in small quantities in particular situations; and a few other articles; exist under what may be called absolute monopolies ;-their supply cannot be increased; and their price must, therefore, depend entirely on the competition of those who may wish to buy them, without being in the slightest degree influenced by the cost of their production.

Monopolies are sometimes established by law; as when the power to supply the market with a particular article is made over to one individual or society of individuals, without any limitation of the price at which it may be sold; which, of course, enables those possessed of the monopoly to exact the highest price for it that the competition of the buyers will afford, though such price may exceed the cost of production in any conceivable degree. Monopolies of this sort used to be common in England, particularly in the reign of Elizabeth: but they were finally abolished by the famous act of the 21 Jac. 1. c. 3.-an act which, by establishing the freedom of competition in all businesses carried on at home, has been productive of the greatest advantage.-(See MONOPOLY.)

The corn laws establish a partial monopoly of the supply of Great Britain with corn in favour of the agriculturists; but, as competition is carried to as great an extent in agriculture as in any other business, this monopoly does not enable them to obtain a higher price for their produce than is sufficient to pay the expenses of its production: though, owing to the peculiar circumstances under which this country is placed, this price is higher than the price in the surrounding countries. Hence it results that the monopoly is injurious to the public, without being of any advantage to those engaged in the business of agriculture. Neither, indeed, can it be truly said to be advantageous to the landlords.-(See vol. i. p. 495.)

The rights conveyed by patents sometimes establish a valuable monopoly ; for they enable the inventors of improved methods of production to maintain, during the continuance of the patent, the price of the article at a level which may be much higher than is required to afford them the ordinary rate of profit. This advantage, however, by stimulating invention, and exciting to new discoveries, of which it is the natural and appropriate reward, instead of being injurious, is beneficial to the public. (See PATENTS.)

There are also partial monopolies, depending upon situation, connection, fashion, &c. These, and other inappreciable circumstances, sometimes occasion a difference of 30 per cent., or more, in the price of the same article in shops not very distant from each other. Generally speaking, the supply of monopolized commodities is less liable to vary than those that are freely produced; and their prices are commonly more steady. But there are various exceptions to this rule, and of these the corn monopoly is one. The great variations in the harvests of particular countries, and their average equality throughout the world, exposes a nation which shuts foreign corn out of its ports to destructive vicissitudes of price, from which it would enjoy a nearly total exemption were the ports open. (See vol. i. p. 493.) Sometimes the expiration of a monopoly-a patent, for example-has occasioned a sudden and extraordinary increase of supply, and consequent fall of price; entailing, of course, a serious loss on the holders of large stocks of goods produced under the monopoly.

3. New Sources of Supply.-The effects on prices produced by the opening of new markets, or new sources of supply, are familiar to every one. The fall that has taken place in the price of pepper, and of most sorts of commodities brought from the East, since the opening of the trade in 1814, is a conspicuous proof of what is now stated.

4. Influence of War on Prices.-The effect of war in obstructing the ordinary channels of commercial intercourse, and occasioning extreme fluctuations in the supply and price of commodities, is well known. In this respect, however, the latter part of the late war is, perhaps, entitled to a pre-eminence. We had then to deal with an enemy who had extended his sway over most part of the Continent; and who endeavoured, by every means in his power, to shut us out of the Continental markets. Mr. Tooke has given, in his elaborate and valuable work on High and Low Prices, a variety of details which strikingly illustrate the effect that the regulations then adopted by the belligerent powers had on prices. “Among the means," says Mr. Tooke, "devised by the ingenuity and enterprise of adventurers to elude or overcome the obstacles presented by the decrees of the enemy, one in particular, which was resorted to on an extensive scale, deserves mention, as illustrating in a striking manner the degree in which those obstacles were calculated to increase the cost to the consumer. Several vessels laden with sugar, coffee, tobacco, cotton twist, and other valuable commodities, were despatched from England at very high rates of freight and insurance to Salonica, where the goods were landed, and thence conveyed on mules and horses through Servia and Hungary to Vienna, for the purpose of being distributed over Germany, and, possibly, into France. Thus it might happen that the inhabitants of that part of the Continent most contiguous to this country could not receive their supplies from us, without an expense of conveyance equivalent to what it would be, if they were removed to the distance of a sea voyage twice round the globe, but not subject to fiscal and political regulations." And in consequence of these, and other causes of the same sort, Mr. Tooke mentions that the price of sugar in France, and other parts of the Continent, during the latter years of the war, was as bigh as 5s. and 6s. a pound; that coffee rose to 7s.; indigo to 18s., and so on.

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But the sums charged for freight and insurance were the most extraordinary. Mr. Tooke states, that he has known instances in which the licence, freight, and other charges on account of a vessel of about 100 tons burden, making a voyage from Calais to London and back, have amounted to the almost incredible sum of 50,000l.! A ship of which the whole cost and outfit did not amount to 4,000l., earned, during the latter period of the war, a gross freight of 80,000/. on a voyage from Bordeaux to London and back! The freight of indigo from London to the Continent does not at present exceed 1d. a pound; whereas it amounted, at the period referred to, to about 4s. 6d.—(High and Low Prices, 2d ed. p. 212.)

every one.

5. Influence of Taxes on Prices.-It is unnecessary to dilate on a topic so familiar to When a tax is laid on a commodity, its price necessarily rises in a corresponding proportion; for otherwise the producers would not obtain the ordinary rate of profit, and would, of course, withdraw from the business. The rise in the price of several of the articles in the annexed Table, is principally to be ascribed to the increase of taxation.

These statements will probably suffice to give our readers a general idea of the principles which determine the value of commodities. To go deeper into the subject would involve us in discussions that belong to political economy, and are among the most intricate in that science. The influence of speculation on prices must not, however, be passed over in a work of this sort.

6. Influence of Speculation on Prices.-It very rarely happens that either the actual supply of any species of produce in extensive demand, or the intensity of that demand, can be exactly measured. Every transaction in which an individual buys produce in order to sell it again, is, in fact, a speculation. The buyer anticipates that the demand for the article he has purchased will be such, at some future period, either more or less distant, that he will be able to dispose of it with a profit; and the success of the speculation depends, it is evident, on the skill with which he has estimated the circumstances that must determine the future price of the commodity. It follows, therefore, that in all highly commercial countries, where merchants are possessed of large capitals, and where they are left to be guided in the use of them by their own discretion and foresight, the prices of commodities will frequently be very much influenced, not merely by the actual occurrence of changes in the accustomed relation of the supply and demand, but by the anticipation of such changes. It is the business of the merchant to acquaint himself with every circumstance affecting the particular description of commodities in which he deals. He endeavours to obtain, by means of an extensive correspondence, the earliest and most authentic information with respect to every thing that may affect their supply or demand, or the cost of their production; and if he learned that the supply of an article had failed, or that, owing to changes of fashion, or to the opening of new channels of commerce, the demand for it had been increased, he would most likely be disposed to become a buyer, in anticipation of profiting by the rise of price, which, under the circumstances of the case, could hardly fail of taking place; or, if he were a holder of the article, he would refuse to part with it, unless for a higher price than he would previously have accepted. If the intelligence received by the merchant had been of a contrary description-if, for example, he had learned that the article was now produced with greater facility, or that there was a falling off in the demand for it, caused by a change of fashion, or by the shutting up of some of the markets to which it had previously been admitted-he would have acted differently: in this case he would have anticipated a fall of prices, and would either have declined purchasing the article, except at a reduced rate, or have endeavoured to get rid of it, supposing him to be a holder, by offering it at a lower price. In consequence of these operations, the prices of commodities, in different places and periods, are brought comparatively near to equality. All abrupt transitions, from scarcity to abundance, and from abundance to scarcity, are avoided; an excess in one case is made to balance a deficiency in another, and the supply is distributed with a degree of steadiness and regularity that could hardly have been deemed attainable.

It is obvious, from what has now been stated, that those who indiscriminately condemn all sorts of speculative engagements, have never reflected on the circumstances incident to the prosecution of every undertaking. In truth and reality, they are all speculations. Their undertakers must look forward to periods more or less distant; and their success depends entirely on the sagacity with which they have estimated the probability of certain events occurring, and the influence which they have ascribed to them. Speculation is, therefore, really only another name for foresight; and though fortunes have sometimes been made by a lucky hit, the character of a successful speculator is, in the vast majority of instances, due to him only who has skilfully devised the means of effecting the end he had in view, and who has outstripped his competitors in the judgment with which he has looked into futurity, and appreciated the operation of causes producing distant effects. Even in the securest, businesses, such as agriculture and manufactures, there is, and must be a great deal of speculation. An unlooked for change of season frequently disappoints the apparently reasonable expectations of those who undertake the former; while the equally capricious variations of fashion have to be encountered by those engaged in the latter; and each is, besides, liable to be affected

by legislative enactments, by new discoveries in the arts, and by an endless variety of circumstances which it is always very difficult, and sometimes quite impossible, to foresee. On the whole, indeed, the gains of the undertakers are so adjusted, that those who carry them on obtain, at an average, the common and ordinary rate of profit. But the inequality in the gains of individuals is most commonly very great: and while the superior tact, industry, or good fortune of some enable them to realise large fortunes; the want of discernment, the less vigilant attention, or the bad fortune of others, frequently reduces them from the situation of capitalists to that of labourers.

The great cotton speculation of 1825 took its rise partly and chiefly from a supposed deficiency in the supply of cotton, partly from an idea that there was a greatly increased demand for raw cotton in this country and the Continent, and partly from a belief that the stocks on hand were unusually low. Now it is obvious, that the success of those who embarked in this speculation, depended entirely on two circumstances; viz. first, that they were right in the fundamental supposition on which the whole speculation rested, that the supply of cotton was no longer commensurate with the demand; and second, that their competition did not raise the price so high as to diminish the consumption by the manufacturers in too great a degree to enable them to take off the quantity to be actually brought to market. If the merchants had been well founded in their suppositions, and if their competition had not raised the price of cotton too high, the speculation would certainly have been successful. But, instead of being well founded, the hypothesis on which the whole thing rested was perfectly visionary.-There was no deficiency in the supply of cotton, but, on the contrary, a great superabundance; and though there had been such a deficiency, the excess to which the price was carried must have checked consumption so much as to occasion a serious decline. The falling off in the imports of cotton from America, in 1824, seems to have been the source of the delusion. It was supposed that this falling off was not accidental, but that it was a consequence of the price of cotton having been for a series of years so low as to be inadequate to defray the expenses of its cultivation. The result showed that this calculation was most erroneous. And besides, in entering on the speculation no attention was paid to Egypt and Italy,-countries from which only about 1,400,000 lbs. of cotton were obtained in 1824, but from which no less than 23,800,000 lbs. were obtained in 1825! This unlooked-for importation was of itself almost enough to overturn the combinations of the speculators; and, coupled with the increased importation from America and other countries, actually occasioned a heavy glut of the market.

The risk to which merchants are exposed, when they either sell off any commodity at a reduced price in anticipation of a fall, or buy at an advanced price in anticipation of a future rise, is a consequence principally of the extreme difficulty of ascertaining the true state of the fact with respect to the grounds on which an abundant or a deficient supply, or an increasing or decreasing demand, may be expected. Rules can here be of no service; every thing depends upon the talent, tact, and knowledge of the party. The questions to be solved are all practical ones, varying in every case from each other; the skill of the merchant being evinced by the mode in which he conducts his business under such circumstances, or by his sagacity in discovering coming events, and appreciating their character and the extent of their influence. Priority, but, above all, accuracy of intelligence, is, in such cases, of the utmost consequence. Without well authenticated data to go upon, every step taken may only lead to error. The instances, indeed, in which speculations, apparently contrived with the greatest judgment, have ended in bankruptcy and ruin, from a deficiency in this essential requisite, are so very numerous, that every one must be acquainted with them. Hence the importance of selecting acute and cautious correspondents; and hence, also, the necessity of maturely weighing their reports, and of endeavouring, by the aid of information gleaned from every authentic accessible source, to ascertain how far they may be depended upon.

When a few leading merchants purchase in anticipation of an advance, or sell in anticipation of a fall, the speculation is often pushed beyond all reasonable limits, by the operations of those who are influenced by imitation only, and who have never, perhaps, reflected for a moment on the grounds on which a variation of price is anticipated. In speculation, as in most other things, one individual derives confidence from another. Such a one purchases or sells, not because he has any really accurate information as to the state of the demand and supply, but because some one else has done so before him. The original impulse is thus rapidly extended; and even those who are satisfied that a speculation, in anticipation of a rise of prices, is unsafe, and that there will be a recoil, not unfrequently adventure, in the expectation that they will be able to withdraw before the recoil has begun.

It may, we believe, speaking generally, be laid down as a sound practical rule, to avoid having any thing to do with a speculation in which many have already engaged. The competition of the speculators seldom fails speedily to render an adventure that might have been originally safe, extremely hazardous. If a commodity happen to be at an unusually reduced price in any particular market, it will rise the moment that different buyers appear in the field; and supposing, on the other hand, that it is fetching an unusually high price, it will

An Account of the Contract Prices of the following Articles of Provision, &c. at the Royal Hospital.

It may be right to observe, that in the infancy of the Institution, the clothes and bedding were
the blue cloth now used for the Pensioners' coats, is

Greenwich for the Years under-mentioned.-(From the Parl. Papers, Nos. 54. 72. and 87. Sess. 1830, and Board of Trade.)

contracted for in suits; and it is so stated in the account. It is also necessary to remark, that

2 G2

of a quality very inferior to the ancient pattern. 45