over last year of more than 100 per cent., of butter (duty paid) 35
per cent.; of cheese 15 per cent.; of grain and flour 300 per cent.;
of coffee (duty paid) between 8 and 9 per cent.; of sugar (duty paid)
15 per cent., and of spirits (duty paid) 25 per cent. _This has all
been eaten and drunk._ But how, it will be said, is it possible it can
have been paid for? and what a splendid export trade the nation must
have carried on, when all this has taken place, and only six millions
of bullion have disappeared! Unfortunately, however, the explanation
lies deeper. Although we have been extravagant in our living, we have
starved our manufactories. We have sold our goods wherever we could
find a market for them, and we have abstained from purchasing the
materials out of which we may make more. We have not increased our
export trade. It shows, in fact, a diminution as compared with last
year; but in our avidity to consume luxuries, we have foregone, as we
could not sustain the expenditure of both, keeping up the stock by
which our mills and manufactories are to be fed."--_Times_, November
24, 1847.
So that the free traders have at last discovered that the unlimited
importation of food is not, after all, so great a blessing as they had
so long held forth. They have found to their cost that there is some
little difference between sending _thirty millions_ in twelve months
in hard cash to America and the Continent for grain, and sending it
to Kent, Yorkshire, Essex, and Scotland. They have discovered that
there is such a thing as a nation increasing its imports enormously
and beyond all example, and at the same time its exports declining
in the same proportion, from the abstraction of the circulating
medium requisite to carry on domestic fabrics. All this is what the
Protectionists constantly predicted would follow the adoption of free
trade principles; and they warned government in the most earnest manner
two years ago, that no increase of exports, but the reverse, would
follow the throwing open our ports to foreign grain; and that, unless
provision were made for extending the currency when our sovereigns were
sent abroad for foreign grain, general ruin would ensue. Two years ago
Mr Alison observed:--
"Holding it to be clear that, under the free trade system, a very
large importation of grain into these islands may be looked for now,
even in ordinary seasons, and an _immense one in bad harvests_, it
is essential that the country should look steadily in the face _the
constant drain upon its metallic resources which such a trade must
occasion_. Adverting to the disastrous effects of such an exportation
of the precious metals in 1839, from a _single year_ of such extensive
importation of foreign corn, it is impossible to contemplate without
the most serious alarm the conversion of that drain into a permanent
burden upon the specie of the country. As the change now to be made
will undoubtedly depress agricultural industry, it is devoutly to
be hoped that, as some compensation, the _expected increase_ of our
manufactures for foreign markets may take place. But this extension
will, of course, require a proportional augmentation of the currency to
carry it on. And how is that to be provided under the metallic system,
when the simultaneous import of foreign grain is _every day drawing
more and more of the precious metals out of the country, in exchange
for food_?"--(_England in 1815 and 1845_, third edition, _Preface_,
page xi. published in April 1846.)
But let it be conceded that the government and the _Times_ are in the
right on this point; that the importation of grain, coexisting with the
absorption of capital in the railways, was more than so poor a nation
as Great Britain could bear, and that the dreadful crisis which ensued
was the consequence--we would beg to ask, _who has made us so poor_?
We shall lay before our readers a few facts in regard to the resources
of this miserably poor nation--this poverty-stricken people, who have
eaten up their little all in the form of 10,000,000 quarters of grain
and 176,000 live cattle, imported in the last nine months. We shall
show what they were before the free trade and fettered currency system
began; and having done so, we shall repeat the question,--"Who has made
us so poor?"
This miserable poverty-stricken people, in the years 1813, 1814,
and 1815--in the close of a bloody and costly war of twenty years'
duration, during which they raised £585,000,000 by loans to government,
and, on an average, £50,000,000 annually by taxes, from a population,
including Ireland, not in those last years exceeding 18,000,000 of
souls--made the following advances and contributions to government for
the public service:--
-----------+----+------------+-------------------------+------------+-
| | | Debt contracted. | |
| | +-------------------------+ |
Population.| | Raised by | | | Total Debt |
| | Taxes. | Funded. | Unfunded. | contracted.|
-----------+----+------------+------------+------------+------------+-
17,750,000 |1813| £68,748,363| £52,118,722| £55,478,938|£107,597,660|
17,900,000 |1814| 71,134,503| 39,692,536| 53,841,731| 92,934,267|
18,150,000 |1815| 72,210,512| 50,964,366| 46,968,138| 97,932,501|
| +------------+------------+------------+------------+-
In 3 years,| |£212,093,378|£142,175,624|£156,288,807|£298,464,428|
-----------+----+------------+------------+------------+------------+-
--+------------
| Total
| Payments
| into the
| Exchequer.
--+------------
|£176,346,023
| 164,068,770
| 170,143,016
--+------------
|£510,557,809
--+------------
If any one supposes these figures are inaccurate, or this statement
exaggerated, we beg to say they are not our own. They are copied
_literatim_ from Porter's _Parliamentary Tables_, vol. i. p. 1; and
we beg to refer to that gentleman at the Board of Trade, to whom, on
account of his well-known accuracy, the Chancellor refers for all his
statistical facts, for an explanation of these, we admit, astounding
ones.
Was the capital of the country exhausted by these enormous
contributions of A HUNDRED AND SEVENTY MILLIONS annually to the public
service, in the twentieth year of the most costly war on record? So far
from it, the great loan for 1814 of £39,000,000 was made at the _rate
of_ £4, 11s. 1d. PER CENT; that of 1813 at £5, 10s. on an average; that
of 1815 at £5, 11s. _per cent._[13] And it is evidently immaterial
whether the immense amount of £100,000,000 debt, funded and unfunded
together, was contracted in the form of direct loan to government, or
of Exchequer bills issued from the Treasury, and forming the unfunded
debt. Such bills required to be discounted before they were of any
value; and their proceeds, as Mr Porter very properly states, were so
much money paid into the public treasury. They were an exchange of the
capital of the nation for Treasury bills, and were, therefore, just as
much a draft on that capital as the exchange of the sums subscribed in
loans for the inscription of certain sums in the 3 _per cent._ consols.
In the next place, this poor nation, which has now nearly eaten up its
resources in a single season, in the year 1844 possessed, in the two
islands, real or heritable property of the yearly value of £105,000,000
sterling,[14] corresponding to a capital, at thirty years' purchase,
of £3,150,000,000; and at twenty-five years' purchase, to one of
£2,625,000,000. These figures are ascertained in the most authentic
manner; that of England by the Report of the Lords' Committee on the
burdens of real property;[15] that of Ireland by the Poors' Rate
returns; and that of Scotland from an estimate founded on the amount of
income-tax paid, as no poors' rate as yet extends universally over the
country.
Further, we have the authority of Lord Palmerston, in the debate in
last session of Parliament on foreign loans, for the assertion that
this poor nation has advanced £150,000,000 in loans to republics since
1824, or to monarchies surrounded with republican institutions; the
greater part of which has been lost. Yet so far have these copious
drafts been from exhausting, or even seriously trenching, on the
capital of the nation, that it appears from the subjoined valuable
table, furnished from returns allowed to be taken from the great
bill-broking house of Overend and Gurney in London,[16] that during
that whole period the interest of money, even in the years when the
pressure was severest, never rose above _6 per cent._, and immediately
after fell to 3½ or 3 _per cent._, and in 1844 and 1845, it is well
known, it was still lower, at some times as low as 2½ _per cent._
Again, the income-tax returns for 1846, of this miserably poor nation,
exhibit a revenue of £5,200,000 yearly drawn from this source, though
the tax is only 7d. in the pound, or £2, 18s. 4d. _per cent._, and
though the tax did not legally go below incomes of £150, and in
practice generally excluded those under £200 a-year. The income-tax,
in the last year of the war, produced £15,000,000 at 10 _per cent._,
reaching all incomes above £60 a-year. Had the same standard been
adopted in 1842, when it was reimposed by Sir R. Peel, it would have
produced at least £18,000,000 yearly, which sum, increased by 33 _per
cent._ from the enhanced value of money by the operation of the act of
1819, would correspond to about £24,000,000, according to the value of
money in 1815. This proves that the wealth of the nation had _more than
kept pace_ with the increase of its population; for the numbers of the
people in the two islands in 1815 were 18,000,000, and in 1845 about
28,000,000, or somewhat above 50 _per cent._ increase.
Lastly, this miserably poor nation, which has eaten up its resources
in the shape of quarters of grain and fat bullocks in a single year,
exported and imported in the three years 1812, 1814, and 1815, and
1843, 1844, and 1845, before free-trade began, respectively as follows:
Exports. Imports.
Official value. Official value.
1812, £29,508,517 £24,923,922
1813--Records destroyed by fire.
1814, 34,207,253 32,622,711
1815, 42,875,996 31,822,053
1843, £117,877,278 £70,093,353
1844, 131,564,503 75,441,555
1845, 132,444,503 85,281,958
Such were the commercial transactions of this nation, which, in the
interval from 1815 to 1845, had become so miserably poor.
Keeping these facts in view, we again ask: Having down to 1845 been
so rich, _what has since made us so poor_? The free-traders and
bullionists tell us it was neither the abolition of the corn-laws nor
the Bank Charter Act. Then what is it which in so short a time has
produced so great, so terrible a revulsion? Government, and their
organs in the press, assert that it was the Irish famine, and the
absorption of capital in railways. To avoid any chance of misconception
on so vital a point, we subjoin the words of the Chancellor of the
Exchequer in the debate on the currency on 30th November 1847, as
reported in the _Morning Post_ of December 1, which were in substance
the same as those employed by the Marquis of Lansdowne in the House of
Lords:--
"Up to October there had been no great pressure; but in that month the
pressure rapidly rose by reason of the _abstraction of capital for
railways and corn_. The House would be surprised to hear the amount of
capital thus abstracted for corn in fifteen months.
June 1846 to January 1847, £5,139 000
January 1847 to July 1847, 14,184,000
July to October, 14,240,000
-----------
Total, £33,563,000
Then as to the capital absorbed in railroads, it had been in each year,
from 1840, on an average, to
1843, £4,500,000
1844, 6,000,000
1845, 14,000,000
1846 { First half-year, 9,000,800
{ Second half-year, 26,600,000
1847, First half-year, 25,770,000
1847, Last half-year, 38,000,000
the latter being, of course, estimated on the supposition of the
expenditure having continued at the same rates."--_Morning Post_,
December 1, 1847.
Now of all the marvellous statements that ever were put forth by a
government to explain a great public disaster, we do not hesitate to
say this is the most marvellous. For let it be conceded that these
are the real causes of the distress,--that it is the railways and the
importation of foreign corn which have done it all--Who introduced the
railways and let in an unlimited supply of foreign corn? Who passed
all the railway bills, and encouraged the nation in the undertakings
which are now held forth as so entirely disproportioned to its
strength? Who took credit to themselves for the prosperity which the
construction of railways at first occasioned, and dwelt with peculiar
complacency, in the opening of the Session of 1846, on the increased
produce of the excise, and diminution of crime, as indicating at once
the augmented enjoyments and diminished disorders of the poor? Who
disregarded the cautious, and as the event has proved, wise warnings
of Lord Dalhousie at the Board of Trade? Who opened the railway of
the Trent Valley with a silver trowel, and enlarged in eloquent terms
on the immense advantages which that and similar undertakings would
bring to the country? Sir Robert Peel and the party who now put down
the whole evils which have ensued to the foreign corn and railways.
Was a single word heard from them condemnatory of the mania which had
seized the nation, and prophetic of the disasters which would ensue
from its continuance? Did Sir Robert Peel warn the people that the
currency was put on a new footing; that the act of 1844 had forbid its
extension beyond thirty-two millions issuable on securities, and that
as credit was thus materially abridged, the capital of the nation would
be found inadequate to the undertakings in which it had engaged? Quite
the reverse; he did none of these things. He encouraged the embarking
of the capital of the nation in railways to the extent of above two
hundred millions,[17] all to be executed in the next four years; and
now we are told that the disasters which have ensued are mainly owing
to that very unmanageable railway progeny which he himself produced!
Again, as to the importation of foreign grain, the second scape-goat
let go to bear the sins of the nation--who let that scape-goat loose?
Who introduced the free trade system, and destroyed the former
protection on native agriculture, and disregarded or ridiculed all
the warnings so strenuously given by the Protection party, that it
would induce such a drain on the metallic resources of the country as
must induce a speedy monetary crisis, and would subject the nation
permanently to that ruinous wasting away which proved fatal to the
Roman empire, when the harvests of Egypt and Libya came to supplant
those of Italy in supplying the cities of the heart of the empire
with food? Who declared that the great thing is to increase our
importations, and that provided this is done the exportations will take
care of themselves? Who laughed at the warning, "Two things may go out,
manufactures _or specie_"? It was Sir Robert Peel and his free trade
followers who did all these things; and yet he and his party, in or out
of administration, (for they are all his party,) coolly now turn round
and tell us that the misery is all owing to the foreign corn and the
railways, which they themselves introduced!
The Irish potato rot of 1846, it is said, occasioned the great
importation of grain, which for the next winter and spring deluged the
country; and but for them we should have been landed in the horrors of
actual famine over a great part of the country. We entirely agree with
this statement. The Protectionists always were the first not only to
admit, but _urgently to insist_ that absolute freedom of importation
should be allowed _in periods of real scarcity_. The sliding-scale
formerly in use expressly provided for this; for the duty began to
fall when wheat reached sixty-three shillings, and declined till at
seventy-three shillings it was only one shilling a-quarter. It was
on the propriety of admitting grain duty-free in periods of _average
or fine harvests_, such as we have just been blessed with, that they
were at issue with their opponents. Under the old system, nearly all
the grain which was imported in the winter of 1846 and spring of 1847,
would have come in, for the duties became nominal when wheat rose to
seventy-three shillings a-quarter, and it rose during that period
to one hundred and five and one hundred and ten shillings. What the
Protectionists said, and said earnestly, when this vast importation,
_necessary at the time_, was going on, that it _anticipated_ the
effects of a free importation of grain, and by its effect on the
currency, while it lasted, might teach the nation what they had to
expect when _a similar drain_, by the effects of free trade, _became
perpetual_. Eight months ago, on March 1, 1847, we made the following
observations in this Magazine:-
"The quantity of grain imported in seven months only, viz. from 5th
July 1846, to 5th February 1847, exceeded six millions of quarters, at
the very time when our exports were diminishing. It may be imagined
how prodigious must have been the drain upon the metallic resources of
the country to make up the balance. The potato rot, it is said, has
_concealed_ the effects of free trade. Quite the reverse. Providence
has done the thing at once. We have got on at railway speed to the
blessings of the new system. Free trade was to lead to the _much
desired substitution of six millions of quarters of foreign, for six
millions of quarters of home growth in three years_. But the potato rot
has done it _in one_. The free trade policy could not have done it so
expeditiously, but it would have done it as effectually. It is a total
mistake, therefore, to represent the famine in Ireland and the West of
Scotland as an external calamity which has concealed the effects of
free trade. _It has only brought them to light at once._"--LESSONS FROM
THE FAMINE. _Blackwood's Magazine_, March 1847.
The real amount of the famine in Ireland, of which so much has been
said, was very much magnified, however, by the fears of some parties
and the interested exaggerations of others. The deficiency in the
two islands has been stated variously, at from sixteen to twenty
million pounds worth. Take it at the larger sum to avoid all idea of
misrepresentation--what is this to the total agricultural produce of
Great Britain and Ireland? That is estimated by Mr Porter on very
rational grounds at three hundred millions annually, in produce of
all kinds. The subtraction of twenty millions worth;--_a fifteenth
part_, at the very utmost, could never account for the prodigious
rise of prices from forty-nine shillings a-quarter to one hundred
and ten shillings, which wheat rose to in March 1847. It was the
impulse given to speculation in grain, by the sudden throwing open
of the ports by Sir Robert Peel's free trade measures, which really
occasioned the prodigious importation so much exceeding what was
required, which actually took place. The defalcation occasioned by
the Irish potato rot, and the deficiency of the oat-crop in Great
Britain, was at the very utmost a fifteenth part of the annual supply.
But the grain imported in the first nine months of this year has
exceeded ten millions of quarters, being a full _sixth_ part of the
annual consumption of the nation, which for the use of man and animals
together is estimated at sixty million quarters. And hence the rapid
fall of prices which followed the fine harvest of 1847, from one
hundred shillings to fifty shillings, which has involved in ruin so
many houses concerned in the corn trade.
But what is particularly worthy of notice, and what we in the most
earnest manner beg to impress upon our readers as by far the most
luminous and important fact which the recent discussions in parliament
have elicited, is this. It is stated, as has been already noticed, by
the Chancellor of the Exchequer, that the sum paid for foreign grain
in the three months ending November 30th 1847, that is in the months
of September, October, and November, 1847, had reached the enormous
and unprecedented amount of £14,240,000! The same statement was made
by Lord Lansdowne in the House of Lords; and the Chancellor of the
Exchequer added, that to be sure of the figures, he had them remitted
to and corrected by Mr Porter. Now, this immense importation, be it
recollected, took place IN THE FACE OF THE FINEST HARVEST KNOWN FOR
YEARS, and for which a public and solemn thanksgiving has just been
returned. We say nothing of the prospects of foreign importation which
this fact opens to our agricultural interests,--that furnishes ample
subject for future consideration; what we pray the public attention
to, is the warning which it gives of the effects of free trade upon
the _monetary concerns_ of the nation, and above all on the credit of
the trading and commercial classes. This is the importation, in an
uncommonly fine season, with a noble harvest in both islands, just
reaped! The dreadful monetary crisis of October 1847, which rendered
the suspension of the Bank Charter Act, on the 25th of that month,
indispensable, was evidently owing to the prodigious importation which
all the fineness of the preceding harvest could not check. The crisis
of April 1847, may with justice be ascribed to the failure of the
potato crop in Ireland, and would probably have come on, though not
with the same intensity, though the change on the corn laws had been
made by Sir Robert Peel in the July preceding. But it is rather too
much to go on talking in December 1847, about the failure of the crop
of 1846 in Ireland, four months after one of the finest crops in the
memory of man had been reaped in the British dominions.
This points to one great and lasting truth, the due appreciation of
which by the people of Great Britain is of such paramount importance,
that it will be cheaply purchased even at the cost of all the misery
and destruction of property which the late crisis has occasioned in
the British empire. This is, that the great importation of grain,
and consequent abstraction of the precious metals consequent upon
the free-trade system, may be expected _to be permanent_. We have
repeatedly warned the nation in every possible form that this would
be the case, but our warnings during the free-trade mania met with no
attention. Now, however, it has been proved by the event that they were
too well founded. The old and rich state will always be undersold by
the young and poor one in the supply of grain for its own market. The
grain-growing state never will take manufactures to any proportional
extent, but _always will take gold in exchange_. This was the case with
Rome in ancient days; this is the case with England in these times.
The steam-engine and machinery do little or nothing for agriculture,
though every thing for manufactures. The great grain states are always
those nations in which the labouring-class are poor, or have few
artificial wants, and consequently take few or no manufactures. Poland,
the Ukraine, the Valley of the Mississippi, are examples. Gold is what
they want, and what they will have; for it is the cheapness of their
production which enables them to export to advantage. So universal is
this truth, of such paramount importance is it upon the fortunes of an
old and highly civilised state, that, it may safely be affirmed, its
existence in its old age depends on the requisite safeguards against
the danger thence arising being established. Such are the effects of
the constant drain of gold and importation of grain on such a state in
its advanced stages, that even the strongest nation will sink in time
under the strain, as Rome did, if nothing is done to avert the danger.