occasioning the recent decline in the prices of sugars having been an extraordinary artificial stimulus; in quinine, the changes in the sources of supply from natural to artificially-cultivated trees; in wheat, the accessibility of new and fertile territory, and the reduction of freight; in freights, on land, the reduction in the cost of iron and steel, and on the ocean new methods of propulsion, economy in fuel and undue multiplication of vessels; in iron and steel, new processes and new furnaces, affording a larger and better product with less labor in a given time; in certain varieties of wool, changes in fashion, and in others an increase of production in a greater ratio than population and their consuming capacity; in ores and coal, the introduction of the steam-drill and more powerful explosive agents; in cheese, a disproportionate market price for butter; in cotton cloth, because the spindles which revolved four thousand times in a minute in 1874 made ten thousand revolutions in the same time in 1885; in "gum-arabic" and "senna," a war in the Soudan; in wines, a destruction of the vines by disease, etc., etc. And yet all these so diverse factors of influence evolve and harmonize under and, at the same time, demonstrate the existence of a law more immutable than any other in economic science—namely, that when production increases in excess of current market demand, even to the extent of an inconsiderable fraction, or is cheapened through any agency, prices will decline; and that when, on the other hand, production is checked or arrested by natural events—storms, pestilence, extremes of temperature—or by artificial interference—as war, excessive taxation, or political misrule or disturbances—prices will advance; and, between these extremes of influence, prices will fluctuate in accordance with the progressive changes in circumstances and the hopes and fears of producers, exchangers, and consumers.[1]
It should also not be overlooked that extraordinary price-movements—mainly in the direction of further decline, and as the result of continually changing conditions in the production and supply of commodities—are constantly occurring, and are likely to continue to occur, unless further material progress is in some way to be arrested. Bes-
- ↑ In new countries, or countries where industry is confined to the production of a few staple products, like wool, wheat, sugar, etc., a decline in prices exerts a wider and much more disturbing influence than in countries where there is great diversity of industry, and where the sources of income and the opportunities for employment are more numerous and more varied. In the latter all branches of industry are rarely depressed at the same time, and prosperity in some compensates to a certain extent for adversity in others. But, in countries of inferior industrial organization and diversification, the interests of the entire community are so common and united that the tendency is always, for a change of price in one commodity—either rise or fall—to unduly influence the prices of all commodities. And this, according to the London "Statist," is what has been particularly noticeable in Australia, where such a sympathy obtains between the three great products of that country—wool, wheat, and copper—that it rarely happens that one of them droops in price without the price of the others rapidly weakening.
