State of trade at home. Agricul tural mis has been clamorous for war. It has been the most noisy. It may not long continue the most numerous. Let us pass from foreign countries and review the situation in the United Kingdom. Here we have suffered from the waste of capital caused by over-production, and from the recklessness with which advances have been made to bankrupt States. We have been excluded from foreign markets by an impassable barrier of tariffs; at home we have had an almost unprecedented succession of bad harvests. It was stated by Lord Beaconsfield, in his recent fortunes. speech in the House of Lords, that the loss on a bad harvest, such as we had in 1875, was no less than 26,000,000l. The crops were equally deficient in the two succeeding years, causing a diminution of wealth by 80,000,000l.; and this succession of bad harvests was accompanied for the first time by extremely low prices. The fall in prices in England was caused by the increased production and abnormal depreciation in the price of agricultural produce in America. Their superabundant harvest led to a heavy export movement, and the British farmer is now threatened with a new and very formidable competition from the United States. He will be called upon to lead a more laborious life. There must be less supervision and more manual labour, The occupier of land and his family must work as the farmers work in the Western States. It is probable that holdings may tend to diminish within limits which can be tilled by a single family, assisted by the best mechanical appliances. Our farmers possess an incontestable advantage in facility of access to the home market, but a reduction of rents may be necessary. Mr. Caird's recent volume, The Landed Interest and the Supply of Food,' contains a table showing the comparative quantity and value of home and foreign agricultural produce consumed annually. We learn from this source that while our importations of foreign agricultural produce amount to 110,707,000l., the value of our home agricultural produce is 260,737,000l., or more than double the amount of the imported produce. Agriculture, as the 'Statist' remarks, must be by far the largest industry of the country, and for a series of years our farmers have been contending with adverse seasons. Consumers generally have shared in the misfortunes of the agricultural interest. During three years of bad harvests we paid, according to Mr. Caird, 160,000,000l. more than in the three preceding years for the purchase of food. 6 duction. We need not go beyond the returns contained in Over-prothe Statistical Abstract' for evidence to show that our productive industry has been extended with reckless. haste. It was quite unreasonable to expect that the increase in the exportation of British produce from 199,586,000l. in 1870 to 256,257,000l. in 1872 could be permanently maintained. By their wealth, energy, and enterprise, the British people have often been the first to take advantage of a favourable conjunction of circumstances for the expansion of trade. By the same qualities they have as often been betrayed into that exaggeration of produc Retirement of experienced merchants. tion which culminates in a crisis. In the words of Aristotle room. τινὲς ἀπώλοντο διὰ πλοῦτον, ἕτεροι δὲ δι' ἀνδρείαν, What banker, merchant, or railway contractor has not realised within the sphere of his own experience the full force of the following observations by the late Mr. Bagehot? Pascal said that most of the evils of life arose from a man's not being able to sit still in a We should have been a far wiser race if we had been readier to sit quiet. In commerce, part of every mania is caused by the impossibility of getting people to confine themselves to the amount of business for which their capital is sufficient. Operations with their own capital will only take four hours in the day, and they wish to be active and to be industrious for the other eight hours, and so they are ruined. If they could only have sat idle the other four hours, they would have been rich men.' Changes in the management, which deprive large concerns of the guidance of age and experience, are another fertile cause of commercial disaster. In England, more than in any other country, it is a customary practice for senior partners to retire in the prime of life, and to give the management to younger and less experienced men. This constant change, says the 'Statist,' in the personnel, by which a business is carried on, is of obvious importance, and it affords a partial explanation of the recurrence of great failures at intervals of ten or twelve years. The fall of the house of Overend and Gurney was the most striking 1 'Ethics,' i. 3. incident of the crisis of 1866. The loss of its most experienced members was the chief cause of the misfortunes, which subsequently befell that famous establishment. manage Mr. Saville Lumley attributes the commercial de- Inefficient pression of Belgium in no inconsiderable degree to ment in inefficient management, arising from the substitution Belgium. of corporate for individual control, of a manager who has nothing at stake for a proprietor who risks his own capital in the enterprise he is conducting. He states that in former days, when Belgian factories were for the most part conducted under the personal supervision of their proprietors, production was limited, as a matter of prudence, whenever indications appeared of declining consumption. In recent years many large factories have been converted into joint-stock companies, managed by directors who have not the same strong personal motives for prudence. Being paid either by fixed salary, or by commission varying with the output, they are interested in producing as much as possible without regard to consequences. ished pur power earning The diminished purchasing power of the working Diminclasses, which must inevitably follow upon a general chasing reduction of wages, has materially contributed to the of wagedepression in trade. We have frequent and perio- classes. dical returns of the movement in our foreign trade; we have no machinery like that supplied by the Custom House, by which we can gauge the extent and the fluctuations in the consumption of commodities at home. It is on our own people that British manufacturers must chiefly rely, and a small reduction in Effects of dear food industry. the earnings of the nation must seriously curtail the aggregate amount available for purchases in the home market. Mr. Newmarch has shown, in his paper on the proon general gress of the foreign trade of the United Kingdom since 1850, how materially the condition of the agricultural population affects the general industry of the country. After 1873, three bad harvests followed in succession. The cost of some of the principal articles of food consumed by the working classes was proportionately enhanced, and a degree of distress was experienced, such as had not been known for a long period. The woollen trade. During the interval, 1873-77, the price of bread and potatoes had not been less than 12 to 14 per cent. higher than the average prices of the three preceding years. When we take into consideration how large a sum is made up by the extra shillings set free by the lower cost of living, among 25,000,000 persons, and remember that the consumption of the masses constitutes the effective demand for the bulk of manufactured articles, it will be evident that increased price of food involves a corresponding diminution in the demand for manufactured articles. The enhanced cost of living, until a very recent period, among the agricultural population, will go far to explain the slackness of trade. The present situation of the woollen trade is analysed in a recent number of the 'Statist.' In 1878, the net imports of wool were 196,000,000 lbs., against 218,500,000 lbs. in 1877. Our importations of the |