flowed into the hands of the town and country bankers, to seek, and seek in vain, for employment. Every bank in the kingdom was glutted with money ; and this money consisted, not of its own paper, but of sums placed in it, in one way or another, that were as solid in their character as land. Mortgages and other good securities could not be found, and it was almost impossible to employ the money in any manner. It was this real, solid, superabundant capital, and not bank notes, that made the bankers so liberal in lending and discounting, that enabled large numbers of other people, as well as merchants, to specu. late, and that furnished the funds for the new companies, &c. At the time of the South Sea bubbles, and in other parts of our history, a similar state of things produced similar consequences, when bank notes were wholly, or al most, unknown.

This superabundant capital was put to various employments, and we will now endeavour to ascertain what share each of these has had in producing that distress under which the nation is suffering.

A very large amount was advanced on loan to foreign nations, and some people make this the leading cause of the distress. We cannot agree with them. When a community has more capital than it can employ at home, the best thing, in our judgment, that it can do with the surplus is, to lend it to friendly foreign governments, provided it can get unexceptionable security. These governments immediately annihilate the loans as capital, and do not employ them to injure the trading, or other interests of the lenders. Assuming that proper security is obtained, loans made by the people of this kingdom to other countries operate, until the money is repaid, much as though they were vested in the purchase of estates in these countries. It is said, that more than sixty millions have been lent in this manner in late years; if this sum pay five per cent, the nations that have borrowed it will have to remit three millions yearly to the borrowers in this country. To the community at large, it will have much the same effect as though the proprietors of estates in those nations, yielding three millions of annual rents, should dwell and expend their rents constantly here.

We say not that good security was obtained for all the money thus lent; on the contrary, we think that much of the security will be found to be very worthless. We fear that many of the lenders will soon have great difficulty in obtaining their interest, and that they will sustain tremendous losses in respect of the principal. But putting out of sight the Spanish Bonds, the effect of which was over before public prosperity commenced, and the Greek loan, the amount of which was contemptible, the loans in question operated up to the beginning of the distress, as they would have done had they been advanced on the very best security. The interest, no matter how, had been regularly paid, and the marketable value of the principal had increased. Had this money been kept at home, there is decisive evidence that human ingenuity could not have found for it beneficial employment. Notwithstanding that it was taken away, and that so much more was absorbed by the schemes, there was, until long after the beginning of the distress, abundance of idle money in the country. The country papers, almost up to this hour, have been constantly offering heavy sums on mortgage. No one will be so foolish as to imagine, that if the money had been kept at home, no efforts would have been made to employ it; and no one but an Economist will say, after looking at all the modes in which capital can be employed, that it could have been employed in any other manner without producing evil. Had it been kept at home, it would doubtlessly have been employed in making the present overstocks of merchandise and manufactures still more destructive; a vast portion of it would have been lost to its owners, and the existing public distress would have been more severe. It was sent abroad-and, up to the beginning of the distress, the foreign stock was saleable without loss, and it practically brought three millions annually into the country to be expended in consumption. We imagine, that the foreign loans were so far from producing the distress, that they operated powerfully to prevent it, and that it would have been much greater if they had not been made. The fall in the South American funds must have done fearful injury; but it followed, and did not precede, the dis

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tress it was not a cause, but a conséquence.

We now come to the schemes. How ever great the folly and villainy of the originators of many of them were, we must still do justice. Some of the new companies that took the most heavy sums out of the market are still in being; and they are not wholly without hope of a small share of success. The distress began before returns could have been expected from any of them -when very few had been dissolved -and when these few had produced no failures, and no great amount of individual loss. The loss occasioned by the schemes has been divided amidst a vast number of individuals; no very large portion has fallen upon each, and very many of them have not been in trade. The new companies took a large quantity of goods out of the markets, and they brought scarcely any into it; they therefore acted to a certain extent as a counterpoise to the heavy importations which have been so loudly complained of. In the bubbles of former times, families embarked their all, and lost their all; the ruin was evidently produced by the bubbles alone. In those of the last two years, people only ventured a part of what they possessed; and they seldom went beyond their depth. We have scarcely heard of a single failure that was produced solely by confiding money to the new companies.

The operation of the foreign loans had in a great degree ceased when the. money was advanced to these companies, so that the absorption of money by these loans and companies was perhaps nearly equal in amount in each of the last four years. If we take this amount at even so much as twenty millions yearly, this does not reach what the government often absorbed during the war, without producing any scarcity of money, or any injury whatever. The shares were principally held by people in the metropolis, and the great body of the merchants and manufacturers had nothing to do with them. The distress did not begin amidst the dabblers in shares; it was not them, but people unconnected with them, who were pressed for money, and were in need of loans and discounts. We conceive that the new companies had no great share in producing the distress; and that if nothing had co-operated with them, this

distress would have been but little felt by the nation at large.

The fact is, that two very prosperous years had greatly increased the capital of almost every merchant, manufacturer, and tradesman. This increase was altogether independent of bank notes, and bank advances; it was solid, unborrowed capital. This, and the largeness of consumption, inevitably led to the holding of heavy stocks, to heavy importations, and of course heavy exportations, and much speculation. A great deal of reproach has been cast upon the merchants for importing so largely; and the increased imports of the last two years have been triumphantly quoted against them, to prove that they are principally accountable for the distress of the nation. Now, a single glance at the revenue of the last two years, will show that consumption called for a very large increase of importations; and we are by no means sure that the importations would have been in any considerable degree excessive, if consumption could have been kept from decrease, and credit from injury.

Ministers, who in these days puff their own talents and wisdom in a most extraordinary manner, declare that they foresaw the distress in the last Session; and that if their cautions had been attended to it might have been avoided. Now, their cautions were confined to the new companies, and even some of these they sanctioned. Mr Huskisson again and again declared, when trade was at the highest point which it reached, that it would increase that it would keep increasing-that the new system would carry it infinitely above what it then was. He and the Chancellor of the Exchequer asserted, that the opening of the silk trade would greatly benefit this trade; that the new Colonial system would increase our commerce with the Colonies; and that the abolition of restrictions would swell out this commerce in every quarter. If this were not calculated to excite the merchants and manufacturers to cast away caution, and carry importing and exporting to the highest point, we cannot tell what could be calculated to do it; yet now Ministers reproach the merchants for over-trading, and assert, that attention to their cautions would have kept things in their proper course! We say this merely in justice to the

merchants, who have been most barbarously dealt with.

While importations kept increasing, consumption received some severe checks. The Combinations did it great injury. They raised wages greatly in some callings; but by this they de pressed them in others; those engaged in them were often idle; and upon the whole, much less money was paid in wages than would have been paid, if they had not existed. They seriously injured many of the masters. The ship wright one, and several others, if they had kept in employment, would have taken a large quantity of such goods out of the market as are now superabundant, without producing an excess of others. The merchants had no share in creating these Combinations.

The cotton speculation, by greatly raising prices, did great injury to consumption. Here a portion of the merchants deserve the blame.

The time approached for the admission of foreign silks; the retail dealers durst not order of the manufacturers, the latter were left without trade, and this did great injury to consumption. It has been said, that the distress in the silk trade was produced by the same causes which have distressed other trades; but this is contradicted by facts. This trade was in a state of stagnation some time before any other began to suffer, and before the want of money diminished the wearing of silks; the dealers assigned the approach of the time for the admission of foreign silks as their reason for not buying. It is, in truth, perfectly ridiculous to ascribe the distress of every trade to the same causes, when causes that injured one did not touch another. The cotton speculations injured the cotton manufacturers seriously, but they did not reach other manufacturers. The new system injured the silk trade dreadfully, but various other trades were not affected by it. The importations caused many descriptions of merchants to suffer fearfully, when others had nothing to do with them. The real fact is, that one interest was distressed by one cause, and another by a wholly different cause, until several of them were distressed, and then their sufferings made distress general. Many at this moment are distressed merely by the distress of others; and others are distressed by things perfectly different.

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The stagnation of the silk trade greatly reduced the consumption of the large part of the population engaged in it; and it prevented the usual orders from being received from Italy for manufactures.

The uncertainty touching the operation of the new system, caused considerable stagnation in the shawl, the printing, and some other trades. This injured consumption.

The new system threw the increase in the carrying trade wholly into the hands of foreigners: this injured consumption greatly on the one hand, and increased imports on the other. This system, instead of increasing the exports to the Colonies, considerably reduced them; and this injured consumption. The merchants had but a very small share in making the changes in our laws and systems; and we conceive that the injuries done to trade by these changes operated greatly to produce the distress.

From different causes several interests began to suffer; workmen were thrown out of employment; trade became flat; and prices generally began to fall. We have already said, that consumption can become a dwarf or a giant in a moment. The fall of prices left almost all traders without profits, and it subjected very many to heavy losses. An instantaneous reduction of expenditure followed. The tradesman who lives at the rate of five hundred per annum, can sink to four, and still maintain about the same appearance in the eyes of the world. All classes were well stocked with clothes, and the buying of manufactures in a great measure ceased. The shopkeepers had heavy stocks, which went off slowly, and they bought very little of the wholesale people. When prices are rising, all the persons between the importer and consumer are anxious to hold; when they are falling, these persons keep out of the market. The speculators stood still; the merchants lost their customers, and had the whole weight of the imports thrown upon their shoulders. Foreign buyers were naturally lost with the home ones. Consumption was greatly reduced ; very little ready money was taken in the shops; the small traders were behind in their payments, and the scarcity of money became extreme amidst the large ones.

Meantime, production went on as

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we think that is very simple "philosophy" which says, "The merchants have erred, they will many of them be ruined, their ruin will ruin many manufacturers, throw multitudes of labourers out of employment, and injure seriously the whole community. The terrible evils which their ruin will bring upon the nation, can only be prevented by lending them money; but, nevertheless, as they have brought the ruin upon themselves, they must not be assisted. Rather let the nation be plunged into distress, than lend them money which they do not deserve." This, we say, is very simple "philosophy." If mercantile distress be like ly to produce general suffering, it ought to be removed without any regard to the cause. It is the most sacred duty of the government to protect the community as far as possible from calamity; and if a great public calamity can only be averted by a loan to the merchants, it is monstrous to say, that this loan ought not to be made, because the merchants themselves will profit from it undeservedly.

As to the doctrine, that a loan to the merchants tends to lead them again into the same error, it is below contempt. If they composed a corporation, then the directors might say-We will speculate deeply in this, or that, and if we get beyond our depth, government will assist us.-But unconnected as they are, it is absurd to imagine that any one of them would ever speculate under the idea, that if his speculation should fail, the whole body would be distressed, and he should obtain assistance from the Exchequer.

The truth is, Ministers had so bewildered themselves with their new system, that they seemed to imagine, that distress could never visit the land again. They could not be persuaded that distress existed to any great extent; and they showed by their conduct that they thought it incapable of increase. They did not content themselves with standing with their arms across, saying, "No!" to the solicitations of the merchants; well would it have been for the country if they had! -but they did that which was calculated to increase in a tenfold degree the ruin. They praised, in the most extravagant manner, the Bank of England, and for what? For being so profuse in lending and discounting, for putting eight millions of additional paper into, circulation. In the same

instant, without law, they prohibited the country banks from issuing a single additional note, they stabbed their character-they brought forward a scheme for changing the currency,-they did what must have ruined every one of these banks, if they had been what Ministers themselves insinuated them to be.

It must be remembered, that ten millions of the people of England drew their circulating medium almost exclusively from, and had their property and bread deeply connected with, the country banks-that the pressure for money was tremendous, and the merchants, manufacturers, and tradesmen, comprehended in these ten millions, could look to no quarter for assistance save these banks-and that the failure of a single bank produces a vast portion of suffering. It must be remembered, too, that the Bank of England had just, by its gigantic efforts, carried its country brethren through the storm, that confidence was beginning to revive, and that if the country banks could have increased their accommodation, it would have yielded the most signal benefits to the community.

Our readers know what followedthey know that the run upon these banks recommenced-that instead of being enabled to render assistance to the suffering traders, they were brought to need it themselves-that some of them failed-that their notes were forced out of circulation-that whole districts were almost deprived of currency, and compelled to resort to barter. They know, too, that Ministers professed themselves to be guided by the new theorics-by that "philoso phy" which Mr Canning lauds so unmercifully, and which stinks in the nostrils of the whole nation. It was a glorious moment for another mighty experiment for another sweeping change affecting the fortunes and bread of the community in the aggregate, and it was not to be lost.

Ministers in these days, as we have said, blow their own trumpet in a most deafening manner. They prevail upon Parliament to adopt their new principles and systems, and then they pat its cheeks, and beg it to defend the "wise and enlightened principles," and "profound and admirable systems," which it has adopted. Mr Canning has declared to it, that those who differ from them, " cannot com