happiness of the district it invades. Take those little hamlets which one sees from time to time nestling in a ravine on the side of one of the low mountains of Siegerland, where every householder has his twenty acres of land, his share in a wood, his three or four cows, his pig, and perhaps a few sheep, whose own land produces his food, and the sale of whose wood supplies all his other wants. The mountain has ribs and bowels of iron; tall chimneys and high prices will soon rise at its base; the peasant may find that his wood buys less than before; he may descend from the rank of a landowner to that of a labourer, and perhaps be tempted to begin a new, anxious, and uncertain career in a town. But there is another side of the picture. The progress of industrial and commercial activity is inseparably bound up with that of science and art, as both cause and effect; and it is the chief of the agencies which by a number of influences, direct and indirect, are elevating at last the condition of the toiling masses of Europe in one place after another.

The movement in place of prices in Germany, or of comparative local prices, is obviously connected with the movement in time, or the comparative prices of different periods, and therefore with the question concerning the changes in the value of money since the new mines were discovered, or the gold question. With a view to the solution of a different though closely related question to which we shall have to recur, and which the title of his essay explains,* an eminent German statistician has recently published an elaborate analysis of the prices of 312 commodities from 1846 to 1865 in the market of Hamburg. Among the results is a classification of the 312 commodities in eleven groups, with the comparative prices of successive quinquennial periods indicated in the following table, in which the prices of the first period, 1846-50, are represented by 100:

Welche Waaren werden in Verlaufe der Zeiten immer theurer? [What commodities become constantly dearer in the lapse of periods of time?] Statistische Studien zur Geschichte der Preise.' Von Dr. E. Laspeyres. Tübingen 1872.

If, however, the reader examines the prices of the particular
articles comprised in the eleven groups, he will find that the
average prices of the groups do not show the real rise, the
greater number of the more important commodities having
risen much more in the period subsequent to 1846-50 than the
averages indicate. Unfortunately, too, the table stops at the end
of 1865, while a great rise in some commodities has taken place in
subsequent years. Group xi. in the table shows, in fact, a fall
in coal and iron in 1861-65 compared with 1846-50, whereas
those great staples are now at extravagant prices in Germany
as in England. The statistics presented by Dr. Laspeyres* do
not enable us to make any close comparison between the

See p. 58 of his Essay.

movement of prices at Hamburg and at London, but so far as
they go they indicate a considerably greater rise at Hamburg
since the discovery of the new mines. On this point it seems
to me that the reason assigned by Dr. Laspeyres for a greater
rise of cereals, &c. (group ii.), at Hamburg than at London,
namely, that England has derived greater benefit than Germany
from improvements in transport and free trade in corn, hides
the real distribution of benefits. Improvements in transport
and trade tend to raise the pecuniary value of raw produce
exported to the benefit of producers in the exporting countries,
and to lower the price in the importing countries to the
benefit of consumers. But Germany is an exporting, England
a great importing country in the matter of corn, Germany
being, in fact, one of the sources of the English supply.
Dr. Carl Knies, the eminent professor of political economy
at Heidelberg, pointed out in an essay on the Depreciation
of Money in 1859, that there were causes tending to a
greater rise of prices in Germany than in England. 'First and
foremost,' he observed, ' among the agencies creating important
changes in prices come railways, diminishing the differences in
the local values of money, by causing its influx into places
where prices were low from places where they were high.
Germany may be classed among the former, England among
the latter. At a time when a general fall in the value of money
is taking place in consequence of the abundance of gold, the
change is diminished in England and augmented in Germany
by the change in the movement of money.' But the same
movement which has given Germany railways and steamers
has given it steam for manufacture and mining as well as for
locomotion, and all the mechanical and chemical inventions of
England and France in addition to its own. If we add great
legal and administrative reforms removing obstacles to production
and trade, and the spread of education, we may see reason for
greater relative progress and a greater relative increase of pecu-
niary incomes in many parts of Germany than in England,
though the actual scale of incomes and prices may still be higher
in England. The prices of Hamburg, it should be added, must
not be taken as representing the movement of prices throughout

Germany, where the real movement is made up of a number of different local movements. Hamburg, long one of the chief seats of German trade, has advanced much less in respect of industrial activity, means of communication, wealth, and the increase of than money, other towns which have come to many the front in the last twenty years. Dr. Engel's tables supply some additional information, showing, for example, the average prices of some important commodities in the chief towns of each province of Prussia in the two decades 1841-50 and 1861-70 respectively. (See table on preceding page.)

If, however, we compare the average prices of 1861-70 with those of the immediately preceding decade 1851-60, we find that while the rise in butter, tallow, beef, pork, hay and straw, has been a continuous one, wheat, barley, oats, peas, and potatoes were, on the contrary, on the average of years, higher in the decade 1851-60 than in 1861-70. The articles, however, which have risen continuously are much better measures of the purchasing power of money in Prussia than those which ranged higher in the first decade of the new gold period than in the second, above the prices of 1841-50. The prices of butter, tallow, beef, and pork are taken on a more uniform system throughout the different markets of the kingdom than those of the other articles. The seasons produce much more violent fluctuations in grain and potatoes than in animal food; and animal food is both a much more important item than bread and potatoes in the economy of the middle and wealthier classes, and one better adapted to test an increased expenditure on the part of the working classes-butter especially, on which the working classes in the mining and manufacturing districts at least of Prussia spend much more than on meat. Not to encumber our pages with too many figures on one hand, and because, on the other hand, butter, of all the articles in Dr. Engel's statistics, affords the best criterion of the movement of prices and the cost of living, let us take the price of that article during a succession of years at various towns; the year 1841 affording, as Dr. Engel's tables show, a fair standard of preCalifornian prices for comparison.