for nothing. And it made no difference for the time whether the loan was granted to a solvent or to an insolvent borrower, whatever might be the result later; whether interest was ever remitted or not, in all cases alike England was emptied, and paper documents substituted into the vacuum, whatever might be subsequently their value.

Germany was caught by the same whirl of over-consumption. Soldiering and war did their wasteful work: nor has the former stopped its devastations. A more severe depression fell on Germany than on any other country, except perhaps America. A harassed Minister is proposing to obtain resources for the support of countless legions of armed soldiers by increasing the over-consumption of wealth by augmented duties at double cost-the cost of the articles consumed, and the extra cost of compelling them to be provided at home. Then a very unlooked-for surprise added largely to her woes. The gold of the French indemnity, which was expected to be her salvation, proved, to the astonishment of the Germans, to be a great aggravation of their sufferings. What could that gold do for Germany, so long as it remained in the country, except place German property in different hands? There was already gold enough in Germany to perform that service. Germany obtained thereby no increase of useful wealth. However, it did execute its function of transferring property to new possessors, and with painfully mischievous energy. First of all, by its help, the Government betook themselves to building fortresses, purchasing military stores, and bringing up the army to the highest standard of efficiency. Did the fortresses and the guns restore the food and materials consumed in their construction? Guns and fortresses were excellent machines for making the national wealth disappear; they could do nothing to repair the terrible waste of the war. Further, much of the idle gold was lent to speculative traders who reckoned on an active demand from now prosperous Germany. They enlarged their factories and increased the stock of goods. Much gold had been paid to individuals in payment of Government debts; these men came forward as buyers: and the eternal tale was repeated-raised prices, increased wages, abundant profits, active consumption of every kind of wealth. Then followed the natural consequence, so touchingly described by the Neue Stettiner Zeitung, as quoted in the Times: "Five long years of unexampled depression are the bitter penalty we have had to pay for one intoxicating year of joy."

Over-consumption worked its will on unhappy France: but the blunder was not commercial. Armaments and war impoverished France as they did Germany, but with the severe additional aggravation that the war was carried on within her territory. German industry lay undisturbed, if excited; French trade, besides what the war itself cost, was harassed with interruption and loss at every point. Labourers were hurried away from their fields, manufacturing towns fell into the hands of the enemy, and their works impeded; railways were filled with carriages conveying soldiers, and trucks containing military stores: commercial lines of communication were broken: French har

bours blocked against French ships; with many other like disasters. The over-consuming force was immense; but it encountered a resistance that was heroic. After the deeds of violence ceased and a gigantic indemnity had been paid, the French people, with instinctive genius, applied, with most painful effort, the one remedy which political economy pointed out for the cure. Without knowing political economy they practised what it prescribed. They could do this, because political economy is common sense. France saved. She underconsumed for enjoyment; the surplus she gave away to the augmented taxation, which then cost her nothing. Thus France has come forth from the commercial depression with a freshness and strength which have called forth the astonishment and the admiration of the world.

Such was the over-consumption which prevailed over the greater part of the human race. It destroyed more than it re-made; it diminished wealth rapidly, but it was accompanied by increased activity of trade, by great commercial prosperity. The co-existence of these two facts, apparently so contradictory, was rendered possible by the process of attacking the wealth which still survived, and filling up the gaps, caused by the consumption, by fresh extra consumption. Had mankind been resolved to carry out the process to its last end, the whole wealth of the world would have been destroyed in some three years amidst universal enjoyment; and the great populations would have died out like locusts. All would have been devoured.

This over-consumption, which was the first stage, with its accompanying commercial inflation, generated the second stage in the history of the great depression-over-production. The excited demand for goods to consume-paid for by fresh sacrifices of the still existing capital-raised prices, wages and profits to an unprecedented height: it seemed to be unlimited. Thus additional machinery for production started up upon every side; new mines were opened, new factories built, new steam engines set to work, new railways opened, multitudes of new labourers called away from the fields to man new mills. "Since 1871-72," justly remarks the Pall Mall Gazette, "we have passed through a complete revolution in our iron and coal industries. The number of blast-furnaces for the production of pig-iron increased in 1873-74 from 876 to 959." Then mark the extent of the over-production as shown by the stoppage of work when the excited buying had disappeared, and trade had to deal only with ordinary demands. "There were in 1878 only 454, or about half, at work. Between 1871 and 1873 the number of collieries at work in the United Kingdom advanced from 3100 to 3627, and at the end of 1875 had still further advanced to 4501. In the three years, 1875, 1876, 1877, no fewer than 270 of these collieries failed; and in 1877-1878 the collapse was still more rapid. In the four years, 1871 to 1875, the number of persons engaged in coalmines rose from 351,000 to 537,000-an extension of employment rapid and violent, almost beyond example; and since 1875, and at present, we are struggling to restore the wholesome equilibrium which we lost eight years ago,' That struggle has been vehemently resisted

by the working classes. They refused to acknowledge the fact that the machinery for producing was vastly in excess of the power of buying, and that the sale of the products could no longer yield_the_same remuneration to labour. They betook themselves to war. Mr. Bevan in the Times tells us that there were last year no fewer than 277 strikes in Great Britain against 181 in 1877; but how many of these distressing battles were victorious? Four only. In 17 the operatives obtained a compromise; in 256 the strikers were defeated. What can show more clearly how idle it is to fight with words and arbitrary ideas against the stern realities of the nature and facts of trade?

And now what are the remedies by whose help we may hope to lessen and ultimately to put an end to the painful sufferings inflicted by this unprecedented commercial depression? One in particular is advocated with great warmth by the leaders of the working classes. Work short time, they cry; produce less. The fact they take their stand on is true. Even up to this very day there is more produced than can be sold, except at such a loss as would lead to the closing of the workshops. The advocates of short time acknowledge this fact. They admit that the business can no longer yield them the same weekly wage. They consent to a reduction of wages: but they demand that it shall take the form of their working for five days a week only instead of six, and of their receiving less money at the week's end, but at the same rate of wage per day as they had been earning heretofore. They will thus fight the evil, they say, from which the depression in trade has come-overproduction. Buyers will be found for the smaller quantity of goods produced: they will receive lower wages, but they will have given less work: they will maintain the standard of the daily wage unchanged, and when better times come they will recover their old position. But this language does not state, in full completeness, the problem calling for consideration, and it tacitly makes an assumption which is positively untrue. It is assumed that the cost of the production of the goods now made in five days will be the same as when the mill worked six. The idea is that the working, the wage, the goods, their price, of one day a week shall be given up: what happened in the five days will go on unchanged as before. This is a complete and very grave mistake. The goods now made in five days will cost more to make, will be dearer to the employer than when they were produced in a mill working one day more. An employer has many more charges to encounter than wages and cost of materials: interest on his own and borrowed capital, rent of buildings, expenses of superintendence and office-work; the pumping out of the water in the mine by an engine that never stops, and other items of the same kind. These expenses now fall on the goods of five days only instead of six: they swell the cost of their production, and then what is the necessary consequence? Their price must be raised, or the loss on the business, already unendurable, will become still heavier. The selling price must necessarily be raised if the business is to continue: and what will be the effect of such a demand? The number of buyers will assuredly be lessened: some more will

drop away from the market: again over-production reappears: a further shortening of time to four days forces itself on discussion; and the same circle of baffled proposing is repeated. And is the foreign rival to be forgotten? He will be delighted with these raised prices; he will not merely threaten, as he does now-he will smite. In these latter days he has in many places been advancing with long strides. We have been told of many large contracts which have been sent to foreign countries for execution because English workmen have distinctly rejected a moderate reduction of wages, which would have brought them work and wages and repelled foreign competition. Let short time send up prices all round, and the invasion of England by foreign goods will be at hand. There is no cure here; but there is something of a very different kind. There is punishment for those who should practise such folly. If the principle is sound, it applies to all trades; and if all which are distressed take to this kind of short time, then those who buy of them--and none are so numerous as the working classes-will find that prices are higher in the shops, and that they must pay more for what they consume. They will lose immensely more than a day's wages in the week. Well was it said of their counsellors-that they were advising the workmen to commit suicide.

In truth, this policy betrays a profound ignorance of the fact that commercial depression means deficiency of buyers, and this in turn means less to buy with, fewer goods to exchange. To make that little still less would be simply ruinous. The true course to pursue to bring this suffering to an end is to produce more, to divide, amongst all, as many products of industry as is possible. Of course industry cannot continue at a permanent loss: more goods will not be made than can be sold; but to make as many as possible that can be sold, that will be exchanged, is the only way to enrich masters, workmen, and the whole people together. To accomplish this great result in the presence of disturbing forces all must make sacrifices. Employers must be content with diminished profits and workmen with reduced wages; then, starting from that point, wealth will increase gradually, as capital is increased by saving, and more commodities come up for division. The sunshine will then not be far off.

The proposal of a second remedy-one stranger yet, more hopelessly indefensible than that we have just discussed-is now surging up in many quarters in England. Let there be Reciprocity-Reciprocity will heal England's woes. It is impossible to escape feeling a blush of shame that in the England we now live in, with her trade of to-day compared with that of thirty years ago, such a cry should come from the lips of eminent and able men. What is become of their common sense? How have they become infatuated? Not one single argument has been brought forward in support of Reciprocity which deserves an answer on its merits, which is anything but a mere shadow. Even its advocates virtually confess that it is indefensible-for, from very shame, they disdain all idea of supporting Protection when they insist on Reciprocity. Yet what is Reciprocity? Simply and nakedly-a de

mand for Protection. Foreign nations protect their manufactures, England must protect hers. Foreign countries decree that English goods shall appear in their markets on dearer and inferior terms than the native; let foreign goods be so handicapped that they shall be sold scantily and with difficulty in England; or, better still, not at all. These commercial doctors repel the reputation of being called Protectionists, for they know that protection is irrational, and refuse to have such a word associated with their names. So they have invented another. It has a different sound; yet Reciprocity is only Protection with an apology. Expel the Protective element from their advice, and they would instantly commit it to the waste-basket.

Let us then proceed to the root of the matter--Protection. What is Protection? Oh! at once exclaim the Reciprocity men, don't ask that question of economists; they are not practical. What know they of business, its ways and its laws? the industrial loss of great nations is not to be put under the feet of theorists and their jargon. Speak to the great manufacturer, the mighty merchant, the omnipotent banker -they know. Be it so, let it be replied. Let the appeal be made to common sense, the common sense of the man who never looks into a book, to the sagacity of an A. T. Stewart, the intuition of an Arkwright. Let common sense decide, and common sense alone; let both sides be sternly forbidden to bring in theory and doctrine; the practical_man will sorely need such a prohibition. And be it also remembered that common sense is the essence, the very core and substance of Political Economy, the sole authority for what it utters, the one single instrument by which it reaches the knowledge which guides the conduct of every sensible trader and manufacturer. Political Economy is not afraid of common sense; it would be nothing, not worth notice, without such a foundation for its teaching.

It is natural that in a season of great commercial suffering the man who finds that the goods which he has produced at great cost cannot be sold because a foreign competitor has better and cheaper goods of the same kind in the market, should cry in the bitterness of his heart -What right has such a stranger to be here? Is he to be permitted to take the bread out of the mouths of Englishmen of the highest merit, much risking, hard working, employers and labourers? More natural yet if the Government of that foreigner shuts the doors of the markets of his nation to English goods; is not that an act of war, to be met with retaliation? Quite natural again that a Bismarck, hard up for money wherewith to pay his soldiers, and to provide them with guns and powder, should think heavy duties laid on foreign merchandize a capital contrivance for filling the German Exchequer. Why should he trouble himself with the thought that he thereby inflicts on every German the loss of more money than if he had proceeded by direct taxetion? Direct taxation is a method hard to practise, very apt to create unpleasantness, very visible to the payer, and very quick at stirring his heart. Pooh, pooh, for Political Economy; let it talk to the winds, they are its fit audience.