Various
Blackwood's Edinburgh Magazine, Volume 67, No. 411, January 1850
The first point, therefore, to which we shall entreat attention is, the prospect of future prices; regarding which we possess some information that may possibly take the reader by surprise.
The adoption of free-trade principles, as regards the trade in corn, proceeded upon a false estimate of the precise quantities available for the supply of this country. Those who, from various motives, combined for the purpose of allowing the foreigner an unrestrained competition in the British market, had no idea of the strength of the power which they had thus evoked; while the fearful and doubting protectionist, who yielded too soon to the clamour, was little aware of the extent of the evils which his supineness was to bring upon him. The statistics of the question were altogether overlooked – at least no proper means were taken to obtain them in a faithful manner. The returns made by the foreign consuls, and the evidence collected as to the ordinary available supplies at foreign ports, were, in nearly every instance, the mere reflex of the views of interested parties, furnished to men unable, from their habits or education, to judge of their approach to accuracy. The voluminous report of Mr Jacob, which might have been of use as a warning, at any rate, that cheap food does not always make a happy and comfortable people, seems to have been forgotten in these latter days. Hence the theories of those who had some experience in trade, and whose published opinions on mercantile matters had obtained credit and celebrity, came to be mainly relied upon. Among these, the ideas of Mr Tooke, whose authority stands pre-eminently high in such matters, as to prices, and the quantity of foreign grain which might, in the event of free trade, find its way to our shores, were much insisted on. But how far these are erroneous and delusive has been sadly proved by our experience of the effects of free trade in corn since 1846.
Mr Tooke says, in the third volume of his work on the History of Prices, in the section entitled, "Conjectures as to the Prices at which Wheat would range, in the event of Free Trade" – which, under ordinary circumstances, he assumes to be 45s. per quarter, – "The quantity which we might look to import, at an average of the price I have named, might approach to from 1,500,000 to 2,000,000 of quarters." He goes on to say, "If there were to be a fixed duty of 8s. the quarter, I very much doubt whether the annual importation would reach that quantity;" and afterwards adds, "Before quitting this point, however, I must observe that my estimate of the price at which a foreign supply might be expected, of the extent supposed, may be considered by some of the opponents of the corn laws as strengthening the ground for the supporters of them, inasmuch as such statements may be made to work upon the minds of the farmers, in frightening them with the prospect of cheap foreign corn."
What wonder, then, if the panic has materially increased, since the history of free trade, for the last three years, has revealed such a fearful addition to this estimate: for how stands the fact? In place of 2,000,000 quarters of wheat annually, from the passing of the Corn-Law Repeal Act (26th June 1846) until the 5th November 1847, a period of little more than sixteen months, we imported 7,229,916 quarters of wheat – while the total of all kinds of grain entered for consumption amounted to 16,331,282 quarters! Some idea may be formed of the effects of such an augmented importation, if we bear in mind that, from 5th July 1828 to 1st Jan. 1841, a period of nearly thirteen years, the whole quantity of foreign wheat and flour entered for home consumption was 13,475,000 quarters.
But lest it should be argued that this was a supply produced by extraordinary circumstances, and which could only be furnished from accumulations of former seasons – as was, indeed, said at the time – the further history of the trade has shown us that our foreign supplies continue to pour in at precisely the same rate. The total of all kinds of grain and flour entered for consumption in the last nine months, ending 5th September 1849, as exhibited by the Board of Trade returns, shows an amount of 9,870,823 quarters, the quantity of wheat being for this period 3,821,292 quarters; and of wheaten flour – besides frightening the farmers, bearing ruin to our own millers – 3,236,993 cwt. – together equivalent to quarters of wheat, 4,746,147. And all this, be it observed, has been imported while the average price per quarter has been one sixpence only above that named as likely to exclude the approach of more than 1,500,000 or 2,000,000 quarters from our shores! Formerly – in the first years of the century, up to 1842 – the farmer had to contend against a foreign supply of grain amounting to little more than 1,000,000 quarters per annum– now, in some cases, under obligations contracted on the faith of protection to native industry, he is called upon to make the vain struggle against an inundation of foreign corn amounting to upwards of 1,000,000 quarters per month! He cannot, it is evident, maintain the contest long.
Such were the facts assumed as the basis of our legislation, and already they stand forth to the public eye as gross and palpable blunders. The British agriculturist has, beyond all question, been injured to an extent infinitely greater than was anticipated by any one – an extent so vast, that, could it have been predicted as a certainty, the rashest theorist would have recoiled from the danger of such an experiment.
But we have by no means, as yet, attained the lowest point of depression. At the close of the year 1849, we take the general average price of wheat as at 40s. per quarter, and we shall probably have a breathing time of two or three months, until the Continental ports are again available for navigation. We shall hereafter consider whether, under any circumstances, the price which we have just quoted can remunerate the farmer: in the mean time, let us see whether it is likely that, in future, even this price can be maintained.
It is no easy matter to ascertain the rates at which corn may be grown on the Continent. The current prices at foreign ports, such as Hamburg, have, in reality, little bearing upon this most vital point, though they have been eagerly assumed by the free-traders as a sure index of future prices. Very little consideration will show every one that the true way towards forming a fair conclusion on the subject, is to ascertain, as nearly as may be, the cost of grain, not at the ports from whence it issues, but in the inland countries where the greater proportion of it is grown. The reason for this is obvious. Under the old system, when protective duties were the rule, the demand for foreign corn was exceedingly fluctuating and uncertain. We never dealt directly with the foreign grower; but, between him and the British consumer, at least three profits intervened. There were middlemen, principally Jews, who made it their regular business to purchase up the superfluity of the Polish crops on speculation, and to sell it to the Dantzic dealers. Then came the profit of the latter, and also that of the British corn-merchant; and, as the trade was notoriously a precarious one, these profits were of considerable amount. The demand, however, may now be considered as fixed and steady. Henceforward, under the operation of free trade, the two considerations of quality and cheapness must alone regulate the market. Not only the superfluity of Continental harvests will be available, but new land, of which there are immense tracts of the finest description, hitherto untilled, will be put under cultivation, and the produce regularly transmitted to this country, where a ready market can at all times be found. The first symptom of this new regular trade will be the disappearance of one of the intermediate profits. This is not subject of prophecy; it has already taken place. The foreigners have now taken the whole of the foreign grain trade exclusively into their own hands. We are informed by the first corn-merchants of Leith, that there is not a single order sent for grain from this country. "The finest Dantzic wheat, free on board," writes one of our correspondents, "will not be sold to a British merchant for less than 38s. the quarter; and as no more than 40s. or 41s. could be got for it here, there is no margin for a profit, and the risk is not run. But the foreigner will send it on his own account, and sell it here at 38s. and realise a profit. You thus see that the entire trade is out of British hands, for the prices of our own grain must entirely be ruled by those of the foreigner; and the consequence is, that every bushel sent to this country is on consignment and not to order."
There still remains another profit, that of the middleman, to be reduced. The creation of a constant and steady demand from the foreign ports – which demand cannot be otherwise unless a protective law is reimposed – will naturally excite the dealers to purchase directly from the Polish grower. In this way they will have double profits, without enhancing materially, if at all, the original cost of the grain; for, in other Continental corn-growing countries, untilled land may be had to any extent for next to nothing, and no farming capital, as we understand the word, is required. Here a remark or two, founded upon past history, may be useful. About a century and a half ago, or rather about the time of the Revolution of 1688, the average price of wheat, as stated by Adam Smith, amounted to 28s. in England. Public burdens were at that time moderate, and so were poor-rates; still they were of such an amount as to be felt by the farmer. The wages of the agricultural labourer were at least seven shillings per week, equal to about 10s. 6d. of our present money, and the rent of arable land might be estimated over-head at 5s. 6d. per acre. All these items are enormously above the rates at present known in the Continental corn-growing countries, and some of them have no existence there. It is difficult to get at Polish charges, especially since the late change in our policy, for we have invariably found that foreign proprietors are most jealous of disclosing their true domestic position. Nor can we wonder at this, for the truth, were it broadly told, might tend materially to check that liberal sympathy, which of late years has been so abundantly shown to the insurgents of central Europe. We are, however, fortunately enabled to throw some useful light upon this matter. Our informant is a Scottish agriculturist, who, some years ago, was engaged as land-steward on the estates of a Polish nobleman in Gallicia, and who, therefore, had ample opportunity of witnessing the foreign system. If the reader glances at the map of Europe, tracing the course of the Vistula from Dantzic, and then following the upward line of its tributary, the Bug, he will find laid down in close proximity the extensive districts of Volhynia, Podolia, Kiow, Gallicia, and others, formerly Palatinates, which together constitute the largest, richest, and most productive corn-field of Europe. Here there are no farmers, and – what is more strange to us – no free labourers who receive a weekly wage. The land is tilled for the profit of the owner; a superintendant presides over it as taskmaster; and the workers of the soil are serfs in the actual position of slaves, who toil late and early without other remuneration than the coarse rye bread, and similar fare, which is necessary to support existence. The manufactures of Manchester and Sheffield have not found their way into this region, and never will; because the population, being utterly without means, could not purchase them, and probably would not were the means within their power. Their dress is of the most primitive kind, and differs in no respect from that of tribes utterly barbarous – being chiefly constructed of the skins of animals. They are hardy, docile, and exceedingly sensitive to kindness, but as far removed from civilisation as the tribes of Tartary; and their owners – for that is the proper term – take especial care that no doctrine shall reach them which in any way may interfere with the exercise of despotic rule. In short, they are like so many cattle cultivating the land for their masters at the bare expense of their keep. To demonstrate more clearly the difference of the value of labour, we may here state, on the best authority, that in that district where the finest wheat, distinctively known as "high-mixed Dantzic," is grown, the ordinary price of a quarter of wheat will defray the expense of from forty to forty-five days' work, whilst here it can procure only from twenty to twenty-five days. The climate is excellent, and the yield of the soil considerable. Wheat may be grown for several years successively without manure, and always with comparatively little work. The produce is floated down the numerous rivers which intersect the district, to Dantzic and other coast towns on the Baltic, where it is stored; and these will in future form the great depots of the grain furnished by central Europe for British consumption. Contrast this state of matters in modern Poland with that of England in 1688, when land yielded a considerable rent, when poor-rates and public burdens were levied, and when the labouring man received a reasonable wage; and we must arrive at the conclusion that the remunerating price of wheat in the former country must be something greatly lower than 28s. per quarter. We are almost afraid to state our conviction, lest it should appear exaggerated; but we do not doubt that Polish wheat could be delivered at Dantzic at 16s., and yet leave a considerable profit to the grower. We must also note that the variableness of our climate, and the comparative poorness of our soil, places us at a vast disadvantage in point of quality, as compared with the southern grower. It can be established, by consulting the prices-current of Mark Lane for a series of years, that it would require a differential duty of 6s. per quarter on wheat, on this account alone, to put the British farmer on a fair footing with the great bulk of his foreign competitors. Last season, the difference between the best foreign and English wheat throughout the year, as proved by the same authority, was upwards of 10s. per quarter.
We beg it will be distinctly understood, that, in estimating the remunerative prices of foreign grain, we do not profess to arrive at more than general conclusions. It matters nothing for or against our argument whether wheat can be delivered at Dantzic a little cheaper, or a little dearer, than the above sum. We leave room on either side for a considerable margin. This much, however, we know for a fact, that an eminent corn-merchant in Leith has, in former years, purchased fine wheat, free on board, at Dantzic for 18s., with the offer of a constant supply, and that no circumstances have since then emerged to enhance the cost of production. Besides this, as Mr Sandars well remarks in one of his published letters, we have had plain and evident experience of foreign production under the working of the corn law of 1842. We had a fixed duty of 20s. per quarter in actual operation for four years; and in 1844 and 1845, such duty was paid, week after week, and in the latter year for six months consecutively, at a time when our general averages were only 46s. to 47s. a quarter. Was the foreigner at that time selling at a loss? His price, then, adapting itself to ours, was 26s. and 27s., deducting the duty, and at that time, be it remembered, he was unprepared for competition. So that, from experience not five years old, we may gather what kind of future competition awaits us, and also what we are annually sacrificing in revenue, by madly abandoning protection. Does any one believe that, in 1845, had there been no duty on foreign corn, wheat would have fallen to 26s., or the foreigner have sold his crop at that price? The remitted duty goes into the pocket of the foreigner, who is selling in the dearest market, and underselling our farmers, as he will be able to do – for he has tested that ability already – down to a point which must extinguish British agriculture. We know also from Mr Meek's report, quoted by Sir Robert Peel in 1842, that "the prices of corn in Denmark have, during the last twenty-five years, averaged, for wheat, 28s. 10d., rye, 19s. 9d., barley, 14s., and oats, 10s. 6d. per quarter," and it is obviously ridiculous to suppose that the cost of production in Poland is nearly so high as in Denmark and Schleswig-Holstein. Last year Denmark sent us upwards of a million quarters of grain. These are facts which have distinctly emerged, and they are all-important at the present time, when the tenantry are urged to expend further capital on the chance of future rise of prices. It is now perfectly clear that the returns, which were assumed as the basis for the great experiment, are worthy of no confidence. On the other hand, we do not wish that our opinions, which point to a totally different result, should influence any one in his future line of conduct; but, beyond our opinions, there are certain facts, which we have just stated, and the import of which cannot be misunderstood, and these may serve as warnings for the future. Of the capability of the foreigner to supply us with any given amount of grain, we think no reasonable man can doubt. There is a breadth of soil open sufficient to supply more than twenty times the most exorbitant demand. It is his power to undersell us, and the extent of that power, which have been questioned; and on the solution of that question depends the utility of high farming, in this country, on a grand and comprehensive scale. We shall show that, at present prices, high farming is so far from remunerative, that those who practise it are actually incurring an immense loss; and that, unless rents come down to zero, or at least to a point which would utterly ruin the landlords, high farming cannot be proceeded with. We have shown that, within the last five years, we have been supplied, and that regularly, from abroad, when wheat was at 46s. per quarter, and a duty of 20s. existed; and, at such rates, it is quite evident that all attempt at competition would be hopeless. Wheat could not be grown remuneratively at 26s. or 27s. in England before a single shilling of the national debt was incurred; and no man is mad enough to insist upon its possibility now. When, therefore, the Free-traders tell us that the present is a mere temporary depreciation, we ask them – and we demand a distinct reply – for an explanation of the imports in 1845. How was it that, for a long period, foreign corn came in plentifully, paying the duty of 20s., when our home averages were at 46s. and 47s.? Can they assign any special reason for it? If not, the conclusion is plain, that the foreign growers can and will undersell us down to that point, if we possibly could compete with them so far, and all the while add to their profit, while they also abstract from our revenue.
Our belief, as we have said already, is, that the foreigner could afford to go much lower, and that he could furnish us with wheat at little more than 18s. We have stated above an instance of this kind, and, if necessary, we could furnish more. Nor will the statement appear exaggerated to those who will take the trouble of comparing English prices and English burdens, as they existed before the Revolution of 1688, with the prices and rates of the great corn-growing countries of central Europe at the present moment, making due allowance for climate and the difference of social institutions. At the same time, let it be understood that we do not aver, that all the foreign grain which way find its way here can be grown at such low prices. Pomeranian and Bohemian wheat is more expensive in culture than that of Poland; and we know that there is some difference between Hamburg and Dantzic prices. Still our conviction is most decided, that henceforward the foreigner has the game entirely in his hands; that he may prescribe what price he pleases to this country; and that every year, in spite of all efforts, all home harvests, all variety of seasons, prices must inevitably decline. If it were possible that, by high farming, or any other means, we could produce wheat remuneratively at 30s., or 25s., the foreigner would be ready to sell in competition at 25s. or 18s., even supposing he received hardly any profit. His business is to get hold of the British market, and that once accomplished, he may elevate or depress prices as he pleases. The declension will be gradual, but it will be perfectly steady. This year wheat has been brought down to 40s., not in consequence of an exuberant harvest, as in 1835, but through competition. A million of quarters per month have been poured in to sink prices, and we are now debating at home whether British agriculture can go on under such circumstances. Tenants are mourning over their losses; labourers are feeling the pinch of lowered wages; some landlords, in apprehension of diminished rents, are exhorting to further outlay of capital; statesmen are consulting with chemists; and agitators, who have made all the ruin, are shouting for financial reductions. In the mean time, the winter is crawling on apace. The price of grain in Britain has been beat down by competition with a poor foreign crop, for such unquestionably was the yield of 1848. That of 1849 was a splendid one, and, the moment the ports are opened in spring, its influence will be felt. The question will not then be of 40s, but of a price still lower; and we apprehend that, in that event, the argument will be nearly closed. We do not, however, anticipate that the reduction will be rapid. The dealers at the different foreign ports will best consult their own interest by keeping, as nearly as possible, just below the quotations current in the British market. In this way large profits will be secured during the whole maintenance of the struggle, which must end by the British farmer, overloaded with rent, taxes, and public burdens, giving way to his competitors, who, with no such impediments, and with a better climate and richer soil, will monopolise his proper function. We shall then experience in corn, what our West Indian colonists, under the same kind of legislation, have experienced in sugar. The greater part of the soil of Britain will be diverted from cereal growth; and, as the earth does not yield her produce without long wooing, we shall be at the mercy of the foreigner for our supplies of food, at any rates which he may choose to impose.
As to the matter of freights, about which so much was at one time said and written, we need not complicate the question by entering into minute details. From information upon which we can rely, we learn that, at this moment, steamers are constructing for the sole purpose of effecting rapid and continual transit between foreign and British ports, for the conveyance of grain – a circumstance which speaks volumes as to the anticipations of the Continental traders. We may also observe that ordinary freights form no bar to importation, since they are now hardly greater from the Baltic to this country than from Ross-shire to Leith, or from many parts of England to London. One fact, communicated by a correspondent connected with the shipping trade, has peculiarly impressed us. We give it in his own words: "I enclose you a price-current, which will give you the prices of all grain. Grain from America has lately come home, both in American and British ships, at 4d. per bushel freight, and flour at 6d. per barrel – but much more frequently shipped on the condition that, if it leaves a profit, the one half goes to the shipper, and the other half to the owner of the ship for freight." He adds, "The freights from Quebec and Montreal are higher – say 2s. 6d. or 3s. for flour; but as British shipping ceases being protected after 1st January, they will be equally low there." So much for pulling down one interest by way of compensation to another!
The reader – or rather the critical economist – may treat the foregoing remarks as speculative or not, according to the colour of his opinions. All the discussion upon free-trade has been speculative, and so was the legislation also. We take credit for having anticipated what we now see realised; but beyond that, and beyond the facts which the experience of former years has given us, and which we have just laid before our readers, we are, as a matter of course, open to objection, and also liable to error. We have not been arguing, however, without sound data – such as, we suspect, never were brought fully under the eye of our statesmen – and they all tend manifestly and clearly to the same conclusion. That conclusion is, that, without the reimposition of a protective duty, prices cannot rise above the present level. Our argument goes further; for we hold it to be clear that, without some extraordinary combination of circumstances which we cannot conceive, prices must decline, and decline greatly. We look for nothing else; but having had our say as to the future, and pointed out the prospect before us, we shall now confine ourselves to present circumstances, and endeavour to ascertain whether, with a continuance of present prices, and under existing burdens, agriculture can be carried on in Britain at a reasonable profit to the farmer.
Mr Caird's pamphlet, though it has attracted a good deal of attention, contains no hints or information which are new to the practical farmer. Its high-sounding title would lead us to suppose that he had discovered some improved system of agriculture, which might be applicable throughout the kingdom. We read the pamphlet; and we find that it contains nothing beyond the description of a very low-rented and peculiarly-situated farm, the occupant of which appears to have realised considerable profits from an extensive cultivation of the potato. It is not necessary that we should do more than allude to the general tone of the pamphlet, which seems to us rather more arrogant than the occasion demanded. Mr Caird, we doubt not, is a good practical farmer; but we should very much have preferred a distinct and detailed statement of his own experiences at Baldoon, to an incomplete and unattested account of his neighbour's doings at Auchness. A man is fairly entitled to lecture to his class when he can show that, in his own person, he is a thorough master of his subject. A farmer who has devised improvements, tested them, and found them to answer his expectations, and to repay him, has a right to take high ground, and to twit his brother tenants with their want of skill or energy. But Mr Caird is not in this position. He is occupier of a farm of considerable extent, but he does not venture to give us the results of his own experience. It is possible that he may himself pursue the system which he advocates, but he does not tell us so; he points to Mr M'Culloch as the model. This is at best but secondary evidence; howbeit we shall take it as it comes; and as this is strictly a farmer's question, it may be best to allow one practical agriculturist to reply to the views of another. We might, indeed, have abstained altogether from doing so, for Mr Monro of Allan, in a very able pamphlet, entitled Landlords' Rents and Tenants' Profits, has distinctly and unanswerably exposed the fallacies of Mr Caird. Still, lest it should be said that we are disposed to reject, too lightly, any evidence which has been adduced on the opposite side, we have requested Mr Stephens, author of The Book of the Farm, to favour us with his views as to Auchness cultivation. We subjoin them, for the benefit of all concerned.
"On perusing Mr Caird's pamphlet, every practical man must be struck with astonishment at the inordinate quantity of potatoes cultivated at Auchness.
"The entire thirty acres of dried moss, (p. 7,) and twenty-five acres of lea, (p. 15,) were in potatoes in 1848; and the county Down farmer, whose statement is reprinted at the close of Lord Kinnaird's pamphlet, reports that the number of acres occupied by potatoes in 1849 was ninety. This is more than one-third of the whole area of the land. I have considered attentively the calculation made by the farmer; and I think that, in order to meet present prices, it should be modified as below. You will also observe that, in my opinion, the outlay on the farm has been too highly estimated.21
"This balance sheet shows a profit of £931; but as the potatoes are worth £1350, which is no less than £419 more than all the profit, it is evident that it is the potato alone that affords any profit under this instance of high farming. Indeed Mr Caird admits as much when he says, 'The great value of a sound potato crop induces the tenant to adopt such means as will not interfere with the continued cultivation of this root.' The admission is, that the profit rests entirely on the precarious potato. The potato has hitherto been safe in the moss of Auchness, and it is safe there in no other class of soil. In Ireland, even the moss does not save it. There is no high farming in the matter, in so far as manures are concerned, for as much and richer manure is used in the neighbourhood of large towns; and as on the moss at Auchness too much manure may be applied, at least after a certain time, so there may be on other soils; and thus high farming, in reference to soils, just means heavy manuring. Mr Caird says, 'The potato has been grown on the moss land successively, year after year; but the entire reclaimed portions, from being so frequently manured, are becoming too rich, and the crop beginning to show signs of disease, and a tendency to grow to tops rather than roots, which makes it necessary to adopt some plan of reducing its fertility.' It is known to every farmer, that it is quite possible to overmanure any crop, and the effects of overmanuring are, the breaking down of the straw of the grain crops, and the hollowing of the core of the tubers and bulbs of the green crops. The inference then is, that a profit which depends entirely on potatoes is uncertain in any year; and the particular case of Auchness, in which that profit is derived from moss, is not generally applicable to the country, and cannot, therefore, be held up as an example to farmers.