Various
Blackwood's Edinburgh Magazine, Volume 66, No. 410, December 1849
That it is this fatal dependence of the currency, and consequent credit of the country, on the retention of its gold circulation, under circumstances when, from the vast importation of grain going forward, it is impossible to retain it, which is the real cause of the calamitous state of the country for the last three years, and not either the potato rot or the European revolutions, to which the Free-traders ascribe it, is evident from the slightest consideration. The potato rot of 1846, which has been the sheet-anchor of the Free-traders ever since – the scapegoat which they hoped would answer for all their sins – was never, by the most determined of their party, set down as having occasioned a loss of above £15,000,000 sterling. Call it £20,000,000 to avoid cavil. The strength of the case will admit of any concession. Now, the value of the agricultural produce of the United Kingdom, prior to the free trade in grain, was generally estimated at £300,000,000.24 A deficiency of £20,000,000, or a fifteenth part, might occasion, doubtless, the most acute local distress in the districts in which it was most severely felt; but it could never, irrespective of its action on the currency, occasion a general monetary and commercial crisis. England and Scotland exported little or nothing to the boys of Munster and Connaught, where the failure occurred. There is no more reason, had it not been for the currency laws, why a failure of the potato crop in Ireland should have produced a monetary crisis in Great Britain, than a failure in the potato crop of Norway.
Again, the revolutions in Europe in 1848, of which so much has been said to account for the distress, are equally inadequate to explain the phenomenon. They could, of course, affect the European market for our export goods only; and they, taken altogether, only amount, to the countries affected by the revolutions, to £13,000,000 – little more than a fourth part of our exports, which vary from £51,000,000 to £60,000,000. Supposing a half of this export, or £7,000,000, had been lost, during the year 1848, by the French, German, and Italian revolutions; what is that amidst the mass, thirty-fold greater, of our total manufactures, which some years ago were estimated at £133,000,000 for the home market, and £50,000,000 for the foreign. They are now unquestionably above £200,000,000 annually. But let it be supposed that the whole defalcation of our exports, from £60,000,000 in 1845, to £53,000,000 in 1848, was owing to the European revolutions, and none at all to the paralysis of domestic industry by the effects of free trade and a fettered currency – seven millions deficit, out of £200,000,000 annual produce of manufactures, is only a twenty-ninth part. Is it possible that so trifling a deficit can have been the cause of the terrible calamity which overtook the country in 1848 and 1849, the more especially as the harvest of 1847 was so good, that, by orders of government, a public thanksgiving was returned for it? That calamity was unparalleled in point of extent, and has, in two years, swept away at least one half of the whole commercial and manufacturing wealth of the kingdom. The thing is perfectly ridiculous. The failure of an eighth part of our annual export, and a twenty-ninth part of our annual creation of manufactures, might occasion considerable distress in the particular places or branches of manufacture principally affected, but it could never explain the universal paralysis, affecting the home trade even more than the foreign, which followed the monetary crisis of October 1847.
Again, as to the European revolutions of 1848, although, undoubtedly, they largely contributed to interrupt the commerce of this country with central Europe, and may fairly be considered as the principal cause of the decline in the exports of that year, yet it may be doubted whether the influx of wealth, from the distracted monarchies of Europe, which they occasioned, did not more than counterbalance that disadvantage. England, during the convulsions of France, Germany, and Italy, became the bank of Europe. Wealth flowed in from all quarters, for investment in the only capital left which held out the prospect of security. The solid specie which then was brought to London for purchase into the British funds, in the course of 1848, has been estimated, by competent authorities, at £9,000,000 sterling. Beyond all doubt, this great influx of the precious metals from continental Europe – at a time when it was so much required, in consequence of the enormous exportation of specie which free trade was inducing, and the monstrous monetary laws which contracted the paper circulation in proportion as it was withdrawn – had a powerful effect in counteracting the evils we had brought upon ourselves, and sustaining the currency and national credit, which the Free-traders had done so much to destroy. And as this was an alleviation of the evil at its fountain-head, it is next to certain that the European revolutions of 1848, so far from having occasioned the distress in Great Britain in that year, had a material effect in abating it.
It is vain, therefore, for the Free-traders to push forward extraneous and separate events, as the cause of the dreadful calamities which have overtaken the country since October 1847; calamities which all the witnesses examined in both Houses of Parliament, in the committees on commercial distress, described as altogether unparalleled. They arose, evidently, not from the failure of crops in a particular place, or the temporary stoppage in the foreign vent for a particular branch of manufacture – causes which only touched the extremities – but from some great cause affecting the heart of the empire, and which through it paralysed all its members. And when it is recollected that, after having landed the nation in extra domestic engagements, for the next four years, to the amount of £360,000,000, the government adopted the most decisive and effective measures to contract the currency, and, after making it mainly dependant on the retention of gold in the country, they took steps which sent that gold headlong abroad – in exchange for enormously increased importations, the fruit of free trade – it is not difficult to discover what that cause was.
But all these evils, it is said, are over. We have passed through the desert, and arrived at the promised land. Free trade, disjoined from the extraneous circumstances which have hitherto concealed its real effect, is at length beginning to appear in its true colours. The Continent is pacified; the trade to France and Germany has revived; the revenue is improving; the exports in September were £2,000,000 more than in the corresponding month of last year: wait a little and we shall soon be in Elysium, and free trade and a fettered currency will realise all their promised advantages. We are not unaware of the Io Pæans which are already sung from the Liberal camp on this subject, and it is precisely for that reason that, when FREE TRADE IS AT ITS ZENITH, we have taken the opportunity to examine its effects. We have seen that the prosperity from 1842 to 1845 arose from extraneous causes, with which the tariff of the first of these years had nothing to do; and that the disasters from 1847 to 1849 were not in any sensible degree owing to external or separate calamities, but were the direct and inevitable effect of the establishment of a system of free trade, at the very time when the industry of the nation was manacled by the restriction of absurd and destructive monetary laws. Let us now examine our present condition, and see whether or not we are in an enviable position at home or abroad; whether the industry of the country can possibly survive, or its revenue be maintained, under the present system; and whether the seeds of another catastrophe, as terrible as that of 1847, are not already spread in the land.
In one particular the Free-traders are unquestionably right. Beyond all doubt, the external circumstances of the nation, at present, are in the highest degree favourable to its manufacturing and trading interests. We are at peace with all the world, and, thank God, there is no immediate appearance of its being broken. The markets of continental Europe have, for six months past, been entirely laid open to our merchants, by the settlement of France under the quasi empire of Louis Napoleon, and the extinction of the war in Italy and Germany. Rome is taken; Hungary is subdued; Baden is pacified; the war in Schleswig is at an end; the Danish blockade is raised; California has given an extraordinary impulse to activity and enterprise in the West; the victory of Goojerat has extinguished, it is to be hoped for a long period, all appearance of disturbance in the East. The harvest, just reaped, has been uncommonly fine in grain, both in Great Britain and Ireland: that of the potatoes above an average in the latter island. The Chartists of England and Scotland, astounded at the failure of all their predictions and the defeat of all their hopes, are silent; the revolutionists of Ireland, in utter despair, are leaving the Emerald Isle. Amidst the general pacification and cessation of alarms, old wants and necessities begin to be felt. Men have discovered that revolting will not mend their clothes or fill their bellies. New garments are required, from the old being worn out; the women are clamorous for bonnets and gowns; the men are sighing for coats and waistcoats. Provisions are cheap to a degree unexampled for fourteen years; wheat is at 41s. the quarter, meat at 5d. a pound. Capital in London can be borrowed at 2-1/2 per cent, in the provinces at 3-1/2. That great Liberal panacea for all evils, a huge importation of foreign produce, is in full operation. This year it will probably reach in value at least £100,000,000 sterling. Let us then, in these eminently favourable circumstances, examine the effects of the free-trade system.
First, with regard to the revenue, that never-failing index of the national fortunes. The revenue for the year ending Oct. 10, 1849, being the last quarter that has been made up, was only £236,000 more than that for the year ending Oct. 10, 1848. That is to say, during a year when free trade was acting under the most favourable possible circumstances, and when the pacification of the world was reopening markets long closed to our manufactures, the revenue only rose a mere trifle above what it had been in the year wasted by the triple curse of a monetary crisis, European revolutions, Chartist disturbances and Irish rebellion. Why is this? Evidently because the effect of free trade and a restricted currency acting together, and the dread of a fresh monetary crisis hanging over our heads from the unprecedented magnitude of our importations in every branch of commerce, have depressed industry at home to such a degree, that even the reopening of all the closed markets of the world, and the rush to fill up the void, created during fifteen months of stoppage of intercourse, has been able to produce no sensible addition to the public revenue.
Next, as to the exports. The reopening of the Continental markets, the pacification of India by the victory of Goojerat, and the impulse given to American speculation by the gold of California, has occasioned a considerable increase in our exports, on which the Free-traders are pluming themselves in an extraordinary degree. We should be glad to know in what way free trade pacified India, extinguished revolution in Europe, and vivified America by the Californian diggings. And yet, had these distant and adventitious occurrences not taken place, would we have had to congratulate the manufacturers on a rise of two millions in September, and a rise of seven or eight millions on the whole year? And what, after all, is a rise of our exports from £53,000,000 to £60,000,000 or even £63,000,000 in a year, to the total manufacturing industry of the country, which produces at least £200,000,000 annually? It is scarcely the addition of a thirtieth part to the annual manufactured production. The Free-traders are hard pushed, indeed, when they are constrained to exult in an addition to the national industry so trifling, and wholly brought about by fortunate external events entirely foreign to their policy.
In the immense and increasing amount of our Imports, however, the Free-traders may indeed see, as in a mirror, the real and inevitable result of their measures. Their amount for this year is of course not yet known; although, from the returns already procured, it is certain that they will greatly exceed the level of last year, which reached £94,000,000. In all probability they will considerably exceed £100,000,000. Indeed, in the single article of grain, the excess of 1849 over 1848, since the one shilling duty began in February, has been so great as much to exceed in value the augmentation which has taken place in our exports.25 The importation of grain in the first eight months of 1849 has been more than double what it was in the corresponding period of 1848, and that in the face of a fine harvest, and prices throughout the whole period varying from forty-five to forty-one shillings a quarter of wheat. The importation at these low prices has settled down to a regular average of about 1,200,000 quarters of all sorts of grain a-month, or between fourteen and fifteen millions of all sorts of grain in a year. This is just a fourth of the annual subsistence, estimated in all sorts of grain at 60,000,000 of quarters. This immense proportion free trade has already caused to be derived from foreign supplies, though it has only been three years in operation, and the nominal duties only came into operation in February last.
So vast an increase of importation is perhaps unprecedented in so short a period; for, before the change was made, the importation was so trifling that, on an average of five years ending in 1835, it had sunk to 398,000 quarters. Indeed, the importation before the five bad harvests, from 1846 to 1840, had been so trifling, that it had become nominal merely, and the nation had gained the inestimable advantage of being self-supporting.26 With truth did that decided free-trader, Mr Porter, say, in the last edition of his valuable work, entitled the Progress of the Nation– "The foregoing calculations show in how small a degree this country has hitherto been dependent upon foreigners, in ordinary seasons, for a due supply of our staple article of food. These calculations are brought forward to show how exceedingly great the increase of agricultural production must have been, to have thus effectively kept in a state of independence a population which has advanced with so great a degree of rapidity. To show the fact, the one article of wheat has been selected, because it is that which is the most generally consumed in England; but the position advanced would be found to hold good, were we to go through the whole list of the consumable products of the earth. The supply of meat, during the whole years comprised in this inquiry, has certainly kept pace with the growth of the population; and, as regards this portion of human food, our home agriculturists have, during almost the whole period, enjoyed a strict monopoly."27
Things, however, are now changed. Protection to domestic industry, at least in agriculture, is at an end; prices are down to forty shillings the quarter for wheat, and half that sum for oats and barley; the prices of sheep and cattle have fallen enormously to the home-grower, though that of meat is far from having declined in the same proportion; and, as all this has taken place during a season of prices low beyond example, it is evident that it may be expected to be still greater when we again experience the usual vicissitudes of bad harvests in our variable climate. The returns prove that ever since the duties on foreign grain became nominal, in the beginning of February last, the importation of corn and flour into Great Britain and Ireland has gone on steadily at the rate of 1,200,000 quarters a-month; and that now seven-eighths of the supply of the metropolis, and of all our other great towns, comes from foreign parts.28 How British agriculture is to go on staggering under such a frightful load of foreign importation into its best markets, it is not difficult to foresee. Every scholar knows how Italian agriculture decayed, under a similar importation of grain from the distant provinces of the Roman empire; and how directly the fall of the empire was owing to that fatal change.
Putting aside all minor considerations, which crowd upon the mind in considering the probable effects of this prodigious change, there are three of paramount importance which force themselves on the attention, any one of which holds the fate of the empire suspended in a doubtful balance.
The first is, How is the revenue of £55,000,000, and the interest of mortgages at least half as much more,29 to be provided for under so great a reduction in the value of the staple articles of British agricultural produce? It has been seen that the total value of the agricultural produce of the empire was, anterior to the late changes, about £300,000,000. If prices fall on an average a fourth, in consequence of foreign importations, which is a most moderate supposition, probably much within the truth, this £300,000,000 will be reduced at once to £225,000,000. But the disastrous effect of such a reduction is not to be measured by its absolute amount, considerable as that amount undoubtedly is. Its dreadful effect lies here, that the £75,000,000 thus cut off, absorb nearly the whole profits of cultivation, out of which both the rent is paid to the landlord, and the farmer obtains the means of livelihood. The remainder is the cost of production, and it is not lowered in any sensible degree. Thus the whole loss falls on the cultivators. This is just what has happened under a similar course of policy in the West Indies, where the indolent habits of the emancipated slaves, and free trade in sugar, acting together, have destroyed the profits of agriculture; and of course the islands are rapidly returning to the jungle and the forest.
Now, if a deficiency at all approaching to this occurs in the revenue derived from land – the sources of three-fifths of the income of the United Kingdom – how, in the name of common sense, is the revenue to be paid? How are the jointures of the widows, the interest of mortgages, and the other charges on the land, to be made good, when the change of prices has absorbed nearly the whole profit of cultivation? If they are recovered, what is to remain to the landlord? How are the home manufacturers, and the numerous class of shopkeepers in towns, and, above all, in the metropolis, who are supported by their expenditure, to be maintained? It is very easy to say the fall of rents is a landlord's question, and the mass of the people have no interest in it. Who support the manufacturers and shopkeepers over the country? The landlords and holders of securities over the land furnish at the very least a half of that support. Of the £5,400,000 a-year, which the Income Tax produces, £3,200,000, or more than a half, comes from the land. How wide-spread, then, will be the distress produced over the community, and, above all, to the shopkeepers in towns, from a change which threatens to dry up the principal sources from which their sales are paid.
In the next place, How is the national independence to be maintained when we come to import so large a proportion as from a fourth to a third of our subsistence from foreign states? If the chances of war, or a Continental blockade, interrupt our usual sources of supply, what is to come of the people? Who is to guarantee us against famine prices on any deficiency of our usual supply from abroad, and our people from becoming, as the Romans were in former days, the sport of the winds and the waves? Observe, nearly all our foreign supply comes from two countries only, Russia, or Prussia, whom it influences, and America. If we lose our maritime superiority – and who will secure its continuance, now that the Navigation Laws are repealed? – we may be at once blockaded in our harbours, and reduced in three months to the alternative of starvation or submission. But supposing we are not at once reduced to so humiliating an alternative, is it not clear that, when we have come practically to depend for the food of a third of our people on two foreign states, we are entirely at the mercy of those two countries, and can never venture to assert, even in form, our independence against them? Without fitting out a ship of the line, or equipping a battalion, they can, by the mere threat of closing their harbours, at any time starve us into submission. And what are the nations beneath whose feet proud Albion is thus content to place her neck? Russia and America, the two most rising countries in existence, and both of which are actuated by the strongest and the most undying jealousy of the ancient glory and maritime preponderance of this country.
Mr Gurney, "the greatest bill-broker in the world," has emphatically declared in public, on more than one occasion, that the country cannot go on with its present expenditure; that £15,000,000 a-year, on the charges of the army and navy, is more than can possibly be afforded; and that, if a great reduction is not made, we shall become bankrupt. His remedy for this is to disband our troops, sell our ships of the line, and establish the reign of peace and bill-broking throughout the world. On the other hand, "the greatest captain in the world," the Duke of Wellington, has made the following remonstrance to several successive administrations, on the total inadequacy of our present establishments, by sea and land, to secure the national independence in the political changes which may be anticipated in the lapse of time: —
"I have in vain endeavoured to awaken the attention of different administrations to this state of things, as well known to our neighbours (rivals in power, at least former adversaries and enemies) as it is to ourselves.
We ought to be with garrisons as follows at the moment war is declared: —
I suppose that one-half of the whole regular force of the country would be stationed in Ireland, which half would give the garrison for Cork. The remainder must be supplied from the half of the whole force at home, stationed in Great Britain.
The whole force employed at home in Great Britain and Ireland would not afford a sufficient number of men for the mere defence and occupation, on the breaking out of a war, of the works constructed for the defence of the dockyards and naval arsenals, without leaving a single man disposable.
The measure upon which I have earnestly entreated different administrations to decide, which is constitutional, and has been invariably adopted in time of peace for the last years, is to raise, embody, organise, and discipline the militia of the same number for each of the three kingdoms united, as during the late war. This would give an organised force amounting to about a hundred and fifty thousand men, which we might immediately set to work to discipline. This amount would enable us to establish the strength of our army. This, with an augmentation of the force of the regular army, which would cost £400,000, would put the country on its legs in respect to personal force, and I would engage for its defence, old as I am.
But as we stand now, and if it be true that the exertions of the fleet alone are not sufficient to provide for our defence, we are not safe for a week after the declaration of war."…
"I shall be deemed foolhardy in engaging for the defence of the empire with an army composed of such a force as militia. I may be so. I confess it, I should infinitely prefer, and should feel more confidence in, an army of regular troops. But I know that I shall not have these. I can have the others; and if an addition is made to the existing regular army allotted for home defence of a force which would cost £400,000 a-year, there would be a sufficient disciplined force in the field to enable him who should command it to defend the country.
This is my view of our danger and of our resources. I am aware that our magazines and arsenals were very inadequately supplied with ordnance and carriages, as well as stores of all denominations, and ammunition.
The deficiency has been occasioned in part by the sale of arms, and of various descriptions of ordnance stores, since the termination of the late war, in order to diminish the demand of supply to carry on the peace service of the ordnance, in part by the conflagration of the arsenal which occurred in the Tower some years ago, and by the difficulty under which all governments in this country labour in prevailing upon parliament, in time of peace, to take into consideration measures necessary for the safety of the country in time of war."
"I am bordering upon 77 years of age passed in honour. I hope that the Almighty may protect me from being again witness of the tragedy which I cannot persuade my contemporaries to take measures to avert."
These are strong words, as all those of the Duke of Wellington, and all other men of powerful and clear intellect, are, when they are roused and thoroughly in earnest. But when charged with such a subject, the means of defence and independence to his country, would a man of his patriotic feeling use expressions less strong, when he saw both endangered by the weakness of successive administrations, acting in obedience to the dictates of a blind and infatuated people? But if our independence has been thus menaced by the inadequacy of our defensive armaments by sea and land in time past, what is it likely to be in days to come, when the public revenue, and the resources of the kingdom, are prostrated by the combined action of a currency fettered by the acts of 1844 and 1845, and national industry overwhelmed with foreign competition under the free-trade system of 1846?
In truth, the peace congresses which now amuse the world, and give an opportunity for clever but chimerical and ignorant men to declaim upon the speedy advent of a political millennium, are nothing more than an effort, on the part of the free-trade party, to escape from the consequences of their own measures. Mr Cobden and the Free-traders of England now see as clearly as any body, that cheap prices and a large revenue, either to individuals or nations, cannot by possibility co-exist; that the £100,000,000, promised us from the abolition of the corn laws, have vanished into thin air, and that the reduction of the income of the whole classes of society under its operation will be so considerable, that it is quite impossible the national expenditure can be maintained. As the touching of the dividends is not for a moment to be thought of – as that would be bringing the tempest back with a vengeance on the moneyed class who evoked it – his only resource, to make our expenditure square with our reduced income, is in disbanding the soldiers, instituting a national guard, and selling our stores and ships of war. He is quite serious in that; and, like all other fanatics, he is not in the slightest degree influenced by the decisive refutation of his principles, which the universal breaking out of hostilities, and arming of the world, in consequence of the French Revolution of 1848, and the momentary triumph of liberal principles, has afforded. He is perfectly aware, that if industry was protected, and we had a currency equal to the wants and necessities of the nation, we might, with our extended population, raise £100,000,000 a-year, with more ease than we now do fifty millions, and thus secure the independence of the country, and bid defiance to all our enemies. But that would lower the value of money in the hands of the great capitalists, and would amount to an admission that he had been wrong; and, rather than risk that, he is content to prostrate the national defences, and hand us over, unarmed, to the tender mercies of the Chartists and Repealers at home, and the Red Republicans or Cossacks abroad.
The more intelligent of the Liberal party are now intent on a different object, but one equally descriptive of their secret sense of the failure of their grand panacea of free trade. They are full of the incalculable effects of the application of science to agriculture; expatiate largely on the analysis of soils and liquid manures, and indulge in learned disquisitions on the application of the refuse of towns and common-sewers to the improvement and fertilisation of the soil. From the Edinburgh Review, which treats its readers to a learned exposé of Liebig's principles, to Sir R. Peel's protegé, the Dean of Westminster, who boasts of having tripled the produce of his land by liquid manure, this is the grand remedy for the evils which they now see they have introduced. It is singular, if there is any truth in these discoveries, that though man has been labouring at the soil for four thousand years, and during that time had an ample supply of these fertilising streams, they have never been brought to light till free trade made them a question of life and death to a powerful party in the state. Having had ample experience of the application of these liquid manures on the largest and most favourable scale, we are able to give a decided opinion on this subject. Liquid manures are of great service in enriching meadow lands, or forcing up coarse but luxuriant crops of vegetables, such as cabbage or cauliflower, of which the leaves or stems, not the seeds or roots, form an article of food. But they do not permanently enrich the soil: their effect is over in a few weeks. A fresh inundation of the fertilising stream is then requisite, the effects of which are speedily evaporated. On this account they are wholly inapplicable to grain crops, and of very doubtful service to potatoes or turnips. In the emphatic language of farmers, they put no heart into the ground. The vegetation they force on is entirely in leaves and stems, not in seeds or roots. If they come into general use, they may increase the determination of the agricultural industry of the country to grass cultivation, and render England in modern, as Italy was in ancient times, one great sheet of pasturage; but they will never overcome the difficulties with which free trade has environed our farmers in the raising of grain crops, or enable them to compete with the harvests of the Ukraine, or the basin of the Mississippi.