848 EEPORT— 1900. 



the Eand should be seeu in a rise of gold prices. This is difficult to bring to 

 quantitative measure, and prediction may prove deceptive. Sir Eobert Gitfen 

 foretold, in 1894, that the fall of gold prices was ended ; but in 1897 he confessed 

 that his expectations were not yet realised. By the present time, however, the 

 evidence of index-numbers, such as that of Mr. Sauerbeck, seems to show a rise 

 beyond any movement due to credit, in spite of the temporary cessation of supplies 

 from the Transvaal. But past experience enjoins caution in any estimate. The 

 percentage of increase in the output is at present much less than it was at the 

 Australian and Californian discoveries in the middle of the century. Predictions 

 made at that time, even by a competent scientific observer like Jevons, were dis- 

 appointed ; and, although the * compensatory action ' of the bimetallic mint at 

 Paris, which then acted as a ' parachute ' to break the fall in the value of gold, is 

 now absent, yet the normal counteracting causes, such as the increased use of the 

 metal in the currencies of the world (apart from any special new demands), the 

 great growth of trade and industry, and the influence of credit, have become more 

 powerful. A rise of gold prices may be expected ; but it is impossible to fix the 

 point which it will reach. Its consequences will be beneficial, and may assist in 

 solving unsettled monetary questions. 



(2) The aid rendered by the colonies to the mother country in the war is 

 likely, in the second place, to increase the momentum behind the conception of an 

 Imperial ZoUverein. There are special difficulties attending a Cuscoma Union of 

 the British Empire, arising from the separate situation of its component parts, 

 which have not presented themselves in the case of Germany or the United States. 

 These difficulties may, or may not, be eventually overcome; but some general con- 

 siderations, apposite to the question, may be submitted to a scientific gathering 

 lilve the British Association. Such a Customs Union, while it may conceivably 

 result in an increase of internal free trade within the limits of the Empire, must, 

 in all likelihood, involve some difl'erential treatment of foreign goods. It must, so 

 far infrin"'e the principles of Free Trade strictly interpreted. Recent theoretical 

 discussion, especially of the incidence of taxation, has weakened some arguments 

 for Free Trade, but the practical difficulty of limiting your action to what you 

 really intend, and the great advantage of an attitude of neutrality on the part of 

 Government in matters of trade, have not been diminished by recent experience. 

 Yet an economic sacrifice may bo incurred to secure a political end, or a temporary 

 loss may be risked in the hope of an ultimate gain. The economist will urge that 

 the step should be taken knowingly, and that its consequences should be seen and 

 realised. On this ground the more obvious and open action of bounties is to be 

 preferred to the obscure indirect influence of import duties. Lastly, the economist, 

 while noting the crude fallaciousness of not a little reasoning, may admit the 

 weicrht of some arguments employed against Free Trade. He may reach the con- 

 clusion that the matter must be deeifled mainly on practical grounds, and that 

 theory ends with opening men's eyes to the results of their action. A non 

 posst/mus attitude towards a Customs Union is no longer possible. 



(3) A third and last consequence of the South African War, which must be 

 briefly noted, is its eftect on Socialism. The unity of classes at home, which has 

 resulted from common interest, is not favourable to class dissension. The increased 

 militarv expenditure is calculated to prevent or delay the execution of costly social 

 experiments, although Chancellors of the Exchequer, seeking to broaden the bases 

 of revenue, may possibly, if improbably, give efl'ect to some socialistic aspirations 

 of mulcting ' unearned increments.' Yet it may be a sound instinct which draws 

 a distinction between socialism and militarism. 



Finally, it may be remarked that the consequences of the war thus noted are 

 certainly not unimportant, if they may seem problematic. 



3. Colonial Governments as Money-lenders. 

 By Hon. W. P. Keeves. 



For many years high rates of interest have been almost as much complained of 

 by farmers and graziers in Australia and New Zealand as in the AN'estern States of 



