of Breton peasants. Men who know the slang and the ruffians of Paris will bear witness to the gratuitous arrogance of his pretentions to this unsavoury lore, in which he is, as compared with Gaboriau or Zola, as a child to a professor. We can all judge of his etymology of the name of that famous Scotch headland,' 'The First of the Fourth.' We can all estimate the verisimilitude of the tale of the fortunes of that great peer, Lord Linnaeus Clancharlie, a voluntary exile from his truly British country-seats of Hell-kerters, Homble, and Gumdraith. Yet, if we are to take M. Hugo's word for it, he knows more about every country in Europe than the natives themselves. Il est bien entendu,' he says in a note to Ruy Blas, on which M. Planche's sarcasm has fixed, 'il est bien entendu que dans Ruy Blas, comme dans tous les ouvrages précédents de l'auteur, tous les détails d'érudition sont scrupuleusement exacts.' Methinks M. Hugo doth protest too much. For in support of his assertion that he is intimately acquainted with the language, literature, and secret history of Spain, he deigns only to furnish us with an explanation of the word Almojarifazgo. Almojarifazgo! One is tempted to embark upon a 'key to all mythologies,' on the strength of a sound acquaintance with the etymology of Abracadabra.

There is one subject-his own Notre-Dame-on which we might have trusted that M. Hugo would have been safe from attack. But when we come on a description of this sanctuary as consisting of 'deux tours de granit faites par Charlemagne' our confidence vanishes with great suddenness. For it is certain that there is not an ounce of granite in the towers of Notre-Dame, and that Charlemagne had just as much to do with building them as Caligula.

It is of course on the moral side that these inaccuracies are most important. There is no question as to M. Hugo's powers of acquisition, comprehension, memory. He might easily have become a real savant, a real historian, if he had given to other subjects the same kind of attention which he has given to versification and grammar, if he had cared as much for what he said as for the style in which he said it. But here once more his self-adoration has interfered. It has taught him that he is supra scientiam, that neither Nature nor History can possibly have any secrets hidden from him, that a royal road has taken him to the very source and fount of things. And when he asserts that some preposterous misdescription of nature, some staring historical blunder, is absolutely correct, we must not think that he is wilfully trying to deceive us. We must remember how easy a man finds it to forget that external facts have any existence independent of his own mind; how soon the philosopher's ipse dixit becomes convincing to the philosopher himself.

FREDERIC W. H. MYERS.

[To be concluded.]

VOL. V.-No. 27.

3 F

THE DEPRESSION OF TRADE.

THE prolonged depression of trade has been the subject of bitter recrimination. The following pages will be written with the desire of promoting more cordial relations between labour and capital.

The decline has been more marked in the home than in the foreign trade, and it has been greater in the values than in the quantities of our exports. The most important items in our export trade are the cotton, woollen, iron, and steel manufactures. In cotton there has been an increase in quantity; in woollen yarn an increase; in iron and steel the falling away in value is considerable, though the quantity exported has increased. In machinery the growth has been important both in quantity and value.

In a recent report to the Board of Trade, Mr. Giffen has given a summary of the changes of prices in the cotton and iron trades between 1861 and 1877. Having minutely and elaborately analysed the variations in the price of the raw materials, and the finished products of the textile and metallurgical industries, he arrives at the conclusion that the reduction of our export trade since 1873 is a reduction, not of volume, but of price. If the prices of 1873 had been sustained, the falling away in the values of the exports of enumerated articles of British and Irish produce would have been less than a million sterling on a total of one hundred and ninety-one millions and a half.

It is difficult to ascertain with accuracy how far the fall in price has been compensated by the fall in the cost of raw material and wages. In any case, as Mr. Giffen remarks, the fact that the trade in 1877 was not greater than in 1873 amounts to a real retrogression,' allowing for the increase of population in the interval. The average level in prices is lower than in 1861. Employment is scarce, and business unprofitable. The effects of the depression extend far beyond the classes directly engaged in productive industry. It is therefore a matter of national importance to ascertain, and, if possible, remove, the causes which have led to the present melancholy condition of affairs. The misfortunes of every country are felt more or less by the other members of the family of nations. We share, by an international participation, in the happy fortunes of a

thriving people; and, on the other hand, we cannot look on unmoved when a neighbouring territory is desolated by war, or its resources are shattered by commercial disaster. When, therefore, we seek to discover the causes of the crisis from which we are at present suffering, our inquiry must be extended beyond our own borders.

Trade with India has been prejudicially affected by the depreciation of silver. This revolution is due, as it was recently stated by the Prime Minister, to the determination of France and Germany, the one with sixty millions and the other with eighty millions of silver, to establish a gold currency. The trade with India and China has suffered from another cause,-from a pernicious system of long credits, and the reckless competition for business on the part of discounting financial and banking institutions. The recent revelations in connection with the Glasgow Bank have brought to light abuses, which have long prevailed, and have been widely extended. An almost incredible amount of over-trading must have been carried on, when the representative of a single firm admitted that, within the space of some ten years, his losses had exceeded 2,000,000l.

Let us now direct our attention to another quarter of the globe. Previous to the outbreak of the civil war the people of the United States were by far the most extensive consumers of our manufactured products. The vast expenditure caused by the war led to an increase of taxation, and to the imposition of prohibitory tariffs on foreign importations. The sudden exclusion of foreign goods had the effect of raising prices, by an amount at least equal to the duties imposed. The issue of an inconvertible paper currency, as it was pointed out by the late Professor Cairnes, accelerated powerfully the upward movement. The development of manufacturing industry was artificially stimulated by a narrow and unwise course of legislation. Railways were extended beyond the requirements of traffic, and the productive capacity of mills, factories, and ironworks was multiplied tenfold. The dearness of labour gave a renewed impulse to the American genius for the invention of labour-saving machinery, the effect being to aggravate the tendency to over-production, which had been originated by other causes.

It has been calculated by Mr. Wells that, while the increase in population in the United States from 1860 to 1870 was less than twenty-three per cent., the gain in the product of the manufacturing industries during the same period, measured in kind, was fifty-two per cent., or nearly thirty per cent. in excess of the gain in population.

The American manufacturers, with all their skill in the substitution of mechanical for manual labour, cannot produce as cheaply, under a rigid system of protection, as they would in an open competition with all the world. They may revel in the monopoly of their home market, but they cannot compete in neutral markets with a country which has adopted a free-trade policy. When, therefore,

In their opposition to the system of piece-work, and in giving no encouragement to diligence and superior skill on the part of the workman, trades unions are wholly in the wrong. As an advocate of liberal wages for an equivalent in work faithfully and diligently wrought, I cannot too strongly express my conviction that the future of British industry depends upon our workmen being allowed to give full scope to their natural energies. If their native vigour be repressed by a baneful influence from without, the star of British commerce must soon decline behind that great continent in the West, peopled by our own descendants, and where we see already so many striking evidences of German and Anglo-Saxon energy and enterprise.

The subjugation of the individual to the arbitrary authority of a guild or corporate body is a cherished fallacy of the workmen of all countries. The right of every man to liberty of action, to be sovereign over himself, is absolute and inalienable. In Turgot's famous preamble to the edict of 1776, by which Louis the Sixteenth suppressed the guilds and monopolies established by Colbert, the freedom of labour was asserted in these memorable words :

When God created man, a being with many wants, and compelled to labour for his livelihood, he gave to every individual the right to labour; and that right is his most sacred possession. We consider that it is the first duty which justice requires us to discharge, to set free our subjects from all restrictions imposed on that indefeasible right of man--restrictions which deprive industry of the incentives derived from emulation, and render talents useless.

The report of the recent French Commission on the condition of the working classes concludes with a similar declaration.

I have pointed to the pernicious influence of trades unions in restraining the energy of our workmen. But the workmen are not solely responsible for the depression of trade. Neither in the cotton nor in the iron trades can it be alleged that the action of the operatives has been the main cause of the present collapse. The depression in the cotton trade is chiefly due to over-production.

The growth in the productive capacity of our cotton mills can be most accurately gauged by a comparison of the number of spindles in existence at successive dates. A table published in the Statist gives the following figures:

These figures speak for themselves. Within the last seventeen years

alone they show an augmentation of potential producing power of over 50 per cent.

The British manufacturers have gone far beyond their rivals abroad in the rashness with which factories have been multiplied. The proportionate increase may not be so great in the United Kingdom as in some other countries, which were in a singularly backward condition, as compared with ourselves; but, if we take the actual as distinguished from the proportionate increase, we find that we have added 10,500,000, while Europe and the United States have added not more than 12,000,000 to the number of spindles in operation in 1860. Our new spindles, in the seventeen years from 1860 to 1877, are more numerous than all the spindles, both new and old, existing at the present time in the United States.

If the condition of the cotton trade is discouraging, the depression in the iron trade is even more serious. As in the case of cotton, so in the iron trade, high prices led to excessive production. It is obvious that the demand for iron is not capable of being increased indefinitely, however low the price may fall. On the contrary, the more general use of steel must tend to still further limit the demand. It is satisfactory to know that, as producers of steel at moderate prices, our own manufacturers have nothing to fear from foreign competition.

The fact that our iron masters are fellow-sufferers with the makers of iron in every iron-making country is a poor consolation; but it supplies an argument in answer to those who contend that our trade has been ruined by the high price of British as compared with Continental labour. Messrs. Fallows, in their latest circular, state that labour has followed in the wake of prices, and is now lower than it has been for many years past. Iron-workers' wages have been reduced 52 per cent. since 1873.'

It may not be uninteresting to follow up in more ample detail the connection between the rise of prices and the rise of wages. In order of time it will be found that, after a period of depression, prices augment in more rapid ratio than wages; and that, on the other hand, after a period of inflation, the fall of prices is more rapid than the fall in wages.

Prices, like wages, are determined by competition, by the varying relation between the demand and the supply. High profits, however, have much more effect than high wages in raising the cost of production. In raising the price of commodities, the rise of wages operates,' says Adam Smith, in the same manner as simple interest does in the accumulation of debt; the rise of profit operates like compound interest. Our merchants and master manufacturers complain much of the bad effects of high wages in raising the prices, and thereby lessening the sale of their goods both at home and abroad; but they say nothing concerning the bad effects of high profits. They