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Professor Cairnes could cite other elaborate efforts only as approximative to the law of market price, and he acknowledged that his statement would be utterly unsatisfactory to some economists, whose views in connection with their science were more ambitious than his own. We must come to the same conclusion with Mr Shadwell. We must acknowledge our inability to devise a theory which will satisfactorily account for the phenomena of market value, and must leave them unexplained. We must hold that the fluctuations of the value of commodities cannot be predicted. At the same time I am unable to share Mr Shadwell's confidence that these phenomena conform to law, though we cannot say what it is. The nature of the regulating force, human feeling, in such matters necessarily, as it seems to me, excludes the dominion of law.

It remains to notice some important points connected with supply and demand.

It results from the nature of all trades that all goods on sale are goods offered in exchange for other goods. Every article in every shop or market asks to be exchanged for some other article in some other market. This cardinal fact is disguised by the use of money in exchanging. Money betrayed even so acute a thinker as Mr Mill into the great error of supposing that goods are a demand for money. If that is so, then this demand is little gratified in modern trade. The Clearing House of London alone exchanges goods for goods by the help of pen and paper and figures to an extent enormously greater than all the coin and bank notes in the kingdom. Goods in shops are a demand for other goods. The seller with the money he takes buys other have been stagnant, mills would not have worked at half time, railway traffics and dividends would not have dwindled down, and commercial bills been hard to find in the money market. So simple a truth as this that the trade of a nation is the exchange of all its goods, and depends for magnitude on the quantity of those goods, is the natural and real, but much unthought of explainer of all these collapses.

Allusion has been made above to the difference of the effects produced on the price of luxuries and of necessaries by a deficiency of supply. Dearer luxuries are given up by many, and thus the rise of value encounters great and increasing resistance. But bread must be bought, whatever its price. Buyers on a bad supply become eager; sellers hold back. The result is a rise of price greatly out of proportion with the amount of the deficiency. A very interesting table has been drawn up by Dr Davenant, and cited by Professor Jevons, founded on conclusions drawn by George King in 1696, in which an estimate is given of the effect on price of different amounts of defect in the supply of corn.

We take it, he remarks, that a defect in the harvest may raise the price of corn in the following proportions-:—

Defects. Above the common Rate.

1 tenth raises the price -3 tenths.

2 „ „ -8 „

3 » » 1'6 „
4' » » 2"8 „
5 » » 4'5 »

so that when corn rises to treble the common rate, it

may be presumed that we want above one-third of the common produce. If we should want five-tenths or half the common produce, the price would rise to near five times the common rate.

Whether this estimate is accurate has been a matter of dispute, but the important fact is not doubted that price ascends far faster than supply falls short.

The sufferings caused by such violent rises of price were fearfully aggravated by the folly of human legislation. The obvious resource against the uncertainties of the seasons was plainly to extend, as widely as possible, the area from which supplies might be regularly drawn. The broader the fields, and the more diverse the climates, from which a people derives its means of existence, incomparably the greater will be their security against starvation, as also against the social and political disorders to which famine so easily leads. But legislators ruled it otherwise.

Artificial contraction of the supply of food would have been bad enough for a people, who in ordinary seasons could protect themselves from want, but applied to a country which at all times could not raise sufficient food for its inhabitants, was the very climax of perverseness. Duties were imposed on corn, not for the sake of obtaining revenue, but avowedly with the object of impeding importation. Nor was this all. The method adopted reached the acme ot absurdity. A prohibitory duty was laid on corn, but as the consciousness could not be escaped, that a season might come when starvation would be at hand, it was enacted that if the price reached a certain figure, the ports should be opened and all duty removed. Thus the growth of supplies abroad for England was converted into gambling, as were also the operations of merchants. There were traders whose custom it was when harvest time approached, to send inspectors round the country with small square hollow frames within which they enclosed from many fields ears of wheat. The ears were gathered, the grains in each counted, and an estimate made of the probable yield per acre. If the prospect looked gloomy straightway large orders for the purchase of corn were sent abroad. The merchant took the chance of a great gain or a great loss. Could an actual desire to keep a people short of bread, and to prevent corn from being grown abroad for its support, have devised a more effectual plan for accomplishing its object? How could foreign farmers sow their fields with wheat for England under such a system?

One point more remains. In civilised countries purchasing in retail shops at the prices asked is substituted for bargaining as in the East, and for the higgling of the market as for cattle at fairs. The principle relied upon for protecting society from lying at the mercy of the shopkeepers is competition, but, as Mr Mill saw, it is a far weaker force in retail than in wholesale business. As we have already seen, there are many prices for the same goods in the same town, often in the same shop through different doors. Either from habit, or fashion, or dislike of trouble, customers persevere in purchasing where they well know the price to be excessive. A still greater defect seems inseparable from retail business. When cost of production rises, shopkeepers are swift to raise prices, and reasonably so, but when

the opposite fact occurs, and they buy their goods on cheaper terms from the wholesale houses, their power in resisting a reduction of their prices to what fair dealing demands is wonderful. The lowering process is slow indeed. No shopkeeper likes to be the first to adapt his rates to altered cost of production, and buyers are weak in applying compulsion. The dealers are a combined body, purchasers a mass of single individuals, mostly too busy to carry on a battle for small purchases. Thus the state of supply and demand is set at defiance. It was mainly the strength and success of this onesided management of the market, this quickness to rise and this slowness' to fall, which called co-operative stores into existence, and they may have a greatness in the future which retail dealers would be wise to think upon in time.

These observations bring us again to the perpetual moral that exchanges and their conditions cannot be reduced to scientific rule. The personal element with all its fitful variations of fairness, intelligence, habit, greed, good nature, dislike of trouble, is ever mighty over prices. Supply and demand is checked by many other forces, though in the main it is the strongest force of all.

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