INFLATED PRICES AND RENTS 375 



accessible supplies of capital, the greater stability of the Bank of 

 England have combined with other causes to minimise the risk of 

 financial stampedes. But, though periods of depression cease to 

 produce the old-fashioned panic, they are not less exhausting. 

 Their approach is more gradual ; so also is the recovery. Disaster 

 and revival are no longer concentrated in a few months. Years 

 pass before improvement is apparent ; the magnitude of the dis- 

 tress is concealed by its diffusion over a longer period. The agri- 

 cultural depressions of 1875-84 and of 1891-99 had all the 

 characteristics of the modern type of financial crisis. 



In 1870 had begun an inflation of prices. The outbreak of the 

 Franco-German War and the withdrawal of France and Germany 

 from commercial competition enabled England to increase her 

 exports ; the opening of the Suez Canal (1869) stimulated the ship- 

 building trade ; the railway development in Germany and America 

 created an exceptional demand for coal and iron. Expanding 

 trade increased the consuming power of the population, and main- 

 tained the prices of agricultural produce. The wisest or wealthiest 

 landowners refused the temptation to advance rents on sitting 

 tenants. But in many cases rents were raised, or farms were 

 tendered for competition. Farmers became infected with the same 

 spirit of gambling which in trade caused the scramble for the 

 investment of money in hazardous enterprises. In their eagerness 

 for land they were led into reckless biddings, which raised rentals 

 beyond reasonable limits. In 1874 the reaction began. Demand 

 had returned to normal limits ; but the abnormal supply continued. 

 Over-production was the result. The decline of the coal and iron 

 trade, the stoppage, partial or absolute, of cotton mills, disputes 

 between masters and men, complications arising out of the Eastern 

 question, the default on the Turkish debt, disturbances of prices 

 owing to fluctuations in the purchasing power of gold and silver, 

 combined to depress every industry. In 1878 the extent to which 

 trade had been undermined was revealed by the failure of the 

 Glasgow, Caledonian, and West of England Banks. One remarkable 

 feature of the crisis was that it was not local but universal. New 

 means of communication had so broken down the barriers of nations 

 that the civilised world suffered together. Everywhere prices fell, 

 trade shrank, insolvencies multiplied. In the United States the 

 indirect consequences of the industrial collapse of 1873-4 proved to 

 be of disastrous importance to English farming. A railway panic, 



