~*m UC-NRLF *B M7b 73fl 8 F >2 ** wA 1 5i >.¥ II *:* *# '* i "$£* *>€ *f ; »*% Sr "*S Cf&it 4*1 - *'SQ> THE PRESENT STATE ENGLAND IN REGARD TO AGRICULTURE, TRADE, AND FINANCE? WITH A COMPARISON OP THE PROSPECTS 0* BNCMAirD AND FRANCS. By JOSEPH LOWE, Esq NEW-YORK : PUBLISHED BY E. BLISS AND E. WHITE, BROADWAY. J. SEYMOUR, PRINTER* 1824. HClSr 18 W: TO WILLIAM MANNING, Es<*. M. P. AND A DIRECTOR OF THE BANK OF ENGLAND, THIS VOLUME, APPROPRIATED TO OBJECTS INTIMATELY CONNECTED WITH THOSE OF HIS PUBLIC LIFE, WITH SENTIMENTS OP THE GREATEST REGARD, BY THE AUTHOR. INTRODUCTION- No subject can present a higher interest than an inquiry into the state and prospects of the produc- tive industry of England. Whatever tends to correct error, or introduce improvement into the operation of that industry, must affect the comfort of so large a population, that no research, bestowed on such a subject, can be accounted too minute, no labour too long. Fruitful as has been the present age in changes,, military and political, there has occurred an almost equal degree of revolution in the value of money and the productive power of labour and capital, de- partments in general so tranquil as hardly to attract the notice of the historian. Those of our readers who are of an age to recollect the peace of 1783 can- not have forgotten the general discouragement caused by the relinquishment of our American Colo- nies, followed as it was by a season of great financial difficulty. They will remember with more satisfac- tion the revival of our commercial activity in the years preceding the French Revolution, and the dis- cussions whether we were indebted for so beneficial a change to the natural course of circumstances or the conduct of Mr. Pitt. This was followed by the war with France — a period subversive of all previous Vlll INTRODUCTION. calculation in finance, since, after experiencing pecuniary difficulty during a few years, our resources appeared to expand with our wants, and continued so long abundant, that we had no little difficulty in anticipating the possibility of a recurrence of em- barrassment. That which took place at the close of the war (1815 and 1816) was altogether unexpected, and the public, accounting pecuniary straits incompatible with our brilliant success in the field, clung to the ex- pectation that their distress would disappear as soon as peace should be firmly established. This hope was confirmed by the revival of our commercial activity in 1817 and 1818, but the succeeding years dispelled the illusion, and taught us that the evils of transition were not yet at an end. During the last and present year circumstances have become more favourable, and our lower orders, in particular, enjoy a larger share of comfort than they have known for a long period. Still it might be going too far, were we to flatter ourselves that our embarrassments had reached their close. The un- fortunate coincidence between the relief of the con- sumer and the distress of the producer of corn, joined to the portion of uncertainty always attendant on a commerce of export, convey a warning that a sea- son of difficulty must yet elapse, ere our circumstan- ces become thoroughly adapted to our new and more natural state. There exists in some branches a want of employment ; in others, a remarkable dis- proportion in the rate of wages and salaries to the earnings of the employer; — the whole affording a painful lesson how little either the public or our rulers foresaw the consequence of lavish expenditure, INTRODUCTION IX and how few among those who undertook to enlight- en them, either in parliament, or through the medium of the press, were acquainted with the circumstan- ces of former periods of transition from war to peace. To elucidate by a careful survey of facts and documents, the obscurities of the past, and to offer suggestions which may perhaps tend to facilitate our transition to a more safe and steady state of things, is the object of this volume. We shall begin by endeavouring to account for our financial prosperity during the war, and to explain the causes of the reverse that followed the peace. No one has yet attempted to show how far our increase of wealth during the war was real, and how far nominal — a dis- tinction, which, if subversive of a part of the flatter- ing picture with which we gratified our imagination during our long contest, has the consoling accompani- ment, that the decrease of our wealth since the peace will be found, by following up a similar reasoning, to be far less than is commonly apprehended. This inquiry will be necessarily connected with researches into the intricate topics of Money and Exchange. How far did the substitution of paper for metallic currency prove an addition to our resour- ces ? At what period did that hazardous experiment cease to afford relief, or become productive of loss ? And do not the public at present labour under a general misapprehension in regard to the effect of the resumption of cash payments, attributing to the act of 1819, commonly called Mr, Peel's Bill, that fall of prices, that recovery of the value of money which ought to be traced to a more powerful cause ? INTRODUCTION. Our next topic shall be the state of our agricul- ture, and the causes of the distress that has assailed this, the most flourishing during the war of all the branches of our industry. Here also, the attentive observer will find much miscalculation to correct, and misapprehension to remove. In attempting this we shall draw a comparison of the charges attendant on British and Continental agriculture, and venture on the more difficult inquiry how far our produce is likely to continue at its present rate ; also how far a low price of corn is or is not conducive to the exten- sion of our productive industry. A more cheering theme will be opened to us by the increase of our population, the adequacy of our produce to its support, and the refutation of the dis- couraging theories circulated on this subject during the war. An intimate connexion evidently prevails between increase of numbers and increase of wealth ; particularly in a town population, among whom labour is subdivided, and the possession of capital gives assurance of profitable employment. These and similar topics will occupy the greater part of our volume : the remainder shall be appro- priated to the discussion of propositions for the re- lief of our suffering classes, founded on the evident tendency of our resources to increase. To objects such as these any attachment to party politics would evidently be unsuited. A writer, thoroughly impressed with the importance of his subject, and animated by the hope of rendering service to his countrymen, will consider as a second- ary object the notice either of men in office or their opponents. While he speaks with commendation of LNTRODUCTlOxN. XI measures, which bear the stamp of good intention or laborious exertion, he will animadvert without re- serve on such as are indicative of hasty or imperfect views. It is on this ground, far more than on de- ficiency of zeal for the general good, that our public men are vulnerable. " In retirement," said an emi- nent public character, " I became sensible, that, when in place, I had been deficient in almost every thing but diligence."* The functions of our heads of office are often ill distributed : the assistance af- forded to them in the higher and more difficult de- partments is apparently very imperfect ; and their minds, engaged from day to day in devising expedi- ents to meet a temporary urgency, become less and less accustomed to long-continued reflection on one subject, and to the conclusions for which such re- flection is indispensable. Without an admission of this nature, how can we account for their delaying so long the adoption of a decisive course in regard to Ireland ; or, their postponing in this country, till the eighth year after the war, the financial measures which were called for by a state of peace ? An equal disposition to impartiality will, it is hoped, be traced when we carry our views abroad, and speak either of that nation which hereditary feeling still represents as our rival in Europe, or of that which contests of recent date have brought forward as our opponent on the farther shore of the Atlantic. A personal residence of several years in France has given the author occasion to mark the national character, to study the political resources, to calculate the prospective power of our once- dreaded neighbour. It has satisfied him that though * Huskisson on the Bullion Question, 1810. \11 LVi'RODUCTUKN. France is still the greatest of continental states, yet that England may soon dismiss the apprehensions entertained by our forefathers, and rest tranquil in the assurance of the more rapid increase of her population, wealth, and power. May we not add, that these views receive confirmation from the con- duct of our rulers, who, when France was in a man- ner at the disposal of this country and of allies ready to join in any project of partition, accounted it im- politic either to weaken her frontiers by the reten- tion of fortresses, or to cripple her trade by the im- position of restrictions? How different then our present situation, from that of former years, when we were obliged to seek security in foreign alliances, and to postpone the correction of domestic abuses from a dread of exciting discontent ! The most sincere well-wisher to his country may now speak with freedom of past transactions, viewing them merely as historical facts, — as events which, though not remote in date, may be boldly scrutinized with- out any prejudicial effect on our present situation. The disposition of the public is fortunately in coincidence with this state of things. During the war events followed in too quick succession to admit of deliberate reflection, or to afford a basis for in- structive conclusions : — all was absorbed in the bustle of action, in an expectation of change. At present the public may be compared to those who, retired from active life, pass their transactions in re- view with the advantage of leisure and experience, — a situation far more favourable than the ardour of a contest, for appreciating both the extent of our sacrifices, and the results of which they have been productive. INTRODUCTION. Xlll In attempting to elucidate these, we shall proceed with a scrupulous reference to facts and documents: but though such details must necessarily form the body of the book, Ave shall hop 3 to introduce, oc- casionally, considerations of a higher kind. Those who, from their time of life, have been enabled to follow the course of occurrences since the early part of the French revolution, have witnessed an age of vicissitude, a succession of events which, whether military or political, were often ill calculated to favour the belief that justice and moderation form the true basis of national prosperity. But time alone was wanting to complete the evidence and assert the truth of that doctrine. The triumph of military usurpation was arrested in the wilds of Russia, and received its overthrow in the plains of Flanders. Since then our southern neighbours have been awa- kened from their dream of continental dominion. We, without having trespassed equally in point of aggression, had also our exclusive creed; — our system of vigour; our jealousy of neutrals ; our notion that war was a source of national wealth. How far these impressions have been corrected by recent events, by our experience during the years that have elapsed since the peace, will remain to be explained in the following pages. CONTENTS. CHAPTER I. Events of the War viewed in Connexion with our National Resources. Page Sketch of military events from 1793 to 1801 25 Our situation at the peace of Amiens - 32 War of 1803 ------- 34 Alternations of success ----- 37 / CHAPTER II. Magnitude of our Expenditure and Sources of our Financial Supplies. Expenditure during the war ; its progressive increase 42 How far defrayed by loans, how far by taxes - 45 Comparison with former wars ----- ib. What were the sources of these great supplies ? 46 Was it our foreign trade ?----- 47 Was it our colonial acquisitions, or the suspension of foreign competition ? 49 All these means overrated ; the chief source of our supplies were the Increase of employment during the war - 50 Consequent increase of our revenue - 52 Increase of our population ----- 53 Increased productiveness of our excise duties - - - ib. Estimate of our taxable income at different periods, from 1792 to 1814 54 Proportion of our burdens to our resources - - - 55 Farther causes of increase of revenue during the war : our taxes, in a great measure, a circulation of money, a repayment of government expenditure ------- 56 Absence of foreign competition - 59 Exemption from cash payments - 60 The public not aware of the reaction to be apprehended at a peace ib. CHAPTER III. General Rise of Prices during the War. The causes specified ------ 62 The demand of men for government service - - - ib. Proportion of the force in arms, to the population at large - 63 Annual expense of our army, navy, and ordnance, from 1791 to 1815 65 Effect of this expenditure on the price of commodities - - ib. Taxation, its effect on house-keeping - - - - 66 Comparative expense of house-keeping in 1792 and 1813 - 69 How far effected by the rise of price in labour - - - 72 How far by the rise of corn - - - - 73 Combined result of all these causes - - - - ib. Exemplified by the rise of lands, houses, and other real property ib. How far was this rise nominal ? - - - - 74 The case of money property, such as loans on mortgage 75 " Change in the value of money ;" this expression defined - 76 Prices on the Continent since 1792 - 77 XVI CONTENTS. file Rise of prices apparently indicative of prosperity - - 80 Evil of high prices when peculiar to a country ; opinions of Mr. S. Gray, and of Mr. Ricardo - - - - 81 Effect of a rise of prices on our public burdens - 84 CHAPTER IV. Our Currency and Exchanges since 1792. Historical sketch of our exchanges since 1792 ; and of the effects of our corn imports and subsidies ----- 85 Tabular statement of these imports and subsidies 93 Our inconvertible bank paper ; contradictory opinions on that subject 96 Our money system previous to 1797 - - - - 97 The bank restriction act - - - - 99 The opinion of the bullion committee on that act - - 100 Effects of that act in augmenting the disposable funds of bankers, faci- litating discounts, and preventing the rise of interest - 101 The question of depreciation and over-issue : Difference between an addition to the stock of bank paper, and an increase of metallic currency - - - - 104 Discounts ; their increase during the war - - - 105 tended, in some respects, to retard the rise of prices 106 greatly facilitated by the exemption from oash payments 107 Effect, in a political sense, of that exemption - - - 109 Depreciation ; distinction between depreciation of bank paper, and a diminution in the value of money generally - - ib. Mode in which depreciation was incurred abroad - - 110 The degree of such depreciation - - - - ill Effect of a rise of prices abroad on prices at home - - ib. Extent of such effect previous to 1809 - - - 112 The same after 1809 - - - - - - ib. Summary of the preceding - - - - - 113 Considerations addressed to the advocates of the Bank - - 114 to the supporters of the Bullion Committee 115 The Exemption Act viewed in connexion with the events of the \var 118 Would the exemption from cash payments, if not resorted to in 1797, have been adopted at a subsequent period ? - - - ib. How far was it a source of financial aid ? - - - 120 Mr. Peel's bill ; its effect overrated - - - - 1 22 CHAPTER V. Our Agriculture. Section I. Historical Sketch. Our corn trade previous to the Revolution of 1 688 - - 1 23 Bounty on export in 1689 - - - - - 124 Prices stationary during the reign of George II. ; rise after 1764 126 Act of 1773 ------- ib. The late Wars ------ 127 The peace of 1814 - - - - - - 128 Fluctuations since 1792, divided into periods: from 1793 to 1800 ; from 1800to 1809; from 1809 to 1814 - - - 129 From 1814 to 1819 ; from 1819 to the present year - 131 Tabular statement of our crops, and average prices since 1790 - 133 CONTENTS. XV11 Page Causes oi these fluctuations; the effect of our corn laws greatly over- rated ._----.- 134 Causes of rise after 1763 - - - - - 135 during the war ----- ib. Causes of fall since the peace ----- 136 - Additional hands employed in tillage - - - - 137 Section II. Situation and Prospects of our Agriculturists. Annual produce and rental of Great Britain and Ireland - 140 Magnitude of the depression since the peace - - - 141 Present situation of our landlords and farmers - - - ' 142 Consequence of a general deduction of farming charges - 144 Comparison of our present prices with those prior to 1793 - 145 Effect on the price of corn of increasing population - - 147 Consumers may increase without raising prices - - 149 Effect of a bad season - - - - - 150 Less felt in peace than in war - - - - - 151 Reaction of the market price of corn on the cost of its production 152 Mode of such reaction in war - - - - - 153 in peace - 154 How far understood by land-surveyors ; by farmers ; by the Agricul- tural Committee of 1821 ----- ib. Prospect of prices; circumstances conducive to a rise - 155 Circumstances which render a low price probable - - 158 Prospect of relief to farmers ; tithe ; poor-rate - - 160 Section III. A protecting Duty. A populous country not necessarily expensive - - - lti2 Comparative burdens on French and British agriculture - 164 Comparative rentals of the two countries - - - 168 Are our manufactures benefited by protecting duties ? - ib. Danger of an over-extension of tillage - - - 171 The Corn Committee of 1813 ; fallacy of their arguments - 172 Objections to a high import duty - - - - 173 Tendency of our legislation to ultimate freedom of trade - 174 Physical advantages of particular countries - - - 175 of England - ib. A free import of corn ; arguments for and against it - - 1 76 CHAPTER VI. Poor-rate. Origin of our poor-law system - - - - - 179 Its progressive extension - - - - - 181 The late wars ------- 182 Amount of poor-rate in the different years from 1813 to 1822 - 184 Reduction since 1818 - - - - - - 185 Workhouses - - - - - - - 186 Management of the poor in Scotland and France - - 187 Poor-rate considered as a tax - -- - - - 190 Its amount estimated in corn - - - - - ib. Comparative number of paupers since 1688 - - - 191 Wages paid by poor-rate ..-..- ib. Particularly in agricultural districts - - - - 1 93 Computed amount of the rental of land and houses assessed to poor-rate 194 3 XV111 (JONTENTfc. Page Comparative comfort of the labouring classes at different periods 195 Is our poor-law system beneficial to the lower orders ? - 196 Repeal of taxes on the necessaries of life - - - 197 CHAPTER VII. Population. Penury of early ages - - - - - * 201 Effect of increasing population - 202 Gradual transition from penury to comfort - - - 203 Is the amount of subsistence limited by physical causes ? - 205 Average increase of population - - - 206 Comparison of the present with former periods in history - 208 Leading ideas of Mr. Malthus and Mr. S. Gray - - 210 Progressive increase of population in Europe; — effects of climate and soil -------- 211 Effect of easy communication - - - - - 212 Effect of the Protestant Religion - - - 213 Population per square mile ; Holland and England - - 214 Austria, Prussia, and Poland ; France- - - - 215 Chief towns of France and England ; their comparative population 217 Ireland ; Italy ; Spain - ib. Connexion between the increase of population and increase of na- tional wealth - - - - - - 219 Effect of increasing population on the wealth of individuals - 220 Comparison of public burdens in different parts of Europe - 222 Rural population ; its stationary condition - 223 Wealth of town population ----- 224 Subsistence more easy of acquisition as society advances - 226 Cultivation becomes extended throughout a diversity of soil and climate 228 Progress of agricultural improvement - ib. The comforts of the lower orders increase as society advances 229 Population ought to be left to its natural course - - 230 Statistical table of Europe in 1823, viz. the comparative taxation and population of different countries - - - - 23 1 Their surprising increase since the 16th century - - 234 Prospect of continued increase on the Continent - - 235 In England a still greater prospect - 236 CHAPTER VIII. On the National Revenue and Capital. Property annually created in Great Britain and Ireland - 237 Table of our present taxable income - 238 Its increase since 1792 - 240 Connexion between the increase of our numbers, and that of our na- tional income - - - - - - 241 How far is the former a basis for the computation of the latter? 242 Fluctuations of income since 1792 - 243 An estimate of them attempted - 244 Tabular statements of our national revenue since 1792 - 246 Our public burdens ; their proportion to our resources since 1792 247 France ; her national income compared with that of England - 249 CHAPTER IX. Effect of the War on Property, individval and national. Difference of opinion among political economists - - 2^ Mr. J. B. Say, JYIr. S. Gray, Mr. Ricardo - - - «,. CONTENTS. XIX Pagft Losses to our productive industry in the beginning of the war - 254 Burdens incurred during the war - - - - 256 Deduction from the apparent amount of these burdens - - ib. Taxation of other countries ----- ib. Our war taxes ; tithe ; poor-rate - 257 The national debt ------ 259 Effect of a state of war on the habits of individuals ib. Losses on the transition from war to peace - 260 Magnitude of the change - - - - - 261 Similar distress in foreign countries - 263 Temporary revival of activity in 1818 - ib. Our probable situation had peace been preserved - - 264 The late wars examined by moral considerations - - 265 Comparative estimate of our taxable income in 1813 and 1823 - 269 Explanatory remarks on this estimate - 270 Reduction of income since the peace - - - - 272 Comparative pressure of our burdens in war and peace - 273 Effect on our public debt of the rise in the value of money - i6. Have our public men, since 1793, understood our financial situation ? 275 Mr. Pitt ------- 276 The successors of Mr. Pitt ----- 278 The Opposition ------ 280 Strictures on the education of our public men - ib. Their conduct of the late wars ----- 283 of our internal affairs - - - - 284 CHAPTER X. lvalue of Money. Section I. Fluctuations in the Value of Money. Tracts published on this subject - - - - 286 Historical sketch of such fluctuations - - - - 287 Effects of a state of war ----- 288 Can fluctuations be prevented in future ? - - 290 Causes which affect the value of money - - - 29 1 Supply of specie from the mines - - - - ib. Circulation of bank paper ----- 292 Supply of agricultural produce - - - 293 Probable effects of a state of war - - - - 295 Injurious consequences of these fluctuations - 296 Particularly on annuitants ----- 297 Section II. Plan for lessening the injury from Fluctuation, and giving a uniform Value to Money Incomes. A table of reference for time contracts ... 300 Effect of the proposed plan on the labouring classes - - 302 Effect of such a plan on agriculture - 304 on tithe ----- 305 on the public funds and government annuitants 307 Objections answered ------ 308 Concluding remarks - - - - - -310 XX CONTENTS. CHAPTER XI. Our Finances. i*age The national debt ------ 312 Fluctuations in the price of stock since 1720 - - - 313 Mr. Pitt's administration - - - - - 314 Reduction of the five per cents. - - - - 316 Our other financial measures since 1815 - - - 317 The sinking- fund ; its limited operation - - - 318 Compound interest a delusion ----- 321 Advantages of a low rate of interest of money • - - 322 Objections to a large sinking fund - 323 Estimate of our annual expenditure - 324 Stockholders ; distinction between permanent and temporary depositors 326 Comparative taxation of England and France - - - 329 Section II. Our prospects in Commerce and Finance. Probability of continued peace - - - - 331 Causes of war that no longer exist - 333 Our prospect of augmented resources - 335 Computed increase of our national income - - - 337 Its surprising increase in the course of last century - - 338 Parallel of the resources of England and France - - 340 Section III. Views of Finance suggested by our Situation and Prospects. How far is taxation a cause of embarrassment ? - - 344 Tabular statement of our taxes - 346 Examples of injury from taxation ; in the distillery ; insurance ; ship- building - . - - - - 347 Relief that would arise from a reduction of taxes - - 349 Objections answered - - - - - - 351 M. Neckar ; his plan of finance - 353 The question of a small annual loan in lieu of taxes : State of the monied interest ----- 355 Transmission of capital to foreign countries - - - 356 Would the proposed loan affect the rate of interest ? - - 359 Would it affect the price of stocks ? - - - - 360 Limitation to borrowing ----- 352 The bill for transferring half-pay and pensions into long annuities 363 Mr. Pitt ; his ability in finance .... 354 The period from 1784 to 1793 365 Conclusion ; a summary of the work - 367 Subjects which remain to be treated - - - - 369 CONTENTS. XXJ CONTENTS OF THE APPENDIX. CHAPTER II. The late Wars. Page Our war expenditure in the form of taular statements - - [1 ] The war of 1 793, distinguished from that of 1 803 - - [3] A simliar statement of our exports, and an explanation of the custom- house term, " official value" - [4] Our exports greater since 1814 than during the war - - [5] Decline in the price of manufactures since 1818 - - [7] The present prices of manufactures compared to those of the reign of King William ------ ?'&, Taxation ; its effect on trade ----- [8] CHAPTER III. Rise of Prices during the War. Lower orders: table of their family expenditure since 1792; — the country labourer ------ [9] The town mechanic ------ ib. The middle and higher classes ; similar fluctuations in their family ex- penditure - - - - - - - [10] Proportion borne by each head of expense, (food, clothing, and lodg- ing,) to the total of family expenditure - - - [11] Comparative situation of the lower orders in war and peace - [12] Effect on housekeeping, of a rise in the price of corn - - ib. -— in the rate of labour - - [13] of a depreciation in our paper cur- rency ------- j£ # Annuitants on mortgage - - - - - [14] CHAPTER IV. Currency and Exchange. On the amount of Bank of England notes in circulation - [15] Uncertainty of inferences from such amount - - - [16] Fluctuations in the circulation of Bank of England Notes - [17] Circulation of country banks ----- $ # The exemption from cash payments ; its effects - - [lg] The time of its operation - - - - - [191 Discounts ; their increase explained - ib. The rate of interest ; its rise prevented by the exemption act - [20] This act considered as an economizing expedient - - ib. Remarks on the Bullion Committee - [21] Questions at issue between their supporters and opponents - [23] Connexion between the circumstances of our agriculturists and the circulation- of country banks - - - - [£4] The power of banks overrated - [25] Inefficacy of an exemption from cash payments in peace - ib. Mr. Peel's Bill - - - - - - [26] Publications on the subject of exchange : Mr. J. R, M'Culloch ib. X3B1 CONTENTS. CHAPTER V. Our Agriculture. Page Effect of increasing population on the price of corn - - [29] Not understood by the Agricultural Committee of 1821 - [30] National disadvantage of a high price of corn ib. Subsistence not enhanced by increase of population - - [32] Uncertainty of speculative opinions - ib. Arguments in favour of a free trade in corn, by Mr. Bannatyne, Colonel Torrens, and Mr. M'Culloch - [33] Computation of Poor-rate and Tithe - [35] Connexion between increase of population and increase of tithe [36] The same in regard to rent of land - ib. Comparative burdens on British and foreign agriculture - [39] A protecting duty ; evidence of Mr. Tooke - ib. Reasons in support of that evidence - [40] Competition of Continental agriculturists - - - [41] Probable limitation of our corn imports in peace ib. Opinion of Mr. Ricardo - [43] A protecting duty ; ought it to be suspended in a dear season ? [44] Observations of Mr. S. Gray on the Corn Trade - - [45] The case of Tenants on lease, and of Debtors on mortgage - ib. The question of inference by courts of justice - [46] Dr. Smith on agricultural improvers • - - [47] Value of land during last century - - - ib. Price of wheat on the continent and in England previous to 1793 [48] Average prices of our corn in 1822 - [49] Exports of corn since 1697 ----- ib. The Agricultural Report of 1821 ; abstract of its contents - ib. Remarks on that Report - - - - - [51] Corn-law of 1822; abstract of its provisions - - - [53] AdditionaHabour bestowed on tillage since 1814 - - [55] CHAPTER VI. Our Poor-rate. Tabular statements of poor-rate for England and Wales - [57] The same for the metropolis ----- [58] Highway, church, and county rate - [59] Report of 15th July 1822, on the poor-rate returns - - to. CHAPTER VII. Population. Employment ; its subdivision as society advances - - [60] Its minute division in a great city - National income apportioned among different classes - - [62] Population ; ratio of its increase in different stages, as society advances [63] The mercantile or manufacturing stage - [64] Effect of the enlargement of farms - [65] Effect of machinery ------ ib. Great increase of population in the present age Proportion of marriages to the whole population - - [67] Deaths ; decrease in their proportion - - - - ib. Counties of England and Wales ; their comparative extent productive power - - [69] — their rank in density of population [70] Census of 1821 : the increase since 1811, exhibited by counties [71 ] CONTENTS. XX111 Page Increase of our principal towns - - - [72] Distribution of our population into classes, and comparative numbers of each ------- ib. Superior increase of town population - [73] In what manner do population returns indicate an increase of na- tional wealth ? - - - - - [74] Census of England in 1377 ----- ib. CHAPTER VIII. Our National Revenue. Ts our consumption equal to our production, or how far is there an annual addition to national income ? - [75] A table of our annual consumption - [77] Proportion of national income exempt from taxation - - [78] Case of Ireland ------ ib. of France ------ [79] National capital ; estimate of it in 1792, 1812, 1822 - - [82] Public burdens in the present year (1823) discriminated into taxes, poor-rate, and tithe - - - - - [85] CHAPTER X. Fluctuation* in Money. Abstract of Sir G. Shuckburgh's table' - - - [85] Comparison by Arthur Young, of the prices of the 17th and 18th centuries ------- [86] Progressive prices of several articles of manufacture ; of horses and cattle ------- [87] General progression of prices since the 13th century - - [88] Annual consumption of gold and silver computed - - [89] Comparative rate of prices in France and England - - [90] M 'Culloch, (Mr. J. R.) on the price of corn throughout Europe [92] Expense of a country labourer's family, and of one of the middle classes - - - - - - [93] Constituents of a table of national consumption - - [94] Farther remarks on a table of consumption - - - [95] The table adapted to farmers on lease - [97] 1 ■ — ■ to the lessees of mines - - - ib. to clergymen ... - £983 Objections answered ------ ib. Letter from a Hampshire farmer - [99] Mr. Tooke on " high and low prices since 1792" - - [101] CHAPTER XI. Sinking fund ; the supplies which constitute it - - [101] The nominal sinking fund - - - - - [102] Comparison of our present burdens with those of 1792 - [103] The malt tax - - - - - - - [104] Price of commodities a century ago - ib. Backward state of France as described by Mr. S. Gray - fl05l / CHAPTER I. Events of the War viewed in Connexion with our National Resources, In appropriating a portion of our volume to mili- tary events, our object is to direct the reader's atten- tion to the effects produced by them on our finances and national industry: — to enlarge on the occur- rences of a campaign or on the policy of cabinets, would be, in a great measure, foreign to our purpose. In some respects, however, the two departments of inquiry are connected, the effect of our military operations having been repeatedly felt by our ex- chequer, and requiring of course frequent notice in the subsequent pages. It seems advisable, conse- quently, that our reasoning should be preceded by a brief sketch of the events of the war ; an outline to which reference may be made from the subsequent chapters, whenever we shall have occasion to allude to the connexion between the state of our finances and the aspect of a campaign. Such a narrative, however cursory, will necessarily lead us over beaten ground ; but we are not without hopes of introducing, particularly in regard to France, occasional remarks that are not altogether familiar to the public. War of 1793. — Nothing would have induced Mr. Pitt to take part in the coalition against France, ex- cept a hope that the contest would have been brought to an early conclusion, and himself left at liberty to pursue those measures of finance which had begun to wear so promising an aspect. His apprehension of France could be only of apolitical nature ; a dread of the example of insubordination gaining ground-, and of rank and property becoming endangered. In a military sense, France was far from formidable : her 4 26 War of 1793. army, in 1792 # , did not exceed the usual peace esta- blishment of 130,000 men, and its strength was great- ly impaired by the emigration of its principal officers, as well as by the general relaxation attendant on a continental peace of thirty years. Her navy having occupied the attention of goverment during and after the American war, was in a better state than usual ; but its efficiency was impaired by the general disor- der of the country, and its aspect was certainly far from offensive. Under these circumstances our government, though in intimate communication with the powers that had taken up arms against France, delayed for some time joining the coalition. The recall of our ambassador from Paris was postponed till the insurrections of autumn 1792, and the subversion of the royal authori- ty ; nor did our prepartions for war commence till towards the end of the year. This caution on our part, and the impetuosity of the ruling faction in France, caused the declaration of war to proceed in the first instance from Paris, and created a general belief in this country that the French were the ag- gressors. A speedy termination in favour of the al- lied powers was promised as well by general appear- ances as by the early events of the war, the French being soon repulsed from the Dutch frontier, and some time after from the Netherlands, while their intestine divisions rose to a height that threatened the downfall of the republican system. A short time, however, sufficed to show the fallacy of judging from appear- ances, and of listening to representations so partial as those of the emigrants. The great majority of the nation, without cherishing either personal hos- tility to the Bourbons or schemes of foreign conquest, were strongly attached to the Revolution. They had long felt the want of a representative assembly, and regarded themselves as checked in the career of honourable ambition by the preference shown to the privileged classes. Without any distinct conception * .fomirii suV le^grandes Operations Militaircs. Vol. V. War of 1793. 27 of the checks requisite to good government, they en- tertained a sanguine hope that the revolution was about to prove a remedy for all their grievances. In such a state of national feeling, the resistance to invasion would probably have been equal, what- ever had been the result of the intestine divisions of France. Had the Jacobin party been kept under by the Girondists, the strength of the country would still have been called forth ; the property of emigrants confiscated ; circulation given to the assignats, and military levies enforced on a large scale. It was in the autumn of 1793, and in the early part of 1794, that these potent levers were made to display all their en- ergy. They sent forth armies, which, without being so numerous in the field as was generally imagined, were assured of an ample supply of recruits ; an assu- rance that justified the new plan of rendering a cam- paign a reiteration of attacks, on the calculation, that, whether successful or not, the country which should be able to call the greatest numbers into the field, would eventually triumph. Such, with a few qualifica- tions, were the operations of 1793 and 1794 : opera- tions in which the national impetuosity was called into full display ; but the command being frequently plac- ed in unskilful hands, the lives of men were exposed with unexampled rashness. The result of continued sacrifices on the one side, and of feeble generalship, of deficient concert, on the other, was that, in the early part of 1795, a total change took place in the aspect of the war. By that time, France had acquired both the Austrian Netherlands and the Dutch provinces, was on the point of concluding peace with Prussia and Spain, and reckoned only Austria and England as her opponents. From this time forward, we may believe with con- fidence, that Mr. Pitt deeply regretted that France had been attacked, and the nation driven to exertions so pernicious to its assailants. He saw that revolu- tionary contagion was no longer to be dreaded ; the credulity of the French, their absurd extremes, their repeated changes, their sacrifice of one party to the 28 War of 1793. other, having brought complete discredit on their politics. His objections to peace, very different from those of 1792, were now of a military character: — to negotiate with France would have been to acknow- ledge inability to resist her ; to leave the Netherlands in her hands, would have been to concede that against which we had contended for a century. He deter- mined, therefore, to continue the war, with the aid of Austria; and the exertions of France might have been equalled, perhaps surpassed, by the two allied governments, had they possessed the knowledge they afterwards acquired ; had England directed her chief resources to continental warfare, and had the Aus- trians opened their eyes to their errors in tactics. The numbers of the French were now less over- whelming than in the time of the assignats ; but their efficiency was greatly increased, their soldiers had become well disciplined, and a number of intelligent officers had been formed. Their system of reiterated attack was continued ; the national ardour was kept in full exercise ; and to the audacity of the first years of the revolution was added, under the command of such men as Bonaparte, Moreau, Kleber, Hoche, De- saix, the advantage of scientific combination. It is to superiority of generalship more than to superiority of numbers, that we should attribute the reverses of the Austrians in 1796 and 1797, followed by a peace (Campo Formio) of which the preliminaries were signed when three armies were in march to their capital. What in these early years of the war was our situation in regard to financial supplies? A state of war creates a sudden demand for money, by superadding what may be termed the mercantile operations of government to those of individuals. The call for arms, clothing, and military stores, forms a new demand on the manufacturing industry of the country, while the drain of men for the public service, enhances both wages and salaries. On the part of individuals, there takes place a decrease in certain branches of industry, a relinquishment of un- War of 1793. 29 dertakings which can be carried on only by cheap labour, or a low interest of money ; but the diminu- tion, in one sense, is by no means proportioned to the increase in the other. Hence, a rise in the rate of interest, and a difficulty in borrowing, even at an advanced premium. Of such difficulties, and of the expedients adopted to meet them, we have had re- peated examples, in our history, during the last cen- tury and a half. It was in the reign of king William that England first took a part in continental war, on a scale of great and continued expense ; and that reign was accordingly the era of the imposition of the land-tax, of the establishment of the bank of Eng- land, and of the first currency of its paper. It unfortunately happened that the demand for money in the early years of the wars of the present age, was coincident with unfavourable seasons, our crops, both in 1794 and 1795, being insufficient for our consumption. Hence, a necessity to export coin for the purchase of subsistence, as well as for military purposes; and hence those embarrassments so se- verely felt in the mercantile world during 1793, 4. 5, 6, and from which we were not effectually relieved until 1797, when there occurred both a diminution of our continental expenditure, and a general accept- ance, at home, of bank paper for coin. At this time, England stood alone in the conflict, and the state of our finances was far from satisfactory; but our navy had in the course of the year (1797) achieved a double triumph, and the war becoming strictly maritime, our attitude, like that of France in 1794, showed all the advantage possessed by a nation, when combining its resources on its proper element. The confidence thus inspired, and the spirit roused by the extravagant ambition of the French go- vernment, enabled Mr. Pitt to meet our pecuniary difficulties, by a recourse to the plan which we shall develope presently, that of raising supplies within the year ; a plan to which, still more than to the sub- stitution of paper for coin, was owing to the surpris- ing increase that took place in our financial receipts. 30 War of 1793. The year 1798 will long be remembered by those who distinguish particular epochs in a great contest, as one of favourable commerce, of improved ex- changes, of an abundant harvest, and of relief from the dread of invasion. The French, discouraged by our naval array, and by the failure of their expedition against Ireland, made a tacit acknowledgment of the hopelessness of an attack on England, by directing their disposable force to Egypt. The absence of this army, and our victory at Aboukir, revived the hopes of the Austrians, who regarded the existing peace as a truce, and who have, throughout the present age, shown themselves so prompt to second our efforts, and to take up arms against France. The year 1799. — We come now to what is termed the third coalition, or the third time that the allied powers commenced operations by land in the hope of either changing the French government, or reco- vering a portion of lost territory. In adverting to these remarkable eras in the contest, it is fit to recol- lect that the aggressions were not on the part of France, and that, with the exception of 1792, Eng- land was the author and main-spring of every suc- cessive coalition. Had this been openly avowed, it is probable, that in those days of alarm the majority of the public would have approved of an offensive system of war ; but it is the well known rule of cabi- nets, and, of course, of their supporters, whether in parliament or connected with the press, to avoid such admissions, and to throw, as much as possible, the odium of attack on the enemy. At present, such re- serve is needless ; the question is to be viewed his- torically, and the point is merely, whether there ex- isted, on the ground of justice and policy, sufficient reasons for calling the continent to arms, and for en- countering the hazards of a conflict by land ? As usual in such discussions, we shall find much to ad- vance on either side. The dread of revolutionary infection had by this time disappeared ; the French themselves had suffered cruelly from their experi- War of 1793. 31 ments in government, having felt all the instability, all the division and party violence attached to the republican form. But while the majority of our countrymen had dismissed the apprehension of poli- tical contagion, they had, in a military view, urgent motives for hazarding an appeal to arms ; they enter- tained the hope, that, with the co-operation of Aus- tria and Russia, we should succeed in expelling the French from Italy, and in recovering the Netherlands. These hopes, whether on the whole justified or not, received confirmation from the events of the first part of the campaign of 1799 : the Austrians took the field with augmented numbers and an improved sys- tem ; the repulse of the French in every direction, in Germany, as in Italy, proved the danger of neg- lecting their military establishment, and of the prac- tice which had begun to show itself for the first time since the revolution, of appointing generals by favour. But in the autumn of the year new levies took the field, and abler chiefs commanded ; the war changed its aspect ; a few months produced the defection of the fickle cabinet of Russia from the coalition, and consolidated the executive power of France in the hands of Bonaparte. The campaign of 1800, though opened by the Austrians with confidence, soon showed their inability to contend with their antagonists ; and on the conclusion of the second continental peace, (Luneville,) England was once more left alone in the conflict. Few periods of the war presented a more gloomy combination of circumstances than the early part of 1801. — Austria humbled, Russia hostile, Denmark and Sweden following her example, and reviving the menace of the armed neutrality ; while at home a double failure of harvest had produced a scarcity and rise of prices, which, in some parts of the country, re- sembled the privations of our ancestors in the latter years of Elizabeth, or the sufferings of France after the dreadful winter of 1709. On the other hand, the value of our paper currency was but slightly affected, our navy possessed the undisputed command of the 32 Our Situation at the Peace of Amiens. sea, while our army had improved equally in strength and numbers: hence, the success of our attack on Copenhagen, and our brilliant exploits in Egypt. Still the expediency of peace was apparent ; our financial resources had been stretched to the utmost; there remained no definite object of warfare, and no co- operation could be expected from the continent. — These considerations were felt by our leading mini- sters ; and, in concurrence with an apprehended di- vision in the cabinet, or a sense that the same ministry could not suitably negotiate with a government so long the object of its invective, led to that retirement of Mr. Pitt from office, which many persons still good- naturedly ascribe to his difference with the king on the Catholic question. Thus ended the first great contest of our age, a con- test, of which the most remarkable feature was, its placing the two leading powers successively in oppo- sition to a confederacy, and baffling, in the case of each, the confident calculation of politicians. France, in 1793, could not, in the opinion of these persons, avoid sinking under the coalition; England, when left alone, in 1797, had, in their view, no alternative but a speedy peace. They were more correct in as- serting that no war had afforded an example of such sacrifices ; of men on the part of France, of money on the part of England. The losses of each seemed of a nature to produce exhaustion, yet each conti- nued capable of prolonging or renewing the conflict. Each had obtained brilliant success, and added largely to its territorial possessions ; but the acqui- sitions of France, at least in the Netherlands, were more compact, and more calculated to add strength to the state, than our dazzling but insecure conquests in the East and West Indies. Our Situation at the Peace of Amiens. — What, it may be asked, were the chief differences, in our condition at the peace of 1802 and that of 1814 ? The financial and commercial evils that have since pressed so hea- vily on us, existed in 1 802. but in a very mitigated Our Situation at the Peace of Amiens. 33 ibrm. The interest of our public debt, (£] 8,000,000,) was great, but not enormous ; our total expenditure, had peace been confirmed, would not have much ex- ceeded £30,000,000 a year. The value of our cur- rency, though shaken at a particular period, (1800 and 1801,) had been reinstated without much injury to the public; and our customers on the opposite shore of the Atlantic, though affected by the transition of Europe from war to peace, were by no means so disabled from paying for our exports as at the peace of 1814. Still our agriculturists felt the sudden change from high to low prices ; our merchants were embarrassed by the surrender of the conquered colo- nies, and had the reduction of our military establish- ment been permanent, we should have experienced, in 1 802, no small share of the embarrassment of late years : it would have been similar at least to that so faithfully described by Sir W. Temple, as affecting the productive industry of Holland, after the peace of 1648. These complaints, however, had hardly assumed consistency, when the public were roused to new alarms : in France, a ruler whom no power could satisfy ; in England, a ministry who followed, instead of leading the public voice, were respectively the authors of an abrupt renewal of war. Seldom has an appeal to arms been made with less of a direct motive or definite object : Malta was too insignificant to form a ground of war ; the real cause was of a general na- ture, and to be sought in the encroachments of Bo- naparte during the interval of peace, in the resent- ment roused by his aggression on Switzerland, and the obstacles opposed to our trade with France. Our ministers could not consider the moment favourable for attempting to recover the independence of the continent; they acted in concert with none of the great powers, and the experience of the past was altogether adverse to hopes founded on a coalition. They knew, however, that our financial resources were lara;e, that the chances of a naval contest were 34 WarofmrX in our favour, and that we should in any event prevent the increase of the enemy's marine. War of 1803. — During two years the contest was strictly maritime, and the demand on our circulating medium, for subsidies or the purchase of corn, being slight, our paper currency maintained its credit. The public attention was closely fixed on the project or pretended project of invasion. But in 1805, the growing discontent of the Russian cabinet with Bona- parte, and the well-known hostility of Austria, in- duced our government to form a new coalition. Our allies began the war with sanguine hopes, but found it vain to attack a great military state, conducted by a single head. The result would have been alarming even to this country, had it not, by a remarkable counterpoise of fortune, been coincident with a na- val victory, which fairly put at rest the question of invasion. It was under these circumstances of alternate dis- appointment and success, that Mr. Fox began at Paris the negotiation of 1806, a measure by no means sanctioned by the majority of our countrymen. The offers of Bonaparte, towards the close of the confer- ences, would perhaps have been satisfactory on the score of territorial cession, had they not, when view- ed in concurrence with his other projects, appeared to our ministers little else than a link in the chain of aggression ; an expedient to procure not a peace, but a truce. War was accordingly renewed, and by land, vic- tory continued faithful to France : the events of the campaigns of 1806 and 1807, were subversive of the remaining independence of Germany, and by giving France the co-operation of Russia, seemed to leave her without a rival on the continent Under these circumstances, our only safety lay in our naval supe- riority, and the war was proceeding without any de- finite prospect or favourable opening, when Bonaparte committed his first great political error. Hitherto, in his successes, he had shown more moderation, at War of 1805. 35 least apparent moderation, than might have been expected from one so little advanced in years, and so confident in his general calculations. He now. however, forgot the dictates of caution, turned his aggression to an unoffending quarter, and by his manner of inveigling the royal family of Spain, excited not only the indignation of foreigners, but general surprise and dissatisfaction among the French, who were heartily sick of war, and coveted no possessions beyond the Pyrenees or the Alps. It is a truth, by no means sufficiently understood in this country, that the French people at no time participated in the rest- less ambition of their ruler : their views in regard to territory were limited to the Belgic provinces, and those they desired not on political grounds, not from a wish to overawe Holland or threaten Germany, but from considerations chiefly commercial, from simi- larity of language and habits, vicinity of position, and the non-existence of physical barriers. So far from being animated by that eagerness for war which so many on our side of the channel ascribe to them, the French regarded themselves as the greatest suf- ferers by the sanguinary contest, and were taught to ascribe its prolongation to the ambitious views of our cabinet. The war in Spain, varied as was its success during several years, proved the first great scene on which the hitherto victorious armies of France were effec- tually resisted. That power of combination, that skill in generalship, which, in the present age, has been so little conspicuous in the military opponents of France, which, in the long struggle of the Austrians, was remarked in only two campaigns, (1795 and 1799,) was here called into action, and directed against the enemy both the discipline of the British ,. and the national antipathy of the Spaniards. This war was remarkable as the first in which Bonaparte did not, on the appearance of serious resistance, for- sake his capitol, and bring the contest to a decisive issue. In 1810, the humiliation of Austria and Prussia left him at iibertv to recross the Pyrenees ; bu< to the 36 War o/1803. surprise of France, as of the continent in general, he allowed his army to remain long in an indecisive posi- tion before our lines at Torres Vedras, and eventu- ally to retreat. This signal repulse was followed by symptoms of resistance in a new quarter. Russia, alarmed for her independence, and taught, by the success of our Portuguese campaign, the means of baffling by defen- sive operations, an enemy hitherto accounted irre- sistible, no longer concealed her hostility to France. Bonaparte passed a year in forming his gigantic plan of invasion : it failed, as is well known, less from direct opposition than from physical causes ; and that over-confidence on his part, which we trace on so many occasions, and at such different periods of his career — at Arcole, at Acre, at Aspern, and finally, at Waterloo. The loss of the Russian campaign and of the flower of the army, however disastrous in a military sense, did not give so great a shock as the public in Eng- land anticipated to the power of Bonaparte in the interior of France. The nation was in affliction at the extent of the bloodshed ; but this feeling was overborne, at least in the middle classes, by the dread of a counter-revolution, and the return of the old abuses — the privileges of the noblesse, the ascen- dancy of the clergy. During 1813, the general wish was, not for a change of dynasty, but for a change of system under the existing ruler. No insurrection took place, no resistance was made, or even attempt- ed, to the enormous levies of men and money, during that year ; nor was it till renewed disasters, and the loss of all Germany, that the public began to contem- plate the possibility of the return of the Bourbons. Even in 1814, the operations continued without any rising in favour of that family, or any defection of the military from their leader, till after the surrender of Paris, the possession of which has, throughout the whole of the French revolution, enabled one party to give law to another. This unconsciousness of the real character of Bo- War of 1803. 37 naparte, this credulity in hoping a pacific system from one so long accustomed to war and usurpation, must appear not a little singular to the untravelled part of our countrymen. But those among them who visited France in 1814, had ample opportunity of observing that the name of the late ruler was seldom mentioned with reprobation, and that when, from the decided royalists, they happened to hear language to that ef- fect, it was unaccompanied by any knowledge of the secret springs of his policy, or, indeed, by any attempt to develope his character. This was, in fact, a task too complicated for the reasoning habits of our southern neighbours; they knew and lamented his propensity to war ; but his di- plomatic art, his Machiavelian policy, surpassed their analysing powers, unaided as they were by the light of a free press. Nor was it until his sudden return from Elba, when the peace so long desired and so recently obtained, was wrested from them, that the French (we speak here not of the military nor of the party lea- ders, but of the bulk of the nation,) gave a loose to resentment, and connected with his name that charge of faithlessness, that suspicion of criminality which we, during so many years, had accounted insepara- ble from it. The reverses of the French arms occurred most opportunely for our finances, as shall be shown when we treat of the depreciation of our currency ; but before proceeding to that, the proper object of our research, we shall bestow a few sentences on the eventful character of the military history of the pe- riod. Alternations of success. — No contest was ever marked by greater variety of fortune, or more chequered by vicissitudes, the effect of which was, at one time, to check sanguine expectation, at another to prevent des- pair. The Netherlands recovered in 1793, were again lost in 1794; the successes of the Austrians in 1795 were more than balanced by their disasters in the two following years. In 1 799 the revived strength 38 War of 1803. of that power, and the co-operation of Russia, led to a brilliant campaign, producing the recovery of Italy, and inflicting severe losses on the French ; but for- tune once more forsook the allies, and obliged them to conclude at Luneville a treaty on conditions which left France the leading power on the continent. In our second appeal to arms, our hopes were raised in 1805 by the co-operation of the great con- tinental powers ; these hopes were blasted at Ulm and Austerlitz, but despondency was prevented by our victory at Trafalgar. Next year, the fatal day of Jena, and the conquest, rapid beyond example, of the Prussian dominions, would have excited great alarm, had not our courage been sustained by a suc- cessful resistance at Eylau, and by a confident esti- mate of the power of Russia. These favourable ex- pectations were shaken by the events of the cam- paign, the treaty of Tilsit, and more than all, by the increasing connexion and community of purpose be- tween the French and Russian cabinets. The close of 1 807 was consequently a period of gloom ; for the capture of the Danish navy, and the issuing of our Orders in Council, could afford satisfaction to those only who were incapable of appreciating the odium inspired by the one, and the disastrous effects likely to result from the other. A more substantial ground of hope was afforded in the ensuing year by the attack on Spain, the general resistance which it provoked, the still more general hatred which it roused. The repulse of the French from the southern and central parts of Spain, and the success of our troops at Vimeira, the first general ac- tion on land that we had fought during the war, con- firmed these flattering impressions; but they were unfortunately clouded by the repeated defeats of the Spaniards in the winter, and the retreat of our army to Corunna. Next year opened with the arming of Austria, and with some successful operations in the Peninsula, but the battles of Eckmuhl and Wagram, the failure of our Antwerp expedition, the second retreat of our army from Spain, cast a gloom over the War of J 803. 39 aspect of affairs, which continued during the whole of 1810. At that time the contest presented no expectation of a favourable issue; the Spaniards were inefficient and divided ; the northern courts, if not unfriendly, were unable to hazard co-operation with us ; and our bank paper, after having during the preceding seven years maintained its value with almost all the stability of a regular currency, now gave way before the triple pressure of corn imports, foreign subsidies, and a sus- pension of our accustomed receipts from the Conti- nent of Europe on account of American merchants. Our exports to the United States had been, for the most part, paid by remittances in money from the Continent of Europe, and would, had we allowed their navigation to continue, have formed a fund ca- pable, in a great measure, of balancing our demands, whether for military expenditure in the south of Eu- rope, or for the purchases of corn in the north. But this truth was unfortunately unknown to the public, and imperfectly felt by ministers. We persevered in stopping the American trade, and thus deprived our- selves of a powerful counterpoise to the irregularity of our circulating medium. Our situation thus be- came replete with anxiety : from invasion we were secured by our fleet, but we dreaded to make peace, lest an interval, turned assiduously to account by our artful enemy, might shake even this last stay of our independence. On other grounds also, peace seemed unadvisable, for by this time Bonaparte had incorpo- rated a farther part of Germany with France, and shown himself equally blind to the lesson given by the resistance of Spain, and to the hazard of alarm- ing Russia. It was under these disquieting circumstances that we passed the latter months of 1810 and the begin- ning of 1811. The necessity of abandoning the Pe- ninsula was declared by many, and silently anticipa- ted by more, when the scene was unexpectedly changed by the retreat of the French army from Por- tugal, and by conflicts, which, if not altogether deci- 40 War of 1803. sive in our favour, were indicative of great improve- ment in our army. An intimation of a growing hos- tility on the part of Russia to France, now raised hopes of a higher kind — hopes which, after an inter- val, were confirmed by the memorable campaign of 1812. Still the period of vicissitude was not passed ; the expectation excited by the advance of the Rus- sians, and the zeal of their Prussian allies, were dis- appointed at Lutzen, Bautzen, and Hamburgh ; while our bank paper had fallen above 20 per cent., a fall involving the certainty of a loss to that amount on all the contributions we might make to the cause of the Continent, whether in Spain or Germany. It was. however, no time to pause ; circumstances had pro- duced an opportunity, such as had not occurred dur- ing the whole war, of restoring the equilibrium of the Continent : Austria had joined the alliance, and the inefficiency of the French levies was shown in their actions with the Prussians in Silesia. Ger- many was now delivered, and the French territory invaded, yet even then there occurred an interval of suspended hope ; the imprudence of Rlucher, and the prompt decision of Bonaparte, led to a check and partial retreat, which, to the public, assumed a se- rious aspect, when viewed in connexion with a ne- gotiation at Chatillon ; but the apprehension inspired by that real or ostensible negotiation, was soon dis- pelled by the evident superiority of the allies, and by the result of a movement, remarkable as indica- tive of the over-confident calculation of Bonaparte even under disaster ; we mean his march to gain the rear, and cut off the retreat of his enemies — a ma- noeuvre that might have been followed by success if at the head of such armies as he commanded at Ulm and Jena, but which, with the feeble means at his disposal in 1814, served only to embolden his oppo- nents, and accelerate the loss of his capital. 41 CHAP. II. Magnitude of our Expenditure. The Sources of our Financial Supplies. After this brief sketch of military events, we pro? eeedto the proper object of our inquiry, the expense incurred by the war, the resources by which it was supported, and the cause of our financial embarrass- ments since the peace. In this we are aware that we venture on difficult ground, and attempt a question of more than usual complexity. War, accounted in for- mer days a season of embarrassment and poverty, as- sumed in the present age the appearance of a period of prosperity. It closed, indeed, with a great addition to our permanent burdens, but with an increase of national income, which seemed fully to counterbal- ance it, and to confine our loss to that of our brave countrymen who had fallen in the struggle. Peace, we thought, was about to bring a consolidation of the advantages earned in battle and sanctioned by treaty, but the result has been widely different : every suc- ceeding year has discovered some financial difficulty, some fresh defalcation in our national resources. — The causes have as yet been by no means satisfacto- rily explained, either in or out of Parliament, and the contradiction between what was expected, and what has actually taken place, implies the prevalence of much popular error, as well as the necessity of an attentive and anxiously-balanced inquiry. This inquiry we may hope to divest, in some mea- sure, of its complexity, by proceeding step by step, and dividing our subject into separate heads. The first point is to form a distinct idea of our war ex- penses, as well the annual charge as the aggregate for the whole contest ; a calculation as yet familiar to few persons on account of the magnitude of the sums. 6 42 Magnitude of our Expenditure. the detached manner in which they are generally brought before the public, and the complexity of our finance accounts, which have hitherto presented, in the sinking fund, an apparent surplus, and, under the head of supply, an apparent deficiency. In the early years of this memorable contest, minis- ters were almost as little aware as the public of the extent to which the national contributions could be carried, and the increase of our expenditure was, consequently, gradual. Taking the total money raised by loans and taxes, but deducting from it 18,000,000/. annually, as the probable expenditure of Great Bri- tain and Ireland, had peace been preserved, we find the following result : — ( Sums annually raised for the War of 1 793. 1793 £ 4,000,000 1798 £29,000,000 1794 10,000,000 1799 36,000,000 1795 18,000,000 1800 36,000,000 1796 26,000,000 1801 45,000,000 1797 35,000,000 1802 44,000,000 These sums are properly the amount raised, not the amount expended in each year : still they convey a fair idea of the annual cost of the war. Their great increase, in the latter years, was owing to several causes ; the augmentation of our establishments, the depreciation of money, and consequent rise of pay, stores, &c. ; and finally, to the accumulation of inte- rest on the expenditure of all the preceding years. Such was the war of 1793, a war exhibiting an ave- rage expenditure of 27,000,000/., which, though nearly double that of any preceding contest, was destined to be surpassed both soon and in a very great de- gree. Sums raised by loans and taxes for the war of 1803, after deducting the portion appropriated to Ireland, and allowing 22,000,000/. as the total of our probable expenditure, had peace been preserved in 1793. 1803 - - ... £29,000,000 1804 - - - - - 40,000,000 1805 - - ... 52,000,000 1806 - - ... 50,000,000 1807 - - - * 56,000,000 Magnitude of our Expenditure. 43 1808 - - ... 57,000,000 1809 (War in Spain) - - - - 61,000,000 18 10 (Ditto)- .... 62,000,000 1811 (Ditto) ..... 66,000,000 1812 (War in Spain and Russia) - - 80,000,000 1813 (Warm Spain and Germany) - - 98,000,000 1814 (War in the French territory) - - 89,000,000 1815 - - - - - 86,000,000 Here also the increase was progressive; so ne- cessary was it, even in our day of enthusiasm, to wait until the machine of circulation became adapted to this new impulse. At last, our expenditure reach- ed a sum unexampled in the history of any country, ancient or modern. It is fit, however, to keep in mind two very material qualifications ; first, that the sums in the latter years are greatly swelled by the accumulation of interest on the previous expendi- ture; next, that after 1810, a large sum, fully 20 per cent, on our foreign disburse, is to be put to the ac- count of the depreciation of our bank paper. With these deductions, the expense of the unparalleled year of 1813 may be stated at 70,000,000/., and the other years reduced in a corresponding proportion. But after every subtraction, the amount of our expen- diture was surprising : for the whole contest it may be thus stated. Total money raised in Great Britain by loans and taxes, during the 23 years that elapsed, between the beginning of 1793 and that of 1816; (see Appendix;) about ...... £1,564,000,000 Deduct for the amount of our peace establishment and charges unconnected with the war, a sum, which, from the increase of our population and the necessity of en- forcing the collection of the revenue in Ireland, we reckon at somewhat more than the average expenditure of Great Britain and Ireland previous to 1793; making (see Appendix) an amount of about ... £464,000,000 Remainder, constituting the charge of the war, £1,100,000,000 The next question is, in what manner did govern- ment find it practicable to raise these unexampled sums ? Loans, the great resource in former wars. 14 Magnitude of our Expenditure. were resorted to during the early years of the con- test; thus — Money raised by Loans. 1794 - £11,000,000 1796 - £25,500,000 1795 - 18,000,000 1797 - 32,500,000 The last of these sums being great beyond exam- ple in the history of our loans, had the effect of lowering stocks in an alarming degree, reducing the 3 per cents, in 1797, below 48.* Mr. Pitt now felt the necessity of altering his plan of finance, and was led, as well by his characteristic confidence, as by the general increase of individual income attendant on the war, to adopt the very bold expedient of war taxes, or, as it was officially termed, " raising a large proportion of the supplies within the year." The success of this plan forms the grand feature of the financial history of our age : attempted at first on a limited scale, it was carried by the imposition of the income tax, to a large amount, and before the close of the war attained a magnitude almost incredible. Supplies raised within the year, being the net produce of our taxes, after deducting 18,000,000/., as the computed average of a peace establishment, and excluding all loans. War of 1 793. — During the first four years the war taxes were inconsiderable ; and in 1797, they were carried to only - - - - - - - £ 3,000,000 But in 1798, they were carried to 12,000,000 1799 - ----- 17,000,000 1800 -'.:••'- - - - - 16,000,000 1801 - - - - - - 17,000,000 1802 - - - - - - 19,000,000 War of 1803. — The produce of our annual supplies computed as above, with the exclusion of loans, but after deduction of a larger sum (22,000,000/., see Appendix) as the probable peace establishment : 1803 - £16,000,000 1810 - £45,000,000 1804 - 23,000,000 1811 - 43,000,000 1805 - 28,000,000 1812 - 41,000,000 1806 - 31,000,000 1813 - 45,000,000 1807 - 36,000,000 1814 - 48,000,000 1808 - 40,000,000 1815 - 48,000,000 1809 - 41,000,000 * Dr. Hamilton on the National Debt. p. 252. Magnitude of our Expenditure. 45 Respective Proportion of Loans and Taxes. Of the total sum of 1,100,000,000/. expended du- ring the war, the amount added to our permanent xlebt was 460,000,000/., so that the aggregate of the supplies raised within the year, amounted for the whole war to 640,000,000/., a surprising sum to be obtained by a mode of taxation almost unknown in foreign countries, and carried in former wars to a very limited extent among ourselves. The financial history of the war may be divided in- to three periods : First, the four years previous to 1797, in which our treasury was conducted as in former wars, with- out any innovation in regard to war taxes or paper money. Secondly, the interval from 1797 to 1805, in which we had both war taxes and non-convertible paper, but without greatly depreciating the one, or carrying the other to an extreme. Thirdly, the period from 1805 to 1815, in which the amount of the supplies raised within the year be- came enormous, and the depreciation of our paper, particularly after 1810, formed a very serious addition to our difficulties. We have thus exhibited a statement of our expen- diture, which, though brief, is, we trust, perspicuous, all complexities of redeemed and unredeemed stock, all distinctions of funded and unfunded debt, being excluded from our calculation, and the charge of the war considered only under the two great divisions of debt contracted and expenditure defrayed in the current year. Compared with these sums, how in- significant were the additions made to our public burdens by former wars. That of 1689, under King William, cost annually between 3 and 4,000,000/. and added in all 20,000,000/. to the national debt. Under Queen Anne, the flattering hopes inspired by repeated victories, led to a longer contest and larger outlay, carrying our annual expenditure to 5 or 6,000,000/. the addition to the public debt during the 46 The Sources of our Financial Supplies. war to somewhat more than 30,000,000/. In the less successful contest of 1740, our expenditure differed from year to year ; the addition to our public debt amounted to nearly 30,000,000/. In that of 1756, the augmented resources of the country, and the bold system of Lord Chatham, raised our annual expendi- ture to an average of 16,000,000/., the addition to our debt to fully 60,000,000/. The unfortunate contest with our colonies, and the war that ensued after 1778 with European powers, was attended with an average charge of 17,000,000/., and an addition to our debt of somewhat more than 100,000,000/. The total of public debt incurred in the course of a century was thus 240,000,000/., a sum which, however large, form- ed only the half of that which we have contracted in the present age. The Sources of our Financial Supplies. — The next and by far the most important step in the progress of our inquiry is, by what means and from what sources the nation was enabled to meet such unprecedented demands? In the opinion of many, the means were derived from the extension, or as it is commonly termed, our monopoly of foreign commerce. " The French revolution," said the late Arthur Young, # " burst forth like a volcano, and laid the industry, manufactures, and commerce of France, and eventu- ally those of the whole Continent, in the dust ; Bri- tain became the emporium of the world, and such a scene of wealth and prosperity filled every eye in this happy country, as the sun before had never shone upon." The belief of such a monopoly has, on the part of a merely practical man, or in the pages of a pamphleteer, nothing surprising, but we were little prepared to find it in a publication of large circula- tion and acknowledged ability.f The fact is, that the amount of our foreign commerce was not greater, nor so great at any time during the war as since the * Inquiry into the Value of Money in England, 1812 ; p. 77. f Edinburgh Review, No. LXV. p. 170., and a^ain in No. LXXTI. p 458. The Sources of our Financial Supplies. 47 peace ; a point which may at once be ascertained by a reference to our custom-house return of exports and imports. These documents, however unfit to represent the balance of mercantile payments from one country to another, form good authorities for as- certaining the comparative extent of our business from year to year. Our exports according to the official value. — We shall give the result of our custom-house return of exports in two modes ; first, by the official value, which means (see Appendix,) the value computed by the weight or dimensions of merchandise, and at a uniform rate of price, without reference to the fluctuations of the market. Total Exports from Great Britain, computed according to thefxed official standard of the Custom-house. Average of the nine years of the first war, viz. from the beginning of 1793 to that of 1802 - - £30,760,000 Average of ten years of the second war, from 1 803 to 1812, both inclusive, leaving out 1813, the records of which were destroyed by fire, and considering 1802 as a year of peace .... - 42,145,000 But if we compare this with the eight years of peace, of which the returns have been made to Par- liament, we shall find a considerable increase since 1814. Average of the total exports from Great Britain com- puted officially for the eight years, from 1814 to 1821, both inclusive. (See Appendix.) ... 54,200,000 These custom-house returns, being made on a uni- form plan, and calculated by the weight or dimen- sions of the package, are conclusive as to the quantity of our exports. It may be said, however, that, in other respects, they are less satisfactory ; and that although the bulk exported at present be greater, the value is less in consequence of the general reduction of prices. That prices were much higher during the war, particularly in the latter years, admits of no doubt, but in whatever way the calculation be made, the advantage is on the side of peace, thus : — 48 The Sources of our Financial Supplies. Exports from Great Britain during the war, computed chiefly from the de- claration of the exporting merchants ; or, when there was no declaration, by a suitable addition to the official value. Average of the ten years from 1791 to 1801, both inclu- sive, - .... . £48,890,000 Average of the ten years from 1801 to 1810 - - 52,847,000 In peace, our exports afford an average considera- bly larger, after making (see Appendix,) an allow- ance for the reduced value of merchandise. Average of our annual exports during eight years from 1814 to 1821, both inclusive, computed chiefly from the declaration of the exporting merchants. (See Appendix.) £63,787,000 In both points of view, therefore, our foreign com- merce is found to have been less considerable in war than in peace : it is equally easy to show, that its profits were wholly inadequate to the support of any great share of our expenditure. Mr. Pitt, on propos- ing the income-tax in 1798, computed our foreign com- merce to yield to the various persons, merchants and others, engaged in it, an annual income of 12,000,000/., a sum, probably not under-rated at the time, but which, for the sake of giving those who differ from us. the full benefit of argument, ought, we shall suppose, to have been doubled, and taken during the war at an annual amount of 24,000,000/. This, be it ob- served, is not saving, but income, out of which are to be supported all the persons engaged in the business : and if we compute the clear saving in a proportion, which, in regard to most other branches of industry, would be more than sufficiently liberal, the result will be a clear yearly gain of three millions sterling. But what would be thought of that sum, or of double or triple its amount, as a counterpoise to such expen- diture as ours during the late wars ? Of all the branches of our foreign commerce, the greatest extension took place in that with the United States : but that outlet was closed several years be- fore the end of the war ; and, however productive of work to our manufacturers, has never been consider- ed a source of pecuniary aid, accompanied as it The Sources of our Financial Supplies. 49 necessarily is, by long credits and debts difficult of recovery. Our Colonial Acquisitions. — Our other sources of imagined supply were the occupation of new colo- nies, the suspension of the navigation of hostile states, and a supposed reduction of their rival manufactures Of the conquered colonies, the principal were Trini- dad, Demerara, Essequebo, Tobago, each little ad- vanced in cultivation, each requiring a large transfer of capital from this country, and each yielding little present revenue. Similar disadvantages character- ized, though in a less degree, St. Lucia, Guadaloupe, Martinique. As to the East Indies, our acquisitions, vast in point of territory, and considerable in regard to internal revenue, have been as yet of very second- ary importance in respect to commerce, though, on the continent of Europe, there prevails an opinion that India is the grand source of our national wealth. Suspension of Foreign Competition. — We come next to a very plausible argument, the benefit supposed to arise to us from the suspension that took place during the war, of the navigation of France, Holland, and the other states dependent on France. The fact doubtless was, that the flag of these countries could not appear on the ocean, because they had not men of war to protect their convoys ; but the transfer of navigation was made less to British vessels than to neutrals, Americans, Danes, Swedes, Prussians, and to Dutch shipping bearing the flag of the petty ports in the north-west of Germany. Lastly, in regard to manufactures, those of France have undergone no reduction since the Revolution, and much less fluctu- ation than is commonly supposed : during the last thirty years they have been on the same scale of gradual increase as before; that is, they have all along kept pace with the wants of a country, in- creasing progressively, though not quickly, in popu- lation. Compelled to quit their favourite ground of foreign 7 50 The Sources of our Financial Supplies, commerce, to what do these calculators resort for the purpose of explaining our prosperity during the war ? Government loans and contracts, however pro- fitable in vulgar estimate, are obviously out of the question as a source of national supply. The com- mand of money, given by the adoption of a paper cur- rency, is a theme confidently urged, to use a parlia- mentary phrase, both " in and out of doors :" it was certainly of great importance, but enough, we trust, will be advanced in a succeeding chapter to show that the extent of supply, derived from that source, has not yet been distinctly comprehended. We dwell, therefore, no longer on delusive suppositions, but proceed to what appears to us the true solution of this financial enigma, seeking it in the increase less of our transactions with foreign countries, than of our productive industry at home. Increase of Employment during the War. — We begin by requesting those of our readers who are of an age to recollect the period of peace prior to 1793, to recall to mind the circumstances of that time in as far as regarded the employment of individuals, the chance of favourable openings in the different walks of industry. They will not fail to remember, that, though by no means an unprosperous season, it was marked by the symptoms common in an era of politi- cal tranquillity, complaints of overstock in the genteel professions, and of inadequate payment in almost all of a humbler description. In a season of peace, salaries or wages are adapted with scrupulous nicety to the sum necessary for personal support, and, ex- cept in the case of the inheritors of patrimony, the portion of income disposable for purposes of indul- gence, is far from large. Such has long been the case in France, and most countries of the Continent ; such, at various intervals of the last century, was the case in our own ; a state by no means unsound or likely to engender future embarrassment, but leading by very slow degrees to the attainment of professional rank, or the acquisition of property. This tranquil The Sources of our Financial Supplies. 51 condition, this medium between activity and stagna- tion, was entirely altered by the war; the army, the navy, the public offices of government opened a ca- reer to numbers of every class, and by absorbing a very large proportion of the candidates for employ- ment, created a corresponding briskness in agricul- ture, trade, and professions ; increasing the wages of the lower, and the salaries of the higher ranks. Capitalists also, a class retired for the most part from active pursuits, partook of the general impulse ; . the pecuniary demands of government were large, and the rate of interest experienced a general and permanent rise. Occupation was thus afforded to individuals of every age and of almost every" degree of capacity; many, who from deficient activity or mediocrity of parts, would, in a state of peace, have necessarily remained unemployed, were brought by the war into situations attended with income ; some in the public service, others in private employment, but all in consequence of the extra demand created by government. Several departments of business, such as our fisheries, our trade with the Continent of Europe, and that with our West India colonies, were exposed to heavy losses, and the whole body of fixed annuitants felt severely the increased expense of liv- ing. But these classes formed the minority of the public: and even they felt, more or less directly, through the medium of their connexions, the benefit of that impulse which for a time improved the income of almost all persons in active life, raising to the monied men the rate of interest; to the labouring class, the rate of wages; to the manufacturer, the merchant, and, in particular, to the farmer, the pro- fits of stock. Such was the activity attendant on a state of war, and on the facility with which extended transactions were managed by means of bank paper. If to some our sketch appear too highly coloured, we have mere- ly to refer them to a comparison of the average rate of wages and salaries in particular periods, such as 1792 and 1812; to the increased sales of our manu- 52 The Sources of our Financial Supplies. facturers and merchants ; the rise of rent to the land- lord ; the increase of profit to his tenant. Consequent Increase of Revenue. — All these circum- stances, in particular the increased call for personal labour, had a powerful tendency to augment the rela- tive population of towns, as well by promoting mar- riage as by drawing to them an extra share of the country population. Now what is the effect of an increase of town population on the productive pow- ers, or, in other words, on the taxable income of a country? To form a due estimate of this, we must point the reader's attention to the passages in our chapter on Population, where, in treating of the comparative revenue of different classes, we contrast the dexterity and dispatch of towns, with the slow, inefficient labour of the country. A transfer of re- sidence from country to town leads to augmented ability in the individual, to the increase of the quan- tity, the amelioration of the quality, of his work ; it raises his wages, and, by enabling him to live better, extends the consumption of articles productive to the exchequer. Of the magnitude of the amount paid by the lower orders, and the increase of public revenue attendant on increase of wages, whether in war or peace, some idea may be formed from the following table : Abstract of Excise and Custom duties in 1820, affecting the consumption of the labouring classes. Malt ....... £5,000,000 Beer ....... 2,500,000 British spirits . . . . . 3,000,000 Salt ....... 1,500,000 Tobacco and snuff ------ 3,000,000 Soap ....... 900,000 Leather ------- 600,000 Candles ------- 300,000 Tea --..-.. 3,000,000 Hemp --..... 200,000 20,000,000 To wli ich may be added timber ... 1,000,000 Coals carried coastwise 'nearlr - - - 1,000,000 Total £22,000.000 The Sources of our Financial Supplies, 53 , The progressive increase in the productiveness of our taxes was owing partly to higher wages, partly to augmented population. Increase of our Population. — We shall have occasion, in a subsequent chapter, to show the close connexion that exists between the increase of our numbers and the productiveness of our taxes : at present, our statement shall be brief. Our population returns for the last twenty years indicate an increase of no less than one and a half per cent, annually; but to avoid the hazard of over-rating, we shall suppose that pre- vious to these returns, and to the general introduc- tion of vaccination, the augmentation was less rapid, and shall assume eighteen per cent, on the popula- tion of 1792 as the total increase during the fourteen years that followed that date. After these preliminary remarks, we proceed to , state arithmetically, the increase of our resources, beginning by a table of the amount of our excise of duties, the operation of which affects, as is well known, a great variety of articles, including as well the wine of the higher orders, as the malt liquor, the spirits, the tobacco, consumed by their humbler countrymen. Revenue* arising from the Excise during the following years of war, being the gross Income, before deducting the charges of collection. 1805 £23,194,000 1806 ...... 24,081,000 1807 ...... 24,681,000 1808 ...... 25,593,000 1809 (Orders in Council) - 23,471,000 1810 ...... 25,796,000 1811 - - - . - - 26,078,000 1812 (War witk America) - 23,532,000 1813 ...... 25,272,000 1814 . . . . . . 26,471,000 J 81 5 - - - . . 27,207,000 54 The Sources of our Financial Supplies. Conjectural estimate of the total taxable income of Great Britain, at different periods, from 1792 to 1814. Money of the same value as in 1792. (Great Britain distinct from Ireland.) In 1792 our taxable income may be computed to have been ------ £125,000,000 In 1806; increase calculated in the ratio of the increase ofthe population, viz. 18 percent., - 22,500,000 147,500,000 Probable addition to national income from the higher wages and higher profits of capital in a state of war, - 22,500,000 Total of taxable income in 1806, - - 170,000,000 We shall now apply this mode of calculation to the last year of the war. In 1813 or 1814: Increase of national income since 1806, calculated in the ratio of the increase of population, 11 per cent. National income in 1806 as above, - - 147,500,000 Add 11 percent. ..... 16,500,000 164,000,000 Probable addition to national income, from the higher wages and higher profits of capital in a state of war, - 24,000,000 Total of taxable income, in 1813 or 1814, in money of 1792, - - . - - 188,000,000 By taxable income, we understand the aggregate in- come of the individuals accustomed to consume tax- ed articles ; and our estimate is founded chiefly on the returns made under the property tax, with the addition of the computed amount of wages and other incomes, which, though exempt from that charge, are subject to taxes on consumption. (See the chapter on National Capital and Revenue.) We shall explain in the next chapter the fluctuation in the value of money since 1792 ; meantime by ex- hibiting our income at different dates in money of uniform value, we simplify the estimate, and enable the reader to mark its increase, without the perplex- ity attendant on a difference in the value of our currency. Proportion of our Burdens to our Resources, 55 . A comparative Statement of our Public Burdens, and Taxable Income. The public burdens include taxes, (with the expense of collection) poor-rate, and lithe. The same reduced Our taxable income Years. Annual burdens in the money of the parti- cular year. to a uniform stan- dard ; viz. mo- ney of the same, value as in 1792. computed by a u- niform standard; viz. money of the value of 1792. 1792 1806 1814 £22,000,000 60,000,000 80,000,000 22,000,000 46,000,000 50,000,000 125,000,000 170,000,000 188,000,000 The advantage of making our computation in mo- ney of uniform value is here very apparent. To judge from the numerical amount, our public burdens would seem to have been more than tripled in the course of the twenty-three years of the war, but when reduced to the money of 1792, the increase is found to be lit- tle more than double. It remains that we bring our reasoning to a point, by ascertaining "the proportion borne at different periods by our burdens to our means." This we ac- complish by a calculation founded on the preceding tables, but modified by some considerations which shall be explained in our chapter on National Reve- nue and Capital. The result is that our burdens bore to our resources, (Great Britain distinct from Ireland.) In 1792 a proportion of nearly - - 18 to 100 1806 of - - - 27 to 100 1813 or 1814 of - - - 27 to 100 (See Chap. VIII.) Such was the proportion of our burdens to our re* sources, after including in the latter the increase aris- ing from the augmentation during the war, both of our numbers and our pecuniary means. The additional pressure stated arithmetically, was about nine per cent, on our national income, a charge less great than is commonly attributed to our taxes, but suffi- ciently large to call for some farther explanation of the remarkable circumstances that enabled us to de- frav it. 56 . Proportion of our Our War Taxes. — The amount of our loans, though very different in different years, averaged, on the whole of the war, the annual sum of 20,000,000/. This bold use of our credit, this free draught on our future resources, was almost all expended in the ex- tension of bur domestic industry. It may be termed a premium given to the existing generation at the charge of posterity : it may be compared to a stream, which, though proceeding from an unnatural and tem- porary source, diffused a fertility approaching to lux- uriance, so long as it continued to now. Our readers have probably little difficulty in conceiving the ope- ration of borrowed money ; in comprehending how individual, and consequently public income may be increased by giving activity to the present age at the expense of the next. The intricacy lies in a different question; in the mode of accounting for our taxes, and for the ease with which sums of unprecedented magnitude were raised in that manner during the War. To solve this difficulty, some writers adopt the convenient theory, that taxation may be made an en- gine for increasing national wealth, as if the money expended on an indecisive campaign were ultimately as profitable as a rate imposed for the improvement of our streets, roads, and canals. Without becoming converts to this singular opinion, we have no diffi- culty in regarding taxation, when expended at home, less as a privation of wealth than as an instrument of circulation. It is evidently applied to the exten- sion of employment, and, by increasing the incomes of individuals, enables them to find a fund for answer- ing its own demand, the subsequent visits of the collector. Taxation considered as Circulation. — Imagine the case of a contractor receiving annually 1 00,000/. from the Treasury, and distributing it in addition to the wages, salaries, and profits of two or three thousand persons. Without the war, these individuals might, and pro- bably would, have had employment, but not to an equal extent, receiving perhaps 60/. annually, instead Burdens to our Resources. )7 of the 70/. or 80/. given them by the war, an addition which fully enabled them to pay the extra charge imposed in the shape of taxes. Or suppose the whole expenditure of the nation, in other words, the amount disbursed on articles, which directly or indirectly pay taxes, to be 200,000,000/. a year, and that in addition to former burdens new taxes are imposed to the extent of 20,000,000/. The effect of this heavy im - post is a correspondent rise in the price of the articles consumed ; but as the amount received by the Trea- sury is forthwith circulated among the payers of the taxes, and applied to remunerate their exertions, the latter are enabled to indemnify themselves by an ad- dition to the charges constituting their respective in- comes, whether in the shape of wages, salary, or profit of stock. Possessed of this power, the higher price paid for articles of consumption becomes a matter of indifference, particularly when, in consequence of the government demand for men and money, the in- crease of their incomes exceeds the increase of their expense. The result accordingly is, that they pay 10 per cent, additional on their consumption, and add as much, or more, to the charges constituting their incomes. To what amount, it may be asked, did the circula- tion in question take place, in consequence of taxes ? To a sum very different in different years, and in- creasing largely after 1806, but forming, on an ave- rage of the whole period of war, more than 40,000,000/. a year. In what particular mode did the annual ex- penditure of that sum, and of the farther 20,000,000/. supplied by loans, chiefly take place ? In recruiting, clothing, and victualling our militia, army, and navy ; in the purchase of stores, the building of ships of war, the repair of fortifications ; in contracts, pay, sala- ries, pensions. Even in that which seemed strictly foreign expenditure, our subsidies to the continent, and the maintenance of our garrisons abroad, the re- mittances took place less in money than in article* of British manufacture. It remains to add a few remarks on tfee manner in 8 o8 Proportion of our which these large sums were repaid to the Treasu- ry. Of our taxation, the far greater proportion (40,000,000/.) is on articles of consumption, a mode in which the tax, blending itself with the price of the article, escapes, in a great measure, the observation of the consumer. No wonder, therefore, that such imposts were, in a manner, overlooked in the general rise of wages, salaries, and profits. In like manner, the increase of stamps, heavy as it became, was ac- counted a secondary object after the great augmen- tation of price obtained, as the war proceeded, by the venders of property. The assessed taxes and poor-rate being undisguised burdens, excited more animadversion, but they were submitted to, as well from a conviction of their necessity, as from the gene- ral ardour in the contest with France, and her dread- ed ruler. Computed Amount thus repaid to the Treasury. — If we go a step farther, and endeavour to define the amount repaid, during the war, to the public Treasury, the plan is to revert to the estimate we have already made of the proportion of our burdens to our national in- come. That proportion, (27 per cent, for the country at large,) was greater in towns, on account of the more general consumption of exciseable articles. Now as the expenditure of government for the war, or, to speak more correctly, the increased expendi- ture of individuals consequent on government dis- burse, took place almost entirely in towns, we shall probably not exceed in calculating that it returned into the Exchequer a proportion approaching to 33 per cent., or a third of the amount that had issued from it. This estimate justifies the following in- ference : Total of expenditure for the war - £1,100,000,000 Of which a third, or 33 per cent., paid back in taxes, formed a sum of about - 360,000,000 n sum which goes far towards accounting for the Burdens to our Resources. f$ payment of our war taxes, enormous as they were ; or, in other words, towards proving that those pe- cuniary sacrifices on which the public received such eloquent compliments from ministerial orators and newspaper writers, were often little more than a re- payment of money issued from the Treasury. The power of paying taxes during the late war is thus to be sought, not in retrenchment on the part of the public, but in an increase of the general activity, and still more in that which a writer of the present age (as yet little known to the public, but to whose works we shall frequently have occasion to refer, Mr. S. Gray) terms the power of " charging and counter- charging ;" the power of individuals to augment those demands which constitute their respective incomes ; and thus to transfer from one hand to another the burden of a new tax. Absence of Foreign Competition. — This augmentation of charge, this transfer of burden, was facilitated during the war by various causes, among which is to be included the existence of similar, though not equal demands from continental governments on their subjects. These demands, in conjunction with the obstructions to intercourse attendant on a state of war, had the effect of preventing the high prices in England from being lowered by foreign competition. Had the war affected only France and England, had the rest of Europe been exempted from the burdens of great military establishments, such a system of increased taxation, or in other words, such a rapid augmentation of prices, would have been impracti- cable : our countrymen would have emigrated ; ca- pital would have been sent abroad ; foreign manu- factures would have been smuggled among us ; the supplies for the United States and other distant markets would have been prepared on the continent. But Holland, the only continental country possessed of disposable capital, was subjected to great op- pression; while Germany, and in the latter years of the war. Denmark and Sweden, were burdened with 60 Proportion of our heavy military charges. British capital was pre- vented from finding its way abroad, as well by dread of Bonaparte's despotism, as by the profitable em- ployment afforded it at home Smuggling was con- tinued, but only in articles (such as spirits, tea, laces,) in which it had been carried on in peace : the number and activity of our cruisers prevented its ex- tension, notwithstanding the additional temptation arising from our augmented duties. Our country was thus insulated, commercially as well as physically ; and an amount of taxation, a rise of prices, which at other times would have been ruinous, were comparatively innoxious when our neighbours were subjected to heavy burdens. As soon as this point is clearly comprehended by the inquirer ; as soon as he becomes satisfied of the non- existence of foreign competition ; he will find much less difficulty in the solution of our financial problem. Substitution of Bank Notes for Coin. — To all those causes there remains to add the exemption of our banks from cash payments; the effect of which, though less great than is vulgarly supposed, was to make money almost as plenty in war as in peace ; and to increase the amount of our circulating medium in proportion as other circumstances led to a rise in prices. Thus was carried on, from year to year, a most ex- pensive contest, without much pressure on any part of the public, unless the fixed annuitant, and without a depreciation of our national capital, except of that portion (such as the funds, or loans on mortgage,) of which the value is permanently represented by money. To many persons, and in particular to those interested in the expenditure, this state of things bore a favourable appearance ; conveying to some the idea of an accumulation of national wealth, to Burdens to our Resources. 6 1 others the belief that we defrayed all our burdens from funds arising from the war. The general enhance- ment of commodities was ascribed to an abundance of money, and deemed a symptom, or rather a proof, of the increase of our national wealth. These explanations enable us to account in some measure for a notion very prevalent on the continent, and which, in the latitude in which it is entertained, strikes every Englishman with surprise, — That we prolonged the war with a view to our pecuniary ad- vantage — as if a charge, which may be true in regard to particular classes, could, with any degree of justice, be applied to our countrymen at large. The temporary stimulus afforded to productive in- dustry by the funding system, though never so strik- ingly exemplified before, might have been traced in various periods of the history of Europe during the last two centuries. Was it not conspicuous in the long contests of the Dutch, first with Spain and sub- sequently with France, as well as in every war that has been carried on by England since the revolution ? In none of these, it is true, did the amount of loans, and still less the amount of war taxes, bear any pro- portion to those of the present age; but they supplied facts of a nature to suggest serious conclusions, had studies of that description entered into the habits of our legislators. To the more cautious among them, it seemed to occur that our situation was, in some degree, unnatural ; that the great expenditure of gov- ernment was not compensated, on the part of the pub- lic, by economy, or by any great share of extra ex- ertion. Hence an apprehension, on the part of some, that the war must entail a burdensome inheritance, but at what time, or to what degree, they did not at- tempt to calculate. Of the reaction to be expected at a peace, no one appears to have had a distinct conception. To foresee its extent was, we admit, im- possible ; but few of our public men bestowed a se- rious thought on its nature, while some of them seem- ed hardly aware of the possibility of its occurring ; so limited had been their study of political economv b'2 Causes of the Rise of Prices as a science, so cursory their examination of corres- ponding periods of our history. CHAP. III. Effect of the War on the Price of Commodities. We shall now fix our attention on that general rise of prices which took place during the war, and con- tinued almost without interruption from 1793 to 1814. As this formed one of the principal changes in our situation, both individually and nationally, it is fit we should investigate it with minute attention. Of the causes of rise during the war, the principal were : — 1. The great demand of men for government ser- vice, and the consequent increase of wages and salaries. 2. The insufficiency of our agricultural produce, caused partly by bad seasons, partly by the drain of labour and capital for the public service. 3. The increase of taxation. 4. The addition to the cost of imported articles, arising from the greater expense of freight, insurance, and other charges of transport ; and still more from, 5. The depreciation of our bank paper after the year 1809. Of these different causes, the insufficiency of our agricultural produce, and the non-convertibility of our bank paper, are reserved for separate discussion : at present, we proceed to the effect of the demand of men for government service. Proportion of our Population engaged in the Public Service. — In 1792, and the preceding years of peace, the demand made on our population for military pur- poses was very limited. In 1793, our levies took place on a large scale, and in 1795, the numbers during the War. 03 raised in three successive years were such as to form a very large establishment. Recruiting, however, continued with activity during the whole war, until the signature of the preliminaries of peace, in the autumn of 1801. — In 1803, the renewal of hostilities was attended by a call on our population, which led, in a little more than a year, to a more numerous es- tablishment than we had ever had on foot. The de- cisive victory of Trafalgar removed the dread of inva- sion; but the continental successes of the French, the aggrandizing projects of Bonaparte, were such as to admit of no reduction on our part ; and after 1808, all hearts were united in the cause of Spanish independence. Hence a continued demand for re- cruits, an increase of levy money, and a progressive addition to the numbers on foot, during the rest of the war. The proportion of our population under arms saw larger in this country than in any other state in Europe. In March 1804, Lord Liverpool, then Lord Hawkesbury, declared in Parliament, that our army and navy, including militia, but exclusive of volun- teers, approached to the number of 400,000, being more than one in ten of the able-bodied population (then computed at 3,800,000) of Great Britain and Ireland. France, he added, had at that time in arms about 560,000 men, or one in fourteen of her able- bodied population. Austria had on foot also one man in fourteen ; and Russia, if any dependence was to be placed in the loose returns of her population, nearly the same proportion. Prussia was the only power whose military force (about 240,000) bore, like ours, the proportion of one in ten to her able- bodied males : but it was with her a season of peace, and a number of her soldiers were permitted, by fur- lough, or otherwise, to give a part of the year to pro- ductive labour. It is usual to compute the proportion of able-bo- died men in a country at a fourth of the total popula- tion. The war of 1793 lasted nine years, and in the middle of that period, (the vear 1797 or 1798.) the 64 Came of the Rise of Prices population of Great Britain and Ireland was proba- bly about 14,000,000, giving for the able-bodied 3,500,000. The war of 1803 lasted twelve years, and in 1809, the medium year, our numbers appear to have been somewhat less than 17,000,000, giving for the able- bodied a proportion of 4,200,000. The year 1804 was in the middle of our great contest, and his Lord- ship's computation may accordingly be taken as a fair average of the numbers under arms during the war. It would be a task of no great difficulty to compute and place in one column the number of our able- bodied population for each year, and in another the number of soldiers, seamen and militiamen in the public service. But the demand of war on popula- tion goes considerably farther, and extends into a field admitting of less accurate calculation, com- prising not only persons in public offices, dock- yards, &c, but a number of individuals unconnected with government, such as manufacturers of arms, clothing, naval stores, builders of barracks, contract- ors, and others, the list of whom is too diversified and too mixed with the occupations of private life to admit of any other than a general estimate. This estimate we are inclined to make, in the proportion of one half of the military servants of the public, taking the average of the army, navy, and militia, at 400,000 during our twenty-three years of war, and at 200,000 the persons deriving an indirect employment from the war. The number of men thus withdrawn from the pur- suits of private industry, appears to have been on an average 600,000, or 15 per cent, of our able-bodied population. It is of importance to remark, that they consisted of individuals born chiefly between the years 1770 and 1790, a time when our population was very considerably inferior* to our numbers in 1800. We mention the year 1800, because in the * Hickman's Preliminary Observations on the Population Return of 1 821 . during the War. 155 event of any contest occurring at present, our re- cruits would, in general, consist of individuals born about tbat period, and the abstraction of an equal number of men from productive industry would, of course, be less felt than during the late war. The magnitude of the change which it at that time pro- duced will be put in a striking light by a reference to our annual expenditure, keeping out of view our payments for interest of debt, or the civil service of government, and fixing our attention on a Statement of the conjunct expense of our army, navy, and ordnance, from the beginning to the close of the war, taken from the accounts laid before Parliament. 1791 - £ 4,226,000 Brought up £287,333,000 1792 - 8,750,000 1804 -■ 30,854,000 1793 - 13,511,000 1805 - 36,219,000 1794 - 20,247,000 1806 - 37,706,000 1795 - 28,751,000 1807 - 36,176,000 1796 - 30,165,000 1808 - 39,778,000 1797 - 27,606,000 1809 - 42,073,000 1798 - 25,982,000 1310 - 43.246,000 1799 - 27,257,000 1811 - 47,968,000 1800 - 29,613,000 1812 - 49,739,000 1801 - 26,998,000 1913 - 54,872,000 1802 - 23,121,000 1814 - 60,239,000 1803 21,106,000 1815 43,282,000 £287,333,000 £809,485,000 Total exceeding- 800,000,000/. To these sums there remains to add a proportion of our subsidies; we mean the part supplied to our allies, not in money, but in stores, the manufacture of which formed, of course, a farther demand on our national labour. Combining these into one sum, and dividing it by the number of years of military expen- diture, (in all twenty-three,) we find the average an- nual charge for the army, navy, and ordnance, to have been thirty-six millions, instead of the four or five millions a year prior to 1792. Observe next, the difference of effect on prices in a sum raised for a military purpose, and that which is levied for the interest of the national debt. The latter bore, like all taxation, on the prices of com- 9 66 Cause of the Rise of Prices modities ; but our military expenditure had a double, or rather triple effect of that nature ; first, by a drain of money ; next, by a drain of hands ; and thirdly, by obliging other hands to work for those so withdrawn. It is only thus that we find it possible to explain either the extraordinary rise of prices in the war, or their no less extraordinary fall since the peace. Effect of Taxation on House-keeping. — The result, or, to speak more properly, the avowed tendency of most taxes, is an augmentation of price. Taxes on commodities are always imposed on the calculation of being paid by the consumer ; the supply of any article, whether a luxury, such as wine and sugar, or a necessary of life, like corn, salt, leather, being pre- sumed to be in proportion to the effectual demand, and the tax intended not as a burden on the producer or vender, but as an addition to the price paid by the consumer. This was strikingly exemplified in the enhancement during the war of several articles of daily use. The sugar which the planter, on pay- ing a moderate duty, could have afforded to sell in England at 60,9. the cwt., was raised by the effect of new taxes and war charges to 70s. or 75s. Tea which, after paying half its original cost to the cus- tom-house, might have been sold at 5s. or 65. the lb., was raised, in consequence of being taxed 100 per cent., to Is. or 8s., and the salt which (see Sir T. Ber- nard's pamphlet on the employment of the labour- ing classes in 1817) might, if unburdened, have been afforded at 1/. a ton, was made, in consequence of the duty, to cost more than twenty times that price. Holland was the first country in Europe that af- forded a striking example of the enhancement arising from taxation, her long and expensive struggle against Spain having necessitated very heavy imposts so far back as two centuries ago. Sir William Temple, among other interesting particulars with which he has diversified the graver matter of his Memoirs, takes occasion (Vol. I. Chapter VII.) to insert the following remark : " The excise in Holland is great, during the War. 67 and so general, that I have heard it observed at Am- sterdam, that when, in a tavern, a certain dish of fish is eaten with the usual sauce, thirty several excises are paid, for what is necessary to that small service." In England taxation was comparatively light, until we became ardent anticipators in continental war, at first under King William, afterwards under Queen Anne. A long peace, and the prudent administration of Walpole, lessened for a time the pressure of the burden; but it was very sensibly increased by the wars of 1740, 1756, 1775, and, above all, by those of the present age. This is sufficiently apparent from the following table of taxes which affect house- keeping. Taxes on the necessaries or com- forts of life. Taxes on Luxuries. Assessed taxes (previous Foreign Spirits, chiefly to the late reduction) £6,500,000 brandy £2,300,000 Malt and Beer, (since the British Spirits, - 3,000,000 reduction in 1822) 6,500,000 Wine 1,600,000 Sugar 3,000,000 Rum 200,000 Tea 3,000,000 Coffee and Cocoa 300,000 Coals carried coastwise 900,000 Raisins and other fruits 400,000 Soap 900,000 Silk, raw and thrown 500,000 Candles and Tallow 400,000 Cotton Wool 500,000 Leather (since the reduc- ductionin 1822) 300,000 Foreign timber 1,000,000 Bricks, tiles, stone, slate 400,000 Glass 400,000 Hemp 200,000 In all, above 32,000,000/., exclusive of stamp duties and postage; also of taxes on foreign articles, such as wool, butter, cheese, linens, drugs, all of which have an effect more or less direct on house-keeping, and were, like those enumerated above, considerably increased during the war. It occasionally happens, that, in consequence of over Supply, the market price of an article does not rise in proportion to the duty, but continues as low, or nearly as low, as previous to its imposition ; the consequence of which is to throw the new burden on the producer. Such was long the case of our West 68 Cause of the Rise of Prices India sugar planters during the war ; such is, in a great measure, their case at present : it is the case, also, of a far more numerous class, our farmers, who, in 1823 as in 1815, are to be considered as paying a large share of their taxes out of their capital. In general, however, there is made an addition to the price of an article, not merely to the amount of the tax, but in a somewhat increased proportion. Sup- pose a custom duty paid on an article which, on im- portation, is sold to a wholesale dealer of the first class, next to one of the second class, and lastly, to a retailer : the demand of a profit on, or rather of an indemnity for the tax, is repeated three times ; and although these demands are far smaller in degree than has been asserted by the advocates for the re- peal of taxes, they form, eventually and collectively, a serious addition to the national burdens ; an addi- tion which, joined to the charge of collecting our taxes, constitutes, we believe, a dead loss of from six to seven millions sterling, on the total amount paid by the public. This loss will be effectually lessened only by the introduction of a double improvement ; a farther simplification, on the part of government, of the process of collection, and, on the part of the public, the adoption of the practice of ready money payments, so general in Holland, in its day of pros- perity. Next, as to taxation in -a more direct and undis- guised form, such as the assessed or the property taxes. In what manner, it may be asked, do indi- viduals in general meet burdens of that description ? Is it by self-denial and economy, by increased indus- try, or by adding the amount of the tax to the charge which, in their respective lines of business, they make on the public ? Economy is practised, we may be as- sured, by those only whose income admits of no in- crease ; augmented exertion is more natural to our countrymen, and was, doubtless, made to bear a con- siderable part in defraying our war burdens ; but the latter, whenever it was at all practicable, were charg- ed by the payer on his customers or connexions ; and during the War. 69 the result, as explained in the last chapter, was a pro- gressive enhancement not only of commodities, but of salaries, professional fees, and labour of every kind. Collective Effect of the various Causes of Enhancement. — The total rise in prices during the war, appears to have been between 60 and 70 per cent, 160 or 170/. being required in 1813 to make the purchases, whether for the necessaries, comforts, or luxuries of life, which were made in 1792 for 100/. The de- gree of rise was, doubtless, different in different situ- ations, but in regard to the public at large, that pro- portion will, we believe, be found to hold. To fa- cilitate the comprehension of this somewhat intricate inquiry, it may be useful to descend into the details of domestic life, and to refer the reader to the sub- joined table of family expenditure. Comparative Expenditure of a Family of the middle class in England in the years 1792 and 1813; discriminating the heads of expense (by JVos. 1, 2, 3, 4,) so as to show the rise produced respectively by each cause of enhancement. 1. Taxation was evidently the chief cause of rise in the following- heads, of expense: 1792. 1813. Assessed taxes and poor-rate - - - £ 1 8 47 Wine and spirits - - - - -16 35 Tea, sugar, and other groceries - - - 22 38 Beer (partly from taxation, partly from enhance- ment of com) - - - - -711 •2. The advance of labour, the occurrence of indif- ferent seasons, and the difficulty of import (from the rise of freight, and depreciation of our bank paper after 1809,) were the principal causes of enhancing Bread --.-__ Butcher meat - Milk, butter, cheese, vegetables - - » 3. The advance of labour was chiefly instrumental in raising Servants 1 wages - - - - - 18 22 House rent, the rent of houses in occupancy being determined by the expense of building- new lieuses, and the latter by the price of la- 60 i©6 25 50 25 45 50 85 70 Cause of the Rise of Prices 1792. 1813. Clothes ...--, £60 85 Fuel - - 24 35 Furniture ; whether we consider the irterest on the money vested in its purchase ; which we calculate at 42 63 Or annual repairs and purchases, estimated at 14 24 6 10 16 25 14 22 14 20 35 55 30 50 35 60 4. The rise of the following- can hardly be referred to any particular head, but appear the mixed re- sult of taxation, enhanced labour, and depreci- ated currency. Articles of leather manufacture, chiefly boots and shoes - Candles and oil Washing- - Education - Medical attendance - Incidents, such as postage, stationary, charity, pocket disburse - Expenses of a less necessary character, viz. travelling-, and temporary residence in the country - Expense of company V - Total £540 900 A table of this kind, useful as it in some degree is, will hardly enable us to ascertain with precision the rise proceeding from each of the great causes of en- hancement. But as on so interesting a topic no inquiry can be too minute, we shall endeavour, by varying our plan and resorting to other grounds of calculation, to attain the desired result. Effect of Taxation. — For an estimate of the effect of taxes on house-keeping, we are in some measure pre- pared, by the tables in our second chapter. These, as well as our subsequent calculations, (see the chapter on National Revenue and Expenditure,) ex- hibit the proportion borne at different periods (1792, 1806, and 1.813.) by our burdens to our resources. And the result is, that the increase of our taxes, during the war, amounted to a charge of nine per cent, on our national capital. This, the arithmetical re- sult, is greatly below the general estimate of the taxes imposed during the war. It is also below the addition which tliev will be found to have caused t<* during the War. 7 1 our prices, when we take into account the obstacles they create to improvement in our agriculture and manufactures. These various impediments, unknown to the public, but severely felt by the persons on whose different lines of occupation they bear, all tend to keep up or augment prices, and their collective effect was, we believe, such as amply to justify our computing the addition to our prices, from our war taxation, at twelve instead of nine per cent. Of this we shall treat more fully in our concluding chapter, when we come to urge the expediency of a farther reduction in our public burdens. Substitution of Bank Paper for Coin. — Here we in- troduce a cause to which, in the opinion of the great majority of the public, we ought to ascribe the chief part of the rise of prices during the war. This, how- ever, is a very complicated question, and one which will require all the elucidation that a separate dis- cussion can confer on it. At present we shall merely observe, that the addition to our prices, arising from the fall of our currency, from the inferiority in value of our paper to coin, appears to have been about 15 per cent, during the latter years of the war. Rise in the Price of Labour. — To what are we to at- tribute the remarkable rise in the rate of labour during the late wars ? — To two main causes : the de- mand of men for the public service, and the increased expense of provisions. In the first years of the war, the rise was caused only by the demand of men for the public service, and provisions had very little share in the enhancement during 1793 and 1794. But after 1795, and still more after 1799, the addi- tional cost of provisions became such as to oblige the labourer and mechanic, in self-defence, to stipulate a higher money payment for his services. A rise of wages may be either real or nominal. That which was consequent on the demand for the militia, army, and navy, proved a real and bona fide addition, the mechanic or manufacturer who remain- 72 Causes of the Rise of Prices ed at home being in greater request, and receiving larger pay from his employer, without reference to an increase in his expenditure. But a rise of wages proceeding from a rise of provisions is very different : the addition, in one sense, is merely a balance to the addition in another, and the augmentation is conse- quently nominal. To such an extent did this hold in the case of our labouring classes during the war, that the 28s. or 30s. paid them weekly in our provincial towns in 1 812, were hardly more available in the pur- chase of the necessaries or comforts of life, than 15s. in 1792. Effect of a Rise in the Price of Labour on Housekeep- ing Expenses. — The direct effect of such a rise is readily seen in the increase of servants' wages ; but its indirect operation, its enhancement of work per- formed out of doors, is of much more consequence. This will be at once apparent on our analyzing the component parts of the cost of manufactures. In cot- ton goods, after all the aid derived from machinery, labour still constitutes nearly a third of the price ; while in woollens, leather, hardware, linen, and per- haps in silk, its proportion is more nearly a half. Next, as to a very different head in family expen- diture, that of house-rent, the chief constituent of charge is labour, since in a country of increasing population, the rent of houses in occupancy is regu- lated by the cost of new buildings ; and in regard to these, the command of materials being unlimited, the question resolves itself into a calculation of the ex- pense of the requisite labour. In the case of fur- niture, a similar remark is applicable ; and even in services of a higher class, such as teaching or medi- cal attendance, the influence of this cause (rise of labour) is not excluded. To the lower orders the rate of labour, in a direct sense, is of little consequence, as they are accustomed to serve themselves ; but, in an indirect sense, by en- hancing corn, it proves of the greatest importance, during the War. 73 Effect of an enhancement of Com on House-keeping. — A return of the ten years of peace preceding 1793, gave as the average of the quarter of wheat in the Windsor market, 2/. 10.?. 9 J. But thirteen years of war, from 1793 to 1805 (both inclusive,) gave for the quarter of wheat an average of 3/. 17s. 2d. ; in other words, 152/. were required to purchase the same quantity as 100/. previous to the war. And the suc- ceeding eight years, from 1806 to 1813, gave the still higher average of 5/. Is. 8(/., for the quarter of wheat, denoting that no less than 200/. were, during that period, required to purchase what, previous to the war, had been obtained for 100/. Such was the rise in wheat : in butcher meat, and agricultural produce generally, the enhancement appears to have been nearly equal ; but for these and other details, we re- fer to the Appendix, and proceed to lay before our readers a statement of the general result. Summaj'y of the Rise in House-keeping at the close of the late Wars^ making the calculation in the most comprehensive form, so as to be appli- cable, not to particular classes, but to the public at large. Proportion of rise proceeding- from increase of Taxation 12 per cent. from rise of wages and labour ge- nerally - 20 ditto from the enhancement of provi- sions, (see Appendix) - 30 ditto Of this rise in provisions, we may ascribe perhaps the half (or 15 per cent.) to the rise of labour, and other farming 1 charges consequent on the demand of men for the public service : the other 1 5 per cent, to the depreciation of our bank paper, enhancement of freight, and other charges attendant on import. Proportion of rise from extra charges on the purchase and import of other articles than corn ; such as wool, cotton, tobacco ---__. 5 ditto Total - 67 per cent. Such appears to have been the operation of the different causes of enhancement during the war. — We proceed to exemplify that rise by a reference to real property. Land. — The farm which, in 1792, let for 170/.; and which, in 1803, (see the tabular return of charges 10 74 General Rise of Prices of cultivation in the chapter on Agriculture,) afford- ed a rental of 240/. let in 1813, for 320/. Houses. — The house which, in 1792, let for 50/., and in 1806, for 65/., might be considered in the lat- ter years of the war, as worth 70/., the rise being less great in houses than in land. Its value, as a purchase, originally 1000/., was raised towards the middle of our long contest to 1300/., and eventually to 1400/. or 1500/. To define the amount of the rise of prices in par- ticular commodities, would be a task of great labour and nicety : the only person who attempted it was the late Arthur Young, of whose calculations we shall treat afterwards. If, for the sake of conferring some degree of precision on an obscure subject, an attempt be made to divide the progress of enhancement into periods, we may consider the war as having produced half its effect towards the year ] 806, viz. that the rise of prices taken in the most comprehensive sense, whether of provisions, clothing, labour, or profes- sional charges, was in that year somewhat more than 30 per cent, above the prices of 1792. From 1806 to 1813 the rise was more rapid, in consequence of the double effect of a non-convertible currency, and extended military operations, so that in 1813 and 1814 the enhancement was 30 or 35 per cent, on the prices of 1806, or about 67 per cent, on those of 1792. How far was this rise of prices nominal? — It is incum- bent on the attentive inquirer, to guard against the error so frequent in former years, and at present by no means exploded, of considering a rise of prices in the light of a bona fide addition to our public, wealth. The reader, on referring to the preceding table of house-keeping expense, and considering how differ- ent trades and professions, are linked together, will readily perceive the manner in which an individual, on the occurrence of a rise of prices in his particular department, indemnifies himself by a charge on the community. If, for the sake of illustration, we ad- vert to articles of daily consumption, and to the during the War. 15 tradesmen who are most familiar to us, we find the baker and butcher raise, of course, their demands on their customers, in proportion as the prices of their articles are raised to them by the farmer or grazier. In a similar, though not equally direct manner, the teacher augments his charge for board and instruction; the upholsterer, the price of his furniture ; the landlord, the rent of his houses. The whole partakes of the nature of circulation ; or, to borrow an expression from Mr. S. Gray, of " charge and counter-charge." But a rise which is common to all can be little else than nominal. The owner of a house or land was hardly able to purchase more commodities with the increased rent, during the war, than with the limited sum paid to him in 1792. He found 130/. in 1806, or 160/. in 1813, of no greater value than 100/. at the beginning of the French Revolution ; and the correct mode of speaking is, that land and houses rose in money rent in proportion as money declined in value, that is, they maintained a nearly uniform value, though the sum paid was very different. The same is appli- cable, as we shall see presently, to the far greater part of income, whether arising from property or labour: from capital vested in trade, manufacture, or agriculture ; from wages, salaries, or professional charges, the sum paid having regularly increased as its value diminished. Money Property, such as a Loan on Mortgage.— We here advert to a description of property materially different from land or houses, a property which ex- periences neither rise or fall, whatever be the fluc- tuations in the value of money. Suppose a sum (3,200/.) to have been advanced on mortgage in 1792, and to have remained on that security during the war, it will hardly be denied that in such years as 1811 or 1812, it was considered a property of less value than previous to the war. The 160/. which the owner continued to draw as interest, was 76 General Rise of Prices in these years worth to him little more than 100/. iti 1792. Proportion of national Income affected in this Manner.— The reader on referring to our estimate of taxable in- come, in the chapter on National Revenue, will find the sums paid to annuitants, whether creditors of the public or of individuals, computed at 50,000,000/. a year, or one-fifth of the total national income. The receivers of the other four-fifths, whether landholders, farmers, merchants, or manufacturers; whether clerks, mechanics, or country labourers, obtained in their annual income, (in the form of rent, salary, wages, &c.) an addition corresponding, or nearly corres- ponding to the decline in the value of money. From this benefit were excluded the annuitants, to the extent we have mentioned ; and many of them would have felt more severely the diminished value of their receipts, had it not been indirectly counterpoised by the activity arising from the war, and the consequent facility in providing for their connexions in the public service. Since the peace, the relative situation of these great portions of the community has, as is well known, been reversed. Annuitants have found their incomes recover their value ; while the other classes, above all, the agriculturists, have experienced the most dis- tressing effects from the fall of prices. Change in the Value of Money. — Our readers will now be able to form a definite idea of what is meant when we speak of a fall or rise in the value of money. The fall of prices since the peace has been very dif- ferent in different articles ; for while in the produce of the soil it is above 60, and in several branches of manufacture above 50 per cent., in the case of house- rent, or the wages of mechanics, it probably does not exceed 15 per cent. But the business of the statis- tical inquirer is with the average, which is, doubtless, not less than 30 per cent, on all payments determined by free competition ; in other words, in all articles during the War. , 7? brought to open market. In payments of a different nature, such as professional fees, salaries, servants' wages, the decrease is as yet inconsiderable ; be- cause in these there exists no ready appeal to com- petition, no prompt means of overcoming the oppo- sition to reduction. In London, journeymen in va- rious trades are, in consequence of their system of combining, still in the receipt of 5s. or 6s. a day, as in the season of war and expensive living ; but such a state of things can hardly be of long duration. The fall of provisions, the example of other countries, the diminished profit of capital, all point to the necessity of a change, and will eventually overcome resistance, whether on the part of the lower orders, or of the re- ceivers of pensions and salaries, in whom, possessing as they do better means of information and compari- son, pertinacity in retention would be more repre- hensible. As such reduction, therefore, will, in all probability, become general, and the words, " fall of price," are too limited to express a decrease of such incomes as arise from personal exertion, we adopt the more comprehensive phrase of a " rise or fall in the value of money." Prices on the Continent since 1792. — In how far, in the present age, have the other countries of Europe participated in those fluctuations of money which among us have reached so extraordinary a length ? This question is of no easy solution, as well from want of documents in countries which had then no representative assembly, as from a depreciated paper having been current in almost every part of Europe. France, the only state that has equalled us in the du- ration of her wars, exhibits a remarkable contrast to us in the extent of her financial burdens. Her taxa- tion, amounting in the beginning of the revolution, to about twenty-two millions sterling, (see the Report of Camus to the National Assembly, in July 1790,) was never increased by more than the half of that sum ; while our sixteen millions of 1793, became forty five millions in 1804; sixty millions in 1808* and nearly 78 General Rise of Prices seventy millions in 1814. In fact, in the early part of the revolutionary war, the collection of revenue in France was (see the Due de Gaete on French Finance,) considerably under twenty millions ; the wants of go- vernment having been supplied by the emission of assignats during four years of emergency, (1792-3-4-5) and afterwards, in a considerable degree, by contri- butions from conquered territories. After the fervour of the first years of the revolution, there was in France no legislative body capable of conferring credit on government stock : no exemption from cash payments to facilitate to the payers of taxes, the means of reimbursing themselves by a ready addi- tion to wages, salaries, or professional fees. The amount emitted in the form of assignats admits of no definite calculation, the value of that government paper having fallen rapidly, and having been at last, in 1796, reduced to a nullity. But if we compute at two hundred millions sterling the amount of public sacrifice from the assignats, and if we add for the bankruptcy committed in regard to two-thirds of the public debt, the forced loan of 1797, and the aug- mented taxation of the latter years of Bonaparte, two hundred millions more ; and, finally, if we add a na- tional loss of one hundred millions, consequent on his inauspicious return from Elba, and the invasion of 1815, we make in all a pecuniary sacrifice on the part of France, of five hundred millions sterling, over and above the twenty-two millions of annual expen- diture necessary under a peace establishment. But the political strength of our southern neigh- bour lies less in money than in men, and that forced annual levy which would be so indignantly received among us, and so subversive of the resources of a commercial and manufacturing country, proved the most effectual means of drawing forth the power of France. In this respect accordingly, her sacrifices have been very great, the number of men who fell in the long struggle from 1792 to 1815, estimated, on a moderate computation, at a million and a half, being probably more than three times the number lost by during the War. 79 r> our country, after every allowance for the destructive effect of tropical climates. In another respect, also, the neglect of education and postponement of the choice of a profession attendant on the Conscription, as well as the loss of time to those who escaped the sword and resumed a pacific occupation, form an amount of national detriment which may very fairly be put in the balance against the vast loss sustained in this country by the transition from war to peace. The Netherlands, subjected during twenty years to the sway of France, and during a part of the time to the Conscription, were also exposed to heavy losses from the war. If less great than those of France in men, they were larger in a financial and commercial sense, as well from augmented taxation as from in- terrupted intercourse, and the many abortive at- tempts made, during the enforcement of the pro- hibitory decrees, to produce substitutes for coffee and other articles, the growth of a tropical climate. Of the other European powers, the chief bellige- rent was Austria, whose pecuniary sacrifice was les- sened by our subsidies, but whose loss in men amount- ed perhaps to the half of that of France. Next came Prussia, Spain, Russia, Sweden, in whose case the duration of suffering was less, but who were all doom- ed to feel the destructive ravage of war and invasion. A pressure of a more lasting kind, we mean that which is attendant on the maintenance of a large standing force, extended to every state, great and small on the Continent, from 1793 to 1814. Their taxation consequently increased, and the general de- mand for men was followed by a general rise in the price of labour. The impractibility of effecting loans prevented that stimulus to productive industry, that drain on the future in favour of the present, which took place among us to so great an extent : nor was there in any part of the Continent a continued in- adequacy of agricultural produce. Accordingly, though prices on the Continent became higher in war than they had been in peace, though during the one period the demand for labour was brisk, in the oilier 80 General Rise of Prices languid, the degree of difference was much smaller than with us. This topic shall be more fully treated in a subsequent part of our volume, (Appendix to Chap. IX.) but were we, for the sake of arriving at a definite estimate, to hazard a conjecture of the dif- ference between the present prices on the Continent and those of 1792, we should pronounce the former about 15 per cent, higher, being half the enhance- ment that we find in England, comparing our pre- sent prices to those of 1792. This excess on our part in the ratio of enhance- ment, added to a nearly similar excess in prices pre- vious to 1792, makes a total difference between this country and the Continent of from 20 to 30 per cent. The leading causes of this are our heavy excise du- ties, the larger size of our towns, and the occasional operation of our corn laws. The balance against us would be still greater, were it not in a considerable degree counteracted by the cheapness of fuel and of several articles of manufacture, in particular hard- ware, in which our command of capital, our inland navigation, and our machinery, afford us a consi- derable advantage over the Continent. Rise of Prices apparently indicative of Prosperity. — An increase in the money value of commodities, of land, houses, and stock in trade, accompanied by a general augmentation of salaries and wages, suggest- ed during the war the idea of a general increase of wealth in correspondence^ was commonly believed, to the increase in our circulating medium. We have already shown that this was, in a great measure, nominal: the augmented price of commodi- ties, of laud, houses, merchandise, required, to repre- sent it, a larger sum of money, but that such money- was of less value. Or, if we admit that there was in several respects an increase of property, that the general briskness caused by the demands of govern- ment led to an actual rise of prices, a rise over and above that which was requisite to meet the alteration in ihp value of the currencv, it is fit. on the other during the War, 81 "5 hand, to recollect that the fixed money property of the country, such as the stocks and loans on mort- gage, all underwent depreciation, because in these the same sums represented a reduced value. What then was the real result ? That, on the one hand, the national property was lessened by the great addition- al charge arising from the war: on the other, it was augmented in proportion, not to the rise of prices, but to the progress of national improvement and increase of population. No such limitations, however, were admitted in the estimate of the public, or as far as we can perceive, in that of ministers : both confident- ly inferred prosperity from rise of prices, and appear never to have suspected that, such a rise was decep- tive, and might take its origin, in great part, from an increase of burden. What a train of misconception, what a series of sanguine and fallacious notions would have been prevented, had the public been earlier aware of these simple truths ! During the war, the rise of price was so regular, and of such long continuance, (from 1793 to 1814,) that the majority of the present generation took for granted that it would be permanent, ascri- bing it less to the war and the demands of govern- ment, than to causes likely to be permanent, — such as the unknown gains of our foreign commerce, or the influx of the precious metals of America. But in this, as in other points, the return of peace has undeceived us ; it has shown that the amount of our commercial gains, and the influx of specie, were both over-rated ; and that the origin of high prices is to be sought in less welcome causes. Of these, the demand for men for the public service, the insufficiency of our growth of corn, and the depreciation of our bank paper, have all, for some time, ceased to operate, but their effect? have by no means ceased ; while the fourth cause, we mean taxation, continues to press on us with al- most undiminished rigour. Evil of high Prices when peculiar to a Country. — The pernicious tendency of fluctuation in the value of 11 82 General Rise of Prices money is generally admitted, but that of a general rise of prices is less understood : it is even the notion of a number of writers, and of a still greater number of practical men, that taxation, though a great cause of enhancement, is productive of no injury in a public sense, because the money thus collected is almost all expended at home. This idea has induced the writer already mentioned (Mr. S. Gray,) whose views, sound and liberal in several respects, are in others greatly impaired by over-confidence, to give our national debt the convenient name of "public service capital." " The payment of the interest is," says Mr. Gray, in the work entitled, 6 All Classes productive of National Wealth,' (p. 136,) "no disadvantage: the public is just where it was before : they have had thirty mil- lions charged on them, for the interest of the national debt, and they have charged thirty millions in re- turn." — All this might be true were the British Islands a distinct planet, or were they separated from the rest of the world by a " wall of brass ten thousand cubits high:" but doomed as we are to intercourse with our continental brethren, does not an excess of taxation place us under a great relative disadvantage in a competition with foreign manufacturers ? And. before the fall in our corn market, was it not to be apprehended, that our capitalists might transfer to less burdened countries, that money, that machinery, and, in part, those hands, which have so effectually con- duced to make us support our financial pressure? A writer of great notoriety, without carrying his doctrine so far as Mr. Gray, expresses, in more places than one, an opinion that high taxation imposes on us no disadvantage relatively to our neighbours, or, to use his own words, that " a generally high price of commodities in consequence of taxation would be of no disadvantage to a state."* This op nion Mr. Ricardo repeats in another passage (p. 305,) where he says, that the " amount of taxes and the increased price of labour in a country does not, according to * Ricardo on Political Economy, 2d edition, p. 283. during the War. 8.3 his ideas, place it under any other disadvantage with respect to foreign countries, except the unavoidable one of paying these taxes." But he soon after makes a highly important qualification, by admitting that these charges render it the interest of every con- tributor to " withdraw his shoulder from the burden, and, in many cases, to remove himself and his capital to another country ;" a course replete with the most injurious results. Were we to suppose, for the sake of illustration, that the whole of the civilized world, the whole of the states who carry on a commercial intercourse with each other, were simultaneously involved in war and obliged to impose on themselves burdens which bear the same proportion to the taxable in- come of each : — the consequence would be a concur- rent and uniform rise of prices ; and a contest, after lasting twenty years, might terminate without any relative disadvantage to any of the belligerents, as far as regarded their finances, or the state of their productive labour. But in every war there are cer- tain states, whose rulers have the prudence to avoid participating in the unprofitable struggle, and who secure to their subjects the advantages of neutrality, along with an exemption from the burdens entailed on their neighbours. Such, in the present age, was the case of Denmark until 1807: such also was, for a time, the case of Sweden, Prussia, and, above all, of the United States of America. Holland, a country particularly inclined to a pa- cific policy, has, from her geographical position, been unavoidably involved in most of the great contests which have taken place since she became a power, so that, during the last two centuries, her history ex- hibits hardly any period of exemption from them, except in the war of 1756. We, whether from ne- cessity or belligerent ardour, have so seldom enjoy- ed the blessing of neutrality, that to trace it in our history, we are obliged to recur to the reign of James I., who, whatever might be his weakness in other respects, steadfastly maintained peace amidst the 84 General Rise of Prices during the War. convulsions of Germany, the dissentions of France, the prolonged hostilities of Spain and Holland. A striking illustration, not indeed of neutrality, but of that prudent mode of warfare which secures national independence, without aiming at foreign acquisitions, is to be found in the troubled reign of Elizabeth, and the wise administration of Cecil. How different would have been our situation in regard to public burdens, had the reins of government in the present age been held by such experienced hands ! Effect of the Rise of Prices on our Finances. — This rise, like all artificial changes, was productive of little permanent effect : it increased the numerical amount of the revenue, but it was ultimately followed by an equivalent loss in augmented expenditure ; en- hancing stores, salaries, the pay of the army and navy, in short, almost every object of government disburse. Unluckily, the amount of our loans was greatest at the time that money was of the least value. If we calculate the debt contracted since 1792 at 460,000,000/., and divide that period with a reference to the value of money, we shall find that the smaller part of this debt was incurred when money was more valuable than at present, the larger when money was more depreciated. Since the cessation of war, money has risen progressively in value, and the interest of our debt, without augmenting in amount, has in- creased in pressure to a degree which, coupled with the evils of sudden transition, has unfortunately borne hard on the majority of the public. 85 CHAP. IV. Our Currency and Exchanges since 1792. Having now traced the fluctuation in the price oi commodities during the last thirty years, we proceed to a topic closely connected with it, the variations in our continental exchanges. In this, one of our chief objects will be to describe the operation of our sub- sidies, and of our purchases, occasionally to a great amount, of foreign corn; these being the causes which mainly affect our exchanges, and are pro- ductive of great and rapid fluctuation. They are, in general, demands both of large amount, and of sud- den occurrence, superadded to our customary dis- burse, and requiring to be paid before time can be given to our merchants and manufacturers to prepare and send abroad an equivilent amount in commodi- ties. This chapter will accordingly comprise, An historical sketch of our continental exchanges ; The effects of the exemption of the Bank from cash payments ; and The questions of depreciation and over-issue. Historical Sketch of our Exchanges. From 1792 to 1797. — In the first year of the war, our participation in the contest produced little effect on the exchange, in consequence of our aid being furnish- ed less in money than in troops and military stores. Next summer (1794) a sudden depression was produ- ced by the remittances commenced for the Prussian susbidy ; but it ceased as soon as it became known that that power, a far less zealous ally in those days than subsequently, was not likely to fulfil its engagements. In 1795, circumstances became verv different : our &t> Our Currency and Exchanges. troops had been withdrawn from the Continent, our contribution to the allied cause, was made, in a great measure, in money, and an unfortunate deficiency in our harvest, forced us to make large importations of corn. A balance from commercial payments began thus to be added to the remittances of government, and the result was a considerable fall in the exchange; money in England becoming inferior in value by five per cent, to the money of the Continent. This dif- ference was of serious moment to the Bank, and obliged them to limit greatly the discount of mercan- tile bills, under an apprehension that the notes issued for such discount would be presented at the Bank for specie, and the latter exported to the Continent. Of the distress caused to merchants by this limitation, those only can judge who witnessed the pecuniary difficulties of 1795 and 1796, or who have had access to read in the parliamentary papers the anxious cor- respondence of that date between Mr. Pitt and the Bank directors. At one time (November 1795) the price of gold, when purchased with Bank notes, had risen to eight per cent, above its value in coin, and necessitated a farther and more distressing reduction of bank paper. In the autumn of 1796, a better harvest delivered us from one cause of drain; but towards the end of that year, and the beginning of 1797, distrust and alarm were renewed by a threat- ened invasion from France. The failure of several country banks having unluckily occurred at that critical moment, the consequence was a run on other country banks, and a great demand for gold from the Bank of England. In vain did the Directors resort to their hitherto unfailing expedient, a reduction of the quantity of their notes : the evil was new and peculiar; the drain continued without a prospect of abatement, when, after bringing down their circu- lation to nearly. 8,600,000/. and communicating their situation to ministers, the Directors received, on the 25th of February, 1797, the well-known injunction from the Privy Council, to suspend all farther pay- ments in cash. Our Currency and Exchanges. 87, This order, limited at first to a few weeks, was soon after prolonged to the end of the current session of parliament, and eventually to the opening of the succeeding session. In the interval, circumstances became more favourable, corn was abundant, our continental subsidies drew to a close, our exports of merchandise were large, the exchange rose, and specie flowed into the country from causes very similar to those which had lately made it flow out. The bank was now in a state to resume cash pay- ments ; but parliament, finding that no inconvenience had resulted from the suspension, determined to adhere to it, and passed resolutions which made exemption from cash payments be considered our settled policy during the remainder of the war. From 1797 to 1802.— The year 1798 was more than usually prosperous, being marked by a favour- able season at home, an exemption from the burden of subsidies abroad, and distinguished success in our naval operations. Confidence being now restored, money became more rapid of circulation, and com- paratively plentiful, while our exchanges with the Continent experienced no fall, although our bank paper was no longer convertible into cash. The succeeding year, however, presented a very different spectacle : Austria, encouraged by a British subsidy and the co-operation of Russia, took the field against France, and hardly did intelligence arrive of the formation of this second coalition, and of an engage- ment for a double subsidy, when our exchanges began to bear the mark of rapid declension. The summer of 1799 was wet, and it unfortunately hap- pened, as in 1796, that large purchases of corn were necessary at the time of the greatest pressure of foreign expenditure. Such continued our situation during the summer and autumn of 1800, when the successes of Bonaparte in Italy, and of Moreau in Germany, brought our subsidies to a close. Relief would now have been felt, had not the calamity of a deficient harvest taken place in 1800, and raised the 88 Our Currency and Exchanges. price of corn in that and the following year to an unexampled height. The total value of our corn imports during 1800, 1801, and part of 1802, was declared in evidence before a parliamentary com- mittee to be no less than 15,000,000/. sterling. Of all the trials our money system had jet expe- rienced, this was the most severe; and it was ac- cordingly in 1800, that the effects of the non-contro- vertibility of our bank paper became distinctly visible in the state of our exchanges. The wants of the merchants drove them to the bank for discounts, and their 'demands were supplied with a confidence which the Directors would not have ventured to ex- ercise, had they been liable to pay in specie. This accommodation, though far from beneficial in its remote consequences, served at the time to lessen to the public the evils arising from the fall of the ex- change, and the subsequent depreciation of our paper (between three and five per cent.) was hardly per- ceived, either by us or by foreigners. The charge most open to observation was in the materials of our currency : our guineas had now, for the most part, gone abroad, and our small-note circulation, insig- nificant during 1797, 1798, and part of 1799, became augmented in 1800, 1801, and 1802, to four millions, exclusive of the small notes of our provincial banks. From 1803 to 1808. — The peace of Amiens was too short to admit of the repeal of the Restriction Act, and on the renewal of war, all idea of repeal was relinquished, a continuance of the suspension being considered an essential part of our policy. Unat- tended by continental subsidies, or by the necessity of corn imports, the years 1803, 1804, and part of 1805, passed over without pecuniary pressure ; and when, in the latter part of 1805, the formation of a new coalition produced a sudden revolution in the exchange, its duration was momentary, for the day of Austerlitz, so disastrous in other respects, dis- pelled the cloud that was gathering over our finan- cial horizon, and showed in the distance the susper- Our Currency and Exchanges. 89 sion of our continental remittances. Next year, war ensued between Prussia and France, but that contest took place at a time when we had a ministry (the Whigs and Grenvilles) sparing in their advances to our continental allies ; the exchange was not se- riously affected, and after the peace of Tilsit (July 1807) began visibly to recover. Four years of the war had thus passed without any material inconvenience from the non-converti- bility of our bank paper, and its depreciation, still unknown to the public, had been but partially inju- rious. We are now, however, arrived at a different era ; a period when our hatred of Bonaparte, the confidence inspired by our decisive superiority at sea, and the influence of enthusiastic counsellors at home, made us forget calmer considerations, and join in a general call for a " system of vigour." The sufferings of several great branches of our commerce ; the stagnation of our East India trade ; the pro- gressive sinking of West India property; the di- minished profit of ship owning ; misfortunes arising chiefly from heavy taxes and increased charges, were ascribed by many of the distressed parties to the competition of the Americans. Commercial jealousies have never been inactive ; the American navigators had become in our eyes, what the Dutch had been in those of our ancestors under Cromwell and Charles II. ; and our merchants had no great difficulty in persuading a ministry elated with our success at Copenhagen, and little versed in the sources of national wealth, that when neutral naviga- tion should be controlled, the Continent must draw its supplies through the medium of England. Hence our Orders in Council of November, 1807, orders issued with so much ardour, with such confidence of a favourable result, that our government paid no attention to the singular fact, that the intercourse they were so anxious to control, was, in the opinion of our enemies, highly advantageous to us; for Bona- parte had, almost at the same moment, intimated to the American ambassador at Paris, his intention to 12 dO Our Currency and Exchanges. prohibit it, declaring that " all maritime commerce tolerated on the Continent, whether through Ameri- cans or others, must turn to the advantage of Eng- land." These remarkable measures, joined to an embargo adopted by the American government, pro- duced an almost complete suspension of intercourse between the United States and Europe, during 1 808 ; the first time that such had been the case during twenty-five years. Our stoppage of the American navigation is, we believe, the greatest error on record in mercantile history. Our trade with that country which, on the ac- knowledgment of its independence in 1783, we consi- dered as wrested from our grasp, had proceeded in a ratio of continued increase, affording both advantage to the parties engaged, and the most gratifying les- sons to those who, studying in the closet the sources of national prosperity, are enabled to discover how often the real are at variance with the apparent causes. This increase showed first that political and even national antipathies do not impede commerce between individuals, and that it is perfectly prac- ticable to reap benefit from countries that were once our colonies, without the charge of defending them. It showed further the still more important truth, that " the greater the freedom of the trade of the Ameri- cans, the more active their intercourse with France, Holland, and other countries, the greater was the ad- vantage arising to us." In what manner, it may be asked, did it produce that result ; a result so contrary to the tenets of the mercantile theory and of the colonial system, not of this country only, but of all Europe ? From a cause of which the explanation, at first somewhat compli- cated, becomes, when examined, sufficiently easy and convincing — the increase of American capital conse- quent on unfettered trade, and the direction of a larger share of it to the purchase of our manufac- tures. Our exports to the United States amounted in 1805, 1806, and 1807, to the very large sum of 11 or 12,000,000/. sterling, while our imports from that Our Currency and Exchanges, 91 country (Seybert's Statistical Annals, pp. 137. 155.) did not exceed 7 or 8,000,000/.: the remainder (Baring on the Orders in Council, p. 155,) was re- mitted to us in money, or, what is the same thing, in bills of exchange from the Continent of Europe, being the proceeds of tobacco, cotton, rice, and other American products sold there. The Continent, feeble at that time in its stock of manufacture and means of giving credit, could not supply the Americans with merchandise equal to more than half the articles which it imported from them ; and the result was the transmission of the proceeds to this country, a course which supplied us with funds for our continental ex- penditure as regularly as the packets crossed the narrow seas. Such was the trade stopped by our Orders in Council ; a measure which, persisted in with blind pertinacity from year to year, drove the Americans first to the temporary expedient of an em- bargo, afterwards to the establishment of manufac- tures in their own country, and, eventually, to a de- claration of war. From 1808 to 1814. — This stoppage, sufficient of itself to produce a rapid fall in the exchange, was unluckily coincident in point of time with a heavy drain of money to Portugal and Spain, in support of the contest with France. From the Appendix to the Report of the Bullion Committee, (p. 232.) it appears that nearly three millions sterling were sent in spe- cie to the Peninsula in 1808. Next year neutral in- tercourse was, in a great measure, resumed, and the hazard of a pecuniary embarrassment would have been less serious, had we not unfortunately been visited by the other great cause of pressure on our foreign exchanges, a deficient harvest. It became indispensable, therefore, to import corn at an unfor- tunate moment ; at a time when, from other causes, our bank notes were at a depreciation of twelve or fifteen per cent. And the sum paid to foreigners for corn in 1810 being very large, exceeding (see the re- turn to Parliament in the following year) seven mil- 92 Our Currency and Exchanges. lions sterling, our exchanges fell so as to bring our bank paper more than twenty per cent, below bullion. This fall took place some time after the public atten- tion had been drawn to the subject by the Report of the Bullion Committee ; and, great as it was, it would have been still greater, had not the abundant harvest of 1810 come most opportunely to our relief. The autumn of 1810 was the first season in which the decrees of Bonaparte against our intercourse with the Continent were actually carried into effect. He had then brought his war with Austria to a close, se- cured himself by an alliance with that power, and conceived, from the fall of our bank paper and the multitude of our mercantile failures, the hope that a vigorous enforcement of his decrees would complete the measure of our embarrassment. Hence, in the winter of 1810, the general seizure of British ship- ping in the Prussian harbours ; hence also the ridicu- lous measure of burning quantities of our merchan- dise in his sea-ports. In 1811 our corn imports were inconsiderable; but the operations of neutral commerce were much cramped, our remittances to the Peninsula were large, and our exchanges extremely low. The same causes operated with increased effect in 1812, the year that our discussions with the United States unfortunately terminated in war. Happily, towards the end of that year, the result of the Russian campaign opened a cheering prospect in the political horizon ; but the result was remote ; a great struggle was still neces- sary, and the campaign of 1813 required exertions in Spain, and aid to our allies in Germany, on a scale of unparalleled magnitude. By this time our metallic currency was exhausted, and the specie bought up for the cause of the Continent, was paid for by go- vernment in bank notes, at the enormous premium of twenty-five or thirty per cent. Such continued to be the difference between paper and coin, until the over- throw of Bonaparte in April, 1*814, after which the difference diminished to ten, and even to eight per- cent. His return from Elba in 1815. and the vast Our Currency and Exchanges. 93 preparations forthwith made on the Continent by us and our allies, again lowered the exchange to twenty, and even twenty-five per cent. — a fall which, after his second overthrow, disappeared with a rapidity that seemed destined to exemplify the arguments of the antibullionists ; of those who maintained that the depreciation of our notes arose not from over-issue, but from continental demands. Tabular Sketch of the Principal Demands on our Currency for Continental Subsidies and Purchases of Corn since 1792. Years. 1792. 1793. 1794. 1795. 1796. Events Political and Com- mercial Peace. Great mercantile failures ; limitation of our paper cur- rency. Confidence reinstated. Subsidy to Austria. State of our Exchange with the Continent. A little above par. A considerable rise in the Ex- change. Exchange nearly as in 1792. A fall at first small, afterwards considerable. Exchange continues very low. Subsidy continued, and an im- portation of corn. 1797. Reduction of our paper cur- rency ; great scarcity of money. (The Bank was exempted from cash payments in Feb. 1797.) 1798. Neither subsidy nor corn im- Exchange continues i port. 1799. Renewed subsidies followed by a deficient harvest. 1800. Continuation of subsidy to Austria; great importation of corn. 1801. Subsidy suspended, but corn import continued. 1802. Peace. From 1 802 No large importation of corn, to 1808. except in the summer of 1805; nor any subsidy of magnitude, except in" the autumn of that year. From 1808 War in Portugal and Spain to 1814. throughout the whole pe- riod : war in Germany in 1809; in Russia in 1812, andinGermanvand France, in 1813 and "l 814. Corn purchases to a great amount in 1810. The Americans excluded from intercourse with the Continent after 1808, but more particularly after 1810. A considerable rise in the ex- change ; large imports of specie. favour. Fall of the exchange after Midsummer. Continued depression. Continued depression. Exchange reinstated. The exchange little affected during these six years, ex- cept in the autumn and win- ter of 1805. The fall in the exchange great and permanent, beginning at eight or ten per cent, in- creasing to twelve, fifteen, twenty-fivo, and eventually to nearly thirty per cent. 94 Our Currency and Exchanges. Y Mr « Events Political and Com- State of our Exchange with * e8,s ' mercial. the Continent. 1814. Peace after 1st April, and a A considerable reinstatement great increase in the export of the exchange, leaving it of our merchandise, but a from only eight to ten per continuance of remittances cent, against England, for subsidies and corn im- ports. 1815. In April, May, June, renewal Fall of the exchange twenty of war. and twenty -five per cent. In August and September, The exchange recovered and peace : cessation of corn brought first within twelve imports ; renewal of Ame- per cent., afterwards within rican intercourse. five per cent, of par. 1816. No subsidy or import of corn. Exchange nearly at par. 1817, 1818. Large imports of corn. Exchange again lowered three, four, five, and eventually six per cent. From 1819 No import of corn or heavy Exchange recovers; rises to to 1823. continental charge. par in 1820, and has since continued somewhat above par. Distribution into Periods during the War. — The years in the preceding table may be classed into periods, each marked by distinct features. The first, from 1793 to 1797, preceded the exemption act : after that act came an interval of two years, during which, from a concurrence of favourable circumstances, the non-convertibility of our bank paper was not pro- ductive of depreciation. A very different scene was opened by the transactions of the three years between the summer of 1799 and that of 1802 ; years of heavy continental demand and of great pressure on the exchange. It was, however, reinstated by the peace ; nor did it experience any pressure of magnitude or long continuance during the long interval that elapsed from the autumn of 1802 to that of 1808. This pe- riod of six years is perhaps the most remarkable of the whole, exhibiting the possibility of carrying on a war of great expense, without a material derange- ment of our currency, so long as we left to trade its free course, and abstained from great continental ad- vances. It was, doubtless, this long enjoyment of financial ease, this apparent stability of our money system, that inspired our ministers and bank directors with over confidence, leading the former to their m> Our Currency and Exchanges. 95 fortunate measures against the American trade, and impressing the latter (Evidence, Bullion Report, pp. 89. 96. 144.) with the notion that their issues of paper had no effect on the exchange. To the measures founded on these views, and to the events noticed in the preceding table, is to be ascribed the depre- ciation that prevailed during the last period of the war — the five years from 1809 to 1814. Total of our Corn Imports and Subsidies. — In com- puting the former, it is fit to bear in mind that we had become previously to 1793, a corn importing country, and that a certain quantity might be termed our habitual supply ; an import not affecting the ex- change, but paid by a corresponding export of our produce or manufactures ; our coals, our tin, our hardware, our cottons. We dwell, therefore, only on the years of scarcity and extra import, which, during the war, were 1796, 1800, 1801, 1802, 1805, 1810. After deducting from our total supply in these years our average annual import, there remains, as extra import, a quantity of which the cost, in the six years collectively, was not short of 25,000,000/. Next as to the amount of our subsidies : the total during twenty-one years, from 1793 to 1814, was be- tween 50 and 60,000,000/., forming with the corn pur- chases, an aggregate of 80,000,000/. Of this great sum, what proportion was sent abroad in the shape of specie ? Of the subsidies, the chief part was sup- plied in clothing, arms, stores ; of our corn pur- chases, the larger share was necessarily paid in money. If, without attempting nicety of calculation, we assume the export of specie for these purposes during the whole war at 30,000,000/., we shall be at no loss to account for the disappearance of our me- tallic currency, and of such supplies of bullion as found their way to this country. Our Exchanges since the Peace. — Since the peace, the different periods, though less marked by extremes, have been equally deserving of attention, as illustra- tive of our view of the causes of fluctuation. In the 96 Our Currency and Exchanges. autumn of 1814 our war charges ceased, our exports had free access to the continent, and the exchange altered from twenty-five to ten, and even eight per cent, only, against us : it would have risen farther, had not our corn imports been large. But no sooner did the return of Bonaparte from Elba revive the alarm of war and subsidies, than the exchange fell to eighteen, twenty, and twenty-five per cent.; a de- pression from which it recovered as suddenly after the battle of Waterloo, and the prospect of a speedy peace. During 1816 there was neither corn import nor subsidy ; the American trade with the Continent was open, and the exchange returned to par, at which it for some time remained ; but the deficient harvest of that year necessitated in 1817 corn imports on a very large scale, reduced the exchange, and would have completely overset it, had not all the counter- acting causes of free trade been in operation. By their aid we were enabled, during 1817, 1818, and the early part of 1819, to pay for an unexampled amount of foreign corn, (above 20,000,000/. as ap- pears by the Appendix to the Agricultural Report of 1821, p. 396.) without a greater depreciation than four, five, or six per cent. Since 1819, these drains have ceased, and the exchange has been steadily in our favour. Our Bank Paper : — Contradictory Opinions on the Subject We have now brought to a close our historical sketch, and shall proceed to make some remarks on the Yery opposite doctrines held in regard to our paper currency, by the adherents of ministry and opposition ; or, to speak more correctly, by the ad- versaries and supporters of the Bullion Committee of 1810. The former are still unwilling to admit the existence of depreciation in our bank paper, even in the latter years of the war: the latter equally unreasonable, refuse to trace such depreciation to the extra demands made on us for subsidies and corn purchases, and insist that it originated in over issue on the part of our banks. A singular die- Our Currency and Exchanges. 97 crepancy this, in a country of free discussion, after the direction of so much reasoning to the subject, and the lapse of so many years replete with commercial and political information. This discrepancy implies, we apprehend, more than the absence of impar- tiality : it gives cause to suspect in one party, an in- adequate knowledge of the principles of productive industry : in the other, an insufficient attention to the evidence of facts. In attempting to point out the manner in which both have deviated from impartial inquiry, and ex- ceeded the limits of fair inference, we shall proceed as much as possible by a reference to documents. We shall have little difficulty in describing the nature of our currency previous to 1797, and the effect pro- duced on it by sudden drains for continental disburse our more intricate task will be to define the results of the exemption act, the operation of which, has. from very different views, been considerably over- rated by each party. The bullionists attribute to it the whole, or nearly the whole, of the enhancement of commodities during the war; while their oppo- nents, regarding it as no less potent in good, than their antagonists in evil, are accustomed to speak of it as almost the sole engine of our financial support. Both sides forget that these effects are too great for the cause, and that the exemption act was coincident in point of time with a change in our financial system, of still more powerful operation ; we mean the in- crease of our war taxes and the reduction of our loans. Our Money System previous to 1797. — The nature of our money system will be best understood by a com- parison with that of the neighbouring countries. The amount of money circulating in France was compu- ted, or rather guessed by Necker at 80,000,000/. sterling ; the amount in England and Scotland, not ascertained with more certainty than that of France, is supposed (Bank Committee Report, May 1819,) to be between 50 and 60,000.000/. The currency of 13 98 Our Currency and JLxchcuigps. France is almost entirely metallic : there are in that country no banks of circulation, except the bank of Paris, and none of its notes being below 20/., paper forms a very small part of the circulating medium. A foreigner may reside many years in a provincial town in France without seeing a bank note, and may occasionally hear the natives speak of having seen them as of a circumstance somewhat unusual and remarkable. France is consequently prevented from saving interest on 40 or 50,000,000/. of metallic currency, the place of which, were the banking system general, might be supplied by paper. The case of France is, in a great measure, that of the Continent at large ; while in this country, on the other hand, the saving arising from bank paper has been en- joyed, in a greater or less degree, for more than a century. In what manner was this saving accomplished be- fore the exemption from cash payments in 1797 ? A bank of good character issued notes to an extent of four or five times the amount of the gold kept in its coffers, a circulation of 100,000/. being maintained in ordinary times without a greater reserve or dead fund than between 20 and 30,000/., leaving above 70,000/. to be vested in productive securities, such as short-dated acceptances, exchequer bills, or the public funds, all possessing a characteristic indis- pensable to a banker, that of speedy convertibi- lity into cash. Hence an income to the banking- house of 2 or 3000/. a year arising from perfectly fair sources ; its credit and the superior convenience of paper to metallic currency. This saving, considered in a general sense, was such as to form a national object, England having, even previous to the exemp- tion act, economised the interest on a sum probably exceeding 20,000,000/., of its currency. Such was the state of our money system in the early years of the revolutionary war, when the con- fident character of our ministers and the surprising exertions of France led to an unexampled extension of our continental expenditure. It became parti cu- larlv heavv in 179/). and unfortunately a deficient Our Currency and Exchanges. 99 harvest in that year necessitated in 1796 large pur- chases of foreign corn, augmenting greatly the de- mand on the bank for metallic currency ; hence a reduction of its discount to merchants, a reluctance or rather inability to make the advances required by government, and a general embarrassment in the money market. Under such circumstances, nothing could be more natural to all parties than to look for relief in exempting the bank from the necessity of paying cash for its notes ; a measure that would ena- ble it to continue its customary accommodation to trade, while government should meet the wants of our allies with our spare coin and bullion. The ex- periment, however, was too bold and novel to be adopted as a matter of choice ; it was delayed until the continued call for guineas in February 1797 left no other alternative. Its adoption excited both sur- prise and distrust, but was divested of a part of its alarming character by the known solvency of the bank ; and the acknowledged discretion of those to whom the new privilege was to be entrusted. A farther source of confidence was afforded to the few who knew the regulations of the bank, by the fact that the personal interest of a director is very slightly promoted by an increase of the income of the estab- lishment. Effects of the Restriction Act. — This decisive measure, which ought rather to be called an exemption than a restriction act, was limited at first to a few months, and the exchange being favourable during 1797, the bank made ample provision by the autumn of that year for the resumption of cash payments. But that step being deemed unnecessary by government, the exemption assumed the character of a permanent war measure, and enabled the bank to give a greater latitude to its accommodation both to merchants and the treasury. What were the chief characteristics of our money system in the succeeding years ? A re- lief from such pecuniary difficulties as those of 1796 ; an increase of our paper circulation, at first small, afterwards considerable, and eventually very large 100 Our Currency and Kxckangea. Next, ia regard to the value of our notes compared to coin or bullion, there was, after 1759, a fall (about four per cent.) in the value of our notes, which long remained uniform, but was followed, after 1 809, by a new and much greater fall. Lastly, the general rise in prices, though it in part preceded the exemption act, and originated consequently in other causes, conti- nued during the whole period of the non-convertibili- ty of our bank notes, and became greatest during their greatest depreciation. These facts are admitted by all parties ; the diffi- culty is in tracing them to their origin, and in dis- criminating how far the exemption act was or was not instrumental in producing them. Opinion of the Bullion Committee. — The writers of the Bullion Report, aware that the amount of Bank notes in circulation had been materially increased, as well as that the scale of discounts (Report, p. 26.) had been greatly enlarged, naturally became impressed with the idea of over-issue, and ascribed to it almost exclusively the great rise in our prices during the war. But this opinion, when given in the unqualified terms adopted by them and their supporters, is liable to serious objections. First, the amount of Bank of England notes in circulation affords, as we have more fully shown in the Appendix, no satisfactory criterion for estimating the increase of our whole circulating medium, as a part of the bank paper may be a sub- stitute for coin sent abroad. In the next place, the means possessed by the Bullion Committee of appre- ciating the effect of the various other causes of en- hancement were very limited : no evidence was given as to the rise of prices prior to the exemption act ; no reasoning attempted in regard to the effect of war in this augmentation. Neither the framers of the Re- port, nor those who wrote and spoke most confidently on the subject, possessed an accurate knowledge of l he increase of our productive industry consequent on the war, or even of the increase of our population. Had Mr. Horner or Mr. Huskisson been aware of these vital truths. — had they known how material]) Our Currency and Exchange*. 101 prices were affected by causes altogether distinct from our paper currency, such as the demand for men for the public service, and the insufficiency of our growth of corn to our consumption, the conclu- sions of the Report would have been materially dif- ferent. The various facts and arguments adduced in our preceding chapters, show how large an addition to our currency was indispensable to transact our ex- tended business, to correspond with our augmented prices. And when to this is added a reason, differ- ent in its nature, but equal in its operation — the in- ducement after 1799 to export our metallic currency to the Continent, we shall find ample means of ac- counting for a fact which we admit to be at first cal- culated to excite surprise, the increase of our bank paper. What then were the results distinctly attributable to the exemption act ; and, in the first place, what was its effect on the rules followed by the Bank of England in regard to discounts ? Its effect was highly beneficial to that Corporation : the Directors were relieved by it from the necessity of watching conti- nental exchanges, from the apprehension of a drain of metallic currency on the approach of a subsidy, or a large import of corn ; the rules of discount became greatly simplified, and, after some years the Direc- tors considered themselves at liberty to issue notes to whoever tendered bills possessing the requisite of solidity, and the less easily ascertained characteristic of being for a bona fide transaction. Country Banks. — In regard to these, the provision made by the act, if not properly an exemption, was an accommodation of great importance. They were relieved from the necessity of paying cash if they tendered Bank of England notes, a supply of which was attainable (Evidence of Mr. Baring before the Committees on Cash Payments) without the uncer- tainty and loss so frequently attendant on the acqui- sition of coin. A stock of notes could be procured at very short notice in exchange for the mercantile acceptances or other securities in which the funds of 102 Our Currency and Exchanges. country banks are generally vested ; and the latter, thus relieved from much expense and anxiety, were enabled to lessen greatly their reserve fund, and consequently to extend their discounts. Such were the effects of the act in regard to banks : to the public the principal result was a relief from scarcity of money. If, for the sake of calculation, we assume that in 1796 the total bank paper in circulation in the king- dom was 25,000,000/., and that 7,000,000/. of coin were kept in depot, we may safely infer that of those 7,000,000/. two-thirds became in the course of a few years, disposable for the purpose of discount. Now, if from the rapidity of our transfers, a million of money suffice to circulate merchandise to the value of twenty or thirty millions, the change, arising from the addition of four or five millions to our cur- rency, could not be otherwise than great in its de- gree, and extensive in its operation. Continental de- mands arose in 1799, and were carried during three years to an unexampled height : these the exemption act enabled us to meet by sending abroad our coin, exempting us, not indeed from a depreciation of our currency, but from pecuniary straits. The act had another, though as yet unnoticed re- sult — that of counteracting the tendency of our pub- lic loans to raise the rate of interest. What, it may be asked, was the current or average rate of interest previous to 1793? If we form our computation, not on the price of stocks, which from artificial causes fluctuated greatly, but on the general transactions of merchants, bankers, and capitalists, we shall find it to have been between four and five per cent. ; and if we apply a similar mode of calculation to the war, we shall have reason to fix the average rate of inter- est between five and six per cent., the charge of com- mission, and other small additions familiar to persons in business (Evidence to the Bullion Report, p. 124.) accounting for the excess above the statutory limit. The effect of a war, the most expensive ever waged, was therefore to raise interest only one per cent, ; on 7 he Question of Depreciation and Over-issue. 10^ etfect evidently disproportioned to the unexampled calls made on our national capital, and the cause * of which is, doubtless, in a great measure to be sought in the reduction of the charge of banking consequent on the exemption act The Question of Depreciation and Over-issue. — We are now arrived at the most important question in the history of our currency; a question in which the advocates of the bank and those of the Bullion Com- mittee are directly at variance. The former main- tain that the public possessed, after 1797, the same power of limitation as before, both in withholding bills for discount, and in paying over their notes to the Treasury, an absorbent to the extent of 1 or 2,000,000/. a week. Their antagonists, without denying this, which in fact cannot be controverted, appeal to the state of the bullion market in the latter years of the war ; to the acknowledged inferiority of bank notes ; and to the formidable argument, that a contraction of the amount in circulation would, at any time, have raised their value, and, if carried suf- ficiently far, have brought them on a par with coin. Such was the substance of the reasoning adduced in the various speeches and publications on this sub- ject in 1810 and 1811: such are still, in a great measure, the tenets of the adverse parties ; each interpreting, in conformity with their own theory, the fluctuations that have occurred since the peace. No speaker in parliament, no writer on trade or finance has, as far as we are aware, endeavoured to reconcile arguments at present so strongly in contradiction, or sought a solution of the problem, while he admitted the sub- stance of the allegations on either side. This we shall now attempt ; and as we enter on the discussion with an advantage unknown to our predecessors, — the evidence supplied by several years of peace, — we are not without hopes of conducting our readers to a satisfactory conclusion, if they will summon patience to accompany us through an inquiry which ran hardly fail to be both long and intricate. If the 104 The Question of narrators of military events, when entering on the relation of complicated movements, deem it neces- sary to make a demand of patient attention on the part of their readers, much more is such a warning required when we venture on a question which has been a source of perplexity to the public for a num- ber of y^ars. Difference between an Increase of Bank Paper and an Increase of Metallic Currency. — The ease with which bank notes are struck off, and the apparent ease with which they are circulated, impressed the public, long before the late wars, with a notion, that banking operated like mining ; and the general rise of prices that took place after 1764, was, by many, ascribed to that cause. Fortunately, Dr. Smith was then alive to combat prejudice in the people, or error in their rulers : he undeceived the public in this impor- portant point, and showed (Wealth of Nations, Book II. Chap. II.) that bank notes formed not an addition to the circulating medium of a country, but a substitution for coin sent abroad. An increase of coin and an increase of bank paper have this radical difference : the former tends to lower the value of money throughout the world at large, by bringing forward gold and silver, commodities of undoubted acceptance and universal circulation, while a bank produces an article current only in a particular country. These countries are, as yet, of very limited extent, paper money being hardly known in France or Holland : while in the rest of Europe the experi- ence of its effects during the present age is not at all of a nature to extend its circulation. What, it may be asked, are the causes which limit the supply of gold and silver from the mines ? Is it a monopolizing spirit on the part of any government or association, a deficiency of metallic ore, or a limitation in the demand of the public for either plate or currency ? To this we answer, that the mines are open to undertakers of any nation; that the demand, whether for plate or currency, is unlimited : Depreciation and Over-issue. 105 and that as to the quantity of ore, it is not probable that one-hundreth part of that which is in existence has yet been explored. The difficulty lies in the ex- pense of mining ; for were the machinery and labour thus employed, to be rendered more effectual or less expensive, we should soon see an increase in the quantity of the precious metals extracted and brought to market. How far does a similar reason- ing apply to banks ? They, like mines, are subject- ed to a limitation arising from expense (in salaries, rent, stamps, and the other charges of an establish- ment) ; but they have a more formidable limitation in the hazard attendant on over-issue, a hazard which may consist either in the discount of doubtful bills, or in the losses, less sudden, but eventually as serious which are inseparable from an attempt to force paper on the public. How imperiously these obsta- cles impede circulation, — how effectually they con- fine a new establishment within narrow limits, is well known to all who have endeavoured to overcome them. So far we are likely to have the assent of our rea- ders, whether bullionists or advocates of the bank ; nor need we enter on any argument to show that the issue of bank paper adds but slightly to the general stock of currency, so long as such paper is demandable in cash. But when exemption prevails, the case appears very different, and requires a close and attentive in- vestigation. Discounts. — Increase of their Amount during the War.— Of the great increase during the war in the issues of bank paper for discounts, there can be no doubt, recorded as it is in the books of the Bank of England, and, we might add, in those of almost every provin- cial bank in the kingdom. On this the supporters of the Bullion Committee found their grand argument for the charge of over-issue, but in their eagerness to attain a favourite result, they overlook several mate- rial considerations. 1. The increase of our population between the years 1797 and 1810 (15 per cent.), was necessarily 14 1 06 The Question of productive of a certain addition to the quantity of our bank paper; an addition sufficient to balance the saving arising from economy in the use of notes. 2. A farther and more powerful cause is to be sought in the activity arising out of a state of war, a state which, by holding forth the prospect of large eventual profits, naturally induced individuals to trade beyond their capital. Hence that multiplica- tion of bills, promissory notes, and other expedients for raising money, so well known to those who have marked the course of mercantile affairs during the present age, and so clearly described in the evidence (p. 124.) appended to the Bullion Report. At that time the great object of a man engaged in business, whether as merchant, manufacturer, or farmer, was to gain time by putting off a payment until he had ac- complished a sale, or otherwise realized an advan- tage in prospect. But in a season of peace, business is comparatively stationary. Our currency is ade- quate to our transactions; bills are less numerous, and payments in ready money or at short dates far more frequent.* 3. Add, farther, that in a state of war, the rise of price proceeding from the various circumstances enumerated in the preceding chapter, (augmented taxation, enhancement of labour, insufficiency of our growth of corn), made a larger sum requisite to cir- culate the same commodities. Yet here we must add a remark which we do not recollect to have seen advanced by any writer or speaker on the subject, viz. that an increase of dis- counts is likely to tend as much to lower as to raise prices. The advances of that nature during the war were made to classes strictly productive, and were evidently instrumental in increasing the quantity of our farming produce and manufactures. If the dear- ness of our farming produce was owing to the insuffi- ciency of our growth, what could conduce more to retard the progress of enhancement, than to give our agriculturists the means of increasing their supply ? '* Tooke on Hi^h and Low Prices. Part. I. pp. 87. k*seq. depreciation and Over-issue. 107 AH this may be readily admitted, but it will be urged that bankers were led by the exemption act, and by the flattering prospects of their customers, during the war, to make advances which, under other circumstances, they would have withheld. They were, we believe, very often persuaded to discount bills which were never paid, and occasionally to de- part from their proper province by making advances on such securities as land or houses. The Bank of England, in like manner, dispensed on various occa* sions with a rule to which they would otherwise have strictly adhered ; we mean the conviction that the bills tendered for discount had been drawn for real or bona fide transactions. Such relaxation probably proceeded from commendable motives : from a wish to prevent the extension of bankruptcies in manufac- turing towns, in particular Glasgow or Manchester, at seasons when a fall of prices, or the failure of some eminent house threatened to involve in insolvency hundreds of persons engaged in trade with inadequate capital. We admit, however, that on such occasions the bank directors went beyond their province, and that the results were, in general, either unavailing or unfortunate, consisting in a loss to the bank, or in a fruitless postponement of bankruptcy to the trader. But these advances could have very little tendency either to overcharge currency, or to raise prices. The notes issued, whether in town or country, whether on good or bad security, soon found their way into hands whose interest it was to keep them as little time as possible ; and any temporary over- issue was of short continuance. Effect of the Exemption Act on our Currency. — We must thus dissent from the assertion so often urged since 1810, that the exemption from cash payments gave bankers the power of overcharging the cur- rency, or, in other words, of causing a direct rise of prices. But in regard to their power in an indirect sense, we mean the power of issuing money to meet a rise of prices proceeding from other causes, such as increase of taxes or insufficiency in the supply of 108 The Question of corn, we consider the question as very different, and are ready to make a very simple admission. So long as the currency of a country consists of coin or of bank notes for which cash may be de- manded of the issuer, the export of a large sum, whether for military purposes, for a subsidy, or the purchase of corn, is necessarily productive of a scarcity of money at home. This was strikingly ex- emplified in 1795 and 1796, and in such a case the money price of commodities, far from rising, is likely to be reduced in correspondence with the reduction of the circulating medium. Had such continued the case, the war, we may be assured, would never have been popular. But under the operation of the ex- emption act, circumstances were altogether different; the check of scarcity was removed, money was to be obtained, as in peace, by whoever was able to offer good bills payable at short dates, and the amount of these was in a state of progressive increase from the various causes recapitulated in the preceding para- graph. Having thus admitted the principle, the next point is to estimate the extent of its operation. And here, if we cannot agree with the Bullionists as to the nature of the power conferred on bankers by the act of 1797, we shall, we doubt not, give them full satis- faction by our view of its results. All parties admit the fact of an increase of currency during the war, but the Bullionists ascribe it to a direct power on the part of bankers to over-issue, while we account that power strictly passive and restricted in its duration to a state of war. We consider it, however, to have been of very comprehensive opera- tion so long as it lasted, and if we were asked in what manner its operation, if temporary, proved so extensive; we answer, because it seems to have enabled bankers to meet a rise of price by an increase of issue, from whatever cause that rise proceeded. What then was the result during the war? An increase of currency in proportion to rise of price, whatever was the cause that produced the rise: whether taxes. Depreciation and Over-issue. 109 scarcity of corn, demand of men for government, or the additional cost of articles purchased abroad. Effect, in apolitical sense, of the Exemption from Cash Payments. — The exemption act was in part productive of, in part coincident with, a great change in our financial situation, a change from embarrassment to abundance, from a state of disquietude to a state of confidence. The continuance of the war, the subsi- dizing of foreign powers, was no longer checked by pecuniary difficulties, and our rulers were induced to take several measures less necessary for self-defence, and partaking more of an aggressive character, than our countrymen in general are aware of. Is it likely that, without the confidence thus inspired, we should have formed against France the coalitions of 1799 or 1805, or that we should have commenced our second war so early as 1 803 ? If, on the one hand, the pos- session of the Netherlands by France, and the rest- less spirit of Bonaparte would, under any circum- stances, have prevented the enjoyment of tranquil- lity, it is fit to add, on the other, that the scale of ex- pense on which the war was conducted, was our own act, and attributable in a great degree, to the ex- emption of our banks from cash payments. Distinction between Depreciation of Bank Paper, and Diminution in the Value of Money generally. — It is of im- portance to make a distinction in regard to the ope- ration of the exemption act before and after 1809. During the twelve years that followed the suspension of cash payments in 1797, our bank paper had given the greatest facilities to government expenditure, without incurring any depreciation of consequence, relatively to coin. The average price of commodi- ties had in this interval experienced a great rise, (not less than 40 per cent.,) compared to their average price in 1792. But as the causes of rise, (taxation, insufficiency of provisions of home growth, demand of men for government, &c.) were distinct or nearly distinct from an inferiority of paper to coiru the proper 110 The Question of term for such rise of prices is not " depreciation of bank paper," but a "diminution in the value of money." In 1809 began a rise of prices from an al- together different cause ; a rise proceeding from our bank paper not being payable in coin, and from its being exposed to a trial it was unable to bear. This trial consisted in the concurrence of three remarka- ble circumstances ; the expense of the war in Spain ; the necessity of purchases of corn ; and the privation of remittances consequent on our unfortunate stop- page of the American trade with the continent of Europe. Mode in which Depreciation was incurred abroad. — If we take, as an example, a campaign in the peninsu- lar war, and suppose that in a year, such as 1811 or 1812, in which our expenditure there exceeded 10,000,000/. there was supplied to the extent of nine- tenths in clothing, arms, stores, and specie, exported from England, leaving 1,000,000/. to be defrayed by bills in our public offices ; in what manner, we ask, could the receivers of these bills in the Peninsula turn them to account ? There was not there, as in this country, an excise-office, a custom-house, a re- ceiver for the country, nor, after the stoppage of the American trade, were there merchants, to whom they could be transferred at par or at a slight discount. If remitted to England, those bills could not pur- chase bullion ; and if they procured English mer- chandise without a perceptible loss, the quantity of such was beyond the demand of the peninsular or any continental market, limited as it was in these years by Bonaparte's anti-commercial decrees. The unavoidable consequence was a fall in the value of our bills, in other words, of the bank notes in which these bills were paid, exemplifying the doctrine of Dr. Smith, or rather the self-evident truth, that " whatever causes delay the payment, or restrict the circulation of a currency, necessarily produce depre- ciation, the ratio of which must increase with the pressure of these causes." A similar reasoning was evidently applicable to Depreciation and Over-issue, 111 our continental subsidies as far as paid in money. It held also as to the purchase of foreign corn whenever such purchases were of an amount to surpass our ex- port of merchandise. The degree of such Depreciation. — Of the degree of inferiority in our paper to the metallic currency of the Continent, the only fit index was the rate of ex- change ; and on referring to that impartial monitor, we shall find an ample confirmation of the preceding reasoning. The extent of fall during the war differed regularly in different years according to the amount of the demands of the Continent on this country. Slight in years such as 1803 and 1804, when the war was merely maritime, it was more considerable in the case of continental operations, as in 1805 and 1806 ; — serious, when to these operations was joined, as in 1 800, the necessity of corn purchases ; and greatest of all when, as in the years following 1809, there ex- isted the double drain of subsidy and corn import, without either a metallic currency, or a free neutral traffic to interpose their countervailing effects. Effect of high Prices abroad on Prices at home. — What- ever enhances corn enhances labour, and makes itself felt in almost every department of our productive in- dustry. Now, after 1809 the quarter of wheat rose from 80s. to 100s. in consequence chiefly of the fall of the exchange, of the necessity of paying in paper a fourth or a fifth more than would have been required had not that paper been depreciated. This rise, un- fortunately so great in corn, prevailed in other foreign commodities ; in timber* hemp, tallow, to which may be added a few articles insignificant in amount, but illustrative of our proposition, because they were wholly supplied by the Continent, such as cork, anti- mony, and others, the price of which rose rapidly after 1809. How far were the effects of this enhancement ap- parent in our hardware, cotton, and woollens, the cost of which was less directly affected by the price of our imports ?■ The cost in English money of Spanish wool and American cotton, doubtless, rose in come- 112 The Question of quence of the fall of our paper ; the wages of our workmen had, likewise, a tendency to rise with the price of corn. The finished article was consequently enhanced, but as the charges we have mentioned formed only a part of the cost, the proportion of rise attributable to our bank paper was not great in the case of our manufactures. Extent of such Effect previous to 1 809. — Having now explained the mode in which our bank paper affected the price of commodities, it remains to ascertain the quantum of the enhancement thus caused. And here when computing such by the rate of exchange, it would evidently be unfair to draw our inferences from a short interval, such as the latter months of 1805, when our exchanges were depressed by a sudden continental demand : the correct and impartial mode is to class the years of the exemption by periods. If we begin with the twelve years that elapsed from the early part of 1797 to that of 1809, we shall find that the inferiority of our bank notes to coin (see Mr. Mushet's Tables and Mr. M'Culloch's article on Money, in Napier's Supplement to the Encyclop. Brit.) may be reckoned, at an average of the whole period, between three and five per cent. But as this inferiority refers to continental purposes, and as a considerable interval elapsed before the deprecia- tion became so great in regard to payments at home, it will suffice that we assume three per cent, as the average rise in our prices, consequent on the exemp- tion act, until 1809. The same after 1809. — After 1809 we enter on a new- era; our financial horizon became obscured, and the tone of the calculator must be altered. If after that year twenty-five per cent, was the average de- preciation of our bank notes abroad, and if at home we make the same allowance as before, an allowance founded on the time which it takes to adjust prices generally to an alteration in the value of a currency, particularly where that alteration is not apparent, we shall probably find fifteen per cent, a fair represen- tation of the rise of prices, as far as caused by the Depreciation and Qver-iss at. . IlS nun-convertibility of our paper, during the five last years of the war; in other words, that 115/. of our bank paper was required to make those purchases, or transact that business for which 100/. of it would have been sufficient, had there been no exemption from cash payments. Summary of the preceding. — If we proceed to make a summary of the various facts connected with our paper currency, and of the conclusions they suggest, we shall find them nearly as follows : In regard to Diminution in the Value of Money generally r , distinct from the Fall of our Bank Paper. — 1. The exemption from cash payments was pro- ductive of a saving to our banks peculiar to this country, and enabled them to make advances at a rate of interest lower than that of any other country during the war. This had, in some measure, a ten- dency to retard a rise of prices ; but 2. The exemption caused a very different result, in as far as it relieved bankers from the necessity of regulating their issues by the state of the exchange. It may even be said to have given free scope to the various causes of enhancement attendant on a state of war. Depreciation or Inferiority of our Paper Coin. 1. Our dependence on the Continent, and the non- convertibility of our bank paper, were productive of its depreciation, particularly after 1 809 ; but, 2. The effect of that depreciation on the price of commodities, in other words, the rise of prices conse- quent on the fall of our bank paper, does not appear- to have exceeded 15 per cent. These conclusions will, we trust, be found to give the question a definite form ; yet moderate as our statement may appear to the reader, we hardly expect it to receive a ready assent from either party, so per- plexing is this inquiry, and so much has it been in- volved with other topics of discussion. We shall ac- 15 114 The Question of cordingly proceed to make a few animadversions on the favourite tenets of each. Arguments of the Advocates of the Bank. — These gen- tlemen, with all their ardour in the cause of ministers, will hardly refuse to allow that the command of money, to which the exemption from cash payments was so instrumental, increased our scale of expendi- ture during the war. In admitting this, they can make no great objection to the inference that the ex- emption act was a powerful, though indirect, cause of the rise of prices previous to 1809. They will be more reluctant to admit our second position, that which assumes depreciation of our bank paper; for though they allow a great fall to have taken place in the exchange after 1809, they are ill prepared to ad- mit that from the moment we declared our paper not convertible into the currency of the rest of the civil- ized world, we rendered depreciation possible, and that a postponement of the evil, or a mitigation of its extent, would necessarily depend on the nature of our connexion with the Continent, on the degree to which our paper should be put to the test. But those who still feel a difficulty in believing depreciation to have existed at home, should begin by asking themselves whether, without the non-con- vertibility of our paper, depreciation would have ex- isted abroad ; or, if it had begun, whether it would have continued. If they refer to the evidence of Mr. Goldsmid, and others, before the Bullion Committee, they will find, that had our currency been of coin, or convertible into coin, 7 or 8 per cent, would have been the greatest difference that could possibly have taken place in the exchange even at the time of the anti- commercial decrees. Let them ask, in the next place, whether a reduction of the quantity of our bank paper would not at any time have raised its value, and, if car- ried a sufficient length, have brought it to a par with coin ? Supposing the advocates of the Bank to assent to this reasoning, and to admit the existence of depre- dation, our next object, is to satisfy them that our es- Depreciation and Over-issue. 116 timate of.it not is exaggerated. This will best be done by a comparison of the rise of prices in England, and on the Continent. If in this country 160/. were ne- cessary towards the close of the war to make the purchases which 100/. made in 1792, or if, in other words, our prices experienced a rise of 60 per cent., the rise on the Continent will probably have been found to have been about 30 per cent. This differ- ence was too great to be explained by any difference in the comparative charges of war ; for taxation, the demand of men for the public service, and the en- hancement of corn, were all operative in a considera- ble degree on the Continent. Farther, since the re- instatement of our currency, the decline in prices has been about 15 per cent, greater in England than on the Continent, a coincidence which seems fully to justify our computation, that that proportion of the rise in war was produced by the fall of our bank paper. The Supporters of the Bullion Committee. — We are next to address ourselves to the adherents of a differ- ent doctrine, to men who take a bolder tone, and do not scruple to tax their antagonists with ignorance of the principles of productive industry. Nor need we, in truth, be surprised at the confidence of their lan- guage in regard to the question under discussion. The rise of our prices during the war was so pro- gressive, and so coincident in point of time with the increase of bank paper, that the connexion of cause and effect was generally asserted, long before it re- ceived a kind of official sanction from the Bullion Report. To ascribe enhancement to over-issue, was easy ; to trace it to other causes and to define the limited operation of the exemption act, would have been a tedious and intricate task. Yet the difference between us and the Bullionists consists less in the extent of enhancement, attributed to our bank paper, than in the mode by which that enhancement wa? produced. While they hardly notice the effect of tax- ation, demand of men for government, or iho insuffi- 1 lb' The Question of cient growth of corn, as causes of rise of price, and ascribe almost all to bank paper, we consider these as the direct causes, and our paper as operative only in a passive sense, by giving scope to these causes, and consequently facilitating the continuance of the war. We can trace no direct power in banks to over-issue ; and those who insist on it, will find themselves in- volved in all the difficulty attendant on an attack of the strong hold of their opponents, viz. the power pos- sessed by the public of relieving themselves of a sur- charge, by paying bank notes into the Treasury. The Bullionists, being in general political econo- mists, will readily assent to the arguments of Dr. Smith, that banks, while subject to cash payments, possess no power of increasing the amount of cur- rency; a power which many projectors, about the middle of last century, fondly imagined to reside in banks, and the non-existence of which is so clearly explained by Dr. Smith, in his account of the unsuc- cessful career of the Ayr Bank. When satisfied of this, let them next endeavour to show in what man- ner it was possible that such power could have been conferred by the exemption act. That act was evidently incapable of giving solidity to bills or other securities, which, without it, would have been bad or doubtful; nor did any of its provisions either oblige or induce the public to pay interest on more currency than they required. During its operation as before, our notes were nothing more than an in- strument of circulation, and one which continued to cost the holders fully as much as during the war. Obtained by a sacrifice of interest, it was important to every individual, whether a speculative or a regu- lar dealer, to circulate them as quickly as possible, to retain them no longer than was necessary to ac- complish a specific purpose. From this reasoning we infer that bank paper, whether payable or not in cash, must await the call of the customer, and that its circulation can be augmented only to meet a rise proceeding from other causes. Farther, this ex- tended circulation can continue only so long as the Depreciation and Over-issue. 117 causes of high prices remain in force; for bank paper has neither the power of raising prices in the first instance, or of maintaining them when the causes of enhancement cease to operate. If this doctrine appear somewhat bold, we appeal to the evidence of facts, and invite our readers to consider how remarkably our conclusions are sup- ported by the course of circumstances since the peace. During the years 1815 and 1816 no compul- sion was exercised in regard to a return to cash pay- ments, nor were the advantages arising to bankers from the exemption act, restricted in a single instance; yet country bankers were forced greatly to curtail their circulation, a measure which, had they pos- sessed the power commonly attributed to them, would, doubtless, have been postponed till the act had been repealed. Further, had our banks pos- sessed this power, the latitude given to circulation during the war, would, we may be assured, have been much greater. Mr. Huskisson, when writing on this subject in 1810, and viewing the question in the light of the Bullion Committee, acknowledged his surprise that the issues of the bank had not been far greater. Is it going too far to ask whether this does not justify the suspicion of a latent error in the reason- ing of Bullionists ; of the existence of circumstances of which their arguments take no account ? Without pressing this point in the abstract, we shall adduce a fact entitled to the most attentive consideration of those who invest the exemption act with so formida- ble an attribute as that of enabling bankers to make a direct increase of their issues. Our growth of corn, inadequate during the whole war, became so, in a high degree, soon after the exemption act : our farmers had then a powerful motive to extend their tillage, and, in fact, did extend it as far as their means admitted. It was a general notion on the part of the public, and we believe of ministers, that this exten- sion was limited, not by want of funds, but by the nature of the soil : an opinion, however, wholly dispro- ved by the experience of the last seven years., in which the 118 The Exemption Act viewed amount produced from our soil has been so greatly augmented. To what has this augmentation been owing, except to the application of additional capital and labour ? Observe the importance of the conclu- sion to which this leads : our soil having been, as far as regarded natural fertility, equally capable of in- creased production, ten or twelve years ago, would not our farmers, had our banks possessed the power ascribed to them, have obtained such an issue of notes as would have enabled them to extend their tillage, and bring our growth of corn on a level with our consumption? If want of hands be alleged as the obstacle, we answer, that in Ireland and in Germany there were many thousand labourers unemployed, and that a command of capital, such as is vulgarly as- cribed to our banks, would soon have transported them to our shores. Historical Inquiries. 1. The Exemption Act, viewed in connexion with Hie events of the War. — We shall now bestow a few para- graphs on an interesting, but hitherto unnoticed topic, in the history of our paper currency; we mean the question, " whether the exemption act, had it not taken place when it did, would have been re- sorted to at any subsequent era in the war ?" This inquiry, brief as we shall make it, requires an atten- tive notice of our situation relatively to the Continent at particular periods. The preliminaries of peace between France and Austria were signed at Leoben in April 1797, a few weeks after the exemption act, and though the defini- tive treaty, (that of Campo Formio) was not conclud- ed till the autumn, there existed little doubt of its taking place, and it is a well-known fact, that, in the course of the summer, our pecuniary resources became more abundant. This was also a time of na- val success, and though the dread of invasion con- tinued, we have the authority of the Bullion Commit- tee (Report, page 27,) that the bank ought to have m connexion ivith the Events of the War, 119 met an alarm of that nature by a liberal issue of their notes. Be this as it may, it seems extremely unlikely that at any time in 1797, after the preliminaries of Leoben, ministers would have adopted a measure so new and questionable as the suspension of cash pay- ments. The succeeding year was one of peace on the Con- tinent, and of prosperity in this country. But in what manner did the renewal of operations by land in 1799, affect the state of our circulating medium ? The effect, for some time inconsiderable, became very different after the failure of the harvest ; the long in- terval of two years that elapsed from that failure, until the certainty of a favourable crop in 1801, would, had cash payments been enforced, have recalled all the difficulties of 1796 ; so that we by no means ven- ture to assert that ministers would have forborne a recourse to the measure in question. The preliminaries of peace with France were signed in the autumn of 1801, and there ensued a long interval of ease in regard to financial and commercial affairs. Even in 1805, when we again roused the Continent to arms, and subsidized not only Austria, but Russia, *jie pressure on our exchange was tempo- rary ; for this was no season of indecisive warfare, of protracted operations : our allies had now an anta- gonist who brought a campaign speedily to an issue ; and who, at Ulm and Austerlitz, effectually relieved us from the pressure of subsidies. In 1806 and 1807, part of our allies continued in arms, but they were not supported by ministers on a scale productive of embarrassment, and our corn imports were fortunately not of a magnitude to press on the exchange. There thus elapsed a period of not less than seven years without any great or continued derangement in our continental exchanges. However, a very differ- ent prospect was opened by the events of 1809, by our augmented expenditure in the Peninsula, and the necessity of large purchases of corn. Had our bank- paper been at that time demandable in cash, we should, doubtless, have experienced great difficulties. 120 The Exemption Act viewed nor would the public, ardent in the cause of Spain, have hesitated to support ministers in any measure that promised an addition to our pecuniary means. There is, on the other hand, equally little doubt, that without the previous existence of the exemption act, and the confidence inspired by its till then success- ful operation, we should not have interfered with the freedom of American navigation : we would have studied more carefully the effect of that navigation on our resources, and have cherished it as a fund for our continental expenses. Our ship-owners might have clamoured, and individual members of the cabi- net might have been rendered converts to their views, but the opinion of the bank directors would have been hostile to such a measure ; and the dan- ger pointed out by the solitary voice of Mr. Baring (Inquiry into our Orders in Council) would have been brought before government with all the weight of that poAverful body. II. The next and concluding object of our inquiry is, "to what degree did the exemption from cash payments increase to government the means of ex- ertion on the Continent ?" By substituting at home paper for metallic currency, it enabled us to send abroad our gold coin, the amount of which, very dif- ferently as it has been computed, (Bank Committee Report, May 1819,) was, probably, not far short of 20,000,000/. sterling ; — a most substantial aid, doubt- less, but one which was, in a great measure, exhaust- ed in the first three years of trial, 1799, 1800, 1801. From that time forward, the portion of gold coin in the country appears to have been comparatively small : at all events, it was found quite inadequate to the demand in the second period, 1809 and 1810, the exchange having fallen rapidly as soon as the pressure on it became considerable. The extent of direct aid arising from the exemp- tion act, seems thus to have been limited to the amount of our gold coin ; but we should enter into a much wider field, were we to calculate the augmenta- tion of our financial means by the other results of the in connexion with the Events of the War. 121 act ; the increased facility of discount,- the compara- tively moderate rate of interest, above all, the prac- ticability of increasing our stock of currency in proportion to the rise of our prices. After every deduction for exaggeration, and after ascribing the larger share of our financial abundance to the bold plan of raising the supplies within the year, there still remains a great amount referable to the effects of the exemption from cash-payments. Of the extent of aid arising from a moderate rate of interest, some idea may be formed by those who have visited the Continent, and observed how slowly productive industry advances in a country like France, where, even in peace, 6 or 7 per cent, is the current interest of money. This benefit we experienced without much alloy, until the five last years of the war, when the de- preciation of our paper on the Continent caused a sudden increase of our foreign disburse, and some time after, an increase less sudden, but of greater amount and permanency, in our expenditure at home. The losses hence arising may, we believe, without pressing the point to an extreme, be carried to 100,000,000/., in addition to which we have to charge on the exemption act a large proportion of the distress of our agriculturists, conducive as that act certainly was, to the enormous rise of prices during war, the fall of which has been, and will be productive of great embarrassment, until wages, sala* ries, and other charges, shall be accommodated to the new scale. It thus becomes a question, whether the amount of benefit derived from the exemption in the period preceding 1 809 has not been balanced, perhaps more than balanced, by the loss and pressure of the subsequent years. This point, however, we have no wish to urge, and still less the speculative question already alluded to, whether, without the aid derived from this act, our government would have renewed the war in 1803, or have conducted it on so expensive a scale. Our object is statistical, not political; and in calculating the advantage or 16 122 The Exemption Act viewed, &c. disadvantage of a great financial measure, we con- fine ourselves to reasoning on events as they actually occurred. Mr. PeePs Bill. — The majority of the public, yield- ing to first impressions, and unable to follow up an intricate course of reasoning, have ascribed to Mr. Peel's bill that re-action which arose from a more comprehensive cause. As to the present effects of that bill, we can trace none of consequence, except a partial rise in the value of gold throughout Europe, consequent on the large purchases of the Bank of England ; while, as to its permanent effects, we can perceive, so long as peace lasts, hardly any worth notice, except an obligation on that establishment to keep a large reserve in cash, and consequently to reduce its annual profits by 400,000/. or whatever may be the charge of providing and keeping that deposit. Country bankers, on the other hand, are subjected to little additional expense, since by a clause in the act of 1819, recently prolonged, they continue exempt from the necessity of paying in cash, if they tender Bank of England notes. But innoxious as this law in a great measure was, we consider its enactment matter of great regret, partly as subjecting to undue censure the individuals instrumental in passing it, more as tending to make the public mistake the real cause of the distress that has since taken place. Had no such act been passed, and had the bank been left to pay in cash or not at its option, the public would, as in 1815 and 1816, have fixed their attention on the transition from peace to war as the real cause of the fall of prices, and have been better prepared to comprehend and second the financial measures which such a transition required. 123 CHAP. V. Agriculture. We propose dividing this very important branch of our subject into three parts: I. An historical sketch of our corn-trade, particu- larly since 1792 : and the causes of the remarkable fluctuations of price. II. The present situation and prospects of our agri- culturists. III. The question of a protecting duty. SECTION I. Historical Sketch of our Corn-Trade. The interference of our legislature with the export of corn, dates from a very remote era ; but our notice shall not be carried beyond the reign of Elizabeth, a reign which, in its early years, exhibited corn at as low a price as at any period of our history, but be- came in its progress as remarkable for enhancement as the reign of George III. England was in those days, a corn-exporting country, if the name of export can be said to belong to a surplus produce hardly greater than that of a single county in the present age. In the early part of the reign of Elizabeth (1562), export was permitted by act of Parliament, whenever our prices fell to 10s. the quarter for wheat, and 6s. Sd. for barley and malt; prices remarkably low, when we consider that our coin was, in point of metallic weight and fineness, the same as at present. At that rate, however, they did not long continue ; a considerable rise took place before 1570: and in 1593 the export limit was extended by act of parlia- 124 Historical Sketch of our Corn-Trade. ment to 20s. for the quarter of wheat, and 12$. for barley and malt. This doubling of price in the course of thirty years, has not a little embarrassed political arithmeticians : it is commonly attributed to the influx of metallic currency from the American mines before an outlet was found for it in India and China, but from our ex- perience of the limited effect of such a cause in sub- sequent times, particularly since the late peace, we are inclined to lay no little stress on the general preva- lence of war throughout Europe, from the middle of the sixteenth to that of the seventeenth century. Be this as it may, the enhancement continued progressive : for in 1623 the export limit was raised to 32s. the quarter for wheat, and 16.s\ for barley and malt. In the succeding age, particularly under Cromwell, our markets were considerably higher, but the rise was in some degree nominal, our coin, though no longer debased by government, being deteriorated by clip- ping and filing, and brought, at times, no less than 20 per cent, below its legal value, — an abuse not com- pletely remedied till 1717. Bounty on Export. — In the reign of Charles II. the prices of corn declined, and though several acts were passed in (1660, 1663, 1670), imposing a duty on foreign corn, their effect in our market was incon- siderable, because our growth equalled, or more than equalled our consumption. Prices accordingly did not rise, the agriculturists complained, and the epoch of the Revolution was marked by a new refine- ment of legislation in their favour. The necessity of providing supplies for the formidable contest with Louis XIV., led government to contemplate a land- tax, and to offer as a douceur to the landed interest, a premium on export, which, accompanied by a pro- hibition of the import of foreign corn, implied a cer- tainty of increase of price, and consequently of rent. The chief provisions of the act were the payment of a bounty of 5s. for every quarter of wheat exported, so long as our price continued at or below 4&,^r% e A t 1802 and 1803. i l»(W, J, 4. $ 3 5 6 1804. A deficient crop, followed how- 1 Average of} ever by average crops in 1805, > the years > 4 2 6, 7. ) 1805,6,7,8. ) 1808. A partial deficiency - 1 Average of 5 1809. A great deficiency - - >the years > 5 9 1810. A good crop - - - )1809&1810. J 1811. A deficiency - } Average of} 1812,13. Crops favourable, but currency > the 3 years > 5 18 8 depreciated. - - S 1811,12, 13. } years 1814, ( 3 115 15, 16. \ 134 Ftuttiifitions in the Price of Com. yeais - of wheat £. s. (I 1814. A crop not exceeding the average ' but a considerable import, an: a decrease both of demand and of Average 1 farming charges consequent on j> during the f the peace. 1815. A full average crop 1816. A great and general deficiency. 1817. A crop somewhat below an average ) ^ vera £ e of ) 1818. An average crop - - - J^ 17& JJJS!j 4 9 5 1819. A crop somewhat below the average — — " 3 13 1820. A crop exceeding the average — — 3 5 7 1821. An average crop ... — — 2 14 '2 \ 822. An average crop --- — — 233 The deficiency of a particular year is felt little on the average price of that year, but greatly in that of the succeeding year, being seldom ascer- tained till late in autumn. The prices in the above table are taken from the Windsor market to 1813 inclusive; afterwards from the average return for England and Wales, which is somewhat lower than the price at Windsor, Causes of Fluctuation in the Price of Corn. It is common to ascribe a great share of these fluc- tuations to the corn laws ; but those who have written and spoken on that subject, whether in favour of or against these laws, would have performed a useful service had they been more sparing of argument and more attentive to the facts connected with our corn trade. The result would, we believe, have been a discovery, that the effects attributed to our corn laws, whether by their supporters or opponents, have been greatly over-rated, and that parliament, in attempting to regulate the currency of our markets, might, as was remarked by the late Mr. Whitbread, be compared to the philosopher in Rasselas, who re- garded the sun, wind, and rain as under his control. The bounty act of 1 689 had, doubtless, for some time, an operation favourable to landlords, enabling them to let their lands more readily, perhaps on somewhat higher terms ; but after the stimulus of war was re- moved, the bounty proved altogether unequal to the maintenance of prices, and certainly caused to our country gentlemen, as members of the community at large, a loss greater than the benefit it brought them Fluctuations in the Price of Corn. 135 in the capacity of landlords. Their prosperous day did not arrive until after 1764, when their boasted aids, export and bounty, disappeared together. From that time corn maintained a steady price, or rather experienced a gradual rise, the causes of which, as the bounty was now inoperative, will, we believe, be readily admitted to have been, First, and principally, an unusual proportion of un- favourable seasons between 1764 and 1773. Secondly, that the increase of capital and labour applied to our agriculture, was not in proportion to the increase of our population. This arose from va- rious causes: the wars of 1756 and 1775: the ex- tension of certain manufactures, particularly cotton ; and an impression, founded on the experience of the preceding half century, that agriculture was an un- profitable pursuit. We now come to the act of 1773, the only act which seems to have had an operation steadily ad- vantageous to landlords ; our average price of wheat from 1773 to 1788 being about 49s. a quarter, while in France it did not (see Appendix) exceed 38s. or 39s., and at Dantzic 41s. a quarter. Here was a real and steady superiority of price, the maintenance of which was owing in part to the American war, but in part also to the moderate nature of the act, the price of 48s., pointed out by it as a kind of limit, offering no temptation to capitalists to transfer their funds from trade or manufacture to land. Had the import limit been 54s. there seems little doubt, after the proofs we have had of the practicability of extending our til- lage, that it would, ere long, have been overdone, and our growth rendered not only equal but superior to our consumption. By asking little the landholders ob- tained a certainty, and this example of the success of interference when interference is very slight, has a claim to their serious attention at the present moment. The late Wars. — In the period from 1793 to 1814, the corn laws were in general inoperative, the cur- rency of our market being usually above the import limit, and our ports consequently open. No differ- ence appears to have resulted from the restraint on 136 Fluctuations in the Price of Corn. import imposed by act of 1 804 ; an act which had, we believe, the effect of enabling landlords to make a rise of rent more general and more approaching to uniformity over the kingdom in point of time than would otherwise have been practicable, but which had certainly no effect in raising markets, its tenden- cy to extend tillage balancing, or more than ba- lancing, any tendency to keep up prices by an occa- sional and short exclusion of foreign corn. What then were the causes of the unexampled rise of prices between 1793 and 1814? The unusual number of bad or indifferent seasons, not less than seven (1794, 1795, 1799, 1800, 1804, 1809, 1811,) in the course of eighteen years. The great demand of men for military service, in consequence of which the increase of the producers of corn failed to keep pace with the increase of the consumers. The consequent rise in the price of labour, and in farming charges generally. The increase of taxation. The prevalence of similar causes on the Continent, and consequent limitation of import. The depreciation of our currency, particularly after 1809. Of all the departments of our national industry, none received so continued a stimulus from the war as agriculture. Our manufactures, particularly those of cotton and hardware, experienced at times a great- er impulse ; but the nature of manufacture admitting of more speedily increasing supply in proportion to demand, the briskness was often temporary, and fol- lowed by seasons of discouragement. Our tillage, on the other hand, was hardly at any time brought on a par with our increasing population, so that the stimulant of a demand, equal to or greater than the internal supply, prevailed throughout almost the whole period. Causes of the Fall of Prices since the Peace. — These have been partly peculiar to this country, partly Fluctuations in the Price of Com. 131 common to it with the Continent of Europe. Of the latter description were The application of additional capital, and, in a greater degree, of labour, to tillage, since the reduc- tion of military establishments. A succession of seasons more favourable than during the war ; the Continent, like England, having had, since the peace, only one bad summer, 1816. Though, from the extent of the failure on that occa- sion, we may consider it equivalent to two seasons of ordinary deficiency, the proportion of favourable seasons since the peace is still considerably greater than during the war. Next, as to the causes of decline peculiar to this country, we have The reinstatement of our paper currency; and, The great reduction of freight and other charges of transport ; a principal cause of the magnitude of the import in 1817 and 1818. Labour applied to Tillage since the Peace. — The ope- ration of several of these causes is sufficiently obvi- ous, but the extent of one which to us appears of con- siderable importance, may be doubted by many per- sons, particularly by those who compute the extension of our growth by the number of enclosure bills, and who have remarked (see Appendix) the great de- crease in such acts since the peace. To those per- sons we would submit an observation which, however plain, is of the highest importance, viz. that " the most productive husbandry is that which is practised on land already under cultivation." This truth es- caped the attention of the Agricultural Committee of 1821, but it is well known to intelligent farmers and land-surveyors. In support of our opinion, we refer our readers to the evidence of a practical farmer* Mr. Becher, of Suffolk, given before the Corn Com- mittee of 1810. When asked whether he considered the import limit of that time (63.?.) as too low, Mr. B answered, (Evidence, p. 55.) " I look upon the price at which wheat is now imported not sufficient to enebtrfage the culture of wheat to the extent, that is necessarv for the king-- 1 38 Fluctuations in the Price of Com. dom ; but I believe there is not the least doubt, if the import price was at 34*. instead of 63s., or even higher, that the effect would be, upon a notice given that that would be the import price after the 30th September in any year, that the consumption of the country would be fully provided for at home, even in the first year after such notice." Could it be provided for in the first year without cross-cropping ? " I believe that the lands now sown with wheat are not in the high Btate generally that they might be ; and this I am aware of, that every additional hoeing of the wheat crop will give, upon an average, at least two bushels an acre. I have tried the experiment more than once in the same fields, by not hoeing, hoeing once, and hoeing twice : the difference has been — with one hoeing, two bushels an acre more and upwards, and in that hoed twice, four bushels more." This opinion may be followed up by asking what amount of additional labour is at the disposal of our farmers, since the peace? A comparison of the population returns of 1811 and 1821, appears at first to operate against our argument, and to imply that the increase of the growers of corn was, in the course of these ten years, considerably below the increase of the consumers, the former being in the ratio of only 9, the latter of 19 per cent, of our population. But this comparison is made by a number of families, and the effectual plan is to calculate the able-bodied la- bourers. Now, of these peace restored a number to agricultural labour, and what was of at least equal importance, suspended the drain of others as recruits for the public service. Is it practicable to reduce the numbers in question to the form of specific calcu- lation ? The proportion of the population of Great Britain and Ireland employed in agriculture in the latter years of the war, could not (see the Popula- tion Return of 181 1) be less than 7,000,000, of whom the able-bodied exceeded 1,700,000. Of these in war there were withdrawn for the army, navy, and militia, (exclusive of local militia,) nearly one-tenth, say - - - - - 170,000 Whereas in peace the number of the agricultural class so withdrawn is not - 30,000 Leaving a difference of 140,000 or one-twelfth of the whole. Fluctuations in the Price of Com. 1 39 iNow if we calculate the produce of their labour on the most moderate scale, not at a twelfth but at a twenty-fourth of our crop, the result is an addition to our supply of more than a fortnight's consumption of our whole population, a quantity which, small as it may seem, was considerably larger than our average import during the war. And as no article is so much influenced as corn, (Evidence, Agricultural Commit- tee, pp. 229 — 240.) by a slight addition to or sub- traction from the usual supply, an increase, such as we have mentioned, is sufficient to cause a material change in the market. Viewed in connexion with the conversion of pasture lands in Ireland to tillage, it will, we believe, be found to afford a more adequate explanation of the low price of corn, than any other cause except the continuance of favourable seasons.* SECTION II. Situation and Prospects of our Agriculturists. We have now explained the causes of the greal change that has taken place since the peace, of the remarkable increase in the quantity and reduction in the price of produce. Our next object is to exhibit the result of this change, and to convey an idea of the actual situation of our landlords and farmers. Estimate of our Agricultural Produce and Rental. Produce. — Annual value of agricultural produce, (not only corn but wool, hemp, flax, timber, &c.) raised in Great Britain and Ireland. In 1812, our produce, exclusive of seed, was com- puted by Mr. Colquhoun, in his well-known work on * See the close of the Appendix to this Chapter : also the close of the Appendix to the Chapter on Population. 140 Situation and Prospects the " Resources of the British Empire," (pp. 66 — 89.) at £217,000,0 H) Deduct pasture and all produce used for the food of horses, horned cat- tle, and the lesser animals, about 100,000,000 Value of annual produce for the food of man, or for the purposes of manufacture - - £117,000,000 Since 1812, prices have fallen above sixty per cent. ; but as Mr. C.'s estimate was made greatly be- low the currency of the time, the deduction applica- ble to his results does not exceed 26 or 30 per cent. This deduction in prices, large as it is, appears to be balanced, or nearly balanced, by the increase in the quantity of our produce. To ascertain the extent of such increase is a matter of great difficulty, but the probability of its being very large is supported by several powerful considerations ; viz. The diffusion of improvements in husbandry. The addition to our population, and the cessation of a drain of the able-bodied men for the public ser- vice. The excess of the population and produce of Ire- land over Mr. Colquhoun's estimate. The conjunct of these causes may, we believe, safely be computed to form an addition of 25 per cent, to the quantity of our produce, and to leave the value of the whole not far short of Mr. Colquhoun's estimate. Rental. — In 1814 the rental of England, Wales, and Scotland was carried, as appears by the property- tax returns, to nearly £43,000,000 Add for Ireland, (conjec- turally estimated) * 10,000,000 Together £53,000,000 Add for all omissions and allow- ances on the property-tax returns, a supposed amount of 5.000.000 of our Agriculturists. 141 The great increase that has of late taken place in our produce having been chiefly on lands already un- der tillage, we add for new land brought into culture since the peace only - - - 2,000,000 Making in all £60,000,000 Deduct for all abatements of rent since 1814 made, making, or which must, ere long, be made, one-third, or 33 per cent, of the war-rents, 30,000,000 Remainder £40,000,000 a sum which will probably form the rental of Great Britain and Ireland, when the price of wheat shall be steadily between 50s. and 60s. a quarter, and when farming charges shall be brought down to the peace standard. Large as is this abatement of rent, it is less great than the fall in the price of produce, but the improved husbandry has of late made considera- ble progress, and the cheapness of provisions has caused a great decrease of poor-rate. In no class of the community has the effect of tran- sition been either so severe or so long continued as among the agriculturists. If to the rental of landlords in the latter years of the war, we add the income of our farmers, we shall find, (see property-tax returns for 1812, printed in 1816,) including Ireland, an aggregate of more than 100,000,000/. This, it must be allowed, exceeded all due bounds, and a reduction to 75 or even to 70,000,000/., for the total of rental and farming income^ would have been nothing more than a fair participa- tion in the general abatement attendant on peace ; a relinquishment of monopoly for a fair average profit. But of late years the income of farmers is, in a man- ner, suspended, and of the rents they at present pay. a large proportion is drawn from their capital. 142 Situation and Prospects Of the extent of national injury arising from this state of things, some idea may be formed from the following estimate of the proportion borne by agri- culture to the productive industry of the country at large. Proportions in 100 Proportion of the national revenue arising from agriculture at the reduced prices of peace, about - - - - 30 Proportion of our population dependent for employment on agri- culture (see the population return of 1821) in Great Britain, distinct from Ireland - - - - - 33 Proportion of national property annually created, being the amount of corn, grass, wool, hemp, flax, timber, &c. after a suitable de- duction from Mr. Colquhoun's estimate - - - 45 Proportion of national capital affected by the prosperity or decline of agriculture, being the value of our land, farming stock, and houses on farms and estates, adopting Mr. Colquhoun's mode of estimating, but making a great abatement on the prices of 1812, (see Appendix to the chapter on National Revenue and Capital) above - - - - - - 60 After this statement it is needless to expatiate on the magnitude of the injury arising to our manufac- turers, our shop-keepers, or the Treasury, from the distress of agriculture : nor need we go farther to ac- count for the chief part of the national embarrassment in 1 81 6, or of our revived prosperity in 1 81 8. It is al- most equally idle to discuss the question, whether the agriculturists are entitled to our sympathy, or whether their profits, towards the close of the war, were not such as to exceed all legitimate proportion. Their case involves a question of policy fully as much as of justice, — the losses of any great part of the nation forming the losses of the whole, and any deficiency in their contributions to the exchequer falling necessa- rily on the other classes. Present Situation of our Landlords and Farmers. — A reduction in the circumstances of farmers was un- avoidable, their profits having consisted less in ac- quisition of capital than in additions to income — ad- ditions which were great only in the latter years of the war, and arose chiefly from the depreciation of our currency. With landlords the case was some- what different: their increased receipts had been of our Agriculturists. 143 less connected with depreciation, while their pos- session of capital exempted them from any immedi- ate necessity of altering their scale of expense. Time has been afforded them to make a deliberate dis- tinction between nominal and real income ; between that decrease which actually deducts from the power of expenditure, and that which, in consequence of the rise in the value of money, does so only in ap- pearance. During the war they had an opportunity of observing how closely augmented expenditure fol- lowed augmented income ; it now remains for them to try reduction, and to carry it to the length pointed out by the fall in the price of commodities. That fall does not, we allow, apply to them so largely as to the lower and middling classes : it has taken place chiefly in the necessaries of life, and, as yet at least, holds much less in regard to the expense of the high- er ranks, such as the bills of tradesmen, salaries, wages of servants, professional fees, to which we may add education at our public schools or universities, along with the cost of articles of luxury, such as wines, plate, and ornamental furniture. Yet even in these reduction has commenced, and may be carried much farther when the upper classes think proper to hold a decided tone, and retrench abuses engendered in days of abundance. On comparing the present situation of our land- lords with what it was in the latter years of the war, we are led to compute the apparent or nominal de- crease of their income at forty per cent., the real de- crease at twenty per cent. ; assuming that the remain- ing twenty per cent, are counterpoised by reduction in their expenditure either already made or perfectly practicable. We go, perhaps, too far in supposing an actual loss to the extent of twenty per cent. : if we make allowance for the repeal of the property- tax, and reduction of the assessed taxes, the loss should, doubtless, be less ; but, without pressing that point, we proceed to ask from what source the extra income arose during the war ? Partly from the gene- ral rise of profit at that period, more from an advan- 144 Situation and Prospects tage peculiar to agriculturists, the monopoly of the market in consequence of the continued insufficiency of our growth. Advantages such as these are ne- cessarily temporary, and, could the nature of our situation have been foreseen, would have been con- sidered by landlords as at a close, as soon as our po- litical circumstances were changed, and the country became assured of peace. But rents, even on this reduced scale, are not, it may be said, at present, nor are our prices equal to the cost of production, leaving rent wholly out of the question. We answer that no calculation can be founded on the circumstances of this season of transi- tion and over-stock ; but as a great part of the dis- tress arises from temporary causes, such as the tardy reduction of farming charges, the better plan is to calculate probabilities, and to reason on a rate of rent, which though not yet generally established, is rendered likely by a concurrence of circumstances. What, it may be asked, is this probable rate of rent ? Several of our principal landlords, convinced of the inefficacy of corn laws to keep up the market, have given examples of successive reduction, carry- ing the whole, since 1814, to 30 or 35 per cent, on their war rents. Our hope is, that such examples may be imitated in all their extent. Supposing, for the sake of illustration, that of this deduction 10 or 1 5 per cent, had been in general made between the year 1814 and the date of the examination of the wit- nesses, before the Agricultural Committee of 1821 ; there then remained to make a farther abatement of 20 or 25 per cent, an abatement repeatedly alluded to in the evidence as necessary, acceded to by many individuals since that time, and which, as far as we are enabled to judge, is imperiously required by the exigency of the case. We shall suppose, therefore, that what is as yet partial, has become general, and that our landlords, throughout the kingdom, aware, on the one hand, of the increased value of money, on the other, of the necessity of sacrificing a part to save the remainder, have consented to this reduction ; also. of our Agriculturists. 145 that the farmers succeed in the arduous task of ac- complishing a corresponding diminution in labour and the other charges of culture. Were these grand points adjusted, the prospect of our agriculturists would be cleared of a part of its gloom ; their ho- rizon would brighten, and it would, we might hope, be no longer doubtful whether ruin or recovery is to be their lot. Supposing this reduction effected, what price, it may be inquired, would enable the farmer to dis- charge his engagements, and to earn a fair support ? Sixty shillings for a quarter of wheat in the counties adjacent to the metropolis, and between fifty '-five and sixty shillings in those where labour is cheaper. This estimate is supported directly by the opinion of Mr. Rodwell, (Evidence, Report of 1821, p. 86.,) and of Mr. Brodie, (p. 335.) while indirectly it is confirmed by all who, when desired to say the cost of raising wheat without rent, fixed it at the charges of 1 82 ) , be- tween 55.9. and 60s. A deduction of 25 per cent, would bring the cost to 45s., and a market price be- tween 55s. and 60s. would obviously supply the fund requisite for the payment of the rent, which is in ge- neral a fourth or a fifth of the produce. How far is the probability of 55s. or 60s., as a me- dium price in peace, confirmed by other circumstan- ces, in particular by the average price of other countries ? Wheat at Dantzic has averaged, (Evi- dence, Agricultural Committee, p. 366.) during the last half century about 45s. a quarter; while in the parts of the Continent, adjacent to England, we mean the Netherlands, and the north of France, 45s. a quarter are generally considered sufficient for the indemnity of the farmer. This difference supposes an advance of 20 per cent, to our farmers in consid- eration of their higher rents and somewhat heavier burdens in other respects. After the high prices of the war, an average of 55s. or 60s. appears low ; but in the payment of labour, in the power of purchase generally, it at present is, or ought to be equal to 80s in the latter part of the war, and the point is not that 19 146 Situation and Prospects which may be expected, but that which it is prac- ticable to attain. Add to this, that under such a price our manufacturers would probably acquiesce with- out complaint, considering our national superiority in fuel, navigation, and command of capital, such as to admit, without much hazard, of a relative disadvan- tage in the cost of subsistence. How far is the probability of such an average con- firmed by a retrospect to history, to periods in which our agriculture was prosperous? In 1804, a price varying from 63s. to 66s. was accounted sufficient by Parliament, under charges heavier than those we have now in prospect. During the thirty years be- tween 1763 and 1793, our farmers made few com- plaints, though the average price of wheat was 49s. a quarter, or about 1 5 per cent, less than we consider necessary for the present time. And if we compare the farming charges on the reduced scale we have anticipated, with those previous to 1793, we shall find that the excess of the former, is, or ought to con- tinue great in one point only, — taxation. This leads naturally to the inquiry, "how far the public burdens, at present defrayed by agriculture, exceed those of 1792." In treating this subject in a preceding chapter, we have had occasion (p. 73.) to estimate the increase of the burden to the public at large at 12 per cent, on their income : in the case of the farmers, we shall make a liberal allowance, and suppose that from the pressure of poor-rate, the ad- ditional burden since 1792, is nearly 20 per cent. This, be it observed, is burden on income, but the produce of a farm being computed by surveyors at three or four times the tenant's income, (see the property-tax return, 1810), it follows that 20 per cent, on income will be defrayed by an addition of 5 or 6 per cent, to the price of produce. Now could the farmers obtain the 55s. or 60s. which we have termed a fair average, the result would be their having a surplus above the prices of 1792 sufficient to serve as a counterpoise to labour and the other charges (dis- tinct from taxation), which are higher at present than of our Agriculturists. 1 47 in 1792, and which it will be a task of great time and difficulty to reduce. The reasoning in the preceding pages, fair as it may seem to some, and sanctioned as it is by the ex- ample of such men as Earl Fitzwilliam and Mr. Coke, may appear in a very different light to others, who, whether landlords or farmers, are ill prepared to re- linquish the hope of high price. Of these persons, some may still cling to the imagined effect of a pro- tecting duty, others, with more plausibility, may build their expectations of an improved market on the progressive increase of population and on the contingency of a deficient harvest. It is of conse- quence, therefore, to enter at some length into a con- sideration of these arguments, and to attempt to bring into the form of an estimate, results, which, at present, are vague and undefined. Effect of increasing Population on the Price of Corn. — The returns in the present age have shown an in- crease in our population to an extent which we had, for some time, difficulty in considering correct, and which when put beyond doubt, was ascribed by many to the temporary stimulus arising from the war. It bids fair, however, to be progressive, arising, as it apparently does, from causes of a permanent nature ; from an improvement in the condition of the lower orders, in diet, clothing, and lodging, as well as from the preservation of the lives of children by vaccina- tion. But those who found on this an expectation of relief to our agriculturists, overlook one very material point; "that the productive powers of our better soils, far from having reached their terminus, may be made to yield a far larger produce by additional labour, and the adoption of the improved methods of husbandry." In support of this apparently bold assertion, we refer, as well to the already quoted arguments of a practical agriculturist, (Mr. Becher,) as to our expe- rience as a nation, during the last nine years. No period was more calculated to suggest the inference 148 Situation and Prospects of a limitation of the productive powers of our soil than the twenty years preceding 1814, yet this opinion (see the preceding section, page 1 38,) has been com- pletely disproved by the result of our agriculture since the peace. If we take a wider range than the experience of the present age, and refer to the his- tory of this and other countries, we find France as capable at present of maintaining a population of 30,000,000, as of supporting 20,000,000 in the begin- ning of the 18th century, or 15,000,000 in the begin- ning of the 17th. And France may be termed an ex- ample altogether in point of increase of product from increase of hands, manual labour forming the basis of her agriculture, to the exclusion, in a great degree, of machinery. England furnishes a case apparently stronger than France, the increase of our population, during the last century, having been considerably more rapid, and our soil being still equal to their subsistence. But we forbear dwelling on this, because it may be argued that the productive power of our agriculture has, particularly in the present age, been much pro- moted by means distinct from increase of population. we mean machinery, and other aids arising from the command of capital. We cannot, however, but ex- press a belief, that the next generation of our coun- trymen will, in all probability, raise a supply of sub- sistence as far beyond ours, as ours is beyond that of the last age ; and that our descendants, on comparing the two periods, will feel no little surprise at the nega- tive predictions of several of our political economists. Without contesting in the abstract the principles of the latter, we must add that nothing is more likely to mislead than the assertions of those who assign limits to the extension of the productive powers of our soil, imperfectly acquainted as they are with its capabilities, and still more unable to foresee the suc- cessive improvements that may, and in all probability will, be made in husbandry. How greatly does our prospect of supply exceed their anticipation : how large, for instance, would be the addition to the pro- of our Agriculturists. 149 duce of the west of England, and of Ireland, were these countries merely to adopt the improved plan now generally followed in our eastern and northern counties. (See Appendix, p. [37].) Consumers may increase without raising Prices. — Our next argument, similar in its object, is somewhat dif- ferent in its nature. There exists a perpetual ten- dency to removal from country to town, and, on com- paring our population lists at different periods, we iind the inhabitants of towns, in other words, the consumers of corn, gradually augment their propor- tion relatively to the producers. Both classes in- crease their numbers, but in town the ratio is larger. We must be cautious, however, of drawing from this fact any conclusion as to rise of price ; it merely marks the natural progress of society in an enlight- ened country ; a progress easily traced in our his- tory for more than two centuries, the agriculturists of England, who now form only 33 per cent, of our po- pulation, having, we believe, formed upwards of 50 or 60 per cent, of it in the reigns of Elizabeth and James , [. Still the supply of produce has continued equal to our increased numbers, and the cause is obvious, the use of machinery, and the adoption of various improvements, enabling the same number of hands to raise a much larger quantity of subsistence. Is then no rise of prices to be expected from the increase of our population ? It certainly may be x- pected under circumstances which give a new or different employment to a portion of our numbers — such as appear to have prevailed on the extension of our cotton manufactures after 1780, and such as evidently characterize the present emigration to Upper Canada, and the Western States of America, the larger proportion of the emigrants being agricul- turists. To this we add, that the increase of our numbers has in it something encouraging and cheer- ing : it assures, in a great measure, the continuance of til- lage on our inferior soils : and, taken in a more general view, it keeps alive the expectation of national im- provement so fully described by Mr. S. Gray, and 150 Situation and Prospects which shall be noticed at greater length when we come to treat of the subject of population. Effects of a bad Season on the Price of Com. — The rise in our corn market, produced by a bad or even an indifferent season, is in time of war very considera- ble. The difference between the crop of one year and that of another will be found, without resorting to an extreme case, such as 1816, to be frequently (Evidence, Agricultural Committee of 1 82 1 , p. 264.) between 1 and 20 per cent. Add to this that on such occasions our purchases abroad are generally enhanced by the causes which produce enhancement in this country. The public, particularly the untra- velled part of the public, are hardly aware of the similarity of temperature prevailing throughout what may be called the corn-country of Europe, we mean Great Britain, Ireland, the north of France, the Netherlands, Denmark, the north-west of Germany, and, in some measure, Poland, and the north-east of Germany. All this tract is situated between the 45th and 55th degrees of latitude, and subject, in a considerable degree, to the prevalence of similar winds. Neither the superabundance of rain which we experience in one summer, or its deficiency in another, are by any means confined to Britain and Ireland; while in winter, both the intensity and duration of frost are always greater on the Continent. Exceptions certainly exist in particular tracts, but in support of our general argument, we have merely to recall to those of our readers who are of an age to recollect the early part of the war, or who have attended to registers of temperature, the more re- markable seasons of the present age. Thus, in 1794, the spring was prematurely warm on the Continent as in England : there, as with us, the summer of 1798, was dry, and that of 1799 wet: again, in 1811 the harvest was deficient throughout the north-west of Europe generally, from one and the same cause, blight; while that of 1816 was still more generally deficient from rain and want of warmth. In regard to of our Agriculturists. 151 a more remote period, we mean the 17th and 18th centuries generally, if the temperature has not been so accurately noted, we find, from the coincidence in prices, that it is highly probable that there prevailed a great similarity between our weather and that of the Continent: thus in France the latter years of the 17th century, the seasons of 1708 and 1709, as well as several of the seasons between 1764 and 1773, were as unpropitious and attended with as great an advance of price as in England. Another observation as yet little attended to, but which has found a place in the Agricultural Report of 1821, is, that an indifferent season is not always fol- lowed by a favourable one, but that two, and even more than two deficiencies of crop occur sometimes in succession. Such was the case in the latter years of Elizabeth, in the reign of William III., and in our own time, in 1799 and 1800. On each of these oc- casions the consequences were very serious, leading to a distressing rise of price, and showing all the importance of making the plenty of one year conduce to the relief of another. Less felt in peace than in war. — But while in war, the effect of a bad or indifferent season is thus severe, its pressure is greatly alleviated by the cheap freight and open communication of a state of peace. On referring to the record of our prices during a century and a half prior to 1793, we find that throughout that long period the effect of an unfavourable season was to carry wheat from 40s. to 50s. or 55s., rarely to 60s. Now 55s. or 60s. in these days were neari} equal to 70s. at the present value of money, and the latter would probably be the currency of our market in the event of a partial deficiency like that of 1795, 1804, 1809. To carry our peace prices higher would require a failure as general as that of 1816, or two partial deficiences in succession as in 1799 and 1800. To those who think otherwise, we submit two considerations ; first, that the increase of our num- bers does not much increase the difficulty of supply- ing our consumption at home : and next, that thV 152 Situation and Prospects range of foreign territory from which our corn im- ports may now be derived is much wider than during last century. Add to this, that a continuance of peace tends in many ways to an equalization of price between dif- ferent countries. The obstacles to emigration are then removed : the tempting profit attendant on government contracts and other war speculations no longer detain at home either the individual or*his capital : the charges of farming as of productive in- dustry generally, are calculated closely, and a decid- ed preference is given to the country where those charges are most moderate. Another, and a still more substantial cause of equalization of price is the increased command of capital in peace, the augment- ed means of buying up the superabundance of one year as a supply for the demands of the next. Among other structures of recent date in the vicinity of the Thames, are warehouses in which corn may be pre- served during six or seven years without injury : the expense, which in the case of wheat was, till lately, 7s. a quarter, would be materially lessened in pur- chases made at the present low prices, as a portion of it arises from interest on the purchase-money. (See Appendix, p. [42].) Reaction of the Market Price of Corn on the Cost of its Production. — If the influence of the seasons has not yet been duly appreciated, much less is that the case in regard to another cause of rise and fall which we admit to be somewhat complicated in its nature, and tardy in its operation ; we mean the reaction of the market price of corn on the cost of its production. Our objects will be best understood by an analysis of the charges of cultivation, as exhibited in the sub- joined table. of our Agriculturists. 153 Expense of cultivating 100 acres qf arable land in England, at three distinct periods, calculated in an average qf the returns made to circular letters from the Board of Agriculture to farmers in different parts of the king- dom. V»ent 1790. 1803. 1813. £ s. d. 88 6 31 20 14 If 17 13 10 15 13 51 85 5 4f 46 4 11 48 3 67 4 10 22 11 111 £ 8. d. 121 2 71 26 8 0| 31 7 7f 22 11 10} 118 4 49 2 7 68 6 2 80 8 01 30 3 8| £ s. d. 161 12 7f 38 17 3£ 38 19 2f 31 2 lOf 161 12 111 9H 17 10 37 7 01 134 19 8i 5.0 5 6 1.8 1 4 Tithe Kates Wear and tear Labour. Seed ......__. Manure Team Interest Taxes Total 411 15 1 If 547 10 1U 771 16 41 Note. The article manure is underrated in the last column ; were it fully stated, the aggregate of 1813 would have exceeded 800J. This document presents materials for reasoning of equal importance to the agriculturist and political economist, exhibiting all the constituent parts of the cost of corn, and enabling us to explain both the high prices of a state of war, and the fall attendant on peace. War. — The effects of war are first felt in the price of labour, the interest of money, and the direct taxes. These all operate to enhance corn : the price of seed is necessarily augmented by such a rise : an increase of tithe, as expressed in money, is a consequence almost equally direct ; the expense of team and manure, cannot, under such circumstances, be long- stationary ; and an advance of poor-rate, has, ever since the days of Queen Elizabeth, followed, at no distant date, an augmented price of bread. Such was the progress of farming charges during the late wars. The early part of the period was with ©ur farmers a season of complaint, and with the ex- 20 154 Situation and Prospects ception of tenants on lease, the partial rise in price, accompanied as it was by high charges, was ac- counted a disadvantage to agriculturists. After 1 804, their situation improved, but it was not until 1809 that the advantage of war to the farmer became great and general. Peace. — Next, as to the reverse of the picture, — the unweaving of that web which owed its texture to a double war and a depreciated currency. Wages, interest of money, the cost of horses, and, in some degree, direct taxes, have all undergone reduction since the peace, in particular since 1820: a fall in the price of seed is a matter of course, while a dimi- nution of tithe and a reduced charge in the bills of tradesmen, are the eventual though less direct re- sults of a decline in the corn market. The remaining charges are rent and poor-rate, both very difficult of reduction, because in the case of landlords the dimi- nution of expenditure is not equal to the fall of corn, while in that of the poor a decrease in employment retards that reduction of parochial charge, which would otherwise follow the cheapness of the necessa- ries of life. These, however, are only postponements of an unavoidable result : landlords must resign in peace the monopoly attendant on war, while to our la- bouring classes the extension of manufactures conse- quent on the fall of provisions, affords relief, not speedy, perhaps, but eventually certain. What then ought to be our inference from the pre- ceding reasoning? That farming charges necessa- rily rise with the market price of corn, and as neces- sarily become reduced by its decline. Now as the reduction of charge is as yet by no means propor- tioned to the fall of price, we are justified in antici- pating that the former will become general, and af- ford, in any event, considerable relief to the farmers. Evidence before the Agricultural Committee. — Our rea- soning may be somewhat elucidated by a reference to the answers of the witnesses examined by the Agri- of our Agriculturists. 155 cultural Committee of 1821, about the cost of raising a quarter of wheat. They declared 55s. or 60s. (Evi- dence, pp. 37. 55. 72.) to be indispensable to meet the charges exclusive of rent ; but that price will be found to supply a fund for rent also, if we suppose a gene- ral diminution of twenty-five per cent, on farming charges. An abatement of this nature was, as we have already remarked, evidently in the view of several of the witnesses. One of them, a land surveyor, declared, (p. 191.) that a price of 64.9. with a, proportional re- duction of charges, would afford a fair rent : while an- other, a farmer residing in Suffolk, adverted (p. 86.) to the remarkable fact that 2000/. forms as efficient a capital at present as 3000/. in 1817, and considered that in the event of an abatement of one-fourth of rent, poor-rate, labour, tithe, and taxes, 60.9. a quarter would afford a fair profit in his county. The answer of a third witness (p. 335.) is still more remarkable, for it declares a much lower price to be sufficient in a quarter (East Lothian) where labour is somewhat cheaper, and tithe happily unknown. How far do these conclusions appear to be familiar to the majority of those who have written or given evidence on the state of our agriculture ? Land sur- veyors, accustomed to arithmetical calculation, are aware of these truths, in a general sense, but the ma- jority of them, like the majority of our farmers, long ac- customed to a state of war, have still difficulty in con- sidering as permanent the low prices and low charges of peace. Next as to the Agricultural Report of 1 821 ; that valuable document seems to have been composed under a conviction similar to that which we enter- tain, but unfortunately it nowhere exhibits a clear and pointed affirmation of the connexion between the price of corn and the cost of raising it. Are low Prices likely to continue ? We are now to follow up the arguments on the very interesting question of a rise or fall in the mar- ket price of corn. Those in favour of a rise are — 156 Situation and Prospects 1st. The expense of bringing into culture new soils of inferior quality to meet the wants of our increasing numbers. This, the chief argument of theoretical writers, is already in a great measure answered by the result of the last nine years ; by the evidence that the largest additional produce is obtained from soils already under tillage; and that the grand means of increase consist in the application of addi- tional labour to such soils. Our enclosure bills in the six years previous to 1815 averaged 115 an- nually; in the six following years, during which our produce has increased so largely, they averaged only 48 ; a decisive proof that the quantity of pro- duce may be kept up and augmented without bringing much new soil under culture. 2d. The expense of keeping inferior soils in cul- tivation, and the necessity of abandoning them if low prices continue. This argument carries much more weight than the preceding, and might produce a kind of revolution in prices were it not counteracted by a cause of most powerful operation, — the decrease in farming charges consequent on a decrease in the price of corn. This fact, joined to the increase of our population, will probably prevent the abandon- ment, to any great extent, of inferior soils. No in- ference can be drawn from the present situation of our agriculturists who labour under all the evils of transi- tion and disproportion; subject at once to heavy charges and low prices. At a time when we are told from so many quarters of over-cropping, of decay of farming stock, and of multiplied bankruptcies, we must necessarily take for granted that the plough will, to some extent, at least, be withdrawn from the less productive lands. In the parts of Scotland where tillage was carried farthest, this painful alternative seems hardly to be avoided : in England, at least in various parts of England, the case is somewhat dif- ferent : tillage was not so often carried to an extreme, and the solicitude of the landlords (Evidence, p. 43.) to prevent the degradation of their estates by paying for lime and other requisites to the maintenance of of our Agriculturists. 1 57 good husbandry, will operate to lessen this and other evils. Add to this the remarkable fact, that after all the extension given to our tillage in the present age, the proportion of ground under the plough and spade is (Napier's Supplement to the Encyclopaedia, head of France, p. 373.) considerably smaller in England than in France. Add also another iact hardly less important, that the practice of drilling corn, so lately introduced, is particularly suitable to second-rate soils. But supposing that the tillage of inferior soils were relinquished to a certain extent both in England and Scotland, it does not necessarily follow that the amount of our produce would decrease : our labour must be employed somehow, and would be transferred to the richer soils. A diminution of production is altogether contrary to the disposition of our country- men : an increase of quantity, even when an article sells for a low price, is more in correspondence with their active and enterprising habits. No decrease of our agricultural produce took place during the long stagnation of last century ; during the fifty years that elapsed between 1713 and i763. And if we advert to a parallel case in the present age, that of our West India sugar planters, we shall find that during a number of years, (1802. 1805, 6, 7,) their produce as little paid the expense of raising it, as corn does at present. A number of estates were abandoned ; in others, the cultivation was reduced ; but this was so effectually balanced by the increased productiveness of the richer soils, that very little, if any, diminution took place in the total quantity raised. 3d. A protecting Duty on Foreign Com. — The efficacy or non-efficacy of such a measure is, in a great degree, matter of opinion. Without assuming a decisive tone on either side, we shall have occasion to show in the next section that a high duty would by no means cause a permanent rise in our corn market, and that the only safe course is to regard the last thirty years as a period peculiar in its circumstances, and alto- 1 58 Situation and Prospects gether different from a season of peace. We ought in the next place, to carry back our view to the period preceding 1793, and ascertain whether the in- crease of the charge of raising corn arising from taxes or otherwise, exceeds the saving attendant on the improvements adopted in our husbandry. In that proportion only would it be practicable to maintain an increase of price : any attempt to carry it higher would be defeated by the extension of our home growth. Agriculture, like trade, has its projectors ; men ready to transfer to it capital from other pursuits, and who would find, particularly in Ireland, many rich tracts open to their speculations, now that there remains so little inducement to keep them in pasture. The only method, therefore, of giving the established farmer a fair chance is, to be very sparing of bounties, protecting duties, and other stimulants : the effect of which is unnatural, temporary, and eventually per- nicious to those who receive them. 4th. Contingency of a bad Season. — On this head we have already attempted a calculation, showing that in former periods of peace the extent of rise varied from IQs. to 20s. on the quarter of wheat, according to the degree of failure in the harvest. Under present cir- cumstances, this limited advance is much more likely to characterize our markets than the greater fluctua- tion that took place in the late wars. That our prices of wheat are not likely to exceed 55s. or 60s., is confirmed by some arguments of a more consolatory nature : viz. The increase of our growth from the diffusion of the im- proved Husbandry. — Under this head we are disposed to class the more general introduction of drilling; the farther consolidation of small farms; and the more frequent adoption of leases when the changes in our money system shall have reached their termi- nation. For her pasturage England is deservedly celebrated, but her tillage is only partially good. In no branch of our national industry has improving ex- ample been as yet less generally followed : in none has it a wider field to occupy. of our Agriculturists. 159 The reduced Interest of Money. — The fall of interest on public securities since the peace is about one per cent., and the prospect is in favour of some farther decrease : or rather, that the reduction, at present partial, will become general, and be communicated to private as well as public securities. No line of business offers at present a tempting return ; nor is any likely to withdraw money investments from agri- culture. Add to this, that from the reduced price of all farming stock, the appropriation of 1000/. to farm- ing (Evidence, Agricultural Committee, p. 86.) is likely soon to be equivalent to that of 2000/. in the time of high prices. Such are the principal arguments against any material rise in our corn market; and if their con- junct effect be merely to give us the supply of three weeks' consumption above the average of our crops in war, the result will be a prevention of high prices, so nearly did our growth approach even in former years to our consumption. Contingency of War. — In the event of war, all these anticipations would be overturned: our capital would no longer be abundant; our navigation no longer cheap ; while from no branch of our industry would labourers be more generally withdrawn for government service than from agriculture. At pre- sent, however, we leave this formidable contingency out of the question; in France, the only country which immediately affects our foreign politics, there exist the strongest reasons for adhering to a pacific course ; and if that government be induced for a time to deviate from it, the recurrence of a state of war so general as that which followed the French Revolution, is certainty not to be expected in the life-time of the present generation. Or, if we admit it to be impracticable to reason with confidence on so wide a question, there is at least one point which we may safely take for granted, viz. that our public men, in the event of a new appeal to arms, will abstain from two of the measures, which, more than 1 60 Situation and Prospects any other, contributed to raise our corn market, — interference with our currency, and the stoppage of neutral navigation. " These they will shun through all the dire debate, And dread those arms whose force they felt so late." Prospect of Relief to Farmers. — This question, though apparently identified with that of rise of price, will be found on examination to rest on very different grounds, and to present, happily, a less unfavourable prospect. The reasons for this opinion are, — 1. The interest of all farmers who are not tenants on lease (Evidence, Agricultural Committee, pp. 49. 1 20.) is to have not a high, but a steady price. Taken in a permanent view, that price is most desirable which gives stability to our manufactures, and pre- vents our continental rivals from having too great a superiority over us in the main point of subsistence. 2. Our growth, if it equal, does not, in ordinary seasons, exceed our consumption ; a situation a good deal different from that of our agriculturists after the peace of Utrecht. This fact, if it does not justify the expectation of a rise of price, affords, when consider- ed along with our increasing numbers, a kind of guarantee of the past : a security against the aban- donment, to any great extent, of the inferior soils. 3. The tendency of agricultural charges to de- crease with the market-price of corn, and of the rate of profit in every line to approach to a common stan- dard. 4. Tithe. — Since war and high prices can no longer enter into the calculation of our agriculturists, it be- comes indispensable for them, as for the equally unfor- tunate sugar planter, to seek relief in a reduction of expense. In this by far the most effectual step would be a commutation of tithe, an exchange of a crude, unequal, and at present oppressive, mode of pro- viding for the clergy, for a contribution from the pub- lic generally; a change which would be facilitated by the growing nature of our financial resources, and for which, as shall be shown in a subsequent passage of our AgricuUimsis. \ (j i \jp. 178,) the landed interest would be able to make an adequate return to the public. 5. Poor-rate. — To this subject we shall shortly ap- propriate a chapter, and take occasion to show how little information is as yet possessed either by govern- ment or individuals, in regard to various essential points, such as the different modes of distributing re- lief, the number of poor in work-houses, the allowance granted for children, and finally, the proportion of disburse for law charges, removals, and other outlay, distinct from the relief of the poor. With such evi- dence of imperfect information, (acknowledged in the Report on Poor-rate, July 15, 1822,) is it too much to question, whether we act an equitable part in con- tinuing the present mode of assessment ? Without at all entertaining the proposition of rendering poor- rate national, we may claim attention to the argu- ments for a more limited change, for rendering it an equal tax on the parish or district, the levy being made not on rent but on income generally, and ex- tending to other classes besides the farmer and householder. These considerations confirm the hope that eventu- ally, the situation of our agriculturists will alter, and our tillage be carried on without the impoverish- ment of a most useful and respectable body of men. Still their distress must, under any circumstances, continue some time longer, and be shared by the numerous persons resident in towns whose livelihood depends on ministering either to the wants of the farmer or the luxury of the landlord. Every feeling mind must sympathize with those industrious classes, whether in town or country, whose privations, very different from those of their superiors, too often im- ply the renunciation of real comfort. They have, however, already experienced considerable relief from reduction in their expenditure ; and a cheering, though somewhat indirect prospect, is opened to them from the improved condition of other classes. All must allow that the sum withdrawn from agricultural iiicome has been far too great in its amount, and too 2 1 1 152 Our Agriculture, : sudden in its deduction ; but it is a consolation that it does not, like shipwrecked merchandize, or the ex- pense of an indecisive campaign, form a total and absolute loss to the community : it is compensated, as far as the evil of sudden transition admits of com- pensation, by the cheaper maintenance of our manu- factures, the prevention of their emigration, and the ultimate benefit arising to our agriculturists from their consumption on a more liberal scale. SECTION III. A Protecting Duty. We come now to the portion of our subject which caused so much discussion in the session of 1822 — the imposition of such a duty on foreign corn as shall afford protection to our agriculturists. Our reason- ing on this head will be found materially different from that of the majority of parliamentary speakers, the amount of duty appearing to us a secondary ob- ject to the public at large ; while to our agricultu- rists, it would, if raised to an undue height, be re- plete with as pernicious consequences as the bounty act of last century. Without further preamble, we proceed to examine the following points : — The comparative burdens on agriculture in France and England. How far our manufactures receive protection from our custom duties. The danger of over-extending our tillage. The tendency of our commercial legislation to the abolition of all restrictions. A populous Country not necessarily expensive. England is, after the Netherlands, the portion of Europe in which population is both most dense as to numbers, and most closely connected by roads and canals. Compared to us, the inhabitants of France. Duty on Foreign Com. 163 on an equal surface, are in the proportion of only two to three ; and the degree of separation is very materially increased by another cause — the inferiori- ty of the roads and the want of water communica- tion. Germany is still more inferior to England, both in numbers and in frequency of intercourse ; and it is needless to show how much more the deficiency pre- vails in the other parts of Europe, in Spain, Sweden, Poland, Russia. The point at issue is, to ascertain whether density of population necessarily tends to raise prices, to render a country dearer than its scantily peopled neighbour ? That it has in an eminent degree that tendency is the general impression and report of those among our travelling countrymen, who found their inferences on a few points most obvious to common observation, such as the moderate price of labour on the Conti- nent, and the no less moderate rate of excise duties ; but they overlook the various considerations on the opposite side of the question, such as the general in- feriority of machinery and workmanship, the loss of time caused by distance from towns, and by the ne- cessity of doing personally that which, in a busy, commercial community, is prepared by others, and obtained by purchase. In a subsequent publication, when treating of " Economy and Retrenchment," we shall take occasion to explain the distinction between real and apparent saving, and describe the habitual waste of time in petty occupations by the inhabitants of provincial towns on the Continent: at present our wish is merely to lay down the general rule, that a population dense, improved, affluent, does not neces- sarily render a country more expensive than one that is poor and thinly inhabited. The difference is in the mode of living, not in the price of the articles. An increase of population, by leading to an abridgment of labour, and to the transaction of business en masse. brings with it a dispatch and an extent of accommo- dation ; the saving from which is equal, we believe more than equal, to the enhancement in provisions attendant on augmented numbers. It is not in towns of moderate size, however near 1 154 Our Agriculture ; each other, but only in the case of an overgrown capital, such as London, Paris, or Constantinople, that the real and unavoidable difference of expense becomes considerable. Holland and England are, it is true, dearer throughout all their provincial towns than the rest of Europe ; but that is owing partly to style of living, partly to high taxation, — to the price paid by either country for the rank which it has maintained in the scale of European politics. Were we to subject individual expenditure to an analysis, and to keep separate the portion of it which results from these causes, we should find that our actual prices, the purchase money of commodities at market* are not, on the whole, much greater than in other countries. These remarks are general, and apply to all classes of society. We now proceed to the point more im- mediately in question, the situation of our agricul- turists. Comparative burdens on French and British Agriculture. That the pressure on our agriculture is greater than on that of our neighbours is sufficiently known, or rather, sufficiently believed ; for very few persons have been at pains to analyze the burdens on either. On our side, they consist of tithe, poor-rate, land-tax, along with a participation in the assessed taxes, the excise duties, and the customs. To begin with the burdens directly applicable to agriculture — tithe and poor-rate — we are inclined, in consequence of the fall of corn, to anticipate that these charges, as far as paid by the landed interest, and as far as poor-rate is distinct from wages, will, ere long, be reduced to a sum of about 7,000,000/. for both. The amount of the land- tax, adding the redeemed, is about 2,000,000/. making together a sum of somewhat more than 9,000,000/. To this formidable burden the French may, with a qualification to be mentioned presently, oppose their fonder, or assessment on real property ; which, after the partial reduction of late years, still forms a charge of 17 or 18 per cent., not on the rent merely, but on Duty on Foreign Com, 165 the rent and farmer's profit together. Next come our assessed taxes, which, in their present reduced state, are probably balanced hy the portes et fenetres of our southern neighbours, when added to the mobilier, or tax on the reputed value of furniture. Our stamps, swelled as they have been during the late wars, are considered by our landlords as a very serious charge, whether on leases, sales, or loans ; and a member of Parliament, remarked for his acquaintance with such subjects,* went lately the length of asserting that this charge was the most heavily felt of any by our agri- culturists. Heavy, however, as it is, even after the modification granted in 1822, its pressure is equalled, in respect to sales at least, by the French enregistre- ment, a duty of no less than 5 per cent, on the pur- chase money, which, added to the other departments of the stamps, produces an amount of 5,000,000/. ; a surprising sum to collect from a country never re- markable for its wealth. So far we may be said to have preserved equality in our comparisons : we now come to points in which there necessarily prevails a difference, though less great than is commonly imagined. Thus, in regard to the charges incurred in the course of cultivation, viz. seed, manure, wear and tear, working cattle, — the difference, very great during the war, has lost, or is now losing, much of its amount. The cost, as ex- pressed in money, is still, we admit, smaller in France; but in the case of implements, and, in some measure, in that of working cattle, the difference means little more than inferiority of quality; an inferiority. not unlike that which would be exhibited by a parallel between our agriculture of the present age and that of the beginning or middle of the last century. A similar remark applies to the domestic expenses of a farmer. The difference lies in the style of living more than in the price of the articles ; for in two ma- terial points, clothing and fuel, the cost is not higher in England than on the opposite side of the Channel, * Mr. Frankland Lewi*. 166 Our Agriculture ; The fuel of the rural districts of France is generally wood ; sometimes, though rarely, it consists, as in Ireland, of turf or peat. We come next to a highly important part of agri- cultural disburse, the price of labour; a point in which the balance is greatly in favour of France, the wages of an able-bodied labourer not exceeding (Chaptal sur Flndustrie Francaise, vol. I. p. 245.) six shillings a week without victuals, a rate considerably below any reduction that, we can reasonably expect from the fall in the price of provisions. Nor is this advantage lessened, as some of our countrymen may imagine, by any personal inferiority on the part of the French peasantry, who repair to their work at as early hours, and continue engaged in it with as much steadiness and activity as our own labourers. Add to this, that the saving we have mentioned is enjoyed by the French farmer equally in the case of domestic servants, whose diet is plain and whose habits are sober. In what, then, shall we be able to find on our side of the Channel a counterpoise to this essen- tial advantage ? — First, our implements, particularly those of iron, being much superior, enable men of the same bodily power to do more work, or to do it better. Secondly, the use of machinery, such as threshing- mills or drilling-implements, is almost totally un- known in France. Thirdly, our farms are of appro- priate size ; while those of our neighbours, limited often to such petty occupancies as those of our an- cestors of the 16th and 17th centuries, afford no field for the beneficial employment of either capital or machinery. Lastly, our farmers, in borrowing money, pay an interest less by one or two per cent, than is required in France, six or seven per cent, being still a very common rate in that country. A long list of the agricultural disbursements of the two countries is thus made to balance, and the re- mainder of the parallel is brought within a com- paratively narrow compass. It may, in fact, be con- sidered as reduced to two points : on the one hand, the contingency of benefit to the English agricul- Duty on Foreign Com. J 67 tunst from a protecting duty; on the other, the heavier excise and customs to which he is subjected. A protecting duty is not unknown in France ; and, under the provisions of the late acts of 181 9 and 1821 , the price of 46s. or 47s. for the Winchester quarter of wheat is apparently secured to the farmer ; but, in a country which generally grows its full consump- tion, regulations affecting import must be of rare and temporary operation. We pass over, therefore, this frail support, and proceed to the permanent and substantial points of difference in the condition of the British and French farmer. These will be found in the magnitude of our taxes on consumption. Our custom duties, being chiefly on luxuries, do not very greatly affect our agriculturists ; but, among our excise duties, the tax on leather, which, after the late reduction, still forms a burden of nearly 150,000/. on our peasantry, is unknown in France; while our duties on malt, beer, and corn-spirits, amounting, after the abate- ment made in 1822, to the surprising sum of 9,000,000/. sterling, are feebly met by the French taxes on wine, cider, and malt. In years of over-stock of corn, as since 1820, the whole of the very large sum we have mentioned may be said to form a charge on our agri- culturists, exactly as the tax on sugar, in a season of over-growth, falls on the West India planter. These, however, are happily extreme cases ; and we shall at present suppose them out of the question, calculat- ing that of such duties no more usually falls on our agriculture than the portion paid for the consumption of the farmers and peasantry. Even then, it will ex- hibit a sum of 3 or 4,000,000/. sterling; a sum which, added to the 1,000,000/. by which our tithe and poor- rate exceed the French fonder, may be said to re- present the greater share of public burdens (4 or 5,000,000) borne by the British agriculturist. If we bring these charges into the form of a com- parative per centage, we shall find that the fonder in France may, after making allowance for all abate- ments and omissions, be computed at 18 per cent, of 1 68 Our Agriculture ; the rent and farming profit; while in England, the amount of land-tax, tithe, poor-rate, and additional excise duties, form a tax on rent and farming income to the extent of 25 per cent. The result is, a heavier burden on the English agriculturists, to the extent of 7 or 8 per cent., except in as far as it receives an oc- casional counterpoise from the duty on the import of foreign corn. # What then, it may be asked, has been, during the present age, the respective situations of the agricul- turists in France and this country ? The war was productive of a rise of rent in both; but while in France that rise was comparatively slender, in this country it doubled, and in many cases more than doubled, the payments of 1792; so that in 1813 the landed rental of Great Britain and Ireland con- siderably exceeded that of their southern neighbour. The rental of France, however, was much more se- cure : the price of corn in that country is little lower in peace than in war ; and the travellers who passed over her departments did not, until last year, hear much of those reductions of rent and wages which among us have been required on so large a scale since the peace. The price accounted sufficient to enable French farmers to make a livelihood and pay taxes is about 45s. the Winchester quarter, in peace. We shall now suspend our continental parallel, and bestow a few paragraphs on one of a different kind — on the comparative situation of our agriculturists and manufacturers. Are our manufacturers actually benefited by protecting duties ? — That such is the case, and in a very con- siderable degree too, is the opinion of the majority of our agriculturists. It is true, however, only in a slight f In Scotland the burden is much less, the agriculturists of that part of 4he kingdom being comparatively exempt from tithe, poor-rate, and land- tax. Duty on Foreign Com. Ito9 degree, as will soon be apparent from the following facts. — The total value of British manufacture an- nually prepared, whether for home consumption or export, was computed in 1812 by Mr. Colquhoun, at 1 23,000,000/. Since then their quantity has greatly increased; but as their price has experienced a ma- terial reduction, we shall probably deviate little from the truth, in assuming that sum as a fair representation of their present aggregate value. But of this very large amount, more than 80,000,000/. consist of the three great articles of cotton, woollens, and hardware.; none of which receive protection from custom duties, our manufacturers being enabled, by inherent advan- tages, to repel foreign competition, and even to meet our rivals in their own markets. Thus our cottons are cheaper than those of France, Germany, or the Netherlands, from various causes — the import of the raw material is somewhat less expensive, our ma- chinery is superior, our supply of fuel more abundant, and the capital employed subject to a less heavy charge of interest. In hardware, we possess a simi- lar advantage in point of fuel and capital, with farther aids in the carriage of the ore by water, and in a sub- division of labour, to which the Continent in no de- gree approaches. If in woollens our superiority be less decisive, and if the quality of French cloth be more substantial, the fact is, that from our power of giving long credit to Americans and others, we, as yet, retain possession of most of the foreign markets. We have thus narrowed, very considerably, the extent of manafacture supposed to be benefited by protecting duties. We might go a step farther, and enumerate various articles (such as refined sugar or pottery ware,) in which protection is out of the question : while the remainder that are more or less protected by our custom-duties do not, perhaps, surpass the value of the agricultural produce to which favour is extended from the same quarter; our duties on foreign timber, flax, hemp, tallow, seeds, madder, butter, cheese, and rice, all operating, or 22 /70 Our Agriculture ; being intended to operate, in favour of our agricul- turists. We add a few words in regard to our taxes on consumption generally. Of these, it does not appear that the agriculturist has greater reason to complain than his mercantile or manufacturing neighbour. Those most severely felt are on leather, soap, can- dles, and glass ; also those on tea and sugar, since they were raised in the course of the last war to an immoderate rate. But these, as well as the farther imposts that form the long list of our excise duties, are paid in common by residents in towns ; and if the pressure of the malt-tax be more heavily felt in the country, a kind of balance is afforded by the untaxed substitutes for groceries, which the country supplies to its inhabitants. If against the payment of land-tax, we place the heavier assessed taxes of towns, we find the amount of public burdens balanced, with the exception of tithe and poor rate. These forming an extra burden on agriculture, and one of great amount, parliament have endeavoured to countervail by our corn-laws : at one time by a bounty on export, at another by a restriction on import. What, it may be asked, was the real motive on the part of government for these multiform regula- tions — this long list of duties, drawbacks, bounties ? Not to confer on any of the parties, whether agricul- turist or manufacturer, an absolute advantage ; but to reconcile them to the taxes imposed on the re- spective articles of their produce, and to prevent foreigners from underselling them in the home market. Under this impression, and considering the amount of tithe and poor-rate at present a dead loss to the landed interest, we can hardly coincide with the argument in the Agricultural Report of 1821 (pp. 23, 24.), that our landholders have not a right to custom- house protection. Our hesitation would arise from a very different cause : first, from a doubt of the effi- cacy of a protecting duty: and. next, from a dread Duty on Foreign Com. ill that the expectation which it would so generally excite, might, as in the case of the bounty, lead to excess of home growth. Danger of an over-extension of our Tillage, This danger, which some years ago would have been treated as chimerical, we now find to have as strong a claim to attention and to precautionary measures, as the hazard of an over-extension of manufacture. Of the truth of this our readers will be satisfied on referring to our arguments in the pre- ceding section ; and, above all, to the fact, that with so small a number of enclosure acts (forty-eight annually), we have found the means of meeting every year, since the peace, the demand of the 200,000 consumers annually added to our population. To what can this be mainly owing, except to the diffu- sion of improved methods, to the application of ad- ditional labour and capital to soils already under tillage ? And who, in this age of agricultural dis- covery, in this season of abundant supply, both as to labour and capital, can with confidence predict either the limit or the result of such application ? In prosecuting this inquiry, our readers may, we believe, leave at once out of consideration all argu- ments against the increase of our growth, founded on the expense of reclaiming poor soils ; not that such expense is overrated by Mr. Ricardo and others, but because it is unnecessary, a larger produce being obtained by bestowing additional culture on the better soils. If in regard to England and Scotland, our conclusions are called in question, and it is maintained that recourse to inferior soils must ere long follow an increase of our numbers, our reasoning can hardly be contested in respect to the sister island, where such extensive tracts of fertile land await the application of a better system. Under such circum- stances, what security have our established farmers against the agricultural speculator, except in a mea- sure at first apparently disadvantageous to them, we 172 Our ,Jofi<;)dlHfc ; mean the removal of a tempting contingency, and an assurance, as far as can be conveyed by legislative regulation, that the prospects of agriculture are not of a nature to justify the transfer of capital from other lines of business ? The true interest of both farmer and landlord is to beware of extending tillage, to adapt our growth, as nearly as they can, to our consumption ; and to keep the former, were it prac- ticable, somewhat below the latter, submitting, as after 1773, to a small but regular import. It is that course alone which can give assurance of a steady demand, of a generally brisk market. The Corn Committee of 1813. — This Committee, actuated by a mixture of ignorance and selfishness, hardly to be credited in men of their station in society, ventured to recommend the prohibition of import, except when our own wheat should be at or above 105s. the quarter. Now, if with the compara- tively small encouragement held out by 80s. our til- lage has so much increased, how much greater would have been the augmentation had the extravagant proposition of the committee been adopted by par- liament? What an extent of inferior soil would have been brought under the plough in the course of two years ! What an overstock on the market before discovering the inefficiency of a corn-law to keep up prices ! — an overstock admitting not of remedy, like excess of import, by shutting our harbours, but re- maining in force for years, perhaps requiring the ruinous alternative of abandoning land under tillage. The iveekly Averages. — Among the various expedi- ents suggested by the distress of late years, was that of comprehending in the returns, which form our weekly averages, such Irish wheat as is sold in Eng- land : the result of this, in consequence of the inferi- ority of Irish wheat, is to render a return of 60s. equivalent as a representative of price, to 62s. or 63s. on the former plan of taking the averages. Under present circumstances, this has no practical effect ; but were our market to rise, we should soon see that all expedients of this nature tended to stimulate production to a hazardous extent Duty on Foreign Com. 173 Objections to a high import duly. — Alter these argu- ments, we may venture to hazard an opinion, which would otherwise have appeared not a little paradoxi- cal, viz. that in peace the injury resulting from a high duty on foreign corn would in all probability be greater to the producers than to the consumers of provisions. Were a high duty imposed, the rise of price would be temporary : extremes soon produce their own cure, and consumers might safely trust to the extension of home culture. The evil, however, would not stop there : the agriculturist would be sunk in distress by overproduction, and the mer- chants and manufacturers would consequently be subjected to an extra share of the public burdens. Hence the importance of maturely weighing, not the demands of a particular class, but the interest of the public in the most comprehensive sense. Farther, the misfortune of the present day is less the reduction of income than the existence of inequal- ity, the evil of transition ; and the public are entitled | to expect such measures as shall set at rest this ruin- ous fluctuation. If our present desideratum be a gene- ral reduction of wages, salaries, and other money payments, not yet brought to their level, nothing, it is clear, can so effectually promote that object as a moderate rate of duty on foreign corn : an assurance, as far as assurance can be given, of our market being- kept at a steady price. How satisfactory to mer- chants, manufacturers, annuitants, and, above all, to farmers, to know on what probable price of corn they are to found their future calculations, to fix wages and salaries, to regulate their domestic expenditure ! In what manner, it may be asked, can a reference to the past be made instrumental in guiding us to a knowledge of the rate which forms a fit protecting duty ? By fixing our attention on the cost of raising wheat, not in a period such as that of the last thirty years, a period as anomalous in productive industry as in politics ; but at a time when Europe enjoyed that tranquillity which she has happily now in pros- pect. Comparing the present and the former charges 174 Our Agriculture : on our tillage, we shall find that labour, team, ma- nure, may and ought soon to be brought back to a rate not much exeeding that of 1792: that tithe is necessarily proportioned to the market price of corn, and must follow its fall ; while poor-rate, though more difficult of reduction, ought to yield to the substantial advantage of cheap provisions, and the opportunity of work afforded by our manufactures. All those considerations are of a nature to show that the late corn bill, which admits foreign wheat when our own attains the average of 70s. has not brought our import limit too low. Tendency of our Legislation to ultimate Freedom of Trade- We shall now suspend, for a few moments, the consideration of temporizing measures, of the expe- dients devised to meet the pressure of the day, and carry our speculations to a more distant object ; to the probable situation of our agriculturists and ma- nufacturers of the next generation. In their time, our financial circumstances will probably be more favour- able ; and parliament, relieved from immediate ur- gency, may legislate with no other view than that of the permanent advantage of the public. It was long an opinion among our countrymen, that the landed and commercial bodies had opposite inter- ests ; that a tax imposed on the land was of no par- ticular detriment to trade : and that the gains of our merchants were of little consequence to agriculture. In the present age a more ample experience, a community of suffering on the part of these great por- tions of the community, have taught them a more liberal doctrine* 3t is no where more emphatically urged than in the passage (p. 20.) of the Agricultural Report of 1821, where the intimate connexion, the strict dependence of agriculture and trade on each other, are proved by the evidence of the last hundred years of our history. Assuming, therefore, that such will be the ultimate basis of our legislative measures, we are naturallv led to take a view of our produe- Duty on Foreign Com. 175 tive industry somewhat more comprehensive than in the preceding paragraphs, and to inquire on what particular advantages our national prosperity has been and is likely to be established, Advantages of particular Countries. — Every country possesses its physical characteristics, its peculiar and distinctive aptitudes. If, adverting to the early histo- ry of civilization, we cast our eyes over a map of Greece, and observe how much intercourse was there facilitated by maritime inlets, and by insular positions in a sea of easy navigation, we shall find it easy to account for the early improvement of that country, without ascribing any great share of influence to for- tunate accidents, to the exploits of warriors, or the counsels of legislators. If we take a wider range, and inquire by what features the physical structure of Europe is discriminated from that of Asia or Africa, we shall find its advantages consist partly in a climate exempt from extremes, but more in the ample means of navigation afforded by the Mediterranean and the Baltic. Lastly, if, drawing nearer home, we en- deavour to ascertain how it happened that Flanders was flourishing amidst the barbarism of the thirteenth and fourteenth centuries, we shall trace it principally to two causes ; fertility of soil and ease of water com- munication. The latter, joined to the advantage of a free government, explains the still more remarkable growth of the Dutch provinces in the seventeenth century. Of England. — By what peculiar advantages has England been distinguished, and enabled to take the lead of France and Germany, countries equally fa- voured in soil and climate ? In a religious and po- litical sense, our superiority has consisted in the en- joyment of the reformed faith and a representative government ; in a physical sense, in our extent of coast, and in the productiveness of our coal mines. Natural superiority of another kind we can hardly boast : our pasture is, indeed, richer than that of con- tinental countries, and we consequently take the lead in horses, cattle, and, in some degree, in the woollen 1 7 6 Our Agriculture ; manufacture ; but whatever comes under the descrip- tion of agricultural advantages, ought, we believe, to be left out of the question, and to be considered as balanced by the less variable temperature, the great- er warmth of the continent. Our farming is, indeed, much more advanced ; but is not that the result of indirect causes, of the reactionof our trade and ma- nufactures, of the application of capital to tillage and pasturage, and of our tenantry being thus enabled to occupy farms of suitable size, instead of the insignifi- cant tenures still so common among our neighbours? In what manner, it may be asked, is this reason- ing applicable to the present discussion, the question of a protecting duty on corn ? Our answer is, that we should greatly mistake our national prospects were we to suppose that we have as yet received all the benefit attainable from our superiority in the grand points of fuel and navigation ; — on the contrary, it may safely be asserted, that we are not yet in the midst of our career, not half-advanced in the task of turning these advantages to account. Continental countries are making a very slow progress, either in navigating the ocean, in forming canals, or in work- ing coal mines : in each of these our superiority still offers an ample basis for the superstructure of nation- al wealth. It would probably be such as to enable our manufacturers, though taxed in regard to pro- visions, to maintain a competition with their conti- nental rivals ; but it is perfectly clear that they never will be able to do full justice to our national advantages until placed on a footing of equality in that very es- sential point. A reference to our custom-house re- turns would soon show how small our export of ar- ticles, such as hardware, glass, and even woollens, is, in comparison with what it might be, were equality in the price of provisions added to our other advan- tages. A free Import of Corn. — This opens to our view all the advantage that would arise from a free trade in corn, or from the reduction of the protecting duty to r* lower scale than has as yet been contemplated. Duty on Foreign Com. 177 either by ministers or by the most temperate of their opponents.* In another place (see Appendix) we have appropriated a few paragraphs to this topic ; and these, under present circumstances, are, perhaps, all that is advisable to urge in regard to it. The landed interest are as jet but imperfectly apprised of the extent of its ultimate advantage to them ; nor can we expect that their attention will, for some time, be weaned from the high prices, the great nominal rents of the years of war. If our ministers are more deeply read in the science of national wealth, more fully convinced of the reaction of the prosperity of trade and manufacture on agriculture, they have objections of another kind ; they cannot but regard a fall of prices as a virtual augmentation of the public debt. They are aware, likewise, of the evils of transition ; and must, to use the language of the Agricultural Report, be anxious " to spare vested interests, and to deal tenderly even with obstacles to improvement, when long implanted in our sys- tem." To all these difficulties we have to add, that the exemption of our agriculture from its extra share of poor-rate, and from tithe in England as well as Ire- land, would be an indispensable preliminary, to a measure which would bring our corn market almost as low as that of the Continent. Now government, however convinced of the impolicy of these burdens in their present shape, could hardly fail to consider a change in long established assessments, above all, a new demand on our exchequer, as replete with em- barrassment. Several of the late measures of minis- ters, such as the limitation of the sinking fund, the re- mission of the most injurious of our taxes, the ex- tended freedom of navigation, the transfer of the half pay and pension list into long annuities, evidently proceed on sound calculation. They seem to indi- cate an adequate estimate of our resources on the part of our political guides; but the free import of corn would be so great a departure from our past policy, * Ricardo on Agriculture, pp. 82. 83. 23 178 Our Agriculture. and would involve so many accompanying changes, that we can contemplate it only as a remote result, as less likely to be the consequence of any arguments that can possibly be urged, than of a continuation of low prices; which, by reducing the cost of pro- duction, and replacing our tenantry in nearly the same situation as in 1792, may cause our corn laws to expire by a natural death. Such were our views of this interesting 1 subject last year, on sending to press the first edition. Since then, there have occurred several circum- stances favourable to an approximation to a system of freedom, and to the hope of that advantage which always arises from the removal of restraints from productive industry. The lapse of time, the reduction of charges, and the prospect of continued peace, have gradually accustomed both landlord and farmer to regard 60*. for a quarter of wheat in the light of a remune- rating price ; the next step may be to consider it as a kind of standard for the duty on the import of foreign corn. Now, so soon as the landed in- terest shall be willing to permit import on the average price of our wheat exceeding 60s., they will be entitled to call on the public for decisive con- cessions in regard to tithe and poor-rate, — in other words, by giving an as- surance of a permanently moderate price to the consumer, they will have a right to demand that these burdens (tithe and poor-rate) shall be shared by the public at large. Are the recent measures of ministers of a nature to promise a concurrence in this plan of mutual concession ? To this we are inclined to answer in the affirmative, and, with confidence, whether we look to the personal change in the Chancellorship of the Exchequer ; to the reduction so promptly made in the assessed taxes ; to the limits which, as far as we can judge, men in office think it fit to affix to the sinking fund ; and, above all, to the introduction of the too long delayed measure for the commutation of tithe in Ireland. Of the power of the monied interest to come to the relief of their coun- trymen engaged in agriculture, we shall treat in our concluding chapter. mi CHAR VI. Poor-Rate. The subject of poor-rate has already engaged so much attention both in parliamentary investigations and published works, that we shall avoid all general discussion, and confine ourselves to what may be termed plain, practical topics, such as the compara- tive amount of money distributed at different dates to the poor, and the degree of pressure on the con- tributors. We take up the subject less as a national question, than as an appendage to our observations on agriculture ; but our summary, brief as it may be, will, we trust, explain two points, at present little understood ; the great increase of parochial charge during the war, when labour in general was so libe- rally paid, and the very considerable reduction that is now taking place, notwithstanding the apparently less favourable state of our productive industry. We propose to treat successively of the — Origin and progress of our poor law system ; Its degree of pressure considered as a tax ; Its effect on the condition of the lower orders. Origin of our Poor Laws. — The origin of the English poor laws, a system so different from that of neigh- bouring countries, is to be traced to two causes, — the call, at the time of the Reformation, for a provision for the poor, when deprived of charitable aid from monasteries ; and the enhancement, both progressive and rapid, which, as explained in the preceding chap- ter, took place in provisions during the 16th century. If the former offered a fair plea for the new system, the latter presented the more substantial grounds^ since the rise of wages seldom keeps pace with a rise in provisions. The conjunct operation of these causes T80 Our Poor Law System ; led to various enactments in favour of the poor, which were definitively consolidated in the act of 1601, — an act prepared with all the care and deliberation characteristic of the ministers of Elizabeth, and which would never have received a pernicious extension had its execution fallen into proper hands. Its provisions were intended at first for the relief of merely the aged and infirm, and led to little beyond the degree of aid afforded at present to the poor in Scotland or in France ; but, from unfitness on the part of annually changed overseers, and from the remissness always attendant on the disposal of public property, when unchecked, the act received, in time, a wider con- struction. It was interpreted into an obligation to find work for the unemployed generally, as well as to make up to those who had children the dispro- portion which in dear seasons took place between the price of bread and the rate of wages. Our poor-rate became thus a fund, not merely for charitable purposes, but for the equalization of wages ; a counterpoise to the fluctuations arising from inclement seasons, or from any cause productive of a rapid fall in the value of money. This result, cer- tainly well intended, and which at first sight seems of beneficial operation, is found, on trial, to be replete with all that irregularity and abuse which it is so dif- ficult to avoid in any interference with the natural course of productive industry. Of this, a striking proof is given, not only in this country, but in the New-England states, and in the state of New-York ; for even in these, the countries of the world in which the pay of the labourer is most liberal, the number of paupers has become large. They are, happily, the only foreign countries in which our example has been imitated. On the continent of Europe, the public in- stitutions afford protection only against infirmity and extreme penury : even Holland, so long noted for its hospitals and charities, has not a poor-rate on the comprehensive plan of England. its Origin and Progress. 181 Its Progressive Extension. — Our records of the dis- tribution of relief to the poor during the seventeenth century are very imperfect: its amount, however, must have been considerable in the first half of the century, in consequence of the continued rise of corn during the reign of James L, and part of that of Charles I. But during the thirty years that interven- ed from 1 660 to 1 690, the price of corn was on the de- cline, and the country experienced in no great degree either the visitation of inclement seasons or the bur- den of military expenditure. In the reigns of William and Anne the case was far different ; an enhance- ment of corn consequent on bad seasons, on war, and interrupted navigation, concurred with the disorder in our currency to render a state of suffering general among the lower orders, and to give a melancholy corroboration to their claims for parochial relief. The number of persons receiving such aid is said (Clarkson on Pauperism,) to have amounted, towards the close of the seventeenth century, to as large a portion of our population as at present, viz. a tenth part of the inhabitants of England and Wales. The amount of money collected for this purpose has not been put on record : it is said, somewhat loosely, but without much appearance of exaggeration*, to have approached at the period in question to a million sterling ; a burden heavily felt in those days of limit- ed rental, and productive consequently of great complaints. The long peace and reduced price of provisions which followed the treaty of Utrecht, were both con- ducive to the decrease of poor-rate, and, notwith- standing an increase in our population, we find that, in the middle of the century, viz. in the three years ending with 1750, its amount did not (Reports on the Poor Laws in 1817 and 1821) exceed an average of 700,000/. After 1760, the charge for the poor participated in the general charge which took place in the state of * Sir F. Eden on the State of the Poor. J 82 Our Poor Law System ; prices, and amounted in that year to 965,000/. while at a subsequent date, in 1 770, it was carried to • 1,306,000/.; so much did the effect of indifferent seasons and the enhancement of corn counterbalance the otherwise favourable circumstances of the latter period — the enjoyment of peace, the extension of our manufac- tures. Next came the contest with our colonies, along with the various losses attendant on interrupt- ed export, and the suspension of undertakings de- pendent on a low interest of money, the result of which, in concurrence with other causes, carried the charge of poor rate in 1780 to 1,774,000/. The peace of 1783, though favourable in the main, was not unaccompanied by the evils of transition. Our productive industry partook at first of the dis- couragement excited by the loss of our colonies; and though it soon exhibited symptoms of vigour, and even of prosperity, the price of bread was kept up by the indifferent harvests of 1788 and 1789. When to this we add the increase of our population, and make allowance for the progressive introduction of abuse into a system subject to so little check or control, we need not be surprised that in 1790, the sum collected for the poor amounted, when joined to the minor rates for highways, church, and county charges, to 2,567,000/. The late Wars. — Such was the state of our poor-rate at the beginning of the French Revolution, the time when we entered on a course of circumstances pro- ductive of a continued fall in the value of money. As wages seldom rise in proportion to a rise in provi- sions, an increase of poor-rate is the necessary con- sequence. Previously to the war of 1793, the aug- mentation of our rates had been gradual, a century elapsing before they doubled, a ratio of increase lit- tle greater than that of our population. But after 1793, the concurrent effect of war, and indifferent seasons, rendered the price of bread so dispropor- tionate to the wages of country labour, that in 1 800, its Origin and Progress, 1H3 the poor-rate, exclusive of the highway, church, and county rate, amounted to 3,861,000/. In 1810, to 5,407,000/. And in 1812, to 6,680,00©/. The peace of 1814 opened, in some respects, a new era. It was followed, as is well known, hy a rapid fall in the price of corn, which continued dur- ing two years ; and had, notwithstanding the many new claims for parish relief arising from want of work, the effect, on the whole, of a partial reduction of the poor-rate. This is apparent from the subjoin- ed table. 1 84 Our Poor Law System ; RETURNS FOR ENGLAND AND WALES. YEAR ending Easter, 1813. Easter 1814. 25th March. 1815. £. £. £. Total money received by poor-rate, and in a smaller degree by church-rate, high- way-rate county- rate, he. in Eng- land and Wales 8,651,438 8,392,728 7,460,855 To these sums are to be added charitable donations, whether arising from land or money, managed by the clergy, church- wardens, or over- seers : Annual ave- rage Expenditure. 238,310 238,310 238,310 For the maintenance and relief of the poor 6,679,658 6,297,331 5,421,168 1 Law-suits, removal of ! paupers and expen- 1 ses of overseers or other officers - 325,107 332,966 324,665 Families of militia- men and other mi- litia charges - 246,202 188,576 105,394 Church-rate, county- rate, highway-rate, &c. 1,614,871 1,692,990 1,657,871 | 8,865,838 8,511,863 7,508,854 ! The average of the two years 1815 and 1816 was, Church, county, and highway-rate - - £1,212,918 Maintenance and relief of the poor, including law- suits, removal of paupers, and expense of over- seers ------- 5,714,506 In all £6,937,425 its Origin and Progress. 185 Increase after 1816. — The poor-rate was thus in progress of reduction, both as to the amount levied, and the number relieved, when a general reaction took place, in consequence of the high price of pro- visions that followed the bad harvest of 1816. AVERAGE OF TWO YEARS. Relief and Maintenance of the Poor ; also Law Suits, re- moval of Pau- pers and Ex- pense of Of- ficers. Church-rates, County-rates, Highway-rates, and Militia- charges. TOTAL. 1816 and 1817 1817 and 1818 1818 and 1819 1819 and 1820 Year ending ) Easter 1821 > Do. 1822 £. 6,918,217 7,890,148 7,531,650 7,329,594 6,947,660 6,335,820 £. 1,210,200 1,430,292 1,300,534 1,342,658 8,128,417 9,320,440 8,932,185 8,719,655 The amount of our payments was highest during the interval (1817, 1818, 1819,) when a high price of corn unfortunately concurred with the derange- ment of productive industry arising from our great national transition. Since 1819 the amount of this formidable charge has experienced a progressive, though very gradual reduction. The year ending Easter 1819, was less than the year ending Easter 1818, by - - 5 per cent. Do. ending 1820, less than 1819, by 3 Do. ending 1821, less than 1820, by 5 Do. ending 1822, less than 1821, by 9 Total reduction since 1818, - 24 22 186 Our Poor Law System ; For the year ending 26th March, 1823, the returns as yet received exhibit a diminution, which, joined to a fur- ther reduction in the year now in progress, justifies our assuming the total of our present expenditure for the poor, at less than £6,000,000 NUMBER OF PERSONS RELIEVED. Poor permanently re- lieved in work- houses - Ditto, ditto, out of workhouses (with- out reckoning chil- dren Parishioners relieved occasionally - Total of paupers > relieved - y YEAR ending Easten 1813. Easter 1814. March <25th, 1815. 97,223 434,441 440,249 94,085 430,140 429,770 88,115 406,887 400,971 971,913 953,995 895,973 Workhouses. — The preceding return exhibits in a separate line the number of poor living in work- houses. This plan is, in a manner, peculiar to Eng- land; the public establishments in other countries being confined to hospitals or houses of correction. The workhouse plan, originally adopted above n century ago, received a great extension from an act passed in 1782, commonly called Gilbert's Act, from the name of the member of parliament by whom it was framed. This act, aiming to combine the ad- vantages of an assemblage of a number of poor on one spot, of a minute division of labour, and a joint management of disburse, empowered all magistrates its Origin and Progress I tf? to consider any large workhouse as a common recep- tacle for the poor throughout a diameter of twenty miles. Sound as these reasons apparently were, the plan has as yet been by no means successful : proper care has seldom been taken to separate the inmates of the workhouses according to their age or their habits; nor has the division of employment been at all carried to the necessary length. Their ear- nings have consequently been insignificant, and the charge to the parish amounts, in general, to 9/. 10/.. or even 1 2/. per head, while half the sum would suf- fice, if paid to the poor at their own habitations. It is thus in some measure fortunate that the limited extent of our workhouses hardly admits above 100,000 individuals. Scotland and France. — It is a general notion in Eng- land, that Scotland has no poor-laws, — a notion ori- ginating in the very satisfactory circumstance of the lightness of her poor-rate. But there are and have long been in that country statutes enacting that cer- tain funds shall be faithfully applied to the relief of the poor. These funds, however, are levied by a a very easy process ; first, from collections made at the parish church ; next, from the interest of money or rent of land bequeathed by individuals for the use of the poor ; and lastly, from a moderate assessment, paid in general, half by the landlords, the other half by the rest of the parish. In 1 817, a year of scarcity and distress, the total poor-rate collected in Scot- land was 119,000/., of which nearly 70,000/. pro- ceeded from charitable collections and donations; the remainder from assessment. The latter, how- ever, did not extend over the whole of Scotland, being levied only in the low r country, particularly in the districts containing manufacturers; while the mountainous counties of the north remained, as they have always been, exempt from assessment. The paupers in Scotland are in the proportion of only one in forty, a proportion which would doubtless have been increased, had the price of corn, and the £88 Our Poor Law System ; attendant operation of the English poor laws, con- tinued as in 1817 and J 81 8; for it is a remarkable fact, that the distribution of a parish allowance to manufacturers in England operates as a serious com- parative disadvantage to their humble brethren in the north. Thus, when in a depressed branch the wages are equal to only 8s. or 9s. a week, the alloAV- ance of poor-rate to the English manufacturer may, and generally does, carry his receipt to 10s. or 12s. ; a difference which has had the effect of inducing a number of the Scottish workmen to forsake their homes. What, it may be asked, have been the causes of so material a difference in the management of the poor in Scotland and in England? The two coun- tries embracing the Reformation in the same period, and falling under the sway of the same sovereign soon after the enactment of the poor law of 1601, the regulations were originally similar ; but in Scot- land their execution was vested, not in temporary officers, such as churchwardens and overseers, but in the landholders, clergymen, and elders or deacons, whose functions were permanent, and whose personal acquaintance with the poor enabled them to act with discrimination. The good effects of this plan, evinced as they have been by the practice of two centuries, induced the Committee on the Poor Laws in 1817, to recommend, that in England the overseer should be a permanent officer with a salary, and should act, if necessary, for several districts ; a prac- tice that has since been adopted with a beneficial result in a number of the parishes and townships of England. In France, before the Revolution, the poor were supported, as in Spain, Italy, and other Catholic countries, chiefly by the abbeys, priories, and other beneficial establishments. These sources of income being absorbed in the sweeping changes of the Revo- lution, there took place in the Assemblee Legislative, in 1791, a long discussion on the fittest mode of provid- ing for the poor: the result was a decided determina- its Origin and Progress. 189 tion to avoid the English plan, but to provide at the public charge a fund of about 2,000,000/. a year, for the relief of the aged and infirm throughout the whole of France. In the disorders of succeeding years, great defalcations took place in regard to this fund ; but in the reign of Bonaparte there were imposed, or rather revived, octrois, or dues on wines, cider* spirits, and other articles of consumption, paid on the introduction of these articles into towns. The imposition of a tax was in these days a matter of far greater difficulty in France than in this country ; and the revival of the octrois was for a time attempted only as a fund for charitable purposes ; but when the public became accustomed to this mode of contribu- tion, its rate was augmented, and the proceeds ren- dered available to a variety of local purposes. In addition to the aid arising to the poor from these dues, collections are made in France by sub- scription in the depth of winter, or on the occurrence of extraordinary distress ; and, finally, in a season of general hardship, such as the winter that followed the bad harvest of 1816, occasional issues are made from the public treasury, on the application of mayors or local magistrates. In Paris there are a number of hospitals : in the large provincial towns there are in general, two ; one for the sick, the other for the aged. These institutions, however, are managed with all the laxity and want of method so common among our southern neighbours ; mendicity is unre- stricted, and prevails in many places to a reprehensi- ble degree. In fact, the dwellings of the lower orders throughout France generally, whether in the country or in the suburbs of a town, exhibit to an English eye a very bare and denuded appearance. But to account for this general aspect of poverty by the want of parochial aid, would be as erroneous as to ascribe the comfort of the lower orders in Holland, to the aid afforded by charitable contributions. In that country, as in England, the better lodging and better furniture of the poor are the result of long- continued commercial activity ; of that ample supply 190 Our Poor haw System : of work, of those habits of care, cleanliness, and order, which in the course of time, it imparts to the agricultural portion of the community. Poor Rate considered as a tax. — -Our next, and equally interesting object of inquiry, regards the contributors to the poor-rate, and the comparative degree of pressure imposed on them at different periods. And here our readers must be prepared for our making a large deduction from the increase of burden indicat- ed by the numerical returns of poor-rate during the late wars ; a deduction justified on two grounds, — the depreciation of the money in which it was paid, and the increase in the number of the contributors. In what manner, it may be asked, do the latter re- ceive an increase ? Of those who pay poor-rate it may be safely assumed, that the augmentation, in point of number, is on a par with the general aug- mentation of their countrymen : and we shall proba- bly not err by assuming, that our national resources increase in proportion to our numbers. This opinion, already advanced in our pages, and about to be more fully developed in the sequel, we shall for the present consider as admitted, and extract from the work of a diligent and benevolent inquirer into such subjects, (Barton on the Labouring Classes, 1817,) a table in which these different considerations are taken into account. Table of the Annual Expenditure for the Poor, computed with reference to the Price of Corn, and the general increase of our Population. Periods. From 1772 to 1776 1781 to 1785 1799 to 1803 1811 to 1815 Average Price of Wheat. 5. 48 49 84 8 93 2 Average of Annual Expenditure on the Poor. 1,556,804 2,004,238 4,267,965 5,072,028 Forming a charge per H?ad on the whole P pulation of the Kingdom. 44 pints of wheat.! 53 do. 54 * do. 50 do. its Origin and Progress, .191 To judge from this sketch, the burden of the poor- rate, estimated not by the price, but by the quantity of subsistence, had actually begun to decline before the close of the war: but instead of pressing any inference on this head, we point the attention of our readers to the near approach to uniformity in the real charge at the time of the greatest apparent variation. This inference is farther confirmed by the following ex- tract from a pamphlet on pauperism, by Mr. W. Clark- son, published in 1815. Year. Population of England and Wales, about Total of Rates, including Highway, Church, and County rates. Numbei of Paopers relieved. 1688 1766 '1783> 1785) 1792 1803 5,300,000 7,728,000 8,016,000 8,675,000 9,168,000 £665,362 1,530,804 2,004,238 2,645,520 4,267,965 563,964 695,177 818,851 955,326 1,040,716 In the fifty years that elapsed between 1764 and 1814, the increase of our population was as 7 to 1 1, and the rise in the price of provisions exceeded the proportion of 7 to 13. Here, accordingly, the two great causes of increase of poor-rate operated in con- currence; and in 1814 it was incumbent on us to be prepared, not only for an augmentation of claimants in the proportion of 1 1 to 7, but for an increase of ex- pense in their maintenance, in that of 13 to 7 ; the two together forming, when compared to the return in 1764, a sum (24 to 7) more than tripple the respon- sibility of that year. Is it then matter of surprise, that 5,000,000/. should go no further in its discharge in ! 814, than 1,500,000/. in the beginning of the reign of George III. Wages paid by Poor-Rate, — it is a great, though very common error, to account poor-rate a bona fide tax, an actual sacrifice to its apparent extent. But the leading 192 Poor-Rate considered as w Tax. rule of our system, particularly in the west of England, is, to afford relief to the lower orders on a conjunct calculation of the price of bread, and the number of children in a family. An allowance made on this plan represents less the degree of distress prevalent in the country, than the difference between the mar- ket price of provisions, and the existing rate of wa- ges ; a rate, perhaps, transmitted with little variation from years of greater cheapness. It is thus that our poor-law system was rendered, during the late wars, an expedient for preventing a rise of wages, as far at least as regarded country labour, on the avowed ground, that wages once raised cannot be reduced without the greatest difficulty. What, it may be asked, was the effect of the war on the price of labour generally ? To increase the demand, and to place a number of the lower orders in towns, whether manufacturers or mechanics, in a better situation than before, notwithstanding the rise in provisions. In no department did it render the de- mand greater than in agriculture, and in none did the wages of the labourer experience a greater rise than in Scotland ; but in England, at least in most parts of England, from the effects of an artificial system, the case was very different. Wages were subjected to regulation ; and their rise, though considerable, be- ing inadequate to the rise of corn, the unavoidable result was a great increase of poor-rate. It is only thus that we find it possible to explain the remark- able anomaly, that in a period when farming was flourishing beyond example, the number of agricultu- ral paupers should increase in. a proportion fully equal to that of our trading and manufacturing dis- tricts. This ,was exemplified in Bedfordshire and Herefordshire, the two counties which employ the largest proportion of their inhabitants in agriculture, Poor-Nate considered as a Tax. 193 Extract from the Report on the Poor Laws, 1817, p. 8. Expended on Paupers in 1776. Average expen- diture of 1783, 84, 85, In 1803. In 1815. Herefordshire Bedfordshire £10,592 16,663 £16,728 20,977 £48,067 38,070 £59,256 50,371 There is thus no doubt, that a part of the poor-rate ought to be deducted from our estimate of it as a tax, and considered in the light of an equivalent for wages. If it be asked, what proportion should thus be deducted, we must answer, by admitting that the in- quiry is complicated, involving a reference to the rate of wages in Scotland and the counties in the north of England, where poor-rate is comparatively light. The proportion, besides, must differ materially under dif- ferent circumstances, in consequence of the greater or less demand for labour. In this uncertainty, and in the absence of the necessary documents, we are confined to a conjectural estimate ; but if a third of our poor-rate is to be thus accounted for, we exclude the idea of a tax or sacrifice to the extent of nearly 2,000,000/. annually, during the last ten years. Mode of Assessment. — Amidst the various sugges- tions entertained during the agricultural distress of 1816, was that of rendering the burden of poor-rate national, instead of parochial ; of paying it out of a general, instead of a local fund. This proposition is noticed here, merely to show its absolute inexpedien- cy. Under our present system, it could be accompa- nied by no adequate checks, — by no satisfactory rule for restricting either the number or the allowance of the pensioners. In Scotland, in France, in short, in all countries with which we are acquainted, the relief of the poor is defrayed by a local contribution. But while we determine to keep up the distinction of pa- rishes and townships, and to oblige each to provide for its poor, there appear to be strong reasons for a change that would be perfectly compatible with the 25 1 94 Poor-Rate considered as a 1 'ax. maintenance of local distinction : we mean new-mo- delling the assessment of property. At present the whole falls on land and houses ; but would not, we may ask, the income of the inhabitants of the parish generally, returned on a plan somewhat similar to that of the property tax, form a much more equita- ble basis of repartition ; particularly since the land- ed interest appear to have lost their principal stay — the counterpoise afforded by the corn laws. The yearly rental of the land and houses of England and Wales, on which poor-rate was collected in 1803, was not (Clarkson on Pauperism) returned at more than - £24,000,000 The latter years of the war exhibited both a large increase of rental and a more correct return, the amount assessed being (Report on the Poor Laws, 1817) not less than - 51,898,000 But increase of demand followed, or rather accompanied, in- crease of means : the rate, 3*. l^d. in the pound in 1803, was not below 3s. Ad. on the far larger sum assessed in the years i 812, 1813, 1814. At present, whatever be the official allot- ment, the burden bears an equal proportion to our resources, because, since the fall of corn, the rental of land and houses in England and WaJes can hardly exceed - - 45,000,000 In 1803, the sum collected for the use of the poor was below 4,000,000/. ; and if, in some years hence, it be reduced, as we anticipate, (see Appendix to the chapter on Agriculture, p. [35]) to a sum (4,500,000/.) not greatly exceeding that amount, it would form a charge of from two shillings in the pound on the ac- tual rent of our land and houses, (45,000,000/.) ; but, if levied on the income of the parishioners ge- nerally, 4,500,000/. would form a rate of less than one shilling in the pound. Did Increase of Wages and Poor-rate counterbalance the Enhancement of Provisions ? — It would, we believe, be a mistake, to imagine that the increase of wages and parochial aid during the war, counterbalanced to the country labourer the enhancement of produce, and had the effect of rendering his situation more com- fortable than in the preceding period. A very different conclusion is suggested by the following calculation made by Mr. Barton, who, in his pamphlet on the " State of the Labouring Clasps," published Our Poor-Law System, fyc, 195 in 1817, shows, that whatever may have been the case in towns, wages in the country, estimated by their power of procuring subsistence, experienced a considerable diminution in the sixty years between 1760 and 1820. Statement showing the Proportion of the If ages of the Country Labourer to the Price of Corn. Periods. Weekly Pay. Wheat Wages in Pint*! per Quarter. of Wheat, j s. d. S. d. j 1742 to 1752. . . 6 30 102 1761 to 1770. . . 7 6 42 6 90 1780 to 1790. . . 8 51 2 80 1795 to 1799 . . . 9 70 8 65 1 1800 to 1808. . . 11 86 8 60 ! Happily the other articles of the expenditure of the lower orders, in particular clothing, were en- hanced in a far less degree than bread. Without that advantage, their situation, favourable as was the pe- riod to our agriculture, would have been deteriorated, as will at once appear by a reference (see Appendix) to the table of the constituents of family expense in the middle and lower classes. We there find, that while provisions of home growth form hardly 30 per cent, of the disburse of the middle classes, they amount to 50 per cent, of the more rigorously calcu- lated out-lay of the lower orders. A still more serious confirmation of the importance of the price of corn to the poor will be found in ano- ther short extract from Mr. Barton's tables. Inefficacy in point of relief has seldom been urged against our poor-law system, but the following return shows that it is far from being completely successful in pre- venting an increase of suffering, and even increase of mortality, among the poor and their children, in times of scarcity. The return comprises seven ma- nufacturing districts in England, distinct from each other 19tf Our Poor 'Law System Years. Average Price of Wheat per Quarter. Deaths. 1801. 1804. 1807. 1810. s. d. 118 3 60 1 73 3 106 2 55,965 44,754 48,108 54,864 It was thus equally desirable, on grounds of hu- manity and policy, that the price of provisions should experience a reduction. It was in 1820 that this took place on a large scale ; and the fall of wages, though considerable, being still far from proportioned to it, the condition of the lower orders, at least all who can find employment, has experienced a favourable change. Were we in possession of returns to a late date, Mr. Barton's parallel of weekly pay and price of wheat, given in our preceding page, might be con- tinued to the present year, and would exhibit an ap- proximation to the wages of the middle of the last century; in some measure in the smallness of the money amount, more in its efficiency in the purchase of provisions. But without such a return, enough appears to esta- blish the important fact, that notwithstanding the relief afforded by an increase of poor-rate, the con- dition of the labouring classes experiences a very unfavourable change oh the enhancement of corn ; while, in return, it is greatly to their advantage, that the provisions should fall, and rates be reduced. Need we then wonder, that in 1810 the framers of the Bullion Report should have considered the situation of the country labourer deteriorated by a continu- ance of high prices, notwithstanding the increase of parochial aid; or, that after 1820, ministers should have accounted the public tranquillity so firmly se- cured, as to admit of a large reduction in our army ? Objections to our Poor-Laws. — We come next to the objections urged against our poor-laws, viz. that they its Effect on the Condition of the Lower Orders. 1 97 induce the labouring class to contract premature marriages, depress their circumstances by an undue increase of their numbers, and accustom them to a state of humiliating dependence. Admitting that these charges are considerably exaggerated, (since the poor increase their numbers almost as quickly in Scotland, where there is so little parochial aid,) a sufficient proof of the radical defects or absurd mis- application of our system is afforded by the fact, that aid, originally restricted to the aged and infirm, should be extended to more than a twelfth part of our population ; for the persons receiving parish re- lief in England and Wales, amount, without reckoning children, to nearly a million. But, unluckily, we cannot speak with approbation of the course as yet pursued, in regard to the poor in almost any other country. That which is followed in Scotland is charged with a degree of indifference to their sufferings in dear sea- sons ; a time when (Evidence of P. Milne, Esq. M. P., before the Poor-Law Committee) necessity prompts labourers to undertake taskwork at reduced rates, and frequently to exceed their strength. A similar feeling must have occurred to most of our country- men who have lived in France, or other countries of the Continent, and witnessed the habitual privations of even the sober and industrious, among those of the lower orders who happen to have families. Hence, a reluctance on the part of many benevolent minds to relinquish our poor-law system, defective as it is, or to forego the hope of solving that most in- teresting problem, the means of lessening to them the difficulty of rearing a family. Reduction of Taxes on the Necessaries of Life. — To at- tain this humane object, the better plan, we believe, is to abandon our attachment to system, and to relin- quish, as soon as in our power, whatever is artificial in our regulations. No contrivance, however in- genious, no combination, however plausible, can be so advantageous as the plain rule of enabling the poor to provide for themselves. Much has been 198 Our Poor-Law System.; lately done to this effect, by the reduction of the du- ties on salt and leather; let our grand object be, the removal of the remaining obstacles, whether existing in the shape of taxes on the necessaries of life, or of restrictions on employment, such, for example, as arise from our duties on coals carried coastwise or by canal. A tax on a necessary of life has, in regard to the poor, the same operation as the enhancement of corn : wages do not become proportionally augmented, and a new pressure falls on those who are least able to bear it. The great addition to the tax on leather im- posed in 1813, was, doubtless, for a time, an absolute sacrifice on the part of the lower orders. That they are indemnified, or partly indemnified, in the rate of wages, at times when their services are in demand, we do not deny ; but the equivalent is uncertain, the sacrifice immediate and unavoidable. From this painful consideration, we turn to the consolatory reflection, that " any reduction of the taxes on the necessaries of life, may, with confidence, be considered the forerunner of a reduction of poor- rate." The more the charges on the necessaries of life, in this country, are approximated to those of the Continent, the more we perform towards confirm- ing the superiority of our manufacturers ; resting the support of our lower orders on the basis of the ividc world, instead of England, and substituting for an elee- mosynary grant, the earnings of independent labour. Is it necessary that we should specify the advantages with which our countrymen enter on the field of com- petition with their continental neighbours? They have the aid of productive mines, of extensive water communication, of a minute subdivision of labour, of habits formed during successive ages to industrious pursuits. These grounds of superiority, imperfect- ly perceived by Englishmen who have remained at home, are amply appreciated by all who have witnessed the slow progress, the deficient resources, the general backwardness of most countries on tho Continent. its Effect on the Condition of the Lower Orders. J 99 But while the benefit arising from this reduction is admitted, the practicability of carrying it to any con- siderable extent may be questioned by those who look to the magnitude of the wants of government. These, persons, however, would soon modify their objections, and extend their hopes, were they to give due attention to a few fundamental truths ; such as, " that the proceeds of a tax by no means decrease in proportion to the reduction of its rate;" and, " that new and unforeseen resources are opened by the ex- tended activity consequent on such reduction/' Whenever circumstances shall admit of giving a com- plete latitude to the course we recommend, the public may safely take for granted, that England will have, if not fewer paupers, at least fewer real sufferers from poverty than any country in Europe. Could this highly desirable result be attained, our upper classes would find their duties towards the poor greatly simplified. They would be justified in confining their interference and aid to cases of urgency ; such as an inclement season, a great and general transition like that from war to peace, or from peace to war; or, finally, to a time when, as is at present the case of the lace-manufacturers on the Continent, a multitude of persons, habituated to work of a particular kind only, find their earnings suddenly reduced by the introduction of machinery. Assist- ance thus conferred would be substantial charity : except in its consequences from the hazard and mis- chief attendant on our poor-law system, and, on that account, doubly gratifying to benevolent minds — to those who, eager to bestow, are withheld only by a doubt of their donations producing a beneficial result. 200 CHAP. VIF. Population, Few subjects in the range of political science have given rise to more opposite theories than that of Population. It is now fully a century and a half since our countryman, Judge Hale, taking doubtless for granted, like a number of reasoners in a more advanced age, that the quantity of food in a country is limited by physical causes, declared gravely from the bench, that "the more populous we are, the poorer we are." And the present age has witnessed the promulgation of a doctrine of kindred import, though somewhat more elaborately expressed, viz. " that population is imperatively limited by subsist- ence." This opinion, proceeding from a writer of extensive research and professional rank, has been very generally received, not only in England, but in the country of Dr. Smith ; a quarter where political economy forming more particularly a study, a rigid scrutiny of its merits might naturally have been ex- pected. Of the various answers to Mr. Malthus, the most substantial in argument, though far from the most attractive in style, is the w ork entitled the " Happi- ness of States," published in 1815, by Mr. S. Gray; a work of which the leading principles were some time after, developed in a more condensed and popular form.* Far from coinciding with the un- comfortable doctrine, that increase of numbers leads to increase of poverty, Mr. G. maintains, that augment- ed population forms the basis of individual as well as * ; In two lesser works, entitled, respectively, " All classes productive of National Wealth." 8vo. 1817; " Gray v. Malthus, the principles of Popu- lation and Production Investigated." 8vo. 1 8 1 8. Increase of Population. 20 \ of national wealth. He has been, on the whole, for- tunate in the events that have followed the publica- tion of his opinion, the present abundance of subsist- ence being particularly calculated to relieve the alarm of those who considered our numbers likely to outrun our means of support. Still the public mind is far from being completely satisfied in regard to the benefit arising from augmented population : the rea- soning in its favour is not yet clear and convincing; while the occasional want of work among our lower orders is attributed by many to a population increas- ing too rapidly for employment, if not for subsistence. In this view of the subject, we are far from joining, and proceed to investigate it at some length, in the hope of finding not only a confirmation of the con- — solatory and cheering doctrine of Mr. Gray, but of being enabled to found on it a practical measure ; to discover in the increase of our numbers, the means of lessening our financial pressure. Our principal topics of inquiry shall be — The condition of society in an early age; The change effected by increase of population ; How far subsistence is limited by physical causes \ The state of Europe in regard to increase in num- bers and wealth, SECTION I Increase of Population, Penury of an early Age. — The predilection with which the popular writers of almost every country have contemplated a primitive age, and the colour- ing cast over it by romantic imaginations, have had the effect of misleading the majority of readers, and rendering them strangers to the privations experienced by their ancestors. These, however, were multiform and grievous ; such, in short, as to form a most striking contrast to the comfort of an advanced state of socie- ty; and if in England we are happily unable to find an existing likeness to a rude age, the sister island 26 202 Increase of Population. will amply supply it. The Irish peasant, occupying a hovel without furniture, and carrying on his culti- vation with wretched implements, may convey to us an idea of the state of England five or six centuries ago, as well as of the present state of a great part of the east of Europe, of Poland, Russia, Hungary, and the inland provinces of Turkey. The improvement of these countries at present, appears to an English traveller extremely slow ; but, aided as it it is by the introduction of settlers from Germany and other parts, it is, of course, far less tardy than the advance- ment of Europe in the Gothic ages, when all were equally backward. In those days, a few cottages formed a hamlet, and many centuries elapsed ere the hamlet became a village. In point of property, ex- tremes predominated : on the one side was the lord, on the other his vassals ; while the middle class were few in number, and uncomfortable in circumstances. Effect of Increasing Population. — What a different aspect of society is exhibited after a progress in the useful arts, accompanied as it is by the rise of towns, and general increase of population ! If we compare such countries as Russia, Poland, Hungary, or the Highlands of Scotland, with the more thickly peo- pled districts of the Continent, such as the provinces of Holland, Zealand, Flanders, Normandy, or, on our own side of the Channel, with such counties as Lan- cashire, Warwickshire, the West Riding of York (to say nothing of Middlesex,) we find a surprising differ- ence in the number and comfort of the middle class. A return of annual income from the first-mentioned countries, would exhibit a few princely fortunes, with a long succession of names below the limit of taxa- tion : in the other, it would show a number of grada- tions rising above each other in a manner almost im- perceptible. How different is the England of the present age, from the England of feudal times, when we could not (see the Appendix, p. [75].) boast twenty towns of 3,000 inhabitants each, and when the commons or middle class were too unimportant Increase of Population. 20$ to hold a share in the representation, until brought forward by the crown as a counterpoise to the aris- tocracy. Gradual Transition from Penury to Comfort. — In what manner does the transition from penury to comfort, in general take place ? If not altogether caused by density of population, it must be allowed to have very close connexion with it ; the conjunction of individu- als in villages and towns being productive of a de- gree of accommodation, comfort, and finally, of re- finement, which would be altogether beyond their reach in an insulated position. In these assemblages the acquisition of one comfort creates a desire for another, until society eventually attains the high state of polish which we at present witness in several countries of Europe. All this, says Mr. Gray, leads the consumer to make fresh demands on the produ- cer; demands reciprocated by the latter on the for- mer, in a different line of business. Hence, the de- pendence of one class on another ; hence, the pros- perity caused to agriculture by the success of trade, and to trade by the success of agriculture. It is of no great consequence to our argument, whether these wants are of first or of second necessity, that which is deemed a superfluity in one country, being often accounted no more than a comfort, a requisite in an- other. What, it may be asked, is the criterion of the dif- ference in wealth and general improvement between different countries ? The relative density, not of population generally, but of town population. This is apparent in almost every link in the chain of Euro- pean civilization, Holland having in the seventeenth century taken the lead of England, exactly as Eng- land at present takes the lead of France ; France of most parts of Germany, and Germany of Spain and Poland. The distinction of town population from population generally, is important: for were the same advantage to belong to districts strictly rural, Ireland would claim an equal rank with England, 204 Population : — and Flanders take precedence of Holland. It is in towns only that we reap the advantage of collective over scattered population ; — an advantage consisting in extensive markets ; a minute subdivision of em- ployment; the greater dispatch and finish of work- manship, and a supply of occupation to individuals of every age and every degree of capacity. New Settlers. — It is but too common among un- thinking persons to consider new-comers as unprofi- table intruders, as dealers, not customers, as sellers, not buyers. This, however, is but a superficial view, a first impression ; for there is very little reason to doubt that in one way or another these persons will disburse in proportion to their earnings. When it happens that they or any other part of the community do not make such disburse, the only source of detri- ment to the public is the practice (now very rare) of hoarding ; for money saved and lent at interest ber comes of service to the community, increasing the capital of the country, and lowering, or contributing to lower, the premium paid for its use. We may safely take for granted, that much public advantage arises from the arrival of new settlers, whether manu- facturers, such as England and Prussia acquired from France on the repeal of the edict of Nantes, or agriculturists, such as Canada and the United States are now receiving from us. Population, however, is generally augmented less by settlers from a distance, than by a local increase ; by an excess of births over deaths : a mode, which, very different from the easy acquisition of foreigner? of mature age, implies a long and often a heav\ charge, until the youth of either sex acquire the strength or knowledge requisite to their support; re- quisite, in the language of the economist, to consti- tute them "producers as well as consumers." Though in such a case the acquisition of new members is much more dearly purchased, the effect in a statisti- cal sense is the same as in the case of arrivals from abroad. Its subsistence limited by Physical Causes. 205 Is the amount of Subsistence limited by Physical Causes ? We now approach the much-disputed point of the physical limits to increase of population ; to the question, whether it is imperiously limited by sub- sistence, or possesses the power of augmenting sub- sistence in proportion to its own increase. The well-known argument of Mr. Malthus is, that popula- tion, if unchecked, would proceed in a geometrical ratio (1, 2, 4, 8, 16, 32, &c), while the supply of food cannot, he thinks, be brought, by the greatest efforts of human skill and industry, to increase otherwise than in the arithmetical ratio of 1,2, 3, 4, 5, 6, &c. This position he illustrates by a reference to the Unit- ed States of America ; a country where the abun- dance of food is so great as to admit of the inhabitants doubling their number each succeeding generation, the 3,000,000 of 1775 having become 6,000,000 in 1800, with a probability of increasing to 12,000,000 in 1825, and so on progressively. That, as far as regards physical considerations, there is both an ability and a tendency in mankind to double their numbers in every generation, we readily admit; also, that wherever j-such reduplica- tion does not take place, the causes are to be sought in checks, such as the poverty that deters from mar- riage, the occurrence of pestilential disease, or some other preventive of the increase of numbers. So far we agree with Mr. Malthus; but in regard to his second proposition, the causes that limit the increase of food, we must observe that the subject has as yet been by no means satisfactorily illustrated, the atten- tion of the different writers on the subject, whether himself, Mr. Ricardo, or others, having been fixed too much on the necessity of having additional land to af- ford the produce required, and too little on the in- crease derived from bestowing additional labour on the same soil. What were the circumstances of the period when Mr. Malthus' book was composed ? It was a period of war, of deficient crop, of continued enhancement of agricultural produce; and the author, like the public at large, was necessarily unacquainted 206 Population : — with our power of augmenting the supply, a power so remarkably displayed since our seasons have become more favourable, and peace has restored to agricul- ture a sufficiency of labourers. Average Increase of Population. — In attempting a computation of the average increase of our numbers, we begin by making an exception of the United States, peculiar as are the advantages possessed by that country. They consist in a territory of vast ex- tent ; a river navigation of great importance ; a people enjoying unrestricted intercourse with the civilized world, and closely connected in language and habits with the most commercial and colonizing country of Europe. Such an example is necessarily rare, and ought to be considered an extreme case : a more sa- tisfactory result as to the average increase of popula- tion would be obtained from a combination of cases, among which assuming the United States as the ex- ample of the most rapid augmentation, we may take, as the second, England, in which, under circum- stances more favourable than on the Continent of Europe, but less so than on the other side of the At- lantic, population has doubled within the last cen- tury, and bids fair to double again in sixty or seventy years. As a farther example, we may take France, where, though the records are far from accurate, the doubling of the population has as yet required a term of 100 to 120 years. Other countries exhibit a greater or less degree of slowness in the ratio of increase, and as these returns apply to them when exempt from the visitation of war, pestilence, or any vio- lent check to increase of numbers, Mr. Gray's infer- ence is, that the average furnished by the whole may be assumed as indicative of the natural progress of po- pulation. After thus endeavouring to establish the natural ratio of increase, Mr. Gray proceeds to argue that such increase is no farther limited by the difficulty of obtaining food, than by the difficulty of obtaining clothing or lodging, because the supply of food, though Is Subsistence limited by Physical Causes ? 207 apparently restricted by a physical cause, is, on a closer examination, found to depend on the amount of capital and labour applied to raising it. In arguing this very interesting question, Mr. Gray and the other opponents of Mr. Malthus, would do well to guard against the charge of over-confidence, and to begin by making a distinct admission of the difficulty of raising a family, a task which to the middle classes is one of labour and anxiety : to the lower, of toil, pri- vation, and often of distress. Of this heavy burden, what portion is to be ascribed to the charge of food? In the middle classes, food forms, (see Appendix, p. [1 1].) between 30 and 40 per cent, of the whole ex- pense of a family ; but in the lower above 50 per cent., constituting thus, the grand article of charge in that class in which the pressure of a family is most severely felt. After this precautionary statement, we may safely allow Mr. Gray and his followers to give a latitude to their inferences, comprehensive as they are, viz.: — That the quantity of subsistence in the world may be augmented in the same manner, and by the same means, as the quantity of our clothing, or the size of our dwellings ; and, That an' addition to our numbers implies no dimi- nution of individual income or property. Such assertions would have appeared not a little extraordinary during the greatest part of the war, when a continued insufficiency in our agricultural produce favoured so strongly the negative doctrine of Mr. Malthus: they would have been received also with no small surprise during 1817 and 1818, when a scarcity of provisions, a general irregularity in the state of our productive industry, concurred to pro- duce apprehension in regard to our increasing numbers. But a different lesson has since been taught us : we have now evidence that numbers increased greatly be- yond anticipation, may draw their subsistence from the same territorial surface; that the amount of pro- duce may be greatly augmented without bringing new soil into cultivation. A similar result from a simi- 208 Population : — lar cause is at present exhibited on the Continent of Europe. Comparison of the present with former Periods. — How far does the preceding opinion appear to be confirm- ed by a general retrospect to the past ? During the twenty years that elapsed between 1692 and 1712, the average price of wheat (about 44s. per quarter) had been such as to afford, in these days of low rent and cheap labour, an ample inducement to the ex- tension of tillage. It was consequently considered as having reached its terminus, and no idea was enter- tained of the practicability of any considerable addi- tion to our produce. The result, however, proved very different, for though during the half century that followed the treaty of Utrecht, our population receiv- ed (see Preliminary Observations on the Population Return of 1821, p. 29.) an augmentation, including Ireland, of fully 3,000,000, the increase of our agri- cultural produce Avas such as more than counterba- lanced that new demand. This was apparent from the average price of wheat, which during that long pe- riod did not exceed 35s. the quarter. — Were it true that the acquisition of subsistence becomes more dif- ficult as our numbers increase, we should naturally expect to find the greatest abundance in a remote age ; in times when the number of consumers was small, relatively to the extent of territory. But if we look back to the earliest periods of authentic history, to the ages when Greece and Italy were most thinly peopled, we find neighbouring tribes maintaining san- guinary struggles with each other, the motive of which, as far as regarded the lower orders, was the hope of ac- quiring additional territory, and increased means of subsistence. It is thus that we are to explain the ob- stinate warfare for small but fertile districts, such as the plain of Tyria, the plain of Tanagra, the Colles Tusculani ; — to say nothing of contests, in a record of higher authority, for the valleys of Palestine, or the banks of the Jordan. Had subsistence been abundant in these days, the inhabitants of the towns Is Subsistence limited by Physical Causes f 209 of Greece would have shown less eagerness in emi- grating to new colonies ; while at Rome, the demand . of an Agrarian law would have been a less powerful lever in the hand of demagogues. But to confine our examination to our own country, and to times compa- ratively recent, how different is the present situation of our lower orders from that of their forefathers un- der Henry VIII., or under our admired Elizabeth, when, without any disposition to severity on the part of the sovereign or her ministers, the number of ca- pita.1 punishments (Speech of Mr. Fowel Buxton on our criminal code, May, 1821,) averaged no less than five hundred annually ! Various causes, in particu- lar the want of education, must have contributed to this unfortunate prevalence of offences ; but can any be supposed to have operated so largely on the part of the commonalty, as the difficulty of obtaining subsistence, although in that age our population did not exceed a third of its present number? But what, it may be asked, was the cause of this difficulty, — of the supply of subsistence being so scan- ty, when the number of consumers was so small ? Of this problem the solution is to be sought in the un- productiveness of even the fairest tracts so long as they remain in a state of nature. Whatever be the serenity of the climate or the richness of the soil, they continue unavailing to any useful purpose, un- til the application of labour. By labour only can over-luxuriance be corrected, the forest cleared, a superabundance of water removed from one spot, a deficiency of it supplied in another. It is to the per-* formance of tasks like these, the most acceptable of any in an early age, that we trace the honours so li- berally bestowed in ancient mythology, — the apothe- osis of the warrior who drained the Lernsean marsh, and combated the savage occupants of the woods, But we are under no necessity of dwelling on an age of tradition, on a scene embellished by fiction : if we turn to plain reality, — to the times in which we live, and to a people noted for their adherence to the pur- suit of substantial profit ; if. in short, we fix our atten- 27 \ A 210 Population : — tion on the western states of America, or on Upper Canada, we shall find an example abundantly con- vincing of the unproductiveness of the finest tracts until improved by labour and capital. It would be easy to multiply illustrations from his- tory, but as our limits hardly admit of detail, we ex- tract from one of the works already mentioned (Gray versus Malthus,) a summary of the leading ideas in the opposite systems of population. Mr. Malthus^s leading 1 Ideas. Mr. Gray's leading Ideas. The increase of population has a The increase of population tends to tendency to overstock, and to les- increase the average amount of sen the average amount of em- employment to individuals, ployment to individuals. The increase of population has a na- The increase of population has a ten- tural tendency to promote povcr- dency to increase wealth, not col- ty. lectively only, but individually. From the conclusions of Mr. Malthus we dissent almost entirely ; to those of Mr. Gray* we would suggest the following modification. Increase of population, when accompanied by im- provement in agriculture, manufacture, and the useful arts generally, has a tendency to augment both the Average amount of employment ; and Our wealth, not collectively only, but individually, Mr. Malthus. Mr. Gray. The amount of subsistence regulates The amount of population regulates the amount of population. the amount of subsistence, in the same way as it regulates the sup- ply of clothing and housing, be- cause with the exception of occa- sional famines, the quantity of subsistence raised depends on the amount of labour bestowed on it. Population has a natural tendency to Population has a tendency to in- increase faster than subsistence. crease, but this increase carries in itself the power of supplying its wants. Here, also, we are desirous to introduce a refe- rence to the progress of improvement, since, although the application of labour on the part of an increasing and unimproving society, like the peasantry of Ire- Is Subsistence limited by Physical Causes ? 211 land and Brittany, augment the quantity of the mere necessaries of life, the hazard of famine can be pre- vented only by improvement in agriculture, or in those arts of which the products enable a people to purchase subsistence from their neighbours. The early marriages of the Irish without the certainty of wages, or a stock of implements and furniture, are productive of incalculable suffering. That the supply of food may be extended, by labour and capital, in the same manner as the supply of manufactures and buildings, we readily admit ; but, as in the case of four-fifths of mankind, food forms by far the greatest article of charge, and is, consequently the most difficult of acquisition, we are fully prepared to excuse those who, in their writings, have overrated the labour of procuring it. From the unqualified, and sometimes confident tone of Mr. Gray, an inhabitant of Canada or the United States might fall into the grievous miscalculation, that to procure food for a family in Europe, was a task of no greater difficulty than in his own country, w here a grant of land may be had on such easy terms. Progressive Increase of Population in Europe, The arguments in the preceding table are of ge- neral application, referring to the state of makind in every age and country. To give the question a more specific form, we shall now introduce a few r statistical results, and explain in what manner are effected those improvements in agriculture and the useful arts, which we consider as conferring the ability to support an augmented population. Effects of Soil and Climate. — Fertility of soil is too directly conducive to increase of numbers, to require illustration ; but in point of climate, we cannot avoid remarking that the superiority of one part of Europe over another, is, as far at least as regards the produc- tive power of the soil, much less than is commonly imagined. The great art of the husbandman consists 212 Pop ulation ;-— in adapting the object of culture to the peculiarity of* the temperature. In various parts of Scotland, ac- counted half a century ago unfit for wheat culture, the progress of improvement has led to raising that grain, not only in abundance, but of a quality fit for the London market ; while in the boasted climate of the south of France,- the season is often too dry for wheat, and the frequent failure of that crop seems to point out maize as a more appropriate object of til- lage. In regard to potatoes, the culture of which is so directly connected with density of population, the warmest and finest climate of the Continent has no superiority over our own. It is thus only, when in extremes, as in the bleak tracts of Russia, Sweden, and Norway, that climate has operated materially to restrict produce and population : the physical supe- riority of the south of Europe, whatever may be its eventual effect, has not, as yet, been such as to out- weigh the political advantages of the north. Effect of Communication by Sea, Rivers, Canals, Roads. —The effect of prompt communication in promoting commercial intercourse is sufficiently apparent, but its tendency to increase the population of towns may require some explanation. What, in the first place, are the advantages enjoyed by the inhabitants of towns over those of the country ; by a collected over a scattered population ? They consist in a more ample field for sale or purchase ; a better division of employment ; greater dispatch and finish of work- manship ; — a more varied supply of occupation, so as to suit individuals of almost any degree of strength or capacity. Now these advantages, arising, in a large town, from concentration of numbers, may, in a great degree, be enjoyed by places comparatively small and distant from each other, when connected by rivers, canals, or a line of sea-coast. Such was the origin of the prosperity of Greece ; such, at present, is the cause that the maritime part of her population make in their contest with the Turks a figure not un- worthy of their ancestors. It is thus that the several Causes of its Increase in Europe. 213 towns of Holland, Zealand, and Flanders, have for centuries maintained an active intercourse with each other ; that Paris is so closely connected with Rouen and Havre de Grace ; that Switzerland maintains by the Rhine an intercourse with Holland ; and that in England, particularly since the multiplication of ca- nals within the last seventy years, the conveyance of coal, iron, salt, and other bulky commodities is so much facilitated. On the other hand, the want of such intercourse is, as we shall see presently, the principal cause of the backwardness of Spain, Po- land, the south of Germany, and in no inconsidera- ble degree, of France. Effect of the Protestant Religion. — The adoption of the reformed faith has been found conducive to the increase, not only of individual comfort, but of the population of towns in the countries into which it has been introduced. Among its other effects, are a more general diffusion of education, and an exemption, in the case of the labouring classes, from the loss of time attendant on the endless holydays of the catho- lic church. In agriculture, the operation of these advantages is less apparent, most countries sufficing wholly, or nearly, to their own consumption, while the insulated position of the husbandman prevents, in a great measure, the benefit arising from competi- tion and frequent personal communication. But in manufactures, particularly in those prepared for foreign sale, the case is very different ; the ease of transporting them to a distant market, and of com- paring their respective quality and price, opens a wide field of competition, and awards the preference to superior skill and ingenuity. Accordingly, though the catholics of Europe are, collectively, much more numerous than the protestants, the far larger share of exported merchandise proceeds from protestanl countries, the labour of the Flemings, the French, and the northern Italians, forming a feeble counter- poise to those of the Silesians, the Saxons, the Prus- sians, and above all, of our countrymen. In Ireland. 2 1 4 Population ;—* linen weaving, the only great branch of manufacture, is almost wholly in the hands of protestants. We proceed to apply this reasoning to the progress of population in Europe, availing ourselves of the of- ficial returns which have been made in most coun- tries in the course of the present age, and which sup- ply the following abstract : — Inhabitants per square Mile. East Flanders - 554 West Flanders - 420 Holland (Province of) - - - .'.'•• 362 Ireland _-.-_. 237 England, distinct from Wales - 232 Austrian Italy, viz. the Milanese and the Venetian States 219 The Netherlands, viz. the Dutch and Belgic Provinces, col- lectively ------ 214 Italy ------- 179 France - - - - - - 150 The Austrian Dominions - - - - 112 The Prussian dominions - - - - 100 Denmark __._-_ 73 Poland ------ 60 Spain ------- 58 Turkey in Europe (conjectural) - 50 Sweden (distinct from Norway and Lapland) 25 Russia in Europe ----- 23 Here are, indeed, some very remarkable differ- ences in population, and to trace this diversity to its source, is an object of no slight interest. Flanders possesses, in a high degree, the main causes of dense population, fertility of soil, and ease of communication, having on the north the sea and the Scheldt, while the flatness of its surface admits of easy intersection by canals. Accordingly, so ear- ly as the 12th century, when productive industry was in its infancy in every part of Europe, except Pisa, Venice, Genoa, and a few other towns of Italy, Bru- ges was a place of commercial eminence, a kind of centre for the intercourse of the northwest of Europe. In this it was succeeded by Antwerp and Amster- dam ; but though Flanders has long ceased to have much foreign trade, its population and manufactur- ing industry have not declined. The great articles of its produce are, corn, hemp, and flax ; of its ma- nufactures, linen, lace, leather, and, in later times. Causes of its Increase in Europe. £15 cotton. Of cities, it contains only two, Ghent and Bruges, and their conjunct population does not ex- ceed 90,000. But it abounds in towns and villages which are populous, though not noticed in history, and hardly in geography. Of the Dutch provinces, the most remarkable for population, as for other characterestics, are Holland and Zealand. On the ground of fertility, they have little claim to density of numbers, the soil being, in general, ill adapted to tillage ; but in ease of water commu- nication, they surpass every other part of Europe. The mouths of the Rhine, Maese, and Scheldt, afford capacious inlets for foreign commerce, while the le- vel surface of the territory admits of easy intersec- tion by canals. These provinces possessed, conse- quently, considerable population and trade before the 16th century, when their prosperity was confirm- ed by the adoption of the protestant religion, and by the establishment, after a long struggle, of an inde- pendent government. How far does fertility of soil account for the in- crease of population in England ? Inferior to seve- ral tracts on the Continent, such as Flanders or the Milanese, but more fertile than the mountains of Spain or the sandy levels of the north of Germany, the soil of England may be said to hold a medium, and to have a claim to rank with the average of the French and Austrian territory. This degree of fer- tility would have determined a population in the pre- sent age of perhaps 150 to the square mile : the ad- ditional number is, as far as regard § physical causes, to be attributed to our insular position, and the produc- tiveness of our mines, particularly of coal; advanta- ges which lead so directly to the increase of our ma- nufacturers, seamen, and traders. In ease of inland navigation, England is second only to the Dutch pro- vinces. Inland Countries : Austria and Prussia. — From these examples of maritime prosperity, we pass to inland countries, and begin by the dominions of Austria. 216 Populat ion which, with a slight exception, are at a distance from the sea, traversed by a few navigable rivers, and by hardly any canals. Though equal to France or Eng- land in fertility, the communication between the dif- ferent provinces is difficult, the progress of improve- ment extremely slow, manufactures backward, and the town population very limited. Prussia, in like manner, has few harbours or navigable rivers, indif- ferent roads, and canals that are only in their infan- cy*: Jie majority of her subjects enjoy the advantage of the protestant religion, and of an education less imperfect than that of their southern neighbours ; but her population is thin, in consequence of a great part, of her territory being sandy or marshy. A still stronger example of the disadvantage of an inland position is afforded by Poland. That coun- try, without possessing all the fertility vulgarly as- cribed to those which export corn, is not naturally below the average productiveness of Europe. Its climate, if in winter it partake of the rigour of Russia, is in summer favourable to corn culture, and the great impediment to the increase of its produce is not a mountainous surface, but a cause more within the remedying power of industry — extensive marshes* Still, its town population is scanty and wretched, the causes of which, in a political sense, are, long con- tinued misgovernment, a bigotted creed, the almost total neglect of education ; in a physical, the difficulty of transporting commodities, the extent of sea-coast being small, the roads proverbially wretched, and the access to the interior by the Vistula, circuitous, and too confined for so large a tract of country. France. — Between these extremes, our ancient rival forms a medium, possessing a considerable ex- tent of coast, but labouring also under the disadvan- tage of an inland territory, square in its form, slightly penetrated by navigable rivers, having, as yet, verj few canals, and roads good only in particular direc- tions. Compared to the Austrian or Prussian states. France is an improved country, but the case is far otherwise when put in competition with the Nether- Causes of its Increase in Europe. 217 lands or England. Superior to our island in climate, and equal to it in soil, she is greatly inferior in density of population, and still more in the average income of individuals. Of her population, two-thirds (above twenty millions) live in the country, and her peasant- ry partake, in many provinces, of the poverty of those of Ireland. In the size of her towns, this great king- dom, so long the dread of our forefathers and of Eu- rope, has in the last and present age, been altogether surpassed by England and Scotland ; for though our island boast only half her population, her distri- bution of it is made, in a manner, far more condu- cive to efficiency in a commercial and financial sense. This is, at once, apparent from a comparison of the twelve principal towns in each. Population Return of 1821. ENGLAND AND SCOTLAND. FRANCE. London, Westminster, Southwark, and the adjoining parishes - 1,225,694 Paris - 720,000 Glasgow, with suburbs 147,043 Lyons - 115,000 Edinburgh, with Leith and their suburbs 138,235 Marseilles - 102,000 Manchester, with Sal- ford - - - - 133,788 Bordeaux - - - - 92,000 Liverpool - - - 118,972 Rouen - - 86,000 Birmingham, with* Aston 106,722 Nantes - - 77,000 Bristol and suburbs - 87,779 Lille ----- 60,000 Leeds and suburbs - 83,796 Strasburg - 50,000 Plymouth, with Dock and suburbs - - 61,212 Toulouse - 50,000 Norwich - - - 50,288 Orleans - - - - 42,000 Newcastle on Tyne, with Gateshead - 46,948 Metz 42,000 Portsmouth with Port- sea - - - - 45,648 Nimes 40,000 Ireland. — In our enumeration of towns we have omitted those of Ireland, because the situation of that country is peculiar. Possessing, in point of navi- gation, maritime and inland, advantages equal to those of England, her towns are comparatively small, her manufactures considerable in one province only. To what, then, is owing the remarkable density of her population ? To two causes, fertility of soil, and ^ 28 218 Population : — Connexion between ik the habit, on the part of .the peasantry, of subsisting on a food, the produce of which, on a given spot, is much larger than that of the wheat, the rye, or the oats, which, in other parts of Europe, form the basis of national subsistence. Italy, — Few countries surpass Italy in natural ad van- tages ; in soil, in climate, extent of sea coast, and, in her northern part, in the means of inland navigation. But a bigotted creed has confirmed the indolence inspired by the climate, and her unfortunate division into petty states, has prevented measures for the ad- vancement of her productive industry. Though more populous than France, her inhabitants have a smaller average income : the want of a concentrated government may be considered the cause of lighter financial burdens, but the advantage is balanced or more than balanced by the loss of that rank among the states of Europe, to which this country is entitled by her population and geographical position. Spain has a climate on the whole, favourable, but in respect to territorial surface, it is, after Switzer- land, the most mountainous country in Europe. Having been all along deprived of the blessings of good government and enlightened religion, the physi- cal obstacles to communication between one district and another, have been very little lessened by exer- tion on the part of the inhabitants ; the roads are few and indifferent, while of canals there are hardly any. Her great extent of sea coast, ought, it may be thought, to have remedied these disadvantages, but the small number of navigable rivers has confined this benefit to the outskirts of her territory, leaving the interior untraversed and almost unopened. Thus, with the exception of Catalonia, Biscay, and part of Andalusia, Spain exhibits all the backwardness of a country deprived of water communication. Portugal is more favourably circumstanced ; she has two great inlets from the ocean, the Tagus and Douro; her towns are less thinly scattered, and without sur- passing Spain in climate or soil, she is enabled to pay a larger revenue in proportion to her population. increase and the Increase of Wealth. 219 Russia and the north of Sweden, form an example of extreme thinness of population, consequent, partly on rigour of climate, partly also on difficulty of in- tercourse. Connexion between Increase of Numbers and Increase of Wealth. — Having thus explained the increase of popu- lation in Europe, we are, in the next place, to ex- amine the circumstances connected with the increase of wealth. Our experience since the peace, unfortunate as it has been to particular classes of the community, has put beyond doubt one material point, we mean our power of subsisting an increased population. The case of England is that of Europe at large, and even anti-populationists can hardly apprehend that such abundance is temporary, or that the civilized world is at all in hazard from insufficiency of subsistence. Equally little can they deny that increase of national wealth, has, for a long time, accompanied increase of numbers. Such has evidently been the case in France, in Germany, in the countries along the Baltic, and, above all, among ourselves. But while the facts are undoubted, the inference that the increase of wealth is closely connected with increase of numbers, will not be so readily granted. From the adherents of Mr. Malthus, it is not to be looked for, nor do we expect it for some time from the majority of our public men. Their objections to it however will, we believe, be lessened by a qualification similar to what we have already suggested, viz. that our arguments for " an increase of wealth from increase of numbers are urged only in regard to a society advancing in a knowledge of agriculture, manufacture, and the useful arts ge- nerally." After inserting this important condition, we may with confidence propose some interesting questions, such as "whether, when the same portion of public burdens is distributed over a greater number of per- *ons. the pressure on the individual is not necessa- 220 Population : — Connexion between its rily lightened?" Our revenue arises chiefly from consumption : each individual bears his part, and the 50,000,000/. at present paid by somewhat less than 15,000,000 of inhabitants in Great Britain, will obvi- ously give a smaller average per head when they shall come to be shared among a population of 16,000,000. Our next question is, " whether the effect of aug- mented numbers, in adding to the revenue, has not been remarkably exemplified in the present age: whether it had not an important share in swelling the product of our taxes during the war, and in prevent- ing their diminution since the peace ?" If these pre- liminary points are admitted, we may proceed to put the more general question, whether " when a greater population is maintained in equal comfort on the same territory, the wealth and power of the commu- nity are not increased ?" This approaches so nearly to a self-evident proposition, that we shall not hesi- tate to take for granted, that as to national income and power, no doubt can be entertained of an increase attendant on the increase of our numbers. It re- mains that we investigate its effects in another sense. Increase of Income to the Individual. — Has an aug- mented population a tendency to expand or contract the separate earnings of its members ? The present may be termed the age of statistical returns, the first period in history in which the governments of the civilized part of the world have called periodically for returns of population. It has also been an era of great fluctuation in the property of individuals : yet amidst all the complaints of losses arising at one time from the expenditure of war, at another from want of employment or superabundance of produce, we have nowhere seen it argued that the circum- stances of our population have undergone deteriora- tion from the increase of their numbers. Of this one main cause is, that the necessity of providing for a family is the strongest of all stimulants to the renun- ciation of indolent habits, to the productive employ- ment of time and capital What a contrast in the re- Increase and the Increase of Wealth. 221 suit of the labour of the parent, who necessarily ad- heres to a uniform pursuit, and of him who, exempt from the calls of a family, is at liberty to pass his time in speculation, indecision, and change ! In nothing is the advantage of a mercantile community, like England, Holland, or the United States of America, more con- spicuous over most countries of the Continent of Europe ; where fanciful changes and visionary pur- suits are so common, and where the upper classes, as they are styled the noblesse, so frequently pass their lives without a definite object, and seek to es- cape trouble by avoiding the responsibility of a family. Let us not, however, be understood as asserting that the increase of our population cannot be too rapid, or as making light of the pressure on the parents of a numerous family ; a pressure which in general implies the necessity of renouncing the grati- fications of leisure, and of almost "sacrificing enjoy- ment for the means of living." That this is applica- ble to the middle as well as to the lower classes, we are fully convinced ; and if we do not dwell on it more largely, it is because we have already adverted to it, and our present inquiry regards the effect of increasing numbers in a sense strictly statistical. Mr. Gray, not content with stipulating for an equality of circumstances to the rising generation, goes a step farther, it being one of the fundamental articles of his creed, that an increase in the numbers of a nation or society, tends, not only to keep up, but to improve the income of its members : that the 30/. forming the average income of individual workmen in one age, may, and, in fact, is likely to become 31/. in the next; or to express it in a comprehensive form, that " the more varied the classes of a commu- nity, the more they conduce to the welfare of each other." To this interesting and important conclusion we are ready to assent, provided the increase of income be considered as dependent less on increase of numbers, than on the circumstances under which (see p. 210.) such increase takes place. ->.>.-> Population How far exemplified in the State of Europe, — We pro- ceed to put this doctrine to the test, by a reference to the returns of taxation and other public burdens, in different countries of Europe. These, we are aware, do not furnish an unexceptionable criterion of national wealth, as the proportion of public burdens may differ from circumstances unconnected with the state of productive industry, such as the greater or less participation of a particular country in war, since the adoption of the funding system. They form, however, the least defective basis, the nearest approximation to the truth in the present imperfect state of public surveys : for few countries have been the object of an assessment so directly calculated to convey an estimate of national wealth, as the property-tax of England or the fonder of France. Proportion of Public Burdens Population per square Mile. paid by each Individual. £. s. d. England distinct from Scotland and Wales 232 - 3 2 England, Scotland, and Wales, collectively 165 - 2 15 The Netherlands* - 214 - 1 10 France - - 150 1 4 The Austrian Empire - 112 12 4 The Prussian Dominions - 100 13 4 Denmark - - 73 16 3 Spain - • 58 116 Sweden - - 25 10 Russia in Europe - 23 9 9 The maritime provinces of Holland and Zealand, are perhaps as heavily taxed as England, the charge of defence against the sea, added to the interest of a heavy debt, contracted during two centuries, render- ing the total assessment probably equal to our 3/. 2s. per head. France exhibits a medium in her taxes as in her population : while in our case, the increase of taxation since 1792 has been more than double the increase of our population, in France the proportion of the former has outstripped that of the latter only by a fourth, or 25 per cent. Still the average pay- ment per head is much greater in France than in the * The repartition of taxes is here very unequal, the Dutch provinces, particularly those of Holland and Zealand, paying much more than 1/. 10*. a head, the Belgic considerably less. its stationary Condition. 223 Austrian empire, a country fully equal to France in fertility, but more thinly peopled, because it is devoid of the means of communication afforded to France by a considerable extent of coast. The population of Denmark, though more thinly spread than that of Austria or Prussia, pays a larger average contribution, the chief cause of which must be the extent of water-communication. Rural population; its stationary condition. — Of the poverty of rural population, examples are but too abundant in every part of Europe, with the exception of England and Holland : we confine our notice, how- ever, to those quarters that are populous, and which ought to be comparatively exempt from poverty, did the same rule hold, as in the case of town population. That such is far from being the case is apparent from the following return : Population per square mile, Ireland - The Milanese and Venetian territory The Neapolitan Dominions - What, it may be asked, are the causes of the sta- tionary condition, we may almost say the hereditary poverty of cottagers ? Their insulated position ; their want of ready co-operation with their neighbours, for purposes of labour ; and the imperfect subdivision of employment even in their own families. For most kinds of manufacturing and mechanical labour, such a situation is decidedly unfavourable, since it offers neither stimulating example, nor the means of direct- ing the exertion of others. In a state of society like that of the Irish peasantry, the acquisition of food is almost the only consideration ; the son subsists him self and his family on the potatoes raised on a patch of land, separated from the occupancy of his father, and regards lodging, clothing, and still more, furniture* as secondary objects. In such a situation, what con- nexion can there be between increase of numbers, and increase of individual income ? Mr. Gray could here trace hardly a single feature of the animating Payment per head only £. s. d. 237 - 11 219 - 10 154 - 8 224 Population ; — picture he has drawn of a country with augmenting numbers : yet it seems to form rather a qualification than a contradiction of his doctrine ; and to prove nothing at variance with his creed in regard to a population differently circumstanced; we mean so placed as to be near to, and in a state of co-operation with each other. Town Population. — What a contrast to this station- ary condition is exhibited by theprogress of towns, whether we go back to the days of antiquity, or fix our attention on modern history : whether we con- template Tyre, Carthage, Athens, Syracuse, in the former; or Pisa, Genoa, Venice, Bruges, Antwerp, Amsterdam, in the latter; or, finally, look to the growth of the towns of our own country in the present age. Widely different as is this progress, according to difference of situation, we can hardly trace in any country an example of numbers collected in one spot, without an acompanying increase of wealth. Even such a place as Debreczin, in Hungary, an assem- blage of 40,000 souls in a succession of cottages, affords relief from the poverty that reigns throughout the greatest part of that backward and thinly-peo- pled region. In what consist the advantages of a concentrated population? In the subdivision of labour; in the power of making the exertions of many concur to one object ; in the means of giving employment, of some kind or other, to persons the most different in education and attainments. In proportion as employ- ment becomes subdivided, the efficiency of the indi- vidual is increased, and the same labour enables him to furnish commodities, superior, either in quantity or quality, generally in both. Besides, an assemblage of numbers is highly favourable to those discoveries and inventions, the effect of which, whether in agri- culture, manufacture, or mechanics, is to increase so remarkably the productive powers of a country, to render the articles produced so much cheaper and better. It admits, we believe, of no doubt that the its stationary Condition. 225 rate of wages in a capital, such as London or Paris, or in a large town, such as Manchester, Birmingham, or Rouen, exceeds those of a small town in a degree greater than the difference in the expense of living. The resources of collected population have been exemplified in the Dutch provinces of Holland and Zealand, during two centuries, by the payment of an amount of taxation almost unparalleled in the annals of finance. At a time when in England, the majority of the inhabitants lived as at present in France, in the open country, Holland had accumulated the larger part of her population in towns ; and though their numbers have now experienced a decrease, Amsterdam and the eight cities situated within a cir- cuit smaller than one of our middle sized counties, still contain a population of more than 400,000, a density exceeded only by London and Paris, and which, rapidly as the numbers of our manufacturers increase, will hardly be surpassed in the present age by the population of either our cotton, our woollen, or our hardware districts. These districts, however, and the parts of our island rendered populous by navigation, already con- firm the result exhibited by Holland, the average income of individuals being considerably greater in these than in the less populous parts of our island. This was apparent from the returns made under the Property-tax Act. In like manner in France, the returns made to government under the fonder, or tax on the income of landlords, farmers, and house pro- prietors, show that the revenue not only of the public, but of the individual, is smaller where the numbers are thinly scattered, smaller in the mountainous depart- ments of the south, than in the more fertile and popu- lous districts of the north. In the main articles of food and fuel, the peasantry are often better provided than the lower orders in towns, but in other respects, there are on the Continent the same reasons as in England for allotting the superiority in property to the latter. It is in a large association only that activity and talent find an adequate field; that the 29 226 Population : — command of capital, the co-operation of assistants, can be turned to account : there is, hence, no com- parison between town and country in the proportion of those who from poverty attain the comfort of a middle station : to say nothing of those who reach a high rank in the scale of property. Farther, as every country raises food for the far greater part of its consumption, density of town- population implies, in general, an advanced state of agriculture : it is along with such density that we find extensive farms, a general application of ma- chinery, and a variety of improvements which enable cultivators to send to market a much larger propor- tion of produce than can be spared in a country like the centre and south of France, where all work being done by manual labour, the larger share of the pro- duce is necessarily consumed by those who raise it. In all respects, therefore, a numerous town-population seems to us a proof of wealth; an evidence of the tendency of individual as well as national income, to increase as society advances in improvement. (See Appendix, p. [75].) Subsistence more easy of Acquisition as Society advances. — The late wars, remarkable as they were for the frequent recurrence of bad seasons, exhibited no examples of local suffering equal to those which marked the latter years of the 16th and 17th centu- ries ; the scarcities in the reigns of Elizabeth and William. The cause is to be sought in the general ease of communication arising from the improvement of our roads, canals, and maritime navigation ; also in the more ample means of purchase afforded to the lower orders by the diffusion of employment, chiefly mechanical and manufacturing, throughout almost every corner of the island. One part of the kingdom is thus enabled to come to the relief of the other, and prices are kept nearly on an equality throughout. To this source of relief at home, is added, particu- larly since the peace, a supply from abroad, arising from the extension of tillage over countries in a man- Acquisition of Subsistence. 227 ner unknown to our ancestors. In our chapter on Agriculture, (p. 150.) we took occasion to remark that that which formerly constituted the corn coun- try of Europe, meaning the country producing corn in sufficiency for export, is comprised between the 45th and 55th degree of latitude, and has a simi- larity of climate greater than is supposed by those of our countrymen who have not travelled or studied the temperature of the Continent. This remark ap- plies to the Netherlands, the north of France, the north of Germany, Denmark, and even to part of Poland, all too similar to our country in latitude and vicinity to the sea, to escape a participation in those causes of deficiency, whether arising from want or excess of rain, which, from time to time, affect our harvests. But the extension of tillage along the shores of the Euxine, and the increased cultivation of the United States, afford new sources of supply ; these countries are distant, indeed, and the amount of im- port from them, must, from the cost of conveyance, necessarily be limited ; but as it will proceed from climates not likely to be affected by the causes which lead to deficient crops in the north-west of Europe, it will of course be available in the day of need. These different inferences, whether deduced from historical or geographical authority, may be admitted by the adherents of Mr. Malthus, and when viewed in connexion with our present abundance of subsist- ence, may be allowed of a nature to relieve a few generations from the apprehension of scarcity ; but the anti-populationists will still contend that their principle is correct, and that a time must come when the world will be exposed to the misery of over po- pulation. The argument is thus brought to a kind of ne plus ultra, but even on this final and decisive ground we are not afraid to meet our antagonists. Without denying that there is in the womb of time, a period when population will attain its complement, we con- tend that such a period is far more distant, and the intermediate increase of our numbers likely to be far greater than enters into the conception of either 228 Population : — our opponents, or the public at large. Nor does it follow that when such a period shall arrive, it must be necessarily a period of misery : — but to waive all speculation on this mysterious point, and to confine ourselves to that which is of nearer interest, we shall briefly give our reasons for the opinion that our pos- terity, lor many generations at least, are likely to in- crease their numbers with less difficulty than has been experienced by us or our ancestors. 1. Our fundamental doctrine, that increase of pro- duce depends less on the extent of newly-culti- vated soil, than on the number of hands employed on the old, will be found proof against the severest analysis. It is supported equally by the experience of the present age, and the general evidence of his- tory : it supposes besides, a proportion between de- mand and supply, — that ability on the part of labour to obtain its reward, which corresponds so clearly with the benevolent ordinations of Providence. 2. From the great diversity of soil and climate in the cultivated portion of the globe, scarcity is never general : " when famine was in other lands, in the land of Egypt there was bread." If this applied to an age when civilization extended over hardly ten degrees of latitude, how much more does it hold at present, and how greatly do the advantages arising from improve- ments perpetually in progress, increase the power of mankind to turn to account the bounty of nature ? Extended communication by water enables even dis- tant countries to supply the deficiency of each other; while in the same territory improved methods of pre- serving corn, additional granaries, augmented capital, all concur to enable the inhabitants to keep over the surplus of one year, as a provision for the possible failure of the next. 3. The labour employed in raising subsistence, be- comes progressively more effectual, the source of a larger produce, as society advances. This is evinced in two ways ; one, the use of improved implements, is obvious to the common observer : the other the supply of the requisite produce by a smaller* num- Acquisition of Subsistence. x 229 ber of agriculturists compared to other classes, is less obvious and requires the evidence of statistical documents. A census of our ancestors, taken a cen- tury and a half ago, would have given, under the head of agriculturists, above 50 persons in 100, instead of the 33 of the present day. The majority of our present population are thus enabled to reside in towns and villages, and are rendered disposable for other pur- poses: the humbler orders employ themselves in supplying clothing or lodging ; a higher class minis- ter to the amusements, the education, or the luxury of the rich ; while the highest of all are exempt from the necessity of following any occupation whatever. Confining our view to the topic at present under dis- cussion, in what light may we consider the persons who minister to our luxuries ? They may be said to form a reserve of capital and labour applicable to the increase of subsistence, in a case of imperious necessity. A population return in France, or almost any part of the Continent, exhibits, it is true, a larger number of residents in country than in town, but many of the former are producers of other articles than food : the flax, the hemp, the madder of their fields, the wool of their flocks, the timber of their forests, the hides of their cattle, are all constituents of supply or ingre- dients of consumption, quite distinct from the raising of provisions. 4. As society advances, and a part of the lower orders participate in the comfort of the middle classes, food forms progressively a less considerable proportion of their expenditure. In a population like that of Ireland, the chief part of France, and the poorer counties of England, food constitutes above 60 percent, of the total family charge; but in our more populous rural districts, in our larger villages, and in our towns generally, the proportion (see the Appen- dix, p. [1 1],) is little above 50 per cent. What does this imply, but the enjoyment of greater comfort on the part of our lower orders, the possession of a fund with which to purchase clothes and furniture in years 230 Population : — of plenty, and to pay, in years of scarcity the extra price required for provisions ? Hence, the less severe pressure of high prices of food on a population, such as that of Holland or England, than one devoid, in a manner, of exchangeable commodities, such as the peasantry of Poland, Russia, or the inland districts of the Highlands of Scotland. Ought Government to take Measures for promoting Population? — "The maxim of the politician," says Mr. Gray, " ought to be to take care of population, as population will take care of subsistence and of every other species of supply." Though convinced that there is much more truth in this than in most po- litical apophthegms, we do not go quite so far as Mr. G., and have no wish to keep in the back ground the case of a population like that of Ireland, Brittany, and Poland, in which increase of numbers is attended by a very slight increase of comfort to the individual, or of strength to the public. Nor do we assert that even in a country the most fortunately constituted, increase of population can bring with it a speedy cure to a dis- ordered state of productive industry, such as has ex- isted among us since the peace. In the case, for ex- ample, of agriculturists, distressed by a superabun- dance of home growth, little relief is to be anticipated from increase of consumers, because the producers can hardly fail to augment their numbers in an equal proportion, leaving relief to arise from the extension of home manufacture, the removal of hands from country to town, or other causes uncertain in the time of their occurrence, and distinct, in a great measure, from the general increase of our numbers. Next, as to men in office, on whom Mr. G. seems to think it incumbent to take measures, more or less direct, to promote population, we confine our exhor- tation to a passive course, satisfied if they do nothing to obstruct the natural increase of numbers. Let them carefully guard their minds against the notion which so naturally follows the creed of limited sub- sistence : viz. that the discouragement of marriage, Europe taken collectively. 231 or the loss of lives in the field, and in unhealthy colo- nies, are not, in a statistical sense, a great misfortune, because they operate, forsooth, as checks to supera- bundant numbers. In regard to population, as to na- tional wealth, the plain rule is to avoid interference, to take no step for the purpose of giving a new direc- tion to the course of events, but to remove obstacles wherever such have been interposed by the mistaken, though well intended intervention of preceding legis- lators. As to town population, with all our convic- tion of its advantage, both to the individual and the community, we should infinitely regret the adoption of any measure to increase its relative amount. Let the tide flow in its natural course : the duties of go- vernment evidently extend no farther than keeping open the channel. We shall now turn aside from general reasoning, and direct the attention of the reader to data of a more specific character, to an estimate of the population and resources of the different states of Europe : STATISTICAL TABLE OF EUROPE, IN 1823. Persons Taxes Proportion j Total Population. to a and public of such j square mile. burdens generally. burdens per head. £. s. d. Norway, including- Finmark 950,000 6 s Sweden, Norway, and Swe- j dish Lapland . 3,600,000 10 j Sweden, distinct from Nor- way and Swedish Lapland 2,600,000 25 1,300,000 10 ! Russia in Europe 37,000,000 23 18,000,000 9 9 1 Scotland; viz. the High- lands distinct from the low country . 30 Turkey in Europe, not as- certained, but probably not above 8,000,000 50 5,000,000 12 6 Poland, before the partition 15,000,000 53 Poland, the present king- 1 dom of, distinct from the provinces incorporated 1 with the Austrian, Rus- sian, and Prussian do- minions 2,850,000 60 1,200,000 8 Sardinia, island of 520,000 1 57 Spain .... 11.000,000 1 60 6.000,000 11 ft 232 Population :- Person s Taxes Proportion Total to a and public of such Population. square burdens burdens mile. generally. per head. Denmark, exclusive of Fa- £. 4. d. roe and Iceland 1,600,000 73 1,300,000 16 3 Hanover 1,300,000 90 900,000 14 Portugal .... 3,700,000 90 3,000,000 16 3 Switzerland, the twenty-two cantons 1,750,000 91 430,000 5 (The pecuniary burden is very small, but the Swiss are liable to mili- tary service.) Wales . 740,000 96 The Austrian empire, inclu- ding Lombardy, and Aus- trian Poland . 29,000,000 112 18,000,000 12 4 The Prussian dominions 10,500,000 100 7,000,000 13 4 Bavaria .... 3,600,000 120 2,500,000 14 Sicily, island of . 1,655,000 132 Dominions of the king of Sardinia, viz. Piedmont, part of the Milanese, the Genoese territory, Savoy, and the island of Sardinia 4,000,000 148 2,200,000 11 States of the Church . 2,450,000 150 900,000 7 6 The Neapolitan dominions, including Sicily 6,700,000 154 2,700,000 8 France, including Corsica, 30,700,000 150 37,000,000 1 4 Scotland; the low country distinct from the High- lands 150 2 Great Britain exclusive of Ireland (the taxes com- puted according to the value of money on the Continent) 14,500,000 165 40,000,000 2 15 Wirtemberg 1,400,000 170 1,000,000 14 4 Saxony .... 1,200,000 170 900,000 15 Italy, exclusive of Sicily . 17,000,000 179 Great Britain and Ireland collectively . 21,500,000 182 44,000,000 2 The Netherlands* . 5,300,000 214 8,000,000 1 10 Austrian, Italy, or the Lom- bardo- Venetian kingdom 4,000,000 219 2,000,000 10 Ionian islands, republic 230,000 230 100,000 8 9 Fingland,distinct fromWales 11,600,000 232" 36,000,000 3 2 Ireland .... 7,000,000 237 4,000,000 11 Holland, province of . 760,000 362 West Flanders . 630,000 420 East Flanders . 610,000 554 Europe collectively, about . 200,000,000 58 J 180,000,000 18 * The repartition of taxation is here very unequal, the Dutch provinces, particularly those of Holland and Zealand, paying much more than 11. 1 0*. a bead ; the Belgic much less. Europe taken collectively. 233 These returns, both as to population and public burdens, are, in general, taken from official docu- ments : they require, however, a few explanations^ thus : Extent in square Miles. — The amount assigned to England, Scotland, and Wales, is taken from official returns, but in regard to Ireland, and most parts of the Continent, the statements are, in some measure, conjectural, and to be considered only as approxi- mations. Our Public Burdens.— The sum of 44,000,000/. as the aggregate of our public burdens, may appear greatly below the mark, but is formed by two import tant deductions from our present payments ; first, by taking credit for a farther reduction of our taxes, and, in the next place, by making an abatement (of 20 per cent.) from the numerical amount of our bur- dens, to bring their value on a par with those of the Continent, with which they are here compared. Taxation of Rural Districts. — It may be objected to the preceding table, that an estimate founded on taxation, does not do justice the property of a rural population, who, in many parts of the Continent, seem almost to escape the grasp of the exchequer. This exemption, however, is limited chiefly to excise dues, and is, in a great measure, balanced by a heavy land-tax, which, under different names in different countries, forms the basis of continental taxation, and is included in the column of public burdens. Population per Square Mile. — Mr. S. Gray assumes, (Happiness of States, p. 421.) that an individual for every two acres, or 320 persons for a square mile, would be a fair complement of population for the soil and climate of Europe. From this rate, how- ever, we are still at a great distance, having at- tained it only in Flanders and Holland : in England and Ireland we are likely, if we proceed as in the 30 234 Population : — present age, to reach it in somewhat less than twenty years. In Iceland the proportion is little more than one person to a square mile, but the lowest extreme of European population is exhibited in Lapland, where there is not more than one inhabitant to two or three square miles. Europe taken collectively. — Our estimate is greater in regard to population, and smaller in respect to public burdens than that which is at present current on the authority of German statisticians ; but the latter made their computation in or before the year 1817, since which, population has increased, and taxation has ex- perienced a partial reduction. If those of our readers who are familiar with his- tory, wHl compare the present state of Europe in po- pulation and revenue, with what it was two or three centuries ago, they will perceive a degree of exten- sion that is hardly credible. How feeble do we find the establishments of France, even when administer- ed by Sully ; of England, when guided by Burleigh ; of Austria, when stimulated by the vigour of Charles V., if we compare them to those of the same powers at the present day ! The army of Henry IV. of France, was, when at the highest, only 40,000 men : the revenue of queen Elizabeth was 600,000/.* Even the Spain of Philip II., aided by the mines of Ameri- ca, is found, when her revenue and her army are brought to the test of accurate computation, to have been on a par with only the second-rate powers of our age. What a striking example is here afforded of the tendency to rapid improvement in those communities which have overcome the difficulties of primitive ignorance, and in which safety is afforded to persons and property ! More than that the inhabitants of the Continent can hardly be said to have received at the * Napier's Supplement to the Encyclop. Brit, under the heads of England and Franre. Europe taken collectively. 235 hands of their respective governors, since if some so- vereigns have been distinguished by active measures for promoting improvement, the beneficial result of their labours has been balanced or more than ba- lanced by ambition and unnecessary warfare on the part of their brethren. How much more effectually would the latter have consulted, not merely the hap- piness of their subjects, but the increase of their po- litical power, had they never unsheathed the sword, but been content to allow individual industry to work its way, augmenting the number and wealth of the community by a silent but sure increase ! It would be idle to lament what cannot be recalled ; but in regard to the future, we may be allowed to in- dulge a hope that the sovereigns of the Continent will pursue a more enlightened course ! How wide a field of improvement is open to them, if they will merely labour to transfer to their respective territories the degree of agricultural knowledge introduced into this country ! No Englishman who has not travelled can form an idea of the general backwardness of the Con- tinent, of the poverty of the farmers, the awkwardness of their implements, the deficiency of their buildings. If we cross the narrow seas and fix our attention on the districts of the Continent said to be farthest ad- vanced, such as Flanders, Normandy, or the Pays de Eeauce, we shall find their machinery so rude, and their work performed in so great a degree by manual labour, that the productive powers of their soil might be doubled by the mere application of the discove- ries and inventions that have taken place in our east- ern and northern counties. If we carry our observa- tion farther, and calculate how much remains to be done in the neglected plains of Hungary and Poland, in the half-irrigated provinces of Spain, Italy, and even the south of France, the inference is, that Eu- rope, that boasted seat of cultivation, is not peopled tp the extent of a fifth of the numbers it may be render* ed capable of supporting. 2 3 » •» Population, 8fc. The prospect of England. — Let us not, however, imagine, that the advancement of the Continent would have the effect of lessening the relative superiority of this country ; on the contrary, those advantages which have enabled us to take the lead — extent of water communication, richness of mines, command of capi- ta!, superiority of civil institutions, formed habits of business, — are all calculated to confirm our pre-emi- nence, and even to lead us forward in a quicker ratio than our neighbours. To comprehend this fully, the reader ought first to acquire the conviction, that na- tional improvement is likely to be progressive, and has at present no more reached a limit, than it had thirty, fifty, or one hundred years ago. To acquiesce in the notion, that the present mode of tilling the ground, of navigating the ocean, or performing me- chanical labour, is the best that can be devised, is the part of the indolent and unthinking ; such is the creed of the spiritless Asiatic, of the unenlightened peasant, and the almost equally unenlightened manufacturer in many parts of the Continent of Europe. In this country, happily the discoveries that so rapidly suc- ceed each other, afford a proof that we have not jet advanced half way in the extension of our national resources. Of this, a more ample development shall be given in our concluding chapter, when we shall show how surprisingly we have gained on our politi- cal rivals, in the course of the last century, and how little we have at present to dread at their hands — considerations calculated to confirm the public, in an approval of the pacific system which we have now so fortunately adopted, and to satisfy the apprehensive among our countrymen, that with a steady adherence to such a course, the day of trial in the finances of England will ere long be surmounted. 37 CHAP. VIII. National Revenue and Capital, Having appropriated several chapters to an exami- nation of the condition of the country, under the se- parate heads of Agriculture, Population, and Poor- rate, we are now to make an attempt of a more com- prehensive nature, and to bestow a chapter on our National Revenue and Capital generally. This will lead us to discuss The amount of our taxable income. The connexion between its increase and the in- crease of our population ; and lastly, The fluctuations it has experienced in the thirty years that have elapsed since the French Revolution. Estimate, by the late Mr. Colquhoun, of Property created in Great Britain and Ireland, in the year 1812. Agriculture in all its branches (including" pasture,) . £217,000,000 Mines and minerals, including coals .... 9,000,000 Manufactures in every branch ... . . 114,000,000 Inland trade and banking . . . . 35,000,000 Foreign commerce and shipping .... 46,000,000 Coasting trade ... . 2,000,000 Fisheries, exclusive of the colonial fisheries of Newfoundland, 2,000,000 Foreign income remitted ..... 5,000,000 Total . . . 430,000,000 Such was the amount of the property created in Great Britain and Ireland in 1812 ; since which there have occurred two very material changes, — a great increase in the quantity, and a still greater decrease in the prices. The latter, in the case of agriculture amounts to 60 per cent. ; in that of manufactures to 40 or 50 per cent ; but as Mr. Colquhoun's estimate was made greatly below the currency of the time, 20, or at the utmost, 25 per cent, will form a suffi- 238 National Revenue, cient deduction from its amount. To this we find an ample counterpoise in the increase of quantity arising from The additional produce on the part of the hands restored to labour by the peace ; The increase of our population since 1812 ; and The progress of improvement in agriculture and manufactures, by which the same number of hands are enabled to produce a considerably larger quan- tity. The result, therefore, is, that even at reduced prices, the value of the produce of the present year, equals or exceeds that of 1812; but as Mr. Col- quhoun's calculation included, under the head of agri- culture, a very large sum for produce, such as oats, hay, grass, &c. appropriated to the food of horses and cattle, and as our object is to confine our table to ar- ticles for the consumption of man, or for the purposes of manufacture, we assume the total at 350,000,000/. That sum, then, we consider as representing the amount of the property annually created in Great Britain and Ireland ; in other words, the amount of our annual production. Of this large sum, what proportion, in this land of taxes, can be considered as exempt from the visit of the assessor ? About 25 per cent., as appears from the calculations in the Appendix, leaving for our tax- able income, somewhat more than 260,000,000. Thus, Estimate of our Taxable Income in 1823. (Great Britain distinct from Ireland.) Rent of land returned in 1814, at 43,000,000/. and probably amounting, after allowing' for all deductions, omissions, and evasions in the returns, to . . • . . £48,000,000 Add for land brought into culture since the peace ..... 2,000,000 Together . . 50,000,000 Deduct for all abatements of rent since the peace, made, making, or which must ere long be made, one third, or 33 per cent. 17,000,000 Probable rental in peace [Carried forward] 33,000,000 National Revenue. 239 Brought forward 33,000,000 Peduct further for temporary deficiencies on the part of farmers at this time of peculiar pressure ..... 3,000,000 £30,000,000 4,000,000 17,000,000 12,000,000 Tithe; amount in 1812 (see Returns of Property Tax, 4,700,000/. ; at present computed, after making- an addi- tion for the increase of produce, and an abatement for the great fall of prices ..... Rental of houses, returned at nearly 16,000,000/. in 1814, since which, the houses have augmented in number by 15 per cent., and as rents have fallen only partially, we com- pute the amount at .... Farming income, which, during the latter years of the war, was so large as to equal the rental of our land, but which is at present so greatly reduced, we estimate, with a view to the future, at the medium rate of 6 per cent, on 200,000,000/., the supposed amounted of capital invested in agriculture ...... Income from trade and professions, comprising not only ma- nufacturing and mercantile profits, but income from mines, docks, canals, tolls, iron-works ; likewise salaries, as far as derived from the concerns of individuals ; to the exclu- , sion, however, of all incomes below 50/. a year. This por- tion of our national revenue, returned during the war at 30,000,000/., and which, if augmented in proportion to the increase of our numbers, should at present be 35,000,000/., we compute, in consequence of the change in the value of money, and the decrease of business, at a great reduction,say 22,000,000 Wages and all incomes below 50/. a year, computed on a po- pulation, which, (exclusive of Ireland) is now nearly 15,000,000, but from which somewhat more than a third is deducted for persons either above or below the station of those receiving wages. This large deduction comprises not merely paupers, but cottagers and all others whose mode of life is such as to lead, in a very slight degree, to the consumption of taxed articles. The result, estimated on a population of 9,000,000 working at the reduced wages of peace, but adding the earnings of women and children to those of the men, is .... . 90,000,000 Interest of our debt, funded and unfunded, since the reduc- tion of the 5 per cents. ..... 30,000,000 Conjectural amount of interest from other money securities ; viz. mortgages, private securities generally; also public securities, such as bank stock, East India stock, foreign stock, in short, all securities distinct from those of our go- vernment. ...... 20,000,000 Income of the army, navy, civil list, and public offices, after allowing for the late retrenchments, and leaving out the proportion expended in Ireland .... 15,000,000 Total of Great Britain ..... 240,000,000 Ireland : taxable income computed during the war at 35,000,000/.; at present at .... 25,000,000 (See Appendix p. [79].) Total of Great Britain and Ireland .... 265,000,000 Of which, lost to taxation, being expended abroad by travel- lers and emigrants .... 4,000,000 Remainder . 261,000,000 240 National Revenue, Ireland. — The total produce of land and labour in Ireland cannot, from the magnitude of the population, be below 70,000,000/. a year, but the cottagers are so numerous and their mode of living so inferior to that of the inhabitants of towns, that the portion of nation- al income expended on taxed articles can hardly, (particularly since the fall of rents, and the general decline of incomes,) exceed the 25,000,000/. which we have introduced into the table. Increase of National Income since 1792. — The last thir- ty years have been a period equally remarkable for financial as for political revolutions. Do we, it may be asked, possess the means of forming, with any de- gree of accuracy, an estimate of the increase of na- tional income since 1792 ? Such an estimate, whether in peace or war, is a matter of great difficulty : the improvements in our land, our houses, our furniture ; the additions to our, towns, our harbours, our manu- facturing establishments, in the present age, are ob- vious, and have been great beyond example ; but as no record can express the amount of expenditure in- curred, or the success, necessarily very various, of such investments of capital, it remains with the in- quirer to seek a standard of computation. For this we are in some measure prepared by the researches in the preceding chapters ; and by following up that course of reasoning we shall probably be enabled to reduce to a systematic form that which seems at pre- sent involved in contradiction. The cause of the changes since 1792, we are disposed to seek in — Fluctuations in the activity of our productive in- dustry ; Fluctuations in the value of money ; The increase of population. Of these different causes the first and second have already been illustrated (Chap. II. and III.) at consi- derable length ; and whatever maybe wanting in re- gard to them shall be supplied in a subsequent part of our volume. At present, therefore, we confine our National Revenue. 241 attention to the effect of the third cause, — increase of numbers ; — adopting the principles laid down in our chapter on Population, and applying, or endeavouring to apply them, to the circumstances of the present age. Connexion between the increase of Numbers and increase of National Income. — We have already remarked that no adherent of Mr. Maithus, whatever might be his objection to increase of numbers, has alleged that our lower orders have made a descent in the scale of comfort ; nor does the surprising increase of our po- pulation in the present age appear (Chapter on Poor Rate, p. 191.) to have carried the proportion of our paupers to our total numbers, much beyond what it was a century ago. We are far from maintaining that marriages in humble life are contracted with the re- quisite prudence, or that the parents of a numerous family can avoid a long and serious struggle : our ar- gument merely is, that the situation of the lower class- es generally, is not altered for the worse. It is the characteristic of a civilized and industrious society, like the inhabitants of Holland, England, or Scotland, to make successive discoveries in the means both of augmenting produce and diminishing expense ; im- provements by which, whether effected in agricul- ture, manufacture, navigation, or trade, a country is enabled to support many more inhabitants in equal comfort. Increase of numbers therefore is, even in the case of the lower orders, conducive to increase of taxable income ; for we have already had occa- sion to show what large sums are annually brought into the exchequer by the duties on beer, spirits, to- bacco, groceries; all of which enter into the con- sumption of the classes in question, particularly when resident in towns. The lowest class of Poor. — How, it may be asked, stands the question of increase of income, in regard to a population of such primitive habits as the cot- tagers of Ireland, or the mountaineers of Scotland, ac- customed to confine their demands to mere subsis- 31 242 National Revenue, tence ? In such a case, an increase of numbers im- plies a correspondent increase, not of taxable income, but of the produce which, like potatoes or bread, constitutes the mere necessaries of life ; and the re- sult is an addition to our population of individuals, who, though able to earn their subsistence, can be said to add to our political strength in hardly any other sense than as recruits for the public service, or as mere manual labourers, being unable to make the sa- crifice requisite for learning the business of an artisan. The connexion between increase of numbers, and increase of wealth, will appear more clearly, if we have recourse to arithmetical statement, and if we subject to an analysis the 250,000,000/. constituting the taxable income of the nation. This will exhibit the following proportions. Great Britain and Ireland. (Taxable Income, exclusive of the pay of the Army and Navy.) Arising- from wages and salaries, and of course, directly af- fected by increase of population - £100,000,000 From capital and labour combined, a portion of national in- come, which also is much increased by increase of popu- lation - 50,000,000 From rent of land, houses, or interest of money, which are influenced, though indirectly, and in an inferior degree, by the increase of numbers - 100,000,000 Total - - 250,000,000 That the increase of taxable income, as far as such arises from wages and salaries, is in correspondence with the increase of our numbers, requires no demon- stration : the same holds in regard to professional men, to merchants, to master manufacturers ; in short, in respect to every line in which income depends on personal exertion. Thus, land in the hands of the far- mer, like money in those of the merchant, is produc- tive in proportion to the labour which it is made to put in motion. So far the connexion is clear and undoubt- ed ; the case, it may be said, is somewhat different in regard to a fixed income, whether derived from real or personal property ; but even in that, the effect of in- creasing numbers is great, producing, as is well National Revenue. 243 known, an increasing demand for both land and mo- ney capital. In proof of this, we have merely to take, as an example, the almost daily case of a family be- coming numerous ; the consequent repartition of the paternal property, and the increase of productive power given to the portion that is put in a state of activity. Fluctuations of Income since 1792. — These arguments will readily be accounted applicable in a general sense, and for ordinary times ; but what shall furnish a rule for computing national income in so fluctuating a period as that through which we have passed since 1792? The question is certainly very complicated, and seems at first to admit of no clear solution; for while a calculator, in forming an estimate twelve or fifteen years ago, could hardly have failed to pronounce the war highly favourable to the increase of our wealth (our debt forming apparently no counterpoise to the increase of our resources), a statement prepared since our years of distress would convey a very different result. In France, the revolution has been styled, the " queen of all earthly reverses ;" but we might almost hazard an opinion that the effect of that con- vulsion, viewed in regard to change of property and in all the extent of its duration (now above thirty years), has been as great in this country as in that which gave it birth. Among our neighbours, the change was more sudden, directed more against a particular class, and bringing with it, too often, the melancholy consequence of loss of life ; but with us it has been more comprehensive, for the alteration in the value of money has come home to every class and condition. If in France, government annuitants suffered during the war a much greater reduction than here, there is no comparison between the two countries in the extent of fluctuation in the circum- stances of a far more numerous class — the farmers. Their prosperity during the war and their decline since the peace, have both been much more in ex- tremes among us, than on the Continent. 244 "National Revenue, An Estimate of them attempted. — Amidst all these changes in individual property, is it practicable to discover any rules of general application, any data on which to found a comparison of the circumstances of the public of the present day with those of the public of 1806 or 1792 ? This task may, perhaps, be found less difficult than it appears. In a community so great and so varied as the population of these king- doms, the ease of one part is often contemporary with the embarrassment of another; and there prevails, in the general result, a tendency to a balance, an ap- proach to uniformity which would hardly be credited by those who, in drawing their inferences, allow them- selves to be forcibly struck by the fluctuation of par- ticular classes. It was thus that our revenue stood its ground during all the trials of the Avar and the no less trying interval that has followed: it is thus, also, that the amount of our exports and imports has con- tinued to bear a proportion to two regulating circum- stances (the value of money and the increase of our population), amid all the anomalies, introduced by restrictions, prohibitions, licences : it is thus that at present, the distress of the producer of corn, is ac- companied by a temporary advantage to the con- sumer. The political arithmetician is, therefore, in some measure, justified in forming a conclusion, which, without this collateral support, might appear vague and untenable ; viz. " That though the cir- cumstances of individuals, separately, are so much altered since 1792, those of any given number, whether 100, 1000, or 10,000, are more nearly on a par than is generally supposed." This reasoning is calculated to lead to the infer- ence, that our national income, (at least that of Great Britain distinct from Ireland), has increased since 1792 in the ratio of the increase of our popula- tion. We have, however, no wish to press this point, it being of little consequence to our argument, whe- ther the proportion of the one, has been greater or Jess than that of the other. It is enough that we ob- tain assent to one leading consideration, viz. that the National Revenue. 245 surprising addition to our numbers since 1792 (50 per cent.) is, as far as can be ascertained, unaccom- panied by any general deterioration of private cir- cumstances. The changes in such circumstances have been almost infinite, but there seems no reason to imagine that the number of families or individu- als, who have experienced a decline, exceeds that of those who have improved their circumstances. But are we, it may be said, authorized to assume an equality in the individual income of this country be- tween 1792, a season of tranquillity, and the pre- sent, which is one of general embarrassment ? To this argument, unluckily of great weight, we oppose one of equal, or almost equal power; viz. the great comparative increase of our town population, the extent of which, as income increases so much more in town than in the country (Chapter on Population, p. 225.) would have justified us, had our present circum- stances been as tranquil and secure as in 1792, in as- suming an increase of national property considerably beyond that of the 50 per cent, indicated by our numbers. Without, therefore, affecting precision in a calcula- tion where it is evidently unattainable, we shall adopt the increase of our numbers, as an approximation to a basis for calculating the increase of our national reve- nue. Proceeding on this ground, we shall exhibit in the tabular form, the augmentation that has taken place since 1792, premising that our chief materials are the population and property-tax returns, and that for the period of war, we make a considerable addi- tion on the score of extra wages and profits. 246 Natiotial Revenue ; Conjectural Amount of our National Revenue or Taxable Income at different Periods, from 1792 to 1822. Great Britain distinct from Money of Totals, also m Ireland. 1792. Money of 1792. In 1792, our taxable income appears to have been as stated in p. 54. about £125,000,000 In 1806: increase calculated in the ratio of the increase of our populution, 1 8 per cent. in 14 years - 22,500,000 Together - - - - 147,500,000 Probable addition from the higher wages and higher profits of a state of war - - 22,500,000 Total of taxable income in 1806 - - 170,000,000 In 1813 or 1814: Increase of national in- come since 1806, calculated in the ratio of the increase of population, 1 1 per cent. ; thus : — National income in 1806, as above - 147,500,000 Add 11 percent. - 16,500,000 Together - 164,000,000 Probable addition from the higher wages and higher profits of a state of war - - 24,000,000 Total of taxable income in 1813 or 1814 - 188,000,000 Great-Britain and Ireland. 1823. Increase of taxable income in the ratio of the population, 15 per cent, since 1814; thus:— Amount in 1814 - 164,000,000 Add 15 per cent. - 24,000,000 Add farther the taxable income of Ireland, 25,000,000/. equal in money of 1792 to - 21,000,000 Total of our taxable income in 1823, (in money of 1792) - 209,000,000 These results, which, we repeat, are only approxi- mations, convey a clear idea of the effect of increasing population on national income. The next point is, the difference of numerical amount produced by the rise or fall in the value' of money. its Increase since 1792. 247 Great Britain distinct Money of Money of subse- Jreland. 1792. quent years. 1792 : Taxable income as per preceding ta- ble £125,000,000 1805 : Do. per do. - - - - 170,000,000 After the general rise of prices that took place between 1792 and 1806, 170,000,000Z. in money of 1792, was in the transactions of 1806, equivalent to - - % 220,000,000 And an actual return of our national revenue or taxable income in the currency of 1806, would probably have given a sum of 220,000,000/. 1813 or 1814 : Taxable income as in last page 188,000,000 The rise of prices, in all 60 per cent, since 1792, rendered this sum equal in all money transactions in 1813 and 1814, to nearly 300,000,000 Great Britain and Ireland. 1823. Taxable income, as in last page The calculation in regard to the value of mo- ney is now reversed, prices having fallen, or, in other words, money having risen in value between 1814 and 1823, nearly 30 per cent. Still it is about 30 per cent, lower than in 1792, so that the last men- tioned sum 209,000,000/. (money of 1792), is equal in the currency of 1 822, to about A sum not materially different from the amount of the table of taxable income contained in p. 239. 209,000,006 270,000,000 Our next object is to introduce our burdens into this comparative table, and to calculate their propor- tion at different periods to our revenue. Statement of our Public Burdens and National Revenue, cal- culated for distinct periods. The Public Burdens include Taxes, (before deducting the expense of collection), Poor- rate, and Tithe. Great Britain distinct from Ireland. Years. Public Burdens. Our National Re- venue or Taxable Income. Proportion of Bur- den to Revenue. 1792. 1806. 1814. 1823. £125,000,000 nearly 18 to 100 220,000,000 27 to 100 300,000,000 27 to 100 Great Britain and Ireland, {see Appendix, p. [85].) I 64,000,000) 260,000,000| 25 to 100 £22,000,000 60,000,000 80,000,000 248 National Revenue ; That we may divest this statement of the intrica- cies attendant on the difference in the value of money at different periods, we subjoin a table, in which the -urns on both 6ides are reduced to a common stand- ard, viz. the money of 1792. Great Britain distinct from Ireland. Years. Public Bur- dens, in Money of 1792. Out .National Re- venue or Taxable Income in Money of 1792. Proportion of Burdens to Revenue. 1792 £22,000,000 £125,000,000 nearly 18 to 100 1806 46,000,000i 170,000,000 27 to 100 1814 50,000,000] 188,000,000 27 to 100 Great Britain and Ireland, [see Appendix, p. [85.]) 1823 | 50,000,000| 200,000,000) 25 to 100 The reduction to a common standard is useful in several respects, particularly in correcting the exag- gerated estimate, which, during the war, we were accustomed to make of both our burdens and our re- sources. France; her Actional Income. — We conclude our chapter by a brief parallel between this country and her most powerful neighbour. The national income, by which we mean the aggregate of individual income, is, in one sense, somewhat greater in France than in this country ; but in regard to the portion of it that is taxable, the advantage will be found on our side, in consequence, chiefly, of our greater town popula- tion; thus. Parallel with France. 249 Comparative Sketch of National Income, expended on taxed Articles. • France, after adding to the Great Britain actual receipts and 20 per cent, for the Ireland. greater value of money. £. £. Rent of land and farmer's profit at peace prices - 50,000,000 60,000,000 Tithe - 5,000,000 Rent of houses - 13,000,000 18,000,000 Income arising- from commerce, manufactures, and professions, as far as such are of 50/. and up- wards ; also income from mines, docks, canals, tolls, &c. 24,000,000 18,000,000 Small incomes, (below 50/.) and wages of all accustomed to con- sume taxed articles, as beer, tea, sugar, tobacco, in Eng- land ; or wine, cider, tobacco, sugar, coffee, in France Together 100,000,000 110,000,000 197,090,000 206,000,000 Such is the amount of income arising from the land and labour of either country. To this we now make an addition of great im- portance as a source of taxation, whatever may be thought of it as a constituent of national wealth. Income from money in the public funds, or lent on private securi- rities - 50,000,000 25,000,000 Received from government, dis- tinct from the interest of the public debt; viz. the pay of the army, the navy, the public offices, the civil list, the mis- cellaneous services, after allow- ing for the late reductions Total taxable income* 18,000,000 19,000,000 265,000,000 250,000,000 * Any discrepancies between this column and that in page 248, arise from the latter exhibiting the returns of Great Britain distinct from Ireland. Wages. — To put the two countries so nearly on a par in regard to wages, may seem hardly fair towards France, superior as that country is in population* 32 250 National Revenue ; — Parallel with France. and reduced as wages in some measure have been, and are likely to be among us. But in a calculation of national revenue, the magnitude of the population of France ought, in a great measure, to be kept in the back ground, many millions being cottagers, who, as in Ireland, do little more than maintain themselves on their petty occupancies, consuming few articles pro- ductive to the exchequer, and adding little to the na- tional strength, otherwise than by recruits for the military service. Wages are highest among a town population, in which England takes greatly the lead. Add to this, that in all Catholic countries there is a considerable loss of wages from holidays. Rent of Houses. — In this respect, France was for- merly entitled to rank before us ; but houses in a rural district yield very little rent : and while French towns are comparatively stationary, ours have been and continue in a state of rapid increase. Comparative Prospects of England and France — This interesting question shall be discussed at considera- ble length in our chapter on Finance. ■i:>\ CHAP. IX. Effect of the late Wars on Property, individual and national. The researches we have already had occasion to make in regard to our agriculture and national reve- nue, prepare us, in a considerable degree, for the farther and more comprehensive inquiry to which this chapter is appropriated. In the investigations connected with it, we shall studiously avoid discussing the policy or impolicy of our great contest ; the prac- ticability of avoiding it in the outset, or of terminating it in an earlier stage. We shall avoid, in like man- ner, any parallel between the magnitude of our sacri- fices on the one hand, and the benefit resulting on the other from restoring the equilibrium of the Continent. Nothing, indeed, would be more hopeless than an attempt to produce any thing like uniformity of opinion on such a subject. The oppositionist, in his review of the events of the last thirty years, takes little account of the danger that arose after 1795, from the aggrandizing spirit of the French government ; nor, while urging, and urging justly, the insignificance to us of most causes of continental quarrel, does he make due allowance for the importance of the Neth- erlands, and the alarming addition which their pos- session made to the power of France. The ministe- rialist, on the other hand, is equally confident and indiscriminating, making no admission of the occa- sions on which (as in 1793 and 1807) our govern- ment acted an aggressive part, and justifying the at- tack on Copenhagen as he would the defence of Spain. From the delusion that the war was a source of permanent wealth, we now begin to be awakened ; but, in other respects, we are yet far distant from the time when the public shall be enabled to view the 252 Effect of the late Wars on Property, transactions of this eventful age with the calmness of historical inquiry. It will be for a succeeding gene- ration to appreciate, on the one hand, the ferment produced by the French Revolution ; on the other, the course by which our political guides, had they been aware of the little dependence to be placed on foreign allies, and of the aid to be derived for the maintenance of order from the upper and middle classes at home, might have endeavoured to cond uct our affairs during the period of alarm. The hazard- ous alternative of an appeal to arms would probably have been avoided, had our councils been guided by a Burleigh or a Walpole ; or had he who was placed at our helm in those critical times, been of an age to derive from personal reflection and experience that knowledge in which he was necessarily deficient, and the want of which was so feebly supplied by the coadjutors with whom our system of parliamentary influence obliges a minister to become connected. Political Economists. — The discrepancy that pre- vails among politicians is equally remarkable among political economists. To the follower of Smith and Say, all war seems impolitic and unnecessary; in his eyes, the whole of military array, the training, equipping, and maintaining of fleets and armies, is an absolute sacrifice, the loss of the labour of the most valuable part of our population. It is with great difficulty that he can be brought to allow that war brings with it even a temporary aliment to its con- suming powers. Mr. Say, the political economist of France, after visiting this country, in the first year of peace, published the following remarks : " Ministers and public men in England are as yet (he wrote with reference to our ministry of 1807), far from having a just sense of the folly and ruinous ten- dency of war : their progress has not kept pace with the progress of the nation. The misfortunes of Eng- land take their rise in the higher regions, like the hail and the tempest, her blessings spring from be- neath, like the fruits of an inexhaustible soil. The Individual arid National 253 taxes have not only doubled, but tripled since 1792 ; and still the war expenditure greatly exceeded their amount. The consequence is, an enormous enhance- ment of prices ; mercantile men are obliged to do business on very slender profits, and what is still worse, many of the manufactured articles are sadly fallen from their former reputation. My French readers," he adds, " will be surprised to find in my pages an opinion so much at variance with the cur- rent notion that England is the land for the easy and rapid attainment of fortune ; but the reality is widely different from the appearance." A very different picture of the effect of war is given by Mr. S. Gray, to whom we have so fre- quently referred in our chapter on population, and who came several years ago before the public, as the author of a system bearing the emphatic name of "productive." The pages in which that doctrine is recommended to the world, contain a number of ar- guments on the connexion between government ex- penditure, and the increase of individual income, taxes being considered by Mr. Gray in the light of useful stimulants to our national industry. He has the merit of detecting several imperfections in Dr. Smith's definition of productive and unproductive labour; but in reasoning on our war expenditure, he evidently fails to distinguish between a temporary and a lasting excitement, and assumes, from the cir- culation of money raised by loans and taxes, as much advantage as if war prices were necessarily perma- nent, and as if, on concluding peace, we could con- sider ourselves exempt from the frightful reaction ex- perienced during the last nine years. To these opposite authorities, each tending in some degree to an extreme, we add the observations of a third writer. " Notwithstanding the immense expenditure of the English government during the late wars, there can be little doubt but that the increased pro- duction on the part of the people has more than compensated for it. The national capital has not merely been unimpaired, it has been greatly in- creased ; and the annual revenue of the people, even after the payment of their taxes,' is probably greater at the present time than at any former pe~ 254 Effect of the late Wars on Property, riod of our history. For the proof of this, we might refer to the increase of population, — to the extension of agriculture, — to the increase of shipping and manufactures, — to the building- of docks, — to the opening of numerous canals, — as well as to many other expensive undertakings ; — all denoting an increase both of capital and of annual production." (Ricardo on Politi- cal Economy, second Edition, p. 170.) This passage presents, perhaps, too favourable a view of our situation ; and ought, before we can re- ceive it as a true picture, to be accompanied by two admissions. First, that though our national income has increased, our burdens have augmented in a still greater ratio ; and, secondly, that in any estimate of our wealth expressed in money in the present day, a considerable deduction is to be made from an esti- mate in 1792, on account of the inferior value of mo- ney. It is fair, however, to add, that this passage was written at a time (1816) when the fall of prices was only beginning, and when we are unable to calculate the extent of fluctuation and loss arising from the war. Since then, seven eventful years have elapsed, and have disclosed a succession of circumstances beyond the reach of foresight, but replete with in- struction when examined in the order of their occur- rence. With this advantage, we now follow up the inquiry, and instead of reasoning in general terms, like the writers we have quoted, we shall endeavour to build on a secure foundation, and proceed as in our preceding chapters, by a series of calculations and specific results. Our arrangement shall be as follows: Losses incurred during the prosecution of the war. Losses attendant on the transition from war to peace. Comparative amount of our national income in war and peace. Have our public men understood our financial situation ? Losses to our Productive Industry on a Transition from Peace to War. — These losses, unknown in a great measure to the younger part of the present genera- tion, will long live in the recollection of those who Individual and National. 25a are of an age to remember the bankruptcies of 1793. These pervaded equally our commercial, manufac- turing, and agricultural interests, and affected almost all whose undertakings were not supported by sub- stantial capital. To what was a pressure so general to be ascribed ? To the sudden and extensive change that took place ; to a demand on the part of government for men and money ; and to the conse- quent necessity of abandoning various undertakings, the profit of which, almost always less than is vul- garly imagined, could be made to answer only by the aid of a low rate of interest and moderate price of labour. In those days, as at present, our country- men were speculative, eager to embark on new en- terprises, and apt to trust to prospective advantages for those means of providing for payments which their limited capital did not afford. This sanguine disposition may be termed the great feature that distinguishes our countrymen and the North Ameri- cans from the traders and agriculturists of the conti- nent of Europe, among whom the same occupation is so often followed from father to son, with little idea of change or attempt at extension. But our spirit of enterprise, however favourable to discovery and improvement, is necessarily attended by a revo- lution in the circumstances of individuals on the oc- currence of any political change. The blow first strikes establishments of the most adventurous cha- racter, and goes on to involve others injured by the failure of the first, and possessing, like them, few re- sources against an unforeseen demand. Embarrass- ments of this description were felt chiefly in the first and second years of the war, during the interval that unavoidably elapsed before the capital and labour disturbed in their employment by the war, could re- ceive a new direction, and be invested anew in a productive form. From this almost forgotten theme, we proceed to a part of the subject much more familiar to the majori- ty of our readers ; to an 256 Effect of the late Wars on Property. Estimate of the Burden arising from Government Expenditure during the War. Interest of the debt contracted during the war, after allowing for the reduction of the 5 per cents. - £22,000,000 The annual amount of half-pay and pensions in the army, na- vy, and civil service, arising- from the war, is at present (1823), about 4,500,0002. : but consisting almost all of life annuities, may be computed equal to a permanent burden of - 2,000,000 Exclusive of this, the expense of our army and navy is very greatly augmented since 1792, partly from the extension of our foreign possessions, partly from causes unconnected with the war, such as the increase of our population, and the necessity of enforcing the collection of the revenue in Ireland. As yet the charge of our army and navy (distinct from half-pay and pensions) exceeds that of 1792 by 6,000,000/., but from the prospect of continued peace, and the general fall of prices, we may anticipate a farther even- tual reduction of 1 ,000,000/. Of the remaining 5,000,000/. we put to the account of the war, somewhat more than half, viz. 3,000,000 Add, for increase of the civil list, salaries, pensions in conse- quence of the war and of the rise caused by it in prices - 2,000,000 Other war charges not enumerated 1 ,000,000 Total £30,000,000 Such is the amount of burden arising from our war expenditure ; happily, however, there are alleviating considerations. Deductions from our apparent Burdens, Taxation of other Countries. — It is in some respects a matter of little difficulty to understand the financial relief which we have in prospect ; such, for example, as the decrease in our half-pay and pensions, either by the occurrence of deaths, or a transfer for long an- nuities ; but the case may not be quite so clear in re- gard to a deduction of another kind, we mean that which arises from a " community of the pressure of taxation on the civilized world at large." Yet, how- ever real our losses from the war, however inferior our national wealth to what it would have been, had peace been uninterrupted, we cannot be said to have incurred absolute injury, or to labour under any per- Individual and National. 257 manent disadvantage, in as far as similar burdens have been imposed on those who are our competitors in the career of productive industry. This, we say, though perfectly aware of the folly of the doctrine that one nation gains by impoverishing another. Our argument, when attentively examined, will be found to rest on a very different basis : war, at all times a losing game, would be doubly so, were our opponents to escape a participation in the pecuniary pressure ; our productive labourers would soon emigrate, and pursue their industry in untaxed countries. To bring our argument to a point: if in England the late wars have increased the proportion of burden to income by twelve per cent, and if in France, Germany, or the Netherlands, the comparative increase be h\e or six per cent., our loss, serious as it is, can hardly be considered as exceeding the difference; we mean that in whatever regards the hazard of rivalship, or the injury from foreign competition, our disadvantage is limited to the extra six or seven per cent. Our War Taxes. — Our next modification of our loss- es is also of a very extensive character, though it does not happen to form a deduction from the preceding table. It comprises no less than the larger portion of the sum raised by war taxes, which, though (see Chapter II. p. 44.) of very great amount, we are disposed to consider as defrayed out of the extra profits of a state of war; so largely were the gains of the public, whe- ther in the shape of interest, salary, wages, or profit of stock, increased by the circulation of the money raised by our loans. In making this great allowance, we are perfectly aware that in many cases, particularly after our unfortunate Orders in Council, our mer- chants and manufacturers paid their taxes, as our farmers at present pay their rent, not from income but from capital. We are aware, also, that the re- sources which supplied our war taxes were, in a great measure, temporary, and of a nature to disappear with the stimulus that excited them : but our estimate is confined to the years of war; and we are probablv 33 258 Effect of the late Wars on Properly, justified, on considering all circumstances, in making the preceding deduction, important as it is. Public Works, such as Canals, Roads, and Bridges.- These, however commendable in the intention, are expedient as undertakings only when the returns are such as to afford a fair interest for the capital invest- ed. From the high price of labour and materials in the latter part of the war, most speculations of the kind, such for example as the new bridges of the me- tropolis, were attended with a far greater charge than if they had been postponed and executed in peace. The same holds in regard to our agriculture, in which a large share of the outlay was incurred on the as- sumption of high prices. Even in the case of our manufacturing machinery, a put erected when labour was high, is no longer necessary or profitable, now that labour is reduced. Still, a great part of such loss is merely in appearance, and resolves itself into the different value of money : the canal share, which, in 1813, cost 100/., may be said to indemnify its owner, if it at present fetches 75/., because that sum is at present equal in the power of purchase to the 100/. of 1813. Such investments of property involve an absolute loss only, in as far as they fall below that proportion, a case at present unfortunately too fre- quent. Tithe. — This portion of our burdens is different, in several respects, from general taxation. Its amount, as expressed in money, increased surprisingly during the war, in consequence of two causes, — the enhance- ment of produce, and the extended cultivation atten- dant on the increase of our numbers. How far did the payment of this increased amount prove of detri- ment to our resources ? It was defrayed by that por- tion of the community, who, so long as the war lasted, were most able to defray their burdens. On the pub- lic at large, its pressure was not apparent ; in an indi- rect sense, however, that pressure was great, for tithe operated as an obstacle to cultivation, and greatly restrict- ed the amount of our produce, at a time when it would have been most desirable to increase it. Individual and National. 259 Poor Sate. — In this respect, the estimate of burden during the late wars is subject to considerable quali- fication. The increase of the rate having been as great in agricultural as in manufacturing districts, al- though in the former, work was, all along, abundant, the inference is, that the rise was, in a great measure, nominal, and would otherwise have been paid in the shape of wages. Add to this the decrease of rates in the last and present year, with the probability of a progressive diminution, add we shall find that the portion of burden attributable to the war is by no means so great as might be inferred from the numeri- cal statements of the poor-rate. The National Debt. — After all these allowances, it may be incumbent on us to answer the question, whether we " consider our national debt as forming an actual loss, an absolute addition to our public bur- dens ?" This question, idle in the view of the atten- tive inquirer, is by no means superfluous in regard to the cursory observer, to those who imagine our debt a property which, without the war, would have had no existence, a responsibility of little importance because due among ourselves. All such notions we entreat our readers to dismiss from their minds, and to consider our debt as not less real for being due to our countrymen. It is the record of money expend- ed, gone for ever ; and involving, as far as our bur- dens exceed those of other countries, a series of dis- advantages. Had we had no war, the capital and labour that has led to the formation of our debt would not have been unemployed ; it would have been put in activity by other causes, and received its increase in a different form. The product, we allow, would, pro- bably, have been smaller, because the ratio of in- crease, whether from interest, profit or stock, or per- sonal exertion, would, in a state of continued peace, have been much less considerable. Effect of the War on the Habits of Individuals. — The increase of wealth arising from the war was much more an increase of income than of property. In the latter sense the war was beneficial to those only who 260 Effect of the late Wars on Property, had formed their habits in a season of tranquil occu- pation, of moderate profit, and who, from their expe- rience and time of life, were capable of reaping the new harvest without abusing it. The case was very different with those who, entering on business during the war, took for granted that circumstances would continue as they found them, and made no provision for a reverse. The characteristics of this youthful generation may be said to have been a general con- fidence, a habit of early expense, a repugnance to the cautious perseverance of former days. The extent of evil arising from such a source can be computed by those only whose observation has embraced a wide range, who have marked throughout the pre- sent age the frequent substitution of adventure for industry, and the reiterated loss of capital when in- trusted to the young and inexperienced. Losses on the Transition from War to Peace, No period of our history affords an example of a change so sudden and so extensive as that which took place in the state of our productive industry after the peace of 1814. For the relinquishment of foreign colonies, and for an active rivalship in manufacture, on the part of the continent of Europe, the public were prepared ; but they had, in a manner, lost sight of the great difference between government expen- diture in peace and war ; and the few who took this difference into account, imagined that the diminution of demand at home would be balanced by our exports to newly opened markets in America and Asia. These persons were by no means aware either of the mag- nitude of our circulation at home arising from war ex- penditure, or of the substantial difference between an assured payment in England, and the hazard atten- dant on transactions with distant countries. Many anticipated a partial reduction of wages, but not a general want of work ; a diminution of mercantile and manufacturing profit to a certain extent, but in no degree proportioned to that which took place. Individual and National. 261 Yet the years of peace have been marked by no ca- lamity of a general nature ; by no such bankruptcy as the South Sea or Mississippi scheme ; by no terri- torial cessions, like the relinquishment, at the peace of 1783, of our North American provinces ; by no in- surrection in our colonies ; no successful rivalship on the part of competitors either in manufacture or navi- gation. Magnitude of the Change. — What, then, were the causes of our great and unexpected embarrassments? Not a reduction of our means considered physically or intrinsically, but a general change in the mode of rendering them productive ; a sudden removal of the stimulus arising from the war. In no former contest had our military establishments been carried to such a height : the number of our militiamen, soldiers, and sailors, discharged, amounted to between two and three hundred thousand, while the individuals em- ployed in the manufacture of cloths, arms, stores, in the supply of provisions, the navigation of transports, amounted, perhaps, to two hundred thousand more. The magnitude of the transition will be best shown by a brief comparison of the sums expended by go- vernment in the five last years of the war, and the live first years of peace : YEARS OF WAR. 1311. 1812. 1813. £92,200,000 1814. 103,400,000 1815. 121,000,000 Average YEARS OF PEACE. £ 117,000,000 110,000,000 108,720,000 1316. 1817. 1813. 72,000,000 1819. 66,300,000 1820. 67,000,000 Average 59,000,000 61,000,000 64,660,000 Peace thus caused an immediate reduction of more than forty millions in the amount of the money dis- tributed by government to pay employment, or, in other words, to stimulate productive industry, Add to this, that during the war most of our establish- ments had been formed on a large scale, a scale that supposed a power of demand, a capacity of pay- 262 Effects of the late War on Property, ment much greater than was found to exist after the Jpeace. This was the case in regard not only to great offices, but private establishments of the most dis- similar character ; manufactures, mercantile houses, seminaries of education, and a variety of underta- kings, almost all of which, whether in the metropolis or provincial towns, were adapted to a community increasing not only in its numbers, but in its power of expenditure. The means by which we were enabled to pay such heavy contributions during the war have been already explained. Exempt from continental competition, the public, or at least four-fifths of the public, had at that time the power of indemnifying themselves for their taxes by an increased rate of charge. This was the case of the land-holder, the farmer, the owner of houses, the receiver of tithe: it was the case, like- wise, of persons exercising professions, of those re- ceiving salaries, and of the very numerous class, whose dependence is on wages. At the peace, all or almost all was reversed : agriculturists, merchants, manufacturers, fell from their Vantage ground, and prosperity was, during several years, confined to an- nuitants, to whom, since 1820 or 182!, we are enabled to add the majority of the labouring classes. It must not be inferred from this that our consumption, whe- ther of agricultural or manufactured produce, expe- rienced an absolute diminution ; for our numbers, as was shown at the time by the extent of new buildings, and subsequently by the population returns, were an- nually on the increase ; but partly from the economy introduced by altered circumstances, more from an augmentation of supply, the increase of buyers did not equal the increase of sellers, and a general fall of prices became unavoidable. Finally, our distress was aggravated in no slight degree by the absence of many of our countrymen of the upper and middling classes, who, whether as travellers or as residents on the Continent, incurred an expenditure of several millions annually abroad, at the time it was most wanted at home. Individual and National. 263 Distress of Foreign Countries. — Similar causes of em- barrassment were unfortunately in operation on the Continent of Europe. In former wars the evils of transition had been felt in few countries, and to a comparatively small extent; but in 1813 and 1814, almost all Europe had been in military array, and every country felt the sudden change from disembo- dying of armies, cessation of government purchases, and an overstock of productive labourers. Add to this, that our greatest customers, the United States of America, had suffered so severely, first from the stop- page of their navigation, and afterwards from the re- turn of peace, as to be far less able to pay for our goods than during the continuance of the war. The consequence was that our foreign trade, though not diminished, and even partially increased in amount, failed, from irregularity in the payments, to prove an efficient source of relief. Temporary Revival of Activity in 1818. — The extent of our suffering might have been in some degree lessen- ed, had our real situation been earlier known, or had it not undergone considerable fluctuation in the years that have elapsed since the peace. The year 1814 produced two great results ; a fall of corn, and a re- instatement of the value of bank paper. Both conti- nued during 1815 and 1816, but the bad harvest of the latter year renewed the operation of our corn laws, and being followed by a revival of trade and manufacture, accustomed us anew to high prices, gave a temporary increase to the revenue, and suspended the measures that might otherwise have been taken for a general adaptation of our burdens to our means; we mean a reduction of salaries and those other in- comes in regard to which, from the sums being pre- viously fixed, the course of circumstances has not had free operation. Our second period of distress (be- ginning in 1819) thus came on us as unexpectedly a^ the first, and we are now, in the ninth year of peace, discussing those points which it had been of infinite importance to us to have understood from the moment 264 Effect of the late Wars on Property, that the overthrow of Buonaparte opened the pros- pect of a general change. Our probable Situation had the War been avoided. — We shall close these remarks by a brief calculation of what would probably have been our financial situa- tion, supposing political science to have been as well understood at the time of the French revolution as at present, and our statesmen equally convinced of the close connexion between the preservation of peace, and the increase of national prosperity. Had such been the case, we may fairly assume that our cabinet would either not have interfered in the war at all, or would have made peace in 1793, as soon as the French were driven within their frontiers. For tran- quillity at home they would probably have trusted to measures of police, to the aid of an armed force, and to the support of the middle and upper classes of so- ciety. The troubled aspect of the times, and the ne- cessity of arming the executive branch with power both to repress sedition, and to effect such measures as the union with Ireland, and the equal collection of taxes throughout the kingdom, would doubtless have obliged us to increase our army and carry our ex- expenditure considerably beyond that of 1792. The result might have been that our taxes and poor-rate which in 1792. amounted (including Ireland) to about 20,000,000/., might by this time have been carried by a gradual increase to 28 or 30,000,000/. In other re- spects also, our situation would have been exempt from the extraordinary fluctuations we have witness- ed. Thus the price of wheat would, even after the double failure of crop in 1799 and 1800, hardly have exceeded 80s. moderate as would have been the charges on import. In a state of peace the attention of our ministers might have been bestowed on measures of internal im- provement, such as commutation of tithe, equaliza- tion of poor-rate, or the removal of commercial re- strictions, all necessarily postponed during a contest, which not only absorbed their time, but obliged them. Individual and National 265 from their dependence on the support of particular interests, to submit to a tacit continuance of abuses. If we are told that the average rate of profits and wa- ges being smaller in peace than in war, our national income would not in the former alternative have been so large, our answer is, that while we admit the quick- er increase of individual income during war, we have to bring against it a formidable deduction in the losses attendant on the transition to peace. Or if, to avoid argument, we limit our estimate of loss arising from the war to a sum of which the interest is 15 or 18,000,000/. a year, we allow even then that we have incurred a burden equal to the revenue of the Austrian or Russian empire. The late Wars examined by moral Considerations. — We proceed to bestow a few sentences on the events of the late war, considered on higher grounds than those of mere calculation. The apparent triumph of injus- tice, in national as well as individual transactions,has, as is well known, often embarrassed candid inquirers, and reduced them almost to question the interference of Providence in the course of human affairs. Among our neighbours on the southern shore of the Channel, scepticism received an unfortunate extension at the time of the revolution : an extension to be attributed partly to the youth and unthinking character of many of the reformers, partly to the odium to which the Ca- tholic clergy exposed themselves by their opposition to the new cause. During many years the success of a restless despot seemed to confirm the doubts of the intervention of a higher power, since it was not till the Continent had been overrun, that political justice resumed its course. But if such impressions may be expected in a coun- try where religion wears a form ill calculated to ob- tain the conviction of a reflecting mind, ought we to have expected in England a favourable reception to such a doctrine as that of our national wealth being augmented by war ? Happily no such conclusions nre suggested bv the writings of those who have most 34 266 Effect of Ifie late Wars on Property, successfully investigated the sources ofnational pros- perity ; by the labours of Turgot, Smith, or Say. If to describe the structure of the human frame ; to ex- plain the connexion and the subserviency of its vari- ous parts, has been declared equivalent to a hymn in praise of its divine Author, not less is that testimony due to the study of the causes of the success of pro- ductive industry. Researches into that subject, when prosecuted in the spirit of impartiality, tend more and more to establish the connexion between equity and prosperity, between fairness in principle and success in practice. This connexion, we can safely assure our readers, is no philanthropic dream, but is practically recognis- ed by the directors of our mercantile policy. The system of prohibition and high duties, so long in fa- vour with our ancestors, is now renounced, and our Board of Trade has, during the last eight years, acted on the conviction that the increase of our wealth is, in a great measure, dependent on the increase of that of our neighbours. Further, if we pass in review our mercantile history during the war, and discrimi- nate the gain and loss of particular classes, we shall find that the change of circumstances since the peace has, in general, been such as to constitute a fair retri- bution to those who had either benefited or suffered by fluctuation. Annuitants have been relieved from their long depression, and now find their income re- stored, or nearly restored, to its former value. Of our countrymen at present in a state of suffering, we may be permitted to remark that they belong in general to the classes whose gains were greatest during the war ; a remark made without the slightest intention of weakening their claim to relief, since not humanity only, but the public interest (see the chapter on Agri- culture, p. 142.) calls on us to prevent their farther depression. And we have adverted to their case merely to show the transient and unsubstantial nature of gains derived from a state of war ; — the frightful recoil to be apprehended by those who imagine that in them they have found a source of permanent ad- vantage. Individual and National 267 The result, therefore, is, that the late war, so long accounted a source of national wealth, involved a sa- crifice of property not inferior to the sacrifice of lives. To this double drain in our resources, what has been the grand counterpoise ? Our progress in the arts of peace : the power of extracting a larger supply of subsistence from our soil ; a larger revenue from our labour and capital. By what criterion are we enabled to compute the amount of the addition thus obtained ? We know of none more satisfactory than a return of the numbers added to our population and supported by our resources ; a subject replete with satisfactory conclusions, and which we have already discussed at considerable length. At present, without recurring to our arguments on that head, we shall merely ad- vert to a very common, but a very erroneous notion, that "the rapid increase of our numbers in the pre- sent age is to be attributed to the war." Whatever may have been the case in regard to the middle class- es, the wages of many of the lower orders, particular- ly those of the country labourer, bore, even when add- ed to the poor-rate (see the chapter on Poor-rate, p. 276.), a smaller proportion to the expense of rearing a family than in peace. Now, as the lower orders form by far the most numerous portion of the nation, and the circumstances affecting them are decisive of the general increase of our numbers, we can by no means join in ascribing the surprising augmentation in the pre- sent age to the excitement arising from the war, al- though that opinion may have (Lord Liverpool's speech, March 1822) the sanction of ministerial au- thority. It has continued with equal rapidity since the peace, and our rulers may, we believe, trace it with confidence to causes of a cheering and perma- nent character ; to the effect of vaccination, to the improvement in the lodging, cleanliness, and sobriety of the lower classes. In thus dwelling on the evils of war, our object is not to join with the decided Oppositionists, in la- menting what cannot be recalled, or in affixing a ge- neral censure on a course of policy, which though re- 268 Effect of the late Wars on Property, prehensible in some respects, admitted in many others of vindication from the conduct of our enemies ; or of defence, from the limited foresight of human nature. Our purpose is strictly ^statistical, and our wish is merely to impress-^n^ me public a consideration of great importance to their future welfare, viz. that the injury to national prosperity resulting from war, how- ever it may be palliated or postponed, is eventually of most serious magnitude even when, in a military sense, the issue of the contest has proved triumphant. We now proceed to a more enlivening theme, — to a survey of the present state of our productive in- dustry, and of the prospect opened to us by a conti- nuance of peace. To our reasoning on this head we shall endeavour to give a definite form by bringing it before the eye of the reader in the shape of arithmeti- cal calculation. We begin our table with the year 1813, as the last in which our prices bore the stamp of a state of war. In comparing this with the present year, we keep in view two important facts. 1. The increase of our population, which, since 1813, is about 15 per cent. 2. The fall in the price of commodities, in other words the reduction of expense, which to most classes we compute at 25 and to some at 35 per cent. An attention to these facts is indispensable to a correct estimate of our situation : we should other- wise fall into the common error of considering our- selves rich or poor, merely as prices happened to be high or low. The complexity of the following table will, we trust, disappear after an attentive examina- tion. Individual and National. 269 ^5.5 ££§a a 15 E9 T"!! £ i «. 6 t. a» > -1 en •'-* EDO V . * co gee. CD. OO ! ! to o E. 0---.5 . 3 .C CO 8? P § « I 3 S ►« S o » C cm- 00 88 c © 8 8! § 8" J= a a, ° o> i^SJr S " « e » 8 g. s 5 g §S| 'fcfjgsis! 88 © © * "3: , « !>> C m O « « N 88 CO© S 3 §2 CTJ 0) O 3 3 °*;> C «-3 a o aE.S ° « •o , <-> - go § o 2Sw. = = - fo! .2 *> w is »' 8 "I si » 3 £* «5 - ® « ^ 82 ■ Sg? I o !£ fj E*. O £ «J 270 Effect of the late Wars on Property, The reader, who shall bestow a little time on stu- dying this table, will not, we trust, be long in finding his labour repaid, and in making the satisfactory dis- covery that the decrease of our financial means since the peace is by no means so great as is commonly sup- posed. Remarks on Col. II. — Interest of Money. — The surplus in the receipts of our monied men above their expen- diture supplies, is, as is well known, an annual fund for investment, and as there has been of late no op- portunity of making loans to our exchequer, this sur- plus has sought a vent in advances to private indivi- duals, or to the French, American, and other foreign governments. We have accordingly made in our ta- ble a large addition to the estimated amount of inte- rest arising since the peace from such investments. Agriculturists. — Though the increase of number in this class since 1813 has been considerable, and has evidently been accompanied by a corresponding in- crease of produce, we have declined, for obvious rea- sons, to suppose it productive of increase of income. Tithe. — Here the same objection does not altogether hold, tithe not having experienced either so great a rise in war or so great a decline since the peace. Wages. — Under the head of wages, we have suppos- ed between 200 and 300,000 men withdrawn at the peace from the militia, army, and navy, and have add- ed the amount of their probable earnings,(6,000,000/.) to the head of wages. A corresponding deduction is made under the head of income to individuals in the public service. The i^reat diminution in this branch puts in a striking light the stagnation attendant on the transition from war to peace. Ireland. — The untaxed income of Ireland rests (see A ppen&ix p. [78].) on a very different calculation from Individual and National. 27 1 her taxed income, and must, from the increase in the number of her peasantry, have received a very large augmentation since 1813. Remarks on Col. IV. — Reduction of Expense.— We may, perhaps, be charged with making a somewhat too large allowance in this respect, the saving com- pared to 1813 being, in various situations, not yet carried to the extent of 25 per cent. Our answer is, that peace being evidently the policy of our govern- ment, there is a probability of reduction continuing, and of that which has not taken place in the present year, being accomplished in the next. Farmers. — Amidst all the distress of this respecta- ble part of the nation, it is some satisfaction to per- ceive the large reduction in their disburse for labour and other farming charges. The Lower Orders. — These form so great a portion of the community, that we can hardly advert too often or too attentively to their situation. The transition from war to peace, bore, doubtless, very heavy on particular classes, principally manufacturers, whose wages were very low at a time when provisions were by no means cheap. Since 1820, however, circum- stances have altered greatly in their favour, the fall of provisions having rendered 22s. a week equivalent, in the power of purchase, to 30s. during the war. K this fall was too great and too rapid, it is at least a satisfaction that the advantage of it should have ac- crued to the most necessitous part of the community. Viewing this very numerous body collectively, we find their situation, whether in town or country, more com- fortable at present that at almost any period within our recollection. Rernarhs on the Table generally. — In comparing the amount of national revenue at different periods, it is fit to keep in view the increasing number of consu- mers, in other words, of individuals to be supported 272 Effect of the late Wars on Property, from that revenue. This increase, including Ireland, amounts to nearly 3,000,000 for the ten years that have elapsed since 1813. For this surprising addi- tion to our numbers, allowance is made in Col. II., but as it may be thought from the estimate in Col. III., that our means are not adequate to the support of this new charge, we must remind the reader, that increased population happily brings with it the means of supporting itself, and that on comparing Cols. II. and V. he will discover that, even after making a deduction from the favourable part of our statement, our present means of affording wages, salaries, and income of different kinds, are not infe- rior to our means during the war, by more than 10 per cent. Now a reduction of the income of the community to the extent of 10 per cent, would not, had it been equal and general, have proved disas- trous : it would have necessitated a diminution of ex- pense, and have given a general check to sanguine expectation, but could never have been the cause of severe distress. But the transition unfortunately took place in a very unequal manner, for while in the case of the landholders, the decrease of income appears to be 20 per cent., and in that of farmers not less than 60 per cent, annuitants on the public funds have benefited or will soon benefit to an extent of 20 or 25 per cent. In what order or succession did these reductions of income take place ? First, in the army, the navy, and the classes, such as contractors and manufactu- rers, who derived their support from government: the agriculturists^followed almost immediately, in con- sequence of the unchecked import of foreign corn during 1814. Trade and manufactures, though un- diminished as far as regarded export, experienced, during several years, a great decrease at home, from the cessation of government purchases, and an over- stock of hands from the discharge and non-enlistment of men for the army and militia. Among the liberal professions, the medical suffered a direct surcharge from an obvious cause : the same held in regard to Individual and National. 273 the civil service of government, and if in the law and the church, the overstock has been less rapid, it has not been the less certain, so much does stagnation of demand in any of the great departments affect the community at large. Our public Burdens ; their comparative Pressure in War and Peace. — Since the peace, the numerical amount of our burdens has been considerably diminished, the repeal of the property-tax, along with the reduc- tion of the duties on malt, salt, and leather, having formed (previously to the reduction of the assessed taxes) a diminution of nearly 20,000,000/. This sum, however, large as it is, has been balanced, or nearly balanced, by the rise in the value of mo- ney; the 65,000,000/. which we have paid annually since the peace, having formed an amount of equal value with the 80 or 85,000,000/. paid at the close of the war. There was thus no real reduction of our burdens until the present year, and, unfortunately, from the evils of transition, from the sudden diminu- tion in the income of particular classes, our taxes have been found a burden of greater pressure since the peace, than during the war. Effect on our Public Debt of the Rise in the Value of Money. — We come now to the circumstance in the series of our transitions, which, more than any other, has contributed to increase the burden of our taxes. To comprehend this fully, the reader should bear in mind, that government stands permanently in the ca- pacity of a debtor ; that its responsibility is repre-- sented not in land, houses, or what is technically termed real property, but in money ; and that what- ever raises the value of money, increases the pressure of its debt. During the long depreciation of money attendant on the war, the payment of 9 or 10,000,000/. of interest, at the Treasury, required no greater drain on the national resources, than the payment of 7 or 8,000,000/. previous to 1793. This fact, long known to our finance ministers, formed during a time the 35 274 Effect of the late Wars on Property. basis of very confident calculations : so long as high prices were kept up, so long did our leading men at the Treasury and in Parliament imagine, that the pressure of the debt contracted during the war, would be alleviated by the continued depreciation of money. At the peace, indeed, a degree of reaction or rise in the value of money was anticipated ; but in the opinion of the public, as of government, that re- action was likely to be slight. Had such proved the case ; had the price of corn been kept up both here and on the Continent, the evils of transition would have been comparatively slight, and our national burdens would have been less severely felt. Their pressure would have gradually decreased as our numbers augmented, and we might have considered the expense of the contest as in a great measure liqui- dated from two sources, — the extra profits of labour and capital which had supplied our war taxes, and the depreciation of that money debt, which repre- resented the undischarged burden. But all such calculations were disappointed ; reaction took place on a large scale ; and without experiencing any di- rect increase of charge, the public were subjected to serious embarrassment from the general diminu- tion of the sums paid for rent, salaries, wages, in short, for almost every thing except the income of annuitants. Has this increase of burden been accompanied by any circumstances of alleviation ? In private life we have for some time experienced relief from the re- duction of our expenditure ; but what is the situa- tion of government ? It feels the pressure on more than two-thirds of its disburse ; the benefit on less than one-third. The former consist of interest of debt, military and naval pay, pensions, half-pay, salaries, and retirement allowances, all of a fixed amount in money, and all virtually increased as the price of commodities has fallen. On the other hand, a reduction of goverument change from the fall of prices, was, till very lately, experienced only in the Conduct of our Public Men since 1793. 275 victualling of our navy, the purchase of stores, and in a portion of the miscellaneous services. These discoveries may be said to constitute the denouement of the mysterious financial drama that has been acting during the last thirty years. Our power of pecuniary contribution, so often and so loudly as- cribed to generosity in the sacrifice of our wealth, may now be, in a great measure, traced to causes of a humbler character ; to an increase of our produc- tive industry, founded on loans, and to a great, but temporary rise of prices. Both of these remarkable features in our situation were expected to be perma- nent ; but the rise of prices has disappeared, and to the extension of our productive industry, circumstan- ces were long unfavourable. Add to this, that though from the time of the overthrow of Bonaparte, the prospect of continued peace produced a radical change in our situation, our ministers were tardy in bringing forward any measure of finance founded on that change, or on the confidence with which we may anticipate an increase of our wealth and num- bers. In fact, until the present year, we made little progress towards relief, unless we account as such a more correct knowledge of our situation : a discovery of certain errors : a perception of the transient na- ture of the aids on which we relied during the first years of peace. Have oar public men, since 1793, understood our finan- cial situation? — After ascertaining the existence of such general misapprehension, it is impossible to avoid asking whether several important circumstan- ces in our situation and prospects have not been un- known to our political guides. Were they aware during the war, that the extension of our productive industry was, in a great degree, artificial, and must decline with that government expenditure which called it forth ? Looking to the amount of the in- terest of our public debt, of our pensions and other 276 The late Wars ; fixed payments, did they or did they not foresee that, on the cessation of this artificial stimulus, the natural course of circumstances would cause a rise in the value of money, and a consequent increase of pressure ? To what degree do these considerations affect the reputation of Mr. Pitt, the leader in that course of policy, which, in a military sense, pro- duced so brilliant a result, in a financial, so much embarrassment ? That Mr. Pitt was at first averse from the war with France, is apparent, from several circumstances, whether we refer to the declaration of respectable writers,* or to the undeniable fact, that a state of war was altogether contrary to his plans, for the reduction of our public burdens. That, after the campaign of 1794 had disclosed the weak- ness of our allies, and the strength of France, he la- mented our involving ourselves in the contest, there seems little reason to doubt : but when the country was fairly engaged in it, and our resources were called into full activity, it accorded with his confident and persevering character, to maintain the struggle, in the hope of recovering the Netherlands so unfortu- nately lost. Hence, a continuance of the contest, notwithstanding the defection of our allies and the financial difficulties of 1797 ; hence those war taxes, which no other minister would have ventured to propose, and certainly no other would have suc- ceeded in raising ; hence, also, our second attack on France by the coalition of 1799. But the perseverance of Mr. Pitt was not blind per- sistency : on a renewed experience of the weakness of our allies, on a proof of the sufferings of the country from heavy taxation and deficient harvests- he felt the expediency of peace, retired from office to facilitate its conclusion, and gave it, when not re- sponsible for its conditions, a sanction unequivocal and sincere. His ardour in 1803 for the recom- mencement of war, admits of a less satisfactory solu- ! " * Nichols' Recollections of- George III. and J. Allan's Biographical Sketch of Fox, in Napier's Supplement^ to the Encyclopaedia BHtannjca. page 361. Conduct of our Public Men since 1793. 277 tion ; it discovered much more the zeal of a comba- tant, than the discretion of the senator ; a disposition to sink the admonitory recollections of our late strug- gle in ardour for new contest. He warned us once in Parliament of the magnitude of the expense, and of the necessity of preparing ourselves for sacrifices greater than before ; but his caution was general and cursory, unaccompanied by any private admonition to the inexperienced ministry of the day, or any ad- vice to delay hostilities, until circumstances should give us an assurance of co-operation on the part of the great powers of the Continent. His last great measure, the attack on France by the coalition of 1805, was, doubtless, on the whole, injudicious, preponderant as France then was in military strength, the whole under the guidance of a single head. Still it may be added that it is by no means uncommon with men of ability to fall into the miscalculation made by Mr. Pitt on that occasion : and to anticipate, as a matter of course, judicious conduct on the part of their coadju» tors. Every impartial man must allow, that it w r ould have been carrying mistrust to an extreme, to have apprehended the commission of faults so gross as those which led to the disasters of Ulm and Auster- litz. And those who are surprised that a man of talent should misplace his confidence, or should cal- culate on others acting with the discrimination natu- ral to himself, will be at no loss to find similar exam- ples in the conduct of the most eminent men of the age : in that of Lord Wellington, when he expected discretion from Blucher ; and in that of Bonaparte, when he allowed the command of Spain to remain in the hands of Jourdan; or when, at a subsequent date, he committed that of his main body at Water- loo, to Ney. Since the distress that has followed the peace of 1814, it has been publicly said, that the embarrass- ment likely to ensue to our productive industry on the cessation of the war expenditure of government, had not escaped the foresight of Mr. Pitt. Such as- sertions are often made loosely and inaccurately ; but 278 The late Wars; the one in question seems to rest on probable grounds. Mr. Pitt was no stranger to the limited produce of our revenue in peace ; he had felt the financial diffi- culties of the first years of the contest, and the sur- prising relief afforded to the Treasury by the imposi- tion of war taxes. He could thus hardly fail to be aware that the spring given to our national industry was, in a great measure, artificial ; still less could he be unconscious of the ultimately injurious operation of loans and taxes when carried to an extreme. Nor is it incompatible with such impressions, that he should for a time have overlooked the inferences which they seem so naturally to suggest, and have been hurried along by ardour in the contest, by an earnestness to obtain a present advantage at the ha- zard of a future burden. It is not when engaged in the bustle of business, that the mind is capable of repos- ing on itself, of meditating, patiently and impartially, the result of favourite measures. How few plans of remote operation, of a nature that requires continued thought in the combination or length of time in the execution, originate with men in office ! Add to this that the great evils of our financial system, the depre- ciation of our bank paper, the extreme pressure of taxation took place not only after Mr. Pitt's death, but, in some measure, in consequence of a deviation from his principles. Never would he have given his sanction to such a measure as our Orders in Council ; or if, for the sake of argument, we suppose him to have been led, by urgency or by plausible argument, to their adoption, will any one maintain that he would have been likely to persist in so absurd a course dur- ing four years, until it, in a manner, drove the Ameri- cans to the alternative of war — a war carried on be- tween us and our best customers — a war in which it was apparent that injury to our opponents must be al- most as pernicious to our national industry, as injury to ourselves ? The responsibility of a great part of our existing burden, is thus transferred from Mr. Pitt to his succes- sors, of whose measures, in regard to neutrals, from Conduct of our public Men since 1793. 279 September 1807, to May 1812, it would be difficult to give a satisfactory explanation. They implied a total unconsciousness of the precarious state of our paper currency, and, in regard to trade, either a dis- avowal of principles generally admitted, or a readi- ness to infringe those principles for temporary pur- poses — purposes that could have no decisive effect on the result of the grand struggle with France. In 1812 began a different era: our Orders in Council were withdrawn ; peace was repeatedly offered to the United States of America ; and, at a subsequent date, no harsh treaty of commerce was imposed on France in the day of her adversity. Add to this, that since the peace, no attempt has been made to give a fallacious prop, by bounties or prohibitions, to any of our suffering interests. Admirable rules of conduct these, and yet in regard to our finances, we must re- peat, that ministers have not been prompt in render- ing the national resources instrumental to the national relief. The fault appears to have lain, not as is usual with governments, in interfering with the course of productive industry, but either in deficient foresight in regard to the changes occurring in our situation, or in deficient vigour in acting on such changes. Take for example the rise in the value of money, a natural consequence of a return to a pacific system, and one which, with some temporary exceptions, has been re- gularly gaining ground since 1814. Would Mr. Pitt, had his life been prolonged, have delayed until the ninth year of peace a reduction of public salaries, an adaptation of government payments to the augmented value of the money in which these payments were made ? Is it not more likely that he would have long since anticipated the result of the general change, and have given, in his own case, a decided example of what he would have exacted from others ? Farther, is it probable that in peace he would have adhered blindly to the financial routine pursued during the war, without attempting some measure, founded on the circumstances that have predominated in our si- tuation since 1814 — the reduced interest of money, 280 The late Wars; and the prospect of long continued peace, in conse- quence of the conviction annually gaining ground that a state of war is as contrary to policy as to hu- manity, and, from our growing power, far less neces- sary for defence than when France was so preponde- rant ? If ministers are open to the charge of deficient vi- gour in finance, in what manner can the impartial reasoner characterize the conduct of their parliamen- tary opponents ? On their part there existed no mo- tive for reserve, in regard to public distress ; no dread of disseminating alarm, by the proposition of change ; yet the investigations of most of the Opposition mem- bers have been confined to insulated points, their ob- jections to specific grants. Where, in the long list of those who opposed the war, did we find a speaker capable of giving the House or the country a distinct conception of the operation of our augmented expen- diture; of the temporary nature of the activity caused by it during war ; of the unfortunate re-action to be apprehended at a peaee ? Where, on the part of those who have combated the measures of ministers since the peace, do we find a comprehensive view of our national means, the suggestion of any measure of a new or of a general character, adapted to our pre- sent circumstances ? To what shall we ascribe this deficiency of resource, this scanty measure of statisti- cal knowledge on both sides of the House ? To a cause to which we have owed no small share of our political disappointments in the present age — an edu- cation on the part of our representatives very little suited to their functions as men of business. This to- pic has a claim to our attentive examination, for by nothing has the situation of the public during the pre- sent age, been more materially affected. Education of our Public Men. — The course of study followed in this country, in the case of young men destined for public life, is remarkable as indicative of the tenacity with which established usages main- tain their ground. Previous to the 17th century, the Education of our Public Men. 281 acquisition of Latin was indispensable to a polite education, no modern language being in these days a depository of elegant learning, or a received medium for the correspondence of either men of letters or di- plomatists. It is thus that we are to account for the interchange of voluminous epistles in Latin, between the scholars of Italy, Germany, France, and England, as well as for the study of the classical languages by females of rank, as was exemplified in the case of Queen Elizabeth, of Lady Jane Grey, and of the daughters of Sir Thomas More. The colleges added in these days to our universities, were naturally con- fined to the branches of literature familiar to the founders ; and in no part of Europe has this limitation been more strictly maintained, or the changes sug- gested by modern discoveries been less adopted, than at Oxford and Cambridge. If academical chairs have been provided for chemistry, for moral or for natural philosophy, an adherence to the established usage of these seminaries has prevented their being generally attended, and continues to confine the la- bours of our youth to mathematical and classical pursuits, to which alone, are awarded honours at the public examinations. The study of mathematics has obviously little con- nexion with the business of life, or with the intended profession of nine-tenths of those who pursue it. The evidence by which the inferences of the student are there guided, is of a nature altogether different from that which he will be called on to weigh in his inter- course with the world, in the transaction of business, in the discrimination of character. On this we shall not enlarge, as it will, of course, be readily admitted, and the defence of the study made to rest on its " ten- dency to improve the reasoning powers of youth :" but would it not, we may ask, be practicable to at- tain equal improvement in that respect by directing their labours to subjects connected with their future occupation ? Taking for example young men intend- ed for public life, would it not be preferable to seek an exercise far their intellect in the historv of our 3fi 282 The late Warn; country as related by Hume, or in the conclusions of political economy as exhibited in the writings of Smith or Say ? By history they would be introduced to a knowledge of characters, such as they are likely to meet on the stage of life ; while political economy would lead them to the examination of subjects which they will be called on to discuss, and which they will find as yet very imperfectly understood. In regard to impressions of a higher kind, the tendency of these studies to convey liberal views, to prove the connexion between the justice of a government and the welfare of its subjects, between the course of public events and the ordination of Providence, we have, we trust, said enough in a preceding paragraph of this chapter. Classical erudition, says an elegant writer,* is by the custom of England more peculiarly called learning ; and we admit that in education, its claim to attention is powerful, even when we keep out of view its fascinating appeals to the imagination, and are content to contemplate it with a mere reference to utility. The record of instructive facts, the delinea- tion of character, the illustration of the rules of com- position, the exemplification of the finest precepts, all belong to writers of Greece and Rome, and warn us to beware of neglecting to cultivate that grateful soil. Of this we are so fully satisfied, that our doubts are confined to the time requisite to acquire a know- ledge of the critical niceties of the languages, and to the question whether we ought not, in most cases, to be satisfied with that progress which enables us to comprehend, with tolerable accuracy, the sense of a writer. And here, fortunately, the line of distinction seems to admit of being traced with considerable confidence. By the youth intended for an active pursuit, for the bar, the pulpit, or the senate, philo- logical researches need hardly be carried further than is necessary to enable him to understand the meaning * Sir James Mackintosh on the character of Fox, in the collection by Dr. Parr, under the name of Philopatris Varvirpnsi*. Education of our Public Men. 283 uf an author, while a more minute and scrupulous investigation is incumbent on him who directs his labours to the instruction of others^ or cultivates literature in retirement with all the advantage of the command of time. But why, it may be said, cannot the two be combined by persons intended for active professions ? To do so, would, we apprehend, be to underrate the sacrifice of time indispensable to the attainment of thorough knowledge, and to lose sight of the scrupulous care with which the eight or ten years, in general allowed for education, must be appropriated, if we mean to avoid the frequent error of misapplying our labour, of undertaking studies which we may be unable to follow up. Conduct of public Affairs since 1793. — Let us proceed to make a brief application of these remarks to the statesmen of the present age ; to the men who guided our councils in the stormy period of the French revo- lution. How different, in all probability, would have been the course of their policy had their early im- pressions partaken more of the light to be derived from the study of recent periods of history, from an attentive observation of foreign countries. Had they possessed a more accurate knowledge of the national character of the French, of the degree in which the invidious distinction between the titled and untitled classes was kept up, of the circumstances which ren- dered a revolution as much the wish of the majority of the nation as it was in this country in 1688, our ministers would have known with how much qualifi- cation the declamations of Burke, and the assertions of the emigrants were to be received. In regard to this country, they would probably have discovered that the support of the middle and upper classes af- forded a sufficient safeguard against the danger of innovation without resorting to the alternative of war. Or, supposing that after the loss of the Netherlands in 1792, and the alarm given to our sovereign and our nobility by the violence of the Jacobins, it be- came impossible to avoid an appeal to arms, bow difc* 284 The late Wars; ierent, with the knowledge we have supposed in our political guides, would have been the conduct of the war ? Had they been aware of the backward state of the countries, in particular Austria, on which we relied for military co-operation, of that blind adhe- rence to old usage, that deference to family rank and court influence, which clogged the wheels of go- vernment and restrained the energy of the people, is it likely that our ministers would have counselled an offensive course against a nation emancipated from these fetters, and which conferred its appointments, whether civil or military, by very different rules ? If from foreign affairs we turn to our interior situa- tion, is it likely, we may ask, that, with a thorough knowledge of the principles of productive industry, our ministers would have been so deluded by ap- pearances as to mistake a rise in the price of commo- dities for an increase of national wealth, or to ima- gine that war could, under any circumstances, be conducive * to commercial prosperity ? Had they studied the lesson to be learned in the history of Hol- land, and, in some degree, in our own, (since inter- vals of stagnation have followed almost every war since the revolution,) our public men would have anticipated a reaction at a peace, and have carefully circumscribed their expenditure during the war. If we examine the discussions that have from time to time taken place on one very material question, — the state of our currency, — we shall find the speeches of our leading men indicate little more than an elemen- tary knowledge of the subject. These discussions began in 1810, when if we could not resume cash pay- ments, we might have desisted from our measures against neutral navigation ; but the degree to which the restraint imposed on that navigation affected the credit of our bank paper was unknown to parliament, and inadequately felt by the Cabinet. Nothing con- sequently was done ; and, when at a subsequent date, and under very different circumstances, we mean in 3819. parliament did interfere with the currency, th* Education of our public Men . 285 measure was ill-timed, and tended, if not to aggravate the evil, to mislead the public in regard to its cause. After all these examples of error, does it seem ne- cessary to add that the labours of our public men ought to be modelled on a new plan ? To give a cursory attention to a multiplicity of topics, leads to a knowledge very little beyond that of first impres- sions : to obtain a satisfactory conviction, to place our opinions on a firm basis, it is indispensable to make a selection, to restrict the objects of inquiry, and to give a long continuance to our research and reflec- tion on the prescribed themes. Looking round in private life, and extending our view to men of emi- nence generally, commercial as well as professional, what else than this limitation of object and perseve- rance in pursuit, do we find to form the basis of such characters, and to distinguish them from the credu- lous multitude, from those who listen with ready ac- quiescence to every plausible assertion ? If the ha- bits of our representatives are different, if they un- fortunately betray the absence of such discrimination and perseverance, ought it to be matter of surprise, that delusion should have prevailed among them dur- ing so many years : that a temporary rise of prices and increase of activity, should have been mistaken for a permanent augmentation of national wealth ; and that the unwelcome discoveries of late years, the finale of which is no less than a suspension of their incomes, should have come on them by surprise ? 286 CHAP. X. Value of Money. SECTION I. Fluctuation in the Value of Money or in the Price of Com- modities. The fluctuation in prices consequent on the great political transitions of the age, has been already dis- cussed in our second chapter : at present our object is to pursue the same inquiry on a more comprehen- sive plan, and to carry back our views to changes that have taken place in former ages. Changes of this nature rank among the most interesting subjects of in- quiry in political economy. To the reader of histo- ry, a knowledge of them is indispensable to the for- mation of a correct estimate of the price of labour, of the public revenue, and of the comparative wealth of a nation at different periods ; while, in a practical view, an acquaintance with this subject is of very serious interest, as connected with the future value of bequests, leases, and time-contracts generally. The discussion naturally divides itself into the following heads: — The tendency of prices to fluctuate. The impracticability of foreseeing or preventing such fluctuation. A plan for lessening its injurious operation. Publications on the Fluctuation of Prices. — The docu- ments for forming an estimate of these changes, have as yet been given to us scantily and imperfectly, the subject never having engaged the attention of go- vernment, and but lately that of any of our public bo- dies. In France, a country little remarked forstatis- Fluctuation in the Value of Money, 2 87 tical research, the attempts hitherto made to compare the rate of prices at different periods have been con- fined to a few literary men : in England, one of the earliest was that of Bishop Fleetwood, who collected prices of wheat during a number of years from the 13th to the 17th century, and reduced them to money of our present standard. His labours, published in 1707, formed the chief materials for the reasonings of Dr. Smith, whose life was not prolonged until the pub- lication (in 1797) of a very valuable addition to such collections by Sir Frederick Eden, in his work on the " State of the Poor," the copious materials of which have been termed afons perennis for succeeding inqui- rers. In 1798 there appeared in the Transactions of the Royal Society, a tabular statement by Sir George Shuckburgh, which, from the clearness of its form (See Appendix,) and the confidence of its deductions, obtained much more credit than it deserved, being- far from correct, even in the fundamental points. In 1811, the late Arthur Young, alarmed at the impres- sion made on the public by the Report of the Bullion Committee, and dreading a contraction of paper cur- rency attended by a fall in the price of agricultural produce, entered into researches of great extent, both as to the past and current prices of commodities, and published the whole in a pamphlet, entitled " An In- quiry into the Progressive Value of Money in Eng- land." This tract, however inaccurate in a theoreti- cal sense, has a claim to attention, as well for the va- lue of its materials, as for a correction of the mistakes of Sir George Shuckburgh. Since 1811, serious be- yond example as has been the fluctuation of our prices, there has appeared no treatise of consequence on the subject until Mr. Tooke's valuable publication on "High and Low Prices since 1792." Historical Sketch of the Fluctuation of Prices. — It is a prevalent notion that the money prices of commodi- ties have been progressively rising since the Norman conquest, or even since the earlier period, when the 288 Fluctuation in the Value of Money. luxury of Rome, and the revenue paid to it by tribu- tary provinces, disappeared before its rude invaders from the north and east. To this opinion, however, there are several strong objections. The supply of gold and silver from the mines, was, during the mid- dle ages, scanty and precarious ; while the numbers of society requiring the use of the precious me- tals, in other words, the population of the west and central part of Europe, were, in some degree, in a state of increase. Dr. Smith, reasoning on the price of commodities generally, from the price of corn, and founding his view of the latter on the collections of Bishop Fleetwood, assumes, that from the year 1200 to 1550, there was no considerable rise of prices ; and that such rise did not begin till the reign of Eli- zabeth, the time when the American mines became productive on a large scale. The import from that quarter, small as it would appear in the present age, was sensibly felt at a time when silver was very little used in manufacture, and not largely in plate : its amount was, under such circumstances, almost whol- ly added to the circulating medium of Europe. This addition was considered by Dr. Smith the main cause of the rise of prices which continued until towards the year 1 650, when, from circumstances on which we shall enlarge presently, prices ceased to rise, and became either stationary or declining. This state of things lasted until 1764, when, as is well known, a new era commenced and continued until 1814. Effect of a State of War. — Dr. Smith's view of the progressive value of money is admitted by Mr. Young, but neither of these writers has thought of tracing a correspondence between the fluctuations in the pre- cious metals in the 16th and 17th centuries, and the political transactions of Europe. A state of war tends, as we have shown in a preceding chapter, greatly to advance prices, and the rise in the reign of Elizabeth may, in no inconsiderable degree, be ascribed to the increase of military establishments in that age, to our defensive attitude against Philip II., to the obstinate Fluctuation in the Value of Money. 2&H contest carried on between him and his insurgent sub- jects in the Netherlands, to the civil wars of France, and to the troubled state of Germany. On the other hand, after the treaty of Westphalia, the chief part of Europe enjoyed tranquillity, and the effect on trade and agriculture, of reduced armies and diminished taxes, is described by Sir W. Temple, in a manner that strikingly resembles the state of this country and the Continent since the late peace. This political change accounts for the decline of prices that prevailed after 1 650, but the application of our theory is, it must be allowed, less clear after 1672, when war was renewed on a great scale, and continued, with comparatively little intermission, during forty years. Add to this, that there took place, during all that time, an import of specie from Ame- rica, to an extent somewhat increased ; viz. to the amount of three, four, or five millions, annually. In what manner, under the operation of this double cause of enhancement, are we to account for prices experiencing no great or permanent rise ? Perhaps by the following considerations : — 1. An increased use of the precious metals, in plate, manufactures, and ornaments, in consequence of the general increase of wealth. 2. An augmented export of them to the eastern world, chiefly through the means of the Dutch East India Company. 3. The fact, that previous to 1 672, the supply of agricultural produce in England, as in the northwest of Europe generally, had become somewhat more than equal to the consumption ; an excess of which the effects are generally felt for a long series of years. The peace of Utrecht was the commencement of a period of general tranquillity ; government expendi- ture was reduced, labourers were restored to agricul- ture, and the decline of prices became general and progressive. In vain did ou ^landholders look to the bounty on the export of corn, for a counteraction of the fall in the market: they exported largely, and re- 37 2&) Fluctuation in the Value of Money. ceived premiums on a liberal scale, but their abun- dant growth kept down the home market, and the excess of supply oyer consumption continued during half a century, terminating only in 1 764. Nor is it at all probable that it would have ceased at that time, peace having been but lately concluded, had we not had a succession of indifferent seasons : these raised priced, and the contest that ensued with our colonies, prevented their fall. After 1783, the restoration of peace tended, natu- rally, to reduce prices, but its effect was retarded by several causes, in particular, the demand of hands for our manfactures, and the occasional occurrence of indifferent seasons. After 1792, the progress of en- hancement was accelerated in an unexampled degree by the general state of war consequent on the French revolution. A rise of prices progressive during twenty years, and amounting at last to more than 60 per cent, above those of 1792, overturned time contracts throughout the kingdom, depressing annuitants while it raised tenants on lease, with various other classes, above their former station, — an elevation, unfortunate- ly, of short duration, since they have been made to descend from it with still more rapidity in the years that have followed the peace. Can such fluctuations be foreseen or prevented f — After this summary in regard to the past, the next and still more important point is to ascertain how far such fluctuations are likely to continue. But here the most indefatigable inquirer will find the result uncertain, and be obliged to admit, that in so complicated a question, all that we can do with confidence, is to state the arguments on either side. Those in favour of the rise of prices, are, The contingency of war. The probable increase of the produce of the mines, from the application of steam-engines and other im- proved machinery. The farther substitution of bank paper for metallic currency: a substitution, which, in its general (though Fluctuation m the Fake of Money. 291 not in its local) effect, operates like the increased productiveness of a mine.* On the other hand, the arguments for the fall of prices are equally substantial ; viz. The tendency of all improvements in productive industry, whether in agriculture, manufacture, me- chanics, or navigation, to produce cheapness. The increasing demand for the precious metals, from the increasing population of the civilized world. As to England in particular, the tendency of a country where prices are higher than in the neigh- bouring states, to approximate (see p. 294), by com- mercial intercourse, to the standard of other countries. Supply of Specie from the .Mines — The amount of specie extracted annually from American mines, was computed in 1760, at 6,000,000/. sterling: in the course of the succeeding twenty years, it had increa- sed to fully 7,000,000/., and some time after (Appen- dix to the Bullion Report of 1810) to 8,000,000/. In this, as in other respects, Mexico is by far the fore- most of the Spanish colonies, the yearly produce of her mines being nearly five millions sterling, while that of the rest of Spanish America may be estimated at three millions more. Adding to these, somewhat less than a million sterling for Portuguese America, and somewhat more than another million for, the mines of our own hemisphere, we make a total of nearly ten millions annually added to the stock of the precious metals throughout the world. From this, however, is to be made, both at present and for some time back, a deduction on account of the politi- cal troubles of Spanish America : still the importa- tion is on a large scale, and would speedily produce depreciation, were not the demands of the civilized world on the increase. Consumption of Specie. — The demands for the pro- duce of the mines arise from various causes, of which * Our mention of bank paper must always be understood as of bank notes payable in cash ; a resort to nonconvertible paper will, we take for grant- ed, be henceforth excluded from our financial creed. 292 Fluctuation m the Value of Money. the greatest, by far, is the aunual consumption of it for plate, watches, gilding, and ornamental manu- facture, generally. The amount of this admits of no satisfactory calculation, but is probably (Appendix, p. [89]) not far short of two-thirds of the total pro- duce of the mines. Next comes the demand for coin: the currency of almost all the Continent of Europe is metallic, and an annual supply is requisite, partly to make good accidental loss or the effect of wear, partly to meet the increase of population. This, though not large, may, when joined to the an- nual export of specie to India and China, (to say little of losses arising from shipwreck or hoarding,) account for the absorption of the remaining third of the produce of the mines. What then appears to be the general result ? That in ordinary times these va- rious sources of demand are equal, or nearly equal. to the amount supplied from the mines ; but that for some years back (since 1818,) they appear to have been more than equal, in consequence of the extra demand for gold on the part of the banks of this coun- try, Russia, and Austria, for the purpose of substitu- ting a metallic for a paper currency. Dr. Smith, in adverting to the future supply of spe- cie from the mines, considered it an equal chance that old mines may become exhausted, as that new mines may be discovered, or the produce of the old increased. Without contesting the accuracy of this opinion in his age, it will hardly be doubted, that since the discovery of the power of steam, the ap- plication of improved machinery to the existing mines, would be productive of a very considerable extension of produce ; but whether, or in what time, it will be carried so far as to lower materially the value of specie, it appears in vain to conjecture. Circulation of Bank Paper. — Our countrymen, accus- tomed during more than half a century to the use of bank notes, have observed, with some surprise, that a currency so cheap, and apparently so easy of intro- duction, should, as yeU be hardly known on the* Con- f Fluctuation in the Value of Money. 293 tinent. The bank of France, though of undoubted stability, has found it practicable to establish branches in very few of the provincial towns : several, con- taining a population of 40,000 and upwards, are still without such branches : and there is not a private bank of circulation in the whole country. The causes are, the distrust excited by the recollection of the assignats, the want of confidence in govern- ment, the absence of commercial enterprise, as well as of the habits of care and arrangement, which are indispensable to success in a line of itself less profi- table than is commonly imagined. Holland, with all her commercial improvements, has never adopted the bank-note system, while in Austria, Russia, and Sweden, the paper circulated is a forced government currency, not convertible into cash. The obstacles to the circulation of bank paper on the Continent, might perhaps have yielded to the ef- fects of peace and augmented trade, but they have been strengthened of late years, by the increased fa- cility of forgery. It would thus be vain to calculate on the extended use of bank paper, or on any effect likely to arise from it in regard to the value of the precious metals. Supply of Agricultural Produce. — Though corn is so liable to fluctuation, as well from difference of sea- sons, as from the occurrence of peace or war, it is re- markable that a character of rise or fall when once stamped on a period, is found to prevail during a con- siderable time. Thus, the rise of price begun in the early part of the reign of Elizabeth, continued, with only occasional intermissions, to 1650, not far short of a hundred years. At that time began an era of stationary, and, in some degree, of decreasing prices, which, with temporary suspensions during the indif- ferent seasons and expensive wars of the reigns of William and Anne, continued until 1764. From that year until 1814, we had no less than fifty years of Ijrisk demand and high prices ; while at present, as far as can be judged from appearances, either in 294 fluctuation in the Value of Money, England or on the Continent, we are entering on a period similar to that which followed 1650 or 1713, — a period when our growth being somewhat more than adequate to the demand, the market long continued heavy, and prices, in a great measure, stationary. In what circumstances are we to look for the cause of a stagnation continuing during so long a period as half a century ? In the investment of capital and la- bour in agriculture, to an extent productive of a sur- plus growth ; and in the fact, that, as in the natural course of things, the producers increase in the same proportion as the consumers, the disproportion con- tinues, year after year, until the occurrence of some great national change, such as a war, or the direction of an extra portion of labour to manufactures. To return to the more immediate object of our in- quiry — the effect of the cost of corn on prices gene- rally. This effect is of the greatest importance, both as corn is the chief object of family consumption, and as it regulates, in a great measure, that other main constituent of prices, the rate of labour. Since 1814, and more particularly since 1819, the operation of the corn market has tended to reduce prices, by gradually extending to other articles the reduction that has taken place in agricultural produce. Nor does this tendency seem likely to alter : part of our taxes on agriculture are reduced ; the effect of the remainder is, as we have shewn in a preceding chap- ter, considerably over-rated ; and the charges of til- lage bid fair to return to a standard little higher than that of 1792. Such is also the prospect in France and the Continent at large ; a state of peace reducing the cost of labour, and preventing, in consequence, any permanent rise of prices in the corn market. Effect of Continental Prices on those of England. — In the case of two countries enjoying peace and the benefit of commercial intercourse, there is a per- petual tendency to equality of price. The reasons are obvious ; there exists a direct motive for emigrat- ing from the dearer country, and for making in the Fluctuation in the Value of Money. 295 cheaper, articles for importation, whether open or clandestine, into the dearer. In the latter, the rate of interest is generally lower, and affords a tempta- tion to send out of it funded and other monied pro- perty. The operation of these causes, steady, though almost unseen, has been a main reason of the fail in our prices since 1814. War ; Mode of its Operation. — Of the effect of war there can be no doubt ; it enhances commodities in various ways : — First, by the addition of a tax to the price of an article; next by a general rise in labour from the demand for men for government service, whether in the field or in the preparation of clothing, arms, and other warlike stores ; and, lastly, by the in- terruption of international intercourse, and the in- creased charge of transport. If in the 16th and 17th centuries these causes had a serious operation on prices, their effect was greatly increased by the adoption of the funding system, since which, the scale of military expenditure has been enlarged in every country of Europe. What, in this respect, was the situation of France during the reign of Bonaparte ? His unsettled go- vernment and personal want of credit, discouraged loans, and diminished one great source of expendi- ture ; nor was his power displayed with much effect in the imposition of additional taxes. But the de- mand of men for his service, was on a large scale, and, without the operation of either paper-currency or war taxes, prices in France rose between 1792 and 1814, about 30 per cent. From this important fact we may form some idea of the effect of a new war on the price of commodities in England, without supposing a repetition of extreme measures, such as an ex- emption from cash payments, or the stoppage of neutral navigation. Even in a mitigated form, the effect of war on prices would be so decisive as to counteract, in the course of a few years, the opera- tion of almost all the causes of reduction. On this, however, we forbear to dwell, because the advan- ;29b Fluctuation in the Value of Money. tages of peace are now better understood, and a re- currence to a state of hostility, to that state which subverts the calculations of the governor, as it de- stroys the happiness of the governed, will be less and less frequent, as sovereigns become aware that the lield of combat presents only barren glories. The arguments for the rise, as for the fall of prices, are thus of great weight, and no question, it is evident, can be more complicated, or present a longer cata- logue of opposing causes. On the one hand, what a prospect of fall is held out by the application of im- proved machinery to the American mines, and the introduction of bank paper on the Continent of Europe ! On the other, what a counterpoise from the prospect of increased population or the recur- rence of a state of war ! To attempt to strike a balance between these contending causes, to advance an opinion in regard to future probability, would be vain : all we can pronounce, is, that fluctuation in the value of money cannot be prevented; that it can hardly fail to recur on any great political transition; and that a measure which should put an end to uncertain- ty in time contracts, would relieve us from a great national evil. Injurious Effect of Fluctuation in the Value of Money. — Money, as Dr. Smith remarks, (Book I. Chap. V.) is, in buying and selling, an unexceptionable measure of value ; and in a contract from year to year, it is, in general, a safe measure ; but in a contract of long duration it is far otherwise. How great was the de- preciation of money during the late wars ; and not- withstanding the various disadvantages attendant on landed property, how general was the preference given to it in the case of a provision for a young family, for grand-children, or for any remote object. Is it not in the unfortunate tendency of money pro- perty to fluctuate, rather than in any distrust of the stability of the public funds, that we are to look for the c anso of stock selling for 6, 7. or H years' p' Fluctuation in the Value of Money. 297 chase less than land ? Then, as to land itself, and the mode of letting it, can we trace among the various objections to long leases any so powerful as the un- certainty of the value of money? Lastly, amidst all the difficulties in the question of a commutation for tithe, what operates so greatly as this uncertainty to prevent the church from acceding to a fixed income, from reducing to a determinate form those collections which, in their present unsettled state, leave open so wide a field for contention ? Situation of Annuitants. — We have already explained in our second chapter, that as to land and houses the fluctuations in price during the war. were, in a great measure, nominal ; that it was. in general, money that changed, and commodities that maintained their value. This maintenance of value was exemplified in many other respects : in income derived from per- sonal exertion, whether in the shape of wages, salaries, or professional fees : in each, the money received was increased in proportion, or nearly in proportion, to the decrease of its value, the whole exhibiting a ten- dency in the transactions of life, to find their level, and to counterbalance all artificial changes, whether arising from additional taxes, the non-convertihility of paper-currency, or the restriction of national inter- course. But "from the benefit of this tendency to equality, of this antidote to enhancement, the fixed annuitants are excluded ;" thev are unable to guard against a progressive decline of income during a war ; and the recovery of income which may indirectly take place at a peace, will hardly prove an indemnity to them if it arise, as at present, from circumstances which bear hard on the solvency of other classes. Are we not, therefore, justified in inferring, that the case of the annuitant, as it stands at present, is un- natural, and at variance with the rules of equity ; and may we not conclude that, by conferring on money income the stability attendant on income derived from labourer real property, we shall correct an es- sential defect in our institutions ? 38 298 Fluctuation in the Value of Money. Money-property in the Kingdom — Magnitude of its Amount. — We proceed to calculate the amount of mo- ney-property in the kingdom, — the property that would be beneficially affected, or relieved from uncer- tainty of value, by the adoption of such a measure. In former ages, when the funding system was unknown, and loans of money from one individual to another were of very limited extent, land, houses, furniture, implements, and clothing, comprised almost every de- scription of property : they constituted " the move- ables and immoveables" of our ancient statutes. But within the last century, there has arisen in the public funds, in canals, vdocks, and other undertakings, held in shares, as well as in private loans, (on mortgages and otherwise,) a property represented solely in money, of which the aggregate approaches to two-fifths of the total wealth of the kingdom. Thus, were we to compute the land, the houses, the farming, the manufacturing, the mercantile stock of Great Britain and Ireland at 2,000,000,000/. (see Ap- pendix, p. [82], we should not be disposed to rate our public funds, the amount of loans existing between in- dividuals, the value of shares in public works, in short, all property of which the value is directly affected by the rise or fall of money, at less than 1,200,000,000/. Though of this sum the greater part can hardly be called an addition to the national property, the whole is evidently individual property; and its amount is demonstrative of the magnitude of that income, which is most exposed to suffer by fluctuation of prices. SECTION II. Plan for lessening the Injury arising from the Fluctuation of Prices. If we proceed to analyze the use of money, whe- ther for national or individual purposes, we shall find it resolve itself into " the power of purchase," or, in other words, into the power of procuring articles for consumption. It is consequently of much more im- Money Contracts. 299 portance in all contracts of duration to look to the value than to the numerical amount of a given sum. The expediency of this has long been felt, and the price of corn has been recommended as a standard of regulation in regard to leases and other time con- tracts. Such it, in some measure, may be in a coun- try like France, where the majority of the lower or- ders are strangers to the use of foreign articles, such as groceries, and expend literally three-fourths of their wages on bread. The price of corn is farther of importance in that country in an indirect sense, from its influence on the price of labour, as manual labour is there made to perform much more in agri- culture, and even in manufactures, than with us : the whole exemplifying the doctrine of Dr. Smith, who as- sumed labour as the measure of value, and corn as the measure of labour. The case of France is that of the Continent at large, and was that of our ancestors a century ago; our situation, however, is now materially altered, our consumption of corn having undergone a comparative reduction, while manual labour enters in a propor- tion far smaller than formerly into the cost of our ma- nufactures. That corn occupies a very different proportion in the expenditure of different classes, will be apparent from a short comparative table. Heads of Expenditure. (See Appendix, p. [11]. Family of a Cotta- ger ; Expense about 37/. a Year. Propor- tions in 100. Family of the mid- dle class, residing in a provincial town, Expense 370/. a year. Proportions in 100. Provisions - Clothing and Washing - [louse-rent - Fuel and Light - Other charges, namely, Wa- ges, Assessed Taxes, Edu- cation, Medical Atten- dance, &c. - 1 60 20 10 Sh 100 33 18 10 6 33 100 300 Plan for giving a permanent Value to This sketch, brief as it is, puts in a very clear light the difference between the wants of the lower and those of the middle and upper classes. To the lat- ter, corn is evidently ineligible as a standard of value. In a direct sense, it forms hardly a third of their ex- penditure, and though, on making allowance for its indirect operation, in particular for its effect on wa- ges, we become more aware of its importance, it will hardly he denied, that in an age of such varied and refined expenditure, a standard of a more comprehen- sive character, ought if possible to be adopted. Now, the progress of statistics, and the multiplication of of- ficial returns within the last half-century, have sup- plied data which, in the time of Dr. Smith, were not accounted reducible to a definite form. Of this, some idea may be formed from a table in the Appendix (p. [95]) comprising a list of articles of general con- sumption, corn, butcher-meat, manufactures, tropical products, &c. and containing the probable amount of money expended on each by the public. This table is followed by explanatory remarks, of which the ob- ject is to show that contracts for a series of years ought to be made with a reference to the power of money in purchasing the necessaries and comforts of life: that after fixing a given sum, say 100/. as the amount of an annual salary, the payment in subse- quent years should not necessarily be 100/., but either 95/., 100/., or 105/., according to the varied power of money in making purchases. Being aware of the uncertainty of calculations, when unsupported by official returns ; as well as that to give to a table the authority requisite to constitute it a regulator of the value of money, must be a work of much time and labour, we decline inserting our list in the text, and confine ourselves to an inquiry in re- gard to the means of obtaining the Documents for the Formation of a Table of Reference. — As yet our official returns are scanty, or rather the use made of them has been on a confined scale : enough, however, has been done to show the practi- cability of obtaining the information we desire. Thus, Money Contrasts, 301 in regard to corn, the registers, both as to price and quantity, are now on a more satisfactory footing than in former years : of sugar, a similar record has long been kept, and there are also registers, which might easily be rendered more complete, of our woollen and linen manufactures. Of the consumption of all ex- cised articles, estimates approaching to correctness may be formed from documents in possession of that Board ; while in regard to foreign commodities, the custom-house would supply similar results. Then, as to average prices, there are the Books of the Vic- tualling Office, of the Commissariat department, and of public hospitals, such as Greenwich. The Board of Agriculture has at various times obtained informa- tion, not strictly official, but substantially correct, by sending circular letters to their correspondents throughout the kingdom ; a plan acted on to a great extent by the late Arthur Young, in 1811. Returns of this nature, when obtained, might easily be reduced into the tabular form on the plan of the late Mr. Colquhoun, but with more selection and discrimination. Since the date of his calculations (1812,) great changes have occurred in respect both to price and quantity, and to complete the collections with the accuracy requisite to form a document of authority would require an extent of labour beyond the means of an individual. A task of such length, and of such general utility, should be defrayed from a common fund, and government, if unwilling to give so direct a sanction to a new project, as would be im- plied by the appointment of persons for collecting and comparing materials, would, doubtless, on the demand of any respectable association, communicate from the public offices, all returns applicable to the subject. For the details of the table, and the calculations connected with it, we refer to the Appendix : at pre- sent, we shall, for the sake of illustration, suppose it in operation, and bestow a few paragraphs on the ef- fects that the adoption of such a measure would have on the great interests of the country. 302 Plan for giving a permanent Value to In what it may be asked, would the benefits of it consist? In ascertaining on grounds that would ad- mit of no doubt or dispute, the power in purchase of any given sum in one year, compared to its power of purchase in another. And what would be the prac- tical application of this knowledge ? The correction of a long list of anomalies in regard to rents, salaries, wages, &c. arising out of unforeseen fluctuations in our currency. In the present undefined form of leases, annuities, and other time contracts, the 100/. of this year may, three years hence, be equivalent in power of purchase, either to 110/. or to 90/. the for- mer being probable, if peace continue, while the latter is a moderate estimate of the change that would follow the first year of a war. So much are the chances on the side of fluctuation, in the value of money, that it may almost be said, that, "in aeon- tract of duration, an adherence to a fixed sum of money implies an acquiescence under a change of value." But a' table exhibiting from year to year the power of money in purchase, would give to annuitants and other contracting parties, the means of maintaining an agreement, not in its letter only, but in its spirit ; of conferring on a specified sum a uniformity and permanency of value, by changing the numerical amount in proportion to the change in its power of purchase. It does not follow from this, that a change of nu- merical amount ought to be annual : it would, in ge- neral, be sufficient that it took place at periods of three, four, or five years, taking ae the criterion the average value of money in purchases throughout the whole period. Effect on the labouring Classes of the adoption of such a Standard. — The use of money to the country labourer is very simple, extending to little beyond the pur- chase of the articles mentioned in the preceding sketch of his annual expenditure. In the case of the inhabitants of towns, the proportion required for house-rent, fuel, and clothing is somewhat larger, while that for provisions is somewhat smaller than in the family of the cottager. To both, the chief object Money Contracts. 303 of expense is corn, the average price of which is al- ready ascertained periodically; but to render the table complete, our wish would be that the average of the other articles consumed by the labouring classes, such as beer, coarse clothing, fuel, were in like manner put on record. If to such returns were added a few plain tables of the average consumption of the lower class in various situations, one for an un- married labourer, others for a labourer married, and having two, three, or four children, it would be an easy process to calculate how far a given sum of wages (for example 45/. annually) was more or less adequate than in former years to the supply of such wants. We should then possess completely the means of judging of the comparative comfort of the working classes ; of making, in a manner satisfactory and conclusive, the calculations hitherto prepared with much labour, and an unavoidable share of error, by Sir F. Eden, Mr. Barton, and others. How important would such a standard of reference have been throughout the last thirty years, a period of such frequent contention between the employer and the employed ! During the war, workmen in towns were repeatedly obliged to combine for the purpose of raising their wages to the level of provisions, and in rural districts, where combination was impracti- cable, the poor-rate was called in to supply the defi- ciency. At present the case is reversed ; the employ- er, particularly when resident in a town, has found, and will long find it a matter of great difficulty to re- duce wages to the standard justified by the fall of provisions. What a scene of inequality is exhibited at present by the current payments of the metropolis ! Wages, salaries, professional fees, are almost all on as high a scale as during the war, notwithstanding the diminu- tion of the two great causes of rise, — the expense of living and the extra demand for labour. The per- sons, whether of high or low station, who are in re- ceipt of the established allowances, if called on for an abatement, would naturally plead the uncertainty 304 Plan for giving a permanent Value to of provisions continuing at a reduced rate i and nothing, it is evident, will induce them willingly to assent to a reduction, except a guarantee against a recurrence of the grand evil — a rise of prices with- out a correspondent rise in wages. Such a guarantee we should hope to afford, not by an interference be- tween the payer and receiver, but by an alternative offered to their voluntary adoption ; by putting it in their power, when making a time contract, to affix a permanent value to a money stipulation ; or to have access, when no such precaution was taken, to an equitable standard of reference. What would be the probable effect of having this authenticated record of the price of commodities, this monitor to declare the rise or fall in the value of money ? It could hardly fail to operate greatly in abridging altercations. At a time when a reduction of wages became expedient, it would relieve the in- ferior from the humiliation attendant on such a step ; and, in the case of a rise of prices, it would guide the employer to a fair advance of wages, the distributor of charitable aid to a fair apportionment of relief. Effect of such a Measure on Agriculture. — In no de- partment of our productive industry has our progress as a nation been less conspicuous than in tillage ; our superiority over our continental neighbours being in a great degree limited to our live stock and our ma- chinery. On computing the annual amount of pro- perty created in the kingdom, we find, after making a great deduction from the prices (moderate as they were, considering the state of markets at the time) assumed by Mr. Colquhoun, that the annual pro- duce of the agriculture of Great Britain and Ireland still amounts to 120,000,000/. What a field is there here for the application of skill and judgment, and how great the call for both in the present situation of our agriculturists ! Leases. — It is not little remarkable, that several of the counties, such as Norfolk and Northumberland, in which our husbandry is most improved, are by no Money Contracts. 305 means our most fertile districts naturally. To what, then, are they indebted for their superiority ? To a cause which Mr. Coke has repeatedly pressed on his brother land-holders, both in and out of parliament. — that there is no good agriculture without leases* In what other way can we explain the high rents paid in a country in general so little favoured in soil and cli- mate as Scotland ? The objections of our landlords to long leases, are various, arising partly from the habits of their predecessors; partly from a reluc- tance to part with the command of their property for a number of years ; but, more than all, from the un- certainty of the value of money. During the war this uncertainty was of very serious import : at pre- sent it is removed, as far as regards landlords, by the return to cash payments, and the difficulty now is to induce a solvent tenant to take a lease. To both parties, therefore, the fluctuation of our currency, even when metallic, is replete with anxiety. Corn-rents. -^-Of late, the great fall of price has in- duced several of our principal land-holders to regu- late their rents by the price of corn ; a plan open to many objections, when varied from year to year, be- cause, a season of high price may be, and generally is, a season of deficient produce. When calculated on the price of a series of years, this course is less exceptionable : in any form, however, it seems less eligible than the plan which (Appendix, p. [98]) we are desirous to propose, of combining the price of corn with that of other articles of consumption. Tithe. — Referring to the remarks under this head in the Appendix, we shall at present merely observe, how great would be the benefit accruing from a re- gulating standard, applied to clerical income, and calculated, as far as regards permanency of value, to justify the church in commuting tithe for a money stipend. A change of that nature would, on the one hand, put an end to altercations unfortunately too frequent ; while, on the other, it would prevent tithe from operating as an impediment to agricultural im- provement. The great, and, at present, well-fou,nded 39 306 Plan for giving a permanent Value to objection of the clergy to a permanent commutation of tithe, is a dread, not of the faith of parliament, but of the uncertain value of money : remove that appre- hension, and you give them substantial motives to prefer a fixed sum, whether they look to the interest of themselves or their successors. In the Protestant church of Holland, they have an example of stipends paid during more than two centuries, by local magis- trates or by government, without any derogation from the respectability of those who received them : and if in France the amount of clerical income be too small to be dwelt on when we are treating of a Pro- testant establishment, the regularity of its payment during twenty years, under circumstances of great financial embarrassment, is calculated to lessen one material ground of apprehension. The commutation to which we allude does not, of course, imply any reduction of the existing income of the clerical body, nor a relinquishment of any secu- rity arising from the tenure by which they are at present invested with tithe. A change from an un- fixed to a fixed money income, may evidently take place without interfering either with such security, or with the patronage of the church as at present established. It might be proposed as a temporary arrangement, to last only during the interval required to carry into effect a plan that has been more than once proposed, and which has lately received a kind of legislative recommendation — the purchase of land for the purpose of affording the church a revenue from rent instead of tithe. But on this we will not enlarge, our subject naturally confining us to the operation of the measure with a view to the relief of the agriculturists ; a view in which it would soon dis- close satisfactory results. Under our present system, the church is entitled to an increase of revenue in proportion to the increase of produce ; such, we may sately take for granted, would form no part of its demand Under a different arrange- ment. All that its representatives would be likely to desire, would be an assurance that the contract Money Contracts. 307 should be maintained bona fide, that the sum once fixed should be made good, whatever be the fluctua- tions of our currency. And what would be the result to the agriculturists of tithe being thus limited ? That all, whether landlords or farmers, might extend their tillage as they chose, without being annually taxed in a portion of the produce. Our numbers are on the increase; our production increases with them, and it is, above all, in a case of such increase, that the pressure of tithe is felt. An exemption from such pressure is most strongly called for by our situation, present and prospective; and may we not add, that when viewed in connexion with the various circum- stances stated in our chapter on Agriculture, it would render probable a result, on which, at present, it seems somewhat bold to speculate? we mean Mr. Tooke's idea of the practicability of our competing with foreigners in the export of corn, as was done by our countrymen previous to 1764. Application of the proposed Plan to the Public Funds. — To offer any suggestion connected with the public funds is, we are aware, to tread on delicate ground, men in office being very properly backward to inter- fere, in even a slight degree, # with*the existing con- tract with the fund-holder. We shall, however, sa- tisfy the most cautious, by premising that the accept- ance of the plan should be optional on the part of each stock-holder, although we can have little doubt of the beneficial tendency of a measure, the effect of which would be to ensure to the stock-holder and his pos- terity, the same income, whether the country was at peace or war; whether its currency were sound or depreciated; whether the mines of gold and silver throughout the world, became more or less produc- tive. The 100/. of 1792, which in 1&06 was equiva- lent to 80/., and seven years 'after, to less than 70/., would thus remain 100/. throughout. The apprehen- sions which at present not unfrequently lead to sales of stock against the wish of the holders, would cease or be materially diminished, and funded, like landed 308 Plan for giving a permanent Value to property, would be seldom disposed of except on particular occasions, such as when a division of pro- perty became expedient on the demise of a testator, on legatees attaining majority, or on their entering on mercantile business. In fact, after the adoption of such a measure, the chief features of distinction be- tween land and stock, would be, that while the one possessed the attraction of local influence, the other would have the more direct advantage of dispatch and certainty in regard to receipt of income. The present is, we believe, the first proposition of a measure for giving a permanent value to our funded property. Our public men, or rather the few among them who are accustomed to take comprehensive views of finance, have hitherto contemplated a very different course. Money, they saw, was declining in value during half a century, and funded property de- clined with it ; a fall carefully kept by them in the back ground, and consequently in a great measure unknown to the public. Our successive chancellors of the exchequer anticipated (see p. 273.) a continu- ance of this decline, and silently calculated on its producing a diminution in the pressure of the debt. But the reaction of the last eight years has greatly shaken this calculation : money has recovered, and along with that recovery, the pressure of our debt has greatly increased. It is time, therefore, to seek re- lief in a measure of a different character. Its Effect on the Price of Stocks. — Nothing can be more different than a rise of stock caused by the adoption of a plan such as we propose, and a rise that might be consequent on the operation of a large sinking fund. The latter would be liable, as we shall show in our chapter on Finance, (p. 323.) to various objections : in particular, it would afford a strong in- ducement to sell out and to vest capital in other se- curities, probably in foreign stock. But a rise pro- ceeding from a course such as we are anxious to re- commend, would prove an inducement to keep ca- Money Contracts. 309 pital in our funds, the value conferred by the measure being, in its nature, permanent and likely to increase. Consequent Advantage to the Public. — This brings us to a question, which, under present circumstances, may very naturally be asked by our readers, — why confer additional value on the funds, at a time when they have risen so considerably in the scale of com- parison with land, houses, and merchandise ? Our answer is, that we contemplate no undue favour to the stock-holder ; we merely point out a measure, which, by benefiting him in the first instance, may give govern- ment a fair plea to demand from him a return calcu- lated to afford relief to other classes of the commu- nity. To require such from the fund-holder without a consideration, would, of course, imply a sacrifice on his part, but the results which we anticipate from the proposed measure, will, if they be well founded, confer on him in one way as much as he may be called on to relinquish in the other. Thus, if it con- tinue a favourite object with ministers to reduce the interest on the old four per cents., nothing is so likely to promote that measure, as conferring an ad- ditional value on funded property. And if it be said that such would be a return partial and inadequate to the advantage conferred, the discussion may be cut short by the general argument, that if the legisla- ture improve materially the circumstances of the fund-holder, or of any great class in the community, there can be no great difficulty in rendering that prosperity conducive to the relief of the public at large. All this may be admitted, but the plan, it will be said, can be adopted by the governments of other countries, and our stocks soon deprived of any rela- tive superiority which it might confer. Our answer is, that the success of such a plan, and the extent of rise attendant on its adoption, will depend chiefly on the degree of confidence that each nation has in its government : a point in which we possess a great and undoubted superiority over the rest of Europe. 310 Plan for giving a permanent Value to General Remarks. — We conclude this chapter by a lew remarks on the general characteristics of the proposed plan. Does it, it may be asked, contain any thing compulsory or unfair, and in particular, does it imply the imposition of any burden on pos- terity ? Our posterity will, in all probability, be in a far easier condition than ourselves, and would in- cur no loss from our conferring the character of per- manent value on our dividends : on the contrary, they will be benefited by whatever shall be found conducive to the relief of the present generation. Our proposition may be considered an attempt to fill up a blank in the mode of regulating our pro- ductive industry, and to do it in a way not fanciful or artificial, but on the principles of unreserved freedom so strongly recommended by Dr. Smith and other eminent authorities. But the use to be made of it would be perfectly optional. It would be in itself merely a table of reference, and all con- tracts, whether relative to loans, leases, or bequests, might, at the will of the parties, be made payable, either according to the proposed standard, or, as at present, in money of undefined value. Our preceding pages explain the operation of the proposed plan in respect to individuals. In regard to its result in a national sense, we may be allowed to anticipate that the removal of uncertainty from time-contracts would contribute very effectually to the extension of our national industry. That industry and its results have been carried farther by us than by almost any of our neighbours, but they are still far from having reached a limit. Circumstances have of late become more favourable and the pressure of taxation less heavy ; but great exertions will still be requisite to carry our national income to an amount corresponding with our burdens ; that is, to increase it so that the proportion of our taxation to our re- sources shall not be greater than in other countries. How far, it may be asked, has the proposition brought forward in this chapter the sanction of pre- cedent ? That sanction, though it cannot be cited Money Contracts. 311 as of frequent occurrence, is not altogether wanting. The course now suggested, is analogous to the plan of corn rents lately adopted by several of our great proprietors, and which, for many years has been ex- emplified in the proceedings of the Court of Teinds, or tithe, in Scotland. The decisions of that court purport that clerical income shall be regulated by the price of corn in the public markets during a series of years. But were precedent wholly wanting, the rule, "that prospective engagements should be framed so as to maintain their bona fide value, whatever be the value of money," is so equitable, and apparently so easy of execution, that there seems no little diffi- culty in accounting for its not yet having found its way into practice. This has, we believe, been owing to two causes ; the unfortunate neglect of political economy in the education of our public men ; and the interest of government, the greatest of all debtors, to prevent the public from fixing its attention on the gradual depreciation of money that went on during the half century previous to the late peace. 312 CHAP. XI. Our Finances* We now approach the end of our volume, and havfc arrived at the department which forms at present the chief object of public attention. In this, as in the former chapters, we shall begin by a statement of facts, a retrospect to past events, and after removing, or endeavouring to remove, several popular errors, we shall proceed to develope the measures apparent- ly best adapted to our present situation, greatly altered, as it has been, by the events consequent on peace. We propose dividing our discussion into the fol- lowing heads : — A historical sketch of finance operations ; Our prospects in regard to trade and national in- come ; The views of finance suggested by such prospects. SECTION I. Our National Debt. A public debt in one form or other, has been, in almost every country, an appendage of established government. Its amount, however, seldom exceeded an anticipation of one or two years' revenue, until the adoption of the funding system, or plan of render- ing public obligations transferable from hand to hand, gave governments a surprising facility in borrowing. This, like many other ingenious schemes, both in civil and military affairs, originated with the Italians, and was adopted early in Venice, Genoa, and Hol- land. In England, it was not introduced until our participation in the great struggle made by King William against the aggrandizement of Louis XIV. ; Fluctuations of Stock. 31$ bat if we were somewhat late in following the ex- ample, in our ultimate progress we have far surpassed our neighbours. Our debt amounted, At the peace of Ryswick - in 1697 to £21,500,000 of Utrecht - - - 1713 - - 54,000,000 ofAixlaChapelle - - 1748 - - 78,000,000 of Paris - - - - 1763 - - 134,000,000 of Versailles - - - 1783 238,000,000 of Amiens - - 1802 452,000,000 of Paris - - - 1815 nearly - 700,000,000 To which, adding the debt of Ireland, somewhat more than - 100,000,000 Total present debt about 800,000,000 These sums represent the total of our debt at each period, without the perplexing distinctions of funded and unfunded, redeemed and unredeemed. Though the figures express an amount, not of money but of stock, the difference at peace prices is not much more than nominal : thus, our present debt, were it practi- cable to pay it off at the market price, would re- quire an amount in money, not greatly below the 800,000,000/. of stock. But as there is no reason to anticipate the liquidation of the debt of this than of other countries, the more correct course, and that which conveys the more distinct idea of the extent of the burden, is to follow the French method of computing, not by the principal, but by the sum re- quired to pay the interest ; a sum which, since the reduction of the five per cents., may he called, in round numbers, 30,000,000/. Fluctuation in the Price of Stock. — By fluctuations in stock, we must be understood to mean changes pro- ceeding, not from the rumours perpetually in circula- tion on the Stock Exchange, which are too absurd for notice, and operate only for a few days, but from causes of a more comprehensive and permanent cha- racter ; the credit or discredit of government ; scarci- ty or abundance of capital ; the adequacy or inade- quacv of our resources to our burdens. The extent 40 3 1 4 Our Finances ; of fluctuation, has, of course, been very great at dif- ferent periods of our history. During the long peace that followed the treaty of Utrecht, and under the prudent administration of Walpole, stocks rose great- ly, the three per cents, having attained par in 1732, and being, in 1739, the time when that minister w r as forced by popular clamour to declare war against Spain, at the very high rate of 107/. in cash for 100/. in stock. They continued high during several years of the war ; and it was not until the range of hostili- ties widened, and assumed a serious aspect, that their fall became great. The same may be said to have applied to the more successful contest begun in 1756, the three per cents, continuing between 70/. and 80/., until 1760, when our loans, in consequence of the na- tional ardour and the confident character of Lord Chatham, were carried to an amount at that time un- precedented. In the American war the fall was more serious : it was great from the time that France took part against us, and the public became aware of the inability of our ministers to conduct the contest with success. Mr. Pitfs Administration. — It was in 1784 that Mr. Pitt succeeded to his financial charge, and found it during several years productive of great contention and embarrassment. Our prospects, however, gra- dually brightened, and ere the expiration of the ten years of peace that preceded the war of 1793, the na- tion had risen superior to its difficulties. This was the era of the so much applauded revival of the sink- ing fund. Partly by the effect of that measure, more by the general prosperity of the country, our 3 per cents, were carried in 1792 to the high price of 97 ; a price from which they fell as soon as the public be- came aware that our government had determined to take part in the coalition against France. But as during the first two years of the war our expenses were comparatively limited, the great decline did not take place until 1796, or rather 1797, when the 3 per cents, sunk to the unexampled low rate of 47. It was then that our minister felt the necessity of altering Measures since 181 a. 31 5 his financial plan, of lessening loans and augmenting taxes : he came forward accordingly with the bold proposition of raising a large proportion of the sup- plies within the year ; a course which, alarmed as the nation was at the aggrandizement of France, obtained general concurrence, and soon received a consoli- dated form by the imposition of the income or pro- perty-tax. In consequence of this decided measure, and of the splendid success of our continental allies in 1799, our stocks revived, but they fell towards the close of the year, when the fickle Paul forsook the coalition, and Bonaparte, arriving from Egypt, gave new vi- gour to the resources of France. Large loans be- came again indispensable, and our funds continued comparatively low, until the signature of the prelimi- naries in October 1801. That event had a tendency to reinstate them, but the peace was too short and too doubtful to admit of any great rise. War of 1803.— On the renewal of war in 1803, the 3 per cents, fell from 70 to 57, and during some time, the general dread of invasion kept them at a very low rate. War taxes, however, were cheerfully sub- mitted to, and in the succeeding years ( 1 805, 6, 7.), these potent auxiliaries enabled government to lessen the loans, and to raise the three per cents, to 60 and upwards. The same cause explains their continued high price in 1808, a year of commercial distress, and in 1 809, a season of general over-trading. Nor was it till the multiplied bankruptcies of 1810, and the heavy drain of money for the peninsular war, that the fall became considerable. Large loans were now unavoidable, and stocks were lowered not only in 1812, a year of chequered fortune to our arms, but during part of 1813, when our prospects were equally cheering in Spain and Germany. At last the balance inclined to the favourable side : the vic- tory of Leipsic, and the evident superiority of the al- lies, outweighed the demands of our Treasury, enor- mous as they had become. From 1815 to 1822.— In the early part of 1815 the 316 Our Finances ; 3 per cents, were fluctuating from 62 to 65, when the return of Bonaparte from Elba, produced a very sud^ den reduction. In the contest that ensued, govern- ment were unluckily obliged to contract for a loan early in June, and were thus deprived of the benefit of the rise which immediately followed the success of our arms. In 1816, peace was consolidated, but the price of commodities experienced a great fall, and much distress prevailing in both trade and agri- culture, the funds recovered very slowly. In 1817, appearances improved, and in the early part of 1818 the 3 per cents, having risen above 80, our prospect became very encouraging. Unfortunately the rise was not of long duration : the mismanagement of the French loan, the over-trading in this country, the dis- tress of the United States of America, all concurred to depress the funds. They continued low during the two years from the summer of 1819 to that of 1821, after which, they gradually improved, so as to enable ministers to carry into effect an important and long contemplated operation.* Reduction of the Five per Cents, — The five per cents, comprised a sum, which in round numbers we shall call 140,000,000/., and which government were at any time at liberty to pay off, by giving 100/. in cash for 100/. in stock. How then, it may be asked, did it happen that the discharge was delayed so long after the peace ? Because the discharge of so large a sum could take place only by the substitution of one security for another; and as the new fund to be created, would, in most of the years that have elapsed Average prices of the 3 per cent, consols during the following years 1803 70, 57, 53. 1813 58, 57, 60, 61. 1804 55, 56, 58. 1814 64, 66, 64. 1805 56, 58, 60. 1815 65, after Mar. 58, 60 1806 60, 62, 64. 1816 60, 62, 63. 1807 61, 62, 64. 1817 63, 70, 75, 83. 1808 62, 64, 66, 68. 1818 80, 82, 79. 1809 67, 68, 70. 1819 77, 74, 65, 70, 68. 1810 70, 71, 69. 66. 1820 68, 69, 70. 1811 65, 64, 63. 1821 69, 72, 75, 77. 1812 62. 61, 59, 58. 1822(toAug. )76. 77, 78, 80. Measures since 1315. All cilice the peace, have fetched an indifferent price, ministers were from time to time obliged to postpone the measure. In the early part of 1818, circum- stances becoming favourable, a new stock bearing 3£ per cent, interest, and not reducible below that rate during ten years, was created evidently for the purpose of supplying the desired substitute. The project, however, failed, in consequence of the gene- ral fall of funded property, and there afterwards oc- curred no favourable opportunity until the beginning of the present year, when, as is well known, the re- duction was very successfully accomplished. There remains open to reduction a farther portion of our stock, viz. the old four per cents., which, dis- tinguished from the four per cents, created in the pre- sent year, amount to about 70,000,000/. This sum is considerable, but in other respects the question of reduction stands on very doubtful grounds. The saving of a half per cent, in the interest would give only about 300,000/. clear, and it seems very doubtful at what period the course of circumstances will admit of even that diminution. Our other Financial Measures. — The course contem- plated by government at the close of the war, was to keep up an efficient sinking fund, and to continue during several years the property tax on the reduced scale of 5 per cent. This plan fell to the ground on the rejection of that tax by the House of Commons on the 1 8th March, 1816 ; a rejection altogether unex- pected by ministers, and which was afterwards de- clared by them to have been productive of great public injury. To this opinion, though expressed deliberate- ly, and long after the first impression of disappointment, we can by no means subscribe. Had the burden been inevitable, and had the question been merely a com- mutation of one payment for another, a property tax might have been somewhat less oppressive than se- veral of the existing imposts : but, under all the cir- cumstances of the case, the rejection of the bill was, we are satisfied, productive of public good. Men in 318 Our Finances : office, immersed in a routine of business, are often very imperfectly apprised of the circumstances of particular portions of the community, In the session immediately preceding, they had, by the magnitude of their grants, shown themselves unconscious of the extent of the loss attendant on the transition from war to peace ; of the approaching fall of prices, the in- creasing pressure of taxation. To all this they were awakened by the loss of the bill, and taught, for the first time in twenty years, the necessity of negativing the importunate demands to which the holders of of- fice are perpetually exposed. Besides, a property tax, had it been imposed in 1816, would have been productive, distressing as was the time that followed, of loud complaint, perhaps of serious and general injury. The next financial measure of importance took place in 1819, when ministers having called on par- liament to give efficiency to the sinking fund, propo- sed and carried a measure little expected in the midst of peace, — the imposition of new taxes to the amount of 3,000,000/. These were imposed chiefly on malt, spirits, and tobacco, and paid with great re- luctance during the interval of doubt and embarrass- ment which ensued. Of late, however, brighter pros- pects have opened, and a diminution of expenditure has been promoted by a concurrence of causes, — tranquillity among our lower orders ; the reduction of the 5 per cents. ; and the transfer of a portion of our half-pay and pension list to the next generation. The consequence has been important and gratifying, — a reduction of taxes in the last two years to the amount of 6,000,000/. The Sinking Fund. The idea of a Sinking Fund is of old date, having been conceived more than a century ago, by Sir R. Walpole, the only public man of his age who appears to have been conversant with finance. Its plan was simple, the fund being formed in the first instance of a the Sinking Fund. 319 small sum of surplus revenue, and augmented pro- gressively by the interest of such part of the debt as was paid off by its operation. Here was no display of the wonders of compound interest, but the long peace that ensued favoured the reduction of debt, and the fund, though small, was progressively in- creasing. Such coutinued the course of circum- stances until 1733, when the troubled aspect of the Continent, and the difficulty of imposing new taxes, necessitated an interference with some disposable resource, and the sinking fund was encroached on. A precedent once given, trespasses became frequent, and this fund, though never abolished, proved of so slender operation, that in the course of half a century it had not discharged above 15,000,000/. of our debt. At last, in 1786, the scheme was revived with aug- mented energy, aided on the one hand by Dr. Price's flattering calculations of the effect of compound in- terest, on the other by Mr. Pitt's declared determina- tion to consider its funds inviolable. The new plan was in substance the same as that of Sir R. Walpole, but the reserve was invested with many additional safeguards, being committed to a special board of commissioners who were independent, not merely of the Treasury, but in some respects, of Parliament. It was at this time that the public first became fa- miliar with the term "Consolidated Fund," which meant, however, nothing more than our taxes formed into an aggregate, out of which government pledged itself, whatever might be the proportion of our reve- nue to our expenditure, to pay a million annually to the new commissioners. The sinking fund consisted consequently of 1. An annual million, to which were added, 2. The amount of government annuities as they successively expired ; and, 3. The interest of such stock as was annually re- deemed. The measure now brought into operation, paid off' the' following sums : 320 Our Finances ; In 1787 £ 662,750 Stock. j In 1790 £1,558,850 Stock, 1788 1,456,900 1791 1,587,500 1789 1,506,350 1792 1,507,110 These sums, small as they were, could hardly be considered bond fide reductions of the public debt, since the Spanish armament in 1790 necessitated an addition to our burdens of nearly half their amount. In an arithmetical sense, accordingly, the effect was inconsiderable; in a political sense it was otherwise, as it excited the expectation of great subsequent de- ductions. To strengthen this expectation, and to re- move an apprehension that a renewal of war, by ne- cessitating new loans, might cast these annual liqui- dations into the shade, Mr. Pitt obtained, in 1792, an act of parliament, declaring that all future loans should carry in themselves the means of their pro- gressive extinction, ministers, on contracting a loan. being pledged to " provide taxes, not only for the in- terest but for an addition to the sinking fund.*' This provision, whether in reality judicious or not, was very favourably received by the public, and had, in concurrence with the commercial prosperity of the year, the effect of producing a considerable rise in the funds. But this flattering prospect was forthwith overcast by oqr participation in the war against France, and the unparalleled magnitude of our expense. The sinking fund was maintained, and operated a large apparent reduction, but the result, in a definitive sense, was null, our debt being augmented by our annual loans in a far greater ratio. After all that we have been told of the operation of the sinking fund-; after the pompous statements of hundreds of millions redeemed by it; after all the eloquent effusions in its praise by both sides of the House, the public will learn with some surprise, that since 1786, this fund has had a real operation during twelve years only, and that the actual reduction effected by it, has not averaged a single million a year ! In this we are to be under- stood, as leaving the twenty-three years of war wholly out of the question, and confining our calculation to the Sinking Fund. \Yl i the six years preceding 1793, and the six years sub- sequent to 1815. Compound Interest. — The surprising results ascribed in our time to compound interest will be cited by the future historian, as affording a striking example of the power of enthusiasm in the original calculator, and of the extent of credulity on the part of the public. In war, the sinking fund is supported by loans, and is it not apparent, that whatever may be the beneficial result of accumulation in the hands of the commissioners of the sinking fund, the loss to the public from the additional loans required by it must be in the same compound ratio ? We might even add, that in all cases of taxation, where the impost has not (and it very rarely has) the effect of inducing economy in the individual, the loss is to be reckoned by compound interest, since, had the money been left in the hands of the subject, the increase would have been in the compound form. Without entering into any arithmetical statement, or even pressing the argument in an abstract form, Ave may safely make the general assertion, that the power of the sinking fund, whatever it may have been, has arisen " not from actual payments, but from its influence on the public mind ;" — from its presenting sl possibility of an ultimate repayment of the debt; — a possibility transformed into confident expectation by the ardour of the public, and our natural inclination to believe what we wish. Present State of the Sinking Fund. — Such was the state of our financial concerns until the beginning of 1822, when, by the double effect of reduction of ex- penditure and increase of revenue, an actual surplus was produced, and the sinking fund was likely to be- come efficient to the extent of 4 or 5,000,000/. a year. We seemed now on the eve of attaining the result so long represented as desirable by ministers ; the pos- session of an engine for raising the price of stocks, or. in other words, for reducing the rate of interest on private securities. In what manner, it may be asked. 41 ;J22 Our Finance* ; would the latter prove a consequence of the former ? In France, where the interest of the public debt does not form 10 per cent, of the income arising from property, and government securities do not command general confidence, the interest of money invested in land, houses, and trade, is not materially affected by the price of the public funds. Land continues to be bought with eagerness, though yielding only 3, 3i, or 4 per cent, on the purchase money, at a time when the same capital would yield between 5 and 6 per- cent, in the funds. In this country the case is other- wise. Our public dividends form a considerable proportion of the income arising from property ; they are held by individuals in all parts of the country? and their value naturally influences that of other in- vestments of capital. It follows that a rise in the price of stock, in other words, our obtaining less interest from purchasing in the funds, has a direct tendency to lower the interest on private securities, as has been exemplified by the general diminution of the interest on mortgages during the last and present year. What, in a statistical sense, are the characteristics or accompaniments of a low r rate of interest ? It is indicative of abundant capital, and of a very advan- ced state of productive industry. It was this which formed the great feature in the situation of Holland during the chief part of the 17th and 18th centuries, and enabled her government to lower toer dividends at a time. (1654) when France and other states bor- rowed at very high interest. It was this which, under Sir R. Walpole, afforded the strongest proof of the re- vival of our financial credit, and which in 1749 en- abled Mr. Pelham to effect a well-known and highly beneficial reduction. But, neither in these cases, or in any other of which history has preserved the re- cord, did the fall of interest proceed from the opera- tion of a sinking fund. It rested on a much broader basis : it w r as the natural consequence of confirmed peace; of the diminished demand for capital; of a fall, or tendency to fall, in the rate of interest on all securities whether public or private ; it was to a con- the Sinking Fund. 323 eurrence of these circumstances, much more than to any surplus in the revenue, that we attributed the for- tunate accomplishment of that great operation, the re- duction of the five per cents. If our readers see with some surprise these deduc- tions from the efficiency of a measure so much vaunt- ed, they will be no less struck with the farther part of our argument ; viz. that a large sinking fund, or, to describe it in the most simple terms, a large surplus revenue applied to the redemption of stock, would be productive of public injury. By lowering unnaturally the rate of interest, it would send capital abroad, and operate as a fund to raise the stocks of France or America. This result is too obvious to have escaped the observation of either the Bank directors or mi- nisters : in fact, the readiness with which ministers consented both in the last and present year to relin- quish their surplus revenue by remitting taxes, seems to indicate a conviction, that a rise in the value of stock, produced artificially, would be replete with injury to the public. They cannot fail to be aware, that since the reduction of the 5 per cents., there re- mains no adequate motive for interfering with the current rate of interest, or for discovering a solici- tude on the part of government, to raise the value of the funds more than of land, or any other description of property. If, in commercial affairs, ministers have, during the last ten years, evinced a prudent forbear- ance, and abstained from the intervention so unfortu- nately exercised by their predecessors, is it likely that in finance they will follow a different course ? Our debt will hardly admit of direct reduction : our hope of relief is in that diminution of pressure which will follow the increase of our means; — the augmen- tation of national income ; — a result most likely to be promoted, by strict impartiality as to property, whether vested in land or the public funds. But, if such be the conviction of our rulers, why, it may be asked, do they still cling to a name, and hold forth the sinking fund to parliament and the country, as an institution entitled to such zealous support ? Partly, we believe, from a wish to retain a surplus of 324 Our Finances : revenue at their disposal, for the relief of suffering in- terests, or to facilitate measures of evident utility, such as the commutation of tithe in Ireland : partly perhaps, from a deficient acquaintance with the back- wardness of other countries, and a consequent diffi- dence in calculating the relative progress of our own. Our true sinking fund is to be sought in the more rapid in- crease of our national income, an increase that rests on no visionary basis, but on our mines, our navigation, our capital. Yet no speaker in parliament, whether ministerialist or oppositionist, appears to have as yet studied the comparative prospects of England and her neighbours, or to be sufficiently aware of the in- ferences which they justify. The admissions successively made by the support- ers of the sinking fund (Appendix, p. [103]) have removed part of the mystery which, by the aid of such phrases as " inviolability of deposit" and " operation of compound interest," had so long encircled it. Our present Chancellor of the Exchequer has had the good sense to relinquish the nominal part of the sink- ing fund, and to describe the remainder merely as a surplus revenue appropriated to the redemption of stock. As such we request our readers to consider it, and to enable them to compute its amount without unravelling a long list of finance papers, we subjoin an Estimateof our Annual Expenditure for 1823 and 1824, Half pay and pensions for the Army, Navy, and Ordnance, about • - £4,800,600 Of which advanced by the Bank, nearly - 2,000,000 Remainder to be paid out of the current - ■ revenue - - ... 2,800,000 Army, exclusive of half pay and pensions - 7,000,000 Navy .-...-. 5,500,000 Ordnance - - - - - 1,200,000 Miscellaneous - 1,500,000 Civil list: pensions for Civil Services ; Courtsof Justice ; Civil Government of Scotland, and some lesser heads, all charg-ed ed on the Consolidated Fund ... - 2,000,000 Amount of expenditure distinct from the interest of the debt 20,000,000 Interest of the public debt ... - 30,000,00 Total £50.oon.or>n the Sinking Fund. ;>2.» Such is our present expenditure ; and our bona fide sinking fund can, of course, be nothing else than the surplus of our income above it : it will be found to amount to three, four, or more millions, according to the productiveness of the revenue. The next and equally important question is, whether a surplus when found to exist, " ought to be applied to the redemption of stock, or made a ground for the further remission of taxes." We subscribe, without hesitation, to the latter, not merely for the sake of relief to the public, but on the less-under- stood ground of the injurious consequences of inter- fering with the price of stocks. Against this, however, it may be urged, that men of the most opposite views in politics have concurred in eulogising the sinking fund — that Mr. Fox, was, in this respect, no less zealous than his great antagonist. Mr. Fox, it is well known, never made a study of finance, still less of political economy; his conclusions in these, as in many other respects, when well founded, owed their justness less to continued research or careful com- parison, than to rectitude of feeling, to a manliness of character, which, in a question like the present, would prompt him to adopt without much investiga- tion that course, which should place the burden on the shoulders of ourselves, instead of our posterity. Again, Mr. Pitt, when he introduced the sinking fund, was only in his twenty-seventh year and could not, from the pressure of other avocations, have been able to study very closely the operation of a surplus reve- nue, applied to the purchase of stock. He was ne- cessarily unacquainted with the statistical returns which we possess, and which shall be more fully no- ticed in the following pages. He had before him no example of a measure tending, by unnatural interfe- rence with the rate of interest, to send capital out of the country : still less could he foresee the rapid in- crease of our numbers, the surprising extension of our productive industry, and the consequent motives for pursuing a system, the reverse of that which maintains a sinking fund — we mean v bearing light on ^26 Our Finances ; Distinction of the present generation, and transferring a portion of taxation to their less burdened successors. If these remarks are at all useful in correcting popular misapprehension, we shall hope somewhat of a similar result from the following paragraphs, re- lating to the situation of different classes of stock- holders. Stockholders : Distinction between Permanent and Tem- porary Depositors. — Those of our countrymen who have travelled and paid attention to topics of this na- ture, must have remarked that in France, Germany, Spain, in short, in every country on the Continent, ex- cept Holland, the public funds are comparatively little resorted to as a deposit for private property. The governments of these countries have not as yet acquired the confidence attached to a representative assembly, and the inhabitants are little acquainted with the security conferred on property by public register, the power of transfer, the steady observance of good faith towards the public creditor. Conti- nental lenders require the visible, and, as they ac- count it, solid security of land and houses. Such, a century and a half ago, was the case throughout England generally, and such, in no small degree, was the case in the provincial part of the kingdom at the beginning of the late war. The general ardour of our countrymen in the contest, their confidence in government, and the comparatively high interest then given by the Treasury, led to the deposit in that ready absorbent, of sums of which the magnitude would have startled the caution of our forefathers. The re- sult of the whole is, that funded property so insig- nificant in a former age, when compared to the gene- ral wealth of the kingdom, is now of an amount ap- proaching to the value of our land, particularly if we estimate it not by capital, but (see p. 238.) by income. Annuitants on our public funds, instead of being confined, as in the last age, to London, Bristol, and a few of our principal towns, are now found in every district, and in every variety of occupation. The Permanent and Temporary Stockholders. 327 great majority of them are permanent depositors, strangers to the manoeuvres of the stock exchange, speculating neither on buying or selling, and attentive merely to the half-yearly receipt of their dividends. These persons consider the stocks as a fund perma- nently eligible for themselves and their families, con- fiding, on the one hand, in the good faith of Parlia- ment, and aware, on the other, of the serious draw- backs attendant on property in land and houses, — the difficulty of collecting rents, the heavy charge at- tendant on transfers. The funds, they are aware, in- volve neither delays nor lawsuits, while, with a view to bequest, they admit of an easy and direct reparti- tion. It is in results such as these,. that we recognise all the advantage of established institutions, of the steady observance of good faith on the part of go- vernment. Viewed in a national sense, they render a people capable of efforts such as those which main- tained the independence of Holland against the suc- cessive attacks of Spain, England, and France : — Viewed in regard to the individual, they offer a mode of investment almost as much superior to that of the circle of private connexion, as is afforded by the Saving Banks, when compared to the precarious de- posits to which the lower orders were formerly ac- customed to trust their petty savings. What proportion do these persons, the permanent depositors in our funds, bear to the body of stock- holders at large? Not less, we believe, than fair- fifths of the whole, whether we look to number or pro- perty. The temporary depositors, however, few as they are, fill a more conspicuous place in the public eye : it is they who bustle on the Stock Exchange, who confer with the Chancellor of the Exchequer, and who come conspicuously forward to bear a part in loan contracts. But these persons consider the funds merely as a transient property, a security in which, as in exchequer bills or mercantile acceptances, they may vest a floating sum until the occurrence of a more eligible mode of appropriation. Their calcu- lations as to the price of stocks go no farther than .'328 Our Finances ; Distinction of the month or the quarter which may elapse ere it suit them to withdraw their money, for the purpose, perhaps, of transferring it to the funds of the United States of America, France, or the lesser Continental powers. Merchants, it has long been said, are citi- zens of the world, but of all mercantile men, that is particularly the case with temporary stockholders, to whom London, Amsterdam, and Paris, present but one vast exchange. How different this from the permanent depositor who exhibits so many charac- teristics of the retired capitalist, of the inheritor of real property, preferring British security, even at a reduced interest, and not seeking to escape his por- tion of sacrifice, when satisfied that it is conducive to the general relief! These persons are much more interested in preserving than in acquiring ; their ob- ject is not a rise of price for the purpose of sale, but security in regard to their capital and strict punctu- ality in the payment of the interest. This disposition has been strikingly exemplified in the late reduction of the five per cents., of which not a fiftieth part was sent out of the country, notwithstanding the great temptation offered by foreign funds. And if in the three per cents, the permanent depositors do not surpass the temporary in so great a proportion, they form, even in these, beyond all comparison, the majority. With what view, it may be asked, do we enter into this discrimination of temporary and permanent de- positors ? Partly because it is little understood, but more for the purpose of showing the unimportance in a national sense, of the class who come forward as the representatives of the fundholders at large. It follows, that any measures that may be taken in re- gard to the funds, should be adapted to the unobtru- sive, we may almost say, the silent majority of stock- holders. Persons circumstanced as they are, can de- sire no aid at the expense of the community : no addi- tion to the market price of stock, except such as shall naturally arise from the continuance of peace, the growing abundance of capital. — An artificial prop. Permanent and Temporary Stockholders. 329 such as the sinking fund, they will not hesitate to forego, when apprised, that in peace it is of injurious tendency, and should he considered only as an in- genious scheme by which the financier, in a season of difficulty, seeks to stimulate the avidity of capital- ists, and to provide for the calls of the Treasury, without an extravagant sacrifice. After these preliminary explanations, and the re- moval from the mind of the reader of certain popular impressions, we shall proceed with advantage to our farther illustrations. Comparative Taxation of this Country and France, GREAT BRITAIN AND IRELAND. Computed for 1823, after deducting the taxes on salt, leather, and malt lately reduced: also a portion of the Assessed Taxes. Gross amount, inclusive of the expense of collection. Assessed taxes - £5,000,000 Customs ------ 11,000,000 Excise ---_.- 27,000,000 Stamps ---_-> 6,800,000 Land tax ----- - 1,200,000 Post office (nett amount) - 1 ,400,000 Crown lands • - 200,000 All other government receipts ... 1,400,000 £54,000,000 Tithe (including Ireland) - - - - 5,000,000 Poor-rate, after deducting the portion paid (see page 191) in lieu of wages - 5,000,000 Total £64,000000 being 25 per cent, on our national income as computed in page 238\ FRANCE. Gross amount, inclusive of expense of collection. Fonder, or land and house tax - - - 9,000,000 MobUier, a farther house tax; also the window tax and patentes, or tax on professions - 3,000,000 Customs ----._. 2,?.\)0 i (j (Excise) $ Tobacco (Customs) Coffee and cocoa Rum Silk, raw and thrown East India piece ) goods $ 2,300,000 3,000,000 700,000 1,600,000 2,400,000 600,000 300,000 200,000 500,000 ete view of our fiscal burdens, we left out of the text, as less with our productive industry. Printed goods 1 (home manu- facture) Foreign linens Foreign butter and cheese Tallow Raisins and other fruits Barilla and other drugs Pepper Skins and furs Mahogany £570,000 80,000 100,000 100,000 400,000 150,000 150,000 50,000 50,000 Various other duties 1,000,000 from Taxation. 347 als, may, on the ground of fiscal calculation, have the earliest claim to diminution. Thus, wine, spiritous liquors, and lace, appear fair objects of high taxation, but if the duty be so great as to hold forth to smug- glers a premium such as enables them to prosecute their business in spite of all the vigilance of our cruis- ers, an abatement of duty may be found an indispen- sable alternative. In the case of sugar, the question of abatement stands on different grounds. In an ar- ticle so acceptable to general taste, and so innocent in its effects, we are justified in expecting a regular extension of sale, in proportion to the diminution of price. This has been in a considerable degree exemplified at different intervals of depression in the market, and seems to authorize the inference, (and a very impor- tant one it is,) that a reduction of the duty would have the effect of extending the consumption, and of grati- fying the lower orders without much injury to the re- venue. On these different claims to priority in the reduc- tion of taxes we acknowledge our inability to decide. The records of the Treasury, doubtless, contain ma- terials calculated to throw light on these intricate in- quiries, although even with such an aid the result of reduction will, at times, be found to differ considera- bly from previous expectation. We decline accord- ingly to enter on this uncertain field, and confine our- selves to the general question of the pressure of taxa- tion. Examples of Injury from Taxation. — The unseen in- jury arising from taxation, its interference with the free course of manufacture, is much greater than is sus- pected by the public. To form a correct idea of this, would require an investigation into all the branches in which the activity and invention of individuals are repressed by the regulations of the excise. Of theiF effect in the case of distillers, some idea may be form- ed from the evidence given before the Sugar Distille- ry Committee in 1808. To advert to a very different case, we shall take an illustration familiar to those 348 Injury arising who transact business as underwriters, and who know the extent of the reduction produced by peace in the terms of insurance. To a war premium of 6, 8, or 10 per cent., a policy duty of one-fourth per cent, on the sum insured formed an addition of little conse- quence, but when premiums were lowered to 2 or 3 per cent, it was found a heavy proportional charge, and afforded an inducement to foreign merchants to effect their insurances at Hamburgh and other ports, where the duty is comparatively light. The conse- quence is, that the recent reduction of our policy du- ty has, in some degree, come too late. Ship-owning, often a losing investment of capital during the war, has been doubly so since the peace, and can hardly prove otherwise, until by reducing the attendant charges, we shall enable our builders, our rope-makers, and others, to meet foreign competitors on equal terms. Navigation does not, like home trade, admit of control by interior regulation : its scene of competition is the ocean, and success in it can be attained only by a clear superiority over fo- reigners. Countries possessing forests of timber in the vicinity of a navigable river, enjoy already one great advantage over our ship-builders : to increase that by an impost on the foreign timber used by our countrymen, is to place them on a footing of inferiority inadequately balanced by our extra duties on goods imported in foreign vessels. A reduction of the duty on foreign timber and hemp, seems an indispensable preliminary to our successful competition with foreign ship-builders — a competition which would not then be hopeless, when we consider the superiority of our workmen, and the recent fall in the cost both of their maintenance, and of the conveyance of foreign mate- rials to our shores. It would be easy to multiply examples of pressure from taxation, but there can, we believe, be little doubt on several essential points, as That it forms a main obstacle to the general free- dom of trade, which government seem so desirous to introduce ; from Taxation. 349 That on a considerable part of the public it bears harder now than during the war ; and That in general its pressure is greater in England than on the Continent. After all the additional means conferred by our navigation, our extent of town-population, and our superior agriculture, the payment of 64,000,000/. a year, must bear harder on the national income of this country than that of 45,000,000/. (see p. 330 of this chapter) on that of France. On the Continent, the evils of transition from war to peace have not been altogether so serious ; the failures among mer- chants and manufacturers have been less numerous ; while among their agriculturists the decline of price, much as it is complained of, has been less ruinous than in this country. How far would a Reduction of Taxation be productive of Relief? — We shall suppose, for the sake of giving our argument a definite form, that it is proposed to discuss the expediency of making a farther reduction of our taxes to the extent in all of 6,000,000/. Were that abatement directed in toto to some specific branches of industry, for example, those connected with the use of such articles as leather, coals, timber, there seems little doubt that, though like all other changes, it would for some time be productive of a derangement of work, the stock of employment even- tually created would supply that which in years of distress was our principal desideratum — a sufficient demand for labour. We shall take, however, the least favourable supposition, assuming that our pub- lic men are not agreed in regard to the farther taxes to be repealed, and that the 6,000,000/. of which we contemplate the reduction, must be abated in the form of a per centage on the revenue at large. What, it may be asked in the next place, would be the result of such abatement to the individual? A diminution of charge to the extent of two or three per cent, on his expenditure — an object of no great consequence, it is true, to the land-holder, the retired capitalist, or 350 Reduction of any person out of business; but one which in the hands of the merchant, the manufacturer, or the farmer, would form an engine of great efficiency. In the case of an individual out of business, the amount of annual disburse represents only the expenditure of himself and family ; in business, on the other hand, it comprises wages, salaries, and other outlay to an amount frequently of three, four, or five times the house-keeping expense. That which in the one case w r ould prove a saving of only 20/. a year might, and generally would, amount in the other to 100/. Now persons in business form evidently the stay of a com- mercial country, the class whose prosperity is deci- sive of .that of the community at large. This will be apparent on our pursuing our reason- ing a step farther, and examining the effect of a re- duction on our means of maintaining a competition with foreigners. The consequence would be that our woollens, our cottons, our hardware, might be sent to foreign markets two or three per cent, cheaper than at present. To those who have a due sense of the smallness of mercantile profit, (Speech of Mr. Baring, 15th July 1822,) even this limited re- duction will appear of great importance, enabling us to compete with our foreign rivals, the manufacturers of France, Germany, and the Netherlands. To these, since the inauspicious era of our Orders in Council, we must add the inhabitants of the Northern States of the American Union, the return of the State of New-York for 1821, exhibiting a value of 8 or 10,000,000/. sterling, (chiefly woollens and cottons,) manufactured among a population of little more than a million. But our national industry is, it may be said, already amply productive, whether in agriculture or manu- facture ; — the evil lies in a want, not of produce, but of vent, and our neighbours, whether Germans or Belgians, have long complained of the free admission of our fabrics. This, however, proves little more than that in certain branches foreigners are unable 1o compete with us, and that our rivalship, if conti- Taxation. 351 nued, may induce them to give a different direction to a part of their labour and capital, manufacturing commodities of which we should probably become the purchasers, in consequence of changes that would follow the increased freedom of trade. A state of continued peace implies a reduced scale of profits, a limited return for capital, but not necessarily an overstock of merchandise or deficiency of employ- ment. In harvest we generally have an opportunity of observing, that the supply of labourers is not super- abundant, and since the beginning of last year, there has existed no overstock but in agriculture. Even in a dull season the surcharge of hands is less great than is commonly supposed. To add a twentieth or even a thirtieth to the existing demand for labour, in other words to find employment for 100,000 indivi- duals of the lower order, would, on most occasions, prove a change completely satisfactory. If we proceed to make an analysis of the causes which determine the quantity of produce prepared among us, either by the loom or the plough, we shall find it to depend mainly on the " amount of capital and number of workmen in the country," points in which, of course, no legislative provision can effect any speedy change. It is a fact, that for a series of years the quantity prepared for a losing market is nearly as large as for a profitable one; so great is the power of habit, the necessity of following up an established trade or profession. This result, so dif- ferent from the inferences of some political econo- mists, is, doubtless, promoted by our poor-law sys- tem; it was exemplified on the part of our manu- facturers amid the continued distresses of 1819 and 1820; and experiences at present a confirmation in the case of our farmers. From all these facts what inference do we make, and what are we to consider the probable result of a reduction of taxation ? Not overstock in any branch of manufacture, but security from foreign competition ? Objections answered. — Various arguments may, we are aware, be advanced as well by men in office as 352 Taxation : others, against any considerable change in our fiscal arrangements. Taxes repealed or modified, cannot, they will say, be re-imposed. Charges that have in- terwoven themselves with our habits ought not to be abruptly removed. To this we answer, that several of our taxes are such as ought never to have been imposed, indicating, as they do, the rudest state of financial science, and betraying an almost total un- consciousness of the check given by these burdens to productive industry. As to the question of re-im- position, we have, happily, good ground for dismiss- ing the apprehension of retracing our steps; but, supposing, for the sake of argument, that such were to become in some degree necessary, the new taxes would be of an altogether different nature. A pro- perty-tax to the extent of 2±, perhaps 5 per cent., would, doubtless, receive the sanction of Parliament, in preference to a revival of such duties as those on malt, salt, leather, coals, or the house and window- tax. Next, as to the evils apprehended from transition. — from that state of change, which, to a nation as to an individual, is always unprofitable and frequently pernicious. Evils of that nature, would, even on a diminution of our burdens, occur in a variety of modes not anticipated by the public, but their dura- tion would necessarily be temporary, and their amount might be lessened by various arrangements, such, perhaps, as making our future reductions consist less in an absolute repeal of a few particular taxes than in a modification, a partial diminution of a number; — a course which might, besides, have the effect of relieving government from much importunate solici- tation. Such are the arguments for a reduction of taxation. Inconsiderable as the proposed abatement may ap- pear, no one can say how materially our productive industry may be promoted by it : but were immedi- ate relief not to prove the consequence, we should have at least the satisfaction of entering on that path. Plan of M. Necker. 353 which must eventually lead to a favourable issue. The modification made last session in our navigation and corn laws have a title to general approbation, yet no one expects from them immediate relief, or re- gards them in other light than as an approximation to a better system. In like manner a diminution of taxes would bring us more nearly to a level with the rest of the civilized world, giving our manufacturers a fair chance in the field of competition, relieving our an- nuitants from the necessity of emigrating, and placing us nearer to that equality of prices which would admit of unrestricted trade, and establish our pros- perity on a solid basis. Plan of Finance pursued by M. Necker. — The financial concerns of France have been, in general, badly con- ducted, and taxation has, time immemorial, been a subject of complaint among a people whose national character is far from querulous. This was more par- ticularly the case in the latter years of Louis XV., after winding up the arrears of the expensive and in- glorious war concluded in 1763. The 18,000,000/. constituting, at 'that time, the clear produce of the taxes of France, were levied in so awkward and cir- cuitous a mode as to cost 4 or 5,000,000/. in the col- lection, and a sum perhaps equally large in the in- jury arising from the obstructions which it caused to the free course of industry. Different provinces in France were subject, in those days, to different im- posts; the frontier lines were discriminated from each other by custom-houses like the boundaries of distinct kingdoms ; the transit of merchandise was taxed ; the douaniers or custom-house officers multi- plied beyond all due proportion. At that time, as at present, the inlposts on consumption were compara- tively small, and a great part of the revenue arose from a land tax similar in its nature, but more une- qual in its collection, than the present fonder. M. Necker, the first real financier whom France had seen for a century, received his official appoint- ment in 1776, and had hardly begun to introduce 45 354 Taxation : order into this chaotic mass, when, in 1778, the course of circumstances caused the French court to depart from its pacific policy. The humane charac- ter of Louis XVI., and the necessity of continued economy, were strong arguments for the preserva- tion of peace, but the cause of the American colo- nists, when opposed to England, could not be other- wise than popular while the French had fresh in re- collection, a war in which we had struck such fatal blows at their navy, and deprived them of so many Irans-atlantic possessions. Louis and his ministers were thus obliged to yield to the public voice ; fleets were to be equipped, and considerable expense to be incurred. M. Necker, on whom the task of pro- viding the pecuniary supplies devolved, was aware of two things ; first, that at that time the imposition of fresh taxes would be wholly unadvisable; and next, that eventually the resources of France would be more than equal to her burdens. He conceived accordingly the plan of meeting the new demands by annual loans, for the interest of which, he made pro- vision, not by taxes, but by the abolition or reduction of pensions, and of many unnecessary appendages of the court. At that time, as at present, France exhi- bited few sinecures of the first magnitude, but an endless list of unmerited grants, of supernumerary offices, of unauthorized appropriations of the public money. The confidence inspired by the personal respectability of the minister, and the prospect of great improvements in the fiscal administration of France, induced the monied interest on the Conti- nent to subscribe to the loans of M. Necker, without the guarantee of a parliament, or the allotment of specific funds for the payment of the interest. In this manner, he succeeded (Hennet on French Fi- nance) in borrowing 15,000,000/. sterling, in three years, at moderate interest, and would, doubtless, have conducted the war to its close, without a single impost, had not circumstances led to his abrupt re- tirement from office in 1781. Does this example supply any inference applicable Plan of M. Necker. 3.30 to our present situation ? If the amount borrowed by M. Necker, appear small, it was far from small when we consider the limited resources of France. Then, as at present, her towns were neither numerous nor large : the majority of her inhabitants were scat- tered over rural districts ; her manufacturers were adequate only to home consumption ; the increase of her population was slow. How different the present state and prospect of productive industry in this country, possessed as it is, of rich mines, extensive water communication, abundant capital, — the whole with a population rapid in its increase, and formed to habits of business. With such auxiliaries, is it going too far, to ask, whether we are not justified in looking to the future with the favourable expectation enter- tained by M. Necker, especially as in one material point we may reason with a confidence greater than he could feel, — we mean the hope of continued peace ? Nothing indeed can be more flattering than our prospects, provided we are enabled to give relief to the suffering part of the public. This, it is evident, could be best accomplished by cancelling or reducing the more injurious of our fiscal burdens ; and we now proceed to inquire whether circumstances justify our imitating the example of the French minister, and substituting a small annual loan for a portion of the taxes repealed. We say a portion, because there seems little doubt, that the productiveness of the re- maining imposts would be so much increased, as to enable government, if they determined on borrowing 4,000,000/. annually, to repeal taxes to the extent of 5 or 6,000,000/. The Question of a small Annual Loan in lieu of Taxes. State of the Monied Interest. — Amidst all the losses and complaints of late years, the monied interest, that mixed body of bankers, retired merchants and capitalists, have, in a great measure, escaped the general cl i stress. Their situation has exempted them 3#6 The Question of from the fluctuations experienced by many other classes ; by our agriculturists, our manufacturers, our exporters of merchandise to the West Indies and America. The monied interest comprises a number of old establishments, who conduct their business more conformably to rule and calculation than seve- ral other portions of the mercantile community : they are strangers to the hazard of credit, and the still greater hazard of distant markets. The cloud, which, from the depreciation of our currency, overhung them in the latter years of the war, has disappeared, and the late reduction of the rate of interest, considerable as it is, may be considered as innoxious to them, their incomes having gained, or being likely to gain, in value what they have lost in amount. The fact is, that they have periodically at their disposal, particu- larly after receipt of the public dividends, a fund of ready money, which has caused the rise in our stocks, so idly ascribed to a sinking fund, and which has also afforded large supplies to the exchequers of our neighbours. Transmission of Capital to Foreign Countries. — The interest of money is always highest in the least ad- vanced communities, and capital has consequently a tendency to move thither, not rapidly, we allow, but progressively. It is thus that at present it begins to be withdrawn from England, exactly as in the 17th and 18th centuries it was withdrawn from Holland. Last year was remarkable for the extent of such transfers, and by writers who do not scruple to take an extra latitude in a popular argument, the impru- dence with which these advances were made, and the losses of which they were productive, might be made the ground of a vehement appeal in support of our plan of exchanging a part of our taxation for an annual loan. We are desirous, however, to avoid all such appeals, and to state deliberately and impar- tially, the arguments on either side. If, on the one hand, it be asked " Why should we not render subser- vient to a reduction of taxes that periodical surplus of a smalt Annual Loan. .if; 7 capital which has for some years been transferred to foreigners?" the advocate of commercial freedom may say on the other, " You are not at liberty to ex- ercise any interference, or to divert capital from the direction which it naturally takes : its tranfer to foreign countries may be, for aught you know, the most profitable means of employing it in a national as in an individual sense. The capitalist, who, living in England, draws a large income from the French or American funds, is enabled to make a larger expenditure, to be a more liberal contributor to the productive industry of his own country." Between these contending opinions what course ought we to hold? The last mentioned argument would be excellent against any legal restraint which might exist, in the shape of a tax or otherwise, on the transmission of capital abroad; a restraint which would be quite as absurd as the lately repealed pro- hibition to export specie. Farther, were our bur- dens no greater than those of our neighbours, or were the doctrine of freedom of trade generally adopted, we should be inclined to look with a favourable eye on the most unreserved transmission of capital. But at present we are obliged to reason in a more narrow circle, and to calculate what peculiar aid we can oppose to peculiar pressure. Our situation is unfor- tunately anomalous ; our taxation higher than that of any other country ; and if, as we have reason to ap- prehend, its magnitude be such as to reduce the profit of stock, and in that manner to cause, or to be likely to cause, capital to leave us, the objection of the political economist, however true in the abstract* ceases to apply, or becomes in a manner, lost in the urgency of circumstances. Though we are thus hardly called on to combat objections, it may be useful, in this day of theorising, to remark that the application of general principles in regard to money transactions is found to require no slight share of the caution that has proved neces- sary in other departments — our corn trade, our navi- gation, our custom duties. To explain our meaning 358 The Question of by example. In 1815, Mr. Robinson, at that time President of the Board of Trade, was as fully con- vinced as Mr. Horner, or any member of the House, of the radical impolicy of our corn laws ; but while he regretted that they should ever have been enacted, or that agriculturists should ever have relied on so unnatural a support, he felt that any change must be gradual, that the advantage from a return to sound principle would be remote, and the evils of transition immediate. The Agricultural Committee of 1821 acknowledged, in like manner, the benefit of free trade, but felt the inexpediency of its early adoption : while in regard to our navigation, the bills brought forward during the session of 1822, for repealing the obnoxious part of our statutes, experienced, as is well known, much opposition and curtailment from the same cause. We must not, however, be understood as proposing any obstacles to the transmission of capital abroad, except that of giving an additional opening for its in- vestment at home. We are perfectly aware, that the principles of pro- ductive industry prescribe, in the words of Vauban, que V argent le mieux employe est celui que le rot laisse entre les mains de ses sujets — that government should, if pos- sible, avoid draining it from the pocket of the indivi- dual in the shape of either a loan or tax. Were it practicable to avoid both, we should be reluctant to urge, or even to listen to the project of an annual loan, however justified by our prospect of increasing wealth. The question, however, has no such scope, being unluckily confined to the alternative of taxing or borrowing; and we appeal to those who have studied the nature of our resources, whether we cannot at present raise a given sum, for example, £4,000,000, with less injury as a loan than as a tax. Probability of Financial Relief — We should on no account suggest a transfer of a portion of our burdens to the next generation, were it probable that their situation would partake of that embarrassment which, since 1814, has borne so heavilv on us. But whether a small Annual Loan, 359 we look to the increasing caution of our rulers, the resources arising from improvements in our national industry, or the diminution of our burden by its re- partition among augmenting numbers, we find reason to consider the prospects of our successors far supe- rior to our own. And though the assertion may ex- cite a smile, it is, notwithstanding, true, that to relieve ourselves from a portion of our taxes, is an effectual method of preventing loss to our posterity, inasmuch as the present pressure, if continued, would, by send- ing abroad the family of the annuitant, and, as we fear, the money of the capitalist, operate to curtail the fund destined to become in the hands of the next generation the basis of national wealth. Would the proposed Loan affect the Rate of Interest ? — One of the chief features in the great transition from war to peace, was an increase of disposable capital, and considering the magnitude of this increase, we may well question, whether government ought not, several years ago, to have made a demand on the monied interest for a loan, rather than on the public for taxes. If such would have been at that time a fit application to the national wound, there seems still less doubt of its being so at present. To take a few millions annually out of the money market would, doubtless, operate in some measure to retard the fall of interest, and the advantage slow, but sure, which follows that fall ; but that it would do so in a slight degree seems probable, whether we consider our present abundance, or our satisfactory prospects in regard to disposable capital. The dread of scarcity of currency from the resumption of cash payments has proved groundless ; and there seems, assuredly, no reason to apprehend an early demand for money for the payment of corn imports, still less for subsi- dies or military charges on the continent. The power of habit is in nothing more strongly ex- emplified than in the appropriation of the disposable funds of our monied men. Accustomed to a few sim- ple securities, they have no idea of changing their 360 The Question of investments, even under an alteration of circum- stances. Our bankers and city capitalists confine themselves to stocks, exchequer bills, or mercantile acceptances, (all convertible into money at short no- tice,) and have no idea of investing money on mort- gage, still less of adventuring in trade, or making a permanent loan to a mercantile house. They look more naturally to foreign stocks, particularly since business of that kind is transacted so largely on our own exchange. In what manner does this reasoning apply to the present question ? It implies that go- vernment by giving a new opening to our capitalists in the form of a small annual loan, would withdraw comparatively little from the accommodation of our merchants and landed interest : the diminution, we believe, would hardly be felt, except in the demand for foreign stock. Would it affect the Price of Stocks ? — This question we shall answer first as it regards the public, and next in respect to the stockholders. Since the re- duction of the five per cents., government appears to have hardly any greater interest in keeping up the funds than in maintaining the price of land, merchan- dise, or any other description of national property. The only direct advantage from a rise in the funds, would be the power of reducing the old four per cents, and the farther power of reducing the new four per cents, five or six years hence. Any diminution of interest in the great mass of our debt, the three per cents., is a very doubtful and remote object : a result not likely to ensue, until after a long continu- ance of peace, and a concurrence of circumstances, which of themselves would materially improve our financial condition. But, whatever may be the pro- bable time of the occurrence of such a power, there can be no doubt that to endeavour to accelerate its arrival, in regard to either the three or the four per cents, by artificial means, would be highly impolitic. The reasons against such a course are, even when briefly stated, (p. 323.) so direct and substantial, as to render it incumbent on everv well-wisher to K*« a small .Annual Loan. 361 country to dissuade it ; and nothing prevents our en- larging on the evils that would attend it, except a con- viction that it can form no part of the plans of the present Chancellor of the Exchequer. Next, as to the effect of a loan on the interest of stockholders. Dividing these into the two classes of temporary and permanent depositors, and consi- dering the former as loan contractors, we shall soon find that they may safely venture on such a loan with- out the pledge of taxes. Four millions, borrowed at an interest of four percent., would involve an annual burden of 160,000/. which, if the plan of a sinking fund provision for each loan were retained, might be carried to 200,000/. a sum not insignificant certainly, but not equal to half the addition that is annually making to our revenue by the increasing consumption of taxed articles. Was such security, we may be al- lowed to ask, ever offered on a war loan in the most brilliant days of our finance ? Lastly, as to permanent depositors and the proba- ble price of stocks for a series of years. What have been the causes of the slow rise of stocks since the peace? The years 1814 and 1815 required heavy loans; 1815 was a season of general distress, but no sooner did our prosperity return in 1817, than stocks rose and continued high during 1818, when the mis- management of the French loan, and, soon after, the effect of overtrading in this country, produced a fall. These causes, joined to the general disquietude dur- ing atrial (in 1820) of unfortunate notoriety, delayed the rise of stocks ; and a farther delay took place from an apprehension in that and the succeeding year that the magnitude of the agricultural distress would necessitate a reduction of the public dividends. Since then, however, the circumstances of the public, and the amount of the revenue have both materially im- proved. Two points will be readily admitted by the perma- nent depositor in our funds ; first, that whatever con- duces to the relief of the suffering classes has a ten- dency to raise stocks ; and next, that a loan for the 16 362 The Question of purpose of reducing taxes is altogether different in its operation on his property from a loan for the purpose of expenditure. By augmenting the value of money it augments his income, and affords him a substantial re- turn for any delay of rise in the market price of stock, which may be attributable to the act of borrowing. Limitation to borrowing. — Were the plan of an an- nual loan to be adopted, and found to answer, what limit, it may be asked, ought there to be to our bor- rowing; at what time ought we to suspend our de- mand on our future resources ? Our answer is — "at the time when our taxation shall have been brought to a level with that of France and other countries, our rivals in manufacture." If in these countries the public burdens form 18 or 20 percent, of the national revenue, let the same be considered the limit of taxa- tion in England ; the point below which we make no attempt to reduce it, satisfied with the superiority given to our productive labour by our physical ad- vantages, — our mines, and our command of water communication. Retrenchment. — Nor ought the adoption of the loan system, though productive of financial relief, by any means to lessen the demand on the part of the public for retrenchment : on the contrary, it would bring with it a direct motive for reduction, the effect of all abate- ment of taxation being to increase the value of money ; to add to the emoluments of the servants of the pub- lic. The allowance to Prince Leopold, for example, has been imperceptibly, but substantially increased from 50,000/. to 60,000/. by the fall in prices since passing the grant ; and if taxes are further reduced, it will, ere long, attain the value of 65,000/. It follows, that a reduction to a sum representing the value of 50,000/. at the date of the grant, might take place without injury to the Prince, and without deviating from the spirit of the act of parliament. Have Loans, in time of Peace, been sanctioned by exam- pie ? — As yet, only by that of the United States and some continental powers who, seeking their supplies from alien capitalists, have no title to be held forth as a small Annual Loan, 363 an example to England. But, had Holland in former ages possessed that evidence of progressive increase of population and income, which at present happily belongs to our country, her course would probably have been that which we recommend, and without any departure from her habitual caution; for if, in peace, wages, salaries, and profits are lower, and the power of present payment less, the labourers in the productive field are more numerous, the results of their exertion far more conducive to eventual prospe- rity. During the late war, our national income was large, but of uncertain duration : at present, it is re- duced in amount, but much improved in prospect. If, in the former case, it was politic in government to de- fray a large share of the current expense out of our passing gains, a different course is obviously suited to a state of peace. The Annuity Bill — These truths have at last been felt, and the proceedings of Parliament in the last and preceding session, have evinced a considerable change in the measures of ministers. Till then, whatever might be their merits in regard to foreign politics or commercial regulations, their financial arrangements were unsatisfactory to the attentive inquirer, disco- vering, apparently, little discrimination between a state of war and peace, in regard to the power of bearing taxes, and a very inadequate impression of the superiority of our progress to that of our neigh- bours. The measures adopted previously to last year, seemed to proceed from the suggestions of mere- ly practical men — of men accustomed to estimate a financial proceeding by its effect on the Stock Ex- change, on the mere monied interest, rather than on the productive industry of the country at large. At last was brought forward, unexpectedly, the plan for exchanging life-interests in half pay and pensions for long annuities ; a plan, which, since the moment of its announcement, we have considered indicative of con- sequences considerably beyond the anticipation of the public. Its temporary failure, or, as we may now say, the delay of its success, was owing to the engage- 364 The Question of ment being brought before the public on too extend- ed a scale : the duration of the contract being such as naturally to startle men not then apprised of all the reasons which determine our rulers to adhere to a pa- cific course. But our confidence in it was unshaken, connected as it is with considerations on which we build the hope of farther and extensive relief. The adoption of such a measure confers a kind of official sanction on views such as those we have endeavour- ed to take, and shows that in the highest quarter there prevails a conviction of the promising nature of our prospects ; an assurance that our only desideratum is present relief. Of our suggestions in this, as in a previous chapter (p. 310.) it may, we trust, be said, that we propose to do nothing by surprise, by contrivance, or by plausi- ble calculation; all may be gradual, voluntary, and open, where necessary, to recall. From circumstances beyond the power of foresight, a great pressure has fallen on the present generation : it is proposed to transfer a part of it to future years, but on a plan that will leave those on whom it may devolve, whether of the present or of the next age, far less burdened than we now find ourselves. How singular, that in all our distress since the peace, amid all the schemes for our relief, none of this nature should have been brought forward until the recent transfer of life interests into long annuities. Had our finances been administered by a statesman of the bold, inventive mind of Pitt, the increase of our population and the connexion between it and the increase of taxable income, would, ere this, have been made the ground-work of some decisive measure. Let it not be objected that such was not his course during the period of his administration that passed in peace, and that the plan pursued for the support of our credit after the American war, was the imposition of additional taxes. At that time the in- crease of our numbers was less rapid, and for want of regular returns, was unperceived. The recent loss of our colonies forbade the expectation of a progressive a small Annual Loan. 363 extension of trade, and there were feW examples in our history, of taxes repealed in the hope of stimulat- ing productive industry. Mr. Pitt pursued, therefore, the only expedient within his knowledge ; but had peace been preserved after 1792, there can be little doubt that the result of the favourable state to which circumstances had brought our finances, would have borne the stamp of his discriminating mind, and of the example given, under circumstances somewhat simi- lar, by Sir R. Walpole : it would have been, not the support of the sinking fund, to an extent that would have afforded an inducement to send capital out of the country, but the repeal or reduction of the taxes which interfered most directly with productive indus- try, in conformity to the course recommended many years before by Dr. Smith.* The period from 1784 to 1793. — To mention the name of Pitt, is to recall the attention of the financial inquirer to the time, unluckily too short, when the plans of that minister were undisturbed by the ex- penditure of war ; we mean the interval from 1784 to 1793. No period of our history is, as far as regards our productive industry, entitled to an equal share of our attention. The circumstances of that interval of peace were in many respects similar to those of the present time. Beginning in financial embarrassment, our prospects gradually brightened, and our trade flourished without the aid, as in a period of war, of artificial causes : all was the legitimate result of the application of capital and industry to the improve- ment of our national advantages. Agriculture pros- pered without a rise of prices : the revenue increased without new taxes : labour was paid not largely but satisfactorily, and the addition to the poor-rate was Very gradual. Let us not imagine that the period in question possessed peculiar advantages ; or that the progress of our cotton manufacture, and the troubles * Wealth of Nations, vol. iii. 366 • The Question of an Annual Loan, of France, placed our countrymen in those days on commanding ground : they felt severely the pressure of taxation, and were not altogether exempt from the pernicious operation of corn-laws. With confidence, therefore, may we conclude, that could but a part of our present burdens be removed, we should follow the career of productive industry with equal or supe- rior advantage. CONCLUSION. We have now brought our labour to a close, after endeavouring to exhibit a picture of our national situ- ation, and enumerating its various advantages and drawbacks, in a manner which, whatever may be thought of the degree of ability, will hardly be ar- raigned on the score of partiality. Political allusions have been avoided as much as was at all practica- ble, in an inquiry in which statistical results were frequently affected by the decisions of the cabinet. If we have ventured on questions of great difficulty, and occasionally expressed opinions with a degree of confidence, it has proceeded from no other feeling than a consciousness of the advantage arising from command of time, and the opportunity of giving long- continued attention to a few select subjects. Summary. — Our first chapter was appropriated to a much disputed question, the causes of the unex- pected abundance of our financial resources during the war, and their still more unexpected deficiency since the peace. This was followed by an inquiry into the subject of " currency and exchange," which, uninviting and intricate as it is, could not with pro- priety be omitted in a work requiring such frequent reference to changes in the value of money. The state of agriculture claimed a longer chapter and more ample details, as well from sympathy for a very numerous and respectable class, as from the impor- tance of the subject to the nation at large. The price of produce influencing so directly the price of 368 Conclusion. labour, it became an object of great solicitude to ar- rive at an opinion as little doubtful as possible in re- gard to our prospect of the supply of corn both as to quantity and price. On that must, in all probability, depend a variety of future measures : the regulation of wages, salaries, and money incomes, generally ; the degree of equality in the means of competition between our manufacturers and those of the conti- nent ; and the latitude which may consequently be taken by government in removing the restrictions on our commercial intercourse. From these doubtful and anxious points we turned with satisfaction to the evidence of our progressive advance in agriculture, manufacture, and the useful arts generally, accompanied, as it is, by a large in- crease in our population. Augmentation of national power ; the prospect of continued peace ; the means of reducing taxes — are all consequences of our decid- ed superiority to other nations in the progress of na- tional improvement. The examination, in a subsequent chapter, of the fluctuations in the value of gold and silver, was prompted by a double cause — the revolutions in the value of money during the last thirty years ; and the evident disproportion existing at present, particularly in the metropolis, between the rate of wages and the cost of the maintenance of the individual. A hope of being instrumental in correcting these anomalies led to researches of which the object is to give a perma- nent and uniform value to money contracts ; to lessen the prevailing objection to leases ; to give facilities to the commutation of tithe ; and finally, to show an- nuitants that it is possible for them to make an abate- ment in the numerical amount of money income with- out incurring a sacrifice. In our concluding chapter we have conveyed our ideas in regard to the operation of a sinking fund ; the comparative weight of English and French taxation ; the growing nature of our resources, and the prospect of a farther and considerable reduction of our bur- dens. Conclusion. 369 It may appear somewhat singular to our readers that subjects of such general interest should not long ere this have been fully discussed ; that questions of such importance to our welfare should not have been decisively answered. But in such researches the magnitude of the labour is found to exceed all pre- vious calculation : the number of persons fitted for it by situation or habits is not great ; and, immersed as they generally are in official or professional pursuits, a long period elapses in this, as in the province of general history, before an individual is enabled to bestow on such topics the time and attention they require. Comprehensive as the preceding investigations may appear, there still remain for discussion several subjects of great interest. Our Trade. — Of our commercial history during the last thirty years, we propose a sketch as circumstan- tial, and as carefully grounded on official documents as that which has been given of our Finances and our Agriculture. The fluctuations in our trade, the over- rating of our profits during the war, the distinction between real and nominal additions to property, are all subjects which require examination and perspi- cuous statement. Emigration. — Though the recent improvement in the state of our productive industry has lessened the necessity of emigration, a disquisition into that sub- ject would open views connected with the diffusion of civilization, not only in our colonies, but in many districts in Europe. The state of these is more back- ward than can well be conceived by the untravelled part of our countrymen. Though to send settlers to these neglected tracts would form no part of our policy, their improvement would be of interest to us, both as opening markets for our manufactures, and 47 APPENDIX CHAPTER II. (Page 41.) Expense of the late Wars, reckoning from the beginning of 1793 to the beginning of 1816. MONEY RAISED, War of 1793 Years. • By Taxes. By Loans. Total. £ £ £ 1793 17,170,400 4,500,000 21,670,400 1794 17,308,811 11,000,000 28,308,811 1795 17,858,454 18,000,000 35,858,454 1796 18,737,760 25,500,000 44,237,760 1797 20,654,650 32,500,000 53,154,650 1798 30,202,915 17,000,000 47,202,915 1799 35,229,968 18,500,000 53,729,968 1800 33,896,464 20,500,000 54,396,464 1801 35,415,096 28,000,000 63,415,096 1802 37,240,213 25,000,000 62,240,213 I *263,714,731 | 200,500,000 I 464,214,731 Deduct sums for the ser- vice of Ireland . . . . 13,000,000 13,000,000 187,500,000 451,214,731 * Dr. Hamilton on the National Debt, pp. 157. 269. M [2] The I ate Wars; [App. War of 1803. Years. By Taxes. By Loans. Total. £ £ £ 1803 37,677,063 15,202,931 52,879,994 1804 45,359,442 20,104,221 65,463,663 1805 49,659,281 27,931,482 77,590,763 1806 53,304,254 20,486,155 73,790,409 1807 58,390,225 23,889,257 82,279,482 1808 61,538,207 20,476,765 82,014,972 1809 63,405,294 23,304,691 86,709,985 1810 66,681,366 22,428,788 89,110,154 1811 64,763,870 27,416,829 92,180,699 1812 63,169,854 40,251,684 103,421,538 1813 66,925,835 54,026,822 120,952,657 1814 69,684,192 47,159,697 116,843,889 1815 1 70,403,448 46,087,603 116,491,051 770,962,331 388,766,925 1,159,729,256 Deduct the proportion of the above raisec I for the service ol 'Ireland . . . . . 46,612,106 1,113,117,150 Note. — See a very short but clear summary, entitled, " Statement of the Revenue and Expenditure of Great Britain, in each year, from 1803 to 1814, by C. Stokes.* Summary. — Instead of dwelling on these complicated state- ments, we invite the reader to fix his attention on the following abstract in round numbers : War of 1793. Total mone}' raised by loans and taxes, exclu- sive of the loans for the service of Ireland, about £450,000,000 Deduct the probable charge in Great Britain and Ireland, had peace been preserved, 18,000,000/. a-year 180,000,000 Balance constituting the war expenditure, 270,000,000 App.] Amoiqit of our Expenditure. [3] War of 1803. Total money raised, exclusive of the sums for the service of Ireland, about . . £1,11 3,000,0QQ The deduction for the probable expense of a peace establishment, may, after , 1803, be called 22,000,000/. a-year, as well on account of our augmented population, as because in the table of the war of 1803, the charge of collect- ing the revenue is not deducted j say 22,000,000/. for 13 years 286,000,000 Balance constituting the war expenditure . 827,000,000 Average war expenditure from 1793 to 1802, both inclusive 27,000,000 Average war expenditure from 1803 to 1815, both inclusive 63,500,000 Total charge of the two wars, exclusive of an ample allowance for a supposed peace establishment, nearly .... 1,100,000,000 Explanatory Remark. — This amount, adopted in the text, as representing the total of our war expenditure, may require some explanation. It is exclusive of the sums raised for the service of Ireland during the twenty-three years in question, whether by taxes in that country, or by loans in England ; on the other hand, it comprises a large sum appropriated in England, not to the war, but to the reduction of the national debt. Still, as the amount of money thus applied did not materially exceed the sums raised for the service of Ireland, and as it forms no part of our object to aim at fractional accuracy, we may safely con- sider the sums thus left out as balancing each other, and assume the 1,100,000,000/. as a representation of our total war expenditure. Addition to the Public Debt. — Though the expenditure of the war of 1803 exceeded that of the war of 1793, in the ratio of more than three to one, the addition made to our public debt was not at all ill that proportion ; the war of 1793 having added to it fully 200,000,000/., that of [4] Comparison of Exports in War and in Peace. [App* 1803 about 260,000,000/. In the war of 1803, the far greater part of the expense was defrayed by the property- tax and other supplies raised within the year. Such were the total sums raised for our war expenditure : but it is fit to recollect that they do not indicate with ac- curacy the extent of sacrifice connected with the war. There remain, as we shall see presently, considerations of great importance on either side of the account ; such, on the one hand, as the loss arising from the transition to peace ; on the other, the amount of supply derived from the extra profits attendant on a state of war. (Page 47.) — Explanation of the " official Value of Goods." — The " official value of goods" means a compu- tation of value formed with reference, not to the prices of the current year, but to a standard fixed so long ago as 1696, the time when* the office of Inspector-general of the Imports and Exports was established, and a Custom-house Leger opened to record the weight, dimensions, and value of the merchandise that passed through the hands of the officers. One uniform rule is followed year after year in the valuation, some goods being estimated by weight, others by their dimensions ; the whole without reference to the current or market price. This course has the advantage of exhibiting with strict accuracy any increase or decrease in the quantity of our exports. Next, as to the value of these exports in the market. In 1798, there was imposed a duty of two per cent, on our exports, the value of which was taken, not by the official standard, but by the declaration of the exporting mer- chants. Such a declaration may be assumed as a repre- sentation of, or at least an approximation to, the current or market price of merchandise ; there being, on the one hand, no reason to apprehend that merchants would pay a per centage on an amount beyond the market value ; while, on the other, the liability to seizure afforded a security against under-valuation. These two scales of valuation, we mean the official regis- ter and the current price, afford the means of solving a question of no slight importance, viz. the comparative value of merchandise in the present age and at the re- mote date of 1696. Some articles, in particular coffee, * Chalmers's Historical View of the Domestic Economy of Great Britain and Ireland. 1812. App.] Comparison of Exports in War and in Peace. [5] cottons, hardware, are cheaper than in the reign of King William ; but the great majority were, during the late war, so much dearer, that it is usual to calculate the real or mar- ket value at 50 per cent, above the official value. Since the peace, the case is greatly altered, the market price of goods having, as we shall perceive from the following state- ment, been greatly reduced. Comparison of Exports in War and in Peace. I. Total Exports from Great Britain, comprising home pro- duce and manufacture, as well as foreign and colonial goods, the whole according to the official value. 1814. . . £56,591,000 1815. . . 60,984,000 1816. . . 51,260,000 1817. . . 53,125,000 .1818^ . . £56,851,000 1819. . . 46,912,000 1820. . . 51,731,000 1821. . . 56,445,000 Annual average of the eight years of peace, above £54,200,000 This is the average referred to in the text, p. 47. We subjoin, in the next place, the declared value of our exports since the peace ; in other words, their value accord- ing to the state of the markets in each year. Exports from Great Britain, taking home produce and ma- nufactures at the value declared by the merchants, and adding in the case of foreign or colonial goods 25 per cent, to the official value, an addition considerably less than that which was made in war. 1818. . . £64,263,000 1819. . . 52,031,000 1820. . . 52,982,000 1821. about 54,000,000 1814. . . £73,489,000 1815. . . 74,372,000 1816. . . 61,138,000 1817. . . 58,032,000 Annual average of the eight years of peace, from 1814 to 1821, both inclusive, men- tioned in the text, p. 48 £63,787,500 In either way, the value of our exports is greater since the peace than during the war. II. For those who may wish to carry farther these calcu- lations of our exports, and of their effect on our productive industry, we add a return of that part of our exports which is illustrative of the extent of our home trade. [6] Comparison of Exports in War and in Peace, [Apf War. Exports of Home Produce and Manufacture from Great Britain, previous to and during the late wars. In Money of the particular year. Supposed to be equivalent at the prices of 1792 to Average of six years ending with 1 792 Ditto - - t - 1793 Ditto - - - - 1804 Ditto - 1810 £22,131,000 25,658,000 36,817,000 43,575,000 £22,131,000 23,325,000 30,681,000 33,519,000 These sums are calculated by adding 50 per cent, to the official value, so that ample prices are allowed for the period of war. Exports of Home Produce and Manufacture from Great Britain since the peace, according to the value declared by the exporting merchants. Years. Money of the par- ticular year. Supposed to be equi- valent at the prices of 1792 to 1814 . . £47,851,453 £37,000,000 1815 53,217,445 42,000,000 1816 42,955,256 . 34,000,000 1S17 43,626,253 35,000,000 1818 48,903,760 39,000,000 1819 37,940,000 35,000,000 1820 38,620,000 38,000,000 1821, about 40,000,000 40,000,000 The returns for these years of peace, when compared with years of war, sufficiently establish the greater value of our exports since the peace. They may appear at variance with a statement published in a work of very wide circu- lation, (Quarterly Review, No. LI!., p. 534.) in which the exports of three years of war, 1811, 1812, 1813, are con- trasted with three years of peace, 1819, 1820, 1821, and the amount of the former found to be considerably greater. This, however, is to be understood of foreign merchandise, and was owing to the extent of our transit trade during the App.] Comparison of -Exports in War and in Peace. [7] years when neutrals had very little direct navigation, and were obliged to carry almost every article through the me- dium of this country. But a transit trade may be very large, without making any great addition to the productive powers of a country, and our object being to show the con- nexion between the amount of our exports and the degree of activity existing among our population, our tables are confined to returns of our home produce and manufac- tures. The reduction to money of a uniform value (that of 1792) is expedient for a period in which money has varied so greatly : it removes a part of the exaggeration to which we habituated ourselves during the war, and simplifies the comparison with years of peace. Decline in the Price of Goods. — We subjoin a further ex- tract illustrative of the general fall in the price of merchan- dise since 1818. Exports from Great Britain, of Home Produce and Manufactures. Years. Official Value. The declared or mar- ket value. 1818 . 1819 . 1820 1821, exclusive of our export to Ireland £44,564,000 35,634,000 40,240,000 I 40,195,000 £48,904,000 37,940,000 38,620,000 35,826,000 Prices, as our readers may remember, began to fall very soon after the peace : yet in 1818, they were still from 10 to 12 per cent, above the official value. In 1819, a year of stagnant trade, the market value fell to within 7 per cent, of the official value, and since 1820 it has been below it. By this we are to understand, not that all merchandise is cheaper than in the reign of King William, when the standard of offi- cial value was formed, but that cottons and hardware (in particular cottons) form so very large a proportion of our exports as to counterbalance the rise in woollens, leather, and other articles, which are still somewhat dearer than they were a century ago. Returns such as these ar£ of the high- est interest to the political arithmetician. [8] Connexion between Expenditure and Revenue. [App. Effect of Taxation. — Taxation is injurious chiefly in two ways : in an individual sense, when the parties assessed have not the means of indemnifying themselves ; and in a national sense, when the magnitude of the burden is such as to reduce the profits of labour and capital materially below those of other countries. The former receives at present a distress- ing exemplification in the case of our agriculturists ; the latter has long prevailed in the Dutch provinces, at least in the maritime provinces of Holland and Zealand, in which the charge for defence against the sea is superadded to heavy demands of a political nature. Such also has been, in a considerable degree, our own situation since the peace ; that it was by no means so during the war, has, we trust, been satisfactorily shown in the text. We consider, therefore, our taxes during the war in the light of circulation, without ascribing to them all the detri- mental effects alleged by the majority of political econo- mists, and still less the beneficial operation attributed to them by others. The latter opinion, singular as it may seem, is nearly a century old, and was supported by re- peated references to the case of Holland before her decline. In this country it seemed to receive a striking confirmation from the stagnation that followed the peace, as the public did not take sufficiently into account how much the circula- tion of borrowed money had been the cause of the genera! activity during the war. APPENDIX TO CHAPTER 111. Rise of Prices during the War. Country Labourer. — Computation of the annual expense of the family of an agricultural labourer, supposed to consist of 5f persons ; calculated chiefly from a table of the expense of 66 families of labourers, in different parts of England, collected by Sir F. Eden. In the year 1792. In 1813. In 1823. Bread, butcher meat, beer, and ) £ s. £ s. £ s. other provisions of home > 16 32 17 growth - - ) Tea, sugar, and foreign articles 2 3 3 Rent - 1 13 2 2 Fuel and candles 2 10 3 10 3 Clothes and washing - 4 7 6 10 6 Contingencies - 10 £27 1 £48 1 £32 Town Mechanic. — Computed expense at different dates, of the family of a mechanic living in a provincial town, and supposed to consist, as in the case of the agriculturists, of 51 persons. In the year 1 792. In 1 8 1 3. In 1 823. Bread, butcher meat, beer, and } £ s. £ s. £ s. other provisions of home > 20 38 210 growth - - - - ) Groceries and other provisions \ * in 7 (] a o imported - - - $ Rent of cottage or rooms - 2 10 4 4 Fuel and light - - - 3 5 4 Clothes and washing - - 70 110 10 School fees, apothecary's bill, ) r an - n and other contingencies - ) £42 £73 £52 [»] [10] Rise of Prices during the War. [App. The Middle Classes. — Comparative estimate of the ex- pense in different years of house-keeping in a family of the middle class, supposed to reside in London. In the year 1792. In 1813. In 1823. £ s. £ s. £ s. House rent - -> - 60 100 90 Assessed taxes and poor rate 18 47 40 Wages; two women servants 18 22 22 Clothes - - - - 60 85 70 Boots and shoes - - 90 180 160 Wine, spirits, and strong beer 16 35 30 Table beer - - - 7 11 9 Tea, sugar, and other groceries 22 38 35 Fuel - - - - 24 35 30 Light, viz. candles and oil - 60 100 80 Washing - - - -160 25 22 Bread - - - - 25 50 25 Butcher meat - - 25 45 30 Milk, butter, fish, cheese - 50 85 70 Education - - -140 22 20 Medical attendance - - 140 20 20 Furniture; annual repairs, and > H Q 24 20 purchases - - - y Incidents, such as postage, sta- ^ tionary, charity, pocket dis- > 35 55 50 bursements - - - ) Expenses of a less necessary"} character, such as excursion ! ~ ft „ ^o 40 O to the sea side, or the | country - - - J Expense of company - 35 60 50 Furniture ; interest on the mo- ) ney invested in its purchase ; > 42 63 53 also its insurance against fire ) £540 £900 £750 We are next to exhibit these charges in a more concise form, classing them under specific heads, and showing the per-centage, or proportion borne by each head ; thus : App.] Hise of Prices during the War. [H Bread, butcher meat, beer, and other provisions of home growth or manufacture - Provisions, such as groceries, of foreign produce - Clothes and washing - Rent - Fuel and light - Continececies - Bread, butcher meat, beer, and } other provisions of home > growth - - - - ) Provisions, such as groceries of) foreign growth - - ) Clothes and washing - House rent - Assessed taxes and poor rate Fuel and light - Education, medical attendance, ) repairs, and occasional pur- > chases of furniture - - ) Travelling, entertaining com- } pany, and other less neces- > sary expenses - - - ) Servants' wages Incidents - - - Expense of the family of a coun- try labourer. Parts in 100. 55 Expense oi the town me- chanic. Parts in 100. 42 10 20 19 6i 8 10 8 3£ 13 100 100 A family of the middle class ex- A family oL pending between larger in- 500 and 800/. come, expen- a-year in Lon- ding 1000/. don, or nearly and upwards. 500 in a provin- cial town. Parts in 100. Parts in 100. 25 20 8 5 18 14* 10 10 7 4| 6 3 100 13 14 5-i lOh 100 In calculating these proportions, we have taken the re- sults, not of any particular year, but of a number of years. [12J Rise of Prices during the War, [App. Comparative Comfort of the labouring Classes in War and Peace. — The expense of the labouring classes is, of course, confined to the necessaries of life, and the above summary shows clearly the greater proportion of their income that is appropriated to the purchase of food. Now as food rose during the war more than any other head of expense, it follows that the ratio of enhancement was greater in the case of the working classes, than in that of their superiors. On the part of the middle and upper ranks, 160/. or 170Z. were required to make those purchases for which 100/. sufficed in 1792 ; but on the part of the lower orders 180/, were probably not more than adequate. It thus becomes a question whether, after all the rise that took place in wages, the condition of the labouring classes during the war was more comfortable than in 1792. That at present it is much better, will at once appear from an inspection of the preceding tables, for while wages have been but little lowered, provisions have fallen greatly, and the reduction of housekeeping since 1814, which to the middle classes has been only about 20 per cent., is nearly twice as much to their inferiors. Rise in the Price of Corn. — Towards the close of the war the price of corn, butcher meat, and most articles of country produce, became double that of the year 1792, which, con- sidering the proportion borne by provisions to our total consumption, might have justified our computing at 33 per cent., the addition thus made to our national expenditure. But as this extreme rise lasted only a few years, we have called it in the text 30 per cent. Causes of this Rise in Corn. — These shall be fully ex- plained in our chapter on agriculture : at present we state them very briefly ; viz, 1 . The rise in labour and other farming charges attends ant on the war. 2. The occurrence of a series of bad or indifferent sea- sons, 1794, 1795, 1799, 1800, 1811. These two causes raised the quarter of wheat from 50s. to 80s., where in all probability, it would have stopped, had not, 3. The depreciation of our currency after 1809, sub- jected our import of corn to an enhancement so great as to carry our averaere from 80s. to 100s. App.] Rise of Prices during the fVar. [13] Are such Causes likely to be operative in future? — Inter- ference with our currency is, in all probability, excluded from the creed of our rulers, and a rise in the price of la- bour seems out of the question in a season of peace. Of the remaining cause of enhancement, the occurrence of bad or indifferent seasons, nothing can be said, except that so long as peace shall continue, the degree of rise proceeding from it, will be greatly checked by the facility of import. Enhancement of Labour. — The proportion of rise attri- buted in the text to " Labour," may appear somewhat be- low the mark, since the rate of wages and salaries was dou- bled, or nearly doubled, in the course of the war, while our table of housekeeping expenditure is found, on comparing the years 1792 and 1813, to exhibit a large addition under the different heads, (clothes, furniture, house-rent, &tc.) affected by rise of labour. These considerations, however, are subject to material qualifications. They apply only to the upper classes, since our humbler countrymen perform service for themselves, aud exclude wages from the list of their charges. Next, in regard to one very extensive de- partment, agriculture, the rise proceeding from " Labour" is comprised in the 30 per cent, attributed, in our summary, to the enhancement arising from " Provisions." Add to this, in the third place, that in various manufactures, such as cot- ton and hardware, the additional cost proceeding from rise of wages, was balanced by improved methods of working, and by the application of machinery. On the whole, there- fore, it seems that we may account an addition of 20 per cent, to our general expenditure, a fair representation of the rise of prices during the war, as far as such rise is attribu- table to enhancement of labour. Paper Currency — its Depreciation. — It may occur to our readers, that in the summary of the causes of enhance- ment in the text, paper currency ought to have found a place along with taxation, rise of labour, he. Allowance, however, is made for its operation in our estimate of the enhancement of corn, and of the other imported articles, cotton, wool, tobacco, the cost of which was so greatly increased towards the close of the war by the decline of our paper. Annuitants on Mortgage. — After explaining in the text the loss sustained by such annuitants in one point of view. [14] Rise of Prices during the War, [App. it is fit to add that in another, viz. keeping up the rate of interest, the effect of the war proved favourable to them. Had peace continued after 1792, their debtors, instead of continuing to pay them 5 per cent, interest, would have ob- tained loans at 4 \ or 4 per cent., and would, doubtless, have availed themselves of the power of paying off or reducing the interest on their mortgages, in the manner so generally practised during the last and present year. [15] APPENDIX CHAPTER IV. Our Currency and Exchanges. On the Amount of Bank of England Notes in Circulation. — The circulation of money is generally considered under two heads ; that of the larger sums, which takes place be- tween wholesale dealers ; and that of the smaller, which applies to retail, the payment of wages, and other petty transactions. Between wholesale dealers money circulates with rapidity : bank notes, like coin, being wholly unproduc- tive, any superfluous stock of them is exchanged as quickly as possible for mercantile acceptances, the purchase of govern- ment stock, or other securities readily controvertible into cash. In London, the vicinity of bankers to each other, and the power of receiving an immediate supply on a deposit of securities, enable banking-houses (Bullion Report, p. 26. and Evidence, p. 123.) to lessen greatly the amount kept by them as a reserve or unproductive fund. Add to this, that whatever renders money abundant in the metropolis has a speedy effect on the kingdom at large ; so intimate is the connexion between town and country, so extensive the cor- respondence (Evidence Bullion Report, pp. 123, 124, 125.) of bill and money agents. If we assume six weeks as the medium term of bills discounted at the bank, and suppose the money to change hands once in two days, the result is that 100,000/. thus obtained will, in the course of the six weeks that the bill remains uncalled for, circulate about 2,000,000/. of merchandise. How great, then, must have been the distress of trade in the latter months of 1796, and the early part of 1797, when our circulating medium was contracted by two or three millions : how seasonable the [16] Our Currency and Exchanges. [Afp. relief afforded in the course of 1797, by the resumption of discounts on their former scale ! An increase of Bank of England notes is not conclusive proof of an increase of our circulating medium at large. — If our readers are reluctant to admit this, we must remind them of a point in which the public opinion was long equally positive, viz. that we received an annual sum of money from foreign countries, in payment of our profits or balance of trade. This was a favourite notion with our ancestors, and is still a prevalent impression among our practical men. The balance was even reduced to specific computation, the received mode of calculating it having been to deduct the amount of our imports from that of our exports, and assume that the difference must be profit, payable to us in hard cash : a comfortable doctrine, cer- tainly, and one which, had it been well founded, would have brought among us, in the course of the last century, a sum little short of 400,000,000/. sterling. This is mentioned merely as an example of the hazard of deducing an infer- ence from appearances : in regard to the present question, the increase of Bank of England paper, the doubt arises from our having no power to discriminate how far such increase forms an addition to our circulation, or is merely a substitution of paper for coin sent abroad. Or, if the state of exchange be considered as affording, in some mea- sure, an index in that respect, what means have we of as- certaining another material point ; viz. how far an extra issue of Bank of England notes may not be a substitution for a corresponding amount of country bank paper with- drawn from circulation ? This was, doubtless, the case in 1810 and 1811, a time when a number of country banks became either insolvent or discredited by the insolvency of their neighbours. Again, on the fall of prices in 1815 and 1816, there took place in our paper currency a reduction of several millions ; but as the Bank of England experienced no variation of consequence, the inference is, that its paper must have been substituted in various districts for the diminished circulation of the country banks. Finally, we have the authority of both the Bullion Report, (p. 26.) and of that of the Bank Committee of 1819, that no satisfactory conclusions are to be drawn from the amount of Bank of England paper in circulation ; a declaration of great im- portance, since the increase of that circulation formed, all along, to the antagonists of the bank, the fundamental argument for the charge of over issue. App.J Our Currency and Exchanges. [17 j Fluctuations in the Circulation of Bank of England Notes. — Were we to attempt calculation on a subject necessarily conjectural, we mean how far additions to the circulation of the Bank of England formed an increase of our currency, or were merely a substitution for coin sent abroad, we should begin by considering in the latter sense all notes of 11. and 21., and confine our attention to the fluctuations in notes of 5Z. and upwards. The addition made to the latter, in the years 1797 and 1798, appears to have done little more than replace the contraction caused by the general embarrassment and distrust of the early years of the war. In 1799, 1800, and 1801, there took place an increase of nearly two millions, proceeding from several causes, par- ticularly the export of coin, and the general rise in the price of commodities. From the end of 1802 to that of 1808, there was hardly any increase ; a circumstance in a high degree remarkable, when we consider the extension of our productive industry, the farther rise of prices, and the con- tinued exemption of the Bank from cash payments. From 1809 to 1814 the case was altogether different, the circu- lation increasing four, five, six, and even seven millions above its amount in the preceding period. Of this the causes were various ; first, the almost complete export of our metallic currency ; next, the discredit ofcountry banks after the insolvencies of 1810; but, above all, the rise of prices which, at this period of the war, was owing chiefly to the depreciation of our bank paper. The next era of fluctuation (1815 and 1816) was of a very different character : it affected chiefly the country- banks, and was evidently a consequence of the general fall of prices, multiplied failures, and stagnation of business. The amount of this contraction has not been ascertained with any accuracy ; but from the returns inserted towards the close of the Report of the Bank Committee of 1819, it seems to have exceeded 8,000,000/. ; a sum which, large as it was, appears to have been nearly counterpoised by the re-extension of country-bank circulation on the rise of prices in 1817 and 1818. Since the peace, what have been the causes affecting the circulation of the Bank of England ? The substitution, on a greater or less scale, of coin for paper ; the rise or fall of prices ; and, what is closely connected with that rise or fall, the credit or discredit of our provincial banks. Circulation of Provincial Banks. — To ascertain the amount of country-bank paper in circulation would be an [18] Our Currency and Exchanges. [App. object of great interest and importance ; at present our means of calculating it are very inadequate, and must con- tinue so while private banks are so numerous and on so small a scale. The Bank of England, placed above the hazard of discredit, declares openly its circulation : private bankers require, or conceive that they require, the aid of secrecy. This will, in all probability, continue until the arrival of the much-desired period, when the coun- try at large shall be admitted to the advantage at present enjoyed by Scotland alone, we mean that of having an un- limited number of partners in country banks. The con- sequence would be, a stability beyond all doubt ; and the accumulation in a limited number of great establishments (chartered banks) of that business which is at present broken into small, and frequently insecure fragments. (See the evidence of E. Gilchrist before the Bullion Commit- tee, 1810 ; also Mr Joplin's pamphlet on Country Banks.) The Exemption from Cash Payments. — To exempt banks from cash payments was a measure altogether new in the history of finance, and the necessity for it is to be sought in difficulties that were peculiar to ourselves. France, Austria, and most other countries, know no mode of carry- ing on war but by furnishing men and military stores ; but after 1795, England, in a great measure, exchanged this plan for the payment of subsidies. Then as to an occasional demand for a very different purpose, the supply of corn, the lower classes in most countries of the Continent, on the occurrence of scarcity, have recourse to coarse substitutes, or, being immersed in a poverty of which we have no idea, often fall victims to unhealthy food, sometimes to ab- solute want ; while, in a wealthy community like England, an export of the circulating medium is made the means of obtaining relief. Now, though the sums sent abroad are in either case less great than they appear, our subsidies being furnished in a great degree, in stores, and our corn paid, in some measure, by manufactures, the drain takes place from a stream already sufficiently small for its channel ; for in no country is there more of circulating medium than is indispensable for the transaction of business. This is ap- parent from various circumstances ; from the rapidity with which money is made to circulate from dealer to dealer ; also, from a recent and striking fact, the distress that oc- curred in France in the autumn of 1818, when, notwith- standing the enjoyment of peace and free trade, the abstrac- tion of a part of the metallic currency led to the most App.J Our Currency and Exchanges. [19] distressing results; an immediate reduction of discounts, a general fall of prices, and a long list of bankruptcies. From difficulties of this nature we were relieved by that decisive measure, the exemption of our banks from cash pay- ments : after its adoption no scarcity of money was expe- rienced in the years of our heaviest continental demands : its effect, in fact, was to remove present pressure by incurring the hazard of depreciation, and of a great ultimate addition to our debt. The Time of its Operation, — A considerable time elapsed before the operation of the act was fairly tried. In 1797 and 1 798, our financial affairs were prosperous ; our con- tinental exchanges were favourable ; and the suspension of subsidies and corn imports would, without the exemption, have restored confidence in our money market : when concurrent with it and with a vigorous increase of tax- ation, they raised the funds and added largely to the command of money on the part of our merchants, our manufacturers, our agriculturists. It was not till the autumn of 1799, that the aid expected from the act was put fairly to the test ; our allies required large payments ; our deficient harvest necessitated a great import ; and both were supplied without the pecuniary embarrassment expe- rienced before the exemption. The means now adopted were, the export of our coin to the Continent, and the substitution of bank paper : the result a partial depreci- ation (between 3 and 5 per cent.) of bank notes relatively to coin. In 1800, notwithstanding the continuance of continental demands both for subsidies and the purchase of corn, both government and the mercantile world still escaped pressure from scarcity of money, and thus got over an interval of greater pressure than any in the early years of the war. The experiment had not, indeed, been made with impunity : we had exhausted our coin, and could not have undergone such another trial without a great depre- ciation of our paper. This was, doubtless, felt by Mr Pitt, and may be ranked among his principal motives for resigning and advising peace ; but the shock was not per- ceived by the public, and was evidently of a nature to be repaired in a season of tranquillity. Increase of Discounts explained. — The Bullion Committee in their Report (p. 26.) animadverted emphatically on the Great increase that had taken place in Hie amount of c\\*- [20] Our Currency and Exchanges. [Apr. counts by the Bank of England, between 1797 and 1810. This they ascribed to over-issue, but they omitted to make allowance for the operation of several causes of a wholly dif- ferent nature. Thus, after the Exemption Act, the notes of the Bank of England were made to replace the cash reserve of every banker in the kingdom, and supplies of these notes could be obtained only by discount. Hence, the adoption of a practice, which, in the last age, would have been deemed not a little extraordinary by the cautious veterans of Lombard Street, — that of London bankers opening, like merchants, accounts with the Bank of Eng- land ; and, when in want of money, sending thither bills for discount, in preference to a sale of Exchequer bills or stock. If the reserve fund of all the country banks of the kingdom, previous to the Exemption Act, be calculated at 4,000,000/., we need be at no loss to account for a very large addition to the demands for discount on the Bank of England. The Rate of Interest. — Our last reference to facts, or, as the French express it, to les choses positives, regards the rate of interest which, notwithstanding the magnitude of our war expense, rose only one per cent, above its average rate in peace. This was certainly a very moderate differ- ence, and owing, in a great measure, to the substitution of war taxes for loans ; to our raising so large a portion of our supplies within the year. It was owing, also, in a very considerable degree, to the advantage arising to bankers, from the Exemption Act ; an advantage founded, in the case of provincial banks, on the saving of their reserve or dead fund, and wholly distinct from a power to in- crease their issues ad libitum. Had the latter been prac- ticable, would not so gainful a business have been followed more extensively, and would not interest soon have been reduced by an eager competition, from five to four per cent.?* The Exemption Act considered as an economising Expe- dient.-. — The use of bank paper is a refinement enabling a community to turn to account a large proportion, sup- pose the half, of a currency which would otherwise be wholly unproductive. The exemption from cash payments * For farther arguments on the limited power of banks, see a pam- phlet entitled " Observations on the Depreciation of Money ;" also, a- second pamphlet, entitled " Farther Observations ;" both published in 1811, by Robert Wilson, Esq. Accountant:, and one of the Directors of the Bank of Scotland. App.] Our Currency and Exchanges. [21] is a farther refinement, enabling bankers to hold, at the dis- posal of their customers, the chief part of their reserve fund ; which, for the sake of precision, we shall consider a fourth of the paper currency in the country. Now, to keep the reserve fund as low as is compatible with security, has long been the wish of our bankers, and the object of a variety of arrangements : of these, by far the most effectual is that by which they settle their daily balances against each other, amounting (Evidence to the Bullion Report, p. 151.) to the very large sum of 5,000,000Z. daily, by an exchange of cheques, without having occasion to use more than a tenth of the sum in bank notes. Of the same nature, are certain facilities given at the Bank of England, in regard to the hour at which a banking house makes its payment for the day ; as well as the employment of money agents or middle- men (Evidence, Bullion Report, p. 124.) in obtaining sums from one banker for another, at very short notice. These various modes of lessening the amount of a dead stock are both ingenious and legitimate, affording a striking proof of the advantages attendant on a great commercial community, on mutual confidence, and vicinity of position. A farther saving of this nature would have formed one of the leading features of Mr. Ricardo's " plan for an econo- mical and secure currency." Now, the result, which, on a comparative small scale, was attained by these arrange- ments, was accomplished, en grand, by the Exemption Act ; which, by one decisive provision, enabled bankers to dispense with the most expensive and anxious part of their business. So far as regarded circulation at home, its effect partook of the beneficial character of the economising ex- pedients; its weak side was towards the Continent, and there accordingly was received the wound which proved the source of so much pain and disquietude after 1809. Report of the Bullion Committee. — This document, the merits of which have been so differently estimated, may be read with interest even at present, when the subject has re- ceived so much additional elucidation, both from research and from events that have intervened. The passages in the Report which treat of the regulation of money and ex- change, whatever, in short, can be termed an exposition of general principles, are remarkable for accuracy and clear- ness : those of a different character are to be found in the latter part (pp. 23, 24.), and are open to censure, chiefly as implying: a belief that the Bank had the means of in- [22] Our Currency and Exchanges. [App. creasing its issues at discretion, as if the public were wholly without the power of checking the circulation, a power so clearly illustrated by Mr. Bosanquet, in his " Practical Ob- servations on the Report." Of the extent of misconception conveyed by disseminat- ing the opinion that " the rise of prices was owing chiefly to our bank paper," some idea may be formed from one simple fact. The total rise of prices between 1797 and 1810 was above 30 per cent. ; and of that not more than 5 or 6 per cent, was at that time attributable to the non-convertibility of our paper. (See the Essay on Money in Napier's Supplement, p. 526.) In this, we refer to the declaration of an eminent bullionist, (Mr. M'Culloch,) and cite his au- thority in contradiction to that of the Bullion Committee itself. Another serious error, or rather omission in the Report, is an inattention to the " effect on the exchange of our sub- sidies and corn purchases." An admission is, indeed, made (p. 16.) in general terms, of the effect of political and mer- cantile transactions ; but the impression conveyed by it is lessened by other passages (p. 21, he.) in which the effects in question are treated as slight, and the result of the stop- page of American intercourse with the Continent is wholly passed over. That the authors of the Report had deferred for a season the formation of their conclusions on a subject so new and complex, had certainly been desirable ; but there seems no ground for the suspicion of their being actuated by party feeling. Their labours give evidence of great research and solicitude for truth ; while the imperfections in their rea- soning admit of explanation from circumstances similar to those to which we have alluded in the text ; in particular, the fact, that so much of the information now before the public was either unknown or very imperfectly disclosed to them. Thus, a witness of evident ability, and in the habit of very extensive discount transactions, gave (p. 124.) the following evidence : " Do you know, in point of fact, whether such transac- tions as you have now described, were in practice previous to the suspension of the cash payments of the Bank ? — Yes ; tiiey were. " Do you know whether they were practised to a similar extent ? — No ; they were not. " In what proportion, compared with the present time ? — I cannot form anv exact criterion. App.J Our Currency and Exchanges. [23] " Crfn you state to the Committee, the cause of such dif- ference ? — I believe it to be on account of the increase of country paper, and also Bank of England paper." When a witness of such intelligence, in accounting for the augmentation of discounts, leaves out of consideration the effects of the increase of our population and productive industry from 1797 to 1810, we need hardly wonder that they should have escaped the attention of the Committee. In fact, the errors of the latter may be easily accounted for. The chief writer of the Report, however temperate, impar- tial, and likely to rise in reputation, had his life been pro- longed, was a stranger to the practice of business ; and could not, from his youth, have had much acquaintance with the state of our money transactions previous to 1797. Of his coadjutors, one was a banker, never remarkable for clearness or accuracy ; another, a man of undoubted ability, but at that time new, as he has himself admitted,* to ques- tions of this nature. Accordingly, in historical and com- mercial matter the Report is very defective ; no notice is taken in it of the pecuniary embarrassments of 1795 and .1796, arising from the double drain of specie for subsidies and corn; nor is tHe recurrence of these causes in 1799 or 1 809 adverted to, although it was to them that we owed the chief increase of our bank notes. Nothing would have con- tributed so much to obtain the conviction of the mercantile body, we may say of the public at large, as a course of rea- soning supported by facts. Such an inquiry, conducted with the candour that marks the Report, and was so con- spicuous in the general parliamentary conduct of Mr. Hor- ner, would have led to several very important conclusions ; — to an estimate of the share in depreciation to be ascribed in the first place to the expenditure then making in Spain ; next, to the corn imports then in progress from the Conti- nent ; and, lastly, to the interruption of the trade of the United States. Had the effect of the last been proved to be considerable, the inquiry might perhaps have led to a most desirable measure — the repeal of our Orders in Coun- cil before the United States resorted to the alternative of war. Questions at issue between the Opponents and Supporters of the Bullion Report. — The points most strongly contested between the opposite parties in the bullion question were * Huskinson on the Depreciation of our Currency, l'JIO. [24 j Our Currency and Exchanges. [Apf. two ; — first, the cause of the fall of our exchanges ; and, next, the cause of the progressive enhancement of commo- dities. As to the former, the events of 1815 showed, be- yond doubt, that the primary cause of fluctuations in the exchange was to be sought in continental transactions, how- ever much the non-convertibility of our paper might affect the degree and duration of the fall. The second question is more complicated, and there is still no small difficulty in convincing the bullionists that the operation of our non- convertible paper was passive, and necessarily posterior to the rise of prices. They will not, however, refuse their attention to facts, or deny that a very general rise of prices took place prior to 1797 ; nor will they object to admit in- ferences from the case of the agriculturists, the class whose circumstances operate most directly on the circulation of country banks. Connexion between the Circumstances of our Agriculturists and the Circulation of Country Banks. — The continued in- adequacy of our growth of corn rendered the war a period of activity in regard to enclosures, drainages, and other ag- ricultural improvements : prices were carried to 30, 50, and in the latter years of the war to 100 per cent, beyond those of peace, requiring thus twice the sum to purchase the same commodities. Wages rose progressively ; the style of living of the farmer, and even of their labourers, was visibly im- proved. Observe the reverse of the picture as exhibited in 1815 and 1816 : prices and wages had fallen surprisingly; enclosures, drainages, and other improvements, were discou- raged ; the style of house-keeping on the part of the farmers was lowered, and a far smaller sum of currency was found sufficient for their transactions. In 1817 the high prices of corn brought back activity in agricultural improvements, and (see the Report of the Bank Committee of 1819) a renewed increase of paper currency. During the last four years the picture has been for the fourth time reversed ; prices have fallen greatly, and with them the circulation of bank paper. Prices of Merchandise. — In regard to these also, a simi- lar course of reasoning will be found to hold : the adoption of a paper currency tended, doubtless, to promote en- hancement ; but the primary causes of it are to be sought in the war demand, or (see Tooke on High and Low Prices) in unfavourable seasons and obstructions to mercantile in- tercourse. It is a fact that almost all articles experienced . &c. After enumerating the respective burdens, we found the difference confined to a portion of our excise duty on malt, beer, and corn spirits ; a difference which, when, as at present, the corn laws are in a manner inoperative, left a sum of 4 or 5,000,000/. to the disadvantage of our coun- trymen. This difference forms a charge of 7 or 8 per cent, on the rental of our landlords, and the income of our farm- ers taken collectively. Competition of continental Agriculturists. — Supposing that the effect of a protecting duty is merely to keep our market from 6s. to 8s. a quarter above that of France, or the Netherlands, would there be reason to apprehend that English capital would find its way abroad, and be applied to the extension of culture on the Continent, with a view to import into this country ? To such a question our answer three years ago might have been in the affirmative ; but our charges are now so much reduced, and the advantages of Ireland in regard to cheap labour, command of water communication, and fertility of soil, are found to approach so nearly to those of the most favoured tracts of the Conti- nent, that we much doubt whether any transfer of capital would take place to the latter, particularly as, on referring to the evidence annexed to the Agricultural Report, we find (p. 364.) that the cost of raising a quarter of wheat in Prussia or Poland, including the conveyance to Dantzic. but exclusive of rent, is about 36s. the quarter, an expense little greater than the cost of raising it (p. 335.) free of rent, in East Lothian. Next, as to the storing or warehousing of foreign corn, with a view to import. — The interest of the money vested in the purchase of corn forms so considerable a part of the annual charge of keeping it in granary, that were our prices to rise materially, it might enter into the views of our corn merchants to purchase in remote countries, like the interior of Poland or the south-west of Russia, where the average M i'42] Our Agriculture. [Avt, price of wheat is not above 30s. and in some years (Evi- dence, p. 364.) lower. At present such a course is out of the question, the inland provinces in these countries being unprovided either with proper warehouses, or with the means of giving security to deposited property. Were these defects supplied by the erection of suitable build- ings in a town adjacent to a navigable river, and by the protection of a military guard, a large supply of corn might be warehoused in cheap years, and on the occur- rence of a rise, sent to a market in this country or else- where. The transport to Dantzic or Odessa, added to the freight from Dantzic to England, or from Odessa to the south of France, might be averaged at 20s. the quarter, carrying the total cost, when brought to market, to some- what more than 50s. exclusive of our protecting duty ; a price which, if not high, is greatly above that which is assigned by vague rumour (see Mr. Curwen's speeches in the session of 1821) to the Polish market. The United States of America. — The great distance of that country from Europe has long led to the practice of ship- ping its produce in the form of flour, rather than of grain ; thus accomplishing a saving in freight, and avoiding the shifting and heating to be apprehended in a long and tem- pestuous passage. Among other recent discoveries, we are apprised (p. 437. Revue Encyclopedique, for August, 1821, printed at Paris) of a method of preserving flour during several years in perfect condition, by means of air-tight casks ; but whether the expense of this or other methods of the kind be not too great for the chance of profit, remains to be ascertained. Compared to these, what means are possessed by our own agriculturists in regard to keeping corn in the granary, and making the plenty of one season conducive to the supply of the next ? They have the command of better buildings ; they pay a lower interest on capital ; and are exempt, in a great measure, from the charge of conveyance to mar- ket : their chief disadvantage lies in the prime cost of their produce. Improvements in Husbandry. — Those who are inclined to subscribe to the efficacy of some lately-promulgated methods of penetrating more deeply into the soil, whether by the plough or spade, may consider the Continent likely to benefit more largely from them in consequence of its cheaper labour, its greater agricultural population. But Afp.J Our Agriculture. [43 J in any improvement arising from such a process, this coun- try can hardly fail to share equally, superior as we are in horses, ploughs, and iron-work generally ; while, in regard to labour, Ireland is as cheaply and abundantly supplied as any part of the Continent. Probable Amount of Import. — A low rate of duty on foreign corn would doubtless prevent any considerable rise ia our market ; but it by no means follows that our tillage would be materially circumscribed, or that the amount of our import would be large. Of barley, our growth is in general equal to our consumption : a considerable import takes place only in particular years, and after seasons unfavourable to this kind of grain, such as the summers of 1816 and 1817. In oats the case has hitherto been different, our growth being habitually below our consumption, and large imports being required both from Ireland and the Continent : the amount has varied, of course, in different years, but has not for a long time averaged so little as half a million of quarters from either. In future our import of oats, at least in peace, is likely to be confined to Ireland. Of beans, pease, and rye, our growth is in general adequate, and our imports in- significant : in regard to wheat, our imports, formerly on so large a scale, are at present suspended ; nor are they likely to be renewed during peace, except on the accidental occur- rence of an indifferent season. What appears to be the average growth of corn of all kinds in Great Britain and Ireland ? According to Mr. Colquhoun, it seems in 1812 to have been, including the corn used as seed, about 40,000,000 of quarters, to which may be added for increase in the period that has intervened about 20 per cent., or 8,000,000 of quarters. In reasoning on years to come, with the prospect of a progressive in- crease, we shall not greatly err in taking our growth at an average of nearly 50,000,000 of quarters, of corn of all kinds. Then, as to import — now that we are in the enjoy- ment of peace, and possess so ample a command of capital and labour, we may calculate our average demand for foreign corn at a very moderate amount. It must necessa- rily vary greatly, according to the seasons ; but the aver- age of a series of years of peace will perhaps not exceed a million of quarters of grain of all kinds, or 2 per cent, on the total of our annual growth. " All undue protection to agriculture," says Mr. Ricardo in his pamphlet on Agriculture, (p. 81.) <: should be [44] Our Agriculture [Apf. gradually withdrawn. The policy which we ought, at thi> moment of distress to adopt, is to give the monopoly of the home market to the British grower till corn reaches 70s. per quarter. When it has reached 70s., a duty of 20s. per quarter on the importation of wheat, and other grain in proportion, might be imposed. " J should further propose, that the duty of 20s. should t very year be reduced one shilling, until it reached ten hillings. A duty of ten shillings per quarter, on. importa- tion, to which I wish to approach, is, I am sure, rather too high as a countervailing duty for the peculiar taxes which ;ire imposed on the corn grower, over and above those which are imposed on the other classes of production in the country ; but I would rather err on the side of a liberal al- lowance than of a scanty one." Ought a Protecting Duty to be suspended in a dear Season'! — However adverse in general to high prices, we are by no means inclined to give this question an affirmative answer. The temperature which causes a partial failur;; in England being likely to prevail throughout the north- west of Europe, can hardly fail to raise the corn market in the Netherlands, the Danish dominions, and the north of Germany, in the same manner, though not in an equal degree, as in this country. Prices may thus be brought, by a natural course, to the limit at which the protecting duty ceases : if not, a suspension of it would be impolitic, as well from the general inexpediency of tampering with an established law, as for another reason, viz. that a rise of price does not (Evidence, p. 36.) in a year of deficiency form an equivalent to a farmer for short quantity ; he can be indemnified only by the continuance of the advanced price during the succeeding year. To that he is fairly entitled : to deprive him of it by a suspension of the protecting duty, would be to cast on tillage a discouragement similar to what it has experienced from unlimited import under the corn law of 1815. But in what manner, it may be asked, should we theii lessen to the poor the pressure of a dear season ? By charitable contributions; which, when limited to an interval of real want, have few or none of the bad consequences oi an established poor-rate. And in what way are the public indemnified for taking this burden on themselves instead of suspending the protecting duty? By the moderate rat which that dutv is fixed. App.] Our Agriculture. [45] To these observations we subjoin the opinion of a writer who differs in many points from the political economists of the school of Smith : — Observations of Mr. S. Gray on the Corn Trade. — Mr. G. has given, in the papers added in 1819 to his work entitled " The Happiness of States," an opinion (pp. 34, 35.) on the corn trade, similar in most points to that of the Agri- cultural Committee of 1821. He always considered our late corn law as likely to make importation affect the home price suddenly or violently ; while a protecting duty would make it flow in a gentle stream, tending to keep prices fair, and inducing the foreign cultivator to look to England as a market, on certain conditions ; according to which he would regulate his purchase of our colonial goods and manufactures. This opinion proceeds from a writer by no means inclined to regard low prices as a public advantage, but who considers (Happiness of States, p. 665.) fluctuating gains as highly pernicious, tending to raise rents and labour extravagantly, and to produce a premature change in the style of living. The true interest of the farmer is in a steady price, tending to rise gradually with the national improvement, and proportioned consequently to the prices of other commodities. Tenants on Lease, and Debtors on Mortgage. — The case of a tenant on lease, on the occurrence of a rapid fall of prices, is peculiarly hard; the evil overtakes him in all its extent, while the relief is but partial, the grand charge of rent remaining unadapted to the altered state of things. He must in the first instance lay his account with a sacri- fice of part of his capital, with refunding the gains arising from the previous depreciation of money. This, it must be confessed, is but fair, since the profit arising during the war from depreciation was reaped chiefly by the tenant. But after a certain period of suffering, a liberal landlord will consider what is due to equity, and what in many cases, where the covenants of the lease are not drawn in the anticipation of such a change, is necessary to prevent injury to his land. Debtors on mortgage are, in like manner, heavy suf- ferers, their means of payment generally diminishing as the value of their money debt increases. They have, however. in one respect a substantial ground of hope ; the prosper? j_46j Our Agriculture. [App. of reducing their interest to 4|, and some time hence to 4 per cent. Interference by Courts of Justice. — During the half cen- tury from 1764 to 1814, the change in the value of money was all on the opposite side, commodities tending to a rise : gradual, and almost imperceptible during thirty years, it was after 1794 so regularly progressive, that in the course of twenty years 160/. became equivalent to only 1001. of 1794. During the latter years of the war, annuitants, and the landlords who had granted long leases, received hardly two-thirds of the original value ; yet no appeal on the ground of depreciated currency was brought before parlia- ment or our courts of justice. Any attempt of that kind in parliament would have been resisted by government, partly from an aversion to interfere with private contracts ; more from a solicitude to prevent the public attention being fixed on the depreciation then going on in the greatest of all debts, that of the nation. Since 1814, we have had a reaction, and of so rapid a nature, that in trade 100/. are equal to 130/. at the close of the war ; in farming to much more. How, it may be asked, does this sudden change affect the question of judi- cial interference ? In equity, there can be little doubt that all engagements ought to continue payable in money of the value at which they were contracted : the objections to inter- ference arise, therefore, from considerations of expediency ; from a dread of exciting litigation among individuals, and a still greater dread of shaking indirectly the credit of our funds, open as are the exchequers of other countries to our capitalists. Some time hence it may, perhaps, be found practicable to combine two very nice points — a farther re- duction of our burdens with the preservation of the divi- dends at their present value. But on this we cannot now enter ; and any intervention on the part of our courts of justice seems at present out of the question. It could be seriously expected only in the case of our corn trade being thrown open, and the continuance of low prices being thus put beyond all doubt. In any event, it would probably not go beyond the suspension of legal process for a given period of years, against a debtor who should have paid or tendered in money the chief part (perhaps three-fourths) of his pre- viously contracted debt: a sacrifice apparently large on the part of creditors, but which, in very many cases, may be unavoidable without such intervention, since a continu- App.] Our Agriculture. [47] ance of low prices would involve the majority of agricultu- ral debtors in insolvency. Dr. Smith on Agricultural Improvers. — In the Wealth of Nations (Book V. Chapter II.) Dr. Smith discusses the ex- pediency of inducing landlords to cultivate for their own account a portion of their lands, with a view to the disco- very and diffusion of improvements in husbandry. He remarks, in another part, that men of mercantile habits frequently become successful agriculturists, being more ac- customed than the hereditary farmer to calculate eventual advantages, and to hazard an outlay for a remote return. Had his life been prolonged, he would have seen, during the war, an ample addition to the list of gentlemen farmers, and have had occasion, since the peace, to qualify very materially his favourable opinion of agricultural under- takings when in the hands of men of other professions. In his time the practical farmers were comparatively poor and uneducated ; the hope of improvement in husbandry seemed to rest m the occasional adoption of a country life by men of different habits. Had the case been otherwise, and had our northern and eastern counties possessed half a century ago a tenantry equal to the present, Dr. Smith would probably have taken a different view of the subject, recommending that agriculture, like other pursuits, should be confined to those who had made it their business for life, and accounting for the success of gentlemen farmers during the twelve or thirteen years previous to the pub- lication of his book (1776) by a cause unforeseen, and, in some measure, accidental, — we mean the progressive rise of the price of corn. Value of Land during last Century.— -In treating histori- cally of the value of land, Mr. Arthur Young, in his " In- quiry into the Progressive Value of Money," 1812, ex- presses an opinion, that about the year 1770, estates sold at thirty-two years' purchase ; a rate higher, compared to the rent, than they bore during the preceding forty years. The reason, doubtless, was, that during that long period we had not an interval of peace of sufficient length to re- duce the interest of money. Next, as to rents, it is a re- markable fact, that from the beginning of last century until towards 1770, they had experienced hardly any rise. " A neighbour of mine in Suffolk," says Mr. Young, (Inquiry, p. 102.) u who inherited a considerable landed property, informed me, that in various conversations which he had. [4b] Our Jigriculturt. [Ai 1 ^ between thirty and forty years ago, (between 1 770 and 1780,) with a relation far advanced in years, and from whom much of that property was derived, that much surprise was ex- pressed at the rise of rents, which then began to take place. Through the long period of his relation's experience, no rise was ever thought of; and lease after lease, in long succession, was signed, without a word passing on the question of rent : that was an object considered as fixed ; and grandfather, father, and son, succeeded without a thought of any rise : in many cases landlords were much more apprehensive of losing a tenant at the old rent, than having the smallest conception of raising it to a new Comparative Price of Wheat on the Continent, and in Eng- land, previous to the French Revolution. Official Return of the price of Wheat at the Rosoy, o>* Paris Market, by the Septier of 240lbs. French. livrts. t a'. Average of the 10 years preceding 1776 - 28 7 9 Average of the 10 years preceding 1786 - 22 4 7 The year 1786 - - - - - 20 12 6 1787 22 2 1788 - - - - - 24 Average per septier, during the 23 years pre- ceding 1789 24 18 2 Reducing this to English measure and money, the ex- change being then twenty-four livres for the pound ster- ling, the result is an average for these twenty-three years, per Winchester quarter, of 38s. 6d. sterling. At Dantzic the average price of wheat in the twenty years from 1770 to 1789, both inclusive, after adding 7s. per quarter for freight and charge to England, was (Evi- dence, Agricultural Report, p. 366.) about 41s. But in England, the annual returns of purchase at Eton market, during the same period, give an average of 49s. : the whole computed by the Winchester quarter. This difference was not a little remarkable at a time when our taxation was hardly greater than that of our neighbours. Arising, in the first instance, from bad sea- sons, it owed its continuance partly to our corhxlaw ; more to the extension of our manufactures, and to our war with our American colonies while the continent of Europe re- mained in peace, ^ ^.pp.] Our Agriculture. [49] Average Prices of Grain in England in the year 1 822, taken from the Official Return. Wheat - 43*. 3d. | Rye - 20s. 3d. Barley - 21*. Sd. Beans - 23s. 9d. Oats - 17s. Id. I Pease - 25*. Id. Export and Import of Corn. (From the Agricultural Report of June 1821.) Quarters. Exporting period. — In the seventy-six years between 1697 and 1773, the amount of our export of corn of all kinds above our import was - 30,968,000 Importing period. — During the forty-two years from 1773 to 1815, the amount of our import above our export was about - 24,630,000 Ireland. — The import of corn of all kinds from Ireland to Great Britain, in the thirty- two years prior to 1806, was only 7,534,000 But after *he act of 1806 had rendered such import free, it amounted in fifteen years (to 1821) to ... 12,304,000 REMARKS The Agricultural Report of 1821. No public document was ever more eagerly expected, or more generally perused, than the Agricultural Report oi 1821. How far, it may be asked, did it fulfil the public expectation ? On the ground of impartiality and liberality of view, no reasonable disappointment could have been experienced, but the composition of the Report was by no means of equal merit with its substance. We do not allude to a deficiency of those graces of style which custom does not require in a parliamentary paper, and which would probably b^ misplaced there, but to a want of that M [50] Agricultural Report of 1 82 1 . [Ar p. brevity and arrangement which in any composition are in- dispensable to a distinct conception of the language of business. The Report begins without any sketch or out- line of its objects, and terminates with a very limited summary of its conclusions. The consequence has been, that many have read, while few have understood it ; for he who aims at understanding it thoroughly, or at viewing it in its ensemble, must go over the whole, not as a reader, but as an analyzer ; forming an arrangement for himself, frequently altering the succession of the arguments, and collecting them under general heads. The object of the Committee was, to express ourselves in official language, " to consider the various petitions complaining of the depressed state of our agriculture, to inquire into the allegations of the petitioners, and to report their observations thereupon." In pursuance of this authority, they examined a number of witnesses, and composed the Report partly from the evidence, but, in a far greater proportion, from their own views and conclusions on the corn-trade, considered as a general question. The whole may be said to embrace the follow- ing topics. Admission of the distress of the Agriculturists ; Attempt to ascertain its course, and to define its extent ; Reference to former periods of distress. Principles of our corn-trade : Historical retrospect : its prosperous state from 177 3 to 1814, a period comparatively exempt from legislative interference. Various disadvantages of our present corn-law ; Modifications suggested, particu- larly a moderate fixed duty on foreign corn. Examination of the petitions of the Agriculturists with regard to taxes ; of the high duty (40s. per quarter) which they propose on foreign wheat ; and, lastly, their objections to the unlimited warehousing of foreign corn. Such are the topics discussed in this long and interesting Report : the principal inferences from the reasoning are, That the bounty-system, whatever might be its early operation, was accompanied by a torpid state of agriculture for the half century previous to 1773 ; That one cause of the prosperity of our agriculture from 1773 to 1814, was its comparative exemption from legisla- tive interference. That the high import-limit established in 1815 tended in some degree to excess of home-growth. The advice of the Committee was to return, by cautious App . J Agricultural Report of 1 82 J . . [5 1 ] steps to an unrestricted state of intercourse ; reducing our import limit ; and substituting a duty of such an amount as should afford protection to the present cultivators of our inferior soils, but holding out no encouragement for the farther appropriation of these ungrateful occupancies. After this return to sound principle, the Committee hope that our increasing population, and the general improve- ment of circumstances attendant on confirmed peace, will relieve the distress of our agriculturists ; but they anticipate no relief from such measures as the proposed high duty (40s. per quarter) on foreign wheat, or from a restriction on the warehousing of foreign corn in our sea-ports. The former would lead to an excess of home-growth ; and the latter would merely transfer the deposites of the corn-mer- chants from our warehouses to those of Holland, Flanders, and other parts of the Continent which are convenient for shipping it to London. To the general spirit of the Report we subscribe, in common with all who acknowledge the principles of free trade, and who lament that our legislature deviated from them so materially in the case of our corn-laws. Next as to the language, the manner of expressing an opinion is a consideration of great nicety hi an official report ; in which, far different from the unauthorized publication of an individual, confidence of tone may lead to serious results. In the present case, it was of great importance to avoid all assertions which might be construed into inter- ference between landlord and tenant ; into a discourage- ment of the continuance of tillage at its present extent ; or, finally, into a protection of the consumer at the expense of the agriculturist. Against all this the Committee carefully guarded ; enjoining nothing with respect to a point so deli- cate as the adjustment of wages or rent to the reduced price of corn, but leaving the change to the natural operation of circumstances. In like manner, with regard to our import- limit for foreign corn, while a modification of its amount and the introduction of a fixed duty were suggested, no confident calculation or authoritative prescription were given as to the rate of either. In short, the Report was calculated to awaken the landed interest to the folly of the late system ; and to the injurious tendency of those inter- ferences, to which, formerly in the shape of bounty, and late!}* in that of discouragement to import, they have clung. If, on the whole, however, we think thus favourably of the Report of the Agricultural Committee, we. are by no [52] Agricultural Report of 1821. [Apr. means blind to its defects ; — to the omission of several to- pics, and to the imperfect illustration of others. We have already noticed in the text (p. 155.) The omission by the Committee of the grand argument, that the cost of raising corn has a tendency to fall with the fall of the market; and we have mentioned (App. p. [29]). Our dissent from the opinion of the Committee, that in- crease of population augmented the difficulty of providing subsistence. In fact, the chief defect of the Report arises from the belief that the cultivation of an additional surface becomes necessary in proportion to the increase of our numbers. So much do the Committee appear to have taken this for granted, that they addressed very few ques* tions to the witnesses on the practicability of augmenting crops by bestowing additional labour on the same soil. We, on the other hand, account the effect of labour in augment- ing produce so great, the connexion between the hands which raise and the mouths which consume, so direct, that in an attempt to calculate the relative productiveness of different countries, we should be guided chiefly by the re- turns of population. Almost every part of Europe raises subsistence enough for its inhabitants, with the exception of the maritime tracts of the Dutch provinces, or rather of the single province of Holland, which happens to have both an unusually large population, and a soil less adapted to tillage than pasture. The Committee have allowed this theory to influence their reasoning in several points, such as (Report, p. 10.) the question of a remunerating price ; the extent (p. 11.) of our probable suffering after a deficient harvest ; the argu- ment (p. 24.) against a high protecting duty. It may, in short, be said, that the effect of this impression is almost as perceptible in their labours, as was in those of the Bullion Committee the notion that the bank possessed the power of keeping an undue quantity of paper in circulation. — These drawbacks on the merit of the Report are neither few nor inconsiderable : they do not, however, prevent us from rank- ing it among the most important and instructive documents of the kind that have appeared for many years. Corn-Law of 1815. — The Committee very properly stigmatized the corn-law of 1815 as adverse to the con- nexion which it is our interest to keep up with the Continent, for the purpose of meeting our occasional deficiencies. Far from inducing our capitalists to purchase foreign corn, when it was cheap and abundant, that law discouraged all inter- App.] Agricultural Report of 1821, [53] course with our neighbours, except in years which, in con- sequence of the similarity of latitude and climate, were likely to be seasons of dearth with them as with us. The foreigner was thus prevented from buying our manufactures, at least from reckoning with any confidence on his means of pay- ment. Hence the advantage of the Act of the present year, whichj imperfect as it is, opens a prospect of eventual inter- course with our neighbours, and of lessening the extremes of rise and fall in our market. Corn-Law of 1822 ordered to be printed 20th June. Abstract. — The Corn-Law of 1815 permitted import free df duty, whenever our own corn, as returned by the ave- rages, was at or above Per Quarter. Per Quarter. Wheat - 80s. I Barley - - 40s, Rye, Pease, and Beans 53s. | Oats - - 26s. When our currency was below these prices, the import was prohibited. The present Act repeals that of 1815, and permits the import for home consumption of foreign corn, whenever our own corn shall be at or above Wheat - - 70s. I Barley - - 35s. Rye, Pease, and Beans 46s. | Oats - - 25s. subject to certain duties, the amount of which is regulated not by these prices, but by the following table : SCHEDULE (A.) Wheat. Rye, Pease, and Beans. Barley, Bear orBigg. Oats. If the average of British Corn be under, per Quarter 80s. . . 53.?. . . 40s. . . 285. Hith Duty . . 12s. . . 8s. . . 65. , 45. 11 at or above, per Quar- ter 80s. . . 53s. . . 40s. . . 28*. But under do. 85s. . . 5Ss. . . 425. Gd. . 305. First Low Duty . . 5s. . 3s. 6d. . 2s. Gd. . 25. If at or above, per Quar- ter ... 85s. . . 55s. . . 42s. Gd. . 30.?. Second Low Duty . . 1*. . . 8d. . . 6d. • • 4d. [54] Corn-Law of June 1822. [App Colonial Corn. — Corn from Quebec, or our other North American Colonies, is admitted to consumption in this country whenever our own averages are at or above Wheat - - - 595. Rye, Pease, and Beans 395. At the following duties : Barley Oats 305. 205. SCHEDULE (B.) ! | . \ Wheat. 1 Rye, Pease, and Beans. Barley, Bear orBigg Oats. If British com be under,] per Quarter . .67s. . . 44s. . . 33s. . . 22s. 6d. High Duty . .1 . . 12s. . . 8s. . . 6s. . . 4s. If at or above, per Quar-| ter . . .67s. . . 44s. . . 33s. . . 22s. 6rf. But under, per Quarter 71s. . . 46s. . . 35s. 6rf. . 24s. First Low Duty .1 . . 5s. . 3s. 6rf. . 2s. 6d. . . 2s. If at or above, per Quar- ter . . .i71s. . . 46s. . . 35s. . . 24s. Second Low duty . . . Is. . . 8d. . . M. . . 4rf. Additional Duty for the first three Months after Admission to sale for Home Consumption. — To prevent an abrupt im- port, or lowering of the market, it has been judged advise- able to impose by the present act an additional duty on Wheat - - 55. Od. Barley - - 25. 6d- Rye, Pease, and Beans 85. Gd. Oats - - 25. Od. On all corn, colonial as well as foreign, payable in addition to those in the Schedules, during the first three months of admission to home consumption, whether the corn be taken from the warehouse or from on board of ship. Corn in Warehouse. — Foreign or colonial corn at present in warehouse may be taken out and sold for home con- sumption, as soon as our averages shall be at or above the preceding rates respectively, of 70.s. for foreign, 595. for colonial wheat, &c, but subject to the highest duty in the Schedules A. and B. And Corn at present in warehouse may be admitted to home consumption in conformity with the Act of 1815, that is free of duty, whenever our averages rise to the rates fixed in that Act, viz. Wheat - 8O5. I Barley - - 405. Rye, Pease, and Beans 535. I Oats - 26s*. App.] Corn-Law of June 1822. [55] Flour, whether of wheat or oats, is subject to duties proportioned to the above-mentioned duties on grain. In this respect also our North American colonies have a pre- ference, which to them is a point of considerable import- ance, since the shipments on the opposite shore of the Atlantic take place more frequently in the shape of flour than of grain. Flour made from wheat, Per cwt. Per cwt. The high duty First low duty - 3s. Sd. - Is. Id. Additional during the first three months Is. Second low duty 05. Id. Ad. Oatmeal per boll : High duty - First low duty - As. 10c?. - 2s. 2d. Additional for first three months - 2s. Second low duty Os. 2d. 6d. Additional labour bestowed on Tillage since 1814. — To our arguments in the text on this head it is objected in a respectable quarter, (Farmer's Magazine, published at Edinburgh, November 1822,) that the years since the peace have been in general a period of discouragement to farmers, and that the " amount of labour applied to tillage is more likely to have been reduced than augmented." To this, however, we cannot assent, and must observe in answer, 1. That several years since the peace, in particular 1817, 1818, and 1819, were years either of high price, or of favourable expectation on the part of our farmers, who at that time experienced no inadequacy of means for the pay- ment of labour. 2. That throughout England, the produce of which forms fully three-fourths of the corn brought to market in the United Kingdom, farmers frequently employ labourers at a loss, to avoid an increase of poor-rate. Declarations to this effect are found in various parts of the Evidence before the Agricultural Committee of 1821, where also, we find that it is not unusual for landlords in England to pay a portion of the farming charges, on condition of the tenant keeping up the productiveness of the land, by applying lime, manure, &,c. 3. A powerful circumstance of the same tendency is the difficulty of withdrawing labour and capital from tillage : a truth so strongly urged by Mr. Cleghorn, in his lately [56] Corn-Law of June 1822. [App* published " Essay on the Causes of the Depression of Agriculture," (pp. 51, 52,) and proved by the experience of •half a century (from 1714 to 1764,) during which the quantity produced was kept up, although prices continued very low. 4. Population returns 1811 and 1821. These, it is true, appear to favour the opinion that the number of labourers engaged in agriculture has not kept pace with the increase of consumers ; for while the latter were augmented in the course of the ten years in question 15 per cent., the former appear to have increased hardly 10 per cent. It is how- ever to be remembered, that, 5. The distinction in the Population returns is made, not by individuals, but by families, and that the discharges from the army and militia, or rather the suspension of drain by enlistment, by leaving the able-bodied at home, gives greater efficiency to the same number of families. Also, that, 6. From the progress of improvement in husbandry the same number of labourers raise a considerable larger share of produce than they did ten or twelve years ago. Aim-! V P P E N D I X CHAPTER VI. On Poor-Rate, (From the Reports on the Poor Laws in 1817 and 1821.) Table of the Amount expended at different dates on the Poor of England and Wales, making the year close at Easter, and adding the corresponding average Price of the Bushel of Wheat. — These sums are distinct from church, county, or highway rates. Price of Wheat per Bushel. \ £ s. d. 1748-49-50 - - average 689,971 4 5 1776 --- - — 1,521,732 6 9 1783-84-85 - - — 1,912,241 7 7 1803 - - - - — 4,077,891 8 1 1813-14-15 - - — 6,129,844 12 8 1816-17-18 - - — 6,844,290 ]0 1819-20 - - - — 7,430,627 9 6 1821 - - - - — 6,947,660 7 10 W [58] On Poor-Hate. [Apr. Amount of 'Expenditure in each Tenth Year since the middle of last Century, together ivith the Price of Wheat. Years. Expenditure. Wheat per bushel. £ s. d. 1750 713,000 4 2 1760 965,000 4 10 1770 1,306,000 6 5 1780 1,774,000 5 11 1790 2,567,000 6 4 1800 3,861,000 10 2 1810 5,407,000 12 4 The following are given in successive years. Expended on the Maintenance of the Poor. Wheat per bushel. £ s. d. Year ending 25th March, 1813 6,656,105 16 8 1814 6,294,584 12 3 1815 5,418,846 8 10 1816 5,724,507 7 9 1817 6,918,247 10 11 1818 7,890,148 11 3 1819 7,531,651 10 4 1820 7,329,594 8 8 1821 6,947,666 7 10 London, Westminster, and Southwark. EXPENDITURE.. Number of poor relieved perma- nently in work-houses - - Out of work-houses, without reckoning the children - - Parishioners relieved occasion- ally either in or out of work- houses ------- Total - Year ending Easter, 1813. Easter, 1814. 25th March, 1815. £ 13,389 12,654 40,993 £ 13,373 13,762 69,332 £ 12,341 13,341 70,322 67,036 ' 96,467 96,004 > App.] On Poor-Rate. [59] Highway, Church, and County Rate. — These minor charges form collectively somewhat more than a fifth of the large sum which passes currently under the name of poor- rate. Are they, it may be asked, likely to experience a reduction corresponding to that of the fund applied to the relief of the poor ? As the chief constituent of charge in these lesser rates is the price of labour, it is evident that at the reduced wages of the present day, a smaller sum will suffice for an equal extent of work : on the other hand, it is very probable that from a sense of the necessity of provid- ing employment for the lower orders, and of the advantage of carrying farther the improvement of our roads, a con- siderable extension may be given to such undertakings ; none, it is evident, can be more advantageous to the public , if conducted with judgment and economy. Report of 1 9th July 1822, on the Poor-Rate Returns. — This, the latest labour of the Committee on the manage- ment of the poor, puts in a striking light both the differ- ence of plan followed in different parts of the kingdom, and our imperfect acquaintance with the system as a whole. There continues, says the Report, an evident connexion between the rise or fall of the price of wheat, and the rise or fall of expenditure for the poor ; the total decrease in the latter since 1818 being 22 per cent. The appointment of select vestries and assistant overseers goes on in different parts of the kingdom, but more slowly than might have been expected after the recommendation of the Poor-law Committee of 1817. But the present mode of keeping parish accounts presents a very imperfect check on the ex- penditure, and ought, in the opinion of the Committee, to be rendered much more specific. All charges either for law, or for such purposes as building or repairing work- houses, ought to be discriminated from the great head of " money expended for the relief and maintenance of the poor :" — while in regard to the latter the return ought to be very explicit, when aid is afforded according to the num- ber of children, or, in particular cases, to able-bodied persons. [60] \Avr. APPENDIX CHAPTER VII. On Population. Employment : its subdivision as Society advances. — We follow up the reasoning in the text (page 202.) by a few familiar illustrations, for several of which we are indebted to Mr. Gray's Remarks on Population. — In a primitive state of society, like that of England in the days of the Britons and Anglo-Saxons, or like that of the interior of Norway in the present day, we find the inhabitants dis- tributed into detached cottages or petty hamlets, each family being obliged to provide almost every thing for itself. To cultivate a lot of ground is, in such a state of things, indispensable ; since no employment, not even those of first necessity, such as the business of the baker, the tailor, or the mason, would occupy the whole of their time, or prove adequate to their support. Each household is therefore obliged to build, to bake, to brew, to make and to mend for itself; how awkwardly and how imperfectly it is needless to say. To rear a family is to them, whatever the imaginatian of poets may figure of these days of sup- posed enjoyment, a task of greater difficulty than in this iron age of rents and taxes. Let us beware of forming our ideas of the condition of our ancestors from the ease of acquiring subsistence in countries such as the Cape of Good Hope, Upper Canada, or the United States of Ame- rica. These enjoy all the advantages of colonies ; they profit by the capital, the activity, the knowledge of Europe, exhibiting the application of the skill and formed habits of the old world to the improvement of vast tracts of unoccu- pied land. They exemplify, in short, almost all the circum- App.J Population, fyc. [61] stances which, in ancient days, led to the rapid growth of the Grecian colonies in Italy and Asia Minor. To revert to the characteristics of a primitive state of society. In the course of ages the hamlet becomes a vil- lage, and as its population increases, a separation of employ- ment gradually takes place ; a process which goes on in an augmented ratio as the village becomes a small town, a large town, and eventually a city. How far is this sub- division carried in the case of a population of between 1 500 and 3000 f The more common species of labour, such as that of the builder, the baker, the butcher, the tailor, the shoemaker, are separated ; but in other lines the division is not complete, the shopkeeper is a linen and a woollen- draper, a grocer, a druggist, a stationer ; the doctor is apothecary, surgeon, physician ; the lawyer unites the func- tions of conveyancer, land-steward, and general agent. This mixture undergoes a decomposition as the inhabitants in- crease from 5 to 10,000; and in a population of from 10 to 15,000, the various classes, whether of mechanics or dealers, are tolerably subdivided, at least in our country ; for in France and most parts of the Continent, the subdivision, even in large towns, is far less complete. Subdivision of Employment in great Cities. — To mark this subdivision in all its extent, the observer must repair to the French, or rather to the English capital, where the mercan- tile, the manufacturing, the mechanical professions, all as- sume the most simple form. A London banker, different from his provincial brethren, issues no notes, and keeps no interest account with his customers : a merchant confines his connexions to a few foreign sea-ports, perhaps to a parti- cular colony or town ; and the name of general merchant, though not yet disused, is hardly applicable even to our greatest houses. But it is in the mechanical arts that the subdivision of employment takes a form the most familiar and most intelligible to ordinary observation. In London the class of shoemakers is divided, says Mr. Gra} r , into makers of shoes for men, shoes for women, shoes for chil- dren : also into boot-cutters, boot-closers, boot-makers. Even tailors, though to the public each appears to do the whole of his business, are divided among themselves into makers of coats, waistcoats, breeches, gaiters. In other lines an equally minute repartition takes place ; and as to the ornamental or elegant arts, such as those of jeweller, painter, engraver, nothing would be more easy than to ex- [62] Population: [Ai»i». hibit a long list of professions limited to large towns, and wholly unknown in a thinly peopled district. Effect of this Subdivision. — What, it may be asked, is the practical result of this minute subdivision, this nice distinc- tion of employment ? By fixing the attention of the work- man on a sjngle part of his business, it renders him sur- prisingly correct and expeditious : his performance gains equally in quality and in despatch. This is the result of a mechanical dexterity, acquired without any particular effort of the mind ; for we must by no means infer that the quickness characteristic of the inhabitants of a large town, that promptitude which distinguishes the Londoner and the Parisian from the hesitation and circumlocution of the countryman, is the consequence of any innate superiority : those who walk in a crowd must adopt the step of others, and advance with the rapidity of the moving mass. The attainments of these persons, meaning such attainments as they possess accurately and thoroughly, are often confined to a few branches : but these are the objects of their profes- sion or business ; and the result is, that their work proceeds straight forward, very little time being lost by them in plan- ning, altering, or correcting. Proportion borne by different Classes in our JYational Income. — In consequence of our insular position, our canals, and our mines, the proportion of our national income, de- rived from manufacture and trade, is greater than in most other countries. The following table is taken, as far as regards its plan, from a publication by Mr. Gray ; but it is subjected to several modifications, arising in one respect from the late population return, in another from the fall in the price of commodities. It is founded partly on conjec- ture, partly on official documents. App.] Ratio of its Progressive Increase. [63] Great Britain distinct from Ireland. Proportion of thej income of the clas^ to the national in- come at large. Agriculturists and all engaged in the supply of sub- sistence, whether farmers, labourers, or dealers Manufacturers and all persons occupied in making clothing, hardware, and other articles for home consumption >_-__. Mechanics, masons, and all engaged in supplying houses with furniture - The professional classes, viz* lawyers, clergy, me- dical men, artists, and teachers, to whom is added a very numerous, though not an affluent class, that of domestic servants - The army, the navy, the civil servants of govern- ment, the annuitants drawing an income from our dividends ; all, in short, who are paid through the medium of taxes - The classes receiving parish support and other cha- ritable aid Total - 30 per cent. 20 do. 10 do. 17 do. 20 do. 3 do. 100 j The proportion allotted to the agricultural classes has unfortunately not been earned by them in the depression that has prevailed since 1820 ; but the case must ere long- alter ; and in a table intended to be referred to for years, it is fit to keep temporary irregularities out of sight. In Ireland the distribution of productive industry is very different from that of England : were it added to our esti- mate, there would be a great augmentation of the agricul- tural proportion. Population ; its different Degrees of Increase. in a primitive stage of society the rate of increase is, doubtless, very slow, since no advantage arising from the boundless command of territory, can counterbalance the anti-population habits of the hunter state. This is suffi- ciently exemplified among the North American Indians, and proves that in the early peopled regions of Asia, the increase, even with the aid of a fine climate, could not [(34] Population :— - [App. have been considerable until the adoption of pastoral ha- bits ; nor great, until these gave way to the agricultural state, in which the augmentation of subsistence concurs so directly with health of occupation to augment our num- bers. The Mercantile or Manufacturing Stage. — The last stage in the progress of society may be termed the mercantile ; the stage in which a large proportion of the inhabitants of a country are assembled in sea-ports and manufacturing towns. Manufactures and trade are by many accounted adverse to population, the former leading to sedentary habits, the latter occasionally prompting a resort to dan- gerous climates. These, we admit, are serious objections ; but, on the other hand, the commercial state is favourable to early marriage, as will be readily allowed by all who have resided in an agricultural country like France, and marked how slowly population increases amidst the pe- nury, the ignorance, and unenterprising habits of the tenants of the soil. Add to this, that many of the irregu- larities of the manufacturing state have arisen, not from permanent causes, but from the fluctuation of wages inci- dent to a state of war, or from the insalubrity of antiquated and ill-planned structures. Evils such as these are in a state of progressive cure from various causes, and from none more than that distribution of population throughout provincial towns which canal communication so directly promotes, by enabling a particular place to confine itself to a particular manufacture, instead of accumulating, as on the Continent, a multitude of workmen in a crowded and overgrown city. Paris and Vienna are, far more than London, the centre of manufacture for their respective countries ; for France, Germany, and the Netherlands, united, do not exhibit provincial towns to be compared to Manchester, Glasgow, Birmingham, Leeds, Sheffield. These, and other places of the kind in England, while exempt, in a great measure, from the drawbacks of a me- tropolis, in regard to health and expense, possess advan- tages nearly equal, in access to markets and division of employment. The district of Birmingham in particular, inhabited as it is by several hundred thousand persons, af- fords a striking proof that a numerous population may pro- secute manufacture without crowding themselves into nar- row streets or lanes. App.] Ratio of its Progressive Increase. [65] Effect of the Enlargement of Farms. — Increase of popu- lation is conducive to increase of employment in many respects, in which, at first, we should hardly suppose it to exert such an influence. Thus the common notion of small farms being conducive to increase of numbers, is far from correct ; it being, in the first place, impracticable in these petty occupancies to do justice to the productive powers of the soil, while farms of larger size (from 300 to 500 acres) have many advantages, admitting of the appli- cation of machinery and the beneficial employment of capital. In the next place, it is a remarkable fact, that while the quantity of subsistence disposable for the market is augmented beyond comparison, the number of persons supported on the spot is (as we find from the population returns of counties so highly cultivated as Norfolk and East Lothian) greater than it was in the age of small farms. Effect of Machinery on the Condition of the working Classes. — The effect of mechanical improvement in adding to the income of a community admits of no doubt, its result being to afford a commodity frequently of better quality, and always at a cheaper rate. To be satisfied of the latter, we have merely to compare the prices of either our cottons or hardware of the present day with those of similar articles made by us thirty years ago, or with those made at present on the Continent, where machinery is as yet but partially adopted. But what, it will be asked, is the effect of ma- chinery on the income and comfort of the workman ? At first injurious, bringing with it the evils of transition, which are very serious in a time marked, like that which followed the peace of 1814, by a great reduction in the demand for hands for the public service. To take an instance familiar to those of our countrymen who have resided in France : in that country coal is very little used, and the general fuel, whether in town or country, is wood : the trees, after being felled, are cut into short but thick blocks, carted into the towns, sold in the public markets, and broken up by men who make a business of it, but whose labour, aided only by the wedge and saw, is tedious and fatiguing, adding nearly ten per cent, to the cost of the article. To break these solid blocks by machinery would cause a consider- able saving of both time and expense, but in the present stagnation of the demand for labour, it would be harsh, and indeed unsafe to resort to such an alternative, without pro- M [o6] Population: — [Aff. viding for the thousands who would thus be deprived of employment. Such, in a greater or less degree, is the case in almost every transition of importance. Eventually, however, the hardship is overcome, and the use of machinery becomes productive of great additional comfort to the lower orders. To prove that its beneficial effects are general, it is not enough to cite the prosperity of a few manufacturing dis- tricts, as the success of these may be accompanied by distress in other parts ; the prosperity of Lancashire may cause embarrassment in Saxony, Flanders, or the banks of the Rhine. The advantage, then, arising from the use of machinery, rests on a broader basis ; on that law in pro- ductive industry which makes every real reduction of cost an addition to individual income, or, what is the same thing, to the comforts procured by that income. The benefit of such reduction is enjoyed by the public at large : the evil, on the other hand, is partial, being confined to the manufacturer. He, however, is benefited in his capa- city of consumer, and experiences relief from his distress as soon as it is found practicable to transfer to a new- branch a portion of the capital and industry hitherto em- ployed on his own. Such transfers are, it is true, tasks of great time and difficulty : we have felt them to be so in our own country, while in others less advanced, they can hardly be accomplished in the lifetime of a generation. Increase of Population in the present Age. — The recent increases of our numbers, so greatly beyond that of any former age, is ascribed by many persons to the excitement attendant on the war, and to the encouragement it afforded to early marriage in the case of so many classes, the agri- cultural, the manufacturing, the mercantile. This, how- ever, applied chiefly to the mechanical ; all, in short, except the fixed annuitants, the middle classes : among the lower the advantage in wages was balanced, or nearly balanced, by the rise of provisions. We must also put in the opposite scale the serious injury to population arising from war, as well by the loss of lives in the field and in tropical cli- mates, as by the removal from home of many who would otherwise have become fathers of families. When to this we add, that since the peace the ratio of increase is not less great than during the war, we are led to attribute the aug- mentation of our numbers to causes more permanent and satisfactory : to the preservation of the lives of children by A pp.] Ratio of its progressive Increase. [07] vaccination ; to the better lodging, the greater cleanliness and sobriety of our lower classes. This result, already ex- emplified in the return of deaths inserted in a subsequent page, will, we believe, be found to rest on a broad basis, whenever our official documents shall become more ample. Similar causes prevail, though in a less degree, on the Continent : in France the increase of population, formerly so slow as hardly to yield an addition of 30 per cent, in a century, may now be computed at somewhat more than twice that proportion. In that country sobriety was always prevalent ; but the abolition of monasteries, the improve- ment of medical practice, the ameliorated condition of the peasantry, are all peculiar to the present age. In Ger- many the degree of increase is probably not very different from that of France. Of Russia we have as yet no accu- rate returns ; Spain, Italy, and the south of Europe generally, are also on the increase, but in a ratio, which, when we consider the general indolence and poverty of the lower orders, is, doubtless, slower than that of France. And in the countries subject to the Turks, the frequency of the plague, and all the pernicious effects of bad govern- ment, are likely still to counteract the natural tendency of population to increase. Marriages. — The proportion of marriages to that of our population does not appear to have increased during the late wars : From 1780 to 1789, marriages, compared to the whole population, were as 1 in 117 1790 to 1799 - - - 1 in 1191 1800 to 1809 - - - 1 in 119 * [Barton on the Labouring Classes.) We shall be more successful in searching for an expla- nation of the rapid increase of our numbers in other causes ; none can be more gratifying than the decrease of mortality in consequence partly of the introduction of vaccination, but partly too of the greater sobriety and comfort of the poor. Progressive Decrease of Deaths in Great Britain. From 1785 to 1789 - - 1 in 436 1790 to 1794 - - - 1 in 447 1795 to 1799 1 in 465 1800 to 1804 - - - 1 in 474 (Barton, ut supra.) [88] Population . [App. To Mr. Rickman, Clerk-Assistant of the House of Commons, who has prepared the successive Population Ab- stracts of 1801, 1811, 1821,) I am indebted for much use- ful information, in particular for A Comparative View of the Area and Productive Power of the several Counties of England and Wales. COUNTIES ACCORDING TO THEIR AREA. Square Square Counties. Statute Counties. Statute Miles. Miles; 1. York 5,961 30. Surrey 758 2. Lincoln 2,748 31. Berks 756 3. Devon 2,579 32. Oxford 752 4. Norfolk 2,092 33. Bucks 740 5. Northumberland 1,871 34. Worcester - 729 6. Lancaster - 1,831 35. Hertford 528 7. Somerset 1,642 36. Monmouth 498 8. Hampshire - 1,628 37. Bedford 468 9. Kent 1,537 38. Huntingdon 370 10. Essex 1,532 39. Middlesex - 282 11. Suffolk 1,512 40. Rutland 149 12. Cumberland 13. Sussex 1,478 1,463 England - 50,535 13. Wilts 15. Salop 1,379 1,341 16. Cornwall 1,327 1. Carmarthen 974 17. Gloucester - 1,256 2. Montgomery 839 18. Stafford 1,148 3. Glamorgan 792 19. Durham 1,061 4. Brecon 754 20. Chester 1,052 5. Cardigan 675 21. Derby 1,026 6. Merioneth 663 22. Northampton 1,017 7. Denbigh 633 23. Dorset 1,005 8. Pembroke - 610 24. Warwick - 902 9. Carnarvon - 544 25. Hereford - 860 10. Radnor 426 26. Cambridge - 858 11. Anglesea - 271 27. Nottingham 837 12. Flint 244 28. Leicester 804 29. Westmoreland 763 Wales - Total - 7,425 57,960 Scotland and Ireland are nearly equal to each other in area, and to- gether are equal to or somewhat larger than England and Wales. The Assessed Rental of Scotland in 1811 was £3,899,364. App.J Population. [69] COUNTIES ACCORDING TO THEIR PRODUCTIVE POWER. Rent and Tithe paid in each County in 1810, per square Mile of 640 Acres. Merioneth - £137 Cambridge - £571 Brecon 154 Huntingdon - 574 Cardigan 173 Hereford 585 Carnarvon 192 Lincoln 594 Montgomery 198 Salop 610 Radnor 229 Berks 611 Carmarthen 244 Bedford 619 Glamorgan - 284 Derby 624 Pembroke 284 Kent - 651 Anglesea 288 Wilts 652 Westmoreland 299 Nottingham - 659 j Durham 300 j Gloucester - 680 J Cumberland 327 Cheshire 684 | Denbigh 331 Essex 692 Hampshire - 435 Rutland 692 Monmouth - 446 Stafford 693 Sussex 445 Northampton 702 Cornwall 470 Oxford 709 Norfolk 509 Bucks 713 Devon 616 Lancaster 718 Northumberland - 520 Hertford 734 Flint 536 Warwick 744 Suffolk 537 Worcester - 772 Dorset 538 Somerset 876 York 541 Leicester 891 | Surrey 550 Middlesex - - 1,325 The area of the counties was measured on Arrowsmith's last map (date 1815 — 1816,) which was formed on the trigo- nometrical survey. The process of squaring and comput- ing the miles, as well as of estimating the parts of miles on the borders of each county, having been performed with much care and labour, the inaccuracies are few and incon- siderable. Annual Value of Land by the square mile o/640 statute acres. — This is computed from the "rent and tithe collective- ly," and the average of England and Wales in 1811 was 17s. 2d. per acre : the counties which take the lead are Leicester and Somerset, and the chief cause of superiority is the extent of good pasture ground, which, of course, yields a return at little expense. '-«] Population. [App. The Rental is taken from the Property-tax return for the year ending April 1811, (seep. 66. of the Property-tax Accounts, printed 26 Feb. 1813.) The fall of rent on the one hand, and extension of culture on the other, probably render this return, though comparatively of old date, a tole- rably accurate representation of the present rental of the kingdom. One method of computing the productiveness of land under tillage is to " take for each county the number of fa- milies employed in husbandry, and to divide by it the amount of rent and tithe." The result may be said to ex- hibit the " average net produce of the labour and capital of each family thus engaged," and indicates, we believe with tolerable accuracy, the progress of the improved husbandry. For England and Wales the average, in 1811, was 4lZ. per family of agriculturists. The proportion was by no means greatest in the counties adjacent to the metropolis ; for while in Hertfordshire and Surrey it varied from SOL to 40/. per family of agriculturists, in Lincoln and Durham it ex- ceeded 50/., and in Northumberland went considerably be- yond that amount. A return of this nature, made after rents assume a settled form, would be a very interesting do- cument, particularly if combined with a similar return from Scotland, where tithe and poor-rate happily form so slight a deduction from the income of the landlord. Rank of our different Counties in Point of Density of Population. 1 Middlesex 2 Lancaster 3 Surrey 4 York, W. Rid. 5 Kent 6 Warwick 7 Gloucester 8 Nottingham 9 Chester 10 Worcester U Durham 12 Somerset 13 Suffolk 14 Derby 15 Cornwall 16 Leicester 1 7 Northampton 18 Essex 19 Berks 20 Norfolk 21 Oxford 22 Bedford 23 Flint 24 Buckingham 25 Hertford 2G Wilts 27 Southampton 28 Cambridge 29 Anglesea 30 Huntingdon 31 Stafford 32 Salop 33 Devon 34 Sussex 35 Rutland 36 York, E. Rid. 37 Denbigh 38 Dorset 39 Glamorgan 40 Hereford 41 Pembroke 42 Carnarvon 13 Monmouth 44 Northumberland 45 York, N. Rid. 46 Lincoln 47 Cumberland 48 Carmarthen 49 Montgomery 50 Cardigan 51 Westmoreland 52 Merioneth 53 Radnor 54 Brecon App.] Population. 71 CENSUS OF 1821. England, Scotland and Wales ; Increase of the Population since 1811, exhibited by Counties. Increase Increase Increase] per cent. per cent per cent Coun'ies from Counties from Counties. from 1811 to 1811 to 1811 to ! 1821. 1821; 1821. I Peebles 1 York, E. Rid- Durham 17 Sutherland - 1 ing - 14 Linlithgow - 17 Perth - 3 Aberdeen 15 Somerset 17 Forfar- 6 Bute - 15 Banff - 18 Kincardine - 6 (Derby - 15 Gloucester - 18 Salop - 6 ! Devon - 15 Norfolk 18 Kinross 7 Essex - 15 Bedford 19 Berwick 8 Inverness 15 Chester 19 Nairn - 9 Kirkudbright 15 Cornwall 19 Clackmannan 10 ! Montgomery 15 Denbigh 19 Merioneth - 10 Northampton 15 Lincoln 19 Hereford 10 Nottingham 15 Glamorgan - 20 Radnor 10 Orkney &Shet- Middlesex - 20 Roxburgh - 10 land - 15 ; Warwick 20 Elgin - 11 Hampshire - 15 1 York, N. Rid- Argvle 12 Wilts - 15 ing - 20 Berks - 12 Worcester - 15 Cambridge - 21 Stirling 12 Brecon 16 Renfrew 21 Westmoreland 12 Dorset 16 Anglesea 22 Dumbarton - 13 Flint - 16 Ayr 22 Dumfries 13 Hertford 16 Pembroke - 22 Fife - 13 Huntingdon - IQ Surrey 23 Haddington - 13 Leicester 16 Sussex 23 Ross and Cro- Monmouth - 16 York, W.Rid- marty 13 Northumber- ing - 23 Oxford 13 land- 16 Wigton 24 Rutland 13 Stafford 16 Lanark 27 Selkirk 13 Suffolk 16 Lancaster - 27 Buckingham 14 Cumbertand 17 Caithness 29 Cardigan 14 Carmarthen - 17 ! Edinburgh - 29 Kent - 14 Carnarvon - 17 1 The ratio of most frequent occurrence is 15 per cent., or an average between 13 and 17 per cent. In several counties the augmentation is to be ascribed to the increase of the principal towns ; thus the increase of Middlesex is the increase of London, Surrey of Southwark, Warwickshire of Birmingham, Lanarkshire of Glasgow, and Lancashire of Manchester, Liverpool, Preston, &c. In the remote county of Caithness, the increase is owing to the extension of the herring fishery ; while the almost stationary condition of the adjoining county of Sutherland is owing to the emi- [72] Population, App.] gration of cottagers, and the conversion of their petty occu- pancies into pasture ground. England and Wales : Progressive increase of our population. Its amount in 1801 - - - 9,343,578 Ditto 1811 - - - 10,791,115 Ditto 1821 - - - 11,977,663 Progressive increase in the ten principal towns of England. Year IgOl. Year 1811. Year 1821. London - 900,000 1,050,000 1,225,964 Manchester - 81,020 98,573 133,788 Liverpool 77,653 94,376 118,972 Birmingham - 73,670 85,753 106,722 Bristol - 63,645 76,433 87,779 Leeds - 53,062 62,534 83,796 Plymouth 43,454 56,060 61,212 Portsmouth - 32,166 40,567 45,648 Norwich 36,532 37,256 50,288 Newcastle-on-Tyne 28,365 37,587 1 46,948 Scotland. — Here the ratio of increase in the towns, par- ticularly Edinburgh and Glasgow, has been equally great. Ireland. — The returns previous to 1811 were too im- perfect to afford the means of calculating the progressive increase of population, nor have those of 1821 as yet been given to the public in a satisfactory form: the general re- sult is, that the population of all Ireland amounts in round numbers to 7,000,000 That of the principal towns, Dublin ..... 186,276 Cork 100,535 Limerick - - - - - 66,042 Great Britain: Return o/*1821. Distribution into Classes. Families. Proportions to the whole pop- ulation inparts of 100. Employed chiefly in agriculture Do. in trade, manufactures, me- chanical employment, &c. In all other situations 978,656 1 ,350,293 612,488 33 46 21 100 App.] Population. [73] Proportion of Agricultural Population. — This varies greatly, according to the particular county. In a highly manufacturing county, such as Lancashire, it is not half the average of 33 in 100; in Yorkshire, which in the West Riding is manufacturing, and in other parts agricultural, the return approaches to the average, but is still somewhat below it ; while in Sussex, Essex, Suffolk, where there are so [ew manufactures, it greatly exceeds it, being above 50 in 100; in Cambridgeshire, Bedfordshire, and Hereford- shire, the proportion is the largest of all, being above 60 in 100. Comparison of the Population Returns of 1811 and 1821. England. Wales. Scotland. Totals. Increase per cent. Families chiefly employed ) in agriculture, 1811 $ 1821 Do. in trade, manufac-) tures, and mechanical > employment, 1811 ) 1821 In all other situations, 1811 1821 697,353 773,732 923,588 1,118,295 391,450 454,690 72,846 74,225 36,044 41,680 20,866 30,801 125,799 130,699 169,417 190,264 106,852 126,997 895,998 978,656 1,129,049 1,350,239 519,168 612,488 19& 18 The most important reflection suggested by these returns, is the great superiority of increase in our town population over that of the agriculturists. This is remarkable on two accounts ; first, as indicating a rapid increase of productive power, and next as peculiar to our island ; the augmentation in France and the Continent generally being no greater in town than in the country. Wales. — Here agricultural employment predominates. Among persons out of business there appears a remarkable increase ; the consequence, probably, of Wales being found a comparatively cheap residence by half-pay officers and other annuitants. M [74] Population. [App. Indications of an Increase of National Wealth, taken from Population Returns. — These are, 1. An increase in the proportion of persons who are independent of labour ; we mean of those who derive their income from property, whether land, houses, or money lent. 2. A greater comparative increase of town population. 3. It follows that under such circumstances agriculturists will increase in a ratio inferior to that of the other classes : still the augmentation of produce may, and probably will, keep pace with the augmentation of the consumers, the im- provements in husbandry and the increased use of machinery (such as threshing mills) contributing greatly to lessen the manual labour employed in raising corn. Census o/1377. — As a matter of historical curiosity, we subjoin the population of the principal towns of England in the year 1377, when an enumeration was made on account of a poll-tax : London - - - 35,000 York - - - - 11,000 Bristol - - - - 9,000 Plymouth - - - 7,000 Coventry - - - 7,000 Norwich - - - 6,000 Lincoln - - - 5,000 Sarum, Wiltshi ire, - 5,000 Lynn - - - 5,000 Colchester - - - Canterbury - - - Beverley - - - Newcastle-on-Tyne Oxford - - - - Bury, Suffolk - - Gloucester ( } Leicester < somewhat > Shrewsbury ( morethan ) 4,500 4,000 4,000 4,000 3,500 3,500 3,000 In that remote age, the total population of England was 2,300,000 ; but the proportion of town population was far smaller than at present, since the number of towns contain- ing above 3000 inhabitants was only 18. App.] [75 APPENDIX CHAPTER VIII. National Revenue and Capital. Is our annual Consumption equal to our annual Produc- tion ? — In adverting to this subject, our limits prevent our enlarging on the distinction between productive and unpro- ductive consumption, as explained by M. Say and Mr. Mill, or the much greater latitude given to the term productive by Mr. Gray. We have, in fact, room for little more than answering the plain practical question, " What part of our national income appears to be saved or invested, so as to form a permanent addition to the national property ?" The part of our income thus appropriated will be found very small, if considered in the limited sense of investments in money securities, such as the funds or mortgage, trans- actions of that nature being confined in a great measure to annuitants, or rather to the comparatively small portion of them that are opulent. If to these we add the invest- ments in the form of money in the part of all other classes, including the saving banks of the lower orders, we shall probably find for the kingdom at large, an annual appropri- ation of 9 or 10,000,000/., the interest of which, at the pre- sent reduced rate, affords an addition of only 3 or 400,000/. to our national income. But if we take in a more liberal sense the difference be- tween the revenue and expenditure of the nation, if we consider as saving or as increase of our stock, all that is laid out on the improvement of land, the building or re- pair of houses, the increase of furniture, and if to these we add interest of money saved, we shall find on the whole, an \ [76] National Revenue and Capital: Correspondence [Apr. addition to our national capital of 50 or 60,000,000, making an increase in our taxable income of nearly 3,000,000/. a year, and rendering it probable that the 260,000,000/. of this year will in 1824 become 263,000,000/. ; in 1825 266,000,000/., &c. This result will be confirmed, if we take as a criterion the increase of our population, confining our estimate to those who annually attain the age of twenty, the age of efficient labour, and whose number we calculate as follows : In 1802 the population of Great Britain and Ireland was about 16,000,000, the annual increase by births over deaths, 1J per cent, or 240,000. The individuals then born, whether male or female, have now attained the age of useful labour, and must be considered as bearing the same share as the rest of the population, in augmenting the national income. In what manner ought the result of their exertions to be calculated ? Our national income, taken in the largest sense, is (see p. 238) 350,000,000/. a year, and the average contribution to it, reckoned per head of popu- lation, is nearly 17/. Estimated in that proportion, the ad- dition from our new cultivators of the field of national in- dustry would be little short of 4,000,000/. a year ; but we prefer the safer course, and reckon as a bond fide addition to our resources only that income which is subject to taxes. Now, on dividing the taxable income of the nation by the number of our population, the result is about 12/. a head as the product of each individual, and the quota of our new contributors, reckoned by that scale, approaches to the 3,000,000/. mentioned above. This will be found a fair and moderate estimate of the annual addition to our national income. If it be objected, that a deduction ought to be made from our assumed number of 240,000, on account of the deaths occurring ere our new contributors attain the age of labour, we answer, that that is amply balanced by the following con- siderations : 1 . The growing increase of our numbers, which, follow- ing the scale of our population returns for 1803, 4, &c. will be next year 244,000 ; the year after 250,000, and seven years hence, 270,000. 2. The fact that our new labourers living chiefly in towns where wages are higher than in the country, their contri- butions might fairly be estimated at somewhat more than 12/. a head. 3. Particularly as that sum forms the average contri- App.] between Production and Consumption. [77] bution of our population including all ages> whereas the 240,000 on whom we calculate have attained the age of la- bour. A Table of annual Consumption substituted for a Table of Production. — Since all, or nearly all, that is produced, is consumed in one form or other, whether productively or otherwise, and since the taxes of this country are imposed chiefly on consumption, it will be more suitable to our reasoning to exhibit the amount in the form of con- sumption. JYational Expenditure or Consumption of Great Britain and Ireland for 1823. Expended on the produce of the soil for the food of man, or for purposes of manufac- ture - £120,000,000 On the produce of the mines - - 10,000,000 On manufactures for home consumption 70*000,000 On houses built or repaired ; on furniture ; and on improvement of land on whatever is termed in law real property - 30,000,000 On all goods imported, whether for con- sumption, such as tea, sugar, coffee ; or for manufacture, as wool, hemp, iron 70,000,000 On all commodities or products not com- prised in the preceding - - 50,000,000 Totd consumption - £350,000,000 Correspondence of this Sketch with the Calculation of other Writers. Mr. S. Gray, in his addition to the Happiness of States, (p. 636.) computes the total expenditure or consumption of the population of Great Britain in 1818 at £280,000,000 To which, if we add for Ireland - 70,000,000 The result is as above £350,000,000 Mr. Colquhoun's table of property annually created, will be found to differ in a few particulars only from our sketch of consumption. We leave out in the latter The produce raised for the food of horses, cattle, and the lesser animals ; also [78] National Revenue and Capital: Correspondence [Apr- The amount of manufactures exported ; while in lieu of the latter, and of some other heads in Mr. C.'s table, we insert the value of imports. Our next inquiry relates to a topic of considerable intri- cacy. Proportion of JYational Expenditure exempt from Taxation, — In France and other countries of limited trade, the governments are obliged to impose their taxes chiefly on production, exacting from the landlord and farmer a pay- ment equivalent in general to 20 per cent, of their incomes. With us the form of impost is different : the direct taxes since the peace are not considerable, but those on con- sumption have long been, and still are so multiplied, that many persons imagine that hardly any portion of our ex- penditure escapes the visitation, direct or indirect, of the exchequer. In various cases, however, the transit from production to consumption is too direct to admit of assess- ment, particularly in regard to the lower orders. The oats, the potatoes, the kitchen vegetables reared by the cottager for his family, or by the farmer for his labourers, though all comprised in our estimate of national consump- tion, are subject to very slight demands on the score of taxation. Case of Ireland. — This is strikingly exemplified in the sister island, where the taxed expenditure, limited as it is to the disburse of the gentry, the merchants, professional men, and the comparatively small portion of the lower classes residing in towns, cannot with confidence be com- puted at more than 25,000,000/. But a population of 7,000,000, supposing their average rate of subsistence not to exceed that of the English cottagers, as calculated by Sir F. Eden, (between 6 and 7/. a head,) could not -exist with out an annual produce of nearly 50,000,000/. ; and if in forming a calculation for Ireland, we make allowance for the better circumstances of her town population, and for the comparative comfort of her linen manufacturers, we may, perhaps, without exaggeration, carry the total property created in that island to 70,000,000/. a year, which is in the proportion of nearly 3 to 1 to the sum we have assumed as representing her taxable income. That the supposed amount of the latter cannot be much above 25,000,000/. is unfortunately too clear from the state of the revenue, the amount of which, before making any deduction for collection, hardly exceeds 5,000,000?., App.] between Production and Consumption. [79] or 20 per cent, on 25,000,000/., although levied of late years on nearly the same scale of duties as in England, where taxation, distinct from poor-rate, exceeds 20 per cent, of the national income. How, it may be asked, does it happen that the two countries differ so greatly in the proportion of their taxed and untaxed consumption ? Be- cause three-fourths of the population of Ireland are cot- tagers, whose consumption eludes the visit of the tax- gatherer, their clothing being of home manufacture, their food the potatoes of the neighbouring field, their fuel the turf of the common bog. One generation thus succeeds to the poverty of another ; and in the eye of the political arithmetician, Ireland is rich only in recruits. France. — This country bears a considerable resem- blance to Ireland in the density as in the poverty of her agriculturists ; their total consumption (exclusive of the food of horses and cattle) is not over-rated at 180,000,000/., but as in the rural districs of France the excise duties are very light, taxation in these districts is in a manner confined to the 45,000,000/. of rent and farmers' income returned as subject to fancier. The assessment under that head, heavy as it is, would not, if calculated on the produce of agriculture, exceed 5 or 6 per cent. ; yet to increase the amount of this tax is a matter of great difficulty, and the contribution of French agriculturists to their government takes place much more in men than in money. Thus in 1793, when the cause of the revolution was highly popular, and the greatest efforts were necessary to repel invasion, the demand of the government was directed not to pecuniary aid, but to levies. And after the discredit of the Assignats, the finances of France owed, in a great measure, their sup- port to the resources of the Netherlands. Such is the state of taxation in regard to agriculturists ; the next question respects the situation of manufacturers. Among them the proportion of expenditure subject to tax- ation may at first appear large, the majority of the work- men residing in towns ; however, a great part of them are indigent, and though the wages of the unmarried are ex- pended in a great measure on taxed articles, such as beer, spirits, and tobacco, those of women, children, or the fathers of families, are more strictly confined to the pur- chase of the necessaries of life. Lastly, in regard to the expenditure of merchants, pro- fessional men and traders, foreign commerce, transacted as it is in sea-ports, and by persons in the command of capital, [80] National Revenue and Capital ; Correspondence [App. creates for the limited number employed by it, a great consumption of taxed articles. Of professional income the appropriation, from the respectable station of the individu- als, is similar, but inland traffic comprises many persons of a very humble rank, mechanics, labourers, and others, of whose consumption a considerable part is but slightly pro- ductive to the exchequer. It would, we believe, answer no useful purpose to enter on a more minute distinction of the expenditure of parti- cular classes. Speaking generally, we may assume that about 25 per cent, of our national expenditure seems ex- empt from taxation, and that if the whole be computed at 350,000,000/., the taxable part may, agreeably to the table in the text, be put down at somewhat more than 260,000,000/. We may perhaps throw some light on this intricate topic by adding a few sentences containing the amount of national income in several of our great departments, with some re- marks on its appropriation. Income from the Produce of the Soil, 120,000,000/. — Of this very large sum, the portion constituting the income of the landlord and of the higher class of farmers, is evidently expended in articles subject to taxation ; in regard to the smaller farmers or labourers the case is otherwise, their principal consumption of taxed articles being confined to malt liquor. Produce of the Mines, 10,000,000/. — Here similar re- marks apply in regard to the rent of the proprietor, the salary of the superintendant, or the wages of the workman. As to the raw material, a considerable duty is raised from coal, but this charge is avoided on all that is not carried coastways, or in a particular direction by canal. Manufactures for home Consumption, 70, 000,000/. — The expenditure on taxed articles in this case arises from the income of master manufacturers, the salaries of clerks, and the wages of the less indigent workmen. The same may be said to apply to the expenditure (computed at 30,000,000/.) on buildings, furniture, and agricultural im- provements. Income from Trade, Professions, and all other Sources, 100,000,000/. — Under this very comprehensive head, the expenditure more particularly subject to taxation consists Apr. J Estimate of National Capital. [81] of the profit of merchants and bankers ; of the income of professional men ; salaries of clerks ; income of shop-keep- ers ; wages of ship-builders, seamen, &c. National Capital. — Calculations of national capital are not, perhaps, of great importance in a direct sense, since taxation has seldom been imposed with reference to the amount of capital. A table of this nature is, however, of interest when viewed in connexion with a return of our na- tional income, and rendered subservient to establishing the accuracy of the latter ; this will, we believe, be the effect of the subjoined sketch. The fall of prices attendant on a state of peace is, from causes which shall be explained presently, productive of much less diminution in regard to our capital than our in- come ; and Mr. Colquhoun's calculation having been made on an estimate extremely moderate for a state of war, the difference between the present year and the year 1812, as calculated by him, is not considerable. Our table for the present year is consequently little more than a re-statement of his results, with a few modifications. w [82J Estimate oj National Capital. [Api Calculation of National Property. Computation foi 1812, nearly in A similar com- Great Britain and Ireland. the form adopted putation for by Mr. Colqu- houn. 1823. Land under cultivation, whether in pasture, tillage, or gardens £1,280,000,000 £1,200,000,000 Farming capital, whether vested in implements of husbandry and farming stock, or in corn and other produce - 228,000,000 200,000,000 Dwelling houses, warehouses, and manufactories - 400,000,000 400,000,000 Manufactured goods in progress or read} 7 for sale, whether in manu- factories, warehouses, or shops : also foreign merchandise on hand 160,000,000 140,000,000 British shipping of every descrip- tion 27,000,000 20,000,000 Here it seems fit to make an ad- dition to Mr. Colquhoun's statements on account of Mercantile and manufacturing ca- pital not specified by him, viz. mo- ney in hand ; advances to corres- pondents abroad : manufacturing machinery ; tools and implements of mechanics - 130,000,000 ]3o,ooo,ooo| This carries to nearly 300,000,000/. our mercantile and manufacturing capital employed in current business and exclusive of whatever capital our merchants may have in fixed i property, such as the funds, land or houses. Such are the great heads of our national property : the lesser as gi- ven by Mr. Colquhoun, are Mines and minerals - 75,000,000 65,000,000 Canals, tolls, and timber Total - - - 50,000,000 45,000,000 £2,350,000,000 £2,200,000,000) This table is to be understood as representing private property, and exclusive of 1. All public property, such as military stores, churches, hospitals ; also of Yi'i'.J Estimate of National Capital. [83] 2. Such private property as is unproductive; viz. waste lands, furniture, or wearing apparel ; and, finally, of 3. Whatever is expressive of a debt from one part of the community to another, such as the stocks, mortgages, or mercantile acceptances. How, it may now be asked, does it happen that the de- crease of our national property since the peace is so much less than is commonly supposed ? The reasons are — Land, as a property, is worth in peace from thirty-two to thirty-five years' purchase ; in war, only twenty-seven or twenty-eight years' purchase ; so that though on our rental we reckon a fall of fully 30 per cent., the principal has not sunk above 1 5 or 20 per cent. Farming capital experiences at present a depression of value far beyond the reduction in our table ; but its amount in 1812 was, we believe, under-rated by Mr. Colquhoun, while, in point of quantity, whether of implements, cattle, or corn on hand, it has increased probably 20 per cent, since that year. As to buildings, whether warehouses, manufactories, or dwellings, the surprising increase in the number appears fully to have balanced the decrease of rent, particularly as such decrease appears to have been much smaller in this kind of property than in land. In our manufactured and foreign goods on hand the fall of price, great as it has been, is nearly equalled by the in- crease of quantity. In our shipping the case is otherwise, and we have accordingly made a large deduction. Such is the comparative amount of our national proper- ty in 1812 and 1822, when represented in money of the re- spective years. But were the calculation for both made in money of equal value, the balance would be in favour of the present year ; we mean, that the valuations for the present vear, if made in the money of 1812, would not be short of 2,500,000,000/. Were we to take a retrospective view of the value of our national property since 1792, we should, in the absence of satisfactory returns for the earlier years, estimate it at two- third's of the present amount. [84] Estimate of National Capital. [App. Public Burdens in the present Year (1823.) — Particulars of the 64,000,000/. assumed in the text, p. 248. Taxes, gross amount, including both the charge of collecting and the repayments in the form of drawbacks, discounts, and allowances £58,000,000 Deduct, not the charge of collection, but the repayments, which form in fact no part of our burdens 4,000,000 Remain - - 54,000,000 This is after a full deduction for the dimi- nution in the duties on malt, salt, leather ; also in the assessed taxes. Add for tithe, including Ireland* - - 5,000,000 Poor-rate, after deducting such portion as be- longs properly to wages (see text, p. 193.) 5,000,000 In all - - £64,000,000 This amount, reduced to money of 1792 in the proportion of nearly 130Z. to 100/., gives the sum expressed in the text, viz. £50,000,000 Or, compared to our national income, a proportion of 25 to 100. • Tithe. All our tables include the tithe paid to lay impropriators. [85] APPENDIX CHAPTER X. On Fluctuation of Prices. (From Mr. Arthur Young's Inquiry into the Value of Money, 1812.) Abstract of part of Sir G. Shuckburgh's Table. The Prices of the Year 1550 are taken for the Integer ; viz. 100. Twelve 1 Years. Wheat. Miscellaneous Articles, viz. an Ox, Cow, Poultry, &c. Butcher Meat. Day Labour. Mean of all.' 1 1550 100 100 100 100 100 1600 — — — — 144 1650 — 239 — — 188 1675 246 — 166 118 210 1700 — — — — 238 1720 — 434 — — 257 1740 197 492 266 250 287 1760 203 — 400 275 342 1780 — — — — 427 1790 — 752 — — 496 1795 426 — 511 436 531 1 1800 — — — — 562 This table represents a very great rise in prices, but the grounds of calculation are far from accurate. Butcher meat is put on a par with meat, although with the mass of [S6] Fluctuation in the Value of Money. [App. the population it does not form a fifth part of the consump- tion. Each of the twelve miscellaneous articles, whether poultry or cattle, are considered of equal importance, and manufactures of every sort are omitted. There are, be- sides, a number of inaccuracies in the authorities from which the table is compiled. Comparison of the 17th and 18th Centuries. — Bishop Fleetwood, whose inquiries, in regard to the particular pe- riod to which he confined them, were very accurate ; and Dr. Henry, the author of the History of England, both ex- hibit results very different from Sir George Shuckburgh. From these Mr. Young attempted an estimate on the fol- lowing plan. 17 th 18th Rise per , Century. Century. Cent. £ *. d. £T~sT~a\ Wheat - 1 18 2 1 18 7 Par. Barley and oats 1 9 54 2 04 33 ButGher meat, butter, cheese, or whatever is the produce of grass land - 1 9 2 3 284 Labour 10* 1 3 46* Wool - 1 9 14 17 8* 394 fall. Iron - 14 11 164 rise. Coals - 1 5 104 1 16 39* Repeating wheat five times, on account of its import* ance, barley and oats twice, the produce of grass land four times, labour five times, and reckoning wool, coals, and iron, each but once, while iron is considered the repre- sentative of all manufactures, the rise from the prices of one century to those of the other will amount to no more than 224 per cent. ; or only the tenth part of the rise stated by Sir George Shuckburgh. Manufactures. — Under the important head of metals, and particularly of iron, Mr. Y. found that the rise for several centuries had been inconsiderable, the improve- ments in the process of preparing them sufficing, in a great measure, to counterbalance the enhancement of labour. But the great argument against Sir G. Shuckburgh's alle- App.J Fluctuation in the Value of Money. [87] gation of general depreciation is to be found in the price of manufactures, in the production of which, far more than in agriculture, free scope is given to the application of all the auxiliaries called forth by the progress of society ; v e mean increase of capital, division of labour, and aid from machinery. The following short list is taken from the books of Greenwich Hospital. Proportions Average of the Years from Shoes. Stockings. Hats. in twenty, when taken collectively. s. d. s. d. s. d. 1729 to 1765 - - 3 11 1 7 2 21 144 1770 to 1785 - - 3 10 1 54 2 34 14 1770 to 1800 - - 4 n 1 51 2 4 151 1790 to 1800 - - 4 64 1 6 2 4 154 1805 to 1810 - - 5 5 2 2 - 3 20 These are articles of subordinate importance ; but the fact is, that in almost all manufactured commodities, we are supplied cheaper than our ancestors, and that a rise, when it has taken place, is to be ascribed either to a tax on the raw commodity, or to some cause which may be termed particular or incidental. In regard to the quality of our manufactures, we must speak with more hesitation, and can hardly decide whether the balance be in favour of the pre- sent or of a former age ; for if our fabrics are now much more neat and convenient, they are in a considerable de- gree less durable. Horses and Cattle. — In these the improvement in point of quality admits of no doubt. In comparing the present price of sheep and oxen with those of a century ago, a great part of the difference is to be ascribed to the inferior size of the animal, at a time when the art of grazing was not under- stood ; the same will be found to hold in regard to horses, and at a later date than is commonly imagined. The only quarter affording authentic information in regard to the price of horses is the War Office, from the records of which Mr. Young extracted the following averages. [88] Fluctuation in the Value of Money. [App. Years. Price. 1766 and 1767 - From 1768 to 1792, both inclusive 1793 to 1802 - 1803 to 1812 £ s. d. 21 23 2 26 5 26 5 The rise of price in this period of forty-six years was much less than might have been supposed from the rate paid by individuals. But the War Office, looking chiefly to strength and the power of standing fatigue, bought, through- out the whole period, horses of nearly equal value. Pri- vate purchasers were not so easily satisfied ; and of the higher prices so generally paid by them, a considerable part is to be ascribed to a size and beauty in the animal which half a century before was comparatively rare. Sketch of the progressive Rise of Prices since the Thirteenth Century, taking 20 for the Integer or highest Sum, and exhibiting the other Parts by their proportion to it. (Ab- stracted from a Table of Arthur Young.) Beef and Pork, from Manufac- Trade, calcu- Periods. Wheat the Books of the Labour. Green- vvich Popu- lation. lated from Victual- our Ex- ling Office. Hospital. ports. 13th Century 5h __ 34 _ 14th ditto H — 4$ — — ■ — 15th ditto 3 — H ■— . — — 16th ditto 6 — 5h — — 17th ditto n — 8 — — 18th ditto H — 12* — — 66 years from 1701 to 1766 n n 10 144 11 5* 23 ditto from 1767 to 1789 ii ii m 14 13* H 34 ditto from 1767 to 1800 12 12J 14 15| 15f » 14 ditto from 1790 to 1803 13 17 16| 15* 18| !5| 7 ditto from 1804 to 1810 20 20 20 20 20 20 App.j Fluctuation m the Value of 'Money. [89 J Annual Consumption of Gold and Silver for Plate, orna- mental Manufacture, and Furniture — Calculations of this nature have hitherto been founded on returns from towns which, like Geneva, were remarkable for the manufacture of watches, or like Paris and Birmingham, for gilding, trinkets, and other ornamental fabrics. At present, how- ever, we are inclined to draw our inferences from a wider field, from a calculation of the probable amount of indi- vidual income founded on the public burdens of this and other countries. If we refer to our property-tax returns during the war, and make allowance, on the one hand, for the reduction of income, on the other, for the increase of numbers that have since taken place, we shall find reason to estimate the number of \ Families in England, Scotland, and Wales, possessing 200/. a year and upwards, at 1 00,000 And taking our island, as representing, in point of such incomes, a fourth of the ci- vilized world, we add for the latter, that is, for the rest of Europe and the United States of America - - - 300,000 Together 400,000 Families whose incomes are be- tween 60/. and 200/. a year amount in Great Britain to nearly - - - 400,000 Add for the rest of Europe and the United States of America 1 ,200,000 Together - - 1,600,000 Now a consumption on the part of the for- mer class at the conjectural average of 10/. a family annually, would give - - £4,000,000 The same for the second class at the rate of somewhat less than 2/. per family - 3,000,000 Add for the consumption of the lower or- ders in watches, ear-rings, buckles, &c. 1,000,000 Total - - £8,000,000 These large sums include loss by accident and wear ; but, as a considerable amount of old plate or old manufacture is annually melted and wrought up, we deduct as not forming a demand on the mines - - 2,000,000 M [90] Fluctuation in the Value of Money. | App. Remainder, being the conjectural amount of specie from the mines annually required for plate and ornamental manufacture or furniture ------ £6,000,000 Comparative Expense of France and England. — Not- withstanding our great intercourse with the Continent of late years, the public are not yet in possession of a correct comparison of the expense of living in France and England. Nothing is more vague and unsatisfactory than the notices on this subject in books of travels, proceeding, as they ge- nerally do, from persons who have little idea of compre- hensive calculation, and who allow themselves to dwell with undue emphasis on a few particular points in which France happens to differ materially from England. Such persons seldom make allowance for a countervailing tendency in other items of the account. The proper mode is to frame a general table, including not only provisions, house-rent, fuel, wages, but manufactures, and professional charges. After ascertaining these material points, there will remain to be made a distinction between different periods ; thus, during the war, particularly in the latter years, the difference between the two countries was very great, 100/. in France being equivalent to 140/. or 150/. in England. Since tho peace, this difference has progressively decreased, the fall of prices in France, though not inconsiderable, being mucli inferior to that which has taken place in England. A com- parison made in 1819 would have exhibited 100/. in France as equal to fully 130/. in England; at present (1823) it would not exceed the proportion of 100/. to 120/. After attending to these preliminaries, the progress of comparison becomes less difficult, and, by balancing one point against another is made to assume, at last, a clear and simple form. This, as to the respective capitals, Paris being inferior in water communication incurs a greater enhancement than London in the conveyance of bulky commodities, such as corn, coal, wood ; while, in respect to number of consumers, the cause of enhancement is consi- derably less, the population of the French metropolis being less than two-thirds of that of ours. These causes may be said to neutralize each other : and the inferences are, — First, that Paris is as much dearer than the provincial part of France, as London is dearer than the provincial part of England. Secondly, that the proportion mentioned above as con- Aep.j Fluctuation in the Value of Money. [91] stituting the difference with England, viz. 30 per cent, in 1819, and 20 per cent, at present, is applicable to the two countries throughout, provided we confine our parallel to places similarly circumstanced, comparing Paris with Lon- don, and Touraine or Lower Normandy, each about 150 miles from Paris, with Shropshire, Derbyshire, or other counties, at a similar distance from London. Another point to which travellers are seldom sufficiently attentive is, that the degree of difference between one pro- vince and another, and even between one country on the Continent and another, is much smaller than it at first ap- pears. Take, for example, the north and south of France* countries very different in climate, produce, and habits, At first the south appears much cheaper, affording in abun- dance wine, fruit, and other articles, for which we are made to pay so extravagantly in England ; but these, on a closer examination, are found to be counterbalanced by the price of corn, always higher there than in the northern districts of France. Again, the lower wages of labour, in a back- ward province like Brittany, make a very slight difference ultimately, when we take into account the inferiority of the labourers. Similar remarks are applicable to Germany. Italy, Switzerland : in none of these countries are the amount of taxation, the interest of money, the state of hus- bandry, or any of the main constituents of price so mate- rially different as to cause any great difference in the expense of living. Accordingly, after all the assertions and exag- gerations of travellers, the distinctions on the Continent are little more than 1 . That provincial towns are considerably less expensive than capitals. 2. That by living in a petty town, or in the country, a farther reduction of expense may be accomplished, but with a greater sacrifice of comfort, a greater removal from busi- ness and society, than is implied by a country residence in England. 3. That in consequence of the want of water commu- nication, the price of bulky commodities, such as corn or wood, varies more in the provinces of the Continent than in the counties of England ; still the difference is less great than is often asserted, (Edinburgh Review, Vol. LXI V. p. 362.) land carriage on the Continent being moderate in consequence of the insignificance of tolls and turnpike dues. 4. That taking France as the representative of the Con- tinent at large in point of expense, the difference with [92] Fluctuation in the Value of Money. [Apr. England, great during the war, (particularly from 1809 to 1814), is at present not more than 20 per cent. ; any dis- burse beyond that proportion being attributable, not to difference of prices, but to additional comfort or luxury on our side. To what degree did a difference of prices exist between France and England prior to the French Revolution r Our materials for such a comparison are far from complete ; the tables collected by the late Arthur Young in 1789 in- dicate a considerable inferiority of price, but the articles quoted are chiefly agricultural ; and had manufactures been included, the general result would have been less un- favourable to England. If we revert to a prior date, such as the middle of the last century, we shall find reason to consider the two countries nearly on a par. At that time England was not much more heavily taxed than France, nor were our manufactures or corn dearer, for both were articles of export. The result accordingly is, that prior to 1760 the only material distinction between the two coun- tries consisted in the style of living ; the proportion of English population in towns being even then considerably greater, and the inhabitants consequently requiring com- forts little known or thought of in the provincial part of France. Mr. M'Culloch, in his " Essay on reducing the Interest on our National Debt," published in 1816, maintains, in contradiction to common opinion, that the rise in the price of corn on the Continent during the last half century has, on the whole, been inconsiderable. He goes into the ques- tion at great length, treating in succession of France, Spain, Italy, and the countries on the Baltic, and adducing several cogent arguments in opposition to those who maintain, that there took place on the Continent a rise of prices nearly correspondent to the rise in this country. His con- clusions are, that in France there was no rise in the price of corn : that in Italy the rise was a consequence of the ex- tension given to the freedom of trade ; and that the partial advance which he admits to have taken place in Russia and Poland was a necessary result of the degree of im- provement introduced in the present age into these very backward countries. To this statement we have merely to offer the qualifications naturally arising from a state of war. In the long period from 1793 to 1814, every state on the Continent was either engaged in hostilities, or obliged to increase its taxes and militarv establishment. In all these App.] Fluctuation in the lvalue of Money. [93] was felt a portion of the activity or excitement so conspi- cuous in England during the war, followed in all by a stag- nation similar, though not equal in degree, to that which we have experienced since the peace. The consequence was, that prices rose during one period and fell in the other ; but to ascertain the extent of change is a matter of great difficulty, there being few official returns in any part of the Continent, and the question being somewhat perplexed by the circulation of government paper so general during the war. On the whole, however, there took place, in family expenditure, calculated on a comprehensive plan, and in- cluding along with corn and butcher meat, wages, house- rent, fuel, &tc. a rise of from 25 to 30 per cent, on the prices of 1792 ; a rise which has, in a great measure, dis- appeared in the continued reduction since the peace. In forming conclusions on the price of corn, allowance ought evidently to be made for particular causes operating in particular countries : — thus, in France, the abolition of tithe, and the sale of the church lands, promoted tillage to a degree which nearly counteracted the rise of labour at- tendant on the war. Annual Expense of the family of an Agricultural Labourer, supposed to consist of h\ persons ; being an average of the expense of 65 families of labourers, in different parts of England, collected by Sir F. Eden, in 1796. Provisions (as dear then as in 1823) - Rent Fuel and candles - Clothes and washing - Contingencies - The same table, adapted to the present time by an ad- dition of 25 per cent, to the respective heads of expense, with the exception of provisions. Provisions ----- £27 1 8 1 13 3 2 10 7 4 18 10 10 £36 14 4 Rent Fuel and candles Clothes and light Contingencies - - £27 1 8 2 1 7 3 3 3 6 2 6 13 i £39 2 7 [94] Plan for giving a steady Value to [A pp. Table comprising articles of general consumption, to each of which is affixed the probable amount of money expended on it by the public, referred to in the text, p. 300. Articles. Quantity consumed. Average price. Expended by the public od each article. Produce of the Soil. Qrs. s. £ Wheat 12,000,000 50 30,000,000 Barley(used chiefly in the brewery and distillery) 7,200,000 25 9,000,000 Oats (the portion appropriated to human food) - 10,000,000 20 10,000,000 Butcher meat and animal food generally - — 1 35,000,000 Manufactures. The following sums representing 1 the value, exclusive of exports, - are, of course, considerably be- low the total of the value an- nually prepared - — — — Woollens — — 22,000,000 Cottons, (the exports exceed 20,000,000/.) — — 20,000,000 Linen — — 15,000,000 Silk — — 8,000,000 Leather — — 15,000,000 Hardware - — — 9,000,000 Foreign Articles, such as Sugar — — 9,000,000 Tea — — 8,000,000 Various other articles of sufficient importance to be specified, and the amount of which it would probably be practicable to ascer- tain from official documents — — 100,000,000 A multiplicity of articles of less importance, which being in a great measure superfluities, and dependent for their consump- tion on the taste of individuals require to be noticed no farther than by assigning to them col- lectively their proportion to the aggregate : this proportion we shall at present suppose to be about 17 per cent., or - j Total annual consumption - : 60,000,000 350,000,000 Such is, or rather would be when completed, a table of our annual consumption at the present time. In framing App.] Money Contracts. 95. or correcting such a table, we have evidently to consider two main points ; the quantities consumed, and the price. As to quantity, a variation can take place only with in- crease of population or change of habits, and any alteration of that kind must be so gradual, that we run very little ha- zard in assuming a similarity of amount during a given pe- riod, which, for the sake of precision, we shall suppose to be five years. As to price, the case is different ; the pro- duce of the soil may, from casualty in the season, rise 10 or 20 per cent., while our manufactures may experience a fall. The result, as far as founded on prices, must therefore un- dergo some change annually : for the sake of illustration we shall suppose in one year a change differing in different articles, but ending in an average rise of 5 per cent. : thus, — Articles. Produce of the soil computed on the same quantities ; but with an ad- dition of 10 per cent, to the prices. Wheat Barley Oats Butcher meat and animal food enhanced in the same propor- tion - ^Manufacturers ; here we suppose I a decrease of 5 per cent-: thus, | Woollens - Cottons Linen - Silk Leather - Hardware - Foreign Articles. Sugar the same - Tea the same - In the other component parts of the table the fluctuations are supposed to change the amount of 170,000,000/. to - Total Quantity consumed. Qrs. 12,000,000 7,200,000 10,000,000 Average price. 55 27 22 Expended bj- the public on each article. 33,000,000 9,000,000 11,000,000 38,500,000 19,000,000 11,400,000 14,250,000 7,600,000 14,250,000 8,500,000 9,000,000 8,000,000 181,100,000 367,500,000 The final change supposed in this statement is that 1057. are required to effect the purchases for which 1007. sufficed in the preceding year. We proceed next to the ; 90J Plan for giving a steady Value to \ wr , Apportionment of the respective Articles in the former Table. Articles consumed. (Wheat iBarley - - - 'Oats -Butcher meat and all animal food - Woollens - [Linen ------ i Leather jCottons jSilk 'Hardware - (Sugar jTea All other heads of national consumption Total Expenditure on each Article. £ 30,000,000 9,000,000 10,000,000 35,000,000 20,000,000 15,000,000 15,000,006 12,000,000 8,000,000 j 9,000,000 i 9,000,000 | 8,000,000 I 170,000.000 350,000,000 I Proportion of the expendi- ture on eachar- ticle to the total expenditure of the public, cal culated in parts of tOO. 8.57 2.57 2.85 10. 5.71 4.28 4.28 3.42 2.28 2.57 2.57 2.28 48.62 100 To those who apprehend complexity in such calculations, we would observe, that the details would rest with persons employed for the purpose ; and that the public would re- quire to know only the result, which, as in the present re- turns of the averages of sugar and corn, might be commu- nicated in a few sentences. Ought a Table of National Consumption to comprise the smaller Heads of Expenditure ? — To calculate the smaller items of expenditure would be a task of great difficulty, and, as far as we can judge, of little utility, since it is easy to make an allowance for the proportion omitted. Besides, we ought to introduce into the table no sum of which the accuracy is not ascertained with considerable confidence from official documents, and of which the importance is not such as to reward the labour of inquiry and comparison. Were the articles enumerated to form only 50 per cent, of the total national consumption, the result, supposing them to be articles of general use, would afford a very fair scale for comparing the prices of different years. A table com- plete in all its parts would, doubtless, be preferable ; but as the heads of our public offices, like our individual in- quirers, are as yet in only an early stage of statistical Arr.] Money Contractu, [97] research, a considerable time must elapse ere their materials acquire a finished form. In the case of the lower orders, a knowledge of the cost of a few great heads of expenditure, such as corn, coarse clothing, beer, fuel, would be found sufficient. There ought evidently to be a material difference in the plan of a table lor them and of one for their superiors, a consideration which leads us to another query in this interesting but some- what intricate discussion. How far are particular Tables required for particular Classes ? — A scale formed on the table in the text is adapted to very many persons in the middle and upper classes, — to the receivers of annuities, whether from the public funds or mortgages, — the landlord who depends on his rent, — the clerk who depends on his salary. But in re- gard to several of the classes currently termed productive, the question is different, as will appear from a reference to a specific case, such as that of Farmers on Lease. — The situation of the farmer onlease> though materially affected by the value of money in pur- chases generally, depends still more on the price of the pro- duce he raises ; — of corn, if his occupancy be chiefly under the plough ; of butcher meat, butter, cheese, if it be chiefly grass land. Leases ought thus to be drawn with a reference to the market price of produce, computed on the average of a series of years. Or, if a regulator of a more com- prehensive character be desired, the price of the produce might be combined with a table of the price of commodities generally, (Appendix, p. [95]) taking the latter as the ba- sis ; but modifying its result by repeating the price of corn or of butcher meat a certain number of times, so as to give due weight to these main constituents of the income of the lessee. The average rate of labour, an object of the first import- ance in farming, might, in like manner, be added to the ta- ble, and repeated several times. Mines, — In an undertaking of this nature, the profit evi- dently depends on two points : the market price of the arti- cles produced (whether coal, iron, tin, or copper) ; and the average rate of the labour by means of which it is rendered saleable. There are thus two ways of stipulating the con- ditional amount of the rent : by a table confined to the rate of labour and the price of the article produced ; or by a ta- ble of the price of commodities generally, (as in p. [05]) with such renetitions of the rate of labour, or price of the M [98] Plan for giving a steady Value to [Apr, article produced, as the contracting parties might think ex- pedient. Tithe. — The case of tithe is different from that of rent. It is evidently more convenient to clergymen that the price of commodities generally should be the standard, than the price of agricultural produce. The latter determines, it is true, the ability of the payers of tithe ; but as the payers are many, and the receivers comparatively few, as that which to the latter forms the whole of income is to the former only a portion of their disburse, the circumstances of the clergy have a claim to prior consideration : that is, without show- ing the slightest partiality to either party, equity suggests that the regulation of clerical income should be made with a view to the value of money in the purchase of commodi- ties generally, and not exclusively in the purchase of corn, which can form hardly a fifth of their expenditure. It would be no difficult task to suggest farther modifica- tions for different lines of business ; but to enter into detail seems wholly unnecessary, since every thing in the proposed plan is voluntary, and may be adopted or omitted as may suit the interest, or imagined interest, of the contracting par- ties. We shall, therefore, take leave of the question, after answering, by anticipation, a few objections, as follows: — 1. Need there he any apprehension of a combination to produce undue returns of prices for the purpose of affecting the standard of particular contracts'? — Attempts of that na- ture are very little to be dreaded injjso extensive a coun- try as this : they could be effectual only if undertaken throughout the whole kingdom, and persevered in during a series of years ; a course which would suppose a com- mand of capital, and a degree of concealment, wholly at variance with probability. 2. Would a measure of this nature be likely to affect the sale price of other property, in particular of lands and houses? — The majority of fundholders are, as we shall explain subsequently, permanent depositors ; strangers to the manoeuvres of the Stock Exchange, and almost as little inclined as our landholders to engage in speculative sales and purchases. But there is another class, persons retiring from business, succeeding to property, or having, from any other cause, funds of which they are desirous to make the investment. To these persons stock Mould, by the measure m contemplation, be rendered more eligible as a permanrn' Aph.j Money Contracts. [99 J deposit, and the motives for purchasing landed property would in some degree be lessened. But the complaint of the country gentlemen does not regard inadequacy of sale price : instead of the 26 or 27 years' purchase to which they were accustomed during the war, land will now sell for 34 or 35 years' purchase : their desideratum is an assured income, — relief from present pressure ; and such, to a cer- tain extent, would be the result of the proposed measure. 3. It may be objected to our table, that " it does not comprise any heads of expenditure, except those repre- sented by commodities ;" while a considerable part of the disburse of the middle classes (not less than a third,) is of another description, as appears from the concluding line in the following sketch : Proportions in 100 ot each head of expense Provisions - - 33 Clothing and washing - - 18 Fuel and light 6 House rent - - -10 Other charges, namely, wages, as- ) sessed taxes, education, medical > 33 attendance, &c. - ) 100 To the objection that might be founded on a statement like this, our answer would be, that the money paid for wages, education, professional aid, he. is ultimately ex- pended on commodities ; and were the case otherwise, there seems no necessity that a scale should comprise aU the items of expenditure. Extract of a Letter to the Author from a respectable Farmer in Hampshire, dated June 1, 1823. " During the low prices of last autumn, I was led to consider of the plan suggested in your book for regulating the wages of my labourers, by a reference to the price of their subsistence, in other words, to the market price of corn. This plan met, at first, with considerable oppo- sition, but the equUy of it became, in the course of a few weeks, so apparent, as to remove all objections. My rule was to take the rate of wages (75. a week) currently given in my neighbourhood, to explain to how much wheat this was equivalent, and to pay my people in wheat or in money, at their option. They soon preferred the former, to the extent of their consumption, and took in money [100] Plan for giving a steady Value, fyc. \Av?. only what they required for their lesser purchases. On taking an average of their weekly receipts, during the winter, and reckoning them in wheat, on the plan adopted by Mr. Barton, and stated in your book, (in the chapter on Poor Laws,) I find it to have been about 80 pints of wheat, which forms a kind of medium of the wages of the country labourer, computed in wheat for the last seventy years. " This was found sufficient for the maintenance of the fa- milies of my labourers, which averaged five persons : viz. the man, his wife, and three children. During the whole winter none of my labourers, who were from 16 to 18 in number, had recourse to the parish. " My inference is, that 80 pints of wheat, or its value in money, would form a fair permanent rate of wages for the country labourers throughout all that part of England in which wheat is the usual food of the country people." On high and low Prices since 17 '92. By Thomas Tooke,Esq. Part I. — It was after writing our chapter on the Rise of Prices during the War, that Mr. Tooke's Treatise fell intoour hands. This first Part relates chiefly to the effect of the currency, and Mr. T. maintains that the bullionists overrate greatly the effect on prices of the substitution of bank paper for coin ; while their opponents are almost equally erroneous in refusing to admit a partial enhancement (about 20 per cent, in the latter years of the war) arising from that cause. Hr is not disposed to allow that the war had so great or general an effect on prices as has been supposed : the rise of corn he attributes chiefly to an extra-proportion of indifferent seasons; and after recapitulating the events affecting other commodities of consequence, such as cotton, sugar or wool, his inference is, that the fluctuation in the price of each de- pended less on any general cause than on circumstances of demand and supply peculiar to the particular article. He steers a middle course throughout, and concludes (p. 201.) by reminding the bullionists of the remarkable fact, that money was less abundant during the bank restriction than at present, when prices are so much lower ; while, on the other hand, he assures the agriculturists that as the fall of prices since 1819 may be explained by favourable seasons, they may safely forbear their complaints against Mr. Peel's Bill. This publication is valuable as a collection of materials, as a specimen of reasoning founded on specific documents, instead of the mania for generalizing, so common in the pre- sent age. J 01 APPENDIX CHAPTER XL On Finance. Sinking Fund. — On this subject a few explanatory pa- ragraphs may be acceptable to those of our readers who are not initiated in the mysteries of the Treasury or Stock Exchange. The Supplies constituting our Sinking Fund. — The com- plex form of our budget, and the appearance of inviolability given to the sinking fund, may induce persons in common life to imagine that that fund derived part of its income from taxes vested in the commissioners, and managed by them without reference to the rest of the revenue. The appropriation, however, never went so far : the income of the sinking fund, paid to the commissioners at the bank, arose chiefly from — 1st. The 1,000,000/. (increased in 1792 to 1,200,000/.) annually payable out of the general revenue. 2d. The dividends of redeemed stock, which, standing in the name of the Sinking Fund Commissioners, were considered as entitled to interest at the quarterly payments at the Bank, in the same manner as the rest of the public debt. 3d. The surplus interest provided on contracting each loan since 1793. This provision, adopted by Mr. Pitt on the suggestion of Dr. Price, will be understood by sup- posing that the loan for a particular year is 10,000,000/., at 5 per cent., for which stock given in the 5 per cents, at par involves an annual charge of 500,000/. Now the plan was. to provide taxes yielding, not 500,000/.. but 600.000/. [102] On Finance ; the Sinking Fund. [App. a year, the 100,000/. forming a fund for the gradual ex- tinction of the principal— a purpose which in the case in question would be accomplished in 37 years. The merits or demerits of this plan of surplus interest are now only matters of historical curiosity, the season of loans being past, or at least suspended. The question, however, is not merely arithmetical ; it is in a great mea- sure similar to that of the expediency or inexpediency of war taxes ; and if the war was a season of large profits, it was evidently politic to make it bear as large a portion as possible of our burdens. It is in a consideration of this nature, and not in the imaginary advantage of compound interest, that we are to seek for a justification of the mea- sure of providing a surplus revenue ; we mean for a coun- terpoise to the sacrifice with which it may easily be shewn to have been attended. The nominal Sinking Fund. — Our sinking fund exhibit- ed until the late change a surplus, which, for illustration, we shall call 17,000,000/., and the revenue at the same time a deficiency which we shall term 12,000,000/. It was for some time a question whether the better plan was to leave the 17,000,000/. to operate in weekly purchases for the redemption of stock, and supply the revenue defi- ciency by a loan, or to adopt the more simple course of receiving from the sinking fund the 12,000,000/., and con- lining the redemption purchases of the commissioners to 5,000,000/. This gave rise to considerable discussion after 1815, the former plan being maintained by the con- verts to the doctrine of compound interest, the believers in the arithmetical wonders of Dr. Price. But in 1819 ministers consented to adopt the latter course, and found in it (see Ricardo on the Funding System, in Napier's Supple- ment to the Encyclopaedia Britannica,) a degree of advan- tage which may be said to have given the first blow to the complex plan of paying with one hand, while we borrowed with the other. The topic was again brought under discussion in the ses- sion of 1822, in the debates on the plan for converting our half-pay and pensions into long annuities. On that occa- sion Mr. Vansittart, unwilling to part with the semblance after he had relinquished the substance of the sinking fund, urged for a time the expediency of making the requisite loans from the public, but was at last persuaded to follow the direct course, and to admit of the loans beincr made App.J On Finance. [l^J from the portion of revenue at his disposal. This plan has been confirmed by Mr. Robinson ; so that the sinking fund is now divested of its complexity, and brought back to a form from which, as far as we can judge, it ought never to have been made to deviate — that of the balance of cur- rent revenue applied to the redemption of stock. Comparison of our present Burdens with those of 1792. Amount of taxation, tithe, and poor-rate, in Great Britain and Ireland in 1792 - - £22,000,000 The increase of our population since then (nearly 50 per cent.) enables us, without additional pressure on the individual, to bear a farther burden of - 11,000,000 Continental countries, our competitors in productive industry, having, in general, increased their burdens in a ratio some- what greater than their population, we are justified (see Chap. IX. p. 257.) in re- garding a corresponding increase on our part as not detrimental to our foreign trade. We add, on this account, a sum of - 5,000,000 The money in which taxes were paid in 1792 being, when compared with our present currency, as 100 to 130 in value, we make a corresponding insertion of - 10,000,000 on the ground that, to that extent, the ex- cess of our present taxation over that of 1792, is nominal. Amount of burden which can be borne by us at present, without greater disadvantage, in comparison with other countries, than . we experienced in 1792 - £48,000,000 Our actual burdens are (see App. p. [84]) 64,000,000/. We have here assumed the increase of population as the measure of the increase of national wealth, arising from our various improvements in agriculture, manufacture, na- vigation, &c. This proportion will be deemed consider- ably below the mark by the majority of those who write or think on such subjects, whether it be the convert to Mr. [104] On Firiunde. [Apr. Gray's doctrine, (p. 221.) that in the progress of society individual income increases in a larger ratio than popula- tion, or the practical observer, who founds his calculation on the surprising improvements in agriculture, manufacture, and productive industry generally, during the last thirty years. These arguments rest, doubtless, on a very sub- stantial basis, and nothing but the unfortunate fluctuations in individual property, attendant on our rapid transitions, would have prevented us from inserting a larger sum (pro- bably 16 or 18,000,000, instead of 11,000,0002.) as the measure of the increase of national wealth, arising from our improvements. The Malt Tax. — The hopes of the agriculturists were at one time excited by the expected repeal of a large share of the duty on malt; but, while we sympathize with their sufferings, and anxiously desire a diminution of their tithe and poor-rate, we cannot help expressing a doubt of the expediency of any great reduction of taxation on an article already so much cheapened by the fall of the materials. Sudden changes are to be avoided ; malt liquor comes only in some respects under the descriptton of a necessary of life ; and the extended cultivation of barley that might have been prompted by a reduction of duty, would probably have pre- vented any material rise in the price. Prices of Commodities a Century ago. Text, p. 33S. — In comparing our present national income with that of the last century, we have assumed the power of money in the pur- chase of commodities as less at present by 30 per cent, than in the reign of George I. or in any period of last century prior to 1792. This allowance is ample when we take into account that prices have fallen since 1820, and that the prospect of war, at least of such a war as would be pro- ductive of general enhancement, seems very remote. On this interesting topic we have given a short table in page [7] of the Appendix. Those who dissent from this opinion, and who imagine money to have been formerly of much greater value, will do well to recollect that many manu- factures are now cheaper than in that age, and that corn is very little dearer. The chief difference, in fact, is in pro- fessional fees, salaries, and wages, all raised during the war, and not yet brought to a level like the price of produce, manufactures, or whatever is regulated at an open market. App.] On Finance. [105] Then as to the charges of house-keeping in a compre- hensive sense, the difference between the present time and a century ago, resolves itself chiefly into a difference in the style of living ; not unlike the existing difference between France and England, in which, though the prices of a number of articles are on a par, the total outlay is less in France, in consequence of the plainer habits of the country. Historical Parallel of the Revenue of England and France, in p. 343. of the Text. — These sums exhibit the nett produce of the taxes, after deducting the expense of collecting ; and the latter years of the column of England include Scotland and Ireland. Backward State of France. Extract of a letter from Mr. S. Gray to Monsieur J. B. Say? printed in 1817 in the Appendix to the volume entitled " All Classes productive." " In a visit which I made to your country last year, I confess I did not find such striking or brilliant results. Travelling partly with a view to ascertain how far the doc- trines, which I had deduced from the facts around me in our island, as well as from information, agreed with the facts found in so populous a state as France, I scrutinized as narrowly as I could the circumstances of the population. Considering the extension of buildings, and an improvement in their style, which show the increase of population com- bined with the concomitant increase of wealth, as the surest symptoms of a thriving country, I paid particular attention to your towns and villages in these points, and am sorry to say, I saw no progress whatever. I have no recollection of any strictly additional buildings : the only new buildings which I perceived were in some villages that had been partly destroyed in the conflicts with the invading armies. In truth, though we also are suffering from an unusual stag- nation, I found, at my return, more new houses going on in the petty suburb of London, Camden Town, and its neighbourhood, than I had seen in the whole of my route through France. Every town and every village seemed stationary. I own, however, I found much of what I ex- pected, on my principles, from a state so long well peopled. There was an appearance of wealth, though, in general, it is true, but of little capital. Your soil is almost universally under cultivation, but, with some exceptions, in a very in- ferior stvle. Your people are generallv emploved and busv.; M [106] On Finance. [App. yet not very effectively. Though the population of France be to that of England only as about 150 to 230 per square mile, France seems to be at a still more considerable rate behind our island in capital, and the results of active capi- tal. In several statistical points we have got the start of a full century before you." THE EiNI>. 14 DAY USE TURN TO DESK FROM WHICH BORROWED LOAN DEPT. RENEWALS ONLY—TEL. NO. 642-3405 This book is due on the last date stamped below, or on the date to which renewed. Renewed books are subject to immediate recall. REC'D LD JUN1 1 70 - 5 PN i n_Q_ LD21A-60m-3,'70 (N5382sl0)476-A-32 General Library University of California Berkeley H **J«