to be. In some way or other the gold will be distributed; and, if there is a general rise in prices in consequence, in the course of time the work and the pleasures of the world will be measured on a new basis. But besides the quantity of gold there are a number of causes of the first importance affecting general prices; and for an indefinite period it is possible that gold may be increasing and prices not rising, or even falling. When we come to apply Prof. Fisher's argument to the problem that is at present exciting so much interest, we have no means of telling how much of the rise is due to the new gold, or how much further the rise may go. He himself, indeed, seems to anticipate so great a rise in prices that the nations of the world ought to agree to substitute for the gold-standard an artificial gold-exchange standard, so that the sovereign, for example, would no longer correspond to the gold of which it is made, but to some idea of purchasing power. On this plan, if prices rise as measured by the indexnumbers, then gold is to be withdrawn, and with the contraction of the currency by the simple quantity theory prices are to come down; while, if prices fall, gold is to be let loose and prices are to go up. It is not necessary to go into the working of the process of the manipulation of the gold, but the basis of the whole scheme is the contraction and expansion of the gold currency so as to operate against movements in prices. Therefore the currency will be contracted and general prices will fall until no more gold is called for, or until there is declared a new official price for gold' (Fisher, op. cit., p. 343).

The difficulty of this plan may be seen by looking to the recent movements of prices in England. By the latest figures of the Economist,'* compared with the basis of 1901-5, prices rose in 1911 some 17 per cent.; and this year there has been a further rise of some 8 per cent. In July 1912 the index-number was just 25 per cent. above the basis of 1901-5. If the sovereign was to have retained the same purchasing power, its scarcity value must have been gradually enhanced (by contraction of the currency) in the same proportion as the rise of prices indicated by the index-numbers. The sovereign at this time, if the plan had been perfectly successful, would

*The Economist,' September 7, 1912.

be one quarter more valuable than the corresponding amount of gold of which it is made; or, roughly, the mint price of gold, instead of being a little under 4l., would be a little under 31. But currency can only obtain a scarcity value by being made scarce; and the effects of giving a scarcity value to the sovereign on the London money-market would altogether outweigh any advantage to be obtained from greater stability in the purchasing power of the sovereign. England might perhaps look with equanimity on the adoption of this index-number gold-standard by other countries, just as it would have done if they had adopted bimetallism. The old tabular standard seems much more simple, and would be, in theory, much more effective. All that is needed is to pass a law that, if the index-number rises as recently, say, 25 per cent., then all creditors are to get 125l. instead of 1007., and nominal wages are to rise in the same proportion. It is, however, generally agreed that the practical difficulties of the tabular standard are so great that it can be applied only in a very limited number of cases.

As regards this new gold-exchange standard based on index-numbers, it has not yet passed the preliminary theoretical examination. It is true that the gold-exchange standard of India has been successful in the attainment of the object desired, namely, a fixed parity of exchange of the rupee with gold, under normal conditions. Sir David Barbour has given in his new book a clear and valuable account of the way in which this has been effected. It is not easy to specify to which class of currency the new rupee belongs; it has resemblances with the limping bimetallism of France, with ordinary token coins, and with bank-notes of which the convertibility is partially suspended or otherwise impeded. However we class it, so long as the principle of limitation is observed and an adequate reserve of gold is available, the parity of the rupee can no doubt be maintained. But to ensure the convertibility of various forms of currency at fixed ratios is a problem totally different from the attainment of stability in the purchasing power of the standard on which these various currencies are based. The former problem has been solved in different ways from the earliest times; there are many examples of currencies at fixed ratios, and ratios different from the

commodity-values of the substances of which they are made. But there are no cases on record in which any standard has attained stability of purchasing power under changing conditions; and such a standard is generally held to be unattainable. The working of a gold-exchange standard based on based on index-numbers is totally different from the working of such a standard as that of India. Prof. Fisher does not realise this distinction. It is a little anomalous' (he says) 'that these gold-exchange standard countries now have a power to regulate their price-level which is not possessed by the gold-standard countries themselves. The latter are, by their present system, kept absolutely at the mercy of the accidents of gold-mining and metallurgy, while the former can keep or change the par of exchange with gold countries at will' (op. cit. p. 340). Now, rupee prices in India during the last ten or twelve years have risen about double, though the parity with gold has been maintained. We should like to know by what methods Sir David Barbour would have proceeded if he had been asked to ensure the stability of the rupee in general purchasing power.

Before any serious manipulation of the world's currencies can be expected with the view of attaining greater stability of purchasing power, the causes which under modern conditions bring about changes in general prices must be much better understood and much more accurately measured. The revised version of the quantity theory gives us no more assistance in connecting the new gold supplies with the recent rise in prices than was given by the theory in its older forms. In some respects the revised version is retrograde. The relations of credit to gold on the one side and to general prices on the other, and the distinctions between inconvertible and convertible currencies, are not so clearly realised by Prof. Fisher as by Mill and Bagehot, not to mention later writers. He tries to apply the quantity theory in a simple form to actual problems, but his main results are either hypothetical or illustrative of hypotheses. One thing, however, his book has shown, and that is the necessity of a much deeper and broader investigation of the causes that affect general prices, and therefore the purchasing power of money; and, if the International

Commission of which he is the advocate is appointed, we may expect valuable results. In the meantime, however, although it has been approved by the President of the United States, the appointment has been delayed, apparently for political reasons. It is said that the op

ponents of the tariff in the United States are unwilling to admit that the rise in the cost of living in that country has any other serious cause; and they think the admission that, perhaps, the new gold has something to do with it might abate the popular resentment against the tariff.

It is quite possible that, before the International Commission is appointed, the rise in prices may have met its reaction. Even if the supplies of gold do not fall off, there are other factors of at least equal importance to be taken account of. The value of money (i.e. in the sense of its purchasing power) depends, like other values, on demand and supply. The price level must be so adjusted by the play of demand and supply that the quantity of money' offered at that level will be equal to the quantity demanded. Stated in this most general form, the theory is difficult to grasp; and the difficulties are increased when we consider the various elements that enter into both the supply of 'money' and the demand for 'money.' The annual production of gold is only one of the elements affecting the supply of 'money.' The recent conference of bankers in Germany has shown that the expansion of credit money has been pushed to the extreme. The American crisis of 1907 is not yet forgotten. To judge by past history, the rapid development of new countries seems likely to lead eventually to a period of over-production and a consequent fall in prices. The demands of India and possibly of China must be considered. That there is some connexion between the quantity of gold available for monetary uses and the level of prices may still be considered as plain a truth as that there is some connexion between seasonal temperatures and the apparent movements of the sun. But the meteorologists have recently confessed in public their inability to forecast the weather even for a season in advance, and the currency prophets would do well to imitate their caution.

J. S. NICHOLSON.

Art. 10.-RECENT CRICKET.

1. Imperial Cricket. Edited by P. F. Warner. London: London and Counties Press Association, 1912.

2. Jubilee Book of Cricket. By K. S. Ranjitsinhji (H.H. the Jam of Nawanagar). London and Edinburgh: Nelson, 1897; new edition, 1912.

3. England v. Australia. By P. F. Warner. London: Mills and Boon, 1912.

4. Twenty-Four Years of Cricket. London: Mills and Boon, 1912.

By A. A. Lilley.

It is probable that the present year, that of the triangular tournament, will be regarded as the date of a new era, just as 1878, the year of the visit of the first Australian team, was the starting-point of modern cricket. Down to 1878, cricket had been complacently regarded as the English national game; it was played as a game, and, if there were abuses, there was also a fine sporting atmosphere. It is no exaggeration to say that when Australia beat M.C.C. on that memorable May day, England was profoundly amazed. It was recognised that our kith and kin from the Antipodes were our rivals at our own pastime, and could show us developments of which we had no previous conception, such as the abolition of long-stop and new methods of bowling and placing the field. Ever since then, cricket has tended to become imperial, instead of merely British, and in its first-class section has grown into a more business-like and cumbrous but less sporting affair. As a commercial concern, first-class cricket must be pronounced a failure; half the counties are barely solvent, and only a few can count on the considerable measure of public support necessary to pay for the modern conditions under which the game is pursued. Nevertheless, to-day, cricket is loved by many more people than ever before, and the present year should herald the development of the game according to the requirements of the younger generation. Any modifications seem heresy to the conservatism of the dry-as-dusts of cricket. But a game which does not suit itself to contemporary exigencies is in peril of growing obsolete if it be entirely dependent upon popular support. Archery was once the national pastime of England; to-day it bears the same