1 Russia, Sweden, Norway, Denmark, Heligoland. * Germany, Holland, and Belgium. France, Portugal with Azores and Madeira, and Spain with Gibraltar. • British North America. Australian Colonies and New Zealand. * British West Indies with British Guiana and Honduras. British India, Ceylon, and Singapore. 45 511 Decrease CHAPTER IX. REVIVAL AND DEPRESSION OF TRADE. Condition of Industry and Commerce from 1866 to 1870.-Prosperity of Trade in 1871.-Great rise in the prices of Iron and Coal.-Number and Import. ance of Joint-Stock Companies in 1870-72.-Increase of Imports.-Foreign Loans:-Speculation Abroad.-Reaction.-Default in Foreign Loans.Recurrence of Commercial Depression in England.-The Balance of Trade. -Condition of Commerce. SOME time elapsed after the commercial crisis of 1866 before trade resumed its wonted activity. The year 1867 was a year of languor. There was war in Italy. The harvest was bad on the Continent and in the United States; the exports of silver to India were considerable. A general disinclination to enter into any enterprise kept the money market spiritless, whilst the defalcation of some railway companies helped to maintain much gloom and uncertainty. The year 1868 was somewhat better. The depressing influences at work in previous years were partially removed. The harvest proved more abundant. But capital was not accumulating to any extent. Confidence was still wanting. Once again the harvest was bad in 1869. Nevertheless, the low rate of discount and the absence of any disturbing element encouraged some activity in many branches of trade, and the exports increased. The year 1870 opened brightly. Every branch of trade was reviving. Greater activity prevailed in the money market, and the harvest, though a little under an average, had not been altogether disappointing, when the unfortunate war broke out between France and Germany which, for a time, perplexed and disturbed every interest. The Franco-Prussian war was of short duration and did not involve any other nation, but it was destructive in the highest degree. The payment by France of an indemnity of 220,000,000l. and the cession to Germany of Alsace and Lorraine produced serious economic consequences. Still greater, however, were the enormous loss of wealth in crops destroyed, in public buildings and monuments ruined, and, above all, in the large number of productive labourers killed or disabled both in France and Germany. The early conclusion of 3 reaty of peace between two such countries in the centre of Europe, and in the van of civilisation and progress, was a great boon to commerce, and immediately thereafter the gloom which was hitherto experienced was dispelled. Happily, too, the 'Alabama' dispute with the United States of America was terminated by the award of the Geneva Tribunal, and thus with the political horizon more serene, the year 1871 was ushered in full of promise and activity. And so in effect it proved to be. The iron trade was the first to rise considerably in value in consequence of an excessive demand from the United States of America where a sudden impulse was given to railway extension. In 1871 iron, hardware, and machinery were all in great activity, and coal rose enormously in value. The coal market attracted more than ordinary attention from the fact that the supposed exhaustless resources of the British mines had been called in question by competent authorities. Professor Hull, in his work entitled 'The Coalfields of Great Britain,' published in 1861, produced evidence to show that the supply of coal is exhaustible, and might be exhausted sooner than we might expect. Two years after, in 1863, Sir William Armstrong made the subject the theme of some observations in his address to the British Association, and in 1865 Professor Stanley Jevons published his work on 'The Coal Question,' which seemed to support the impression that we stood in danger that the coal supply might suddenly, and at no distant time, come to an end. To set at rest any doubt on such a momentous question, in 1866 a Royal Commission was appointed to investigate the probable quantity of coal contained in the coalfields of the United Kingdom, and their report, published in 1871, was to the effect that within the attainable depth of 4,000 feet the probable quantity of coal available was 90,000,000,000 tons; that if we went a little deeper under the Permian new red sandstone and other superincumbent strata, but still at workable depth, we might get some 50,000,000,000 tons more. And that even making allowance for an increasing consumption, there is coal enough for 360 years more, while if the consumption should not increase, the available coal might last four times as much, or even 1,200 years longer. Notwithstanding, however, this encouraging report, when the demand of coal suddenly increased in 1871 in an unprecedented manner the original impression of a limited supply, fostered to some extent by a concert between coal owners and coal miners for a restricted output, once more revived, and the price of coal, as well as the price of all metals and manufacture in which coal enters, rose enormously. The prices were as follows:-1 Report on the Prices of Exports of British and Irish Produce and Manufac ture, 1861-1877 (Command paper, 2247, 1879). The average price per ton of best house coal in London was as follows: 1868, 188. 7d.; 1869, 18s. 8d.; 1870, 188. 6d. 1871, 198. 3d.; 1872, 248. 11d.; 1873, for 5 months, 328. 6d. The price of iron, in consequence, rose in equal proportion. The prices per ton of Scotch The cotton trade was also very prosperous. Messrs. Ellison & Co. in their trade circular said: Beyond all question, 1871 has been one of the most prosperous periods in the history of British commerce and manufactures. Every branch of industry has experienced a most extraordinary expansion, and the condition of the working classes has been one of unexampled comfort and prosperity.' As usual in times of excitement, a large number of Joint Stock Companies came into existence. In 1870, the number of Joint Stock Companies was 584, with a subscribed capital of 38,000,000l. In 1872, the number of companies formed was 1,116, and the amount subscribed was 130,000,000l. The trade of the United Kingdom increased considerably in volume. The imports rose from 303,257,000l. in 1870, to 371,287,000l. in 1873, an increase of 22 per cent. The exports of British produce rose from 199,586,000l. in 1870, to 255,165,000l. in 1873, showing an increase of 27 per cent. But yet another source of excitement was produced by many foreign loans contracted in the same year. To meet their increasing financial exigencies, state after state came forward as a borrower in the money market. France required 10,000,000l. in 1870, and 80,000,000l. in 1871. Russia obtained in four loans, 54,000,000l., Turkey got 44,000,000l. Buenos Ayres, Chili, Peru, Honduras, Bolivia, Uruguay, Paraguay, each obtained large sums, whilst large investments were made in railways in the United States and other countries.2 pig iron on Clyde were as follows: 1868, 27. 15s. 3d.; 1869, 2l. 178. 6d. ; 1870, 21. 198. 3d.; 1871, 31. 2s. 2d. ; and 1872, 51. 10s. Od. 2 The following are the particulars of the loans negotiated during this period: Nor was the excitement limited to the United Kingdom. The Moniteur des Interêts Industriels calculated the total amount of investments in state and municipal loans, credit companies, railway and industrial establishments in the principal countries in 1872, at 505,000,000l., and in 1873, at 624,000,000l. A general illusion prevailed of enormous profits in every description of investments, and financial securities rose to an inordinate value, able speculators thereby realising considerable profits. That was the time when syndicates were formed to bring out new loans and fresh |