of the world which took place earlier in England itself. Places formerly remote, undeveloped, and backward, ill-furnished with both means of locomotion and money, have gained access by steam to the best markets, have advanced in both industry and skill, have ceased to be poor and cheap, and have made vast additions to their currencies. But many of the foreign channels which railways and commerce have created for the streams of new money are now full-some full to overflowing. Many parts of the Continent, which not long ago were noted for cheapness, are now as notorious for dearness ;* and although a great part of Europe has yet to be opened up by railways, it were rash to assume that the progress made in the next twenty years will be equal to that of the last twenty. The west of Europe is already reticulated with railways; the east will hardly in two decades overtake the west, and during their construction new railways raise the prices of English iron and coal, though when finished they find new outlets for money. An eminent authority points, indeed, to possible absorbents for much of the future gold in the resumption of payments in specie by France and the United States on the one hand, and the gold coinage of Germany on the other. The fact, however, which actually confronts us is, that France, the European country which had hitherto absorbed most of the new gold, is now driving it from its currency; and that Germany is exchanging silver for gold-the silver will be liberated for circulation elsewhere-but what we have to look to is, not the amount of gold only in the world, but the amount of gold, silver, and credit together, remembering that a great rise of prices in England can be brought about with a small importation of specie. Suppose that English iron and coal, for example, sell fifty per cent. dearer in the foreign market by reason of the abundance of the precious metals abroad, they may sell as much dearer in the home market, mainly by an expansion of

* See, as regards Germany, 'Prices in Germany,' Fortnightly Review, November, 1872. It is greatly to be desired that the eminent French economists who have discussed the effects of the new gold mines, M. Chevalier, M. Levasseur, and more recently M. Victor Bonnet, would resume the investigation in connexion with later changes of prices in France.

the credit circulation; and other English productions will then rise in price.

Other causes, besides the abundance of the precious metals, have raised the cost of living in England. The method of averages assumes the new gold to be the sole cause of the rise in prices arrived at, on the ground that 'the average must, in all reasonable probability, represent some single influence acting on all the commodities.' But why not a plurality of influences? Mr. Jevons's own work on coal proves the existence of one other cause besides the new gold. Mr. Tooke's History of Prices supplies a still more decisive example. The high range of prices from 1793 to 1815 was ascribed by many persons exclusively to the over-issue of notes, and the consequent depreciation of the currency. Mr. Tooke demonstrated that the main causes of the rise lay in conditions affecting commodities, not money, and that the depreciation of the currency never exceeded 30 per cent., while corn, to take one commodity, stood at one time at 177s. the quarter. Mr. Newmarch has done good service accordingly, by insisting from the first on an investigation of the conditions of demand and supply affecting commodities, before coming to any conclusion respecting the influence on prices of the increase of gold. By means of such an investigation only can we ascertain whether the causes of the rise of prices are permanent or temporary, and, what is more important, whether they are, as in the case of coal and animal food, to some extent within our control, or, like the fertility of the gold mines, altogether beyond it. It should, however, always be borne in mind, in speaking of demand and supply, that it is only in the shape of moneydemand that the new gold can ever come into circulation, and that if there be independent conditions of supply and demand sufficient to cause a rise of prices, a great addition to the quantity of money in circulation must magnify the rise in proportion. But some reasoners go beyond this. They urge that since the demand which raises prices can be no other than a money-demand, to trace a rise of prices to an increase of demand is simply to trace it to the new gold. A rise of some commodities, it has been added, would, but for the new gold mines, have

been compensated by a fall of others, since the total amount of money expended would otherwise not have increased. It is not so, however. The total expenditure of money will naturally advance with the increase of population, though no new sources of money be discovered, and prices may rise without any discovery of more fertile mines. Suppose the population of England to grow from twenty to thirty millions, English exports and money returns increasing nearly in the same ratio, and the average money-income of the population continuing at, say, £10 per head. Though individual incomes will not rise on this supposition, yet the total money-income of the nation will increase with the population from £200,000,000 to £300,000,000. Suppose, then, that half the income of each individual, on the average, is spent on house-rent, animal food, leather, coal, and some of its products, not an acre of land will have been added to the island, and house-rents may rise; meat, butter, milk, and some other products of land may grow considerably dearer; coal may have to be fetched from greater depths or poorer mines at high cost. There may thus be a considerable rise in the cost of living, and a corresponding fall in the purchasing-power of fixed incomes, as the consequence merely of the growth of population. Let new gold mines of extraordinary fertility come at the same time into play-let money-incomes rise on the average from £10 to £15 per head, and the rise of prices may beggar the classes whose income are stationary.

The actual situation of matters in England is, then, that a number of causes, of which the new gold is only one, have raised the cost of living, and that the cause which has hitherto diverted from England the chief effects of the new gold mines can hardly be counted on. One result with which we may be threatened may be exemplified by the fact that the race of scholars in Germany is said to be in danger of dying out before the rise of prices and the diminished power of fixed incomes. We cannot, however, control the production of gold, we cannot hasten the development of foreign countries, and thus provide for its absorption. The more need, therefore, to do what lies in our power at home to check the increasing cost of chief staples of expenditure, such as coal and the

produce of land. Even Lord Derby tells us that the produce of land is only half what it should be; and the bearing of our land system on the matter is sufficiently illustrated by the statement in the last Agricultural Returns of Great Britain, that a decrease of 3,592,600 sheep, or 12 per cent. in the whole stock of sheep in Great Britain, took place between 1868 and 1871, chiefly if not entirely through the want of irrigation and grass.

It is not in political economy to tell how the cost of extracting coal can be diminished, or how the enormous waste of fuel may be lessened. But it might at least be expected of economists not to foster extravagant prices by fictions and fallacies. The equality of profits is a fiction under which producers and dealers are enabled to hide inordinate gains; at one time by keeping down wages, at another by charging exorbitant prices. The assumption that an omniscient competition equalizes profits has done infinite mischief, both theoretical and practical, by checking inquiry into the actual phenomena of trade and the real distribution of wealth. The new gold itself is a novel condition from which an eminent economist anticipates a disturbance of relative prices and profits for thirty or forty years. What sort of equality is that which is liable to disturbance for more than a generation by even one of the numberless changes which industrial progress and discovery (to say nothing of political events) are perpetually importing into the conditions of trade? In London alone seventy-four new trades appear in this year's Directory, and it may be affirmed that before they were added not a capitalist in London knew so much as the names of the trades already existing. How then can it be maintained that capitalists are so well acquainted with the situation and prospects of every occupation that their competition equalizes profits? The truth is we are almost in total darkness respecting the profits of many longestablished businesses, and this darkness (which is often the cover of exorbitant prices) is due in great measure to an influential school of economists who have taken away the key of knowledge-the investigation of facts-which Adam Smith and Mr. Mill had put into our hands.

XXIV.

THE MOVEMENTS OF AGRICULTURAL WAGES IN

EUROPE.

(Fortnightly Review, June 1, 1874.)

THE question presenting itself in the Eastern Counties is really no mere local question or struggle, no mere trial of the right or power of English agricultural labourers to raise wages by combination, important and significant as is its assertion. It is a particular phase of a movement, or series of movements, general over Europe, arising everywhere mainly from similar causes, and exhibiting everywhere some similar phenomena, along with phenomena due to special causes in particular countries and localities. Farmers in the Eastern Counties no doubt imagine themselves in presence of an extraordinary difficulty. But there have been no combinations or strikes of agricultural labourers on the Continent, yet complaints of the rise of agricultural wages have been heard for years; it was one of the chief causes of the late French Enquête Agricole; a serious alarm on account of it is now felt in most parts of Germany (notwithstanding a recent general fall in the price of labour), and in some parts of Belgium. A survey of the principal facts in several representative countries may aid us to estimate the nature and strength of the forces with which the farmers in the Eastern Counties have to contend, and to judge how far general and permanent, how far local and temporary, causes are at work. The chief reason, however, for the present investigation is, that it is not an agricultural labour question only which is finding its issue at home and abroad, but one connected with all the most important economic phenomena and problems of the age, with the course of industrial and