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tity of labour, and took a vast quan- ing at the issues of paper from the tity of goods out of the market, with Bank, it was seen that these had not · out bringing any into it. The de- varied much during the rise of prices, mand for various important articles and that they had been considerably could scarcely be supplied. An im- less than they were for some years mense portion more of this money was previously, when prices were very low. employed in taking goods out of the This was grievously mortifying to the market, and holding them on specula- enemies of a paper currency. Howtion. Prices kept rising, and every ever, upon looking at the issues of the one prospered.

Country Banks, lo, and behold / these Production during all this kept re- had been almost doubled during the ceiving mighty additions to its powers, rise. Here was a discovery! Without but it required some time to get its more ado, the Earl of Liverpool, Mr increased crops of cotton, &c., the Robinson, and Mr Huskisson, on the goods of its new manufactories, &c., one hand, and the Marquis of Lansready for sale. At length these began down with the other Whig heads on to reach the market, and they did this the other, asserted in effect that these at a time when consumption was gi- increased issues of the Country Banks gantic, and credit almost unbounded. had supplied the new companies, the The retailers were almost necessitated purchasers of foreign stock, the specuto keep heavy stocks by the largeness lators in cotton, tallow, &c. &c. with -of demand; the smaller merchants funds, and had caused the destructive and wholesale dealers, from the good glut in the money market !!! ness of credit, were enabled to buy The question is one of immense almost as largely as they pleased, and importance, and it is one on which they were tempted to buy largely from the Ministry and the Opposition think the case with which profitable sales alike. We shall, therefore, speak of it were effected; and the leading mere without any regard to reserve or comchants were almost compelled to order pliments. very largely from abroad to meet the It will, we suppose, be conceded to calls on the market. All things conspi- us by all, save Economists and Philored to prevent the market from break- sophers, that a nation ought always ing down under the stocks of different to possess as much circulating medium commodities, until they obtained the as the honest and legitimate needs of widest basis and greatest weight pos- its pecuniary interests call for that, sible.

whether this circulating medium conAt length production reached con- sist of gold or paper, there ought alsumption, and prices became station ways to be as much of it in the marary; it passed it, and then they began ket as people may find it necessary to to decline. Before we describe what buy, provided they can give twenty followed, we will, from what has been shillings' worth of goods for the sovesaid in Parliament, examine in detail reign or bank-note. No one, we apsome of the causes which led to the de- prehend, will say that the circulating struction of balance between supply medium ought never to exceed a cerand demand.

tain sum ; and that if this sum should A set of people in this country as

be found insufficient for the fair needs cribe every variation of prices solely to of trade, people should be compelled our currency. Bad harvests--destruc- to resort to barter- the farmer should tion of the means of producing—the be compelled to barter corn for cloth loss of sources of supply or demand- and groceries, and the manufacturer abundance or scarcity of trading capi- to pay his wages with bread, bacon, tal-sudden variations in consumption &c., obtained in barter for his manu-all these things are without influ, factures. ence on prices. If a rise take place, It will, we suppose, be likewise conno matter what the cause may be, the ceded to us by all, that the amount of cry is set up—The currency is depre- circulating medium necessary for supciated !—The banks are ruining the plying the nation's honest and legiticountry with an excess of their paper! mate needs must fluctuate very greatWe hoped that the slang had had its ly; and that an increase of populaday, when, to our utter astonishment, tion, or trade, or riches, may make an the Ministry adopted it. Upon look- addition to it indispensable.

Always excepting Economists and next year it was sixty-four Philosophers, it will, we suppose, be following one it was sixty-and, moreover conceded to us by all, that the one that succeeded, it was fortygreat fluctuations in prices may possi. five. bly be produced by other things than In 1794, it was fifty-one shillings the circulating medium. A bad har- in 1795, it was eighty-two-and in vest may make corn, or a blighting 1796, it was seventy-two. In the bespring may make fruit, exceedingly ginning of 1797, gold ceased to circudear in this country. A bad season late, and the currency became paper; may make sugar exceedingly dear in yet, strange to say, the quarter of the West Indies, or cotton exceedingly wheat fell to fifty-two; and in 1798, dear in America, or wine exceedingly it fell again to forty-nine. Time makes dear in France or Portugal. To put unaccountable changes in the nature the matter beyond doubt, and to prove of bank-notes. In 1799, the quarter that a paper currency is not the only of wheat was sixty-seven, and in 1800, thing that can cause prices to fluc- it was one hundred and twelve. In tuate, we will show how the price of some parts of the last-mentioned year wheat fluctuated in this country, in it was much higher. The farmers times when bank-notes were either who remember the dreadful harvest wholly, or to a very great degree, un- of 1799, will not ascribe the high known to our farmers and specula- price to the issues of bankers.

We tors.

ourselves knew one, the occupier of a In 1651, the price of the quarter of pretty large farm, who, instead of hawheat was seventy-three shillings-We ving a large stock of wheat to sell, acomit the pence for the sake of brevity. cording to custom, had to buy fifty In the following year it was forty-nine pounds' worth for his own consumpshillings. Here was a fall of twenty- tion. His case was by no means a sinfour shillings in a single year. In gular one. 1653, wheat was at thirty-five shil- In the intervening periods, the fluclings. Here was a further fall in the tuations were frequently as great. The succeeding year of fourteen shillings. price of the quarter of wheat but sel

In 1658, the quarter of wheat was dom remained the same for more than twenty-five shillings--in 1659, it was two years. It rose to the heights we sixty-six shillings-in 1660, it was have stated; then in three or four fifty-six shillings--and in 1661, it years it ran down to thirty-five, thirwas seventy shillings. In the second, ty, or twenty-five; and then it rose therefore, of these four years, it rose again. There was commonly a variaforty-one shillings,-in the third it tion in it between one year and another fell ten shillings, and, in the fourth, of five, ten, and sometimes fifteen it rose fourteen shillings.

shillings. It inust be remembered, In 1699, wheat was sixty-four shil. too, that we only give the average lings per quarter-in 1700, it was forty. price of each year, so that the fluctuaHere was a fall in twelve months of tions must in reality have been much twenty-four. In 1704, it was forty- greater than they appear from the six-in 1705, it was thirty. Here was statement. If we go to the earlier pea fall in the same term of sixteen. In riods of our history, we find that the 1707, it was twenty-eight, and in the fluctuations were greater. The quarter following year it was forty-one. Here of wheat was sometimes as high as ten was an advance of thirteen. In 1709, and sixteen pounds of our money, and it was seventy-eight. Here was an ad- sometimes as low as five or six shilvance of thirty-seven. In the space of lings. two years the price was nearly trebled. When we look at all this, it certains

In 1727, the quarter of wheat was ly amazes us that people can be found forty-two shillings--in the following to maintain that a metallic currency year it rose twelve shillings-in the will always keep prices from great and next year it fell eight-and in the frequent fluctuations; or that it will succeeding year it fell ten.

of necessity always keep them low. In 1756, the quarter of wheat was Let us now glance at the “ high forty-five shillings--in 1757, it was prices” of the last two years, which sixty-in 1758, it was fifty-and, in have thrown the Ministry and Parlia1759, it was thirty-nine.

ment into such agonies, and brought In 1766, it was forty-three-in the such terrible denunciations upon the Vol. XIX.



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-note. First, with 1825, operated greatly to raise both cultural produce, it is wool and mutton. In the last two A hands with the utmost years from the prosperity, the inhabia at the rise in this was caused tants of towns demanded an enormous the small-note bill, and we number more than usual of saddle, ne that it would be just as well coach, and draught horses: this could ssert that it was caused solely by not be foreseen; the farmers had only the steam-washing company.

For bred horses to meet the ordinary desome years previously to the passing mand; a horse must be four years old of this bill, agriculture had been in before he is fit for regular labour; and great distress; in these years many in consequence there was a scarcity of farmers were ruined, much land was horses, and they became dear. Corn put out of cultivation, and the fertili- and horses cannot be produced in ty of land in general was greatly re- quite so short a time as a parliamen. duced. Now it requires no great tary speech, or a newspaper paradifference of season, or cultivation, to graph. make a difference of one-sixth in the Let us now turn to other things. crop of corn; and if less and less It was discovered that there was an corn be brought to market, supply unusually small quantity of certain must become scanty. In 1822, prices kinds of spices in the market. Money from diminished supply began to ad- not merely bank-notes, but solid, vance; they continued to advance in unborrowed capital-wasin profusion; the most gradual manner, and it was thespices were quickly boughtup; they not until 1824 that they reached what got into a few hands; the holders, for was necessary to protect the farmer a time, produced a great scarcity in from actual loss. “In 1824, we had them, and obtained what prices they not a sufficiency of oats for our con- pleased. Supplies arrived from abroad, sumption, and are we to be told that and then spices tumbled again in spite oats would not have risen if the cur. of bank-notes. Certain great mercanrency had been gold ? In the early tile houses, of large unbounded capipart of 1825, it was the opinion of tal, confederated to buy up the chief many intelligent people, that there part of the raw cotton that was in the was not sufficient wheat in the coun- market; buyer bought against buyer, try to bring in the harvest ; and are we until a great scarcity was produced in to believe that wheat would not have cotton, and prices were in consequence risen if there had been no bank-notes ? very greatly raised. Supplies arrived, In the sanie year, the barley-land, and then cotton fell again, without the from an untoward season, was very, assistance of a metallic currency. The badly cultivated, the crop from this, same took place with tobacco and some and the hot, dry weather, was a very

other articles. The combinations raishort one; there was a deficiency to be sed wages in some trades very greatly, supplied from abroad; and are we to and far above what the supply of la. think that bank-notes caused the rise bour and the price of provisions jusin barley ? In one part of the last tified; the articles produced in these summer, an advance of fourpence or trades were raised in consequence. Pasixpence per pound, suddenly took per, we think, was raised twenty per place in fresh butter in London. On cent, and the paper-makers publicly inquiring into the cause of this grie- declared that they were compelled to vous business, our butter-dealer said make the advance by the combination not one word touching bank-paper; formed by their workmen. We apprea he assured us that the pastures were

hend that bank-notes had no share in burnt up, and that if rain did not fall exciting the combinations to demand speedily, the price would be much such unfair and extravagant wages. higher. We believed him. For the Looking at the “ high prices” as a greater part of last summer the wea- whole-wheat rose about eight or ten ther was exceedingly hot and dry; shillings per quarter each year, and pastures were exceedingly bad ; con- the chief part of the advance was nesumption was very great, and in con- cessary to protect the farmer from sequence, butter, cheese, and animal loss. It never was so high as it often food, advanced much in price. The was in former periods, when the curvast numbers of sheep that were car- rency was a metallic one, and it was ried off by the rot in the early part of only for a few months a few shillings

per quarter above the lowest price five millions of sovereigns since 1819; that the farmer ought to have, to rea and, while it has done this, it has ceive very moderate profits from his only drawn in five or six millions of capital. The more important articles its paper. It is calculated that fifteen of colonial produce continued long at or seventeen millions of these sovelosing prices, and they never fetched reigns still remain in the country; and more than remunerating ones. The every one knows, that, in so far as very few articles that were very dear they circulate, their circulation is alwere rendered so by scarcity, real or most exclusively confined to those artificial; they only continued so for a parts in which the notes of the Bank short period, and then they fell to circulate. If we assume that sixteen losing prices. Generally speaking, millions remain, that of these, two prices were very good, but not high ; millions were hoarded, or scattered they were very liitle above what pub- through the other parts of the realm, lic prosperity demanded, and with few and that the Bank drew in six milexceptions the fluctuations have been lions of paper, it will appear that the from good, to such as would, at almost Bank added eight millions to the cir. all times, be ruinous ones. The ad- culating medium of London, Man. vance in many articles was caused in a chester, Liverpool, and their environs. very trifling degree by speculation ; it If we estimate the number of souls was demonstrably occasioned by the supplied by the Bank at 2,000,000, shortness of supply, Parliament said the case stands thus: While the counnothing against high prices in the last try bankers added six or eight milsession, although they were then about lions to the circulating medium of ten at the highest ; on the contrary, it millions of people, the Bank of Engexulted over the condition of the land added eight millions to the cire country.

culating medium of two millions of In the face of all this, the Ministry, people. Those whom the Bank supthe Opposition-the two Houses of plies, carry on their business in a far Parliament, protest that the rise of greater degree by means of bills of ex. prices was caused solely, or almost change, than those who are supplied solely, by the additional paper put out by country banks. A bill for one hunby the English country bankers! We dred pounds will often pass from hand will never believe thein-no, we will to hand before it comes due, und pay never believe them, even if they vote debts of ten times its amount, without it to be the truth ten thousand times, the aid of a single bank-note or soveand then make solemn oath that it is reign. so before the Lord Mayor of London. If at the moment when the Bank

Prices rose in Ireland, and Scotland, began to issue these sovereigns, it had in London, Liverpool, and Manchester, had them already out, and had had as well as in those parts of England eight millions less of paper in circa. which are supplied with circulating me- lation ; and if it had kept the amount dium by the country bankers. Prices of them in circulation nearly stationrose first in London and Liverpool. ary, and had slowly put eight milYet we are told that this general rise licns more of paper into circulation, of prices was caused wholly, or chiefly, what would have been said of it? by the gradual issuing in the space of Ministers would have been horrorthree years, of additional notes, to the struck-Mr Brougham would have amount of six or eight millions, by the raved himself hoarse-Cobbett would English country bankers. We are told have gone stark-mad—and Mr Baring this, although these additional notes himself would have groaned over its had no circulation in Ireland, &c. It excessive issues.” All the distress is incredible it cannot be believed. of the nation would have been at once

But then it is said that the Bank, fathered upon it. Yet the circulating which supplies London, Liverpool, medium of London, &c. has been in Manchester, &c. did not greatly vary a worse condition, in regard to paper, its issues during the rise of prices, the than it would have been in, had ihis increase of trade, and the speculation been the case; but because the Bank fever. Now, in fact, the Bank in. has increased its issues by means of creased its issues of circulating me- gold, the increase has had no effect dium in a greater degree in propor- whatever in the eyes of our sagacious tion than the country banks. Mini- rulers, although every one may see sters say, that it has issued twenty, that the currency of London, &c. has been' increased much more than that when he is in easy circumstances, he of the other parts of England. generally lives some miles from a

People-and very exalted people bank. He cannot make his payments too-seem to imagine that a country by checques ; he has scarcely anything banker can only get his notes into cire to do with bills of exchange ; he canculation by lending them, or discount- not go at a moment's notice to the ing bills with thein, or giving them bank for cash; and he commonly away. It appears to be thought that keeps from twenty to fifty pounds in the inhabitants of Leeds, Wakefield, notes in his dwelling. Let it be reHull, Bristol, Newcastle, &c. &c. are men bered, in addition, that the cirso miserably poor, that they have not culation of money is infinitely slower wherewith to buy a bank-note, and in the country than in towns. When that they can only procure such notes all these things are taken into consithrough the charity of bankers. This deration, it will surprise no one that a is somewhat erroneous; the wealth of vast additional quantity of circulating England is not altogether confined to medium was called for in the agrithe regions of Cockaigne, and the dis- cultural districts. tricts inhabited by Mr Huskisson's With the exception of London, Liconstituents and their connexions. We verpool, Manchester, and their neighwill venture to say, that the chief part bourhoods, all the manufacturing disof the additional notes put into circu- tricts and sea ports of England had lation by the country bankers, were scarcely any other circulating medium bought of them with property as solid than the notes of country banks, Es that which was given by the people Trade increased very greatly, wageș of London in exchange for the sove- rose very much, a vast additional reigns. We will venture to say, that, quantity of labour was employed, and if the country bankers had not issued the price of everything was greatly these additional notes, they would raised. Was it possible in such a state have put nearly their amount of sove- of things for the amount of circulating reigns into circulation. In truth, for medium to remain stationary? the two years previously to the com- If the whole of the bankers of the mencement of the present distress, the three kingdoms added twenty milcountry bankers were so little pressed lions in notes and sovereigos to the for loans and discounts, that they currency, this, on the average, would scarcely knew how to employ their scarcely give an additional pound to money ; if money were offered them each member of the population. Now, on loan they would scarcely take it at notes and sovereigns are more or less the lowest interest, and they often needed by the whole population. Putwholly refused it. In the country, as ting the calls of business out of sight, well as in London, people in general every one who is not an utter stranger pay the same for the bank-note as for to the world knows, that, in prosperthe sovereign ; and they are as able to ous times, all traders, farmers, &e. buy the one as the other, if the choice small and great, together with their be before them.

wives, and sons, and daughters, keep • The truth is, agricultural produce much more constantly in their poce of all descriptions rose considerably in kets, as mere pocket-money, than they price; in some districts, husbandry keep in times of adversity. This mowages advanced, and in all a much ney is in effect hoarded, for it is kept greater quantity of husbandry labour at about the same amount. In the was employed. A great advance took way of business, most farmers, as we place in almost all articles of mer. have already said, and most small, chandise and manufactures. The con- middling, and even great traders, keep sumption of the agricultural popula- much more in notes or sovereigns by tion, and the trade of country towns, them, in good times than in bad ones. were very greatly increased. Let it be When wages are good, and work is remembered, that, in all the agricul- plentiful, a vast portion of the works tural districts of England, the circu- ing classes hoard to a certain extent; lating medium consisted almost ex- the mechanic, or even the labourer, if clusively of the notes of country banks. he be single, or if his family be small, Let it be remembered, too, that, when can constantly keep a pound or two in the farmer is poor, he can scarcely his pocket; he saves by little and litkeep a pound in his pocket ; and that, tle, until he has perhaps five or six

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