GREAT BRITAIN, I

241

Here are phenomena which (so far as concerns the present
inquiry) can be more easily explained away than they can be
explained. The price changes up and down are the changes of all
prices, as recorded by the usual index numbers; nothing appears
as to any special changes in import prices or domestic prices.
The movements of money incomes might be significant. They
would be indicative of tendencies to gain or loss from the conditions
 of international trade, if they could be regarded as having
been influenced solely by this factor. But they were of course
influenced by sundry other factors as well — by the general downward
 trend of prices and incomes the world over between 1820
and 1850; by the sharp upward movement of similar wide sweep
that followed the Australian and Californian gold discoveries;
and so on thru the familiar fluctuations. And obviously there
were other changes than those due to varying monetary conditions.
 Consider the commanding position which Great Britain
held as a manufacturing country during the second and third
quarters; the heavy and increasing demand for her products;
the probability that the barter terms of trade thruout this halfcentury
 were favorable to her; and then the slow change during
the last quarter of the century, the rise of rival manufacturing
countries, the modified conditions of international trade and international
 competition. How disentangle the effect of any one
among the many and various factors? How verify in the actual
course of events the theoretic previsions ?
A further circumstance calls for comment, one connected with
the puzzling movement of prices and incomes, and connected, as
these were, with the actual working of the machinery of international
 trade. It is the relation of the flow of specie to the
hanging phenomena and the changing relations.
The excess in money values of exports at one period and of imports
 at another appears to be in accord with the net balance of
payments. This accordance is not peculiar to Great Britain.
[t is found in the international trade of all the countries of western
civilization. So far we have a verification of theoretic analysis;
the observed phenomena are such as general analysis leads us to