ing not only many individuals, but a great nation, in serious financial difficulty. All of us now know, as John Stuart Mill says, in "Principles of Political Economy,"[1] "When a commodity * * * can be made in indefinite quantity * * * if the value * * * is such that it repays the cost of production with a higher rate of profit, capital rushes to share in this extra gain, and by increasing the supply of the article, reduces its value. This is not a mere supposition or surmise, but a fact familiar to those conversant with commercial operations. * * * There is sure to be, in a short time, so large a production or importation of the commodity, as not only destroys the extra profit, but generally goes beyond the mark, and sinks the value as much too low as it, before had been raised too high; until the over-supply is corrected by a total or partial suspension of further production." It is the one case where reaction actually exceeds action.
Indeed, where has there ever been a more complete demonstration of these truths than is now passing before our eyes? Under the law of supply and demand, raw sugars, notwithstanding repeated indictments for alleged profiteering, moved in continuing advance. There then came the inevitable competition from all parts of the world, and an enormous drop of nearly the equivalent of thirty-eight dollars a barrel for refined sugar has taken place—a decline, doubtless, largely in excess of any advance for which anyone has been indicted, and, yet, a decline that was as inevitable, at some time, as further large declines that are sure to take place. And this decline took place, at just the busiest season when all would have expected the highest prices!
- ↑ John Stuart Mill, in "Principles of Political Economy," Book III, Chapter III, Section I.
