considerable attention in England, and with good reason, but in many parts of the Continent it has been for more than a decade the subject of remark and complaint, and in the earlier attention to it abroad one may perceive the main reason why it has received comparatively little at home until now. A much rapider fall must have taken place in the value of money in England had there been no considerable fall in other parts of the world, had the chief part of the additional gold which has come into circulation in the last twenty-two years been poured into English markets; a matter in itself sufficient to show how deeply we are concerned in its distribution, and in the movement of prices in other regions. The movement in Germany in particular deserves investigation, as a country which has undergone great economic as well as political changes in the period of the new gold, and one in which several of the conditions determining its action on prices can be most advantageously studied. German statistics afford fuller information respecting local prices than are obtainable with respect to England or any other great country. But in every country the real movement of prices has been a number of different local movements, and in Germany we can trace the causes governing the modern changes not in German prices only, but in prices throughout the world. Wide miscalculations respecting the effects of the American silver mines on the value of money in the sixteenth and seventeenth centuries arose from attending only to some statistics of prices in a few principal markets. Even two centuries after the discovery of the American silver mines prices had not risen all over Europe in the manner commonly supposed. It was a partial, local, and irregular rise over a limited area, whence the prodigious effect of the streams of additional money in the localities which actually received them; prices rising enormously in London, for example, while wholly unaffected in part of the Highlands of Scotland and of the west of Ireland, and but little affected even in some parts of England itself not far from the metropolis. The monetary phenomenon which now first strikes the eye on an inspection of German statistics is the extraordinary inequality of local prices, and it is one which throws a flood of light on both the

past and the probable future distribution of the produce of the new mines of our own time.

*

In the month of December, 1870, to take official statistics published by Dr. Engel, Director of the Royal Prussian Statistical Office, the price of beef, putting silbergroschen and pfennigen into English money, was 3d. a pound at Neidenburg, in the province of Prussia, at the east of the kingdom, while it was 8d. at Aix-la-Chapelle, in the Rhine province. In the same month butter was 94d. at Neidenburg, 124d. at Berlin, 141d. at Magdeburg, in the province of Saxony, 15d. at Dortmund, in Westphalia, and 16d. at Aix-la-Chapelle. Straw was 10s. the shock at Braunsberg, in the province of Prussia, and £2 12s. at Saarbrücken, west of the Rhine. Take again the following statistics of a number of the most important articles at various towns. See table on next page. The prices are given in silbergroschen and pfennigen in Dr. Engel's tables, but the proportions will be sufficiently indicated by the figures.

Dr. Engel's tables give prices at other towns in each of the different provinces, the naked statistics being presented in all cases without theory or comment. The war in France may probably have disturbed the markets in the towns nearest the military operations during the latest period for which the official statistics are published, and the military element is one which we shall have to notice again as one of the conditions besides the new gold affecting the movement of prices in Europe. But it by no means accounts for the inequalities, as is evident from the statistics of a number of years before the war. Going back, for instance, to 1865, we find butter 7d. a pound at Neidenburg, 10d. at Thorn, in the same eastern province, and 13 d. at Aix-la-Chappelle, at the extreme west of the kingdom. The value of money, in short, is a local affair, even in Prussia, though one of the most advanced countries in Europe, and one of the best provided with internal communications. Some of the differences are partially accounted for by differences in the fertility or in the harvests of different regions.

'Zeitschrift des Königlich Preussischen Statistichen Bureaus.' Elfter Jahrgang 1871. See also the statistics of prices in the volume published in 1867.

Great fortifications, as at Cologne, Coblentz, Mayence, Königsberg, Dantzig, and Stettin, obstructing the growth and business of towns, and raising the rents of houses, occasion other diversities. Other local causes affecting supply or demand were recently assigned on the spot at other places in reply to my own inquiry. But if special local causes alone were at work, the rise in some localities would be attended by a fall in others, because the same sum of money cannot be in two places at once, and if part of the money previously current had been drawn off to new localities, there would be less left in the old ones; whereas we find a higher range of prices than formerly everywhere throughout Germany, though the differences are surprising. In Germany, as in England, combinations and strikes are now often referred to as the chief cause of rise in the present year in the prices of many things, and of the greater cost of living at particular towns. But this explanation fails to account for a continuous rise of prices for twenty years before strikes or combinations (which are of very recent appearance in Germany) were heard of; nor could a rise of the mass of commodities take place without either an increase in the money demand, or a diminution, which is not pretended, of the supply. A rise in money wages at the expense of employers may cause a change in relative prices, and a rise of things produced mainly by labour, but in that case things produced mainly by fixed capital, and whose price consists largely of profit, would sustain a corresponding fall. An altered distribution of money to the advantage of the working classes, again, would lead to an increased expenditure on their part; their comforts and luxuries might accordingly rise. But this in turn would be met by a corresponding diminution of expenditure on the part of other classes, and a corresponding fall in some articles. A fall in the house-rents of the middle classes, for example, would ensue, whereas what is particularly complained of is a rise. The payments of France on account of the war are in some places spoken of as one cause of advanced prices in the present year. The chief part of the money coming from that source seems, however, as yet either to have been withheld from circulation by the Government, or to have been expended west of the Rhine, in Alsace and Lorraine; and in any

case those payments afford no explanation of the continuous advance of prices before July, 1871, the last month to which Dr. Engel's statistics come down. There are, I must allow, anomalies in German prices which remain inexplicable to me after much recent local inquiry; but some general results of importance seem to emerge beyond doubt from their examination in a number of different places.

The lesson, it is true, which investigation of facts impresses more and more on one's mind is distrust of economic generalizations; still they are of use if we are careful both, as far as possible, to cover under them only the proper particulars, and also to use them as guides to, instead of as concluding inquiry. A generalization which may be advanced with reference to the present subject is that, in the first place, a much lower scale of the prices of land, labour, animal food, and other main elements of the cost of living to large classes, will usually be found to prevail in places without steam communication than in places similarly situated in other respects, but possessing railways or steam transport by water; in the next place, among places possessing steam communication, a considerably higher scale of prices of the staples referred to will for the most part be found in those which are centres of industrial or commercial activity or of foreign resort than in such as are of a stationary or colourless. character; and, thirdly, as a general rule, there is a marked tendency to a higher elevation of prices in Germany as we travel from east to west. Hence Germany may be roughly divided into four monetary regions:-(1) places in arrear of the world's progress in respect of their means of locomotion as in other respects; (2) places communicating by steam with good markets, but not themselves the sites of much enterprise, or possessing any special attractions; (3) places which unite the best means of communication with local activity, or considerable resort from without; (4) among places falling within the last category, a higher scale of rents, wages, the price of animal food and other essentials will be found, cæteris paribus, in those which lie nearest the traffic and movement of Western Europe. Of the effect of the want of steam communication the reader may observe an example in the comparative prices given above, of