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even there they are not kept on quite the same system, and comparison is not as easy as could be wished. As regards the value of the output of the factories and workshops of the seven colonies my estimate,—which I give with becoming hesitation,is seventy millions a year. As to the number of hands employed, I put that at 200,000 at the outside. Thanks to the Factory Law in New Zealand under which every workroom in which two persons are engaged preparing articles for sale has to be registered, the figures are completest in that colony. The number of hands employed in the New Zealand factories in March last was 40,000, or, if the employees in the railway workshops be included, 41,000. The official figures for the year 1897 showed 51,000 hands in the New South Wales factories; in those of Victoria 50,400 were returned in 1896, of which 1,000 - were home workers. Were, however, the figures in New South Wales and Victoria calculated on the New Zealand basis, then, allowing for this year's increase in the former colony, and for the last two years in the latter, I should set the number of hands engaged in the three colonies at 150,000. That is as near as I am able to get to exactness. In Victoria, thanks to the financial disasters of 1891-2-3, the number of factory hands employed fell from nearly 60,000 to 40,000, but the greater part of this loss has since been made good.

To what extent have the Protective duties contributed to building up the industries whose bulk is thus indicated ? That again can only be approximately estimated. One can only give one's belief. Mine is that woollen mills, boot and shoe factories, tanneries, breweries, distilleries, the whole industry connected with the growing and refining of sugar, jam-making, soap and candle works, furniture-making, printing and book-binding (partly), brick and tile-making (partly), hat factories, clothing factories, iron foundries and machine shops, owe their existence in the colonies chiefly, if not entirely, to State aid, whether by way of bonus or customs duties; whether imposed for revenue or for avowedly Protective purposes. For instance, New Zealand, with but threefifths of the population of New South Wales, employs seven times as many hands in her woollen mills as New South Wales. In the latter colony the industry has had only temporary and imperfect aid from the tariff; in the former they have been protected for twenty years.

If New South Wales had been persistently a Free Trade colony, and if her extent of territory and immense and convenient coalbeds did not give her natural advantages which the rival colony of Victoria does not possess, then of course we should be able to institute a fair and very useful comparison between the manufacturing progress of Victoria and that of New South Wales. As it is, colonial partisans of Protection and Free Trade have wearied themselves and their hearers with every kind of distortion and qualification of the figures furnished by these two colonies. In 1891 it appeared that Victoria with a rather smaller population and a very much smaller territory, virtually unprovided with coal, was manufacturing £22,000,000 worth of goods against something less than £17,000,000 worth turned out by New South Wales. But, as I have just said, I attach no very great importance to the value of the comparison. If the Reid tariff were to remain in operation in New South Wales for seven or eight years longer, and if the Victorian tariff were to remain unchanged during the same period, then a more useful though still imperfect comparison would be possible. But should Australian Federation come about and both conies have to dwell together under the same fiscal laws, they will cease to furnish object lessons more or less misleading to Australasian controversialists. To what extent have the Protective tariffs kept up wages and kept down unemployment ? A table already quoted shows how limited their effect was in the first respect. Since that table was drawn up there have been distinct advances in the rate of pay in several trades, though without Trade Union effort and Labour Legislation these might not have been obtained. On the whole it may be said of the Protected employers that they pay their men very well, but women and boys by no means so well. But for recent legislation the position of the female and child workers in certain colonial factories might soon have been well-nigh as bad as in the sweated industries of Great Britain. On the other hand, as sources of employment, the Protected industries have been of very great service, and the upenviable prominence of the unemployed in New South Wales during the last four years has been a matter of note throughout the colonies.

1 See the table appended.

Meanwhile English students may be warned not to attach too much weight to the fiscal question as a factor in the prosperity or depression of the Australasian colonies. All of these are in the main producers of raw material and gold for the European market. If the prices in London of wool, meat, tallow, wheat, butter and cheese are good, then the colonies are prosperous. If the prices, or most of them are bad, then the colonies are depressed. Their Protected industries are of importance and value to them. On the other hand, the cheapening of certain articles under the Reid tariff is appreciated by the consumers of New South Wales. But these things are not the main influences which determine the economic condition of Australasia, though in the course of heated fiscal polemics amongst colonists attempts are often made to lift them into that position.

W. P. REEVES

NUMBER OF PERSONS EMPLOYED IN CERTAIN PROTECTED INDUSTRIES IN 1895, IN

NEW SOUTH WALES, VICTORIA, AND NEW ZEALAND.

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NOTE.-It must be remembered that in the year 1895 the Reid Tariff had not come into operation, and New South Wales was a Protectionist colony. 1895 was a year of general colonial depression. If I could give the figures for 1898, they would, I believe, show a marked increase, especially in Victoria and New Zealand.

FUTURES IN THE GRAIN MARKET.1

The modern system of “ futures” has proved itself a convenient scapegoat for all the evils of the grain trade. It is charged with being the cause of low prices and of high prices, with increasing trade risks, and with diminishing them till there is no chance for profit. A few years ago the farming class clamoured for the suppression of the speculative market, while recently the Kansas farmers started a movement to contribute a cent a bushel on all their wheat to a fund for the benefit of the most daring speculator of the Chicago market. This confusion of ideas is not unnatural. The last half-century has seen a complete revolution in the trade in agricultural staples, brought about by the great changes in the means of transportation and communication. This transformation of the nature of the market for such commodities has resulted in severe hardships at certain times to certain classes. At the same time the speculative market has come into great prominence, and it is not unnatural that this institution, which is really the natural result of the new conditions, should be held up to criticism as their cause.

Even as late as 1850 the markets for grain were local markets, and in the main prices were determined by local conditions. With the growth of the world-market of to-day the price in each locality came to be determined by the conditions of demand and supply in all parts of the world. A sudden change in the crop conditions of India had an immediate effect on the price of wheat in Birmingham and San Francisco. The trade in these commodities consequently became far more hazardous. No knowledge of local conditions and no foresight regarding them could protect a dealer against disastrous changes in value due to far-off occurrences. The unpredictable forces in the market--the

The main points in the present essay are treated at greater length in the writer's monograph, “Speculation on the Stock and Produce xchanges of the L'nited States," Columbia University Studies, New York, 1896.

Konjunktur-became increasingly important. The more extensive the trade in the great staples became, with the growth of commercial facilities, the more seriously these risks were felt. All great branches of the international trade in raw products became extremely speculative. To buy and store wheat for a future market was no longer a conservative but a hazardous undertaking. The growth of organised speculative markets was in direct response to these conditions. The greater the risks, the greater the opportunity for, and the greater the need of, speculation. It is characteristic of this development that the first organised speculation to become prominent in the trade between England and America was that in cotton. The trade in cotton was completely disorganised by the Civil War in America, and out of this disorganisation arose the speculative market at the end of the sixties. The evidence taken before the German Imperial Commission, appointed in 1892 to investigate the subject of speculation, revealed the fact that every speculative market in Germany arose, as did the cotton market, in response to increased uncertainties of trade.

These markets, however, were not a result of a philanthropic desire to benefit the public, but of the chances for great profit which these trade risks gave. The very conditions which repelled cautious traders attracted those of a speculative turn of mind. Furthermore, new men were attracted to these trades, who were equally willing to deal in wheat or cotton or stocks or anything else, so long as the ordinary cares of the trader were reduced to a minimum and the fluctuations in price were great. In other words, the uncertainties of trade differentiated traders into two classes, out of one of which the class of professional speculators

This special class, organised in exchanges, with a perfected method of facilitating business, has arisen to assume the great risks that were becoming intolerable to the trader; and this is its primary economic function.

The way in which trade risks may be shifted to the speculative class is two-fold; first, through the existence of a continuous market; secondly, through the possibility of hedging transactions. The former is due to a general change in trade conditions, the latter is a special device for insurance against loss.

The continuous market is the result of the ceaseless opportunities for trade furnished by market fluctuations. There is an unending stream of business, the bulls and the bears, the buyers and the sellers, making new contracts with every indication of changed conditions of demand and supply. Into this stream the merchant,

arose.

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