we listened to all that is commonly said of the effects of depression of trade. I do not find that Pharaoh's dream has been realised, or that the lean years have swallowed up the fat years. Taking the lean and fat years together, the country has done well. It cannot be supposed that the whole of the great increase of wealth in the decade, estimated by Mr. Giffen at 2,400 millions, and at the rate therefore of 240 millions a year, took place in the periods of great prosperity between 1870 and 1874. The profits in these years were probably much greater than in others, but the profits and sayings of the country in the years of depression must also have been great; and as a proportion of the realised wealth of the country consists of the savings of those who are living upon fixed incomes, and of the profits of those whose profits do not vary much in times of inflation, it stands to reason that such persons are better able to save when prices are low than when they are high.5

Here then we begin to see glimpses of Harbours of Refuge amid the gloom and storm, or to recognise at least the direction in which the vessel's course must be steered to find safety. The essential truth is very simple, and, when once pointed out, is very obvious. We have nearly all of us been living up to our income in those bright times; many, no doubt, beyond it; the natural consequence is, that now hundreds of thousands are reduced to live upon our capital-or on the capital of others. Thousands, moreover, have been guilty of the folly (which might be called by a harsher name) of aping the modes of life of those above them in the social scale. What we have to do is to fall back upon common prudence and common sense, and cheerfulness and security will once more come in view. Perhaps I estimate even more seriously than most, both the reality and the gravity of the present crisis. I admit the sharpness of the warning that has been sent us. But I see in it no reason for despondencyto which indeed Englishmen are seldom prone; but every reason for the adoption, individually and nationally, of sounder principles of action, of less luxurious and self-indulgent habits of life, of more conscientious and sagacious industry, and of that systematic economy in which as a people we are so wofully and undeniably deficient. I do not believe, and I refuse to admit, that Britons are intrinsically wanting in the gifts requisite to win and keep supremacy in any line to which they may devote their energies. They only need somewhat less conceit as to their own incontestable pre-eminence, somewhat better education, and considerably wiser guides or sagacity to choose such, perhaps also-absit omen-a harsher lesson of suffering than has yet been forced on them. I am convinced, too, that these amended habits of life and thought-difficult, no doubt, to begin with-need involve no deterioration, no step downwards or backwards, in any of the essential comforts and respectabilities of family existence (I say nothing as to mere idle luxuries)—probably, indeed certainly, the reverse. By adopting these they will conquer a securer, less anxious, and less precarious position for the next genera

A Decade of Inflation and Depression.

tion at all events, if the passing one be too rigid and too old to change."

In writing thus hopefully we can point to an example and illustration at our door as proof that we are indulging in no baseless dream. Eight years ago our nearest neighbours had to encounter a reverse almost unparalleled among modern nations, to pay a debt or a fine (whichever we may call it) about equally unexampled, to meet a drain upon their resources which to critical and observant Europe appeared too exhausting. France had to part with a considerable portion of her territory, to consent to an indemnity of five milliards, and to provide taxation to meet this enormous sum. There was no help for it. She accepted the tremendous fate, spent no time in whining, but set to work with admirable fortitude and spirit to redeem the vast misfortune, complicated as it was with revolution and civil war. The incalculable wealth and the unexpected strength that lie hid in economic habits when inherent in a nation then came to light and astonished all Europe. We began to realise the full

The following extract from the Economist's Commercial Review of 1878 will be interesting:-'Within the last twelve years our labouring classes have had opportunities of setting aside a considerable amount, and there ought to be no reason for the excessive distress complained of at this moment. A certain amount has doubtless been saved by the thrifty and careful, as witnessed by the larger amount held by the savings banks, friendly and building societies,* a large portion of which belongs to the working classes. But a considerable proportion of the extra amount earned, especially from 1871 to 1873, has been spent in maintaining a standard of comfort higher, probably, than a labouring man is warranted in looking for, unless he has first put by something for the rainy day, and more especially in an excessive expenditure for eating, drinking, and smoking.† A wiser and more economical appropriation of wages is the great want of the British working population. In no other country are the wages more liberal, but in no other country are they more wastefully used, than in the United Kingdom. Here there is scope enough for practical education touching the moral, quite as important as the intellectual, bringing up of the new generation.'

* The amount held by the Savings Banks in 1866 and 1877 was as follows:

The amount held by friendly societies in 1865 was 5,362,0007., and in 1874, 9,039,0001.--increase, 3,676,0007.; total of both savings banks and friendly societies in ten years, 32,113,0004., or an average of 3,200,000l. per annum. On December 31, 1877, the liabilities of building societies, in which the working classes have largely invested, to the holders of subscription or incomplete shares, of completed or realised shares, and of preferential shares, to depositors, and also for unappropriated profits, were-in England and Wales, 23,916,0001.; Scotland, 1,126,0007.; and Ireland, 678,000.-total, 25,720,000l. The consumption of the following imported and excisable articles of food and drink per head of the population in 1866 and 1877 was as follows:

meaning of the maxim, Magnum vectigal est parsimonia.” The immense resources of a country where every peasant was a proprietor and almost every citizen a patriot, enabled her to nearly double her debt without impairing her credit, and to nearly double her revenue without crushing her productive powers; and the result has been that France has suffered far less from the calamitous years that have swept over the world than either Germany, Great Britain, America, or Russia. Now can we seriously entertain any doubt that, if English artisans as a rule had the careful habits, and the modest, though thoroughly comfortable, requirements, of the French peasantry; still more if they were aided and encouraged in the practice of these unfamiliar virtues by the example of those captains of industry' who have hitherto taught them rather how to make money than how to hoard it,-we might have tided over far more easily and speedily a crisis incomparably less severe ? 8

It is now nearly a generation since our great philosophical economist laid his finger on one of the most serious blots in our social economy-the unsoundness of our distributive system; that is, the excessive proportion which the distributors bear to the producers, the number of retailers of consumable articles in comparison with the

Mr. Smith's comparison of the taxation, local and imperial, of the three great capitals of the world is curious and rather consolatory :

8 We may be reminded of one special difference between the French and English people, which makes saving so much easier and more natural to the former, viz., their much slower rate of increase. To this may be added that their laws of inheri tance foster habits of economy, which the English ones certainly do not. This is true enough; but to discuss fully the bearings of the subject would take us too far from our present topic. It may suffice at present to say that we have the vast and almost inexhaustible resources of emigration, of which our neighbours make, perhaps can make, comparatively so little use. England thus disposes of those redundant numbers which in France do not appear. In the thirty-nine years, 1837-76, there left the United Kingdom as voluntary emigrants, destined chiefly to North America and Australia, 8,000,000 persons, or an average of 22,800 persons per annum. It has been computed that each emigrant was worth to the country or colony to which he went, quite 175.; that is to say, speaking in commercial language, his infancy, education, training, skill, and the stock of clothes, money, and goods he brought with him were worth 1757. to the new country of his choice. On the average of the thirty-nine years, 1837-76, this country has contributed 40,000,0007. per annum in emigrants to the progress of North America and Australia, and no discussion of the progress of these new countries can be of any value which does not assign due prominence to this wonderful phenomenon. Of late years the emigration to Australia has assumed larger dimensions. In 1866-70 it was 9 per cent. of the whole; in 1876 it was 29 per cent. Shorter and cheaper passages to Australia have produced a large effect. No part of the social changes of the last forty years is more satis factory, both to the mother-country and the colonial and foreign countries, than this voluntary emigration undertaken by the free choice, and paid for out of the savings, of the emigrants themselves.

need for them. Retail trade required, in reference to other occupa tions, little professional skill or knowledge, and little capital; and in consequence many scarcely qualified easily took up this line of business, or added it to their other functions. The mischief grew, and with it grew many disastrous consequences. Small shopkeepers multiplied beyond any wholesome demand; they competed with each other for a business inadequate for all, and those who might have made a decent and an honest livelihood out of a hundred customers could not do so out of fifty. Those, again, who had capital sufficient to enable them to buy their stores cheaply because on a large scale, might be satisfied with moderate profits in retailing them; those who were destitute of these advantages were forced either to ask higher prices or to serve out inferior qualities. Those, too, who gave credit to their customers did not always get paid: thence came the practice of making punctual purchasers pay for those who paid tardily or perhaps never paid at all-at once a cruelty and an injustice. Unsoundness thus crept into the entire practices of retailers in smaller towns and among poorer populations; and buyers-that is, the whole body of customers were mulcted, paid more than they need have done or ought to have done, and found that their earnings did not go as far as was essential. This was the case in the manufacturing districts. In the metropolis and in the larger cities the same unsoundness prevailed, in a somewhat varied form and on a more extensive scale. A larger proportion of those who dealt at retail shops were wealthy, and cared comparatively little what prices they paid; numbers were too busy to look closely after such matters, and were growing rich fast enough to despise them; and these two classes gave the tone to others. Numbers of them, moreover, were not over-punctual in their payments, yet too important to be pressed, and therefore could not with any propriety demur to the inflammation of their weekly bills.' Thus, in the late prosperous times since the advent of free trade, there has been an alarming growth of household expenditure which has at last led to a natural and most salutary reaction-out of which, unless I am much mistaken, there will come a gain, both moral and economical, the extent of which will amaze many and prove a genuine harbour of refuge' to not a few.

The truth is to speak it broadly-that the sudden and enormous prosperity of the country and the extraordinary advance in the prices of nearly all articles of general consumption during the ten years which preceded the actual collapse-coupled with the natural and inevitable rise in the style and 'standard of living' as it is called— were fast bringing to ruin the numerous classes known as 'people of fixed incomes.' The luxuries of the parents were becoming the necessaries of the children; and what had been competence to one generation was, or was becoming, a scanty pittance to the next. The civil servants, the fundholders, the officers of the army and

navy, and clergymen above all others, felt that if they were not to sink altogether into a lower social position, they must bestir themselves in earnest. They did so bestir themselves; and a few among them, instinctively discerning where the fault lay, combined to correct it and established 'Co-operative Stores.' Never was there a more simple, more timely, more practical, more successful, more wholesome and righteous movement, or one which I incline to believe will approach nearer to a quiet social revolution, and rectify, directly or indirectly, certain symptoms in England's condition that may be safely characterised as unhealthy.

In the course of the controversy that has arisen out of this movement, many absurd aspersions and not a few thoroughly unjust ones have been vented on both sides; but the irritation of conflicting interests will gradually subside, and the motives to the movement are obviously too strong to be effectually resisted. The truth of the case is in fact too clear, and lies too near the surface to be either concealed or contested. The wealthy, who do not need to spare their shillings or their guineas, but who do wish to have the ordinary transactions of life made smooth and facile, and surrounded by as much beauty and splendour as are attainable, will deal with butchers and grocers who come to their doors for orders and take all trouble off their hands, will give their custom to tailors and dressmakers who suit their tastes, will frequent shops which lie within easy reach, whose plate glass and decorations attract their fancy, and the fashionable locality of whose premises involves high rents, and they will have to pay, and be content to pay, for all these facilities and pleasures; and no one can fairly maintain that the tradesmen who supply their wants in this comfortable fashion are not entitled to be well paid for the expenditure which this fashion involves. Equally, on the other hand, must the more numerous classes with fixed and inadequate incomes, whose peace and respectability in life depend on keeping within these incomes, who must watch and calculate every shilling of expenditure, and who grudge no time or trouble which will enable them

9 We need not enter into these allegations and disputes. Where the ordinary retailers have any foundation for declaring that co-operative establishments are unduly favoured by law, as in escaping the income tax while dividing large profits among their shareholders,-by all means let this inequity be rectified, by treating them as, what in fact they have become, joint-stock companies. But as to the indignation expressed against establishments conducted on the original prineiple of supplying themselves cheaply by purchasing on a large scale and selling low by selling only for prompt payment, and which make no profits because they reduce their prices as they find the prices they had fixed yield a surplus over their expenses, this indignation is manifestly misapplied; while the outcry against civil servants, naval or military officers, clergymen or others, who give their vacant hours to superintending or auditing these establishments, which are and must be practically managed by paid employés, is too unfounded even to deserve discussion. It is on a par with the objections of those who would prohibit struggling barristers or clerks from devoting their unemployed evenings in writing for the press.