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1825, operated greatly to raise both wool and mutton. In the last two years from the prosperity, the inhabitants of towns demanded an enormous number more than usual of saddle, coach, and draught horses: this could not be foreseen; the farmers had only bred horses to meet the ordinary demand; a horse must be four years old before he is fit for regular labour; and in consequence there was a scarcity of horses, and they became dear. Corn and horses cannot be produced in quite so short a time as a parliamentary speech, or a newspaper para◄ graph.

Let us now turn to other things. It was discovered that there was an unusually small quantity of certain kinds of spices in the market. Money

note. First, with cultural produce, it is hands with the utmost at the rise in this was caused the small-note bill, and we e that it would be just as well ssert that it was caused solely by the steam-washing company. For some years previously to the passing of this bill, agriculture had been in great distress; in these years many farmers were ruined, much land was put out of cultivation, and the fertility of land in general was greatly reduced. Now it requires no great difference of season, or cultivation, to make a difference of one-sixth in the crop of corn; and if less and less corn be brought to market, supply must become scanty. In 1822, prices from diminished supply began to advance; they continued to advance in the most gradual manner, and it was not until 1824 that they reached what was necessary to protect the farmer from actual loss. In 1824, we had not a sufficiency of oats for our consumption, and are we to be told that oats would not have risen if the currency had been gold? In the early part of 1825, it was the opinion of many intelligent people, that there was not sufficient wheat in the country to bring in the harvest; and are we to believe that wheat would not have risen if there had been no bank-notes? In the same year, the barley-land, from an untoward season, was very badly cultivated, the crop from this, and the hot, dry weather, was a very short one; there was a deficiency to be supplied from abroad; and are we to think that bank-notes caused the rise in barley? In one part of the last summer, an advance of fourpence or sixpence per pound, suddenly took place in fresh butter in London. On inquiring into the cause of this grievous business, our butter-dealer said not one word touching bank-paper; he assured us that the pastures were burnt up, and that if rain did not fall speedily, the price would be much higher. We believed him. For the greater part of last summer the weather was exceedingly hot and dry; pastures were exceedingly bad; consumption was very great, and in consequence, butter, cheese, and animal food, advanced much in price. The vast numbers of sheep that were carried off by the rot in the early part of

not merely bank-notes, but solid, unborrowed capital-was in profusion; the spices were quickly bought up; they got into a few hands; the holders, for a time, produced a great scarcity in them, and obtained what prices they pleased. Supplies arrived from abroad, and then spices tumbled again in spite of bank-notes. Certain great mercantile houses, of large unbounded capital, confederated to buy up the chief part of the raw cotton that was in the market; buyer bought against buyer, until a great scarcity was produced in cotton, and prices were in consequence very greatly raised. Supplies arrived, and then cotton fell again, without the assistance of a metallic currency. The same took place with tobacco and some other articles. The combinations raised wages in some trades very greatly, and far above what the supply of labour and the price of provisions justified; the articles produced in these trades were raised in consequence. Paper, we think, was raised twenty per cent, and the paper-makers publicly declared that they were compelled to make the advance by the combination formed by their workmen. We appre hend that bank-notes had no share in exciting the combinations to demand such unfair and extravagant wages.

Looking at the "high prices" as a whole-wheat rose about eight or ten shillings per quarter each year, and the chief part of the advance was necessary to protect the farmer from loss. It never was so high as it often was in former periods, when the currency was a metallic one, and it was only for a few months a few shillings

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very few articles that were very dear were rendered so by scarcity, real or artificial; they only continued so for a short period, and then they fell to losing prices. Generally speaking, prices were very good, but not high; they were very little above what public prosperity demanded, and with few exceptions the fluctuations have been from good, to such as would, at almost all times, be ruinous ones. The advance in many articles was caused in a very trifling degree by speculation; it was demonstrably occasioned by the shortness of supply. Parliament said nothing against high prices in the last session, although they were then about at the highest; on the contrary, it exulted over the condition of the country.

In the face of all this, the Ministry, the Opposition-the two Houses of Parliament, protest that the rise of prices was caused solely, or almost solely, by the additional paper put out by the English country bankers! We will never believe them-no, we will never believe them, even if they vote it to be the truth ten thousand times, and then make solemn oath that it is so before the Lord Mayor of London. Prices rose in Ireland, and Scotland, in London, Liverpool, and Manchester, as well as in those parts of England which are supplied with circulating medium by the country bankers. Prices rose first in London and Liverpool. Yet we are told that this general rise of prices was caused wholly, or chiefly, by the gradual issuing in the space of three years, of additional notes, to the amount of six or eight millions, by the English country bankers. We are told this, although these additional notes had no circulation in Ireland, &c. It is incredible-it cannot be believed.

But then it is said that the Bank, which supplies London, Liverpool, Manchester, &c. did not greatly vary its issues during the rise of prices, the increase of trade, and the speculation fever. Now, in fact, the Bank increased its issues of circulating medium in a greater degree in proportion than the country banks. Ministers say, that it has issued twenty

five millions of sovereigns since 1819; and, while it has done this, it has only drawn in five or six millions of its paper. It is calculated that fifteen or seventeen millions of these sovereigns still remain in the country; and every one knows, that, in so far as they circulate, their circulation is almost exclusively confined to those parts in which the notes of the Bank circulate. If we assume that sixteen millions remain, that of these, two millions were hoarded, or scattered through the other parts of the realm, and that the Bank drew in six millions of paper, it will appear that the Bank added eight millions to the circulating medium of London, Manchester, Liverpool, and their environs. If we estimate the number of souls supplied by the Bank at 2,000,000, the case stands thus: While the country bankers added six or eight millions to the circulating medium of ten millions of people, the Bank of England added eight millions to the circulating medium of two millions of people. Those whom the Bank supplies, carry on their business in a far greater degree by means of bills of exchange, than those who are supplied by country banks. A bill for one hundred pounds will often pass from hand to hand before it comes due, and pay debts of ten times its amount, without the aid of a single bank-note or sovereign.

If at the moment when the Bank began to issue these sovereigns, it had had them already out, and had had eight millions less of paper in circulation; and if it had kept the amount of them in circulation nearly stationary, and had slowly put eight millions more of paper into circulation, what would have been said of it? Ministers would have been horrorstruck-Mr Brougham would have raved himself hoarse-Cobbett would have gone stark-mad-and Mr Baring himself would have groaned over its "excessive issues." All the distress of the nation would have been at once fathered upon it. Yet the circulating medium of London, &c. has been in a worse condition, in regard to paper, than it would have been in, had this been the case; but because the Bank has increased its issues by means of gold, the increase has had no effect whatever in the eyes of our sagacious rulers, although every one may see that the currency of London, &c. has

been' increased much more than that of the other parts of England.

People and very exalted people too-seem to imagine that a country banker can only get his notes into circulation by lending them, or discounting bills with them, or giving them away. It appears to be thought that the inhabitants of Leeds, Wakefield, Hull, Bristol, Newcastle, &c. &c. are so miserably poor, that they have not wherewith to buy a bank-note, and that they can only procure such notes through the charity of bankers. This is somewhat erroneous; the wealth of England is not altogether confined to the regions of Cockaigne, and the districts inhabited by Mr Huskisson's constituents and their connexions. We will venture to say, that the chief part of the additional notes put into circulation by the country bankers, were bought of them with property as solid as that which was given by the people of London in exchange for the sovereigns. We will venture to say, that, if the country bankers had not issued these additional notes, they would have put nearly their amount of sovereigns into circulation. In truth, for the two years previously to the commencement of the present distress, the country bankers were so little pressed for loans and discounts, that they scarcely knew how to employ their money; if money were offered them on loan they would scarcely take it at the lowest interest, and they often wholly refused it. In the country, as well as in London, people in general pay the same for the bank-note as for the sovereign; and they are as able to buy the one as the other, if the choice be before them.

The truth is, agricultural produce of all descriptions rose considerably in price; in some districts, husbandry wages advanced, and in all a much greater quantity of husbandry labour was employed. A great advance took place in almost all articles of merchandise and manufactures. The consumption of the agricultural population, and the trade of country towns, were very greatly increased. Let it be remembered, that, in all the agricultural districts of England, the circulating medium consisted almost exclusively of the notes of country banks. Let it be remembered, too, that, when the farmer is poor, he can scarcely keep a pound in his pocket; and that,

when he is in easy circumstances, he generally lives some miles from a bank. He cannot make his payments by checques; he has scarcely anything to do with bills of exchange; he cannot go at a moment's notice to the bank for cash; and he commonly keeps from twenty to fifty pounds in notes in his dwelling. Let it be remenbered, in addition, that the circulation of money is infinitely slower in the country than in towns. When all these things are taken into consideration, it will surprise no one that a vast additional quantity of circulating medium was called for in the agricultural districts.

With the exception of London, Liverpool, Manchester, and their neighbourhoods, all the manufacturing districts and sea ports of England had scarcely any other circulating medium than the notes of country banks. Trade increased very greatly, wages rose very much, a vast additional quantity of labour was employed, and the price of everything was greatly raised. Was it possible in such a state of things for the amount of circulating medium to remain stationary?

If the whole of the bankers of the three kingdoms added twenty millions in notes and sovereigns to the currency, this, on the average, would scarcely give an additional pound to each member of the population. Now, notes and sovereigns are more or less needed by the whole population. Putting the calls of business out of sight, every one who is not an utter stranger to the world knows, that, in prosperous times, all traders, farmers, &e. small and great, together with their wives, and sons, and daughters, keepe much more constantly in their poc kets, as mere pocket-money, than they keep in times of adversity. This money is in effect hoarded, for it is kept at about the same amount. In the way of business, most farmers, as we have already said, and most small, middling, and even great traders, keep much more in notes or sovereigns by them, in good times than in bad ones. When wages are good, and work is plentiful, a vast portion of the working classes hoard to a certain extent; the mechanic, or even the labourer, if he be single, or if his family be small, can constantly keep a pound or two in his pocket; he saves by little and little, until he has perhaps five or six

pounds, or more, for the purchase of clothes, or some other purpose. When wages are low and work is scarce, those who can procure employment can only earn what will supply them with necessaries, and they are compelled to part with their note or sovereign as soon as they receive it. Great numbers are unemployed, and have never so much as a pound in their possession. If five millions of the population keep on the average two pounds more each in their pockets, this renders ten millions more, in notes or sovereigns, necessary, without any rise of prices or increase of trade.

When we look at all these things, we are thoroughly convinced that the additional amount of currency put into circulation was not the CAUSE, but the EFFECT, of the rise of prices and the increase of trade. It, no doubt, did, occasionally, for a moment, operate, in a trifling degree, as the cause, but looking at its operation from first to last, as a whole, it certainly, in our judgment, was the effect. Of course, we imagine that nothing could well be more simple and absurd than the assertion made by the leaders of that portentous and fatal Coalition which the Ministers and the Whigs and Burdettites now form, that the speculations, &c. flowed from the increase of paper put out by the English country bankers.

The merchants, manufacturers, and tradesmen whom these bankers supply, do not speculate with bank notes, if they enter into speculations. The merchant carries on his business chiefly with bills; he gives his acceptance for what he buys-he receives an acceptance for what he sells ; and these acceptances are, almost always, payable in London. When he receives a bill, he takes it to his banker, not to receive notes for it, but to pass it to account: if the banker do not pay it away, he sends it, when due, to London, to receive the amount in Bank of England notes, or gold. The merchant does not take up his own acceptances with the notes of his banker, but the latter takes them up for him, in London, with gold or Bank of England notes. If he need a heavy advance from his banker, he receives it, not in notes, but in bills, or in the taking up of his acceptances in London. If his banker assist him in his speculations, he can only do it in a very trifling

degree with his own notes; he must do it almost wholly with what is the same to him as gold or Bank of England paper.

The manufacturer is paid chiefly with bills, and he needs large discounts for the wages of his workmen ; but he pays for what he buys chiefly with the bills that he receives, or his acceptances, both of which are generally payable in London. If he speculate, he cannot do it with the notes of his banker; and if he need assistance in his speculations, he must receive it in the same way as the merchant receives

it.

All but small tradesmen buy nearly everything with bills. If the tradesman pays his London or other commercial travellers with country notes, they immediately take the notes to the bank to obtain bills for them. But he does not so pay them. If he take to his banker gold, or Bank of England notes, or the notes of the different banks of the place in which he dwells, he has credit given him for the sum in his account, as cash; if he procure from his banker a bill in exchange, he has discount allowed him for the time that the bill has to run. His travellers will take in payment good bills at two months, on the same terms as they will take sovereigns, without demanding discount. He therefore profits considerably by paying with bills instead of notes. In country towns, good bills that have not more than two months to run are taken by most men of business as cash, although the banks regularly charge, or allow discount, on receiving or paying them; and in consequence, in paying for the goods that he buys of his own townsmen, the tradesman has a profit in paying with bills instead of notes. If his banker make him advances to assist him in speculations, he cannot pay his accounts in London, Manchester, &c. with notes; if he pay these to his own townsmen, the latter immediately take them to their respective bankers, and in a day or two they are returned to his banker, who has to give what is equal to gold for them. His banker cannot assist him, to any degree worth mentioning, merely by lending him notes; if he lend him notes, they cannot be kept in circulation for a week.

Nearly all the bills that circulate in the kingdom are payable in London

-many of the heavy payments of both merchants and tradesmen are made in bank notes-from the system of banking that prevails, many of the smaller traders are not able to open accounts with the banks. From these and other causes, the discounting of bills prevails to an enormous extent. In the country, where the heavy payments are made principally in bills that are payable in London, there is comparatively but little of what is really the discounting of bills with country notes, except among the manufac turers, who have to pay great sums in wages. In London, the notes that circulate are those of the Bank of England, and if the other banks receive them from their connexions, they do not return them to the Bank for gold. In the country, every banker is in effect constantly labouring to drive the notes of other banks out of circulation: immediately on receiving them from those who keep accounts with him, he sends them to their respective issuers, to be exchanged for what is equal to gold, or notes of the Bank of England. Most of the loans that the country banker makes are not made in notes; he will only lend notes for particular purposes, and when they are likely to be put into circulation; he will not lend them to merchant, tradesman, farmer, or country gentleman, if these want to pay them away in one sum, because he is sure that they will at once get into the hands of another banker, and be returned to him, to be exchanged for solid money. From the manner in which business is carried on in the country, and from the powerful checks which the country banks impose upon the issues of each other, we think it almost impossible for the issues of these banks to be ever much greater than the fair and legitimate needs of business call for.

Where, and by whom, were these speculations entered into, that are charged upon the notes of the English country bankers? They were entered into principally in London and Liverpool, by persons who had nothing to do with these notes or their issues. In these places, and among these persons, the scarcity of money and the failures began; and not much complaint has been heard, up to this hour, from Hull, Bristol, and the other ports which have neither sovereigns nor Bank of England paper.

In the manufacturing districts of Yorkshire, &c. the distress was manifestly caused by other things than the speculations of the manufacturers and tradesmen. Once more we say, that the circulating medium was in proportion increased more in London, Liverpool, &c. than in the other parts of England; and are we to believe that Bank of England notes and sovereigns will not enable bankers to discount bills and make loans-will not enable men to form mining and other companies, and to enter into great cotton, tallow, and other speculations? We cannot, and we will not believe it. The charge brought against the notes of the English country banks was most disgraceful to those who made it.

The truth is, that the new com→ panies, speculations, &c. flowed from a profusion, not of circulating medium, but of wealth, real wealth,-of that which gives birth to, and is represented by, the circulating medium. Before the peace, the government, independently of the taxes, borrowed almost yearly twenty or thirty millions of the savings of the nation, and it immediately destroyed the sum as capital. The funds constantly offered a good and secure investment to all the capital of the country which could not be profitably employed in business; such capital regularly flowed into them from all parts, and they dissipated it solely in consumption. This ceased soon after the war terminated; and it seems to be foolishly imagined by the leaders of the Coalition, that the money thus lent was created solely by the issues of bank paper, and that the ability of the nation to save ended with the need of the government to borrow. In late years, the country accumulated surplus capital, as it did during the war; the drain for taking it away was cut off, and instead, the sinking fund added to this surplus capital five or six millions annually. The consumption of capital, if we may so speak, was, in effect, diminished by perhaps twenty millions yearly, while the supply remained at any rate the same, and can any man wonder that this soon made it superabundant ?The capital which, during the war, regularly flowed into the hands of government, as soon as it could be spared by its owners to take goods out of the market and consume them, now

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