IIo SECTIONAL ADDRESSES 
influence of an increase in the rate of annual supply of gold following 
upon the Australian and Californian discoveries. The post-war boom, 
which reached its greatest height in the winter of 1872-73, was followed 
by a downward trend which, if measured from the top of the boom to 
the bottom of a depression, continued for approximately twenty-three 
years. his trend in prices is usually attributed to a fall in the rate of 
annual supply of gold, but I believe it to have been due, in greater measure, 
to a rapid increase in the world demand for gold required for monetary 
purposes. It covered the period during which the gold standard became 
popular. One after another of the silver and bimetallic countries trans- 
ferred their allegiance to gold. The United States returned to gold 
after several years on a paper standard. New territories were exploited, 
and the respective Governments adopted the gold standard. ‘The world 
demand for gold reflected the process of transition ; it grew far more 
rapidly than trade and population, and more rapidly than it could be 
expected to grow under any other conditions or at any time in the future. 
By the end of the century practically the whole of the modern industrial 
world was on the gold standard, and from that time forward the standard 
was free from the complications and dangers created by the appearance 
of new disciples. It had become, to all intents and purposes, a world 
standard. It could be judged on its merits as an international standard. 
For the time being the countries that had not yet adopted it could be 
regarded as relatively minor exceptions. The growth in the demand 
for gold would be expected to keep pace with the growth in population 
and in trade per head. During the remainder of the period ending in 
1914 there was a fall in the relative amount of gold needed as money. 
Not only was the banknote increasingly employed in ordinary transactions, 
but in English-speaking and other communities the cheque or its equi- 
valent was growing in popularity. While on the one side the rate of 
increase in the demand for gold was affected by the cessation of the 
march of nations towards the gold standard and the growth in the use 
of substitutes for gold coins, on the other the rate of annual supply was 
increased by the development of the South African gold mines. For 
these reasons the downward trend in prices came to an end about 1895 
or 1896 and was replaced by an upward trend which continued until the 
outbreak of the world war and the suspension of the gold standard. 
"The rise in prices during this period was not acceptable to everybody. 
The lag in wages caused serious discontent and probably hastened the 
growth of national organisations capable of much good but also of serious 
harm. Forces were being generated which have materially helped to 
shape economic and social events since the war. But the period of rising 
prices was also one of rapidly developing trade and relatively high profits. 
The discontent was that of the employed worker rather than, as at present, 
of the unemployed worker. The former might complain of inequalities 
in the distribution of wealth, but he could not complain of the pernicious 
effects of ‘ deflation.’ As the gold standard permitted a steady increase 
in the supply of money, and a rise in prices, the arguments now frequently 
employed against the gold standard would have sounded foolish. ‘The 
standard itself was enjoying a respite from popular criticism. In its 
