defeat. From eight till noon his flagship, the 'Royal James,' battled manfully against enormous odds, until at length, torn with shot and aflame beyond hope of extinction, she had become no more than a sepulchre for heroes. Sandwich told the survivors of the crew to save themselves as best they might. He was pressed to do the same, but, alleging his own unwieldiness, refused to take the poor chance of life. So long as human eye could see him, he remained upon the burning ship; then, when the fire became at length unbearable, he must have cast himself to the water. The sea gave up her dead. Within a fortnight the poor body, 'neither singed nor scorched,' was found off Harwich, and with all proper splendour was put to rest in Westminster Abbey.

It was five years later (1677) that the Duke of York, to avert the appointment of Monmouth, recommended the restoration of Ormonde to the Lord Lieutenancy of Ireland. The King had no dislike for the idea. With Ormonde in that position, he enjoyed a sense of security about Irish affairs that no other man could give him. Thus the Duke came into his own again. Yet so notoriously uncertain was the royal favour that every fresh shuffle of places at St James's threatened to shake him out of the saddle. Nevertheless he survived the Popish Plot, the fall of Danby and the Tory reaction, to fall before the Duke of York's desire to place the government of Ireland in the hands of the more pliable Rochester. He had little to regret, except the ingratitude of his Sovereign. His administration had brought Ireland a steady increase of prosperity; but the work was too severe for a man of seventy-five, and he was contemplating retirement at the time of his dismissal. Private griefs besides bore far more heavily upon him than public injuries. The lights were going out one by one. He had lost his wife. He had lost his eldest son, the incomparable Ossory, of whom he averred in pathetic words he would rather have him for a son dead than another man's living one. He had lost the Dutch daughter-in-law whom that son had wooed so passionately in the days of exile. In another branch of his family Death was busily at work. And, in the palace, the King he loved and honoured with so little apparent cause went presently to his long home. Yet it is impossible

to think that Providence meant to deal hardly with such as he was. A great character had to be brought to its full perfection. And he did not fail at the final test. Serene always, he showed himself most admirably serene in his last adversities. The end of the long road had no terrors for him. 6 The steps downwards,' he wrote quaintly and composedly to his friend, are very natural, from the field to a garden, from a garden to a window, from thence to a bed, and so to a grave.' It was doubtless a kindly though hidden fate that gave it to him to take them thus leisurely. A fate, more evidently kind, brought the close on the eve of the downfall of that House for which he had spent himself so long and faithfully. He died on July 21, 1688. And, as we take our last view of Sandwich in the midst of the great deeps, so we do well to figure the passing of Ormonde in that peaceful Dorsetshire home of the Bankeses, where the Downs begin to reach out towards Camelot.

ALGERNON CECIL.

Art. 9.-THE RISE IN PRICES AND THE QUANTITY THEORY OF MONEY.

1. The Principles of Money. By J. Laurence Laughlin, Professor of Political Economy in the University of Chicago. London: Murray, 1903.

2. The Meaning of Money. By Hartley Withers. London: Smith, Elder, 1909.

3. The Purchasing Power of Money. By Irving Fisher, Professor of Political Economy in Yale University. New York: Macmillan Co., 1911.

4. The Standard of Value.

London: Macmillan, 1912.

By Sir David Barbour.

5. An Introduction to the Study of Prices. By W. T. Layton. London: Macmillan, 1912.

THE recent rise in prices, especially in the articles that enter into the consumption of the masses of the people, has been so widespread and accompanied by such symptoms of social unrest that it has aroused the interest not only of economists and statisticians, but of the general politician and the general reader. What are the causes of the rise? How much longer will it continue? What are the remedies for the evils? These are questions being asked on all sides. Some of the consequences of a general rise in prices are obvious, and none the less serious and difficult to adjust because they are plain to view. Even in this age of legislation the greater part of all the business of the world is carried on by means of voluntary contracts; and these contracts involve the element of time, and are expressed in terms of money. If, then, in the course of time the meaning of money' changes, the real meaning of the contracts also changes, unless such a change was contemplated and allowed for. Apart from definite legal contracts there are still, all the world over, numbers of agreements and customs involving money payments that are only capable of gradual and unequal change. The modern theory of wages asserts that in the case of any definite vendible product wages are paid out of the price of the product; and various methods are adopted in practice, by sliding scales and boards of conciliation and the like,

to make wages respond to movements in the prices of the products. But wages are only one element in the cost of production; and the equitable relation of wages to prices is always difficult of determination, even if the parties are agreed on the principles to be applied.

The difficulty of adjustment is all the greater when the rise in prices is not a rise in the relative prices of particular commodities, but is more or less general. Any general rise in prices must affect directly or indirectly all the factors of production as well as labour. The difficulty in the readjustment of wages, and the comparative immobility of labour as compared with capital in general, cause the wages of labour, considered as the price of labour, to lag behind the upward movement of prices. This result, which is probable in theory, has been abundantly confirmed by experience. Nearly every country has, at some time or other, suffered from a general rise in its prices, caused by the depreciation of its currency, whether metallic or paper, and whether the depreciation is due to the act of the Government or to the cumulative effect of natural causes. And it has been observed in practically all cases that money wages rise much more slowly than the articles on which the wages are spent. The general consequence is that, so far, the economic condition of the labouring classes is adversely affected as compared with that of owners and employers of capital. The relative prosperity of capital with rising prices is shown by booming trade, and the relative depression of labour is shown by strikes. The truth of the reasoning as regards rising prices is confirmed by taking the converse case of a fall. The Commission on the Depression of Trade (Final Report, 1886), and that on Gold and Silver (Final Report, 1888), found that, with the general fall in prices which marked the depression, wages had not fallen, and in consequence that the relative economic position of labour had improved; while the indirect effects of the depression of capital did not seriously affect the great mass of the workers.

The recent rise in general prices has been associated with a rise in the rate of interest. But in this case the causal connexion is not so easy to trace. With booming trade and greater demand for capital, with new issues of

shares of all sorts of industrial undertakings competing for new accumulations, and with the spending powers of the richer classes increasing, the demand for capital is likely to rise faster than the supply. The natural consequence is a rise in the rate of interest. But there can be little doubt that the recent rise in the rate of interest is to be ascribed largely to the general increase of security all the world over. Capital is now sent into places and employments which were formerly considered too dangerous by the mass of ordinary investors; they had found too often that high interest meant bad security. But in these days it has been discovered that relatively high interest can be obtained with proper distribution in new fields on practically as good security as low interest in the older fields. And, if regard is had not only to the yields of interest, but to stability in the capital value, the security of the older kinds of investments, with their low interest, seems less than that of the new with the high rate. As a natural consequence, capital has been diverted from the older modes of investment to the new; and the yield of the older securities has risen with the fall in the capital value, as in the notorious case of Consols. How much of the fall in the price of Consols (or, what is the same thing, the rise in the yield) is due to the general extension of security, and how much to the rise in general prices, is a problem so difficult that most financial authorities leave out, in their enumeration of the causes of the fall in Consols, any consideration of the rise in general prices. But, if the rise in prices is the cause of the rise in the rate of interest, it is so far a cause of the fall in Consols. As it happens, people who take a very mild concern in changes in the cost of living, and would not feel appreciably a rise in the cost of bread and butter of 20 or even 100 per cent., are specially concerned with any movements in the rate of interest; for movements in the rate of interest affect all kinds of investments, and affect them in different ways.

The position, then, is this: whether we look to social unrest and labour troubles, or to the gains of investors, or to the necessities of Governments in the way of borrowings, the economic question of perhaps greatest importance at the present time is the rise in prices and