Various
Blackwood's Edinburgh Magazine, Volume 66, No. 410, December 1849
In the third place – and this is perhaps a more vital consideration than any – How is the constant recurrence of monetary crises, similar to that which has left such woful desolation behind it, to be avoided upon every recurrence of a deficient harvest at home, or a straitened importation from abroad? The people of England are sensitively alive on this subject. They watch the rain in autumn with the most intense anxiety; and, if it falls a few days more than usual, the utmost alarm pervades all classes. They know well what rain in autumn portends. They see rising up, in dismal perspective before them, a great importation of grain, a vast export of sovereigns, the screw put on by the Bank of England, a contraction of credits by every bank, every man finding his creditors on his back, and one-half of his debtors bankrupt. All this they see, and see clearly; but the minds of a large portion of them are so benighted by the free-trade dogmas, that it never occurs to them that all this is the creation of their own policy, and is in no degree imputable to the laws of Providence. They think the thing is inevitable. They believe that there is a natural connexion between three weeks' rain in August and a monetary crisis, just as there is between a similar deluge and flooded meadows, or destroyed bridges. The evil, however, is entirely of human creation, and may, with absolute certainty, be avoided by human means. There is no more reason why three weeks' rain in August should produce a monetary crisis, than three weeks' rain in November. It is our ruinous monetary laws which render them cause and effect.
But assuming that the monetary laws are to continue, and free trade to be persisted in, it will become the people of this country, and especially the trading classes, to consider well the inevitable effect of such a state of things on the monetary concerns of the country, and, through them, on the solvency of every one of themselves. We have seen that the heavy rains and large importations of grain in 1839 produced the severe and long-protracted period of distress from 1839 to 1842; and that the potato failure in 1846, acting on the Bank Charter Act of 1844, occasioned the terrible catastrophe of October 1847. But what was the importation of grain, in either of these periods of distress or famine, to that which is now taking place, and has become habitual in the face of exceedingly low prices? In 1839, the whole grain of all kinds imported was 4,000,000 quarters, an amount in those days unprecedented. In 1846 and 1847, 12,000,000 quarters, under the stimulus of famine prices, was imported in fifteen months. But now, after a fine harvest, and with wheat at 41s. a quarter, we are importing annually, as our average amount, fifteen millions of quarters of foreign grain! How are the most terrible commercial disasters to be averted, if this immense amount receives any augmentation from bad seasons? Nay, how are they to be averted even in ordinary seasons, with so immense a drain on the metallic resources of the country? This is a question in which the mercantile classes are far more interested than the agricultural – for with them a monetary crisis is an affair of life and death. With landholders, cheap prices, unless very long continued, are merely an affair of temporary loss of income, because the land itself remains, and it is the value of the annual fruits only that is affected.
To compensate so many perils, past, present, and to come, have free trade and a fettered currency, since they were simultaneously brought into action in this country, afforded such a spectacle of internal prosperity and concord as to render them on the whole worth persisting in, at such hazard to our national independence, and even existence? Alas! the view is now, if possible, more alarming than the prospect of dangers to come, so much have the realised and experienced evils of the new system exceeded what the most sombre imagination, fraught with the most gloomy images, could have anticipated. Amidst the infinite variety of topics bearing on this subject, we select the five following, as bearing decisively on the subject: – The increase of the poor-rate, both in Great Britain and Ireland; the increase in emigration; the increase of crime; the decline in railway travelling, and the ruin of agriculture in Ireland.
With regard to the increase of the poor-rate, since free trade and the new monetary system were introduced, we have the best possible authority in the following statement in the last number of a leading journal. "It appears," says the Edinburgh Review, "from Mr Commissioner Symmon's report on pauperism, that the poor-rate in England has now become heavier than it was before 1835 when the New Poor law was introduced. It was, in 1834, £7,373,807; it was in 1848, £7,817,459. Every ninth person now in England is now a pauper: and the increase of paupers during the last two years has been double in proportion to the relative numbers of criminals."30 In Ireland, above 2,000,000 persons are paupers; and the poor-rate since 1846 has risen from £260,000 a-year to £1,900,000, though it was in the first of these years only (1846) that there was any general failure of the potato crop. In Scotland the poor-rate, has nearly tripled in the last three years; it has risen from £185,000 a-year to £560,000. In Glasgow, the poor-rates, which anterior to 1846 were under £30,000 yearly for the city and suburbs, rose in the year 1848-9 to £200,000, and in the present year (1849-50) amount to £138,500. Nor is it wonderful that assessments have increased so prodigiously, when the augmentation of paupers has been so alarming. The following is the increase in the city of Glasgow parish, being about a half of the city and suburbs, during the last three years: —
The total number of paupers relieved in the city of Glasgow and suburbs in the year 1848-9 was 122,000; being exactly a third of the population receiving parochial relief.
The enormous and unprecedented increase of emigration in the last three years is still more alarming and descriptive of the fatal disease under which the body politic is labouring. Previous to 1846 the annual emigration had stood thus: —
But free trade and a fettered currency soon doubled these numbers. The emigration stands thus in round numbers: —
For 1849 the numbers have not yet been made up; but that they have much exceeded 300,000 is well known, and may be judged of by the following facts. From the official return made up at New York, and published in the New York Herald of October 10, it appears that, up to that date, there had landed, in that harbour alone, 238,487 emigrants, of whom no less than 189,800 were Irish. If to these is added the emigrants who went to Boston – where 13,000 landed in the same period, and those who have gone to Canada, where above 60,000 landed last year – it is evident that the total emigrants from the United Kingdom this year must have considerably exceeded 300,000; being probably the greatest emigration, from any country in a single year, in the whole annals of the world. It considerably exceeds the annual increment of the population of the United Kingdom, which is about 230,000: so that, under the combined action of free trade and a fettered currency, the population of Great Britain and Ireland, which for three centuries had continually been advancing, has for the first time declined. The Free-traders may boast of an exploit which all the enemies of England have never been able to effect. This has become so notorious, that it has passed into an ordinary newspaper paragraph; which, without attracting the least attention – though it is the most striking thing that has occurred in English history for five centuries – is now making the round of the public prints.
It is in vain to put this dismal fact down to the account of the Irish famine. That occurred in the winter of 1846-7, three years ago, since which period we have had good harvests; notwithstanding which the emigration has, since that, been constantly about 250,000; and this year, in the midst of a fine harvest, has turned 300,000.
The increase of crime during the last three years has been equally alarming, and illustrative of the grievous distress which, for that period, has affected the industrial interests of the empire. Having, in the last Number of this magazine, fully discussed this subject, we shall only observe that, during the last three years, the increase of crime in the two islands has been nearly 50 per cent. Sir R. Peel, in spring 1846, when the railway mania was at its height, and full employment was given to railway labourers and mechanics in every part of the country, dwelt with peculiar emphasis and complacency on the diminution of commitments which appeared in the preceding year, as the most decisive proof of the beneficial effect of his measures in 1842. We hope he will dwell with equal emphasis on the increase of crime since that time, and draw from it the appropriate conclusion as to the wisdom of his subsequent measures.
The woful state of the railway interests throughout the country, and the steady and alarming decrease of the mileage profits, on an average of all the lines, is another internal symptom of the dreadful effects of the new system which, within the last three years, has been introduced. Railway property, within the last three years, has almost everywhere declined to a half, in many great lines to a third of its former value. In one of the greatest lines in the kingdom, the £50 shares, all paid up, are now selling at £14, and were even lately down as low as £10. The following is taken from the Times of October 21: —
"The subjoined table exhibits the number of miles opened at Michaelmas in seven consecutive years, and the average traffic per mile during the first nine months in each year: —
The decline in the last column, from 1845 to the present year, is sufficiently alarming, and looks like a sinking to zero."
To what is this lamentable sinking of property, in so important a branch of public investment, to be ascribed? We are aware that much of it is owing to unproductive branch lines; but what is the main cause of these branch lines having, contrary to general expectation, proved so unproductive? It is in vain to ascribe it to the cholera: that only temporarily affected parts of the kingdom; and, at any rate, it is now over, and government have very properly appointed a public thanksgiving for its termination. It is equally in vain to ascribe it to the monetary crisis of 1847; that is long since past: capital is overflowing, and interest in London is again down to 3 and 2-1/2 per cent. It is evidently owing to one cause, worse than plague, pestilence, and famine put together – viz. the wasting away of the internal resources of the country, under the combined operation of free trade and a restricted currency: free trade deluging us with foreign goods in every department of industry, and a restricted currency paralysing every attempt at competition in our own. We are very complacent: we not only present our shoulders bare to the blows of the enemy, but we tie up our own hands, lest, under the smart of the injury, we should be tempted to return them.
But by far the most deplorable effect of free trade and a fettered currency is to be seen in Ireland, where, for the last three years, misery unexampled and unutterable has existed. We shall mention only three facts of a general nature, descriptive of the state of that unhappy country since the simoom of the new principles blew over it, and leave our readers to judge of the state of things to which they point.
In the first place it appears, from a parliamentary return, that the holders of farms who, in 1845, were 310,000 over the Emerald Isle, had sunk in 1848 to 108,000. Two hundred and two thousand cultivators of land have disappeared in three years, and with them at least half of the capital by means of which the land was made to produce anything.
In the second place, as we noticed in our last Number, the bank returns corroborate, in the most fearful manner, this alarming decrease in the agricultural capital and industry of the country. Ireland, it is well known, is almost entirely an agricultural country. Now, from the returns of the bank-notes in circulation in Ireland, as made to government in terms of the act of 1845, it appears that, while in August 1846, there were £7,500,000, they had sunk, in August 1849, to £3,833,000! Othello's occupation is gone! The bank-notes can find no employment: the bankers no customers. Free trade and the bank restrictions have in three years reduced the circulation which the country could take off to half of its former amount.
In the third place, if we cast our eyes across the Atlantic, we shall see where the cultivators and agricultural capital of Ireland have gone. During the years 1847 and 1848, out of the 250,000 emigrants who annually left the British Isles, about 180,000 were from Ireland. But this year 1849, when the duties on grain became nominal in February, outdid all its predecessors in the magnitude of the stream of human beings which it caused the Emerald Isle to send across the Atlantic. It has been already mentioned that, up to October 10, 1849, 189,800 Irish emigrants had landed at New York, besides 10,000 at Boston. If to these we add the probable number to Canada, perhaps 30,000, we shall have at least 230,000 Irish who have emigrated in one year to America – and that a year of general peace, a fine harvest, reopened Continental markets, and revived manufacturing industry in the empire. And the Irish county members formed a large part of Sir R. Peel's majority which carried free trade in 1846. Truly they have smote their constituents hip and thigh.
After these facts, and the woful one, that about 2,000,000 paupers are kept alive in Ireland by a poor-rate of £1,900,000 a-year, which is crushing the little that remains of industry and cultivation in the country, it is superfluous to go into details. But the following extracts from that powerful free-trade journal, The Times, are so graphic and characteristic of the effect of its own favourite measures, that we cannot forego the satisfaction of presenting them: —
"The landed gentry and farmholders in this county, [Limerick,] impelled by a national calamity, now at a crisis without example in Ireland, have in contemplation a meeting to represent to his Excellency the Lord-Lieutenant the utterly prostrate condition of all agricultural property, and the universal failure of every expedient in the best rural economy to sustain the Irish farmer – destitute of capital, bereft of legitimate protection, and overwhelmed by poor-rates and taxes —against the free-trade imports of the whole world. The ministerial policy of Great Britain, under sanction of a law which thousands of her loyal subjects deprecated, invites the foreign trader from all ports known to the compass to import at a nominal duty, and then suffers him to export in specie only, for his own country! What other ballast have the fleets of foreign vessels conveyed from our shore for the last three years but metallic and bank currency? With such immeasurably unequal competition at his very door, the native grower finds no market for the produce of his honest industry, unless at a price wholly incompatible with the position of a solvent man. He sells, alas! only to lose, and the selfish foreigner is sure of profit on every cheap venture; while his speculation renders no equivalent whatever to the revenue or taxation of that state which encourages his importations at the expense of our own independence; for the permanent independence of those kingdoms implies the prosperity of Irish produce, and its preference in the English market. Ireland, unfortunately, has no trade or manufacture to employ her people, and wherefore is best known to England; but her only staple, agriculture, which all nations, ancient and modern, loved to cultivate, will soon be little more than a name. The causes and effects of this disastrous revolution the philosopher and historian will hereafter do justice to. A preparatory meeting, relative to the above, is now being held, with closed doors, in the county court, Lord Monteagle in the chair. Poor-rate was the monster grievance of discussion. The meeting broke up at 3 o'clock, it having been decided to collect facts from every district of the country in connexion with taxation and valuation of property." —Limerick Chronicle, of Saturday, Oct. 26.
"The Land Question. – A letter from Kilrush, dated the 27th inst., and published in the Clare Journal, says: – 'So eager are the country farmers to make sale of their grain, that every day is a market. Two causes seem to influence them; first, their present and urgent necessities press upon them, and, secondly, an opinion prevails, which appears not to be confined to the west, that it is more secure to have the money in their pockets than to leave the crop to become a prey to agent or poor-rate collector; and also that, in the event of no reduction being made in the annual rent, they may have no difficulty in walking off. Such are the feelings operating on the minds of the majority of the farmers in this locality. It is now too plain and obvious, that should a reduction in the rents take place here, it will come two years too late, as the greater number of the farmers (formerly comfortable) have not as much as would support their families for half the coming year. This is a sad but true state of things, in a district where, some few years since, the rents were paid, perhaps, more regularly than in any other part of the south of Ireland. A few have left their holdings, after selling every article, leaving the naked walls of a house to the landlord, and gone to a neighbouring townland, where the quality and cheapness of the land presented a greater encouragement; but such cases of flying tenants have become so common of late, that every paper teems with similar statements. If we are to have the land cultivated here, the rents must not only be reduced to half the former price, but the tenant must be assisted to set the crop, and encouraged to introduce a proper method of cultivation, otherwise the land will be left idle, and the majority of the present occupiers will become inmates of the workhouse.'" —Times, Oct. 31, 1849.
"There must also be taken into account the dire domestic privations endured for the last three years of famine, the general flight of tenants with the landlords' rent, the desertion of the land, impoverished to the last degree by the runaways, yet for whose dishonesty and abuse of solemn contract the unfortunate proprietor is held responsible – the abandoned farms being still subject to accumulation of poor-rate and taxes. Then come the distraint, the impounding, the sale and sacrifice of property; while the home market, swamped by free trade with foreigners, has left landlord and farmer no help or resource whatever to bear up against the intolerable oppression of financial burdens, sanctioned by law, under the free constitution of Great Britain! One case of grievous suffering by a respectable family in this county was communicated to the preparatory meeting on Saturday last, by one of the gentlemen present. The possessor of a rent-roll of £1500 a-year landed estate, which netted £1200 annually four years ago, was absolutely compelled to subsist with his wife and seven children for three months of the past twelve, without the ordinary comfort of a meat dinner; a cup of weak tea or coffee, and the vegetables of the kitchen-garden, commonly furnishing the table of this most wretched household! Incredible and appalling as this may appear, we have been assured it is not a solitary instance of the excessive want and privation known to exist." —Times, Nov. 4, 1849.
So much for the working of free trade and a restricted currency in the Emerald Isle. One would suppose, in reading these melancholy accounts, we were not dealing with any people in modern times, but transported back to those dismal periods, after the fall of the Roman empire, when the contemporary annalists contemplated the extinction of the human race, from the desolation of some of its provinces.
This dreadful state of things in Ireland is but a repetition of what, under the operation of these causes, aided by the fatal step of unqualified emancipation, has for some years been going on in the West Indies. We have not room to enlarge on this prolific subject, teeming as it does with facts illustrative of the effects of the free-trade system. They are generally known. Suffice it to say, the West Indies are totally ruined. British colonies, on which £120,000,000 sterling has been expended, and which fifteen years ago produced £22,000,000 worth of agricultural produce annually, have been irrecoverably destroyed. The fee-simple of all the estates they contain would not sell for £5,000,000 sterling. We know an estate in the West Indies, which formerly used to net £1500 a-year, and to which £7000 worth of the best new machinery was sent within the last five years, which the proprietor would be too happy to sell, machinery and all, for £5000.
Canada has lately shared largely in the moral earthquake which has so violently shaken all parts of the British empire. We subjoin an extract from the temperate and dignified statement of their grievances, lately published by 350 of the leading men at Montreal, to show how largely free trade enters into them.
"Belonging to all parties, origins, and creeds, but yet agreed upon the advantage of co-operation for the performance of a common duty to ourselves and our country, growing out of a common necessity, we have consented, in view of a brighter and happier future, to merge in oblivion all past differences, of whatever character, or attributable to whatever source. In appealing to our fellow-colonists to unite with us in this our most needful duty, we solemnly conjure them, as they desire a successful issue, and the welfare of their country, to enter upon the task, at this momentous crisis, in the same fraternal spirit.
The reversal of the ancient policy of Great Britain, whereby she withdrew from the colonies their wonted protection in her markets, has produced the most disastrous effects upon Canada. In surveying the actual condition of the country, what but ruin or rapid decay meets the eye? Our provincial government and civic corporations embarrassed; our banking and other securities greatly depreciated; our mercantile and agricultural interests alike unprosperous; real estate scarcely saleable upon any terms; our unrivalled rivers, lakes, and canals almost unused; while commerce abandons our shores, the circulating capital amassed under a more favourable system is dissipated, with none from any quarter to replace it! Thus, without available capital, unable to effect a loan with foreign states, or with the mother country, although offering security greatly superior to that which readily obtains money both from the United States and Great Britain, when other than colonists are the applicants: – crippled, therefore, and checked in the full career of private and public enterprise, this possession of the British crown – our country – stands before the world in humiliating contrast with its immediate neighbours, exhibiting every symptom of a nation fast sinking to decay.
With superabundant water-power and cheap labour, especially in Lower Canada, we have yet no domestic manufactures; nor can the most sanguine, unless under altered circumstances, anticipate the home growth, or advent from foreign parts, of either capital or enterprise to embark in this great source of national wealth. Our institutions, unhappily, have not that impress of permanence which can alone impart security and inspire confidence, and the Canadian market is too limited to tempt the foreign capitalist.
While the adjoining states are covered with a network of thriving railways, Canada possesses but three lines, which, together, scarcely exceed fifty miles in length, and the stock in two of which is held at a depreciation of from 50 to 80 per cent – a fatal symptom of the torpor overspreading the land." —Times, Oct. 31.
In what graphic terms are the inevitable results of free trade and a restricted currency here portrayed by the sufferers under their effects! Colonial protection withdrawn; home industry swamped by foreign; canals unused! banks alarmed; capital dissipated; rivers and harbours untenanted; property unsaleable! One would have thought they were transcribing from this magazine some of the numerous passages in which we have predicted its effects. And let England recollect, Canada now employs 1,100,000 of the tonnage of Great Britain. Let it be struck off, and added to the other side, and the British tonnage, employed in carrying on our trade, will, in a few years, be made less than the foreign.31
One would have thought, from the present state of Canada, that our colonial secretary had followed the advice of Franklin in his "Rules for making a great Empire a small one."
"If you are told of discontents in your colonies, never believe that they are general, or that you have given occasion for them; therefore, do not think of applying any remedy or of changing any offensive measure. Redress no grievance, lest they should be encouraged to demand the redress of some other grievance. Yield no redress that is just and reasonable, lest they should make another demand that is unreasonable. Take all your informations of the state of your colonies from your governors and officers in enmity with them…
If you see rival nations rejoicing at the prospect of your disunion with your provinces, and endeavouring to promote it – if they translate, publish, and applaud all the complaints of your discontented colonists, at the same time privately stimulating you to severer measures – let not that alarm or offend you. Why should it? You all mean the same thing." – (Rules 16 and 17.)
If our rulers had followed the advice of the sages of former times, instead of the theories of modern bullionists and interested parties, they would have avoided this unparalleled accumulation of disasters. Hear the greatest and wisest of men, Lord Bacon, on the subject: —
"'For the home trade I first commend to your consideration the encouragement of tillage, which will enable the kingdom to provide corn for the natives, and to spare for importation; and I myself have known more than once, when in times of dearth, in Queen Elizabeth's days, it drained much coin of the kingdom to furnish us with corn from foreign parts.'
He added also —
'Let the foundation of a profitable trade be so laid that the exportation of home commodities be more in value than the importation of foreign, so we shall be sure that the stocks of the kingdom shall yearly increase, for then the balance of trade must be returned in money.'
And Lord Bacon went on to give this wholesome piece of advice: —
'Instead of crying up all things which are either brought from beyond sea or wrought by the hands of strangers, let us advance the native commodities of our own kingdom, and employ our own countrymen before strangers.'" —Bacon's Essays.
"Trade," says Locke, "is necessary to the production of riches, and money to the carrying on of trade. This is principally to be looked after, and taken care of; for if this be neglected, we shall in vain, by contrivances among ourselves, and shuffling the little money we have from one hand to another, endeavour to prevent our wants: decay of trade will quickly waste all the remainder; and then the landed man, who thinks, perhaps, by the fall of interest, to raise the value of his land, will find himself cruelly mistaken, when, the money being gone, (as it will be if our trade be not kept up,) he can get neither farmer to rent, nor purchaser to buy, his land."…
"If one-third of the money employed in trade were locked up or gone out of England, must not the landlords receive one-third less for their goods, and, consequently, rents fall – a less quantity of money by one-third being to be distributed amongst an equal number of receivers? Indeed, people, not perceiving the money to be gone, are apt to be jealous, one of another; and each suspecting another's inequality of gain to rob him of his share, every one will be employing his skill and power, the best he can, to retrieve it again, and to bring money into his pocket in the same plenty as formerly. But this is but scrambling amongst ourselves, and helps no more against our wants than the pulling of a short coverlid will, amongst children that lie together, preserve them all from the cold —some will starve, unless the father of the family provide better, and enlarge the scanty covering. This pulling and contest is usually between the candid man and the merchant." – Locke's Works, v. 14, 70, 71. Considerations on Rate of Interest and Raising the Value of Money.
We add only the opinion of a great authority with the Free-traders, Mr Malthus, which seems almost prophetic of what is now passing in this country. We are indebted for it to the Morning Post, which has consistently argued the doctrines of protection and an adequate currency since they were first assailed.
"If the price of corn were to fall to 50s. a quarter, and labour and other commodities nearly in proportion, there can be no doubt that the stockholder would be benefited unfairly at the expense of the industrious classes of society. During the twenty years, beginning with 1794, and ending with 1813, the average price of wheat was about 83s.; during ten years, ending with 1813, 92s.; and during the last five years of this same twenty, the price was 108s. In the course of these twenty years, government borrowed near £500,000,000 of real capital, exclusive of the sinking fund, at the rate of about five per cent interest. But if corn shall fall to 50s. a quarter, and other commodities in proportion, instead of an interest of five per cent., the government will really pay an interest of seven, eight, and nine, and for the last £200,000,000, of ten per cent. This must be paid by the industrious classes of society, and by the landlords; that is, by all those whose nominal incomes vary with the variations in the measure of value; and if we completely succeed in the reduction of the price of corn and labour, this increased interest must be paid in future from a revenue of about half the nominal value of the national income in 1813. If we consider with what an increased weight the taxes on tea, sugar, malt, soap, candles, &c., would in this case bear on the labouring classes of society, and what proportion of their income all the active, industrious middle orders of the state, as well as the higher orders, must pay, in assessed taxes and the various articles of custom and excise, the pressure will appear to be absolutely intolerable. Indeed, if the measure of value were really to fall as we have supposed, there is great reason to fear that the country would be absolutely unable to continue the payment of the present interest of the national debt." —Malthus's Essays.
This was Mr Malthus's anticipation of the effect of wheat falling to 50s. What would he have said of it at 40s., its present average price? We recommend the concluding paragraph to the notice of the fund-holders, by whose influence the late changes have mainly been introduced.