January       December
L,  s.  d.     L,  s.  d. 
Wool—­South Down hogs     per pack     13   0   0    21  15   0
Cotton—­Upland ordinary   per lb.       0   0 7 1/4   0   0   8
No. 40 mule yarn, &c.     per lb.       0   1 1 1/2   0   1 2 1/2
Iron—­Bars, British       per ton       7   2   6     8  17   6
Pig, No. 1 Clyde        per ton       2  13   3     3  16   0
Lead                      per ton      18   7   6     8  17   6
Tin                       per ton     137   0   0   157   0   0
Copper—­Sheeting          per ton      75  10   0    95   0   0
Wheat (Gazette average) per qr.       2  12   0     2  15   8

—­and in other cases there is a tendency upwards in price much more often than there is a tendency downwards.

’This general rise of price must be due either to a diminution in the supply of the quoted articles, or to an increased demand for them.  In some cases there has no doubt been a short supply.  Thus in wool, the diminution in the home breed of sheep has had a great effect on the price—­

In 1869 the home stock of sheep was 29,538,000
In 1871 27,133,000
Diminution 2,405,000
Equal to 8.1 per cent

and in the case of some other articles there may be a similar cause operating.  But taking the whole mass of the supply of commodities in this country, as shown by the plain test of the quantities imported, it has not diminished, but augmented.  The returns of the Board of Trade prove this in the most striking manner, and we give below a table of some of the important articles.  The rise in prices must, therefore, be due to an increased demand, and the first question is, to what is that demand due?

’We believe it to be due to the combined operation of three causes cheap money, cheap corn, and improved credit.  As to the first indeed, it might be said at first sight that so general an increase must be due to a depreciation of the precious metals.  Certainly in many controversies facts far less striking have been alleged as proving it.  And indeed there plainly is a diminution in the purchasing power of money, though that diminution is not general and permanent, but local and temporary.  The peculiarity of the precious metals is that their value depends for unusually long periods on the quantity of them which is in the market.  In the long run, their value, like that of all others, is determined by the cost at which they can be brought to market.  But for all temporary purposes, it is the supply in the market which governs the price, and that supply in this country is exceedingly variable.  After a commercial crisis, 1866 for example, two things happen:  first, we call in the debts which are owing to us in foreign countries; and we require these debts to be paid to us, not in commodities, but in money.  From this cause principally, and omitting minor causes, the bullion in the Bank of England, which was 13,156,000 L. in May 1866, rose to 19,413,000 L. in January 1867, being an increase