lab REVIVAL OF TRADE. A LL England will rejoice if the
deduction drawn from the trade returns of the last two months should turn out to be accurate. An increase of five millions in the exports and imports of August—three millions in imports, and two millions in exports—is nothing enormous, but it coincides with other signs which inspire hope, and though the improvement may be but a spurt, it may also be proof that the long continued " depression " which began with the " arrangement " for the Barings, and was exasperated by the collapse of Argentina, the breakdown in Australia, the American currency troubles, and many other incidents, has at last reached its close. We may be entering on a cycle of prosperous trading, and if we are, the effect on opinion as well as on incomes will be very widely spread. Agriculture, it is true, seems not to benefit by prosperity, nobody giving more for flour because he is getting rich, or eating more English wheat because he is free of pecuniary fear ; but agriculture is not now the most important of British industries, and even in agriculture general prosperity brings this advantage, that landlords stand their losses with much more ease, and grow with the rest of the community less pessimist and timid. To the remainder of the world a "boom" in commerce means comparative material happiness. It is sellers who govern opinion about everything but bread, and all sellers find that when trade is steadily expanding they can get better prices and a more ready market. There are more willing buyers for ships, houses, furniture, dress materials, pictures, and indeed all articles of luxury. There is more disposi- tion to invest in new projects, the rate of profit rises a Little, and the hope of profit much, while pecuniary fear, which stops business more even than actual loss, becomes perceptibly less. It is not merely that there is more spendable money, though an addition of even £500,000 a month to that reservoir is not insignificant in result for those who live by supplying the fortunate, but there is more disposition to spend it, less of the feeling that as everything is going worse all resources must be kept intact. How far " depressions " are caused by mental changes, and how far by an actual decrease in business and profits, due, one cannot help imagining, to markets becoming glutted, is a question which will never be settled, but that every decline of a million in trade returns causes a withdrawal of another million—it may be much more—from general expenditure on things that are not indispensable, may be taken as certain. The failure of the economists to explain the recurrence of cycles of prosperity and depression is, as the Times says, remarkable proof of the limitation of their acumen ; but one reason of it, we feel as- sured, is that they underrate the effect of economic fear. The buyer shrinks back when he is frightened, say, by a Stock Exchange crash, as well as when he has supplied himself sufficiently. A panic lasts, too, and spreads in the most wonderful way. The buyer of a new house, for instance, offers, just after great failures, a lower price, and will give no other, not merely because he can afford less, but because he is determined that, as buyer, he will not forego " the benefit of the depression." There is courage, when the depression is over, to use the masses of money which even in bad times ac- cumulate in this country ; and with courage come better incomes, real or imaginary, the result in either case being more expenditure, more work, and better wages. Whatever the state of trade) if everybody hoarded profits there would be a sense of depression, an apprehensiveness resembling that which the steady fall in the rate of interest has spread among the investing middle-class. It is perfectly true, and must not be forgotten, that the buyer loses much that the seller gains from increased prices, but the worst condition of all, when buying and selling tends to stop, ends. Two hats cannot be sold for one without the hat-buyer paying more ; but when he is frightened, he does not buy even one hat, and gets no hat, while the hatter is for the time a ruined man. It is probable that there is no one in all England except the farmer to whom a great expansion of trade does not bring a sense of increased material comfort. The traders benefit first, and then the workmen, whose slack periods become fewer, even if wages do not positively rise, but the advantage, and still more sanguineness as to coming advantage, spreads through the whole community, reaching classes which have no direct connection with or interest in trade. One would fancy, for example, that authors were pretty independent of the chances of trade, but nobody feels a depres- sion more rapidly or to a greater extent than the large publisher, upon whose business the incomes of authors mainly depend.
We wonder what the precise effect of a period of depres- sion or prosperity really is on politics. A priori, depression should in an industrial community be favourable to Liberal- ism, for Liberalism is friendly to change, and a people which is economically uncomfortable or alarmed must, one would think, naturally desire change. The sick man longs for morning or for night. That theory, however, though it seems as if it were unanswerable, is not completely borne out by the facts. Undoubtedly the great discomfort which prevailed in this country from 1816 to 1830, when taxation was excessive and the new industry hardly de- veloped, and the people pessimist from the exhaus- tion produced by their tremendous effort during the Great War, helped to make possible the Revolution of 1832 ; but Liberalism has not prospered in all periods of depression. It has, for example, rather suffered throughout the Western world during the last four years. No Govern. ment could be more Liberal, not to say Radical, than the one which has just disappeared, and it died of popular indifference or dislike. It is, moreover, almost an axiom of history that Revolutions begin just when the load is becoming lighter, a proposition demonstrable from the history of France, of Ireland, and, as we should read the history of the Reform Bill, of Great Britain also. Liberalism was never stronger in this country than in the time when Mr. Gladstone boasted of the prosperity of the Kingdom increasing by leaps and bounds. No one then attributed the strength of Liberalism to discontent, or doubted that it was fed on hope and the courage to try experiments which so fre- quently accompanies prosperity. With all trades ad- vancing, it would seem much easier to try an eight-hours law than with all trades declining. We suspect that under the conditions of civilised life politics are much more affected by ideas than by economic conditions, but that, so far as the latter rule, the old illusion still prevails, and that prosperity and adversity are alike attributed, not so much by the reflection as by the blind impression of the masses, to the party in power. The people do not cal- culate that this or that set of ideas will give them comfort, but that change will improve an uncomfortable position. Rain and sunshine are alike carried to the credit of the Cmsar of the hour. The impression is not a very strong one, or the people would never have suffered Sir Robert Peel to be dispossessed of power, but it has probably a certain amount of weight, varying with the degree of popular intelligence. If this is true, the new Govern- ment should, if trade goes on expanding, have a. very good chance of popularity, and the late Government owed its downfall in part to a cause for which it was not re- sponsible. The fact, however, that mankind attribute their comfort or their discomfort in some measure to their rulers, is not one on which it is safe for any Ministry to rely. The prosperous lose their tempers as readily as the depressed. Man does not live by bread alone, and a great idea will attract more votes to the Government which evolves it than a great harvest. Defeat in the field has overthrown many Governments, but how many have been overthrown by the economic suffering produced by vic- torious war ?
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