Workmen's advocate. (New Haven, Conn.) 1883-1891, 1886-11-21

of the two previous aspects Of the com
petition; that is, upon whether the com
petition in the ranks Of the buyers or
that in those of the sellers is the keener
Business thus leads two opposing armies
into the field, and each of them again
presents the aspect of battle in its own
ranks between its own soldiers. That
army whose troops are least mauled by
one another carries OFF the the victory
over the opposing host.
Let us suppose that there are hun
dred bales of cotton in the market, and
at the same time buyers in want of a
thousand bales. In this case the demand
is greater than the supply. The compe-
tition between the buyers will therefore
be intense; each of them will do his best
to get hold Of all the hundred bales of
cotton. This example is no arbitrary
suppostion. In the history of the trade
we have experienced periods of failure
Of the cotton plant, when particular
companies of capitalists have endeavored
to purchase, not only a hundred bales of
cotton, but the whole stock of cotton in
the world. Therefore in the case sup
posed each buyer will try to beat the
others out of the field by Offering pro
portionately higher price for tive cotton.
The cOttOn-sellers, pecelNlng the troops
of the hostile host in violent combat with
one another and being perfectly secure
as to the sale of all their hundred bales,
will take very good care not to begin
sVuabbling among themselves in order to
depresS the price at the very moment
| Then their adNerSarieS are emuIating each
other in the process of scrcWlng il higher
up. Peace Is therefore suddenly pro-
| claimed in the army Of the sellers. They
present Il united front to the purchaser,
and fold their arms in phllOsUphiC content;
and their claims would be absolutely
boundlesS if it We're not that the offers
of even the most pressing and eager of
the buyers must always have some def
mite limit.
Thus if the supply of commodity is
not so great as the demand for it, the
competition between the buyers wakes.
Result: A more or less important rise in
the price of goods.
As IA rule the converse case is of com
moner occurrence, producing an oppo-
site result. Large excess of supply over
demand; desperate competition among
the sellers; dearth of purchasers: forced
sale Of goods dirt cheap.
| i'ub w ilttl - tlt lllttlllllS u lilt IiSt
and fail in prices? What is the meaning
OF higher price or lower price? A grain
of sand is nigh when examined through
microscope, and IA tower is low when
compared with a mountain And if price
is determined by the relation between
supply and demand itself determined?
Let us turn to the first worthy citizen
we meet. He will not take an instant to
consider, but like a second Alexander
the Great will cut the metaphysical knot
by the help Of his multiplication table.
III the production of the goods which
| sell, he Will tell us, has cost me 100
| pounds, and get ITO pounds by their
sale-Wltmn the year, You understand
that 5 what | call a sound, honest, reason
able profit. But if | make l2O pounds or
1870 pounds 10y the sale, that is higher
prOht; and If We're to get a yDOu 200
pounds, that would be an exceptional, an
enormous profit" What is it then that
serves Our citizen rs the measure of his
proht! The cost of production of his
goods. If he receives IN exchange for
them an amount of other goods whose
production has cost less, he has lost by
his bargain. If he receives an amount
whose production has cost more, he has
gained. And he reckons the rise and fall
of his profit 10y the number Of degrees at
which ii stands with reference to his
zero-the cost of production.
We have now seen how the changing
proportion between supply and demand
produces the rise ana fall Of prices,
making them at one time high, at another
low. If through failure in the supply, or
exceptional increase III the demand, an
important rise IN the price Of commodity
takes place, then the price of another
commodity must have fallen; for. of
course, tie price of a commodity only
expresses in money the proportion In
which other commodities can be eX-
changed with it. For instance, if the
price Of Il yard of silk rises from five to
six shillings, the price Of silver has fallen
in comparison with silk and in the same
way the price of all other commodities
which remain at their old prices has
fallen if compared with silk. We have
to give larger quantity of them in eX-
change In order to Obrain the same
quantity of silk. And what is the result
Of a rise i'll the price of a commodity
A mass of capital is thrown into that
tlourshing branch Of business, and this
immigration of capital into the province
of the privileged business will last until
the ordinary level of profits is attained;
or rather, until the price of the products
sinks through overproduction.
Conversely if the price of a commodi-
ty falls below the cost of its production,
capital will be withdrawn from the pro-
duction of this commodity. Except in
the case of "A branch of industry which
has hapbn,n Al,
doomed to disappear, the result of this
! Hiuht of rauital will be tbat tho ,,r,,.@,,,,