Reduced cost of living.

Cheapness of wheat.

question. Thus, by the enhancement in the price of a single article, an extra tax was imposed upon the households of this country not less in amount, as Mr. Fawcett points out, than half the interest on the National Debt.

6

When similar changes take place in the price of almost every article in general consumption, the economy in the cost of living goes far to compensate the working classes for reductions in wages. In his recent speech at Westminster, the First Lord of the Admiralty estimated the alterations in the cost of living as making 18s. equivalent in purchasing power to a sovereign, at the prices of two years ago.' According to a calculation published in the Economist' on the 28th December last: Market prices are, taking an average of a great number of commodities in daily use, from 10 to 12 per cent. cheaper than in any of the years of depression which followed the panic of 1866, and from 8 to 10 per cent. below those of 1859-the cheapest year of the series after the crisis of 1857. . . . Tracing further back, to the time of stagnation following upon the railway panic of 1847, we at length obtain a record of prices apparently cheaper than those at present existing, and in 1849," the cheapest year of the century," the average of marketable commodities was probably 7 per cent. lower than at present.'

In another article on the same subject the Economist' remarks that while we had received 556,000 cwts. more wheat in October 1878 than in the corresponding month of the previous year, we had actually paid 177,000l. less money; for 16,000 cwts. more of

cheese we had paid 71,000l. less; for 10,000 cwts.
more of butter, 8,000l. less.' In the first nine months
of 1878, we had received from the United States
Atlantic ports 21,089,000 cwts. of wheat against only
5,892,000 cwts. in the first nine months of 1877; and
the price of wheat had fallen to 40s. 4d., or 14s. 8d.
per quarter less than at the corresponding date in 1877.
The price of wheat is now as low as it was in March
1875, and lower than at any other time during a long
period of
years. Even when our harvests have been
bad, the overflowing supplies from abroad have pre-
vented any burdensome increase in the price of bread,
and the better harvest of last year has still further
reduced the prices, already very moderate, which we
have been paying for imported food. Several other
of the commodities, which constitute the principal food
of the people, have been considerably reduced in price.
Sugar has never been so cheap. The price is from
18. to 38. per cwt. lower than at the corresponding date
in 1877. Coffee has fallen in the same interval from
10s. to 158. per cwt.'

cost of

rials.

The compensation afforded by a reduction of prices Reduced is not confined to the operatives. The manufacturers raw matederive their share of advantage, not only in the reduction of wages, but in the cheapness of the raw materials of industry. A paper by Mr. Giffen, read at a recent meeting of the Statistical Society, gives some of the principal changes in values which have recently occurred. Mr. Giffen compared the prices of leading wholesale commodities on January 1, 1873, the period of maximum inflation, with the prices of the same

Mr. Shaw
Lefevre's

articles on January 1 of the present year. Thus Scotch pig-iron fell, per ton, from 127s. to 43s.; Straits tin, from 1421. to 617.; coals, from 30s. to 10s.; wheat, per quarter, from 55s. 11d. to 39s. 7d.; cotton, per pound, from 10d. to 5d.; wool, per pack, from 231. to 137. We should hardly have expected beforehand,' he remarked, after quoting a series of figures, 'that prices of wholesale articles not selected with a view to make out a case, but impartially chosen years ago as representative of the markets, would exhibit a fall in the last six years ranging from 66 per cent. in the most extreme to 10 per cent. in the least extreme case, and ranging, with three exceptions only, between 26 and 66 per cent.'

Mr. Shaw Lefevre gives the following remarkable address to illustration of the fall in prices : Coal, which in 1870,

the Statis

tical Society.

before the great rise, was 12s. 6d. per ton at the pit's mouth, and in 1873 was 32s. 6d. per ton, is now re

duced to 9s. per ton.
which in 1870 was 6l.

The best Staffordshire bar-iron,
10s. per ton, and in 1873 150.
Cotton is 25 per

per ton, is now worth only 5l. 10s.
cent. less than in 1869. American salt beef is 10 per
cent. less, and European salt pork 20 per cent. less
than in 1874. Sugar is 15 per cent. less than in 1869.
American salt beef is 10 per cent. less, and European
salt pork 20 per cent. less, than in 1869. Freights are
lower than at any time during the last ten years; and
steamers which were constructed for the emigrant trade
are now mainly employed in bringing over fat cattle
from the United States, to the great benefit of meat
consumers.'

of prices

The value of materials for manufactures, imported Reduction in 1878, was 122,000,000l., showing a fall of in 1878. 14,000,000l., or 11 per cent. on the previous year. Of this fall, 8,210,000l. on 122,340,000l., or rather less than 7 per cent., is due, according to the calculations of the Economist,' to reductions in prices. Commenting on a mass of valuable statistics, from time to time published in its columns, the Statist' remarks: In this, as in other cases, the very low prices of the raw material are a sure sign of depression in trade. We have the satisfaction of knowing, however, that such prices are always the beginning of a new start in trade, as soon as the bottom has been touched, which seems to be now the case.'

nance of

dividends

From a similar cause the railways, those vast under- Maintetakings in which are accumulated the savings of the railway middle classes of the United Kingdom, have been en- by dimin abled in most instances to sustain their former rates of ished expenditure. dividend. In 1877 there was a slight decrease in the receipts, the expenditure, and the net earnings per train mile, the final result being a fractional diminution of dividend on the total ordinary capital of from 4.52 to 4.51 per cent. The saving in the expenditure on materials and labour was sufficient to balance the large additions, which are constantly being made to the capital of the most important lines.

The following remarks occur in a leader in the 'Times' on the railway dividends for the second half of the year 1878. On an ordinary capital of nearly 140,000,000l. sterling, the sum payable in dividend amounted to 4,250,000l. sterling, and the net reduction

Relief to steamship

owners.

in the amount available for dividends, as compared with the corresponding period of 1877, was only 30,000l. Many of the companies had been doing a smaller business; but raw materials had been lower in price, and wages had been reduced. The case of the North-Eastern Railway was quoted, as a striking illustration of the maintenance of dividend by economy in expenditure. The dividend was threatened by a decrease of 191,000l. in the gross traffic. The reduction of expenditure has not only largely compensated this reduction, but has even exceeded it. The expenditure on permanent way is reduced from 441,000l. to 361,000l., or 80,000l.; on locomotive power from 496,000l. to 434,000l., or 62,000l.; and traffic expenses from 444,000l. to 413,000l., or 31,000l., making, with other reductions, a total saving of 196,000l., or about 11 per cent., the reduction in gross traffic being less than 6 per cent.'

The shipping interest, like the railways, has received a sensible relief from the fall in the cost of coal and iron. The result in the case of seventeen leading steam companies was worked out and published in the 'Statist' of June 1878. The capital of the companies enumerated amounted to 10,841,955l., and the aggregate profits distributed as dividend on capital were, in the respective years, as follows:

The depression of commerce forbids the idea that

this recovery in the rate of dividend can be attributed