Prices of Commodities during last Seven Years ( 1886 - 92 ). 403 
1. Reduction of the cost of production and conveyance of some large 
articles of consumption by the opening of the Suez Canal, by the increase of 
steamers, and by the enormous extension of railways and telegraph lines, 
especially in extra-European countries. The opening of new sources of 
supply. In consequence of these causes, great increase in production. 
2. Alterations in currencies, demonetisation of silver, and insufficient 
supply of gold. 
I ascribed the greater influence to the second cause. The in- 
crease in production had indeed been very large, but I showed that 
in former periods it had been similar — at least proportionately from 
one period to another. In fact the development from 1850 to 1873 
and the growth of wealth were quite phenomenal, as can be easily 
shown by merely looking at the trade of this country and the 
returns of the income tax, but while at that period the circulation 
of money expanded simultaneously with the production of com- 
modities, it was possible to maintain on the whole a certain price 
level for about twenty-five years. From 1870 or 1873 to 1885, on 
the other hand, the monetary circulation had scarcely increased 
owing to the demonetisation of silver and the withdrawal of notes. 
During the last seven years, 1886-92, the first cause, extension 
of the new sources of supply and increase of production, was again 
at work, and has already been referred to. 
The production of gold has of late made satisfactory progress, 
but there was a considerable extra demand during the last few years 
from Austria and Russia, who have taken the whole balance avail- 
able for monetary purposes during the last seven years. There was, 
however, a large addition of silver, particularly in the United 
States, and also of notes, and I estimate that the total addition to 
the currency of Europe, United States, and Australia during the 
same period amounted to about 123,000,000?., or 17,500,000?. per 
annum, which is very considerable. 
This may partly account for the fact already noticed that prices 
have not gone materially lower than in 1887. The second cause, 
therefore, alteration of currencies and insufficient supply of gold, 
has apparently not had any additional influence on prices since 
1887. 
There will, however, arise a fresh demand for gold by various 
countries, and the supply will again be insufficient for some time to 
come, if trade continues to expand at the usual rate. 
Conclusion. 
A comparison of the years 1890-92 with the years 1883-85 
shows a great similarity; production was arrested in 1885 and 
1886, and business improved somewhat at the end of 1887, and to 
a greater extent in 1888. Production is now also arrested, but 
there are no signs yet of any real improvement in the great in- 
dustries of the world and in general commerce. 
After a great deal of overtrading and overfinancing, the losses 
on investments, in commerce, and agriculture have been enormous, 
