Part 3

The distress which prevails in the nation, and, most of all, _in the commercial districts and cities_, being universal and undeniable, the supporters of the present system, which has led to such results, are sorely puzzled how to explain so decisive and damning a practical refutation of their theories. The common theory put forth by the free traders and bullionists is, that it is the railways and Irish famine which have done it all. This is the explanation which for months has been daily advanced by the _Times_, and which has been formally adopted by the leaders of government in both Houses. We are a miserably poor nation; we have _eaten up our resources_; the strain upon our wealth has been greater than we could bear. This, of having eaten up our resources, has, in a peculiar manner, got hold of the imaginations of the able writers in the _Times_; and, forgetting that a great importation of food was the very thing which they themselves had held forth as the great blessing to be derived from free trade, they give the following alarming account of the food devoured by the nation in the first nine months of 1847:--

"Of live animals and provisions imported in 1847, there is an excess 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.