1886, nevertheless claim that consumption has at the same time increased to such an extent, that the general assumption of an excessive production of this commodity has not been warranted, and in truth has "but slightly exceeded the ordinary growth of population, and that; therefore, other influences must have been at work to cause the great decline in its price which has characterized the course of events during recent years." But to this it may be replied, that when the supply of any commodity exceeds by even a very small percentage what is required to meet every demand for current consumption—specially in the case of a staple commodity like wool, whose every variation in supply and demand is studied every day, as it were microscopically, by thousands of interested dealers and consumers—it is the price which this surplus will command that governs and fixes the price for the whole; and as this can not be sold readily—as under such circumstances no one buys in excess of present demand, and all desire to dispose of accumulated stocks—the result is a decline of prices, in accordance with no law, and which will be more or less excessive, or permanent, as opinions vary as to the extent of the surplus and the permanence of the causes that have occasioned it.[1]
Another illustration to the same effect is afforded in the case of silk, which, according to accepted English statistics, has notably declined in price, comparing the average rates of 1867-'77 with those of 1885, without anything like a corresponding increase in supply. Hence the inference would seem warranted, that some other agency than increased and cheapened production had occasioned the decline in price, and that the case was one which affords support to the gold-scarcity theory. But a careful examination of all the involved circumstances discloses the fact, that within recent years materials other than silk—more especially the "ramie"-fiber—largely enter into the composition of silk fabrications—in the case of the cheaper silks of extensive consumption to the extent of even 60 per cent—and that other methods of adulterating silk, formerly but little known, are now extensively practiced; all of which is equivalent to increasing the supply of silk for manufacturing, far beyond what commercial reports respecting the supply of the fiber would indicate.
Such, then, are the leading and admitted facts illustrative of the nature and extent of the extraordinary and most extensive decline in prices which has occurred in recent years, and which has been the most apparent and proximate (but not the ultimate) cause of the period of economic disturbance which, commencing in 1873, still exists, and seems certain to last for some time longer. Such, also, is a
- ↑ The estimates of Messrs. Helmuth, Swartze & Co., were that the wool product of the world increased from 1871-'75 to 1886—or during a period of from eleven to fifteen years—35 per cent; while the increase in the world's consumption of wool from 1860 to 1886—a period of twenty-five years—was from 2.03 pounds to 2.66 pounds per head, or in the ratio of 30 per cent.
