|THE ECONOMIC DISTURBANCES SINCE 1873.|
DEPRESSION of prices has, to a large extent, been accepted as a prime cause of the "economic disturbance" which has prevailed since 1873. Indeed, Mr. Robert Giffen, the well-known English economist and officer of the British Board of Trade, in an article contributed to the "Contemporary Review," June, 1885, does not hesitate to express the opinion that "it is clearly unnecessary to assign any other cause for the gloom of the last year or two;" and continuing, he further says:
"The point to which I would draw special attention is, that . . . the most disastrous characteristic of the recent fall of prices has been the descent all round to a lower range than that of which there had been any previous experience. It is this peculiarity which—more than anything else—has aggravated the gloom of merchants and capitalists during the last few years. Fluctuations of prices they are used to. Merchants know that there is one range of prices in a time of buoyancy and inflation, and quite another range of prices in times of discredit. By the customary oscillations, the shrewder business people are enabled to make large profits, but during the last few years the shrewder, as well as the less shrewd, have been tried. Operations they ventured on when prices were falling to the customary low level have failed disastrously, because of a further foil which is altogether without precedent. The change is more like a revolution in prices than anything which usually happens in an ordinary cycle of prosperity and depression in trade."
Here, then, is a description of the extent of the recent fall in prices, and its influence in producing and aggravating the gloom of merchants and capitalists, by one well competent to appreciate and describe what has happened. The point of novelty and greatest significance, however, in Mr. Giffen's statement is, not that a depression of prices has been productive of gloom and a depression of business—for no fact is better recognized by all economists and business men than that on a falling market trade is always stagnant, and that nothing is more productive of gloom to the industrial and mercantile community owning or carrying stocks of merchandise than losses experienced or anticipated through a fall in prices; but that the recent fall in the prices of the great staple commodities of the world has been in extent and character without precedent in the world's history.
A further fact of the highest importance, and one that is not dis-
- "Many who discuss this question, and whose opinions generally command deference, appear scarcely to realize the enormous extent of the fall, and it is only by means of very extensive statistics and of a comparison of various periods that a clear insight into the details and a broad view of the whole can be gained."—Augustus Sauerbeck Journal of the Statistical Society of London, September, 1886.