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strikes, the measure of the increase of price is the excess of the percentage increase in the marketable supply of bullion over the percentage increase in the volume of commerce. It is of course an obvious fact that industry throughout the world is constantly expanding; but side by side with this expansion has grown up a set of circumstances tending to increase the fluidity of

money. Rapid postal services, quick transit by sea and by land, and the power of controlling money by telegraph have multiplied the services of which the coinage is capable, and, in consequence, have limited the necessity to augment it to the full measure of the increase of commerce. Despite these limiting forces, however, the enormous increase in the volume of trade during the last sixty years has unquestionably called for a large addition to the currency; but the output of the mines has more than kept pace with the increased demand and a superfluity of gold has resulted.

As gold mining has been established since 1851 on what has proved to be a regular basis, one would naturally expect that, as soon as general prices commenced to rise, the upward movement would continue and would bear a fairly definite proportion to the rate of increase of the gold output. One would expect in fact, having regard solely to the figures shown in the table of mining returns given above, that there would be a fairly large increase of prices from 1851 to 1885, possibly a period of marking time from 1886 to 1890, a further increase from 1891 to 1899, a probable rise in 1900, followed by considerable subsequent rises. The best criterion of general prices is to be found in index figures arrived at by taking the average prices of a large number of the principal articles in daily use. During the period 1851 to 1911 index prices were as followsthe standard being based on the aver

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It will be noticed that from 1851 to 1871 the index number rose from 75 to 100. The rise was a fairly steady one, although-notably during the period of the Crimean War-prices were occasionally abnormal as a result of political stress. A rise from 75 in 1851 to 100 in 1871 means that 158. had the same purchasing power in 1851 that a sovereign had in 1871. The outbreak of the Franco-Prussian War resulted in a temporary exceptional increase of prices; but, in 1874, a downward movement commenced, despite the fact that a large annual addition to the world's output of gold was resulting from the success of the Californian and Australian miners. The reason for this falling-off was, however, mainly due to the facts that

Germany, which had adopted a gold standard in 1872, commenced to coin gold largely in 1875, and that the United States adopted a similar standard in 1873. From 1875 to 1885 Germany alone absorbed in new coinage nearly £100,000,000 worth of gold. The downward movement of prices was helped by diminished output of the mines during the years 1886 to 1890. The last decade of the nineteenth century was remarkable for a series of currency changes which absorbed a very large amount of gold, and fully counterbalanced the increased yield of the Transvaal mines. During the years 1892 to 1898 the Austrian mints were actively engaged in coining gold in substitution for silver: in 1894 a process of extending the use of the more precious metal in the Indian coinage was instituted: in 1897 Japan adopted a gold standard, and in the same year Russia commenced coining fifteen-rouble pieces. In Russia and Japan the amounts coined were very large, as will be seen from the appended table:

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1898 263,890,000 21,385,797 1899 378,000,150 16,491,270 1900 161,575,195 12,615,549 1901 61,270,320 14,549,646 1902 51,390,135 37,269,753 1903 53,910,285 23,952,000 The mint return of Russia shows that, while, as is natural, a very large amount of gold is coined immediately after the introduction of, or extension of, a gold standard, the amount is greatly reduced in subsequent years. That the Japanese returns bring out this point less strongly than the Russian is due to absolutely phenomenal LIVING AGE VOL. LX. 3155

commercial development in Japan. Another remarkable illustration of the same point is furnished by Germany. In the ten years 1875-1884 that country's gold coinage amounted to 1,922,016,605 marks, or an average of 192,201,660 marks yearly; in the twenty-five years 1885-1909 it amounted to 2,622,781,395 marks, or an average of less than 105,000,000 marks yearly, and this despite the enormous development of German commerce during the latter period,

Since gold-mining was changed from a haphazard affair of luck to a settled industry, there has been a progressive increase in the amount won from the mines. Simultaneously, there has been a tendency for prices to advance. In all cases where the advance has been very rapid the cause is directly traceable to political disturbance, e. g., the Crimean, Austrian, FrancoPrussian, and South African wars; and in those cases where the natural tendency to advance has been checked or transferred into a movement in the downward direction, the occurrence has been coincident with a change of currency by one or more of the great commercial countries, involving large but exceptional demands for gold. Parenthetically it may be mentioned that it is a matter of common knowledge that those changes of currencies which have appreciated the value of gold and reduced general prices have at the same time depreciated the value of silver, and consequently increased prices on the silver basis.

There is no doubt that the adoption of gold standards by Germany, Austria, Russia, and Japan has had an immense influence in the past in preventing an excessive increase of prices. An effect is still felt, and will continue to be felt as a result of those countries' annual demand for gold to keep pace with the legitimate growth of commerce; but the amount required for

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this purpose is much smaller than that needed in the few years following the adoption of a gold standard. This is sufficiently evidenced by the mint returns of all those countries which have changed their standards.

No more countries of first-class importance are left with a silver standard, and there cannot therefore arise in the future the same extraordinary causes for preventing an increase of prices that have operated in the past. The currencies of the world have become, as it were, saturated with gold, and any output of the metal in excess of that needed to replace wastage and to supply normal additional requirements becomes a glut upon the market: it reduces the value of the whole stock, whether coined or not, just as the production of, let us say, cotton goods in excess of that required to meet the normal demand depreciates the value of, and lowers the price of, both new and old stocks of cotton goods. But the output of the mines is increasing faster than ever, and there now appears to be nothing to prevent a glut of gold. This will infallibly cause prices to continue to appreciate. If the quantity of gold placed on the market goes on increasing year by year the reduction of the purchasing power of the sovereign must necessarily be automatic. If the movement were to continue unchecked, its effect would be nothing less than the gradual crumbling away of all our economic standards, just as they crumbled away in the sixteenth century when a series of discoveries of rich silver mines cheapened money and caused general prices to rise to undreamed-of heights.

A powerful temporary check upon the increasing superfluity of gold was imposed by the Balkan War. As a result of that war, not only have there been exceptional demands for money, but large quantities of gold have been

hoarded in France, Austria, and Germany. The prolonged maintenance of bank rates at a high level was only effective in bringing back into circulation a part of the money so hoarded. As, however, public confidence is restored, the remainder will be placed on the market and its effect on prices will be exactly the same as that of new gold added to circulation.

Prior to the Balkan War the financial world was in a state of something like consternation because Consols had dwindled in value. From the fact of this depreciation all sorts of pessimistic conclusions were drawn. Indeed, the idea began to take root that the international credit of Great Britain had been seriously impaired. But the funds of all the first-class Powers had fallen at the same time as, and to much the same extent as, Consols. Enormous depreciations had taken place in the quotations for Colonial Government issues, and debenture and preference stocks of great railways. All first-class securities throughout the whole civilized world had, in fact, declined simultaneously. When it became known that a conflict between Turkey and the Allies was inevitable, responsibility for the fall in price of Consols and, incidentally, of all other securities in the market was assigned to the disturbed state of Europe. A costly war inevitably has a depressing effect upon Stock Exchange quotations, and the effect is accentuated when, as in this case, there is acute danger of other countries being drawn into the struggle. The war in the East is certainly an ample reason for the depreciation in the price of securities which has occurred since it became evident that resort to arms could not be avoided, but, equally certainly, it had no bearing whatever on the crumbling away which had been going on for several years previously. A steady fall in the price of first-class

securities throughout the whole world can only be attributable to a deepseated economic cause. In this instance one has not to seek far to discover it. The real value of money has fallen; prices of commodities have risen, and, with them, the rate of interest obtainable on money invested in commercial undertakings. If it is a commonly acted upon opinion among investors that they ought to obtain twice as much interest on money embarked in trading concerns as on that invested in Government stock they will be content with three per cent. on stock when the commercial rate is six. But if they find themselves able to obtain eight per cent. in trade there will be a stream of sellers of Government stock until the price has been sufficiently reduced to make four per cent. obtainable. The actual fall may be arrested by Government purchases for redemption of debt or on Savings Bank account; but such purchases will merely delay a natural fall and temporarily buoy up the price artificially. True equilibrium cannot be obtained until the price represents the real value of the stock in relation to other openings for the money of investors.

It is usually with a sense of grievance that one sees the marketable value of one's stock falling away; but the hardship which has overtaken the holders of Consols is no greater than that which has been inflicted upon the holders of debenture and preference stocks. All have suffered as a result of changed currency conditions, and people who have invested their money in Consols have no more right to ask the Government to make good a porThe Fortnightly Review.

tion of their losses at the expense of the community than the owners of debenture stock in a railway company have to ask the directors of the company to make good their losses at the expense of the shareholders,

The same decrease in the purchasing power of money which has resulted in the depreciation of Consols has caused heavy loss to whole groups and classes of people in ways too numerous to relate. Every annuitant has to face a steady decrease in the purchasing power of his income. Most workers for wages are confronted with similar loss, for wages are seldom altered immediately there is a change in the cost of living. There is no doubt that much of that industrial unrest which has troubled, and is still troubling, Great Britain, Germany, and other mercantile nations, is attributable to the fact that the loss to workmen due to decreased purchasing power of their money wages has not always been covered by increased pay.

It is probable that in course of time economic forces will set a limit to the output of gold, although it is impossible to say when that limit is likely to be applied. As over-production causes the value of the metal to decline, the profits of mine owners will decrease. It is not outside the bounds of possibility that a point may be reached when the output of gold will diminish, not because mines at present regarded as "rich" are exhausted, but because they will not pay to work. The history of the gold mines may be something like the history of the silver mines.

Walter F. Ford.

HENRI ROCHEFORT.

It is with mixed emotions that I record my own personal recollections of the late Henri Rochefort. They date back to fourteen years, to the lurid, delirious summer of 1899: when Jules Guérin, the ieader of the antiSemites, evaded arrest by shutting himself up in Fort Chabrol; when Dreyfus-bent, shattered, almost voiceless-was enduring the anguish of a second court-martial; when the boulevards were being swept of tumultuous manifestants every night by the Republican Guard-and Rochefort was living in a tranquil, charming little villa at the entrance to the Bois de Boulogne. A retreat for a sage, a poet, a dreamer: the very last abodeone would have thought-for the most thunderous figure in French public life. By rights, Rochefort the Ferocious should have been living in a vast boulevard apartment overlooking the nightly anti-Dreyfusard uproar. But there he was (when first I met him) in that innocent maisonette: in dressinggown and slippers, amidst flowers, pictures, and frail china; actually playing with a fluffy toy lamb of the kind hawked about for two francs on the terraces of the Paris cafés. It was only his snowy white hair-brushed upwards-that made him picturesque. Pale, steely blue eyes, that lit up cruelly, evilly at times; a face seamed, sallow, and horse-like in shape; a harsh, guttural voice; large yellowish hands with long, pointed finger-nails. To ease the huskiness in his throat, Rochefort was for ever sucking lozenges. When he became agitated, he cracked them; but upon the occasion of my first visit to the innocent maisonette there was no cause for agitation. The toy lamb was the attraction. A tube was attached to it, and at the end of the tube was a bulb which,

when pressed, made the lamb leap. Again and again, Rochefort the Lurid set the lamb leaping. I too, lost my heart to the lamb-and also made it frisk. Amidst all this irresponsibility, my host was pleased to pronounce me "sympathetic" and "charming"-not like the "traditional" Englishman with the bull-dog, the aggressive side-whiskers, and long, glistening teeth. Rochefort saw me to the garden-door; Rochefort actually plucked me a rose; Rochefort's parting words were a cordial invitation to visit him and his lamb again soon. So was I amazed to find myself described in his very next article as "a sinister brigand, in the pay of the Jews; in fact, one of those diabolical bandits who are devastating our beloved France." .. A week later I approached him-and mildly protested as he was sitting on the terrace of the Café de la Paix, drinking milk and Vichy water, sucking his eternal lozenges, and still playing with the lamb. "Bah, that was only print," came the reply. "Let us resume our game with the lamb." As he made it leap about deftly amongst the glasses on the marble-topped table, passers-by, recognizing his Luridness, stopped, stared, and smiled at the spectacle. "That's the great Rochefort," said the maître-d'hôtel to an American tourist: and stupefaction of the States. Rising at last and stuffing the lamb into his pocket, Rochefort remarked, "I must go off and do my article-but you shan't be the brigand. I feel amiable to-night, and shall write something pleasant." Next morning appeared the notorious, atrocious article demanding that walnut shells-containing long, hairy spiders-should be strapped to the eyes of Captain Dreyfus.

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