Part 5

If they do not actually say this to him, this is what they will think; and that is, as to the effect, precisely the same thing. It is childishness to suppose that any nation will act from a desire of _serving all other nations_, or _any one other nation_, as _well as itself_. It will make, unless compelled, no compact by which it does not think itself _a gainer_; and amongst its gains, it must, and always does, reckon the injury to its rivals. It is a stupid idea that _all nations are to gain_ by anything. Whatever is the gain of one, must, in some way or other, be a loss to another. So that this new project of "free trade" and "mutual gain" is a pure humbug as that which the newspapers carried on during the "glorious days" of loans, when they told us, at every loan, that the bargain was "equally advantageous to the contractors and to the public!" The fact is the "free trade" project is clearly the effect of a _consciousness of our weakness_. As long as we felt _strong_, we felt _bold_, we had no thought of conciliating the world; we upheld a system of _exclusion_, which long experience proved to be founded in _sound policy_. But we now find that our debts and our loads of various sorts cripple us. We feel our incapacity for the _carrying of trade sword in hand_: and so we have given up all our old maxims, and are endeavouring to persuade the world that we are anxious to enjoy no advantages that are not enjoyed also by our neighbours. Alas! the world sees very clearly the cause of all this; and the world _laughs at us_ for our imaginary cunning. My old doggrel, that used to make me and my friends laugh in Long Island, is precisely put to this case.

When his man was stuffed with paper, How John Bull did prance and caper! How he foam'd and how he roared: How his neighbours all he gored. How he scrap'd the ground and hurled Dirt and filth on all the world! But John Bull of paper empty, Though in midst of peace and plenty, Is modest grown as worn-out sinner, As Scottish laird that wants a dinner; As Wilberforce, become content A rotten borough to represent; As Blue and Buff, when, after hunting On Yankee coasts their "bits of bunting," Came softly back across the seas, And silent were as mice in cheese.

Yes, the whole world, and particularly the French and the Yankees, see very clearly the _course_ of this fit of modesty and of liberality into which we have so recently fallen. They know well that a _war_ would play the very devil with our national faith. They know, in short, that no ministers in their senses will think of supporting the paper system through another war. They know well that no ministers now exist, or are likely to exist, will venture to endanger the paper-system; and therefore they know that (for England) they may now do just what they please. When the French were about to invade Spain, Mr. Canning said that his last despatch on the subject was to be understood as a _protest_, on the part of England, against permanent occupation of any part of Spain by France. There the French are, however; and at the end of two years and a half he says that he knows nothing about any intention that they have to quit Spain, or any part of it.

THE FINANCIAL CRISIS OF 1824 AND 1825.

=Source.=--_The Political Life of Sir Robert Peel_, by Thomas Doubleday. London, 1856. Vol. I. pp. 329-331.

The most trustworthy account of the almost insane operations of 1824 and 1825 is perhaps that of Mr. Tooke, the well-known author of the treatise on "High and Low Prices," who in his "Considerations on the State of the Currency," published in 1826, immediately after the panic, thus describes the steps that led to it.[2] Speaking of the latter months of 1824 and the first six months of 1825, Mr. Tooke thus proceeds:

"Never did the public exhibit so great a degree of infatuation, so complete an abandonment of all the most ordinary rules of mercantile reasoning, since the celebrated bubble year of 1720, as it did in the latter part of 1824 and the first three or four months of 1825.

"The speculative anticipation of an advance was no longer confined to articles which presented a plausible ground for some rise, however small. It extended itself to articles which were not only deficient in quantity, but actually in excess. Thus coffee, of which the stock was increased compared with the average of former years, advanced from 70 to 80 per cent.; spices rose in some instances from 100 to 200 per cent., without any reason whatever, and with a total ignorance on the part of the operators of everything connected with the relation of the supply to the consumption.

"In short, there was hardly an article of merchandise which did not participate in the rise; for it had become the business of the speculators, or of the brokers, who were interested in the raising and keeping up prices, to look minutely through the general prices-current, with a view to discover any article which had not advanced, in order to make it the subject of anticipated demand. If a person, not under the influence of the prevalent delusion, ventured to inquire for what reason any particular article had risen, the common answer was, 'Everything else has risen, and _therefore_ this ought to rise.'

"Whilst such were the transactions in the markets for goods, and whilst there was an extension of the system of loans to the transatlantic states, some of them affording little or no security, but almost all coming out at a premium, an enlarged field was presented for the spirit of gambling to enter upon. New mining, insurance, and other schemes, were set on foot, on the principle of joint-stock companies, in immense number.

"The earliest South American mining speculations or associations formed in this country had been entered into with considerable circumspection, the parties with whom they originated having, by local information and connexion, secured comparatively beneficial contracts, and priority of the working of mines known to be most productive. These apparent advantages being made known, attracted numerous persons to buy shares from the original subscribers at a progressively increasing premium. The great gains--or rather premiums in anticipation of gains--thus obtained by one or two of these associations, held out an inducement to the formation of new ones.

"It is well known how numerously mining and other joint-stock companies sprung up, and how successful they were for some time in catching and turning to account the disposition for hazardous adventure which now pervaded the nation. The operators on the share market made the new schemes the basis for an enormous extent of gambling. Many persons, quite removed from all connexion with business--retired officers, widows, and single women of small fortune--risked their incomes or their savings in every species of desperate enterprize. The competition and scramble for premiums in concerns which ought never to have been but at a discount, were perfectly astounding to those who took no part in such transactions. These operations in shares had an effect like that of speculations in goods, in adding to the mass of the circulation of paper and of credit; and this, be it still kept in mind, concurrently with the addition which had been made to the Bank of England issues.

"It is not possible to compute, with even any approach to accuracy, the amount of the addition to the total of the circulating medium by these united causes; but if I were called upon to hazard an estimate, I should conjecture that the whole amount of the circulating medium, including the transactions on credit without the intervention of paper, must have been, on the average of the four months ending April, 1825, _little if at all short of fifty per cent. above what it had been in the corresponding period of 1823_. The approximation of this estimate to the truth is rendered probable by the consideration that, upon the principles which determine money prices and nominal values, such a general rise of prices, amounting in some instances to above 100 per cent., without even the allegation of any general scarcity, could not have taken place without an immense expansion of the circulating medium."

Tooke's _Considerations of the State of the Currency_, 1826, p. 47.

THE FRENCH OCCUPATION OF SPAIN (1826).

=Source.=--Martineau's _History of the Peace_, Vol. I. pp. 406-408. Bohn's Libraries. G. Bell & Sons.

It having been objected that the balance of dignity and honour among nations had been affected by the French occupation of Spain, which was thought to have exalted France and lowered England, Mr. Canning replied: "I must beg leave to say that I dissent from that averment. The House knows--the country knows--that when the French army was on the point of entering Spain, his Majesty's Government did all in their power to prevent it; that we resisted it by all means short of war. I have just now stated some of the reasons why we did not think the entry of that army into Spain a sufficient ground for war; but there was, in addition to those which I have stated, this peculiar reason, that whatever effect a war commenced upon the mere ground of the entry of a French army into Spain, might have, it probably would not have had the effect of getting that army out of Spain. In a war against France at that time as at any other, you might perhaps have acquired military glory; you might, perhaps, have extended your colonial possessions; you might even have achieved, at a great cost of blood and treasure, an honourable peace; but as to getting the French out of Spain, that would have been the one object which you almost certainly would not have accomplished. How seldom, in the whole history of the wars of Europe, has any war between two great powers ended in the obtaining of the exact, the identical object for which the war was begun! Besides, sir, I confess I think that the effects of the French occupation of Spain have been infinitely exaggerated. I do not blame those exaggerations, because I am aware that they are to be attributed to the recollections of some of the best times of our history; that they are the echoes of sentiments which, in the days of William and Anne, animated the debates and dictated the votes of the British Parliament. No peace was in those days thought safe for this country while the crown of Spain continued on the head of Bourbon; but were not the apprehensions of those days greatly overstated? Has the power of Spain swallowed up the power of maritime England? Or does England still remain, after the lapse of more than a century, during which the crown of Spain has been worn by a Bourbon, niched in the nook of that same Spain--Gibraltar?... Again, sir, is the Spain of the present day the Spain ... whose puissance was expected to shake England from her sphere? No, sir, it was quite another Spain; it was the Spain within the limits of whose empire the sun never set; it was Spain "with the Indies" that excited the jealousies, and alarmed the imaginations of our ancestors. But then, sir, the balance of power! The entry of the French army into Spain disturbed that balance, and we ought to have gone to war to restore it! I have already said that when the French army entered Spain, we might, if we chose, have resisted or resented that measure by war. But were there no other means than war for restoring the balance of power? Is the balance of power a fixed and unalterable standard? or is it not a standard perpetually varying, as civilisation advances, and as new nations spring up, and take their place among established political communities? The balance of power, a century and a half ago, was to be adjusted between France and Spain, the Netherlands, Austria and England. Some years afterwards, Russia assumed her high station in European politics. Some years after that again, Prussia became, not only a substantive, but a preponderating monarchy. Thus, while the balance of power continued in principle the same, the means of adjusting it became more varied and enlarged. They became enlarged in proportion to the increased number of considerable states--in proportion, I may say, to the number of weights which might be shifted into the one or the other scale. To look to the policy of Europe, in the time of William and Anne, for the purpose of regulating the balance of power in Europe at the present day, is to disregard the progress of events, and to confuse dates and facts which throw a reciprocal light upon each other. It would be disingenuous, indeed, not to admit, that the entry of the French army into Spain was, in a certain sense, a disparagement--an affront to the pride--a blow to the feelings of England; and it can hardly be supposed that the government did not sympathise, on that occasion, with the feelings of the people. But I deny that, questionable or censurable as the act might be, it was one which necessarily called for our direct and hostile opposition. Was nothing then to be done? Was there no other mode of resistance than by a direct attack upon France; or by a war to be undertaken on the soil of Spain? What if the possession of Spain might be rendered harmless in rival hands--harmless as regarded us--and valueless to the possessors? Might not compensation for disparagement be obtained and the policy of our ancestors vindicated, by means better adapted to the present time? If France occupied Spain, was it necessary, in order to avoid the consequences of that occupation, that we should blockade Cadiz? No. I looked another way. I sought materials of compensation in another hemisphere. Contemplating Spain, such as our ancestors had known her, I resolved that if France had Spain, it should not be Spain 'with the Indies.' I called the New World into existence, to redress the balance of the Old."

THE REMOVAL OF TRADE RESTRICTIONS

=Source.=--_The Political Life of George Canning_, by A. G. Stapleton. London, 1831. Vol. III. pp. 16-22.

Mr. Huskisson felt therefore, when he came to the Board of Trade, that although much had been done, yet more remained to do, and he proceeded fearlessly, yet at the same time most cautiously, in relaxing those restrictions on our commerce, which if preserved were calculated to render almost nugatory the concessions already made.

Accordingly during the sessions of 1823, 1824, and 1825, different Acts were introduced by Mr. Huskisson for doing away with the discriminating duties; but in order that foreign nations might not impose new, or increase old discriminating duties, at the very moment when we were abandoning ours, a power was reserved to the King in Council to enforce the payment of additional duties upon the ships of all foreign countries, in the event of the treatment which British ships should meet with in their ports, not being reciprocal to that, which their ships were to meet with, in the ports of the United Kingdom.

In 1826 a new rule of navigation, exclusively applicable to the Mediterranean, was established. Goods, the productions of Asia and Africa, which should find their way to ports in Europe within that sea by internal routes, and not by the Atlantick Ocean, were made importable from those ports in British ships: thus erecting the Mediterranean and its surrounding shores, as it were, into a fifth quarter of the globe.

Mr. Huskisson also revised and altered the list of "enumerated articles." When that list was first constructed it was intended to consist of commodities of extensive importation; in process of time some of the articles contained in the list had nearly ceased to be imported, while their places were supplied by other articles which were omitted. The list was therefore reconstructed upon the principle of its original intention.

In 1825 the general consolidation of the Laws of the Customs was effected by Mr. Hume,[3] under the favouring auspices of the Board of Trade and Treasury. The difficulty and vastness of this undertaking was only surpassed by its importance. From the reign of the first Edward up to the present times, these laws had accumulated to the enormous number of fifteen hundred--frequently contradictory, and made without reference to each other, they were only understood by the initiated few, and required the devotion of a whole life to their study, at once to comprehend, and to obey them. They were unintelligible to the merchants, while they perplexed and harassed all their proceedings. This chaos of Legislation was compressed by Mr. Hume into Eleven Acts (a sort of Code Napoleon), with an order, a clearness, and a precision whereby even the least talented of our mercantile men are now enabled to consult the laws of the Customs with facility, and to take them with safety for their guide. These effects, upon which for their advantages to commerce Mr. Huskisson several times expatiated with exultation, would alone make this consolidation a most important era in our fiscal policy; but advantage was likewise taken of the opportunity to introduce into the Laws themselves some memorable changes, in conformity with the spirit of those principles of commercial intercourse, on which the Government had determined to act. Not only were duties of importance considerably reduced, but those on numerous minor articles were lowered. During the war the rates of the Tariff had been so increased, for the single purpose of revenue, that they had become for the most part inapplicable to a state of peace, and required general revision. This revision was regulated by the following principles: First, those duties were reduced, the heaviness of which tended to lessen, rather than to increase their total product. Secondly, the duties on raw materials, and on various articles useful in manufactures, were lowered to little more than nominal sums. Thirdly, protecting duties of extravagant amount were reduced to that point, at which the consumer was fairly entitled to relief, either by the increased industry of the home manufacture, or by access to other sources of supply. And, lastly, the comforts and the tastes of the publick, and the advantage of their retail suppliers, were consulted by the removal of duties which prevented the introduction, or most unnecessarily abridged, the use of many articles without benefit to any party whatever.

By the system founded on these principles, there has not only been distributed amongst a numerous population a great increase of employment, but its diffusion has been greater in proportion, than its increase. It is also very remarkable, that those trades which have been prominent in complaining of foreign competition have neither suffered more in diminution of profits, nor increased less in extent of business, than those which have been able to hold foreign competition at defiance.

Besides this consolidation of the Customs' Laws which took place in 1825, an Act was passed in the session of that year, whereby many commercial advantages were conferred on the Colonies, beyond those contained in Mr. Robinson's two acts of 1822; Mr. Huskisson laying down as the fundamental principle on which his alterations were founded--a principle deduced from past experience with respect both to _Ireland and to our Colonies_--that "so far as the Colonies themselves were concerned, their prosperity was cramped and impeded by a system of exclusion and monopoly; and that whatever tended to increase the prosperity of the Colonies could not fail, in the long run, to advance, in an equal degree, the general interests of the parent state." By these Acts, not only articles of first necessity, but goods of all descriptions, with very few exceptions, were allowed to be imported from all countries, either in British ships, or in ships of the country of their production; and the goods of the Colonies were allowed to be exported in any ships to any foreign country whatever. The only part of the Colonial system which was persevered in, was that which excludes foreign ships from carrying goods from one British place to another; "so that by this arrangement was preserved the foundation of our Navigation Laws--all intercourse between the mother-country and the Colonies, whether direct or circuitous, and all intercourse of the Colonies with each other, being considered as a coasting trade to be reserved entirely and absolutely for ourselves."

The admission of foreign ships, however, was not unconditional: it was made to depend upon reciprocal or equivalent liberality towards our trade and navigation on the part of the countries profiting by the advantages of it; but a power was given to the King in Council to relax the rigour of the Law, if occasion should, in any particular cases, seem to require it. By the same act, the privileges of warehousing were extended to the chief trading ports of the Colonies; a measure, which was well adapted to promote the creation of _entrepôts_ in those places, for the general barter trade of that quarter of the globe.

Independently of all these measures of internal legislation, Treaties of Commerce, founded on the principles of reciprocity, were negotiated with Prussia, Denmark, Sweden, the Hanse Towns, three of the new States of Spanish America, and lastly with France. In the case of Prussia, the power with whom the first of these Treaties was made, it may be said that, it was fairly forced upon this country. It certainly was not the wish of our Government unnecessarily to stir the question. But "the Prussian ship-owners were all going to ruin," and the Prussian Government very wisely resolved not to give to British ships privileges which the British Government denied to Prussian ships. When once foreign powers began to adopt that course, against which we could not justly remonstrate, it has been already shewn that the only safe and wise way was to meet it with concession. Prussia having therefore thus attained her object, to have manifested any unwillingness to treat other powers on the same footing, would have been inconsistent with the principle of our navigation law, which, acting upon the principle "divide et impera," was more anxious for an equal distribution of foreign shipping, than for its diminution.

PORTUGUESE APPEAL FOR AID AGAINST SPAIN (1826).

=Source.=--_The Political Life of George Canning_, by A. G. Stapleton. London, 1831. Vol. III. p. 219.

_The King's Message._

"George R.--His Majesty acquaints the House of Commons that His Majesty has received an earnest application from the Princess Regent of Portugal, claiming, in virtue of the ancient obligations of alliance and amity between His Majesty, and the Crown of Portugal, His Majesty's aid against an hostile aggression from Spain.

"His Majesty has exerted himself for some time past, in conjunction with His Majesty's Ally, the King of France, to prevent such an aggression, and repeated assurances have been given by the Court of Madrid of the determination of his Catholick Majesty, neither to commit, nor to allow to be committed, from his Catholick Majesty's territory, any aggression against Portugal; but His Majesty had learned, with deep concern, that notwithstanding these assurances, hostile inroads into the territory of Portugal have been concerted in Spain, and have been executed under the eyes of Spanish Authorities, by Portuguese Regiments, which had deserted into Spain, and which the Spanish Government had repeatedly and solemnly engaged to disarm, and to disperse.

"His Majesty leaves no effort unexhausted to awaken the Spanish Government to the dangerous consequences of this apparent connivance.