1)CT1MI0:^S
MMBMTIMS.&C.
FLUCTUATIONS
CURRENCY, COMMERCE,
MANUFACTURES ;
Kl.FERABI.E TO
THE CORN LAWS,
JAMES WILSON, Esq.
LONDON:
PUBLISHED BY LONGMAN, ORME, BROWN. GREEN. AJSU
LONGMANS.
1840.
London :
rrluted by William Clowe-j and Son'§,
Staniforil Street.
^^044
INTRODUCTION.
The frequent recurrence oi" periods of excite-
ment and depression in the nionetarial and
commercial interests of the country, and the serious
evils which have thereby been inflicted on all classes
1^ of society, have become matters of the gravest
"^ interest.
>-
^ In the numerous inquiries which have been
~ made as to the cause thereof, with a view to re-
medial measures, attention has been directed almost
^ exclusively to the operation and management of the
~ currency and banking system of the country ; so
- much so, that it appears to be almost implicitly
admitted, that somewhere within the range of these
^ subjects the true cause is to be found ; and in
cjs consequence, the inquiry appears in a great measure
"^^ to have been narrowed into a consideration of the
principles upon which they are and ought to be
conducted.
As yet, however, no satisfactory result has
attended these inquiries, and the further they pro-
ceed, the more it appears that these influences are
too much themselves under the control of the public
feeling, and to be regarded as the cause of these
constant fluctuatious.
4^4115
IV
In the discussions which have recently taken
place on the effects of the present Corn Laws,
many circumstances have tended to associate their
operations upon prices and the general condition of
the country with these periodical derangements.
We have long thought that they were most inti-
mately connected, and that the influences produced
on society by the fluctuating character of the price
of the first necessaries of life have been sufficiently
powerful in themselves to create derangements in
all interests and classes of the greatest magnitude.
With a view to ascertain how far facts and cir-
cumstances, as to time and otherwise, agree with
the strong conviction we entertained on this subject,
the following investigation has been undertaken :
and we trust that this attempt may lead others to a
further inquiry on this important subject, as we are
now more than ever convinced, both by principle
and by facts, that the fluctuating character of the
cost of the first and imperative necessaries of life
is the chief cause of the whole derangements of
the monetarial and commercial interests of this
great country, which have been attended with so
much distress, disappointment, and ruin.
London, March 20, 1840.
FLUCTUATIONS
CURRENCY, COMMERCE,
MANUFACTURES, et
In the " Influences of the Corn Laws " our atten-
tion was confined to those exerted over the agri-
cultural interests ; not only because we consider that
class particularly interested therein, but because the
primary effects produced on them become the second
causes which are productive of all the baneful conse-
quences resulting from these laws to the remaining
parts of society.
We then only glanced at some of the effects pro-
duced on the commerce, industry, and morals of the
country, as far as they were intimately associated with
the agricultural interests, and as far as they appeared
necessary to illustrate the influences exerted over this
class.
It is our intention now to direct our attention more
exclusively to the influences which these laws ultimately
2
exert over the currency, commerce, industry, and
morals of this country, and of the continental coun-
tries, merely glancing as we go along at some of the
retributive effects (if we may use the term) which
these influences in their turn produce upon the agri-
cultural interests.
We are the more induced to turn our attention to
this part of the subject at this moment, from a con-
viction that the present derangement of national pros-
perity can be fairly traced to these influences as its
exclusive cause.
In proceeding to this argument, we take it for
granted that the considerations in the " Influences
of the Corn Laws" have been carefully perused and
understood ; and more especially the most important
feature of the whole matter, viz., the necessary ten-
dency which these laws have of creating great fluctua-
tions in the supply and price of the first necessaries
of life.
PART I.
FLUCTUATIONS OF THE CURRENCY, &c.
It is not our intention to detain the reader by
entering into any evidence of the rapid and extensive
fluctuations which for some years have been continually
taking place in this country in the amount of the
floating capital, disengaged money, and currency^
which from time to time have been available for car-
rying on and conducting the ordinary business and
commerce of the country.
These facts are so generally known, and have excited
so much of the public attention, that we shall content
ourselves with merely referring the reader to the table
at page 41, showing the amount of bullion and depo-
sits possessed by the Bank of England by the returns
from 1828 to the present time, as exhibiting an index
of the proportions in which these fluctuations have
taken place, as well as the periods.
The fluctuations shown in this table, however great,
are less than those which have actually taken place,
owing to the mode in which the Bank's returns are
made ; being made once in each month, of the average
of the three preceding months. In the case of a di-
minishing amount, it is evident that at the moment
when it is at the lowest point, that month has the
advantage of being mingled with the two preceding
b2
months of lart»"er amounts, and therefore showing a
larger stock than is actually on hand ; and so also in
the case of an increasing stock, it is equally evident
that at the moment when it is at the highest point,
that month being averaged with the two preceding of
smaller amounts, must show a smaller sum than is
actually possessed. Thus the smallest and largest
amounts of bullion in possession of the Bank is never
shown ; and thus the fluctuations are even greater
than displayed by these returns.
This table furnishes only an index of the proportions
in which these fluctuations have taken place, and has
little or no reference to the actval amoiint of the fluc-
tuations of available capital in the whole communit}'.
We must disclaim any intention of entering into the
general question of the currency, or of the constitution
and management of the Bank of England, further
than is necessary to elucidate the causes of these fluc-
tuations, and to show what influence the Corn Laws
can fairly be said to have exercised over them, or how
far they can be proved to have been the chief causes
thereof.
For some years past, during the exciting and ruin-
ous changes which have taken place in the money
market, as it is termed, men have eagerly sought for
reasons and cures ; but, as is too frequently the case,
mistaking effect for cause, mere symptoms for the
disease, the extent of that inquiry has seldom pro-
ceeded further than all agreeing in denouncing the
Bank of England and the caprice of its management
(expanding and contracting the currency at pleasure)
as the groundwork and base of all the mischief : nor is
this a matter of surprise when we consider that these
fluctuations and changes must first be made visible
to the public eye by the policy of that establishment,
however little control it can exercise over them.
There is no greater danger to society than arriving
at and resting satisfied with an erroneous cause for an
existing evil. In the first place, it is apt to preclude
further investigation ; and in the second place, a cure
to such evils is difficult to effect, when opposed on
untrue grounds : there are always some parties who
are more or less interested in existing evils ; and to
them it is no difficult task to oppose arguments which
have not as their base the strength and symmetry
which truth alone can afford them : to this reason, we
think, may be attributed the continvied existence of
many of the most glaring evils long after they have
been almost universally acknowledged as such.
Whatever are the defects of the constitution of the
Bank of England, and however inefficient that estab-
lishment may be for the supposed position which it
holds as the head of the monetarial system and
arrangements of the great commercial country, it is no
difficult task to prove that the charge here brought
against it cannot be true, that it must indeed be too
innocent of any charge of exercising a control over the
currency, and that, therefore, the general reasons as-
signed for the changes in the money market arc
equally erroneous.
The Bank of England is an establishment possessed
of an enormous capital ; but that capital is more than
absorbed by loans to the Government, and therefore
not available for the general purposes of business ; but
it communicates to it all the credit and security which
could be afforded by the government; which, with a
certain degree of publicity given to its actions, secures
to it an extent of confidence greater than is enjoyed by
an other such establishment in the world.
In respect of credit, therefore, while the Bank of
England ranks highest, in respect of real available,
independent means of conducting its usual business
it must rank on the lowest scale of solvent establish-
ments. It, therefore, necessarily follows, that when
money is everywhere abundant and prosperity general,
the resources of the Bank of England must be very
great : at such times the surplus of every man through-
out the country finds its way to his banker ; a portion
of the surplus of the bankers throughout the country
finds its way to their agents in London for employ-
ment ; and the surplus of these agents, as well as all
the London bankers, finds its way to the coffers of the
Bank of England, as the most accredited place of
safety ; and thus constitutes an index not of the wealth
and capital of the Bank of England, but of the extent
of surplus capital possessed at any given moment by
the whole country : at this moment the Bank of Eng-
land has no power to prevent money being cheap, as it is
termed, because it is universally abundant ; and being
obliged to employ its deposits and circulation for the
benefit of its proprietory (we speak of the Bank of
England as it is), it must do so at the rate estab-
lished by the law of supply and demand, or leave all
the business to be done by other establishments.
In like manner it follows as necessarily that when
money is ev^erywhere becoming scarce, the surplus
balances of money must be everywhere diminishing ;
individuals throughout the country draw a larger
portion from their bankers, who, in their turn, retain a
smaller amount with their agents in London, and who,
with all the London bankers, have less to employ in
loans and discounts and smaller balances with the
Bank of England. If, then, the cause which has ren-
dered money scarce, has proceeded from a demand to
send money abroad either to purchase some necessary
such as corn, or to conduct some huge speculations
into which the public has been tempted, or to carry
on an expensive war, the unusual transfer of this
capital from this to another country can only be accom-
plished by the means of bullion as having a common
and well ascertained value everywhere : the Bank of
England is, then, not only called upon to give up a
large portion of her deposits, but also to redeem a
portion of her notes for gold ; and thus, without any
independent resources of her own to fall back upon,
she becomes the more seriously and dangerously
affected by the pressing scarcity than any other solvent
establishment in the country. The situation of the
Bank of England is, then, not an index of any dimi-
nution of its own wealth or means, which remain as
safely locked up as before, but of the general dimi-
8
nution of the floating money of the whole country
available for trading purposes.
The Bank of England is now competent to conduct its
transactions as before only in reference to supply and
demand; and in the rates of interest to be governed by
the general market value, having no control whatever
over them at either period. If, at the former period
of plenty, the Bank of England were to attempt to
charge more than the market value, in order to make
money scarce, the consequence would merely be that
all the business would be done by other establish-
ments ; or if the Bank of England were to attempt to
charge less at the latter period than the market rate,
in order to make money abundant when it really was
not so, two days would exhaust her reduced means ;
and in neither case wovild she be able to pay any divi-
dends to her proprietors.
It must, however, be admitted that there are many
circumstances connected with the movements of the
Bank, which naturally give rise to the erroneous opi-
nion that these movements are the causes which induce
fluctuations. From the position which we have just
explained the Bank to hold, it is evident that the
directors of that establishment must be the first to
notice, by their own internal index, any movement
which is going on either to render money scarce or
abundant ; they must be the first to observe either the
eftlux or influx of bullion ; they must first feel either
an increasing or decreasing demand for money. And
from their own dependent state on these events, re-
quiring always the greatest watchfulness to look before
them for their own safety and protection, or profit,
they are forced into a line of policy, the reasons for
which are not visible to the public eye at the moment,
and which, as they afterwards become developed, are
often mistaken as the effects instead of the inducing
causes of the policy of the Bank.
These are the simple facts which must ever influence
this establishment as at present constituted, however
different circumstances, political and civil, are con-
tinually occurring to render them intricate and diffi-
cult to understand, however a season of prosperity
gives rise to speculation and excitement, and however
a season of alarm and scarcity creates fears and distrust,
which alike aggravate the natural consequences of such
occurrences.
It must, therefore, appear clear that the conduct of
the Bank of England as connected with the fluctua-
tions complained of has been merely part of the effects
and symptoms, not the cause of the disease — that it is
utterly innocent of causing these changes, and as
utterly weak and powerless to control them. It would
be far different if it traded upon its own real sub-
stantial capital, instead of only upon a credit, however
good, *or privileges, however valuable, purchased at
the cost of locking up that real strength.
"We must look to some wider and more extensive
first cause for these fluctuations and changes in the
condition of a nation the most uniformly industrious,
10
persevering, and enterprising that has ever existed,
and we believe that we shall find some more satisfac-
tory result in attributing them to the huge fluctuations
in the amount of its means which, from time to time,
have been required to pay for the necessary subsistence
of life ; or, in other words, to the fluctuations of the
price of food, which we have shown in a former work
to be the necessary consequence of a restriction of the
supply of that first great necessary.
It may be here useful to examine what is the amount
of the national income which is on an average ab-
sorbed in the price of wheat ; fluctuations being much
more apparent in this than in any other of the great
necessaries of existence, we shall confine our attention
to it;, merely inferring from the result, the aggravation
of the consequences shown, if the consideration had
extended over every article. The nearest estimate of
the annual production of wheat which we have been
able to arrive at is as follows. It is estimated that
there are, in average years, in the united kingdom five
millions of acres cultivated with wheat, producing on
an average three quarters and a half per acre. The
following will, therefore, be the annual cost of wheat
to the country : —
5,000,000 acres, 3^ quarters per acre, will give
17,500,000 quarters; from which deduct 1,500,000
quarters for seed, &c. ; will leave 16,000,000 quarters
to be consumed by the country, which, at the average
price of the last seven years, b^2s. per quarter, will
amount to the annual sum of £41,600,000.
11
It thus appears that the annual average value oi" the
wheat consumed in this country is £41,600,000. In
the absence of any accurate and authenticated sta-
tistical accounts, this apparently enormous sum is the
nearest we can arrive at ; and although it may not be
perfectly accurate, it is sufficiently so to elucidate our
theory and argument.
This amount, then, we say, is absorbed annually
from the national income to pay for this first great
necessary, calculating the price at the average prices
of the last seven years, which, including high and low.
may be taken as a fair average price over a longer
space. It will, however, be suflRciently evident, that
in proportion as the price rises above or falls below
the given average, that the amount of the national
income and wealth which is then thereby absorbed in
this great first necessary, must increase or diminish
accordingly, and thus altering in the same proportion
the amount left for all other purposes.
Thus, in the event of a number of cheap years fol-
lowing each other, when prices are below the average
rate, the diminished amount of money absorbed in this
way, accumulating year after year, cannot fail to give
to the community a very greatly increased command
of wealth, and to render more abundant the means of
employing it in all other ways ; and that, on the con-
trary, when a number of years occur when prices are
above these average rates, the increased amount of
money absorbed in this way, year after year, cannot
12
fail to diminish the general amount of wealth, to be
employed for other purposes.
It may here be remarked, that the facility with which
money is removed from one country to another by in-
vestments in public securities, altogether independent
of commerce, and that the periods of low prices and
high prices, above referred to, having occurred simulta-
neously throughout Europe, has tended materially to
aggravate the effects of the greater amount of capital let
loose in the former^ and absorbed in the latter periods.
Another serious aggravation of these changes in this
country has arisen from the fact that, in dear years,
not only is the sum absorbed much above the average,
but a large amount is sent out of the country in the
shape of bulhon to purchase supplies abroad; while
in cheap years, not only is the sum thus absorbed
much less, but the country is in such years deprived of
nothing for foreign purchases. In order to show the
great fluctuations in the amount of money absorbed in
the article of wheat alone, we present the following
table, showing the sum in each year which must have
been paid for wheat at the average price of the year,
calculating the consumption at 16,000,000 quarters,
which, whether correct or not, displays with equal truth
the proportion of these fluctuations : — also showing
the amount in each year paid for foreign wheat;
which will be found to be important in the dear years,
when we could least afford it, and most trivial in the
cheap years, ^yhen the redundancy of means could best
afford it.
1817
1818
IS19
1820
1821
1822
1823
1824
1825
1826
1827
1828
1829
1830
1831
1832
1833
1834
1835
lS3f)
1S37
1838
1839
Quantity
consumed.
Quarters.
16,000,000
Average
price.
94/0
83/8
72/3
65/10
54/5
43/3
51/9
62/0
66/6
56/11
56/9
60/5
66/3
64/3
66/4
58/8
52/11
46/2
39/4
48/6
55/10
64/7
70/8
Total
amount of
Cost.
£
75,200,000
66,933,333
57,800,000
52,666,666
43,450,000
33,600,000
41,400,000
49,600,000
53,200,000
45,533,333
45,400,000
48.250,000
53,000,000
51,400,000
53,066,666
46,916,666
42, 316, €66
36,933,333
31,400,000
38,800.000
44,666,666
51,666,666
56,533,333
Quuntity of
Foreign
Wlieut taken
into Con-
sumption.
Quarters.
1,020,949
1,593,518
122,133
3-1,274
2
12,137
15,777
525,231
315,892
572,733
842,052
1,364,220
1,701.885
1,491 631
325,435
82,346
64,653
28,-!83
30,554
244,619
1,853,048
2,700,131
4,032,748
5,471,018
349,605
87,113
5
22,301
31,075
1,352,469
662,056
1,195,580
1,912,159
3,495,813
4,190,891
3,828,519
710,533
156,114
101,750
34,654
51,177
499,430
4,594,014
7,515,S64*i
<^>^ ^J.i^^U//
* It is necessary to remark, witn respect to this table, that the
quantity of sixteen millionsof quarters, being taken as the annual
consumption, in the absence of any statistical information that
can be relied upon, is the nearest approximation to the truth to
which we can arrive, as the average consumption of the last few
years: — but there is not the slightest doubt that it exceeds the
real quantity consumed in the early period embraced in the table,
and perhaps falls short of the quantity consumed in the last three
14
The facts which are brought to view in this table
demand the most minute attention and the gravest
consideration. We find the entire cost of the wheat
consumed in this country representing in one year,
1817, upwards of seventy-five millions of pounds ster-
ling: — with a payment for foreign-grown wheat", in
the same year, of four millions sterling, gradually fall-
ing, for five years, to thirty-three million pounds ster-
ling in 1822, without any expenditure for foreign wheat ;
then again gradually advancing until, in 1829, fifty-
or four years ; but still it serves the purpose of comparing the fluc-
tuations of the amount of national means absorbed in this article,
better than if we had been able to ascertain the actual quantities
consumed in each year, and calculated accordingly : for although
the whole quantity annually consumed has gradually increased
during that time with the increase of population, yet it is assumed
that the consumption of wheat, the first necessary of life, not an
article of fashion, luxury, or caprice, has always borne the same
relative proportion to the population and its means: — and that,
therefore, the fluctuations in the total annual price of it, whether
the consumption were larger or smaller, but still bearing the same
proportion to the wealth of the community, would have the same
influence in increasing or diminishing proportionably the general
wealth of the country available for other purposes. As has been
already remarked, the fluctuations in the price of wheat having
been simultaneous in every part of Europe with those in England,
it becomes a difficult task to compute the stupendous amount of
capital let loose at one period, and absorbed at another, in this
article alone. In France, where bread forms so large a portion of
the diet, and the population is one-third greater than in this king-
dom, it would appear a moderate estimate to state the capital thus
fluctuating at the same amount as in this country : in other parts
of Europe the fluctuations of price have been as great as in this
country, but the consumption of wheat-bread is comparatively
15
three millions sterling is the entire cost, with a sum of
nearly three millions and a half paid for foreign-grown
wheat; then declining gradually until, in 1835, thirty-
one millions is the whole cost, with the insignificant
sum of thirty-four thousand pounds paid for wheat of
foreign growth; and, lastly, gradually advancing un-
til, in 1839, the entire cost to the community for wheat
is fifty-six millions and a half sterling, with no less a
sum than seven millions and a half paid to foreign
growers, chiefly in bullion. These extreme points
will stand thus : — (See next page.)
limited. The following table will show the uniformity, in regard
to time, which has prevailed in diflFerent parts of Europe, in the
changes of price : —
Average price
Average price
Average price
Years.
in
in
in
Great Britain.
France.
Danzig.
1817
94/0
• •
75/8
1818
83/8
....
64/7
1819
72/3
34/1
43/9
1820
65/10
45/7
33/3
1821
54/.i
34/3
31/7
1822
43/3
36/9
29/1
1823
51/9
35/10
26/8
1824
62/0
34/4
22/9
1825
66/6
35/6
23/3
1826
56/11
36/5
23/1
1827
56/9
49/7
22/5
1828
60/5
52/6
24/4
1829
66/3
48/2
36/10
1830
64/3
51/0
34/3
1831
66/4
50/10
37/3
1832
.55/8
41/3
37/7
1833
52/11
34/1
29/4
18.34
46/2
35/9
25/5
1835
39/4
33/8
23/0
1836
48 6
39/8
28/7
1837
55/10
41/0
29/0
1838
64/7
51/6
45/0
1839
70/8
....
16
Whole cost of Wheat.
Cost of Foreign Wheat
consumed.
1817 .
£75,200,000
£4,032,748
1822 .
33,600,000
nothing.
1829 .
53,000,000
3,495,813
1835 .
31,400,000
34,654
1839 .
56,533,333
7,515,864
It is impossible to look at these facts — to consider
that the sum absorbed in the consumption of wheat
alone, in this country only, has been more than twenty-
one millions of pounds sterling greater, during the
last year, than it was only four years ago; that in
France the increase must be in the same propor-
tion ; that independent of this additional absorption for
our own purposes, that upwards of seven millions of
it has actually gone out of the country for the purchase
of foreign wheat, while, in the former year, only about
thirty-four thousand pounds was required on this ac-
count : — it is impossible, we say, to have these facts
placed before our eyes without feeling at once the
strongest conviction that they are sufficient to produce
enormous fluctuations in the currency, in the wealth
and prosperity of the country.
It shall now be our task to endeavour to trace the
influences exerted by such striking causes, to endea-
vour to discover, by fair and close investigation, how far
the facts which have occurred, during the last few years,
agree with and corroborate the conviction which has
been produced by the simple details before us ; and
if, in the course of this investigation, we may have oc-
casion to allude to the pohcy pursued by any of the
different classes of banking establishments, it shall
17
only be, as far as is necessary, for elucidating our prin
ciples ; as we again disclaim any intention, in our pre-
sent inquiry, to mingle with it the general question of
currency or banking, as they exist or have existed.
We have already intimated that it is not to high
prices or to low prices that we attribute the evils
complained of ; but to a constant and incessant
changeableness ; to periodical fluctuations ; to a
series of years of great cheapness, followed by years
of very high prices. There is no more striking
truth in political, mercantile, and social existence
than there is in human nature a strong tendency
to adaptation ; to conform every arrangement and
plan, as well for the present as the future, in re-
ference to existing circumstances ; to enact laws, to
enter into engagements, and to contract habits con-
sonant with the wants and the means of the present :
for, however the mind may indulge in the retrospective,
or delight in speculative views of the future, it is the
present onl} which has sufficient substantiality and
form to constitute the great cause of all our actions.
If, then, that present has no endurance ; if great and
important changes are ever going forward, it follows
that there is no security in the most prudent calcula-
tions for the future ; that circumstances, over which
persons have no control, may interfere with engage-
ments and habits contracted with the most justifiable
reasons ; and thus, by constant fluctuations, security
in the future, the greatest moral tie which Providence
has pleased to link to the human constitution, is mate
rially weakened.
18
From these remarks it will naturally follow, that we
regard the seasons of extreme low prices as productive
of as much mischief, of being accessory to as great an
amount of evil, as we do the seasons of extreme high
prices : the two are naturally and necessarily linked
together as cause and effect; and although distress
and disappointment are more apparent in the latter
than the former period, yet it remains to be seen how
far the former period has been accessory to the neces-
sary cause of the great evils experienced in the latter
period ; and if the causes of the mischief are equally
identified in the two periods, they must equally share
the blame.
It may be imagined by many who have not well
considered the subject, that as far as the fluctuations
which we have shown to exist in the amount of money
absorbed in payment of the necessaries of life are of
an internal nature ; that is, as far as the additional
amount paid by the community in a series of years
goes only from one portion of the commvinity to
another; from the general consumers to the agricul-
turists, that there should be little or no interruption of
national prosperity — that there should be little or no
derangement of the currency : this point deserves and
will obtain our close attention as we go forward with
the investigation in this and the following proposi-
tions. Every person, however, easily understands that
inasmuch as these fluctuations have called for only
£34,654 in one year, and for £7,515,864* in another
* Although the sum of £7,515,864 is put down as paid for
19
year, only four years apart, to be remitted to foreign
countries for our consumption of bread, great and im-
portant evils must ensue.
In order to go into the investigation proposed, it is
obvious that we must discover, that we must conde-
scend to some given sum which, could it be main-
tained steadily, would be the correct amount of the
means of the country absorbed for this particular
purpose annually, namely, for the pvirchase of wheat ;
in order that we may determine what the fluctuations
really have been ; how much too cheaply the com-
munity have been served at one time, and how much
too dearly at another time. Now we know of no
principle so accurate to determine this point, and, at
all events, it is sufficient for a fair and full considera-
tion of our case, as to take the actual average price
which has been obtained in a currency of years amidst
all these oscillations and fluctuations. Relying as we
do upon the excitement being in exact proportion to
the depression, and the depression, in its turn, being
in exact proportion to the excitement ; to the vibra-
tion of the pendulum being to the left in the same
proportion that it was to the right, and on the right
that it obtained on the left, we take the average price
of the whole period as a fair and just point from which
foreign wheat in 1839, yet from Oct. 10, 1838, to Oct. 10, 1839,
one year, the sum of £12,126,369 was paid; this large amount,
crowded into the short space of twelve months, and not as it
appears diffused over two years, is an important feature in re-
ference to the effects produced on the currency.
c 2
20
to date all our calculations in elucidation of the princi-
ples we advocate.
It has already, in a former work, been shown that
the average price of seven years, from 1832 to 1839,
was 52*. 2c?. per quarter for wheat, and that price is,
therefore, without hesitation, taken as a fair average
on which to ground our calculations.
At this rate the average amount of the national
means absorbed in wheat will be £41,600,000 sterling,
and, therefore, as the actual sum paid in each year
differs from this, either in excess or diminution, must
we regard it as a fluctuation of the general wealth or
means of the community, whether the difference may
be felt in the increased or diminished amount of de-
posits in bankers' hands, the increased or diminished
demand for manufactured goods or other luxuries, or
in any other way.
By way of illustrating these principles, we would
claim especial attention to the occurrences since the
year 1831, in relation to the points under consi-
deration.
On referring to the table, page 13, it will be seen
that 1828, 1829, 1830, and 1831, were years of very high
prices of wheat, in which large importations took place,
at an enormous cost to the country : during these four
years, it must be obvious that the means of the
country must have been absorbed to a great extent as
compared with previous years ; and there is no diffi-
21
culty in reconciling, with such state of matters, the
great scarcity of money which was felt during these
years, the contraction of circulation especially felt in
1829, and the languishing condition of the general
pursuits of industry and commerce at this period.
It may be imagined that as far as the excess of
national income paid in these years went chiefly to
enrich the agriculturist, no derangement of the cur-
rency, of the means of conducting the great com-
mercial operations of the country, should have been
experienced, as the amount only passed from one part
of the community to another, from one kind of in-
dustry to another ; this notion, however, is false ; and
we will show that this excess, as well as the three to
four millions sterling annually transmitted to the con-
tinent during these years, could not fail to impair the
general active capital of the country. At the com-
mencement of this period there was a given distri-
bution of the entire capital of the country ; so much
in mercantile operations — so much in manufacturing
establishments — so much in government securities —
so much in agricultural property and industry, &c.,
&c. ; and, for the sake of illustration, let us suppose
that the capital thus sunk in these various ways bore
the exactly proper proportion to each other to supply
the wants of the community — that all at once an un-
usual proportion of the income of the country begins
to flow into the agricultural interests, in consequence
of very high prices. What follows ? — some one or all
of the other public interests must suffer an abstraction
of their previous share of the annual expenditure in
22
the like proportion ; the demand for their products
must become more Umited, and their ability of pro-
duction too great for the wants of the country. ; and as
far as this ability is in excess does it show a portion of
the general capital unprofitably and idly invested— in
fact, so much abstraction from the national wealth
while it remains unemployed. Well, but how is the
currency affected ? — if there is, in reality, nearly the
same amount of annual income — if all the excess of
expenditure which flowed into the agricultural interest
remained in circulation, the currency would not be
much curtailed, although it would experience a dif-
ferent distribution. But what is the fact ? — high prices
and high profits in every pursuit stimulate extended
production, and we consequently find that the excess
of the nation's income, which in the three years went
into the agricultural interest, was invested in improved
and extended cultivation ; and thus went to increase
the entire amount of the whole capital stock embarked
in this industry, while it diminished, as has already
been explained, the value of the capital stock pre-
viously invested in other interests ; inasmuch as it
absorbed, for the creation of its new capital stock, the
portion of the national income which alone gave the
previous existing value to all the other invested
capitals.
During the four years at present under review, it is
evident, from these principles, that the amount of ca-
pital employed both in extending and improving the
cultivation of the land must have been materially in-
creased, and that in nearly the same proportion must
23
have been the tendency of the currency to diminish,
but for the following reason. The increased absorption
of national income in agricultural produce had two
obvious tendencies ; first, to reduce the demand for
the produce of all other capital and industry, and con-
sequently the profits ; and, secondly, to diminish the
amount of the circulation, or money, by increasing the
amount of its fixed capital stock, and thus to cause a
rise in the rate of interest at the moment of the
greatest depression of commerce. A higher rate of
interest, and a greater reduction of profits would then,
no doubt, have a tendency, in the course of time, to
cause an abstraction of capital from such pursuits,
where an abstraction was practicable, to fill up the
blank created in the currency. But such abstrac-
tion is only practicable to a certain extent, while
in many of the chief objects of investment it is
quite impracticable ; for example, in the capital repre-
sented by manufactories, machines, mines, ships, &c.,
&c., which must all at such periods assume a deterio-
rated value. The floating capital, or currency, of the
whole country must, under such circumstances, have
very materially diminished ; or, in other words, at this
period our means must have become very much con-
tracted for commercial enterprise, and the value of
property must have assumed a very reduced rate.
Let any one ask himself what was the fact, and how
far our theory agrees with it ?
But four years is a period sufficiently long for a
community in a considerable degree to adapt ilself to
24
existing circumstances, however they might have
changed for the worse ; and, having suffered a great
diminution of its capital^ to turn to the best account
what still remained. But let us now narrowly watch
what occurred, and how these occurrences (the na-
tural oiSspring of cause and effect, and therefore not
peculiar to this period, but alike applicable to every
recurrence of similar causes) acted on the currency.
At this time, when it might have been expected that
much of the evil of such a change of national wealth
had passed away, by the aptness of adaptation to
circumstances, it proved that we were on the eve of an
era, of greater and more sudden expansion of avail-
able floating capital than we had for the four previous
years suffered its contraction.
The immense increase of fixed capital which had
become absorbed by the agricultural interest had
stimulated production so much, that in 1832 the
amount of national income absorbed in the price of
wheat was reduced upwards of six millions sterling, as
compared with 1831 : and instead of nearly four mil-
lions being sent abroad for this article in the latter
year, only seven hundred thousand pounds were re-
quired in the former.
Such an amount of the national income (accom-
panied by such a diminution of the export of our
means for this purpose) becoming available for all
other purposes, could not fail to give a fuller cur-
rency, part of which would remain available as cur-
rency! and part would be absorbed in the products
25
of other industrial pursuits, which, in their turn, would
give a stimulus to industry and credit, and ultimately
to a further extension of the currency.
It appears here necessary to show why the reaction
in the price of wheat, and a lesser amount of income
thereby absorbed and thrown into other industry, acts
differently on the currency than when a larger portion
of income is taken from other pursuits and thrown into
the price of wheat.
Wheat is the first necessary of life, and, whatever
may be its price, differs less than any other article in
the quantity consumed. The variations in price,
therefore, may be considered only owing to the varia-
tions in quantity produced, and not in any material
variation in consumption. We always consider that
wheat has the first and imperative claim on our income,
to which all other productions must yield ; it is, there-
fore, a scarcity of wheat which drags capital from all
other uses, and an abundance which again gives it
back : therefore, when capital is flowing into the agri-
cultural interest in a greater than average proportion,
it is owing to great scarcity, and an absorption imme-
diately takes place to stimulate a larger production,
and the currency is thereby contracted ; whereas, when
capital is again flowing back by a reaction in the price
of wheat, it is caused by a redundant supply of that
article, and not by a too limited supply of the results
of other industrious pursuits : they only ultimately
become stimulated by the expanded currency which is
thus effected, and a consequent greater ability to con-
26
sume their products on the part of the community ;
but the first influence is to enlarge the currency or
available capital of the country.
We may consider 1832 as the beginning of a new
era — as the change in the tide when the excess of
capital which had, under an artificial stimulus of high
prices and a legal promise of their continuance, began
to flow back into all the channels from which it had
been absorbed. It is not here our place to inquire
how much was actually wasted in the operation ; we
will confine our attention to its necessary influence on
the currency, or floating available capital of the
country. As we have already remarked, upwards of
six millions sterling was required less of the national
expenditure this year than the previous to pay for the
consumption of bread alone ; and more than three
millions sterling, which had been the year before sent
abroad for wheat, was retained at home ; so great a
difference could not fail sensibly to affect the amount
of surplus money at the end of that year, and to render
that commodity more abundant.
The same causes still acting, the following year,
1833, another reduction took place of more than four
millions and a half sterling in the total cost of bread,
with another reduction of more than half a million
sterling in the sum remitted for foreign supplies : to-
wards the close of this year we consequently find that
the currency became very full — money very abundant ;
for as yet commerce had not shown sufficient symptoms
of recovery to induce an extension of operations equal
27
to the disengaged capital. In the following year,
1834, we find another reduction of nearly five millions
and a half sterling ; and again, in 1835, another re-
duction of upwards of five millions and a half sterling
took place in the cost price of this one first necessary
of life. Thus we find that in the short space of four
years the portion of the national expenditure absorbed
in this way was reduced from fifty-three million
pounds sterling, with an import at the cost of three
millions eight hundred thousand pounds sterling, in
1831, to thirty-one millions four hundred thousand
pounds sterling, with an import at the cost of only
thirty-four thousand pounds, in 1835 ; making a dif-
ference of upwards of twenty-one millions of pounds
sterling in the cost of wheat in these two years. But
the following table will show still more the accumulated
effects of the two different periods of years, viz., the
four years from 1828 to 1831 both inclusive, and the
four succeeding years : —
Years.
Total Cost of
Wheat.
Total Cost of
Foreign Wheat.
Years
Total Cost of
Wheat.
Total Cost of
Foreign Wheat.
1828
1829
1830
1831
Total,
4 years
£
48,250,000
53,000,000
51,400,000
53,066,666
£
1,912,154
3,495,8)3
4,190,891
3,828,519
1832
1833
1834
1835
difTer-
ence
£
46,916,666
42,316,666
36,933,333
31,400,000
£
710,533
156,114
101,750
34,654
205,716,666
13,427,377
157,566,665
48,150,001
1,003,326
12.-124,326
205,716,666
13,427,652
This table shows that during the first four years the
huge sum of forty-eight millions sterling was paid for
28
wheat more than in the same period next succeeding ;
and in the former period twelve millions sterling was
paid for the foreign wheat which was taken into con-
sumption more than in the latter years. It will be
seen, by a further examination as we go along, that
the sum paid in the latter period was as much too little
as that in the former period was too much ; judging by
what should be the annual sum spent according to the
average of a number of years, by which the different
interests have been sustained amidst all these changes.
Can it, then, be a matter of surprise that extraordinary
changes and fluctuations were visible in the currency
with such facts before us — that the increasing abun-
dance of money which every year was experienced
from 1832 to 1835 should have given rise to all
manners of speculations, many of which tended only
still more to increase the already surcharged currency,
especially the establishment of joint- stock banks, one
of the favourite schemes of the times, all eager in the
pursuit of business ? But it is evident that this state
of the currency had in itself the principles of its own
cure. The abundance of money reduced its value so
much, with a growing eagerness to invest, that not
only were all the usual channels of absorption and
occupation greatly expanded — not only were new and
extensive internal improvements undertaken, especi-
ally in railways — but speculators in foreign countries,
particularly in America, attracted by the facility of
obtaining loans in this country at a low rate of interest,
were induced to embark in the wildest undertakings.
In short, at home and abroad, the plethora of money
in this country, at the period we now speak of, pro-
29
duced a spirit of speculation, in every possible way so
formidable in its extent and ramifications, that by the
middle of 1836 there were symptoms of a reaction, by
an unfavourable turn in the foreign exchanges, a de-
crease of bullion, and a growing scarcity of money,
which ended in the panic of the autumn and winter of
that year. The derangement which then occurred in
the currency can be regarded in no other light than
the mere reaction of the unnatural abundance of
money and credit which had existed for the two or
three previous years, and the necessary consequences
arising therefrom. We term it an unnatural abun-
dance, because it was created by a price of wheat,
which could not possibly be sustained as it was below
the cost of production. The influences of this panic
were chiefly felt, as was to be expected, by the highest
monetarial interests ; the channels through which
foreign loans had been negotiated ; by those who bore
the enormous responsibilities arising out of the over-
heated and excited engagements called into existence
between this country and America ; by the great abun-
dance and cheapness of money here, and by the spirit
of speculation which was fostered in that country by
the facilities afforded in raising money on their secu-
rities in this market.
At this period it was evident that a great part of the
rapidly accumulating surplus capital of the few pre-
vious years had been absorbed by the extension of
private enterprise, by the huge number of public un-
dertakings at home, and by investments in foreign
securities ; and that thus the actual available currency
30
of the country had become much contracted. We
find^ however, that a few months' caution and quietude
gradually restored confidence ; the price of wheat and
other provisions was still comparatively low in 1836
and 1837; and by the end of the latter year, a suffi-
cient abundance of money, for all useful purposes, was
found to be in circulation ; we were then, as nearly as
possible, the proper medium condition of relative
prices and expenditure, which the experience of a
number of years has shown to be the correct average
price at which the different interests of this great
community could be sustained in these different pos-
tures and advantages which on an average of years
they have enjoyed.
We consequently find that from the autumn of 1837
to that of 1838 every circumstance indicated a sta-
tionary, but healthy condition of the currency, whether
we regard the character of the business of that year —
the absence of all speculation — of any depression or
complaints from the numerous interests of the com-
munity — of the uniformity of the amount of bullion
held by the Bank of England ; all concur in giving
the strongest evidence that the currency was more
equally proportioned to all the wants of the commu-
nity than had been experienced for many years.
But just at this moment we discover that the appa-
rent calm and healthy equanimity which was then
enjoyed was only leading to another great, but na-
tural and imperative reaction. We have seen that
from 1833 up to 1837 capital to an enormous amount
31
had annually been flowing from the agricultural in-
terests ; and, while it left that interest, year after year,
more and more weakened and impoverished, had, by
its unnatural abundance in other channels, produced
much evil. The advance of the price of wheat in 1837,
although only to what may be deemed the correct
average, showed that the low prices of previous years
had produced an effect on the productive powers of
the land; and the harvest of 1838 being not only
backward, but deficient, found us with an exhausted
stock of the first great necessary of life.
This is a moment which demands the most attentive
consideration. In the whole range of society there
was not one evidence of a disturbing cause to the
currency ; a year more void of speculation never ex-
pired ; a year of more healthy and legitimate business
was never enjoyed, when all the industrial classes, of
whatever denomination, had a full and satisfactory
share of prosperity ; or when the monetarial engines
of commerce maintained so much equality and uni-
formity of action : a year in which nothing disturbed
our prospects of peace abroad ; in which the uniform
and prosperous condition of the working classes gave
the greatest guarantee for contentment and quiet at
home.
But, notwithstanding all these securities, we find
that we are once more on the eve of a great convulsion
of the currency. As the harvest of 1 838 approached,
its lateness and supposed deficiency began to excite
some alarms ; the diminished stock of wheat caused
32
prices to advance rapidly ; and the exhausting in-
fluence of the prices of 1834, 1835, and 1836, on the
productive ability of the soil was now seen as the
inevitable consequence of prices having been pressed
below the cost of production. In the end of 1837 and
the early part of 1838 the average price of wheat was
maintained about 52s. (the actual average price of a
number of years) ; towards the autumn of 1838 it rose
until it reached in August 75s., and, with some fluc-
tuations, ranged nearly that rate until the middle of
last year.
It therefore follows that, calculating the national
consumption at sixteen millions of quarters annually,
or upwards of three hundred thousand quarters weekly,
that, in the autumn of 1838, we commenced an ab-
sorption of the national income of more than 300,000/.
weekly, in addition to the fair average price of wheat ;
and, as compared with the expenditure of 1835, the
additional weekly sum now required to pay for wheat,
was upwards of 450,000/., or nearly half a million
sterling.
This cause, sufficient as it may appear to account
for any amount of derangement in the currency — the
abstraction of 300,000/. weekly from the channels in
which, by all the existing arrangements of society and
commerce, it was at this moment finding useful and
convenient employment — was accompanied by the usual
attendants on high prices, a large foreign importation.
For some years a most trivial portion of the re-
33
sources of the country had been abstracted for the
purpose of importing wheat, and therefore, by the
universal law of adaptation to circumstances, no ar-
rangement whatever existed by which any money could
be spared, or our labour exchanged, for the growth of
other countries: but bread is an article of overruling
necessity, to the possession of which every other con-
sideration, whether mercantile or political, must give
way.
In the three last months of 1838, in addition to the
enormous advance of the price of provisions ; in ad-
dition to the abstraction of upwards of 3C0,000/. weekly
from the accustomed channels of convenient occupa-
tion ; our currency had to suffer an abstraction of
more than five millions sterling, for the payment of
1,812,294 quarters of foreign wheat, introduced into
consumption from the 10th of October till the 5th of
January inclusive. Nor did it stop here : even this
enormous sum made no visible impression in filling up
the deficiency, we shall not say of one bad harvest, but
of a number of successive insufficient harvests, as
shown by the almost exhausted stock before the har-
vest of 1838. At the commencement of last year,
prices still went on increasing until they reached an
average of 80^". per quarter ; the weekly absorption of
capital became greater and greater ; the importa-
tion of foreign supf»lies continued, until the whole
quantity of foreign wheat introduced into consumption,
from the 10th of October, 1838, to the 10th of Octo-
ber, 1839, inclusive, amounted to 4,355,778 quarters,
at a cost of more than twelve millions sterling.
D
34
Now admitting, as we always do in these views, that
about 52^. per quarter is the fair average price at
which all interests in this country have been sustained,
and that the average of this period was about 20^-.
higher, it follows that not only have sixteen millions
sterling of the national income, during this year, been
paid and consumed in bread, more than the average, and
thus abstracted from other employment, but that three-
fourths of this excess of price has actually been paid
for wheat, the produce of other countries, and ab-
stracted, for reasons we have already considered, from
the available currency of the country. We only com-
pare this with what should be an average; but, in
order to show again the great extent of fluctuations in
our available current means, to which these charges
subject us, let us put the three last years in compa-
rison with the three preceding years : —
Years.
Total cost
of
Wheat.
Total cost
ot Foreign
Wheat.
Years.
Total cost
of
Wheat.
Total cost
of Foreign
Wheat.
1834
1835
1836
£.
36,933,333
31,400,000
38,800,000
£.
101,750
34,654
51,177
1837
1838
1839
period
£.
44,666,666
51,666,666
56,533,333
£.
499,430
4,594,014
7,515,864
107,133,333
More
187,581
paid in this
152,866,665
43,733,332
12,609,308
12,421,721
107,133,333
187,681
This table shows that, during the last three years,
we have nationally spent in wheat 45,733,332Z. more
than in the three preceding years, and paid the sum of
35
12,421,727/. more in the latter than the former period
for foreign wheat.
In order to place the operation of these principles,
during the last two years, more clearly before the
reader, we submit to his attention the following Table,
showing the quantity of wheat which entered into con-
svimption in each month in 1838 and 1839; the general
average price at which the same was cleared ; the cost
in sterling money of each such monthly clearance, calcu-
lated at 15s. per quarter less than the general average
of the time ; and the amount of bullion and deposits^, as
shown by the Bank returns in each month during that
period. {See next page.)
d2
36
Wheat and
Wheat flour (
cleared for
consump-
tion.
General
iverage
price.
(Jost of Foreign
Wheat taken into
consumption. —
At \hs. less than
the average.
Bullion held
by the
Bank of
England.
Deposits
ill the
Bank of
England.
1838.
Jan. 5
Quarters.
1,619
53/0
3,076
1838.
Jan. 11
£.
8,895,000
£.
10,992,000
Feb. 5
1,569
53/3
3,000
Feb. 8
9,543,000
11,266,000
Mar. 5
759
54/11
1,514
Mar. 8
10,015,000
11,535,000
April 5
1,081
56/4
2,234
April 5
10,126,000
11,262,000
May 5
1,914
58/3
4,139
May 4
10,002,000
11,006,000
June 5
2,939
61/3
6,796
June 1
9,806,000
10,786,000
July 5
851
64/7
2,109
„ 29
9,722,000
10,426,000
Aug. 5
9,584
67/8
25,237
July 26
9,749,000
10,424,000
Sept. 5
14,891
68/0
39,461
Aug. 24
9,746,000
10,298,000
Oct. 5
*1, 514, 046
72/11
4,334,424
Sept. 21
9,615,000
10,042,000
Nov. 5
12,537
65/10
31,864
Oct. 19
9,437,000
9,327,000
Dec. 5
7,295
71/6
20,603
Dec. 13
9,362,000
9,033,000
1839
Jan. 5
278,416
76/ 1
850,32^
Jan. 10
9,336,000
10,315,000
Feb. 5
168,130
79/7
542,924
Feb. 7
8,919,000
10,269,000
Mar. 5
234,183
74/5
695,718
Mar, 7
8,106,000
9,950,000
April 5
517,848
72/1
1,478,024
April 5
7,073,000
8,998,000
May 5
188,191
70/1
518,309
CT>
May 2
6,023,000
8,107,000
June 5
July 5
153,777
504,536
71/1
71/4
431,216
1,421,109
' !D
00
„ 30
July 1
5,119,000
4,344,000
7,814,000
7,567,000
Aug. 5
23,821
70/0
65,507
"«
,. 25
3,758,000
7,955,000
Sept. 5
4,242
71/6
12,483
1
Aug. 22
3,255,000
8,029,000
Oct. 5
811,679
71/9
2,303,139
Sept. 19
2,816,000
7,781,000
Nov. 5
123,160
67/2
321,242
Oct. IS
2,522,000
6,734,000
Dec. 5
17,468
67/5
45,780^
Dec. 12
2,887,000
5,952,000
This table deserves close examination, and affords a
most instructive illustration of the action of the theory
and principles of which we are treating.
* Of this 630,000 quarters had been imported, and paid for in
former years, before 1838, leaving 884,046 quarters of this quan-
tity of the import of that year.
37
It will be seen that during the first half of 1838
the prices of wheat were moderate and tolerably steady
(although gradually advancing), and that a most
trivial quantity was cleared for consumption. From
this time until September prices advanced so rapidly
that, early in that month, the averages had risen so
that wheat was admitted at the lowest duly, at which
time more than one million and a half of quarters were
cleared for consumption. During the whole of this
year (1838), the bullion and deposits, and especially
the former, display a very uniform condition ; and the
large clearance of foreign wheat, which took place
during September, appears to have had little influence
on them
This fact may be satisfactorily explained in the fol-
lowing manner : — Of the quantity cleared up to this
period, 630,000 quarters had been imported, and the
payment therefore provided for in former years ; a
further quantity of 869,245 quarters had been im-
ported during the six weeks preceding this large clear-
ance ; of this a considerable portion was held in con-
tinental ports on English account of former purchases,
and therefore not to be then provided for; and a
further large portion of this quantity was imported
from near ports during the month of September, when
the low duty became a matter of certainty (the quan-
tity imported in this month amounted to 533,771
quarters) ; and as the practice is for the shipper to
draw upon the importer at three months, the payment
for such new purchases would not become due until
the close of the year, or the beginning of the year
M *->.% A A d
38
1839; accordingly towards the close of the year we
remark a gradual though not extensive diminution of
bullion.
During the two months succeeding the 10th of Octo-
ber, the clearances and imports were alike trifling, and
it is not until the month ending January 5th, 1839,
that we find an important quantity imported or cleared,
and from this time forward, until the 5th of Novem-
ber, the quantities imported and cleared for consump-
tion continued unprecedentedly large. The greatest
part of old purchases, held on British account, as well
in this country as abroad, having been now exhausted,
the transactions of the following periods show their
full natural action on the currency and the floating
capital of the country.
We accordingly find, that month after month dis-
plays a rapid diminution both in the bullion and
deposits of the Bank during the whole of this period ;
the former falling from 9,336,000/., on the 10th of
January, to 2,522,000/. on the 18th of October; and
the latter falling from 10,315,000, on 10th of January,
to 5,952,000/. on the 12th of December.
Adding together our estimated amounts of the cost
of the wheat cleared from the 5th of December, 1838,
during the following year, it amounts to 8,685,779/.
In this period we find a most uniform correspond-
ing reduction taking place in the amount of bul-
lion, until we find, from January till October 5th,
6,814,000/. abstracted from the country. To this sum
39
should be added the credit of 2,500,000/., which the
Bank obtained on Paris, tlie drafts for which may be
said to represent so much bulhon exported. In this
way we see clearly how our imports of wheat have been
provided for, and how our bullion has been disposed of
We would crave attention to the reduction in the
amount of the deposits on two grounds : —
First. — For the same reason that so large an im-
portation of wheat finds no corresponding commo-
dity of exchange except bullion, as having a common
value every where, viz., its being uncertain and acciden-
tal; we believe that its amount must always be ab-
stracted, in great measure, from that portion of the
capital of the country constituting the currency, or
convenient medium of exchange ; or from that portion
which constitutes the stock of what is termed the
money-market. This is chiefly represented by the
deposits with bankers throughout the kingdom ; the
whole amount of which, it has been shown, is in some
measure indicated by the deposits in the Bank of
England. These transactions being accidental, a small
portion of the usual fixed commercial capital is directed
into this channel, or kept available for its uses ; and,
therefore, when the demand does arise, it can only be
abstracted from the sources referred to ; were the
demand equal and certain, the same amount of trans-
actions thrown over a large space of time with any
degree of uniformity, not only would a regular medium
of exchange in other commodities be the necessary
consequence, but also would a suitable share of the
40
capital of the country find its way into that trade, liT<e
any other, for its convenient conducting ; and thus not
only would the derangement in the currency be pre-
vented, as caused by an abstraction of bullion, but also
the derangement of "the money-market, inseparably
associated with the currency, would be prevented, as
at present caused by such large amounts being acci-
dentally abstracted from its stock, which usually
finds employment in contributing to the general con-
venient conducting of the commerce of the country, by
discounting bills of exchange and otherwise.
Secondly. — As we have throughout these views
shown how an unusually high price of provisions must
tend to a contraction of the currency, and the floating
capital of the countr}^ by directing an unusual portion
into particular channels for investment, and stagnating
the capital employed in other interests, from which
tliis abstraction of their usual portion takes place, it
must be plain that this deficiency must become evi-
dent, by a diminishing amount of the deposits with
bankers.
Before taking leave of the period embraced in this
inquiry, we will draw the reader's attention to the fol-
lowing Table, exhibiting the same principles of con-
nexion between the prices and operations in wheat and
the amount of bullion and deposits held by the Bank,
during the whole period of inquiry : —
41
3 months
ending
Deposits.
1833
1834
Fel). 2, 1828
1829
1830
1831
1832
April 3,
July 3,
Oct. 2,
Jan. 1,
April 2
July 2,
Oct. 1,
Jan. 1,
April 1, „
June 3, „
Aug. 26, „
Nov. 18, „
Feb. 10, 1835
May 5, „
July 28, „
Oct. 20, „
Jan, 12, 1836
April 5,
June 28,
Sept. 20,
Dec. 13,
iM:arch7,1837
May 30,
Aug. 22,
Nov. 14,
Jan. 11, 1838
April 5, „
June 29, „
Sept, 21, „
Jan. 10, 1839
April 5,
July I,
Sept. 19,
Dec. 12,
Bulliou. I'rices ot
Wlieat.
£
9,198,140
9,553,960
10,763,150
11,213,530
8.937,170
8,969,000
9,020,000
10,861,000
11,737,000
12,777,000
12,045,000
13,057,000
13,101,000
14,011,000
4,539,000
15,384,000
12,669,000
12,535,000
10,726,000
11,561,000
14,227,000
19,169,000
14,751,000
13,810,000
14.118,000
13,330,000
13,260,000
10,422,000
11,005,000
10,242,000
10,992,000
11,262,000
10,126,000
10,040,000
10,315,000
8,993,000
7,567,000
7,781,000
5,952,000
£
10,347,290
6,835,020
9,171,000
8,217,050
5,293,150
5,354,000
5,780,000
7,401,000
8,983,000
10,068,000
10.673,000
10,905,000
9,948,000
9,431,000
8,645,000
8,272,000
6,781,000
6,693,000
6,197,000
6,203,000
6,186,000
7,060,000
7,801,000
7,362,000
5,719,000
4,545,000
4,048,000
4,423,000
5,754,000
7,432,000
8,895,000
0,126,000
9,722,000
9,615,000
9,336,000
7,073,000
4,344,000
2,816,000
2,887,000
56/9
60/5
66/3
64/3
66/4
53/8
52/11
46/2
39/4
48/6
^55/10
64/7
Amount iiaid for
Forei''u Wheat,
1827
1828
1829
1830
1831
1832
1833
1834
1835
1836
1837
1838
70/8
£
1,195,580
1,912,159
3,495,813
4,190,891
3,828,519
710,533
156,114
101,750
34,654
51,177
449,430
4,594,014
1839
7,515,864
42
It will be observed that, from 1828 to 1832, the bul-
lion diminished, under a large import of wheat, from
10,347,000/. to 5,293,000/. Here prices became lower,
imports decreased, and became quite trivial ; the stock
of bullion gradually rose again to 10,905,000/. in the
end of 1833. With some fluctuations of lesser im-
portance, it continued at a convenient amount until
the results of the extensive speculations of 1836 re-
duced it, in March, 1837, to 4,048,000/., from which it
rapidly recovered, in April, 1838, to 10,126,000/. It
remained very stationary during that year; but in
1839, under the heavy import of wheat, was reduced in
December, to 2,887,000/., and, but for the credit on
Paris, before alluded to, would have been reduced even
much lower.
Similar corresponding fluctuations are observable in
the deposits ; the two lowest points being, in 1832,
8,937,170/., after a continuance of high prices and
large imports, from 1828 to 1831 inclusive ; and in
December, 1839, only 5,952,000/., after the high prices
and huge imports of that year; and the largest
amount being, in a remarkable extent, in the four
cheap years without imports, 1833, 1834, 1835, and
1836.
From the whole tendency of these facts and argu-
ments, it will be plain to the reader that it is, as we
said before, not to high or low prices, but to the con-
tinued fluctuation that we ascribe chiefly these most
dangerous and extensive influences on the currency ;
nor can it be a matter of any surprise, when we view
43
the enormous amounts to which these fluctuations have
extended, that the occurrence of monetarial difficulties
should have been as frequent and severe as they have
been ; the only surprise is, that they have not been
felt to a much more serious extent ; which only gives
some evidence of the extensive resources, wealth, and
enterprise enjoyed by this country.
Having now, we are afraid rather tediously, glanced
at the history of the fluctuations which have taken
place during the last eleven years, let us direct our
attention to the general result, not only of this period,
but of the whole time exhibited in the table, from
1817.
We find, from beginning to end, periods of scarcity,
high prices, and large importations, succeeded by
periods of plenty, low prices, with little or no importa-
tion; and thus, period after period succeeding each
other in the most uniform cycles which we could well
imagine. Confining our attention exclusively in the
present places to the influences these rapid changes
have exercised on the currency, as shown by the tables
and facts already given, we naturally come to the fol-
lowing conclusions, as the irresistible consequence of
such fluctuations ; consequences which ever have, and
ever must continue to be, experienced as long as we
are all subject to such changes.
In the periods of scarcity, high prices, and large
importations, an extensive contraction of the currency
must take place, not only by the exportation of the
44
precious metal to purchase an accidental supply of
wheatj but also by abstracting much of the capital of
the country otherwise usefully employed in agricul-
tural pursuits, where it is absorbed in improved and
extended cultivation ; and so far as these improve-
ments or extensions are carried consistently with the
wants of the community, no absorption of capital could
be more useful ; but stimulated by a pretended legis-
lative protection of prices which have never been rea-
lised, experience teaches us that these operations have
always been carried to such an extent as to produce a
period of prices as much below a remunerating rate as
they had before been above it. The effect of which is,
that the capital which is thus absorbed, during dear
years, becomes wasted and worthless in a short time, by
calling into existence so much more productive power
than can be profitably consumed, pressing prices far
below the cost of production ; and, instead of being
beneficial to the agricviltural interest, only leaves
them in ultimate losses and disappointments. It was
thus that from 1817 to 1820 the severe contraction of
capital was experienced; it was thus that from 1827
to 1831 a similar difficulty occurred, and it is thus
that at this moment the national income and capital
is so much absorbed in an extravagant price of pro-
visions and the payment of foreign supplies, that the
currency has become so much exhausted and curtailed
as to be quite insufficient for the usual wants of other
branches of trade and industry.
Then following such periods we find uniformly
periods of extreme low prices, which have^ in some
45
respects, even a more violent influence on the currency
than the periods of high prices. So small a portion of
the national means being consumed in these years in
the purchase of food, causes, year after year, so great
an accumulation of wealth, such an expansion of the
currency, such a depreciation in the value of money,
and so much difficulty of finding profitable employ-
ment for it, that a spirit of daring enterprise and
speculation is engendered, which has at different
periods not only disburthened the country of all super-
fluous means, but threatened it with dangers and evils
of the greatest magnitude. Thus we find that the
extreme low prices, with an absence of foreign pur-
chases in 1821, 1822, 1823 and 1824, produced the
effects above described, and brouglit on the speculative
fever in the spring of 1825, which ended in the panic
of the winter of that year ; and thus again we find
that the accumulated means from the low prices of
1832, 1833, 1834, and 1835, brought about another
period of great excitement and speculation, and which
produced the panic of 1836.
It has often been a subject of remark by practical
men, without referring to the real causes, that there
appeared periodically to exist a plethora in the cur-
rency or available capital of the country, which brought
about these periods of excitement and wild specu-
lation, opening up channels through which the redun-
dancy flowed, not only to the cure of the disorder, but
much to the danger of the patient. Such were the
years 1825 and 1836.
46
In the former year, to say nothing of the millions
that were absorbed and buried for ever, with as much
utility as if they had been committed to the deep, in
the innumerable mining speculations abroad and at
home, and many other objects, which seldom knew a
longer existence than was requisite for the mere ex-
penditure of the capital; to say nothing of these, we
will give a list of only nine of the foreign loans made
out of the redundant capital of this period, in the end
of 1824 and beginning of 1825, which, at their present
value, show an actual loss to the country of upwards
of ten millions sterlinsr.
Nine Loans made in 1824
and 1825.
Nominal
Amount of
Loan.
Contractinj
Price.
Actual Amount
at the Contract-
ing Price.
Present
Value.
Colombian, 6 per cent, loan
Buenos Ayres
Peru
Ditto
Mexican, 5 per cent
Ditto, 6 per cent. . . . .
Guatamala, 5 per cent. . . .
Greece, 5 per cent
Ditto, ditto
4,750,000
1,000,000
750,000
616,000
3,200,000
3,200,000
2,000,000
800,000
2,000,000
85
77
78
58
85
73
59
56J
Total paid up, and total present value .
Total loss to the coutitry
£
4,203,750
850,000
577,500
489,480
1,856,000
2,872,000
1,042,988
472,000
1,130,000
£ •
1,050,937
255,000
101,062
85,659
417,600
861,600
13,493,718
2,771,858
10,721,860
13,493,718
13,493,718
The extensive and injurious speculations in Ameri-
can securities, and other objects equally destructive.
47
which occurred previous to the panic of 1836, are too
recent and well known to require any further notice
than merely to mark them as the result of the un-
natural redundancy of capital at that period, as the
means by which the apparent plethora of capital was
reduced.
But independent of the wild speculations which
these years induce, and the absolute destruction of
capital which results therefrom, there is another mode
by which the available currency is, perhaps, even more
extensively influenced.
The greatly increased means of the whole com-
munity during these years to consume articles of
luxury, the produce of arts and manufactures, giving
an increased stimulus to these branches of industry,
causes a great absorption of capital to take place in
the extension of their productive powers, equal to the
excited demand of the moment, but which only can be
said to be profitably invested capital as long as the
demand is equal to the produce, which only is the case
until the existing excitement wears off by the arrival
of a period of high prices of provisions, when we find
that a large amount of capital has been sunk to supply
a mere momentary demand, and is no longer of any
value to the community.
Again, at these periods of a redundant capital, in-
ternal improvements and speculations in railways and
other objects have been undertaken, under this un
natural excitement, to a much greater extent than the
48
real actual wealth of the country would warrant ; and,
before they have been completed, have drained more
of the floating capital into their channels than a due
regard to existing industries and the proper condition
of the currency render desirable. For, however bene-
ficial such improvements ultimately proved, it must be
clear that they should never be attempted to such an
extent as to endanger the abstraction of capital from
the permanent and existing channels of the industry of
the country.
Finally, then, it would appear, from the whole of
these considerations, that the necessary tendency of the
fluctuations which we have shown to exist in the
annual portion of the national income absorbed in the
supply of the first necessaries of life, is to produce
continued and violent fluctuations in the condition of
the currency, or floating capital of the country ; and we
think, when we have compared the theory with the
facts, and seen the correspondence in point of time
when the great and marked convulsions have taken
place, the conviction of the close connexion which we
have endeavoured to prove must be irresistible.
Both reasoning and evidence clearly demonstrate
that with these large fluctuations there is, and must
be, a continued action on the currency, rendering it, at
one time, inconveniently full, and productive of the
wildest and most destructive speculations, and, at
another, so contracted that the whole community, from
the Chancellor of the Exchequer down to the poorest
artisan, are subjected to the most grievous pressure
49
and distress It is plain that the Bank of England,
and the bankers generally throughout the countrv, as
being the dealers in money or currency, must be the
first to feel the changes which we have described ; but
it is equally plain that they can have little to do with
creating them, and almost as little in controlling them.
They can do much by wise and prudent conduct, by a
timely contraction of their own liabilities, to render
their own position more secure against the effects of a
coming storm, and ultimately to steer safely through
it ; but beyond this they have little or no power.
They are pressed by necessities, arising out of the
causes we have described, into a course of policy which
the world are too apt to think the influencing cause of
the evils which afterwards become developed ; and
hence the public very generally attribute, as we before
stated, all these derangements and convulsions in the
currency to the imperfect construction of our banking
system, and especially of the Bank of England. As
in the beginning of these remarks we disclaimed any
intention of entering into consideration of the prin-
ciples of banking or management of the currency
generally, we shall not here inquire whether this in-
stitution is the best that could be devised for the pro-
fessed objects; whether its powers are too limited or
too full — whether its functions are incongruous or not ;
for we are convinced that, however imperfect it may
be, or however perfect it may be made, the country
will ever remain subject to violent changes and fluc-
tuations in its currency, as long as the real causes
which produce the rapid changes and fluctuations ij
Is
50
the price of the first great necessaries of life shall
continue to exist.*
We have already, in a former work, traced these
fluctuations as the imperative offspring of the ex-
istence of laws attempting to control and regulate
the supply and price of these first necessaries ; of
laws which have separated, by most unnatural vio-
lence, the great leading interests of the country ;
which have called into existence feelings of animosity
and jealousy among parties who had, in reality, only
one common and indissoluble stake ; and which have
created a continued and never-ending strife, in which
each party in his turn is the great loser, and by which
neither party is ever permanently advantaged. Until
these laws are erased from the statute book — not
altered, not amended, for alterations and amendments
will only produce new difficulties, new incongruities,
new false positions, in which we shall have everything
to learn over again — but swept for ever away; until
we find all the great leading interests of the com-
munity going on in one uniform and fair compact,
whereby energy, industry, and capital shall have a
free, full, and unfettered exercise of their functions ;
when men will no longer deceive themselves into a
reliance on legislative enactments for partial ends ;
* While we thus avoid the subject of banking or the manage-
ment of the currency as irrelevant to the considerations imme-
diately under review, we are not insensible of the immense bene-
fits which will accrue to the community by the adoption of correct
•nd wise principles in relation thereto.
51
and when we shall no longer " refuse to ourselves
the benefit of that provision which Providence itself
has made for equalising to man the variations of cli-
mate and of seasons — until then, we shall in vain
look for any uniformity in the condition and prosperity
of the country, for any theory or plan of conducting
the monetarial arrangements of this great and enter-
prising community with any degree of certainty and
success.
E '^
52
PART II.
FLUCTUATIONS OF COMMERCE, MANUFAC-
TURES, &c.
The rapid and violent fluctuations in the manufacturing
and commercial prosperity of this country, which have
occurred in late years, have equally excited the astonish-
ment of the thinking economist, and puzzled his inge-
nuity satisfactorily to account for them.
During a time of extensive and protracted warfare,
when strong and unnatural barriers are raised to inter-
rupt the usual course of production and consuinption ;
when the productive ability of entire countries is
paralysed and destroyed by being the seat of length-
ened campaigns ; when more of labour's creation is
often destroyed by rapine, plunder, and devastation in
one day, to appease the wrath or gratify the passions
of the triumphant conqueror, than would suffice to
minister to the wants and reproductive energies of
a whole kingdom for a long period ; it is an easy
matter to understand that great and sudden changes
should be experienced by the trading interests of the
whole mercantile world. But that such fluctuations
should still continue to be experienced after nearly the
whole civilised world may be said to have reposed in
peace for a quarter of a century, during which period
intelligence has made more progress, productive energy
53
acquired more strength, and consumptive ability, ex-
tending hand in hand with civilisation, has obtained a
wider and richer field than ever could have been hoped
for by the most sanguine lover and well wisher of his
race, is indeed a matter, at first sight, of great diffi-
culty to reconcile.
And this difficulty is certainly much increased when
we consider what constitute the true fundamental
grounds of industrial and mercantile prosperity, and
its uniformity : — a productive ability, on the one hand, to
administer to the necessities, tastes, and pleasures of the
community ; a consumptive ability, on the other hand, to
absorb the creation of production.
Now, it requires no argument to show that the
extent to which productive ability will be stimulated
and called into existence, will depend much on the
extent and power of the consumptive ability. But let
us shortly inquire what constitutes this consumptive
ability : — in a few words, it is production alone, it is
labour alone^ — whether it be that of the present
moment, or the accumulated recompense of past
toil : — in other words, it is the price paid for labour,
and the profits or interest of capital which, whether
taken in the light of merely accumulated labour, or, as
an active instrument of present labour, is, perhaps, the
most important element in production : — for we see by
its application to mechanics, the power of one labourer
is multiplied one hundred-fold and more ; by its appli-
cation to commerce, the labour of exchanging the
productions of the most remote corners of the globe
54
is reduced from an utter impracticability without it, to
an almost insensible amount by its aid.
Well then, consumptive ability, — whether arising
from the rents of land or houses, the value of which
have alone been created by past labour ; whether
found in public functionaries, civil, military, or naval ;
whether in the interest derived by the capitalist for
his loan — the profits of commerce, the produce of
the soil, the wages of labour, are all resolved into two
simple things — the price of labour, and the interest of
capital ; or, in other words, the two only elements of
production.
It would therefore follow, that, in order to increase
or diminish materially the consumptive ability, one
or both of these elements should be correspond-
ingly increased or diminished ; and it would therefore
be no great matter of surprise if we saw a community
evincing great energy and industry one year, and
utter imbecility and indolence another year : that
such periods should be marked by a very different
amount of consumptive ability : but consumption
certainly could not be materially abridged, until pro-
ductive energy had failed : — on the other hand, if we
see a nation steadily becoming richer and more indus-
trious, with a productive ability uniformly increasing,
Ave have necessarily to expect that its consumptive
ability must, in like manner, advance as uniformly ;
and until a reaction takes place in the former, no
change should be experienced in the latter.
This natural and necessary inference cannot, how-
55
ever, be said to be at all applicable to the experience
of this country ; and it is no wonder that many
attempts should have been made to account for so
obvious a departure from the natural order of things
— for the violent and constant changes which have
occurred in the relation of production and consumption,
— and thereby, for the continual derangement and
excitement which have followed each other at rapid
intervals, and which have time after time shaken the
whole commercial fabric to its base.
It is a common and favourite mode to arrive at an
object by the shortest possible mode : and therefore,
in the inquiries which take place as to the cause of
certain effects, it is not unusual to mistake some of the
other symptoms as the cause, instead of merely as the
CO -existing effects of a common cause.
In the eager inquiries which have occupied the
public mind from time to time as to the cause of the
disorders of which we now speak, we think we dis-
cover a striking illustration of this tendency. In all
these investigations the chief, if not only causes which
have been relied upon have been : first — An imperfect
banking system, by which the capital of the country
has been capriciously managed ; by which, in the
popular term, a power has been given to certain
establishments, especially the Bank of England, to
" tamper with the currency ;" by which at one period
money has been rendered plentiful and of easy
acquirement, and has given a most unnatural stimu-
lus to speculation and production : — and at another
56
period very scarce and difficult to obtain, and thereby
cramped the facilities of commerce and production : and,
secondly. That, at particular periods, overtrading, as
it is termed, prevails to a great extent;, stimulated by
excessive and easy credit producing wild speculation,
which ultimately ends in a serious reaction, producing
all the panic and dismay which have attended our
commercial crises. It must be admitted that inany
reasons have existed to direct the public mind to these
two points; but it is not difficult to show that there
can be no fruth in alleging that they are the first
cause of the serious occurrences to which we refer, the
continued fluctuations in the condition of the indus-
trial and commercial prosperity of this kingdom.
With regard to the former reason, after having so
fully gone into a consideration of it, in the last
chapter, it would be superfluous to repeat the argu-
ments which we there use to show that no banking
establishment, much less the Bank of England,
powerless and dependent as it is for its existence on
credit only, could exercise such an influence on this
great and powerful community. Whether we speak of
the action of the Bank of England, or of the action of the
whole banking establishments in the kingdom, it must be
clear that they can only act, as they are acted upon, by
the source from which their power of action is derived.
Now inquire what is the source of power : — the wealth
of the eommunity from time to time, which finds its
way into the hands of bankers for employment, and
who are therefore the agents through whom the surplus
or spare capital of one portion of the public finds a safe.
57
prudent, and profitable employment by another por-
tion of the community. — A, B, & C, have money to lend
or invest for an uncertain period ; they have no suffi-
cient knowledge or reliance on their own judgment to
undertake the task of lending themselves, especially
as they may require the money again at a day's notice ;
they lend to their banker, from whom they can always
rely on obtaining it when required. The banker, then,
having a connection of borrowers, as well as lenders,
distributes these sums intrusted to his care in such
loans and other ways as enable him to make a profit ;
but always having at the same time his means suffi-
ciently available to repay his creditors whenever they re-
quire it. The business of a banker may therefore be
said to be, that of borrowing at one rate of interest from
one portion of the public, and lending at a higher rate
of interest to another portion ; the difference being the
remuneration for the undoubted guarantee which his
knoAvn wealth and respectability infuse into the trans-
action, and for the facility of always being able to
receive it back when required. It is true, there are some
bankers who have a large available capital of their
own always employed, and so far these bankers are
more independent of external influences; to this class
the Bank of England certainly does not belong. It is
also true, that there is a certain power amongst bankers
of creatmg money by paper issues, but this is a most
weak and inefficient source of means. In a country
where only a large denomination of notes prevails, and
those always convertible, such paper issues can only be
sustained to a certain proportion of the whole circula-
tion. There may be moments when by violent
58
attempts more than a usual proportion is sustained,
but those periods must be of very short duration ;
as a rule, if the whole circulation increases or dimi-
nishes, the portion of it which is paper convertible on
demand must also in like manner increase or diminish.
In comparison, therefore, of these two last modes of
bank action on the public, viz., their own private and
independent capital, and the power of creating money
by paper issues — the first mentioned, viz., that of
deposits, bears a most indisputable and overtowering
importance. The amount of deposits of banks is their
great strength and power. The wise and active em-
ployment of deposits, is the greatest and truest source
of bank profits. Even in Scotland, where a paper circu-
lation prevails to a much lower denomination than in
England, deposits are still the greatest and most
available power of business and source of profit.
Seeing, then, that any increase or diminution of the
power of bank action must proceed from the public,
that power can only become greater when money is
becoming more abundant with the public, and cannot
fail to become much weaker when the public means are
diminishing, or suffering any unusual or extraordinary
absorption ; and it would, therefore, be more correct to
say, that in any correspondence which is seen between
the action of banks, and the oscillations in the trade and
commerce of the country, the former is rather the effect
of the latter, than the cause; and perhaps truer still to
say, that they are equally the effects of some common
cause.
59
With respect to the other alleged cause of these
derangements and fluctuations, that they proceed from
and are caused by overtrading, and an excess of credit
called into existence simply by the will or caprice of the
moment, it will be no difficult matter to show that such
a state of things were utterly impossible. It is utterly
impossible that any production whatever could take
place upon credit ; except where an inconvertible paper
currency existed of a very low denomination, which
could not last long without the most alarming deprecia-
tion ; — but, circumstanced as we are in this country,
with a convertible paper currency only, and that only
of a large denomination, no production whatever can
take place that is not represented by real capital.
True it is, as far as the immediate agent of produc-
tion is concerned, all may be done upon credit ; he
may buy his raw material upon credit ; he may pay
the wages of labour by an advance from his banker ;
he may sell his goods to a merchant at a lengthened
credit, and receive an acceptance for the amount, which
he may convert into money ; and, to put an extreme
case, he may thus actually become possessed of capital in-
stead of investing it by this process. True it is, to put a
case advanced in a recent pamphlet, written to prove
that the objects of our present consideration are the
cause of these evils, — that these goods so produced
(amounting to £2000) may be sold and resold nine times
within a few days, and that for each sale a bill of exchange
may be drawn and discounted : and that amongst
these individuals, from the producer to the last seller,
an amount of capital to the extent of £20,000 may Ihus
60
be created. True it is (to follow another illustration of
the same writer), the same goods may be then consigned
to a distant market, and an advance made by the accept-
ance of the party to whose care they are intrusted payable
at a distant date, which may also, by similar means, be
converted into cash. True it is, that by this extreme,
though quite possible proposition, capital to the extent
of £22,000 may, by the multiplied credits of those
parties, find its way to their possession : but just as
true it is, that every shilling of this sum must be ad-
vanced from the real substantial capital or money of
some one or other of the community. The immediate
parties who give the credit may only be enabled to do
so by themselves receiving credit ; the parties who
discount the bills may only be enabled to do so by
re-discounting them again and again, but at every
stage, and ultimately every shilling must represent the
real capital of some one or other. The only possible
mode in which production could take place on credit,
in the broad sense affecting the community, would be
to suppose, that the labour that produced from begin-
ning to end could be supported by credit ; that the
muscle and sinew, the physical energy, which to-day
is exhausted, by calling into existence a new object
could wait two, three, or four months to be replenished ;
for it would not be enough, even that the labourer
should be able to give a credit upon his labour; for
then it is obvious that he is either a capitalist himself,
or indebted to some capitalist ; — day by day, nay,
hour by hour, the exhausted energies must be replen-
ished ; they can give no credit, — they cannot wait the
result of markets.
Gl
All the means, therefore, by which these various
credits are supported from beginning to end (except-
ing when an inconvertible paper currency of low deno-
mination exists), must be supplied from the real abso-
lute capitals and money of some one or other of the
community, whether the exchange of the commodity
be confined to two parties only, or extended to any
number. Now this capital, or accumulated labour, ex-
isting as it does in the community, is as urgent for
employment in order to give it any value to its pos-
sessor, as is the use of the sinew and the muscle of the
present labourer to him. To either, inactivity is un-
profitable and waste. Each, therefore, are simple
merchantable commodities, the value of which, and the
facility of acquiring their assistance, depends only on
the relative proportion of supply and demand. If,
therefore^ credits become abundant and excessive, and
trade or production is thereby extravagantly stimu-
lated, it can only be because the supply of capital
seeking employment is very great ; and, if credit
becomes very contracted, and the facilities of trade
much impaired, it can only be by the amount of capital
seeking employment being much lessened — the simple
effects, it is true, being exaggerated by the competition
which in the first case exists to invest, and the greater
risks that are then taken ; and the second place, by the
increased' caution by the market of demand being more
in the hand of the suppliers ; but, in both instances,
it is simply a question of amount of supply in relation
to demand. It would therefore appear, that both of
these popular modes of accounting for the sudden and
frequent fluctuations of trade are only part of the co-
62
existing effects arising out of the great fluctuations in
the amount of capital available for trading purposes
at different periods.
It has already been shown how difficult it is to con-
ceive that the wealth or capital of a country, of uniform
industry and perseverance, can fluctuate much ; but
this is not necessary, as the same effect will be pro-
duced if we can show that that capital suffers any very
material and imperative change in its direction from
time to time.
In the preceding chapter we have entered into so
much evidence to show the great extent of such
changes in the direction of the national income and
floating capital of this country, by the fluctuations which
have continually been going forward in the amount
absorbed at different periods, in payment for the first
necessaries of life, whereby great and violent changes
are shown to have occurred in the state of the cur-
rency and money market ; and we believe, by a care-
ful investigation, that we shall find that the same
cause has exercised over commerce and trade all the
fluctuations of which we have spoken.
If our reasoning, and the facts displayed to illustrate
our position, have proved at all satisfactory to the
reader, with respect to the influence which the fluctu-
ations in the price of wheat have exercised over the
currency and money-market, we believe that the appli-
cability of the same facts and the same reasoning will
not fail to be more satisfactory and conclusive on the
present subject of consideration.
63
In considering the influence which the large fluctu-
ations of the amount of the national income and means
absorbed from time to time have exerted over our
industry and commerce, there must necessarily be a
considerable similarity to the arguments and illustra-
tions already used, in reference to their effects on the
currency and money-market ; and to prevent any
tedious repetitions of these arguments, we must take
it for granted, that the reasoning in the previous
chapter is always clearly before the reader.
By the policy pursued by our laws, the interests of
this great country have been divided into two great
sections, the agricultural and commercial : but it
must be very plain to every thinking mind, that these
interests, ultimately interwoven with each other, and
entirely dependent upon each other, and having no
ultimate and final interest distinct from each other,
never could have suffered this unnatural severance but
by the exertion and interposition of unnatural laws,
which have ever proved impracticable and futile,
because they were unnatural ; — because they af-
fected to give a support to one interest, which, if it
should have any effect at all, was to be a direct charge
on the only other interest which was expected to sup-
port the protected one ; and, therefore, in the exact
proportion that the law should prove successful in its
object, must have had the direct tendency to weaken
and iinpoverish the objects on which they relied.
The laws of Providence and the laws of nature are
mutual dependence ; — a principle calculated to bind in
64
the strongest harmony the best interests of all classes
and portions of the community ; and any legislative
attempt to sever these mutual interests and reliance,
while it may have given to the whole tone and arrange-
ments of the social system, and prosperity of the com-
munity, a most unfavourable and unhappy direction,
never succeeded in the object it had in view ; nothing
has tended more to lower the estimation and influence
of legislative wisdom than their abortive attempts to
control the natural and imperative current of national
and mutual interests.
But treating things as they are, such a severance,
however unprofitable to all parties, has been effected.
We must admit, that the first and most imperative
call upon the national income of the country, upon its
consumptive ability, must be the first necessaries of
food ; that to this provision all other considerations
must give way ; that every thing else must be con-
sidered relatively as luxuries, which are indulged in
only in proportion to the ability remaining after the
first necessaries are secured.
If, therefore, the cost of these first necessaries is
very changeable and fluctuating, the ability to consume
all other products must be equally fluctuating ; and
the fluctuation of the former must necessarily prove
the cause of the fluctuation of the latter.
Confining our consideration of these principles, as
we have hitherto clone, to vhcat, the first universal
necessary of life, we liave shewn in page 10, that at
the average price of a number of years the actual cost
of this article to the country has been 41,600,000/.;
and taking this average as the correct amount of the
annual expenditure which should be so absorbed, it ne-
cessarily follows, that in proportion as it rises above or
sinks below that average, the national means for sus-
taining other branches of industry must necessarily
increase or diminish.
The fluctuations which have occurred in the amount
of national means, so absorbed, have been carefully
given in a table, page 13. This table shews that the
means thus absorbed gradually fell from seventy Jive
millions in 1817, to thirty-three millions in 1822 : then
gradually advanced to fifty-three millions in 1829 ;
then again fell to thirty-one millions 'va. 1835, and finally,
again, advanced to fifty-six inilUons in 1839.
In this manner has the most imperative portion of the
national expenditure varied and fluctuated, and leaving
therefore so much less in some years, and so much more in
other years to expend in all other objects of lesser neces-
sity, of taste and luxury ; the obvious and necessary ten-
dency of which must be to give in some years a most
unnatural excitement and encouragement to manufac-
turing and commercial pursuits, and in other years to
withdraw from such pursuits not only the portion of the
public income which they had enjoyed more than their
proper share, but to reduce it as much below the fair
proportion as it had been before above it, has been
sufficiently alluded to in the preceding chapter, in the
F
66
obvious and close relationship such considerations have
with the currency.
We will now endeavour, as shortly as possible, to
trace the effects of these fluctuations on manufactures
and commerce, as exhibited by the occurrences since
1832. The four preceding years had been marked by
a continuance of high prices of wheat, and by a low
stagnant state of the manufacturing and commercial
interests.
In 1832, the sum absorbed in the price of wheat
was six millions less than the preceding year, and we
find that in that year trade began to evince symp-
toms of a more active character.
In 1833, a further reduction took place in the sum
absorbed in the price of wheat to the extent oi four
millions : — a further improvement and steady extension
of commercial prosperity was visible during this year.
In 1834, a further reduction took place in the sum
absorbed in the prices of wheat oi Jive millions — which
was again accompanied by a further increased demand
for the products of commerce and manufactures.
In 1835, a further reduction took place in the sum
absorbed in the prices of wheat oljive millions, making
a total difference of twenty-one millions in this year
as compared with 1831, in the portion of the national
income and means thus absorbed. During this year,
and the beginning of the following, the demand for the
products of manufacturing skill, for the luxuries wafted
67
to our shores by our commercial enterprise, rose to au
amount unprecedented (in relation to our means of
supplying them) in the annals of commerce ; while the
agricultural interests sunk year after year into a state
of poverty and ruin.
It may appear somewhat unaccountable, that the
former interest should have flourished so much, while
the latter should be so depressed ; but it must be
borne in mind, that the portions of the agricultural
interest who experienced this suffering were only the
landlords and farmers, while the great bulk, the large
mass of consumers represented by the labouring
classes, received really higher wages in these years than
formerly, in consequence of the great demand for
labour called into existence in the manufacturing dis-
tricts, and in carrying into effect all the schemes of
internal improvement^ by railways, &c., to which the
unnatural abundance of capital, set free in those years,
gave rise
We would now inquire what was the imperative
consequence of this state of things? — a demand for
manufactured goods and commercial products, which
could hardly be met by existing means ; a price for the
products of agriculture, which brought certain ruin
and difficulty on all whose capitals were engaged
therein.
The natural and imperative consequences ensued.
Every effort was used to extend the means and faci-
lities of extending production on the one hand. Fac-
f2
68
lories were reared on all hands — the productive
ability of machinery was increased by new improve-
ments and accelerated movement — ships were built —
mercantile establishments sprung into existence —
and banks were created day by day ; in short, all the
necessary and contributary means suited not alone to
the present enormously increased action of commerce,
but to a belief that the increase would continue at
the same rate, rapidly arose on all sides, while the
capital engaged in agriculture was year after year
suffering greater and greater depreciation, and conse-
quently tending to discourage production.
In this most unnatural position, therefore, at this
moment were we placed : we were calling at an enor-
mous rate productive ability in manufactures to supply
the supposed demand of the future, while the means of
future subsistence were daily suffering diminution.
The unnatural excitement and speculation which
arose out of the plethora of free capital in 1835 and
1 836, lead, as we have shewn in the last chapter, to
the panic of 1836-37-
The character and symptoms of this crisis demand a
most minute investigation in reference to its general
connexion with trade. It was most strikingly a money
crisis, and a money crisis only :* a disturbance of the
* When we use the term " money crisis,'* we do not mean to
assent to a most prevalent opinion, that it was brought about by
a redundant and extravagant paper issue, which we believe to be
an error, but into which we shall by-and-by inquire more parti-
cularly.
69
channels of connexion between producer and consumer,
and not a disturbance in any general relative ability
of consumption and production.
The approach of this crisis was not marked by any
diminution in the demand for the products of in-
dustry, but on the contrary, this demand continued for
many months with unabated vigour, after the com-
mencement of the monetarial crisis, and suffered no
check until the channels of interchange were entirely
choked by the want of confidence which ensued.
Great as were the monetorial powers and means
of the time, a spirit of extensive enterprise was
encouraged and called into existence, and future
commercial and financial liabilities contracted, which,
as they became due, proved to be greater than the
ability which existed for their provision. But, in the
first instance, these difficulties were confined to a few
of the leading parties, who had entered most exten-
sively into these liabilities ; and altogether may be
said to have been confined to foreign commerce :
and that chiefly by the sudden reduction which took
place in the price of every commodity, in consequence
of the urgent demand for money to meet the extrava-
gant engagements which had been promoted by the
unnatural excitement and speculation of the previous
two or three years. Towards the middle of 1837,
when this panic arrived at its greatest height, there
were certainly considerable symptoms of a depression
in manufacturing industry ; but we believe these
arose altogether out of the derangement of the chan-
70
nels of supply, and not out of any abatement in the
actual consumption ; which, whether it be considered
in relation to a foreign or home demand, we will
hereafter shew suffered no diminution, but, on the con-
trary, exceeded that of any preceding year. The
elasticity which every interest displayed in recover-
ing its natural position, immediately the unnatural
pressure of overloaded liabilities was removed, suffi-
ciently shewed that this crisis was a mere reaction of the
unnatural abundance of money and excitement of com-
mercial enterprise arising therefrom, which we we have
shewn had been called into existence at this period,
and not of any substantial derangement of the ability
of consumption and production, which must ever be
regarded as the only great source of general prosperity.
We are ready to admit, that during this crisis, from
September 1836 until September 1837 (but felt chiefly
from February until July of the latter year) larger losses
were incurred by individuals, and a greater difficulty
was experienced in sustaining engagements than per-
haps ever before existed in the commercial world.
The enormous amount of foreign credits, especially
American, which had been granted, and the huge
liabilities which arose out of them (promoted by the
great abundance and facility of obtaining money for
some time previously), found our money-market in a
condition of comparative exhaustion : and hence the
competition which arose to obtain money and support
credit, led to great sacrifices, and a sudden and intense
depression of prices. This chiefly took place in the
71
months of March, April, and May. On the first of
June, the crisis reached its summit,, but the public
mind was relieved from the suspense in which it had
been held for some time, by the protection which the
Bank of England had extended to some leading houses
being withdrawn, and their consequent suspension of
payment. Immediately after this event confidence
became greater and greater every day ; prices grad-
ually improved, and before the close of the year
things had assumed their usual appearance ; and
although many individuals lost large sums of money
by the sudden depression of prices during this period,
yet, as a whole community, the amount of wealth did
not suffer much contraction : production and consump-
tion went on without much interruption, the price of
food was still moderate : a large portion of the na-
tional income was still available for the consumption
of manufactures : this will appear by the following
analysis of the cotton trade of 1836 and 1837 :
Cotton wool taken
into consumption.
Exported in Goods and Yarns.
1836
1837
363,684,232 lbs.
368,445,035 „
198,868,910 lbs.
207,576,839. „
We therefore consider this crisis in the character
of a mere temporary reaction, the effects of which soon
disappeared.
In the commencement of 1838, every branch of in-
dustry assumed a most active but substantial appear-
ance, every description of produce obtained a fair and
72
moderate value ; and the great engines of increased
productive power, which had been called into exist-
ance by the excited demand which had prevailed for
two or three years, sprung into great and energetic
action. In the absence of any speculation or excite-
ment, all the new manufacturing establishments, all
the increased mechanical power, and labourers of
every class, found in this year a full employment : and
never was there, to all external appearances, more
reason to look forward to a continuance of existing
prosperity : an enormous advance had been made in
the economy of production, reducing the price and
increasing the consumption of all articles of manu-
facture, and the well-poised relative condition of all
the leading interests of the country gave great assu-
rance of durability.
In the midst of this security, however, towards the
close of the year, a cause of embarrassment, which had
been secretly and unwittingly in silent operation for
some time, began to shew itself. The depressed con-
dition of the agricultural interest for some years had
not failed to discourage production, as much as the
increased impulse of the manufacturing interest had
tended to encourage it. The lavish consumption of
wheat, for some years, and the diminished efforts of
production evinced themselves towards the autumn of
this year, by rapidly rising prices consequent on an
exhausted stock. In addition to this alarming symp-
tom the harvest was not only late, but to every ap-
pearance threatened to be very deficient. As we have
now arrived at the end of a period of low and moderate
prices, at the point when, by the necessary operation
of cause and effect, we are about to suffer a great and
violent change in existing interests, we crave attention
to the following statistical evidence of the rapid and
uniform advance of our manufactures during; the
period under review.
The cotton trade offers the safest evidence on this
point ; being an article altogether imported, and no
part produced at home, the Custom-house returns
furnish an unerring guide to the progress of its con-
sumption. It is also the article of our most important
manufacture.
Years.
Cotton taken into Consumption.
1832
1833
1834
1835
1836
1837
1838
259,412,463 lbs.
293,682,976 „
302,935,657 „
3-26,407,692 „
363,684,232 „
368,445,035 „
460,756,013 „
The following is the weekly consumption of Cotton
Wools in each of these years in bags :
1832
1833
1834
1835
1836
1837
1838
16,650
17,217
17,165
18,157
19,978
20,794
24,312
shewing in seven years an increase of 7,662 bags
weekly, or 398,464 yearly : or of 201,343,550lbs. in
the consumption of this great staple of our manufac-
74
tures : while in the preceding seven years (during
which period wheat ranged at very high prices), the
increase in the consumption of cotton wool was only
70,702,7841bs. The two periods stand thus :
Years.
Average
price of
Wheat.
Progress of.the consumption of Cotton Wool during
seven years of high prices, and seyen years of low
prices of wheat.
1825
1826
1827
1828
1829
1830
1831
66/6
56/11
56/9
60/5
66/3
64/3
66/4
202,546,869 lbs.
162,889,012 „
249,804,396 „
208,987,744 „
204,097,037 „
269,616,640 „
273,249,653 „
1832
1833
183-1
1835
1836
1837
1838
58/8
52/11
46/2
39/4
48/6
55/10
64/7*
259,4 12,463 lbs.
293,682,976
302,935,457
326,407,692
363,684,232
368,445,035
460,756,013
, 70,702,784 lbs;
Increase ^^ 35 per cent.
, 201,343,550 lbs ;|
Increase ,„ ' . '
or bO per cent.
We have seen in the former chapter that in the
autumn of 1838 we commenced an expenditure of more
than £300,000 weekly, as the price of bread, above
the fair average cost of that article, which continued
during the whole of the following year, 1839 ; during
which period foreign wheat, at a cost of thirteen mil-
lions sterling, and other grain at a cost of two millions
more, were taken into consumption. It became ob-
vious that so large an additional amount of our expen-
diture being directed into this channel, could not fail
to act with great effect in the consumption of all other
articles of less importance ; and that so large a sum
being required to pay for foreign supplies could not
* The price of wheat was moderate in 1838 until towards the
close, when it rose to a very high range, which shews a high aver-
age, but the effects of which were experienced in the beginning
of the following year.
^5
fail to derange the financial arrangements by which
our commerce and industry were supported. The
cause, however, continued in operation for a long time
before its effects became very apparent. Merchants,
manufacturers, dealers, wholesale and retail, must
always act by anticipation. Provision must be made
before the hour of demand. The manufacturer con-
tinues his industry and his purchases of raw material
from the merchant, in anticipation of his usual demand ;
the dealers order their usual supply for an approaching
season, anticipating the same consumption as before ;
and it is not until some time has passed, until the
dealer is disappointed in the demand from the actual
consumers, that, failing to replenish his stock to the
ordinary extent, the deficiency falls back upon the
manufacturer, and ultimately upon the merchant, for
the raw material, and the suffering artizan for his
labour. It was not, therefore, until the spring of 1839
that any material falling off" was experienced in the
demand for the products of our chief manufactures.
Froni this period the effects of the high prices of wheat,
in lessening the consumption of manufactured goods,
became daily more and more apparent. The usual
extensive preparation for the spring demand (when
nature, gladsomely arrayed in new attire, invites us
to be so also) proved much too great ; disappointment
was experienced, and derangement rapidly ensued.
It became evident, that if the enormously increased
productive power was continued in full operation, ma-
nufactured goods would soon have scarcely a price at
all, from the competition which must ensue. Mills
were, therefore, by common consent, put on short
76
work, and production checked in every possible way :
but here arose two new evils ; it soon became apparent,
first, that in proportion as production is checked, its
cost is enhanced in all mechanical operations by a given
amount of capital invested with its whole management,
producing so much less than before; and, second,
that a great number of working men must be thrown
either altogether or partially out of employment, and
the whole ability of consumption being thus lessened,
was soon felt to re-act again on the demand for pro-
duction.
Such is the mutual dependence on each other in the
social system, that no sooner does one branch of in-
dustry fail than all others immediately feel the shock ;
and -every day, by the action and re-action of cause
and effect fresh numbers are added to the list of the
unemployed and distressed.
If one class of producers cease to be fully employed,
while at the same time the necessaries of life are con-
siderably dearer, it is clear they can no longer pur-
chase the labour of other classes of producers to the
same extent as before. The means of the latter classes
being thus abridged re-acts again on the former, and
thus all classes of labourers are, sooner or later, drawn
into the position of having a much smaller demand
for their products ; and, therefore, independently of
the high price of provisions, their ability to consume
becomes day by day lessened ; the necessary action of
which is to create a supply of labour very dispropor-
tionate to the demand, and thereby, with half work
11
and dear food, to cause a reduction in the price of the
little labour required.
In this manner, week after week and month after
month, the depression became greater, and extended
itself to every class of industry throughout the king-
dom ; and fully justified the worst anticipations which
existed as the necessary consequences of the diminution
of national means to consume the products of manu-
facturing industry.
In illustration of the effects of the present Corn
Laws, the consideration of this year is very important
and interesting ; as it is the first since 1831 in which
prices have risen so high as to allow of a free impor-
tation, or of an importation to any extent, with the
exception of the last three months of 1838, the effects
of which we have already shown, were experienced in the
year under' notice. We will therefore endeavour to
show how the influences, of which we have spoken have
acted upon the interests of trade, by examining the
comparative result of 1839 with the preceding year, in
which inquiry we shall be guided only by official, or
other undoubted authority.
Much disputation has taken place as to the relative
importance of the home and the foreign trade of this
country; we are however assured, by every calm
reflection, that ultimately the one must ever depend
in a great measure on the other. A foreign trade
can only be supported by an ability of consumption of
the articles taken in exchange, which necessarily im-
78
plies a proportionate consumption of our home pro-
duction ; and it is evident there is no attempt to
send articles to a distance for sale as long as there is
consumption at home.
Whatever may be the difference of opinion as to
the relative importance of the two classes of trade
(into which we have not here leisure to inquire), it
must be obvious that the home trade furnishes a much
more accurate criterion of the real condition of the
nation and business generally than the foreign trade,
for the two following reasons : first, a large portion of
our foreign trade consists in consignments on specu-
lation of the demand in foreign countries, which often
increase in the proportion that parties are disappointed
of an actual demand for consumption at home, but
which, in reality, may be considered a mere transfer
of goods from the warehouse of the owner in this
country to that of his agent in some other, without
being any nearer to actual consumption ; and, secondly,
because it is possible, but not probable, that for some
time at least reasons should exist for an increasing
consumption of goods in foreign countries, while our
home consumption was much depressed.
One thing, however, must be obvious, that in pro-
portion as the supply prepared for home consumption
proves to be too great for it, there must be a tendency
and an effort to diffuse the surplus over foreign mar-
kets : there are two motives for this operation ; first,
the quantity cannot be consumed at home — an ex-
tended field must be sought, and the surplus is neces-
sarily pressed on other markets ; and, second, by
tlie practice in business it is usual for the parties
receiving consignments of goods for sale in foreign
markets, to make advances in anticipation of the ulti-
mate result of such sales ; and, therefore, if parties are
disappointed of a home demand, a facility of obtaining
means to meet their engagements is thus afforded, of
which they have otherwise been deprived.
It is therefore clear, that a large export trade may
equally prove two things : — first, a demand from foreign
countries, temporarily independent of our condition ;
or , second, a very depressed home consumption, by
which the surplus production is pressed into other
channels to find consumption, and in the mean time to
afford the facility of obtaining advances in the current,
and apparently regular mode of business.
It was therefore to be expected, that when any
sudden cause arose to disappoint the usual arrange-
ments which had been made for the home supply, the
surplus on such occasions should be forced into an ex-
port trade, for the two reasons we have given.
With these preliminary remarks, we will proceed to
the proposed comparison of the trade of 1838 and
1 839 ; in which we shall find, as all our arguments lead
us to anticipate, a great reduction of our home con-
sumption with an increase in our exports of manufac-
tured goods in the latter year as compared with the
former.
80
In this inquiry, we will direct our attention
chiefly to the cotton trade, not only because it is
by far the most extensive branch of our manufac-
tures, but being exclusively of foreign produce, the
custom-house accounts furnish a perfect and unerring
guide to its progress.
With respect to the home consumption of our manu-
factures, there is no official data to guide us, nor has
there been any attempt hitherto to arrive at any
correct estimate of its amount. We trust, however,
that the mode we have adopted will appear sufficiently
clear and accurate, to obtain a correct estimate of the
home consumption.
COTTON TRADE OF GREAT BRITAIN. — 1838.
BAGS.
January Ist, 1838, stock on hand 409,057
Imported into Liverpool . . . . 1,329^142
j> >>
London . . . 46,764
„ „ Glasgow ... 53,156
1,429,062
Total supply .... 1,838,119
Deduct exported 102,370
Stock left, December 31st . . . 498,929
601,299
Total number of bags consumed, 1,236,820
At an average weight of 3461bs., making 426,090, 1161bs.
81
of cotton wool spun in this year, of which was ex-
ported firom England in manufactured goods as
follow : — *
Wkight df Yarn in Manukacturku Cotton Goods Exported
KROM England in the Ykak 1838.
Deiciiption.
Number ol
yards. Sic.
of each
description.
Length
of each
piece.
Number of
pieces of
each
description.
Weight o
yarn in
each piece
Total weight
01 yarn
exported in
goods.
Calicoes, Printed & d)'ed
Yards.
■264,724,867
Yards.
28
9,45 J, 459
Ibfl
4
4
lbs.
40.181,451
Calicoes, Plain . . .
282,847,754
24
11785,323
6
70,711.938
Cambrics and Muslins.
5,845,521
20
292,276
3
876,828
Velvet<ens. Velvets.
Cords, &c. . . .
4,6S8,077
60
78,135
22
12
1,777,570
Quiltings and Ribs . .
472,202
60
7.870
18
141,660
Ci>tton & Linen, mixed
1,870,473
40
46.762
8
374,086
Ginghams and Checks
2,516,576
20
125,829
3
8
440,401
Ticks, checked ' and
striped
212,553
50
4,251
20
85,020
Dimities
89,802
60
1,497
12
17,964
Dama--ks and Diapers .
18,332
36
509
10
5,090
Nankeens
383,786
50
7,676
8
8
65,246
Lrwus and Lenos, . .
18,250
•20
912
9,
8
2,280
Imitation Shawls . . .
106,572
12
8,881
2
8
22,202
Lace, &c
81.987.421
40
2,049.685
8
1,024,842
Ciainterpants & Quilts
96.307
No.
96,307
7
674,149
Shawls & Ilanil kerchiefs
8u8,924
Doz.
808,924
2
8
2,022,310
Tapes, Bobbins. &c.. .
1,-05
51,205
1
51,205
Hi)s;ery
44 -,391
447.391
o
8
1.118,477
Unenumerateil . . . .
119,190
£.
Sterling.
10
1.191,900
Total Weight of Yarn Exported in Manufaciured Goods, in 1838, 120,784,629.
* FortLe data of these calculations, &c., in this table, we are
indebted *o Mr. Burnes, of Manchester (so deservedly known as a
great authority in cotton statistics), obtained through Richard
Cobden, Esq.
G
82
lbs.
Total of yarn in manufactured goods . . 120,784,629
as such 113,753,197
„ „ Thread 3,362,983
Total weight of yarn exported .... 236,900,809
To which add f th, to show the quantity
of Wool 33,842,972
Total weight of cotton wool exported in
goods and yarn 270,743.781
Shows cotton wool consumed at home, in
manufactured goods, and the Scotch
trade 155,346,335
426,090,116
COTTON TRADE OF GREAT BRITAIN. 1839.
BAGS.
Jan. 1st, 1829, Stock on hand 498,929
Imported into Liverpool . 1,015,357
„ ,, London .
51,231
„ „ Glasgow
41,962
1,109,550
Total supply .
1,608,479
Deduct exported
, 121,659
Stock left, Dec. 31 . . .
. 370,276
491,935
Total number of Bags consumed 1,1 16,544
Or, at the average weight of 346 lbs. : — making
384.928,079 lbs. of cotton wool, spun in 1839,— of
83
which was exported from England, in manufactured
soods, as follows : —
WEIGHT UK YAKN IN M *Ni: FACTURKD COTTON GOODS, EXPOKIKIJ KUOM ENOI.ANU IN THK
YKAR 1839.
Description.
Number of Yards
of
each descriplion.
Length
of each
piece.
Number of
pieces of each
description.
Weight ot
yarn in
each piece.
Total weight of
yarn exported
in kjODds.
Calicoes. Printed and
Dyed ....
Yards.
278.064,831
28
9,9.i0,887
lbs.
4
oz.
4
lbs.
42,207,019
Calicoes, Plain
316,001,128
24
13,166,713
5
12
75,708,599
Cambrics and Muslins
.^,168,734
20
■-'58,437
3
775,311
Velveteens, &c. .
4,396,77;
60
73,279
22
12
1,667,096
Qmltiugs and Ribs
215,373
60
3,. 589
18
4
6'>,599
Cotton and Lineu .
1,910,745
40
47,769
8
382,152
Ginfjhams and Checks
2,681,394
20
134,070
3
8
469,245
Ticks, checked, &c. .
326 ,981
50
6,540
20
130,800
Dim ties ....
92,254
60
1,538
12
18,456
Dam sks and Diapers
24,108
36
679
10
6,790
Nankeens ....
121,258
50
2,425
8
8
20,612
Lawns and Lenos .
47,8-10
20
2,392
2
8
5,980
Imitation Shawls .
27,6,)2
12
2,304
2
8
5,760
Lace, &c
91,531,094
40
2,283,277
8
1,144,138
Counterpanes, &c. .
142,708
No.
142,708
7
998,956
Shawls and Handker-
chiefs ....
686,616
Doz.
686,616
2
8
1,716,560
Tapes, Bohbns, &c.
81,432
..
81,4.'^2
1
8 1,43 J
Hosiery ....
516,156
..
516,156
2
8
1,300,390
Unenumeratid
159,341
£
Sterling.
10
1,593,341
Total Weight of Yarn Exjioried in Manufacttired (ioods m 1539,-128,298,236
Total weight of yarn in manufactured lbs.
goods 128,298,236
„ Exported as such . 99,04.3,.'')39
„ Thread .... 2,711,798
230,053,673
G 2
84
lbs.
Total weight of Yarn exported . . 230.053,673
To which add | to show the quantity of
Wool 32,864,810
Total weight of Cotton wool exported
in goods and yarn 262,918,483
Shows Cotton wool consumed at home
in manufactured goods, and the
Scotch trade 122,009,596
3b4,928,079
Which leads us to the following comparison of the
Cotton trade of 1838 and 1839 :—
Quantity of cotton wool exported in a lbs.
manufactured state, in 1838 . . 270,743,781
do. do. 1839 . . 262,918,483
Deficient in the latter year, all in yarns 7,825,298
Quantity of cotton wool consumed at
home in manufactured goods, and
the Scotch trade, in 1838 . . . 155,346,335
do. . 1839 .. . 122,009,596
Deficiency in the latter year, in home
consumption 33,336,739
do. do. Export 7,825,298
Total deficiency of cotton wool manu-
factured in 1839 41,162,037
Of this deficiency the whole of the portion in the
export is in yarns, which, in that state, may be esti-
85
mated at one ■sldlluig per lb. for the weiglit of wool.
The deficiency shown in the home trade must be con-
sidered altogether as manufactured goods of every
kind ; the value of which, as a fair general average, is
calcucated at 2.?. 4</. per lb. of cotton.*
The deficiency as thus shown, on the whole trade,
will stand thus : —
7,825,298 lbs. in yarn . U. Od. 391,264
33,336,739 „ goods . 2^. 4cL 3,889,286
£4,280,550
The deficiency of the consumption of cotton manu-
factures in 1839, as compared with 1838, was there-
fore upwards of fot/r millions- of pounds sterling ; of
which sum one-fovrth may be called the price of the
raw material, and three-fourths the representative of
labour, interest of capital^ and j/rojit, in all the
different branches o^ spinning, weaving, dyeing, bleach-
ing, printing, 8(c. and it becomes therefore evident
* This we believe to be a correct calculation ; as we have tried it
with the whole accounts of the last three years, as shown by the
customs entries for export, which were as follow : — in
1837. Exported in manufactured goods 114,709,861 lbs. of
cotton wool as manufactured goods: — at the declared
value of £13,G40,181,— or Is. \.\d per lb,
1838. Exported in manufactured goods 138,039,576 lbs. of
cotton wool as manufactured goods: — at the declared
value of £16,715,857.— or 2*. bd. per lb.
1839. Exported in manufactured goods 146,626,555 lbs. of
cotton as manufactured goods: — at the declared value of
£17,694,303, or 2«. 5rf. per lb.
86
that the cotton intirest alone has suffered an abstrac-
tion from its income, in the last year, as compared
with the preceding, in labour, interest, and profit, of
the large sum of three millions- two hundred mid ten
thousand potinds.
After calmly examining these facts, can any one be
surprised at the ndn which has crowded the Gazettes
with bankrupts and the famine which has wrought such
wreck in the cotton manufacturing districts, during the
last year?
All the other leading branches of manufactures
have shared a similar fate during this period. In
every instance, as far as can be discovered, the quantity
of raw material consumed has been greatly diminished ;
and in every case a greater proportion of the amount
of what production has been created has been forced
into an export trade, for the want of a home consump-
tion, which is therefore shown to have diminished, not
only by a great diminution of the whole quantity
manufactured, but by a large increase of the portion
forced abroad.
The following statements will show the result of the
leading articles of manufacture : —
Quantities taken into consumption and exported in
1838 and 1839 of the following articles: —
WOOL.
lbs.
Taken into consumption, 1838 . . . 56,415,460
Ditto 1839 . . . 53,221,231
Less, cleared for consumption . 3,194,229
87
£
Woollen goods exported, 1 838 . . . . 6,179,604
Ditto 1839. . . . 6,679.287
More, exported 499,683
FLAX, &c.
cwt.
Taken into consumption, 1838 .... 1,625,830
Ditto 1839 .... 1,228,894
Less, cleared for consumption . . . 396,936
£
Linen manufactures exported, 1838 . . 3,566,435
Ditto ditto 1839 . . 4,237,095
More, exported 670,660
SILK. — RAW, WASTE, THROWN, &C.
lbs.
Taken into consumption, 1838 .... 4,887,456
Ditto 1839 .... 4,757,639
Less, cleared for consumption . . . 129,817
£
Silk Goods exported, 1838 777.280
Ditto 1839 865,768
More, exported 88,488
EXPORTED, HARDWARE AND CUTLERY.
£
In 1838 1,498,327
„ 1839 1,819,000
More, exported in 1839 . . . 320,673
88
As maybe expected, we find all the articles, contri-
butary to the manufacture of the above great staple
articles, falling off greatly in consumption also. The
following table will show the comparison of the con-
sumption of the two years under review of the following
articles : —
CLEARED FOR HOME CONSUMPTION.
1838.
1839.
Barilla and Alkali
. cwt.
77,759 .
. 59,607
Indigo
. lbs.
3,020,562 .
2,719,503
Lace-dye
J5
633,869 .
. 539,599
Logwood
. tons
14,107 .
. 17^937
Madder . . .
cwt.
109,385 .
. 97,645
Madder-root
,,
83,725 .
. 81,219
Shumac .
),
208,251 .
. 171,222
Olive Oil . .
galls.
2,037,987 .
1,815,692
Train, &c., do. .
tuns
28,014 .
. 22,348
Palm do. . . .
cwt.
276,809 .
. 266,427
Cochineal and logwood are the only articles which are an
exception (o a great decrease.
From all these official statements it becomes suffi-
cieiHly (>lain that the home consumption of the whole of
our leading articles of manufacture has been greatly
reduced during the past year, not only to the extent of
the diminished quantity actually manufactured, as shown
by the falling; off of consumption of the raw material,
but also by the additional quantities exported to relieve
this market of a pressing excess. But although this
pressing excess has apparently been disposed of, it is not
89
in reality so. It has only been removed from this mar-
ket, and diffused over other markets, where it has also
created an excess; tlie consequence of which is, at this
time, that ijreat sacrifices are being made in these distant
markets, which all fall upon the British merchant and
manufacturer, on whose account such goods were ex-
ported.*
It is therefore obvious that, although the effect of the
diminished ability to consume the produce of manufac-
turers, in consequence of the increased portion of the
national means absorbed in a high price of provisions,
is first apparent on the home consumption, it must ulti-
mately tend also to destroy and to derange our foreign
markets in a twofold manner ; first, by tiie large excess
thrown upon them from this country, by which they
become glutted, and the niore healthy demand of direct
purcha.ses superseded ; and, secondly, in consequence of
the great fallmg off" of the consumption in this country of
such articles of their growth as form their ability of ex-
change, their power of consumption neces,sarily becomes
contracted.
There is still one other mode by which the mercantile
* Illustrative of this operation, we may quote the following from
an American correspondent to one of our leading journals : " I
would wish to give a hint to those of British manufacturers wht)
continue to send over goods to this cou7itry to be sold at forced
sales, at almost any price. If the practice is continued, the loss
u^'ll be enormou-s." The forced sa^es are, ho -vever, only the effect
of forced exports.
90
interest becomes greatly injured at such periods. When,
by the sudden demand for grain, the import can only be
secured in exchange for bullion, then , according to every
authority on the currency question, it becomes a duty
with the managers of the currency, whoever they are, to
contract it in the same proportion that there appears a
tendency for the bullion to lessen, in order to raise the
value of money, an<] [)revent a further abstraction of
bullion. Well, be it so, and admit that they succeed :
what is the result? The same quantity of wheat must
still be obtained, and it must be paid for : the principle
is that by raising the value of money so high, the price
of goods is depressed so low, that at last, instead of
taking gold at a very high price, they take goods at a
very low price ; instead of taking a small quantity of
bullion, they are induced to take a large quantity of
goods, as compared with the ordinary and real compa-
rative value of the two commodities.
If, therefore, this attempt of raising the value of
money means anything, it is simply depressing the value
of goods so low, comparatively, that the foreigner is
induced to take the latter, instead of the former, in
exchange.
Suppose this to be true — it is obvious that this is
another motive from the same common cause of forced
exports, at ruinous prices ; and it is not necessary to
accomplish the object that the exports should lake place
to the countries from whence we derive the grain : these
countries may require none of our products at that par-
91
ticular time; or we may find intermediate countries with
whom a forced exchange may be made of our goods for
bullion, at a smaller sacrifice than could be with the pro-
ducer of grain ; but it is nevertheless the forced exports
of our goods at a low price that enables us to satisfy
such purchases of grain with bullion so obtained.*
We will not here inquire whether any part of the de-
pression of prices and the forced exports have arisen
from a voluntary contraction of the currency, or whether
they are altogether referable to a diminished demand
for home consumption, as in either case the first cause
is the same; and the ultimate effect is to charge the
mercantile and manufacturing interest with the whole
cost of correcting the derangement.
Having now, we are afraid rather tediously, traced
the course of trade since 183*2, we would now crave
* In speaking of the monetarial derangement in the United
States last year, Mr. Biddle says : " There remains to be added
the vast quantity of foreign merchandise which has been poured
in upon us for a market to swell the amount of our imports, during
the present year, far beyond the proceeds of our exports. Im-
mense amounts of the precious metals have already been exported
within that period ; it is believed that the port of New York alone
has witnessed the departure of probably not less than twelve mil-
lions of dollars, the fruits chielly of her collections, for the sales of
foreign goods, here and elsewhere ; the packets of England, de-
parting every five days, all lake their quota ; and the great
steamers, each with her millions, vie with each other in accele-
rating their speed to replenish with our means, ere it be too late,
the exhausted vaults of the Bank of England."
02
attention while we shortly apply our general principle
to the facts.
We say that the chief cause of the fluctuating charac-
ter of our trade and manufactures arises from the great
fluctuation in theamountof the national income which
is absorbed in a number of consecutive years, as com-
pared with others, for payment of the first and im-
perative necessaries of life ; thus leaving in some years
a much larger portion of the national means to be
expended in manufactured goods, than can be regularly
and eventually maintained.
Considering wheat as the most universal first neces-
sary of life, we regard it as an article which fluctuates
less in the amount of consumption than any other ;
with all classes of society, not absolutely in want, the
consumption is nearly the same at all times ; and with
the very poorest classes everything else is curtailed
or given up before bread. As therefore the consump-
tion does not materially increase with low^er prices, or
diminish with higher prices, and as we have seen that
these prices fluctuate very much, it follows, that the
whole amount of means absorbed in the purchase of
this article must fluctuate at the same rate as the price.
It also follows that as the means of the community
to purchase manufactures, and other articles of a
secondary consideration, must depend entirely upon
the amount of income left, after securing the first
necessaries, the demand for the former must fluctuate
93
exactly in proportion to the price of the latter. Ad-
mitting these obvious principles, it follows that if we
could maintain a uniform price of wheat, by which the
amount of income necessarily absorbed would be
always the same, then only could we expect a uniform
condition of the trade.
But, if by the operation of our Corn Laws, we have
alternately periods of very high prices, and of very low
prices, the general condition of trade must oscillate
correspondingly. Thus, if the price of wheat continues
unusually high for three or four consecutive years,
trade must remain restrained and stationary ; and
thus, if prices fall much below the average late, the
demand for manufactures must receive a great impulse;
and, as in both cases, the effect is accumulative, if low
prices continue for a number of years, the influence is
correspondingly great.
Referring to the table page 1-3, we find that, during
the extremely high prices which ruled from 1817 to
1820, trade was extremely depressed ; great distress
existed in our manufacturing districts, and the peace
of the country was materially interrupted ; but no sooner
did prices fall in 1820, than an improvement was
visible; — a further decline took place in 1821; all
complaints vanished, and trade became active : in 1S22,
a further decline took place,— the influence was more
and more evident on manufacturing industry which, in
this year, received a great impulse, the effect of which,
with moderate prices, continued until the speculative
94
iiiania of i8'25, with a high price of wheat and a con-
siderable importation, caused a most serious re-action,
and which [)roduced the panic of 1825-26.
The great excitement which had prevailed, and the
increased demand which had been experienced for the
products of our manufactories, during the two or three
preceding years of very low prices of wheat, had
naturally called into existence an amount of productive
power, equal to the demand. In the beginning of
1826, when the effects of the crisis and the high price
of grain greatly reduced the demand, the increased
productive ability which had thus been called into
existence from a temporary cause, added to the other
existing circumstances, created a great depression in
all branches of business. In 1827, there was a general
sign of improvement, but in 1828, the price of wheat
advanced materially, and continued very high, Avith
extensive importations, until 1831, during which period,
especially in 1829 and 1830, trade was reduced to an
extremely low ebb ; and the peace of the country was
once more threatened by an ill employed population.*
* The following table shows the sum expended in each year in
support^of the Poor in England and Wales, and bears a remarkable
coincidence with the principles under consideration, and the
description we have just given of this period : —
YEAR. £>• 8. d.
1818 7,822,733 Following 1817 Price of Wheat 94
1819 7,468,383 „ 1818 , 83 8
1820 7,330,256 „ 1819 „ 72 3
1821 6,959,249 ,. 1820 „ 65 10
95
The rapid extension of business which took place
under the influence of low prices from 1832 to 1830,
and forward until the autum of 1838, with the sudden
and disastrous check it received in 1839, in conse-
quence of the rapid advance in the price of wheat,
have already been sufficiently considered.
Having now fully considered the fluctations to which
commerce and manufacturing industry are subjected,
by the fluctuating price of wheat, we will shortly
examine the relative results of these fluctuations to this
and the agricultural interests.
We have found that each interest, at opposite periods,
have experienced similar effects — each interest has had
periods of alternate excitement and depression — which
have been attended by equally ruinous consequences to
each.
The landed interest has had periods of very hi^h prices
(as from 1828 to 1831) — much above the average prices,
1822
6,358,702 „ 1821
54 5
1823
5,772,958
1822
43 3
1824
5,736,898
18-23
51 9
1825
5,786,989
1824
62
1826
5,928,50)
1825
66 6
1827
6,441,088
1826
56 11
1828
6,298,000
1827
56 9
1829
6,332,410
1828
60 5
1830
6,!<29,042
1829
66 3
1831
6,798,888
1830
64 3
96
whicli ciiew into it u much larger portion of the national
income than could t)e sustained. The natural conse-
quence, however, was (and the natural corrective), profits
being thus forced much above the ordinary rate, the
greatest part of the excess of capital which thus flowed
into the agricultural interest was invested in improved
and extended cultivation; and just in proportion as
the price, and consequently the profit, was above the
average, did the inducement exist to improve and extend
cultivaton to secure these advantages. This natu-
allv led to an over productionin the exact proportion
to which prices had been forced above the average and
remunerating rate ; and which, as a necessary conse-
quence, led to a reduction of prices as much below
the average and remunerating rate, as they had before
been above it : and thus we find that after this period
from 1831 prices regularly fell every year until 1835,
from 66/3 per quarter in the former to 39/4 in the
latter year. Of what advantage, therefore, did the high
profits made from 1828 to 1831 prove, when, by the
necessary tendency of such profits, losses to a corre-
sponding amount arose from 1832 to 1836?
On the other hand, manufacturers have had periods of
very extensive demand increasing year after year, as the
prices of wheat became lower and more ruinous to the
farmer (as from 1832 to 1836). He was then enjoying
a demand for his products as much above the proper
average rate as provisions were below it. We have
given abundant evidence of the rapidly increasing demand
for such products, while wheat fell from 66/3 per quarter
97
in 1831 to 39/4 in 1835. In the history of the world
there is not an instance of so rapid an increase of manu-
facturing production as arose out of the unnatural stimu-
lus afforded by these extreme low prices. The great and
profitable demand which existed under the excitement
had the natural effect of forcing into existence a suffi-
ciently increased productive power not only to accom-
plish all the demand of the time, but to provide for a
further increase at the rate experienced by each indi-
vidual party. We consequently find that productive
ability to a most unexampled extent was called into
existence at this period, but which did not come into full
operation until 1838. In 1835, when most of the cotton-
mills not only worked very long hours, but in very many
instances with two distinct sets of work-people, continued
in full operation night and day, with the greatest possible
effort under a most excited demand, the whole productive
ability of our cotton manufactures was equal to a weekly
consumption of cotton wool of 18,157 bags ; but in
1838 it had advanced to a weekly consumption of
24,312 bags, showing an increased power of working up
6,155 bags every week by the great extension of manu-
factories and expensive improvements in machinery.*
* While the foregoing was at press, we have received a most in-
teresting communication from John Sturrock, Esq., banker, in
Dundee, to whom we had addressed inquiries relating to the pro-
gress that town had made since 1828, the period which we have so
closely examined ; and the statistical facts which he furnishes,
with his observations thereon, are so truly illustrative of our prin-
ciples, that we must crave the reader's particular attention to the
following extract from them : —
In 1828 the productive ability of Dundee in tlax-spinning was
II
98
But, as the fundamental cause of this excitement was
too great to be permanent — as this extensive demand
equal to 500 horse-power ; it advanced very slowly until the end
of 1832, when it was equal to 615 horse-power : from this time
until 1836 the progress was very rapid, having in these three
years increased to 1309 horse- power. The continued impulse of
the great demand in 1835 and 1836 induced a still further
extension, until it amounted in 1839 to 1695 horse-power.
The progress stands thus : —
Flax-spinning power in 1828 — 500 horse-power.
Advanced in four dear years to 1832—615 „ „
„ „ cheap years to 1836 — 1309 ,, „
1839—1695
Up to the end of 1836 the whole productive ability of the town was
kept in full operation. The reaction which took place in 1837
threw about 200 horse-power out of working ; part of which were
again set to work in 1838 : but by the end of 1839, and up to
this time, out of the whole existing 1695 horse-power, only 951
are employed, and 744 are standing idle. The comparison is thus :
1828, existing, 500 horse-power; employed, 500 horse-power.
1832 „ „ 615 „ „ 615 „
1836 „ „ 1309 „ „ 1309
1837 „ „ 1456 „ „ 1256 „
1839 „ „ 1695 „ „ 951
We thus see, by the excited prosperity of the cheap years, a
productive ability was called into existence which could not
ultimately be used, and there is no doubt that a large portion,
if not the whole, of the advantages obtained in the good years,
have been since lost and sunk in unproductive power. The cost
of flax-mills is about 400/. per horse-power. The portion now
standing in an unproductive state shows a sunk loss of 297,000/. ;
but, large as this sum may appear, to it must be added the depre-
ciation which the existence of this surplus necessarily inflicts on
all those that are employed ; as well as the losses which must
arise from a branch of industry of which there must always be.
99
was based on a price of provisions much below the cost at
which they could be produced, — a reaction sooner or later
was an imperative consequence ; and we find that prices
gradually rose, but continued moderate, until the end
with such an excess of productive ability, a large surplus in the
market.
The depreciation in the value of the existing mill property, since
1836, is thus stated : —
These mills have cost . . . £678,000
Of which are employed £380,400
„ unemployed 297,600
678,000
Their present value is not above . 339,000
To which add depreciation on
manufactories and machine-
shops of all descriptions . 121,000
Makes a loss in sunk capital,
since October, 1836, of . . 460,000
This loss to individuals is a loss to the nation ; therefore what
benefit can years of prosperity be either to individuals or the
community, when they are, necessarily, succeeded by a loss of the
whole advantages, and producing innumerable evils in the de-
rangement and ruin which ensue ? Mr. Sturrock observes, with
great truth, in reference to this loss —
" The value can never be restored, unless our rulers adopt
measures for having a free trade with all the world — admitting
at the (,ame duty the same articles from every quarter — and,
above all, a free trade in corn, that our population may be
freed from the situation in which they are at present placed, when
they eat as much as they can get, but do not get as much as
they can eat.
" Thus, by the starvation of the people, are the two ends of the
year made to meet.
11 2
100
of 1838 (the very year in which the increased productive
abiUty first showed its great power), when it was dis-
covered that low prices and a lessened production had
exhausted the ordinary stock of wheat ; prices rose sud-
denly, and large imports were required from abroad;
and so much did the enhanced prices of wheat reduce
the consumption of manufactures in 1839, that the
productive ability, which we have seen was capable of
working up 24,312 bags of cotton weekly in 1838, was
only called to exercise its powers to the extent of 20,348
bags weekly in 1839, and that at ruinous prices to the
" Tlie long-continued depression of mercantile affairs is breaking
down the spirits of the people and demoralising them. They are
become callous — think nothing of becoming bankrupts — and many
of them have failed twice since 1836.
" The disastrous consequences which have resulted can only
be first alleviated, and then eventually removed, by allowing all
nations freely to exchange with us, that markets may be found for
the necessaries and luxuries of life, which, from our not-to-be-esti-
mated productive powers, can be furnished to an unlimited extent
— for what bounds are there to human wants ? — and what reason is
there why the population of our country should not be quadru-
pled?
•* By a free intercourse the status of the world would be gene-
rally raised, and our own country, from its wealth, from the con-
fidence which exists between man and man, its ingenuity, perse-
verance, and skill, would assuredly progress in a much greater
ratio than any other. ^'
The state of things we have described as existing in Dundee,
leads us naturally to the consideration that, if so much mechanical
power be stagnant, how much physical power and skill must be
stagnant with it. We learn from this report that wages are now
twenty-five per cent.loicer than they were in 1836, when wheat
was half the present price.
101
producers. It is therefore plain that a productive ability
equal to working about 4000 bags of cotton, weekly, or
200,000 bags in this year, remained stagnant, unprofit-
able, and just as useful as if it had never existed.
The extraordinary excitement which cheap years of
wheat produce in the demand for manufactures, and the
great profits which are then secured by this interest,
lead only to a time and consequences correspondingly
ruinous, by calling into existence a productive ability
which cannot be regularly maintained, and which is not
only so much positive loss of capital, but, by the general
law of competition, when the supply is greater than the
demand, reduces the whole product to ruinous prices.
The result, therefore, is, that each of these leading in-
terests is alternately introduced into periods of great
prosperity, but which necessarily lead to periods of
equal depression, Avhen all the advantages obtained in
the former period are lost and destroyed. There is no
permanence in the success of either ; and these fluctua-
tions are always proceeding in their course of operation,
although it is only at the extreme points that public
attention is much attracted by the consequences.
The only way in which these crying evils could be
remedied would be by maintaining a uniformity of the
price of the first necessary of life, which we have shown
is the great acting impulse. If this happy object could
be obtained, then the two interests, commercial and
agricultural, could only go on hand in hand — progress
102
together or recede together. As there would exist no
undue exciting causes for over-production on either side,
each would produce regularly and uniformly nearly the
precise quantity required for consunoption ; no re-action
would, therefore, take place, which, while it depressed
the one interest, unduly excited the other ; but they
would advance steadily together, regularly affording to
each other additional means of extension, and tending
continually to the benefit of each other, instead of as it
is at present — that the two interests are alternately rising
on the ruin of each other.
We have sufficiently shown in a former work that
this most desirable uniformity never can be experienced
under the operation of the present law, or any other
law which tends to restrict the supply of a regular and
uniform quantity — which forbids the excess of one coun-
try to flow into another to equalise a deficiency created
by accident or a change of circumstances ; but which,
on the contrary, by holding out delusive promises of a
maintenance of extremely high prices, tends to give a
most unnatural and excited impulse to production, and
thus imperatively induces a course of violent fluctua-
tions which are ruinous to all and beneficial to none.
When these laws were first enacted in 1815, Lord
Grenville, and the other peers who subscribed his cele-
brated protest against them, with great sagacity foresaw
all these effects. The following extract from that en-
lightened document is so true in principle, has proved so
true in practice, and is so universally applicable to all
103
mercantile legislation, that it well deserves to be sus-
pended in every senate-house in the civilised world : —
" We cannot persuade ourselves that this law will
ever contribute to produce plenty, cheapness, or steadi-
ness of price. So long as it operates at all, its effects
must be the opposite of these. Monopoly is the parent
of scarcity, of clearness, and of uncertainty. To cut off
any of the sources of supply can only tend to lessen its
abundance ; to close against ourselves the cheapest
market for any commodity must enhance the price at
which we purchase it ; and to confine the consumer of
corn to the produce of his own country is to refuse to
ourselves the benefit of that provision which Providence
itself has made for equalising to man the variations of
climate and of seasons."
104
PART III.
FLUCTUATIONS OF COMMERCE, MANUFAC-
TURES, &c., OF THE CONTINENT.
The effects which our Corn Laws produce on continental
industry and commerce, and the tendency that these
effects necessarily have to re-act again on this country,
are well deserving of our consideration.
By the imperative operation of our Corn Laws we
have clearly seen that the demand for foreign grain can
only be at uncertain periods, considerably apart from
each other. For years successively these countries are
altogether excluded from our markets, and, when at last
they are admitted, it is at the very highest prices. This
circumstance necessarily produces in these countries
fluctuations even to a greater extent than are experienced
in this country.
The extensive demand which was experienced from
1828 to 1831 for continental wheat, at very high prices,
gave a similar impulse to its production that the high
prices of that period exerted in this country ; and the
consequence was that, as soon as our prices fell to the
point at which foreign wheat could no longer be ad-
mitted, the continental producers had two difficulties to
105
contend with — first, a greatly increased production sti-
mulated by high prices ; and, secondly, the entire loss of
the market which they had enjoyed to some extent for
three years. Under this two-fold cause the price of
wheat fell to an extremely low point ; the average price
in Dantzig, in 1835, being only 23*. per quarter.
During these years of low prices on the continent the
same effect on manufacturing industry was experienced
as in this country. Throughout Germany, Russia,
France, and Belgium a very rapid progress was made in
the industrial arts; a great quantity of capital, which
would otherwise have been invested in agriculture, being
diverted to these objects. The very low prices of the
first necessaries of life leaving a large surplus to con-
sume other products, an excited demand arose in exact
proportion to this lowness of price.
With the continuance of low prices, and exclusion
from the market, a re-action in agricultural production
necessarily ensued, which became reduced to a limit of
their own consumption.
When, therefore, a large demand arises for this coun-
try, such as was experienced last year, the prices on the
continent are raised, even in a much greater proportion
to their average prices than those of this country, by the
inevitable process which we have examined in the
Appendix to the second edition of the " Influences of
the Corn Laws," &c.
By this means the income of the continental countries,
106
especially of France, Belgium, and others, which con-
sume chiefly wheaten bread, is absorbed in a proportion-
ably greater degree in payment for the first necessaries
of life ; and leaving, therefore, so much less to expend
in the products of other industries. The same reasons,
therefore, that are acting in this country to contract the
demand for manufactures, are acting in a stronger degree
in the very countries from which we abstract, by the
compulsary force of high prices, the quantity of food
needed to make up our deficiency.
In proportion, therefore, to the amount of our acci-
dental necessity of importing their produce, we raise
the prices so much on them, that we reduce their
means, for the time being, to consume their own ma-
nufactures, and therefore the difficulty is still greater to
induce them to take any portion of our manufactures
in return. At first sight this may appear a strange con-
tradiction ; that, by paying a country high prices for its
produce, its power of consumption is thereby dimi-
nished ; but we do the same in this country ; we pay
one class of producers a very high price for their pro-
duce, and are unable to consume the usual quantity of
the produce of another class ; and, although in this
country the evil is rendered greater by our having to pay
for the deficiency, while the continental countries receive
the price of their surplus, yet, as concerns the ability of
the masses of consumers, it is very much the same ; in
both cases the advantage of these high prices, being
altogether accidental and not regular, goes to enrich the
few, while the great masses, who are the chief con-
sumers everywhere, suffer merely so much abstraction
107
from their ordinary means to enjoy other things. Hence
we find (hat during the past year the falling off of ma-
nufacturing industry on the continent has been as great
as in this country, and in many instances greater; for
not only have they had a diminished ability of consump-
tion, but they have also had to contend against the forced
exports from this country ; as an intelligent corre-
spondent in Belgium writes, in relation to the decrease
of the cotton trade of that country during the past
year, that it was " partly owing to the high prices of
bread-corn, but more especially to the competition of
British manufactures, which, notwithstanding a high
protective duty, have been imported and sold at such
low prices as to compel our manufacturers materially to
curtail their operations."
The following comparative statements of the trade of
some of the most important continental countries, in
1838 and 1839, will show that the same corresponding
effects have attended extremely high prices of provisions
as in this country.
TRADE OF BELGIUM, 1838 & 1839.
COTTON wool..
BAGS.
Stock, January 1, 1838 . 2,566
Total imports in 1838 . 39,552
Total supply „ „ . 42,118
Stock left, December 31 . 3,881
January, 1839
Consumption, 1838 . . . 38,237
Showing a falling off of lri,797 bags in 1839
BAGS-
. 3,881
. 22,766
. 26,647
. 5,207
. 21,440
108
SHEEP S WOOL.
BAGS.
Stock, January 1, 1838 . 4,600
Imports in . . . 1838 . 9,756
Stock, December 31
14,356
2,460
BALES.
January, 1839 2,460
„ » _7>982
10 442
„ ,, 52.150
8,292
Consumption of 1838 11,896
Showing a falling ofif of 3,504 bales in 1839.
This table refers only to the wool imported by sea ; of
that brought by land from Germany and the north of
France we have no account.
These are the chief articles of manufacture in Bel-
gium, except linen, the raw material of which being
produced in the country, we cannot ascertain the quan-
tities ; but in all the leading articles, contributing to ma-
nufactures, dye stuffs, oils, &c., the falling oflF has been
on the same scale.
COTTON TRADE OF FRANCE 1838 & 1839.
COTTON WOOL.
BAGS.
BAGS.
Stock on hand, Jan. 1,
January, 1839 . .
. . 62,000
1838 . . 63,500
Imported in „ . 390,978
j» « • • •
. . 342,100
Total supply „ . 454,478
Stock, December 3 1,1838 62,000
Consumption
392,478
Total „ 400,100
Stock, December 31, 1839 75,000
Consumption
329,100
Showing a falling off' of 63,378 bags in France and the neighbouring
parts of Switzerland, in 1839,
109
The woollen and silk trades of France are so much of
an inland character that we cannot arrive at any com-
parative statement ; but the consumption of dye stuffs,
&c., has also fallen off greatly in 1839.
COTTON TRADE OF HAMBURG FOR THE SUPPLY
OF GERMANY in 1838 & 1839.
COTTON WOOL.
BALES.
Stock, January 1, 1838 16,600
Impoits in „
Total supply „
Stock, December 31,
Total „
42,224
58,824
7,960
, 50,864
January, 1839
BALES.
. 7,960
40,956
Total „ 48,916
Stock, December 31, 1839 8,880
Total „
„ 40,006
Showing a falling off of 10,828 bales in 1839.
And, in addition to all these deficiencies of the con-
sumption of cotton wool, the continental countries have
purchased from this country less cotton yarn to manu-
facture into cloth, by 14,700,000 lbs., in 1839, than in
1838.
But not only does it appear that a great falling off has
taken place in the consumption of manufactured goods
in the continental countries during the last year, but
also that the same effect has been experienced with re-
ference to other articles of colonial produce, of which
we may quote coffee, as one of the chief articles of con-
sumption.
The consumption of Belgium, as shown by the deliveries
no
in Antwerp ; of France, as shown by the dehveries in
Havre, and of the parts of Germany, drawing their
supply from Hamburgh, as shown by the dehveries of
port, were : —
1838.
Antwerp . 17,642 Tons
Havre . 20,044,000 Demi Kils.
Hamburgh r)6,256,000 lbs.
1839.
Antwerp . 15,411 Tons.
Havre . 15,550,000 Demi Kils.
Hamburgh 48,000,000 lbs.
The faUing off of the consumption of manufactures
and colonial produce on the continent has a two-fold
effect on our manufactures and commerce : first, the
excess which is everywhere experienced in the manu-
facturing districts on the continent compels them to
force their goods into foreign markets, at the time
that we are doing the same, and thus tends still further
to deluge these markets; and secondly, as in ordinary
times, a considerable portion of the supply of raw ma-
terial, as well as colonial produce, consumed on the
continent is furnished, either directly or indirectly, by
means of British commerce, and in exchange for British
manufactures, it follows that, in proportion as the con-
sumption falls off on the continent, our trade must be
lessened with those countries which originally produce
these articles. For example, a large portion of the
cotton wool consumed in Belgium and Germany is im-
ported from the East Indies and America by us, in ex-
change for our manufactures, and re-exported by us to
those countries. The same is the case, to a very large
extent, with respect to indigo and many other articles.
The returns for nearly the whole of our exports to the
HI
Brazils, and other parts of South America, as well as
St. Domingo and many other places, are made in pro-
duce ultimately consumed on the continent; the discri-
minating duties in favour of our own possessions ex-
cluding the produce of these countries from consump-
tion here. It is thus seen that the extremely high prices
to which food is accidentally raised throughout Europe
by the necessary actions of our Corn Laws, inflicts the
most serious and extensive evils to our commerce in
many ways not visible at first.
If we had not the continental countries as customers
for the coffee and sugars which we receive in exchange
for our manufactures from St. Domingo (where coffee is
the only exchangeable commodity they can offer), and
the Brazils where it is the chief one, and the same ex-
clusive principles continued which at present exist in
favour of our own colonies, we should necessarily be
deprived of these markets for our manufactures alto-
gether.
The extent of our trade with neutral countries is, we
believe, very generally under- rated : we find that about
three-fourths of the whole of our exports of British
produce and manufactures go to foreign countries, with
which we have no other relationship than the strong bond
of mutual interest ; while only one-fourth of such exports
go to our own colonies. This very extensive foreign
trade, being carried on to a great degree, in exchange for
commodities which we are practically prohibited from
using in this country, we are only enabled to continue it
by finding consumers in other countries for such produce.
112
Independent, therefore, of the vast quantity of foreign
produce which is shipped, direct, on British account, to
the continent, the re-exports of such articles from this
country forms one of the largest branches of our trade.
In 1838, we re-exported, in the latter mode, chiefly
to the continent : —
Coffee . .
. . 1 1,293,290 ibs.
Sugar
. . 374,697 cwt
Tea
. . 2,577,877 lbs.
Cotton
. . 30,644,469 „
Sheep's Wool
. 1,897,860 „
Raw Silk
166,767 „
Indigo
. 5,143,891 „
Pepper
. . 3,077,109 „
Tobacco .
. 13,294,212 „
Besides gums, dye stuffs, wines, spices, furs, and other
articles to a vast amount, all of which may be considered
as the payment for our manufactures sent to the various
places from which they were imported ; thus the con-
sumption of cotton wool on the continent is one of the
modes by which the growers in America are able to pur-
chase our manufactures.
It must, therefore, be obvious, that if any circumstance
occurs materially to diminish the rate of general con-
sumption, on the continent, of those articles which we
receive from other countries, in exchange for our ma-
nufactures, it must tend to reduce the consuming ability
of our customers, by lessening the demand for their pro-
duce, and, ultimately, the demand for our manufactures.
113
It is therefore clear that we are intereste*! in the uniCorni
pros[)erity of the continental countries equally as mer-
chants and as manufacturers ; and we cannot but
think that the popular jealousy which exists against the
advancement of those countries not only displays a spirit
of culpable selfishness but at the same time ill accords
with a true and enlightened view of our own interests.
In proportion as any country improves and advances,
the general field of consumption is expanded, and must
be beneficial, directly or indirectly, to producers every-
where : indeed two nations might exist, who had not one
transaction directly with eachother, and yettheir prosperity
might most materially depend on each other; and while
either was vising means to injure the other, the greatest
force of such injurv might fall upon itself: such are the
indirect and insensible modes by which different coun-
tries act upon each other. Neither national nor indi-
vidual interests require to be guarded by a policy result-
ing from jealousy or envy ; but are best promoted by
the exercise of a free, liberal, and benevolent principle,
by which all are rendered prosperous and happy, and are
only thus capable of again reflecting prosperous in-
fluences.
114
PART IV.
FLUCTUATIONS OF LABOUR.
It is im[)Ossible that these violent fluctuations in the
demand for labour and the price of food can exist,
without exercising effects equally violent on that portion
of society whose only exchangeable commodity for their
daily bread is their labour.
Very little reflection will shew us that the changes
which take place in the condition of the working-classes,
must be exactly corresponding in character and time
with the fluctuations in the industrial world which we
have examined : a little investigation on this subject
may prove very useful.
It is a plain and easily-understood principle that the
value of labour, like money, or any other merchantable
article, must be regulated entirely by the proportion
which the supply and demand bear to each other. These
two elements, however, of regulating value^ are acted upon
by numerous secondary causes; and, like all other arti-
cles, there will always be a tendency for an adjustment
between the two. If the supply be larger at any one
time than the demand requires, the price of the whole
must necessarily fall in proportion to the excess, until, in
course of time, low prices increase the demand, or,
failing this, until the supply itself was reduced ; if, on
the other hand, the demand materially exceed the
115
supply, the price of labour would rise until the en-
hanced cost reduces the consumption, or until the
supply was increased, so as to be equal to the demand,
to which there would be a strong tendency.
So far as to the price of labour generally, and with
respect to any particular kind of labour, the principle is
exactly the same. There are many considerations
which influence the supply ; — the time and expense
necessary to acquire the knowledge ; — the degree of
certainty of demand and remuneration when acquired ;
— the healthiness and agreeableness, the respectability
and station which society accords to the occupation.
The demand for all or any must depend on the power
of consumption ; but as we have before seen that this
power must ultimately be regulated by productive
ability only, the proportion between the demand and
supply ought always to remain nearly the same ; and
there can be no doubt that they would, were it not
for the violation of their regulating laws by the inter-
ference of partial legislation attempting to promote
particular interests; by which^ although the object
intended never was and never can be accomplished,
a derangement ensues which leads to ruinous changes
and fluctuations, afflictive of serious injury in their
operations to all parties.
The two great distinctions into which we have seen
society severed by such violence, are the agricultural and
manufacturing
[t will be useful for the purpose of illustration to know
I 2
116
the relative proportion which these two classes of labour
bear to each other. In 1831, the proportion of labour
in England, in the two great sululivisions of industry,
was 761,348 families agricultural, and 1,182,912 manu-
facturing, or about 50 per cent, more of the latter than
the former; and there is every reason to think that at
this moment the difference is even much greater in
favour of the latter industry. In 1811 the difference
was only 33 per cent., but gradually rose to 50 per cent,
in 1831, and there is no doubt has still continued to
advance since the last census.
This IS important to know in a consideration of how
and when labour is likely to be influenced by these
fluctuations : for it is clear that labour generally must
be influenced by the condition of that interest which
retains and consumes the largest portion ; and that,
therefore, the position of manufacturing industry as
employing the largest portion, must always be the index
to the general state of labour.
If the manufacturing interest be prosperous, as in
1835, the great improvements and extensions which in
such periods take place in our sea-ports and manufactur-
ing towns, and by public undertakings of various charac-
ters, such as railways, canals, Sfc, give a great impulse
not only to the demand for manufacturing labour, but
also for what may be called common labour; and
therefore, at such moments when iiroxiisions are at the
lowest price, and the landed interest in the most de-
pressed state, wages of all kinds of labour have been
highest. In 1835 and 1836, when the agricultural
117
interest was at the lowest point of depression, one of the
great causes of complaint was, that labour was higher
than it had been some years before, when the price of
wheat was double. At this period, therefore, the whole
of the labouring classes have three great advantages, —
full employment, high wages, and a low price of pro-
visions ; they experience to its full extent the excite-
ment which then prevails in the commercial world ;
labour of every description becomes greatly in demand,
and commands high [>rices ; the condition of the
labourer everywhere becomes greatly improved ; he
inhabits a better class and a better furnished house;
he contracts habits of comparative luxury. In every
way his expenditure and engagements rise in proportiotj
to his means; — marriages are numerously contracted;
a great impulse is given to the increase of population
by the extraordinary demand for labour. So great was
this demand, that at this period there were instances of
large manufacturing establishments standing still only
for a want of work-people. In this state of prosperity,
the working classes made great progress in intelligence
and taste ; and, generally speaking, their condition was
materially advanced.
This would certainly be a most pleasing picture, arous-
ing most gratifying reflections, if it were not alloyed by a
conviction that this state arose out of a false and arti-
ficial excitement which could not be maintained, bur
which, on the contrary, mu>^t, ere long, lead to a depres-
sio7i as great as was the excitement.
But it can be no matter of sur[)rise that this class
should fail to discover, that the enjoyments and pros-
118
perity of the present could not last — that they should
act as if it were to continue so forever — that they should
do all things in relation to the existing causes of the
moment, without looking forward to the future. It can-
not be matter of surprise that this class should do so,
when we have seen all classes in their turns have com-
mitted the same error; — that the agrictdturist cultivated
during dear and excited year:, in reference only to the
existing state of things, and found, by doing so, that he
brought loss and ruin upon himself by calling into exist-
ence a power of production at an expensive rate, greater
than could be consumed at prices consistent with the
cost ; that the manufacturer, in his turn, used every
eflfort to create a productive power equal to the demand
he experienced, at the time of the greatest excitement,
but which, by the time it was ready for full operation,
was not required, and therefore may be called so much
sacrifice of the profits of past years — that, in fact, all
mankind are governed by the influences of the present,
without much reference to the future.
We have already shown how delusive and ruinous to
all [)arties such policy had proved, with what certainty
a re-action succeeded such excitement; and it is now
our melancholy duty to trace this re-action on the con-
dition of I he labourer.
We have already seen that from obvious reasons the
fluctuations in the condition of the labourer (even agri-
cultural) must correspotid with those of the manufac-
turing classes; and, in addition to those reasons already
given, it must also be obvious that when the latter in-
119
terest is greatly depressed, there must l)e a larye quan-
tity of labour usually employed in it, which, at such
times, will come in competition with common labour,
which, being of a less skilled character, is easily taken
up by many not usually employed therein. It therefore
necessarily happens, from all we have seen, that when
provisions are at the highest point, manufacturing industry
at the greatest depression, labour is least in demand
and lowest in price. Our manufacturing and seaport
towns, instead of absorbing and drawing towards them
a portion of the country labour as before, (and so
preventing any redundancy which might otherwise have
been felt in the agricultural districts during depressed
times,) now throw back upon the country a considerable
amount of labour — there is no longer any great demand
for internal improvements ; and thus, when the agricul-
tural interest is in a high state of prosperity and exten-
sion, the increased supply of labour prevents any in-
crease of price.* Then comes the reverse of the la-
bourer's former position ; he is injured — he is compro-
mised in three most distressing ways — deficient emjAoy-
ment, low wages, and a high price of provisioihs.
The experience of the past year and the present
• We are quite iiware that in some solitary instances during
high prices, a shght advance has taken place in the price paid for
agricultural labour : but this has not !)een general by any
means, and may be termed rather the exception than the rule ;
and in no case has wages been raised at all in proportion to
food ; and in many cases among agriculturists have the money
wages been lowered.
120
moment furnishes a most melancholy evidence of this
deplorable experience of the whole labouring classes —of
the existence of these ill-assorted elements of their
condition : they are now called upon to relinquish all
the habits of comparative comfort and luxury into which
prosperous years introduced them ; thousands of com-
fortable cottages built for them in the manufacturing
districts and suitable for their means a few years ago are
now empty, while several families are crowded into
single garrets and cellars : the intellect that was par-
tially expanded, the taste that was a little cultivated, are
now of no use but to render less endurable the degra-
dation which has come over them : the impulse that was
given to an increase of population and physical productive
ability only tends now by its consequences to swell
the amount of evil and difficulty. Instead of the com-
parative plenty which was in all ways enjoyed only a few
years ago, the most deplorable stHrvation and want now
exists. Their marriages are denounced as " improvi-
denty' because the altered state of affairs renders the
obligations arising from them a burthen to themselves
and the public. Improvident ! Let the landowner ex-
cuse the improvidence of making laws which give de-
ceptive promise of high rents which last for a year or
two, and then fall lower than before, but on the strength
of which an extraordinary scale of expenditure is in-
curred, which ends in embarrassment and mortgage —
let the farmer excuse the improvidence of being led to
an expensive culture of waste and barren lands, by
the excitement of high prices and an expectation of
their continuance, but which produce only ruin and dis-
121
appointment — let the manufacturer excuse the imjirovi-
dence of creating factory after factory, and swelUng the
amount of his productive power equal to the wants of
the moment, but which prove superfluous when done ;
and then will there be no difficulty in finding much more
excuse for the misfortunes of these poor innocent victims
of such laws — laws which teem with mischiefs of the
gravest character to every possible class of the commu-
nity, but which weigh with the heaviest and most op[)res-
sive anguish and suffering on the unemployed and starv-
ing labourer — doomed to see the only relicts of better
times, the fruits of an " improvident " marriage, endeared
to him the more from their it\nocent suffering, daily
pining away before his eyes by want and disease. There
is surely an awful responsibility for all this human suf-
fering resting somewhere ; and wherever it rests, a wilful
ignorance of these facts can be no excuse; if investi-
gation be petitioned for, he imjdored for, information
offered, evidence tendered, and all disdainfully rejected,
the responsibility for the consequences^ for every pang of
suffering, and for every crime arising therefrom, must
rest upon the inflictors of this wrong.
There are two ways in which these times of depression
act with increased hardship upon this class of sufferers :
first, they are more than any other class innocent either
of the original or immediate cause ; and second, with
this class only it becomes a consideration of daily sup-
port. The landowner, the farmer, and the manufacturer,
are not immediately dependent upon the present moment
for their daily food, but the poor labourer relies only
122
from day to day on the result of his toil for the existence
of himself and those dependent upon him; when his
labour, therefore, fails him, he is at once reduced to
want. That a serious amount of crime and disease should
arise out of such a slate of destitution is only to be
expected.
We find that there never have been times of serious
and alarming crime, of public commotion and disturb-
ance, of disregard to the laws of the country, excepting
at such periods of high prices and want of employment.
The disturbances which threatened the peace of the
country in 1818 and 1819, the frame-breakers, the
Ludites, and the serious occurrences in Manchester, were
all promoted by this cause ; but how soon all trouble and
anxiety ceased on a return to low prices and full work.
Again in 1829 and 1830 the same reason can be justly
assigned for the violence of that period. The great distress
and consequent discontent which prevailed in France in
the manufacturing districts during 1829-30 led to the
disturbances, and at length to the revolution in the latter
year. By referring to the table, page 15, of the prices of
wheat in France, it will be found that it was dearer for
the two years preceding 1830 than had been the case
for many years. Although on such occasions many
engaged most prominently in agitation are not of a
suffering class, yet all the attempts of such men would
ever be in vain, if idleness, want, and starvation did not
predispose the mind to crime, partly from desperation —
partly from a delusive hope to alleviate their grievances
and improve their future condition.
1-23
Nor is it to the labouring classes of this country alone
that these fluctuations in the price of food exercise so
severe a wrong. We have already shown that the manu-
facturing industry of the continent must necessarily suffer
a depression as great as that of this country from the
same cause ; and therefore we find that during the last
year, and up to the present moment, the working classes
in France and Belgium particularly are suffering propor-
tionably with those in this country ; and we believe that
sooner or later a similar action and re-action will be ex-
perienced in the productive labour of the whole world, de-
ranging the whole social economy of this class, creating
a great mass of misery, disease, and crime, and inter-
fering most materially with the onward progress of moral
and intellectual improvement.
Who, then, we ask, have been benefited by the Corn
Laws? Who are interested in their maintenance?
Every class of society under their operation has been
artificially excited in an extraordinary manner at par-
ticular times by false prosperity, which has been followed
by an imperative re-action, bringing with it ruin and
disappointment to all in their turn.
The deceit began with the law itself; — it professed,
it promised what it never could fulfil ; and just in pro-
portion as people believed it could fulful its pretensions,
did it fail ; just in proportion as the landowner and his
dependants believed it would secure to them the high
prices it professed to uphold, was the eflort made by
124
each to secure to himself as large a portion of the benefit
as possible. High rents were promised; extensive and
enriched cultivation ensued, an immense increase of
production was the consequence, in the great eagerness
to reap the advantages of this law. This law was passed
in 1828 : before 1833 the struggle to reap its benefits and
the competition for its promises had been so great, that
overproduction, disappointment, and distress already were
visible as the result. A parliamentary committee inquired
into the agricultural distress of this period without any
satisfactory result as to its cause ; the tendency of the law
still went on for two years more ; the competition which
had been created in productive power for high prices still
so much further depressed the condition of the landed
interest, farmer and landlord equally, that m 1836
another parliamentary committee was obtained to inquire
into their distress. The evidence before this committee
teems with the most instructive lessons of the necessary
operation of such laws. The whole tendency of this
evidence was to prove that the Corn Laws had, by in-
ducing an expectation of high prices, raised rents very
high; had called into cultivation a vast quantity of new
land ; had increased, by expensive modes, the produc-
tiveness of that which was in cultivation ; had produced
thereby a greatly increased supply, which being much
more than could be consumed, reduced prices to a
destructive rate ; to the ruin of the farmer, to an im-
possibility of collecting the rents in full, to an ultimate
reduction of rents, to a depreciation in the quality of
cultivation ; and, in many instances, to a complete
abandonment. (See Appendix.)
1-25
With such evidence before us, how can we doubt the
baneful effects that these laws have produced on the
landed interest?
We have already sufficiently considered how the
necessary re-action of these laws influenced the whole
of the other classes of society ; the capitalist, the
merchant, the manufacturer, and the labourer ; — to
all they have been productive of constant and most
injurious fluctuations and derangements. It may how-
ever be said that these fluctuations may be accounted
for by the natural tendency which the human mind
has to excitement and depression ; each state necessarily
producing the other by simple re-action.
We are free to admit that such impulses are evident
and visible in the daily transactions of the world : but
we cannot conceive that any one large class of men of
one given pursuit should always be uniformly, and at
the same time, and for periods of considerable duration,
under the same impulses. We cannot suppose that the
whole agricultural classes continue excited simultane-
ously for a few years, while the whole manufacturing
classes are depressed — that the latter should thence
become all excited, while the former become all de-
pressed, except by supposing that some strong influ-
encing cause existed which acted upon each as a class.
We must admit that there are some of the appa-
rently more immediate causes of the depressions and
excitements both of the money market and manu-
.126
facturing pursuits, which we may be charged with having
passed over without sufficient consideration, more par-
ticularly the derangements which have been so con-
stantly occurring in our connexions with the United
States, which, from the great extent of our business with
them, cannot fail to exercise a most important effect
upon us : but if we have passed them slightly over, it has
not been because they have not seriously engaged our
attention, but because the more we have examined and
considered them, we can only treat them as part of the
effects ; in the first place, as owing their origin altogether
to the first great influencing causes of the fluctuations in
this country. But, for the great excitement and unnatural
abundance of money which prevailed in this country in
1834, 1835, and 1836, could the American crisis of
1837 have occurred ? — and there would be little diffi-
culty to show, if our limit admitted, that most of the
speculative spirit which has existed in America, has
been promoted in a great degree by the unnatural and
extensive facilities afforded in this country at particular
times, and consequently re-action and depression have
never been experienced here without producing even to
a more intense degree similar effects there, as they rely
in every way so much upon their credit with this country.
To trace all the evils of the necessary tendency which
we have shown these laws have in rendering the whole
existence of present circumstances uncertain and fluc-
tuating, would be a task of too serious a magnitude to
undertake. From what we have seen, we must feel
assured that they are opposed in their operation to every
127
effort of civilisation, to every effort of advanced and
improved society, to every effort of science and dis-
covery. The first and great object of all being to
render uniform and certain the present and future supply
of the great necessaries of life, by distributing and
equalising with certainty and speed the gifts which
Providence plentifully bestows upon some parts of the
earth to other places where they are required, and
thus producing a feeling of reciprocal benefits and mu-
tual reliance which cannot fail to advance the best and
most enlightened interests of the whole human race.
12'.)
APPENDIX.
The following extracts from the Evidence given before the
Parliamentary Committee in 1836, will show how far the
opinions of the parties selected to be examined on the condition
of agriculture, and the facts which they speak, agree with our
theory. It will be borne in mind that this is the period in the
fluctuation of great depression in wheat. As may be expected,
from a number of men selected from all parts of the country,
the different notions and opinions relative to the value and
eff"ect of the Corn LaAvs which are entertained will be found in
all their difi^erent shades and forms ; but what we want chiefly
to show is the facts to which they speak : — that the Corn Laws
gave delusive hopes to the landlord and farmer of high prices,
which never could be maintained — that both were thereby
entrapped to press their productive powers to an extent incon-
sistent with the consumption of the country by an expensive
and ruinous outlay ; that a reaction took place, in conse-
quence of the excess of supply, by which prices were reduced
as much below the fair average price, as the temptation had
been held out of obtaining a price above it ; that by this state
of things the farmers had expended much capital on these im-
provements, and become ruined : the landlord was disappointed
in the rent he expected : another reaction took place, land
fell into bad cultivation and became unproductive — the
excess of previous years became gradually consumed, after
which the lessened production is inadequate to the consump-
tion of the country — prices rise, and at the highest point the
K
130
foreign grower pours in his accumulated excess of several years.
The Enghsh farmer had forced, by great additional expense,
large crops of wheat, which he sold below the cost of produc-
tion. He then lessens his production until it is very small, and
when prices consequently rise very high, the foreign grower is
chiefly benefited by selling his large excess at a price double
that at which the English grower sold his excess a few years
before.
It is curious to observe in this evidence, that wheat, the chief
object to which protection has been directed, and which was so
much encouraged in 1829-30 and 1831, was at this period, 1836,
the only article that was pointed to as the certain ruin of the
farmer ; and that now, at a distance of four years, fluctuation
has placed it in the same position again in which it stood in
the first-named period: —
From the Evidence of Mr. John Ellis.
Mr. Loch. With regard to the question of low prices, have
you ever considered how those low prices might be affected by
the present system of Corn Laws? — Latterly they have not
been affected at all by the Corn Laws, because we are living
entirely on our own growth. I have thought a good deal upon
the Corn Laws, and if I had been asked that question two years
ago, I should have said, without hesitation, that it would be
desirable to abolish the present system so as to have a fixed
duty ; but since 1 have seen that we can grow so much more
than we want ourselves, 1 doubt whether that would be a safe
plan to resort to. But I think the present duty is too high — for
this reason, that I think it gives a fictitious value to land, that
it gives the farmers an expectation that something is to come
to their relief that can never arrive, and on that account it holds
up the value of land fictitiously.
Then you think it induced the tenants to make larger offers
131
than in the result they have been able to pay? — I think so;
farmers are naturally prone to expect high prices, and they
have been expecting something that was not likely to happen.
Then what alteration would you recommend? — Mine is a
vague opinion, but I should propose to retain the fluctuating
duty, and to reduce it one-half. I think that that would be all
the protection that we ought to have.
Mr. Clay. When you say " reduce it one-half," do you
mean that you would make it begin at 60s. instead of 70^. ? —
Yes.
Mr. Clive. Would you take off the extreme ends of the
duty altogether ? — I think it might be left where it is, only
changing from lOs. to 60*.
Chairman. Would you stop at the two last stages of the
scale, and have a fixed duty of 5^. and never a lower duty than
5,y. ? — That is a point upon which I have not thought; but I
should not think that would be a bad plan, because I think the
5^. would be no injury to anybody.
Mr. B. Baring. You object to the present scale of Corn
Laws, because it encovirages delusive hopes in the farmer's
mind ; is not the farmer undeceived at present ? — I think the
farmer is anxious for some change in the Corn Laws, he does
not know what ; but he finds that he has not got the advan-
tage that he expected to get. The fact is, that it is the
seasons and himself that have brought these low prices upon
him.
The present Corn Laws no longer continue to raise their de-
lusive hopes? — I cannot say ; the men that occupy the poor
soils are not very intelligent men.
Would not any change encourage other delusive hopes ? —
Not if you were to lower the duty.
It is for the advantage of the farmer to raise prices, is it
not? — I do not think so, I am not of that opinion, I do not
think it is the advantage of the farmer to have very high prices.
k2
132
What do you consider most advantageous to the farmer ? —
A steady price ; that the farmer when he goes to take land
should look to some steady price, and not look to adventitious
circumstances to help him out of a difficulty.
What is the effect upon the market of the present Corn
Laws? — It has no effect at all now; the supply of corn is a
mere supply and demand amongst ourselves.
In the long run what has been the effect of the present Corn
Laws ? — It has tended to keep up the price when we have had
bad seasons.
Do you think the present scale has had the effect of creating
greater fluctuations of price than there would have been under
a more reduced scale? — That is a question that I cannot an-
swer, not having been in the corn trade, but I am certain that
the Corn Laws have raised delusive hopes in the farmers.
Mr. Clay. You are decidedly of opinion that steadiness of
price is the circumstance most important to the farmer ? — My
opinion is not in accordance with that of most people with
respect to the interests of landlord and tenant ; up to a certain
point I hold that they go together, that it is the interest of the
tenant to keep the land in good condition, as it is of the landlord
that he should do so ; but his landlord's interest is to have a
high price to enable him to pay a high rent ; I do not think it
is the tenant's interest to be clamorous about a high price ; it
makes very little difference to me whether I pay a high price
or a low price, and 1 think the country thrives better all round
me if the price is a moderate one ; it is better for me not to
have a high price, provided my expenses are in proportion.
The farmer is a capitalist, and it is of importance to him to
be able to calculate the returns upon his capital ? — Just so.
He would do that better and feel more certainty if he were
sure of a steady price of wheat? — Yes, he would.
Supposing that the present system or any system of Corn
Laws tends to produce fluctuation in the price of wheat, that
133
must be ruinous in its consequences to the farmer ? — There is
no doubt of it.
Mr. Miles. Do you think you could do without protection
altogether ? — Not in the present state of things ; I think we
must come to that ultimately, but we must go by easy steps.
But you think that the poorer class of farmers at present
look at Q)Os. as the price at which wheat can be maintained ? —
Yes.
Is it your opinion that upon the average of years prices can
attain to that height ? — It is my opinion that they cannot, and
that they will not attain 50*. with fine seasons.
And the consequence is that the poorer farmers have falla-
cious hopes raised ? — Yes.
From the Evidence of Mr. John Hancock.
Mr. Sanford. — Have you any observations to make with
regard to the state of agriculture in the neighbourhood with
which you are acquainted, which you would wish to add to
the evidence which you gave in 1833 ? —Yes, certainly it is
worse than it was. Wheat has gone down from 1*. 6d. to 2*.
a bushel.
In consequence of the low price of wheat has there been
much less land sown to wheat the last year? — I should think
much less ; one-fourth, and from that to one-fifth.
From the Evidence of Mr. Robert Hatch Stares.
Chairman. Are you acquainted with the condition of the
farmers of a considerable district of Hampshire ? — Yes, I value
the land occasionally, therefore I have an opportunity of know-
ing the situation of many of them in our own county.
Comparing their condition at the present time with their
condition in 1833, is it better or worse? — Decidedly worse.
To what do '-m,i attribute that? — Low prices.
134
From the Evidence of Christopher Comyns Parker, Esq.
Chairman. What is the condition of the farmers in that
part of the county of Essex with which you are so well ac-
quainted ? — The condition of the farmers in part of my neigh-
bourhood has been very bad.
Where farms have been re-let to new tenants, have those
tenants gone on in improvements in draining, and so on? — I
have never seen more improvements in draining, liming, and
chalking, than within the last three years.
Do you consider that the distressed state of those farmers
can be at all attributed to the rents not having been lowered
sufficiently in time? — I should say very materially, the land-
lords not prudently lowering their rents earlier than they have
done.
Do you think the total reduction of rent would have been
less if the rents had been lowered sooner ? — I know farms that
men of capital were occupying that were 25^. and 305. an acre,
and they offered a pound, and they have since been let for 12^.
to \4:S. and 15.?. an acre, and I believe that had they been
reduced to \l. at that time, those tenants would now have been
in possession of them, and they would never have been im-
poverished in their cultivation.
From the Evidence of Mr. William Cox.
Chairman. For the last three years have you been farming
that land to a profit ? — Decidedly not to a profit.
Are the farmers doing well or ill that occupy land of that
description ? — A great part have failed : and more than half
the rest, if they were to reckon, would be insolvent.
Chairman. What is the condition of the labourers in your
neighbourhood? — The labourers are not well off in Bucking-
hamshire.
Are there many out of employment ? — We have not so many
135
out of employment as we had ; there are very few out of em-
ployment now. in consequence of the railroads and other public
works.
Chairman. Have new tenants been found for unoccupied
farms? — For some of them there have, and some of them are
in the landlord's hands ; a nobleman has two on hand near
Aylesbury.
Were those farms exhausted by the tenants before they left
them? — One of those alluded to had as good a tenant upon it
as any in the country.
Have those farms been offered to be let at a reduced rent ?
— I cannot say; but I know the landlord would not occupy
that description of land, if he could get good tenants.
Mr. Loch. Are those farms in a good state of cultivation ?
— One was in the hands of a very excellent farmer.
In what condition did he leave it ? — I think it was left in
good condition.
Has there been any draining or other improvement made in
the farm ? — The proprietor has drained it since he had it on
hand.
Was the other farm in good condition ? — I think it was..
Mr. Clive. Were the buildings in good repair ? — Yes, they
were new.
Adapted for the convenience of the farm in all respects ? —
Yes.
Mr. Loch. Then why did the tenants go? — They went
because they had lost a good deal of money.
Chairman. If the rent of those farms had been reduced after
the war to a proper level, do you think those farmers would have
left those farms? — There is one of them that I would not
have without rent at all.
Sir Robert Price. What was the rent? — I suppose lbs. an
acre.
136
Chairman. Why would you not have it without rent?— Be-
cause I should lose money.
Frovi the Evidence of Mr. John Brickwell.
Marquis of Chandos. What is the state of the part of the
county in which you reside? — I hear complaints from the
farmers whom I meet, that they cannot pay their way ; that
produce is selling so low, they are very much distressed : that
is the general complaint when I meet them.
Was there not a farm in the neighbourhood of Buckingham
which was thrown entirely out of cultivation ? — There are two ;
this was in the parish adjoining that in which I live ; one adjoin-
ing my own farm let three years ago at 5.5. an acre, and wheat
was then 7s. per bushel, and now wheat is 4^. 6d., that farm
can be of course worth nothing ; the persons who see it all
refuse it at any rent.
On what ground do they refuse it ? — Because the price of
j)roduce will not answer.
At Avhat did that farm let several years ago ? — At about 20s.
an acre ; it was a poor farm, rather wet clay land.
How many years ago? — I should think about 1826 or 1827 ;
I do not know what the exact rent was ; I believe it might have
been about 20s. an acre, and now it is worth nothing.
Should you say that the cultivation of Buckinghamshire has
fallen off within these last eight or ten years ? — I should say so
in the neighbourhood in which I live.
In what respect ? — The land is getting very foul and over-
cropped ; in some places driven further than it should be.
From the Evidtnce of Mr. John Houghton.
Marquis of Chandos. Have you not arable farms in the
county of Buckingham, over which you are steward ? — Yes, I
have.
What is their htate now, compared with the state of the
137
grazing farms to which you allude? — On the heavy clay lauds
the distress is very great, more than it is on the turnip and
barley lands, or grass land.
How do you account for that distress upon the clay lands ?
From the low price of wheat.
Do you find that the capital of the farmers has been diminish -
ing ? — Certainly ; I think the great distress has been on the
heavy land farms.
Have the farmers been paying their rents out of their produce,
or out of their capital?— If you take the heavy clay land, cer-
tainly out of their capital.
The chief complaint is on account of the depression in the
price of wheat ? — Yes, that is where the farmer is suffering
most ; that is where he looks for his rent in the spring of the
year, when he should have the price of his wheat to raise the
money for his rent; when he is looking for a large sum of
money to meet his payments ; when he comes to thresh out
and carry to market, his expenses almost take the whole price.
Mr. Cayley. Can you assign in your mind any particular
reason for the estate alluded to becoming so much diminished
in value as to fall within the grasp of the mortgagee ? — My
opinion is this, that it is that description of soil that will grow
nothing in its present state but wheat, and wheat has been so
very low in price that persons have not been found to
purchase it.
From the Evidence of Mr. John Rolfe.
Marquis of Chandos. What is the rent you pay for land ?
— Twenty shillings per acre.
Do you use wheat for any other purpose but that of human
food now ?— I have not done it ; some have ground wheat for
the pigs : some have given it to their horses, but that was
principally the grown wheat of the last harvest but one.
What is the cost of the cultivation of your farm per acre now,
138
as compared with what it was some years ago ? — The cost of
cultivation is very much the same ; there is a little difference
in the price of labour.
Mr. Cayley. Can you state how rents are paid in your dis-
trict ? — Rents have heretofore, till the last two years, been very
well paid.
How have they been paid since 1833 ? — They have been
paid very badly.
Even on the light soils you speak of? — Yes.
What will become of the landlord? — We shall be all beggars
together.
Do you think then that the tenants of this country to a great
extent hold their farms upon sufferance only, and at the mercy
of the landlords ? — Yes, I do.
To what extent should you say that was the case? — I
should say that one-half at least in your neighbourhood are
subject to that. In the parish where I reside, to my own
certain knowledge, if the landlord was to say, I will have the
whole of the rent that is now in arrear, the tenant must give
up.
Then you mean to say that one-half of the tenantry in your
district are insolvent? — Yes, I do.
Has the reduction in rent been equal to the fall in price of
corn ? — Certainly not : nor if the whole of the rent was reduced
it would not be equal.
Mr. Miles. When any farms are untenanted in your district,
is there any difficulty in getting tenants ? — Yes.
Frovi the Evidence of Mr. John Kemp.
Marquis of Chandos. With regard to wheat, you state
that the market is down as regards that ; can you assign to
the Committee any cause for that depression in the wheat
market ? — No, I cannot ; unless it is from the productions of
the seasons ; in the last three years there has been a great im-
139
provement in the average quantity per acre on our growtli, and
consequently the supply has been greater.
Do you consider, then, the quantity of wheat in the market
has been the cause of the depression of the price ? — I should
say so.
Has the capital of the farmers in your neighbourhood, and
under your knowledge, diminished or not ? — Very much dimi-
nished.
Has any land gone out of cultivation in your neighbour-
hood ? — No, I believe not ; there has been a great quantity of
land left on hand with the landlords, and they have taken it
and farmed it themselves ; that has been very much out of
condition.
What is the state of the small farmer about you; the man
who rents an hundred acres? — As bad off as the poor man.
Are farmers paying rents from their profits or their capital ?
— From their capital.
Have the rents been sufficiently reduced in your neigh-
bourhood, do you think, compared with the reduction in the
price of corn ? — Certainly not, compared with the price of
com ; I think in many instances, if the tenants were farming
without paying any rent, they would not be able to do more
than to keep themselves up.
Suppose the landlords sued their tenants for all arrears, what
do you think would be the consequence to the landlords ? —
They would have all the farms on their hands.
You consider then that the tenants now are merely holding
their farms on the sufferance and at the mercy of the laud-
lords ? — In many cases that is the case ; where they are not,
they have borrowed capital to carry on their farms with.
From the Evidence of Mr. William Thurnall.
Mr. Cayley. Do you think that as yet they have reduced
rents equivalent to the reduced price of corn ? — If my landlord
140
would ofi'er me my farm rent-free, as we have had the prices
lately, I would not accept it.
Do you know many farms similarly circumstanced that you
would not take rent-free ? — I scarcely know one.
What, in your opinion, is the condition of the tenantry
generally in your neighbourhood ? — I think verging on insol-
vency, generally in the most desperate state that men can
possibly be.
You say that you are an oil-crusher, do you sell as much
oil-cake as you used to do .'' — Not a fourth ; I have sold more
oil-cake than all the crushers in my neighbourhood do now ;
there are five in that trade, and in rape-dust, which is very
considerably used in our neighbourhood ; the trade is reduced
to a mere nothing, in consequence of the farmers not being
able to purchase it.
In consequence of the farmers not using this rape-dust, can
they grow as good crops as they used to do ? — Certainly not,
and the land will feel it in the course of a year or two very
materially indeed.
You say that you sell less oil-cake and less rape-dust ; do
you get as well paid for that as you used to do?— No, that has
caused me many unhappy moments ; I believe at this moment
my book debts with the farmers are not worth ten shillings in
the pound ; there are two farmers in the Cambridge gaol at
this moment, and I dare scarcely open a letter, knowing the
state of the farmers, fearing that it may contain notice of some
bad debt or other.
Are those men who are verging on insolvency, men of pru-
dent character and industrious habits ? — I am speaking only of
that class of men.
And yet those men are on the verge of luin ? — Yes, not
only in Cambridge, but, generally speaking, great part of Nor-
folk, Suffolk, and Essex.
HI
From the Evidence of Mr. Robert Babbs.
Marquis of Chandos. Do you believe whether the farmers
are paying their rent out of their capital or out of the profits
of their farms ? — I believe the farmers have been paying their
rents out of the capital they employ.
Is that your case ? — It has been my case.
Has the land been cropped harder in your neighbourhood
than it used to be ? — I think it has.
What is the state of the small farmer as compared with the
man that occupies largely ? — I think he is very little better
than a ])auper, a 40 acre farmer.
From the Evidence of Mr. Charles Howard.
Mr. Cayley. Taking the period since the last Committee sat
in 1833, what do you consider to be the comparative state of
the farming interests now and at that time ? — Decidedly and
progressively worse.
Do you take into your consideration every species of land, or
one species of land more than another ? — I think upon the
sheep farms, the upland farms, from the increased demand
which there has been for sheep, the distress has rather de-
creased ; sheep have been very high.
Then with respect to the low land farms? — Their situation
has been progressively much worse.
Have the Holderness farmers in your opinion been paying
much rent, or has the cultivation paid the expenses in the last
three years ? — The rents have been considerably reduced ; but
those reduced rents have been paid from the capital of
occupiers.
From the Evidence of Mr. James Grinding Cooper.
Chairman. Where do you reside? — At Blythburgh, in
Suffolk.
What is the state of the farmer? — The condition of the
14-2
farmer I consider to be bordering on ruin ; he is not so well
off as he was in 1833.
Do you know any farms untenanted in that part of Suffolk ?
— I know a farm that has been untenanted till within the last
month or so ; the landlord could not let it ; but I think he
has let it within the last month or six weeks.
Was it let at a reduced rent ? — I believe at a very reduced
rent.
To a man of capital ? — I believe to a man of capital at the
present time.
Do you know any other farms that have been without
tenants ? — I have known a small farm last year without a
tenant ; it was a considerable time in letting.
What sort of land was that? The principal part of it very
heavy land.
From the Evidence of Mr. Samuel Byron.
Chairman. Do you rely entirely or mainly upon your wheat
crop ? — The small farmers do rely almost entirely on the wheat
crop.
To what do you attribute the low price of wheat ? — I attri-
bute it in the first place to an abundantly great harvest, in the
next to the great quantity of grazing land that has been con-
verted into tillage.
From the Evidence of Mr. Robert Hope.
Mr. Loch. Have you ever thought anything about the pre-
sent Com Laws, whether they are beneficial to the farmer, or
not? — Yes, they have been often discussed; but it is a very
general feeling among those that pay Corn-rents, that they
have not been hitherto beneficial, but the very reverse of
being beneficial.
What is your reason for that opinion ? — It induced men to
offer more than has been well realised by the price of corn,
because it was generally expected from the Corn Laws, that
143
prices would be kept up to something like what they promised ;
that the import of foreigti corn would be restricted, and by that
means keep up the price of the home growth to 705, or so.
Is it the operation of the law, or some other cause, that has
made the price of wheat so low, in your opinion ? — I think
the law has had nothing to do in bringing down the price of
wheat ; I think it is the favourable seasons and the abundant
crops.
The favourable seasons and the abundant crops have affected
the price of wheat, not the Corn Laws ? — Yes.
Then how has the Corn Law disappointed your expecta-
tion? — Because it led those that took farms at money-rents to
give a much higher rent than they would have done.
Then they did not calculate upon such favourable seasons ? —
They did not expect that a series of favourable seasons would
ever reduce prices at the rate we have seen the last six
months.
Then is it the opinion of you and those other gentlemen
that have considered the subject in the way you mention, that
the present Corn Law ought to continue, or do you think that
that any change would be beneficial to the farmer? — From
what we experienced in the year 1831, I am disposed to think
that a change would be more beneficial to the farmer, by
reducing the scale at which foreign corn is imported.
By reducing the limit? — Yes.
How would that be more favourable to you? — Because
prices were run to the top of the scale in 1829; before any
foreign corn could be imported, they were run up so high as
70s. a quarter ; when we could not grow so much wheat as we
paid in rent, and had the price only run up to 60^. a quarter,
we should just have had so much less money to make up the
deficient quantity of wheat.
Then it is as affects corn-rents that your observation
applies? — It applies entirely to that.
144
Mr. Sanford. You have stated that the existing Corn Law
you consider is prejudicial to the farmer ; is your opinion
founded upon the circumstance of there having been a miscal-
culation as to the effects to be produced by the Corn Laws, or
upon the working of the Corn Laws themselves ? — I think by
the present working of the Corn Laws that it may run prices too
high for the interest of the farmers in years of scarcity ; before
any foreign com can be admitted into the country, prices may
be run up so high as to be prejudicial to the interest of the
farmer ; because in such a year as we had in 1831, we could
not grow so much wheat as we had to pay in rent.
Mr. Clay. If the result of this Corn Law should be to
produce great fluctuations in price, you would think that effect
would apply to all farmers ? — I think it has been prejudicial to
those that even pay a money-rent, because I am sure that if it
had not been for the Corn Laws, they would not have given so
high a money-rent.
Mr. Sanford. That proceeded from a miscalculation, upon
their part, as to the effect to be produced by the Corn Law ? —
It was merely a miscalculation.
From the Evidence of Mr. Andrew Howden.
Mr. Cayley. If you had been sold off in 1 820, do you think
you would have been better off than you are now ? — I do not
know that mine is a fair case to be taken as a general case,
because I started very poor in life, and I have had a hard
struggle, and other circumstances that contributed to assist me: I
am the only remaining farmer in the parish where I was brought
up ; except myself, there is not a farmer nor the son of a farmer
remaining within the parish but myself.
What is the reason of their having all gone away ? — The
money-rents that were exacted of them; they all conceived
that they were to have 8O5. a quarter, and their calculations
145
were made upon that ; it soon appeared that that could not be
realised, and they were not converted, and ruin has been the
consequence.
Then there has been a great change of tenantry in your
neighbourhood ? — ^There has been.
And that has been caused by the fall of prices? — Yes, and
the want of accommodation on the part of the proprietors.
The proprietors have not reduced their rents in proportion ?
— They now have generally done so ; but they were later in
doing it than the circumstances required, and therefore the
tenantry fell.
In your opinion, did the Corn Law that was made in 1815
deceive both the landlord and the tenant? — It did ; I believe
that the calculation upon which they took at that time was
almost universally 4/. a quarter.
The general impression was, that the Corn Laws then made
would have the effect of keeping wheat at the price of 80.y., and
both landlord and tenant were deceived in that? — Yes.
There was some other cause at work, which brought the
price down ? — I do not know.
If the Corn Law had not the effect of keeping up the price,
something must have reduced the price ? — It did reduce ; but
as to the cause, I shall not pretend to say.
The Corn Law having promised a price of 80^. failed to
perform it ? — Yes.
From the Evidence of Lawrence 0/iphant, Esq., M.P.
Mr. Cayley. Have you ever made a comparative estimate of
the increase of the grow^th of wheat, and the increase of the popu-
lation since the fall of prices ? — I believe it was a very general
opinion, at the time of the first Corn Law in 1815, that this
country could not produce anything like what it consumed. The
consequence was, both the farmer and the proprietor conceived
L
146
that, by getting the ports shut up at a particular price, the mo-
nopoly would be complete with regard to our own produce. It
certainly was so, but the increase of cultivation has far out-
stripped the consumption, and our low prices are now attribut-
able simply to two or three good years, and the increased
cultivation by bone manure and furrow-draining.
From the Evidence of Mr. William Bell.
Mr. Loch. In yuur opinion, can Parliament do anything to
relieve the farmers ? — I am not satisfied that they have the
power of doing anything ; if they did anything, I think it would
only shift the burthen to the consumer.
Have you ever thought whether the Corn Laws affect the
farmer beneficially or otherwise? — ^The present Corn Laws
have operated of late as a complete prohibition against the sale
of foreign corn, and I cannot conceive that any other protection
can be given beyond a monopoly of the market.
Do you conceive that a system of average, such as the
present, or a fixed duty, would be beneficial to the farmer ? — I
am not sure that a fixed duty would not be ultimately the most
satisfactory ; but it is a difficult question, because a fixed duty
in scarce seasons would not be submitted to.
Upon the whole, are you satisfied with the present Corn
Law ? — I should consider it a complete protection against
foreign corn.
And you would make no alteration? — Unless an alteration
was made to a fixed duty.
Mr, Handley. What is your reason for supposing a fixed
duty vvould be preferable ? — By the present Corn Law, when-
ever the price approaches near the rate at which the foreign
corn can be brought into the market with a profit, the prices
may possibly be run up to that rate by artificial means ; thus
a great quantity of corn would be improperly liberated and
147
thruwn upon the market, and this might probably depress the
market for the whole season ; now at a fixed duty that could
not take place.
Do you consider that a fixed duty would have the effect of
preventing fluctuation ? — I think so; I think it would make
the price more uniform.
You are aware that there are two articles of agricultural pro-
duce that for years were subject to a fixed duty, namely, wool
and tallow ; are you aware whether or no they have not fluctu-
ated very considerably in price? — They have fluctuated verv
much ; but I understand that wool was only at a penny a
pound, a mere nominal duty.
Has the foreign corn imported into this country been the
surplus corn of Europe, or has it been grown expressly for this
market .'' — I believe that it is the surplus corn of Europe ; this
is the best market they can bring it to.
If by a fixed duty you made this market a certain market, is
it Your opinion that considerable tracts of country might not
be brought into cultivation on the Continent expressly to supply
this market ? — Perhaps they might to a certain extent.
Would not that be prejudicial to the farmers of this country?
— They would probably take something else from us in lieu of
that.
Under the present system of Corn Laws, when a prohibition
lasts so many years as it has done, is not that the best protec-
tion against the growth of foreign corn for the supply of this
market ? — I have stated distinctly that I think the farmer has
no reason to complain of the present law ; that it is a sufficient
protection to him.
Have you ever considered what would be the proper amount
of fixed duty ? — My notion would be, if a fixed duty was to
take place I would lay it on as high as the country could bear
it, and I would reduce it gradually Is. or 2s. every year, till it
came to a nominal duty ; and during the operation of that, the
l2
148
landlord and tenant would come to an adjustment, and the
land would find its natural value.
If such then be the effects on those interests, which were
intended to be benefited and supported by the present Corn
Laws, on what principle can their continuance be defended or
sought for ?
London : Printed by William Clowes and Sons, Duke Street, Stamford Street.
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