payments were thus allayed, and although after events proved that a much greater saving virtue was then attached to the arrangement than it really possessed, yet the confidence it inspired at the time gave a stimulus to business, both in and with the States. Of that we felt the beneficial effects, and later on the conclusion of peace between Japan and China exerted a favourable influence, not because it bronght any immediate accession of trade, but because it strengthened the belief in the probable opening up of the vast Chinese empire to trade and industrial enterprise. Yet, although under these improved conditions there was some increase of industrial activity in the second quarter of the year, the gain was comparatively slight, and barely sufficed to make good what had been lost in the previous three months. A marked and very gratifying change, however, took place during the latter half of the year-a change, in which, unfortunately, perhaps the most important of all our industries, that of agriculture, did not participate. Month after month the returns of our foreign commerce showed a substantial improvement upon those of the corresponding period of the previous year. There was a steady growth in railway traffic receipts. The volume of bankers' clearings mounted continuously upwards, and all statistical evidence concurred in bearing witness to a sustained expansion and development of trade. With the extent of the recovery we shall deal presently, but it is satisfactory to find that, while the improvement was most marked in the woollen and certain other industries, there are comparatively few of the trade reports we publish to daythose relating to agriculture again excepted-which do not tell of a better position of affairs at the end of the year than at the beginning. For the most part, too, they speak more hopefully and with greater confidence as to the prospects of their respective branches of business than they have done for some years past. In brief, the prevailing opinion seems to be that 1895 has inaugurated a new period of trade revival, provided always that a peaceful settlement of the various political difficulties that have sprang up during the past few months be arrived at. And when such views obtain widely, they do something towards bringing about their own fulfilment.

"How much more favourable was the movement in our foreign trade during the latter than in the earlier half of the year will be seen from the following statement:

"At the end of the first half of the year there was a decrease in the aggregate recorded value of our imports and exports as compared with the like period of 1894 of 7,531,000l. On the other hand, the second half of the year produced an increase of 28,228,000l., which sufficed to wipe out the previous decline and leave a net gain for the year of 20,697,000l., or about 3 per cent. But while these figures show clearly enough how trade improved as the year grew older, they do not afford an adequate measure of its expansion. The recorded values with which we have been dealing are the product of the two factors, prices and quantities, and as prices were on the average lower in 1895 than in 1894, it follows that the increase in quantities was greater than is indicated by a mere comparison of values. It is not necessary to repeat here the calculations set forth in Appendix A, but these demonstrate that when allowance is made for the lower range of prices, there augmentation last year as compared with 1894 of 5'54 per cent. in the volume of the imports retained for home consumption, and of 8.57 per cent. in that of our exports of home products. And how this growth compares with the movements in previous years will be seen from the following statement :Volume of Our Foreign Trade. Increase or Decrease per Cent. as compared with previous Years.

was an

"It would be necessary to go back for very many years to find an increase in the volume of our exports in any twelve months equal to that which took place in 1895. But account has to be taken of the fact that a very large proportion of the increase last year was in the shipments to the United States, and that these were abnormally restricted in 1894 owing to the tariff unsettlement. Part of last year's growth, therefore, was of a somewhat adventitious kind. But after making due allowance for this a substantial advance is shown.

"Still more pronounced evidence of an expansion of business is afforded by the returns of the bankers' clearing houses. The amount of bills and cheques cleared in London was 7,592,886,000/. as compared with 6,337,222,000l. in 1894, the increase thus amounting to 1,255,664,000l., or close upon 20 per cent. And of this increase also the greater portion accrued during the last six months of the year, the comparison by half-yearly periods being :

Total for year

Increase.

Stock
Exchange
Account
Days.

Increase.

£

Per cnt.

£

=

3,573,801, + 406,613, 12.84
4,019,085, +849,051, |=26°78

608,273, +115,641, =23°47 696,406, +224,583, 47'60

7,592,886, +1,255,664, |=19'81 1,304,679, +340,224,35°28

"To the total increase for the year the Stock Exchange largely contributed. If, however, we eliminate the clearings on Stock Exchange and Consols pay days, we have a total for the year of 5,942,761,000l., which compares with 5,071,319,000l. in 1894, and shows an augmentation of 871,442,000l., or 17.2 per cent. In this total also must be included some portion of the Stock Exchange business. But if we take the returns of the chief provincial Clearing-houses, which more clearly reflect the condition of trade, we find that they also show a marked growth. The figures are :

"The average growth here shown is greater than that which took place in our foreign commerce, and the inference is that there was also a considerable expansion in the volume of our home trade. In confirmation of this, the statistics of railway traffic and of the shipping employed in the coasting trade, which will be found in the Appendix (pp. 185-6, might be quoted.

"The fall in prices which had gone on practically without interruption throughout the whole of 1894 continued, though at a somewhat slackened rate, during January and February, 1895. Then, however, an upward movement set in, and by the end of March the level of prices, as measured by our index number, had risen practically to the point at which it stood at the beginning of the year. A further slight advance took place during the June quarter, and during the September quarter the rise became both more general and more pronounced. But it would appear to have been carried rather too far, for the December quarter brought with it some reaction; yet, in spite of this, prices at the close of the year were, on the average, appreciably higher than at its commencement. The movement as recorded by our index number was:

66

Although, however, there was this rise in prices during the year, the general range was lower than in 1894. In that year the highest index number recorded was 2,082, and the lowest 1,923, whereas in 1895 the highest was 2,009, and the lowest 1,906. To this fact we have already referred when dealing with the volume of our foreign trade, and on reference to Appendix A it will be seen that the average prices of the net imports for the year were 3'54 per cent. lower than in 1894, and the average prices of the exports 3'48 per cent. lower, this movement comparing with that of previous years thus:

:

Prices of Imports and Exports. Average Rise or Fall as compared with previous Years.

"Yet, notwithstanding this lower level of average values, the change from a period of constantly falling to one of rising prices has had a distinctly inspiriting effect, and has contributed greatly towards the more confident feeling as to the position and prospects of business that now prevails.

"On the whole, our working population would appear to have fared better in 1895 than in 1894. There is no better test of the spending power of the people than their consumption of those semi-luxuries upon which customs and excise duties are levied. And how very considerably that increased during the year the following table will show :

Quantities Retained for Home Consumption.

"The augmented spending power to which these figures testify does not appear to have been due to an increase in rates of wages. These, on the contrary, would seem to have fallen. In a preliminary report upon wages in 1895 the labour department of the Board of Trade state that 732 changes were reported during the year, of which 528 were increases and 204 decreases. But of the 1,004,200 persons affected only 91,800 gained an addition to their wages, while 912,500 had to submit to a reduction, and the conclusion drawn from those statistics is that the preliminary figures undoubtedly indicate that the rate of wages as a whole fell in 1895,' the fall, it may be added, being greatest in the mining and quarrying industry. On the other hand, however, employment would appear to have been fuller and more constant. That is