Neidenburg on the one hand, without either railway or steam transport by water, and Thorn on the other hand in the same province, seated both on the Vistula and on a railway. Again, for an example of the lower range of prices in comparatively stationary places, though well provided with means of locomotion, than in centres of industrial activity, compare prices, stated above, at Münster, in Westphalia, with those of Dortmund and Bochum, in the same province, but among the busiest spots in the Ruhr Basin. For an illustration, lastly, of the ascent of prices as we move westward in Germany, compare prices in the chief towns of the province of Prussia with those of Saxony and Westphalia, and these again with the prices of Aix-la-Chapelle, on the borders at once of Belgium, Holland, and Prussia, and on the high road to France and to the English Channel. This upward movement of prices as we move westward seems to be connected both with proximity to the best international markets, the increase of the manufacturing element and of industrial and commercial activity, and also with a third condition, itself not remotely allied to the two others-namely, the influence of education. In the two most eastern provinces of the kingdom, Prussia and Posen, it appears that above twelve per cent. of the recruits annually enlisted are unlettered; in Brandenburg, Saxony, and the Rhine Provinces, the percentage of unlettered recruits is considerably below one per cent. One discovers some correspondence between this scale of education, and the following scale of the average prices, in the decade 1861-70, of towns in the different provinces from Dr. Engel's statistics :

The higher range of prices in western Germany, in short, springs from the greater abundance of money where business and traffic are best situated and most active, the manufacturing element furthest developed, and general intelligence highest.

Butter.

Beef.

Pork.

Hay.

Straw.

Knowledge, industrial energy, the value of land, labour, and time increase, and the commercial and money-making spirit becomes keener, for better for worse, as communication with the wealthiest and busiest countries of Western Europe becomes closer, and the German approaches the principal lines of western traffic, travel, civilization, and money expenditure.

Those who are conversant with the theory of the international distribution of the precious metals expounded by Mr. Senior and Mr. Mill, may find evidence in the local prices of Germany that the principles which govern the partition of the world's currency among different countries, and the scale of international prices, apply also to the distribution of a national currency and the comparative prices of different places in the same country. The more efficient, productive, and valuable the industry of any country, or of any locality, and the cheaper and faster its produce can be carried to the best markets, the higher will be the scale of pecuniary earnings and incomes, and the higher consequently the prices for the most part of things in great demand, such as labour, land, and fresh animal food, of which the supply is limited, and which make a great figure in the cost of living. The producers for the foreign market get higher profits and wages; money flows in from abroad, and producers for home consumption, though no such nice equality of wages and profits as book theorems assume really exists, earn more than can be earned in less active and less advantageously situated places. If Yorkshire cloths and Lancashire cottons,. carried by steam, could be made to suit the convenience and taste and awaken a demand on the part of the whole population of European Russia and Asia, what would follow with respect to prices in England? Yorkshire and Lancashire would have a larger claim on the money of the world; there would be a rise in Yorkshire and Lancashire wages and profits in general, though by no means in the exactly equal ratio which economic. fictions assume for wages and profits throughout the whole kingdom; both the working classes and their employers would have more to spend, and the comforts and luxuries of both, of which there was not a proportionately increased supply forthcoming, or not without additional cost, would advance in price. So in

Germany, although one cause of prices being higher in places of great industrial activity or resort than in more purely agricultural or less frequented localities, may be that the supply needed, or part of it, must be brought from a greater distance, yet the principal cause is the difference of money demand and expenditure. The great rise in the cost of living at Berlin in the last year and a half springs in the main from the fact that Berlin has become the capital not merely of Prussia, but of Germany, its political, intellectual, and financial centre. Hence a great influx of capital, people, and money, a great activity of business, an extraordinary demand for houses, building materials, and labour, an exorbitant rise in the prices of things into which they enter as principal elements, and a condition of the labour market which enables workmen in some trades to exact what are thought by employers exorbitant terms. The same monetary phenomenon presents itself likewise in small towns, which situation and local advantage have made places of much resort. At Heidelberg, for instance, I was lately told by a resident, who is a high authority with respect to German prices, that the cost of living to persons of moderate income, though rising many years before 1866, had advanced fifty per cent. since that date, and is still advancing, the main proximate cause in the last twelve months being the exactions by the working classes, in one trade after another, of a great advance in wages. But Heidelberg lies on the high road of travel, and almost at the intersection of the principal lines of European railway communication; it is one of a ring of towns of much resort, and itself possesses special attractions; the demands for higher wages have been grounded on the rise of commodities, and the increased pecuniary expenditure, of which the higher wages and prices afford proof, could not be forthcoming without a more plentiful circulating medium.

The comparison of local prices in Germany reconciles in principle two seemingly opposite theories respecting the international movement of prices consequent on the new gold mines, though neither theory is quite in accordance with facts. According to one theory, prices should have risen earliest and most in the countries whose industrial efficiency and whose

means of communication were furthest advanced, and therefore more in England than in Germany or France. Another theory is that steam communication equalizes prices, raising them, therefore, most where they were formerly lowest, and therefore most in what formerly were backward and cheap countries and localities. Each theory contains a measure of truth, but the first overlooks the rapid diffusion of industrial inventions, activity, and improvements in transit, the consequent changes in the distribution of money and in the relative prices of different countries and different localities in the period of the new gold; while the second exaggerates the equalizing influences of steam locomotion. The real movement of comparative national and comparative local prices has not been a general equalization, nor as yet even a tendency towards it. What we find is, not a uniform elevation of the whole level, but the rise, as it were, of a great number of monetary peaks of different altitudes-a rise, that is to say, at a great number of points in continental countries to or near to the highest ranges in England, and again at a still greater number of other points to altitudes considerably below the pitch reached at the points of highest development, but much above the level of places without improved communication. Railways and steamers are said to equalize prices; and so they do, creating equalities and tendencies to equality of two kinds. They tend to raise prices at many of the most advanced places on the Continent to, or nearly to a par with those of the principal English markets, and again to bring prices in previously remote and cheap places up towards the range generally prevailing along the lines of steam transport. But they also create new inequalities, and these, too, of two kinds. They raise prices at places obtaining the new means of communication above the range prevailing at places obtaining no similar advantage; and again, they concentrate capital, business, and money expenditure plethorically, as it were, at particular spots with peculiar natural resources or advantages of situation, and thus elevate prices enormously there at a time when an unwonted abundance of money is in the world. Improvements in locomotion develop the resources of the world, but the resources of different countries and of different localities

are unequal, on the one hand, and the new means of locomotion develop their actual resources unequally, on the other hand, because not equally distributed. It is not, we must remember, the mere acquisition of means of rapid communication that raises money-earnings to the highest point, or that makes the greatest change in habits of expenditure and the pecuniary cost of living; what does so is the ingress of wealth, enterprise, and outlay, the generation not only of opportunities for pecuniary gain, but also of the habit of taking advantage of them, the influx not only of money, but also of the money-making spirit, the creation of a custom of looking, not for customary prices, but for the highest prices to be got for everything, every inch of ground, every trifling exertion, every minute of time; while, at the same time, the habits of consumers naturally become costlier as their incomes as producers become larger. So far are railways and steamers from diffusing these causes of extraordinary pecuniary gains and extraordinary prices equally throughout all the regions they traverse, or even all the places they actually touch, that they often draw capital, business, and money, not to but from places on the very lines of steam communication, to others with greater advantages. Even at spots whose position and opportunities are such that the moneymaking spirit, the habit of seeking the utmost price, and the organization often necessary to obtain it, might be expected to develop themselves at once, they sometimes do not do so for years. In a district, for example, where the bulk of the inhabitants are owners of land, growing chiefly for their own consumption, they may not be tempted immediately by the offer which a new railway makes of high prices at a distance, to send their produce to market. People are often reluctant to change their ways of life, even where they would be great pecuniary gainers. A few weeks ago, at a place in the Ruhr Basin, which must soon be absorbed in the whirl of industrial activity round it, but where life is still comparatively cheap, tranquil, and old-fashioned, an hotel-keeper answered the question, whether there were any great factories or industrial establishments yet? No, thank God!' It must be confessed that the new movement does not always add to the comfort or

yet?—No,