problem of the probable result of the use of a silver standard, as conditions in India are abnormal. An index table constructed upon silver prices in China would have much greater promise of value, but I have no knowledge of the methods employed by Mr. Wetmore. I assume his competence from the fact that his table is included in a public document whose compilers must have been familiar with the facts. The two tables with the diagrams prepared from them are as follows and are given for what they are worth: RELATIVE SILVER PRICES IN INDIA. Table of Index Numbers, prepared from his own calculations, by F.J. Atkinson, Journal Royal Statistical Society, 1897. According to the foregoing table, silver prices of commodities in India fluctuated violently and were 28 per cent higher in 1895 than in 1871. RELATIVE SILVER PRICES IN CHINA. Table of Index Numbers compiled by W. S. Wetmore from calculations based on the records of the Imperial Customs of China. According to Mr. Wetmore's table, silver prices in China were quite stable, and were twelve per cent lower in 1892 than in 1873. I am not able to throw much light upon the question as to which of these two tables, if either, indicates the normal course of silver with respect to commodities, but taking into consideration the fact that local conditions affecting prices were more nearly normal in China than in India, and the general coincidence of Mr. Wetmore's table with the course of silver and commodities in England, as shown in Diagram V., I am compelled to believe that Mr. Wetmore's table comes nearer to showing the probable result of the general use of the silver standard than Mr. Atkinson's. But one swallow does not make a summer, and it must not be so imagined in either case. The diagrams on this page give all the information possessed by Economists as to the course of silver prices in countries of a silver -160 The item of transportation enters so largely into the cost of products delivered at the great wholesale centers that no treatment of the subject of prices-especially from the farmer's standpoint-is complete without a consideration of the relative prices of transportation. Unfortunately the data upon this subject, for the earlier part of the period covered by the foregoing tables, are very meagre, as to railroad transportation, and I have found no statistics, whatever, covering transportation by sea or inland waters. The statistician of the Interstate Commerce Commission supplied to the Aldrich Committee all the data relating to early freight tariffs which could be gathered by that office. Since the creation of the Interstate Commerce Commission the data are ample, but no one, that I am aware of, has summarized the facts and constructed an index table or other device to show the course of cost of transportation. The most convenient method of showing relative freight rates is by a comparison of the average rates per ton per mile. The information on this point which was available in 1893 will be found on page 615 of the Aldrich Report. From the facts there given I select the following. While they apply in each case, only to the railroads named, they will give an idea of the decrease in the cost of transportation during the last quarter of a century. AVERAGE FREIGHT RATES PER TON PER MILE. SOME TYPICAL CASES SELECTED FROM DATA ON PAGE 615 OF THE REPORT OF THE ALDRICH COMMITTEE. The foregoing will give an idea of the reduction in cost of transportation, and may be as valuable as an average for the United States were it known. APPRECIATION AND INTEREST. It is claimed by some that while gold has very likely appreciated, with respect to commodities, interest upon invested capital has fallen so rapidly that the possession of $10,000 of loanable capital will now bring to its owner no more annual income than $5,000 would have procured in 1870. The table below is from Professor Fisher's "Appreciation and Interest," in which, substantially, that view is taken. The figures are doubtless authentic but require some explanation for the reader untrained in finance. The rates of interest quoted are all upon securities upon which principal and interest can ordinarily be counted on to be paid upon the day they become due. The element of risk is eliminated, so far as is possible in human affairs. The column showing rates (per annum) upon sixty-day paper represents money loaned by commercial banks to merchants, the money being mainly the balances of depositors, and so subject to check at sight. When business is lively, interest upon such loans tends to rise by reason of increased demand, and in times of panic, it tends to rise still more, by reason of distrust of security offered, and the unwillingness of banks to lend money whose owners are likely to call for it at any moment. This accounts for the raise of interest rates in the panic years of 1857 1873, and 1893. On the other hand, the columns showing current rates of interest upon giltedged bonds represents money intended to be permanently invested, and, as will be noted, the interest rate is not affected by business conditions. While these figures are doubtless reliable as to interest rates received by capitalists for large sums, when security is believed to be perfect, every farmer knows that they bear no relation to the rates which he has to pay upon mortgage loans. I can find no evidence of any reduction in the rate of interest upon small loans upon such security as the farmer can offer. The "retail" price of money has not fallen according to my observation, but I know of no data establishing the fact. It is said that one day when the Emperor Nero was out of sorts, he expressed the wish that all the Roman people had but one neck, so that he could the more easily cut it off. Capital seems to be trying to put itself in a position where it can be similarly dealt with. When one army is greatly inferior to another, its best course is ordinarily to take to the bush and carry on a guerrilla warfare. The power of capital is vastly inferior to that of the people, and if it deliberately proposed to make war upon the public, its most prudent course would be to conceal itself, and fight under cover. There is no such intention. Capital is not organized as a whole, and competes with itself as vigorously as farmers or commission merchants compete with each other. Each capitalist, however, is striving to make the most possible for himself, and at the present time there appears to be a craze among owners of industrial plants to unload their possessions, at high prices, upon the investing public. They are, therefore, rapidly organizing Trusts by the methods described on page 411, and endeavoring to sell out. Investors are allured by the promise that as the result of the consolidations for which they are asked to supply the capital, prices can be raised to a point which will enable the concerns to pay dividends upon the enormously inflated stock. In this they will usually fail, and the investors will lose their money. In its present shape, therefore, the campaign for the formation of Trusts is a campaign against investors. The people can rest perfectly easy. No harm can come to them, for the consolidation of interests will render them vastly easier to deal with. The logical outcome of a Trust formed in the normal manner, as the result of unbearable competition, and with plants put in at bedrock prices, and in the absence of excitement, is profit to those concerned in it, and a raise in prices to just below the point at which new competition will be invited. This will do no harm. It is desirable that all business be done at a reasonable profit. On the contrary, it may do good, as tending to counter organization among farmers, working men, and other classes. The logical result of such a campaign as is now going on is a financial panic when investors shall have discovered the true value of the properties which they have purchased. It is to be hoped that it will not advance to that point. The most of the Trusts now torming will probably not succeed. They are competing with each other for the money of investors, and the crop of fools, although large, is after all, limited. Some of the proposed combinations appear to be really consolidations of enormous capital, with the intent, and possibly, for the present, the power to oppress. These may have to be dealt with, possibly by constitutional amendment. It is easy enough to tax out of existence combinations of capital which are dangerous to society. The wild laws which some legislatures are now passing can do no good, and are most of them not only unconstitutional, but more injurious to business than the evils at which they are aimed. What the public, and especially the farmers, most need, in order to deal successfully with combinations of capital, is perfectly clear minds and perfectly cool heads. The following list of Trusts is compiled from the San Francisco Chronicle Almanac for 1899, and a late number of the San Francisco Argonaut. It |