some necessary of life is scarce becomes a place to which currents of it are set up from other places where it is relatively abundant, and these currents from all sides. lead to a wave of accumulation where they meet--a glut: whence follows a recoil--a partial return of the currents. But the undulatory character of these actions is perhaps best seen in the rises and falls of. prices. These, given in numerical measures which may be tabulated and reduced to diagrams, show us in the clearest manner. how commercial movements are compounded of oscillations of various magnitudes. The price of consols, or the price of wheat, as thus represented, is seen to undergo vast ascents and descents whose highest and lowest points are reached only in the course of years. These largest waves of variation are broken by others extending over periods of perhaps many months. On these again come others having a week or two's duration. And were the changes marked in greater detail, we should have the smaller undulations that take place each day, and the still

smaller ones which brokers telegraph from hour to hour. The whole outline would show a complication like that of a vast ocean-swell, on whose surface there rise large billows, which themselves bear waves of moderate size, covered by wavelets that are roughened by a minute ripple.

"Thus, then, rhythm is a necessary characteristic of all motion. Given the coexistence everywhere of antagonistic forces -a postulate which, as we have seen, is necessitated by the form of our experience -and rhythm is an inevitable corollary from the persistence of force."

The expressions which are commonly heard among traders and speculators: "The market is tired," "It can't go one way all the time," "What goes up must come down," "Look out for a reaction," "The tide must be nearly ready to turn," and hundreds of others of a similar nature are acknowledgments of the force of a fundamental law, and it is safe to say that any business-man who goes along without recognizing, consciously or unconsciously, this

all-governing law is likely to come to grief. He it is who "goes clamming at high tide,' who buys vacant lots at the "top of a boom," who "gets left" with a big stock when buyers become scarce and who has nothing to sell when everybody wants to buy.

Theoretically there is no difficulty whatever in accounting for the fact that prices and activities rise and fall. The undulatory character of trade movements corresponds with all known motion, and it is no more the duty of the political economist to inquire further into the why and wherefore of the phenomenon than it is his business to ask why over-exertion makes him tired, why a current makes eddies, why exaltation leads to depression, why scarcity leads to glut and low prices, and glut and low prices to scarcity and high prices, or why force and resistance have any place in nature.

Recognizing that rhythm in motion is allprevading, although perhaps never thinking of it as rhythmical, the shrewd man of business will attempt to measure the forces

and resistances which, at a given time, result in carrying prices upward or downward or in holding them nearly stationary. And much of his success must depend upon his ability to measure correctly.

But there has been a downward movement in prices which has been going on ever since the year 1872, and while the undulatory character of the movement has not been wanting, yet the result of it has been to put the average of general prices upon a very low plane, although not lower for many staples than was ever known before. Mr. Edward Atkinson points out1 that the necessaries of life were lower in 1845-1850 than they are now, but, nevertheless, quite a revolution has taken place, and there are many individuals who attribute this fall in prices to the "outlawry " or the "demonetization" of silver, in spite of the fact that there has been neither outlawry nor demonetization properly so-called.

Criticising the subject-matter of the first chapter in this volume, when about to be

1 Testimony before House Committee on Coinage, Weights, and Measures, 1891.

published in Lippincott's Magazine, Mr. John A. Grier, having, with my consent, my manuscript before him, wrote an article for the same number of Lippincott's in which he said: "In 1873, when the United States outlawed silver as full legal-tender money, we blindly committed an absurd national mistake that has cost the mass of our people the loss of untold millions of dollars annually.1

"Only a small part of this has legally, but unfairly, enriched a few thousands of our own people, while many millions have been uselessly thrust upon our creditors on the other side of the Atlantic. The late Mr. Manning, Secretary of the Treasury, in his annual report of December 6, 1886, distinctly expressed this view of the case. Mr. Manning was a believer in the efficacy and necessity of international treaties in the use of silver as full legal-tender money. Thus, in advocating such treaties he urged

1 The United States merely stopped the coinage of silver dollars, the country using only paper from 1862 to 1879. No effect of this stoppage was noticed for a long while; people do not agree on the reasons for the stoppage; and nobody can prove that prices are lower in consequence of the stoppage.