the development of commerce in England, the growth of population and wealth consequent on Free Trade, and the accompanying expansion of trade to the East, would have taken place whether the gold-fields had been discovered or not. They were not in any sense produced by the augmentation of the supply of gold. Had the gold discoveries been made at a time when commerce and population were stationary, no general benefit would have been reaped by any countries except those actually in possession of the gold-mines; and the benefit to these countries it must be remembered consists principally in increasing their purchasing power. Australia and California, as Prof. Cairnes has pointed out, have benefited by the gold which they possess in so far as they have parted with it by purchasing the commodities produced by other countries. The gold discoveries have however been of great service to the whole mercantile world because they increased the supply of the circulating medium just at the time when the growth of commerce made the increase most needful. It would have been a great commercial misfortune or embarrassment if the gold discoveries had taken place at a time when trade was stationary; the terms of all monetary contracts would have been disturbed by the alteration in the value of gold. Every one would probably have had more money, but the purchasing power of money would have decreased. As previously stated, this inconvenience is now actually being suffered in India, in consequence of the fall in the value of silver. It must not be forgotten that if general prices are doubled, a man who formerly had a pound a week is no better off if he is now in receipt of two pounds a week; because the two pounds will only exchange for the same quantity of commodities that could formerly be obtained for one pound. M. Bastiat's illustration, at the end of the second chapter of this Section, demonstrates the truth of this assertion. If, in a game

of cards, the stake remain unchanged, it matters little how many counters are used to represent the stake. The fewer the counters, the greater the value they represent; the greater the number of the counters, the less is their exchange power.

QUESTIONS ON CHAPTER IV. The Value of Money. 1. What is the meaning of the phrase "price of money"?

I.

2. Why in an economic sense is such an expression meaningless?

3. What is the value of money? Why is it sometimes erroneously supposed that the value of money is invariable?

4. Into what class of commodities must money be placed in relation to its value?

5. How is the value of the precious metals regulated? 6. What circumstances have occasioned a fall in the value or purchasing power of silver?

7. Name the principal circumstances which produce a demand for gold and silver.

8. Explain the manner in which the demand for money varies with national wealth and population.

9. By what means is the use of money, in large commercial transactions, usually dispensed with? Give an illustration.

IO. Illustrate the manner in which the demand for money is increased when commodities are bought and sold for money many times, previous to their consumption. Shew by an illustration the action of increased demand upon the value of money.

II.

12. Shew by an illustration the action of increased supply upon the value of money.

13. Why do the results described in these examples never actually occur?

14. What circumstances generally counteract the effect of increased demand for gold and silver?

15. What has been the effect of the recent gold discoveries upon the value of money?

16. Enumerate the circumstances which have caused the decrease in the value of gold to be comparatively so slight.

17. Describe the action of these circumstances on the demand for gold.

18. What circumstances have rendered necessary a large annual export of silver from England to India and China?

19. Were the gold discoveries the cause of the increased trade and population of England?

20. What would have been the result had the gold discoveries been unaccompanied by an increase of wealth and population?

I. Suppose a wealthy millionaire desired to confer a benefit upon the inhabitants of some island that had no commercial relations with the outside world, would he accomplish his object by doubling the amount of money possessed by each of the islanders?

2. If population and commerce increased so that twice as many people were receiving wages, and twice as much buying and selling took place, what would be the effect on general prices and wages, supposing that the supply of money remained the same?

3. If you could choose which of two Australian vessels should be lost, one laden with gold or one containing a corresponding value of wool and corn, which would you select?

4. Would the wealth of England have been increased if the country had contained gold mines, instead of our iron and coal?

SECTION III.

The Distribution of Wealth.-Introductory Remarks.

Wealth is divided into Rent, Wages and Profits. In a previous section on the Production of Wealth it was stated that the three agents of Production were Land, Labour, and Capital. It is therefore evident that Wealth is distributed between those who respectively own these agents of production, i.e. between the Landlord, the Labourer, and the Capitalist. The share allotted to the Landlord is termed Rent; that possessed by the Labourer is called Wages, while that belonging to the Capitalist is termed Profits. Wealth is therefore divided into three parts, viz. the Rent of Land, the Wages of Labour, and the Profits of Capital. In the following chapters the proportion which these three parts bear to each other will be pointed out, and the circumstances will be explained which cause an increase in one and a corresponding decrease in another. It will for instance be shewn why a decline in general profits causes an increased amount to be paid as rent. This and many other interesting economic problems will easily be solved by those who rightly understand the laws which govern the distribution of wealth.

Rent, Wages and Profits are in various countries owned by different combinations of persons. In the case of agricultural industry Rent, Wages and Profits are nearly

always in this country allotted to three distinct classes, viz. Landlords, Labourers and Capitalists. It must however be borne in mind that in other countries different modes of distribution prevail. In many parts of the continent the same individuals frequently possess all three of the agents of production. Land, Labour and Capital being in this case provided by one person called a peasant proprietor, he derives all the wealth which they are capable of producing, viz. Rent, Wages and Profits. In Ireland and in India labour and capital are in many cases provided by the same individual, who is a peasant tenant. In this case the tenant can fairly claim both wages and profits as his own, the rent only being the due of another person. From these examples it is seen that, in different countries, Land, Labour and Capital are owned by different combinations of persons, or, in other words, different tenures of land prevail.

QUESTIONS ON THE INTRODUCTORY REMARKS ON SECTION III.

I. Into what shares is wealth divided, and to what productive agents do these shares correspond?

2. Are these shares always owned by different persons?

3. Mention some of the modes prevailing in different countries of distributing these shares.

CHAPTER I. The Rent of Land.

A definition of Rent.

Rent is that share of wealth which

is claimed by the owners of land; it is the price which is paid to them for the use of their land. The rent of land is regulated in some countries by custom, and in others,