, under 

 date of September, 1887, writes, " No one can predict the future of 

 this product, as all past experience goes for naught." 



But a more interesting question, and one more pertinent to this 

 discussion than any other, is : has gold, in recent years, as an instru- 

 mentality for effecting exchanges (by measuring the relation between 

 the various commodities and things exchanged), really become scarce 

 — at least to the extent of occasioning, through its increase of value or 

 purchasing power, a considerable fall in the prices of all commodities ? 

 And on this point the following is a summary of the evidence in favor 

 of and in contravention of such a supposition.* The position taken 

 by the advocates or believers in the gold-scarcity theory, is, in brief, 

 that the production of gold in recent years has largely fallen off and 

 become wholly inadequate to meet the demands for coinage contin- 

 gent on the increase in the world's trade, wealth, and population ; 

 and further, and as a direct consequent, that trade everywhere has 

 been obstructed and depressed ; that prices, profits, and wages have 

 fallen, and the burden of public debts and of taxation in general has 

 been augmented. 



That the world's annual product of gold — consequent mainly upon 

 the exhaustion of the mines of California and Australia — has largely 

 diminished in recent years is not disputed. Opinions as to the extent 

 of this reduction of supply are, however, widely at variance. This is 

 illustrated by the following tables presented in the " First Report of 

 the British Commission on the Recent Changes in the Relative Values 



* To avoid confusion of ideas on this subject, it is desirable that the reader should 

 keep clearly in view that price is the expression of the value of a commodity in terms of 

 money, and that the expressions, "fall in prices" and "appreciation of gold," for pur- 

 poses of the present discussion, mean really one and the same thing. " If you have a fall 

 in prices, you have an appreciation of gold ; and if you have an appreciation of gold, 

 you have a fall in prices." The problem presented is, therefore, not has gold appreci- 

 ated in value or purchasing power — for, a fall in prices being admitted, such a result be- 

 comes inevitable and coincident — but has its appreciation been due to something that has 

 befallen commodities, or something that has befallen gold itself, such as scarcity of sup- 

 ply or extraordinary demand ? 



