8%. When J. S. Mill said, many years ago, that capital had become cosmopolitan, he made one of his wonted hasty and exaggerated statements.

The cost of capital differs according to countries, nevertheless nothing else can be so easily transported. The economic market for capital is considered as the most international.

In the latter half of this century wages have increased in every country. But what is the meaning of such an increase? Let us take two neighboring countries: France and England. The wages of the farm laborers have increased as follows:

The wages of the French farmer in a little more than a century have almost quadrupled, while on the other hand, the wages of the English farmer have hardly doubled. The same in other trades. The following wages were paid to the coal miners of Belgium and France:

Dr. Pain, Chairman of the Board of Guardians of Cardiff, affirms that there are several thousands of miners who earn from 13 to 17 francs per day.*

1 Lorini devotes many pages of his volume, La moneta ed il principio del costo comparativo, Roma, 1896, to refute the classical economist's doctrine of the movement of capital. He tries to demonstrate that capital moves very readily. A consideration of the various rates of interest yielded in various countries would have convinced him of the contrary.

V. Pareto, Cours d'économie politique, Lausanne, 1896, p. 278.

3 A. De Foville, La France Économique, Paris, 1889.

4 "There are many hundreds of coal trimmers who earn £3 to 4 a week. There is a gauger who works under these, and without any difficulty earns from 30s. to £2 a week."-Cf. Drage, The Problem of the Aged Poor, London, 1896, p. 38.

I have chosen European countries with a high-wage level. The differences would have been far greater if I had compared the wages of Russian, Polish and Italian workmen with those of the Englishmen. Less by far are the wages of the Japanese.

A Japanese weaver receives little over two dollars per month. A woman weaver $1.75, the farmer $1.22, and the woman $0.68, that is, the man about seven francs and the woman one-half as much.1 The wages of the Chinese and Hindu are lower still. William Petty, Temple and Houghton in the XVIIth and XVIIIth centuries would have called it a sign of superiority of the Chinese and Japanese trades. Many remain sceptical at the demonstration offered by Smith, in spite of all his facts and psychological and physiological proofs, that the economic superiority of a country over another is due to the amount of wages paid. McCulloch was the first clearly to demonstrate that the high wages paid in America, England and Holland, in place of being detrimental, were advantageous to the economic development of those countries. The economists Rau, Roscher, Walker and Gunton, and many who have followed, but Senior especially, recognized the truth of this economic principle, rendered popular by Ludwig Brentano, and his disciple, Dr. Gerhardt von Schulze-Gaevernitz, by Luigi Albertini, by Rae, but above all by Schoenhof, an American business man, who named the theory "The Economy of High Wages." Therefore, at the present time, very few will believe in the fallacious theory that low wages establish an economic superiority in international competition. The Chinese or Japanese workman who receive such low wages, which are the only possible ones, owing to the poorly developed state of the home industries, would be utterly unable to live on his wages, not only in New York, Paris or London, but even in the humblest European village. Apparently the wages of the Chinese workman and those of the European are widely different, but compared with their power of purchase in their respective countries, the difference becomes much less. A series of natural phenomena, hard to define, determine the social economic organization of the various countries, from the industrial and economic 1 See L'Économiste Européen, 15 Mars, 1896, p. 325.

development to the varying cost of living. If we consider a single phenomenon in order to infer either the superiority or inferiority of one in respect to the other, we arrive at a classification like the one by Tounescemer, who distinguishes vegetables as either trees or herbs. Judged by its climate, Italy is the garden of Europe, but judged by the conditions of Italy's agriculture, such a title becomes purely ironical. When J. S. Mill says: wages depend on the demand and supply of labor, or as it is often expresed, by the relation of the population to capital1 he, as well as Cairnes, Sidgwick3 and several others, fall into a common error, by having failed to observe that, if the amount of wages are determined by anything, it is determined by the conditions and the cost of living in the several economic and social environments: wages are relatively high where the cost of living is high, while they are low where the cost of living is low. Besides, wages are influenced by several other causes.

The improved means of transportation and the widened field of economic markets have modified or totally banished certain differences in the value of precious metals and commodities; apparently a balance of trade has been established in the economic market of the world. Now gold and silver are quoted at the same ratio in the leading markets of the world, and it would be impossible to find an instance parallel to 1324, when the relation of gold to silver in Florence was 1:13.62, while in France the proportion was 1:12.60; twenty years later, in 1344, the rate fell to III.* On the other hand, in

the IXth century the ratio in Florence and Milan was 1 :9.25. But even though the economic isolation of the middle ages has largely disappeared, the natural differences between the two countries are still left, and will never disappear, but will produce equally important and natural differences in the economic and

1 J. S. Mill, Political Economy, Book II, ch. xi, § 1.

2 Cairnes, J. E., Leading Principles, Book II, ch. i, § 5.

3 Sidgwick, Principles of Political Economy, Book II, ch. viii, §1. See also Taussig, F. W., Wages and Capital, 1890, p. 76–77.

4 Villari, Storie Fiorentine, Firenze, 1829, Vol. i. Shaw, History of Currency,

social conditions of those countries. The economic condition of Roumania is very inferior to that of England, owing to the high rate of interest; while in England capital is abundant at a very low rate. Nevertheless, wheat is cheaper in Roumania than it is in England; money has a greater purchasing power in Roumania, or rather, the cost of living is lower. On the other hand, the productive powers of the English workman and his better skill are superior to those of the Roumanian workman. Were it possible to continue and weigh all these and other factors, we should be able then to ascertain which of the two countries is superior in international competition, or in any one line of production. This is not possible, but the ultimate result of those social and natural conditions determine the respective positions of two countries in international competition.

The same kind of money varies considerably when it is applied to measure the prices of two different economic markets. On the other hand, the bimetallists mistake the effect for the cause, and delude themselves by thinking that international bimetallism would place all countries on an equal footing in the international competition. It would be sufficient to take a hundred franc banknote and spend it in Belgium, to find that the value of the note had changed: on July 31st, 1896, its value in Belgium was 100.05 fr.; while in Germany it was worth 100.08 fr.; 100.09 fr. in Austria; 100.19 fr. in England; 100.37 fr. in Switzerland; 100.87 fr. in the United States; 101 fr. in Holland; 107.37 fr. in Italy; 119.86 fr. in Spain; 150 fr. in Russia; 159.63 fr. in India; 177.25 fr. in Greece; 187.15 fr. in Japan; 190.56 fr. in China; 194.27 fr. in Mexico; 270.83 fr. in Brazil; 274.72 fr. in Chili; and 284.50 fr. in the Argentine Republic. In no country have the hundred francs of France the same value. But if to this intrinsic and nominal value could be added the variations caused by other agencies at work in those economic markets, the difference would be still greater in the value of the hundred French francs, owing to the many and continuous fluctuations in the prices of those countries. King Peter IV of Aragon, in 1346, ordered the coinage of a gold coin identical with that of Florence. But

such a coin was too high for the economic market of Aragon, and Peter IV was forced to recall his edict and issue another, by which he ordered the coinage of a standard money equal to the French. A great crisis followed, and poverty was so appalling that the Cortes of Medina del Campo were compelled to issue the famous edict scaling down the money.1

The value of money reflects the economic and natural conditions of the different markets. They exist independently of money. If those natural conditions favor the international competition in an economic market or do not favor it, the value of the money of such a market will reflect such a state of affairs. As the barometer marks fair and stormy weather, and the thermometer heat or cold, without one instrument acting upon the other, so money measures the economic condition of markets. In Florence, in 1347, the ratio of gold to silver was lower than abroad. The wool manufacturers paid their workmen in silver, while their credits abroad were paid in gold.2 Nevertheless, this apparent loss did not cause their economical ruin: the price of wool reflects the increased wages in silver. Money never can act artificially. It only reflects the economic condition of the market using it.

If the advice of bimetallists should be followed by all countries, regardless of their interests and historical traditions, and if they should adopt silver as a universal money, although countless reasons are against it, as the various monetary conferences have clearly shown, it would be impossible to find, soon after its adoption, the same nominal value of money, even in two neighboring countries.

Rome, Italy.

G. M. FIAMINGO.

1

1 Juan de Dios de la Rada y Delgado, Bibliografia numismatica Española. Madrid, 1886.

2 G. Villari, 1. c.