BLACKWOOD’S
EDINBURGH MAGAZINE.
NO. CCCCXV. MAY, 1850. VOL. LXVII.
CONTENTS.
FREE-TRADE FINANCE, 513
GREECE AGAIN, 526
THE MODERN ARGONAUTS, 539
MY PENINSULAR MEDAL. BY AN OLD PENINSULAR. PART VI., 542
GERMAN POPULAR PROPHECIES, 560
THE HISTORY OF A REGIMENT DURING THE RUSSIAN CAMPAIGN, 573
THE PENITENT FREE-TRADER, 585
TENOR OF THE TRADE CIRCULARS, 589
ALISON’S POLITICAL ESSAYS, 605
OVID’S SPRING-TIME, 621
DIES BOREALES NO. VII. CHRISTOPHER UNDER CANVASS, 622
LETTER FROM MAJOR-GENERAL SIR WILLIAM NAPIER, 640
EDINBURGH:
WILLIAM BLACKWOOD & SONS, 45, GEORGE STREET;
AND 37, PATERNOSTER ROW, LONDON.
_To whom all communications (post paid) must be addressed._
SOLD BY ALL THE BOOKSELLERS IN THE UNITED KINGDOM.
PRINTED BY WILLIAM BLACKWOOD AND SONS, EDINBURGH.
BLACKWOOD’S
EDINBURGH MAGAZINE.
NO. CCCCXV. MAY, 1850. VOL. LXVII.
FREE-TRADE FINANCE.
The Chancellor of the Exchequer has brought forward the Budget, and the
Financial Measures of Government are before the public. It contains
matter worthy of the most serious consideration. It is hard to say
whether the admission it contains, or the measures it proposes, are most
condemnatory of the system of Class Government which the Reform Bill has
imposed on the country.
The statement of the Chancellor of the Exchequer, in a few words, is
this:—“Last year, I calculated upon a small surplus of L.104,000 for the
year ending 5th April 1850, but that surplus has swelled to L.2,250,000,
by rise in the produce of the taxes, and reductions of the expenditure.
Of this sum L.1,500,000 is to be regarded as the real surplus to be
relied upon for the measures of this year.” Assuming this as the surplus
to be dealt with, he proposes to apply L.750,000 in reduction of the
last contracted part of the debt, and L.750,000 in reduction of
taxation; L.400,000 a-year being applied to the reduction of the duty on
bricks, and L.350,000 to that of stamps on conveyances. It is thus that
he proposes to alleviate the agricultural distress which, he admits,
prevails in the country.
Three things are especially worthy of observation in this statement.
In the first place, it affords another illustration, if another was
needed, of the present deplorable subjection of Government to the
pressure from without, which has so often and painfully been exhibited
since the new system of government began. It is well known that, during
the three disastrous years that preceded the present one, debt to a
large amount was contracted. To mention two items only: eight millions
were borrowed in 1847 to relieve the Irish famine; L.2,000,000 in the
succeeding year, to carry on the current expenses of the year; and in
1841 the deficiency had been such, that no less than L.5,000,000 was
borrowed to meet the ordinary expenses of the year. One would suppose,
that when a surplus arose in the year 1849, the natural course would
have been to have applied it, in the first instance, to extinguish, so
far as it would go, the additional debt so recently contracted. Has this
been done? Not at all. Only L.750,000 out of a real surplus said to
amount to L.1,500,000, is to be applied in this way; and L.750,000 is to
be devoted to reduction of taxes. L.10,000,000 is borrowed during two
years of distress; L.750,000 only has been devoted to its reduction, in
a year, we are told, of unparalleled commercial prosperity.
In the next place, to what object is the L.750,000 a-year of surplus
available to reduced taxation, discovered for the first time after three
years of deficit, to be applied? Is it to be devoted to remission of
taxes pressing upon the agricultural interest, whom the measures pursued
for behoof of towns have reduced to such a state of depression? Not at
all. It is to be applied to reduction of the duty on _stamps and
bricks_. The first may be admitted to be desirable, because, as so large
part of the landed property in the kingdom will soon, to all appearance,
change hands, it is an object to render the transfer as little costly as
possible. But of what use is the reduction of the duty on bricks to the
suffering cultivators? That it is a boon to the master-builders in
towns, may be conceded; though it may well be doubted whether it will
ever cause a reduction of price to the purchasers from them. But what
the better will the farmers and ploughmen, the landlords and yeomen, be
of the change? Additional houses are not wanted _in the country_; on the
contrary, there will in all probability not be inmates for those that
already are there, from the certain and experienced effect of Free-trade
in diminishing the demand for rural labour. It is in the towns and
villages that the building is going on; because Free-trade policy is
daily more and more forcing the rural inhabitants into the towns in
quest of employment or relief. In London, 200 miles of new streets, and
66,000 houses, are said to have been constructed, or to be in course of
construction, during the last two years. Is there any increase of houses
in the rural districts? Herein, then, lies the injustice of the present
measures of Government, that, though prefaced with professions of a
desire to relieve all parties, they in reality benefit one class only;
and that, introduced at a time when it is admitted the agriculturists
are in a state of extreme depression, and the manufacturers are asserted
to be in a state of unexampled prosperity, they are mainly calculated to
add to the prosperity of the latter, and take nothing from the
sufferings of the former. It is not difficult to see where the Reform
Bill has practically lodged the power of Government in the British
Empire.
In the third place, and what is most material of all, the speech of the
Chancellor of the Exchequer contains an admission in regard to the
present state and past direction of our finances, since we have fallen
under Liberal direction, of such moment, that we regard it as the most
important statement that has ever yet been given in regard to the effect
of the new measures on the national fortunes. It must be given in his
own words, as reported in the _Times_ of March 16:—
“If honourable gentlemen will refer to what has taken place during the
last twenty years—the sums which have been borrowed on the one hand,
and the amounts which have been applied to the reduction of the debt
on the other—I think they will see that there is good reason for not
being indifferent on this subject. In 1835 and 1836, a sum of
L.20,000,000 was borrowed for the emancipation of the West Indian
slave population; to defray the deficiency, in the year 1841,
L.5,000,000 were borrowed; I was obliged to borrow L.8,000,000 to meet
the necessities of the sister country in 1847; and when the House
refused to increase the income-tax in 1848, I was obliged to borrow a
further sum of L.2,000,000, to meet the extraordinary expenditure.
Since the period I have mentioned, then, a sum of L.35,000,000 has
been added to the national debt. When I turn to the other side of the
account, I find that all the money which has been applied from surplus
income to the reduction of debt, in the course of the last twenty
years, amounts to only L.8,000,000; so that, _in a period of profound
peace, an increase of debt of no less than L.27,000,000 has taken
place_. (Hear, hear.) When, in 1848, the House refused to accede to
the proposal I made for an increased tax upon income, I certainly did
hope that, when a turn took place in our financial affairs, they would
not, the moment there was a surplus of income, instantly press that
the whole of that surplus should be devoted to the reduction of
taxation. What should we think of a private individual who acted in
such a manner (hear, hear)—a man who, whenever he found his income
fall short of his expenditure, borrowed the money necessary to meet
his liabilities, but who never thought of paying off that debt when,
by a fortunate turn of affairs, he happened to be in receipt of an
excess of income? (Hear, hear.) I must say that it will be hopeless
for us to maintain that character as a nation which we think
indispensable in an individual, if, in a time of profound peace,
instead of reducing our public debt, we go on adding to it from year
to year.”
Here it is admitted, by the Whig Chancellor of the Exchequer, that after
twenty years of profound peace and unbroken Liberal government, (Sir
Robert Peel was essentially Liberal,) not only has there been no
reduction of the public debt, but AN INCREASE OF IT TO THE EXTENT OF
TWENTY-SEVEN MILLIONS. It has been repeatedly demonstrated that, if the
noble sinking-fund of L.15,000,000 a-year, which Mr Pitt’s policy left
to the Administration at the close of the war in 1815, had been
preserved unimpaired by keeping up the indirect taxes from which it
arose, the whole national debt would have been extinguished in 1845.
When the ruinous monetary act of 1819, and the increasing concession of
successive Administrations to urban clamour had rendered that
impossible, the semi-Liberal semi-Tory Governments from 1815 to 1830
still contrived to pay off L.82,000,000 of the public debt in fifteen
years; and when the Duke of Wellington resigned in November 1830, he
left, by the admission of all parties, a real sinking-fund, arising from
an excess of income above expenditure, of L.2,900,000 a-year to his
successors. But since that time, under his Liberal successors, not only
has that surplus on an average of years disappeared, but during twenty
years of profound peace L.27,000,000 has been _added_ to the total
amount of the debt. Well may Sir Charles Wood say, “What should we think
of a private individual who acted in such a manner?” Such is the rule of
the urban constituencies, to humour whose fancies, and appease whose
clamour, the whole efforts of Government for the last twenty years have
been directed.
The important thing in the statement of the Chancellor of the Exchequer
is, that it gives us the result of Whig government and Free-trade
finance during so long a period. Every successive quarter, during these
twenty years, we have been told by the Liberal press that the finances
were in the most flourishing condition; that any deficiency that
appeared was more apparent than real; and at any rate, in the most
unfavourable view, it was sufficiently explained by temporary causes,
and afforded no ground whatever for despondency in the future. Every
successive Session, the Ministers came down to Parliament with the most
flourishing accounts of the state of the country and of the public
finances, and demonstrated to the satisfaction of every reasonable man
in the nation that both never were in more hopeful and prosperous
circumstances. Even when a deficiency of one or two millions stared the
Chancellor of the Exchequer in the face, which was not unfrequently the
case, there was always some temporary or transient cause to which it was
to be referred. The China tribute had ceased, or some reduction of
duties had come into operation, or revolutions in Europe had diminished
our exports to the adjoining states. The Irish potato-rot was a perfect
godsend to the Liberal financiers. It constituted their stock in trade
for the next three years. The ruin of L.15,000,000 worth of agricultural
produce in Ireland, out of at least L.260,000,000 worth in the two
islands, explained the whole distress of the country and the exchequer
for the next three years; and, strange to say, the very men who paraded
so ostentatiously the ruinous effects of this comparatively trifling
deficiency in a single year, made a boast soon after of their having
destroyed L.90,000,000 of agricultural remuneration by the importations
they induced of foreign grain.
But nothing is more certain than that error and delusion cannot, by any
human effort, be prolonged for a very long period. With the advent of
the time when the interest to deceive has ceased, or a new generation of
deceivers has succeeded, the whole fabric falls to pieces. As certainly
and mercilessly as the vices or follies of preceding monarchs are
portrayed by those who have succeeded to the inheritance of their
results, are the ruinous consequences of former delusions in democratic
Governments exposed by succeeding Administrations who find themselves
hampered by their effects. Many a popular Nero is cast down from his
pedestal, almost before the vital warmth has left his body; many a
republican Necker is exposed by a republican Bailly, when he finds the
public finances rendered desperate by the measures which had been
pursued with the cordial approbation of the whole Liberal party in the
state. It is the same with our present Chancellor of the Exchequer. He
finds the public finances, in the midst of boasted commercial and
manufacturing prosperity, in so deplorable a condition, that he is fain
to lay the whole blame upon his predecessors; and, after deploring the
extraordinary fact, that during twenty years of profound peace, Liberal
government, and retrenching Administrations, we have not only made no
reduction whatever in the public debt, but added twenty-seven millions
to its amount, he very naturally and justly observes, “What should we
say to a private individual who should conduct his affairs in this
manner?”
We have been so accustomed, during twenty years of Liberal and popular
rule, to see every successive Administration live only from hand to
mouth, and to be content if they can get over present difficulties,
without bestowing a thought on the future, that the nation has almost
forgotten what it was to have a prudent and foreseeing Government at the
head of affairs: or rather, nearly the whole generations who have risen
to manhood have come to think that such a system of government is
impossible, and is to be ranked with the El Dorado of Sir Walter
Raleigh, or the Utopia of Sir Thomas More. To enlighten their minds on
this subject, we subjoin two Tables, showing what was done by the
corrupt old Tory Governments—even during the anxieties and expenditure
of a most protracted and costly war, or when the national finances were
slowly recovering from its effects—to put the finances on a good
footing, and lay, in present fortitude and sacrifice, a solid foundation
for future relief and prosperity.
TABLE I., showing the growth of the Money
applied to the reduction of the Debt, and
the Sums paid off from 1792 to 1815, being
twenty-three years of war.
1792, £1,558,504
1793, 1,634,972
1794, 1,872,957
1795, 2,143,697
1796, 2,639,956
1797, 3,393,210
1798, 4,093,164
1799, 4,528,568
1800, 4,908,379
1801, 5,528,315
1802, 6,114,033
1803, 6,494,694
1804, 6,436,929
1805, 9,406,865
1806, 9,602,658
1807, 10,125,419
1808, 10,681,579
1809, 11,359,691
1810, 12,095,977
1811, 13,073,577
1812, 14,098,842
1813, 16,064,057
1814, 14,830,957
1815, 14,241,397
————————————
£186,928,399
—PORTER’S _Parl. Tables_, i. 1.
It is a total mistake to allege, as is often done, that this immense and
growing sinking-fund was obtained entirely by borrowing with the one
hand what was paid off with another. The _funds_ thus applied to the
reduction of debt were obtained from the _indirect_ taxes set apart on
the contraction of each loan, in amount adequate not only to defray its
annual interest, but also to extinguish, within forty-five years after
it was contracted, the principal of the loan itself. That part of the
loan was applied in each year, especially during the latter years of the
war, to keep up the sinking-fund, is true, but is immaterial. That was
only because the taxes set apart for its support were absorbed, in great
part, by the necessities of the contest; and when _the contest and loans
ceased_, these taxes were amply sufficient to keep up the sinking-fund
without any extraneous aid. This appears from the following Table, also
taken from Mr Porter, exhibiting what was actually paid off of the
public debt during the next fifteen years of Tory peace-government:—
TABLE showing the Money applied to the
reduction of Debt, Funded and Unfunded, from
1815 to 1832.
1816, £13,945,117
1817, 14,514,457
1818, 15,339,483
1819, 16,305,590
1820, 17,499,773
1821, 17,219,957
1822, 18,889,319
1823, 7,482,325
1824, 10,625,059
1825, 6,093,475
1826, 5,621,231
1827, 5,704,766
1828, 4,667,965
1829, 2,559,485
1830, 4,545,465
1831, 1,663,093
1832, 5,696
————————————
£162,682,256
—PORTER’S _Parl. Tables_, i. 1.
But the Reform Bill, passed in 1832, has entirely put an end to the
reduction of the debt. Since that time, as Sir Charles Wood tells us,
the debt, so far from having diminished, has increased £27,000,000.
That there was a substantial reduction of debt going on during the
period included in the above table, and not a mere juggle, by
transferring debt from one denomination to another, though not to the
amount which these figures would indicate, is decisively proved by the
following Table, showing the general result of the financial operations
from 1816 to 1832, when the Whigs introduced the Reform Bill:—
Funded Debt on 5th Jan. 1816, £816,311,940
Unfunded do., 48,510,501
————————————
Total, £860,822,441
Total Debt on 5th Jan. 1832—
Funded, £754,100,549
Unfunded, 27,752,650
———————————— 781,853,199
————————————
Paid off in sixteen years, £82,969,242
—PORTER’S _Parl. Tables_, ii. 6.
In the next eighteen years, since the Reform Bill changed the
Constitution, it has been seen the debt was increased by £27,000,000.
So prodigious and fatal a change in our financial system would be wholly
inexplicable, considering the many able and patriotic men who, since
that period, have been intrusted with its direction, if we did not
recollect the vital change made since that time in the constitution of
the country, and the new class which was brought up in overwhelming
numbers to return representatives to the House of Commons. That class is
the borough and shopkeeping interest, with whom the main object is to
buy cheap and sell dear. Not only has this principle, since that time,
formed the sole regulator of Government measures in general or
commercial policy, but it has operated decisively on our finances, and
is the main cause to which their present hopeless condition is to be
ascribed. To cheapen everything became the great object; and this was to
be done, it was thought, most effectually by taking taxes off articles
of consumption. Under the influence of this principle, indirect taxes to
the following enormous amount have been repealed since the peace, the
magnitude of which renders it noways surprising that the sinking-fund
has disappeared:—
TABLE showing the Taxes, Direct and Indirect, Repealed and Imposed from
1816 to 1847, both inclusive.
REPEALED. IMPOSED.
Year. Direct. Indirect. Direct. Indirect. Year.
1816, £15,000,000 £2,547,000 £320,058 1816
1817, 36,495 7,991 1817
1818, 9,564 1,336 1818
1819, 705,846 3,094,902 1819
1820, 4,000 119,602 1820
1821, 471,309 43,642 1821
1822, 2,139,101 1822
1823, 1,860,000 2,190,050 18,596 1823
1824, 1,704,724 45,605 1824
1825, 3,639,551 43,000 1825
1826, 1,973,812 188,000 1826
1827, 4,038 21,402 1827
1828, 51,998 1,966 1828
1829, 126,406 1829
1830, 4,093,955 696,004 1830
1831, 1,598,536 627,586 1831
1832, 747,264 44,526 1832
1833, 1,526,914 1833
1834, 1,200,000 891,516 198,394 1834
1835, 165,817 75 1835
1836, 989,786 1836
1837, 234 3,991 1837
1838, 289 100 1838
1839, 66,258 1,783 1839
1840, 18,959 2,155,673 1840
1841, 27,176 1841
1842, 1,596,366 £5,529,989 1842
1843, 1843
1844, 1844
1845, 4,535,561 23,720 1845
1846, 1846
1847, 1847
———————————— ———————————— ———————————— ————————————
£18,060,000 £33,523,623 £5,529,989 £7,743,962
Imposed, 5,529,989 7,743,962
———————————— ————————————
Taxation reduced, £12,431,011 £25,779,661
Thus the balance of indirect taxation, reduced since the Peace, has been
above £25,000,000—of direct, above £12,000,000 annually; and till 1842,
it was £15,000,000 yearly. Had the sinking-fund been kept up at its
amount as it was in 1815—that is, at £15,000,000 sterling out of the
indirect taxes, there might have been repealed £15,000,000 of direct,
and £14,000,000 of indirect taxes, and still _every shilling of the
public debt would have been paid off by 1846_. Why has this most
desirable, most vital object for the national safety in future times,
not been gained? Simply because the mania of cheapening everything has
ruled the State. Successive Administrations, which have succeeded to the
helm of affairs, have endeavoured to gain a fleeting popularity, by
bidding against each other in the race for popularity, by the sacrifice
of the best interests of their country; and because Parliament—composed,
so far as its majority goes since 1832, of the members for boroughs—have
shut their eyes entirely to the ultimate consequences of their actions,
and looked only to the gratifying their buying and selling constituents
by the incessant reduction of the indirect taxes, and lowering the
remuneration of industry of every kind throughout the country.
In truth, the chasm made in the finances of the country by this
incessant, uncalled for, and ruinous reduction of the indirect taxes, in
pursuance of the mania to cheapen everything, under which the nation has
been labouring during the last thirty years, has been far greater and
more disastrous than the preceding figures, formidable as they are,
would lead us to suppose. The taxes repealed are of course set down at
the amount they were _at the time of their repeal_. But that is very far
from what they would have produced if they had been kept up; because, in
that case, of course they would have shared in the vast increase of
wealth and population which has since taken place. At the time when a
large part of these taxes were repealed, the British isles did not
contain above from 20,000,000 to 24,000,000 of inhabitants—now they
contain 29,000,000. Our exports and imports have more than doubled in
amount since the income-tax was taken off in 1816. Beyond all doubt, at
its original rate of ten per cent, it would now have produced, at the
very least, £20,000,000 a-year. The duty on spirits, so fatally lowered
in 1826, would now have produced, not £2,000,000, but £3,000,000 or
£3,500,000 annually. There cannot be a shadow of doubt that the taxes,
which in 1815 produced £72,000,000 a-year, would, if continued at the
same rates, have been now producing 50 per cent more, or £110,000,000.
There is no man in his senses who would think that the nation either
could have borne, or ought to have borne, such a load of taxation.
Relief, on the return of peace, was indispensable. But it is one thing
to give relief in a reasonable and prudent degree; it is another, and a
very different thing, to throw away the public revenue with a reckless
prodigality, without either principle or foresight, and for no other
reason but to win a temporary popularity for wasteful Administrations.
Indeed, the inevitable effect of the cheapening system, and especially
of the repeal of the Corn Laws, in rendering the taxes unproductive, and
payment of the interest even of the public debt ere long impossible, was
distinctly foreseen and foretold not only by ourselves in this Magazine,
but by the most decided apostles of the opposite set of opinions. Hear
Mr Cobbett on the subject, in Vol. LI. of his _Register_, No. 2, July
10, 1824—a quotation for which we are indebted to that able and
consistent journal, the _Standard_.
“‘The commercial world’ will, I believe, find it rather difficult to
persuade the landlords to ‘modify and alter the Corn-laws,’ much less
to ‘do away’ with those laws: but what now is to become of all the
pretty doctrine about the inseparable interests of manufacture and
agriculture? I trust we shall hear no more of that soft nonsense....
“Now mind, I do not say that the manufacturers ought not to be
permitted to get food from abroad; but I say—and what man in his
senses does not say, that in whatever degree this cotton body is
supplied with food from abroad, it must and will dispense with food
from our own lands....
“I would fain then see the two-legged animal who is quadruped enough
still to contend that the interests of the landlords and those of the
cotton-lords are inseparable. They are directly opposed to each other;
and opposed to each other they must be as long as this debt shall
last.
“It will be curious enough to observe how ‘the manufacturing mind’
will work upon ‘the agricultural mind.’ These two minds will now come
into direct contact with each other. It will be the business of the
cotton mind to convince the landlords that bringing in foreign corn
will not make their English corn sell cheaper; or, failing in this, to
convince them that wheat at 4s. a bushel will, ‘in the long run,’ be
better for the landlords than wheat at 8s. a bushel. A very long run,
I believe, indeed! In short, it is a question of rents or no rents.
With the present debt and taxes, and with wheat at 4s. a bushel, there
can be no rents; so that, when the cotton mind comes forward to get a
repeal of the Corn Bill, it comes in fact to pray that there shall no
longer be rents in England.
“The cotton-lords, and indeed all the lords of the loom and anvil, are
bestirring themselves, and collecting all their forces for a desperate
assault upon the jolterheads (the landlords) who cry aloud for
national faith. I wish them success. I will not absolutely join them;
but I wish them success; because that success would destroy the _whole
system_ (the system of paper-money, national debt, and oppressive
taxation) root and branch. The Corn Bill, the Small-Note Bill, the
laying out of public money in Ireland, the lending of money
occasionally to manufacturers and merchants, the Bank advancing money
upon big estates—all these shifts and tricks just keep the thing
agoing; but come a war, or repeal the Corn Bill, and you will soon see
what is to become of the system. Everything seems strained to its
utmost: and when that is the case, something must soon give way.”
The alleged advantage which the Free-trade party oppose to the obviously
calamitous effects of this incessant surrender of the public revenue,
and the now admitted abandonment of all attempts to pay off the public
debt, is, that commodities have been cheapened thereby, and the weight
which oppressed them taken off the springs of industry. We utterly deny
this advantage. What is the good of this constant cheapening, when
confessedly you cannot cheapen our debts and obligations? Is it anything
else but diminishing the funds from which the interest of these debts
and obligations is to be discharged, and running the nation into the
most imminent hazard of incurring a general bankruptcy, public and
private? Do not salaries and incomes fall, from the highest to the
lowest, in consequence; and if so, what good does the fall of prices do,
even to the individuals who apparently profit by it? Suppose we gained
our object, and rendered everything as cheap here as it is in Poland or
Norway—what should we gain by it, but that we should speedily become _as
poor as them_, and that the realised wealth of this nation, now for the
most part invested in situations where its interest is paid by the
industry of the people, would be lost by that industry having ceased to
receive a sufficient remuneration? And is that an object for which the
national security should be endangered, and the means of maintaining our
independence destroyed?
In truth,—with the exception of some manufactured articles, such as
cotton and calicoes, in which the fall of prices has been prodigious,
owing to the successive improvement of the machinery employed in their
formation,—we are at a loss to see that this immense remission of
indirect taxes, which has evidently been fatal to the national finances,
has been attended with the slightest benefit to the country generally.
We say the country generally—because there can be no doubt that it has
been a very great advantage to the _master-manufacturers engaged in the
trades affected by the taxes_, who have, in most cases, contrived to put
the whole tax lost to the public into their own pockets. That is the
real secret of the remission. Individual selfishness, the thirst for
gain, was in most cases the moving spring. The parties interested
besieged the Chancellor of the Exchequer with memorials, setting forth
the hardships they sustained from the tax affecting their branch of
industry, and the immense benefit the _public_ would derive from its
abolition; but the public was the very last thing they were really
thinking of. It was their own profits to which they were looking; and
but for that, they never would have stirred in the matter. The immense
fortunes made in many branches of manufactures, during the last quarter
of a century, have been in great part owing to the tax remitted having
been wholly gained to the master-manufacturers engaged in them. We pay
the same now for our shoes and beer as we did thirty years ago, though,
since its termination, the whole tax on leather and the war tax on malt
have been repealed.
There is no doubt that prices have declined in most articles of
consumption to a great degree during the last twenty-five years, and in
some to a most extraordinary extent. But where the decline has been
great—as, for example, in cottons or calicoes, which are now selling for
a fifth of what they cost during the war—it is not owing to the
remission of taxation, so much as to the extraordinary perfection to
which machinery and the division of labour have been brought. The proof
of this is decisive. The fall of price has been fully as great in
branches of manufactures in regard to which no remission has taken
place, or in a very slight degree, as in those in which it has been most
considerable. And in regard to all commodities, the effect of the
monetary bills of 1819, 1826, and 1844, must be taken into
consideration. Those bills, by contracting the currency to _one half_ of
what it previously had been in proportion to the industry and population
of the country, have effected a revolution of prices so great, that
nearly the whole reduction of the cost of articles prior to the last
year is to be ascribed to it. The great organ of the money interest, the
_Times_, boasts that recent legislation has doubled the value of the
sovereign. Unquestionably it has; and of course it has also doubled the
whole debt of the country, public and private. It has turned the
national debt of £800,000,000 into £1,600,000,000; it has made the
annual taxation of £52,000,000 as burdensome as £100,000,000 would have
been during the war. Prices have generally fallen; but it is the
contraction of the currency which has done that. As to the remission of
taxation, with the exception of a few articles, such as salt and
spirits, in which the remission, being very large, was immediately felt
by the consumer, the reduction of prices has not been greater than
necessarily flowed from the artificial scarcity of money, and would have
been the same though no reduction of public duties had taken place.
Generally speaking, the tax, lost to the public, has been entirely
gained by the master-manufacturer.
Had the system of cheapening, carried into effect by the contraction of
the currency on the one hand, and the extensive remission of duties on
the other, been attended by beneficial consequences to the people, and
resulted in general happiness and prosperity, there would at least have
been some set-off against the ruin of our financial prospects which it
has occasioned; and we might have consoled ourselves for the evident
imposition of the public debt as a hopeless burden upon the nation, by
the reflection that at least temporary wellbeing had resulted from the
change. Has this been the case? Alas! the fact is just the reverse; and
among the many mournful reflections which the present hopeless condition
of our finances awakens, it is perhaps the most mournful, that the price
paid for it has been, not public happiness, but general and
unprecedented misery. In the long and varied annals of English history,
there is beyond all question no period which has been marked by such
repeated and widespread suffering as the thirty years which have elapsed
since the cheapening system was begun, by the contraction of the
currency in 1819, and the present time, when it has been carried into
full effect by Sir R. Peel’s Free-trade policy in 1846. The three
dreadful monetary crises of 1825, 1839, and 1847, followed, as each of
them was, by several years of devastation and ruin to the trading
classes; the repeated recurrence of agricultural distress, especially
from 1832 to 1836, and in 1849; the unheard-of agonies of the Irish
famine of 1846, perpetuated by the fall of prices, which rendered
agriculture unremunerative over great part of that country,—are some of
the leading features of an epoch which will ever be regarded as at once
the most momentous and the most disastrous which the British Empire has
ever known.
It has left its traces deeply furrowed and for ever marked in English
annals. It has produced consequences which will never be forgotten, and
to which the historians of future times will point as the turning-point
of British story, an eternal warning to future ages. It has produced the
Revolution of 1832; disfranchised our whole Colonies; displaced the
government of property, talent, and intelligence in the ruling island,
and installed that of buying and selling in its stead. It has severed
the public policy from the protection of the Land and Native Industry,
the real inheritance and only sure patrimony of the nation, and anchored
it instead on the shifting quicksands of Commercial Prosperity. It has
destroyed the West Indies beyond the possibility of redemption, and
spread discontent so widely through our other Colonies, that it is
universally known they are all only waiting for some serious disaster to
the parent state, or the advent of a protracted and hazardous war, to
declare themselves independent. It has rendered every seventh man in
Great Britain and Ireland, taken together, a pauper. It has driven from
250,000 to 300,000 industrious citizens, for the last three years,
annually into exile from their native land. It has raised the poor-rate
in both islands to an unprecedented height, and, when measured by its
true standard, the price of subsistence to double what it ever was
before. It has implanted the seeds of ruin in our Mercantile Navy, by
the rapid growth of foreign shipping as compared with British in
carrying on our own trade. It has rendered our shores defenceless as
they were in the days of the Saxon Heptarchy; and made one of our first
admirals, Sir Charles Napier, thankful when the winter frosts closed the
Baltic harbours, and secured our capital from the insulting visits of
the successors of the sea-kings of the north. It has rendered our means
of raising a revenue so hopeless, that the “greatest bill-broker in the
world,” Mr Gurney, has declared that we must end in national bankruptcy;
and the leader of the Free-traders himself, Mr Cobden, has publicly said
that there is no resource but to disband our troops, sell our ships of
war, and trust the national security to the justice and moderation of
our enemies, and the total absence of envy in our rivals. Such, and not
public and passing felicity, is the price which the nation has paid for
the ruin of its finances, the abandonment of the sinking-fund, and the
imposing of the public debt _for ever_, as a burden, hopeless of
redemption, on the country.
The destruction of property which has taken place in the British Empire
during the thirty years that this cheapening process was going on,
exceeds probably anything recorded during a similar period in the annals
of mankind. It has much exceeded all that was produced by the
confiscations of the Convention, or the devastation of the wars of
Napoleon. Each of the three great monetary crises of 1825, 1839, and
1847, occasioned the destruction at once of two or three hundred
millions worth of mercantile property, and halved the fortunes of
persons to double that extent. The intervals between them were, with the
exception of a few brief gleams of perilous prosperity, periods of
anxiety, gloom, and depression, during which all persons engaged in
business, with the exception of the great capitalists, who were daily
getting richer, found their property melting away under the ceaseless
and progressive fall of prices. It was exactly the obverse of the vast
impulse given to industry over the whole world by the discovery of the
mines of Mexico and Peru, and the consequent rise of prices which
everywhere ensued. One class, and one only, flourished amidst the
general distress; but, unfortunately, in that class the government of
the nation for the time was vested, viz., the _moneyed interest_. So
immensely had this interest grown under the protective policy of the
preceding hundred and fifty years, that it was able to set all other
interests in the State at defiance, and to pursue the system of making
the sovereign worth two sovereigns, despite the evident ruin which that
system was bringing on all the industrious classes in the state. Future
ages will ask what were the devastating wars, the stunning calamities,
the loss of provinces, the severance of colonies, which inflicted such
deep and irremediable wounds on the British nation during these
memorable periods? and they will be answered, it was thirty years of
unbroken peace at home, a series of brilliant colonial conquests abroad,
and ONE SYSTEM.
But that one system was amply sufficient to break down the most
wisely-conceived system of finance, to ruin the most flourishing
revenue, to render beggarly the richest nation, to destroy the greatest
empire. It is the system, originating with the Roman empire, as a
necessary and just consequence of its universal conquest, of universal
free-trade—a system which ruined the empire. It is the more dangerous
that it recommends itself to the people in the first instance by the
alluring prospect of cheapening everything, of making money daily go
farther, rendering every one apparently richer and more comfortable than
he was before. It is readily adopted by the shopkeeping and trading
class, because it enables them, in the first instance, to purchase the
goods at a less cost; forgetting that if they buy cheap they must also
sell cheap, and that their customers’ means of payment are melting away
from the effects of that very cheapness. It is long, however, before
this truth, how obvious soever, is generally understood. It is by slow
degrees, and after much suffering only, that it is discovered that this
system of general cheapening does not stop short with people’s
_expenditure_; that it speedily comes to affect their _incomes_ also,
and that in a still greater degree; that, if shopkeepers buy cheap, they
must sell little or sell cheap also; that wages must fall with the
decline in the price of commodities; and that the last condition of the
people is worse than the first. But while this great and eternal truth
is in the course of being brought home to the nation by suffering, the
national pre-eminence is lost, the national security is endangered, the
national spirit is weakened. Multitudes become desperate in regard to
their own and their country’s fortunes, from the scenes of suffering and
distress which they perpetually see around them; the selfish feelings
acquire a fatal preponderance, from the general experienced
impossibility of indulging in the generous. Meanwhile the national
income melts away under the effects of the general cheapening of the
remuneration of industry—all steady or foreseeing system of finance is
abandoned, and every successive Government, like a needy spendthrift,
deems itself happy if it can get through the year without a financial
crisis, never bestowing a thought on the future, either as regards the
national security, its finances, or its means of defence.
One memorable instance of the way in which, under the cheapening system,
the public revenue has been recklessly and needlessly thrown away, is to
be found in the Penny Postage. It is well known that, prior to the
change, the Post-office income, after paying _the whole charges of the
Packet Service_, yielded a clear surplus revenue to the nation of
£1,500,000 or £1,600,000 a-year. The postage of letters, however, was
decidedly too high; a reduction was loudly called for by the public;
and, if cautiously and judiciously applied, the increase of letters
might have compensated the reduction of rates of postage, and a boon
have been conceded to the community, without any detriment to the public
service. A uniform 2d. or 3d., or even 4d., postage would have been
hailed with unmixed satisfaction by the people, who had been paying 10d.
or 1s. for their letters, and no material diminution of that important
branch of the revenue experienced. Instead of this, what did the
Government, urged on by the cheapening party, actually do? Why, they
reduced the postage at once to a penny for all letters, from all
distances within the two islands. We were told, that not only would
there be no loss, but a certain gain, after a few years had elapsed,
from the vast and certain increase in the number of letters that would
be transmitted. How have these expectations been realised? The revenue
set down as coming from the Post-office, immediately after the change,
was only £500,000 or £600,000 a-year; and, after having been nine years
in operation, it has only risen, in the year ending 5th April 1850, to
£803,000; much less than half of what it would have been under the
former system, when the increased population and transactions of the
country are taken into consideration, if either the old rates had been
continued, or a reasonable reduction to 2d. or 3d. had taken place. It
is to the embarrassment produced by this great defalcation that we are
mainly indebted for the renewal of the income-tax.
But this defalcation, great and serious as it thus appears on the face
of the public accounts, was little more than _a half_ of what really
occurred in consequence of the change. To conceal the effects of this
great innovation, the Free-trading party, who had now got entire
possession of the Government, had the address both to get the expense of
the Packet Service, _previously borne by the Post-office, thrown upon
the Navy_, and to keep that important change a secret among the
Government officials. In this way a double object was gained. The
disastrous effect of the reduction was kept out of view, and the
increased charges of the Navy afforded a plausible ground for demagogues
to assail the Government for alleged extravagance in that department.
But that which one demagogue had done, another demagogue brought to
light. Mr Cobden made so violent a clamour about the increase of
expenditure in the Navy since 1835, when it had been reduced, under the
pressure of the Reform mania, to its lowest point, that the Admiralty,
in their own defence, let out the important fact, that, since the
penny-postage system began, they had been saddled with the whole cost of
the Packet Service, which they never had been before; and, in the debate
on the Estimates, Lord John Russell stated that this cost now amounted
to £737,000 a-year. Thus the real Post-office accounts stand thus:—
Apparent surplus for year ending 5th April 1850, £803,000
Deduct cost of Packet Service, thrown on Navy, 737,000
————————
Real Post-office revenue, £66,000
And it has been raised to this level only during a year of extraordinary
manufacturing activity, when our exports turned £60,000,000. On the
whole, since the postage was reduced in 1841, the Post-office has not
yielded a farthing to the country, but, on the contrary, has occasioned
a loss of some hundred thousand pounds.
We have heard enough from the Free-traders of the disasters which
accumulated on the year 1848, and commencement of 1849, when a monetary
crisis, the Irish famine, the European revolution, the Irish rebellion,
and the Chartist sedition, combined to reduce the revenue to an
unprecedented degree. We have heard enough, also, of the unexampled
prosperity of the year 1849, when these extraneous disasters had ceased,
and the blessings of Free-trade and the cheapening system were still in
undiminished lustre. Be it so. Let us compare the public revenue of this
year of unprecedented disaster with that obtained in the next year of
unexampled prosperity, as appearing from the finance accounts of April
5, 1850:—
Year ending Year ending
5th April 1849. 5th April 1850.
Ordinary revenue, £48,490,002 £48,643,042
China money, 84,284
Imprest and other monies, 665,293 656,855
Repayment of advances, 427,761 553,349
——————————— ———————————
£49,667,430 £49,853,246
49,853,246
———————————
Increase in 1849, £185,816
—_Times_, April 1850.
So that the increase in a year of extraordinary and unprecedented
prosperity, as we are told, over one of unexampled and overwhelming
suffering, is _only_ £185,000, for £128,000 of which we are indebted to
an excess in the repayment of advances in 1849 over 1848. We care not to
what this extraordinary fact is to be ascribed, whether reduction of
duties, the continuance of distress, or any other cause. We rest on the
fact that Free-trade finance and the cheapening system have brought the
revenue of the country, _in a year of what the Free-traders call its
highest prosperity, to a level with what it had been in a year of its
greatest adversity_. History cannot, and will not, overlook these facts.
The leaders of the Free-traders say they live for posthumous fame. Let
them not be afraid. Posterity will do them full justice.
The financial problem of the Free-traders is—“Given a cheapened nation,
to extract an adequate revenue out of their unremunerated industry.” We
recommend this problem to the study of the Free-trading Chancellor of
the Exchequer. If he solve it, we shall assign him a place superior to
Archimedes in physical—to Bacon in political science.