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CHAPTER V.

POLITICAL ECONOMY.

State of the different Branches of National Industry-First Debate on the Subject-Mr Baring's Motion relative to the Currency-Mr Gooch's Motion relative to Agricultural Distress-The Timber Trade-Mr Wallace's Plan for a New Code of Navigation Laws.

THE Condition of the country, in respect to the various branches of national industry, was still deeply mark ed by distress. Manufactures had, indeed, experienced such a measure of improvement, that labourers, in all their different branches, found now employment, though at wages very barely sufficient to afford the necessaries of life, while the profits of their employers were, if possible, still more scanty. The extreme cheapness of provisions, however, disastrous as it was to agriculture, afforded to the other classes the means of support upon even a slender income. It was upon the landed interest, therefore, that the weight of public distress now peculiarly fell; and petitions for relief were poured in without number from this respectable and influential class of the community. They were not willing to admit, yet were scarcely able to deny, that everything had already been done for them which the circumstances of society admitted of; and that neither ministers nor the country were prepared to grant any more extensive monopoly than they now enjoyed.

The subject of national distress was

first discussed at length, on occasion of a petition presented by Mr Dugdale, on the 9th February, from the merchants, inhabitants, and tradesmen of the town of Birmingham. The petitioners represented, that the present state of their trade, and consequently of those numerous classes who were dependant upon it, was deplorable. In order to get more accurate information as to the state of Birmingham in this respect, a committee was appointed by the petitioners some time back to inquire into the consumption of meat, beer, and other necessaries, in the town, as compared with the year 1818; and the result was, that a most material diminution of the consumption of such articles was found to have taken place, and this, it was unnecessary to add, had existed principally among the lower classes. Though there was some improvement in some articles, yet that, in the main branches of the trade, there had been a diminution of 25 per cent; the consequence was, that the capitalists were withdrawing their capital in the trade, and the workmen, in most instances, got employment only for three or four days in the week.

The

depression, he feared, arose more from general than local causes.

Mr Lawley seconded the motion. He had heard with pleasure, and was not disposed to contradict, the statement of ministers, as to the improvements in many parts of our trade; but, if he were to rest his opinion upon what he knew of the state of the trade of Birmingham, it was not such as would bear out those statements which had given him so much satisfaction.

Mr Littleton observed, that if similar inquiries to those made in Birmingham had been instituted in the southwest of the county of Stafford, the same results would have been found. He believed, though the petitioners only hinted at it, that if a committee should be appointed, it would be found that a great part of the distress complained of, would be found to have resulted from what had been, he would admit, very properly done by his Majesty's government with respect to the metallic currency. The petitioners did not attribute their distress to the cessation of the war; but, though unwilling to dissent from so respectable a body, when he considered the very great extent to which the trade, in articles of military furniture, had been carried on in Birmingham, the great quantity of swords, guns, stirrups, and other such articles, which were constantly in demand; when he considered the large armaments which were fitted out in every part of Europe, and the liberal assistance which was given by this country; when he consider. ed the great bodies of militia which were kept up for so long a time, and when he recollected the increased demand which those circumstances must have created for articles in the Birmingham trade, he could not but conclude that it would require many years to fill up the chasm caused by the cessa tion of such a demand. The dulness of the iron trade appeared also in a great measure owing to the depression of

agriculture. He considered it, therefore, of importance that something should be done to assist the agricul turists, as that would, no doubt, effect a material improvement in the business. of the manufacturers. Any improvement of the agricultural interest, however small, would be most important; and he sincerely hoped that the serious attention of government would be turned to it. He thought that some relief might be afforded by a revision of our system of taxation.

Mr Curwen considered the depression of so important a branch as the iron trade as a clear proof of the general distress of the country. Some kind of cheering hope had been held out, when it was stated that an improvement had taken place in some branches; but he would ask, was this of such a nature as to encourage a hope that a favourable change was about to take place in the state of the country? He believed not; and if his Majesty's ministers should consent to inquiry into the subject, he thought it would be found that there was more ground for alarm than for hope. It was believed that the increase in our cotton manufactures was a proof of this growing improvement. If, however, that were to be looked upon as an improvement, the workmen would, as on other occasions, have turned round and demanded an increase of wages; but surely that had not been the case. He looked upon that increase as the result of a speculation from which no general benefit to the country would be derived. It was his fear that government had not taken the pains to make themselves acquainted with the real state of the country. It had been said elsewhere, that 16,000,000l. of taxes had been remitted since the peace; but the fund from which these could have been paid had been reduced much more than in proportion. He had no expectation of benefit from return to a system of restriction upon cash payments. The

remedy which he thought would be an effectual one was this, a decrease of the interest to the fundholder. He said this was the only remedy, and the present was the time when the question could be fairly met. His own situation as an agriculturist was this:-He had been for a long series of years engaged in agricultural pursuits, and he thought he might say of himself, that he had never been considered a hard landlord; but, notwithstanding, he had almost all his farm-lands offered to be given up to him. In the dreadful situation of the country, it was the duty of every member, independently of all party feelings, to support any member, and to co-operate in any measures, where any prospect of relief was presented. Some members were afraid of parliamentary reform-some of Catholic emancipation; he was afraid only of the period when the great majority of the people would have nothing to do, and therefore nothing to fear.

Mr F. Robinson was convinced, after the most deliberate consideration, that a repeal of the act for the resumption of cash payments would be highly inexpedient. The resource which had been alluded to by the honourable gentleman opposite, was one of fearful consideration. It might be palatable to many, but it would be pregnant with the utmost danger, forcibly, by an act of legislation, to reduce the rate of interest on the national debt. Such an expedient might give temporary relief, but it would create more evil than could be calculated. When they thought of its effects, not on the great fundholder, but on the small fundholder, who wrapped himself in perfect confidence, when he thought of the faith pledged for his income-when they thought of the infinite evils of breaking faith with the public creditor, they could not view such a project but with the utmost possible alarm. Great and pressing as the difficulties and dis

tresses of the country were, he did hope that the House would not be hurried into rash measures that might produce incalculable and irreparable mischief.

Mr Baring complained that the last speaker had evaded the main question, by confining his notice to one single proposition of Mr Curwen. Upon that subject, indeed, he agreed with him, (Mr Robinson.) He could see no honesty or honour in a measure that would-notwithstanding the great war carried on for so many years-notwithstanding the exertions made during the war-and notwithstanding that the country had been relieved from taxation during the war by borrowingpoint out a fraud on the public creditor as the means of relief.-Mr Curwen having interposed, and said that he proposed such a measure only under the impossibility of doing otherwise, Mr Baring declared, he knew no other inability to prevent keeping faith with the creditor but the debtor having paid all he had. At the same time, Mr B. considered the petition as applicable to the general state of the country. It was singular, that we were now in our sixth year of peace, without one of the great interests of the nation being in a settled state, and without anything like prosperity, except in the speech from the throne. How was it that things were in this state in the sixth year of peace? The effects of the transition from war to peace had subsided; yet every branch of trade, and manufacture, and agriculture, was carried on at a loss, and none could tell where this state of things would end. A very considerable part of the distress, he was convinced, arose from the nature of the currency. He did not mean to say, that we ought therefore to return to an unlimited paper currency; he only wished to call attention to the danger of a departure from a proper standard. That departure had undoubtedly produced extravagance in the public expenditure for

which we were now suffering so severely, and increased the public debt to an amount so enormous, as to make a return to the right standard extremely difficult. Yet he was of opinion that the produce of the soil was not of much less value now, when the quarter of wheat was sold for sixty shillings, than it had been when the price was eighty. It was less relatively to nominal pounds sterling; but a quarter of corn would now buy as much cloth, or as much iron, as when it sold for eighty shillings. If they supposed a man to have had no debt, and to have now an income of 60l. instead of 80%., he was in the same relative situation. But unfortunately many farmers who have but small sums of capital, had been induced, by the rise in the prices of corn, to take farms under mortgages for a large portion of the price. In consequence of having thus tampered with the currency, many honest farmers had not only lost all their property, but were themselves in jail. The Chancellor of the Exchequer seemed to be very much puzzled to reconcile the diminution of revenue with the increased consumption of exciseable articles. For his part, he saw no difficulty at all in this apparent contradiction. The fundholder, and all who had fixed incomes, found that every 100%. would now go as far as 1501. formerly. He thought, therefore, that the increased consumption of exciseable articles was entirely on the part of those who had fixed incomes. He meant not to cast any odium on particular classes as drones in society; he would only illustrate his argument :-The enjoyment of the drone in society had increased, while everything connected with agriculture and commerce was diminished in value. He would now very shortly advert to the measures which he should be disposed to recommend in a committee. He would willingly give all that permanency to the currency as now esta

blished, or in a course of being established, which was requisite to the security of the public creditor. It might hereafter be shewn, however, that perhaps, by the present system, the cord had been stretched a little too tight. It might even be shewn that the 17. sterling was now a little above its nominal or ordinary value. This was manifest from the rise in the foreign exchanges; and he himself could entertain no doubt, as he said before, that the cord was a little too tight, and the obligations of the bank rather too peremptory. When he said this, he hoped he should not be misunderstood, or supposed to be advising, with justice in his mouth, an act of injustice. If what he recommended could be shewn to be unjust, he should be one of the last men to press it upon the House; but his persuasion was, that by perpetuating the system of the honourable member, (Mr Ricardo), with a temporary relaxation, the present difficulty might be materially lessened; and that

another obvious means of relief and increased facility would be, to enable the Bank to pay its notes either in silver or gold, at its own option.

After a few words from Mr Western, vehemently calling for relief to the agriculturists, Mr Ricardo rose, and expressed his dissent from Mr Baring's opinion, that the fall of prices was general, and that the cause arose from changes in the currency. He believed that the fall in corn had been severe beyond measure, whilst there had been no fall with regard to many other articles, or at any rate, no fall in the least degree similar, or that could be readily traced to a similar cause. If the prices of bullion were referred to at former periods, it would be seen that the price of corn had altered to the amount of 25 per cent. He was surprised to find his honourable friend making a statement, from which, if correct, it must be inferred that the

distresses began at the moment when the last change in the currency took place. Now, if he looked back to the price of bullion in the flourishing year of 1818, and compared it with the present price, it would be seen that the difference did not exceed 6 or 7 per cent. To this extent other prices might have since been affected, and he had no doubt, though without the means of ascertaining the fact, that there had been a considerable reduction of prices in other countries. Wine had fallen here, and so had cotton goods, but he believed that fall was not more than equal to that which had occurred in most parts of Europe. In the year 1816 the price of gold was at 41. an ounce. In the following year it was 47. and 6d. In the year 1818 bullion still did not rise above 47. 2s. and 4l. 3s., and in the year 1819, when the plan which he had the honour to recommend was adopted by the House, it was at 41.1s. The question then before the House was, whether it was advisable to return to the old standard, or to take the existing market rate, which was then about 4 per cent. above that standard, as the measure of value in future; but his honourable friend had argued on this subject as if bullion had been at that time, as it formerly was, at 51. or 5l. 10s. an ounce. If, instead of being at 41. 1s., bullion had been much higher, he should not have proposed a recurrence to the mint standard. What he was anxious about was, not to restore the old, but to establish a fixed standard; for, however desirable it might be to a body of merchants or bankers to possess the power of raising or lowering a fourth or fifth the value of the currency, and to make 31. 17s. 10 d. at one time, equivalent to 51. at another, it was a power destructive of every engagement, and finally ruinous to every interest. With regard to the depression of agriculture, he believed it was a good deal owing

to the laws which were enacted for the purpose of protecting it. It was cer tainly desirable that those engaged in the production of corn should have a vent when an excess of supply existed. When two or three good harvests followed in succession, we might, if prices were at all on a level with those on the continent, export it after a fall of three or four shillings a quarter; but at present there must be a destructive fall before it could be sent abroad. Neither could he agree to the plan of allowing payments to be made in two metals, either in gold or silver. This appeared to him to be a complete departure from the true and sound principles of currency. No currency could be of the same value perpetually, any more than other articles could always retain the same price. Gold bullion, however, was the commodity which varied the least; and if a contract was made to pay 100%. at a future period, the contract would be most faithfully performed by the payment of that sum in gold; but it might suit the purpose of the debtor to pay it in silver, whilst, by so doing, the creditor would sustain a loss. The two metals seldom maintained the same proportion to each other long. The price of the one might rise, while that of the other fell. So the Bank, being now under an obligation to pay 60 ounces of gold, would enable a person who received it to propose more, or a greater nominal amount of commodities, than he would if he paid in silver. The relative value of the two metals had varied since the act of Parliament; but what was the cause of that variation?-It was this :-the Bank, being a timid body, seldom clinging to the true principles of circulation, had taken alarm, and had made great and unnecessary purchases of gold, although they found, by experience, that no person applied to them for any.

Mr Baring defended his views, ex

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