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situated as to make tlie town inaccessible to the producer. In such a case the 

 remote country pi'ice would be, let us suppose, 2s. per couple. Though these 

 assumed prices are not of much importance, they ai'e such as I have known to 

 coincide. Now, what I have described as taking place in the case of a railway 

 loan, may be anticipated as certain to take place in the case of the productions 

 of the small farmer. The cost of transmitting poultry by i-ailway is very small ; 

 deducting that cost, the producer and consumer will share the advantage between 

 them in proportions to be determined by a double competition, that is, the 

 competition of producer against producer tending to lower the price, — the 

 competition of consumer against consumer tending to raise the price. If these 

 two competitions be of pi'ecisely equal force, then (leaving out the trifling cost 

 of conveyance as being infinitesimal in this case) the consumer who has 

 hitherto paid 6s. will get his fowls for 4s., and the producer who could only 

 get 2s., if indeed he could sell at all, would now get 4s."" It is unnecessaiy to 

 dwell on other articles. The town consumer will get his bacon, hams, butter, 

 eggs, and cheese at perhaps one- third less, while that same reduced piice will 

 yield to the small farmer perhaps one-third or half as much more than he can 

 now obtain. Let it not be supposed that this is speculative or chimerical. 

 Remember, that I could purchase in the Eastern market of Melbourne as good 

 a turkey for 7s. 6d. in 1862, as cost about seven times as much in 1854. Let 

 me once more remind you that I do not state this as an additional gain, but 

 only as explanatory of the mode in which the whole gain arising from cheap 

 transport distributes itself. 



I cannot resist the temptation of illustrating this part of the subject by 



* As an illustration of tliis double competition, and of tlie manner in wliich tlie 

 relative forces of the two may be disturbed, I may here refer to the mode in whick the 

 Victorian debentures were placed upon the London money market. The loan was nego- 

 tiated tlirough the six principal banks of Melbourne. They agreed to supply the 

 Government with money, in sums required from time to time, and to hold the deben- 

 tures as security at a limit — communicated at first under sealed cover. Under that limit 

 they were not to sell for a certain stipulated time ; but when their advances reached a 

 certain amount, and after the expiration of the time agreed upon, they had power to sell 

 in order to replace their advances, and to enable them to supply the renewed wants of 

 the Government. To prevent the six banks from competing with each other, it was 

 however stipulated that the sales were to be effected through one bank only ; in other 

 words, that the market should be fed through one conduit pipe only. The effect of this 

 was to reduce the force of the competition of sellers against sellers tending to lower the 

 price, while it left unaffected the competition of the buyers. Thus the balance of these 

 two forces being on the side of the buyers, the result was the profit of £385,000 which I 

 have mentioned. If the six banks had been left free to compete with each other, and 

 had not substituted for the condition in the contract which I have mentioned some 

 equivalent arrangement among themselves, that competition would have acted in some 

 degree against the force of the competition among the buyers, and the result would 

 probably have been a lower premium and a smaller aggregate profit. 



