568 PROCEEDINGS OF SECTION G. 



speculation ensued. Speculators sought to realise a profit on the 

 purchase and re-sale of all sorts of merchandise. Manufacturers 

 and producers no doubt were stimulated to their utmost at the same 

 time, but production and manufacture are not doubled in a day. 

 Progress is very slow compared with the increase of speculative 

 transactions. A cargo of imported produce, for instance, is usually 

 transferred from the importer through the agency of the middleman 

 into the hands of the distributor, but in speculative times the same 

 cargo may pass through the hands of half a dozen different pur- 

 chasers, each sharing a profit, each making use of instruments of 

 credit to finance his operations, and so the pressure on the credit 

 system becomes severe. The bank rate begines to rise, renewals 

 and even discounts are declined, and money becomes abnost unob- 

 tiiinable. Meantime the increased price of the merchandise deters 

 purchasers, prices fall, the necessity to realise becomes urgent. 

 The bottom tumbles out of the market and, like a house of cards, 

 the whole speculative fabric collapses, leaving stranded wrecks in 

 all directions, and secret sufferers innumerable. But in an 

 incredibly short time the strain is removed ; m.oney again fiows 

 in its accustomed channels ; the over-production, to which many 

 attribute the crisis, has somehow vanished ; the goods have 

 gone into consumption, and prices have regnined their f"rmer 

 level. It is well known that, notwithstanding the tecurrence 

 of these panics, the price of commodities was in 1873 nearly as 

 high as during the palmiest days of the influx of Australian 

 gold, and, in spite of inflations, panics, and the rumors of over- 

 production, the level of prices was maintained and the general 

 prosperity unabated. Since that date, marked by the demone- 

 tisation of silver, prices have gone down gradually and surely. 

 The law which upheld the ratio, that is, the free coinage of 

 silver and gold at 15^ of the former to 1 of the latter, was 

 abrogated, and silver took its place among commodities to be 

 purchased with gold, the sole legal tender; and, only tliat the 

 currencies of the Continent and of America still required it as 

 gold was not available to take its jjlace, the fall would have been 

 still more rapid. As a commodity its gold price maintained a 

 level with that of other commodities ; as it fell everything else 

 purchased with gold fell in proportion. The general movement 

 indicated one active cause, to which no other name has yet been 

 tjiven than the appreciation of gold. 1 have already attempted to 

 show how a restricted currency in its function of a measure of 

 value must tend to reduce prices. I have pointed out that the fall 

 which has taken place, and which is still continuini;. in the price 

 of all merchandise and of real estate — a fall in which the laborer 

 is nov,' participating, through the reduction of wages and dearth 

 of employment — is attributable to this restriction. But the public, 

 through the Government, is also made to suffer in proportion to 

 their indebtedness. England, probably the least burdened in this 



