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Low Prices., Issue 8007, 9 September 1889
Sir Lyon Playfair, discussing the low range jof current prices in connection with the bi-metallic problem, said:—“ Let the three staple commodities—cotton, Iron, and wheat—be taken as an illustration of the potent causes which had lowered the prices irrespective of the appreciation of gold. The application of machinery in the cultivation, harvesting, and cleaning of cotton had been so great that, while in 1873 a given amount of human labor produced 3 8-10 th millions bides in America, a much leas amonnt of labor in 1887 turned out six and a-half millions bales. The economies in its manufactured products were still greater. In 1873 spindles made 4,000 revolutions in a minute; they now made 10,000. In the last fifteen years the population of the world had increased 16 per cent., while the production of
cotton goods had increased by 86 per cent. Again, in iron, while England had increased her production by 143 per cent!, competing countries had Increased theirs by 239 per cent. Lastly, with reference to wheat, the Stronghold of the hi-metallists, the original fall in price had been in America. There the economy of labor both in the production and transportation had been very great. As foi the importation of low-priced wheat from India, where machinery was not used, since 1873 the railways have been developed in India, and the beltof land under cultivation had increased. The cost of labor in India waa very low. Since 1873 the export duty oi 7 per cent, had been removed, and the Suez Canal had been opened for traffic, reducing the costof transport. Thescarcity ofgold, like the scarcity of capital it would represent, must gradually have produced less movement, less production, and less consumption of commodities, for since 1873 production, movement, and consumption had been greater than ever, though prices had been low. If it were true that the chief .causes of the fall in prices were improvements of machinery, and new inventions resulting in enlarged capacity and greater economy of production, together with increased facilities of transport, it was obvious that no legal ratio established between gold'and silver could ever raise prices to their old standard in 1872. Soon after 1873 the Suez Canal had been opened, and that had led to a complete revolution in commerce. A great fleet of sailing vessels were rendered useless, and the first steamship built for the canal had soon to be superseded. The reduction in the cost of transit and the extension of the use of the telegraph in commercial matters had destroyed the small local markets, and put in their place the one great world market; and these things had led to a dislocation of affairs and a revolution in commerce.
Low Prices., Issue 8007, 9 September 1889
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