a rise and to see a source of profit in cheapness, had after the interminable falls become completely reversed; it was not cheaper wool that the trade wanted but dearer wool. When, therefore, on the report of a decrease in the River Plate production some houses in France began to buy resolutely, this practical manifestation of confidence proved contagious. The movement was not resisted, but on the contrary hailed with universal satisfaction. Every one helped it on, speculation revived on a large scale, and the general replenishing of stocks which ensued produced apart from the actual consumption a wave of demand which carried all before it. The advance reached lengths which rendered a reaction natural. Yet the extent of the latter, making all due allowance for the unexpectedly heavier supplies of the last series and the influence of the political apprehension, is in the face of an excellent business intelligible only on the ground of a sense of bewilderment. All speculation collapsed, and though the bulk of the wools offered in December was sold, it passed into fewer hands, and the conspicuous abstention of many French buyers, by limiting the number of competitors, depressed the market beyond what seemed requisite.

Though much of what was gained in summer has been lost again, the year must have enriched the trade generally. On a superficial view its results seem to teach that thorough-going confidence on the part of a few may achieve much, and movements to reproduce these experiences are being witnessed at this moment. But it is unlikely that last year's peculiar circumstances will recur, and if an improvement is carried it will probably be less by means of speculative action than on the more solid grounds of large consumption and moderate supplies.

LONDON, January 11, 1888.

A REVIEW OF THE YEAR.-In strong contrast to the violent fluctuations which had marked the preceding twelve months, the even course of 1887 appears singularly uneventful. The year began under distinctly favorable auspices, and the thought that it might possibly have in store a repetition of the experiences of 1886 was probably present to not a few minds. The position of the article appeared so sound, the raw material had receded to so low a level, and the forthcoming supplies promised to be so well within the bounds of industrial requirements, that a renewed manifestation of elasticity would have had nothing unnatural in it. Any illusion on the point had, however, to be abandoned, for though a rise in the first series seemed temporarily to support sanguine views, the smallness of the improvement and its undecided transient character showed its inherent weakness too clearly to allow of any further expectations being based upon it. Still, and despite the adverse influence of ever-recurrent war apprehensions, a generally favorable opinion managed to maintain itself during the first three or

four months, and this part of the year must have yielded generally favorable results to the trade. After that confidence waned so distinctly that whereas at the beginning of the year no solid ground had appeared why prices should not return to the high rates of the year before, the question which the trade asked itself in autumn was, What should prevent the market from falling to the lowest point of 1886? The moderate supplies of the raw material forbade an approach to that exceptional level, but yarns and goods came near it, rendering the position of manufacturers for a time very difficult. The last month of 1887 witnessed-partly in consequence of a rise in other articles of consumption-a return of confidence, greater activity in the trade and a moderate improvement in the prices of wool and woolen goods, which brought the former back to the opening level of the year, but left the latter still distinctly behind it.

We thus have a twelvemonth of mostly indifferent and halting business, but with a good tone at both ends; the opening tone good as an after effect of the experiences of the previous year, the closing good because of the contagious influence of a rise of articles quite unconnected with wool; at both ends also the same prices of the raw material, with a moderate depression-say of 5 to 10 per cent-in the middle, and a range of values low throughout. Considering the favorable conditions in which the trade was placed, and the evident signs of strength the article had revealed in the preceding year, the result seems disappointing; the more as the grounds on which better expectations had been built have proved sound in the main. As had been assumed, the stocks have shown themselves low, the rate of consumption large, the supply stationary. Whence, then, the indifferent result? The answer must, we believe, be partly sought in the injurious influence of politics. Again and again have war rumors destroyed the reviving confidence, stifled all healthy speculation, and prevented the trade from stocking itself to a legitimate extent. But it must also probably be admitted that, as we pointed out in our last annual circular, a permanent return of the value of wool to former levels can not yet be expected, and that however low present prices may appear as compared with ten or fifteen years ago, they are but in harmony with the reduced, value of most large articles of consumption.

LONDON, January 10, 1889.

The past year has been fairly satisfactory to both growers and manufacturers. Its main feature is the absorption of a rather large increase in the supplies without difficulty, without accumulation of stocks and with no more than a very moderate, one may say legitimate, pressure upon prices. Throughout the year machinery has been well employed. A partial reduction of working hours was indeed reported from France, where the condition of the industry has given ground for complaint for

some time past. But taken as a whole the rate of consumption has been very large; the trade has been much less disturbed by political apprehensions than in 1887 and has for the most part, we believe, worked at fairly remunerative rates.

The increase in the colonies amounted to 10 per cent, and though the clip in the River Plate States differed but little from that of 1887, the supplies that actually reached the hands of the trade were also about 10 per cent larger. This is a considerable surplus in one year. Yet it is easy to exaggerate its importance. A large expansion of the production is no longer the standing feature which it was in former years when the forward strides made annually were indeed incomparably greater and their lowering effect upon the value of wool unmistakable. In recent times there has been no appreciable lowering of prices from this cause. The production still goes ahead, of course, but the increase is much smaller, less general, and more intermittent than formerly, a rapid growth in one season and one country being partly neutralized by a stationary or even receding supply in another season and another country. Hence the comparatively small pressure exercised upon values. The rate of consumption is fully abreast of the supplies, and an occasional strong increase is, as in the past year, cleared with ease.

The low state of stocks in the hands of the trade is a feature which has been observed for some time, but which during the past year or two has come into view with increasing clearness. It is a fruit partly of a long period of declining prices which taught the trade to avoid stocks as an almost invariable source of losses, partly the result of the accelerated means of transport and the quicker transmission of intelligence, which render large provisions practically unnecessary. The amount of the latter still varies, of course, in accordance with the more or less sanguine views held at the time, but, given the same degree of confidence, there is little doubt but that the industry is now stocked less than in former years. This is a new factor, which has to be borne in mind in every estimate of the market and its chances. In some measure it will cause prices to follow the changing conditions of supply and demand more closely and immediately; but it may also in times of revival produce precipitate action and undue excitement, as was the case in the summer of 1886.

The present range of prices is often called low, and appears so on a comparison with former years; but the comparison is misleading. If the fall of wool to an altogether different level had been brought about by causes peculiar to itself, it might be treated as a fluctuation. But there has been no overproduction-if not only the supplies from beyond the seas, but the equally important European clips be considered-and there certainly has been no limitation in the range of purposes to which wool is applied. The causes which have lowered the value of wool are the same which have reduced the price of most large articles of con