To stimulate the production of labour by the increase of the

circulating medium, the fruits of which must be wrested away by an

inevitable contraction, is a policy whose glory is not to be

coveted; and surely no statesman will be found to adventure it till

the last tradition of the consequent woes of our working-classes

shall have died away. By that time, it is probable that the danger

of such recurrence will be obviated by the adoption of some

principle of security, which will give society the advantage of a

free trade in money. It must be long before this can take place; for

it must be long before the values of commodities are allowed to

adjust themselves; and money must, from its importance, be very

cautiously and gradually committed to the equalizing influences of

the natural laws of demand. But, however long it may be, the woes of

past convulsions will not till then be forgotten. That the time of

arbitrary interference will, however, cease, can scarcely be

doubted, if the following be true principles.

In exchanging commodities for one another directly, that is, in the

way of barter, much time is lost, and trouble incurred, before the

respective wants of the exchanging parties can be supplied.

This trouble and waste may be avoided by the adoption of a medium of

exchange,—that is, a commodity generally agreed upon, which, in

order to effect an exchange between two other commodities, is first

received in exchange for the one, and then given in exchange for the

other.

This commodity is Money.

The great requisites in a medium of exchange are, that it should be—

What all sellers are willing to receive;—

Capable of division into convenient portions;—

Portable, from including great value in small bulk;—

Indestructible, and little liable to fluctuations of value.

Gold and silver unite these requisites in an unequalled degree, and

have also the desirable quality of beauty; gold and silver have

therefore formed the principal medium of exchange hitherto adopted;

usually prepared, by an appointed authority, in the form most

suitable for the purposes of exchange, in order to avoid the

inconveniences of ascertaining the value of the medium on every

occasion of purchase.

Where the supply of money is left unrestricted, its exchangeable

value will be ultimately determined, like that of all other

commodities, by the cost of production.

Where the supply is restricted, its exchangeable value depends on

the proportion of the demand to the supply.

In the former case, it retains its character of a commodity, serving

as a standard of value in preference to other commodities only in

virtue of its superior natural requisites to that object.

In the latter case, it ceases to be a commodity, and becomes a mere

ticket of transference, or arbitrary sign of value; and then the

natural requisites above described become of comparatively little

importance.

The quality by which money passes from hand to hand with little

injury enables it to compensate inequalities of supply by the

slackened or accelerated speed of its circulation.

The rate of circulation serves as an index of the state of supply,

and therefore tends, where no restriction exists, to an adjustment

of the supply to the demand.

Where restriction exists, the rate of circulation indicates the

degree of derangement introduced among the elements of exchangeable

value, but has no permanent influence in its rectification.

--------------

In proportion as the processes of exchange become extensive and

complicated, all practicable economy of time, trouble, and expense,

in the use of a circulating medium, becomes desirable.

Such economy is accomplished by making acknowledgment of debt

circulate in place of the actual payment,—that is, substituting

credit, as represented by bank paper, for gold money.

The adoption of paper money saves time, by making the largest sums

as easily payable as the smallest.

It saves trouble, by being more easily transferable than metal

money.

It saves expense, by its production being less costly than that of

metal money, and by its setting free a quantity of gold to be used

in other articles of production.

A further advantage of paper money is, that its destruction causes

no diminution of real wealth, like the destruction of gold and

silver coin; the one being only a representative of value, the other

also a commodity.

The remaining requisites of a medium of exchange—viz., that it

should be what all sellers are willing to receive, and little liable

to fluctuations of value, are not inherent in paper as they are in

metallic money.

But they may be obtained by rendering paper money convertible into

metallic money, by limiting in other ways the quantity issued, and

by guarding against forgery.

Great evils, in the midst of many advantages, have arisen out of the

use of paper money, from the neglect of measures of security, or

from the adoption of such as have proved false. Issues of

inconvertible paper money have been allowed to a large extent,

unguarded by any restrictions as to the quantity issued.

As the issuing of paper money is a profitable business, the issue

naturally became excessive when the check of convertibility was

removed, while banking credit was not backed by sufficient security.

The immediate consequences of a superabundance of money are, a rise

of prices, an alteration in the conditions of contracts, and a

consequent injury to commercial credit.

Its ulterior consequences are, a still stronger shock to commercial

credit, the extensive ruin of individuals, and an excessive

contraction of the currency, yet more injurious than its excessive

expansion.

These evils arise from buyers and sellers bearing an unequal

relation to the quantity of money in the market.

If all sold as much as they bought, and no more, and if the prices

of all commodities rose and fell in exact proportion, all exchanges

would be affected alike by the increase or diminution of the supply

of money. But this is an impossible case; and therefore any action

on the currency involves injury to some, while it affords advantage

to others.

A sudden or excessive contraction of the currency produces some

effects exactly the reverse of the effects of a sudden or excessive

expansion. It lowers prices and vitiates contracts, to the loss of

the opposite contracting party.

But the infliction of reverse evils does not compensate for the

former infliction. A second action on the currency, though

unavoidably following the first, is not a reparation, but a new

misfortune.

Because the parties who are now enriched are seldom the same that

were impoverished by a former change, and _vice versâ_; while all

suffer from the injury to commercial credit which follows upon every

arbitrary change.

All the evils which have arisen from acting arbitrarily upon the

currency prove that no such arbitrary action can repair past

injuries; while it must inevitably produce further mischief.

They do not prove that liability to fluctuation is an inherent

quality of paper money, and that a metallic currency is therefore

the best circulating medium.

They do prove that commercial prosperity depends on the natural laws

of demand and supply being allowed to work freely in relation to the

circulating medium.

The means of securing their full operation remain to be decided upon

and tried.

--------------

Nations exchange commodities as individuals do, for mutual

accommodation, each imparting of its superfluity to obtain that in

which it is deficient.

The imparting is therefore only a means of obtaining: exportation is

the means of obtaining importation—the end for which the traffic is

instituted.

The importation of money into a country where money is deficient is

desirable on the same principle which renders desirable the supply

of any deficient commodity.

The importation of money into a country where money is not deficient

is no more desirable than it is to create an excess of any other

commodity.

That money is the commodity most generally bought and sold is no

reason for its being a more desirable article of importation than

commodities which are as much wanted in the country which imports

it.

That money is the commodity most generally bought and sold is a

reason for its being the commodity fixed upon for measuring the

relative amounts of other articles of national interchange.

Money bearing different denominations in the different trading

countries, a computation of the relative values of these

denominations was made in the infancy of commerce, and the result

expressed in terms which are retained through all changes in the

value of these denominations.

The term by which, in each country, the original equal proportion

was expressed is adopted as the fixed point of measurement, called

the par of exchange; and any variation in the relative amount of the

total money debts of trading nations is called a variation from par.

This variation is of two kinds—nominal and real.

The nominal variation from par is caused by an alteration in the

value of the currency of any country, which, of course, destroys the

relative proportion of its denominations to the denominations of the

currency of other countries; but it does not affect the amount of

commodities exchanged.

The real variation from par takes place when any two countries

import respectively more money and less of other commodities, or

less money and more of other commodities.

This kind of variation is sure to correct itself, since the country

which receives the larger proportion of money will return it for

other commodities when it becomes a superfluity; and the country

which receives the smaller proportion of money will gladly import

more as it becomes deficient.

The real variation from par can never, therefore, exceed a certain

limit.

This limit is determined by the cost of substituting for each other

metal money and one of its representatives—viz., that species of

paper currency which is called Bills of Exchange.

When this representative becomes scarce in proportion to

commodities, and thereby mounts up to a higher value than the

represented metal money, with the cost of transmission added, metal

money is transmitted as a substitute for bills of exchange, and the

course of exchange is reversed, and restored to par.

Even the range of variation above described is much contracted by

the operations of dealers in bills of exchange, who equalize their

value by transmitting those of all countries from places where they

are abundant to places where they are scarce.

A self-balancing power being thus inherent in the entire system of

commercial exchange, all apprehensions about the results of its

unimpeded operation are absurd.

--------------

The crying philosophers of all times have mourned over the

pertinacity of men and of nations in clinging to errors through all

the sufferings thence arising; the suffering being ascribed to

"fate, or Providence, or something,"—to any thing rather than to

their favourite errors. The laughing philosophers cannot deny this;

but, looking farther, they see that, error by error being exploded

at length, there is no return to that which is clearly seen to be

the cause of suffering,—unless such an experimental brief return as

can only serve to confirm the truth. Commerce has now been

instituted for a longer succession of ages than we have any distinct

knowledge of;—ever since the first root-digger exchanged his

vegetable food for the game of the first sportsman. From that time

till now, an error has subsisted among all classes of exchangers

which has caused enough of privation, of ill-will, of oppression and

fraud, of war, pestilence and famine, to justify the tears of a long

train of crying philosophers. But the error has been detected.

Philosophers have laid their finger upon it; the press has denounced

it; senates are preparing to excommunicate it; and its doom is

sealed. This error is,—that commerce is directly productive. Hence

arises the belief, that if one party gains by commerce, another must

lose; and hence have arisen the efforts of clansmen to confine their

exchanges within their own clan; of villagers within their own

village; of citizens within their own state; of a nation within its

own empire. Hence it arises that the inhabitants of one district

have been afraid to enjoy the productions of any other district, and

that they have been doomed by their rulers to pine and die in

occasional dearth, and to quarrel with occasional superabundance

when they might have had plenty in the one case, and an influx of

new enjoyments in the other. Hence have arisen some of the most

humbling scenes of human vice which have disgraced the species.

The atrocious practice of wrecking was formerly pursued, not only as

a method of robbery, but as a means of impairing the commercial

resources of foreigners. There was connivance at pilots who ran a

rich vessel upon rocks; and protection for the country people who

gave their exertions to destroy instead of to save. If the cargo

went to the bottom, something was supposed to be gained to the

country, though those who looked upon the disaster were disappointed

of their plunder. Next came the ridiculous and cruel practice of

making aliens engaged in commerce answerable for the debts and

offences of each other; and as a kind of set-off against the

advantages which they were supposed to take from the people among

whom they lived, they were compelled to pay much heavier duties than

natives for all articles of import and export.

The necessity thus arose for commercial treaties which should ensure

the safety and proper treatment of commercial agents when any two

powers agreed to exchange good offices. Edward II. made an agreement

with Venice that its merchants and mariners should be permitted,

_for ten years_, to come and go, and sell their merchandise in

security, without having either their persons or goods stopped on

account of other people’s crimes or debts. From the time of such

partial relaxation,—such narrow openings to a foreign trade,—the

wants of the multitude of each civilized people have forced one

after another of the barriers raised by national jealousy, while all

parties remained under the influence of the error that commerce is

directly productive, and of course an advantage to be denied to

enemies, except when a very hard bargain can be driven with them.

Perhaps the most curious specimens in existence of attempts at

mutual overreaching, of laborious arrangement to secure what must

naturally happen, and of an expensive and tyrannical apparatus for

achieving what is impossible, may be found in the commercial

treaties from the infancy of commerce till now. The only idea which

never seems to have struck the negotiators is, that commerce is

valuable,—not because production takes place in the mere exchange of

commodities,—but because systematic exchange facilitates the most

extensive division of labour and the closest economy of capital,—

advantages which must be shared by both if experienced by either of

the exchanging parties. On the same principle that the shoemaker

makes no hats, and the hatter no shoes, and that both find an

advantage in supplying each other, without any new product arising

from the mere act of exchange, the growers of tea and the makers of

hardware respectively profit by supplying each other; and they can

afford to employ an intermediate class, the merchants,—to conduct

their traffic, since they can go on preparing their tea and grinding

their cutlery, while the process of exchange is being transacted.

The saving of capital is mutual also. It must be mutual and

incalculable as long as the regions of the earth differ in their

productions, yielding a superabundance in one place of some

necessary or comfort which is rare in another. No commercial treaty

bears the least reference to the obvious final purpose of all

commerce;—that the greatest number shall obtain the largest amount

of enjoyment at the least cost. Such a recognition of the ultimate

principle would, indeed, be inconsistent with the very existence of

commercial treaties, except as far as they relate to the personal

protection of traders. But, while the people of each country have

shown the most decided inclination to obtain more and more of what

they cannot produce at home, the aim of governments, and generally

of merchants, has been to sell as much as possible to other nations;

to take from them as little as possible but money; and to get the

greatest possible quantity of that. In furtherance of this view,

money has been taken from the people at large, and given to their

merchants to tempt them to go and sell at a loss, rather than not

get hold of foreign money; and again, money has been exacted from

foreigners who come to sell their goods in our ports. Nothing is

gained by this to the nation, as the foreigners must be repaid these

duties as well as the cost of their articles; and it is clear to

every observer how much is lost to all the parties concerned. Yet

such is the false principle on which commercial treaties have

hitherto been founded. This child’s-play of universal circumvention

is pursued less vigorously than it was; and some of the players are

so tired of the wasteful and wearying sport as to be ready to give

it up: but, owing to the false belief that no one could yield

without the rest, the absurdity has endured longer than might have

been expected.

It was not perceived, till lately, that it is a good thing to any

nation, as it would be to any man, to get what it wants, even if it

be compelled to pay in money when it had rather pay in goods:

especially when it is certain, from the ascertained self-balancing

quality of money, that it will soon flow in from some other quarter

in exchange for the goods wanted to be sold. When so plain a truth

as this is once experienced, it cannot but spread; and fewer

examples will be henceforth seen of nations keeping themselves poor,

lest their neighbouring customers should grow rich. How rapidly such

truth runs, when once sent off on its career, may be seen from the

following facts: it being borne in mind that nations are educated by

the experience of centuries, as men are of years.

In 1703, a commercial treaty was concluded between Great Britain and

Portugal, which was for many years lauded by the British as being in

the highest degree favourable to the interests of her manufacturing

classes, at a very slight expense. Our woollens were then excluded

from Portugal. Mr. Methuen, who managed the treaty, obtained a free

admission for them, in return for a concession which was considered

a mere nothing in comparison with the advantage obtained. It was

merely promised that port-wine should be admitted into Great Britain

at one-third less duty than French wines. As for the woollens, their

admission into Portugal duty-free was a much greater advantage to

the Portuguese than to us. They obtained cheap an article which they

very much wanted, and which we were sure of selling in one quarter

or another, if we could produce it at such a cost as made its

production worth while. As for the wine,—the Portuguese and the

British have both been suffering ever since for the arbitrary

preference given to that of Portugal over that of France. Portugal

has, and has always had, too little capital for the capabilities of

the country and the wants of the people. By the monopoly of the

British market being given to Portugal, too large a proportion of

its small capital has been devoted to the growth of wine, and the

whole country is in a more backward state than it would have been if

its capital had been allowed to find its own channels. We,

meanwhile, lost the French market for our woollens, brought upon

ourselves retaliatory restrictions on other articles, and were

compelled to drink inferior wine at a greater cost than if the trade

had been left to itself. France grew more pettish; we grew

resentful, and raised the duties again, and again, and again.

Thousands, who had been fond of French wines, found that they could

afford the indulgence no longer, and took to port. Thousands more,

who had drunk port because they could not afford French wines, left

off drinking wine at all. In three years the revenue from the

wine-duties fell off by more than 350,000_l._, while the naturally

wine-drinking population was increasing. The richest of our

citizens, to whom the price of wine is not a very important

consideration, had their cause of complaint. Guernsey was all this

time receiving small quantities of wine, and sending out large

quantities. A prosperous manufacture of wines was carried on there;

and no gentleman could tell how much sloe-juice, apple-juice, and

brandy he might be drinking under the name of wine. There is no good

reason why a day-labourer should not drink French wines at his

dinner instead of beer, if they are equally cheap; and no one knows

how cheap they might have been by this time, if they had been

allowed their fair chance; and the cheaper, and therefore the more

abundant, those wines, the larger must be the quantity of our goods

taken by the French in exchange. As it is, the Portuguese have

profited where we meant they should not, and suffered where we meant

they should be permitted to profit. Our Government has suffered a

diminution of revenue; our rich men have drunk adulterated wines;

our middling classes have been obliged to put up with dear port-wine

or none; our working classes have been debarred from having wine at

all, and have been shut out for more than a hundred years from one

of the largest markets where their labour might have found its

recompense.

Such are some of the consequences of the famous Methuen treaty,

which was, for a considerable length of years, extolled as a model

of commercial negotiation. These consequences, and others which

followed similar blunders, wrought at length their natural effect

upon the minds of those primarily interested in the principles and

methods of commercial policy. On the 8th of May, 1820, the following

petition from the merchants of London was presented to the House of

Commons. It was signed by all the principal merchants of London;—a

class whose opinions on this question could not but be respectfully

regarded, if they had been announced with less dignity and precision

than we find in this memorable address. The time may and will come

when its propositions will be regarded as a set of truisms scarcely

worthy of announcement under such circumstances of formality; but it

should in fairness be remembered in those days that it was drawn up

at the very period when silk and tobacco were being smuggled into

hundreds of creeks along our shores; when bread and wine were taxed

for purposes of unjust protection at home, and wicked oppression

abroad; and when our houses and ships were being built of bad wood

at a higher cost than need have been paid for the best, in order to

favour a colony which, after all, would flourish much more through

our prosperity than at our expense. No change of times and

convictions can impair the honour due to those who concurred in the

following petition:—

"To the Honourable the Commons, &c., the Petition of the Merchants

of the City of London.

"Sheweth,

"That foreign commerce is eminently conducive to the wealth and

prosperity of a country, by enabling it to import the commodities

for the production of which the soil, climate, capital, and industry

of other countries are best calculated, and to export, in payment,

those articles for which its own situation is better adapted.

"That freedom from restraint is calculated to give the utmost

extension to foreign trade, and the best direction to the capital

and industry of the country.

"That the maxim of buying in the cheapest market, and selling in the

dearest, which regulates every merchant in his individual dealings,

is strictly applicable, as the best rule for the trade of the whole

nation.

"That a policy founded on these principles would render the commerce

of the world an interchange of mutual advantages, and diffuse an

increase of wealth and enjoyments among the inhabitants of each

state.

"That, unfortunately, a policy the very reverse of this has been and

is more or less adopted and acted upon by the government of this and

every other country; each trying to exclude the productions of other

countries, with the specious and well-meant design of encouraging

its own productions: thus inflicting on the bulk of its subjects,

who are consumers, the necessity of submitting to privations in the

quantity or quality of commodities; and thus rendering what ought to

be the source of mutual benefit and of harmony among states, a

constantly recurring occasion of jealousy and hostility.

"That the prevailing prejudices in favour of the protective or

restrictive system may be traced to the erroneous supposition that

every importation of foreign commodities occasions a diminution or

discouragement of our own productions to the same extent; whereas it

may be clearly shown, that, although the particular description of

production which could not stand against unrestrained foreign

competition would be discouraged, yet, as no importation could be

continued for any length of time without a corresponding

exportation, direct or indirect, there would be an encouragement for

the purpose of that exportation, of some other production to which

our situation might be better suited; thus affording at least an

equal, and probably a greater, and certainly a more beneficial,

employment to our own capital and labour.

"That of the numerous protective and prohibitory duties of our

commercial code, it may be proved that, while all operate as a very

heavy tax on the community at large, very few are of any ultimate

benefit to the classes in whose favour they were originally

instituted, and none to the extent of the loss occasioned by them to

other classes.

"That among the other evils of the restrictive or protective system,

not the least is that the artificial protection of one branch of

industry or source of production against foreign competition, is set

up as a ground of claim by other branches for similar protection; so

that, if the reasoning upon which these restrictive or prohibitory

regulations are founded were followed out consistently, it would not

stop short of excluding us from all foreign commerce whatsoever. And

the same train of argument, which, with corresponding prohibitions

and protective duties, should exclude us from foreign trade, might

be brought forward to justify the re-enactment of restrictions upon

the interchange of productions (unconnected with public revenue)

among the kingdoms composing the union, or among the counties of the

same kingdom.

"That an investigation of the effects of the restrictive system at

this time is peculiarly called for, as it may, in the opinion of

your petitioners, lead to a strong presumption that the distress

which now so generally prevails is considerably aggravated by that

system; and that some relief may be obtained by the earliest

practicable removal of such of the restraints as may be shown to be

most injurious to the capital and industry of the community, and to

be attended with no compensating benefit to the public revenue.

"That a declaration against the anti-commercial principles of our

restrictive system is of the more importance at the present

juncture; inasmuch as, in several instances of recent occurrence,

the merchants and manufacturers of foreign countries have assailed

their respective governments with applications for further

protective or prohibitory duties and regulations, urging the example

and authority of this country, against which they are almost

exclusively directed, as a sanction for the policy of such measures.

And certainly, if the reasoning upon which our restrictions have

been defended is worth anything, it will apply in behalf of the

regulations of foreign states against us. They insist on our

superiority in capital and machinery, as we do upon their

comparative exemption from taxation; and with equal foundation.

"That nothing would tend more to counteract the commercial hostility

of foreign States, than the adoption of a more enlightened and more

conciliatory policy on the part of this country.

"That although, as a matter of mere diplomacy, it may sometimes

answer to hold the removal of particular prohibitions, or high

duties, as depending upon corresponding concessions by other states

in our favour, it does not follow that we should continue our

restrictions in cases where the desired concessions on their part

cannot be obtained. Our restrictions would not be the less

prejudicial to our own capital and industry, because other

governments persisted in preserving impolitic regulations.

"That, upon the whole, the most liberal would prove to be the most

politic course on such occasions.

"That, independent of the direct benefit to be derived by this

country on every occasion of such concession or relaxation, a great

incidental object would be gained, by the recognition of a sound

principle or standard, to which all subsequent arrangements might be

referred; and by the salutary influence which a promulgation of such

just views, by the legislature and by the nation at large, could not

fail to have on the policy of other states.

"That in thus declaring, as your petitioners do, their conviction of

the impolicy and injustice of the restrictive system, and in

desiring every practicable relaxation of it, they have in view only

such parts of it as are not connected, or are only subordinately so,

with the public revenue. As long as the necessity for the present

amount of revenue subsists, your petitioners cannot expect so

important a branch of it as the customs to be given up, nor to be

materially diminished, unless some substitute less objectionable be

suggested. But it is against every restrictive regulation of trade,

not essential to the revenue, against all duties merely protective

from foreign competition, and against the excess of such duties as

are partly for the purpose of revenue, and partly for that of

protection, that the prayer of the present petition is respectfully

submitted to the wisdom of parliament.

“May it therefore, &c.”

In order to see how extensively and how effectually governments have

interfered to pervert the natural distribution of the gifts of

Providence, it would be necessary to review almost the whole list of

spontaneous and artificial productions; for there are few or none

whose spread has not been arbitrarily stopped in one direction or

another. What Great Britain alone,—the most enlightened of

commercial countries,—has done in damming up the streams of human

enjoyment, is fearful to think of. In the vineyards of France and

Portugal, the grapes have been trodden to waste, and the

vinedressers’ children have gone half clothed, because wines were

not permitted to be brought in, and cottons and woollens were

thereby forbidden to be carried out, at their natural cost. During

the long series of years that good tea has been a too costly drink

for many thousands of our population, they would have been glad of

the refreshment of chocolate, in some of its various preparations,

if Spain had been permitted to send it to us from her colonies as

cheap as Spain was willing to afford it. But the article has been

loaded with a duty amounting to from 100 to 230 per cent.; so that

few but the rich could ever taste it; and they have been swallowing

a curious compound of the nut, flour, and Castile soap. The

silkworms of Italy would have wrought as busily for England as for

France, if England had not been jealous of France, and thereby

injured her own manufacture. England is wiser now, and new myriads

of worms are hanging their golden balls on the mulberry trees, while

the neighbouring peasantry are enjoying the use of our hardware, and

looms are kept busy in Spitalfields. Time was when the northern

nations welcomed our manufactures in return for their timber and

iron of prime quality: but now, the ship and house-builders must pay

higher for worse wood from Canada; and we have laid exorbitant

duties on foreign iron, in order to encourage mining at home. The

good people of Sweden and Norway, having nothing to offer us but

timber and iron, must do without our manufactures; and thus are

willing nations prevented from helping one another. Whatever may be

thought of the indulgence of opium in this country, no one objects

to its being used by the Hindoo and the Chinese as a stimulus

appropriate to the climate in which they dwell. If we had allowed

things to take their natural course, Persian husbandmen would have

tended their vast poppy-fields, season by season, guarding the

delicate plant from the injuries of insects, and sheltering it from

unfavourable winds, while the Chinese and the Hindoos would have

been busy preparing commodities to exchange with the Persian, and

all would have been made rich enough by their traffic to keep

British merchant-ships continually going and coming to supply their

wants. But our India Company has chosen to force and monopolize the

culture of opium. It has beggared and enslaved many thousands of

reluctant cultivators; narrowed the demand; lessened its own

revenue, year by year, and just lived to see China freely supplied

with Turkey opium by American traders. Thousands of our lowly

brethren in Hindostan and Ceylon have dropped unnoticed out of life

because they have not been permitted to touch the crisped salt

beneath their feet, or to pluck the spices which perfume the air

they breathe. Millions more have sunk at the approach of famine,

because no labour of theirs was permitted to provide them with what

might be exchanged for food from some neighbouring coast.

It is difficult to say whether we have injured China or Great

Britain the most by our extraordinary fancy of sending functionaries

invested at once with political and commercial power into a country

where commerce is held by far too degrading an employment to be

associated with political functions. This blunder was made by our

monopolists, who were, but lately, keeping up a splendid

establishment of important personages, who were regarded by the

Chinese as being just above the rank of vagabonds;—no more

respectable, in their possession of incomes graduating from 4000_l._

to 18,000_l._ a-year, than the American free-traders who turn their

backs on the Hong merchants, and go into the open market, offering

their furs with one hand, and receiving teas and nankeens with the

other, cleverly stealing the trade of the British meantime with

both. What wealth and comfort untold might the two vast empires of

Britain and China have poured into one another by this time, if

their original jealousies had not been perpetuated by English

mismanagement! The Dutch and the Americans have both smuggled large

quantities of tea into England, while the twelve supercargoes at

Canton have been talking politics or yawning within the walls of

their Factory! Truly did the Celestial Emperor say to our

representatives, “Your good fortune has been small! You arrived at

the gates of the imperial house, and were unable to lift your eyes

to the face of heaven.” The day of exclusion is, however, over. It

may be long before we can overcome the contempt of the nation, and

make them forget that some of our politicians were traders: but we

have the interests of the Chinese in our favour. They will import

according to their needs; more of our weavers and cutlers will have

money to buy tea with, and they will get more tea for their money;

and no one can tell what new classes of productions may become

common when the messengers of these two mighty empires shall go to

and fro, and knowledge shall be increased.

Such are a few of the specimens which might be adduced of the

mischiefs wrought in one hemisphere by interference with commerce.

“To all things there cometh an end;” to all unjust and foolish

things, at least. We are now in possession of so ample a stock of

experience, that the day cannot be far off when all customs duties

shall be repealed but those which are necessary for the purposes of

revenue. There will be some half-objectors left; some importers who

will admit the impolicy of protections of all articles but the one

in which they happen to deal. Mr. Huskisson was pathetically

appealed to to protect green glass bottles; and a last struggle may

be tried with another minister in favour of liquorice or coral

beads; but an immense majority of every civilised people are verging

towards a mutual agreement to give, in order that to each may be

given “full measure, pressed down, and shaken together, and running

over.” Such is the plenty in which God showers his gifts among us;

and such is the measure in which he would have us yield each to the

other.

The countries of the world differ in their facilities for producing

the comforts and luxuries of life.

The inhabitants of the world agree in wanting or desiring all the

comforts and luxuries which the world produces.

These wants and desires can be in no degree gratified but by means

of mutual exchanges. They can be fully satisfied only by means of

absolutely universal and free exchanges.

By universal and free exchange,—that is, by each person being

permitted to exchange what he wants least for what he wants most,—an

absolutely perfect system of economy of resources is established;

the whole world being included in the arrangement.

The present want of agreement in the whole world to adopt this

system does not invalidate its principle when applied to a single

nation. It must ever be the interest of a nation to exchange what it

wants little at home for what it wants more from abroad. If denied

what it wants most, it will be wise to take what is next best; and

so on, as long as anything is left which is produced better abroad

than at home.

In the above case, the blame of the deprivation rests with the

prohibiting power; but the suffering affects both the trading

nations,—the one being prevented getting what it wants most,—the

other being prevented parting with what it wants least.

As the general interest of each nation requires that there should be

perfect liberty in the exchange of commodities, any restriction on

such liberty, for the sake of benefiting any particular class or

classes, is a sacrifice of a larger interest to a smaller,—that is a

sin in government.

This sin is committed when,—

First,—Any protection is granted powerful enough to tempt to

evasion, producing disloyalty, fraud, and jealousy: when,

Secondly,—Capital is unproductively consumed in the maintenance of

an apparatus of restriction: when,

Thirdly,—Capital is unproductively bestowed in enabling those who

produce at home dearer than foreigners to sell abroad as cheap

as foreigners,—that is, in bounties on exportation: and when,

Fourthly,—Capital is diverted from its natural course to be

employed in producing at home that which is expensive and

inferior, instead of in preparing that which will purchase the

same article cheap and superior abroad,—that is, when

restrictions are imposed on importation.

But though the general interest is sacrificed, no particular

interest is permanently benefited, by special protections: since

Restrictive regulations in favour of the few are violated, when such

violation is the interest of the many; and

Every diminution of the consumer’s fund causes a loss of custom to

the producer. Again,

The absence of competition and deprivation of custom combine to make

his article inferior and dear; which inferiority and dearness cause

his trade still further to decline.

Such are the evils which attend the protection of a class of

producers who cannot compete with foreign producers of the same

article.

If home producers can compete with foreign producers, they need no

protection, as, _cæteris paribus_, buying at hand is preferable to

buying at a distance.

Free competition cannot fail to benefit all parties:—

Consumers, by securing the greatest practicable improvement and

cheapness of the article;

Producers, by the consequent perpetual extension of demand;—and

Society at large, by determining capital to its natural channels.

-------

Colonies are advantageous to the mother-country as affording places

of settlement for her emigrating members, and opening markets where

her merchants will always have the preference over those of other

countries, from identity of language and usages.

Colonies are not advantageous to the mother-country as the basis of

a peculiar trade.

The term “colony trade” involves the idea of monopoly; since, in a

free trade, a colony bears the same relation as any other party to

the mother-country.

Such monopoly is disadvantageous to the mother-country, whether

possessed by the government, as a trading party, by an exclusive

company, or by all the merchants of the mother-country.

It is disadvantageous as impairing the resources of the dependency,

which are a part of the resources of the empire, and the very

material of the trade which is the object of desire.

If a colony is forbidden to buy of any but the mother-country, it

must do without some articles which it desires, or pay dear for

them;—it loses the opportunity of an advantageous exchange, or makes

a disadvantageous one. Thus the resources of the colony are wasted.

If a colony is forbidden to sell its own produce to any but the

mother-country, either the prohibition is not needed, or the colony

receives less in exchange from the mother-country than it might

obtain elsewhere. Thus, again, the resources of the colony are

wasted.

If a colony is forbidden either to buy of or sell to any but the

mother-country, the resources of the colony are wasted according to

both the above methods, and the colony is condemned to remain a poor

customer and an expensive dependency.

In proportion, therefore, as trade with colonies is distinguished

from trade with other places, by restrictions on buyers at home, or

on sellers in the colonies, that trade (involving the apparatus of

restriction) becomes an occasion of loss instead of gain to the

empire.

If restrictive interference be impolitic,—oppressive,—impious,

between empire and empire, it becomes absolutely monstrous when

introduced among the different classes of the same country. The

magistrates of a grazing county would do ill to prohibit intercourse

with the manufacturing, and agricultural, and mining districts

around; but much more oppressive and fatal would be the policy of a

city corporation which should make the resources of the city depend

on the will of the corn-dealers which it contained.—Such has been

the policy of the rulers of Britain; and side by side with this

restriction of the supply of food,—this abuse of capital,—may be

placed the curious perversion of labour which is caused not only by

the forcing of agriculture at the expense of manufactures, but by

the existence of exclusive and injurious privileges to trading

corporations, of certain ancient laws respecting apprenticeship, and

of the iniquitous practice of the impressment of seamen.

The system of restricting the supply of food would exhibit as many

sins under the head of Production as of Distribution. To make an

ever-increasing population depend on graduating soils for its

support, is at once to enact that either a certain number shall die

outright of hunger, or that a much larger number shall be half-fed;

and that, in either, case, waste of capital must be made in

proportion to the inferiority of our newly-cultivated soils compared

with those which might yield us their produce from abroad. From this

waste arises another and equally destructive species of waste in the

preparation of our manufactured articles. Wages are higher than they

need be to purchase the same necessaries; therefore our manufactured

articles are higher priced than they need be; therefore they have

not a fair chance in foreign markets; and therefore our ill-fed

manufacturing population is wronged. Such are some of the evils of a

restricted trade in corn, considered under the head of Production.

As for the distribution of this prime necessary of life,—the

circumstance of its being loaded with an artificial cost suggests

the deplorable scenes and narratives of suffering which may be

verified in every street of all our cities. No arrangement can be

more utterly unprincipled than that by which a necessary of life, of

which the richest can scarcely consume more than the poorest, is

made needlessly expensive. We may linger in vain to find a

comparison to illustrate the iniquity. It is the worst possible

instance of legislative injustice; and when it is considered that

this injustice is perpetrated for the benefit of a particular class,

which class is brought by it to the verge of ruin, and that the

injury spreads to every other class in turn, it will be seen that no

words can describe its folly. Add to this our provisions for

diverting labour from its natural channels, and for making it

stagnate in one spot, and it will appear as if we had yet to learn

the rights of labour and the uses of capital, or as if we openly

defied the one, and abused the other. It is not so, however. The

folly came before the iniquity; and, in cases of false legislation,

the folly, originating in ignorance, must be long perceived and

pointed out,—i.e. must become iniquity,—before it can be remedied.

But the remedy is secured from the moment that the denunciation goes

abroad. We have passed through the necessary stages, and the issue

is at hand. Our grandfathers legislated about corn on false

principles, through ignorance; our fathers clung to these false

principles in a less innocent state of doubt. We have perpetuated

them wickedly, knowing their disastrous results; and a voice is

going up through all the land which will almost immediately compel

their relinquishment.

Very little can be done to improve the condition of the people till

the Corn Laws are repealed. All practicable retrenchments, all

ordinary reduction of taxation, all reforms in the organization of

Church and State, important as they are, are trifles compared with

this. The only measure of equal consequence is the reduction of the

Debt; and this ought to accompany or immediately precede the

establishment of a free trade in corn. Day and night, from week to

week, from month to month, the nation should petition for a free

trade in corn, urging how landlords, when freed from fluctuation of

their revenues, will be able to bear their fair proportion of the

national burdens; how the farmer, no longer tempted to a wasteful

application of capital, will cease the so-called ungrateful clamour

with which he repays legislative protection; how the manufacturing

class will prosper and will multiply our resources when they are

allowed the benefits of the free competition in which their

ingenuity qualifies them to hold a distinguished place; and how our

labourers will be, by one comprehensive act, raised, every man of

them, a grade higher than any laborious, partial legislation can

raise any one of their classes. An act which must, at once, prevent

the waste of capital and the misapplication of labour, unclog the

system of manufactures and commerce, and obviate the main distresses

of our agriculturists, must do more for the improvement of our

revenue, and the union of our nation than all less comprehensive

measures put together. To untax the prime necessary of life is to

provide at once a prospective remedy for all the worst evils of our

social arrangements. This will scarcely be disputed by those who

admit the principles of the following summary. It is important that

such results of these principles should be traced out and made

familiar to the mind, as it is certain that the days of free trading

in corn are at hand.

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As exchangeable value is ultimately determined by the cost of

production, and as there is an incessant tendency to an increase

in the cost of producing food, (inferior soils being taken into

cultivation as population increases,) there is a perpetual

tendency in the exchangeable value of food to rise, however this

tendency may be temporarily checked by accidents of seasons, and

by improvements in agricultural arts.

As wages rise (without advantage to the labourer) in consequence

of a rise in the value of food, capitalists must either sell their

productions dearer than is necessary where food is cheaper, or

submit to a diminution of their profits.

Under the first alternative, the capitalist is incapacitated for

competition with the capitalists of countries where food is

cheaper: under the second, the capital of the country tends,

through perpetual diminution, to extinction.

Such is the case of a thickly-peopled country depending for food

wholly on its own resources.

There are many countries in the world where these tendencies have

not yet shown themselves; where there is so much fertile land,

that the cost of producing food does not yet increase; and where

corn superabounds, or would do so, if there was inducement to grow

it.

Such inducement exists in the liberty to exchange the corn with

which a thinly-peopled country may abound, for the productions in

which it is deficient, and with which a populous country may

abound. While, by this exchange, the first country obtains more

corn in return for its other productions, and the second more of

other productions in return for its corn, than could be extracted

at home, both are benefited. The capital of the thickly-peopled

country will perpetually grow; the thinly-peopled country will

become populous; and the only necessary limit of the prosperity of

all will be the limit to the fertility of the world.

-------

But the waste of capital caused by raising corn dear and in limited

quantities at home, when it might be purchased cheap and in

unlimited quantities abroad, is not the only evil attending a

restriction of any country to its own resources of food; a further

waste of capital and infliction of hardship are occasioned by other

consequences of such restriction.

As the demand for bread varies little within any one season, or few

seasons, while the supply is perpetually varying, the exchangeable

value of corn fluctuates more than that of any article whose return

to the cost of production is more calculable.

Its necessity to existence causes a panic to arise on the smallest

deficiency of supply, enhancing its price in undue proportion; and

as the demand cannot materially increase on the immediate occasion

of a surplus, and as corn is a perishable article, the price falls

in an undue proportion.

These excessive fluctuations, alternately wasting the resources of

the consumers and the producers of corn, are avoided where there is

liberty to the one class to buy abroad in deficient seasons, and to

the other to sell abroad in times of superabundance.

It is not enough that such purchase and sale are permitted by

special legislation when occasion arises, as there can be no

certainty of obtaining a sufficient supply, on reasonable terms, in

answer to a capricious and urgent demand.

Permanently importing countries are thus more regularly and cheaply

supplied than those which occasionally import and occasionally

export; but these last are, if their corn-exchanges be left free,

immeasurably more prosperous than one which is placed at the mercy

of man and circumstance by a system of alternate restriction and

freedom.

By a regular importation of corn, the proper check is provided

against capital being wasted on inferior soils; and this capital is

directed towards manufactures, which bring in a larger return of

food from abroad than could have been yielded by those inferior

soils. Labour is at the same time directed into the most profitable

channels. Any degree of restriction on this natural direction of

labour and capital is ultimately injurious to every class of the

community,—to land-owners, farming and manufacturing capitalists,

and labourers.

Labourers suffer by whatever makes the prime necessary of life dear

and uncertain in its supply, and by whatever impairs the resources

of their employers.

Manufacturing capitalists suffer by whatever tends needlessly to

check the reciprocal growth of capital and population, to raise

wages, and disable them for competition abroad.

Farming capitalists suffer by whatever exposes their fortunes to

unnecessary vicissitude, and tempts them to an application of

capital which can be rendered profitable only by the maintenance of

a system which injures their customers.

Landowners suffer by whatever renders their revenues fluctuating,

and impairs the prosperity of their tenants, and of the society at

large on which the security of their property depends.

As it is the interest of all classes that the supply of food should

be regular and cheap, and as regularity and cheapness are best

secured by a free trade in corn, it is the interest of all classes

that there should be a free trade in corn.

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The duty of government being to render secure the property of its

subjects, and their industry being their most undeniable property,

all interference of government with the direction and the rewards of

industry is a violation of its duty towards its subjects.

Such interference takes place when some are countenanced by

legislation in engrossing labours and rewards which would otherwise

be open to all; as in the case of privileged trading corporations;—

When arbitrary means of preparation are dictated as a condition of

the exercise of industry, and the enjoyment of its fruits,—as in the

case of the apprenticeship law;—

When labourers are compelled to a species of labour which they would

not have chosen,—as in the case of the impressment of seamen.

The same duty—of securing the free exercise of industry—requires

that companies should be privileged to carry on works of public

utility which are not within the reach of individual enterprise,—as

in the case of roads, canals, bridges, &c.; and also,

That the fruits of rare ingenuity and enterprise should be secured

to the individual,—according to the design of our patent law.

In the first-mentioned instances of interference, the three great

evils arise of

The restraint of fair competition in some cases;

The arbitrary increase of competition in other cases;

The obstruction of the circulation of labour and capital from

employment to employment, and from place to place.

In the last-mentioned instances of protection, none of these evils

take place.

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The general principles of Exchange are so few and obvious that there

would be little need to enlarge upon them but for their perpetual

violation. To leave all men free to seek the gratification of their

wants seems a simple rule enough; and universal experience has

shown, not only that wants freely expressed are sure to be supplied,

generally to the advantage of both parties, but that every

interference of authority, whether to check or stimulate the want,—

to encourage or discourage the supply, proves an aggression on the

rights of industry, and an eventual injury to all concerned. All

that governments have to do with the exchanges of nations, as of

individuals, is to protect their natural freedom; and, if a system

of indirect taxation be the one adopted, to select those commodities

for duty which are not necessary enough to subject the lowest class

to this species of tax, while they are desirable enough to induce

others to pay the additional cost. It may be a question whether this

method of raising revenue be wise: there can be no question that a

government directly violates its duty when it grants privileges

(real or supposed) to one class above another.

But, it is said, governments have always shown more or less of this

partiality. May it be confidently anticipated that they will ever

cease to transgress the legitimate bounds of their power?

Yes; very confidently. Such transgression is a feudal barbarism. The

feudal system has died out in theory; and it is impossible that its

practical barbarism should long remain. The progress of freedom has

been continuous and accountable, and its consummation is clearly a

matter of confident prophecy. Sovereigns, grand and pretty,

individual or consisting of a small number compacted into a

government, have first exercised absolute power over the lives,

properties and liberties of their subjects: this despotic grasp has

been gradually relaxed, till life, property, and liberty have been

made to depend on law, and not on arbitrary will. Next, the law has

been improved, from being the agent of such arbitrary will, to being

the expression of a more extended and abstract will. From this stage

of improvement the progress has been regular. The province of rule

has been narrowed, and that of law has been enlarged. Whatever may

have been,—whatever may still be,—the faults in the methods of

making the law, the absurdities of the law in some of its parts, and

its inadequateness as a whole in every civilized country, the

process of enlargement has still gone on, some unjust usurpation

being abolished, some sore oppression removed from time to time,

affording a clear prospect of a period when every natural and social

right shall be released from the gripe of irresponsible authority.

No king now strikes off heads at any moment when the fancy may seize

him. No kings’ councillors now plunder their neighbours to carry on

their wars or their sports, or are paid for their services by gifts

of patents and monopolies. No parliaments now make laws according to

the royal pleasure, without consulting the people; and, if they are

slow to repeal some oppressive old laws with which the people are

disgusted, it is certain that such laws could not at this day be

proposed. What can be more eloquent than this language of events?

What more prophetic than this progression? While the agents by which

the advance has been achieved are multiplied and strengthened,—while

its final purposes are more clearly revealed, day by day, what other

expectation can be entertained than that it will advance more and

more rapidly, till the meanest rights of industry shall be at length

freed from the last aggressions of power? Then the humblest labourer

may buy his loaf and sell his labour in what corner of the earth he

pleases. Then legislators will no more dream of dictating what wine

shall be drunk, and what fabrics shall be worn, and through what

medium God’s free gifts must be sought, than they now dream of

branding a man’s face on account of his theology. They will perceive

that the office of dispensing the bounty of nature is not theirs but

God’s; and that the agents he has appointed are neither kings,

parliaments, nor custom-house officers, but those ever-growing

desires with which he has vivified the souls of the haughtiest and

the lowliest of his children.

-----------------------

PART IV.

CONSUMPTION is of two kinds—productive and unproductive.

The object of the one is the restoration, with increase, in some new

form, of that which is consumed. The object of the other is the

enjoyment of some good through the sacrifice of that which is

consumed.

That which is consumed productively is capital, re-appearing for

future use. That which is consumed unproductively ceases to be

capital, or any thing else: it is wholly lost.

Such loss is desirable, or the contrary, in proportion as the

happiness resulting from the sacrifice exceeds or falls short of the

happiness belonging to the continued possession of the consumable

commodity.

The total of what is produced is called the gross produce.

That which remains, after replacing the capital consumed, is called

the net produce.

While a man produces only that which he himself consumes, there is

no demand and supply.

If a man produces more of one thing than he consumes, it is for the

sake of obtaining something which another man produces, over and

above what he consumes.

Each brings the two requisites of a demand,—viz., the wish for a

supply, and a commodity wherewith to obtain it.

This commodity, which is the instrument of demand, is, at the same

time, the instrument of supply.

Though the respective commodities of no two producers may be exactly

suitable to their respective wishes, or equivalent in amount, yet,

as every man’s instrument of demand and supply is identical, the

aggregate demand of society must be precisely equal to its supply.

In other words, a general glut is impossible.

A partial glut is an evil which induces its own remedy; and the more

quickly the greater the evil; since, the aggregate demand and supply

being always equal, a superabundance of one commodity testifies to

the deficiency of another; and, all exchangers being anxious to

exchange the deficient article for that which is superabundant, the

production of the former will be quickened, and that of the latter

slackened.

A new creation of capital, employed in the production of the

deficient commodity, may thus remedy a glut.

A new creation of capital is always a benefit to society, by

constituting a new demand.

It follows that an unproductive consumption of capital is an injury

to society, by contracting the demand. In other words, an

expenditure which avoidably exceeds the revenue is a social crime.

All interference which perplexes the calculations of producers, and

thus causes the danger of a glut, is also a social crime.

-------

It is necessary to the security and advancement of a community that

there should be an expenditure of a portion of its wealth for

purposes of defence, of public order, and of social improvement.

As public expenditure, though necessary, is unproductive, it must be

limited; and as the means of such expenditure are furnished by the

people for defined objects, its limit is easily ascertained.

That expenditure alone which is necessary to defence, public order,

and social improvement, is justifiable.

Such a direction of the public expenditure can be secured only by

the public functionaries who expend being made fully responsible to

the party in whose behalf they expend.

For want of this responsibility, the public expenditure of an early

age—determined to pageantry, war, and favouritism—was excessive, and

perpetrated by the few in defiance of the many.

For want of a due degree of this responsibility, the public

expenditure of an after age—determined to luxury, war, and

patronage—was excessive, and perpetrated by the few in fear of the

many, by deceiving and defrauding them.

For want of a due degree of this responsibility, the public

expenditure of the present age—determined chiefly to the sustaining

of burdens imposed by a preceding age—perpetuates many abuses; and

though much ameliorated by the less unequal distribution of power,

the public expenditure is yet as far from being regulated to the

greatest advantage of the many, as the many are from exacting due

responsibility and service from the few.

When this service and responsibility shall be duly exacted, there

will be—

Necessary offices only, whose duties will be clearly defined, fully

accounted for, and liberally rewarded;—

Little patronage, and that little at the disposal of the people;—

No pomp, at the expense of those who can barely obtain support;—but

Liberal provisions for the advancement of national industry and

intelligence.

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If the above principles be true, a comparison of them with our

experience will yield very animating conclusions. Consumption—that

is, human enjoyment—is the end to which all the foregoing processes

are directed. Demand is the index of human enjoyment. Every increase

of capital creates a new demand. Capital is perpetually on the

increase. To sum up the whole, human enjoyment is perpetually on the

increase. The single exception to this happy conclusion is where, as

in Ireland, the growth of capital is overmatched by the increase of

population. But even in Ireland (the worst case which could be

selected) the evil is so partial as to allow the good to spread.

Though too large a portion of the demand comes in the form of a

clamour for daily food, there is a new and spreading demand for a

multitude of articles of less necessity. Portions of the population

are rising to a region of higher and wider desires; and if this

partial elevation has taken place under a most vicious political

system, there need be no question that a more rapid improvement will

grow up under that wiser and milder government which the civilized

world will take care that Ireland shall at length enjoy. There is

something so delightful in the review of the multiplication of

comforts and enjoyments, that it is difficult to turn away from it

at any time; and never is it more difficult than when establishing

the moral of hopefulness. But I have dwelt largely on this happy

truth in my story of “Briery Creek;” and probably no day passes in

which my readers do not hear or say something about the wonderful

improvements in art, the variety of new conveniences, and the spread

downwards of luxuries to which the wealthy were formerly believed to

have an exclusive title. Great as is still the number of those who

are scorched by God’s vivifying sun, and chilled by his fertilizing

rain, for want of shelter and clothing, the extension of enjoyment

has kept its proportion (being both cause and effect) to the

improvement of the subordinate processes. With every increase of

production, with every improvement of distribution, with every

extension of exchange, consumption has kept pace. The only checks it

has ever received have arisen out of those legislative sins which

have wrought, or must work, their own destruction.

As for that species of consumption which has been always regarded

with the least complacency,—the too long unprofitable consumption of

government,—nothing can be more cheering than to mark the changes in

its character from an early period of our empire till now. Viewed by

itself, our government expenditure is a mournful spectacle enough;

but the heaviest of the burdens we now bear were imposed by a former

age; and our experience of their weight is a sufficient security

against such being ever imposed again. We are no longer plundered by

force or fraud, and denied the redress of a parliament; we are no

longer hurried into wars, and seduced to tax our children’s children

for their support. The sin is now that of omission, and not of

perpetration. We do not shake off old burdens, or provide for public

order and social improvement as we should; but we do not neglect the

one and despise the other, as was done in days of old; and what is

left undone there is a spreading movement to effect. The only

irreclaimable human decree,—that of an enlightened multitude,—has

gone forth against the abuses of the Church and the Law. The Army

will follow; and there is reason to hope that a force is being

already nourished which may grapple with the gigantic Debt itself.

New and noble institutions are being demanded from all quarters as

the natural growth from the renovation of the old ones. Religion

must yield Education, and Law a righteous Penal Discipline. Schools

must spring up around our churches, and prisons will be granted

where the law must, if possible, mend criminals as effectually as it

has hitherto made them. In time, we shall find that we have spare

barracks, which may be converted into abodes of science; and many a

parade may become an exercising place for laborious mechanics

instead of spruce soldiers. Such are some of the modes of public

expenditure which the nation is impatient to sanction. What further

institutions will be made to grow out of these, we may hereafter

learn in the schools which will presently be planted wherever

families are congregated. All that we can yet presume is, that they

will be as much wiser than ours as our extravagances are more

innocent than the savage pageantries of the Henries, the cruel

pleasantries of the Charleses, and the atrocious policy of the

“heaven-born Ministers” who figure in our history.

--------------

All the members of a society who derive protection from its

government owe a certain proportion of the produce of their labour

or capital to the support of that government—that is, are justly

liable to be taxed.

The proportion contributed should be determined by the degree of

protection enjoyed—of protection to property; for all are personally

protected.

In other words, a just taxation must leave all the members of

society in precisely the same relation in which it found them.

This equality of contribution is the first principle of a just

taxation.

Such equality can be secured only by a method of direct taxation.

Taxes on commodities are, from their very nature, unequal, as they

leave it in the choice of the rich man how much he shall contribute

to the support of the state; while the man whose whole income must

be spent in the purchase of commodities has no such choice. This

inequality is aggravated by the necessity, in order to make these

taxes productive, of imposing them on necessaries more than on

luxuries.

Taxes on commodities are further injurious by entailing great

expense for the prevention of smuggling, and a needless cost of

collection.

They could not have been long tolerated, but for their quality of

affording a convenient method of tax paying, and for the ignorance

of the bulk of the people of their injurious operation.

The method of direct taxation which best secures equality is the

imposition of a tax on income or on property.

There is so much difficulty in ascertaining, to the general

satisfaction, the relative values of incomes held on different

tenures, and the necessary inquisition is so odious, that if a tax

on the source of incomes can be proved equally equitable, it is

preferable, inasmuch as it narrows the province of inquisition.

There is no reason to suppose that an equitable graduation of a tax

on invested capital is impracticable; and as it would equally affect

all incomes derived from this investment,—that is, all incomes

whatsoever,—its operation must be singularly impartial, if the true

principle of graduation be once attained.

A graduated property-tax is free from all the evils belonging to

taxes on commodities; while it has not their single recommendation—

of favouring the subordinate convenience of the tax-payer.

This last consideration will, however, become of less importance in

proportion as the great body of tax-payers advances towards that

enlightened agreement which is essential to the establishment of a

just system of taxation.

The grossest violation of every just principle of taxation is the

practice of burdening posterity by contracting permanent loans, of

which the nation is to pay the interest.

The next grossest violation of justice is the transmitting such an

inherited debt unlessened to posterity, especially as every

improvement in the arts of life furnishes the means of throwing off

a portion of the national burdens.

The same rule of morals which requires state-economy on behalf of

the present generation, requires, on behalf of future generations,

that no effort should be spared to liquidate the National Debt.

-------

No sign of the times is more alarming,—more excusably alarming,—to

the dreaders of change, than the prevailing unwillingness to pay

taxes,—except such as, being indirect, are paid unawares. The

strongest case which the lovers of old ways have now to bring in

opposition to the reforming spirit which is abroad, is that of

numbers, who enjoy protection of life and property, being reluctant

to pay for such protection.

This reluctance is a bad symptom. It tells ill for some of our

social arrangements, and offers an impediment, at the same time, to

their rectification; and thus gives as much concern to the reformers

as to the preservers of abuses. This eagerness to throw off the

burdens of the state is a perfectly natural result of the burdens of

the state having been made too heavy; but it does not the less

exhibit an ignorance of social duty which stands formidably in the

way of improvements in the arrangement of social liabilities. We are

too heavily taxed, and the first object is to reduce our taxation.

Indirect taxes are proved to be by far the heaviest, and the way to

gain our object is therefore to exchange indirect for direct taxes,

to the greatest possible extent. But the direct taxes are those that

the people quarrel with. What encouragement is there for a

government to propose a commutation of all taxes for one on

property, when there is difficulty in getting the assessed taxes

paid? How is it to be supposed that men will agree to that on a

larger scale which they quarrel with on a smaller? How can there be

a stronger temptation offered to our rulers to filch the payment out

of our raw materials, our tea, our beer, our newspapers, and the

articles of our clothing? The more difficulty there is in raising

the supplies, the more risk we run of being made to yield of our

substance in ways that we are unconscious of, and cannot check. The

less manliness and reasonableness we show in being ready to bear our

just burden, the less chance we have of the burden being lightened

to the utmost. It is more than mortifying to perceive that an

overburdened nation must, even if it had a ministry of sages, submit

for a long time to pay an enormous tax upon its own ignorance.

Such appears too plainly to be now the case with our nation, and

with some other nations. A party of gentlemen may be found in any

town, sitting over their wine and foreign fruits, repelling the idea

of paying a yearly sum to the state, and laughing, or staring, when

the wisest man among them informs them that they pay above 100 per

cent. on the collective commodities they use. Tradesmen may be found

in every village who think it very grievous to pay a house-tax,

while they overlook the price they have to give for their pipe of

tobacco and their glass of spirit and water. Some noblemen, perhaps,

would rather have higher tailors’ bills for liveries than pay so

much a head for their servants. As long as this is the case,—as long

as we show that we prefer paying thirty shillings with our eyes shut

to a guinea with our eyes open, how can we expect that there will

not be hands ready to pocket the difference on the way to the

Treasury; and much disposition there to humour us in our blindness?

The cry for retrenchment is a righteous cry; but all power of

retrenchment does not lie with the Government. The Government may do

much; but the people can do more, by getting themselves taxed in the

most economical, instead of the most wasteful, manner. It is a good

thing to abolish a sinecure, and to cut down the salary of a bishop

or a general; but it is an immeasurably greater to get a direct tax

substituted for one on cider or paper. All opposition to the

principle of a direct tax is an encouragement to the appointment of

a host of excisemen and other tax-gatherers, who may, in a very

short time, surpass a bench of bishops and a long gradation of

military officers in expensiveness to the people. It is time for the

people to take care that the greater retrenchments are not hindered

through their mistakes, while they are putting their whole souls

into the demand for the lesser.

Such mistakes are attributable to the absence of political knowledge

among us; and the consequences should be charged, not to

individuals, but to the State, which has omitted to provide them

with such knowledge. The bulk of the people has yet to learn that,

being born into a civilized society, they are not to live by chance,

under laws that have been made they know not why nor how, to have a

portion of their money taken from them by people they have nothing

to do with, so that they shall be wise to save as much as they can

from being so taken from them. This is the view which too large a

portion of us take of our social position, instead of understanding

that this complicated machine of society has been elaborated, and

must be maintained, at a great expense; that its laws were

constructed with much pains and cost; that under these laws capital

and labour are protected and made productive, and every blessing of

life enhanced; and that it is therefore a pressing obligation upon

every member of society to contribute his share towards maintaining

the condition of society to which he owes his security and social

enjoyment. When this is understood,—when the lowest of our labourers

perceives that he is, as it were, the member of a large club, united

for mutual good,—none but rogues will think of shirking the payment

of their subscription-money, or resist any particular mode of

payment before the objections to it have been brought under the

consideration of the Committee, or after the Committee has

pronounced the mode to be a good one. They will watch over the

administration of the funds; but they will manfully come forward

with their due contributions, and resent, as an insult upon their

good sense, all attempts to get these contributions from them by

indirect means.

Till they are enabled thus to view their own position, it is not

wonderful, however deplorable, that they should quarrel with a just

tax because it is unequally imposed, ascribing to the principle the

faults committed in its application. This is the less surprising

too, because their teeth have been set on edge by the sour grapes

with which their fathers were surfeited. A lavish expenditure and

accumulating debt have rendered odious the name and notion of every

tax under heaven. Great allowance must be made for the effects of

such ignorance and such irritation. Let the time be hastened when a

people, enlightened to its lowest rank, may behold its meanest

members heard with deference instead of treated with allowance, if

they shall see reason for remonstrance in regard to their

contributions to the state! When they once know what is the waste in

the department of the Customs, and the oppression and fraud in that

of the Excise,—what are the effects of taxes on raw produce, and on

the transfer of property, and how multiplied beyond all decency are

the burdens of local taxation, they will value every approach

towards a plan of direct levy, and will wonder at their own clamour

about the house and window taxes, (except as to their inequality of

imposition,) while so many worse remained unnoticed. I shall attempt

to exhibit the effects on industry and happiness of our different

kinds of taxes in a few more tales; and I only wish I had the power

to render my picture of a country of untaxed commodities as

attractive in fiction as I am sure it would be in reality. Meantime,

I trust preparation will be making in other quarters for imparting

to the people those political principles which they desire to have

for guides in these stirring times, when every man must act: those

principles which will stimulate them at once to keep watch over the

responsibilities of their rulers, and to discharge their own.

-------

What, then, is the moral of my fables? That we must mend our ways

and be hopeful;—or, be hopeful and mend our ways. Each of these

comes of the other, and each is pointed out by past experience to be

our duty, as it ought to be our pleasure. Enough has been said to

prove that we must mend our ways: but I feel as if enough could

never be said in the enforcement of hopefulness. When we see what an

advance the race has already made, in the present infant stage of

humanity,—when we observe the differences between men now living,—it

seems absolute impiety to doubt man’s perpetual progression, and to

question the means. The savage who creeps into a hollow tree when

the wind blows keen, satisfying his hunger with grubs from the

herbage, and the philosopher who lives surrounded by luxury which he

values as intellectual food, and as an apparatus for securing him

leisure to take account of the stars, and to fathom the uses of

creation, now exist before our eyes,—the one a finished image of

primeval man; the other a faint, shadowy outline of what man may

be.—Why are these men so unlike? By observing every gradation which

is interposed, an answer may be obtained.—They are mainly formed by

the social circumstances amidst which they live. All other

differences,—of bodily colour and form, and of climate,—are as

nothing in comparison. Wherever there is little social circumstance,

man remains a savage, whether he be dwarfed among the snows of the

Pole, or stretches his naked limbs on the hot sands of the desert,

or vegetates in a cell like Caspar Hauser. Where-ever there is much

social circumstance, man becomes active, whether his activity be for

good or for evil. In proportion as society is so far naturally

arranged as that its relations become multitudinous, man becomes

intellectual, and in certain situations and in various degrees,

virtuous and happy. Is there not yet at least one other stage, when

society shall be _wisely_ arranged, so that all may become

intellectual, virtuous, and happy; or, at least, so that the

exceptions shall be the precise reverse of those which are the rare

instances now? The belief is irresistible.

There has been but one Socrates, some say; and he lived very long

ago.—Who knows that there has been but one Socrates? Which of us can

tell but that one of our forefathers, or some of ourselves, may have

elbowed a second or a tenth Socrates in the street, or passed him in

the church aisle? His philosophy may have lain silent within him.

Servitude may have chained his tongue; hunger may have enfeebled his

voice; he may have been shut up in the Canton Factory, or crushed

under a distraint for poor-rates or tithes. Till it has been known

how many noble intellects have been thus chained and silenced, let

no one venture to say that there has been but one Socrates.

Supposing, however, that there has been but one, does it follow that

the world has gone back, or has not got forward since his day? To

judge of the effect of social institutions on character and

happiness, we must contemplate a nation, and not the individual the

most distinguished of that nation. What English artisan would change

places with the Athenian mechanic of the days of Socrates, in

respect of external accommodation? What English artisan has not

better things to say on the rights of industry, the duties of

governments, and the true principle of social morals, than the

wisest orator among the Greek mechanics in the freest of their

assemblies? It is true that certain of our most refined and virtuous

philosophers are engaged nearly all day in servile labour, and that

they wear patched clothes, and would fain possess another blanket.

This proves that our state of society is yet imperfect; but it does

not prove that we have not made a prodigious advance. Their social

qualifications, their particular services, have not been allowed due

liberty, or received their due reward; but the very circumstance of

such men being found among us, banded together in the pursuit of

good, is a sufficient test of progress, and earnest of further

advancement. Such men are not only wiser, and more prosperous in

their wisdom, than they were likely to have been while building a

house for Socrates, or making sandals for Xantippe, but they have

made a vast approach towards being employed according to their

capacities, and rewarded according to their works,—that is, towards

participating in the most perfect conceivable condition of society.

When, till lately, has this condition of society been distinctly

conceived of,—not as an abstract good, to be more imagined than

expected,—but as a natural, inevitable consequence of labour and

capital, and their joint products, being left free, and the most

enlightened intellect having, in consequence, an open passage left

accessible, by which it might rise to an influential rank? Such a

conception as this differs from the ancient dreams of benevolent

philosophers, as the astronomer’s predictions of the present day

differ from the ancient mythological fables about the stars. The

means of discernment are ascertained—are held in our hands. We do

not presume to calculate the day and hour when any specified

amelioration shall take place; but the event can be intercepted only

by such a convulsion as shall make heaven a wreck and earth a chaos.

In no presumption of human wisdom is this declaration pronounced.

Truth has one appropriate organ, and principles are that organ; and

every principle on which society has advanced makes the same

proclamation. Each has delivered man over to a nobler successor,

with a promise of progression, and the promise has never yet been

broken. The last and best principle which has been professed, if not

acted upon, by our rulers, because insisted on by our nation, is

“the greatest happiness of the greatest number.” Was there ever a

time before when a principle so expanding and so enduring as this

was professed by rulers, because insisted on by the ruled? While

this fact is before our eyes, and this profession making music to

our ears, we can have no fears of society standing still, though

there be brute tyranny in Russia, and barbarian folly in China, and

the worst form of slavery at New Orleans, and a tremendous pauper

population at the doors of our own homes. The genius of society has

before transmigrated through forms as horrid and disgusting as

these. The prophecy which each has been made to give out has been

fulfilled: therefore shall the heaven-born spirit be trusted while

revealing and announcing at once the means and the end—THE

EMPLOYMENT OF ALL POWERS AND ALL MATERIALS, THE NATURAL RECOMPENSE

OF ALL ACTION, AND THE CONSEQUENT ACCOMPLISHMENT OF THE HAPPINESS OF

THE GREATEST NUMBER, IF NOT OF ALL.

THE END.

London: Printed by W. Clowes, Duke-street, Lambeth.

------------------------------------------------------------------------

Transcriber’s Note

Hyphens appearing on a line or page break have been removed if the

preponderance of other occurrences are unhyphenated. Those words

occurring midline are retained regardless of other occurrences. The

following variants were retained: land-owner(2), day-light(1),

On some occasions, a word spans a line break, but the hyphen itself

has gone missing. These fragments are joined appropriately without

further notice here.

Errors deemed most likely to be the printer’s have been corrected,

and are noted here. The references are to the page and line in the

original.

THE FARRERS OF BUDGE-ROW.

1.15.14 of which she had this afternoon heard.[”] Removed.

1.44.15 [“]Some other improvements Added.

1.69.14 for which t[k/h]e people Replaced.

1.78.29 Jane’s en[t]rance had baffled her calculations Inserted.

1.85.32 to each burner.[”] Removed.

1.126.32 before he calls you t[o] another! Restored.