relates to determining the influence of the supply of the precious metals, or indeed of any individual agency, upon prices. To do this with any exactitude is wholly impossible. Prices are affected by very many other influences than that of the existing stock of money in the world, or even in any particular country. As regards the extent of demand, the most potent influencer of value, increased facilities of conveyance (such as railways and steamships), which augment demand by opening new markets, tend to raise prices in exporting countries; while to importing countries these improved means of conveyance have exactly the opposite effect, lowering prices by cheapening the means of supply. In this way wheat becomes dearer in Hungary and Russia, and cheaper here. From the same cause coal tends to become cheaper in the countries which get it from us, and dearer here. In fact, as is well known, improved conveyance tends to equalise prices, not only among separate countries, but also among various districts of the same country. Manufactured articles, in a question of this kind, may be wholly thrown out of account. Science, in the form of machinery and chemical inventions, is constantly cheapening manufactures of every kind, altering their price to such an extent as wholly to obscure any effect produced by a change in the supply of the precious metals. Raw or unmanufactured commodities are the only ones which can be taken into account in such an enquiry; yet even wheat, which is usually appealed to as the standard in such questions, is more or less subject to all of the above-mentioned agencies affecting price. Down almost to the middle of the present century, agricultural operations remained very much the same as they had been for generations before, so that up to that period the price of wheat was a tolerably trustworthy indication of changes in the value of money. But, since then, so many improvements have been introduced in farming that the price even of wheat now cannot be safely compared with what it was in former times. Bonedust and artificial manures marked the first stage of agricultural improvement, which has been followed by an extensive use of machinery, such as reaping-machines, the steam-plough, and itinerant steam threshing-machines. Even legislative changes affect prices, in some cases largely. The abolition of the Corn Laws has greatly lowered wheat in England, while the recent legislation for the protection of miners is said to have added 1s. to the cost of every ton of coal. The price of foreign commodities in the English market, likewise, has been largely affected by legislation-tea, sugar, coffee, and other imported articles being now much cheaper owing to a

reduction of customs-duties. In a country which has little or no customs-duties, the price of foreign commodities is pro tanto lessened. Foreign tariffs, too, affect prices by opening or shutting markets, and thereby affecting the demand which so largely influences prices. Nay, more, a bonus on export given by a Government tends to reduce the price of the favoured commodity in other countries-as we see at present in the case of sugar: the bonus, or exemption from taxation, given by the French Government upon the export of beetroot sugar sufficing to undersell the cane-sugar of our colonies in the English market, and thereby really supplying us with sugar at an artificially low price.

To these manifold agencies which obscure the effect of the new mines upon the value of money, must be added the vicissitudes of trade (whether produced by war, as recently in France and the United States, or by general causes), which of late years have been very great. In truth, the influences at work upon prices are so various and complex as to defy any accurate analysis. In opposition to Mr. Jevons, Mr. Newmarch maintains that there has been no fall in the value of money at all; and in a paper which he read before the Statistical Society in May last he gave a list of prices in support of this opinion; and since then, prices have fallen considerably. We incline to think that in 1853, when the produce of the new gold-mines was accumulating in the Western world, before it obtained an outlet-just before the Crimean War occasioned a considerable expenditure of specie in Turkey, which was immediately followed by the great drain of specie to the East, produced by our large railway investments in India and the expansion of trade with that country-a temporary rise of prices may be attributed to the new supplies of gold. But, since then, the new requirements for gold have fully kept pace with the supplies; and the circumstances of the last four years prove incontestably that money at present maintains its old value. And thus we have the remarkable fact that although 670 millions sterling of gold (about 430 millions in excess of the produce of the old mines) have been poured into the world within the last thirty years, the world's requirement for gold has been sufficient to keep money at its old value.

But although there has been no fall in the value of gold, undoubtedly there has been a fall in the value of silver in relation to gold. This, too, is the very opposite of what was anticipated. The most confidently held of all the opinions so prevalently expressed between 1850 and 1859 was that there

would be a great rise in the value of silver. At that time the production of gold was more than trebled, while the supply of silver remained stationary at the same amount as at the beginning of the century. It was most natural, therefore, to reckon that the relative value of the two metals would undergo a change, and that gold would lose a portion of its old supremacy in value. Moreover, as then appeared, silver (its supply being stationary) would retain its old absolute value-its value as measured in labour and commodities, although not in gold -whereas the value of gold would be constantly changing and falling as the new supplies poured in. So certain and serious did these results appear that the Dutch Government demonetised gold, and adopted silver as its standard money. Holland is a small country, in which such a change can be effected without much inconvenience; and other and larger States would have followed its example but for the greatness of the difficulty which, as large States, would beset them in such an undertaking.

For a considerable time these opinions appeared to be fully justified by the facts. The price of silver during the first halt of the present century had been five shillings the ounce the actual price, during the ten years immediately preceding 1848, averaging 59d. In 1851 the price per ounce rose to 61d., and thereafter by slow gradations to 62d. (its highest point) in 1859. After a drop to 603d., the price rose again almost to its maximum (62d.) in 1862-4, the period of the Cotton Famine, when an unusually large quantity of silver had to be sent by our cotton-merchants to India. After 1866 this exceptional value of silver began to disappear, the price receding by slow gradations until it returned to its old level, or somewhat lower, viz. 59d., in 1873. In 1874 it fell to 584d., and in the following year to 563d. Then came the memorable year of the Silver Panic. In 1876, beginning at 56d., the price of the ounce of silver fell in April to 54d., in June to 50d., and finally, in the autumn, to 47d. At this point the tide slightly turned; the artificial or temporary effects of the panic passed off; and twelve months afterwards, in the autumn of 1876, the price of the silver ounce had risen to 52d. Within the last few months, however, silver has again fallen, the price at present being only 504d. Thus, instead of rising, compared with gold, as was universally expected, the price of silver has greatly fallen.

The operating circumstances in this case are visible enough, although their effects have been far greater than was to have been expected from past experience. Of the several causes

which have produced this great fall in the price of silver, the first to be noticed, as the most widely influential, is the large addition to the annual supply of silver which has followed the discovery of the new mines in Nevada in 1859. In 1863 the silver-produce of these new mines had risen to fully 2,000,0007. a year; in 1871 it amounted to 4,500,0007.; in 1875, after the discovery of the great Comstoke vein, it was 9,000,000l., and in 1876 the produce of these mines stood at the same amount. Simultaneously, however, the produce of the old silver-mines of Mexico and South America, which had stood at 6,000,000l. a year from 1852 to 1868, has since averaged only about 5,000,000l.; and the total annual produce of silver at present is about 16,000,000l. Meanwhile gold, which reached its maximum production (ranging from 29 to 36 millions sterling) in 1853-7, fell almost to 21 millions in 1869-71, and since then has averaged barely 20 millions. Thus, despite the recent great addition to the supply of silver, the annual production of gold still exceeds it in the proportion of 19 to 16; while, during the last thirty years, the addition made to the world's stock of gold has been much more than double that of silver. Now, as the stock of gold has largely increased, compared with silver, since 1848, and as the annual supply of gold is at present about one-fifth larger than that of silver, how does it happen that silver has fallen from the price which it bore relatively to gold in 1848, when the annual supply of the two metals was about equal, and when the stock of gold in the world was very much less, compared with the stock of silver, than it is now?

The next operating influence to be noted is the action of some European States in adopting a gold in lieu of a silver currency, and of other European States in restricting the coinage of silver. Also, since 1865, the adoption of inconvertible paper-money in Italy has driven out of circulation the whole of its metallic money, estimated to amount to 17 millions sterling. In 1873 the new German Empire resolved to provide itself with a gold currency, retaining silver merely for the minor currency; and the same change has been made by the Scandinavian kingdoms. Holland, also, without re-altering

* The Committee on the Depreciation of Silver in 1876 state in their Report that the annual silver-produce of the world, exclusive of the United States, was 7,000,000l., and that the total product [of 'silver] of the United States could not be safely estimated at less than เ 9,000,000l. This makes the total annual production of silver equal to 16,000,0007.; and, so far as is known, there has been no change in the produce of the mines since 1876.

its standard from silver back to gold, has taken to coining gold in preference to silver. In this way a new field has been opened for the employment of gold, thereby tending to uphold the value of that metal, while a considerable quantity of the disused silver has been thrown upon the market. The States of the Latin Union-France, Italy, and Spain-have put restrictions on the coining of silver, thereby stopping a use to which some of the silver set loose elsewhere would have been put. Including the disused metallic currency of Italy, a considerable portion of which has doubtless been hoarded in that country, all the silver thrown upon the market by these several operations of European Governments during the ten years ending with 1876 probably amounted to about 20 millions sterling-not much more than a single year's production of silver. But it was not until 1873 that silver began to fall below its old and ordinary price; and between 1872 and May, 1876 (as stated by the Parliamentary Committee), the silver thrown on the market amounted only to 8 millions sterlingnamely, 6,000,000l. sold by Germany, and about 2,000,000l. 'set free by the action of the Scandinavian kingdoms.' Moreover, France, during the same period (1871-5), absorbed 33,500,000l. of silver in partial replenishment of her currency, which had been greatly reduced by the payment of the warindemnity to Germany.

For a

The third of the visibly operating influences upon the value of silver has been the action of the British Empire. The annual payments of the Indian Government to the Home Government have largely increased of late years. quarter of a century previous to 1863 the bills drawn by the Home Government upon India averaged 24 millions sterling; throughout the next eight years (1863-70) the average was 64 millions. The amount then rose rapidly, and during the six years ending with April last it has averaged 124 millions, or ten millions in excess of the average previous to 1863. These bills take the place of specie; and thus the requirement for silver in payment of the trade-balances always due by this country to India has been reduced since 1863 by an amount exceeding two-thirds of the produce of the silvermines during the same period. In other words, a field for the employment of fully two-thirds of the supply of silver has recently been closed.

This change in the monetary relations between our Home Government and that of India has been the chief cause of the depreciation of silver. It is highly important, therefore, to note the character of this change and the probability of its