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1
LANCASHIRE,
Printer & Bookseller,
Rochdale.
!
He "" "" "THE AND HE "HE "HER,
?
ARTES
LIBRARY
UNIVERSITY OF MICHIGAN
VERITAS
LE MURIOUS UNUM
TCEBOR
SCIENTIA
OF THE
SI QUÆRIS-PENINSULAM-AMŒNAM
CIRCUMSPICE
RIMINININJAJOJAJAJA
-
}
GREAT BRITAIN,
FOR THE LAST
FORTY YEARS;
BEING AN
HISTORICAL AND ANALYTICAL ACCOUNT
OF ITS
FINANCES,
ECONOMY, & GENERAL CONDITION,
DURING THAT PERIOD.
BY THOMAS HOPKINS.
LONDON :
PUBLISHED BY SIMPKIN AND MARSHALL, STATIONERS'-COURT,
LUDGATE-HILL.
1834.
PREFACE
•
THE histories of nations are ordinarily made up of
accounts of party struggles, intrigues, negociations,
armaments and battles; and the condition of the great
mass of the people is seldom inquired into, or treated
of, except when reference is made to the means which
that people are able to furnish to the ruling power.
In the following pages it is proposed to pursue
a different course ;—to inquire into the workings of
the principal causes which have affected the well-
being of the people of Great Britain, during the
eventful period of the last forty years;-to shew
what were the peculiar circumstances which arose in
that time;-to point out the nature of the measures
adopted by the government;-to explain the general
principles which were in active operation;-and to
trace the whole of these causes to their final effects
on the condition of the people.
iv
PREFACE.
Arranged bodies of statistical facts, taken in chro-
nological order, furnish the materials through which
we are enabled to obtain an insight of the nature and
magnitude of the causes which were brought into
operation, whilst the results are traced by connecting
these facts with the workings of the general principles
of political economy; and evidence of the final effects
on the condition of the people is given in further
statistical facts indicative of that condition.
1
Objections may possibly be felt to the blending of
theoretical principles of political economy with sta-
tistical facts and important legislative measures ;
but how are the general effects of important measures
on the condition of the people to be traced and
exhibited, except upon some known or explained
principles? The most dogmatical writer is obliged
to say, that the effect produced, whatever it may be,
is in accordance with some principle;-he must
connect the effect with the cause, agreeably to some
law of nature: and the only difference between
such a writer and a political economist is, that the
dogmatist, having no general system, is obliged to
form a separate theory for each case; while the
political economist, seeing that nature acts by general
laws, in this as well as in every other department of
her works, inquires into and endeavours to develope
赚
​V
PREFACE.
those laws, and treats of every measure and of its
effects with constant reference to them.
As the correctness of the results arrived at
depends, in a material degree, on the truth of the
general principles advanced, it was considered requi-
site to give a brief explanation of those principles.
In the first chapter, therefore, the true principles
which, it is conceived, regulate and determine rent,
tithe, profit, and wages, are briefly discussed and
explained. Some of these do not accord with the
principles laid down by other economical writers;
but, in a science so intricate and so new, it is not
surprising that differences of opinion should exist.
Each reader will, however, be able to judge for
himself, whether the facts given strictly harmonize,
as they ought to do, with the general principles ad-
vanced. If they do not so harmonize, the facts
being authentic, it follows that the principles must
be erroneous; whilst, on the other hand, if they do
so harmonize, a strong presumption is raised that
the principles are sound. Facts and principles may
thus be said to test and correct each other; and,
whilst theory, by pointing out the way, assists in
collecting and classifying the facts, those facts,
when arranged and exhibited in proper order,
furnish means of judging of the truth of the theory.
vi
PREFACE,
It would have been easy to go into more minute
detail in the matter given, but the object has been
to exhibit such important facts alone, as either have
had a considerable influence on the state of the
country, or have thrown a light upon that state. The
authorities have been commonly named, and their
general accuracy, it is conceived, may be relied
upon.
The great improvements in manufactures, the
extension of foreign commerce, and the consequent
alteration in the value of the precious metals, added
to the existence of a depreciated paper currency,
produced, during this period, results, the precise
nature and extent of which are not yet understood, as
appears from the various opinions entertained respect-
ing those results; whilst the power of the government
to raise such immense sums as they did, during the
war, in loans and taxes, seems, even after the lapse
of so long a time, to be still almost inexplicable.
These subjects, it is presumed, are of so much im-
portance as to justify a more elaborate examination
than any to which they had previously been subjected.
The large amount borrowed at the time, for which
interest is now paid, gives additional importance to
those subjects, and makes it doubly desirable that
correct opinions should be formed relative to the
S
PREFACE.
vii
causes which then determined the value of the cur-
rency. Another general European war may soon take
place, when expedients for raising money, by loans
and taxes, similar to those adopted in the last war,
will, doubtless, be again resorted to. Hence the
necessity of being able correctly to appreciate the
peculiar circumstances under which those expedients
were successful.
A war of twenty years' duration, with an expen-
diture of wealth perfectly unparalleled, yet accom.
panied by comparative prosperity, followed by peace
for an equal period, with considerable economy and
retrenchment, attended by adversity, presents an
anomaly which no one has hitherto successfully
endeavoured to explain. In this volume it is at-
tempted to be done, in as brief a manner as appears
compatible with perspicuity. Others may hereafter
separately and minutely examine the various sub-
jects which, for the purpose of historical exhibition,
have been here brought together, in chronological
order, as nearly as was compatible with a proper
enumeration of the numerous statistical facts on
which all the arguments and conclusions finally rest.
CONTENTS.
CHAP. I. INTRODUCTION.
Nations are constituted of different classes, with separate interests.
-Interests of landowners, &, of capitalists.-Theories of rent
of land; of Adam Smith, Ricardo, and Thompson.-Tithes.-
Profit, and the effects of taxes and loans upon it.-Productive-
ness of labour.-Population.-Gross and net wealth.-Primary
and secondary producers.-Wages.-Relation of capital to
population.-Reproduction of capital.-Foreign commerce.
-Employment.-Taxes...
...
¡CHAP. II.—FROM 1793 to 1802.
Productive power of the people.-Amount of the population.-
Of net wealth paid.-Poor-rates.-Imports and exports.-
Prices of the funds.-The system of borrowing, and its effects
on wages.-Bills and loans.-Aggregate amount of capital.—
Peace and war employments.-Number of bankruptcies.-
Machinery, and its effects.-War expenditure and bank notes.
-Prices of wheat.-Rise of the rate of profit.-Prices paid
for weaving.-Number of inclosure bills.-Advance of rent.
-Bank restriction.-Government expenditure, and its effect
on wages.-Importation of grain.-Gold and paper money.-
Increase of foreign commerce.-The cotton manufacture.-
Peace in 1802.-The effects of the war on the condition of the
people
..
•
S
S
CHAP. III.-FROM 1802 to 1809.
Amount of bank notes issued during this period, and the price of
gold.-Depreciation of the currency and its effects.-Prices
of wheat and beef.-Government income, expenditure, and
loans.-Effects on the condition of farming labourers-Prices
of weaving. Increase of exports.-Rate of profit.-Number
of inclosure bills.-Analytical view of the state of society-
-The population.-Value of the currency.-Cost of the
imports
PAGE.
1 to 63
64 to 91
92 to 101
X
CONTENTS.
CHAP. IV.-FROM 1808 TO 1814.
Government income, expenditure, and loans.-Amount of bank
notes. Prices of gold, wheat, and beef.-Value of the cur-
rency.-Value of gold, when produced, and when procured.
-Depreciation, and reduction of value.-Supply of gold in-
Auenced by exports and imports.-Affected by cheaply pro-
duced exports.-The cotton manufacture...
CHAP. V.-FROM 1808 ro 1814.
Effects of seasons on the prices of food.-Rise in prices and fall
in the value of gold.-Effects on farmers and their labourers.
-Number of inclosure hills.-Imports of grain.- Commerce
in peace and in war.-Official and real values of the exports.
-Bank notes and prices of gold.-Two-fold reduction in the
value of money. The rate of profit.—Deceptive and injurious
loans.-Gold supplanted by paper money.-Circulation.-
The sinking fund.-Recapitulation.-Favorable and inju-
rious causes in operation.-Analysis of the condition of dif-
ferent classes. Decline in that of the labouring class.-
Increase of London, Brighton and other places
··
105 to 138
CHAP. VI.-FROM 1814 TO 1820.
Monetary state near the end of the war, prices of grain, and
quantity of currency.—Corn law of 1815.-Agricultural dis-
tress of 1816.-Sums expended on paupers.-Prices paid for
weaving. Reduced expenditure of government.-Transition
from war to peace.-Country bank and Bank of England
notes.-Peel's bill, tables of the currency and of prices.-
Condition of the poor.-Cessation of loans and reduction of
taxes, and their effects.-Exports and imports.-Value of the
currency.-Prices of exports.-Effects of import duties on
prices.-Value of money in Great Britain and other countries
from 1793
•
..139 to 181
·
PAGE,
CHAP. VII.-FROM 1820 to 1828.
Repeal of taxes.-The rise of rent during the war sustained
during peace.-Tithes.-The currency from 1820 to 1826.-
Effects of low price of food on manufactures.-Poor's rate.
Decline in the rate of profit.-Exports.-The panic of 1825.—
Small notes. Increase of manufactures, and reduction of
prices of exports.-Elements of cost of supply of gold and of
price. Best criterion of the value of money.-Component
parts of price
.182 to 214
.215 to 248
CONTENTS.
CHAP. VIII.-FROM 1820 TO 1828.
Extension of manufactures consequent on an advance of rent.-
Rent in Great Britain and Ireland.-Manufactures in America
and Italy.-Effects of the corn laws on manufactures and the
value of money, and in driving manufactures to foreign
countries.-Possibility of perpetuating high rents
Maga
··
CHAP. X.-FROM 1828 TO 1834.
Productive power of labour to raise food, and procure imports.-
Importers driven to dear markets.-Productive power of
secondary producers unimportant to the people.-English
system of poor laws, and its influence on the character and
efficiency of labourers.-Pauperised state of the labourers.-
Parishes of Lenham and Eastbourn, wages, rates, tithes, and
rent.-Pauperising effect of high rent.-Cultivation driven to
the sea shore. Pauperism the effect of excessive exaction.-
Exaction in Ireland and in Italy.-Partial character of the
"Reports of the Poor-law Commissioners."-Returns that
are wanted.-Difficulty of comprehending the magnitude of
the debt.-The receivers of the interest compared with the
persons engaged in the cotton manufacture...
·000.
xi
CHAP. IX.—FROM 1828 to 1834.
Rise in the value of money.-Official and real values of exports.—
Fall in the prices of cotton manufactures.-Number of people
engaged in the cotton manufacture compared with the prices
of cotton goods exported.-Returns in money value for ex-
ports. Increased distress of the labouring class.-Analysis
of society to shew the cause of it.-Errors of Mr. Malthus.-
Nature's table.-Why there is not room at it for all the la-
bourers. Classification of the population
.270 to 308
PAGE.
.249 to 269
..309 to 340
GREAT BRITAIN,
FOR THE LAST
FORTY YEARS.
CHAP. I.
INTRODUCTION.
NATIONS ARE CONSTITUTED OF DIFFERENT CLASSES, WITH SEPARATE
INTERESTS.—INTERESTS OF LANDOWNERS, AND OF CAPITALISTS.-
THEORIES OF RENT OF LAND; OF ADAM SMITH, RICARDO, AND
THOMPSON. TITHES.-PROFIT, AND THE EFFECTS OF TAXES AND
LOANS UPON IT.-PRODUCTIVENESS OF LABOUR.—POPULATION.-
GROSS AND NET WEALTH.-PRIMARY AND SECONDARY PRODUCERS.
-WAGES.—RELATION OF CAPITAL TO POPULATION.—REPRODUC-
1
·00·
—
TION OF CAPITAL.-FOREIGN COMMERCE.—-EMPLOYMENT.-TAXES.
NATIONS, when considered in their relations to each
other, are generally viewed as simple aggregate bodies,
affecting each other in various ways, in a state of
peace
as well as in a state of war. The rise of one nation
may cause the decline of another, and then it is con-
sidered that the whole of the former flourishes, and
the whole of the latter decays. No analysis of compo-
A
#
2
NATIONS ARE FORMED OF CLASSES.
nent parts is thought necessary, when nations are thus
exhibited in relation to each other. The aggrandize-
ment of Rome was attended with the downfall of
Carthage, the advance of Venice with the decline of
Genoa, and when speaking of them relatively to each
other, we view each of these states in its aggregate
character, as a single political body. But an enquiry
into the causes of the rise or fall of a single state will
lead us into an examination of the internal workings of
the various component parts of which it is constituted;
and such an enquiry will often shew that national
success, and even what is frequently called national
prosperity, is not always accompanied by improvement
in the condition of the great body of the people. Not
only may conquests be made, but foreign commerce
may possibly be extended, at the expense of national
happiness. The negro slaves of Jamaica would not
necessarily have their condition improved by an in-
creased export of the produce of their labour, nor is
the condition of the Egyptians rendered better, at
present, by the flourishing external trade carried on by
their ruler. A rise of rent in Ireland, and a consequent
increase of the exports of landed produce to pay that
rent to absentee proprietors, would not add to the
comforts of the Irish cultivators of the soil. We are,
therefore, not at liberty to infer that a nation is neces-
sarily prosperous, because it has an increasing foreign
commerce, as it is quite possible that that commerce
may benefit one class at the expense of the rest of the
the community.
In a country like Great Britain the nation is made
up of various classes, whose interests are often not
only different from, but opposed to, each other. That
which benefits one class may injure another, and,
3
MONOPOLIES.
consequently, while one class is flourishing another
may be going to decay.
The principal bodies of which the state of Great
Britain is composed admit of a tolerably distinct clas-
sification, according to their different interests; and if
we are to trace the results of many important measures
which have been adopted at different times, on the
various classes which constitute the community, we must
first carefully analyse that community, and discover the
particular position and interests of each class. Without
this analysis it is impossible that we should be able to
ascertain the effects of many measures which have
materially affected the well-being of different portions
of the community.
It is often said that the whole people are bound
together by a common tie of interest, and this, to a
certain extent, is true. A nation may be in danger of
being destroyed by a powerful neighbour, and the
whole of this nation would clearly have a common
interest in avoiding such an evil. The blockade of
its ports and the destruction of its foreign trade might
affect all classes injuriously, and all would, conse-
quently, be interested in preventing such occurrences.
But it does not follow that some measures may not
benefit one class at the expense of all the others.
Monopolies have almost invariably this effect. Those
who obtain a monopoly are benefited by it at the
expense of other parties who pay a high monopoly
price for the article. The East India Company,
for instance, having the exclusive right of trading to
China, are thereby enabled to compel the people of
England to pay nearly double the price for common
tea that they could obtain it for under a system of free
trade. Now there can be no doubt that the destruction
4
PARTIAL INTERESTS.
of this monopoly, and the establishment of a free trade
to China, would injure the East India Company, and
benefit the people of Great Britain.*
The sugar growers of the West Indies have a partial
monopoly of the British sugar market, in the favour-
able rate of duty at which their sugar is admitted, and
in the bounty on that portion which is re-exported in
a refined state. The higher duty charged on Baltic
timber gives a degree of monopoly to the importer of
timber from Canada, The particular parties thus
favoured receive higher prices for their produce than
they would obtain under a system of free trade, and
are benefited at the expense of the consumers, that
is, the rest of the community. Restrictions on the
importation of foreign food might enable the home
producers of it to obtain so high a price, as to enrich
themselves, or their landlords, to the complete im-
poverishment of the rest of the people. These are a
few familiar instances, which shew that different
parties in a nation may be differently affected by par-
ticular measures; that one may be benefited by that
which injures another.
But these partial interests do not emanate exclusively
from measures of restrictive regulation in foreign com-
merce. They may arise out of the very nature and
structure of society. They may either be the offspring
of recent legislative enactment, or the result of the
slow and almost imperceptible progress of circum-
stances during a long period of time. To the foster-
ing and nourishing of partial interests in opposition
to the general good, either by the passing of new
* Since this was written measures have been taken to terminate the
monopoly, but the argument remains the same.
PARTIAL INTERESTS.
10
5
laws, or by obstinate adherence to old ones, may be
ascribed the decline of most of the states which once
flourished in the world, but are now no more. The
true causes of national decay, when subjected to strict
investigation, will generally be found to have been
the nurturing of such partial interests. They absorb
to themselves what should equally nourish the whole
body; and impoverishment, decay, and death follow.
Partial interests are a kind of political vampires,
which live and, for a time, flourish upon the life blood
of nations; and though such nations may struggle on for
centuries, their deaths are not the less certain, if the
causes of their decay be suffered to continue in operation.
Such being the consequences of fostering partial in-
terests, at the expense of the general good, it becomes
the business of the historian, when writing the history
of a nation, to point out the particular workings of
these interests, to trace their effects in the condition
of the people, and finally in the rise or decline of the
state. But the attention of historians has seldom been
directed to these subjects. In a state they have
generally seen only a government and a military
force, and their histories are made up almost entirely
of accounts of the hostile conflicts of armies, and
the luxuries, the intrigues, and the treacheries of
courts. Sometimes, it is true, they have attempted
to follow the operations of a particular law or treaty,
where it had an immediate and palpable effect on the
community; but seldom indeed have they attempted
to trace in the institutions or internal economy of the
country, the slow and silent workings, in which all
parties participate, of those causes which are con-
stantly effecting changes in the relative conditions of
the different classes of which the nation is composed.
6
PROFIT OF CAPITAL.
One great partial interest in a nation, which may
be, and often is, opposed to the general good, is that
of the owners of land. The public welfare requires
that land, under certain restrictions, should be con-
sidered as exclusive private property. But if all the
land in the country is in the possession of a small
number of its inhabitants, and the remainder become
dependent on that land for a supply of food, the pro-
prietors have a monopoly of that which is essential to
the existence of the rest of the people, and that
monopoly may be used to the promotion of their own
immediate interests, and to the injury of all other
classes. This monopoly arises partly from natural
causes, nature having furnished but a limited supply
of land; and partly from social regulations, by which
the exclusive possession of this limited supply is gua-
ranteed to a few individuals.
+
The securing to each man of the fruits of his labour,
more or less effectually, appears to be essentially
necessary to the existence of any considerable com-
munity. And from the various dispositions of men,
some are found disposed to accumulate such fruits,
while others consume them in immediate enjoyment.
A consequence of this different conduct is, that some
are in possession of certain stocks of these fruits,
denominated wealth, while others are destitute of
them. Now if the owner of this wealth lend, or in
any way advance a portion of it to one who wishes to
use it, such owner may stipulate to have, not only an
equal quantity of wealth returned at a subsequent
period, but also something exceeding an equal quan-
tity, as a remuneration for the accommodation afforded
by the loan or advance. This excess is called profit ;
and it may be much or little compared with the quan-
"
7
CAPITALISTS NOT MONOPOLISTS.
tity advanced. It is evidently the immediate interest
of the party advancing to obtain much profit, and it is
as evidently the immediate interest of the party to
whom the advance is made, to pay as little profit as
possible. Now in a state circumstanced as Great
Britain is at present, these parties represent two
numerous classes. The party advancing represents
the capitalists, whose immediate interest it is to have
as high a profit as possible, and the party to whom
the advance is made represents the labouring portion
of the community, who are without capital, and whose
immediate interest it is that as low a profit as possible
should be paid for the advance. Here, then, we have
two classes in a nation, whose immediate interests are
directly opposed, and particular measures or systems
of policy may most materially affect the relative con-
ditions of these two classes-enriching the one at the
expense of the other.
The capitalists, however, unlike land proprietors,
cannot be considered as monopolists, seeing that they
are merely in the possession and use of the fruits of
their own industry, or of the industry of their fore-
fathers. If all labourers had been equally industrious
and economical, all labourers would have been also
owners of wealth, and there would have been no sepa-
rate class of capitalists. But to be in possession of
the fruits of industry, which all might have had if they
had used the same means of obtaining them, is not to
be in possession of a monopoly. The fruits of indus-
try are, to some extent, always within the reach of
the industrious and economical, as such fruits are
regularly created by labour, and may be accumulated
by economy. Capital, therefore, differs from land,
seeing that the former is the creation of labour, and
8
LAND AND CAPITAL.
is renewed and may be indefinitely increased by labour;
but land is the gift of nature, is limited in quantity,
and appropriated by man in his social character, and
when it is all possessed by a few to the exclusion of the
many-those few are monopolists.
The effect of the monopoly of the land by a few is,
that they exact a rent or payment from others for per-
mission to use the land, and this rent may be low or
high; and the effect of the exclusive possession of
capital by a part of the community is the exaction
from the rest, in some shape or form, of a profit for
the mere use of the capital, and this profit, according
to circumstances, may be high or low. The general
laws of nature, which regulate these payments of rent
and profit, and also those particular laws and systems
of social polity which modify the natural laws, become,
therefore, most interesting objects of enquiry.
In tracing the state of Great Britain and the con-
dition of its people during the last forty years, among
other causes affecting that state and condition, the
influence of varying rates of rent and profit will have
to be considered in connexion with measures which
modified those rates. But previously to going into an
examination of the particular causes which affected
rent and profit, it is highly desirable, or rather essen-
tially necessary, that we should ascertain what those
laws of nature are which determine that such pay-
ments should be made.
RENT OF LAND,
There have been different theories relative to the
principle which determines the payment of a rent, in
return for permission to cultivate land. The French
economists, Quesnai and others, maintained that it
was the amount of produce above what was required
9
to furnish wages and profit; but they did not shew
what determined the amounts of such wages and profit,
or why wages and profit should not take the whole of
the produce. Dr. Adam Smith evidently had not a
distinct conception of the nature of rent, as he represents
it at one time as being that part of market price which
is above the natural price, thereby agreeing in substance
with the French economists; and at another time he
represents it as that part of market price which was
above the cost price, and which was obtained through
a monopoly of the land.* But the theory of rent which
is generally adopted in the present day is that which is
named after Mr. Ricardo. This writer exhibits rent as
the result or effect of cultivating successively portions
of land diminishing in fertility, or of applying suc-
cessive doses (as his disciple, Mr. Mill, calls them) of
capital to the same land, the various doses yielding
successively smaller returns.
If this theory were true, the amount of rent of land
in every country in the world would be determined by
the difference in the returns from equal quantities of
capital applied to land; but this is well known to be
contrary to facts.
In Tuscany, and other parts of
RENT OF LAND.
* « Rent," says Dr. Smith, " considered as the price paid for the use of
land, is naturally the highest which the tenant can afford to pay in the
actual circumstances of the land." And again, "The rent of land, there-
fore, considered as the price paid for the use of the land, is naturally a
monopoly price. It is not at all proportioned to what the landlord may
have laid out upon the improvement of the land, or to what he can afford
to take, but to what the farmer can afford to give."-Wealth of Nations,
book I. chap. 11. If Dr. Smith, instead of saying that rent is the highest
which the farmer can afford to pay, had said that it may be made the
bighest that the farmer can possibly pay, it will presently be shown that he
would have justly characterized rent; but he afterwards speaks of rent
being "the effect" of high price of produce, and indeed gives the theory of
rent recently revived by Col. Thompson.
B
10
RICARDO'S THEORY OF Rent.
Italy, the rent on all the land, rich and poor alike, is
one half of the produce! Here, then, it is palpably
evident that the rent paid does not accord with the
theory.
Mr. Ricardo, in developing his theory, assumes that
there is a natural inequality in the returns for equal
quantities of capital or labour on lands of different
fertilities, rich land yielding more and poor land less
produce ;* but this is not necessarily true. It is true
only when the parties are restricted to equal extents of
land. Suffer one party to have double the quantity of
land, only a little inferior in fertility, and he might
obtain a greater return for equal labour than could be
obtained from the smaller quantity of more fertile land.
If the party using the best land has as great an extent
as can be beneficially used by his labour, while the other
party is obliged to go to poorer land, it is a consequence
of the former having a monopoly of the rich land, that
is, of having an exclusive right to it; and all the
advantage which he obtains is the result of that mo-
nopoly, and not of any natural inequality in the returns
from equal quantities of labour; for, were it not for
this monopoly, labour would not go to the poorer land,
where it could obtain only a smaller return, but would
employ itself on the rich land, where it could get the
larger return. There is, therefore, no natural in-
equality in the returns from equal quantities of labour,
but the inequality which actually exists arises from the
right of property in, and consequent exclusive pos-
session of, the best land; which right of property is
the offspring of social institutions, and not a law of
nature.
* See Principles of Political Economy and Taxation,' by D. Ricardo.
11
Those who, through a right of property, have ex-
clusive possession of all the best land, may either
cultivate that land themselves, and enjoy the large
return that it will yield, or they may permit other
persons to cultivate it, and make a charge, or exact a
rent, for the permission thus given; but this rent is
evidently obtainable in consequence of the monopoly
enjoyed, and not through the unequally productive
power of labour.
If, instead of paying a rent, those
who have not any of the best land were to go to poorer
land, where they could obtain only a smaller return,
this would not shew that nature had caused labour to
produce unequal returns, but that the monopoly of the
rich land had prematurely forced labour upon poor
land, and thus made it unequally productive. If left to
itself, unchecked by the monopoly, labour would have
remained on the rich land, and shared in the highest
returns.
FERTILITIES OF LANDS.
The existence of poorer land,—from which a some-
what smaller return can be obtained by labour when
a rent is demanded for the best land,-so far from being
a cause of rent being exacted, is a check to the amount
of exaction. If no poorer land existed, the monopoly
of the rich land would be a more complete monopoly,
and those who possessed it might exact greater ad-
vantages than they could when the existence of poorer
land checked, and, for the time, limited the extent of
their monopoly. Exclusive possession, as the result of
private property in land, therefore, gives the monopoly
of the rich independent of the existence of the poor
land, and the monopolists may, where no poor land
exists, charge to others such a rent for permission
to use their land as in their discretion they may
think fit.
12
PRINCIPLE OF RENT.
The land of a second quality may, in like manner,
become exclusive private property, and a rent be
charged for it; and if there should be land of a third
quality, labour might be driven to cultivate it,* by the
high rent required by the owners of the land of the two
better qualities; and in the same way the exaction of
rent might drive labour upon lands of the fourth, fifth,
and still inferior qualities, until the poorest lands were
cultivated, and the whole soil of the country became
exclusive private property in the hands of a small por-
tion of the community.
The monopolists might now exact from the culti-
vators, and through them from the rest of the com-
munity, such a rent as they in their discretion pleased,
and as it was possible for the cultivators to pay;
seeing that the owners of all the land in the country
would now be in the same situation relatively to the
rest of the community, as the owners of the best land
were shewn to be when they held all that land, and
there was none other in existence.†
The different qualities of land have in reality nothing
to do with the principle of rent. One country might
possibly have lands of twenty different qualities, and
another country might have land of only one quality.
Being in the hands of a separate class, the lands of the
latter country might be charged a rent of five shillings,
or ten shillings, or twenty shillings an acre per annum,
accordingly as the owners chose to charge one or other
of those sums, or any farther amount that it was pos-
sible for the cultivators to pay; and, in like manner,
the owners of the lands in the former country, of
* This process is now going on in the United States of America.
+ Great Britain, Ireland, France, and Italy are in various stages of this
state.
13
twenty different qualities, might charge from six-
pence to ten shillings per acre, the average being
five shillings-or from one shilling to twenty shillings,
the average being ten shillings-or from two shillings
to forty, the average being twenty shillings,—or any
other average that the cultivators could pay.
In the
country where the lands are of different qualities, we
have only to consider the mean or average rate as the
rate of rent; and where the land is all of one quality,
the rent of any part may be taken as a sample of the
whole. Competition, be it observed, will be always
active to prevent any one portion of land, in either
country, from falling below the general or average
rate, according to its quality; for, if any such portion
were to be offered, there would be such a competition
to obtain it as would soon bring it up to the general
rate, whatever that might be. The rent of each por-
tion, therefore, according to its quality, would tend to
a certain relation to the mean rent. Where there were
lands of twenty qualities, the mean being ten shillings,
the worst would always have a tendency to be at one
shilling, and the best at twenty shillings; if the mean
were to be twenty, the worst would tend to two
shillings and the best to forty, and so on, whatever the
average might be. In like manner, where the land
was of one quality, and the rent ten shillings an acre,
every acre would have a tendency to let at that rate.
If any were to be put up by auction at nine shillings,
competitors would not suffer it to be let at that sum.
Competition is, in fact, always at work to equalize the
rate of rent, whatever that rate may be, whether high
or low.
AVERAGE RENT OF LAND.
Mr. Ricardo, and his followers, Mr. Mill and others,
in their expositions of his theory of rent, speak of
14
CAPITAL APPLIED TO LAND.
successive portions or doses of capital applied to the
same land yielding unequal returns, and the difference
in the returns, they say, constitutes natural rent. This
is, however, an unauthorized and groundless assumption.
The capital applied to any piece of land for the pro-
duction of a crop is a whole quantity, and produces a
simple and undivided result, and the capital is no more
separable into doses than the crop. The one is a whole
quantity producing another whole quantity. It is true
the quantity of capital applied may be much or little,
and the returns in the crop may vary accordingly ;—
but whether much or little, each crop is produced by
some certain whole quantity of capital, which is not
separable into successive doses.
But if we choose to imagine such a separation, still
it would not follow, as Mr. Ricardo and those of his
school assert, that each successive dose yields a smaller
return. When a country is first occupied, the capital
brought from other countries and applied to the land
yields a very small return, as is proved by the difficulty
with which settlers in a new country maintain them-
selves. But when, through great labour and severe
privations, they are enabled to apply more capital to
the land, the rate of return is increased. Capital yields
a greater return from the old settled lands of the
United States of America than from the new countries
in the west. The back-woodsman obtains the smallest
return for his labour and capital-his is a life of severe
labour and great suffering, such as the most hardy
alone can endure. The first settler obtains a very poor
return, until, by great exertion and economy, he has
accumulated, and is enabled to apply, what the disciples
of Mr. Ricardo would call a second or third dose of
capital to his land, when his rate of return is augmented.
C
POSSIBLE AMOUNT OF RENT.
15
Until that time he gets less for his labour than would
be paid to him by a capitalist in the older settled parts
of the country, who might, out of his returns, have his
own profit to make, and also a rent to pay. In Great
Britain the return for capital applied to the land is
greater than in the old settled parts of America. Now
if we imagine that four doses of capital have been ap-
plied to the land in Great Britain beyond what has
been applied by the first settler in America, each of
these imaginary doses may be considered to have given
a greater return than the preceding, as each is known
to have augmented the general rate of the return. The
admission, therefore, of the possible divisibility of the
capital used in producing any given crop into different
doses, would not prove that these doses successively
yielded inferior returns, as the reverse of this may be,
and in point of fact has been true. Indeed, while ad-
ditional capital applied to the land in the United States
of America is producing an increased rate of return,
rent is regularly paid for the land; the rent, therefore,
cannot be caused by the inferior productive powers of
successive doses of capital.*
It is clearly evident that if one party has possession
of land, upon the cultivation of which another party is
dependent for a subsistence, the former can exact from
the latter such remuneration as he pleases, without
reference to the quantity or doses of capital employed.
The only limit to the possible exaction is in the limited
ability of the cultivator to pay; and this ability may be
taxed to a moderate extent, or to the utmost extent
that it is able to bear.†
* The erroneous nature of the Ricardo theory of rent adopted by Mill,
M'Culloch, and others, vitiates the whole of their economical system.
+ For a more full elucidation of the nature of rent see my 'Rent of Land.”
16
THOMPSON'S THEORY Of rent.
Colonel Thompson, in his True Theory of Rent,'
successfully opposes the Ricardo theory, and shews
that the existence of different soils is merely an ac-
cidental circumstance, which does not affect the theory
or true principle of rent; yet he appears to be so
involved and entangled in the theory he is opposing
as to be unable to escape from its errors. This is
shewn in the beginning of his essay, where he says that
"The simple cause of rent is the limited quantity
of the land in comparison with the competitors for its
produce." This is incorrect. The cause of rent is to
be found not in the limited quantity of the land com-
pared with the competitors for its produce, but in the
exclusive possession of the land by ONE CLASS, while
another class is dependent upon it for a subsistence.
The former class is thereby enabled to take advantage
of the latter, and to compel it to pay a rent for the use
of the land. If there were only two men on the Isle of
Wight, and one of them was the acknowledged owner
of the whole island, whilst the other was without land,
and wanted it for the purpose of raising a subsistence,
the former would be able to charge the latter what
rent he pleased, and the latter must pay it, or leave
the island. It is left to the prudence or discretion of
the owner to say what shall be the amount of rent.
He could not, it is true, obtain more than the other
was able to pay; but, within the limit of that ability,
any amount might be exacted from him. If there were
fifty owners and fifty non-owners, rent might be exacted
on just the same principles by the former from the
latter. If the island were densely peopled, and one
half or one fourth were owners, and the other half or
three fourths were non-owners, rent might be taken
by the one class from the other, from just the same
·
S
COMPETITORS FOR LANDED PRODUCE.
17
cause as that which enabled the one owner to take it
from the one non-owner. On the other hand, the
island might be thickly inhabited, or the competitors
for landed produce might be very numerous compared
with the quantity of land, and yet if all were equal
land proprietors there would be no rent paid. Rent,
therefore, does not depend upon the limited quantity
of the land compared with the competitors for its
produce.
When the landowners are few in number, and the non-
owners, or the rest of the community, are numerous,
it is true that these circumstances enable the owners
to obtain more rent than they could if the rest of the
community were but few in number; but this is be-
cause the numerous population is able to pay the
larger amount of rent :-in both cases, however, the
owners are equally at liberty to exact as high a rent as
the cultivators are able to pay. There are parts of the
world, as in Italy, Greece, and Hindoostan, where the
population is very scanty, and yet where one half, or
even three fourths of the produce are taken as rent.
In these countries the competitors for the produce are
not numerous compared with the quantity of land, but
the owners take advantage of their monopoly to exact,
from the few who are without land, a very large pro-
portion of the produce which they raise by their labour.
This writer, proceeding on the ground that rent
arises from the number of competitors for landed pro-
duce, goes on to say, that "if the right of property in
land was vested in a number of owners who were
without the means of bringing the land into immediate
cultivation, it would be equally plain that the compe-
tition among these owners would, in the commence-
ment, reduce the rent which any of them could obtain
с
18
COMMENCEMENT OF RENT.
to the lowest possible magnitude, which is, in fact, no
magnitude at all." This is sufficiently obscure, but
let us endeavour to ascertain its meaning. In substance
we may suppose the writer says, that if the land-
owners, who held all the land in the country, had more
than they could themselves cultivate, they would let
somebody else cultivate the remainder without payment
of rent. Now, if this were the fact,-if they would
suffer others to begin to cultivate their lands without
requiring rent, they might just as well suffer them to
continue so to do. If the first man who presented
himself were to be allowed land rent free, the second
would have the same claim to equal privilege; and the
third, the fourth, and all succeeding applicants might
equally be allowed to cultivate it rent free, seeing that
there is no reason for charging a rent to the twentieth
or the five hundredth, which would not apply to the
first party. The amount of the rent is another point,
but a rent might be charged by the owners to the first
applicant for the land for just the same reason that it
could be charged on the hundredth. It is true, that
when there are many owners with lands to let, and few
who offer to take the land, the owners may (or they
may not) bid against each other in order to procure
tenants, offering their lands at lower and still lower
rents; but there is no reason to suppose that any one
would let his lands rent free. We know, however, that
there are many parts of the world in which the lands
are neither fully nor even one half occupied, and yet a
high rent, compared with the amount of produce ob-
tained, is exacted from parties who occupy portions of
these lands; thus shewing that landowners may, under
some circumstances, prefer having lands unoccupied to
letting them at a low rent.
19
Colonel Thompson afterwards says that rents natu-
rally and necessarily increase as the landless population
increases, until the landowners "get rich through the
simple fact of their being the landowners, and there
being no more land to own;" whereas he should have
said that they get rich through voluntarily taking ad-
vantage of their monopoly to exact from their tenants,
and, through them, from the rest of the community,
a rent, which rent may be low, or may be high-indeed
as high as the rest of the community can possibly pay.
The landowner, it is to be observed, when he lets his
land to a tenant, suffers the tenant to have all the
benefit arising from the limited quantity and conse-
quent natural monopoly of the land, on condition that
he, the tenant, shall pay the owner a stipulated value
or rent; and if the tenant sells the produce to a third
party, he, the tenant, charges, in the price he puts on
that produce, not merely the cost of production in
ordinary wages and profits, but also the rent which he
is obliged to pay. If he did not charge this additional
price he would not obtain for himself ordinary wages
and profits; and as the third parties must have the
produce, whatever may be its price, they are obliged to
pay the rent charge, in addition to the cost in wages
and profits. The rent thus raises what would other-
wise be the market price of landed produce; yet
Thompson says that there is a natural 'residuum' left
after the farmer has got his wages and profits, and that
this residuum is rent, agreeing with Mr. Ricardo that
'rent will be paid because corn sells high, and not
corn sells high because rent is paid."
66
MONOPOLY SOLD TO TENANTS.
In a subsequent paragraph the same writer supposes
a case of a landowner who farms his own land, the
ordinary rate of profit on capital in the country being
20
HIGH PRICE THE EFFECT OF RENT.
£10, per cent. He is presumed to expend £1,000. a
year in cultivation. To replace this, and to afford the
ordinary profit, the produce should sell for £1,100.
but it is stated, or assumed to sell for £1,200. Now
the real question is, why should this sum of £1,000.
employed on the land raise produce which will sell for
£1,200. and thus yield £20. per cent. while the same
sum employed in any other way would return only
£10. per cent.? In any other employment, where
there was no monopoly, if at any time a return of £20.
per cent. should be made, while the common rate was
only £10. per cent. capital would flow from other em-
ployments to this, which yielded double profit, until the
profit in it came down to the common level; and this
would be precisely the case in cultivating land, if
capital were permitted to flow to it unobstructed by
rent. The rate of profit being £10. per cent. no one
£1,000. would be permitted to obtain a profit of £20,
per cent. on a particular piece of land: £100. or £200.
more would flow from other employments to this land,
until, by increased cultivation, and consequent in-
creased production of landed produce, the quantity was
increased, and the price, compared with the prices of
other commodities, reduced so low as merely to replace
the amount laid out, and to furnish the ordinary £10.
per cent. profit, leaving nothing for rent. It is clear
that, if capital were to be allowed to flow freely to the
cultivation of the land, in the same way that it does to
the different branches of manufactures and commerce,
that the same principles of competition, which pre-
vented any portion of capital from obtaining more than
the ordinary returns in those departments, would
equally apply to the cultivation of the land. Now the
obstruction to the free flow of capital to land is evi-
COMPETITION FOR LAND.
21
dently the demand made for a rent by the owner, in
consequence of the monopoly of the land which he
possesses, as the price of his permission to use that
land: £100. being required as the rent of the farm
(supposed by Thompson), it becomes necessary that the
produce should sell for £1,200. in order to have
£1,100. as the return of the £1,000. and the ordinary
rate of profit. Rent is, therefore, the cause of the high
price, and not the effect of it.
An erroneous theory is often found to be based on
some apparently trivial error in laying down the first
principles of that theory, and this appears to be the
case with Thompson's 'True theory.' He says that
the cause of rent is "the limited quantity of the land
in comparison with the competitors for its PRODUCE.”
Now the competition is not for the produce of the land,
but for the land itself. Suffer these competitors to use
the land in the way in which the owners are using it,
and they will supply themselves with produce. There
is competition for fish caught in the sea, as well as for
landed produce; but as the sea is not appropriated by
a separate class who tax fishermen, the competition for
fish does not cause the price of fish to rise so high as to
afford the payment of a rent or tax out of that price.
If fishermen attempted to charge such a price, other
persons would become fishermen, increase the supply,
bring down the price, and make the trade of the fisher-
man yield not more than ordinary wages. The produce
of the land is scarce, and high in price, not merely
because the land is limited in quantity, for the sea is
also limited in quantity, but because those who want
landed produce are not permitted to raise that produce
from the land, without paying a consideration or rent
for the permission to those who have appropriated the
22
LANDED PRODUCE AND FISH.
land to their own exclusive use. If no consideration
of that kind were required, a fisherman or a manufac-
turer would not give the fruits of eight days' labour
for the fruits of six days of agricultural labour.
If so
unequal an exchange were required, some of the manu-
facturers or fishermen would transfer their labour from
manufactures or fishing to agriculture; and thus, by
increasing the supply of landed produce, and decreasing
the supply of manufactures or fish, establish an equi-
librium in their exchangeable values. Such a transfer
is prevented only by the exaction of a rent. It cannot
be true, then, that rent arises from the competitors for
landed produce being numerous compared with the
quantity of land, seeing that all which these com-
petitors want is to be permitted to labour on the
limited quantity of land which is in existence, in order
to raise that produce for themselves; and all that
Thompson has said respecting manufacturing wages
naturally falling as population increases, only proves
this, that landowners, by charging a high rent, compel
those who cultivate their lands to pay that rent, which
reduces the wages of the cultivators: and when any
part of this produce is sold to manufacturers, the rent
is charged in the price of the articles, in addition to
what the price would be if there were no rent. The
consequence is, that the results of, say six, or even four
days of agricultural labour are sold for, or exchanged
against, say eight days of manufacturing labour, the
difference between the prices of the two results of
labour being the amount of the rent.
Thompson attempts to illustrate his theory by a
reference to the land which produces Tokay wine.
This land is small in extent, and the competitors for
its produce are numerous, and able to pay a high price
POWER OF LANDOWNERS.
23
for it; and all that can be obtained is exacted in the
high price of the wine. Landowners, when circum-
stances induce them to act together, have precisely the
same kind of power to exact a high price for food, or
for permission to raise it; and they sometimes exercise
that power, so as, at last, to destroy many of those who
are compelled to submit to the monopoly price. When
Italian or Irish landowners stipulate to have one half
of the produce, or of the value of it, they exercise their
monopoly power to the great disadvantage of the pro-
ducers and other consumers of that produce. When
the British landlord takes only a fourth of the value of
the produce, he exercises his monopoly power less to
their disadvantage. Still, in all the cases, the exaction
arises from the power conferred by the monopoly, whe-
ther that power is or is not exercised with moderation.
There is, however, this difference between the cases of
Tokay and food-the parties who purchase Tokay can
decline to take it, it not being essential to their exis-
tence; but those who purchase food, or permission to
raise it, are obliged to obtain it or perish. It is neces-
sity which compels those who have no land, to give
their labour for only one half the produce raised by
that labour, or by other equal labour. They do not
willingly do this, but are compelled by the monopolist
to submit to it as a preliminary condition of obtaining
food, or the means of raising it. The proof of it is in
this fact-remove the monopoly, and labour will supply
itself with produce, keeping the whole quantity raised,
and competition would soon equalize wages in agricul-
ture and manufactures: and when landowners, from
their wants arising out of luxurious habits, from exciting
tenants to bid against each other, from established
custom, or from any other cause, exact a half of the
24
RENT IN BENGAL.
produce, or the value of it, the producers have no morë
power to avoid the payment of the half than they have
to avoid the payment of one fourth, one eighth, or any
other smaller proportion; the ability to pay the ex-
action, and also to subsist themselves, being the only
natural limit.
The nature of rent is well exhibited in the following
extract from the 'Companion to the Almanack for 1833,'
describing the systems of letting lands in India.
"It is evident that, however advantageous the Za-
mindary system might be to the few who should be-
come possessed under it´of a kind of property in the
land, it would yet leave the actual cultivators, who
form the mass of the population, as completely as ever
in the power of their landlords. Unfortunately the
Indian is, in general, too prone to convert power into
a means of oppressing those dependent on him, to leave
much room for hoping that the ryots (the cultivators)
would have their interests consulted or their rights
respected under that system; and the Indian govern-
ment has latterly become the purchaser of all estates
which have been brought to sale, with the view of
abolishing an authority which has stood between itself
and the dispensation of that measure of just and bene-
volent government which it feels called upon to ad-
minister to all its subjects. In proportion as it succeeds
in obtaining possession of the estates in Bengal, the
government substitutes for this Zamindary system
another which it has always principally followed at the
other presidencies, and which, as it admits of no inter-
vening authority between its officers and the actual
cultivators, the ryots, is known under the name of the
ryotwary system. The principal feature of this mode
of administering the land revenue consists in this, that
25
LOW OR HIGH RENT.
the government makes its bargain with each individual
cultivator for the rent of his holding. In fixing these
amounts in former years, too much of the old leaven of
oppression was used by the officers of government, and
the assessments were laid at so high a rate that it has
scarcely ever been found possible to adhere to them, so
that a sort of bargain has to be made annually with
the ryots, in settling which a great deal of discretion
must necessarily rest with the officers. In this manner,
the legal claim of the government is, with but few ex-
ceptions, ALWAYS GREATER THAN CAN BE ENFORCED
WITHOUT RUINING THE TENANT."
Thus it has been shewn that rent is a tax levied by
the landowners as monopolists, and that that tax is
charged on the consumers of landed produce in an ad-
dition to its price, in the same way that a tax upon
tea, malt, hops, or any other commodity, is charged in
an increased price of the article. The only difference
is, that in the former case the tax is paid to one class
of the community by the whole of the remainder, who
are the consumers, whereas, in the latter case, it is
paid by the consumers to the government.
Rent of land being then a tax, that tax may be low
or it may be high. At one time the aggregate amount
of the rent paid in the country might be, say twenty
millions sterling, at another time it might be forty
millions sterling, and the condition of the country
would be very different in the former to what it would
be in the latter case. When rent was twenty millions,
that sum would be furnished from the produce of the
labour and capital of the country, and the remainder
of that produce would be wages and profits; but if
instead of twenty the rent was forty millions, then this
latter sum would be abstracted from the annual pro-
D
26
EFFECTS OF RENT.
duce of labour and capital, and the portion remaining
for wages and profits would be materially reduced.
When rent was £20,000,000. the land proprietors
and their families, dependents, assistants, and trades-
people, all either living directly on the rent, or on the
expenditure of it, might be in number, say 500,000
persons, but when rent was £40,000,000. they might
amount to 1,000,000 of persons. Now supposing the
total population to have been 10,000,000, only one-
twentieth would, in the former case, have been living
upon the rent tax, but in the latter case one-tenth
would have been so living; and in the former case
nineteen-twentieths of the people would have contri-
buted to the payment of the rent, while in the latter
case only eighteen-twentieths, or nine-tenths would
have so contributed. Thus not only does a rise
of rent increase the rent tax in amount to the extent
of that rise, but the higher tax has to be paid by a
smaller number of persons! The rate of rent, and, con-
sequently, the aggregate amount have, therefore, a
material influence on the state of society in such a
country as Great Britain; and it becomes of great im-
portance that we should trace its advance, shew its
extent, and point out, as clearly as we can, the way in
which society, and the various classes of which it is
composed, are affected by it.
For the purpose of having an analytical view of the
subject, let us suppose that
9,500,000 persons produce wealth annually to the ave-
rage amount of £20. each, or a total of £190,000,000
and pay as rent
20,000,000
when there would be left for wages and
•
profits..
£170,000,000
giving an average of nearly £18. for each person.
•
27
But let rent be raised to forty millions, and the number
of persons subsisted on it be increased to one million,
and then the account would stand thus:
9,000,000 of persons produce at £20. each £180,000,000
and pay as rent
40,000,000
and they would have left for wages and
TITHES.
profits only
£140,000,000
which, divided among the nine millions of persons,
would leave for each person an average of only about
£15. 11s. and this is the way in which an advance of
rent really operates on the condition of the people.
TITHES.
Tithes, where generally exacted, constitute an ad-
ditional tax on land, and are taken from the amount
which would otherwise go to make up wages and
profits, after rent had been paid, or stipulated to be
paid; and of course they further reduce wages and
profits to the extent of the amount abstracted.
Collecting the tax, in the form of a tithe of the pro-
duce, is generally supposed to have an injurious
influence on cultivation beyond the amount actually
taken, it being presumed that tithes check improve-
ments in agriculture; the reasons advanced for this
opinion appear not to be well founded. See my 'Rent
of Land,' &c.
Colonel Thompson has endeavoured, as already
stated, to shew that rent arises from the demand for
landed produce exceeding the supply, and that the ex-
tent of that excess of demand determined the natural
amount of rent ;—meaning by that term the residuum
left after paying ordinary wages and profits. This
theory of the nature of rent has been shewn to be
erroneous; and the conclusion which he draws from
his theory, that tithe is a part of this natural residuum,
•
28
NATURE OF TITHES.
and is, therefore, taken from what would otherwise be
rent, is equally erroneous. If landowners have the
power, as it is contended they have, to tax cultivators
to the full extent of their ability to pay, they (the
landowners) cannot be deprived of that power by the
land being made also subject to the payment of tithes.
The ability of the cultivator to pay is indeed the ex-
treme limit to the possible exaction of either the land-
owner alone, or to the joint exaction of the two parties.
But the exaction of rent is not always carried to its
utmost possible extent; on the contrary, it varies
materially in different countries. The removal or
abolition of tithe would not be necessarily followed by
a rise of rent to the amount of the tithe, any more than
the abolition of the tax on tea would necessarily be
followed by a rise in the monopoly charge for tea by
the East India Company equal to the amount of the
tax abolished; nay, it would not follow that there must
necessarily be any rise, either in the rent charge for
land, or in the monopoly charge for tea. Tithes being
abolished, one of the charges to which the cultivators
had been subjected would be removed, and the imme-
diate or temporary effect would be that their wages and
profits would rise above the ordinary rates. As,
however, labour and capital are always disposed to go
where wages and profits are above the ordinary rates,
there would, in such a case, be a transfer of labour and
capital from other employments to the land, and a
greater amount of landed produce would be raised; its
price, compared with all other articles, would conse-
quently fall, and the whole of the consumers would
then receive the benefit of the abolition of tithes, in
being able to obtain more landed produce in return for
their labour and capital, or for the results of their
29
TITHES ARE TAXES.
labour and capital, than they had obtained previously
to the abolition of tithes. This is one way in which
an abolition of tithes might operate, and this would
probably be precisely the way in which it would operate
if the actual cultivators happened to hold their lands on
leases of considerable length. But it is also possible,
and indeed, under the present circumstances of this
country, probable that, upon the cultivators being re-
lieved from the payment of tithes, they themselves, or
others, would be ready to offer a higher rent for the
land, in order to participate in the advantages which
would temporarily result to the actual occupants of the
soil from the abolition of tithes. In this country a
large part of the land is already free from tithe, and,
in the event of its abolition, either rent would rise on
the land then freed from the tithe, or it would fall on
the land previously free; and the former is the more
probable occurrence. Although, therefore, tithes are
a tax paid by cultivators, in addition to the rent they
have to pay, and they are, consequently, obliged to
charge the tithe tax, as well as the rent tax, in the
price of their produce when they sell it to the rest of
the community, yet it does not necessarily follow that
the repeal of the tithe tax either would or would not
permanently relieve the cultivator, and, through him,
the rest of the community, from that amount of burden,
seeing that it is possible that the rent may be ad-
vanced equal to the amount of the tithe.
There is one view of this subject which it is important
should be attended to by those who wish to trace the
effects of different imposts on the condition of the
people, namely, the effect of a rise of rent on the
burden of tithe. For instance, if land were rent free, a
tithe would merely give a value equal to one-tenth of
the labour bestowed on the land to raise the crop,
30
EFFECTS OF TITHES ON PRICES.
with common profit; but if a high rent is exacted, a
tenth of the crop does not merely give a tenth of the
value of the labour (with common profit) bestowed
in raising it, but also the additional price or exchange-
able value which arises from the whole being subject
to a high rent. Let us take a case of a single farm
from which produce is obtained which, if there were
no rent, would sell for say £300. The tithe of this
would, of course, be worth £30.; but let a rent of
£50. be charged for this farm, and the value of the
tithe becomes £35. or one-tenth of £350. because the
whole produce must now sell for that sum. In like
manner, let rent be raised to one-third of the pre-
vious value of the produce, or £100. and that produce
must sell for £400. and the tithe would be worth £40.
In parts of Ireland rent is said to amount to more than
one half the value of the produce, and, as it sells loaded
with the rent charge, the exchangeable value is more
than double the amount of the labour value, and tithe is,
consequently, more than double the labour value that
it would be if land were rent free! But this is not all,
the tithe of landed produce, being itself a tax, in-
creases the exchangeable value of the articles taxed,
so that the tithe receiver gets his tenth of the produce,
when it is enhanced in value by the tax of that tenth,
and this too, is in addition to the enhancement through
the rent paid to the landowner.
But let us take another view, in order that we may
form as clear and distinct a conception of the nature of
this subject as possible.
Suppose then, in the first instance, land to be rent
free, and also free from tithes, and that the produce
of a given farm shall be worth, say £300, and that
this produce would exchange for any other commo-
dities, manufactures, fish, or other things requiring
EFFECTS OF TITHES AND RENT.
31
equal labour and capital to produce them. But let
a tithe of the landed produce be taken, and the
remaining nine-tenths must still sell for the same
money, namely, £300. or in other words, exchange
against commodities requiring unaltered quantities of
labour and capital to produce them. Here then all
manufacturers would have to give a certain amount of
the produce of their labour, for only nine-tenths of the
amount of landed produce, which they received before
tithe was exacted! This would be the case if the culti-
vator sold all his produce, but if he retained, as indeed
he must, a part for his own consumption, then that part
would be reduced one-tenth in quantity by the payment
which had been made of tithe; but the tithe receiver
would have, not only a tenth of the value of the pro-
duce, as that value was before he took his tithe, but a
tenth of the quantity of the produce with its value
enhanced by the tax which he himself had received.
To find what the price of the tithe would now be, we
have only to ascertain, if nine-tenths sell for £300.
what will the remaining tenth sell for, and the answer
is £33. 6s. 8d.: and thus we see that one-tenth of
the quantity being taken, as tithe, renders that tenth
of one-ninth the previous exchangeable value.
But now let us suppose a rent to be taken of one-
fourth of the selling price of the produce, when it is
loaded with the tithe tax, and then let us see what,
under these circumstances, that selling price would
become. First, then,
the labour and capital price is
the tithe tax is..
·
or together
now the rent, being one-fourth of this sum or
when added to it, will make the price be..
£300 0 0
33 6 8
333 6 8
83 6 8
£416 13 4
32
MONEY PRICES NAMED.
and every part of the produce would now be sold after
that rate. What then would become the value of one-
tenth of this produce ?-just £41, 13s. 4d. So that we
see the rent tax and tithe tax together would increase
the exchangeable value of the tithe £11. 13s. 4d. on
£30. or more than one-third, and of course give an
additional command to that extent over the produce of
the general labour and capital of the country.
In the same way we may exhibit a statement of the
case where rent is equal to the whole amount obtained
for the labour employed in the production, as is said
to be the case in parts of Great Britain. Here
we may put down the labour value still at the same
.£300 0 0
300 0 0
sum..
and the rent charge the same amount....
The value of the tithe of this would be
more than ..
66 0 0
because it would be a tenth of the total.. £666 00
and thus the tithe would now be enhanced in value by
rent and tithe taxation, until it became of more than
double the previous value.
In the illustrative case here exhibited, the money
prices have been supposed to rise in exact proportion
to the taxes, i. e. rent and tithes, as this mode of ex-
hibiting the cases gave a clearer comparative view.
But if the money prices of labour, and of all other
articles produced by labour, fall, while the money
prices of landed produce do not fall, the effect on the
condition of the people is just the same.
If the pro-
duce of the supposed farm, after rent and tithe were
paid, continued to sell for only £300. and one half of
this price went to the landowner and tithe receiver,
the cultivator, when he had sold his produce and paid
his rent, and satisfied the tithe claim, would have only
EFFECTS EXPERIENCED FROM TITHES.
33
£150. for himself; and if the wages and profits of the
cultivator were thus reduced one half, the wages and
profits of all others would be equally reduced; for
cultivation would be abandoned unless it yielded the
average wages and profits, and it would be partially
forsaken upon a rise of rent and tithes, until the
scarcity of landed produce made that produce rise in
price as compared with manufactures, and an equi-
librium of wages and profits was established in the two
branches of production. It is the division or distribu-
tion of the produce that is the essential point to be
attended to. Naming money price is only a means of
expressing what that distribution is under the different
circumstances of high or low rent, or tithed or untithed
land, Taxes on horses used in agriculture, or on
agricultural implements, or any other tax paid by the
cultivator, would further augment the exchangeable
value of landed produce, and consequently further
increase the value of every portion of it, including the
tithes.
When such are the effects of the payment of tithes
in couutries like Great Britain and Ireland, where
rents have been greatly raised, need we be surprised
at the increasing dissatisfaction of those who pay
them? The precise way in which they operate may
not be clearly seen, but the effects are FELT, and
the payments are sufficiently palpable to induce the
payers to connect their increasing distress with those
payments.
In the following pages tithes will be considered
simply as a tax, paid in the first instance by the culti-
vators, and charged by them in the price of the produce
which they sell to manufacturers and other productive
classes of the community.
E
34
PROFIT ON CAPITAL.
PROFIT.
The labours of men, engaged in producing those things
which are necessary to their subsistence, are rendered
much more effective when aided by a stock of accu-
mulated wealth or capital. Those who are not them-
selves owners of this stock, or capital, find it more
advantageous to give up to a capitalist part of the pro-
luce of their assisted labour, than to labour without
assistance and to keep the whole produce to themselves;
because, in the former case, their portion-that which
is left after the capitalist has had his share-is a
larger quantity than they could have produced by their
unassisted labour. It is from this cause that men in
all countries acquiesce in the payment, in some form,
of a profit for the use of stock or capital.
The proportional amount of this payment, or the
rate of profit, varies greatly in different times and in
different countries. Rather than labour without the
assistance of accumulated capital, men have been found
readily to acquiesce in paying to the capitalist as much
as one half of the whole product of that capital and
their labour; but they would not have done so if that
half had not been a greater quantity than the whole of
what they could have produced by their unassisted
labour. The payment of a profit to the capitalist for
the use of his capital is then acquiesced in because the
labourers are more benefited by the use of the capital
than they are injured by the payment of the profit.
Capital is a general term, used to designate the
wealth which is employed in producing new wealth.
Tools, machines, seeds, manure, houses, warehouses,
cattle, stocks of food, clothing, and money, are the
articles which constitute the mass of capital in every
8
35
NATURE OF PROFIT.
country. These articles may be abundant, or they may
be scarce, according to the inclination and opportunities
of the people for accumulating them; and the rate of
profit will be dependent on their abundance or scarcity,
compared with the number of labourers who want to be
assisted by them in their labours. The practical course
generally adopted is for the capitalist to retain the
management of his capital, and to engage to pay la-
bourers their proportional share of the value of the
produce in the shape of wages, and to retain the re-
mainder of the produce, or of the value of it, as his
profit. Labourers sometimes hire the capital, and pay
a value agreed upon for the use of it, and this latter
mode exhibits the nature of profit more clearly than
the former does; but the real nature of the transaction
is the same in both cases-the produce, or the value of
it, is divided between the two parties, the capitalist and
labourers, and constitutes profit and wages. When
the word 'labourers' is used, it is not to be understood
in the restricted sense that is sometimes applied to it to
designate the lower class of labourers alone; but in an
economical sense, when it expresses all those who, by
their exertions, contribute to the production of wealth,
whatever may be the way in which they exert them-
selves: it may be the labour of superintendence, or of
study, in order to direct more beneficially; but this is
all labour, and the parties are labourers as distinguished
from capitalists.
The proportional share of the capitalist is generally
expressed in hundredths or cents. It may be fifty out
of a hundred, or 50 per cent. or it may be twenty-five
out of a hundred, or 25 per cent. or any other propor-
tion; but it must always be some proportion or per cen-
tage, as no capitalist would suffer his capital to be used
E 2
36
DIFFERENT RATES OF PROFIT.
without having some advantage to himself arising from
it; indeed, it is the expectation of this advantage that
constitutes his motive for accumulating beyond the
amount which he could himself use. The profit is, there-
fore, the premium which is constantly offered and paid
for accumulation. Under circumstances which render
accumulation of capital difficult, the premium must be
high; but let those circumstances give place to others
-more favourable, and the high premium would cause
so great an accumulation as to make capital more
abundant, and the premium then to fall; and as those
circumstances become more and more favourable, and
capital is accumulated in a greater degree, the pre-
mium continues to fall. The additional capital, it will
be observed, has to be offered to labour, or to be used
in employing labour, in competition with the old stock
of capital; and it is only by employing labour on terms
more advantageous to the labourer that it can tempt
labour from the use of the old stock. The rate of
profit necessary just to keep up the existing stock of
capital in a country may be at one time, say 25 per
cent. per annum. Under these circumstances, of all
the articles produced in a year, twenty-five would go to
the capitalist, and seventy-five to the labourers; but
let an increase of capital take place, and the rate of
profit consequently fall to 20, 15, or 10 per cent, then,
in the last case, of the articles produced only ten
would go to the capitalist, while ninety would go to the
labourers. This result would be seen more clearly if
all labourers hired the capital, and paid for it in the
form of a per centage; but it is not the less real when
labourers are employed, and wages paid to them, as
those wages rise as competition reduces the rate of
profit, until each labourer obtains ninety for his labour,
PROFIT A PROPORTIONAL SHARE.
37
The
as readily as he before obtained seventy-five.
reverse of this process takes place when any circum-
stances cause a reduction in the amount of capital-the
rate of profit then rises, and wages fall.
It is necessary, however, to explain that, when
speaking of the rates of profit and wages, and the
effect of one upon the other, we speak merely of the
proportional shares of some understood quantity, and
that quantity may be large, or may be small. The
whole quantity is expressed by the number 100, but it
may be 100 pounds or 100 shillings; 100 quarters, 100
bushels, or 100 pecks, and whether it be one or another
of these depends on the productiveness of the labour
and capital; but whatever may be the degree of pro-
ductiveness, whether it be such as can be found only on
the richest soils, and among the most skilful manu-
facturers, still the division of the whole quantity,
whatever that may be, depends on the rate of profit.
When speaking, therefore, of the effects of the rate
of profit on wages, it is to be understood that we
speak only of the division of the
value of it, whatever that may be,
parties interested-the capitalists and labourers.
produce, or of the
between the two
That wages may be materially affected by this
division, varying from time to time, will be evident from
an examination of the situations of capitalists and
labourers in a country, at different times, where the
rates of profit have considerably altered, all other
things being supposed to remain unaltered.
Say, then, in a country resembling Great Britain,
the whole amount of wealth produced annually, and
divided between capitalists and labourers, shall be ex-
pressed by the sum of 100 millions sterling. It is
evident, if the rate of profit was 15 per cent. that there
38
CIRCULATING AND FIXED CAPITALS.
would be for capitalists 15 millions, and only 85 millions
left to be divided among labourers as wages; and the
average wages of each man would be according to the
number among whom these 85 millions had to be di-
vided. But now let the rate of profit fall from 15 to 10
per cent. and there would be left for wages 90 millions,
and the share of each man would rise as 5 on 85, or
one-seventeenth. Suppose profit to fall further to 5
per cent. wages would rise to 95, as may be thus exhi-
bited in a tabular form :-When profit is
15 cent. profit is 15 millions, and wages are 85 millions,
10 cent. profit is 10 millions, and wages are 90 millions,
5 cent. profit is 5 millions, and wages are 95 millions.
But a profit has to be paid on the capital which is
durable, as well as on that which is annually renewed-
on the fixed as well as on the circulating capital of the
country; and the fixed may greatly exceed in amount
the circulating capital. Suppose the whole of the
capital, both fixed and circulating, requisite to assist
labour in the production of the 100 millions of wealth
annually, is at one time 300 millions sterling, then
profit being
15
10
cent. it would take 45 millions, leaving for wages 55,
cent. it would take 30 millions, leaving for wages 60,
5 † cent. it would take 15 millions,leaving for wages 75,
and in this way as profit fell wages would rise, or, on
the contrary, as profit rose wages would fall.
Every thing that tends to raise up obstacles to the
accumulation of capital has a tendency to cause profit
to be high, and every thing that stimulates to accu-
mulation has a tendency to cause profit to be low.
Among the causes of high profit may be named luxu-
rious habits, heavy taxation, loans by governments for
carrying on wars, and insecurity of property. These
TY
NET PROFIT NOT TAXABLE.
39
all tend to make capital scarcer than it would other-
wise be, and therefore to raise or keep up the rate of
profit; while habits of economy, light taxation, an
absence of state loans, and perfect security of property,
all tend to make capital abundant, and therefore to
reduce the rate of profit. In any given state of society
it is evident that some one rate may be considered the
general or average rate of profit. The quantity of
capital and the number of labourers bear some definite
relation to each other, and some mean rate must exist
towards which the competition of individuals will have
a tendency to bring the profit in every individual
transaction. This becomes the natural rate of profit
under the then existing circumstances.
Profit being the premium which experience proves
to be necessary to obtain any given supply of capital,
it follows that the premium must always be adequate
to that end. And, while the circumstances of the
country remain the same, this premium or per centage,
whatever it may be, cannot be reduced. It is con-
sidered a net receipt, just sufficient to stimulate to
the supply of the stock of capital, and therefore no
part of it can be taken in the shape of a tax, nor in
any other form. Say that 6 per cent. is requisite to
keep up this supply of capital, it would not, for in-
stance, be possible that two out of the six should be
taken as a tax. If such a tax were to be imposed on
profit, the effect would be to raise the gross rate of
profit from 6 to 8 per cent. seeing that our assumption
is that 6 per cent. is the clear net receipt that is
requisite to keep up the supply of capital. The 2 per
cent, would, therefore, be merely advanced by the
capitalist when he paid the tax, as he would after-
wards deduct it from wages in the shape of a higher
40
NET AND GROSS PROFITS.
gross profit, and the tax would be finally paid out of
wages, and wages would be lowered to the extent of
the tax.
The whole amount of capital being considered 300
millions, and 6 per cent. the necessary rate of profit,
18 millions would be the clear aggregate sum which
would be requisite to induce and enable the owners to
keep up that stock. But if 2 were to be taken from
the 6, or in all 6 millions, from the 18 millions, there
would be only 12 millions left for the capitalists them-
selves. Now, as our supposition is, that 18 millions
clear are requisite,-when the tax was imposed which
took 6 millions, it would be necessary that the aggre-
gate amount of profit should rise to 24 millions. The
tax of 6 millions, therefore, though raised from and
advanced by capitalists, would be finally abstracted
from wages.
If the 6 millions were to be raised from the capi-
talists in the shape of an income tax, still the effects
would be the same. It is not the form or manner of
taking the sum that causes the rise of profit, but the
taking in any way of 6 from the 18 millions, when,
according to our argument, 18 are necessary to cause
the supply of capital to be sufficiently abundant to keep
the rate of profit at 6 per cent. Taxes on articles of
consumption, which should take from the capitalists
an equal total sum, would have just the same effect as
any particular tax imposed on them;-18 millions of
untaxed produce are necessary to keep profit at 6 per
cent., and, if that produce be taxed to the amount of
6 millions, the rate of profit must rise so high as to
give to the capitalists an equal command over the pro-
duce, that is, it must rise from 6 to 8 per cent., or from a
total net profit of 18 to a total gross profit of 24 millions.
41
The rise in the gross rate of profit consequent on
taxes on capitalists does not, it is true, instantaneously
follow the imposition of the tax. It has to operate
through a reduction in the amount of circulating capi-
tal and a fall of wages, and may require some time to
produce its full effect. It is also possible that the im-
position of a tax upon capitalists might alter their
habits,―make them more parsimonious, and thus they
might, out of the 12 millions, save a part of the 6
millions, and use it as capital, and so far counteract
the effect of the tax. But this is not included in our
assumed case, as in that we suppose the habits of the
parties to remain the same; and, such being the case,
the final effect of taxes on profit, or on capitalists, di-
rect or indirect, is a rise of the aggregate profit to the
same amount, and a proportionate reduction of wages.
If taxes, by reducing the quantity of capital, raise the
rate of profit, loans for purposes of war expenditure must
have the same effect, as they operate in the same way.
A loan made by government to carry on a war takes a
portion of the capital of the country from its productive
use as capital, and it is then expended as mere wealth,
without exercising any further reproductive power.
The whole capital of the country being 300 millions,
and the net profit 6 per cent. which, on account of
taxes paid by capitalists, makes the current or gross
profit 8 per cent,-suppose a loan of 10 millions is
made for the purposes of war expenditure, what would
be the effects of such a loan on the state of the country?
It would, in some definite time, reduce the 300 millions
to 290 millions, and the reduction, in the first instance,
would take place almost entirely in the quantity of
circulating capital, which would consequently become
scarce, and the rate of profit on it would rise. Profit
LOANS.
42
EFFECT OF LOANS ON PROFIT.
being then higher on circulating than on fixed capital,
the latter would cease to be renewed until it also be-
came scarce, when the rise in the rate of profit would
be extended to all the capital of the country. The ex-
tent of this rise would, in the end, be about sufficient
to take from wages the amount which had been
abstracted from capital by the loan. The gross rate of
profit would now be sufficiently high to furnish to the
capitalists-first, the amount of the loan they had ad-
vanced-secondly, the amount of the taxes which they
had paid and thirdly, the necessary premium to induce
and enable them to keep up the requisite supply of
capital. These would be, for
-
the amount of the loan
the taxes advanced
the net profit of 6 per cent.
making a total gross profit of
which sum, on the reduced capital, gives a per centage
approaching 12 per cent. making the gross profit, by
the operations of the loan and the taxes, nearly double
the net profit.
•
£10,000,000
6,000,000
18,000,000
£34,000,000
Supposing, as before, the whole annual produce to
be 100 millions, the effects of the loan and taxes would
then be, to take from that sum 34 millions, as the
amount of gross profit, instead of 18 millions, the
requisite net profit, and, consequently, to reduce the
aggregate wages from 82 millions to 66 millions, and
the wages of each individual labourer in the same
proportion.
That loans, for the purpose of war expenditure, are
actually taken from capital, and increase the gross
rate of profit, is sufficiently evident from the following
considerations. The capitalists are the only parties
who use or advance capital for the sake of obtaining
43
a profit, and therefore they must be those who advance
the loan to the government :-this advance reduces the
amount of their stock, and that reduction, making
capital more scarce, raises the rate of profit. There is
no more reason to suppose that land proprietors or
labourers would accumulate wealth, in order to lend it
to the government, than there is to suppose that they
would accumulate it in the absence of government
loans; and if we suppose that some of them accumulate
both before the loan and after it, they, in fact, become
capitalists, and are as such included with that class in
the whole of the statements and reasonings. The loan
intercepts a part of the annual supply of new wealth,
let it come from what class it may, which is about to
be used as capital,—or it takes a portion of that which
had previously been used as capital, and causes it to be
consumed in an unproductive way; and in either case
makes the capital more scarce than it would otherwise
be, and raises the rate of profit. Whether the loan is
large or small, it has its proportionate degree of effect,
and every part and the whole has always the same
kind of effect.
LOANS TAXES ON WAGES.
A loan, then, to a government, to carry on a war, is
to be considered as a tax on wages, levied through the
agency of the capitalists of the country, who collect the
tax in the form of additional profit, and they, or a part
of them, pay the amount to the government in the loan
which they advance. The injustice of a system which
thus enables one class to take so largely what was pre-
viously enjoyed by another class, and to lend it in such
a way as shall entail on the party from whom it is
taken a perpetual burden, in the payment of interest to
those who were merely the collectors, must be suffi-
ciently striking, and may hereafter be remarked upon;
44
HIGH AND LOW PROFITS.
but at present we are endeavouring to ascertain what
the real effects are, and not whether injustice is or is
not practised.
It appears, then, that profit has a self-adjusting
power, and adapts itself to the supply of capital in such
a way as to ensure some supply under almost every
variety of circumstances. Near the end of the Roman
republic profit must have been high, as, in Cyprus, 48
per cent. per annum was paid as interest. In the year
1253 the rate of interest in England was 50 per cent.
per annum. Near the Caspian sea, and also in Bengal,
according to Fraser and Mill, the rates of interest have
been from 12 to 15 per cent. per month ;* and even in
the western parts of the United States of America,
Morris Birkbeck represents profit as being occasionally
so high as 100 per cent. These examples shew that
distress on the part of the people, that is, of the labour-
ing class, does not prevent profit from rising to an ex-
travagant height; as, in all the first named countries,
there is no reason to doubt the high rate of profit was
accompanied by severe distress among the people,-
the high profit itself being one of the causes of that
distress. In modern European countries profit is com-
paratively low, as is indicated by the rates of interest
being at times not more than 5, 4, or 3 per cent. In
Holland, at one period, interest was not more than 2 per
cent. These low rates were the consequences of a
*In the 'Companion to the Almanack for the year 1833,' published
under the superintendence of the society for the diffusion of useful know-
ledge, it is stated that "some of the Zamindars (of Bengal) run into
arrears systematically, and defer making their payments till the latest
moment, their reason for which is obvious. The rate of interest among
themselves is at least 24, and sometimes 30 per cent. per annum, while
they are charged only 12 per cent. by the government."
+ At present (in 1833) country bankers allow 21 per cent. on deposits.
45
great abundance of capital,-the competition of ca-
pitalists bringing the rates down to those points.
It being established that profit rises as capital be-
comes scarce, it seems to follow that it is to the
advantage of the capitalist that it should be rendered
scarce, and this may be partly true, as will be hereafter
shewn. But if, by taxation or any other cause (loans
excepted), capital be reduced in quantity equal to the
rise in the rate of profit, there would be no advantage
to the capitalist in the alteration ;-£100. at 4 per
cent. interest will yield as large an income as £80. at
5 per cent. The relation which exists between the
reduction in the quantity of capital and the rise of
profit is a very interesting subject of enquiry, but it
would not be easy to obtain data to ascertain what that
relation would be under different circumstances. In
like manner, it may be supposed that if taxation cannot
reach the income of the capitalist, he would be indiffe-
rent respecting taxes; whereas, in point of fact, it is
known that he is not so, as he pays them with as much
reluctance as any other party: but it should be borne
in mind that he does not know that his higher rate of
profit is caused by the taxes which all capitalists are
compelled to pay, and he is willing to believe that if
he were untaxed his profits would remain undiminished.
Where taxes are very heavy, and levied directly, they
palpably limit the extent of saving, and not only really
keep down the amount of each man's principal or stock,
but they appear to him so to do; they are, therefore,
viewed by each capitalist as checks or obstacles to a
further increase of his capital, but he does not see
equally clearly that such further increase would be
followed by a reduction in the rate of profit.
The rate of profit, whatever it may be, must be taken
EFFECT OF TAXES ON CAPITAL.
46
PROFIT DETERMINED BY GENERAL CAUSES.
as the necessary result of the existing quantity of capi-
tal compared with the existing number of labourers,
and the quantity of capital is itself the result of the
ability and inclination of the people to accumulate.
Lessen either the ability or the inclination to keep up
the full stock by taxes or loans abstracting from the.
existing stock, and thus reducing its quantity,—by
luxurious habits begetting a disinclination to save, or
by insecurity of property weakening the motive for
saving, and the rate of profit adapts itself to the new
circumstances; it rises, and, as has been already shewn,
the labourers are then compelled to submit to a lower-
rate of wages. General laws govern in this as well as
in every other part of nature's works, although it may
not appear quite so easy to trace them in this depart-
ment as in some others. Individuals seem to act from
caprice; one man's reason for saving may differ from
another man's. One may go on accumulating when
interest is only 2 per cent. while another may think
that so small a premium is not sufficient to induce him
to abstain from the enjoyment which arises from the
expenditure of his wealth; but, after making allowances
for differences of these kinds, there is still a general
motive which pervades all classes of accumulators, and
this is the expectation of advantage to themselves and
their families :-this operates with more or less force
on all, and produces some general result. Under
varying circumstances the results will differ, and the
circumstances and their results may be traced, and their
final effects on the condition of different classes may
be ascertained and exhibited.
WAGES.
From what has been advanced respecting rents and
tithes, it will have been seen that they are taxes on the
47
produce obtained from land by capital and labour; and
where rent and tithes taken together are low, or but a
small part of the whole, the proportion left for the
capitalists and labourers will be large; while, where
they are high, the proportion left will be comparatively
small. In the division of the portion left, between the
capitalists and labourers, the former take a part or
share, the amount of which is determined by the ex-
isting rate of profit; and it is only the remaining portion
which constitutes wages.
The labourer is, then, the last claimant on the pro-
duce, and is obliged to submit to take what is left after
the former claimants have been satisfied. The amount
thus left is, by the operation of competition, divided
among all the labourers, and constitutes their wages.
If it is large, they have an abundance of the necessaries
and many of the comforts of life; but if it is small,
each individual share will be small, and it will give
only a scanty supply of the necessaries, and few of the
comforts of life.
WAGES.
The degree of productiveness of labour, when fur-
nished with land and aided by capital, determines, in
the first place, what shall be the total supply of wealth
from which all classes are supported. If this total
should be a large quantity, it is possible that much
may be taken for rent, tithes, and profit, and yet a
tolerable abundance be left for wages. If labour
should be made more productive, or to produce a still
larger quantity, and rent, tithes, and profit take no
more produce, the increased productiveness of labour
would increase real wages, that is, the amount of com-
forts and necessaries on which labourers subsist. If,
on the other hand, rent, tithes, and profit should, any
ene or all of them, advance, while the productive power
48
PRODUCTIVENESS OF LABOUR.
of labour was stationary, real wages must decline; for,
the total produce being the same whole quantity, if the
former take more, the latter will have less.
This view of the subject shews the desirableness of
obtaining a clear and distinct knowledge of the separate
effects of each of those causes which thus affect the
condition of the labourer; and yet how imperfect is
that knowledge, even in the present period! Not only
is tithe, under all circumstances, viewed simply as a
tenth of the produce, and rent thought to be regulated
in its amount by the laws of nature, according to the
quality of the land last taken into cultivation,—but
that which increases the productive power of labour is
extensively believed to be greatly injurious to the la-
bourers themselves. Mr. Owen and others have main-
tained that the steam-engine, and modern machinery in
general, which so powerfully aid labour in the great
work of production, are absolutely injurious to the
labourer.
If neither rent nor tithe was exacted, and the la-
bourers owned the capital which assisted their labour,
all that they produced would belong to themselves, and
the amount of the whole, or the quantity, or degree of
abundance of produce brought into existence, would
depend on the productiveness of labour. If that labour
was unassisted by steam-engines, and other machines
and tools, it could produce but little, and there would
consequently be but little to enjoy as wages; but if that
labour was aided by effective machines and good tools,
it would be highly productive, and there would be an
abundance of produce, or of wages, to enjoy.
And when parts of the produce are taken for rent,
tithes, and profit, these circumstances furnish no reason
why the labourer should be deprived of such aid and
SUPPLY OF LABOUR.
49
assistance from machines as he formerly obtained; on
the contrary, he would stand more in need of their
assistance: as he would now have only a part of the
produce instead of the whole, it is his interest that the
whole should be as large a quantity as possible. The
errors on this point seem to have arisen from machines
being considered the rivals, instead of the assistants, of
labour; but it would be as correct to say that a man's
right hand was an injurious rival to his left hand, as to
say that a spade was an injurious rival to a labourer,
and a spade is a simple specimen of all machines used
by man to aid him in his labours.
There are other philosophers who contend that the
labourers themselves regulate the amount of their own
wages, by the extent of the supply of labour which they
bring into the market; and, as this is a very important
point, it will be necessary to examine it with particular
care; for, if this doctrine were true, rents, tithes, taxes,
and the rate of profit, could all have only a temporary
effect on the condition of the labouring class, seeing
that they would have only to lessen the supply of
labour, and wages would then rise. Mr. Malthus may
be considered as the principal promulgator of this doc-
trine, but he is followed by nearly the whole of our
modern political economists.
According to these writers, the capitalist is the party
who is obliged to put up with the residuum which is
left, after all the other claimants, including the la-
bourers, have been satisfied; and the amount of this
residuum, they say, determines the rate of profit.
Perhaps the best way of examining this point will be
to omit, in the first instance, all reference to rents, tithes,
and taxes, and consider the produce as divided between
the capitalists and labourers only, as profit and wages.
F
50
THE PRODUCE OF LABOUR, WAGES.
Man has been found living on wild fruits and roots,
or on the shell fish which he picked up on the sea shore,
and what he thus obtained furnished his subsistence,
and was, in fact, his wages. If suitable animals ex-
isted within his reach, he might become a hunter, or a
shepherd, and thus obtain a better subsistence; but
still what he obtained would be the wages of his labour.
Should he become a cultivator of the earth, the return
for his exertions might be a much more abundant
supply of subsistence; but yet all would be the return
for his labour, and therefore all would be wages. But
now suppose a capitalist to say to him,-I have certain
things (tools and materials) by the use of which your
labour will be made more productive, and if you will
come and work with them I will allow you out of the
produce, which you will then bring into existence, more
than you can get by your unassisted labour, and I will
keep the remainder of the produce for myself as profit.
This bargain being acted upon, the labourer would
receive his wages, and the capitalist his profit, out of
the joint produce of the labour and capital-the labour
and capital co-operating in order to obtain the wages
and profit. Society being made up of these two classes,
the supply of labour, compared with the supply of
capital, both fixed and circulating, would determine the
relative proportions of the produce which should go as
wages and profit; always, however, leaving wages more
than labour could obtain without the assistance of
capital. If the supply of labour should be reduced,
while that of capital continued the same, wages might
rise relatively to profit, and profit consequently fall
relatively to wages. Suppose, however, population to
be stationary, the rate of profit would then depend on
the extent of accumulation of capital; and it might be
REDUCING THE NUMBER OF LABOURERS.
51
any amount which would be sufficient to stimulate to
accumulation. It might be 15 per cent. or 10 per cent.
and wages would take the remainder, wages being
higher as profit was lower, and lower as profit was
higher—but say that profit settles at 10 per cent. If,
under these circumstances, the labourers endeavoured
to improve their condition by reducing their numbers,
what would be the result? It is conceiveable that they
might, by making labour scarce, reduce the rate of
profit to, say 9 per cent. and thus cause 1 per cent. to
be added to wages; but then a question arises as to
whether 10 per cent. is the lowest rate of profit that
will stimulate to adequate accumulation ? If it is, as
was, in fact, supposed to be proved by previously
settling at that rate, capital would be reduced as fast
as population. The rate of profit would not fall, and
it would not, therefore, be practicable for the labouring
class to improve their condition by reducing their
numbers. It should be recollected, too, that when the
labouring population is reduced, the aggregate pro-
ductive power of labour is reduced in an equal degree.
The falling off in the stock of wealth becomes then as
great as the reduction in the numbers of those among
whom that stock has to be divided as wages; the share
of each, therefore, remains the same, and no improve-
ment in the condition is effected. Indeed, if reducing
the numbers of the people would improve their condition,
a continuance of that reduction would improve it still
further, and the people of those countries where the
population had been most reduced would be in the
happiest circumstances; but the reverse of this is known
to be the fact. It is requisite to have the co-operation
of a considerable population, with labour much divided,
in order to make it highly productive; and a reduction
F 2
52
ANTI-POPULATION DOCTRINES.
in the number of labourers might materially impair the
productive power of those who remained.
Reducing the numbers of the labouring people will
not then necessarily improve their condition, even when
they have neither rent, tithe, nor taxes to pay; and
when they have such payments to make, they have still
less power to improve their condition, or rather they
have less power to prevent it from deteriorating by the
use of such an expedient: and, as the people of Great
Britain have heavy burdens to sustain, an examination
of the doctrine of Mr. Malthus, with reference to their
actual situation, becomes more particularly necessary.
The people of Great Britain, at some certain period,
may be supposed to have had to pay as rent of land 16
millions, as tithes 4 millions, as taxes 20 millions, and
as profit on capital 14 millions, making a total of net
payments of 54 millions. The population was at the
same time, say 10 millions, 1 million of which lived
upon the net wealth, and the other 9 were productive
labourers, who, at an average of £14. per head, pro-
duced wealth to the amount of 126 millions. Taking
the net 54 from this, we should have 72 millions for the
producers, which would give an average of £8. per
head. But now some anti-populationists propose to
the people to improve their condition by reducing their
number; and let us say that I million emigrate, and
what would be the effects ?-8 millions now, instead of
9, would produce, at £14. per head, a total of 112
millions; from which take the net 54, and we have left
for the producers 58 millions, which, divided among
them, give £7. 5s. per head, instead of £8. as before
the reduction of the population!
But this mode of exhibiting the case does not shew
its full effect. Where 54 millions of net wealth are
53
MANY OR FEW LABOURERS.
consumed, the one million whom we presumed to be the
owners would not consume it all themselves, but would
employ a part of the labouring people to administer to
their gratification, and, in return, would give them a
subsistence out of their net wealth. This would reduce
the number left to create the great fund of wealth to,
say, in the first instance, 8 instead of 9 millions; then,
8 millions would, at £14. per head, produce 112 millions,
and pay, net wealth.
54 millions,
58 millions,
leaving for wages
which would yield per head £7.5s. But now suppose,
as stated above, that 1 million out of the 8 millions emi-
grate, and then we have this case-
7 millions would, at £14. per head, produce 98 millions,
and pay, net wealth...
54 millions,
leaving for wages
44 millions,
being a re-
which would yield per head about £6. 6s.
duction of about 19s. on £7. 5s. and £1. 14s. on the £8.
Further, the owners of net wealth would be able to
employ a greater number of labourers with their super-
abundant net wealth when wages were at £6. 6s. than
when they were at £7. 5s. and this would cause the
aggregate fund of wealth to be less than 98 millions-
seeing that it required full 7 millions of people to pro-
duce that amount.
But it will make this part of our subject more
intelligible, if we assign distinguishing names to the
different classes of which we are treating. The pro-
ducers of the great aggregate fund of wealth, out of
which are furnished rents, tithes, taxes, profits, and
wages, may be called primary producers, as upon their
productive powers all classes depend. Out of this great
fund, which may be called primary produce, the various
net payments of rent, tithes, taxes, and profit are made,
54
leaving some certain portion for wages; but the parties
receiving these net payments have commonly a com-
mand over more of the primary produce than they can
themselves consume in the state in which it is created
by the primary producers. They, therefore, offer por-
tions of it to a part of the primary producers, on con-
dition that they become what we may call secondary
producers, that is, that they furnish such luxuries as
will administer to the gratification of the net receivers.
And thus a class is formed which we propose to desig-
nate as secondary producers, because they do not bring
into existence any part of the primary produce, but
merely transform or convert some of the net wealth.
into a shape better fitted for the consumption of the net
receivers. They are fabricators of luxuries, and instru-
ments of gratification, menial servants, &c. and constitute
a numerous body in such a country as Great Britain,
where net wealth is annually furnished to a large amount.
But, of the whole population, the larger the propor-
tion which is made up of net receivers and secondary
producers, the more difficult will it be for the primary
producers to furnish the net wealth. We have seen
that 7 millions of primary producers, creating £14.
each, paid the net wealth, and had left for wages about
£6. 6s. per head; let, however, 1 million of these 7
millions be converted into secondary producers, and the
case of the primary producers would then stand thus :—
6 millions would, at £14. per head, produce 84 millions,
and pay, as net wealth.
54 millions,
PRIMARY AND SECONDARY PRODUCERS.
•
leaving for wages.
30 millions,
which, divided among the primary producers, give to
them just £5. per head!
Here, then, we perceive that wages are reduced not
only by rents, tithes, taxes, and profit abstracting 54
•
..
55
EMIGRATION OF LABOURERS.
millions of net wealth from the gross amount of primary
produce, but by the owners of the net wealth taking a
part of the primary producers from their previous la-
bours, and converting them into secondary producers.
And as every successive emigration lowers wages, so
every fresh reduction of wages converts more primary
into secondary producers; which operation, in its turn,
lowers wages still further, until the process would end,
if persevered in, in wretchedness and depopulation.
Let the primary producers, by the double process of
emigration and conversion into secondary producers, be
brought down to 5 millions, and then,
5 millions, at £14. each, would produce.. 70 millions,
and pay, as net wealth..
54 millions,
leaving for wages only.
16 millions,
which would leave not much more than £3. per head;
and yet this process is seriously recommended by those
who are, by some persons, considered the most en-
lightened men of the age, as a means of improving the
condition of the people.
This view of the subject is interesting, as shewing the
way in which exactions of net wealth impoverish the
great mass of the people; but it becomes much more
so when considered in connexion with the various ex-
pedients which have been, and are yet being, tried, to
improve the condition of the labouring class by re-
ducing their numbers. Discouraging early marriage,
and a stimulated system of emigration, have been
openly recommended. These recommendations have
most fortunately failed in producing any considerable
effects, as the labouring population have gone on
increasing their numbers, and have thus become enabled
to bear the heavy burdens with which they are loaded,
and also to produce, comparatively, tolerable wages for
56
CAUSES OF ERRORS.
themselves; yet the doctrine is diligently propagated
by its advocates, and is countenanced by those in
authority.
It appears to have obtained countenance and support
partly from the avidity with which the wealthy classes
(the net receivers) embraced a theory which removed
the odium of causing distress from themselves, and
threw it on the improvidence of the people; and partly
from viewing a part of the case as if it were the whole,
which, in questions in political economy, more than in
any other science, writers are liable to do. The former
of these causes begets a strong disinclination in the
wealthy classes to attend to statements and arguments
which are likely to disturb their self-complacency and
repose. While enjoying the fruits of labour, they hug
this doctrine,—can be comfortably humane, and flatter
themselves that they most benevolently wish that the
people would be more prudent, and keep the supply of
labour more below the demand for it; but as (say they)
the people will not, or, at least, do not do this, all that
is possible for us to do is to alleviate distress in extra-
ordinary emergencies as far as we can.' In this way
the wealthy willingly lay the ‘flattering unction to their
souls' that not they, but the poor themselves are the
cause of distress; and, in this state of mind, they are
carried away to approve of expedients which, when ex-
amined and exhibited in their real form and colour,
appear absurd and injurious.
That 'wages depend upon the relation between capi-
tal and population' is the proposition upon which this
fallacious theory is built. The proposition itself is
true, but it forms only a part, not the whole of the case.
Increase the capital, population remaining the same,
or increase the capital faster than the population, and
CAPITAL PRODUCED BY LABOUR.
57
wages will rise. In like manner, if you were to reduce
the population without reducing the capital, wages
would rise. In either of these cases, as there would be
more capital in proportion to labourers, each labourer
would have more, or his wages would rise. But this is
not the real point at issue:-the question is, if you
reduce the labouring population, will the capital also
be reduced? and the answer to this question must be
in the affirmative; and not only will the capital be
reduced, but, it will be reduced in a greater degree
than the population! This, however, is a point into
which the anti-populationists have not enquired; they
have assumed that capital would be undiminished,—
that it would remain the same in amount after the
population had been reduced that it was before, and in
this false assumption lies the foundation of the whole of
their erroneous theory. They seem not to be aware
that the labour is necessary to the creation of the
capital, and this strange oversight has led to all the
absurdities that have been advanced respecting the
excessive population of Great Britain, and the means
of improving the condition of the people by reducing
their numbers.
It does seem strange that it should ever have been
supposed that capital could remain the same in amount
after the labouring people, the creators of it, were
reduced in numbers. Rents, tithes, taxes, and profit are
all expended, as revenue, among people who create
nothing that operates as capital, or that perpetually
reproduces itself. The secondary producers bring into
existence only luxuries; they change the form of ex-
isting wealth in such a way as enables the wealthy to
consume it, but they bring into existence nothing that
constitutes wages. The primary producers, and they
58
INCREASE OF LABOURERS BENEFICIAL.
alone, are the fountain from whence flows the annual
supply of net wealth, and also of the capital which con-
stitutes wages; reduce this stream, and you reduce the
supply: and, in such a country as Great Britain, as the
net receivers are a kind of basin which receives the first
supply from the great stream of wealth that flows from
labour, the falling off in the stream will be experienced
by those who are obliged to rely on what remains after
the basin has been filled.
As reducing the number of the labouring population
reduces wages, increasing their number has the opposite
effect. The net payments remaining the same, any
increase in the number of primary producers by in-
creasing the aggregate amount of wealth brought into
existence for the payment of wages beyond what they
themselves receive and consume, will increase the
average rate of wages. In like manner, reduce the
amount of any one or more of the net payments, and
you give to wages a larger proportion of the wealth
annually produced; while, by transferring labour from
secondary to primary production, you increase the
amount of primary produce. A reduction of rent, an
abolition of tithes, a repeal of taxes, or a fall in the
rate of profit, would each or all of them operate in this
way on the condition of the people. There is a two-
fold evil in abstracting additional net wealth from the
aggregate annual produce, when that wealth is used in
taking labour from primary and transferring it to
secondary production; and there is a two-fold good
resulting from the opposite process: and when the
science of political economy is studied, with the sym-
pathies of the student more in favour of the great body
of the people than they are at present, these points will
have due importance attached to them.
f
PRODUCTIVE POWER.
59
In examining the condition of a people who are
burdened with heavy net payments, their productive
power should be considered a subject of first-rate im-.
portance. With feeble productive powers, a people
might sink under trifling burdens; but let those powers
be greatly strengthened, and the same burdens might
be borne with ease. Any increase or decrease in the
productive energies of a people should, therefore, be
estimated when we try to ascertain their condition
in connexion with its causes. Let the productive power
be equal to the realization of 100, and the net payments
abstracted from that be 54, and there will remain for
the producers themselves only 46; but let the produc-
tive power be increased to 150, while the net payments
remain 54, and the producers will have 96. Sometimes
the productive power increases with the increase of net
payments, and in a greater degree. If, while produc-
tion advanced to 150, net payments increased to 60,
still the producers would experience an increase in their
incomes from 46 to 90. Under such circumstances as
these, it is very common to attribute to the increased
expenditure of net wealth the improvement in the con-
dition of the people, which arises from an increase in
the quantity of primary produce brought into exis-
tence by the primary producers. The expenditure of
additional net wealth is said to give additional employ-
ment; but does it cause anything to be brought into
existence which the people enjoy as real wages? It
does not. The real nature of such employment has
been shewn in the remarks on the effects of transferring
labour from primary to secondary production.
Foreign commerce will have to be adverted to, and
its influence on the condition of the country will be
attempted to be traced; it therefore becomes requisite
60
FOREIGN COMMERCE.
to speak of the light in which it will be viewed.
Foreign commerce arises out of imperfection in pro-
ductive power. If a people could themselves produce, by
their own labours, directly, all those articles of which
they stand in need, or imagine that they stand in need,
as well as they can get them from a foreign country,
there would be no foreign commerce. It is only because
the articles can be procured on better terms indirectly,
that is, by producing something else, exporting it, and
bringing back the article wanted, that the circuitous
routine of foreign commerce is resorted to. The benefit
of it is, therefore, always realized in the article received,
that which is exported being only the necessary means
which must be used in order to obtain the import,
which is the end. It follows from this, that the less
you export, and the more you import, the better; or,
in other words, the dearer you sell, and the cheaper
you buy, the greater benefit you receive: or, to express
the same thing in quantities of labour, the smaller the
quantity of labour expended in your exports, and the
greater the quantity of labour saved in your imports,
the better. If, at one time, from any peculiar circum-
stances, the exports have required comparatively little
labour to produce them, the imports will then have cost
but little of the whole labour of the country to procure
them, and, of course, the rest of that labour would be
left for home production. If, at another time, from
certain alterations having taken place, the exports cost
much labour, then, a larger part of the labour of the
country would be expended in procuring the imports,
and, of course, there would be less labour left to be em-
ployed in the work of production for home consumption.
It is often said that foreign commerce is beneficial,
because it gives employment; but that is mistaking the
61
means for the end-the painful process which it is
necessary to go through, in order to realize a good, for
the good itself. It is the imported produce that is
wanted, and not the necessity for labouring, and the
less labour or employment that we have in getting that
produce, the better. If double the quantity could be
obtained in return for the same amount of British la-
bour that is now employed in obtaining it, there can be
no doubt that it would be better for the British labourers;
it would be, in fact, in common language, to obtain the
imports for half price. In conformity with these prin-
ciples, the effects of foreign commerce on the condition
of the people, at different periods, will be enquired
into and exhibited.
TAXES.
With respect to the influence of taxes, which have so
materially affected the people of Great Britain, much
need not be said here. The ordinary effect of a tax is
to take the amount of it from the payer; or, if it be
levied on an article of consumption, to take so much
from the consumer. Taxes are sometimes so laid as to
prevent the final consumer from perceiving that he is
paying them. Taxes on bricks, glass, and imported
timber, are advanced, in the first instance, by the
makers and importers; the advance is repaid to them
by the dealers, in the form of a higher price; the
same repayment is made by the builder of the house,
and he, in his turn, is repaid in the higher rent that he
obtains: but few occupiers are aware that, when paying
their rent, they are partly repaying an advance of taxes
previously paid to the government. The situation of
capitalists in general has been already adverted to ;—
these, it is contended, as such, are beyond the reach of
taxation, because a supply of capital must be obtained
by labourers on some terms, and these terms depend
62
on the habits of the capitalists, independent of taxation :
any taxes, therefore, paid by them, in any shape or form,
are merely advanced, and are finally paid out of wages
in a higher gross profit. The labourer, as the user or
consumer of capital, is the final consumer of it, and he
pays all the taxes, direct or indirect, with which it is
incumbered.
FINAL PAYMENT OF TAXES.
The tithe owner, as he can claim only his tithe of the
landed produce, cannot remunerate himself for the
payment of any tax, unless it should raise the price of
the produce, which point has been already explained.
The landowner, also, when he has fixed his rent, re-
ceives a given sum, whatever may be the amount of his
taxes, and in whatever shape imposed. But as the
landowners, as a body, have the power to increase their
rent-tax, so as to remunerate themselves for any tax
imposed on them, or on the articles which they con-
sume, provided the cultivators are able to pay it; so
they generally do remunerate themselves by an advance
of rent, and, in that case, any tax charged on them may
be considered as laid on the cultivator, in the shape of
a higher rent. The cultivator charges a proportionally
higher price on that part of the landed produce which
he sells to the manufacturing class, and these two last
parties may be considered as the final consumers, with
whom the payment ultimately rests.
Tithes being
themselves a tax, we may then say that all taxes either
necessarily are, or may be thrown upon labour, and
finally be abstracted from wages, reducing wages to
the extent of the whole amount of the taxes.
But some of the followers of Mr. Malthus may say,
that when taxation becomes very heavy on the labourers
they will not breed fast, and, therefore, will not supply
the market with labour on those terms; to which the
EFFECTS OF DEPOPULATION.
63
reply is, that if they should reduce the supply of labour
they only make their own condition worse, as wages
would then fall still lower. But where are the people
who have refused to supply the market with labour
and thus lightened their heavy burdens? Have the
people of France, amidst the wars of their revolution,
refused to increase their numbers? Have the people
of England done so during the same period, although
they have been driven extensively to the poorhouse for
relief? or have the people of Ireland? On the con-
trary, have not the people of these countries, although
under different degrees of privation, all increased their
numbers, and, through that increase, become enabled
to bear burdens which would have crushed-absolutely
destroyed their less numerous ancestors? If the people
had reduced their numbers, as our anti-populationists
advised, instead of increasing them, those countries
would have sunk into a state of misery, exhaustion,
and, finally, of depopulation, similar to that in which
parts of the Turkish empire are found at present.
GREAT BRITAIN, &c.
CHAP. II.
FROM 1793 TO 1802.
PRODUCTIVE POWER OF THE PEOPLE.-AMOUNT OF THE POPULATION.
-OF NET WEALTH PAID.-POOR RATES.—IMPORTS AND EXPORTS.—
PRICES OF THE FUNDS. THE SYSTEM OF BORROWING, AND ITS
EFFECTS ON WAGES.-BILLS AND LOANS.- AGGREGATE AMOUNT OF
CAPITAL-PEACE AND WAR EMPLOYMENTS.-NUMBER OF BANK-
RUPTCIES.MACHINERY, AND ITS EFFECTS.-WAR EXPENDITURE
AND BANK NOTES.-PRICES OF WHEAT. RISE OF THE RATE OF
PROFIT. PRICES PAID FOR WEAVING.-NUMBER OF INCLOSURE
BILLS. ADVANCE OF RENT.-BANK RESTRICTION.—GOVERNMENT
EXPENDITURE, AND ITS EFFECT ON WAGES.-IMPORTATION OF
GRAIN. GOLD AND PAPER MONEY.-INCREASE OF FOREIGN COM-
MERCE. THE COTTON MANUFACTURE.—PEACE IN 1802.—THE EF-
FECTS OF THE WAR ON THE CONDITION OF THE PEOPLE.
—
·00·
THE Condition of Great Britain, from the commence-
ment to the conclusion of the French revolutionary war,
offers to the philosophical enquirer an interesting subject
of contemplation. The immense resources which the
government obtained from the people, the issues of
paper money, the sums borrowed and funded, and the
great foreign expenditure, are all calculated to arrest
the attention, and exhibit Great Britain as a phenome-
non among nations.
But what were the peculiar circumstances which
enabled the country to meet the great demand made
upon it during this period? How were the different
65
PRODUCTIVE POWER.
classes which existed in society affected by the extraor-
dinary measures to which the government resorted?
and what are the effects yet felt from the adoption of
those measures? These are questions of the highest
importance to the people, and they ought to be fully
and satisfactorily answered.
At the commencement of this period the people
possessed, in an eminent degree, the power of producing
those articles which are necessary to the subsistence
and comfort of man; and this power had been for a
considerable time developing and extending itself.
A general spirit of improvement pervaded every class
of producers, and its effects were seen in the increased
quantities of produce, obtained from the soil, to meet
the wants of an increasing population, and in the ex-
tension of the various branches of manufacture carried
on in the towns of Manchester, Glasgow, Birmingham,
Sheffield, and other manufacturing places throughout
the country.
The amount of the population was not accurately
known, but, from the number of marriages and bap-
tisms, it may be computed to have been something less
than ten millions. According to the census returns, the
population of Great Britain was, in 1801, 10,942,646,
and in 1811, 12,609,864, making an increase of 1,667,218
in ten years. If a similar increase had taken place in
the preceding eight years, it would give a number
sufficiently near to warrant us in assuming that the
population, at that time, was the round number of ten
millions.
From this population were obtained various annual
payments of net wealth, furnished by the productive
portion of the people, to certain parties, who received
and consumed them. These payments may be stated at
G
66
18 millions sterling, paid to the land proprietors as rent,*
4 millions furnished to the clergy of the established
church, as tithes, and in various annuities, and 18
millions paid to the government in the shape of taxes,†
making a total aggregate of net wealth, to the amount
of 40 millions sterling per annum, furnished by the
producers.
AMOUNT OF NET WEALTH.
For the purpose of shewing how certain measures
may variously affect the condition of different classes of
a people, the whole population may be supposed to be
divided, in the first instance, into two classes, the one
unproductive, and the other productive, according to
the principles already explained. The unproductive,
who receive and consume or expend the 40 millions of
rent, tithes, and taxes, in a year, may be assumed
to have consisted of the following numbers, namely,
100,000 families, which, consuming or
expending on an average £400.
a year each, will make up the
total sum of ..
Supposing each of these fami-
lies to contain six persons, we
* In a work published in 1723, by J. Chamberlin, the yearly rent of all
the lands of England and Wales is stated to be £7,500,000. the surface
being above 39 millions of acres.
+ The public revenue, on an average of four years, at the time of the
death of George the First, in 1727, was £6,762,643. of which
the land tax, at 4s. in the pound, was £2,000,000,
malt tax, at 6d. per bushel...
the customs
excise (excepting the malt duty)
sundries
In 1767 the public revenue was,
In 1777
In 1787
-Moreau,
""
""
··
in
peace
in war.
in peace
•
...
£40,000,000.
..
.
750,000,
1,530,361,
1,927,354,
704,928.
.£ 9,200,000.
10,604,013.
15,360,857,
SECONDARY PRODUCERS.
shall have an unproductive po-
pulation of...
600,000 persons, who may be called net
receivers. Now let us imagine
that these 100,000 families, in
expending portions of their in-
comes, employ twice the number
of themselves, or ...
·
1,200,000 other persons, who may be de-
nominated secondary producers.
This would give, for the class
of net receivers, and the se-
condary producers employed by
them to administer to their
gratification, a total of ………..
1,800,000 persons; leaving for the re-
mainder of the population, who
may be called primary produ-
cers, including both capitalists
and labourers
67
8,200,000, making the total population of
10,000.000. The 8,200,000 primary produ-
cers have now to be separated
into two bodies, the capitalists
and labourers, who are diffe-
rently affected by various mea-
sures. The capital in existence
was, say £350,000,000. and
being owned by, say
100,000 persons, at an average of
£3,500. each, receiving 6 per
cent. will give that number in
receipt of a total sum of...... £22,750,000.
Taking these capitalists to
• •
G 2
68
AGGREGATE ANNUAL WEALTH.
represent families containing an
average of five persons, the
total persons will be..
500,000 living on the profit of capital;
and as these receive more than
they can directly consume, they
may be presumed to employ
persons equal to themselves in
number, in working up their
profit to adapt it for consump-
tion, or...
500,000 other persons, their dependents,
making a total of. . . . .
1,000,000, leaving the number of the pri-
mary labourers..
•
7,200,000, or 1,200,000 families, of six per-
sons each family. These, as-
sisted by capital, bring into
existence an average quantity
of wealth, each family, of say
£100. or
£120,000,000.
From which £40,000,000. being paid as net wealth, and
£22,750,000. as profit, leave £57,250,000. for the pri-
mary labourers,-about £47. 14s. for each family, or
nearly £8. as an average for each individual.
It must, however, be remembered, that, under the
term of primary labourers, are included all who labour
in primary production, whether by superintendence or
by bodily exertion; and also all who assist the primary
labourers, as teachers, lawyers, or doctors, or as far-
mers, shopkeepers, manufacturers, artisans, merchants,
&c. considering them as active undertakers and super-
intendents, and not as capitalists, and the average
above given includes the sums paid to all such parties.
• •
69
These assumptions are made for the purpose of illus-
trating the nature of the alterations which subsequently
took place, and are approximations to the actual state
of society sufficiently near for that purpose. The con-
dition of the poorer portion of the working classes,
under these circumstances, is indicated by the amount
of the assessments for the relief of the poor. From the
year 1789 to 1793 there are no returns of the assess-
ments, but the amounts are presumed to have been
about the same as those from 1784 to 1788, which gave
an annual average of £2,167,748. Thus, during this
period, the condition of the people seems not to have
deteriorated, although the population had, in all pro-
bability, considerably increased.
EXPORTS AND IMPORTS.
Notwithstanding the improvements which had been
effected in agriculture, the consumption of grain had
been greater than the amount produced at home; as,
from January 5, 1785, to January 5, 1793, an annual
average of 564,185 quarters had been imported, those
quantities having been obtained in return for manufac-
tures exported, instead of producing the grain directly
from the soil.
The average annual value of produce and manufac-
tures exported above the value of colonial produce re-
exported, was, from the year 1789 to 1793, £15,961,865.
and the value of the imports retained for home con-
sumption was £13,367,180.* These are what are called
the official values, that being an unvarying valuation
put on the same kind of goods at the custom-house,
whatever the market price may be, and, therefore,
* See 'Marshall's Statistical Illustrations of the British Empire.'-As
this gentleman has had a sum of money voted to him, by the House of
Commons, for his statistical productions, I prefer quoting him as an
authority.
70
STATISTICAL FACTS.
really expressing quantity, and not value. The value
of the currency may, for the present, be inferred from
the average price of the best wheat, which was at a
mean of the two prices at Lady-day and Michaelmas,
from the year 1784 to 1793-55s. 3 d. per quarter.*
The rate of profit on capital was comparatively low,
as is evidenced by the small per centage obtained for
money expended in the purchase of annuities. The
price of the 3 per cent. consols, in the year 1792, having
been 91, yielding an interest of a little more than 34
per cent. per annum. These facts, put into a tabular
form, will at once exhibit
the population in 1793
the amount paid in the year 1793,
in taxes..
in rent
in tithes, &c..
total ..
wheat, per quarter-up to 1793..
3 per cent. consols..
and the
• •
10,000,000,
•
official annual value, from 1789 to 1793, of
all exports to be....
imports...
£18,000,000.
18,000,000.
4,000,000.
55s. 3 d.
£40,000,000.
91
Į
£15,961,865.
13,367,180.
564,185 quarters,
•
the annual imports of grain.
and the annual assessments for the relief
of the poor
£2,167,748.
Such are some of the more important statistical facts
relating to those causes which operated upon and
affected the condition of the people of Great Britain at
the commencement of the French war, when the more
* Marshall's 'Statistical Illustrations of the British Empire.'
+ See G. Chalmers' Comparative Estimate,' for the prices paid by the
Commissioners for managing the Sinking Fund, page 281.
PREVIOUS ANNUAL WEALTH.
71
full developement of some of them, and the bringing into
existence of others, materially modified that condition,
and finally produced results altogether different from
those which would have arisen in a peaceful and na-
tural progress of circumstances.
At the termination of the American war it may have
been that the inferior productive power of the country
was unable to bring into existence annually more than,
say, £115,000,000. of gross wealth, which, when the
£40,000,000. of net wealth had been paid, would leave
for aggregate profits and wages only £75,000,000; but,
after that time, the improved system of cropping, known
by the name of the rotation system, was much extended,
and increased the productive power of agricultural
labour.*
The more extensive application of machinery to manu-
factures, not only enabled the British manufacturer to
furnish larger quantities of goods in exchange for the
same quantities of British labour in the home market,
but also gave to the exporter the power to sell them at
such prices in foreign markets, as enabled him to bring
back, in return for those goods, a greater abundance of
foreign produce. These causes may have enabled the
productive classes in Great Britain, at the commence-
ment of the French war, to produce annually, with
equal ease, £120,000,000. and then the additional five
millions would be added to the previous fund which
constituted wages. For, the profits of the capitalist
were, at the period, about equally low, as may be seen
by the current rate of interest obtainable; and taxes,
tithes, and rents, were nearly stationary, so that all the
* See Middleton's Agricultural Report of Middlesex, and A. Young's
experiments, recorded in the 23rd vol, of the Annals of Agriculture.
72
CAUSES OF LOW WAGES.
advantages arising from the increase in the productive
power of labour, were enjoyed by the labourers them-
selves in the form of higher real wages, or a greater
abundance of the necessaries and comforts of life; and, if
profits, taxes, rents and tithes had remained stationary,
or nearly so, and the productive power of labour had
gone on increasing, as it afterwards really did, wages
must have continued to rise, and a period of great
prosperity would have been enjoyed by the labouring
classes. All those commodities which constitute real
wages, or the subsistence of the labourer, wonld have
been abundant; and the capitalists who owned them
would, in competition with each other, and through the
instrumentality of money, have used them in giving
employment to labour wherever it could be found, and
in the payment of those high wages which that labour
would then have commanded.
But the country was conducted through a very dif
ferent course. Loans were contracted, which raised
the rate of profit on all the capital in the country, to
the benefit of the capitalist, but to the injury of the
labourer,-taxes were increased to a great extent,-
important alterations in the value of the currency first
lowered the real amount of the rent of land, but after-
wards stimulated a baneful advance of it, and the burden
of tithe was considerably increased, until these causes,
altogether, not only deprived the labourers of every
benefit which they would otherwise have enjoyed from
an increase in their productive power, but, in spite of
that increase, and of other favourable circumstances,
lowered their real wages, and, finally, reduced them to
a state of privation and distress.
At the commencement of the war, one of the first
steps of the government was to increase the issue of
M
NAVY AND EXCHEQUER BILLS.
73
bills, as that was a proceeding the least likely to alarm
the country. The amount of navy and exchequer bills
in circulation at the end of each year was
in 1792..
£14,449,889.
in 1793...
17,954,665.
in 1794..
19,758,109.
in 1795..
24,972,616.*
making an increase in three years of above 10 millions
sterling! This was incurring a debt to that amount
as decidedly as if a regular loan had been made, and
its effects were of the same character as those of a loan
would have been. The rate of profit was thereby rais-
ed, first on the floating capital in the London market,
and in succession on the loose or circulating capital
throughout the country, and, finally, on all the capital
employed in production, whether fixed or circulating.
G. Chalmers, in his 'Estimate,' boasts that floating
debts of the navy, victualling and ordnance departments
were funded to an amount that required £938,000. of
annual taxes to pay the interest. The commencement
of a new war soon created an unfunded debt similar in
kind to that which he says, in 1784, 'depressed the
whole system of our funds and credit.'
In addition to the 10 millions raised by bills, there
were paid into the exchequer. on account of loans,
during the same period, the following sums, namely,
in the year 1793...
£3,925,000.
11,000,000.
in the year 1794. .
in the year 1795..
17,300,000.*
making, in the three years, a total of £32,225,000. bor-
rowed, to which add the navy and exchequer bills
issued, and we have a grand total of £42,747,727. raised
* See Marshall's 'Statistical Illustrations,' page 111, and page 1.
·
74
AMOUNT RAISED BY LOANS.
on credit in three years. Capital to that amount was
taken from productive use,—its abundance was dimi-
nished,—the rate of profit was raised, and the general
rate of wages thereby reduced, below what it would
have been, if these loans had not been made.
That this £42,747,727. was finally taken from wages
in the form of higher profits will appear from the fol-
lowing facts and reasonings. In the year 1792 the
price of the 3 per cent. consols was 91, yielding an
interest to the party investing his capital of rather
more than 34 per cent. per annum. Now if we take
the general rate of profit on all the capital of the
country at double this rate of interest, it will be rather
more than 6 per cent.* The whole capital in the
country, at this time, according to an estimate in
'Rees' Cyclopedia,' was £348,000,000.† but we will
take it at the round sum of 350 millions, which, at 6
per cent. yielded to the owners an aggregate income of
£22,750,000.; but, in 1796, the average price of consols
was 624, furnishing an interest of nearly 5 per cent.
per annum. Taking, as before, the capital to yield, as
profit, double the rate of interest, or, in round numbers,
say 10 per cent, we shall find that the annual sum
received by the owners, as profit, would now be
* "Double interest is, in Great Britain, reckoned what the merchants
call a good, moderate, and reasonable profit, terms which, I apprehend,
mean no more than a common and usual profit."-Wealth of Nations,
Book 1. Chap. 9.
+ Value of the houses in Great Britain
farming stock and cattle...
shipping £16,000,000.-money £25,000,000...
"
33
""
...
• •
Total...
-See Rees' Cyclopedia, article 'Britain.’
·
goods in the hands of merchants, manufac-
turers, and dealers
• O
£170,000,000.
102,000,000.
41,000,000.
35,581,000.
£348,581,000.
EFFECTS ON PROFIT.
75
£35,000,000. making a total increase of profit, in the
year, of £12,250,000. Now, the average annual sum
raised by bills and loans, for these three years, was
£14,249,242. being but about one-seventh more than
the amount of the additional profit.
To apply this to the rate of wages, we must take the
whole amount of the fund furnishing—both profit and
wages, as before, at £80,000,000. When profit was at
6 per cent. there would have to be taken from that
fund, for profit, only £22,750,000. leaving £57,250,000.
for wages; but when profit was 10 per cent. the sum of
£35,000,000. would be taken as profit, leaving for
wages only £45,000,000. The sums thus named, it is
to be observed, may be taken to mean sums of money,
if money prices remain unaltered, or they may be con-
sidered to express quantities of commodities.
A consequence of this altered state of the situations
of labourers and capitalists must have been a reduction
in wages, and a falling off in the demand for those
things which form the comforts of the labouring class,
The consumption of these articles would be reduced,
and the demand for them would decline. Many of the
persons who had previously been engaged in producing
them would cease to be so employed, and would be
obliged to become sailors or soldiers, or to engage in
producing those articles on which the £42,747,727.
that had been abstracted principally from wages,
would now be expended. Tanners, shoemakers, wea-
vers, tailors, hatters, maltsters, and others of similar
trades, would be reduced in numbers; and the persons
who might have been employed in these branches to
produce articles for the use and enjoyment of those who
live on wages, would go to swell the ranks of the un-
productive navy or army, or to labour in the dock-yards,
76
or other establishments required in the new state into
which the country had passed: in short, they would be
transformed from primary to secondary producers.
A part of the productive power of the country would
thus receive a new and, for the labouring class, a less
beneficial direction, which would be felt in a scarcity of
employment in some departments, a new demand for
labour in other departments, and, on the whole, a
general fall in the rate of real wages.
Such a transfer of labour, at the time, caused an ex-
tensive derangement in the affairs of individuals, as is
shewn by the great number of bankruptcies which
occurred.* The following table shews the number of
commissions of bankrupt issued:-
NUMBER OF BANKRUPTS.
commissions issued in the year 1791
1792
1793
1794
>>
""
""
•
769
934
1,956
1,041†
Notwithstanding this derangement, the system of
borrowing which had been acted upon, and the peculiar
situation of the country at the time, particularly in the
manufacturing districts, where machinery had been
but recently introduced, and had raised wages in some
departments, enabled the government of that day to
obtain a tolerably general sanction to the war. The
capitalist soon experienced the benefit of the rise in the
rate of profit, and that tended to reconcile him to the
war; while the increase which was taking place in the
productive power of the people, through improvements
* The distress at this period was aggravated by the failure of above one
hundred country banks, whose notes were annihilated.-See Macpherson's
'Annals of Commerce,' vol. 4, page 266.
+ Marshall, page 73.
EXPENDITURE AND INCOME.
in agriculture and the use of machinery in manufac-
turing, checked, to some extent, the fall which would
otherwise have taken place in wages, and prevented
the war from becoming very unpopular with the la-
bouring classes. This was the case more decidedly in
the cotton manufacture, where machinery had pre-
viously raised wages to a high rate, and afterwards
either further advanced them or kept them from falling,
in opposition to the effects of loans, and the consequent
scarcity of capital.
The following table exhibits the total amount ex-
pended by the government in the first three years of
the war, the portion raised in taxes (the difference
being borrowed), and the amount of the notes of the
bank of England in circulation.
In 1793. In 1794. In 1795.
£
£
£
*Total expenditure 22,754,366 29,305,447 39,751,091
Amount received from 17,707,938 17,899,295 18,456,298
}
taxes
Bank notes in circulation 10,838,214 10,628,222 11,458,382
··
77

··
This table shews that the most important alteration
which had yet taken place was in the increased exp endi-
ture by the government of the sums they had borrowed.
The additional sums received for taxes were not
considerable, and the amounts of notes of the bank
of England in circulation had not been greatly aug-
mented.
The exports had increased from £14,605,753. in the
year 1793 to £18,761,427. in 1795, but as a part of
the goods exported was made with the aid of improved
* Marshall.
78
PRICES OF WHEAT.
Th
machinery, there would probably be no material in-
crease in the quantity of labour requisite to produce
this additional quantity of exports. The whole of the
annual imports would, consequently, be obtained without
the expenditure of any great additional quantity of
labour. Among these imports were foreign grain and
flour, which, from 1793 to 1797, both inclusive, amounted
to 5,380,000 quarters of grain, and 589,847 cwt. of
flour, the value of which was £8,300,000. being an
annual average of 1,076,000 qrs. of grain, and 117,969
cwt. of flour, of the value of £1,666,666. sterling.
The average prices of wheat, of medium quality, per
quarter, in the years named, were as follow:-
48s. lld.
51s. 8d.
74s.
2d.
77s. 1d.
53s. 5d.*
In the year 1793..
1794..
""
1795..
1796..
1797..
""
The high prices of wheat, in the years 1795 & 6, arose
partly from the deficiency of the crop in the year 1795,
which was estimated by lord Sheffield, in the house of
commons, on the 13th of December, in that year, at
about one eighth. The free issue of exchequer bills
by the government, might, by furnishing means with
which to speculate, have caused the price to rise some-
what higher than it would have done in the absence of
those bills, but the rise is certainly not attributable to
any excessive issue of bank of England notes, as appears
by the return of the amount of those notes in circula-
tion in 1795 & 6. In the former year the amount was
£11,458,382., and in the latter only £9,531,335.
The extent of the rise in the rate of profit, and con-
""
""
·
• ·
* Marshall, page 104, from a parliamentary return in 1819.
79
sequent reduction in the general rate of wages, may be
seen from the prices of the 3 per cent. consols, which were
In the year 1792
91/1/2
1793.
76
1794
67/
1795
6611
1796
621/1
503*
""
1797
yet the introduction of machinery into some branches
of manufacture, particularly in the cotton-spinning
department, not only counteracted, in those branches,
the tendency of wages to fall, but absolutely raised the
money rate of wages, as is seen in the prices paid for
weaving a particular kind of cotton cloth much used,
called a Blackburn printing cloth 7-8ths, 74. Those
prices were,
In the year 1793
6s. Od.
1794
6s, Od.
1795
7s. Od.
1796
7s. Od.
7s. 6d.†
1797
""
The general rise in the rate of profit would, of course,
include profit on capital employed in agriculture, and
thus tend to reduce wages in that department; and as
the improvements in agriculture were not sufficient
fully to counteract the effects of a rise in profit, the
real wages of the farming labourer would fall. This
was indeed known to be the fact at the time, and the
larger sums said to have been required for the relief of
the poor would have been evidence of it, but, as there
are no returns of those sums, we cannot adduce the
proof which they would furnish.
""
""
""
""
""
""
دو
PRICES PAID FOR WEAVING.
•
•
•
► •
* From the Monthly Magazine,' and other periodicals,
+ See the Lords' report of 1814.
80
NUMBER OF INCLOSURE ACTS.
Mr. Tooke has shewn, in his work on prices, that
when a deficient harvest occurs, the prices of grain
rise, for a time, in a greater ratio than the degree of
deficiency; and this was seen in the high prices of 1795
and 1796, which gave to the farmer a profit above the
advanced rate that was general throughout the country.
Farmers, therefore, had their profits increased from
two causes, operating at the same time,-that is, from
the general scarcity of capital, arising from its ab-
sorption by government loans, and also from scarcity
of grain consequent on a bad harvest. And as these
causes benefited the farming capitalist, so they injured
the great body of labourers throughout the country.
One of the effects which resulted from additional
means being thus placed at the disposal of the agricul-
tural capitalist, was an increased activity in cultivation.
This was observable not only in the spirit with which
farming was carried on, upon the lands already under
cultivation, but also in the number of acts of par-
liament obtained to inclose common lands. They were
40
60
74
77
72
85*
In the year 1792
1793
1794
1795
1796
1797
Another effect was a rise of the rent of land through
the competition of cultivators to obtain that land,
which now yielded so high a profit to the farmer.
Accordingly, at this period, it is well known that rents
""
""
""
دو
دو
•
•
* See the Lords' report on the resumption of cash payments, in 1819, p. 430.
G. Chalmers states that, from 1783 to 1793 inclusive, three hundred and
forty-three acts were passed for inclosing, draining, &c. land; being 31
and 2-11ths annually.-See his 'Estimate,' page 275.
STATE OF THE EXCHANGES.
81
advanced considerably, and land proprietors, expe-
riencing this, would feel themselves in a state of pros-
perity. The labourers, particularly those engaged in
agriculture, were the sufferers by these alterations,
which took from them a part of what should have been
their real wages, and gave it to their employers. The
labourers' privations were increased, and their reduced
state obliged them to apply to their parishes for
relief, to a greater extent than they had previously done.
In the year 1797 a loan, remitted to the Emperor of
Germany, turned the exchanges with the continent of
Europe against this country for a time, and a general
alarm arising at the same period from political circum-
stances, there was such a call upon the bank of England
for coin, in payment of their notes, as nearly exhausted
their stock of the precious metals. Reduced to this
state they applied to the ministry of the day to protect
them from the claims of their creditors, and they were
accordingly "prohibited," as it was rather singularly
termed, from paying their notes in coin.
This measure was attended with important conse-
quences at a subsequent period, but for a few years it
had not any considerable effect on the general condition
of the country. The exchanges soon adjusted them-
selves through the increase, and the kind, of the
exported commodities, as we shall see more particularly
hereafter; and the bank gradually augmented the
amount of their notes in circulation, and issued some
as low as £1. each; but as either the peculiar state of
our exports at that time tended to cause the precious
metals to flow strongly towards this country, or coin
flowed out of the country equal to the increased issues
of paper, or both of these effects took place to certain
extents, the notes were not depreciated, but continued
H
-
82
EXPENDITURE AND INCOME.
generally of equal value with gold. The result merely
was, that, of the whole amount of money in circulation
a larger proportion was of paper, and a smaller of
metallic money. The notes of the bank of England,
in circulation in the year 1797, amounted, as we have
before stated, to..
£11,408,826.
£12,191,025.
£13,259,873.
in 1798 they were increased to.
and in 1799 to..
• •
without the exchanges or the prices of bullion indicat-
ing any excess in the whole amount of the currency.
The expenditure of the government, and consequently
the sums drawn from the people in various ways, went
on increasing, as may be seen in the subjoined state-
ment, which shews the expenditure,-the amount re-
ceived from the taxes,-and the amounts borrowed in
each year, viz.

""
Expenditure.
Amount received in
taxes.
Amount borrowed.
In 1796, £40,761,533 | £18,548,628
£45,810,943*
1797,
50,739,857
19,852,646
31,263,974
51,241,798
30,492,995
18,017,734
""
1798,
,, 1799,
59,296,081
35,311,018
23,965,978
£202,039,269 £104,205,287 £119,058,629
Here we see, that instead of 18 millions, the sum
drawn from the country by the government, in one
year, prior to the commencement of the war, there
were expended in 1799, that is only six years after its
commencement, nearly 60 millions. And from the
* This includes £17,256,126. of exchequer bills funded in the year. The
amount borrowed is not always expended in the same year. There is also
a small sum received from Ireland.-See Marshall, page I.
The round sum of 60 millions is named that the reader may not have
his attention unnecessarily occupied with a long detail of figures. The
nature of the alterations which were in progress, and the kind of effect pro-
duced, being what are attempted to be exhibited, and not minute accuracy
in detail.
PRICES OF CONSOLS.
causes already pointed out, this very large amount
must have been all, or nearly all, finally taken from
what would otherwise have been the aggregate fund to
constitute the wages of British labourers. The rise of
rent, it may presumed, compensated land proprietors
for such parts of the taxes as they had to pay, and the
rate of profit continued high, as is shewn in the prices
of consols, (3 per cents.)
In 1797*.
1798
1799
1800
1801
1802
5032/
51
56
61
581
702
These prices point at a considerable advance of the
rate of profit from what it was in 1792; the capitalists,
therefore, in their additional profits, would have the
means both of paying their taxes and of creating
annuities for themselves by feeding the loans, without
encroaching upon the fund which they obtained from
their ordinary profits, and on which they would still be
able to subsist without at all diminishing their comforts.
Mr. Tooke says, when speaking of this period, “that
discounts by private bankers were nearly out of the
question, as it was natural they should be, seeing that,
while the law restricted the rate of interest on private
securities, the rate on public securities, through the
greatest part of 1797, was considerably higher. The
3 per cent. consols were, at one time, below 48; ex-
•
83
ተ
+ Collected from various periodical publications.
* On the 20th of September, 1797, the 3 per cents. sunk to 478.-
M'Culloch's Dictionary, page 547.
H 2
THE HARVESTS OF 1799 AND 1800.
ehequer bills at £2. 10s. and navy bills at above 15 per
cént. discount. This enormous rate of interest rendered
the use of money, even for the shortest intervals,
valuable.”—See his work on prices, vol. 1, page 46.
Thus it is apparent, that the whole of the wealth
expended by the government was really furnished by
the labouring class, and abstracted from their wages ;
and had not their productive power been augmented,
by improvements in agriculture and manufactures, 42
millions sterling, being the difference between 18 and
60 millions, would have expressed the consequent
reduction of the aggregate annual fund which con-
stituted real wages. But there can be no doubt that
these improvements prevented an absolute fall, in real
wages, to the full extent named; yet, if we suppose the
improvements to have furnished wealth to the extent of
one-fourth, or even one-half of the amount absorbed by
taxes and loans, enough of the effects of those taxes
and loans will remain to account for the deteriorated
condition of the common labourers throughout the
country.
The privations of the labouring part of the people
were greatly increased by the bad harvests of the years
1799 and 1800; and the scarcity, consequent on these
harvests, caused the prices of food to rise to a great
height, and large quantities of wheat, oats, barley, and
malt were imported. The prices of wheat, of medium
quality, and the quantities of grain imported, above
what were exported, were,
84

In the year
Price per quarter..
Quarters imported
•
1798.
50s. 3d.
1,185,074
1799.
67s. 6d.
862,041
* Marshall, page 104.
1800.
1801.
113s. 7d.
118s. 3d.
1,902,574 | 2,074,328*
85
The exports of British goods increased in their
quantities considerably by this time, and, as we shall
soon have occasion more fully to shew, those goods
were calculated to command a plentiful supply of the
precious metals ;-yet the sudden import of so unusually
large a quantity of grain checked that supply, and
indeed turned the balance of payments so much against
this country as to cause gold to flow out of it, and the
respective values of bank notes and gold became differ-
ent. This difference in value was probably not caused,
in the first instance, by an excessive quantity of paper
depreciating the currency, as a much larger amount of
paper was afterwards issued without causing any ma-
terial depreciation, but from the great imports of grain,
causing an unusual demand for the precious metals to
pay for those imports. Had there been no bank notes
in existence at the time, the demand for gold bullion,
to remit to foreign countries, would have raised its
currency price. And as the law did not permit gold
coin to be melted or exported, the currency price of
bullion would not have fallen, until either the extra
demand for it had ceased, or the illegal conversion of
coin into bullion had reduced the quantity of the cur-
rency. As it was, the currency price of bullion rose,
and gold coin, being comparatively scarce, when
sought after to be converted illegally into bullion,
commanded a higher price than its denomination ex-
pressed. The demand for gold bullion thus extended
to gold coin. As paper could not be exported to
make the required payments, it was not in demand
from the same temporary cause which acted upon the
prices of bullion and coin, the two latter, consequently,
parted in value from the paper. This subject, however,
will have to be treated of more fully when we come to
BALANCE OF PAYMENTS.
86
EXPORTS AND IMPORTS.
enquire into the value of the currency, connected with
the amounts of the taxes and loans raised by the
government at later periods of the war. In 1801 the
demand for gold raised its price in currency to 85s. the
And the probability of this being caused solely
by an excessive issue of bank notes, may be judged of
by the amount of notes in circulation at this, and also
at subsequent periods. The amounts were,
ounce.
In 1798..
£12,191,025.
13,259,873.
14,735,378.
14,970,321.*
The annual official values (quantities) of exports
above colonial produce re-exported, and also of imports
from all parts of the world, Ireland included, were as
follows, viz.
In
Exports
Imports
In
1799.
1800..
1801...

Exports
Imports
·
··
··
1796.
£
19, 102, 120
23,187,319
1799.
£
24,084,213
26,837,432
1797.
£
16,903,103
21,013,956
1800.
£
24,304,287
30,570,605
1798.
£
19,632,543
27,857,889
1801.
£
25,760,188
32,795,557*
It may here be perceived that the quantities of ex-
ports were increased from £19,102,120 to £25,760,188;
but as considerable portions of them were made by
superior machinery and improved processes, their pro-
duction did not require an equal increase in the quan-
tities of labour. The additional quantities of imports
£9,608,238, the difference between the imports of 1796
* Marshall, page 53.
87
and those of 1801 were, therefore, obtained without
the expenditure of much additional labour; and the
general labour of the country was, consequently, nearly
as much at liberty to be devoted to the production of
commodities for home consumption as it was prior to
the increase in the imports. Imported articles were, in
fact, procured on cheaper labour terms, and without
stopping to enquire into the particular articles im-
ported, we may generally affirm that foreign commerce
was highly beneficial, inasmuch as the foreign produce
was obtained for what had cost comparatively little
labour. As this return expresses only quantities, and
not value or price, we cannot infer from it how pay-
ments were balanced; but all foreign commerce is and
must be finally barter of goods for goods, and there is
reason to presume that, in the period of which we are
treating, our returns of goods in the imports were large
and beneficial, compared with the amounts of the ex-
ports. It was not, therefore, from the state of foreign
commerce that any part of the privations of the people
arose, but from those internal alterations which took
so much wealth from the productive classes, and trans-
ferred it to the non-producers to be by them consumed.
The new inclosure acts passed were
In 1798..
1799.
1800..
1801...
COMMERCE IS BARTER.
48
66
80
122
This account points out the direction in which the
large profits of the agricultural capitalists were expend-
ed. As the prices of grain rose, farmers became wealthy,
and they used their wealth partly in living in a more
expensive manner, partly in improving their farms, and
partly in extending cultivation to lands not previously
88
used for that purpose.
Hence the number of acts
passed to inclose common lands. This extension of
cultivation, to lands of inferior quality, furnished agri-
cultural produce in greater abundance at a subsequent
period, but, for a time, it increased the task of the la-
bourers employed without increasing their remunera-
tion. What may, perhaps, appear an impossibility to
some persons now took place; there was an increase of
employment for farming labourers, not only without
an increase of wages, but with an absolute reduction of
real wages! A part of the real wages of those em-
ployed, in the old way, and on the old land, was taken
from them by the operation of the causes already
pointed out, which part was used by the farming capi-
talists to pay the wages of those employed in improv-
ing the old lands, and in bringing into cultivation the
new lands. The competition among farmers for ob-
taining labourers did not cause the real wages of farm-
ing labour to rise, nor even prevent them from falling,
because the demand for farm produce by the commu-
nity, and for capital by the borrowing government,
ready to give a high interest for it, were sufficient to
keep up the high profits of the farmer. The labourer,
being the necessitous party, was, therefore, obliged to
give way, and to accept such a reduced rate of wages
as he could obtain. Evidence of the decline in the con-
dition of common labourers, particularly in farming,
may be seen in the increase of the assessments for the
relief of the poor. At the commencement of the war,
we have shewn that these amounted to £2,167,748. a
year; but from the year 1798 to 1803 the average
annual assessments amounted to no less a sum than
£5,300,000, being thus considerably more than doubled
in less than ten years!
CONDITION OF LABOURERS.
PEACE OF AMIENS.
89
In the cotton manufacture, the use of superior ma-
chinery, particulary in spinning, and the consequent
preference obtained for cotton goods, furnished such
means of paying wages, and caused such a demand for
labour in that manufacture, as raised the money price
paid for weaving an ordinary piece of cloth (a Black-
burn 3-74) from six shillings, the sum paid for it in
1793, to the following rates :-
In 1798...
1799..
1800.
1801...
1802.
•
• •
•
7s. Od.
7s. Od.
8s. Od.
8s. Od.
10s. Od.
In this case machinery counteracted the effects of a
scarcity of grain, of a rise in the general rate of profit,
and of increased taxation. And yet, because machi-
nery does not always thus counteract, in a palpable
manner, the effects of such injurious causes, it is itself
often mistaken for the cause of low wages.
In March, 1802, peace was made with France, and
thus terminated the first stage of the French revolution-
ary war, which had lasted nearly nine years. During
this time taxes were raised from the people to the
amount of £281,644,493, independent of the cost of
collecting them; and within the same period the go-
vernment expended the enormous sum of £469,260,938.
The difference between the two sums, or £187,616,445,
having been borrowed in some form, and generally at a
high rate of interest.
At the same time it is matter of notoriety that rents
of lands were raised, and land proprietors were com-
pensated, in the advance of rent, for any portion of the
war taxes which they had paid. Their command over
the produce of the industry of the country was aug-
90
RESULTS OF THE WAR.
mented by the rise of rent as much as it was diminished
by additional taxation. They, consequently, consumed
as much of the fruits of industry as they had enjoyed
previously to the war,-that war was, therefore, no bur-
den to them.
The borrowing system adopted by the government,
by taking up large quantities of capital, at a high rate
of interest, and expending it in an unproductive way,
made capital comparatively scarce and profits high.
And these high profits were obtained by capitalists, not
only on the wealth thus lent to the government, but
also on all the capital used throughout the country.
The owners of houses, manufacturing establishments,
farming stock, shipping, and stocks of goods of all
kinds, to the amount, according to some estimates, of
400 millions sterling, participated in these profits which,
as has been shown, were raised greatly above what they
were previously to the war, and to the establishment of
the borrowing system.
Had it not been for the increase in the numbers, as
will be shown more fully hereafter, and the augmenta-
tion of the productive power of the labouring part of
the people, they must have sunk under these burdens.
As it was, all the benefits arising from these causes,
which ought to have been enjoyed by the people,
were absorbed by the government and the capitalists;
and more than all the benefits were absorbed by those
two parties, for a portion of what had been previously
the means of support, and tolerably comfortable en-
joyment, to the labourers' families,—in short, a por-
tion of the previous real wages was taken from them,
and they were reduced to a state of greater privation.
Some of the comforts of the poorer portion of the labour-
ers disappeared,-they too often found it impossible even
to obtain a sufficiency of common necessaries to sustain
C
INCREASE OF PRIVATION.
91
themselves and families, and those who were the prin-
cipal instruments in producing the abundance of wealth,
which flowed in copious streams into the hands of the
government, the landlords and the capitalists, were ex-
tensively compelled to apply for a scanty pittance from
their parishes, to preserve themselves and their families
from perishing with hunger.
Such were some of the general results of the first
stage of the twenty-two years' war. These results were
favourable to persons employed by the government,
and to capitalists: with them, therefore, the war was
popular, and they joined the original promoters of it.
These classes collectively have great influence, and the
complaints of the suffering labourers were drowned in
their loud acclamations. By the aristocracy, the clergy,
the magistracy, and even the press, the war was de-
clared to be just and necessary, and the shouts at the
stock exchange were echoed by the capitalists in every
part of the country. Poorhouses and jails in vain ad-
monished them that something was "rotten in the
state of Denmark"-short-sighted selfishness triumph-
ed, and the most industrious and highly productive
people on the face of the earth were doomed to bring
into existence, in abundance, all that is necessary for
the support and solace of man, only to have it ab-
stracted by those around them. Like Tantalus, they
had the desired good within their view, but it evaded
their grasp. They saw others enjoy that which, by a
kind of financial magic, was taken from themselves,-
they at the same time being frequently obliged to ac-
cept a miserable portion, doled out in the form of
charity, to enable them to continue that labour upon
which all depended. It is true they did not see clearly
how all this was effected, but they felt the effects, and
were compelled to endure the results.
K
GREAT BRITAIN, &c.
CHAP. III.
FROM 1802 TO 1809.
AMOUNT OF BANK NOTES ISSUED DURING THIS PERIOD, AND THE
PRICE OF GOLD. DEPRECIATION OF THE CURRENCY AND ITS
EFFECTS. PRICES OF WHEAT AND BEEF.-GOVERNMENT INCOME,
EXPENDITURE, AND LOANS. EFFECTS ON THE CONDITION OF
FARMING LABOURERS.-PRICES OF WEAVING.-INCREASE OF EX-
PORTS.-RATE OF PROFIT. NUMBER OF INCLOSURE BILLS.-
ANALYTICAL VIEW OF THE STATE OF SOCIETY. THE POPULATION.
-VALUE OF THE CURRENCY.-COST OF THE IMPORTS.
M
M
·00
THE short-lived and feverish peace of Amiens termi-
nated in 1803, and the war recommenced; when the
same modes were resorted to of raising the supplies for
conducting the war, that had been practised in the
first stage of it. Borrowing and taxing were carried
to a greater extent, and paper-money was issued so
profusely as, at last, materially to depreciate the cur-
rency and to violate all existing contracts. But, not-
withstanding these proceedings on the part of the go-
vernment, the manufactures and commerce of the
country were greatly extended, without, however, im-
proving the condition of the people.
We have seen that, in the year 1801, the amount of
Bank of England notes in circulation was £14,970,321,
DEPRECIATION OF THE CURRENCY.
93
and the price of gold in the same year was 85s. per
ounce. The average amount of Bank of England notes
in circulation, together with the average price of gold,
in each of seven years, will be seen from the following
table:
*

In the year
1802.
1805.
£
£
B. of E. notes. 16,887,113 17,035,959|17,322,991 16,296,178
Gold
ounce. 84s.
80s.
1803.
£
80s.
1804.
£
80s.
In the year
1806.
1807.
1808.
£
£
£
B. of E. notes. 19,072,898 20,034,112 17,365,254
Gold ounce. 80s.
80s.
80s.
* Marshall.
:
This table exhibits a depreciation of the currency, or
a reduction in the value of a given amount of that cur-
rency, as compared with the value of the precious
metals throughout the commercial world; and, at the
same time, an increase in the amount of Bank of Eng-
land notes, which indicate that the latter was the
cause of the former. The Bank of England notes,
however, issued at this period, were not the sole cause
of the depreciation; to them must be added the amount
of country bank notes, which, together with the large
amount of bills, both government and commercial, that
were in circulation, formed a mass of currency exces-
sive in quantity, and, consequently, depreciated in value.
This depreciation in the value of the currency altered
all existing contracts to pay definite sums, to the ad-
vantage of the payer, and, of course, to the disad-
94
PROSPERITY OF FARMERS.
vantage of the receiver. Fixed annuitants,-as the
receivers of ground rents of buildings, and other owners
of permanent annuities-life annuitants-stock owners
-and landowners who had let their lands on long
leases, when receiving their definite sums of current
money, now obtained a smaller value, and those who
paid them had to pay a smaller value. This altera-
tion was, so far, favorable to the productive classes, as
they now had to part with less of the produce of
labour. In other words, they had to pay that which
would command smaller quantities of the produce of
labour, than it would have done prior to the period of
the depreciation.*
Of all the parties affected by the alteration in the
value of the currency, as well as by the manner in
which that alteration was effected, the farmers or
agricultural capitalists seem to have been the most
benefited. One of the effects of the depreciation was to
enable them to pay their money rents with a smaller
part of the produce of the land, than would have been
requisite if the currency had remained at its full value;
the difference was a clear gain to the farmer. The
money wages of agricultural labourers, it is well known,
do not alter with the money prices of produce, and on
this occasion their money wages remained nearly the
same as before the depreciation—this was another source
of gain to the farmer. He was, accordingly, considered
The paper-
a thriving man and worthy of credit.
money system, then in existence, was favourable to the
creation of country bank notes, and, with these, the
farmer was supplied by the country banker, and he
* It will be shewn hereafter that, though the issue of bank notes was the
cause of the depreciation of the currency, it was not the sole cause of the
reduction in its value.
95
was thus enabled, occasionally, to keep back his pro-
duce from the market, and to raise the price higher
than it would otherwise have been, with such quantities
of produce as were actually obtained from the land.
The average prices of wheat throughout England, and
of beef in Smithfield market, for the seven years from
1802 to 1808, may be seen in the following table :-
K
In the year
Wheat
Beef stone.
TAXES AND LOANS.

1802
1802 1803 1804 1805 1806 1807 1808
s. d. s. d. s. d. S.
87
5 1 4 9 5 1 4
quarter..67 556 660 1
d. s. d. s. d. s. d.
1079 073 379 0
1401 5243
Bad harvests, such as those of 1799 and 1800, have
two effects. First, through the high money prices
obtained by the farmer, they stimulate him to make
greater efforts to raise produce; and, secondly, those
same high prices deprive the great mass of the con-
sumers of ability to purchase to the ordinary extent.
These two causes combined seem to have produced
their maximum effect in lowering prices in 1803, when
the average price of wheat was only 56s. 6d. per
quarter. But from this point prices rose, as the
general causes which have been already adverted to
operated on the condition of the different classes.
The amount of taxes and loans, during this period,
may be seen from the following table of the income of
the government arising from taxes, together with the
amount expended, the difference having to be made
up by borrowing in some shape, either by loans, gene-
rally so called, or by the issue of bills, viz:-
* Tooke.
96
Income from taxes.
In 1803.. £36,847,882
1804..
44,278,381
1805.
1806.
1807.
1808.
CONDITION OF LABOURERS.

•
49,272, 060
53,896,980
57,403,402
60,751,973
Expenditure.
---
£45,823,783
56,159,262
67,070,942
65,421,802
65,016, 112
70,645,219
Borrowed.
£8,975,901
11,880,879
17,798,882
11,524,823
7,612,710
9,893,246*
These are the net sums which were actually received,
and, therefore, do not express the whole amount raised
from the people, as the expenses of collecting and bor-
rowing were known to have been great. But these
sums, with the expenses attending the obtaining of
them, were (with some exception, which it is not
necessary here to point out) taken from wages, and, to a
proportionate extent, kept down real wages through-
out the country. The effects on the condition of the
agricultural labourers may be discovered in their gene-
ral impoverishment,—counteracting causes acting with
less force on their condition than on that of other
labourers, and the general effect on the whole of the
poorer portion of the labouring class, may be seen in
the amount of assessments made for their relief. The
average annual amount of these, from 1804 to 1809,
was £6,500,000. being about three times the amount
at the commencement of the war in 1793.
* Marshall
In some branches of manufacture the use of greatly
improved machinery enabled the English manufacturer
to produce his commodities with so small an expendi-
ture of labour, as gave him the power to undersell the
manufacturers of other countries, and yet to command
high profits himself. With these high profits he na-
turally aimed at extending his business, and he accord-
ingly offered and paid high wages, compared with the
97
general rate throughout the country. But the com-
paratively high wages in the manufacturing districts
soon attracted labour from other parts, and though the
increase of population in those districts showed that
there was a great extension of business, yet, in a short
time, wages in them partook of the general decline.
The lords' report of 1814 represents the wages paid for
weaving a Blackburn 74, as follows:-
In the year 1803....
1804..
1805..
1806.
PRICES PAID FOR WEAVING.
""
""
"
7s. 6d.
7s. 6d.
5s. 6d.
""
The manufacturing population, as well as manu-
factures, increased greatly during the war, and some
persons thought that the war was the cause of the
increase: this, however, was evidently an error. If loans
and taxes had not regularly taken up large portions of
capital at that time manufactures would have increased
with still greater rapidity, seeing that then all the accu-
mulations of capital must have been vested in business,
and thus there would have been an additional demand
for labour. It may, however, be remarked, that the
profits of the manufacturer were partly obtained from
the foreign consumer, while the high profits of the
agricultural capitalists all came from the wages of
British labour.
""
•
•
1807....
1808..
9s. Od.
7s. 6d.
8s. 6d.
•
That the reduction of money wages, and, in a still
greater degree, of real wages, was not attributable to
any decline of commerce is evident from the amount of
the exports during the same period. We have already
seen that in the year 1793 the official value (quantity)
of produce exported beyond colonial produce re-
I
98
INCREASE OF MANCHESTER.
exported was £14,605,753., and in the period between
1802 and 1809 the annual amounts were,
In the year 1803....
1804.
1805..
1806..
1807..
1808..
Yet, notwithstanding this increase in foreign trade,
and the additional demand for labour shown by the
employment given in manufacturing districts to an in-
creased population, the counteracting causes, loans,
taxes, and consequent high profits, were sufficiently
strong to bring down both money wages and real
wages to the extent seen in the table.* Some idea
may be acquired of the increase of employment, from
the increase of the population of the town of Manches-
ter, the principal seat of the cotton manufacture, which,
in the year 1801, was 93,363, and in the year 1811 was
113,798.
""
""
در
در
""
""
ردو
In the year 1803.. 714
That the general rate of profit continued high there
is no room to doubt, as taking from fifty to seventy
millions of capital each year from productive use, or
from trade, in the shape of loans and taxes, and spend-
ing it in an unproductive way, must have kept capital
comparatively scarce, and profit high. The prices of
the 3 per cent. consols were, on Feb. 28,
1804.. 55
•
1805.. 581
|
£22,115,238.
23,935,793.
24,358,037.
27,402,705.
25,171,268.
26,691,063.
In the year 1806.. 60
1807.. 621
1808.. 63 +
""
99
*The decline in the wages of weavers has been attributed to the
introduction of power-looms; but, at this period, the power-loom had not
been brought into use sufficiently to affect the market.
+ Pablo Pebrer's 'Taxation, Revenue, &c, of the British Empire,' p. 281.
INCLOSURE BILLS.
The high prices of grain in 1800 and 1801 produced
great gains to the farmers, and their additional profits
were in part laid out on the land. The result of this
extension of cultivation was a comparative glut of
landed produce in 1803, which brought the price of
wheat down to an average of 56s. 6d. in that year.
The new inclosure bills passed were,
In the year 1802
1803
1804.
1805
1806
1807 ..
1808
""
"",
""
""
""
""
•
•
99
96
104
52
71
76
91
92*
Although we have no means of clearly proving it,
yet there is every reason to presume, from the ex-
istence of highly favourable circumstances for effecting
it, that rent was at this time considerably raised.†
The holding of land had been very beneficial to the
tenant, and, nearly every farmer being desirous to in-
crease his holding, endeavoured to take any land that
was to let. Proprietors were not long in perceiving,
nor slow in taking advantage of this state of things;
* Marshall.
+ In the 'Annual Register,' for 1815, in a review of this period, the
writer says, "The prices of all kinds of grain rose suddenly and enor-
mously; the profits of the farmer rose nearly in the same proportion; the
demand for farms became urgent, and rents were raised excessively." And
again, "Though our harvests now produced an average crop, yet, from the
causes just stated operating along with the increased rent of land, the price
of corn continued high; the competition for farms, consequently, continued
and increased; not only did new competitors appear, but those who already
held farms, having increased their capital by the high price of grain, were
anxious to occupy more land. Thus, in a few years, the rent of land was
more than doubled, although it was evident that it was much above what
could be paid if corn ever resumed a moderate price."-Page 211.
I 2
100
FALL OF WAGES.
but if they had not seen it, such was the keen compe-
tition for land, that tenants were ready to bid against
each other, and in that way almost compelled the
owners to raise the general rate of rent. The result,
however, was, that a general advance took place in the
aggregate amount paid as rent of land, or the rent tax
was increased; and, at no subsequent period has the
advance been taken off. It compensated and, probably,
at times, more than compensated the land proprietors
for those government taxes which were imposed on
them; and they thus obtained a greater command over
and were enabled to consume a larger quantity of the
produce of labour than they had done previously to the
advance of rent.*
Thus everything tended to strip the labourer to a
greater extent of the produce of his labour, and to
transfer it to other parties, such as the government
and those whom they employed, to the landowner,
and to the capitalist. Labour was, it is true, made
more productive, and, therefore, better able to bear
the heavy deductions to which it was subjected, but the
increase of productive power was not sufficient fully to
counteract the abstraction of so large a portion of
wealth as was taken in the various ways pointed
out; and the condition of the labourers, particularly
the poorer classes of them, was generally on the
decline.
To have an exhibition of the state of the country at
the termination of the period of which we are treating,
we will take another analytical view of it. In the year
* To what extent the real burden of additional money rent was counter-
acted, by a reduction in the value of money, will be enquired into when we
reach the period of the greatest depreciation of the currency.
ANALYSIS OF SOCIETY.
101
1808 government expended .....
£70,645,219
and, the causes just mentioned had raised
rent to, say
28,000,000
Tithes, &c. say as before
4,000,000
Profit on say 400 millions, at 6 per cent.* 26,000,000
Total.. £128,645,219
This is a larger amount of wealth than the primary
producers brought into existence in 1793, and, there-
fore, if there had not been alterations going on which
enabled them to furnish this large amount in 1808, it
is impossible that it could have been furnished. The
attempt to extract it would soon have brought them
into extreme wretchedness; and, if persisted in, they
must have sunk. The principal alterations which were
taking place at the time, which enabled the primary
producers to part with such an immense sum, were
three in number, namely, an increase in the population,
an augmentation of the productive power of the
primary producers, and a reduction in the value of the
currency, which made the sums command less of the
produce of labour.
The 1,200,000 primary labouring families in 1793
produced, at £100. each, only £120,000,000. But, in
1808, if through an increase of the population, 250,000
other families were added to their number, the whole
could, with equal ease, produce £145,000,000. which
would yield the whole of the net wealth and profit,
and leave £16,354,781. for wages, and this difference
would arise solely from an increase of the population.
* As the full amounts of the sums paid as taxes and loans are put down
in the first place, the additional profit between 6 and 10 per cent. obtained
by the capitalists, must not be put down again, as that would be reckoning
he same sum twice.
102
INCREASE OF POPULATION.
That the population did increase to the extent
named, during this period, is clear. For a considerable
time prior to the French war of 1793, and from that
time up to 1801, the same kinds of alterations were
going on in the economy of the country, and the sizes
of the towns, as those which have taken place since the
last named year. From the returns of the two censuses
of 1801 and 1811 it appears that, at the former period,
the population of Great Britain was 10,472,048, and, at
the latter period, 11,969,364, making an increase in
ten years of 1,497,316. We may, therefore, take for
granted that from 1793 to 1808 the population increas-
ed one and a half millions, or 250,000 families, of six
persons each. Had these been all labouring primary
producers they would, at the rate of production already
given, have created additional wealth to the amount of
£25,000,000. and from that fund would be taken a
proportional part of the net wealth abstracted from the
whole of the primary producers. The grand total of
primary produce would become 145 instead of 120
millions, and the aggregate fund left for wages would
then be £16,354,781. This exhibits, most strikingly,
the effect of an addition to the number of primary
producers in counteracting the bad consequences which
flow from an abstraction of large portions of net
wealth. But when the productive power also is in-
ereased the results are much more beneficial. Let the
primary productive power be increased on an average
5 per cent., and this would add commodities equal
to £7,250,000. to real wages, making the total fund
for wages £23,604,781. Still it is evident that so
small a fund would not have supported the primary
labourers, and, it therefore follows, that either their
productive power must have been increased more than
103
5 per cent., or the wealth taken from them, as ex-
pressed by the sums named, was not so large a propor-
tion of the whole wealth produced as would appear
from the sums named. In short, that the sums collected
by the government and the landowners were in a
currency reduced in value, and, consequently, no longer
commanding the same quantities of commodities.
How far the last named cause operated, at this time,
we shall have occasion hereafter to enquire, but, for
the present, enough has been said to show the beneficial
effects both of an increase, of the numbers of the
primary labourers, and of their productive power.
It is probable that, at this period, the supplies of
foreign produce did not cost the country any great
additional quantity of its labour, as, although the ex-
ports sent out to obtain them had increased in quantity,
yet the power of labour to produce them had also so
much increased as to warrant a presumption that not
much more labour was employed in furnishing them.
The imports of grain, from 1803 to 1808, were as follows:
In the year 1804 . 1,002,418 quarters.
1805
1,240,765
1806
1,267,045
1807
1,107,758
514,104
•
""
1808 ..
and, as these were obtained in return for the produce
of highly productive labour, they were procured on
favourable terms.
""
>>
"
در
IMPORTS OF GRAIN.
""
""
در
The period, from the rupture of the peace of Amiens
to the year 1809, was then marked with the same
general features as the first stage of the war. The
same system of loans and taxes abstracted increasing
proportions of the wealth produced, and, by making
capital comparatively scarce, raised and kept up the
104
EXPENCE OF THE WAR.
general rate of profit; and either prevented wages
from rising, or, as was generally the case, caused them
absolutely to fall. The advance in the prices of landed
produce caused an advance of the rent of land, and the
average profit of the agricultural capitalist being made
high at the same time, by other causes, the whole of
the additional rent was taken from wages. On the
other hand, to counteract the effects of these causes,
we have the augmented productive power of the people,
and the depreciation of the currency. The former
enabled the people to bring more wealth into existence,
and the latter caused less of it to be taken by the
owners of annuities; but these two causes combined
were less powerful than those which operated in the
opposite direction, and, therefore, real wages declined,
and, with them, the condition of the labouring class.
The total sum expended in the six years, from
1803 to 1808 inclusive, was..
£370,137,120.
302,450,678.
of which.....
were raised by taxes, and the remaining
67,686,442.
were, in some form, borrowed. The sum expended
was, it should be remembered, the net receipt by
the government, independent of the cost of collecting,
on account of which 7 per cent. might be added, which
would raise the whole amount extracted from the
people, in the six years, to nearly 400 millions sterling.
GREAT BRITAIN, &c.
CHAP. IV.
FROM 1808 TO 1814.
GOVERNMENT INCOME, EXPENDITURE, AND LOANS.-AMOUNT OF BANK
NOTES.—PRICES OF GOLD, WHEAT, AND BEEF.-VALUE OF THE
CURRENCY.-VALUE OF GOLD, WHEN PRODUCED, AND WHEN PRO-
CURED.—DEPRECIATION AND REDUCTION OF VALUE.-SUPPLY OF
GOLD INFLUENCED BY EXPORTS AND IMPORTS.-AFFECTED BY
CHEAPLY PRODUCED EXPORTS. THE COTTON MANUFACTURE.
·00·
We now approach the period when the borrowing,
taxing, and paper-money systems were carried to their
greatest extent, and produced their most important
effects on the condition of the different classes in
society. In reviewing the occurrences of the six years
between 1808 and 1815, there appear to be such an
amazing display of national resources, and, at the
same time, such a reckless expenditure of wealth
as is, probably, unequalled in the histories of warlike
struggles. And it becomes peculiarly interesting to
enquire what were the circumstances which enabled
the English government to raise such resources, and
how the people were affected by the abstraction from
them of such large quantities of wealth.
106
EXPENDITURE AND PRICES.
In the following table may be seen some important
facts relating to each year of this period, namely, the
government income arising from taxes, the expenditure,
and the difference, which was raised in the form of
bills or loans-the amount of Bank of England notes
in circulation in the first week in August; and the
effects of those are shown in the mean price of gold,
marking the extent of the depreciation of the currency;
together with the mean prices of wheat per quarter,
and of beef per stone.*

In the
years
Income.
Expen-
diture.
Borrowed
Bank
notes.
Gold Price Price
of
per
of
ounce. wheat. beef.
£
ť
£
£
S. d. S. d. s. d.
1809 61,952,294 73,012,257 11,059,963 19,357,241 80 0 95 7 4 4
1810 67,449,645 77,961,400 10,511,755 24,446,275 85 0106 2 5 6
1811 65,462,295 79,346,420 13,884,125 23,793,115 93
1812 63,203,192 88,925,508 25,722,316 23,482,910 101
1813 71,202,676 109,054,125 37,551,449 24,024,869 110
1814 72,151,281 106,901,336 34,750,055 28,978,876 89
0 94 6 5 8
9 125 6
9 125 6 5 8
0 108 9
0108 9 5 8
073 11 5 0
In looking over this table, the attention must be
arrested by the enormous expenditure of the govern-
ment, amounting in the year 1813 to £109,054,125 ;
and this, it should be recollected, is exclusive of the
sums paid over to the commissioners of the sinking
fund, as the sums thus laid out by them in the
purchase of stock may be considered as having been
lent again to the government by the sellers of that
stock. But, extravagant as was the ministry of that
day, they are not chargeable with having expended so
large an amount of money in a currency of full value.
In comparing the expenditure of this with the expen-
diture of former periods, we must estimate, and allow
for, the extent of the depreciation of the currency
*The prices of beef and gold are from Tooke, the other facts from
Marshall.
EXTENT OF DEPRECIATION.
107
through excessive issues of paper-money. This depre-
ciation, as measured by the market price of gold, was,
according to Tooke, in 1812, as £5. ls. 9d., and in 1813,
as £5. 10s. Od. to £3. 17s. 10d., and may, for the
purpose of having a simple per centage, be taken for a
number of years, at an average of 20 per cent. It was
more than this, we see, in 1813, but taking 20 per cent.
as the extent of average depreciation, makes it apply to
a longer period. Presuming then, that the sum of
£109,054,125.* in the year 1813, was in a currency
depreciated 20 per cent. it would be equal in value, or
would represent commodities equal to £87,243,300. of
undepreciated currency, and this sum exceeds the
expenditure of 1808—the year of the greatest expen-
diture, up to that time, by no less than £16,598,081. of
the currency of that period. But the currency being
then depreciated, say 4 per cent., the expenditure in
1813 over the expenditure of 1808 in money of full
value, that is to say, equal in value to gold bullion,
was £19,423,889., a very large sum added to the
expenditure of 1808.
66
The extent of depreciation of the currency, at this
period, has been the subject of much dispute among
different parties, some of whom have contended that it
was much greater than was indicated by the price of
gold. It has already been stated that, by the word
depreciation,” is meant a fall in the value of the
currency below the value of gold. The standard being
£3. 17s. 10 d. of currency formed of an ounce of gold,
and, therefore, equal in value to an ounce of gold: if
£3. 17s. 10 d. ceases to be so equal, and £4. or £5.10s.
of currency are found to be requisite in the market to
The expense of collecting the taxes in this year was said to be eight
millions !— Annual Register for 1815, page 237.
108
EXTENT OF DEPRECIATION.
obtain an ounce of gold, then the currency is depre-
ciated to the extent of the difference. It is the
departure of the currency from the gold standard, by
sinking below it, which constitutes the depreciation,
and the price of gold, expressed in the currency, being
ascertained to be such as to require £5. 10s. of it to
purchase an ounce of gold, is conclusive proof of the
depreciation to the extent of the difference between
£3. 17s. 10 d. and £5. 10s. The value of gold itself,
as compared with other commodities, may either
increase or decrease, at the same time that a currency
may be depreciated by an excessive issue of paper.
And there have been persons to maintain that, at the
period of which we are treating, gold rose in value in
consequence of its scarcity; while others have as
confidently asserted, that it sank to less than one half
of its previous value, and of the value it has since
attained. The ministerial writers, of the period, were
the parties who maintained the former of these opinions,
now, however, generally abandoned; and Mr. Cobbett,
Mr. T. Attwood, and others, have supported the latter
opinion. As it is not possible to form a just estimate
of the effects produced by the various measures of the
then existing government, without knowing the value
of the sums raised, or what quantities of commodities
they were equivalents to, it is necessary that we should
go into an inquiry respecting the value of gold,
compared with other commodities, at this period.
The relative value of gold, compared with the value
of other commodities, in the countries in which both
are produced, depends on their relative costs of pro-
duction. To produce an ounce of gold costs fifteen
times as much labour as to produce an ounce of silver,
and, therefore, one ounce of gold exchanges against
COST OF GOLD.
109
fifteen ounces of silver. If, in the same country, it is
equally difficult to produce a quarter of wheat, then
the quarter of wheat, the ounce of gold, and the fifteen
ounces of silver will exchange against each other. If
the quarter of wheat is raised with only one half the
labour, then (omitting all consideration of the rent
paid) the wheat exchanges against, or sells for, half an
ounce of gold, or seven and a half ounces of silver,
and the same rule will apply to all other commodities.
In countries where the supply of gold is procured
in exchange for exported commodities, the cost of
procuring it, in like manner, determines its value. If it
requires a quarter of wheat, or a piece of cloth, of
given quality, in the production of which, a quarter of
wheat has been directly or indirectly expended, or any
other articles equivalent in value to a quarter of wheat,
or such a piece of cloth, to procure in the market of
the world an ounce of gold, then all these various
articles will exchange against each other. But if the
piece of cloth should be the article sent out into the
market of the world to procure the supply of gold,
and, if it should, through any improvement in the
process of manufacture, be made with the expenditure
of, say, half a quarter of wheat, or equivalent com-
modities, and should yet command an ounce of gold in
exchange, then gold would soon be brought back in
such abundance as to cause an ounce of gold to
exchange against half a quarter of wheat, or other
equivalent commodities. Should paper-money, at the
same time, be substituted for gold currency, tbat
circumstance would not alter our case, as the relative
exchangeable values of the commodities, wheat, cloth
and gold, would still be respectively determined by the
cost of producing or procuring them. If the paper
110
currency should be excessive in quantity, and, therefore,
be depreciated in value, this depreciation will apply
equally to all commodities, and the currency prices of
wheat, cloth and gold would all rise in a direct ratio
with the depreciation. The gold bullion prices of
commodities, at different periods, would then become
the tests by which to determine the value of gold
relatively to other commodities.*
Such are the general principles that determine the
value of gold as far as relates to the supply of that
article ;
but its value is liable to be altered by par-
ticular causes, and this makes the question of deter-
SUPPLY OF GOLD.
* "An English manufacturer, by expending a bushel of wheat, or the
price of it, is able to get a yard of cloth made, which he can export, and, in
return, bring back five shillings, after paying his own expenses. England
is, then, supplied with gold or silver at that rate. A Russian merchant has
four bushels of wheat at Moscow, which he exports and sells, and, after
paying all expenses, he finds that he brings back to Moscow five shillings.
It is, therefore, necessary to export four bushels of wheat from Moscow,
and one from England, or an equivalent value, to obtain an equal quantity of
gold or silver-five shillings; that quantity will, consequently, exchange
regularly, in the two countries, at those rates:-wheat will, in England, be
5s. a bushel, and in Moscow 1s. 3d.
"Should manufacturing skill and capital, in France, be such as to make
it more advisable to export manufactures than wheat, and yet be so inferior
to the skill and capital of the English as to make it necessary to expend
two bushels of wheat in making a yard of cloth of equal quality, the con-
sequence must be, that as the producer of gold would not give a higher
price for the yard of French cloth than for the yard of English, five shillings,
France would obtain her supply of gold after that rate, and in France
wheat would sell at 2s. 6d. per bushel.
"Should England, by the invention of superior machinery, be enabled
to make the yard of cloth with the expenditure of only three-fourths of a
ushel of wheat, it would alter the terms upon which the supply of gold
was obtained; and three-fourths of a bushel would then be equal to five
shillings, or wheat would sell for 6s. 8d. per bushel. If the same cloth
could be made for half a bushel, wheat would rise in money price to 10s.
per bushel."—See my 'Economical Enquiries,' page 85, published by
Hatchard in 1822.
ISSUES OF PAPER.
111
mining the value of gold, compared with other com-
modities, more complex, and more difficult, especially
when it relates to a short period of time.
A certain quantity, say 1000 millions of gold,* for
instance, may, during a long course of time, have
been accumulated from the quantities produced and
furnished to the commercial world, and its average
relative value, compared with wheat, might be, say,
half an ounce of gold to a quarter of wheat, and to all
other commodities in the same proportion. But let
1000 millions of paper-money be then thrown into
circulation with and in addition to the gold, and the
quantity of currency would evidently be doubled, and
if other things remained unaltered, the exchangeable
value of any part of the currency, gold or paper, would
sink one half. In this case, although the gold is not
increased in quantity, the paper, which is made to
perform the same service as a currency, is so increased,
and the effect on prices is precisely the same as if the
gold itself had been suddenly doubled in quantity.† The
currency price of every article, excepting gold, which
had been made relatively so abundant by paper doing
half its work, would now be doubled-wheat would sell
for an ounce of gold instead of half an ounce, and every
other article, excepting gold itself, would rise in
currency or money price.
* Silver might be added, but as gold is the standard of value, it was con-
sidered unnecessary to name silver in addition to gold.
+ Throughout the whole of this argument, when gold is spoken of, it is
to be understood that only that portion of the gold which is used either as
coin, to effect payments between individuals within the country, or as
bullion, to balance the payments between different countries, is meant to
be expressed. The portion of the metal used in gilding, or as trinkets or
plate, may be omitted, as not belonging to the subject of currency.
112
But as gold would now exchange against not more
than one half the commodities it did previously to the
issue of paper, the producers of gold would no longer
receive the same remuneration-their profits and
wages, expressed in commodities, would sink one half,
and they would soon cease to furnish any further
supply. Gold, however, being durable, a cessation of
supply might not, for a considerable time, materially
affect the amount of the whole quantity in existence
throughout the commercial world, and, therefore, the
reduction in its exchangeable value, in consequence of
the large quantities of paper-money used in conjunction
with, and as a substitute for it, might continue for a
long period.
GOLD DRIVEN AWAY BY PAPER.
How far the issue of paper, by various nations,
increased the quantities of currency and decreased the
value of gold, during the period of which we are
treating, it is difficult to determine; but that it was
not considerable may be concluded from the stationary
prices of the principal articles of subsistence in those
countries where the prices were the least affected by
other causes than alterations in the value of the cur-
rency. Mr. Tooke, after quoting from Mr. Huskisson's
pamphlet, in 1810, says, "from these considerations it
would seem that a sum of from twelve to fifteen
millions is an ample allowance for the quantity of gold
which went from England to increase the mass of the
precious metals in the rest of the world, and which,
so far as it went, must have tended, caeteris paribus, to
diminish their value." Tooke on high and low prices,
vol. 1, p. 25. The amount appears to be understated.
But, whatever may have been the alterations in the
value of gold, compared with commodities in the general
market of the commercial world, there may have been
2
I
113
VARIOUS VALUES OF GOLD.
peculiar causes to alter its relative value in particular
countries. It has been already stated, that in countries
supplied with gold in exchange for other commodities,
the value of gold will depend on the cost of procuring
it. It may cost 5 quarters of wheat, or other com-
modities equal, in exchangeable value, to 5 quarters of
wheat, to procure an ounce of gold in Siberia, and,
consequently, an ounce of gold, in that part of the
world, will exchange against, or sell for, 5 quarters of
wheat, or other equivalent commodities. In the Crimea
it may require 3 quarters of wheat, or equivalent
commodities, to procure an ounce of gold, therefore 3
quarters of wheat, or equivalents, will exchange
against it. In Poland, 2 quarters, or equivalents; in
France, 1 quarters; and in Great Britain 1 quarter
might procure an ounce of gold, and, in those countries
respectively, the exchangeable value of the gold would
be determined by the cost of procuring it.
The cost of gold may also alter from time to time,
from particular causes, in each country. In Great
Britian, in 1793, the cost of procuring an ounce was
about 1 quarters of wheat, or equivalent commodities,
the mean price of ordinary wheat being then 48s. 11d.
per quarter. Wheat, however, was not itself exported at
that time to procure the requisite supply of gold,
manufactured goods having been the general exports.
Suppose the commodity actually exported at that
period, to procure gold, to have been cotton cloth, then
cotton cloth, equal in price and exchangeable value to
13 quarters of wheat, would be exported in return for
every ounce of gold obtained, and that ounce of gold
would exchange against 13 quarters of wheat, or
equivalent value in cloth or in any other commodity.
The cotton cloth is considered equal in exchangeable
K
114
value to 1 quarters of wheat, or other equivalents,
because it was necessary, in the then state of the
country, and with the then known modes of manufactur-
ing, to consume or expend such equivalents in obtain-
ing the cotton cloth. But now let us suppose that,
through the discovery and use of improved processes
for making the cotton cloth, it can be equally well pro-
duced for 1 quarter of wheat, or other equivalents. We
shall then find that the export of cotton cloth, and the im-
port of gold, would be highly profitable, and gold would
be imported in such abundance as to reduce its value,
and at last to cause an ounce of gold to be made equal
in exchangeable value with, not only the cloth, but the
quarter of wheat, or the other equivalent commodities.
When gold had been reduced in exchangeable value to
this extent, the exporter of cotton cloth would not bring
back gold in greater quantities than were sufficient to
supply the ordinary consumption of the country, as any
supply beyond that would not be profitable to him as
an importer.
ALTERED VALUE OF GOLD.
A proceeding similar to this which we have imagined,
for the purpose of illustration, actually took place
during the war, from 1793 to 1814. Within that
period improvements were effected in the modes of
producing many of those articles, which were exported
to foreign countries-and these were, perhaps, most
strikingly exhibited in the manufacture of cotton. An
almost immediate effect of these improvements was a
reduction in the cost of producing cotton fabrics, and,
as they were articles much in demand in most of the
great markets in the world, their prices did not, for
some considerable time, fall as much as the cost of
production had been reduced. A result was that gold
was obtained at a smaller cost than it had been pre-
115
viously. At every successive improvement supplies of
it were obtained at a smaller and smaller cost, and in
greater abundance, and it, consequently, exchanged
against fewer commodities, and prices, at last, settled
at that rate which left the manufacturer and merchant
only the ordinary rates of profit on their capitals. In
this way the relative value of gold was lowered in
Great Britain, or the general prices of commodities, as
measured by gold bullion, were raised. Best wheat
from 56s. 5d., its price on an average from 1783 to
1792, rose to an average of 109s. 4d.* of currency
in the five years between 1808 and 1814, and other
commodities, not produced by the improved modes of
manufacture, rose in about the same degree. The
depreciation of the currency at the latter period below
its bullion value, say 20 per cent., being taken from
the 109s. 4d., leaves it at 87s. 6d. in gold, and the
difference between this price and 56s. 5d. may be taken
as an approximation to the reduction of the exchange-
able value of gold, arising from its being obtained at a
smaller cost.t
REDUCED VALUE OF GOLD.
* Marshall, see page 99. The prices are those of Lady-day and Michael-
mas, at Eton.
+ Some ambiguity arises out of the terms used to express increase and
decrease of the quantities of currency, and the raising and lowering of its
value. When the quantity of currency is increased from 40 to 60, as there is
an increase of 20 upon 40, the previous stationary quantity, it is said to have
been increased 50 per cent. in quantity; but its value is said to be reduced
only 33 per cent. because the same amount of money will then purchase
two-thirds of what it did before the increase in its quantity. When the
currency is reduced in quantity, say from 60 to 40, it is said to be reduced
in quantity one-third, because the calculation is from the previously sta-
tionary quantity, and the reduction is only one-third of that quantity; but
the value is now said to be increased 50 per cent. because the same quan-
tity of currency will now command or purchase 50 per cent, more goods.
K 2
116
It certainly appears paradoxical to say, that gold was
brought to this country in such abundance as to
lower considerably its exchangeable value, when it is
notorious that at that very time gold really left the
country in large quantities, and towards the end of the
period of which we are treating, there was, in fact, no
gold currency remaining, paper money having entirely
superseded it. But this seeming contradiction is only
apparent—not real. It was for the purpose of shewing,
in the most simple form possible, the effects of a
reduction in the cost of procuring gold, on its exchange-
able value in the country, that the presence or excessive
issue of paper money was for a time left unnoticed. If
there had been no paper money, the effect would have
been such as described, and the issue of paper money
does not alter the case as far as respects our present
subject. An issue of paper money, considered by itself,
merely displaces an equal amount of gold, which is
thereby driven to, and distributed among, other nations,
and, according to its quantity, it increases the whole
amount of currency in the world, and so far lowers the
value of each and every part, as already explained.'
But the substitution of paper for gold in Great Britain
did not prevent cheaply produced goods from deter-
mining gold to flow towards this country, in such
abundance as to reduce its exchangeable value. If no
*
PAPER AND GOLD CURRENCY.
* Mr. Tooke, in his work on prices, vol. 1, sec. 5, examines, at con-
siderable length, various statements which had been made by other parties,
shewing that mercantile bills were occasionally issued in great abundance,
and made to supply the place of money; and that various expedients were
resorted to, to economise the use of money: but as all these had the same
kind of effect on the currency that an additional issue of paper money
would have had, the nature of those effects is really exhibited when we
shew the results of issues of paper money.
DIFFERENT AMOUNTS OF CURRENCY.
117
paper had been issued the gold currency itself would
have been abundant, and prices would have risen ;-
and, as paper money was issued, the determination of
gold towards this country allowed a larger amount of
paper money to be issued before the prices of paper
and gold separated than could have been done, if there
had been no such strong determination of the gold.
Previously to the use of the improved modes of pro-
ducing our exports, the whole amount of the currency
may, for the purposes of illustration, be assumed to
have been 40 millions of gold,* and when the full
effect of the cheap supply of gold had been experienced,
by having it coined, and thus converted into money,
the amount of currency might have been, say 60
millions, and the general prices of articles not pro-
duced by the improved modes would rise proportionally.
Under these new circumstances 60 millions might be
considered the natural amount of our currency. But
paper might now be issued to the amount of 1 million,
making the whole currency 61 millions, and as we
assume 60 to be now the natural amount, there would
be a small excess in the whole quantity. And, as gold
had a value in other countries whilst paper had not,
the super-abundant million would leave the country in
gold. As the gold was thus driven out by the paper,
more paper might be issued, and this process might be
continued until 40 millions of paper and 20 millions of
gold were in circulation. Now this 20 may be said to
have been brought into the country by the exports of
cheap goods, notwithstanding the issue of paper had
driven and kept 40 millions of gold out of the country,
* Gold and silver would be more correct, but it is unnecessary to use the
two words.
118
at the very time that the exports were determining the
import of gold so strongly as to keep this 20 millions
of gold currency in it. Paper might be further issued
until it reached, say, 50 millions, and drove out 10
millions more of gold, and there would still be no
difference of prices between paper and gold to shew
a material depreciation of the paper. But had not
cheap exports determined gold so strongly towards
this country as to increase the whole currency to more
than 40 millions, issuing paper to the amount of 50
millions would have caused a separation of gold and
paper prices. Paper to the amount of 60 millions
might, in like manner, be issued, without any material
depreciation, gold leaving the country just as fast as
the paper was issued. But had it not been for the
counter tendency of gold to flow back, caused by the
export of cheap commodities, the issue of these 60
millions of paper would have depreciated it one third;
40 being presumed to have been the natural amount
of the currency before the export of the cheap manu-
factures. Previously to obtaining the greater command
over the gold, the determination or tendency of that
metal towards this country was only strong enough to
keep up the currency to 40 millions, but after that
command was obtained, the determination or tendency
was equally capable of keeping it up to 60 millions.
And whether that 60 millions was gold, or a mixture
of gold and paper, or wholly of paper, there would
be no separation of the value of gold from paper.
An ounce of gold bullion would exchange against
£3. 17s. 10 d. of currency, as well as against cloth, or
wheat, or other commodities of equal value with that
amount of currency, whatever might be the material
of which it was formed; because the ounce of gold
GOLD BANISHED BY PAPER.
FORCE OF SUPPLY OF GOLD,
119
had been brought into the country in exchange for
the cloth which cost £3. 17s. 10 d. of the currency.
The tendency of gold to flow towards this country, as
a consequence of cheap exports, while it was really
driven out by issues of paper money, was, therefore,
not without its effect on the value and amount of the
currency for some time before the currency became
depreciated, through the issue of an excessive quantity
of paper. If, at this stage of the issue, the export of
cheap goods could have been suspended, and gold,
consequently, no longer have been strongly determined
towards this country, a separation between the values
of gold and paper would have taken place, although
the amount of paper in circulation had continued un-
altered.
The continued export of cheap goods may be con-
ceived to have resembled the action of a forcing pump
of some given power, by the working of which gold was
determined to flow so strongly towards this country, as
to have kept the currency up to a certain degree of
fullness or height, whether that currency was formed
of gold, or gold and paper, or of paper alone. When
the currency was raised to the highest level that this
pump could raise it, no more gold would flow in, and
the currency could not be increased beyond this point
without suffering depreciation. Let, however, this
pump cease to work with equal force, and if the cur-
rency consisted, in part, of paper, and, in part, of gold,
a portion of that gold would flow out of the country,
the currency would be reduced in quantity, its value
would be increased, and the general range of prices
would subside to a lower level; but if the currency was
wholly of paper, none of it would flow out of the country,
and, as gold would not now be determined so strongly
120
EFFECTS OF IMPORTS ON CURRENCY.
to flow towards this country, the pressure or force of
supply would be reduced, and gold bullion would become
scarcer; gold would rise in value, and separate from
paper; paper would be depreciated, and continue so
until either the quantity of paper was reduced, or the
stronger determination of gold towards the country
was restored.
The continued import of commodities may be con-
sidered a counteracting force or pump, which tends to
draw gold out of the country; and some equilibrium is,
in time, established between these antagonist forces,
and some level of retained supply of gold is the general
result. Under extraordinary circumstances this equi-
librium is disturbed, and the ordinary level of supply is
altered. The very bad harvests of the years 1799 and
1800 caused an import of grain, in the years 1800 and
1801, to the amount of £13,500,000.-the imports of
grain, for the eight preceding years, having been, on
an average, only to the amount of £1,387,500. a year.
Now these unusually large imports of grain, added to
the ordinary imports of other commodities, proved too
strong an antagonist force for the exports of those
years, and gold, consequently, flowed from the country
at that period. A separation then took place between
the exchangeable values of gold bullion and currency,
and gold bullion rose in value compared with other
commodities :—an ounce of gold then commanded
£4. 5s. of currency, or commodities equal in value to
£4. 5s. of currency. This, however, was only the
temporary effect of large importations of grain in those
two years. As goods for export could still be produced
with little labour, while they commanded high prices
in the general markets of the world, their export soon
forced the gold to flow back towards this country; and,
BALANCE OF PAYMENTS.
121
in 1803, the price of gold fell to £4. the level at which
it remained for years. The increase in the export of
goods, to bring it to this level, may be traced through
the years 1799, 1800, 1801, and 1802, the exports having
been, in official value,
In the year 1798*.
1799
1800
1801
1802
1803
""
""
""
""
""
► •
•
£19,672,503.
24,084,213.
24,304,284.
25,719,980.
27,012,108.
22,252,102.
The peace, which took place in 1802, had probably
some influence in increasing the exports; but the
increase commenced some time before the peace, and
the full effect of it, on the value of gold, was not pro-
duced until 1803, as the average price of gold, in 1802,
was £4. 4s. per ounce.
The tendency of gold to flow into the country, in
1803, did not, however, lower its value quite equal to
the value of the then existing currency. Bank of
England notes to the amount of £17,035,959. together
with country bank notes, and bills, seem to have depre-
ciated the currency to a little below the level at which
it would have settled if it had been left to be determined
solely by the influx of gold; as it was, gold kept above
the value of the currency to the extent of the difference
between £3. 17s. 101d. and £4. the former sum in gold
being equal to the latter in currency. This difference
would present some (though not a very strong) induce-
ment to the melting or exporting of the coin; but the
increase of bank notes, from 1803 to 1809, appears to
have been sufficient to supply the place of the coin thus
* Marshall, page 48.
122
melted or exported, as the price of gold remained steady
during this period. The practice of the bank of Eng-
land probably assisted in keeping the price steady, as
they received gold at £4. an ounce; but if they had
not done this, the exchanges shew that the prices would
have fluctuated about that point. If any alteration
took place, at this time, in the power of the exports to
procure gold, it must have been balanced by issues or
withdrawals of paper of some description.
But paper money was at last issued to such an ex-
tent as to reduce the value of the currency much below
the rate at which gold could be obtained, and then a
wider separation took place between the values of the
gold and the paper. This proceeded to such an extent
that, in 1813, it required as much as £5. 10s. of paper
money to procure an ounce of gold, and, of course, to
procure commodities, cloth or other articles, equivalent
to an ounce of gold. The currency was now reduced
in value from two different causes operating at the same
time;-one reduced the exchangeable value of gold,
and the other depreciated the paper below this reduced
value of gold. The depreciation of the paper we have
taken to have been, for some time before and in 1813,
20 per cent.
To what further extent the gold was re-
duced in value cannot be determined with precision ;
but, as we shall see hereafter, the range of prices of
commodities of the greatest aggregate value, and in the
most general use at the time, compared with their
prices before and since, authorizes us to suppose that
it might be, at least, 30 per cent. If this supposition
is correct, the reduction in the value of the currency,
from both the causes, was, at least, 50 per cent.!
The value of gold, compared with that of other com-
modities, being determined by the cost of producing or
REDUCED VALUE AND DEPRECIATION.
PROCESS OF REDUCTION OF VALUE.
123
procuring it, it follows that, if the power of procuring
it for any country, from the general market of the world,
varies from time to time, the exchangeable value of
gold itself will also vary in that country. It may re-
quire, at one time, say 40 days' labour to produce
articles which, in the gold market (the general market
of the commercial world), will procure an ounce of
gold; and then an ounce, at home, would exchange
against, or pay for 40 days' labour, or the produce of
40 days' labour. If, by improvements in the modes of
producing the same article, it could be produced with
30 days' labour, gold would soon be brought into the
country in such quantities as would, at last, cause an
ounce of gold to exchange against, or pay for, only 30
days' labour, or the produce of 30 days' labour. Im-
provement continuing, the same article might be pro-
duced, say by 20 days' labour, when the ounce of gold
would, in no long time, pay for not more than 20 days'
labour, or the produce of those 20 days' labour;—the
condition necessary to the full accomplishment of this
process being, that the market shall be sufficiently ex-
tensive to take off all the goods made by the improved
modes, without any reduction of their selling prices in
foreign countries, as the same article, though made
with only half the labour, must continue to command
the same gold prices. A great influx of gold would be
the necessary result of these operations, and when they
had caused gold to become so plentiful as just to double
the money prices of both goods and labour, the capi-
talists, who were the makers of the articles by the
improved modes, would be in precisely the same
situation as before the improvement. Before that event
took place, they had to pay, for 40 days' labour, a
certain quantity of gold; and, after that event, they
124
would have to pay, for 20 days' labour, the same
quantity of gold; so that the effect of the improve-
ment, as far as respects our present enquiry, would be
merely to reduce the exchangeable value of gold one
half. In practice, many modifying causes would come
into operation to prevent the effect being precisely what
has been described; but, though modified to a certain
extent, the effect would be substantially produced, and
the nature of the process is best exhibited by placing
it in the most simple light.
MANUFACTURE OF COTTON.
The working of the causes which lowered the value
of gold may be conceived to have been in the following
way :—A cotton manufacturer had produced an article
which required, say 40 days' labour, and for producing
which he had to pay the wages of 40 days' labour, at
1s. 6d. per day, or, in all, 60s. This article he exported,
and obtained for it an ounce of gold, which was a re-
turn of 77s. 10d.; thus getting 17s. 10 d. profit, which
we presume to have been the ordinary profit on such
transactions. While the supply of gold was obtained
on those terms, it had a certain rate of exchangeable
value in the country, which gave 1s. 6d. per day as
ordinary wages, and the prices of all other things were
in accordance with that rate. But suppose this manu-
facturer discovers a mode by which he can produce the
same article with 30 days' labour, he will then, in pro-
ducing it, have to pay for only 30 days' labour, and the
article would cost him only 45s. When he exports this,
and brings back his ounce of gold of the value of
£3. 17s. 10 d. he finds that, instead of 17s. 10d. the
ordinary profit, he now has 32s. 10d.! His business
being thus extremely profitable, he would naturally
use a large part of his high profits in extending that
business; and supposing, for a moment, the supply of
125
labour to be ample, he would, in no long time, make
his trade one of great magnitude. Here, then, accord-
ing to the principles already laid down, we should soon
have a stream of gold flowing into the country, in-
creasing in magnitude in some ratio of progression.-
But what use would be made of this gold? The first
effect of such an influx would be to lower the value of
gold bullion, in the country, sufficiently to make it
profitable to have the bullion converted into coin. The
bullion having fallen in price to this point, a part of it
would be sent to the mint, and, being there converted
into coin, it would be used as any other coin-put into
circulation-and would be so much added to the pre-
vious amount of currency. As more bullion was im-
ported, more would undergo the same process, and thus
the quantity of money in circulation would be increased,
and general money prices be raised. This rise of money
prices would be a rise of the general prices of com-
modities, and of labour, and, of course, of that parti-
cular labour employed in the manufacture of the article
exported. As money prices thus increased, the profits
of the manufacturing capitalist would be reduced; and
when prices had risen so much as to cause 2s. to be paid
for a day's labour, he would be in just the same situa-
tion as he was in prior to the improvement. He would
now have to pay, for 30 days' labour, at 2s. a day, just
60s. and his profits would sink to the old rate, 17s. 101d.
on the transaction. Another step might be made in the
career of improvement, which should enable the same
article to be made with, say 20 days' labour, and the
same course might be gone through until it required 3s.
a day to be paid for labour, when that improvement also
would have produced its maximum effect on the quantity
of currency and prices. In this way improvements
BULLION CONVERTED INTO COIN.
126
PARTIAL RISE OF WAGES.
may be conceived to be made in the articles exported,
and money prices consequently raised, without any
other alterations in the state of the country than those
produced by the particular improvements themselves.
Such would be the course of circumstances, provided,
as supposed, that the supply of labour was ample, in
the department in which the improvement was made ;
but that is seldom, perhaps, never the case. When
that supply could not be as rapidly increased as capital
could be augmented by the high profits, the labourers
engaged in that department, or in any preparatory
or finishing portion of that department, would soon
participate in the benefit of the improvement, by
having an advanced rate of wages. Previously to the
influx of gold having any material effect on general
money prices, the demand for labour, skilled to work
in that particular department, might raise its price
from 1s. 6d. to, say, 1s. 9d. a day, and this rise of wages
would check the extension of the manufacture, as the
means of extension in the hands of the master would be
less, the benefit arising from the improvement having
now to be divided between the master and workmen,
instead of being left entirely with the master. Wages,
however, being in this department higher than in
others, other labourers would endeavour to qualify
themselves for this employment, and to participate in
the higher wages. A competition would thus com-
mence, which would not entirely terminate until wages
had been equalized in all the different kinds of employ-
ment. This partial rise of wages would, however, only
check the extension ;-it would retard it, but would
not prevent the same end being attained in a longer
time. For, the profitable export, and the consequent
influx of gold, would continue until the rise in money
1
INCREASE OF MONEY...
127
prices obliged the master to give as much gold for
producing the article as would, out of his return,
leave him only an ordinary profit.*
Every successive step in the career of improvement
is attended with the same kind of consequences. The
master first gets his higher profits, and he then extends
his business; the skilful workmen then require, and
obtain, higher money wages; other workmen endeavour
to get a share of these higher wages, and, at last, by
their competition, equalize the rate in different em-
ployments.
While this process is going on, the return of gold for
the article exported is increasing the quantity of
currency, and lowering its exchangeable value; and the
result of each improvement, as far as respects our
present argument, is, in a shorter or a longer time,
attained, when the improvement has produced its full
effect on the import of gold, the increase of the
currency, and the rise of money prices. Then, and
not until then, the master (the capitalist) will have
to pay for labour, so much gold as will leave him
only common profit on the amount he procures in
return. He will then have no more profit in bringing
back gold, than in bringing back any other com-
modity, and it would be brought in quantity only just
sufficient to meet the ordinary consumption, or wear
and tear, as it is sometimes called. If more than
* When an article is exported, it is commonly sold for so much of the
money of the foreign country; and, as far as exporting goes, that is the end
of the commercial transaction, and the money may be brought back, and
increase the stock at home: but if the exporter chooses to add the character
of importer, by purchasing goods for importation with the money, or if he
chooses to buy a bill of an importer into the foreign country, that is another
transaction, and one which he will not have recourse to unless it affords
him an additional advantage.
128
this were brought, money wages would rise high
enough to put a stop to the further export of the
article, seeing that then it would become a losing
trade. The only permanent results which are at last
left are, a greater abundance of gold in circulation,
and a general rise in money prices.
This was the kind of operation that was in progress
during the war. Improvements, particularly in the
cotton manufacture, first raised the profits of the master
manufacturers, these extended their business, and, in
so doing, were obliged to pay higher wages, those
higher wages brought labour from other parts, and the
competition of the old and new labourers checked the
advance of wages. In this way, the manufacture
proceeded progressively, at every step causing a flow
of gold towards the country, with greater or less force,
increasing the natural quantity of currency, and
raising the general rate of money prices. This rise
was entirely distinct from any issue of paper, which
was superadded to, and independent of, the influx of
gold towards this country, and should be treated of
separately, and on its own merits or demerits.
ABUNDANCE OF EXPORTS.
The exports of a country being made up of those
articles which are produced in it with the greatest
comparative facility, when they are increased, the
greatest increase is almost always in those articles in
the production of which the people have the greatest
advantage over the rest of the world; but when those
goods are pressed on foreign markets in too great
abundance, and their prices fall, they command less
gold in exchange, and less gold is brought back for
them. The fall of price may proceed so far as, at last,
to cause the goods to command a quantity of gold
reduced, as much as the improved mode had reduced
129
the time requisite to fabricate the goods; and the
whole effect then left would be a reduction in the cost
to the foreign consumér. But before this final result
arrived, the exports would cause a great influx of gold,
and a general rise in the gold prices of goods produced
in a less improved way, and a still greater rise in those
produced in an unimproved way. Now, if any of these
latter articles continued to be exported, the declared
value or price of them, compared with their quantities,
would be higher, while the declared value of the
articles produced, in a greatly improved way, compared
with their quantities, would be lower. The whole of the
the exports being made up partly of one and partly of
the other of these kinds of goods, the one might balance
the other, and the declared value preserve an unaltered
relation to the official value, or either the one or the
other of those kinds of goods might preponderate; and
the improved articles doing so, the declared value
might decline, compared with the official.
In this way, in fact, the rapidly progressive increase
in the exports of cotton goods, by partially glutting
foreign markets, lowered their prices, while, at the
same time, the returns in gold for those goods raised
the home prices of all other articles, and checked their
export. The fall in the prices of the one class, and the rise
in the other, variously affected the declared and official
values of the exports, sometimes the influence of the
one and sometimes of the other preponderating.
From these considerations it becomes apparent, that
a great improvement in the modes of producing any
article in extensive demand throughout the commercial
world, may not only alter general money prices, but
may also cause a revolution in the foreign commerce
of a country. If, at one time, money prices were at
L
VARYING VALUE OF EXPORTS.
130
such a range as enabled wheat to be produced and
sold at 45s. per quarter in England, it might have been
advantageous to export it to another country, such as
Spain, provided it would there command, say, 60s. per
quarter: 10s. per quarter being considered sufficient to
pay all costs attending the conveyance.* But let
improvements be effected, such as those which have
been made in the cotton manufacture, and a consequent
influx of gold take place, and, independently of any
alteration in the relative situations of landlords,
farmers, and their labourers, the prices of wheat might
rise to 50s. 60s. or 80s. per quarter, and thus an
entire stop be put to the export of wheat. The same
kind of statement and reasoning will apply to any and
every other article exported, the means of producing
which had not been improved, or which had been
improved only in an inferior degree.
Cotton goods have been produced by means more
improved than others, and have taken the lead as
exports. They may, therefore, be said to have deter-
mined the influx of gold and its exchangeable value,
at the period under consideration; although other
articles were produced by means so much improved as
enabled them to follow cottons. The steam engine has
been the great instrument of improvement in the
woollen, and even in the silk and linen, manufactures,
as well as in the production and working up of the
metals. Had not improvements been made in these
branches, cotton goods would have taken a still more
decided lead among the exports than they have done.
If the money prices of the products of Leeds, Sheffield,
GRAIN FORMERLY EXPORTED.
* Up to about the year 1764, England generally exported grain, and in
that year exported of wheat and barley 643,749 quarters. After that time
the imports of grain preponderated, and that to so great an extent as to shew
that some other exported article was superseding grain.
¿
CONSUMPTION OF COTTON.
131
and Birmingham, had been increased 30 or 40 per
cent., their exportation would have been checked, and
might, indeed, have been destroyed by the improve-
ments in the cotton manufacture.
From the year 1781 to 1790 the average annual
importation of cotton wool was about 18 millions of
lbs. weight; from which it rose, in the following ten
years, to an average of about 32 millions of lbs. In
the next ten years, which terminated with, and
included, 1811, the average annual quantity was above
81 millions of lbs: making, in twenty years, an
increase in the annual import equal to three and a
half times its previous quantity.
The increase in the number of people employed in
working up this raw material is not exactly known,
but it is certain that it was not nearly as great as in
the quantity of the material worked up; although an
increased proportion of that material was used in the
manufacture of fine and costly fabrics. Manchester is
the capital and centre of the English cotton manu-
facturing district, and the population of that town may
be presumed to have kept pace with the population
engaged in the cotton manufacture. In the year 1773,
Manchester and Salford, which form one town, were
ascertained, by survey, to have a population of 27,246
inhabitants. In the year 1788 Manchester contained
42,821, and Salford 7,560 inhabitants, making a total
of 50,381. In 1791 the christenings were 2,960, and
the burials 2,286, which (says Aikin, from whose work
the above returns are taken), are calculated to give
from 65 to 74,000 inhabitants,
When the censuses of 1801 and 1811 were taken,
the town had spread into adjoining townships, and the
returns of the population were as follows :-
L 2
132
Manchester
Salford
Ardwick
Chorlton
Hulme.
Cheetham
Broughton
Pendleton
·
•
·· •
Total...
COTTON MANUFACTURERS.

In 1801. In 1811.
•
70,409
13,611
1,762
675
1,677
752
866
3,611
93,363
79,459
19,114
2,763
2,581
3,081
1,170
825
4,805
113,798
Taking 70,000 as nearly a mean of Aikin's account of
the population in 1791, we shall have an increase of
43,798 in twenty years, and allowing the odd 3,798 for
the population of the adjoining townships in 1791, of
which there are no accounts, they being then deemed
too insignificant to notice, we shall have an increase of
40 thousand upon 70 thousand in the 20 years. Thus,
while the working up of the raw material increased to
four and a half times its amount in 20 years, the
increase in the number of people, in the principal seat
of the trade, was not more than four-sevenths, shewing
a great increase in the productive power, or the power
of working up the material, in that population.
The increase in the population of the county of Lan-
caster from 1801 to 1811, according to the census
returns, does not materially differ from the increase in
the whole town of Manchester. The number for the
county in 1801 was 672,731, and in 1811, 828,309, being
an increase of nearly one-fourth in 10 years. The
following table will also shew the increase in the places
named, where the cotton manufacture flourished:-
INCREASE OF THE POPULATION.
Bolton, Great and Little.
Blackburn
Oldham
Preston
Stockport
··
Total....
In 1801. In 1811.
133

17,416
11,980
12,024
24,149
15,083
16,690
11,887 17,065
18,598
22,777
71,905
95,764
being an increase, in the 10 years, of one-third of the
number in 1801. From these data it may be presumed
that the population in the general seat of the cotton
manufacture increased, in the 20 years named, not
more than two-thirds, while the material worked up
increased to four and a half times the quantity, shewing
a great increase in the power of working up the
material. That increase is here, it is to be observed,
estimated on the whole population, but it should be
remembered, that a large part of the population was
engaged in other ordinary employments, and, therefore,
the increase in the productive power of those actually
engaged in working in the improved ways must have
been very great to exhibit such a result in 20 years,
computed on the whole population.
It was about the year 1790, that what may truly be
called the present system of manufacturing cotton
commenced. Mr. Kennedy, in a paper published in
the Memoirs of the Literary and Philosophical Society
of Manchester, vol. 3, says, "Before the year 1790 the
mules (spinning machines) were turned by hand, and
were confined chiefly to the garrets of cottages. About
that time, Mr. Kelley, of Lanark, first turned them by
machinery; and, at the same period, Mr. Watts'
steam engine began to be understood, and introduced
134
PROGRESS OF THE MANUFACTURE.
into this part of the kingdom (Lancashire), and it was
applied to the turning of various machines. The
application of the steam engine to this purpose, pro-
duced another great change in this branch of the
trade. The mules were removed from the cottages to
factories-were constructed more substantially, and
upon better mechanical principles, and produced yarn
of a more uniform quality, and at less expence. The
fine fabrics made of the yarn spun upon these mules
surpassed in beauty and cheapness everything that had
been produced before, and the demand for them was,
consequently, great." "In the year 1797, a new
machine for cleaning cotton was made by Mr. Snod-
grass, and used at Johnston, near Paisley. This is
called a scutching or blowing machine. Its merits
were but little known until 1808 or 1809, when it was
introduced into Manchester. It is now, generally,
adopted for cleaning cotton. The labour of that
operation, formerly performed by women, in a most
fatiguing manner, has been reduced by this machine
to about one-twentieth of what it used to be."
should be recollected that thousands of ingenious con-
trivances have been tried and laid aside, before spinning
machines were brought to their present state of perfec-
tion (in 1815.) I may observe, however, that their united
effects amount to this, that the labour of one person,
aided by them, can now produce as much yarn, in a
given time, as 200 could have produced 50 years ago.”
Prior to 1803 power-looms had been invented, and
"made good cloth, but so much time was lost in
dressing the warp in the loom, that, on the whole, they
possessed no advantage over the common loom. In
that year Mr. Johnson invented a machine for warping
and dressing warps, preparatory to weaving, by which
"It
PROGRESS OF THE MANUFACTURE.
135
this operation is performed much better and cheaper
than it can possibly be done by hand. This is a great
advantage to power-looms, for without it they never
could have been made practically useful, and, during
the last 10 years (from 1805 to 1815), some large manu-
factories of this kind have been established, first in
Scotland, and afterwards in England. Several im-
provements in the construction of power-looms have
lately been brought forward, and some of them appear
to have important advantages over any other construc-
tion that has hitherto been in use." "By these means,
cotton fabrics have been produced of such variety and
usefulness as to be sought after by the people of every
climate, and of every stage of civilization.”
From this account by Mr. Kennedy, who had
ample means of becoming acquainted with what he
has described, we may see how a population which, on
the whole number, increased not more than two-thirds,
were able, at the end of 20 years, to work up 4 times
the quantity of raw material. The improvements were
principally in spinning, but these improvements, in
addition to enabling one person to produce 200 times
as much yarn as he could 50 years before, caused the
yarn to be made so much better and stronger, as enabled
the weaver to weave, with equal ease, more cloth in the
same time, the threads not breaking so often as with
the hand-spun yarn.
Now it is very clear that these cotton fabrics, which
were "sought after by the people of every climate, and
every stage of civilization,” if they had continued to
command the same prices in foreign markets, would
have commanded, or sold for, quantities of money
(gold) progressively increasing, as compared with the
quantities of labour employed in their production.
136
THE COTTON MANUFACTURE.
A piece of cloth was produced in, say 6 days, which
had before required, say 12 days, and, in succes-
sion, 11, 9, and 7, until it came to 6 days; and, if
it had sold for the same money abroad, 6 days would
have procured as much gold as 12 days had done pre-
viously; and, this operation being continued, and the
trade being of sufficient magnitude, gold would be
brought into the country, or, if kept out by paper
money, would be disposed to flow into the country to
such an extent as would, at last, make double the
quantity of gold equal to only the same quantity of
labour, and to other articles produced with the same
quantities of labour. In other words, gold would have
come into the country in such abundance, as to cause
the money prices of labour, and of all articles produced
in an unimproved way, to be doubled. But this effect
was prevented from immediately taking place in two
ways, first, by an advance of wages, and, secondly, by
a fall in the selling price of the article.
Mr. Kennedy, when speaking of the early progress
of the cotton manufacture, says, "The people, being
placed in a new situation, having food better in quality,
and in greater abundance, and the means of increasing
almost all their other comforts, began to feel their in-
dependence, acquired new wants, and endeavoured to
gratify those wants, each according to his taste.
A desire for better dwellings, as well as a demand for
a greater number of them, became general.”.
"With the advance of wages their dissipation in-
creased." And, when speaking of the introduction of
the large factory system, he observes, "Being obliged
to be more regular in their attendance at their work,
they became more orderly in their conduct, spent less
time at the alehouse, and lived better at home. For
•
137
some years they have been gradually improving in their
domestic comforts and conveniences.”
THE COTTON MANUFACTURE.
The improvements in spinning, by making the yarn
stronger, and causing it to break less while weaving,
enabled the weaver to make more cloth in the same
time, yet, from an account published in the Lords' report
of 1814, already quoted, it appears that the money price
paid for weaving a piece of cloth, considerably increased
after the unfavourable year 1793, it being in that year 6s.
In 1797 it rose to 7s, 6d. in 1800 to 8s. and in 1802 to 10s.
Thus, though the improvements were principally in the
spinning department, the consequent increased demand
for weavers raised their wages, and that rise checked
the extension of the trade.
But the high wages tempted others into the business,
and then a reduction of price took place. Mr. Kennedy,
speaking of the period about 1770, says, “During this
time there was little to disturb the continent of Europe.
Their (the Lancashire cotton manufacturers) improve-
ments could scarcely keep pace with the increased de-
mand for manufactures, and, of course, there was but
little diminution in their price." But there appears to
have been some diminution in the price so early as about
1770. The increase of the population, and of the quantity
of cotton consumed, mark the extension of the manu-
facture, and, with the extension of the manufacture, the
selling prices declined; but successive improvements
proceeded so rapidly as to counteract the effect on
wages, of the decline in price, and to cause wages to rise
as we have seen, while the rise of wages checked the
power of extension. If the rise of wages, in this de-
partment, was to double the ordinary rate, it would be
necessary that the improvement should be sufficient to
cause more than twice the quantity of goods to be pro-
138
duced in the same time, or the exporters would have
only common profit; but the improvements were of this
magnitude, and were sufficient to enable the exporters
to sell at a reduced price and to retain large profits,
although high wages had to be paid.
About the period of the commencement of the revo-
lutionary war, the export of these goods became of
sufficient magnitude to affect the value of the currency,
and, if bank notes had not been issued more freely in
the progress of that war, gold must have flowed into
the country, from the rest of the commercial world,
and the money prices of all commodities, not produced
in an improved way, would have been raised precisely
as the gold or bullion prices actually were, and those
high prices would have continued until the fall in the
selling prices of the exports became greater than the
new improvements in the means of producing them.
The following table shews progressive alterations in
the prices of some yarns. It was furnished to me from
one of the oldest and largest spinning establishments
in Manchester. Those of 1820 and 1831 are given for
the sake of the comparative view, although it is an-
ticipating what will have to be treated of hereafter.
Table of the Prices of Mule Twist per pound, first quality.
1799. 1799. 1800. 1800. 1801. 1820. 1831.
Aug. Oct. May. Sept Jan. August. Sept.
Fineness. Cops. Cops. Bundles. Bundles. Bundles.
Bundles. Bundles.
70.
80.
No. 60.... 7 4
8 2
9 0
90.... 9 10
100....10 8
Raw Cotton 2 8
Cotton
•
PRICE OF COTTON THREAD.

谩
​• • •
s. d. s. d.
6 6
7 4
8 2
9 0
9 10
2 83
s. d.
5 2
6 0
6 10
7 8
8 6
2
3
s. d.
5 3
6 1
6 11
7 9
8 7
232/
s. d.
4 9
5 7
6
5
7 3
8 1
2 3
S.
d.
2 7
3 5
4 3
5 0
5 6
0 111
s. d.
21
2 6
2 111
3 5
3 11
0 10*
* The prices of raw cotton, excepting the price for 1831, are those of West
India, including Surinam and Berbice, and are taken from Tooke.
GREAT BRITAIN, &c.
CHAP. V.
FROM 1808 TO 1814.
LABOURers.-
EFFECTS OF SEASONS ON THE PRICES OF FOOD.-RISE IN PRICES AND
FALL IN THE VALUE OF GOLD.— EFFECTS ON FARMERS AND THEIR
-NUMBER OF INCLOSURE BILLS.- -IMPORTS OF
GRAIN.-COMMERCE IN PEACE AND IN WAR.-OFFICIAL AND REAL
VALUES OF THE EXPORTS.-BANK NOTES AND PRICES OF GOLD.-
TWO-FOLD REDUCTION IN THE VALUE OF MONEY. THE RATE OF
PROFIT.-DECEPTIVE AND INJURIOUS LOANS.-GOLD SUPPLANTED
BY PAPER MONEY.-CIRCULATION.—THE SINKING FUND.-RECA-
PITULATION.—FAVORABLE AND INJURIOUS CAUSES IN OPERATION.
-ANALYSIS OF THE CONDITION OF DIFFERENT CLASSES.-DE-
CLINE IN THAT OF THE LABOURING CLASS.-INCREASE OF LONDON,
BRIGHTON, AND OTHER PLACES.
·00
Ma
MR. TOOKE has attempted to shew that the high
bullion, as well as currency, prices of wheat, during the
latter years of the war, were caused by a series of bad
harvests; but the evidence he brings forward is of a
very vague character, and when the causes here pointed
out are sufficient to account for all (or nearly all) the
advance, it is unnecessary to have recourse, as he
has done, to a supposition that bad harvests must have
been the cause of high bullion prices. In vol. 2, page 5,
he says, "If this opinion of the recurrence of bad
140
seasons, at nearly equi-distant periods, or of the aggre-
gate produce of any four or five years being equal to
that of any other four or five years, or rather, in the
same proportion to the population, be admitted to be
correct, the conclusion might naturally be, that no part
of the great difference in the average price of corn,
during the twenty years ending in 1813, could be referred
to bad seasons. And certainly, if this conclusion was
well founded, there would be no alternative but to seek
in the circumstances affecting the value of the currency
(the issue of paper), or in the war, and in the transition
from war to peace, for the whole of the fluctuation.”
Here Mr. Tooke, having, in his first volume, shewn that
the causes last named were not sufficient to account for
the fluctuation, sets to work to prove that variations in
the seasons were the cause. He does this evidently be-
cause he thinks that, if the seasons are not the cause, there
is no alternative but in the others named, and, having a
great number of facts relative to the seasons, and their
effects, to select from, he makes out a plausible case;
but, in doing so, he apparently overlooks what he had
previously spoken of, and given in a quotation from the
Lords' report of 1814,—that there had been an appli-
cation of great additional capital to the land; and this
ought, by him, to have been considered as counter-
acting, to a great extent, the effects of bad seasons, in
bad years, as well as increasing the produce in good
years. Further, it is well known that people are dis-
posed to take high prices as, of themselves, evidence of
the badness of the season; and, when prices have been
really raised by another cause, operating unseen, a
season, which would otherwise have been considered a
moderately good one, is soon said to have been bad.
Now the existence of the general opinion, that bank
TOOKE ON PRICES.
EXTENSION OF CULTIVATION.
141
notes were the cause of the long continued high prices,
at which Mr. Tooke expresses so much surprise, proves
most certainly that, at the time, the badness of the sea-
sons was not considered an adequate cause. It may, how-
ever, be, that the effects of the particular seasons, pointed
out by him, might raise the bullion prices higher than
they otherwise would have reached; but this rise was
only super-added to the general advance which re-
sulted from the reduced exchangeable value of gold.*
Tooke says, in vol. 1, page 131, “The fall in agri-
cultural produce, which had commenced in the autumn
of 1812, became more decided after the harvest of 1813,
which proved to be very abundant. It was this de-
cidedly favourable season which developed the full
effects of the encouragement that had been held out,
by the long previous range of high prices, to the
application of great additional capitals to the land.
The extent to which that encouragement had operated,
is stated by the committee on the corn laws, in 1814,
(Report, page 3,) in the following terms :-' It appears
to your committee to be established by all the evidence,
that, within the last 20 years, a very rapid and exten-
sive progress has been made in the agriculture of the
United Kingdom :—that great additional capitals have
been skilfully and successfully applied, not only to the
improved management of lands already in tillage, but
also to the converting of large tracts of inferior pasture
into productive arable, and the reclaiming and in-
closing of fens, commons, and wastes, which have been
brought into cultivation.' An admirable description
of the effects produced by the alteration in the ex-
changeable value of gold, added to the depreciation of
* The continental prices did not rise with the British,
142
AVERAGE PRICES OF WHEAT.
paper, on the condition and means of the farmers; but
not calculated to countenance Mr. Tooke's opinion,
that the high prices were the consequences of a deficient
supply of landed produce.
It is not easy to determine the exact value of gold as
compared with the mass of other commodities, because
there are so many fluctuating elements to be taken
into the calculation. The ordinary way is to compare
the relative exchangeable values of gold and other
commodities, but more particularly of food, at different
periods. But food itself, we have seen, is liable to
have its exchangeable value, as compared with all
other commodities, altered by its degree of scarcity;
and this is more decidedly the case, if the comparison
is made between short periods, as from year to year.
Taking the averages for considerable periods, and
making such corrections as known facts will justify,
seems to be the best way of approximating to the
truth; and there being no preferable mode of proceed-
ing, we have only to make the best use we can of this.
The average gold prices of best wheat per quarter,
at the periods named, were,
From 1783 to 1792, both inclusive, & quarter, 56s. 5d.
72s. 24d.
85s. 10d.*
""
1793 to 1802,
1803 to 1812,
From this table it appears that the average price of
best wheat, for the ten years, from 1793 to 1802, was
72s. 2 d. per quarter, while the average, for the ten
preceding years, was only 56s. 5d. per quarter, being
an advance of 15s. 9½d. on 56s. 5d. or more than 28 per
cent. That is, in the period from 1783 to 1792, the
""
""
""
* Marshall, page 99. The prices are those of Lady-day and Michaelmas,
for best wheat. I have no account of the prices of medium quality so far
back as 1783.
143
same quantity of gold would have exchanged against
28 per cent. more of wheat, than in the period from
1793 to 1802, and gold was, consequently, reduced in
its value, relatively to wheat, 28 per cent.
But it is maintained that, from 1793 to 1812, a
succession of bad harvests altered the price of wheat,
while gold retained the same general exchangeable
value, compared with other commodities; and, there-
fore, that it was wheat and not gold that altered. To
this it may be replied, that the money power of
purchasing corn is limited by the means of the pur-
chasers, the great mass of whom are poor. A single
bad harvest may, for a year, strip those purchasers
of more of their means of paying than can be
annually obtained from them; but their ability to give
the same price next year would be thereby reduced;
and, if we suppose a third year, with a bad harvest,
they would, probably, not only be incapable of paying
an advance, but even of paying the old price, and
prices would, consequently, sink to the level of their
diminished means of paying. Let these bad harvests
continue, and the country would approximate to the
state of those countries which regularly produce very
scanty crops, and where, consequently, what may be
called bad harvests alone can be obtained. But in
these countries uniformly bad harvests do not cause
the money prices of food to be high, because those who
buy the food cannot pay the high prices. In these
parts, as well as in others more favoured by nature,
the money prices, during a sufficiently long period,
take their range according to the ordinary means pos-
sessed of paying them. If more be taken in one year,
or in two years, less will be paid afterwards, and
thus the average price will be the same as if the price
had not varied.
EFFECTS OF BAD HARVESTS.
144
PRICES OF VARIOUS ARTICLES.
It may, indeed, be supposed that, when wheat is
scarce, more of the money in circulation in the country
will be regularly employed in buying wheat, and less in
buying other things. But, admitting this to be possible
to some extent, how does the supposition agree with
the recorded prices of other things at the time? The
following is a table of the currency prices of Irish mess
beef, common iron, and tin, from 1790 to 1802, to which
are added the average prices of wheat, of medium
quality, that the relative prices of all may be seen at
once.


Beef pr. tierce.
S. d.
In 1790.. 74 0*
1791.. 75 0
1792.. 73 6
1793.. 92 6
1794.. 103 0
1795.. 96 0
1796.. 110 0
1797.. 126 3
1798.. 132 10
1799.. 117 9
1800.. 122 6
1801.. 117 6
1802.. 123 9
1ron.
S.
S.
60 to 140*
110 to 150
100 to 150
100 to 150
100 to 150
100 to 160
100 to 160
100 to 160
100 to 160
100 to 160
110 to 180
110 to 180
110 to 180
Tin.
S. d.
77 0*
81 6
98 0
104 6
102 0
100 0
102 0
102 6
100 2
103 0
107 0
110 9
114 6
* From Tooke on Prices.'
+ Marshall, page 104.
Wheat.
:
S. d.
46 +
47 2
42 11
48 11
51 8
74 2
From an inspection of this table it will appear, that
there were fluctuations in the relative values of these
articles, arising, doubtless, from particular causes,
such as variations in the supply and demand, which
operated on the temporary market prices, but on the
whole there was an advance, and in each article so
77 1
53 1
50 3
67 6
113 7
118 3
67 5
145
nearly alike as to indicate a common cause. Mess beef,
it is true, was more in demand after the war com-
menced, but Mr. Tooke has, himself, shewn that war
demand does not, permanently, raise prices, unless the
article has to be brought from a foreign country loaded
with heavier charges; in which case the cost of pro-
curing it is altered. But, in articles produced at home,
the supply soon adjusts itself to the demand, and the
price to the average rate at whieh it can be produced
in the then existing state of the country. Some
allowance, however, may be made for this particular
cause of advance of the price of beef, and yet much of
the difference between 74s. in 1790, and 123s. 9d. in
1802, will remain to be attributed to a reduction in the
exchangeable value of gold.
In iron, the advance between the extreme points of
the period is, from 60s. to 110s. on the lowest prices,
and from 140s. to 180s. on the highest; and this
advance took place while the more extensive introduc-
tion of the steam engine lowered the cost of producing
the metal. The prices of this article, therefore,
warrant a very strong presumption that gold sank in
its exchangeable value during this period.
Tin is an article which continued to be produced in
nearly the same way before and during the period
under consideration, and yet the price of it advanced
from 77s. in 1790, to 114s. 6d. in 1802. It is not easy
to imagine any adequate cause for this advance in
price, but an alteration in the value of gold. The
more extensive use of the steam engine would have a
tendency to reduce the cost of the production of tin, as
well as that of iron, and to induce a decline, rather
than an advance; and yet we see that the opposite was
the fact. But whatever may be thought to have been
M
PRICES OF VARIOUS ARTICLES.
146
PRICES OF VARIOUS ARTICLES.
the cause of the advance in price of these three articles,
that advance is evidently opposed to the supposition
that a continued scarcity of grain caused its price to
rise, and thus absorbed, to the purchase of grain, an
additional portion of the whole money in circulation.
English beef, and other butchers' meat, it may be
said, move in price with grain, as a bad harvest
affects both in a similar way: this is not strictly true,
but, as meat rises in price, it certainly requires more
of the money in circulation to purchase it. From
returns it appears that the mean price at Smithfield
for beef, per stone, was, in 1796, 3s. 8d. and in 1802,
5s. ld. The rise in the prices of cheese and butter
Mr. Tooke accounts for, from the increased expence of
importing them, and the stoppage of the supplies from
Holland. But still these, as well as nearly all other
articles, not produced by much improved methods,
being advanced in price, would require additional
money to circulate them; and this could not have been
had, unless cheaper exports had brought it into the
country in greater abundance.
Now, if cheaper
exports did bring gold into the country in greater
abundance, that fact, of itself, fully accounts for the
general rise in money prices, as such a rise is the
natural and necessary consequence of having a more
abundant supply of gold.
Upon the whole, it sufficiently appears, that from
the commencement of the war, in 1793, to 1802, there
was some general cause in operation which raised
money prices, or lowered the exchangeable value of the
currency; and as there was not any separation between
the values of gold and paper, until towards the end of
the period, and then the difference was not consider-
able, compared with the alteratiou of general money
PRICES OF VARIOUS ARTICLES.
147
prices, and continued but a short time, the great
reduction in the exchangeable value of money could
arise only from a reduction in the value of gold.
The whole advances on the prices of 1790 to 1802,
were,
On Irish mess beef....... 673 per cent.
On iron..
83-1
On tin
81
""
And, if we allow 8 per cent. for the depreciation of the
currency in 1802, the price of bullion having been in
that year £4. 4s. per oz., the alteration in the gold or
bullion value of these articles would seem to indicate
a very material reduction in the exchangeable value of
gold.
··
The same causes which lowered the value of the
currency from 1790 to 1802, were in operation from
1802 to about 1814. The mean prices of the same
articles—Irish mess beef, iron, and tin, in each period,
were,
Beef, from 1790 to 1802,
the mean
Iron, from 1790 to 1802,
the mean
•
Tin, from 1790 to 1802,
the mean
•
S. d.
104 10
95
""
to
157 10
51802 to 1814,
the mean..
100 2
1802 to 1814,
the mean..
}
..
S. d.
147 9
136 8
to
180 0
1802 to 1814, 134 0
{
the mean.
And, as no further depreciation in the value of the
currency took place until the year 1810, when the
price of gold reached £4. 5s, an ounce, from which it
rose to £5. 10s. in 1813, a part of the advance in the
prices of these articles may be attributed to a further
reduction in the value of gold. But these facts, taken
together, and every due allowance being made, shew
that the hypothesis of a reduction in the value of gold,
to the extent of 30 per cent,, in addition to a deprecia-
M 2
148
PRICES OF BEEF.
tion of the currency to the amount of 20 per cent., at
the latter part of this period, is fully warranted. And
this double reduction would, of course, affect the
currency prices of wheat, as well as of other com-
modities; and it renders unnecessary the extraordinary
hypothesis of Mr. Tooke, that a succession of bad
harvests alone raised the prices of that article to the
great height they attained, allowance being made for
the depreciation of the paper money.
The following are the mean prices paid for beef, per
stone, at St. Thomas's Hospital, London, on Lady-day
and Michaelmas in each year, averaged for periods of
10 years each, from 1783 to 1812, taken from the
official statistical returns, made in 1833, page 164.
From 1783 to 1792, both inclusive, beef
stone, 2s. 91d.
3s. 11åd.
5s. 01d.
""
""
1793 to 1802,
1803 to 1812,
These prices indicate a great reduction in the value of
the currency, and fully justify the assumptions made.
According to this view, the sums raised from the
productive classes, at this period, may be taken to
represent not more than one half of the commodities
which the same sums would have represented from 1784
to 1793; and, consequently, the burdens on the people,
that is, the quantities of wealth taken from them, were
not so great, as at first view they appear from the sums
expressed. In the years 1813 and 1814 the net expendi-
ture, by the government, was a mean of £107,977,730.
each year, which, in a currency reduced to one half the
value of that of 1793, gives an expenditure equal to
£53,988,865. of the currency of that period. This,
however, is an increase of £35,988,865.
The two-fold reduction in the value of the currency,
which we have been attempting to describe, had, at
99
دو
PROSPEROUS STATE OF FARMERS.
149
this period, important, though very different, effects on
the conditions of different classes of society, While
a decline in the exchangeable value of gold, and
successive depreciations in the paper currency beyond
that decline, reduced the value of the sum contracted
to be paid as rent, the farmer was a gainer by the
alteration until the advance of his rent, And as money
wages did not alter precisely with, or to the same extent
as, the value of money, he was also able to pay for labour
with less of produce. As he could thus pay both rent
and wages with a smaller, and, at times, a much
smaller proportion of his produce, he had a large
proportion left for himself, and he enjoyed a period of
great prosperity. He became rich, kept back his
produce from market, which he was the better enabled
to do by borrowing freely from makers of country
bank notes: and thus was created, for a time, an
artificial scarcity, which carried up the prices to the
great height they attained in the year 1812. These
causes are all known to have been in operation, and
are sufficient to account for the very high prices, while
they also account for the great prosperity of the
farmer at the time, with which a continuance of
unfavourable seasons is scarcely compatible. The
average supply of grain was tolerably abundant, but
the alteration in the value of money gave to the farmer
a disproportioned share of this supply, compared with
the shares received by the landowners and labourers.
The rise of rent,* ultimately, compensated the land-
* "Very high prices of almost all descriptions of agricultural produce
were the consequences; and, as the range of high prices (with an interval
of depression, at the close of 1810, so short as not to have been felt at all by
the landlord, and very little by the farmer,) had been of unusually long
continuance, it was hastily concluded, as it unfortunately too often is, that
150
CONDITION OF LABOURERS.
lords, and some advance of money wages, in part,
remunerated the labourers; but the period of the
farmers' greatest prosperity preceded these alterations.
The following extract, given by Mr. Tooke, from the
evidence of P. Milne, Esq. before the committee of
the House of Lords, 1814, is illustrative of the way in
which the alteration in the value of the currency
operated on wages. Question: "Can you state to the
committee any particular instance of agricultural work
that you may have contracted for in a dear and in a
cheap year?" Answer: "I can state a very strong
instance, that happened to myself last year. I wished
to inclose a farm at the latter end of the year 1812, or
the beginning of 1813; I sent for my bailiff, and told
him that I had inclosed, about 25 years ago, a good
deal of land; that the inclosure, at that time, cost me
three shillings an ell of thirty-seven inches; that a
neighbour of mine, two or three years ago, had made
similar inclosures, which cost him five shillings an ell;
that I thought he had paid too much; and that I
ought to do it cheaper. The answer I got from my
bailiff was, that provisions were very high; that the
labourers were doing double work, and that, of course,
there was less demand for labour; and that he could
do those inclosures last year at a cheaper rate than I
had ever done them; and he actually executed this
inclosure at about 2s. 6d. per ell. He again came to
me, and told me, that I had proposed to him to do
some ditching and draining upon another farm, which
I did not intend to do until about a twelvemonth after-
wards, from the circumstance of not being in full posses-
the causes of that high range were permanent This, accordingly, was the
period (from 1809 to 1811) in which rents experienced a great rise, and
speculation in land became very general."-Tooke on Prices, vol. 1, page 124.
151
sion of the farm: he requested that I would allow him to
do it that season, as he could do it so much cheaper; and
that a great many labourers were idle, from having
little work, in consequence of those who were employed
doing double work. I desired him to go on with that
work also, and he actually contracted for very large
ditches at sixpence an ell, which I do not think I
could now do under from one shilling to one shilling
and sixpence, in consequence of the fall in provisions !',
Notwithstanding that there had been 1,266 inclosure
bills passed from 1792 up to 1808, being an average of
79 a year, yet the new ones passed were,
In the year 1809..
1810...
1811.
1812..
1813..
1814...
122
107
133
119
111
112
""
and, in the cultivation of the inferior lands thus
inclosed, it is probable that a large part of the high
agricultural profits was expended.
The causes which enriched the farmer* seem to have
produced their maximum effect in the year 1812, as, in
that year, the price of wheat averaged 125s. 6d. per
quarter. In 1813 prices began to fall; and, although
""
""
""
INCLOSURE BILLS.
""
•
• ·
* An alteration in the value of the currency operated in the same way in
France, when paper money was there issued in great excess. A Mr. G
Greene, an Englishman, was, at the time, in Lower Normandy. He says,
in page 124 of his book, giving an account of what he saw,—"At a time
when the exigences of the state have been great enough to be made the pre-
text of a dreadful revolution, the farmers are not only almost exempt from
contributing to its relief, but are enriched by the common distress; and,
while the rest of their countrymen behold, with unavailing regret, their
property replaced by scraps of paper, the peasants [small farmers, I pre-
sume], becoming insolent and daring by impunity, refuse to sell [provisions]
but for specie, and are daily amassing wealth."
152
IMPORTS AND EXPORTS.
the farmer must have had part of the wealth which he
had recently acquired, yet such was the abundance of
the stock of grain, that prices declined, until, in 1814,
wheat was at an average of only 79s. per quarter.
The high prices of grain, at this time, would pro-
bably have caused considerable imports of it from
foreign countries, had not the peculiar war then carried
on prevented it. That war greatly increased the cost of
conveying bulky commodities, and thus checked the
obtaining of foreign supplies, and left the causes, which
have been pointed out, to operate their full effect on
prices in the home market. The quantities of grain
(and flour, converted into quarters of grain,) imported
were as follow:
In the year 1809....
1810....
1811...
1812.
1813.... 1,396,286
1814.... 1,501,218
""
""
""
""
""
•
•
•
1,535,200 quarters.
1,997,231
362,633
535,733
""
""
""
""
""
Considering that there were no corn laws in practical
operation at the time, these quantities are very small.
The official values of goods exported, above colonial
produce re-exported, were,
In 1809..
1810..
1811.
£35,107,439.
34,940,550.
24,109,931.
31,243,362.
32,000,000.
33,200,580.
1812..
1813..
1814...
which gave a yearly average of £31,600,320., and as
the yearly average of the six preceding years was
£25,074,400. when we consider the superior economy
of labour in the production of the exports in the latter,
WAR EXPENDITURE.
153
as compared with the former period, the increase in the
quantity of labour required to produce the whole of the
exports, and, consequently, to purchase the whole of
the imports, was not considerable. Thus the benefit
arising from the increase of manufacturing power was
enjoyed almost exclusively by this country; as the
articles exported, although many of them were pro-
duced with much less labour, sold for almost equally
high prices in the general market of the world. And
the exporters of them were enabled to bring back a
tolerably plentiful supply of those foreign commodities
which were in demand in Great Britain, in return for
what had cost but little of British labour.
The supply of imports would have been still more
abundant, had it not been for the great foreign war
expenditure of the government; as that expenditure, in
fact, rested on the exports, and absorbed a considerable
part of them. The bills drawn and paid by British
agents, for supplies to the fleets and armies in various
parts of the world, were received by British exporters
in payment for their goods. The subsidies, also, to
foreign powers, were really furnished in the same way.
Those powers drew bills upon the British government,
which bills were sold, in the various marts of commerce,
to persons who used them in the purchase of British
goods; and those goods were thus the real things
which supported our armies and fleets, and paid our
allies in the formidable struggle in which we were
engaged. The bills were, finally, paid in money by
the British government to the British producer, with
the sums raised by taxes and loans from the people of
Great Britain.
Contemplated in this way, the power to produce,
with a small cost of labour, an abundant supply of
154
goods, which command a high price in the general
markets of the world, becomes of superior importance.
When possessed of this power, by the appropriation of
a comparatively small proportion of the whole labour of
the country, immense resources of the kind wanted
may be extracted from other countries, the people of
which readily give in exchange their food, and those
other necessaries which constitute the most important
means of making war. Not only did we obtain, in
this way, supplies for carrying on the war; but we
obtained them almost always precisely in the places
were they were wanted. Our goods were readily
converted into the articles which, without such means,
it would have been extremely difficult to obtain. This
view, however, belongs to the politician rather than to
the political economist. The point to be noticed here
is, that the immense resources commanded and con-
sumed by Great Britain, at this period, in every
quarter of the globe, were obtained by the sacrifice of
but a small proportion of the labour of the country,
and, consequently, the greater part of that labour was
at liberty to be employed in the production of such
other articles as were wanted.
FOREIGN COMMERCE.
Foreign commerce benefits a country in peace as
well as in war. When the materials for such a
commerce exists in goods, that command a sale in
foreign countries, the exporter takes them to the
foreign markets, and brings back a supply of com-
modities which could not have been produced with
equal labour at home; and it is this supply which
benefits the country in a time of peace. Commerce is
sometimes spoken of as if it had some magic power to
enrich a country; it is, however, clear, that it merely
offers means to remedy, to some extent, the imperfect
COMMERCE IN WAR AND IN PEACE.
155
productive power of a nation. If those articles which
are imported could be produced directly at home, as
cheaply as they can be procured from abroad, through
the instrumentality of commerce, it is clear that, in a
time of peace, there would be no benefit in foreign
commerce, and, consequently, none would be carried
on, It may, therefore, be said to rest on the imper-
fection of the productive powers of different nations,
and, partially, to remedy that imperfection, by taking
from a country those articles in the production of
which it excels, and supplying it, in return, with those
in the production of which another country excels.
But the commerce is evidently dependent on the pro-
ductive power which furnishes the export; and the
whole benefit, in time of peace, is realized in the
import.
In time of war, the power of producing suitable
exports enables commerce to take articles, frequently
of moderate bulk, and of a durable nature, to almost
any part of the world; and the sale of these articles
gives a command over any resources which the
buyers of them may possess. But still commerce is
here a mere instrument of the producers-it only
conveys the article to the place where it is wanted. It
to the producer of the exported article that we are to
look, as the grand source of the power thus obtained.
The precious metals are the best articles for this
purpose, as the demand for them is the most universal
and uniform, but they are not produced and consumed
annually in sufficiently large quantities. But articles.
manufactured from cotton, wool, linen and iron, are in
such extensive demand, and can be sold in such large
quantities, as to give the producers of them a powerful
command over the resources of the countries in which
156
DECLARED AND OFFICIAL VALUES.
they are sold. And when these articles are, through
great improvements, produced with comparatively
little labour, the country so producing them obtains
formidable power at a trifling cost.
That the general money prices of British produce and
manufactures, exported to the different parts of the
commercial world, did not decline during the period
under consideration, particularly the earlier part of it,
as they have since done, may be seen from a comparison
of the declared and the official values of the exports of the
period. The declared values are the market values, or
prices of the articles, at the time they are exported. This
value was first taken from the shippers, who had to de-
clare the price or value in the year 1798, in order to have
charged each his proper proportion of the convoy duty,
and this duty would sufficiently prevent any overstate-
ment of the value. The official values are, as has been
already stated, taken by affixing an unvarying value to
articles of the same quality, and, therefore, exhibit,
from time to time, the quantities. The two values
were as follows, for the periods named:-

From 1798 to 1802, inclusive,
1803 to 1808,
1809 to 1814,
""
""
Declared Value. Official Value.
£
£
201,833,420 | 120,793,088
246,123,166 150,446,405
265,240,912 | 190,601,862*
And as each of the values was taken in the same way,
during the whole of the time, they become deserving of
confidence, as far as respects comparisons between the
different periods. In the three periods the declared
* From parliamentary returns, moved for by Mr. Waithman.
157
values are expressed in the currency prices of the
times, but as that currency was depreciated in a small
degree at the second period, and in a greater degree at
the last period, the bullion prices would be in the
second about 4 per cent. and in the whole of the last
period, say, about 20 per cent. below the currency
prices. Allowing for this depreciation, the declared
value, in bullion prices, from 1803 to 1808, will be about
236 millions, and from 1809 to 1814 about 212 millions.
The bullion declared values would then be to the
official values (quantities) as, keeping to the millions,
201 to 120 in the 1st period, or say as 20 to 12,
236 to 150 in the 2nd period, or say as 20 to 12,
212 to 190 in the 3rd period, or say as 20 to 18,
shewing that, while the prices advanced from 201 to
only 212, the quantities increased from 120 to 190.*
OFFICIAL AND DECLARED VALUES.
During the whole of the period from 1802 to 1808,
both inclusive, the amount of Bank of England notes
in circulation continued not far from the same; and
the superior price of gold, in the form of bullion, £4.
an ounce, to the price of gold, in the form of coin,
£3. 17s. 10 d. an ounce, would offer some (though not
a strong) temptation to melt or export coin. Shortly
after the commencement of the period from 1809 to
1814, the amount of those notes issued was materially
increased, as they averaged about 24 millions, until the
last of those years, when nearly 29 millions were in
circulation. The following were the amounts in circu-
lation in the first week in August, in each year, to
which are added the prices of gold:-
* In the last of these periods quantity gained on price. Did gold begin
to ebb back from this country, before 1814, as a consequence of the com-
mercial restrictions, on the continent and in the United States of America
reducing the selling prices of British exports?
158
In the year 1809.
1810.
1811.
1812.
1813...
1814...
""
>>
☺ ☺
""
""
•
• ·
BANK NOTES.

·
Bank of England
Notes.
£
19,357,241
24,446,275
23,793,115
23,482,910
24,024,809
28,978,876
Gold
per ounce.
* From Tooke.
S. d.
80 0
85 0
93 0
101 9
110 0
89 0*
It appears that the small increase in the amount of
Bank of England notes, together with the increase
in the amount of country bank notes, which took
place from 1803 to 1808, did not, by increasing the
whole quantity of currency, depreciate its value, but
only supplied the place of the coin which would other-
wise have been in circulation; but, in this table, it is
made apparent that, from 1809 to 1814, the further in-
crease in the amount of Bank of England notes was an
addition to the natural quantity of currency; for the
currency now sunk in value, relatively to gold, as the
bank notes increased, until, in 1813, the currency price
of an ounce of gold was £5. 10s. At this time gold
had entirely disappeared from circulation, and even the
better kinds of silver coins had left the depreciated
currency, to obtain their value as bullion. The silver,
which remained in circulation, consisted either of
tokens, or of coins, so much worn or debased as to be
of no greater value than the depreciated paper money.
The two-fold reduction in the value of money had
now produced its full effect on all fixed annuities. The
owners of ground rents of houses in towns-of annuities,
secured on land, or received from annuity offices;-the
159
owners of stock (government annuities), and of lands
let on long leases, received smaller values in their
annuities; and the payers of them, who may be gene-
rally considered as persons engaged in active employ-
ment of some kind, in making these payments, all paid
smaller values. This reduction in the value of fixed
annuities was a relief to the productive classes, and
enabled them the better to bear the burdens arising
from loans and taxes.
VALUE OF ANNUITIES.
But all lands, which had to be re-let, were sought
after with an avidity which caused a general and very
considerable further advance of rent: and this is not
one of the least of the evils which a reduction in the
value of the currency, in the way in which it was
effected, has inflicted on the productive classes. The
very high profits of the farmer were temporary,—they
could not continue permanently above those of other
capitalists; but, for the purpose of participating in
those temporarily high profits, farmers readily gave
and established a general rate of rent, which soon dis-
abled them from paying competent wages, and, at the
same time, obtaining very moderate profits for them-
selves.* By the end of this period, the lands of Great
"In the year 1799 we were again visited with a very deficient crop of
all kinds of grain. The consequence was, that corn, and especially wheat,
rose to an enormous price, which at once stimulated and enabled the far-
mer to renew his lease at a very great advance. A reaction took place;
the high prices, which had originally given birth to exorbitant rents, were
continued by those rents.”—Annual Register for 1815, page 211.
And again, in page 213, "The high price of corn, the increase in the rents
of land, the increased income of the landlord, in some instances, and, in
other instances, the increased income of the tenant, continued, with few
and feeble interruptions, till the power of Buonaparte was on the eve of its
dissolution."
In the House of Commons, on February 17th, 1815, Sir W. Curtis said,
"that, as rents had, in all cases, doubled, and in many trebled, during the
160
Britain, in cultivation, as it is generally called, that is,
in productive use, may be computed at 40 millions of
acres, which, at an average of £1. an acre, would give
a total rental of 40 millions in current money. Pre-
suming this computation to be correct, then, from 18
millions, the supposed amount in 1793, there would be
an advance of rent to the extent of 22 millions a year,
making a total of 40 millions! The reduction in the
value of money, at the time, prevented this from being
felt as a heavy additional burden. Indeed, if what has
been advanced respecting the two-fold reduction in the
value of the currency is correct, it was not so; but the
general increase in the amount of the sums paid as rent
of land was established, and, as we shall see hereafter,
this increase became permanent, while the reduction in
the value of the currency, in which it was first paid,
was only temporary.
The rate of profit continued high throughout this
period, as may be concluded from the prices of the 3
per cent. consols, which were, on an average,
RATE OF PROFIT.
In 1809..
681/2
1810..
672/
1811..
63/1/2
59
1812...
59
1813..
1814.....
6612*
and a little consideration will be sufficient to satisfy
• •
•
war, he saw no rate of taxation which could justify the interference of par-
liament, as to the importation of corn.”—Annual Register, page 90. He was
not contradicted, although the agricultural gentlemen of the house were
generally present to hear Mr. Robinson's resolutions, relative to prohibiting
the introduction of foreign grain into the home market, until the price of
wheat reached 80s. per quarter.
* Marshall, page 129.
INJUDICIOUS LOANS.
161
us, that the general rate of profit was higher than is
indicated by those prices. If the government had, in
return for the money borrowed, or when funding ex-
chequer bills, always created annuities in the 5 per
cents. they would have been able, according to the
common terms of all such contracts, to pay off the
sums borrowed, at par, at any future time. If, at the
establishment of peace, these 5 per cents. were to rise
to say 105, the rate of interest might be reduced, or,
in the event of the holders of the stock refusing to
accept a reduced interest, a new loan might be made
on more favourable terms for the nation, the amount
of which might be used to pay off the old debt. And
the knowledge that this could be done, as soon as the
government found it advantageous, would prevent the
selling price of such 5 per cent. stock from ever rising
greatly above par, or £100. money, for £100. stock.
But in the actual system of borrowing pursued in the
3 per cent. stock, the government engaged not to pay
off these 3 per cents. excepting at the full price of
£100. money for £100. stock! The holder of such
stock, consequently, had the advantage of all the
possible rise which might take place from the then
current price, say, as an average, 64 to 100. And
when persons either lent their money to the govern-
ment, or purchased stock, they were quite aware of
this advantage; and lent, or gave, more money in
return for the stock they received, on the expectation
of this future benefit. The government, in fact,
practically said to the capitalists of that day, "if you
will advance £64. or £59. as the case might be, in
money, we will give you an annuity of £3. until we
return you £100. in money." The interest obtained
for money invested in the 3 per cent. stocks was, there-
N
162
TERMS OF LOANS.
fore, only a part of the remuneration given to the
capitalist who advanced his money in this way. If the
whole remuneration had been confined to the interest
paid, that interest would have been higher, and would
have indicated more correctly the general rate of
profit on capital throughout the country. Some facts
may be stated which shew the correctness of the view
here taken. The 5 per cent. stocks always sold at
prices which yielded a higher interest for the money
invested in them, than could be obtained for money
invested in the 3 per cents. When the 5 per cents.
yielded 5½ or nearly 6 per cent. and money could not
be borrowed by private individuals at legal interest
(5 per cent.) and when country bankers allowed 5 per
cent. on their deposits, by the use of which they made
a profit-purchases in the 3 per cents. yielded less
than 5 per cent, interest. In our attempts to deduce
the rate of profit throughout the country from the
prices of the 3 per cent. consols, we should, therefore,
make due allowance for the expectation of the ultimate
repayment of a larger principal sum than that which
was borrowed. And, in making a comparative estimate
between 1792 and 1813, the allowance for this expecta-
tion should not be the same in both cases, seeing that
the possible advance from 91½ to 100 is small, com-
pared with the possible advance from 59 to 100. The
greater the difference between the two numbers, the
stronger is the tendency of the principal sum to
advance in price. At 59 the elasticity may be con-
sidered as having been at its greatest force; as it
approaches 100 it becomes weaker, and when it
reaches the 100 its force may be considered as nearly
expended, there being no probability of the price going
much beyond that, as the stock might, at any time, be
paid off at that rate.
163
An advantage, to a certain limited extent, resulted
from the substitution of paper money for gold. The
issue of the paper drove the gold out of the country ;
it was not, however, given away to other countries, but
sent to them as so much wealth exported to pay for
the imports which were received at the time, or to
defray the foreign expenditure of the government. In
this way, say, 20 millions of wealth were liberated from
their employment as currency, and made available
for purposes of national expenditure, and so far the
country was assisted at the time. For, had not these
20 millions been so employed, an equal amount of
wealth, in other articles, would have been abstracted
from the country and exported, instead of the gold,
which, by reducing the aggregate stock of wealth,
would have left less for the consumption of the people.
If these 20 millions had been obtained by additional
taxes, they would have lowered wages directly to that
amount; if they had been additional loans, profit
would have been thereby raised, and wages lowered
indirectly. Now, as all that could not be raised by
taxes, at this period, was borrowed, the fact was, that,
by the liberation of the gold, capital was made a little
more plentiful, and the rate of profit was kept a little
lower than it would have been if the gold had remained
in circulation.
LIBERATION OF GOLD COIN.
This alteration had, however, also its disadvantage.
When the gold was in the country it was in the hands
of, and was owned by, the aggregate mass of the
people, who were engaged in carrying on the general
business of society. It formed the stock of circulating
medium for which no interest was, in the aggregate,
paid, as it was used by the owners themselves; but
when paper was supplied as a substitute, those who
N 2
D
164
issued that paper charged an interest on it, and thus
levied a new contribution from the great mass of the
people. The people parted with their gold, instead of
parting with an equal value of the produce of their
labour, and were so far relieved; but when they
obtained a substitute for that gold, they were obliged to
pay interest for it to a separate class of paper money
makers, and this was a burden. While, however, the
gold was leaving the country, the relief was, say, as
about 20, and the burden as 1. The people were, in
fact, having their principal expended, and paying
interest for the substitute that was provided for that
principal.
When either a metallic money or a government paper
money forms the currency of a country, individuals
occasionally lend portions of that money, on interest,
to other individuals. The same thing takes place when
bank notes form the circulating medium; but then, in
addition to this, there is, in the latter case, a general
lending, by the bank note makers, to the rest of the
community. This additional lending produces an ap-
pearance of superior activity in the circulation of money,
and hence has probably arisen the notion that circula-
tion has a very powerful influence on national prosperity.
PAPER MONEY.
The mere passing of money from hand to hand, it is
evident, cannot conduce to national prosperity; nor can
the introduction of a lender to furnish money, of itself,
place those who have to conduct the general business
of the country in a more favourable situation than they
would be in if the money were their own. The money,
it is true, in passing through an additional hand, leaves
in that hand a profit; but that profit reduces the shares
of the other parties concerned, and there is, therefore,
on the whole, no advantage obtained in the additional
USES OF MONEY.
165
circulation. Money of some kind is beneficial, because,
in effecting exchanges, it saves labour; but that is no
reason why multiplying those exchanges, beyond what
the occasion requires, should be considered beneficial.
In a country where labour is extensively divided, almost
every man has to part with nearly all the produce of
his labour, and to obtain the produce of the labour of
others in exchange; and money performs an important
part in effecting those exchanges, and in distributing
the whole of the wealth produced, until it reaches the
final consumer; but having done this, its work is com-
pleted, and any further circulation would be an evil.
The effecting of exchanges is, like eating or drinking
when hungry or thirsty, a good thing, when there are
commodities in different hands which require to be ex-
changed; but when all are as well supplied as the
existing stock of commodities will permit, the effecting
of further exchanges is, like eating or drinking after
nature has been fully satisfied, a bad thing. To expect
benefit from increasing the number of exchanges in-
definitely is as irrational as expecting beneficial results
from digging holes and filling them up again, after the
regular labours of the day had been performed.
Neither circulation nor labour are good in themselves,
but only when they produce beneficial results.
-
During the war the rate of profit was high, and
capitalists, of course, concluded that the country was
prosperous. At the same time the system of borrowing,
adopted by the government, collected large portions of
those profits, and poured them into the treasury. It
required many persons to form the machinery by which
all this was effected-loan-contractors and jobbers,
bankers, both in town and country, through whose
hands the extra profits passed to feed the loan of the
166
time; and the capitalists throughout the country who,
in reality, furnished the loan, all felt that there was
additional activity in the circulation. And, not know-
ing, nor probably caring to know, that these were
consequences of portions of every man's wages being
taken from him and passed through different channels
until they were poured into the treasury, but seeing
circulation particularly active, they took it for the
cause, while it was, in reality, an effect; thus adding
one to the numerous instances which might be named
in political economy, of an effect being mistaken for a
cause. The effect of mere circulation of money may,
perhaps, be best seen in a gambling-house, or on a
race-course. It is evidently of no consequence to the
community whether each man keeps his money in his
pocket, or circulates it 10, 20, or 50 times, by repeated
bettings. As there are no commodities beneficially
exchanged or distributed, circulating the money is, on
the whole, so much labour thrown away.
The word "circulation" was, at the time of which
we are treating, made use of, not unsuccessfully, to
mystify the subjects of taxation, loans, and large
government expenditure. Indeed, there were not
wanting persons to maintain that, increasing the
rapidity of circulation increased wealth, and gave to
the nation the power to furnish it to almost any
amount to the government, for war expenditure.
The "sinking fund," of which so much was said at
this period, and from which so much was expected,
was a fallacious and mischievous expedient. When a
nation is incumbered with debt, and has a surplus
revenue with which it is proposed to discharge a part
of the debt, the simple and most effectual way to
proceed is to pay off, or purchase and cancel, a part of
CIRCULATION.
167
the debt with the surplus revenue.
For a nation, in
its collective capacity, to keep a regular debtor and
creditor account with itself, of a fund set apart to
accumulate, itself being both debtor and creditor, is
undertaking a superfluous labour, which must be
attended with expence, and cannot be productive of
any countervailing advantage. But to establish a
system of borrowing for the purpose of purchasing
portions of your own debt (stock), to form a growing
fund—that fund being made up of money borrowed to
furnish the principal, and, also, to pay the interest-
seems to be the extreme of childish folly. There is,
however, another degree to be added to it, the money
was borrowed on such terms as made it cost the
country, say, 6 per cent. interest, while a larger prin-
cipal had to be repaid, but in expending the money in
buying up portions of the debt (stock), not more
than 5 per cent. was obtained! It is ludicrous and
humiliating to read the speeches delivered by the most
eminent men of the time about this sinking fund.
They, evidently, believed that the nation could get out
of debt by borrowing at a higher and lending at a
lower rate of interest! How many of our present
popular opinions will appear equally ridiculous twenty
years hence?
SINKING FUND.
The whole sum expended by the government, from
the year 1809 to 1815, both inclusive, was, in the cur-
rency of the time, £630,789,973. being an average
annual expenditure of £90,112,853. If, to this, we
add 7 millions a year, for the expence of collecting the
taxes, it makes a total of £679,789,973. and the whole
expenditure, from 1793 to 1815 inclusive, may be thus
given, including the probable cost of collecting :-
168
WAR EXPENDITURE.
In the 9 years, from 1793 to 1802. . £514,260,000.
In the 6 years, from 1803 to 1808..
In the 7 years, from 1809 to 1815..
400,000,000.
679,789,973.
£1,594,049,973.
Of this immense sum, £1,187,509,864. were obtained
by taxation, and £407,540,109. were raised by borrow-
ing, for which stock or funds were created, amounting
to £631,088,832.! increasing the national debt from
£233,733,609. to £864,822,441.!!*
The amounts of the debt and interest, at the periods
named, were,
At the commencement of the
American war, in 1776
At the commencement of the
French war, in 1793
At the peace of Amiens.
At the peace of Paris..
Deduct decrease since the
peace
In January, 1832..
•
..
……….
• •
• •
Debt.
£
135,943,051
Interest.
£
4,476,821
233,733,609
8,176,837
528,839,277 20,428,488
864,822,441 41,225,257
82,155,207 | 12,883,841
782,667,234 28,341,416
In reviewing the state and progress of society, from
the year 1808 to the year 1814 inclusive, we have
traced the active operation of various powerful causes,
some of which produced beneficial, and others injurious
results. Among those which produced beneficial results
will be found the increase of the population, as shewn
in page 102. This increase in the number of the peo-
ple enabled them to bear the abstraction of an amount
of wealth which, if it had been taken from a smaller
number, would have reduced them to indigence and
* See Marshall's Statistics,' and Pebrer's Taxation, Revenue, &c.'
169
BENEFICIAL CAUSES IN OPERATION.
wretchedness ;—would have destroyed their superior
productive power, and, the same abstraction being
continued, would finally have destroyed the people
themselves. What would have been impossible for 10
millions to bear, was borne, with comparative ease, by
11 millions; and, under the pressure of their burden,
they contrived to go on increasing their numbers, and
thus enabled themselves afterwards to sustain heavier
burdens with less difficulty.
Another beneficial cause which affected the condition
of society, at this time, was, an increase in the produc-
tive power of the people. As the various and heavy
claims, made on industry, took much wealth from the
producers, they would have been more impoverished
than they were, had not their capabilities of producing
new wealth been increased; but, having this increased
power, they were enabled to furnish what was taken
from them, and also to subsist themselves in a degree
of comfort which would have been unattainable if their
productive power had remained stationary.
The two-fold reduction, which we have seen took
place, in the value of the currency, had various effects ;
but among them was one which operated decidedly in
favour of the labouring classes :-the quantity of labour
requisite to raise produce to pay fixed annuities,
became thereby materially reduced. If our compu-
tations have been correct, after the two-fold reduction
of the currency, one half of the labour that was
previously necessary would be sufficient. The capitalist,
it is true, would, in numerous cases, be the party who
would first feel the benefit of this alteration, as he
would be able to pay any annuity, to the payment of
which he was liable, by selling commodities which had
cost only one half the previously required quantity of
170
VALUE OF ANNUITIES,
labour, and the difference would be to him, for the
time, a clear gain; but, as has been before shewn,
every alteration which increases the profit of the
capitalist, and which does not, at the same time, take
from him and consume wealth, as in the case of war-
loans, tends directly to a reduction of the rate of profit,
and, consequently, to a rise of wages. And such would
have been the effects of the reduction in the value of the
currency, on the payment of private annuities, and, con-
sequently, on profits first, and finally on wages, if other
counteracting causes had not been in operation at the
same period. As it was, however, the reduction in the
value of the currency had its degree of effect-it pre-
vented capital from becoming as scarce as it otherwise
would have been, and, therefore, it prevented the
general rate of profit from rising to the height it would
have attained, and thus it, to some extent, checked the
fall of wages.
The sums furnished to the government, in taxes
or loans, to pay the interest of the then debt, were
also raised by the sale of fewer goods, and were the
produce of much less labour than would have been
required, had no such reduction in the value of the
currency taken place. The existing permanent burdens
on the productive classes were thus lightened, and those
classes were enabled the better to bear the new burdens
which were laid upon them. The receivers of the
annuities were, of course, injured by this alteration ;
but we are here not so much considering all the effects
produced by the various important causes which were
in operation at this period, as how the more important
causes affected the great mass of society, and more
particularly the productive classes.
The receivers of the rents of land are to be included
PAPER SUBSTITUTED FOR COIN.
171
amongst the annuitants thus affected, until their rents
were advanced; and, as a period intervened between
the reduction in the value of the currency and the
advance of rent, the effect on the gain of the farmer
was of the same kind as on that of any other capi-
talist who had to pay an annuity. The tendency was
to give him a high profit, and to induce him to accumu-
late capital more abundantly.
An advantage, to a certain amount, was obtained inci-
dentally through the excessive issue of paper, and the
consequent banishment of metallic money. The coin
thus driven out of, or liberated from circulation in the
country, was not given away, but exported as capital to
other countries, and, for the time, operated as if so much
new wealth had been created by labour, and exported
in order to obtain such returns as were wanted. The
creation of the paper money, and the consequent con-
version of the gold coin into an article of export, made
capital more abundant; and, instead of sending out the
produce of British labour to purchase our imports, or
to feed our foreign war expenditure, gold was made to
effect those objects to a certain extent. It is true we
parted with the metals of intrinsic value, and had paper
only as a substitute for them, and thus we appeared to
be so much the poorer for the alteration; but we obtain-
ed value for the metals in foreign countries, instead of
sending out goods, the produce of British labour, in
exchange for that value. These goods were, therefore,
kept for home use, or rather, the labour which would
have gone to produce them was employed to produce
in some other department.
The liberation of the me-
tallic money from circulation, and the consequent con-
version of it into an export, was, therefore, an advan-
tage at the time, whether that advantage was appre-
172
CHEAPLY OBTAINED IMPORTS.
ciated or not; and this advantage has to be traced
through a somewhat inferior scarcity of capital, a lower
rate of profit, and a little higher rate of wages.
The last of the active causes which had a beneficial
operation at this period that it is necessary now to
notice is, the small cost of labour at which was obtained
the imported commodities, and by which the foreign
expenditure was supplied. The peculiar state of our
manufacturing department, where important improve-
ments rapidly succeeded each other, enabled com-
paratively little labour to produce articles which
commanded much of the produce of other countries;
while the war, which then swept over all the other
European manufacturing countries, prevented our im-
provements from being extensively adopted in those
countries; and thus circumstances gave us advantages
similar to those which arise from a monopoly.
These five causes-increase of population, increase
of productive power, reduction in the real value of
annuities, export of the metallic currency, and the high
prices obtained for cheaply produced exports-all
tended, at the same time, to benefit that part of the
people who were engaged in the great work of pro-
ducing the annual supply of wealth which sustained
the whole community, and enabled them the better to
bear up under the baneful influence of causes of an
opposite character.
Among these causes of an opposite character, we
must place in the front the additional taxes and loans
extracted from the people; and, after making every
allowance for the depreciated currency in which the
amounts are expressed in the different returns, the
increase is enormously great. Expressed in currency
of equal value, compared with commodities, the amount
INJURIOUS CAUSES IN OPERATION
173
was, in 1793, £18,000,000. and the average of 1813
and 1814 was £53,988,865.; a much larger portion of
the labour of the country must, consequently, have
been employed in furnishing to the government the
amount of wealth taken at the latter period, than was
required to furnish the smaller amount at the former
period, and, consequently, there was less labour left
to be used in producing those commodities which con-
stituted the subsistence, and contributed to the enjoy-
ment, of the people themselves.
Loans, as has been shewn, although obtained in the
first instance from capitalists, were, in the form of
extra profits, taken finally from wages, and the real
wages of the labouring class were thereby reduced.
The extra profits were consequent on the increased
taxation and the borrowing; and were, indeed, rather
the shape in which part of the taxes and the loans
affected the labouring class than additional burdens
themselves. These higher profits, however, in all
probability, stimulated capitalists to a more expensive
style of living, and thus gave them habits which made
accumulation more difficult and capital less abundant.
Profits would, consequently, be higher than they would
have been had the economical habits remained which
were produced by lower profits.
The great rise which took place in money rent of
land, we have seen, was, in a considerable degree,
counteracted by the fall in the value of money. The
rise of rent, therefore, did not give landowners so great
an additional command over the produce of the labour
of the country, at this period, as might be supposed,
and, consequently, was not found to be so material an
addition to the burdens previously borne by the labour-
ing classes.
174
INCREASE OF TITHES.
The high price of landed produce was beneficial to
those who received tithes in kind; and, accordingly,
we find that the clergy, who were in the receipt of
tithes, considered that, for them, this was a prosperous
period. They benefited first from the increase in the
quantity of produce raised from the land; secondly,
from the advance of rent; and, thirdly, from the
additional exchangeable value which their own tithe
tax gave to the landed produce. And as clergymen
are presumed to expend their incomes, whatever may
be their amounts, and not to accumulate any part of
them to be used as capital in the way in which the
farmer is supposed to use the greater part of his
additional profits, the whole of the wealth thus furnish-
ed to the clergy, in the form of tithes, was so much
abstracted from the productive classes, without any
return being made of a counteracting nature.
It has been stated that the increase of population
was favourable to those who had to furnish so large an
amount of net wealth annually; and this would have
been the case, to the full extent of the increase, if it
had been solely in the numbers of the primary pro-
ducers; but this was not the case. The advance of
rent, the greater quantity and increased value of tithes,
the additional annuitants created by the borrowing
system, together with the immense number who lived
upon the government expenditure, caused a great
increase in the number of the net receivers; and, as it
is known that each of them, on an average, was in the
receipt of considerably more than he himself directly
consumed, he would naturally employ others to work
up the remainder of his income into such a form as
would enable him to consume it indirectly. A
material addition would, consequently, be made to the
175
numbers of the secondary producers. This increase
in the numbers of the net receivers and secondary
producers would not enable the primary producers to
sustain their burdens with more ease; on the contrary,
every conversion of a primary producer into a net
receiver, or a secondary producer, would so far lessen
the power of the primary producers to furnish the net
wealth, and, also, to subsist themselves.
RECAPITULATION.
There were, therefore, six causes in operation at this
time, which had unfavourable effects on the condition
of the people, which, together with the five of an
opposite tendency, may be thus placed in juxta position.
UNFAVOURABLE CAUSES.
1. Increased taxation.
2. Heavy loans.
3. High profits.
4. Advanced rents.
FAVOURABLE CAUSES.
1. Increased population.*
2. Increased productive power.
3. Annuities reduced in value.
4. Export of the coin.
5. Cheaply produced exports.
5. Tithes.
6. Conversion of primary into
secondary producers.
The influence of the six causes, having unfavourable
effects, was much stronger than the influence of the
five opposing causes, and the condition of the people
was, consequently, on the whole, deteriorated.
In order to have a kind of bird's-eye view of the way
in which these various causes operated at this time on
the different classes, we will make another analysis of
* When there is a great increase of the net wealth, there will be a great
increase of the net receivers, or of the secondary producers, or of both, as
the numbers of these classes will generally bear about the same relation to the
the amount of the net wealth furnished; but if there had been no increase in
the whole population, at the time there was an increase in the amount of net
wealth, a part of the primary would have been converted into secondary pro-
ducers, which would have reduced the numbers of the primary population.
The increase in the whole population, then, by first supplying secondary pro-
ducers, prevents a reduction of the primary population, and, if the increase
is more than sufficient for this purpose, it increases the primary popula-
tion, and, in either case, is beneficial to the productive classes.
176
of society, similar to that of 1793; and that we may
be able to institute a comparison between the state of
the country at this time, and at the commencement of
the war, we will repeat some of the leading facts then
exhibited.
COMPARATIVE ANALYSIS.
The population in 1793 was taken at 10 millions,
and, by the census of 1811, it is shown to have been,
in that year, 12,609,864, which, according to the
progressive increase, may be presumed to have reached
13 millions in the year 1813. In 1793 the wealth
produced was expressed by the sum of £120,000,000.
out of which 40 millions were net, and subsisted
1,800,000 persons, receivers of net wealth and secondary
producers, leaving to be divided, among 8,200,000
primary producers, capitalists, and labourers, 80 millons
of wealth.
In 1814 the net wealth furnished, expressed in a
currency of equal value in commodities with that
of 1793, will be found to have been,
in taxes and loans
£53,450,688,
in rent of land, supposing the amount in
currency of the time to have been 40
millions, then in currency of equal
value with that of 1793. ...
for tithes and various net annuities, say,
making a total net round sum of
£80,000,000.
being just double the net wealth furnished in 1793.
Proceeding on the assumption that the net receivers
and the secondary producers increase in number in the
same ratio with the net wealth, they will now be
3,600,000 instead of 1,800,000, as in 1793. Out of the
•
20,000,000*
6,549,312
•
* It is possible that the income tax caused the net revenue of land pro-
prietors to be reduced below this sum in real value; but we can only
approximate to the actual circumstances which took place.
177
population of 13 millions in 1814, we have then
3,600,000 who subsist on the wealth produced and
furnished by the primary producers, leaving the latter
-class 9,400,000 in number. To ascertain the number
of the labouring part of these primary producers we
must subtract the capitalists and their dependents;
and, taking the whole capital in 1814 to be 400
millions, in a currency equal in value to that of 1793,
and the number of owners of it and their dependents
to be in the same proportion to the capital as in that
year, we shall have their number 1,142,856, which,
being deducted from the 9,400,000, leaves 8,257,144 of
primary labourers. Now, if these continued to produce
at the same rate as in 1793, each family of six persons
£100. the whole amount of wealth which they would
bring into existence would be £137,619,000. from
which take the net 80 millions, and there would remain,
for the two classes of primary producers, £57,619,000.
From this we have to take the net profit of the
capitalist, 6 per cent. on 400 millions, amounting to
26 millions, and there remain to be divided among the
primary labourers, as wages, £31,619,000. This sum,
being divided among the 8,257,144, gives an average of
less than £4. each person, or £24. a family of six
persons, instead of £47. 14s. as in 1793!
But what would have been the situation of the
primary labourers had there been no increase of their
numbers?—had their population been kept down. The
7,200,000 would produce a total wealth of 120 millions;
and when, from this, the net wealth and profit of 1813
were taken, amounting to 106 millions, there would be
left for the primary labourers themselves just 14
millions-not £2, a head! And if wages did not
really fall towards that rate, it was, as far as our
NUMBER OF PRODUCERS.
0
178
present argument goes, because the number of the
primary labourers increased.
PRODUCTIVE POWER.
From the censuses, and from other sources, we have
seen or estimated, on data deserving confidence, the
increase in the number of the whole population ;
and a part of that increase was in the class of primary
labourers. But what was the extent of the increase in
their productive power? This is a question not easily
answered. In agriculture it was, no doubt, consider-
able, but the common arts and businesses throughout
the country remained unaltered. In some branches of
manufacture, such as the hardware, linen, woollen and
cotton, there was a great increase-equal quantities of
labour yielding much larger quantities of commodities.
And as these commodities formed the greater part of
the exports, equal quantities of labour obtained larger
quantities of foreign produce, until the prices of the
exports fell.
But, on the whole, whatever may have been the
increase in the aggregate productive power of the
primary labourers, that increase, added to the increase
in their numbers, was not sufficient to counteract the
effects of the abstraction of such large quantities of
wealth from them as were actually taken, and their
situation was, consequently, rendered worse, as became
apparent in the condition of the poorer classes through-
out the country, but particularly in that of the agri-
cultural labourers. Evidence of the progressive decline
in their condition is seen in the increase of the rates
which it was found necessary to raise to afford them
the poor pittance allowed by the parishes. About
1793 the sum raised annually for the relief of the poor
was only £2,167,748. but in the year 1812 it was
£8,640,842. which, being taken to be in a currency
INCREASE OF LONDON.
179
reduced in value 50 per cent. will give, in a currency of
the value of that of 1793, £4,320,421. being more than
double the value expended at the latter as compared
with the former period.
The decline in the condition of the labourers was not,
however, experienced alike by all portions of that
class. As net wealth increased, those who laboured to
modify it-to render it fit for the consumption of its
opulent owners, would find, for the time, increased
demand for their labour, and, sometimes, instead of a
reduction, a temporary increase in their remuneration.
But that would not last long, as competition would
immediately begin to operate to bring their remunera-
tion down to the reduced general rate. The increase
of net wealth would thus cause an increase of the
numbers of the net receivers and secondary producers,
and these would form a large part of the additional
population. Indications of this may be seen in the
great increase of the population of those places more
particularly selected for their residences. In the years
1801 and 1811 the respective numbers in the following
parishes round London were :—

Chelsea
Kensington
Paddington
Mary-le-bone
Pancras
Islington
Battersea
Camberwell
Clapham.
•
In 1801. In 1811.
11,604
8,556
1,881
63,982
31,779
10,212
3,365
4,409
7,059
11,309
3,864
5,083
142,302 191,580
18,262
10,886
4,609
75,624
46,330
15,065
being an increase of about 34 per cent. while the
02
180
whole population increased, during the same period,
only a little more than 15 per cent.
In 1801, Brighton had a population of..
1811,
MANUFACTURING POPULATION.
""
""
""
In 1801, Cheltenham had a population of..
1811,
""
""
In 1801, Worthing had a population of.
1811,
Those who laboured to produce the articles for
exportation, the modes of producing which had been im-
proved, had their wages also, for a time, either positively
raised, or kept above what they would otherwise have
sunk to. And here, also, the local effects of wages, in
one branch, being above the general rate was seen in
the superior increase of the population. In Manches-
ter and other places, seats of the cotton manufacture,
the increase was above 25 per cent. while the general
increase was only 15 per cent.
""
7,339
12,012
•
3,076
8,325
1,018
2,692
Such an analysis as that just given shews the utter
groundlessness and absurdity of the opinion, that a
reduction of the numbers of the labouring people of
Great Britain would improve their condition. And
yet such an opinion generally prevails among writers,
and speakers at public meetings, and in the legislature,
and, founded on that opinion, laws have been passed to
stimulate emigration! It also proves the erroneous-
ness of the opinion entertained by Mr. Owen and
others, that machinery and other things, which increase
the productive power of man, are injurious to the
interests of the labouring classes, and it tends to bring
us back to common sense, which always says that a
workman is injured by having wealth taken from him,
but not by having fellow labourers to assist him in
bearing his burdens, nor by being enabled to produce
more wealth with the same labour.
GENERAL RESULTS.
181
The aggregate results of the alterations of this
period were, a great increase in the income of the
net receivers, and a corresponding increase of their
numbers, partly caused by capitalists becoming an-
nuitants,—an increase in the number of the secondary
producers, and a rise in the rate of profit, which
enabled the capitalists to pay the taxes imposed upon
them-to feed the loans-and to obtain annuities, and
yet to have a further profit as high as at the com-
mencement of the war. To these must be added a general
fall in the rate of real wages, temporarily counter-
acted in those departments of production where the
luxuries of the opulent net receivers had to be admi-
nistered to, and in those where greatly improved ma-
chinery and processes had been introduced; but, on
the whole, notwithstanding the increase of the popula-
tion, there was a reduction in the real wages of
ordinary labour. This was felt by those who laboured
in old and unimproved modes, and particularly by the
common country labourers, who had to endure increas-
ing privations.
GREAT BRITAIN, &c.
CHAP. VI.
FROM 1814 TO 1820.
L
MONETARY STATE NEAR THE END OF THE WAR, PRICES OF GRAIN, AND
QUANTITY OF CURRENCY.-CORN LAW OF 1815.-AGRICULTURAL
DISTRESS OF 1816.-SUMS EXPENDED ON PAUPERS.-PRICES PAID
FOR WEAVING.-REDUCED EXPENDITURE OF GOVERNMENT.-
TRANSITION FROM WAR TO PEACE.-COUNTRY BANK AND BANK OF
ENGLAND NOTES.—PEEL'S BILL, TABLES OF THE CURRENCY AND
OF PRICES.-CONDITION OF THE POOR.-CESSATION OF LOANS AND
REDUCTION OF TAXES, AND THEIR EFFECTS.—EXPORTS AND IM-
PORTS.-VALUE OF THE CURRENCY.- -PRICES OF EXPORTS.-
EFFECTS OF IMPORT DUTIES ON PRICES.-VALUE OF MONEY IN
GREAT BRITAIN AND OTHER COUNTRIES FROM 1793.
·00·
THE period near the termination of the war appears
to have been a crisis in the internal condition, as well
as in the political relations of the country; and so many
alterations were taking place, and so many causes in
active operation at the same time, as to make it difficult
to trace the separate workings of each.
The large profits of the agricultural capitalists, con-
sequent on the successive reductions in the value of the
currency in which they paid both rents and wages, had
enriched them, and caused them to bring considerable
183
ABUNDANCE OF GRAIN.
quantities of poor land into cultivation, and, at the
same time, to expend much of their profits in forcing
large crops of grain and other landed produce. In
1813 the effects of these proceedings began to appear,
in the decline of the price of landed produce beyond
that of any other class of commodities. This decline
continued through the two following years, and was a
natural result of the previous large profits. In any
department of industry, sudden high profits lead to
over-production, and over-production brings, in its
train, low price, until the low price clears the market
of the comparative superabundance.
The opening of the markets of the north of Europe
has been supposed to have caused the fall in the price
of grain in the years 1814 and 1815; but this could not
be true, unless considerable quantities of grain were
poured in from those quarters. The quantities of
foreign grain imported into Great Britain, to compete
with that of home growth, in the years 1814, 1815, and
1816, may be seen from the following tables, which
shew the quantities of wheat, oats, and barley im-
ported into Great Britain from all parts of the world
(except Ireland), the quantities exported, and the quan-
tities left for home use in those years.*
WHEAT.
OATS.
BARLEY.

Years. Imported. Exported. Imported. Exported. Imported. Exported.
qrs.
qrs.
qrs.
1814...
600,845 111,478 247,949
1815.. 133,862 227,947
120,314
1816... 202,304 121,611 75,277
qrs.
54,118
qrs.
46,945
29,608
32,470 14,864
qrs.
26,687
2,033
8,202
33,691
Total.. 937,011 461,036 443,540
109,023 45,584
96,011
6
* The Edinburgh Review' for January, 1833, speaks of the fall of
prices being partly caused by importations from Dutch ports.- Page 396
184
Wheat.
Oats
Barley.
••
IMPORTS OF GRAIN.

Deduct
Imported. Exported.
qrs.
qrs.
937,011
443,540
461,036
45,584
1,426,135
666,070
760,065}
109,023
96,011
666,070
qrs. excess
of imports.
Thus we see that, in the whole of these three years,
the quantities of wheat, oats, and barley imported,
beyond the quantities exported, were only 760,065 qrs.
or an average of 253,355 qrs. in each year. A quantity
which, instead of being large, was unusually small, and
incapable of producing any effect worth estimating on
the markets of this country. It follows that the
depression of price which resulted from quantity is
attributable to the superabundance raised from British
soils; and that superabundance was the effect of
previous high profits having stimulated agricultural
capitalists to push cultivation to a great extent.
The Bank of England notes in circulation were
In 1813..
£24,024,869.
28,978,876.
1814.
1815..
27,024,049.
Supposing the whole circulating medium, at that
time, to have been about 60 millions, as the Bank of
England notes in existence were to the amount of only
from 24 to near 29 millions, the remainder must have
been from 36 to 31 millions: and of these a large part
must have consisted of country bank notes. These
notes, indeed, together with bills of short dates, formed
the currency, above the value of silver coins, of nearly
the whole country, excepting London and its neighbour-
hood and Lancashire. They had, to a great extent,
185
been issued by country bankers to accommodate farming
capitalists; the high prices of their produce having
procured for farmers ample credit, and enabled them,
with facility, to borrow these notes; and the same high
prices tempted them to expend money freely in pushing
the cultivation of that produce which had brought
such high prices. But, in 1813, abundance began to
lower its price, wheat having been, according to the
prices paid at Eton College, at 17s. a bushel at Lady-
day, and at only 13s. a bushel at Michaelmas, of that
year. By the Lady-day of 1814 it had fallen to 10s. 9d.
per bushel.
COUNTRY BANK NOTES.
This continued fall in the price of grain would natu-
rally alarm the more cautious of the bankers, and credit
would not be quite so easily obtained. Hence a dimi-
nution in the amount of country bank notes in circula-
tion would take place, as really occurred in 1815; and
this, by accelerating the fall of prices, would increase
the alarm, and diminish still further this species of
currency. All the agricultural part of the country
would now be similarly affected; the whole amount of
country bank notes and bills in circulation, and, con-
sequently, the amount of the currency, would be re-
duced; and, not only the prices of landed produce,
but also the prices of bullion, would fall.
That a process of the kind, and to the extent here
described, took place at this time, there is ample
evidence on record. Mr. Wakefield stated, in evidence
before the agricultural committee, in 1821, that "down
to 1814 there were banks in almost all parts of Eng-
land forcing their paper into circulation at an enormous
expence to themselves, and, in most instances, to their
own ruin. There were bankers who gave commission,
and who sent persons to the market to take up the
notes of other banks; these people were called money-
-
186
FAILURES OF COUNTRY BANKS.
changers, and commision was paid to them." (See the
report of 1821, page 213.)-And Tooke says, "the in-
terval, therefore, between the close of 1811 and the
beginning of 1814, united once more the conditions on
which a great extension of private paper, and of transac-
tions on credit, has been shewn to depend; and there is
concurrent testimony that such extension did really take
place to a very considerable degree during that inter-
val."-Tooke on prices, vol. 1, page 128.
In the ‘Edinburgh Review' for January, 1833, it is
said, that, "among the various answers to the queries
sent by the board of agriculture, in 1816, to the most
intelligent persons in different districts of the country,
there is hardly one in which the excessive issue of
country bank notes is not particularly mentioned, as
one of the principal causes of the enormous rise of rents
and prices, previously to 1814.” And in Macculloch's
' Commercial Dictionary,' it is stated that prices “sus-
tained a very heavy fall in the latter end of 1813, and
the beginning of 1814. And this fall having proved
ruinous to a considerable number of farmers, and
produced a general want of confidence, such a destruc-
tion of provincial paper took place as has rarely been
paralleled. In 1814, 15, and 16, no fewer than 240
country banks stopped payment, and 92 commissions
of bankruptcy were issued against those establishments,
being after the rate of one commission to every 7½ of
the total number of banks existing in 1813." (See p. 70.)
These extracts sufficiently shew the state of the
farmers at this period. At Lady-day, in 1815, at Eton,
the price of wheat was 10s. per bushel, and at Michael-
mas 9s.
The landed interest, both landlords and
farmers, were alarmed; and imagining that the low
prices, which originated in superabundant production
from our own lands, were either caused or aggravated
187
by foreign importation, resolved upon having a corn
bill to protect the home producer from foreign com-
petition. To say that this bill had no effect in impeding
the fall of the prices of grain, would be rash and
erroneous; but that it did not keep up prices as its
promoters and advocates expected, was shortly after-
wards experienced and acknowledged. This bill pro-
hibited the importation of foreign wheat into Great
Britain until the price rose to 80s. per quarter, and all
other grain was protected in a similar way.
It was soon discovered that the corn law did not
raise the prices of grain. Indeed, if the view we have
taken of the causes of the reduction of the prices is
correct, it was impossible for the law to have had that
effect. By preventing foreign grain from coming freely
into the market, in competition with that of home
growth, it prevented prices from sinking so low at the
time as they otherwise would have done, but that was
all it could do. It was necessary that the abundant supply
should be taken off, and that a comparative degree of
scarcity should be experienced, before even those who
were able would be disposed to keep back their stocks,
and thus suffer the demand to raise the prices.*
The low prices of landed produce, as the results of
superabundant supply, acting upon a paper money such
as then formed a considerable part of the circulating
medium, though now they may appear to the enquirer
obvious and natural, and such as must have flowed
from the causes which were then in operation, were, at
the time, attributed to various other causes. Foreign
importation was the first thing complained of; as it
CORN LAW.
* Mr. Jacob stated, in his examination by the agricultural committee,
in 1833, that," in 1816, at the time of the harvest, there was a stock of
wheat in hand equal to six months' consumption, owing to the abundant
harvests of the three preceding years."
188
NOTES IN CIRCULATION.
was said that even a small quantity of foreign corn had
a great effect in lowering the English market price.
But when the protecting enactments of the corn law
produced so little effect, other causes for the fall in
price had to be discovered. And, as the Bank of
England, according to law, would be liable to pay
their notes in gold in six months after the termination
of the war, many persons attributed a reduction of the
currency, and a consequent increase of its value, to
preparation for that event: this is now known to have
been a mistaken opinion. The bank had in circulation,
on the average, during the years 1815 and 16, above
27 millions, being a higher average amount than they
had kept out at any previous period of equal duration.
An apprehension of the effects which would result from
a sudden contraction of bank issues had induced the
government to postpone the period for the resumption
of cash payments, and the bank made use of the power
thus given, to extend, instead of contracting, their
issues; and in 1817 they had in circulation upwards of
30 millions of notes. There can be little doubt that
this increase of the amount of Bank of England notes,
at the time that the country notes were so much re-
duced, was attended with good effects. Had it not been
for the increase prices would have fallen still lower
than they did; and it would have been much more
difficult for debtors to meet their engagements. There
would, in all probability, have been a worse panic than
there was, and such a one as occurred in 1826; the
country would have been commercially convulsed, and
peace would have been looked upon as incompatible
with British prosperity, as, indeed, it was by many at
the time said to be. Gold would, probably, have sunk
in currency price below £3. 17s. 103d. per ounce, and
then it would have flowed back into the country to
In the year 1812
1813
1814
1815
1816
supply the place of paper, if any more was withdrawn
from circulation. There is, however, scarcely any
room to doubt, that, if the war had continued, and
the superabundance of landed produce had caused a
contraction of country notes, that nearly the same
effects would have been experienced as those which
took place after the peace, more especially if the Bank
of England had not increased their issues much beyond
what they did.
The fall in the prices of food operated, for the time,
in favour of the great mass of the labouring people.
It has been shewn that the prices of labour do not rise
with the rising prices of food, and it is equally true
that they do not fall with falling prices. There was,
therefore, a period, during the fall of prices, in which
the condition of the labourers was somewhat improved;
but, by 1816, the reduced means of the farmers obliged
them extensively to decline giving full employment to
all the agricultural labourers. Evidence of this is to
be found in the replies to questions circulated by the
board of agriculture in that year, by which time the
labourers had to participate in the distress of their
employers. The amounts expended for the relief of
paupers, in England and Wales, and the prices of
wheat, were,
>>
""
""
""
•
PRICES OF GOLD.
•
•
Sums
Expended.
189
£
6,656, 105
6,294,584
5,418,845
5,724,506
6,918,217
Price of Wheat
per quarter.
S.
d
125 6
120 0
73 9
66 3
76 2
Thus we see that the sum expended for the relief of the
190
WAR, AND PAPER MONEY SYSTEM.
poor declined in the commencement of the fall of prices,
and before the farmers were much impoverished; but,
by the year 1816, though the price of wheat was only
72s. 6d. per quarter, the amount expended was £262,112.
more than in 1812, when the price was 125s. 5d. per
quarter.
From these facts we are enabled to trace the parti-
cular workings of the system, which had so long been
followed by the then government, on the condition of
the agricultural part of the community, both farmers
and labourers. The latter had to suffer from the
general effects of that system in the reduction of real
wages; and the former had to experience the conse-
quences of those measures, which, adding to natural
causes acting in the same direction, gave them, at one
time, double, or perhaps triple profits, and thus stimu-
lated them to an extension of production, which, at last,
glutted the market, and brought down the prices to
nearly one half the previous highest rate ;-that highest
rate having been attained partly through the means of
country bank notes, the withdrawal of which, on a de-
cline of price, reduced it greatly below what it would
have reached had the country had an equal quantity of
currency, not liable to be annihilated when most wanted.
The manufacturing class was somewhat differently
affected by the circumstances of this period. A great
abundance of agricultural produce always gives to them
a temporary advantage; for, those commodities which
they obtain in return for their labour, or for the pro-
duce of their labour, being cheaper, they get a larger
portion in exchange for their manufactures, or, in other
words, the real wages of manufacturers rise. But, in
addition to this temporary source of comparative pros-
perity to the manufacturing class in general, the opening
of new markets, at this time, on the continent of Eu-
191
rope, by the defeat of the French, caused a great de-
mand for such British goods as were exported. The
kind of effect produced may be seen from the price paid
for weaving a piece of calico, already adverted to,
which, in the year 1808, and again in the year 1811, was
only 5s. 6d., but it rose in 1814 to 10s.; and this may
be taken as a specimen of the general advance which
took place in nearly every article of cotton manufacture
in the spring of that year. This advance was, however,
principally the effect of speculation. It was generally
believed that the demand for British goods, in the
newly opened markets, would be so great as to enable
the holders to realize almost any price; but a short
time was sufficient to dissipate this delusion. By the
autumn of that year it was discovered that the high
prices could not be sustained, and they rapidly declined
in the Manchester market. The account of the sums
paid for weaving a common calico, as given in the
Lords' report, do not come down later than 1814, but
the alteration in the prices paid for weaving may be
seen in an account of those prices given in Marshall's
'Statistical Illustrations;' and, to enable us to continue
the comparison progressively, from time to time, the
prices of weaving a common calico, from the Lords'
report, are given up to 1814, with the prices paid for
weaving a six-quarter cambric, 12 yards long, as given
by Marshall.
WAGES OF WEAVERS.

In the years
1812 1813 1814 1815 1816
d. s. d. s. d. s. d.
010 0
013 06 64 0
is.
For weaving a common calico..6
For weaving a 6-4ths cambric, Į
12 yards
S
8
d.s.
68
017
Here we see that the price paid for weaving this
cambric advanced from 8s. in 1812, to 13s. in 1814;
192
GOVERNMENT EXPENDITURE.
but by 1816 it had sunk to only 4s., being just one half
the sum paid in 1812. It is evident that the advance
arose from erroneous speculation, as the then concealed,
but effective causes of decline in prices were in full
operation, and exhibited their effects pretty palpably
in 1815, and still more decidedly in 1816, and following
years. When comparing prices of different periods,
however, we should recollect that the currency had now
become less depreciated; and due allowance should be
made for that circumstance. Taking the 8s. paid in
1812 to have been in a currency depreciated 10 per
cent, below that of 1816, we still have more than 7s.
paid in the former, and only 4s. in the latter year.
In 1815 the total net expenditure was £95,588,927.
and the net income from taxes was £76,831,368.leaving a
deficiency, to be made up by borrowing, of £18,757,559.
This expenditure arose partly from winding up the
accounts of the war.
In 1816 the expenditure was only £63,440,597., but
as in that year the property tax was repealed, which
had brought in £15,225,000., the net revenue was
reduced to £64,294,490., leaving a surplus of £851,892.
The gross revenue taken from the people, and which
included the expence of collecting was about 69 millions.
At the commencement of the war in 1793, a transfer
of labour from peace to war employments caused a
great derangement among the productive classes. And
to another transition, from a state of war to a state of
peace, the ruling powers of the day, and those who
supported them, ascribed all the distress which was
experienced in 1816. It cannot be denied, that,
to divert capital abruptly from its ordinary form of
employment, is always attended with loss, and com-
monly with distress; but we have seen that there were
other causes in operation at the time, which must have
STANDARD OF VALUE.
193
produced great distress if the war had continued. The
transition from a state of war to peace undoubtedly
added to the distress, but was neither the sole nor the
principal cause of it.
When, through agricultural distress, country bank
notes were extensively driven or withdrawn from circu-
lation, the Bank of England were urgently applied to
for extended accommodation; and, being relieved from
immediate apprehension of having to pay their own
notes in gold, they materially extended their issues.
Now, had the war continued under these circumstances,
it is very likely that, when low prices had taken the
superabundance of grain out of the market, the prices
would have recovered-country bank notes might again
have been put out to as great an extent as before-the
currency might have been even more depreciated than
in 1812; and the mint standard of value might, in the
end, have been altered. In this way it is quite possible
that a continuance of the war might have given rise to
a measure which would have had a beneficial effect in
relieving the people from a part of the burden of fixed
money payments. But it was considered that the peace
rendered it necessary that preparation should be made
for returning, at no distant period, to the old metallic
standard of value, and for repealing the bank restric-
tion act. This not only induced the Bank of England
to begin to reduce the quantity of their paper in cir-
culation, and to increase their stock of gold, but it also
compelled country bankers to limit their issues, as they
also would be more liable to be called upon to pay in
gold. Such considerations, no doubt, induced a more
cautious issue of notes; and the quantity of currency
was kept down nearly to what it would have been if
the exports had been suffered to draw gold from the
P
194
PEEL'S BILL.
commercial world to furnish a metallic currency for
Great Britain. The bill, commonly called 'Peel's bill,'
passed in 1819; and it caused such preparation to be
made as removed a depreciation of 16 per cent. from
the currency of 1816, and 3 or 4 per cent. from that of
1817 and 18, and at last restored the currency to its
old standard value. But any further alterations in the
value of the currency, and of general money prices,
are attributable not to 'Peel's bill,' but to other causes,
which would have had as powerful an influence on the
exchangeable value of gold if 'Peel's bill' had not
passed. That bill enacted that the Bank of England
should be liable to pay their notes in gold in 1823, and
in the interim to pay them in gold bars at standard
value, of not less than 60 ounces weight. But the bank,
having acquired a large stock of gold in 1821, com-
menced paying in coin on the 21st of May of that year.
And thus terminated the period, during which, under
the sanction of law, the currency was 'depreciated
by an excessive issue of paper, which increased its
quantity beyond that which would have been deter-
mined by the supply of gold.
The view here taken accords with the facts respecting
the issues of the different kinds of money which made
up the currency of the period, as far as we have accounts
of them. The amount of country bank notes in cir-
culation is not easily ascertained: the following, as
far as respects country bank notes, is from tables
made by Mr. Mushet, from the returns of Mr. Sedgwick,
chairman of the board of stamps.
In the years
AMOUNTS OF CURRENCY.
Country
Bank
Bank Notes England Notes) of
in circulationin in circulation England Notes
each year,
in the last week in circulation
ending
in August.
under £5.
October 10. (Marshall.) (Pebrer.)
Bank
of
In the years Gold coined.
(Marshall.)
વો
£
£
£
£
1813.. 22,597,000 | 24,024,869 | 7,875,375 46,621,869
1814.. 22,709,000 28,978,876 | 9,005,310
9,005,310 | 51,687,876
1815.. 19,011,000 27,024,049 | 9,258,890 | 46,035,049
1816.. 15,096,000 | 27,075,854 8,616,740 | 42,171,854
1817.. 15,898,000 30,099,908 | 8,064,710 45,997,908
1818.. 20,507,000 26,602,838 | 7,463,305 | 47,109,838
1819.. 17,366,875 25,657,610 7,294,735
7,294,735 | 43,024,485
Gold Coin
Average
amount of
in the hands of | Gold & Silver
Bullion
held by the
Bank.
the
Bank.
(Pebrer.)
et?
£
1813..
1814..
1815..
1,631,000
1,468,000
1816..
1817.. 4,275,337
1,366,000
1818.. 2,862,374 | 3,311,000
1819.. 3,574 4,805,000
Cat?
195


£
Total
of
Country Bank
Notes
and Bank of
England Notes
in circulation.
11,109,381
6,721,647
S.
d.
101 0
104 0
93 6
2,179,147
3,399,114
93 6
7,504,284 80 0
80 0
81 6
Prices of Gold
per ounce.
(M'Culloch.)
By an inspection of this table, it may be seen that
the increase in the amount of bank notes in circulation
from 1813 to 1814 was £5,066,007., and yet, during
this increase, wheat fell from an average of 120s. to
73s. 9d.! The effect of the issue of so large an amount
of paper at this time, on the value of the currency,
may be seen in the price of gold, which shewed a depre-
ciation of the currency in 1813, according to Mr. Tooke,
of above 25 per cent.* In 1815 the amount of country
* The accounts of the prices of gold vary. The following are given by
P2
196
bank notes was reduced more than 3 millions, and of
Bank of England notes nearly 2 millions, which brought
down the total amount a little below what it was in
1813. In 1816 country notes were reduced nearly
to 15 millions, and in 1817 they were not quite 16
millions, while the Bank of England notes were in-
creased to above 30 millions! In 1818 country notes
came out again freely, and Bank of England notes were
withdrawn, yet the whole amount of notes in circula-
tion was greater in this than in any preceding year,
except 1814; and, in this year (1818), the gold which
the bank had issued must have been added to the cir-
culation. In 1816 they had coined gold in hand
amounting to £1,468,000., and in the two following
years they had gold coined to the amount of £7,137,711.
which, if they had kept the whole, would have given
them £8,605,711. of gold coin. But, instead of this
sum, they had only £4,805,000. in 1819; so that they
must have put into circulation, at this time, nearly
4 millions of gold coin, a sum almost equal to the
reduction in their notes from the highest point in 1817,
to the amount in 1819.
Mr. Tooke, in his work on prices, and by Mr. M'Culloch, in his 'Commer-
cial Dictionary.'
Yrs. Tooke.
1800
1801
FLUCTUATIONS OF THE CURRENCY.

1802
1803
d.
S.
1804
1805 80 0
1806
1807
··
M'Cul-
loch.
Yrs. Tooke.
Sta
s. d.
1808
77 10
85 0 1809
84 0 1810 85 0
80 0 1811 93 6
80 0 1812 101 9
NO O 1813 110 0
80 0 1814 98 0
80 0
s. d. s. d.
80 0
80 0
M'Cul-
loch. Yrs. Tooke.
s. d.
•
90 O
84 6
95 6
101 0
104 0
1815
1816
1817
1818
1819
1820
1821
M'Cul
loch.
s. d.
93 6
93 6
80 0
80 0
81 6
79 11
77 10
Mr. McCulloch's table being the most full and recent, and professedly taken
from official documents, I have adopted it; but a little difference in taking
the averages will give different results.
PRICES OF COMMODITIES.
197
That we may be the better enabled to trace the causes
which were at work at this period, the following table
of facts, relating to the four years, 1816 to 1819, both
inclusive, is given.

Yrs.
Expen- Wheat, Prices
diture. average of 3 pr.
per Qr. Cents.
£
S. d.
1816..63,440,597 76 2*
[1817.. 49,317,435 94 0
1818..48,488,721 83 8
1819.. 48,438,396 72 3
62
763
782
72
Assessments
for the relief
of the poor.
£
8,128,418
9,320,440
8,932,185
8,719,655
Sums
expended in
the relief of
the poor.
£
6,918,217
7,890,148
7,531,650
7,329,594
Prices paid
for weaving
a 6-4ths
cambric.
s. d.
4 0
4 0
5 6
4 0
The amount of government expenditure in 1813 was
£109,054,125., and, by the price of gold, the currency
was then depreciated 22 per cent., which would
give an expenditure, in gold value, of £84,863,697. ;
and, from the table, it appears that not more than
£48,438,396. were expended in 1819. Now, whether
we estimate the amount of the difference in gold or in
wheat, we shall find that the government took from
the people a much smaller amount of wealth in the
latter than in the former year; and, as the government
took less, more should have been left with the people,
to be by them enjoyed. The same observations will
apply with more or less force to each of the inter-
mediate years.
But the extent of parish relief which was necessary
for the poor, does not indicate any improvement in
their condition; as, in 1813, a sum equivalent to about
1,200,000 quarters of wheat was sufficient for their
relief; whereas, in 1819, a sum equal to more than
2,000,000 of quarters was required. Who, then, obtained
that amount of wealth which the government ceased to
take from the community? The derangement arising
* Marshall, page 101. These are the prices of a medium quality.
198
out of a transition from war to peace employments
might have some effect on particular classes, but could
not produce any extensive and long continued general
effects. To account for the little relief experienced at
this time by the people, from the less lavish expenditure
of the government, we must advert to the nature of
the particular burdens removed.
GOVERNMENT EXPENDITURE.
The drains of the government were first lessened by
the cessation of loans; but, although this would be
ultimately followed by a rise of wages to the same
extent, the effect would not be immediately felt. It
would be necessary that the amount of wealth, which
had been annually taken up by the government in loans,
should be left to be employed as capital, in competition
with the other existing capital; and that thus profit
should be reduced, and wages made to rise; but this
operation would require time. When a loan is first
made at the breaking out of a war, the rate of profit
does not rise on all capital instantaneously, but only on
that portion which is in what is called the London
market-that is, the money in the hands of specula-
tors, bill discounters, and bankers; and from them the
rise, in due time, extends to all circulating, and, finally,
to all fixed capital. When loans cease, the rate of
profit does not immediately fall on all capital. The
capital must first accumulate in the hands of its owners,
and come into competition with circulating, and,
also, with fixed capital, and it is only when it has
reduced the rate of profit on the latter, that the full
effect on wages is experienced. This view of the effects
of a cessation of loans will account for the labouring
class not experiencing immediate relief equal to the
amounts left in the hands of the capitalists. The
tendency to a decline in the rate of profit may, however,
TRANSFER OF EXPENDITURE.
199
be traced in the rise of the prices of 3 per cent. consols,
which were, in 1816, at 62, but, by 1818, had risen to
783; so that, in the former year, £62. obtained an
annuity of £3. whereas, in the latter year, it required
£78. 15s, to obtain the same annuity.
It so happened also, that, in taking off taxes,
that course was pursued which gave the least relief,
either immediate or final, to the labouring part of the
community; for, instead of taking off those taxes
which pressed immediately on them, and thus affording
them relief in the most direct way, and in the shortest
time, the property-tax was repealed; a tax the only
one which did not come finally out of the pockets of the
labourers, and from the repeal of which, relief to them,
to any considerable extent, would come the most cir-
cuitously, and at the most distant period. The pro-
perty-tax was paid principally by land proprietors,
fundholders, and capitalists. Now, of these, the fund-
holders would be immediately benefited to the full
amount of the tax; and, as the government had less
command over the wealth produced by the people, the
fundholders would have just so much more command.
The sum would be merely transferred from the govern-
ment to the fundholder, both being net receivers;
and, with reference to the condition of the productive
classes, it was of no consequence whether the govern-
ment or the fundholder expended the amount. Land
proprietors, also, while they received the same rents,
would find that the repeal of the property-tax left them
so much more to expend; and, instead of the govern-
ment, they would have the command over, and would
consume, the amount of the tax.
When a tax is imposed on capitalists, in whatever
shape it may be taken, the rate of profit, eventually,
200
THE PROPERTY TAX.
rises equal to the tax, as has been before explained;
and it follows, that, when a tax advanced by capitalists
is repealed, the rate of profit will fall equal to the tax.
But the effects are not simultaneous-they do not take
place at the same time. The property-tax being re-
pealed, the capitalist would, for a time, have the pre-
vious high rate of profit which was caused by the tax,
although he would have ceased to pay it. His net profit
would, therefore, be higher than was requisite to keep
up the existing stock of capital; and, in a little time,
capital would become more plentiful. Profit would
then fall, and when it had fallen equal to the tax, the
condition of the labourer would be so far improved by
the repeal of the tax. These considerations are suffi-
cient to shew that the condition of the poorer part of
the labouring class could not be immediately improved
by a repeal of the property-tax, and was not likely to
be ever improved by it, beyond what the fall in the
rate of profit would accomplish.
Such being the only alterations consequent on the re-
duction of the expenditure of the government during the
first four years of peace, no surprise need be felt at the
benefit of that reduction not reaching the great mass
of the people. The land proprietors and fundholders
were most palpably and materially benefited; and the
capitalists had a temporary advantage in the repeal
of the tax; but the labourers had to endure their
privations, and what they were is shewn too plainly in
the sums necessary to afford them relief up to the year
1819.
The foreign commerce of the country, during the
same time, appeared to be extremely flourishing; the
exports had greatly increased in quantity, and grain
had been imported to a large amount, the money prices
201
having kept up to a high rate in a currency not much
depreciated. The exports and imports may be seen in
the following table :—
In the Years
1816..
1817.
1818.
1819..
EXPORTS AND IMPORTS.

•
British produce & manufactures.
Declared value Official value
of exports. of exports.
Official value of
imports
retained for
consumption.
£
£
£
40,328,940 34,774,520 12,933,255
40,337,118 | 39,235,397 | 19,647,049
45,188,250 | 41,963.527 | 24,983,998
34,248,495 32,923,575 19,775,664*
From this table it would appear that the nation was
in a flourishing condition. The quantities of exported
goods had increased from £34,774,526. in 1816, to
£41,963,527. in 1818: although there was a falling off
in the quantity exported in 1819, it having been in that
year only £32,923,575. Yet the poor required more
relief than at any former period. Here, then, we have
the government expenditure reduced from £84,863,697.
of gold value in 1813, to £48,438,396. in 1819, with an
increasing foreign commerce, and, at the same time, the
numbers and productive power of the people were
known to have augmented, and yet distress increases !
How is this to be accounted for? There must have
been counteracting causes at work; and these we
must endeavour to trace out, following them through
their particular modes of operation, to their final effect
on the condition of the people.
The first of these, to which we shall advert, is the
restoration of the currency to the standard value. The
currency was, for some time prior to, and including
* Marshall, page 99.
1
202
1813, depreciated, say, 20 per cent. But from that
time, with some fluctuations, down to 1821, the depre-
ciation became less, until in that year it ceased, as
gold was then at standard price. In stating the reduc-
tion of government expenditure, we have allowed for
this depreciation in 1813, by taking the amount in gold,
and not in the currency of that period. But there are
other fixed money payments which the productive part
of the people may have to make, and which, in fact,
the British people had to make, to a considerable
amount, at this time. These are annuities of various
kinds: sums engaged to be paid by lease for all kinds
of mines, buildings, houses, warehouses, mills ;-com-
positions for tithes, mortgages, &c., and, lastly, rents of
lands. These having all to be now paid in a currency
increased in value 20 per cent., would, in effect, cause
20 per cent. more of produce to be taken from the
payers, and given to the receivers. Whatever might
be the form in which the payment might be made,
this would be the real effect. Every payer would have
to part with 20 per cent. more goods to obtain the
money wherewith to pay, and every receiver would, in
the money which he received, obtain the power of
purchasing and consuming 20 per cent. more of the
produce of labour. Now, as the body of receivers are
of the wealthy and unproductive class, and the payers
are of the poorer and productive classes, the former
would be the gainers, and the latter the losers by the
rise in the value of the currency. It has been suffi-
ciently explained before, that, whatever burden the
capitalist may have to bear, it affects him only tem-
porarily; and when capitalists, in this way, were gene-
rally obliged to pay annuities 20 per cent. more in
value, the gross rate of profit would be proportionately
VALUE OF PRIVATE ANNUITIES.
AGGREGATE PRIVATE ANNUITIES.
203
kept up, and the whole effect of the alteration in the
value of the annuities would fall on the labouring
classes, aud would be, finally, taken from wages. The
rent paid for land at the end of the war has been sup-
posed to have been 40 millions, and rents did not then
fall, as a strong expectation was generally entertained
that prices would again rise. The passing of the corn
bill of 1815 contributed to the fixing of this expecta-
tion; and, in point of fact, rents did keep up to the
war rate, or rather to the rate paid in the low-valued
currency. If we imagine all other annuities, payable by
the productive classes, to have amounted to 10 millions,
it will give a sum to be paid of £50,000,000., and
this, in a currency increased in value 20 per cent.
would command as much wealth as 60 millions would
previously have done. Even if we suppose the whole
of these annuities to amount only to 40 millions, then
these 40 would be equal in value to what 48 would have
been in the depreciated currency. As we find the
annuities to be either 40 or 50 millions, we shall have
to conclude that the cessation of a depreciated state of
the currency was equal to an additional tax of either 8
or 10 millions sterling in that currency, and the labour-
ing class finally lost, and the receivers of the annuities
gained, that amount, by the rise in the value of the
currency to the old metallic standard of value.
But the restoration of the currency to an undepre-
ciated state was not the only alteration which it under-
went at this time. Gold was rising in its exchangeable
value, from an alteration in those circumstances which
had previously determined it to flow towards this
country with a strong force. The tendency of gold to
flow into or towards the country became, at this period,
weaker, or it ebbed back from the country; and had
-
204
GOLD AND BANK NOTES.
the currency been made up entirely of gold at the time,
gold would have flowed out until the quantity was re-
duced, and prices had sunk to a lower level. The existence
of paper money, when that paper was made liable to be
paid in gold, did not, however, keep up the quantity of
currency materially above what it would have been, if
constituted of gold alone; as the paper was reduced to
the quantity to which the gold would have amounted
in the absence of paper. And as gold either ceased to
flow towards this country with equal force, or ebbed
back from it, paper was obliged to be taken in, to
preserve it at the same level as the gold. If this had
not been done gold would have become relatively
scarce, and would have risen in paper price, instead of
falling as it did. Country bank notes must, at this time,
have been withdrawn from circulation to an extent
sufficient not only to put an end to the depreciation of
the paper below gold, but also, to an extent sufficient
to make its value rise equal to the rise that was taking
place in the exchangeable value of gold itself. As
there was a two-fold reduction in the value of the
currency during the progress of the war, first from a
fall in the exchangeable value of gold, and afterwards
from an excessive issue of paper; so there was now a
two-fold rise in the value of the currency, first from a
withdrawal of paper to an extent sufficient to remove
the depreciation arising from the excessive issue of
paper, and afterwards sufficient to raise its value equal
to the rise in the exchangeable value of gold. The
reasons for asserting that gold itself rose in value at
this time, we now proceed to state.
The returns of the official values of the commodities
exported express their quantities, and the declared
values give the currency prices of the period. If, there-
205
fore, we allow for the depreciation of the currency at
the time, we may obtain the aggregate value of the
exports in gold, or their bullion values. Now, by
comparing the bullion values with the quantities at
successive periods, we find what alterations were taking
place in the power of the exports to command gold, in
the great market of the world, and to determine it to
flow towards this country. The official and declared
values, the latter being reduced to gold value, and
expressed in millions, for the following periods, will
shew the alterations which were taking place. In the
period of
5 yrs. from 1798 to 1802, the gold value was 201, the official, 120,
6 yrs.
1803 to 1808,
236,
140,
1809 to 1814,
212,
190,
192,*
190.
""
""
6 yrs.
5 yrs.
1815 to 1819,
Here we perceive that, while the quantities of goods
exported increased from 120 in the first period to 190
in the last, the gold value fell from 201 to 192. The
quantities increased about seven-twelfths, and the gold
value decreased about one twenty-second part, shew-
ing that the power which any portion of the exports
possessed to command gold had considerably declined.
The command over gold seems to have been about the
same during the two first periods, as, in both of them,
the gold values were to the quantities as about 20 to
12, in the third period a great alteration took place,
and the gold value was to the quantity only as 20 to
18, and in the last period we see they are nearly as
20 to 20.
""
"9
VALUE OF THE EXPORTS.
""
""
""
>>
""
It thus appears that the improvements effected in
the production of British exports commanded a more
* 209 millions were the amounts in these 5 years, from which take 83
per cent. for depreciation, and the gold value, in round numbers, will be
192 millions.
206
copious supply of gold from the rest of the world up to
the period terminating in 1808; but, after that time,
either from abundance of supply of exports, or from
foreign competition, or from both of these causes to_
gether, the power of commanding this supply of gold
was weakened. Up to 1808, as gold was procured at
comparatively little cost in products, its exchangeable
value was low; but, after that period, as more goods
had to be given for gold, it was obtained at a some-
what greater cost in products, and its exchangeable
value began to rise, slowly at first, and not very per-
ceptibly; but, by the end of 1814, it shews itself plainly
in the reduced gold prices of the exports, and must
have affected the general prices of all commodities
produced and consumed within the country. The alte-
ration was, partially, concealed for a time, by paper
remaining in circulation in a depreciated state; but,
when a part of that paper was withdrawn by country
banks, in consequence of the superabundance of grain,
and its decline in price; and, more especially, when
the banks found that they must prepare for paying in
gold, and the issuers of paper were compelled to draw
it in, until it acquired the value of gold, the decline of
prices became general and palpable.
But the improvements in the production of exports,
and the consequent low exchangeable value of gold in
-the first instance, and the subsequent rise of that value
on the falling of the selling prices of the exports,
could not have been a simple or uniformly progressive
operation. The improvements were successive; but,
when the earliest improvement had had its maximum
effect, and when the fall in price of the article made
by it was about to suffer gold to recover its value,
another improvement might be, and, in point of fact,
COST OF SUPPLY OF GOLD.
DECLINE IN PRICES OF EXPORTS.
207
was made. In this way the great power over foreign
gold first, and reduction of price to the foreign con-
sumer afterwards, might proceed in all imaginable
degrees of relation to each other. The article which
had required 40 days' labour, upon being produced with
30, would determine some certain supply of gold, which
would raise money prices to some given height, while,
at the same time, an increasing supply of this article
might be lowering its own price in the foreign market,
and, at last, might lower it so much as to cause the
supply of gold to begin to decline. But now the other
improvement might take place, and the same article
be produced in 20 days. The reduction of its price
might become, say, equal to the extent of the first im-
provement, the foreigner getting it for only three-
fourths of the gold he had given previously to any im-
provement. But the second improvement beginning
now to produce its effect might be sufficient to keep
the supply of gold strong, the currency full, and its
value low. In time a superabundance of the doubly-
improved article might sink its price still lower, and
the foreigner might obtain it for, say, the price of 28,
26, or 24 days' labour; and in this way, at last, the
improved article being produced and exported in suffi-
cient abundance, the whole benefit might, finally, be
absorbed by the foreign consumer; the price sinking
in a ratio equal to the whole improvement, and British
labour commanding only the same quantity of gold as
it did previously to the first improvement.
In the earlier progress of these alterations, the money
prices of the improved exported articles would be thus
raised, compared with the quantities of labour required
for their production, as would also the prices of those
articles produced in an unimproved way-the earlier
208
LIMIT OF GOLD PRICES.
effect of a more full supply of gold being to raise the
gold prices of all things. Now it is clear, that if the
exports were made up of goods, in part produced in
improved, and in part in unimproved modes, that the
fall which, in time, would take place in the former
might be counterbalanced by the rise in the money
prices of the latter, and thus the aggregate quantities
and prices might preserve about the same relation to
each other. It seems tolerably evident that the un-
varying relation of quantity to price, in the whole of
the period from 1798 to 1808, was preserved in this way.
A fall took place in the prices of the improved articles,
while the unimproved rose in price, and the two alter-
ations balanced each other; but, after that period, the
fall appears to have continued in the prices of the im-
proved articles, while either but little or no further
rise took place in the prices of those which were unim-
proved. Indeed, it seems that even a constant succes-
sion of important improvements cannot raise gold prices
beyond some certain height, as the rise first checks,
and, if carried sufficiently far, at last destroys, the ex-
port of articles produced in an unimproved way. This
drives more labour and capital to the production of the
improved articles; and the result, in no long time, is a
superabundance of those articles, and a reduction of
their selling prices in foreign markets.
At the same
time, as the general rise of money prices raises the
prices of all articles produced in an unimproved way,
a strong stimulant is presented for the more extensive
importation of those articles from other countries.
The money prices of food, as well as of other articles
similarly produced, rise when there is a general rise of
money prices; but this makes their home prices so much
above the foreign prices, as to tempt to an increase of
DUTIES ON IMPORTS.
209
their importation; and this increase tends to take gold
out of the country at the same time that cheaply pro-
duced exports, selling at high prices, tend to bring it
in: and, the two forces acting in opposite directions,
an equilibrium is established which leaves money prices
at some certain level. If, by prohibiting importation
of grain, you weaken this counteracting force, you may
keep up prices to a higher range; and the check to
higher prices, arising from importation, may be then
found in some other article, the difference in the prices
of which, in the home and foreign markets, offers the
greatest inducement to importation. If importation
should be generally clogged and impeded by high im-
port duties, the range of prices might be carried still
higher. In fact, under such a system, the smuggler
might become the regulator of the quantity of currency,
and the determiner of the range of money prices.*
Impeding importation would not, however, perma-
nently secure very high money prices, because the high
prices of the exports would check their sales in foreign
countries; and that check, acting together with com-
petition in the production of the exports at home,
would lower their selling prices to such a rate as would
give only common profits and wages in Great Britain.
If money prices were now much higher in Great Bri-
tain than in foreign countries, the British producer
would have an inducement to go to another country,
where money prices were low, and become the rival of
his countrymen in foreign markets. Foreigners, also,
would establish rival manufactories, and the higher
the range of money prices in Great Britain, the stronger
would be the inducement to establish them; so that
Q
* In Spain this appears actually to have occurred.
210
EXCHANGEABLE VALUE OF GOLD.
the final effect of a system which should aim at keeping
up a high level of gold prices would be an earlier
transfer of the improved manufacture to other countries.
The effect of exporting articles made in an improved
way is, then, to lower the exchangeable value of gold,
or to raise the gold prices of commodities to some cer-
tain height, when counteracting causes begin to operate,
and, at last, limit the possible height to which prices
can be carried. The prices may remain at some high
level for a greater or less time, according to the extent
of the improvements, the opportunities for counterac
tion by importation, or the facilities for establishing
rival manufactories in other countries. At the period
of which we are treating, all these causes were
operating, with more or less force, from time to time.
The improvements in the cotton manufacture, in par-
ticular, were great and progressive; gold was procured
for little labour, in return for exports, and gold prices
rose. The superior profits and wages at first ob-
tained in that department of manufacture, caused a
great extension of the manufacture at home, while rival
establishments were appearing in other countries; and
the effect, in due course of time, was a decline in the
selling prices of the articles, which gave a larger part
of the benefit of the improvement to the consumer, and
reduced the power of the producer to command gold.
Gold prices then began to fall, while the superior
facilities, presented by a state of peace, for importation,
counteracted more strongly the effect of cheap exports.
This superior facility for importation was checked by
the corn-bill, but the importation of other articles had
its degree of influence; and when an equilibrium was
established, it was at a lower range of money prices
than that which existed during the war.
SUPPLY OF THE PRECIOUS METALS.
211
The alteration in the value of the currency was not
then attributable solely to withdrawing enough of paper
to restore it to a level with gold, but also to a rise in
the value of gold itself.
Mr. Jacob, Mundell, and others, have contended that
the reduction of prices, since 1812, is the effect of a
falling off in the supply of the precious metals from the
mines; but the evidence they adduce is of a very un-
satisfactory nature. If the decline of prices had been the
result of a reduced supply of the metals, that decline
would have been experienced throughout all the
countries of the commercial world; but no such decline
took place. The general range of money prices in
continental Europe has remained about the same during
the last 40 years. The great general alterations in
prices, during that period, have been local, and con-
fined to Great Britain, or to articles dependent on the
market of Great Britain.
M. Say, in answer to enquiries made by Mr. James,*
says, “you address to me several questions, of which
the principal is to know if prices have undergone, in
France, the same revolution as in England? As regards
the precious metals, I can answer, no.
As regards
wheat, the prices have never been more variable than
within the last 20 years. There have been very good
crops, and very bad crops; and the contracts for the
armies, made sometimes at any price, augmented the
effects of the vicissitudes of the seasons. The medium
price of wheat, in the important market of Roye, in
Picardy, one year with another, for the 14 years ending
in 1816, was nearly 29 livres for the septier of Paris;
but this price is evidently too high, as these 14 years
*The letter appeared in the Morning Chronicle' of August, 1822.
Q 2
212
VALUE OF GOLD IN FRANCE.
contain two years of famine, and three epochs of
supplies for Bonaparte, for the important campaigns of
Moscow, of Leipsic, and of the hundred days.”
"The price of colonial produce has fallen much in
France; but this proves nothing more than the advan-
tage of having the sea free.".. " Although it is difficult,
consequently, to judge of the value of money, after the
variation in the price of such and such an article, never-
theless, we can state that things generally have not
fallen in price in France since the depreciation and the
restoration of the paper money in England, except as
far as particular circumstances may have contributed,
as the introduction of cheaper and more expeditious
processes of fabrication, &c. I do not believe, there-
fore, that there is any ground for saying that the fall
of prices in England has its analogy on the continent.
It appears to me that it proceeds entirely from the
alterations in the value of your money."-See Tooke,
vol. 1, p. 179.
According to the Marquis Garnier, taking the ex-
change at 25 francs, wheat, at the market of Paris, for
the nineteen years ending in 1819, was at an average of
45s. 6d, per quarter. Count Chaptal, in his work 'Sur
l'Industrie Françoise,' published in 1819, estimates
the ordinary average price of wheat throughout France
at 42s. 10d. per quarter. The average price in England,
for the nineteen years ending in 1819, according to
the Commons' report of that year, was 87s. 8d. per
quarter!
That we may see the periods of high prices in Eng-
land, the following table is given of the mean prices of
wheat, on the 1st of January, and the 1st of July of
each year, during periods of seven years each, ending
with 1798, 1805, 1812, and 1819, taken from the Com-
VALUE OF GOLD IN ENGLAND.
213
mons' report, on the resumption of cash payments in
1819.
From 1792 to 1798, average of the mean prices of wheat per qr.. 56s. 6d.
From 1799 to 1805,
82s. Od,
From 1806 to 1812,
91s. 4d.
From 1813 to 1819,
73s. 2d.
39
""
در
··
..
During this period, great variations in the seasons,
producing abundance or scarcity, affected France and
England alike, as is almost always the case, from the
contiguity and similarity of climate. Both were at
war, and could obtain supplies from other countries
only under considerable disadvantages. This was the
case, more particularly with France; and yet the gold
price of wheat was, in England, nearly double the
price that it was in France. Gold in England, from the
causes explained, had only about one-half the ex-
changeable value that it possessed in France.
The mean price of wheat in 1819 (72s. 3d. per quar-
ter) may be taken as the indicator of the general decline
in money prices, or of the rise in the value of gold.
And, taking this rise to have been, up to 1819, 10 per
cent., then the whole sums of net wealth paid by the
productive classes, at that period, would be, from this
cause alone, increased in value 10 per cent., and addi-
tional wealth to that amount would be taken from
them. For a certain time, it is true, some of this would
be furnished by the capitalists; but it would be finally
paid by labourers alone, and their privations would be
proportionally increased.
The total net wealth, furnished at this time, may be
put down at 100 millions-that is, 50 millions to indi-
vidual annuitants, and 50 millions to the government;
and the rise in the value of gold, 10 per cent., would
make this 100 millions equal to 110 millions previous
to the rise. Add to this the 20 per cent. increase in
214
INCREASED VALUE OF CURRENCY.
value, consequent on the removal of depreciation, and
we have, from alterations in the value of the currency,
additional wealth taken from the people equal to 30
per cent. on the total sum, or the 100 millions would
now command commodities equal to 130 millions when
the currency was at its lowest value; while the benefit
which the labouring classes would receive could arise
only through a reduction in the rate of profit, conse-
quent on the cessation of loans, and the repeal of the
property and income tax. This statement, it is con-
ceived, is quite sufficient to account for the condition of
the labouring classes not improving immediately after
the termination of the war.
The increase of population would, there is no doubt,
counteract to some extent the additional burdens thus
imposed, as such increase would enable the people to
furnish the required wealth with more ease; and, had
it not been for this advantage, the rise in the value of
the currency would have had a still more injurious
effect on the condition of the people than that which
was actually experienced. But, on the other hand, the
fall in the selling prices of the exports would make it
necessary that a larger portion of British labour should
be engaged in their production than when they sold at
higher prices. The same amount of imports, therefore,
cost larger quantities of British labour; that is, they
were dearer in labour value, or required more labour
to procure them; and less labour was, consequently,
left to produce annually at home all that great mass of
wealth which satisfies the demands of the net claim-
ants, and subsists the whole community.
GREAT BRITAIN, &c.
CHAP. VII.
FROM 1820 TO 1828.
REPEAL OF TAXES.—THE RISE OF RENT DURING THE WAR SUSTAINED
DURING PEACE.-TITHES. THE CURRENCY FROM 1820 to 1826.-
EFFECTS OF LOW PRICE OF FOOD ON MANUFACTURES.-POOR'S
RATE, DECLINE IN THE RATE OF PROFIT.—EXPORTS.—THE PANIC
or 1825.-SMALL NOTES. INCREASE OF MANUFACTURES, AND
REDUCTION OF PRICES OF EXPORTS.—ELEMENTS OF COST OF SUPPLY
OF GOLD AND OF PRICE.-BEST CRITERION OF THE VALUE OF
MONEY.-COMPONENT PARTS OF PRICE.
·00·
In the year 1820 the total government expenditure
was £50,259,032. leaving a surplus, to be used in buying
up the debt, of £667,436.*
In 1821 taxes on horses used in husbandry were
repealed, to the amount of £480,000. and the expen-
diture was £49,254,306. leaving a surplus, that year,
of £2,743,362.
In 1822 taxes were reduced, on malt from 3s. 6d.
per bushel to 2s. 6d. amounting to £1,400,000.; on
leather, from 3d. b. to 1½d.-£300,000.; on salt,
from 30s. per cwt. to 2s. 6d.-£1,300,000. and the re-
mainder to cease on the 5th of January, 1825. The
* Marshall, p. 113.
216
REPEAL OF TAXES.
tonnage duty on shipping was also repealed, amounting
to £160,000.;-making a total of £3,610,000, of
taxes taken off. The expenditure, in this year, was
£45,935,195. leaving a surplus of £4,788,481.
In the year 1823 assessed taxes were partially re-
pealed to the amount of £2,360,000. and there was a
reduction of the duty on spirits in Scotland; yet, in
that year, the net income of the government was
£54,473,871. The expenditure was £48,385,998.
and the surplus £6,087,873.
In 1824 the reduction in the duty on rum, from
11s. 7 d. per gallon to 10s. 6d. gave a relief of £150,000.;
on coal carried coastways, £100,000.; on raw silk,
from 5s. 6d. to 3d. and on thrown silk, from 14s. 8d. to
7s. 6d.―£450,000.; on foreign sheeps' wool, from 6d.
to ld. gave £350,000.; and a repeal of stamp duty
on law proceedings gave £200,000. making a total
reduction of £1,250,000. in that year:-yet the net
income was £55,456,575.
In these five years £7,700,000. in taxes were taken
off, independent of the reduction in the duty on spirits
in Scotland, in 1823, which would make the whole
about eight millions. At the time, this reduction was
considered to have given great relief; as, towards the
end of the period, an appearance of general prosperity
was exhibited by the country; but this appearance was,
two years afterwards, found to have been fallacious.
In looking at the taxes repealed, or reduced, in these
five years, it will be seen that many of them, which
were the earliest taken off, were such as pressed more
particularly upon the land. Those on horses used in
husbandry, on malt, on leather, and on salt, to the
amount of £3,380,000. pressed almost entirely on the
land. This circumstance, of itself, would not have
*
HIGH RENTS RETAINED.
217
been of material importance, if it had not been con-
nected with something else, as we have seen that all
taxes come finally out of wages; but the reduction of
these taxes enabled the land proprietors the more
easily to keep up their rents. It is, indeed, often
loosely said, that rents have been reduced since the
termination of the war; but what evidence have we of
this fact? Some who had advanced them beyond the
general rate they attained, in 1812 and 1813, may have
reduced theirs; but it does not appear that any general
reduction has taken place. The corn-law of 1815 fed
the farmers with hopes that high prices would be sus-
tained, and they clung to their farms through the
trying year 1816. When prices fell still lower, in 1822,
they were somewhat relieved by the repeal of taxes,
and expectations were kept alive, which prevented rents
from being lowered, although the prices of produce had
fallen one half.
It is fully shewn, at the commencement of this work,
that rent is a tax levied on the farmer, and, through
him, on the rest of the community. And that the land
proprietors, when circumstances induce them to act
together, can raise the rent to as large an amount as
the community can possibly pay. Individual owners of
small portions of land cannot do this; nor can it be
imagined that there is any actual conspiracy or concert,
on the part of the proprietors, against the rest of the
community, seeing that the parties are very numerous
and spread over the whole country, and are generally
unaware of the great power which, collectively, they
possess: fortuitous circumstances must, therefore, oper-
ate to produce any considerable rise of rent. It must be
the result of proceedings in which all the parties im-
mediately concerned, are, although acting indepen-
218
dently of each other, induced to concur, and such was
the nature of the circumstances in operation at this
period.
HIGH RENTS RETAINED.
During the progress of the war the reduction in the value
of the money in which the tenant engaged to pay his rent
altered the contract to the advantage of the tenant,
and this alteration happened to be progressive through-
out the war. The holders of land were truly considered
the most prosperous class in the community; and the
natural consequence was, a keen competition for land,
at rents greatly advanced; it having been found that
agreeing to pay a rent beyond the rate of the time was
advantageous, because the alteration in the value of the
currency in which it was paid, enabled the tenant to
pay, with comparative ease, what had been previously
considered an extravagant rent. In this way rents
were raised up to the year 1814, when, it is presumed,
they reached an average of £1. an acre, on 40 millions
of acres in Great Britain.* But if our facts have been
true, and our arguments conclusive, these 40 millions
sterling of rent would command, in 1813, not more of
common commodities than 20 millions would have done
in 1793, the currency having been reduced 50 per cent.
in value. In this period, therefore, the rise of rent was
almost nominal, the probability being, that any rise in
its real value did not do more than furnish to the pro-
prietors the means of paying additional taxes imposed
on them. But in a subject of this kind, it is imprac-
-
* A farm, containing 33 Cheshire acres, in Whalley, Derbyshire, was, in
1797, let for £30. a year, the landlord paying all taxes; at present the
owner can get £80. a year for it, the tenant paying all taxes. In Cheshire,
near Sandbach, five farms, in 1793, and two others, in 1802, let for £820.-
at present for £1,720. The common advance, from the commencement of
the war, in the various cases that have come to my knowledge, appears to
have been after the rate of from one to about two and a half.
HIGH RENTS RETAINED.
219
ticable to go into minute particulars, as we have not
data to proceed upon; all, therefore, that can be done,
is, from the facts in our possession, to assume some
general amounts; and, if those amounts prove fair
approximations to the truth, they answer the purpose
of illustrating the causes of the alterations which were
taking place in the conditions of different classes of
society, as well as if perfect accuracy were attained in
the detail of facts.
In computing the amount of rent of land in 1813 at
40 millions, the land proprietors are then presumed to
have been in a situation to command the means of
living in about the same style as in 1793, the advance
of nominal rent compensating them for the reduction
in the value of the currency, and the additional taxes
they had to pay. But after the period of 1813, the tide
of value turned-the cause of depreciation was removed,
—and gold began to return to an exchangeable value
in this country, nearer to an equality with that which
it had in other European nations; and, had rents fallen
in amount as money rose in value, the productive part
of the community would have felt no injurious effects
from the alterations in rent, seeing that only the same
quantities of wealth would continue to be taken from
them. Rents, however, did not fall, but remained at
the same nominal sums, while those sums were repre-
senting larger quantities of wealth.
A principal influencing cause of this stationary
nominal and rise of real rent was, the tenacity with
which tenants adhered to their farms, through igno-
rance of the real nature of the situation in which they
were placed. Farming had been so profitable a pursuit
that it was clung to in the natural expectation that it
would become so again. Of the causes which had
M
220
RENT AND WAGES.
reduced the value of money, the farmers, as a body,
were as little aware as the ministers or legislators of the
time shewed themselves to be, and of the causes that
were then raising its value, they were equally unin-
formed; they, therefore, generally kept their ground
as well as they could. Now, a general concurrence of
the farmers, in the payment of any rate of rent, is
sufficient to establish that rate; and, in this way, the
rents first paid in a currency of low value were retained
in a currency of higher value. The removal of the
depreciation was at a time when the farmers had much
of the large profits obtained during a long previous
period, and they were, therefore, the better able to
stand that blow. The rise in the value of gold was
more gradual, and gave them time to adjust themselves
to their reduced condition; and, between the termina-
tion of the war, and the last year of the period of
which we are now more particularly treating, 1824,
they seem to have settled down into a state in which
they have been compelled to part with much larger
proportions of their produce to obtain the means of
paying their high money rents. Their ability to pay
their labourers became, of course, reduced; their in-
genuity was exercised in paring down wages to the
lowest possible rate; and more labourers sank into the
ranks of pauperism. And thus the farmers, the labour-
ing paupers, and the parish officers, have been strug-
gling on under increasing difficulties. The prices of
the articles consumed by paupers declined; but the
sums necessary to give them relief continued equally
large.
The burden of tithes too increased at the same time,
as they now became much more than a tenth of the
returns for the profit of the capital, and the wages of
221
the labour employed on the land. They became a tenth
of the crop, when that crop was enhanced in value by
the high rent, and they commanded in the market not
merely a tenth, but, say, a sixth or a fifth of the labour
and capital value. From the produce of an acre which
would sell for, say, 80s. would have to be paid 20s. as
rent, and 8s, tithe; but this 8s. would be, not one-tenth
of the wages and profits, but a sixth and a half part,
seeing that the 8s. tithe is the sixth and a half part of
52s., the sum left for wages and profit after paying the
rent and tithe. From this 52s. has also to be deducted
enough to procure seed for the next year, and to keep
up the stock of horses, implements, &c., so that we
may state the tithe to amount to one-fifth of the wages
and profit value, instead of one-tenth, as is generally
loosely intimated.
The burden of tithe is more complained of at present
than it was formerly; and, from this view, it will be
perceived, not without cause-it is more felt now than
it was before. The cultivators are suffering under
heavy taxes and high rents, and the burden of tithe is
greatly increased by those taxes and rents. The land-
lord can refuse to permit his land to be cultivated,
unless the rent he requires be given; and there are so
many wanting to occupy it, that they are willing to
take it on the landlord's terms, feeling that they
obtain the use of the land in return for the rent paid.
But with the tithe owner no previous contract is made
-from him nothing tangible is obtained; but when the
cultivators are about to reap the fruits of their labour,
he steps in and claims a tenth of the crop. No matter
what the cultivator has to pay in other quarters; no
matter what horses he must keep; how expensive his
seed may be; the manure he has to buy; what rent he
VALUE OF TITHES.
i
[
222
ABOLITION OF TITHES.
has to pay; the tithe owner takes his tenth of the crop,
even though only five-tenths of it should be left to
repay the farmer for his labour, and the use of his
capital, and to pay all the people he has to employ. In
France tithes were felt to be an increasing burden;
and, at last, popular discontent swept them away.* In
Ireland the same thing is taking place in another form,
and the turn of England will probably come ere long.
It is not a question of religious feeling; it is distress
struggling against exaction.
But the effects do not rest with the agricultural class.
Neither capital nor labour willingly remain struggling
with difficulties, if they can escape from them; and,
while the manufacturing and commercial classes were
in a better condition, capital and labour would be, to a
greater or smaller extent, passing from agriculture to
manufactures and commerce:-this, in fact, would con-
tinue until competition had reduced all those classes to
nearly the same state. When this result arrived, it was
found that, although the price of landed produce was
low, compared with what it had been, in a currency of
lower value, yet it was high compared with the prices of
* G. Greene, in his account of the occurrences in Normandy, at the
early part of the French revolution, says (page 23), "The abolition of tithes,
evidently decreed by the national assembly to gain over the peasants to
their cause, has wonderfully operated on that class of people; and the
abolition of the feudal laws, which took place at the same time, completed
the intoxicating draught." This was written some time after the event had
occurred, when the people bad had time to experience the benefit of the
abolition of tithes. In addition to tithes, the cultivators had had "to pay,
in France, besides all government taxes and other impositions, a rent of
from 10s. to 12s. an English acre, and to furnish to their landlords poultry, day-
labour, &c." The cultivators appear to have been most dreadfully burdened.
"The pay of the day labourer," says Greene, "is only 73d. per day, for the
maintenance of himself and family;-humanity will suffer by a detail of
their manner of living."-page 234.
LANDED PRODUCE TAXED.
223
manufactures. The reduction in the quantity, and the
increase in the value of money, caused prices generally
to fall; but they fell less in landed produce than in
manufactures, because the landed produce was loaded
with heavy taxes, in the high rent and the tithe, which
the farmer was obliged to pay. The farmer, conse-
quently, sold his produce at a high price, as compared
with the prices of manufactures, for the same reason
that the maltster sold his malt at a much higher price
than the barley grower sold his barley. Both parties,
having to pay taxes, were obliged (in addition to the
common cost charges in the profit and wages of the
time, as established by competition,) to charge the
taxes in the prices of their respective articles. The
manufacturers loudly complained of this, and called
for a free trade in corn; but the land proprietors had
a predominating influence in the legislature, and the
distress which the farmers had really experienced was
made a pretext to compel all classes to purchase pro-
duce from the now highly rented and oppressively
tithed lands of Great Britain.
It is very probable that the land owners of Great
Britain were stimulated to adhere to the high money
rents they had obtained, in a different currency, so
generally as to enable them to secure those rents, by a
great number of them being burdened with the pay-
ment of fixed sums, as annuities, and by others being
under obligations to pay interest for money borrowed
in a currency of low value. Parties so circumstanced,
having large definite sums to pay, are obliged to
struggle to keep up their rentals, or the incumbrances
would sweep away the whole of them. Such influences
as these account for the retension of the nominal rates
established under different circumstances, and the con-
224
sequent great rise in the real rent paid. We should
also bear in mind, that the different parties concerned
were not aware that any alteration had taken place in
the value of the money which was paid and received;
they had their attention fixed merely on the market
price of corn. Landlords, as well as farmers, wanted
high prices. The language of the farmers commonly
was, "We do not mind the amount of rent, only let us
have high prices restored;" and, to accomplish this
point, different expedients were recommended. Corn-
laws, paper money, and a different system of banking,
were proposed, and, to a greater or less extent, adopted;
all aiming at establishing high prices, but without ac-
complishing the desired object. It now cost more
labour or goods to obtain a given quantity of gold;
and, therefore, more labour or goods would exchange
for that quantity of gold. If paper money was forced
into circulation to excess, the quantity of currency
became more than our command over the gold in the
market of the world would sustain; and gold separated
from paper. Paper sank in value below gold, and was
returned on its issuers, and thus it was again raised to
a level with gold,—or, a part of the gold left the coun-
try; and the currency remained that quantity which was
determined by the reduced command over gold; and a
low range of money prices was established accordingly.
From 1820 to 1824, the Bank of England notes in
circulation were reduced more than four millions; but,
as the bank was known to have issued, at the time,
much more than that sum in coin, as far as they
were concerned, no reduction had been made in the
whole quantity of currency. If a part of the coin paid
by them left the country, that circumstance showed
that, from some cause, our quantity of currency was
FALLING PRICES.
225
greater than could be supported by the degree of com-
mand we had over the gold market of the world; and,
therefore, the quantity was reduced by gold flowing out
of the country.
AMOUNT OF CURRENCY.
The following tables present a view of such important
facts, connected with the currency at this period, as, in
addition to those given in page 195, will enable any
one to form a conclusive opinion on some circumstances
which occurred at the time.


In the years
Country
Bank Notes
Bank
of
in circulation in England Notes
in circulation
each year,
ending
October 10.
(Mushet.)
In the years Gold coined.
The portion of
Bank
of
in the last week England Notes
in August.
under £5.
(Marshall.) (Pebrcr.)
(Marshall.)
£
1820.. 949,516
1821.. 9,520,760
1822.. 5,356,787
1823..
759,748
1824.. 4,065,075
1825..
1826..
£
£
£
£
|
|
|
1820.. 11,767,391 | 24,553,160 | 6,686,857 | 36,320,551
1821.. 8,414,281 20,449,320 4,148,812 28,863,601
1822.. 8,067,260 18,526,430 1,038,267 26,393,690
1823.. 8,798,277 19,582,348 595,640 28,380,625
1824.. 10,604, 172 20,293,326 458,222
1825.. 14,147,211 | 19,290,570
30,897,498
432,032 33,437,781
Gold Coin
in the hands of
the Bank of
England.
(Pebrer.)
Average
amount of
Gold & Silver
Bullion held by
the Bank
in the years
ending Feb. 25.
(Pebrer.)
Total
of
Country Bank
and Bank of
England Notes
in circulation.
£
2,957,000
3,162,000
£
3,969,528
8,174,419
11,631,090
4,805,000
7,509,000 10,254,698
7,575,000 12,606,963
6,405,000 11,858,595
2,682,000
4,321,702
* In the official tables, published in 1833, the amounts of gold coined at
R
226
AMOUNT OF CURRENCY.
From these tables we may see pretty clearly the
working of 'Peel's bill.' The Bank of England, in
1821 and 1822, gave gold for the one and two-pound
notes; and the country bank notes, partly through the
abundance, and consequent cheapness, of landed pro-
duce, were reduced to about eight millions, or to some-
thing more than one-third of their amount in 1813.
The exchanges rose to par, and the currency to the
mint standard of value, and these results were obtained
without the Bank of England and the country bankers
collectively having themselves materially reduced the
aggregate amount of currency. The whole amount
above silver, was, in 1813, say, 46 millions, all in bank
notes. In 1823 the notes in circulation were only a
little more than 28 millions, but the Bank of England
had, since 1815, caused to be coined £23,728,096. in
gold, to which, if we add the stock in hand in 1815,
£1,631,000. we have a total of £25,359,096. Now, as,
of this there remained in hand in 1823 only £7,509,000.
the bank must have paid to the public £17,850,096. in
gold, to which add the £28,380,625. of notes in circu-
lation, and we have a total currency above silver of
£46,230,721. being a little more than the paper cur-
rency of 1815, and very near to that of 1813.
That the whole of this did not remain in circulation
in this country is very evident; but then a part of it
flowed out because the currency was in excess. During
the Mint are stated to have been, in the years
1825...
1826..
1827.
1828..
1829..
1830.
1831.
• · •
• •
↓ •
•
·
£4,580,919.
5,896,461.
2,512,636.
1,008,559.
2,446,754.
2,387,881.
587,949.
227
NOTES OF ONE AND TWO POUNDS.
the issue of the gold the exchanges were occasionally
in a state which afforded a good profit on the exporta-
tion of the gold coin, and a part of it would undoubt-
edly go away; and thus the whole of the money in
circulation would tend to settle down to such an amount
as the state of the exports would determine it to be,
and prices would arrange themselves accordingly.
But when a vacuum was made in the circulation by the
withdrawal of the one and two-pound notes, (about one-
third of the whole of the notes withdrawn) that vacuum
would be filled with gold coin. And when gold flowed
out of the country, it shewed that the remainder of the
notes and the gold, taken together, were in excess, and,
therefore, a part of the gold went away. The substi-
tution of gold for small notes might affect the particular
interests of the issuers of them, and also the system of
credit that existed at the time, but certainly could have
no permanent effect on the prices of commodities; as
those prices would be determined by the causes which
regulated the aggregate amount of the currency, and
not by the particular kind of money of which a small
part of it was formed. Had the small notes been re-
tained in circulation, and the issuers of them been made
liable to pay them in gold, the whole amount of the
currency must equally have been kept down to its
natural quantity, and prices must have been equally in
accordance with that quantity. Any temporary issue
beyond this, could only cause an exportation of gold,
and a run on the banks for gold in exchange for notes.
In fact, 'Peel's bill,' by making the Bank of England
liable to pay their notes in gold, obliged them, and
through them all other bankers, to keep the amount of
their issues within the natural amount of the currency;
and thus it prevented depreciation, and a rise of prices
R 2
228
consequent on that depreciation. That was the full
extent of its effects, as far as respects prices, and any
further alterations in them are attributable to those
general causes of which we have already treated.
The following table exhibits some facts, relating
to this period, which may be best seen in connexion
with each other in a tabular form.
PRICES OF COMMODITIES.

Expended
Beef Wheat Weaving
per per a 6-4ths
on
Yrs. stone. quarter. cambric. Official value. |Declared value paupers.
s. d
1820.. 4 4
1821.. 3
3 1
1822.. 3 0
1823. 3 4
1824.. 3 10
•
s. d.
65 10
EXPORTS.
s. d.
£
4 6
5 0
37,818,036
40,194,893
4 0 43,558,490
3 9 43,144,446
48,030,037
54 5
43 3
51 9
62 0 4 0
£
£
35,568,000 6,958,445
35,826,082 6,358,703
36,176,897 5,773,096
34,691,124 5,736,898
37,573,918 5,786,991
The price of wheat fell very low in 1822, lower than
it had been at any time from the commencement of the
war, or than it has been since. This great fall is
evidently attributable to causes similar to those which
were in operation in 1814 and 15, namely, the great
extent of land cultivated,—an abundance of produce
arising out of preceding good harvests, and a with-
drawal of accommodation country bank notes. It was
one of the oscillations of that state of things which
had given us, at one time, cheap gold and a cheaper
(depreciated) paper currency; which had produced
high money prices, and very high farming profits;
and, as a consequence, country bank notes in abun-
dance during a time of agricultural prosperity, and in
small quantities only in times of its adversity; which
fed the farmer when he was in a state of repletion, but
withheld supply from him when he was in want; this
was, accordingly, a period of very severe distress to the
agricultural capitalist.
INCREASE OF MANUFACTURES.
229
The manufacturing class were, for the time, benefited
by the low price of landed produce, as they obtained
food for about one third of the currency prices which
they had paid for it at the latter period of the war.
The wages of the inferior class of labourers fell, it is
true, but not nearly as much as provisions: their con-
dition was, therefore, for the time, improved. But,
by the year 1824, this advantage was lost, as the
wages paid for weaving gave no greater command
over food than in 1820. Within this period the
quantity of manufactures
was very considerably
increased, particularly in the cotton manufacture,
as may be seen from the increase in the population
engaged in it, as well as from the quantities of raw
cotton consumed in the different years. In 1820, above
125 millions of lbs. were consumed; in 1822, above
144 millions; and, in 1824, more than 174 millions
of lbs. were used in this manufacture. But this
great increase was not attended with a corresponding
advantage, either to the parties engaged in the manu-
facture, or to the country collectively; as the foreign
consumer obtained the articles at so much cheaper a
rate. The total exports were increased in quantity
from £37,818,036. in 1820, to £48,030,037. in 1824,
being an increase exceeding one fourth in four years—
while, in the same time, the declared value, or price,
increased from £35,568,670. to £37,573,918.; being an
increase in value of little more than one eighteenth!
How far this decline in value is attributable to more
economical modes of producing the articles, and how
far to a reduction of the profits and wages of the
manufacturers, will be further considered, when we
reach the end of the whole period of which we are
treating. But, in the mean time, it is clear that
/
230
REDUCTION OF PROFIT.
British produce and manufactures were losing their
command over gold, as well as over other articles
in the foreign markets; and this, according to the
principles here advanced, would tend to increase the
exchangeable value of gold in Great Britain, and to
lower the general average of prices.
The sums expended for the relief of the poor, when
compared with the prices of food, indicate any thing
but an improvement in the condition of the poorer
classes of labourers, even when every allowance is
made for the increase of population. Indeed, the
sum expended in the relief of paupers in the year
1821, when wheat was at 54s. 5d. per quarter, was
£6,358,703; while, in 1813, when wheat was at 120s.
per quarter, it was only £6,294,584; the sum raised
in 1821 being thus equivalent to double the quantity
of wheat at that time, that the sum raised in 1813
was to wheat of that period. In 1822 the sum ex-
pended was equivalent to a still greater quantity of wheat.
Yet, notwithstanding this evidence of the non-
improvement of, or positive decline in, the condition of
the labouring class, the rate of profit on capital was
falling, and had continued to fall, with occasional
fluctuations, since the termination of the war. The
average prices of 3 per cent. consols were in
1815....
1816..
1817..
1818...
1819...
1820..
1821...
1822..
1823...
1824...
•
•
A •
•
•
•
·
581/
62
7623/
783
72
6821/
7432/
793
801
94
PROFIT AND WAGES.
231
Here we see fluctuation, arising, probably, out of the
political alarm of the period, from the state of the
manufacturing districts in 1819 and 1820; but, on an
average, the prices of stock shew that capitalists were,
by circumstances, induced or compelled to invest money
in the purchase of stock in 1824, at a price which yield-
ed an interest of not much above 3 per cent., although,
in 1815, above 5 per cent. was obtained by purchasing
the same stock. This alteration in the rate of interest
obtainable, was, of course, attended with a correspond-
ing alteration in the rate of profit, first experienced in
the circulating, and, finally, on the whole, capital of
the country. Under favourable circumstances, this
decline in the rate of profit would have been accom-
panied by a rise of wages; but, in the actual circum-
stances of the country, other and unfavourable causes
were in operation, sufficient to counterbalance and
neutralize this beneficial tendency of low profit. But
if the low profit did not cause a positive rise in wages,
it caused wages to be higher than they otherwise
would have been. If high profit had been added to
the other baneful influences which then kept down
wages, the labouring classes would have been more
distressed than they actually were. It is important
that we should attribute the effects to the real causes
that were in operation.
The fall in the rate of profit was evidently a conse-
quence of the superior abundance of capital. When, at
the termination of the war, the large borrowing ceased,
the wealth which had previously been annually absorbed
by loans, and expended in an unproductive way, was.
left in the hands of its accumulators. To make a pro-
fitable use of it, they must either employ it themselves
as capital, or place it in the hands of other persons to
:
232
be so employed. Capital thus became more plentiful
in the various departments of production, and the com-
petition of capitalists lowered the rate of the profit
which could be obtained for its use. Ten, fifteen, or
twenty millions being, in a year, added to the capital
used by the primary producers, this new capital would
be brought into competition with that previously used
in primary production, and, in competition with it,
would bid for labour; and the result of these new cir-
cumstances would be, that the capitalists would, in pro-
portion to the capital employed, take less of the new
wealth produced than they had previously taken, and
the labourers would take more; or profits would fall,
and real wages would rise. This process really did
take place at the time; and, if the result was not
a rise of real wages, it was not because a reduction of
profit did not work in the way stated, but because other
causes prevented the rise of real wages. That which
should have remained with the labourer, to be by
him enjoyed as additional real wages, was taken by a
third party.
This party it is our business to trace,
as well as his receipt of that wealth, which, on the fall
of profits, ought to have gone to the labourer.*
The great abundance of capital, and the consequent
low general rate of profit, together with the moderate
prices of landed produce, in 1822, 1823, and 1824, gave
PROFIT AND WAGES.
* When profit falls, circulating is disposed to become, to some extent,
fixed capital. When interest was, say 5 per cent. capital would not be
used in making new roads, canals, or railways, unless those works would
yield a corresponding large per centage; but wheu interest became only 4
or 3 per cent. capital would be advanced for such improvements, if it ob-
tained only a proportional lower per centage. Joint stock companies, to
accomplish great improvements, are the natural offspring of a falling rate
of profit. It also induces individuals to fix their capitals in the form of
buildings and machinery.
233
a strong impulse to manufacturing for export, as may
be seen from the declared, and still more decidedly
from the official, values of the exports of the last of these
years. As the same system of banking, or rather the
same system of making money by any country banker
who chose to make it, existed, which had prevailed
during the whole of the period, this apparent manu-
facturing prosperity attracted much capital to manu-
factures; and a system of credit was generated, which
caused a further extension of manufacturing. Specula-
tion, at the same time, was added to, and pushed on,
this extension, until, in the course of the year 1825, the
quantity of paper money, of various kinds, thrown into
circulation increased the quantity of currency beyond
what the causes which determined our supply of gold
could sustain. The exchanges were turned against us ;
the currency became a little depreciated; and gold
began to flow out of the country. The Bank of Eng-
land, finding the demand for gold decrease their stock
of coin, contracted their issue of notes; and, in this
way, if the state of trade had been good, the currency
might have been reduced sufficiently to restore the ex-
changes to par, and to leave us with our natural quantity
of currency. But the reduction in the quantity of
currency took place first among those who had pushed
their credit the farthest. These parties were, con-
sequently, rendered incapable of meeting their engage-
ments, and became bankrupts. Speculating, or over-
trading, as it was called, being very general, the failure
of some alarmed others; those who had given credit
pressed for payment; goods were sacrificed to make
payments; prices came down; alarm increased; many
wished to sell, none liked to buy; universal failure
seemed impending, and people really wealthy found it
EXCESS OF PAPER MONEY.
234
SUSPENSION OF CREDIT.
impossible to meet their immediate engagements. The
3 per cents. from 82 sunk to 75; and so difficult was
it to get money which would be taken at the time, that
it was said interest was given for temporary loans at a
rate equal to 50 per cent. per annum. Country bank
notes were extensively driven from circulation; and the
Bank of England, being in better credit, put out a large
additional amount; yet they were nearly drained of
their metals. Had their stock of them been quite
exhausted, either a new restriction must have been had
recourse to, or the whole mass of Bank of England
notes would have been annihilated; and, as it would
have been impossible to obtain metals immediately, we
should have been reduced to a state of barter, in making
the few exchanges that would be then made. We have
the anthority of Mr. Huskisson for saying that a run
on the bank for coin, for another 48 hours, would have
reduced us to this awful state.
These calamitous effects arose out of the system
which allowed companies, or individuals, to create
paper money to any extent, and put it into circulation;
the only check being in their liability to pay their paper
in gold; a check which, as the events of this period
shewed, afforded no adequate security against the
almost general annihilation of the common instrument
of exchange. Neither the amount of taxes, nor the
high rate of rent, had any connexion with this extra-
ordinary derangement. Nor had the low rate of profit,
nor the natural quantity of currency of the period, any
necessary connexion with such a course of procedure.
It resulted from speculation, aided by a vicious system
of paper money making, which improperly increased
the quantity of currency, drove gold out of the country,
and then caused a general demand for it in exchange
SMALL NOTES PROHIBITED.
235
for paper, which demand could not be met; the con-
sequence being an almost universal breaking up of
those who depended on this paper, and an approach to
an annihilation of all paper money.
The evident connexion between an over issue of
country bank paper and the breaking up of credit, at
this period, directed the attention of the government
to country bank notes under £5. and they were made
the scapegoats of the occasion. The evils belonging to
the system were attributed to them, and they were
sacrificed; but, is it not evident that, if £2. and £1.
notes can be issued to an injurious excess, notes of £5.
and upwards may be so also? The system which en-
courages individuals to put notes into circulation, and
thereby to displace solid money,—driving gold away,
and even banishing superior paper money, until the
inferior notes constitute nearly the whole currency of a
district, is, on the face of it, a bad one; but when we
consider that, upon credit being shaken, these notes,
from their intrinsic worthlessness, are peculiarly liable
to be annihilated, and the district to be thus left without
a medium of exchange, it is not easy to find language
sufficiently strong to characterize this system. The
prohibition of £1. and £2. bank notes was only a
partial correction of a bad system.
But it is most certain that this suppression of small
notes could have no permanent effect on the value of
the currency, or the general range of money prices.
When the withdrawal of the notes had sufficiently
lessened the quantity of the currency, gold would flow
into the country, and coin would take the place of the
notes, as before described. If some of the notes had
continued to circulate, they would merely have supplied
the places afterwards occupied by sovereigns, and the
236
whole quantity of currency would finally have been
the same.
EXTENSION OF MANUFACTURES.
One effect of the extension of credit, and the conse-
quent extravagant speculation of this period, was a
great and sudden increase in the manufacturing power
of this country. Much capital was sunk in forming
those establishments which constitute an essential part
of our present manufacturing system; or much circu-
lating capital was converted into fixed capital, for the
purpose of manufacturing to a greater extent. The
effects of this were felt, soon afterwards, in an increase
of the quantities of goods made, without a corresponding
increase being experienced in their aggregate value.
They were forced on foreign markets, and sold at prices
progressively reduced; and to such an extent as to go
beyond what the improvements in the modes of pro-
ducing them could cover. Profits and wages were,
consequently, brought down in those branches of manu-
facture, in which even the greatest improvements had
been made.
It is not, however, to be believed that the same effects
would not have been produced, in these departments,
on profits and wages, by a more gradual extension of
the means of production in them; but this speculative
period accelerated the operation. The quantities of
exports increased, and their values declined more rapidly
than they would otherwise have done. The products
of British labour lost, a little earlier, some more of
their power of purchasing in the markets of the world,
and commanded smaller quantities of foreign produce
to return; and, among other articles, gold was pur-
chased at a dearer rate, and therefore acquired a higher
exchangeable value, and money prices declined to a
somewhat lower level.
OFFICIAL AND DECLARED VALUES.
237
From 1820 to 1824, we have seen that the quantities
of exports increased materially on the prices; and this
alteration was still greater in the next four years.
In the

1825.
1826.
1827.
1828.
£
む
​£
£
The official values of exports were 46,468,282 40,332,104 51,276,448 52,029,15]
The declared values were ...... 38,083,773 30,847,638 36,396,339 36,152,799
The effects of the speculations of 1825 are here seen
both in the quantity and value of the exports of that
year; but the deep-seated causes which were then in
operation soon began to shew their effects. In 1827,
quantity had greatly advanced, while value had sunk;
and, in 1828, while the former had risen to £52,029,151.
the latter had sunk to £36,152,799.! Quantity had
increased above 51, while value had sunk nearly 2. And
this took place at a time when no palpable improve-
ment was made in the modes of producing the articles.
But as, for a short period, temporary fluctuations, the
causes of which cannot be traced, may affect the relative
quantities and values, we will take the whole time
since the termination of the war, and divide it into
three separate periods, and give the average annual
quantities and values of the exports for each period.
And thus we shall have a comparative view tolerably
free from the effects of temporary fluctuations.
Years

The quantity
was
was
±
£
41,951,209 38,121,804
35,967,358 42,549,120
35,370,137 | 47,526,496
Here then we sec, that, while the value sank from
From 1815 to 1819.
1820 to 1824.
1825 to 1828.
""
>>
The average
annual value
...
238
nearly 42 millions in the first period, to less than 35
millions in the third period, the quantity which it was
necessary to export to obtain this value, increased from
a little more than 38 millions to 47 millions!
It is commonly said, by those who call themselves
political economists, that this increase in quantity, and
decrease in price, is attributable to the improved modes
of producing the exports; and some of them go so far
as to consider them evidence of our prosperous situa-
tion. Mr. M'Culloch, in his 'Dictionary of Commerce,'
when writing of the rapid increase in the official value
of the cotton goods exported, while the declared value
has declined, says, "It shews that the decline in the
price of the raw material, and the improvement in the
machinery and processes used in the manufactures,
have been so great, that we are now able to export,
and sell with a profit, for unless such were the case the
exportation would very speedily cease, nearly double
the quantity of cotton goods we exported in 1814, for
about the same price."-See the article "cotton."*
When so limited and fallacious a view of this interest-
ing subject is taken by a writer who is generally con-
sidered to rank high as a political economist, is it
surprising that political economy should be decried?
that, with the great mass of the people, who judge by
results, it should be considered as opposed to ex-
perience, and made up of mysticism and absurdity?
Undoubtedly, the exportation of the cotton goods must
yield a profit to the exporter, or they would not be
exported. This is a simple truism. But why are the
exporters enabled to purchase the goods so cheaply?
PRICES OF COTTON GOODS.
* See also the 'Edinburgh Review' for July, 1832, article, ‘Recent Com-
mercial Policy of Great Britain.'
WAGES OF MANUFACTURERS.
239
Why are the manufacturers, both the capitalists and
labourers, induced, or by circumstances compelled, to
part with the produce of their capital and labour for so
low a price? And why have they been progressively
compelled to part with it at regularly declining prices?
They "sell nearly double the quantity of goods that
they did in 1814, for about the same price." Thus the
foreign consumer gets two instead of one for his money,
and the British producer has to part with two instead
of one. Why is this? Mr. M'Culloch attributes it
to the fall in the price of raw material, and the im-
provements in the machinery and processes used in the
manufactures. But he seems not to perceive that there
are other causes in operation to induce a sacrifice of
British labour. He concludes, from a statement furnish-
ed by Mr. Kennedy, that wages in the cotton manu-
facture have not fallen; this is most certainly incorrect.
With all the beneficial tendency of machinery to keep
up wages in the cotton manufacture, they have declined,
less in some departments than in others it is true; and,
in general, they are higher yet in that branch of manu-
facture than in agriculture, but still they have fallen,
´are falling, and, it is to be feared, will continue to fall,
until they sink much below what they now are. A
moderately careful inquirer may soon satisfy himself that
the fall in the prices of cotton manufactures has not
been at periods corresponding with the introduction of
the great improvements in the machinery and pro-
cesses; nor with the fall in price of the raw material.
These must, undoubtedly, have had their effects in due
time; but other causes of a more general and less
palpable character have also been in operation, which
have sometimes counteracted the natural tendency of
these improvements; and when improvements have
W
240
been made, have prevented prices from falling. Causes
of a similar nature have, at other times, accelerated the
fall of prices much beyond what the improvements of
the time would have effected. Into these other causes
we must enquire more particularly when we have all
the facts which it is necessary to place before us as data
from which we can reason.
In 1825 various taxes were reduced, amounting
altogether to £2,354,995. This reduction must have
been beneficial to the people, and, under ordinary cir-
cumstances, would have been felt by them to have been
so; but, in reality, the country was not conscious of
experiencing benefit from this repeal, as the condition
of the people was not improved. Similar reductions
took place in following years, without, however,
materially reducing the whole sum received, as the
extra consumption of some taxed articles made up for
the reduction of the duties on others. Still, on the
whole, distress did not disappear, nor decrease, as might
naturally be expected, but rather seemed to increase
with the increasing value of the currency.
Hitherto, in treating on the value of gold, as deter-
mining the value of the currency, and the level of money
prices of commodities, prices have been always spoken
of, in general terms, as simple in their nature; but
when we take the prices of commodities as evidence of
the exchangeable value of gold at any time, as we now
propose to do, it becomes necessary that we should
examine a little more minutely how those prices are
themselves made up, or constituted. Gold, we have
seen, is procured in exchange for other commodities,
and the cost of it in commodities determines its ex-
changeable value; but what are the elements of cost
of these commodities?—and do those elements vary?
REDUCTION OF TAXES.
7
ELEMENTS OF PRICE.
241
Again, when the exchangeable value of gold is altered,
are the gold prices of all other commodities equally
altered? And if not, what commodities, by their altera-
tion in price, best measure the alteration in the ex-
changeable value of gold? These are points which it
is necessary briefly to examine, if we are to arrive at a
tolerably correct knowledge of the alterations which
have taken place in the value of the currency.
The elements of cost, and, therefore, of exchangeable
value, of some commodities, are comparatively simple,
of others compound, and the elements of those that are
compound vary relatively to each other. Labour,
capital, and land, are means or instruments of produc-
tion, necessary to the bringing into existence of the
mass of wealth which is annually created. Portions of
this mass ordinarily go to labourers, capitalists, and
land proprietors, as wages, profit, and rent; and
these elements are found varying in their proportions
in different commodities. In the same commodities
they may also vary at different times, so that, the cur-
rency being supposed to remain for a time unaltered in
value, commodities might alter considerably in their
relative prices, while they preserved the same average
level.
Some commodities have their prices made up almost
entirely of wages, as stone, fish, &c. and the prices of
these will be according to the rate of wages. Other
articles are produced through the joint agency of labour
and considerable capital, as in manufactured articles
made by expensive machinery: the prices of these will
be formed of profit and wages. Now, if profit should
rise, and wages consequently fall, the prices of stone or
fish would fall, as compared with such manufactured
articles. Land is necessary to the production of food
S
242
ELEMENTS OF PRICE.
and raw materials; and, to have the use of that land
in this country, a rent must be paid, and this rent may
be either low or high. Now as rent and profit, and
consequently wages, may vary relatively to each other,
the prices of articles into which these elements enter in
different proportions may vary, while the general level
of money prices continues the same.
If the supply of gold is obtained in return for articles,
the cost of which is made up of profit and wages, and
decreasing returns of gold are obtained for the same
quantities of capital and labour, gold would increase
in its exchangeable value as compared with profit and
wages; or, the prices of all articles, the cost of which
was made up of profit and wages, would fall ;—but it
does not follow that the prices of articles made up in
part of rent would fall in the same degree. The rent
element of cost might remain unaltered, and any
alteration in the selling price of such article would be
in the profit and wages elements alone: and any par-
ticular article which had the greatest proportion of
the element of rent in its price would alter the least.
In 1812, when wheat was at 125s. per quarter, and
other landed produce of a proportionate price, if the
produce of an acre was £5. in money, and rent was £1.
the rent would be one fifth of the price. But if this
£1. of rent remains when the price of the produce has
greatly fallen, the fall must have been entirely in the
other elements of the cost. If the value of the cur-
rency is doubled, or general money prices sink to one
half, the prices of landed produce would not sink to
£2. 10s. the half of £5. because one fifth of the £5.
remains an unaltered sum. The fall of one half can,
therefore, take place only in the other four-fifths, or in
the £4. which were made up of the elements of profit
ELEMENTS OF PRICE.
243
and wages. The currency becoming then of double
value, the price of landed produce would sink from
£5. not to £2. 10s. but to £3. and it follows from
this, that, when a currency has risen in value, the
price of the produce of unvaryingly high rented land,
is not a true measure of the degree of alteration which
has taken place in the value of the currency. If any
one article of landed produce could be considered as
having its price made up entirely of rent, which re-
mained unaltered in its nominal amount, it is clear
that the price of that article must remain unaltered,
whatever might be the state of the currency. It would
be like an article the price of which was made up of
a tax, as was nearly the case at one time with salt.
While the tax remained the same the price was the
same, the payment of that tax or price being the con-
dition on which alone the article could be procured.
Agreeably to these principles, of articles of landed
produce, those which require the most labour and
capital to bring them to market will have had their
prices the most affected by the rise in the value of
money ;—and those articles which are produced spon-
taneously, are easily brought to market, and for
which a high rent is charged, will be the least affected.
Grain, potatoes, and other articles of expensive culti-
vation, will consequently have been more reduced in
price than hay or sheep. And the greatest difference in
the alteration will be in the first sale to the wholesale
dealer, as the price beyond that is increased by the
labour of taking to market. The charge for pasturing
or grazing in a 'ley' should be the least altered, as that
is nearly pure rent.
In some manufactures, such as those of wool and
leather, the raw material may have the element of rent
s 2
244
in its price, and that element may remain unaltered,
while the other elements may become unable to com-
mand more than a low price, or but little gold. But
rent does not generally enter into the price of manu-
factures sufficiently to make it worth while to attempt
here to trace its effect. Manufactured articles may,
therefore, be considered as having their prices made
up of profits and wages, and as articles thus made, do
really procure our supply of gold, the terms on which
it is procured will determine their prices. It appears
to follow, from this, that the alterations in the prices
of manufactures will measure the extent of the altera-
tion in the value of the currency, better than it can
be measured by the prices of landed produce. And
this would be the fact in any important manufacture in
which the mode of producing remained the same, and
which was not temporarily affected by competition
with any other article,-but it is not easy to fix upon
any such manufacture. The steam engine, and the
substitution of mechanical for human agency, have
affected, more or less, all branches of manufacture,
and it is impossible to say in what degree each has
been affected.
ELEMENTS OF PRICE.
Independently of any alterations in the modes of
producing manufactures, affecting their prices, there
is another cause in operation, which should be taken
into the account, if we attempt to estimate the rise in
the value of the currency, by the fall in the prices of
manufactures. Since the termination of the borrowing
system, the rate of profit has fallen perhaps one half;
consequently, the prices of all articles, the principal
element of which was profit, would also fall proportion-
ally, without reference to any fall of prices from a rise
in the value of money. From this cause then, all
245
manufactures, the prices of which were made up in a
greater degree of profit, and in a smaller degree of
wages, would fall, while those in which the element
of wages preponderated, would, in the absence of other
influences, rise in proportion to that preponderance.
Had no other cause been in existence to prevent such
a result, the fall of profit to one half would have been
attended by an equal fall in price of all articles made
up entirely of profit, while the price of fish, &c. being
made up of wages would have relatively risen.
If an
important article of manufacture existed, in the price
of which the elements of profit and wages entered in
the same proportions as in the articles of cotton manu-
facture exported to procure gold, and that article con-
tinued to be made in an unaltered way,—the prices of
such an article would be a good measure of the altera-
tion which has taken place in the exchangeable value
of gold, and consequently of the currency. But we
know of no such article, and such a one is alluded to,
only to point at the kind of measure of the alteration
in the value of the currency that it is desirable to have.
ELEMENTS OF PRICE.
Landed produce is, then, the best practical measure
that we can take; but, in selecting it, we must make
allowance for that part of price which is made up of
rent, as that, we presume, remains the same; and the
whole alteration in the price is to be considered as
taking place in the other elements. Thus the gold
price of a quarter of wheat, near the end of the war,
was, say, £4., one of which was rent, and remains as
rent, which must be now paid. When the average
price of wheat fell from £4. to £3, for a number of
years, the whole fall must have been in that part of the
price which is resolvable into profit and wages, and,
consequently, the profit and wages portion of the price
246
RENT A PART OF PRICE.
of wheat fell from £3. to £2., or just one-third. If
the fall from £4. to £3. per quarter had been com-
puted on the whole price, the rise in the value of the
currency would have appeared but one-fourth, or 25 per
cent., but when we consider the £1. rent as a fixed part
of the price, then the rise in the value of the currency
is seen to be one-third or 33 per cent., and this dis-
tinction must be attended to, when, from the recorded
prices of grain, we attempt to estimate the rise in the
value of the currency,
Should wheat fall further to, say, 50s. per quarter,
the £1. rent being still the same, the fall in the alter-
able part of the price would then be from £3. to £1.
10s., or one-half, indicating a doubling of the value of
the currency. A fall in the market price to £2. would
be, in like manner, a fall in the alterable price from
£3. to £1., or a rise in the value of money to three
times its previous rate.
•
The average market price of wheat in 1812 was 125s.
and supposing the price in gold per quarter during the
latter years of the war to have been 80s.,* then, the
present price being 52s. take the 20s. rent from each of
these sums, and the fall in alterable price is from 60s.
to 32s. being nearly to one-half. The conclusion from
this is, that 32s, will now command as many com-
modities, which are produced solely by capital and
labour, as 60s. did at the latter period of the war. And
any 32s. which the people have now to pay, will be paid
with as much difficulty as 60s. were at that period. At
* From 1805 to 1813, both inclusive, the mean price of wheat, in cur-
rency, for the whole period, was 94s. 5d. per quarter, and if the mean of the
depreciation of the currency, during the time, was £8. 13s. 8d. per cent.
the gold price of wheat averaged above 80s. for the whole of these nine
years. See 'M'Culloch's Dictionary,' article, 'Currency.'
247
least this would be the case if no other cause counter-
balanced the effect of the alteration in the value of the
currency.
If this were to be taken as the measure of increase
in the value of the currency, it would follow, that, in-
dependently of, and in addition to, the rise resulting
from that contraction of paper which caused the depre-
ciation to cease, it would seem that the currency had
become of nearly double the value that it was at the
latter period of the war. This would account, too, for
much of the fall that has taken place in the prices of
manufactures, and also for the great difference which
has arisen between the quantities and prices of exported
manufactures, as shewn in the differences between the
declared and the official values. In the period from
1809 to 1814, the prices were to the quantities as about
13 to 92; but in the period from 1825 to 1828 the
prices were to the quantities as only about 82 to 112.
Thus while the prices sank from 13 to 83 the quantities
rose from 93 to 112. If the 112, expressing quantities
in the latter period, had commanded the same prices as
the 93 in the former period did, the value would have
been, say, 16 instead of 83, shewing a decline in value
approaching one-half!
TAXES PARTS OF PRICE.
An article which is taxed to a fixed amount, it is clear
cannot have the tax part of the price altered by any
alteration in the value of money. When threepence
b. duty is charged on soap, the alteration in general
money prices, it is evident, can affect only that part of
the price which is above the threepence. duty.
The same remark will apply to cotton, wool, sugar,
malt, bricks, and many other articles; and, upon a rise
taking place in the value of the currency, and a general
fall in money prices, the whole prices of these will not
fall as much as the prices of articles not so taxed.
248
RISE IN VALUE OF CURRENCY.
It is not here presumed, however, that any, or all, of
these facts, comparisons, and calculations, can give us
the precise extent of the rise in the value of the currency,
the subject being of so complicated a nature as to
render such precision impossible; but they all have the
same bearing, and all point at a degree of alteration
sufficient to account for much that has been experienced
since the termination of the war. The prices of wheat,
in the period from 1805 to 1813, may have been a little
raised by bad harvests, although the probability is, that
the great extension of cultivation would counteract the
effects of those harvests. Prices may also have been
enhanced by paper money speculation; but allowances
may be made for the trifling effects of these two causes,
and yet the difference of prices, corrected as above, will
warrant a conclusion that a great rise has taken place
in the value of the currency; a large part of which
rise has been caused by an advance in the exchange-
able value of gold-the regulator of the value of the
currency.
-000
GREAT BRITAIN, &c.
CHAP. VIII.
FROM 1820 to 1828.
EXTENSION
OF MANUFACTURES CONSEQUENT ON AN ADVANCE OF
RENT. RENT IN GREAT BRITAIN AND IRELAND. ·MANUFACTURES
IN AMERICA AND ITALY.-EFFECTS OF THE CORN LAWS ON MANU-
FACTURES AND THE VALUE OF MONEY, AND IN DRIVING MANUFAC-
TURES TO FOREIGN COUNTRIES.-POSSIBILITY OF PERPETUATING
HIGH RENTS.
·00
Much has been said and written on the assumption
that a great extension of manufactures in a country is
evidence of the prosperous condition of its inhabitants,
and the quantities of exports and the tonnage of ship-
ping have been pointed at, by those who have made the
assumption, as triumphant proofs of that prosperity.
But however advantageous manufactures and com-
merce may be, when they are pursued and extended
solely from experience of their beneficial results, still
it does not follow that the simple fact of their great
increase can be properly adduced as proof of the
prosperity of the people engaged in them. If men are
driven from a more to a less beneficial employment,
the mere fact of their adoption of the latter, or even
of partial success in it, is no proof of their being in a
250
EEFECTS OF INCREASING RENT.
better condition than they were, in that from which
they had been driven. It is possible that so many per-
sons may be driven to manufactures and commerce, as
to cause those employments to yield a very poor return
for capital and labour, and then the great numbers
engaged in those pursuits, and the extension boasted
of, may produce effects the very opposite of those pre-
sumed to be produced; privation and distress, instead
of prosperity, may be the final results.
A country with some certain extent of manufactures
and commerce, with plenty of good land, let at
moderate rents, and with a consequent flourishing
agriculture, may be in a prosperous and happy state.
But, suppose that, from any combination of circum-
stances, land proprietors are induced generally to
raise their rents to a high rate, and thus to reduce
the profits first, and afterwards the wages, of those
employed on the land:-profits and wages being thus
reduced in agriculture, would be, and for a time
would remain, higher in manufactures and commerce
than in agriculture, and capital and labour would be
induced to pass from agriculture to the two other
departments, until, by competition, profits and wages
were equalized in all.
In this case we should have an extension of manu-
factures and commerce, as an effect of an increase of
rent of land, and a consequent reduction of the general
rates of profit and wages. Those who thus engage in
manufactures and commerce, are driven to them as a
resource from a greater evil; and if they contrive to
exist in their new employment, in some certain way,
with less or more of the indications of comfort about
them, we are not at liberty to point at those indications
as proofs of the excellence of the system under which
REAL VALUE OF RENT.
251
they have been able to obtain them, and still less can we
cite an increase of their numbers, and of the quantity of
of business done, as of themselves proofs of the sound and
wholesome state of society under which the people are
living. That state may be merely a less miserable one
than another from which they had escaped, and to which
they were reduced by the rise of rent; but the real
point to which attention ought to be directed is this,—
is their state better than that from which they were
reduced by the rise of rent?
If it is not, this appear-
ance of manufacturing and commercial prosperity is
no more than the result of a resource in which they
have been driven to take refuge when forced from a
happier state.
Since the termination of the war, the alteration in
the value of money has been, in reality, equal to a
progressive rise in the produce rent of land, until the
cultivators, in order to procure the money requisite to
pay their rents, have been compelled to part with,
give up, or sell the produce of their capital and labour,
to an amount twice as large as that which was pre-
viously found sufficient for the purpose.
There is,
consequently, less produce left to be divided between
the capitalist and labourer, as profit and wages, and
both profit and wages are therefore proportionally
reduced. Capital and labour, it is known, are ready
to go wherever they can obtain higher profit and
wages, and they went, at this period, from the high
rented land to manufactures and commerce, until, by
competition in those pursuits, the markets for manu-
factured goods became overstocked, prices declined,
and, at last, profits and wages sank to, or nearly to a
level with the reduced agricultural rates. The com-
pulsory influx of labour from the land thus over-
252
TRANSFER OF LABOUR.
stocked the markets with manufactures, and reduced
their selling prices, or
caused the manufactured
articles to be sold for less gold; the gold then rose in
value at home, and the general range of prices was
reduced, as has been explained. This fall of prices
was equivalent to another rise of rent, and another
reduction of real profit and wages, and labour was
further driven to manufactures. The continuance of
this process fully accounts for a great extension of
manufactures and commerce, without a corresponding
improvement in the condition of the people engaged in
them. In this way, in fact, the people of Great Britain
have been induced to manufacture to a greater extent
than they otherwise would have done ;-in this way the
manufacturing districts have been amply supplied with
labour, the manufacturing population has increased,
and wages have been kept down so low as to enable the
exporting capitalist to sell at low prices in foreign
markets; those low prices alone enabling him to sell
the large quantities of goods unceasingly produced.
The end of this course is, that the foreign consumer is
furnished with the produce of British labour at a greatly
reduced rate of remuneration to the British labourer ;
and yet this end, so much to be lamented, is boasted
of by some who are considered eminent political
economists! These parties say exultingly, "See at what
low prices British goods can be sold, and yet a profit
be obtained!".. "Look at the immense quantities of
British produce sent to every part of the world,—our
merchants defying competition, underselling every rival,
and beating him out of the market!" This language
would suit an individual exporter, or all the individuals
engaged in exporting and selling the goods, because
their sole business is to sell at a profit; but for a poli-
253
tical economist, who ought to take a general and com-
prehensive view of the whole of society, and to trace
the causes in operation to their final effects on the
condition of the people-for such an one to draw
general conclusions from the limited views taken by a
mere exporter, says very little in favour of the present
state of knowledge among political economists. Rents
shall be, say doubled, and wages, consequently, re-
duced, which shall drive labour to manufactures, To
sell the increased quantities of the manufactures pro-
duced, such low prices must be taken as will afford
only very low wages, and thus the foreign consumer
gets the produce of much British labour for a small
return; and when this state is arrived at,—a state
which assigns miserable wages to labour, in the first
place, for the benefit of the British landowner, and, in
the next place, for the benefit of the foreign consumer,
we are to be called upon to exult at the great prosperity
exhibited in the extension of manufactures!
RENT IN IRELAND.
The high rents of land, in Ireland,* have caused
wages, in that country, to be wretchedly low, and large
numbers of Irish labourers have, therefore, come to the
manufacturing districts in Great Britain,† where, com-
peting with those persons previously employed, they
work at reduced wages; and thus assist to extend
manufactures, and to produce that kind of prosperity
of which mere increase is taken as proof. But is it
desirable that high rent should reduce the labourers of
* Mr. O'Connell stated, in the house of commons, that the rental of Ire-
land was (in 1833) 16 millions sterling. There are 12,125,280 statute acres
at present in productive use. Other accounts corroborate the statement
relative to the amount of rent.
It is supposed that there are 50,000 Irish and their immediate de-
scendants in Manchester and its neighbourhood.
S
254
INFLUX OF IRISH LABOURERS.
✓
Ireland to a state of wretchedness, in order that they
may be driven to supply Glasgow, Birmingham, and
Manchester, with that labour which assists in extending
the manufactures of those places? A great reduction
of rent in Ireland would give such wages as would keep
the Irish people at home; but ought such an occur-
rence to be deprecated as an evil, because it would cut
off the supply of labour to, and thus check the further
extension of manufactures for exportation? If rent of
land in Great Britain were to be reduced one half,
profits first, and then wages, would rise in agricultural
employments, and attract labour from manufactures,
and, of course, would reduce the extent of manu-
facturing; but ought this to be lamented?
An extension of manufactures, either for home con-
sumption or for exportation, in a natural and ordinary
way, by improvements in the modes of producing the
articles, and through increased demand, is good and
may be fairly exulted in; but if that extension is stimu-
lated-is pushed further by reducing agricultural
labourers to a state of wretchedness, and driving them
to take refuge in manufacturing districts, there to work
at low wages, it is anything but a subject for exultation.
The reduction, first of agricultural, and afterwards of
manufacturing wages, is to be lamented as an evil;
and, for that evil, the mere increase in the quantities of
manufactured goods exported offers no adequate com-
pensation. At the same time, it is not maintained that
the extension of manufactures does no service to the
labourers employed in it. On the contrary, the la-
bourers take refuge in it as a smaller evil than the one
from which they have escaped, and they are, therefore,
for a time, better off than they otherwise would be.
But it is maintained that the mere extension is not in
255
UNITED STATES OF AMERICA.
itself proof that the country is in a sound and healthful
state, as that extension may have been, and it is con-
tended that it has been, during the last thirty years, fed,
stimulated, caused, by a deterioration of the condition of
the great mass of the people engaged in agricultural em-
ployments; and, when that is the case, the effect ought not
to be hailed as the offspring of prosperous circumstances.
In the United States of America the great impedi-
ments to the extension of manufactures are, the compe-
tition of British goods, and the high wages of American
labour. But if rent of land could be there greatly
increased, and agricultural wages be thereby materially
reduced, the American capitalists would be much better
able to compete with the British, and thus to extend
their manufactories. Paterson might then rival Man-
chester in supplying the distant markets of the world,
while its population might be swelled by impoverished
labourers driven from the high rented land. But would
the condition of the American labourers be improved?
No! so far from that being the case the extension of
the manufacture would be caused by a decline in their
condition.
It may, however, be said that, if high rented land
stimulates to an extension of manufactures, how
happens it, that in such countries as Ireland and Italy
they do not flourish? The reason is, because, in those
countries, other causes counteract the effects of low
wages. In Ireland, excepting in the northern parts,
the general tone of the public mind,—the pre-
vailing modes of feeling and acting, are unfavourable
to continued accumulation. When an Irishman has
accumulated, what an Englishman would consider only
a small stock of capital, he retires upon it, is ashamed
of trade, and becomes the independent gentleman.
256
ITALY AND HOLLAND.
Capital is, consequently, not sufficiently abundant to
conduct manufacturing on such a scale as will enable
that country to compete successfully with England.
Should the feudal pride of being the gentleman, inde-
pendent of trade, be superseded by a passion for accu-
mulation, and respect for the accumulator, Ireland may
yet become a manufacturing country. An alteration in
the internal economy of the country, which should give
superior consequence to towns, might be instrumental
in producing this effect.
Italy was, in the fourteenth century, the greatest
manufacturing country in Europe; and, it is very
probable, that an advance in the rent of land stimulated
manufactures in that, as it has recently done in this
country. But, at last, rent was carried to so great a
height as not merely to place the landowners decidedly
above the capitalists, but to make them almost the only
opulent and really influential part of the community;
and all political power and honours being placed in
their hands, the other classes were treated as inferior
orders. The capitalists then being unable to obtain
distinction, respect, or even security, either left the
country, or lost the appetite for accumulation, and
manufactures and commerce declined. While, in Italy,
the manufacturing and mercantile capitalists came to
be looked upon as an inferior class, in Holland it was
disreputable to live independent of trade. The natural
results were, that trade declined in Italy, and flourished
in Holland. A capitalist may be induced to remain'
in a country, where, from the great abundance of
capital, profit is very low, provided that he has security
for the preservation of his property, the respect of the
community, and a fair chance of obtaining honours and
distinction. This was shewn in Holland, where capital-
MANUFACTURING CAPITAL.
257
ists were content to remain when interest was not more
than 2 per cent,; but they would not, under such cir-
cumstances, remain in a country where they were a
degraded class. Low real wages alone are not suffi-
cient to raise up, or sustain, manufactures: capital
must be created and cherished; and these objects can be
attained only by presenting adequate inducements.
Where, however, capital has been created, and manu-
factures established to a considerable extent, a forcible
reduction of agricultural wages, through an advance of
rent may, by driving labour to manufactures, give a
great impulse to their extension.
When treating on the large importations of grain in
1802, and the effects of these importations on the cur-
rency, it was shewn that the payment for this grain, in
the countries in which it was purchased, determined
gold to flow from Great Britain to those countries, and
in that way produced a separation between the res-
pective values of bank notes and gold. Cheap exports
were, at the time, generally operating to bring gold
into the country in abundance, and large imports were
just then exerting an opposite force, and causing gold
either to remain abroad, or positively to go out of the
country. The exports and imports, as has been shewn,
are varying forces exerted in opposite directions on the
gold of the commercial world, and sometimes the one
and sometimes the other preponderates. When the
force of the exports preponderates gold comes into the
country, when the force of imports preponderates gold
goes out of the country; and it is the particular
business of the bullion merchant either to export or
import gold as circumstances enable him to make a
profit. Sometimes export to one country preponderates,
and import preponderates from another, and then the
T
258
EXPORTS AND IMPORTS.
exchange broker, or dealer in bills of exchange, by a
circuitous transmission of bills, adjusts the payments;
or, if that does not finally settle the transactions, he
diverts the stream of gold, which was disposed to flow
from one country to another, and from that to a third,
into a shorter channel, by which it flows from the
first directly to the third, until the payments are
balanced.
The force of the export of cheaply produced goods,
from 1793 to near the end of the war, predominated;
and the result was an abundance of currency and high
prices-high when expressed in gold, and, in the latter
part of the time, still higher when expressed in a depre-
ciated paper currency. But, towards the end of the
war, the force of the exports was weakened by the re-
duced power of the exported commodities to command
gold in the foreign markets. Then, as the force of
import remained nearly the same, a different equi-
librium was established: gold now flowed from this
country until the quantity remaining sank to such a
level as could be maintained by the two existing an-
tagonist forces. As the force of exports decreased, from
time to time, more gold flowed out of the country, and
a balance was established, with prices at a lower level,
and, in this way, we have been proceeding since the
latter years of the war. At first, on a decline of prices,
unaccompanied by a reduction of rent, capital and
labour went from the land to manufactures, and the
selling prices of manufactures in foreign markets were
reduced; the force of supply of gold was then weakened,
and the level of home prices subsided accordingly. At
every fresh fall of prices this process was repeated,
until, at last, we have arrived at our present low level
of prices, and great extension of manufactures.
CORN LAWS.
259
But, at the termination of the war, when countries
producing food in abundance, particularly grain, were
opened to us, if that grain had been permitted to be
imported free from duty, the process just described
would have gone on with much greater rapidity. Great
as has been the actual extension of manufactures since
the war, with a free import of grain it would have been
much greater; and the progress of the cotton manu-
facture, in particular, would then have been pointed at
as having been wonderful indeed. This, however, was
prevented by the different corn laws which were passed,
apparently with an intention thereby to keep up the
rent of land at home.
With a view to obtain as clear a perception of the
nature and operation of these laws as we can, we will
endeavour to trace the probable effects which would
have been experienced from a free importation of grain.
In accordance with the level of prices, near the
end of the war, the average gold price of wheat in the
home market may be stated at about 80s. per quarter;
and the general average of the prices of wheat in the
countries from whence we could obtain it, may be con-
sidered to have been such as would enable the importer
to sell it in Great Britain at 50s. per quarter. Under
these circumstances wheat would be extensively im-
ported, and its price in the British market ultimately
be reduced to that rate which would just leave the
importer a common profit. The increased demand for
wheat in the foreign market might, for a time, raise
its price, and thus cause the supply to be obtained on
such terms as would disable the importer from selling
it at less than, say, 55s. or 60s. per quarter. But this
increase of price in the foreign market would stimulate
foreign cultivation, and, at last, enough of foreign grain
T2
260
FREE IMPORT OF GRAIN.
would be furnished to bring down the money price of
wheat in the British market to a level with the average
money prices in the markets of the world, carriage
and common profit being added. This price, we pre-
sumed, would be 50s. per quarter, and to that price the
British grower would then have to conform.
If all this could possibly have been done in a year,
or in two or three years, the British farmers, with their
obligations to pay high money rents and tithes, would
have been suddenly reduced to poverty; and so great
might have been the destruction among them that land-
owners might have been obliged to reduce their rents
to a low rate. But as it is presumed, that, through the
rise in the price of foreign grain, from the sudden new
demand for it, the alteration would be effected more
slowly, and the farmers be pressed upon more gradually,
-the less wealthy, and those who had been the most
enterprising in taking land, would sink first, and the
owners of lands, not being able to let them at equally
high rents, would be obliged to cultivate them them-
selves by bailiffs or agents. Other farmers would take
refuge in retrenchment in their own expenditure, and
in a reduction of wages. This last expedient would
throw labourers more extensively on the parish funds
for relief, and the whole class of cultivators would be
in great distress.
Food being thus reduced in price by free importation,
manufacturers could sell their goods at the then cur-
rent prices to great advantage, seeing that those prices
would command so much more food. The manufactur-
ing class would, for a time, experience a degree of
prosperity, proportioned to the adversity of the agri-
cultural class, and the usual effects of manufacturing
prosperity would follow. Full employment would be
EFFECT OF IMPORT ON PRICE.
261
given to all, and new means of extension would be
rapidly created. Those reduced to wretchedness in
the farming districts would fly to the manufacturing
districts, and the population, as well as the business, of
the latter would be increased. But with this increase
would also come, in time, an abundant supply of manu-
factured goods, and a fall in their selling price. The
transfer of labour from land to manufactures would
continue, and a further fall in their prices would be
experienced, until, in the end, wages and profits became
equalized in the two departments, a larger proportion
of labour being employed in manufactures and a
smaller on land.*
During the progress of this alteration, the importa-
tion of grain would act with increased effect in taking
gold from this country, and, at the same time, as the
prices of exports fell, their power to determine gold
towards the country would be weakened, and the rela-
tive strengths of these two antagonist forces being thus
altered, a new equilibrium would be established, rest-
ing on a less abundant supply of gold, and a lower
level of money prices.†
But when a reduction was effected in the price of
wheat from 80s. to 50s. per quarter, would not rent be
lowered at least to a corresponding extent-that is, from
an average of 20s. to 12s. 6d. an acre? From the
nature of rent, as explained at the commencement of
this work, it will be seen that this is a question which
cannot be conclusively answered. Rent of land being
* Marshall states that, in 1831, out of a population of 16,537,393, only
800,000 families, containing 4,800,000 persons, were agricultural labourers.
+ Mr. Jacob and others, having attempted to shew that the fall in prices,
since the termination of the war, is attributable to a falling off in the supply
of the precious metals from the mines, the following statement, taken from
262
EFFECT OF PRICE ON RENT.
in the nature of a tax, which may be made high or low,
according to the wills of the class of land proprietors,
when in any way they are induced to act together—it
might or it might not be lowered. If the alteration
had taken place abruptly, the apparent impossibility of
paying the same high nominal rents might have induced
land proprietors, each acting for himself, to submit to
a reduction of rent to a greater or a smaller extent.
But if the alteration in prices took place more gradually,
a paper presented to the house of commons (see the Times,' May 6, 1833),
will shew the groundlessness of this opinion, as far as respects the value of
gold. The materials from which the returns have been made are but
imperfect, but they were the best that could be obtained.
Statement of the value sterling of Gold and Silver raised in each of the
several mining countries of America and Russia, in the two periods of 20
years, from 1790 to 1809 inclusive, and from 1810 to 1829 inclusive; de-
rived from the returns of British consular agents.

MEXICO.
1790 to 1809..
1810 to 1829.
Total...
...
•
1790 to 1809..
1810 to 1829.
Total..
•
PANAMA.
•
1790 to 1809...
1810 to 1829.
Total...
CHILI.
BUENOS AYRES.
1790 to 1809...
1810 to 1829..
Total.
•
1820 to 1829..
•
RUSSIA.
..
Gold.
Silver.
£
£
4,523,378 94,429,303
1,913,075 45,388,729
6,436,453
223,518
23,603
247,121
863,974
1,904,514
2,768,488
1,862,955
2,161,940
4,024,895
Total.
£
98,952,681
47,301,804
139,818,032 146,254,485
3,703,743
944,736 1,808,710
878,188 2,782,702
1,822,924 4,591,412
19,286,831 21,149,786
7,895,842 10,057,782
27,182,673 31,207,568
1,502,981 5,206,724
263
the great body of farmers, having no other means of
subsisting, might cling to their lands in the hope of
more favourable circumstances; and, if occasional fluc-
tuations occurred while the general decline of prices
was proceeding, they might be led on to give the same,
or nearly the same rent, and thus suffer all the effects
of the decline of price to terminate in a reduction of
profits first, and, finally, of wages.
Any peculiar circumstances under which the land
proprietors had to act on such an occasion would be
Mexico..
Panama
Chili....
Buenos Ayres..
··
Mexico.
Panama
Chili..
Buenos Ayres.
General Abstract of the foregoing Table.
Total of America
...
DEPENDENCE OF FARMERS.
•
•
►
Total of America
Russia...
·
Gold.
£
4,523,378
223,518
863,974
1,862,955
7,473,825
Gold.
£
1,913,075
23,603
1,904,514
2,161,940
6,003,132
3,703,743
9,706,875
1790 to 1809.
Silver.
£
94,429,303

Total.
£
98,952,681
223,518
1,808,710
21,149,786
944,736
19,286,831
114,660,870 122,134,695
1810 to 1821.
Silver.
£
45,388,729
878,188
7,895,842
54,162,759
1,502,981
55,665,740
Total.
£
47,301,804
23,603
2,782,702
10,057,782
60,165,891
5,206,724
65,372,615
J. BACKHOUSE.
In the statistical returns of 1833, page 169, it is stated that, from 1820 to
1831 inclusive, there were coined, at the mint, £40,073,047. in gold, and
£3,097,733. in silver. The fall in prices in Great Britain cannot, therefore,
be justly attributed to a deficient supply of coin.
264
STIMULANTS TO HIGH RENT.
likely to influence their conduct. If, in consequence of
the prevalence of a fallacious theory, a general belief
existed that rent must increase with an increase of
population, and they knew that population had increas-
ed, and was increasing, they, each acting for himself,
would be the more disposed to adhere tenaciously to
the old rate of rent, and to stand firmly for the full
average 20s. an acre. And when landlords generally
insist on any rate of rent that the cultivators can pay,
we have seen that that rate the cultivators must pay,
or leave their country. Other circumstances might also
stimulate the landowners to keep up rent. Should
rent have been rising for a considerable time previ-
ously, and that landlords, supposing that the rise
would proceed further, or, at the very least, be fully
sustained, had by contracts bound themselves, either in
family arrangements, or with mortgagees, to pay large
fixed sums annually, self-preservation would stimulate
them to struggle hard to keep up the old rate of rent,
and that struggle might enable them to effect it.*
Thus we see that a reduction of rent would not neces-
sarily follow a fall in the price of landed produce, as
the rent might be kept up to the rate it reached when
corn was at a very high price.
The corn laws which have been passed since the war,
have, however, to a certain extent, prevented those
* It has been recently stated, by Mr. Loudon, that many of the parks and
mansions of our great land proprietors are suffered to go to decay in such a
way as indicates the poverty of the owners: this is, however, quite compa-
tible with the continuation of high rents. The landowners have been dis-
posed to live in advance of their incomes, and many of them are involved
in difficulties, through settlements, bonds, and mortgages; and the payment
of interest is sweeping away their rentals. This state of things accounts
for both the retention of high rents and the poverty of the landowner. In
Italy, where rents are excessively high, the landowners are very poor.-
(See Lady Morgan's 'Italy.")
CORN LAWS.
265
effects from taking place which would have resulted
from an entirely free trade in corn. They have par-
tially sustained the prices of British landed produce,
and have temporarily placed the British cultivator in a
somewhat better position;-they have checked the ex-
tension of manufactures, and kept higher the general
level of money prices;-they have prevented the full
force of free import from being exerted on the currency,
and lessened the rapidity of the fall in the selling
prices of British manufactures in foreign countries ;—
and have, therefore, kept up, in some degree, the force
of supply of gold from exports, and preserved the ex-
changeable value of it higher than it otherwise would
have been.
The action of the corn laws has, consequently, enabled
the agricultural class to adjust itself to the new cir-
cumstances which have arisen since the war. As prices
fell, some agriculturists were transferred to manufac-
tures, the supply of landed produce was thereby a little
reduced, and of manufactures increased. This enabled
the agriculturists to raise, to some extent, the prices of
their produce relatively to the prices of manufactures
-landed produce becoming comparatively scarce, and
manufactures comparatively abundant. The corn law
of 1815 was evidently planned to keep the price of
wheat at 80s. per quarter; but such was the state of
manufactures, and of their selling prices in foreign
countries, that it soon appeared that the supply of
gold could not be kept strong enough to sustain so
high a range of prices. The prices of landed produce
therefore fell, owing to the terms upon which gold was
obtained being such as would not keep wheat up at an
average of 80s. per quarter.
As the prices of food fell, manufactures were stimu-
266
SUCCESSIVE CORN LAWS.
lated, and their prices, in due time, reduced. The
same operation on prices was then repeated, and, in
this way, prices being lowered, the corn law was altered
to adapt it to a lower range of prices. The same pro-
cess was again gone through, and we descended another
step in the scale of prices, and, in this way, we have
proceeded since the peace, the corn laws regularly
impeding the extension of manufactures, and the down-
ward progress of prices.
But the transfers of capital and labour from land to
manufactures in this country were not the only causes
which impelled the people on in the course in which
they have proceeded. The manufacturing establish-
ments which have arisen in other countries have had
their share of influence. The inventions, machinery,
and practical skill of this country, have, in a certain
degree, passed to other countries, where, shielded
by protecting duties, rival establishments have been
nurtured, and their produce brought into the market
in competition with ours; thus increasing the abun-
dance of the supply, and accelerating the decline in the
selling prices.* The British manufacturer, thus met
and competed with in foreign markets, naturally and
reasonably called for a removal of the restrictions on
the importation of foreign corn, in order that he might
the more successfully compete with his foreign rivals ;
and, so far, the result has been as described-a relaxa-
tion of the law. The same causes are, however, still in
operation, and a further relaxation will be required.
This may be effected under the colour of a substitution
* The quantity of cotton consumed in foreign countries in Europe and
in the United States of America, in the year 1831, was
194,566,000lbs.
.273,249,653lbs.
in Great Britain
•
•
4
•
267
of a fixed for a varying duty, or in an alteration of the
scale of duties, but a reduction will be pressed for;
and, reasoning from the past, we may fairly infer that
it will be granted by the legislature. Already the
advocates for reduction are confident in argument, and
urgent in their claims, while the champions of agri-
cultural protection, as it is called, are scarcely heard,
The probability therefore is, that, on the next fluctua-
tion in the prices of landed produce, which shall cause
a general advance of them, the duties on the importa-
tion of grain will be reduced; and thus we shall
proceed, until general money prices in Great Britain
approximate more closely to those of other commercial
nations. We have already advanced far in this course,
and there is no reason to suppose that the causes which
have induced us to advance thus far will cease to operate
in the same way, until we arrive at the end named.
HIGH RENT SUSTAINED.
It may, however, be still asked whether rents can be
kept up to their present nominal amount, while the
prices of landed produce continue to descend? To
which the reply is, that they may be, provided the
productive part of the community can possibly furnish
them. And that it is possible, may be seen by reference
to the state of Ireland; or, if we will go a little farther
off, to Italy. The money rents of the lands of Ireland
are higher than those of England; and, though the
productive power, and, consequently, the ability of the
Irish cultivator to pay rent, are, principally through his
extreme poverty, much inferior to those of the British
cultivator, yet the high rents are paid. The level of
money prices of food, it should be recollected, is lower
in Ireland than in England, and, therefore, in Ireland,
the same nominal is a higher produce rent. In Italy
rents have been carried so high as commonly to
268
take one-half, and, sometimes, three-fourths of the
produce; and yet these rents are paid. It is true that
the whole of the productive classes are impoverished
by these high rents, both in Ireland and in Italy, and
the same classes may hereafter be equally impoverished
in Great Britain; but still they may possibly be obliged
to pay the high rents, and that is the point we are
speaking to at present.
That the continuance of high money rents of land,
while money prices are falling, is a cause of increasing
privation to the productive part of the community, must
be, after what has been advanced, sufficiently clear. In
Ireland it is so palpably evident that no one denies it.
The cultivator in that country is so poor, that he does
not consumed taxed articles to any extent worth naming;
and, as he uses very little capital, he cannot pay much
of taxes through the higher profit charged on taxed
capital; but the high rent is a clear and palpable
burden, distinctly traceable in the large proportion of
the whole produce of the land that it is necessary to
sell, in order to obtain the means of paying the rent.
In Great Britatn it is not yet so evident. The farmer
has not here been stripped of his capital, and profit,
therefore, enters into the price of British landed pro-
duce; and, as British agriculturists, both capitalists
and labourers, still consume taxed articles, to the taxes
on those articles, whether consumed by farming capital-
ists or labourers, a great part of the distress is attributed.
But though, from circumstances such as these, rent of
land in Great Britain is not seen as nakedly in con-
nexion with its effects as it is in Ireland, yet these
effects are experienced; and if rent continue at the
same nominal amount, the lower prices fall, the greater
will be the pressure of rent on the well-being of the
RENT IN IRELAND.
DIFFERENT RATES OF RENT.
269
productive classes. It is quite within the range of
possibility that the intelligent capitalists who now farm
the lands of Great Britain may be stripped of their
capital, and reduced to the impoverished state of the
Irish cultivator,
•
Although such may be the effects of rent, when ex-
acted to an excessive amount, yet it is not to be con-
cluded that no rent ought to be paid, as that would
be nearly tantamount to a cessation of private property
in land. But rent may be very low, or moderate, or
very high; and the consequences of one or another of
these rates are of a very important nature, and should
be clearly understood. When pointing out these con-
sequences, the whole amount of the rent was named,
because it was considered inexpedient to assume that
any particular part of it was excessive. The nature of
the rent, and of the effects of high rent, were the im-
portant points to be elucidated; and the whole amounts
presumed to have been paid at different times were
given, in order to render our explanations more palpa-
ble and definite. It may, however, be fairly asked,
might not the amount, not only of rent, but of all other
net claims, have possibly been as low in 1831 as they
were in 1793? If the country had continued at peace,
taxes might have remained as they were in that year;
and from the nature of rent, there can be no doubt of
the possibility of its remaining as low as it was at that
period. Had such really been the case, all the benefit
arising from the increase of population and productive
power would have been enjoyed by the labourers in an
advance of real wages, and their present situation
would have been better, there is no doubt, than even
that of the labourers of the United States of America.
GREAT BRITAIN, &c.
CHAP. IX.
FROM 1828 TO 1834.
RISE IN THE VALUE OF MONEY.—OFFICIAL AND REAL VALUR Or
EXPORTS.-FALL IN THE PRICES OF COTTON MANUFACTURES.—
NUMBER OF PEOPLE ENGAGED IN THE COTTON MANUFACTURE
COMPARED WITH THE PRICES OF COTTON GOODS EXPORTED.
RETURNS IN MONEY VALUE FOR EXPORTS.-INCREASED
TRESS OF THE LABOURING CLASS.-ANALYSIS OF SOCIETY TO
SHEW THE CAUSE OF IT.-ERRORS OF MR. MALTHUS.-NATURE'S
TABLE.—WHY THERE IS NOT ROOM AT IT FOR ALL THE LABOUR-
ERS.-CLASSIFICATION OF THE POPULATION.
DIS-
·00·
SINCE the year 1826 there has been a further reduc-
tion of taxes, and the rate of profit has continued low,
yet there is no clear evidence of improvement in the
condition of the people. The probability, therefore,
is, that the value of money has continued to increase,
to an extent sufficient to counteract the effects of the
reduction of taxes. Landed produce has not, indeed,
until very recently, materially altered in price; but
when we consider how much farmers must have been
impoverished, and cultivation consequently discouraged,
the high rent paid, the increase of the population, and
the restrictions on the importation of foreign grain,
INCOME AND EXPENDITURE.
271
the continued comparatively high price of grain will
not surprise. The prices of the produce of mines,
resolvable almost entirely into wages and profits, have
sunk considerably. Pig iron, which, in 1826, was at
£8. a ton, sank in 1832 to £4. 17s. 6d. ; bar iron,
from £10. 15s. in 1826, sank to £6. 5s. in 1832.
Since that time both these articles have a little
recovered, but they still remain low in price.
-
The following statements of the total ordinary in-
come, and of the government expenditure of the
United Kingdom, to 1831, are taken from the official
statistical returns of 1833, that of 1833 is taken from
a parliamentary paper.

In the year 1820.
1821
""
>>
,,
""
وو
29
""
""
""
☺
""
""
35
··
··
1822.
1823.
1824.
1825.
1826.
··
..
•
··
1827..
1828..
1829
1830
1831.
1833..
•
Income.
Expenditure.
£
£
53,622,438 53,183,205
54,593,679 54,814,321
53,652,473 49,499,130
51,508,376 | 50,962,014
52,202,018 | 52,774,600
52,065,389 51,620,027
49,625,485 53,885,541
49,581,576 53,800,291
51,665,077 49,336,973
50,428,275 49,075,133
49,889,994 47,142,943
46,293,646 47,123,298
46,988,755
The net revenue of Great Britain was, for the years
ending on the 16th of October, in 1832, £43,408,812.;
in 1833, £43,028,392.
The rate of profit is indicated by the average prices of
the three per cent. consols, in the months of February
and August, in each year, from 1821 to 1831 inclusive,
taken from the same official returns.
272
In 1820....
1821..
1822.
1823..
1824...
1825..
781
84/
85/
873/
1830..
90/
1831.. ... 793
>>
""
The low price of 1831 was the effect of the political
state of Europe after the Parisian revolution of the
three days. The apprehension of war yet keeps the
prices of stock lower than they would otherwise be,
compared with the rate of profit obtained. Mr. Lewis
Loyd, in his evidence before the committee on com-
merce, &c. on the 16th of May, 1833, said "
cannot employ our surplus money at two per cent."
Consols were on the 18th of May, 87% to 2.
we
From the state of the exports, it appears, that the
power to command an abundant supply of gold, at a
cheap rate, was still on the decline; as, while official
values continue greatly to increase, the declared values
remain nearly the same; as may be seen in the returns
for the years from 1829 to 1832, both inclusive.
They were
>>
""
در
""
In the year 1829.
1830.
""
1831.
1832.
LOW RATE OF PROFIT.
67% In 1826...
74
1827...
79
1828...
77/1/
1829..
931/1
90%
ور
!
""
""
99
""
""
•

In
official value.
£
52,019,728
55,465,723
60,492,637
In
declared value.
£
36,150,379
35,212,800
37,691,300
60,090,12336,652,600
Thus, (adhering to the millions) while about 47½ in
quantity, commanded 354 in value, on a yearly average
from 1825 to 1828, it required 60 to obtain 36½ in
1832; shewing a decline in the selling prices far
beyond what can be supposed to have resulted from
273
any improvements which took place, during the period,
in the modes of producing the exported articles. The
produce of more British labour, must, therefore, be
given in exchange for the imports, including that
supply of gold which determines the value of the
EXPORT OF COTTON GOODS.
currency.
The leading articles of export, cotton manufactures,
exhibit the same features as the aggregate exports;
and as accounts of them have been published from
1815 to 1830, we may trace the progressive decline in
their declared, compared with their official values;
and, in order to avoid being misled by fluctuation
in particular years, we will divide the whole into
three separate periods. The average annual export
was, for

The 5 years ending
with 1819..
•
The 5 years ending
with 1824....
The 6 years ending
with 1830..
•
U
At the
declared value.
At the
official value.
£
£
20,271,567 18,202,179
23,562,359 16,161,422
31,460,860 | 17,113,485*
Mean price
of bowed
cotton.
d.
18弄
​9時
​7+
The value of the raw cotton is supposed to be about
1-6th of the value of the manufactured article, and
as the price of raw cotton, from the first to the third
period, sank to nearly two-fifths, when we compare
the declared values of the two periods, we must add
the other three-fifths of the price of the cotton, which
would raise the declared value of the last period, to
* From Pebrer, page 341.
+ Tooke.
* One seventh some say, but I wish to allow the full proportion for raw
material.
274
say, in round numbers, £20,000,000. And thus we
find, that from, say 1817, the middle year of the first
period, to 1827, the middle year of the last, in all 10
years, supposing the raw material to cost the same at
the two periods, it became necessary to export 50 per
cent. more of manufactures, to obtain, in return, an
equal amount of money!
In the first and last years of the series, the diffe-
rences between the official and declared values, are
much greater, as they were
EXPORT OF COTTON GOODS.

In the year 1815.
1830.
""
•
•
In
official value.
£
•
In
declared value.
17,655,37820,033,132
£
37,269,395 17,394,584*
Had cotton goods remained of the same declared value
in 1830 as in 1815, the quantity exported in the
former year would have been of the aggregate declared
value of above £42,000,000. instead of sinking to
£17,394,584. This is an extent of reduction in price,
for which the reduction in the price of the raw material,
and the improvements in the methods of producing
the articles, will not account. The improvements
have been, principally, in the spinning department,
and Mr. Kennedy's statement of the extent of them,
from 1812 to 1830, has been triumphantly referred to
………
*The quantity of raw cotton taken for home consumption, which gives
the quantity used in Great Britain, was, in 1815,-85,800,000lbs.; in 1830,
242,000,000lbs.; and the average quantities per annum, taken during the
whole period, were,
in the 5 years ending with 1819
in the 5 years ending with 1824
in the 6 years ending with 1830
··
100,690,200lbs.
.143,509,000lbs.
204,391,332lbs.
275
as conclusive evidence on the subject. The following
is the table furnished by that gentleman.
Hanks per day
produced per spindle.
Price of
cotton and waste
per lb.
Yarns. 1812. 1830. 1812. 1830.
No.
40..
60.
80..
100..
120..
150..
200...
250.
•
•
....
..
· •
COTTON SPINNING.

•
S. d.
2. 2.75 1 6
1.5 2.5 2 0
1.5 2. 2 2
1.41.8 2 4
1.25 1.65 2 6
1. 1.33 2 10
.75 .90 3 4
.05 .06 4 0
S. d.
0 7
0 10
0 11
1
1
13
4
1 8
3
0
3 8
Labour
per lb.
1812. 1830.
S.
d.
Cost in
cotton & labour
per lb.
1812. 1830.
S. d.
S. d. S. d.
0 7 2 6 1 2
1036
1 10
2
1
0
1 6
2 2
2 10
3 6
6
66
9
16 8 11 6 20
31 0 24 6 35
1 7 4 4
2
2
5 2
2 8
4 11
63
3
4
4 0
6 7
0
4
0 14 6
028
2
From this table it will be seen that the greatest
increase in the amount produced per spindle, is in the
yarn No. 60, but the whole quantities produced of
that and higher numbers, are very small compared
with the quantities of No. 40, and lower numbers.
Now the increase in the production of No. 40, from
1812 to 1830, is only as three upon eight;-—that is,
eleven were produced in the latter, where only eight
were produced in the former year. Here, then, we
see, that in the spinning department of the cotton
manufacture, that particular department in which the
most important improvements had been made, the
increased production, at the end of nineteen years,
was only three upon eight, while the decline in the
declared value of the whole of the goods, exported at
the end of sixteen years, was, omitting the fractional
parts,-from, what would have been, if the value had
remained unaltered, forty-two millions, to only a little
more than seventeen millions! And yet it is stated,
broadly and confidently, that, allowing for the dif-
ferent values of the raw material, the fall in price is
U 2
276
attributable entirely to improvements in the methods
of producing the articles !*
The following is a table shewing the selling prices
of 36's Blackburn weft, in the Manchester market,
from 1815 to 1830, furnished from Messrs. Birley and
Co. one of the largest and oldest spinning and weaving
establishments in Manchester; to which I have added
the cost in cotton and the sum left for spinning. The
prices paid for weaving are also given from Marshall,
page 44, and from Mr. E. a manufacturer, of the
prices paid at Preston,
Years.
1814.
1815.
1816.
1817.
1818.
1819.
1820.
•
· •
•
•
•
❤
1821..
1822..
1823..
1824.
1825.
1826..
1827..
1828..
1829.
1830.
1831..
1832.
1833.
•
•
•
•
·
·
THE COTTON MANUFACTURE.
•
Black-
burn
36 weft.
(Birley.)
S. d.
Cost
Average For A 6-4ths
left for weaving cambric,
in ran
Left spinning 12 yards 34 picks
bowed for at 3 of 6-4ths to a 1 of
cotton. spinning periods. cambric. an inch.
(Marshall)] (Mr. E.)
5
4
S. d. S. d.
2 6
2 10
261
2 4 1
2 2
1
1
8
0
1
1 8 0 10
16132
0 10/2/20
08
•∞ ∞ ∞ ∞
1
1
1
1
0
1
1
0
1
0 0
0 11/2/2 0
0 11 0
0 112 0
0
8
8
1| 1 0
11 08/
11
90 7
8/1/1 0 92/
18/1/12 0
8/2/20
11
0
6/2/2 0
6/20
630
mlt mit 700
52 0
620 43/2
8d
S. d. S. d.
13
113 d
113d 4
5 3 d
026 0
6 14 0
0
0
6
6
0
6
4 0
11
0
11
5 6 9
4 0
4
5
0
4
010
0
3
910 0
4
010 0
3 6 9 6
2
9 9 0
8
6
6
10
6 11
0 10
∞777~~
8
6
7 6
6
6
6
The cambric weavers get an average of from about 7s. to 8s. per week.
* A machine, called a "stretcher," is used in spinning, in which an im-
provement has been made, that has tripled its power of producing, and
THE COTTON MANUFACTURE.
277
From this table it will be seen, that from 113d.
the average sum obtained for spinning a lb. of 36's
weft, in the five years ending in 1819, the sum left for
spinning it in the six years ending in 1830 sank to
5 d., being less than one half of the first price.
Mr. John Fielden, M. P. for Oldham, who is a very
extensive spinner and manufacturer, in Todmorden,
read the following tables in his place, in the house of
commons, in May, 1833, relative to the alterations in
prices of cotton goods.
30 Hanks water twist.

In the years
1 1-7th
1 1-7th
1815...
1824.
1831.. ] 1-7th
1832.
1 1-7th
...
·
Cotton
required
for llb. of
twist.
1815...
1824.
1831.
1832.
•
Price of
cotton
per lb.
Pounds of Price of
cotton
In the years for 1 piece.
cotton
per lb.
S. d.
1
7
0 82
0 5
0 623/0
5/1/
5/1/
Cost of
cotton
for llb. of
twist.
S. d.
1 10
S. d.
1 7
0 8
0 93
0 61
0
Cost of spinning and weaving a 72 calico, made by a power-loom.
Cost of
cotton
for 1piece.
S.
d.
8 8
3 9
0 5 2 6
0 63/ 2 10
Value of
1lb. of
twist.
S.
3 3
1 8
1
0
10
d.
Value
of
I piece.
S.
27
مل
Sum
for labour
expences,
and profit.
0
13 6
8 3
8 3
S.
d.
1 42
0 10/1/
0 5
0 5

Sum
for labour,
expences,
and profit.
S.
d.
18 4
9 9
5 9
5 5
Mr. Fielden also gave the following table of the cost
and price of a piece of third 74 calico, woven on the
this also has been named as a sample of the whole process. The stretcher,
however, performs but a small part of the process, and its improvement
does not seriously affect the whole cost of production.
278
THE COTTON MANUFACTURE.
hand-loom, with elements of its cost. To which I
have added the average prices of wheat per quarter,
of medium quality.

In the years
1815....
1816..
1817.
1818...
1819.
1820..
1821
1822.
1823.
1824.
1825.
1826.
1827
1828.
1829.
1830.
1831.
1832.
··
..
The
average cost of
raw cotton
for one piece of
calico.
S. d
7 0
6
7
7 2
7 2
4 10
4 3
3 4품
​2 11
2 11
3 0
4
4
2
5
2
3
2
2
2 0
2
2
0
2 3/
The
average price
of such calico
in the
Manchester
market.
S.
d.
18
0
16 0
15 3
16 0
13
0
11
6
10 6
10 0
9
6
9 0
9 9
7
2
6
5
6 3
5 7
6
3
5
9
5 0
The
average sum
for labour,
expences,
and profit.
S.
11
9
8
d.
0
4/
8 10
9 2
7
3
71
7
1
6 7
6
0
5
4
4
9
4 2
4
022
3
7
3 10/0
3
9
3 2
T
The
average price
of
wheat
per quarter.
S. d.
66 3
76 2
94 0
83 8
72 3
65 10
54 5
43 3
51 9
62 0
66 6
56 11
56 9
60 5
66 3
64 3
66 0
66 4
In his speech Mr. Fielden stated that, during this
period, the hand-loom weaver had had his wages reduced
from 4s. 6d. to 1s. 3d.
In the whole of these documents there is a general
agreement, which makes them substantially confirm each
other. In particular points where they do not harmonize
it may be accounted for. Indeed, when we recollect that
cottons of various qualities and prices are mixed in diffe-
rent proportions by different manufacturers, and that the
averages for the year are arrived at in different ways,
279
some taking the prices of each day, others a day of each
week, and others a day in each month, we may be assured
that honest and independent statements will appear to
differ in minute circumstances, although they may
agree fully in their general substance. It may also be
remarked, that wages of hand-loom weavers, have
fallen more in parts where coarse goods are made, as in
the neighbourhood of Todmorden and Blackburn, than
in Manchester.
COTTON WEAVERS.
In Mr. Henderson's report on the poor laws, from
Lancashire, an account from Mr. Harrison, surgeon, is
given, relative to the condition of the hand weavers in
Preston, in December, 1831, in which it is stated that
in one district there were 139 families, containing 634
individuals, or 4.56 to each family, whose weekly income
"including parish allowance, when made, was £73.3s.3d.
which makes, on an average, 10s. 6d. for each family,
or 2s. 3 d. for each individual. From the 10s. 6d.
however, we ought to deduct 2s. a week for looms,
paste, brushes, candles, &c. which are expended in the
production of their manufactures;" it is afterwards
stated, that the weaver is obliged to pay higher rent for
space in which to put his loom-2s. 6d. instead of
2s. Od. or 2s. 3d. "If then," says Mr. H. we deduct
2s. 6d. from 8s. 6d. the net average income of a
weavers' family, we shall have 6s. 03d.; from this again
we must take 3d. a week for direct taxes, and 7d. for fuel,
which will leave 5s. 2d. a week for the food and
cloathing of 4.56 individuals, or about 1s. Id. a head.
This is the average, and, of course, there were many
below this statement." It is also stated, that 58 of the
poorest families, containing 318 persons, or 5.48 to each
family, had a weekly income of only £25. 15s. 1d.
being 8s. 10 d. per family. A number of these were
“
280
COTTON WEAVERS.
weavers, from whose income, if we deduct 2s. for ex-
pences connected with labour, 2s. 6d. for house rent,
10d. for taxes and fuel, we shall have 3s. 6d. left for
cloathing and feeding 5·48 individuals, or about 8d. per
head per week, or a little more than ld, a day!" This,
however, is not, it appears, the lowest state into which
weavers have sunk, for Mr. Henderson says, that "in
the neighbourhood of Burnley an average hand-loom
weaver cannot, at present, earn above 4s. 6d. per week,
although a Manchester or Preston weaver can earn
6s, or 7s. weekly."-See the report, p. 340 and 341.
It has been very generally asserted, and is indeed
commonly believed by the parties themselves, that the
introduction of the power-loom has been the cause of
the great depression of hand-loom wages; but this is
probably another instance of a circumstance, coincident
in point of time, being mistaken for a cause. Power-
looms were not used so extensively as to make any
material impression on the market price of cloth until
near the termination of the war, but the price paid for
weaving a particular kind of cloth, which, according to
the report of the Lords of 1814, was, in 1792, 8s., and
in 1802, 10s. sank in 1808, and again in 1811, to 5s. 6d.
from which it rose again in 1812 to 6s. 6d., in 1813 to
8s., and in 1814 to 10s. Now, as few power-looms
existed in 1808, and not many, compared with the
number of hand-looms, in 1811, the fall of wages at
those periods cannot be attributed to power-looms.
And we see, notwithstanding their introduction, up to
1814, in that year the weaving of the above named
cloth rose to 10s. From 1815 to the present time, it is
true, the use of power-looms has been much extended,
and hand-loom wages have fallen more than any others.
But this latter circumstance is, it is very likely, attri-
281
butable as much to common weaving being an employ-
ment to which children can be readily put, as to the
extension of the power-loom. Had not the power-loom
been used, there would have been employment for a
greater number of hand-loom weavers, but what reason
have we to suppose that that greater number would not
have been found to work at wages equally low as those
paid at present? The business and population of
Manchester have doubled during the same period, and
yet wages have generally fallen. It is computed that
there are, at present, fifty thousand Irish, or their
immediate descendents, in Manchester and its neigh-
bourhood, a large part of whom depend upon weaving ;
and if an additional number had been wanted, there is
no reason to doubt that they might have been had.
And if what Mr. Fielden said in his speech is even near
to being correct, the number of power, compared with
hand-looms, at present in existence is very small. He
said "the number of persons, too, employed in cotton
mills, was small, compared with the number of hand-
loom weavers who were in such deep distress. The
number in all the cotton mills in Great Britain would
not, he believed, exceed 170,000; and his opinion was,
that there were four persons engaged at hand-loom
weaving for one person employed in cotton mills."
Mr. Babbage, in his book on manufactures, has stated,
from information collected to be laid before parliament,
that, in 1830, the number of hand-looms in use in
Great Britain was 240,000; and that nearly the same
number existed in the year 1820;—that the number of
power-looms in 1820 was 14,000, but in 1830 they had
increased to 55,000. From this statement it appears
that there was no positive reduction in the number of
hand-loom weavers, and the younger part of these, of
NUMBER OF COTTON WEAVERS.
282
HAND AND POWER LOOMS.
both sexes, are the most suitable for attending power-
looms, and are, therefore, wanted for that purpose.
There is, however, an error in the statement made by
Mr. Babbage, of the relative quantities of work done
on a hand and on a power-loom. He says,
"each of
the power-looms did as much work as three worked by
hand," and that "the increased producing power was
equal to that of 123,000 hand-looms." In order to
ascertain the correctness of this statement, I applied to
Messrs. E. and T. Dodgshon, of Manchester, who manu-
facture the same kind of cloth, both by hand and by
power-looms, to learn the proportional quantities woven
by each; and I received from Mr. T. Dodgshon the
following note in reply :—“ I find that our hand weavers,
on a 50 reed domestic (Stockport count) have turned
off from their looms more cloth than we could turn off
from an equal number of our power-looms,reckoning
both to work the same hours. The hand weavers
generally strike more picks per minute than power-
looms do for coarse work." The power-looms are of
recent construction, are well made, and work at the
rate of about 100 picks a minute. Mr. Babbage was
probably led into error by mistaking a weaver for a
loom. In general, one weaver attends two power-looms.
The whole quantity or rather cost of labour required
in the two modes, is, however, not materially different,
as, in addition to mere weaving, there is in the process
by power, labour employed, in making and repairing
the machinery, in working the steam engine, and in
getting the coal. The principal advantage attending
the power-loom is in the more uniform texture of the
cloth made by it, which causes that cloth to command
a higher price than the hand woven cloth.
establishment in Manchester, Mr. Eadsforth employs
In an
283
140 hand-loom weavers, male and female, who weave
on what are called "dandy-looms."* He states that
each individual, on an average of the whole number,
weaves 5 one-sixth cuts per week. The cut or piece
was 36 yards long, and 41 inches wide, and the weft
(the cross thread) had 44 picks to an inch. Mr. E.
informed me that, in a large power-loom establishment
in the town, the same kind of goods was made, and that
each power-loom, on an average, turned off little more
than four cuts per week:-the time of working
equal.
HAND AND POWER LOOMS.
The power-looms of Messrs. T. Marsland and Co. of
Stockport, are said to be of the very best make, and to
be worked at the highest speed. On an average of
many of their looms, it was found that 6 cuts were
obtained from each. The cut was four-fourths in
breadth (generally about 32 inches in the cloth), 29
yards long, 60 Stockport reed, and 56 picks to an inch.
A calculation will shew that Mr. E.'s hand weaver
threw the shuttle 274,536 times in the week, while in
Messrs. M.'s power-loom it was thrown 370,016 times.
But the former passed through 41 inches each time,
while the latter went through only 32 inches, the
latter consequently traversed little more space than the
former.
The average annual quantity of raw cotton taken for
home consumption, in the 3 years ending with 1831,
245,641,878lbs.
in the 3 years ending with 1822, it was 132,082,000lbs.
Increased annual consumption in 9 years 113,559,878lbs.
was
These dandy looms wind up the cloth as fast as it is woven: they
have been of late much used, and their number is now considerable. A good
weaver will get from 9 to 10s. per week.
1
284
The twist and yarn exported in the 3 years ending with
1831 was an annual average of....
63,302,677lbs.
23,718,154lbs.
in the 3 years ending with 1822.
Increase per annum.
39,584,523lbs.
The number of yards of cotton cloth annually exported
in the 3 years ending with 1831 was..
422,766,765
260,878,795
in the 3 years ending with 1822
Increased annual export in 9 years
161,887,970
The number of hand-looms in 1830, according to
INCREASE OF LOOMS.
Mr. Babbage, was.....
number of power-looms. .
Total
The hand-looms in 1820
power-looms in 1820.
• •
• •
•
·
240,000
55,000
240,000
14,000
Total
254,000
Increase in 10 years.
41,000
The increase in the number of looms is palpably dis-
proportioned to the increase in the exportation of cloth.
The hand, as well as the power-looms, were, it is proba-
ble, materially increased, particularly the dandy-looms;
and hand weaving has been extended in parts of the
country more distant from the principal seats of the
manufacture.
295,000
That power-looms have had some effect in lowering
hand-loom weavers' wages may be and probably is true,
but that they have been the principal, or even an im-
portant, cause of that lamentable circumstance, does
not appear. The wages fell, and very considerably too,
before power-looms were used; and they have since
fallen with the general decline of money prices; and
would, doubtless, have fallen, although perhaps not so
rapidly, if power-looms had not been introduced.
Prices and remuneration have generally declined in
the cotton manufacture for the last 20 or 25 years;
INCREASE OF WEAVERS.
285
and that, too, as has been shewn, far beyond the decline
in the price of the raw material, or the extent of the
improvements introduced.
Mr. Kirkman Finlay said, in his evidence before the
select committee on manufactures, &c., May 21, 1833,
"I think that a grand mistake exists in supposing that
the power-loom supplants the hand-loom universally,"
and "the number of hand-loom weavers in Scotland
now, I apprehend to be much more than the number of
hand-looms in Scotland when the power-loom was first
introduced ;" and again, “it would require a very good
hand, and very hard work, to earn from 6s, to 7s. a
week, from what I am assured by weavers themselves,
upon whose word I can place every dependence."
But there is another mode of exhibiting this subject,
which will shew clearly that the decline in the price of
cotton manufactures has been accompanied by a great
falling off in the remuneration of the parties engaged
in the manufacture. In the year 1811 the population
of the whole town of Manchester was 113,798; and, in
1821, it was 158,631: presuming its increase to have
been uniformly progressive, the number in 1815 would
have been 131,730. The population of Manchester may,
at that time, be taken to represent the whole of the
parties engaged in the cotton manufacture, and when
that town contained 131,730 inhabitants the exports of
cotton manufactures were of the declared value of
£20,033,132. But, in the year 1831, the population of
Manchester had increased to 232,578, while the declar-
ed value of the manufactured cottons exported in 1830
was only £17,394,584. During these sixteen years the
population increased more than 100,000, but the total
value of the exports declined from £20,033,132. to
£17,394,584. In 1815 the value of the exports was to
286
COTTON MANUFACTURERS.
the population of Manchester as above £152. to each
person, in 1831 as less than £75. to each person!
Thus, without going into any minute calculation to
ascertain the actual numbers of the whole population
engaged in the cotton manufacture, and the total value
of the goods produced, but proceeding on the above
data, and taking Manchester to represent the whole
cotton manufacturing population, and the declared
value of the exports of cottons to indicate the value of
the whole of the cotton manufactures at the two
periods, it will appear that, on a general average, each
person engaged at present in the cotton manufacture
receives less than one-half of the money that he did in
1815 as a remuneration for his capital or his labour.*
The extent of improvement made does not affect our
conclusions from this mode of viewing the subject, as
we have here simply the number of persons, and the
sum of money at each period; complexity is thus
avoided, and but one conviction can follow. It is not,
however, pretended that the computations on which we
proceed strictly accord with the real facts of the case;
on the contrary, to approach accuracy, many trifling
allowances must be made, such as for the altered price
of the raw material, the difference between the in-
crease in the whole population engaged in the manu-
facture, and the increase of the town of Manchester,
but such attention to detail is not here necessary, the
broad facts admit of no dispute, and they prove beyond
* In this manufacture there is no doubt that profits have fallen more
than wages, the general reduction in the rate of profit has contributedto
effect this. The wages of fine spinners have kept up, and among those
employed in connexion with machinery in general, the fall has not been
great; but among common hands, and particularly in common hand
weaving, the fall has been considerable.
287
a doubt that the fall in the value of cotton goods has
been attended with a great reduction in the money re-
muneration of the individuals engaged in the manu-
facture. Of the cause of that reduction we have already
treated, and shewn it to have been an influx of labour
from other departments of production, where it was
worse remunerated, which beat down wages in the
cotton manufacture, glutted the markets with goods,
and brought down their prices. Prices being thus
reduced, equal imports were not obtainable without
much more labour; and gold, among other articles,
costing much more labour, it exchanges for much more
labour, and for much more of the products of labour,
than it did during the time of the war.
If we look to the towns engaged in the woollen
manufacture we find the same kind of facts as those pre-
sented in the cotton manufacture. The population of
Leeds was....
in 1811.... 62,534-in 1831.. 123,393
Huddersfield, in 1811.... 9,671-in 1831.. 19,035
And in towns dependent on the manufacture of hard-
wares we have the same features. The population was,
in Birmingham
in 1811.. 85,755-in 1831 146,986
in 1811..
53,231-in 1831
14,836-in 1831
91,692
24,732
in Sheffield
in Wolverhampton in 1811..
and the same kind of increase is observable in the
other towns, the people of which manufacture for ex-
portation, and yet, notwithstanding this general
increase in the number of the people who labour for
exportation, the declared value, and consequently the
money value returns, for the aggregate exports have
absolutely declined.
The foregoing facts and reasonings, taken altogether,
authorise us to conclude that, up to a recent period,
MANUFACTURERS OF EXPORTS.
•
•
•
288
AMOUNT OF POORS' RATES,
money, in Great Britain, continued to rise in value,
and, consequently, that all payments of fixed sums of
net wealth in that money became more burdensome.
Taxes have been reduced, it is true; but, as it appears,
not to a sufficient extent to counteract the influence of
the rise in the value of money, and the condition of the
people, therefore, continued to decline. This is most
palpably shewn by the amount which it has been found
necessary to raise annually for the relief of the poor,
notwithstanding that the poor's rate has been long and
loudly complained of, and that various expedients have
been tried to reduce it. The average sum raised annually
for the four years ending with 1828 was.. £7,359,195.
and for the four following years the average
was.
8,249.222.*
a very great advance, especially when we recollect the
general efforts which have been made to reduce it, fur-
nishing painful evidence of the increased distress of the
class receiving relief.†
In a country circumstanced as Great Britain is, the
value of money is a subject of great consequence:
hence the importance of ascertaining whether money
is or is not yet rising in value. It may be stated, as
a general proposition, that common food in Great
Britain, cheap as it may appear, is at present at least
• ·
* In 1829, the sum raised was £7,642,171....in 1830, £8,961,281.
in 1831,..
£8,114,220.....in 1832, £8,279,217.
+ In many parishes in Lancashire it is customary to publish the names
of all persons receiving relief, and the public are invited to inform the
overseers, should they know any reason why relief should be withheld.
Select vestries have been appointed, composed of the principal rate
payers, and of others the most likely to know the actual circumstances of
those who apply for relief. At the same time, it ought to be remarked,
that in some agricultural districts, portions of wages are paid through the
poor's rate.
··
PRICES OF FOOD.
289
25 per cent. higher in money price than it is on the
continent of Europe; or, that the same amount of
money will, in Great Britain, command one fourth
less food than on the continent. Money is kept down
here, thus low in value, by cheaply produced exports,
yet selling at such prices as purchase and bring home
a supply of gold, which determines it to have that
exchangeable value. Competition at home and rival-
ship in foreign countries, have a tendency to cause
the prices of these exports to fall,—that is, to com-
mand less gold, and consequently to make gold of
greater exchangeable value when brought home; and
this process would go on until gold in this country was
raised to an equality in value with what it is in Holland
or France, or until money prices were equalised in the
three countries; were there not causes in operation to
counteract it. These causes are, successive improve-
ments in manufacturing the exports: such improve-
ments raised our money prices, and a continuation of
them can alone sustain money prices.
Are there, then, improvements of this kind in pro-
gress at present, sufficient to keep down the value of
gold? The answer to this question can be only con-
jectural. In the cotton manufacture, the leading
article of export, establishments are being successively
enlarged, and more economical arrangements are pro-
gressively made. Various little improvements admit of
the machinery being moved at a greater speed, and of
course enable more to be produced in the same time
with equal labour and capital. The machinery itself
is also made at less expence. Steam engines can be
had for about two-thirds of what they cost eight years
ago. In one establishment in Manchester, that of
Messrs. Sharp, Roberts and Co. various improvements
X
290
IMPROVEMENTS IN MACHINES.
have been made by Mr. Roberts, which have greatly
increased the efficiency of the labour employed in
making machines. By the application of steam power
to forcing a steel tool or cutter along the surface of a
plate or bar of iron, or by moving the iron while
the tool is held fast, the tool is made to cut a shaving
off, and to leave the surface of the iron perfectly level.
The tool being moved a little sideways, the cut is
repeated, and thus, in succession, the whole surface of
the iron is planed and left smooth and true. By the
use of this simple but highly effective machine, one
man is enabled to do as much work as, according to
the kind of article planed, from twenty to fifty men can
do by the old method of chipping and filing, and the
work is done much better. The application of the
same principle in another machine, enables one man
to do as much as twelve can do by the old mode, in
cutting key-beds, or grooves in wheels, to fix them on
shafts; or in cutting any other similar things. And
in the old way there are files and chisels used, equal
in value on an average to one half of the wages of the
workmen, so that the whole saving is one half more
than the amount named. These are, however, very
favourable examples of the kind of improvements that
are being made.
Mr. Roberts has also invented a self-acting mule, or
spinning machine, which is getting rapidly into use.
The various important advantages attending the use of
this machine, it is stated, enable those who adopt it
to save from one-fourth to one-third of the whole ex-
pence of converting the raw cotton into yarn or thread.
Improvements of this kind, however, pass rapidly to
other countries, where, combined with their general
use at home, they in time cause the selling prices of
291
the articles produced by them to fall equal to the
extent of the improvements, when they cease to keep
down the value of gold. And as manufacturing by
machinery increases in other countries, there will be a
tendency in gold to become equal in value, in the
various manufacturing countries, and this tendency will
cause its value to rise, or prices to fall in Great Britain.
But a fall of prices, through a rise in the value of
money, increases the value of all fixed sums paid, and,
in this way, rents, the interest of the debt, and other
obligations, may become more difficult to pay, because
it may require more labour, or the produce of more
labour to pay them.
That distress should increase among a people such as
that of Great Britain seems, at first sight, very surpris-
ing. The country is at peace, and opulence, capital,
intelligence, industry, skill, and perseverance abound
to an extent equal, if not superior to what has been
found in any other country. This has hitherto ap-
peared strange. But, in order that we may have a
more distinct perception of the real state of this society
in which the apparent anomaly exists, we will once
more take an analytical view of it, and in this view we
shall see not only how opulence and distress may exist
together, but also how the former may be the cause of
the latter, in spite of all that capital, intelligence,
industry, skill, and perseverance can do to prevent that
distress.
EFFECTS ON PRICES.
The total population of Great Britain in 1831 was
16,537,398 persons, including the army and navy. The
productive portion of this population yielded a round
sum of net wealth amounting to probably £100,000,000.
but we will take it at £90,000,000. That is
x 2
292
rent of land, say..
£38,000,000.
taxes, including expences of collecting.. 46,000,000.
and tithes, mines, building, ground-rents,
ANALYSIS OF THE POPULATION.
•
and other fixed payments..
Total annual net wealth furnished......
6,000,000.
90,000,000.
On the 16th of July, 1833, Mr. Spring Rice said in
parliament, as reported in "The Mirror,' when ex-
plaining the expenditure, "In the first place there is
the interest of the national debt, amounting to upwards
of £27,000,000. next follows the dead weight, or half-
pay of the army, the navy, and the retired and super-
annuation charges for civil officers. If these are added
to the national debt, they constitute no less a portion of
the yearly expenditure of the country than (in round
numbers) £33,000,000. Now the actual expenditure
of last year was £44,922,000. or to speak again in
round numbers, £45,000,000.” This is independent of
the expence of collecting.
In April, 1833, Lord Althorp, in the house of commons,
said, that the income for the year was £46,852,650, and
the expenditure was £45,365,507. The sum expended
in 1831, according to the tables of 1833, was 47,123,298.
so that the amount assumed is too low, independent of
expence of collecting. The sum put down for tithes
and various annuities is probably also too small. If
we suppose tithes to average one-fourth only of the rent,
they would amount to £9,500,000., deducting from
this one-third for the lands not subject to church tithe,
and there will remain £6,333,334. Royalties, and other
payments made by miners and ground rents for build-
ings in towns, amount to very large sums. The round
number of 100 millions might have been taken as a
grand total, but we will proceed with the smaller sum,
90 millions.
10
ANALYSIS OF THE POPULATION.
293
Now, presuming that this sum is received and expended
by persons who, as in 1793, each on an average receive
£400. a year, their total number would be 225,000, and
taking each of these to represent, as heads of families,
six persons, we shall have a total number of net
receivers amounting to 1,350,000 persons. These we
further suppose employ others, as menial servants,
manufacturers and tradespeople, to administer to their
gratification as secondary producers, in number double
of themselves: we shall then have a population of
receivers of net wealth of..
1,350,000 persons,
and of secondary producers*
2,700,000
making a total, dependent upon the
net wealth, of....
4,050,000 ""
leaving for the remainder of the
""
population
12,487,398
to make the grand total of ...... 16,537,398
""
The 1,350,000 net receivers, it will be borne in mind,
produce nothing, but merely consume; the secondary
producers only work up a part of the net wealth to
render it more fit for the consumption of the net
receivers, and for this service obtain a part of the net
wealth for their own subsistence. The 12,487,398
primary producers furnish all the net wealth, and also
subsist themselves. These have, however, to be divided
into two bodies, the capitalists and labourers, before
we can ascertain the number of labourers through
whose exertions the whole of the wealth is obtained.
""
The amount of capital in the year 1793, we took to
be 350 millions, and at present it may be assumed to
be 500 millions, and the owners of this being supposed
* The net receivers and secondary producers are probably underrated,
as may be seen in a table of the whole population, in classes, to be given
shortly.
294
ANALYSIS OF THE POPULATION.
to be in the same proportion to the capital that they
were, at that time, the whole number of capitalists will
be 142,857, and these, as before, being taken each to
represent five persons, will give 714,285 persons sub-
sisting on profit of capital. Allowing to these a number
equal to themselves, to be employed to administer to
their gratification, and we shall have a population of
capitalists and their dependents, all living, directly or
indirectly, on profit, of 1,428,570 persons, which being
added to the net receivers and their dependents, will
give a total of 5,478,570 persons, leaving 11,058,828 of
labouring primary producers, or 1,843,138 families,
with six persons to a family.
Taking the productive power of these to be the same
as those of 1793-£100. each family, it would give
a total of......
£184,313,800.
from which take the net wealth.
and we have left for the primary producers
The profit on 500 millions of capital, at
6 per cent. would be.......
leaving, to be divided among the primary
labourers
• •
90,000,000.
94,313,800.
32,500,000.
£61,813,800.
affording for each family something more than £33.10s.
or £5. 12s. each person.
This, however, does not shew the whole effect pro-
duced on the condition of the labouring class by the
abstraction from them of an increased quantity of net
wealth, and the consequent reduction of wages. When
wages averaged £8. each person, as in 1793, a much
smaller number of labourers could be retained by
the expenditure of a given sum of net wealth, than
when they averaged £5. 12s. each, At the former
rate, the 2,700,000 secondary producers would require
£21,600,000. to pay them; but, at the latter rate, the
ANALYSIS OF THE POPULATION.
295
same sum would equally well command the labour of
3,833,035 persons. The fall of wages would, therefore,
cause persons equal in number to the difference between
these two numbers, to be taken from primary and trans-
ferred to secondary production. The primary labourers
would now be 9,925,793 instead of 11,058,828, and the
primary produce would be £165,429,900. instead of
£184,313,800. and the sum left to be divided among
the primary labourers would be not £61,813,300., but
only £42,929,900. affording to the reduced number of
primary labourers not a sum of more than £5. 12s.
each, but only about £4. 6s. each. This reduction of
wages would, in its turn, enable the net receivers to
command the labour of more persons as secondary
producers, and, of course, would a little further reduce
the number of primary labourers, and cause an addi-
tional reduction of wages.
The amount thus left for wages at last, is, however,
entirely attributable to the increase of the labouring
population. Had the population remained only 10
millions, and the net wealth been raised to 90 millions,
and the net receivers and secondary producers conse-
quently increased to the number of 4,050,000, then,
adding the number of capitalists and their dependents
in 1793, and taking the whole from the population of
10 millions, and it would leave less than five millions
of primary labourers; who, if they produced after the
rate of £100. each family of six persons, would furnish
a total of wealth amounting to only 83 millions: con-
siderably less than that now furnished to the net
receivers alone. It would, therefore, have been utterly
impossible for such a population as that of 1793 to have
furnished annually 90 millions of wealth. Any near
296
ANALYSIS OF THE POPULATION.
approach to it must have destroyed the primary labour-
ers, and then the whole of society would have declined
together.
On the other hand, had the net wealth remained at
the same amount as in 1793, and the population in-
creased to its present number, the case would have
been very different. From 16,537,398, the whole popu-
lation of 1831, take the 1,800,000 who subsisted on net
wealth in 1793, and those who lived on profit in 1831,
1,428,570 persons, making together 3,228,570, and we
shall have left of primary labourers 13,308,828, yield-
ing a total of wealth amounting to £221,813,800.
From this total take the net wealth of 1793 and profit
of 1831, and we have remaining for the primary labour-
ers £149,313,800., being an average of nearly £13. 10s.
per head, or £5. 10s. a head more than in 1793! In
what abundance might the labourer have then lived!
This increase in wages would render the receivers of
the net wealth less able to employ labour in secondary
production, and, therefore, a greater number would be
left to primary labour, which would raise the general
rate of wages somewhat higher.
It may be said that the land proprietors and govern-
ment annuitants themselves furnish to the govern-
ment a part of the taxes which are annually collected;
and this is, to a limited extent, true. But it is impossi-
ble to ascertain with precision what portion of the
taxes is thus obtained. The proportion paid, however,
is evidently not greater than it was forty years since,
and the increase in the amount of wealth abstracted
from the people since that time is the important con-
sideration. In the year 1791, according to Moreau,
the whole revenue consisted of
-
TAXES PAID BY LABOUR.
£3,764,483
8,082,391
Stamps..
1,293,432
Land and assessed taxes.. 2,776,810
342,000
Customs
Excise
•
Post-office
•
Total in 1791
£16,259,106.
In 1831, by the official tables, the ordinary revenue was,
Customs..
•
Excise.
Stamps
Land and assessed taxes
Post-office....
Miscellaneous
•
297
£16,516,271
16,303,025
6,947,829
4,864,343
1,530,205
131,971
Total in 1831..
-£46,293,644.
The present customs and excise duties are almost
entirely paid by the great body of the people. Of the
stamps and the land and assessed taxes, suppose the
land proprietors and annuitants to have paid, in 1831,
one-third of the amount, still, as they paid quite as
large a proportion in 1791, the increase in the total
amount of net wealth affected the people in the way
described, and to the same proportional extent.
If the productive power of the primary labourers had
increased, as well as their numbers, it would be still
more beneficial to them. Instead of £100. each family,
suppose them to produce £105. and the average of
their wages would be increased in the same degree.
But enough has been said to shew what are the general
causes of the low wages, and consequent distress, of
the labouring people of Great Britain. It has been
proved, as clearly as such a thing can be, that that distress
arises entirely from too large a portion of the wealth
produced by primary labour being taken as net wealth,
in the various shapes of rents, tithes, and taxes. The
298
exaction of this net wealth reduces wages in the first
place; and, afterwards, by detaching labour from
primary and employing it in secondary production, the
the primary labourers are reduced in number, while
the net wealth remains the same. The same amount
of net wealth is, therefore, taken from the primary
produce, created by fewer labourers, the remainder of
that produce, consequently, affords only a still lower
rate of wages.
WAGES OF SKILLED LABOUR.
In a country possessing much fixed capital in machines
where difficult processes require great skill and care,
and, of course, confidence in the persons employed,
skilful labour may continue to be paid at a good rate,
while the wages of common labour are declining. And
when the state of the common labourer is much reduced,
the difference between the rates of payment for the two
kinds of labour may increase. The great poverty of
the poor labouring families prevents them from educat-
ing any of their children for the more skilful employ-
ments: from this class, consequently, few can rise, while
it receives all who sink. The difference between the pay
of common and skilful labour in the United States of
America is small, because the wages of common labour
are sufficiently high to enable the children of that
class to be educated without difficulty for most of the
superior branches of employment. In England a
common farming labourer cannot educate his son to
qualify him to become a bookkeeper, a mechanic, or a
town artisan: the necessary school instruction being
beyond his means. The comparatively high wages
which yet remain to the superior class of labourers in
Great Britain are, therefore, no evidence that common
labour is even moderately well paid. The consump-
tion of certain taxed articles is sometimes pointed out
299
WAGES IN AMERICA.
as evidence of the undeteriorated, or of the improved
condition of the people, but the consumption of these
articles may be kept up by the skilled labourers in
towns, who are increasing in numbers, and are yet
tolerably well paid.
This general view accounts, too, for the wages of
common labourers being so much higher in the United
States of America than in Great Britain. It is not that
labour is more productive in the former than in the
latter country, but that less of what is produced is taken
from the labourer in the forms of rent, taxes, and
tithes. The two first of these burdens are light, and
the last does not exist in America. If the burdens of
the people of Great Britain could be rendered as light
as those of the Americans, real wages would, there is
no reason to doubt, be higher in Great Britain than in
the United States, because labour is more productive
in the former than in the latter country. This mode of
considering the subject will also enable us to account
for the otherwise strange and unaccountable anomaly
which presents itself in the fact, that the people of
Great Britain, the most industrious, the most ingenious,
and the most highly productive people on the face of
the earth, are in distress. The cause of that distress
becomes now obvious. It is impossible for the labour-
ing part of this highly productive people to furnish
ninety millions of net wealth to the non-labouring part,
and yet to have the wealth created by their labour for
their own enjoyment. The labourers are dealt with
like Sancho at the table-the dishes appear, but they
vanish without the labourers being permitted to partake
of them. They are indeed allowed what remains after
the great feast, which has been furnished by their
labour, is ended; the prior claimants being satisfied;
300
NATURE'S TABLE.
but, unfortunately, when those prior claimants have
finished, so little is left as to constitute but a meagre
repast for those who produced all. Mr. Malthus says,
that there is no room at the table for those who have
no title, but their power to labour, on which to found a
claim to a place; but why is there not room? Evidently
because so many others come first with their prior
claims. These fill the table to the exclusion of the
labourer. Reduce their number and there would be
plenty of room for those who labour, and a plentiful
board they would have. They would not then have to
complain of nature excluding them from her feast, as
their own skill and industry from that nature extract
an abundant supply?
There are other countries where labourers often
cannot find places at nature's table, because others
have occupied those places, and consumed the feast.
And those who are permitted to sit down to the frag-
ments find very little left. The Irish labourer is obliged
to put up with potatoes; happy if he can get enough of
them, though he is well aware that he has sent large
supplies of beef, pork, and flour, to the feast, which
supplies have been all consumed by others. In Upper
Egypt, according to Mr. Legh, "the fields enriched by
the Nile teem with plenty, but the wretched Arab is
compelled to live on a few lentils, and a small portion
of bread and water-not a twentieth of the produce of
his labour falls to his share!" There are but very few
fragments left for the poor Arab it seems. But is
nature to be accused of this? or the unjust and rapaci-
ous regulations of society? Mr. Malthus, and those of
his school, throw the blame on the labourers; but the
labourers, as has been shown, have no power to improve
their condition while such a state of society exists.
A MALTHUSIAN WRITER.
301
Those who have stripped, half-starved, and debilitated
them, are to blame. The state of the labourers in Ire-
land and Upper Egypt is attributable to excessive ex-
action; and the present comparatively low rate of
wages in Great Britain is to be accounted for from the
operation of the same cause. Give the British labourer
a suitable portion of the fruits of his own labour; and
not only would his table be well spread, but new comers
would be welcomed to the board, provided they joined
in the labours necessary to heap it. Or, to drop Mr.
Malthus' figure of nature's table, there would be plenty
of employment and high wages.
CC
Mr. J. Wade, a recent writer, in his history of the
middle classes, is so imbued with the principles of the
Malthusian school as to cause him to write as follows:
'If, however, he (each labourer) contributed ten times
ten shillings in tax; and the whole amount was at once
repealed, it would not better his lot, provided his labour
was redundant in the market." But why is labour,
what the writer calls, "redundant?" Evidently because
the labourers are stripped of what they produce, and a
part of them are taken away to labour in gratifying the
strippers. Leave to those labourers who are in employ
£5. each, in addition to their present wages, and in
expending that £5. on additional food and clothing,
they would soon give employment to all who want it.
And then a larger number of labourers would be em-
ployed in bringing into existence food, clothing, and all
those other things which constitute real wages, and a
smaller number would be employed in working up
wealth already in existence, into a shape suitable to be
consumed by the tax-eaters. Mr. Wade goes on to say,
that wages are determined by the "competition of the
unemployed, who, rather than starve, will accept any
C
302
A MALTHUSIAN WRITER.
S
wages on which they can barely subsist." Why, there
are unemployed' in the United States, in England,
and in Ireland; but the labourers are not equally re-
duced to "any wages on which they can barely subsist."
There are ‘unemployed' in all countries, and they,
in competition with the employed, seek to obtain the
ordinary rate of wages, which rate is determined by the
aggregate fund left for the payment of wages after
other claimants have been satisfied. Reduce the claims
of these others; lower rents, abolish tithes, and repeal
taxes, and more will be left for wages. The general
rate of wages will then rise, and all who labour will, in
competition with each other, obtain such a rise of their
particular wages as their peculiar labour entitles them
to. And further, the same writer says, “if a tax on
any article of consumption be repealed, the remission
is speedily followed by an equivalent reduction in wages,
because the remission has left a surplus beyond the
means of that bare subsistence for which the unem-
ployed labourer will submit to work." So then taxes
do no harm! If bread, meat, and other similar articles,
were to be, for a long time, taxed equal to their untaxed
price, and the taxes were to be afterwards repealed,
wages would then fall equal to the remission of the
tax! Who then would receive that which was formerly
tax? The government gives it up, but who receives it
afterwards? The capitalists can only get their ordinary
rate of profit, rent would not necessarily increase,
therefore, the labourers are the only parties to receive
it, and each individual would, most undoubtedly, come in
for his share; or average real wages would rise probably
to the height they are in the United States. It would
be truly astonishing to find that such strange notions
as those advanced by Mr. Wade, should be the prevail-
*
303
NET WEALTH IN COMMODITIES.
ing ones of the day, did we not know that numerous
equal absurdities have been current in former times.
Writers resemble sheep, if one contrives to take the
lead others follow wherever he may go.
The amounts of wealth, expressed in commodities,
which were taken from the primary producers in each
of the years 1792, 1813, and 1831, may be estimated
and exhibited by taking the sums paid by them, in
currency, in each of those years, and ascertaining the
quantities of wheat, as the representative of commo-
dities, which those sums would command at the cur-
rency prices of the times. Thus,
Net wealth.
When wheat was at
Qrs. of wheat.
In 1792.. £40,000.000.. 55s. per qr. equalled..14,545,454.
In 1813..£155,000,000..120s. per qr. equalled..25,833,333.
In 1831.. £90,000,000.. 66s. per qr. equalled..27,272,727.
Or, if....£100,000,000.. 66s. per qr. equalled..30,308,030.
The proportions of these taken by government and
by individuals were,
In Sby government, £18,000,000..equal to 6,545,454 qrs.
1792 by individuals, £22,000,000..equal to 8,000,000 qrs.
In Sby government£109,000,000..equal to 18,166,666 qrs.
1813 by individuals £46,000,000..equal to 7,666,666 qrs.
In by government, £46,000,000..equal to 13,939,393 qrs.
1831 by individuals, £44,000,000..equal to 13,333,333 qrs.
Here we see that the commodities taken as net wealth, in
1831, were nearly double those taken in 1792, presuming
only 90 millions to be taken at the first named period;
and, if we suppose 100 millions to have been taken, then
above double. During the war, the portion taken by go-
vernment increased from say 6 to 18, and, since the war,
it has decreased from 18 to 14. The amount taken by
individuals was, it should appear, a little reduced during
304
PRIMARY LABOURERS.
the war; but, since that time, it has been raised from,
say 7 to 131! Again,
Primary
labourers.
0 each.*
1
6
0/
qrs. b.
In 1792..7,200,000 furnished 14,545,454 qrs. or 2
In 1813..8,257,144 furnished 25,833,333 qrs. or 3
In 1831..9,925,793 furnished 27,272,727 qrs. or 2
Or if ....9,925,793 furnished 30,308,030 qrs. 3
ر,
""
19
Thus, although the quantities of commodities furnished
increased from 25,833,333, in 1813, to possibly 30,308,030,
in 1831, the increase in the numbers of the primary pro-
ducers reduced the average of each individual contri-
bution half a bushel, or about 2 per cent.; and yet it is
commonly said and believed, that the increase in the
numbers of the labouring class is injurious, and they
are stimulated to leave the country. These compara-
tive exhibitions, though not strictly accurate, throw a
strong light on what was really taking place in the
country at the time.
It has been already shewn that the loans made during
the war were taxes on wages. It was bad enough to
entail on the people the payment to others, for ever, of
interest on the money they themselves had furnished;
but there are additional features in this borrowing
system, as it has actually been conducted, which ought
to be exposed. By borrowing in a 3 or 4 per cent.
stock, instead of a 5 per cent. about, say £150. of stock
were created, on an average, for every £100. of money
borrowed. In the latter part of the war, money was
so low in value as to cause £100. to be then equal in
value only to what £50. were before the war, or are at
present! Therefore, should the £150. stock now have
* This is per head, including children. A family of six persons would
furnish twelve quarters, and so on,
BORROWING AND PAYING.
305
to be paid off, a value equal to three times that which
was borrowed would have to be paid! Is not this
monstrous?
For every £100. of money, of reduced value, then
borrowed, stock was created, bearing interest often of
£6. per annum, but say £5. This £5. being now
payable and paid, it follows that £5. are now paid
annually for the loan of what was equal to only £50.
of present money,—or a real payment is made of 10.
per cent. per annum on the value lent!
Two-thirds of the present debt were borrowed during
the war, and that debt now requires that 30 millions a
year should be raised to pay the interest. That amount
was, in 1813, equivalent to.... 5,000,000 qrs. of wheat,
but it was, in 1831, equivalent to 9,090,090 qrs. of wheat!
and, if the equivalents at the two periods could be ex-
pressed in manufactures, the increase in the value paid
as interest would be much greater, seeing that the
money prices of wheat are kept above those of manu-
tures by high rents. Should a perfectly free trade in
corn be established, and wheat sink to 50s, per quarter,*
and other articles sink in the same proportion, then
these 30 millions, which were,
in 1813, equivalent to only. . . . . 5,000,000 quarters,
would be in, say 1834, equivalent to 12,000,000 quarters
of wheat! or other commodities of equal value. Is it
not surprising that even the British people, increased
* It is now, December, 1833, actually below 50s. Mr. Joshua Bates
stated to the committee on manufactures, &c. in 1833, May 17, "that
wheat in the western country (of North America,) was at a high price
when 16s. a quarter. It might," he said, "then be delivered at London
or Liverpool at about 30s. per quarter." If wheat were to sink to that
price, and all other commodities sink to the same level, it would require
20 millions of quarters of wheat, or other equivalent commodities, to
furnish the interest of the national debt, being four times the quantity
required in 1813!
Y
306
THE POPULATION IN CLASSES.
in number as they are, can bear up under a dead weight
of this magnitude ?-laid on in reckless ignorance, when
money was of little value, by a party utterly regardless
of what might be the consequences when money re-
covered its value.
The following table, shewing the proportion of the
population engaged in various branches of production,
and in receipt of income is given by Marshall,


1. Agricultural occupiers.
2. Agricultural labourers.
3. Mining labourers
• •
4. Millers, bakers, and
butchers
·
5. Artificers and builders.
6. Manufacturers
7. Tailors, shoemakers,
and hatmakers
..
8. Shopkeepers
9. Seamen and soldiers.
10. Clerical, legal, and
medical
11. Disabled paupers
12. Proprietors of annui-
ties
•
1821.
No. of
Families.
1831.
No. of
Families.
1831.
Total
No. of Persons
250,000
1,500,000
250,000
738,956
110,000
800,000 4,800,000
120,009
600,000
160,000 180,000
900,000
650,000
200,000 230,000
340,000 400,000 2,400,000
151,000 180,000 1,080,000
310,000
350,000
350,000 2,100,000
319,300
277,017
830,000
80,000
90,000
459,000
100,000
110,000 110,000
190,000 316,000
316,000 1,116,398
2,941,383 3,303,504 16,537,398*
From this table it appears that, in 1831, there were
only 800,000 families of agricultural labourers, including
the able-bodied paupers, to cultivate the whole of the
lands of Great Britain, being one family to 50
acres; and, while the whole manufacturing population
amounted to but 400,000 families, the proprietors of
annuities were 316,000 families. The table is curious
and highly interesting; but, as it does not enable us
* There are errors in this table, but they are not important.
PARTIAL INCREASE OF TOWNS.
307
to distinguish between non producers, secondary produ-
cers, and primary producers, it does not furnish the means
of dissecting society economically. The increase in the
families of annuitants, in ten years, from 190,000 families
to 316,000, is, however, an extraordinary alteration,
and indicates an increase of the number of unproductive
families, which would surprise, if our preceding remarks
and statements had not shewn that such must be the
results of the system which has been in operation.
Effects of the increase in the number of annuitants
may be seen in the increase of the population in the
places more particularly selected for their residences.
In the years named the numbers were, in

Chelsea
Kensington.
Paddington
Mary-le-bone
Pancras
Islington
Battersea.
Camberwell
Clapham.
Brighton.
Cheltenham
Worthing
•
..
In 1811.
18,262
10,886
4,609
75,624
46,330
15,065
4,409
11,309
5,083
12,012
8,325
2,692
214,606
In 1831.
32,371
20,902
14,540
122,206
103,548
37,316
5,540
28,231
9,958
40,634
22,942
4,576
443,764
being an increase, in 20 years, of above 106 per cent.!-
See also pages 179 and 180.
The following general statement, from the official
tables of 1833 (p.139), will shew the increase of crime :-
Number of persons committed to the gaols in England and Wales, for trial,
in each of the two periods of 7 years ending in 1825.
In the 7 years ending with the year 1818.. 64,538.
In the 7 years ending with the year 1825.. 93,718.
Y 2
308
In 'The Companion to the Almanac' for 1834, just
published, there is an article on wages and prices, in
which a partial view is presented of the state of the
cotton manufacturing population. For instance, the
prices quoted as paid for weaving are those paid in the
town of Manchester, which are considerably higher
than those paid in places at a distance from it. This
arises from the saving of carriage by the master, on
the one hand, which enables him to pay more, and, on
the other hand, from the greater expence of living in
Manchester requiring that the workman should receive
more. Yet, notwithstanding, in weaving the seven
kinds of fabrics named in the article, including fancy
and best nankeens, and quiltings, woven by the best
men, the mean sum obtained per head per week is
admitted to be less than 10s. In the spinning depart-
ment there is the same kind of partial statement. The
principal returns are from the mills of Messrs. H.
Holdsworth and Sons, Glasgow, and Mr. Thomas
Holdsworth, Manchester, both spinners of very fine
yarns, who employ the best hands, and, of course, give
the highest wages. The persons sufficiently skilled to
work in these mills are not yet so numerous, compared
with the demand for them, as to cause wages to sink
as low in them as they have sunk in the inferior depart-
ments. The real value too, of these wages, is estimated
in the present very low prices of food; but will the
wages named continue, with the present prices of food?
No! either food will rise in price, or the wages will
fall; perhaps both may take place together.
PARTIAL STATEMENTS.
GREAT BRITAIN, &c.
CHAP. X.
FROM 1828 To 1834.
PRODUCTIVE POWER OF LABOUR TO RAISE FOOD, AND PROCURE IM-
PORTS.-IMPORTERS DRIVEN TO DEAR MARKETS.-PRODUCTIVE
POWER OF SECONDARY PRODUCERS UNIMPORTANT TO THE PEOPLE.
-ENGLISH SYSTEM OF POOR LAWS, AND ITS INFLUENCE ON THE
CHARACTER AND EFFICIENCY OF LABOURERS.—PAUPERISED STATE
OF THE LABOURERS.—PARISHES OF LENHAM AND EASTBOURN,
WAGES, RATES, TITHES, AND RENT. PAUPERISING EFFECT OF
HIGH RENT.-CULTIVATION DRIVEN TO THE SEA SHORE.—PAU-
PERISM THE EFFECT OF EXCESSIVE EXACTION.—EXACTION IN
IRELAND AND IN ITALY.—PARTIAL CHARACTER OF THE “REPOrts
OF THE POOR-LAW COMMISSIONERS.". --RETURNS THAT ARE
WANTED.—DIFFICULTY OF COMPREHENDING THE MAGNITUDE of
THE DEBT.-THE RECEIVERS OF THE INTEREST COMPARED WITH
THE PERSONS ENGAGED IN THE COTTON MANUFACTURE.
·00
In the analysis in the preceding chapter, no esti-
mate has been made of an increase in the produc-
tive power of the people, because it is a question
whether such an increase has or has not, on the whole,
taken place within the last 40 years. During the
progress of the rise of prices, and the increase of pros-
perity to the farming capitalist, there can be little
doubt that such improvements took place as consider-
ably increased the productive power of agricultural
310
PRODUCTIVENESS OF LABOUR.
labour. This was, however, in some degree, counter-
balanced by the diversion of labour to inferior soils,
previously considered unfit for cultivation. Even during
the period of high prices, few of these could be made to
pay the expences incurred, and, therefore, on them
labour could not be very productive. But, since 1813,
as the farmer has had to carry on his operations with
diminishing means, the labour employed on such lands
must have been less productive, and, in all probability,
much more land of that kind would have been thrown
out of cultivation, had not the increase of rent had the
effect of driving labour extensively to inferior lands, in
order to endeavour to escape the pressure of rent. But
in thus leaving, to some extent, rich land where it was
highly productive, to go to poor, but nominally low-
rented land, the productive power of the labour became,
on the whole, reduced, and this reduction would more
or less counterbalance the improvements made in the
systems of cultivation during the period of high prices.
It should be remembered, also, that within the whole
period of which we are speaking, while rents have been
greatly advanced, and labour driven to inferior land,
the population to be supplied with food has increased at
least six millions, that is, from ten to above sixteen
millions. Now, if a considerable part of the supply of
food required by this additional population is obtained
from poorer land, we may well doubt whether, on the
whole, the productive power of equal labour has in-
creased in agriculture.
Such quantities of food, as are at present imported
from other countries, undoubtedly cost the country more
in labour than equal imported quantities did during
the war. The food at that time imported was obtained
in return for smaller quantities of exports, and, in the
PRODUCTIVENESS OF LABOUR.
311
production of which, but little labour had been ex-
pended; but now it is requisite to export, not only
larger quantities of goods to obtain any supply of food,
but it is necessary also that those quantities should be
so much larger as to require much additional labour to
be expended in their production. The labour employed
in procuring food in the indirect way, through importa-
tion, is, therefore, less productive for the people of this
country than it was twenty years ago, while more food
is now obtained through importation.*
The same kind of remarks will equally apply to other
articles of import, the previous prices of which had not
been raised by the high money prices in Great Britain,
as they also cost more labour to procure them than
they had previously done. However much, therefore,
the productive power of the labour employed in various
manufactures in Great Britain may have been increased,
and however much that increase may have benefited
the consumers of those manufactures, either at home or
abroad, the returns for them from foreign countries
have been greatly reduced, and, consequently, the
labour employed in this way has become less productive
to the people of Great Britain. The power of procuring
those articles which we cannot ourselves produce, equal
quantities of labour being employed, has diminished,
and in a country which imports so large a part of the
* Mundell, in his tract 'On the operation of the corn-laws for the last
60 years,' says that, "in the 5 years ending on the 5th of January, 1831, the
average import of grain was 4,130,305 quarters per annum."-(See also the
words corn trade,' in M'Culloch's 'Commercial Dictionary.')—And, in
the official tables of 1833, it is stated that, from 1826 to 1831, both inclusive,
the quantities imported of foreign and colonial grain and meal, including
peas, were
•
brought from Ireland
Total
...
-See page 162 of the tables.
•
•
2,259,142 quarters per annum,
2,214,374
4,473,516 quarters per annum.
""
312
RESTRICTION ON COMMERCE.
wealth consumed, this is a point of no inconsiderable
importance.
It was formerly the avowed general policy of the
British government to prevent the importer from going
to the cheapest markets to purchase his goods, and to
compel him to go to such parties only as would agree
to take our goods directly in return, and the result has
been that while our improved and cheaply produced
articles alone are exported, and sold at very low prices
to foreigners, we are obliged to pay such high prices
for our imports as restriction to bad markets compels
us to submit to. And thus the power of British labour
to procure imported commodities is reduced, not only
by those causes over which laws have little influence,
but also by the pernicious operation of absurd and
vicious laws. It is to be hoped, that, when the simple
but important truth is distinctly seen, that a nation is
benefited by the wealth it receives, and not by that
with which it parts, that those absurd laws which drive
us from cheap, and send us to dear, markets, will be
repealed. While they exist they undoubtedly lessen
the power of British labour to procure supplies of
foreign commodities, and, consequently, make it really
less productive when producing exports. The restric-
tions to dear markets are defended on the ground that
there is a necessity for forcing a system of reciprocity
in trade. Why, all foreign commerce is necessarily
founded on reciprocity. It is essentially exchanging
goods for goods; and, from whatever market you obtain
your goods, you either directly or indirectly give goods
in exchange. By going to a cheap market, you get
more goods in exchange, that is all the difference; that,
however, is a very important difference to the consumer.
And the British importer having been, by impolitic
partial duties, driven to Portugal for wine, to Canada
313
for timber, and to Jamaica for sugar, has made the la-
bour of the producer of British exports less productive,
because less produce is obtained in return for them.
Col. Torrens has lately attempted to shew that re-
striction is the best policy for Great Britain, as by
restriction the value of money may be kept down.
What has been advanced respecting the causes which
determine the value of money, sufficiently answers all
that the Colonel has put forth in his Commercial
Letters. The kind of benefit really derived from free
trade is strikingly shewn in what has taken place in
Guatemala. Mr. Thompson, in his account of that
country, p. 491, says, "British goods are sold in
Guatemala very cheap, not perhaps above 30 per cent.
higher than they can be purchased in the respectable
retail shops in London. The fall in their prices, as
compared with those at which they sold before the
ports were opened, or when the Spaniards had the
monopoly, is excessive: they may, in most cases, be
bought for less than one-tenth of the former price."..
"The people of the country consume more European
manufactures in one year than they probably did before
the revolution in a century." Here we see that com-
merce furnished these people with ten articles instead
of one! in return for what they exported. Captain
Basil Hall also, when writing of Santiago and Valparaiso,
says, that the prices of goods under the Spanish rule,
and under a system of free trade, were as follows, in reals:
ADVANTAGES OF COMMERCE.
✔
Under Spanish rule. With free trade.
Printed cotton goods.. 18 to 24......25 to 3
Velveteens
2
Crockery, per crate
40
100
Hardware
Glass
· 100
•
26..
350.
300.
200.
• •
314
SECONDARY PRODUCERS.
while Chili copper, the produce of the place, rose from
6 to 7 up to 12 to 13. Thus, a given weight of copper,
produced by the people of Chili, would obtain 26 times
the quantity of velveteen, after the free trade was
established, that it would have done before! Here the
very great benefit is clearly realized in the imported
velveteen.
There is an important distinction to be made, when
speaking of an increase or decrease in the productive
power of British labour affecting the condition of the
great mass of the people; and, if proper attention had
been paid to this distinction, it would have removed
much of the obscurity and ambiguity which has sur-
rounded the subject. The benefit which a people receives
from an increase of productive power is limited to an
increase of the productive power of the primary pro-
ducers. It is of no consequence whatever, to the mass
of the people, whether the luxuries brought into ex-
istence, by the secondary producers, are produced in an
unimproved way, or by an improved process. It is of
no consequence to them, whether a diamond-necklace
can be polished and set in 100 days, or 50 days, or 10
days, as the only difference would be, that the con-
sumer (the wearer) of the necklace might have two
instead of one, or might have more of some other
luxury. If the secondary producers were to have their
productive powers so much increased, that they could,
with equal ease, produce double the quantities of
articles, it would not make the least difference in the
general condition of the people; precisely the same
number of secondary producers would be employed,
and real wages would be exactly the same.
The only
difference would be, that each net receiver would have
two balls or routs, two chalked floors, two silk dresses,
315
two diamond necklaces, two carriages, &c. &c. instead
of one;—points, no doubt, of due importance to the
parties who enjoy those things, but not of any to the
great body of the people.
This subject has been rendered obscure by the dis-
tinction which has been made between what have been
called productive and unproductive labour—a distinc-
tion which serves no good purpose whatever. Of what
consequence is it to the people whether a secondary
producer brings forth a number of musical sounds in
an opera or concert, which immediately afterwards
cease to exist; or chalks a floor, which may exist one
night; or makes a lace dress, which may last two
nights; a carriage, which may last a season; or a
decorated mansion, which may last an age-provided,
as is always the case, that these various things are
enjoyed exclusively by the net receivers ? No part of
them ever becomes wages, to be enjoyed by the people;
and, therefore, however abundantly they may be pro-
duced, or however short or long a time they last, they
never benefit the people.
PRODUCERS OF LUXURIES.
Among the primary producers, no one attempts to
employ labour unproductively. Those who study the
best modes of labouring,—those who exercise a watchful
superintendence, and direct labour,-those who con-
troul, and, when necessary, coerce, as judges do ;—all
these assist, and give very valuable assistance too, in
the great labour of primary production, and are as
much primary producers, and contribute as essentially
to the bringing into existence of the great mass of
primary produce, upon which the whole society depends,
as those who hold the plough, the reapers, threshers,
millers, or bakers. If, indeed, the plan of a late
minister, of having holes dug one day, and filled up the
316
ENGLISH POOR LAWS.
next, had been adopted, (and the bare naming of such
a plan marks the state of information on the subject at
the time,) we should have had some unproductive la-
bourers among the class of primary producers. But,
next to the hole-digging plan, is that of compelling the
importer of foreign produce to purchase in a dear,
instead of a cheap market;-to give 100 days' labour,
or the produce of 100 days' labour, for an article in one
market, when he could obtain it for 80 days' labour in
another! The 20 days' labour, thus thrown away,
might really have been quite as well employed in the
hole-digging manner.
The English system of poor laws, although it has had
many beneficial effects, has, nevertheless, some in-
jurious ones; among which may be named, reducing
the productive power of labour. Under this system
labour is often in excess in one part, while it is much
wanted in another part. The labourer is compelled to
remain where his labour is not wanted, and where, if
used, it would not be very productive, and is, at the
same time, prevented from going to the place where it
is the most wanted, and where it would be the most
productive. And as this is the case throughout the
greater part of the country, the aggregate productive
power of labour must be seriously affected by it. The
system of making up deficiencies in wages by allowances
from the poors' rates, so as to render the wages of all
just equal to a bare subsistence, whatever the degree
of exertion of individuals may be, is directly calculated
to destroy all energy of character. Superior reward is
the great stimulant to superior exertion; take away
that reward, and listlessness and langour must, to a
greater or less extent, succeed to energetic exertion;
and the productive power of labour must decline. Poor
ENGLISH POOR LAWS.
317
laws do good in protecting the less efficient labourer
from that extreme impoverishment and distress into
which excessive exaction might, in the absence of those
laws, plunge him; but, they cannot protect him from
that deterioration of character which results from sub-
stituting dependence on parish allowance for reliance
on individual exertion. Man cannot, with impunity, be
stripped of a large part of what he produces, and then
have a uniform scanty allowance doled out to him.
His labour, and its reward, which should be in close
connexion and dependence upon it, are separated; and,
as far as respects his mind and feelings, they are made
independent of each other. He will now attempt to
obtain the allowance by other means than working;
and self-abasement, in all its various shapes, will be
resorted to, to propitiate the party who deals out
to him that allowance; but destruction of energy of
character, and decline of ability to produce, is the
inevitable result.
In a book lately published by "the commissioners
as to the administration of the poor-laws," already
adverted to, a great number of facts are given, which
shew that systematic relief to the labouring class from
a general fund, raised apparently, and only apparently,
from others than the labourers themselves, has had a
considerable influence on the productive power of the
agricultural labourers of England. It is stated that
in many places agricultural capital is diminishing.*
* Mr. A. Murray, who had been a practical farmer and manager in
several counties in England and Wales, in his evidence before the agricultural
committee, in 1833, states most positively, from actual observation, that,
within the last twenty years, produce has been very considerably reduced-
(he estimates the reduction at one-third);—that the quality of the land has
been greatly deteriorated, and that the farmers on cold clay lands are
1
318
ENGLISH POOR LAWS.
If this should become generally the case, the peculiar
evils arising out of the poor-laws will increase, while
the difficulty of altering those laws will increase in a
greater degree. Indeed it is not possible to press ex-
action on labour to an extreme degree, without ex-
periencing bad effects from it in some form. If a
system is established, which enables you to relieve
those who are the least able to bear the extreme
pressure, it is in human nature that an increasing
number should endeavour to obtain that relief; and
each individual, in order to entitle himself to it, will
exert his ingenuity to put on the appearance of distress;
and many, if no other means succeed, will relax their
energies, enjoy the, to them, luxury of indolence, and
really sink into the degree of distress which shall give
them the requisite claim for support in idleness. And
if you do not establish such a system of relief, the
victims of exaction will present themselves in another
form. Wretchedness and beggary will throng the
streets and highways. Imposture and profligacy will
follow. Vagrancy, and all its attendant vices, will
multiply, and if the poorer portion of the labouring
class do not retain sufficient energy or desperation to
take refuge in rioting or insurrection, they will sink
into a state of listless wretchedness and hopeless
imbecility.
The commissioners establish one point most clearly,
namely, that a great number of the agricultural la-
bourers and hand-loom weavers are unable, by their
utmost exertions, to obtain, for themselves and their
enabled to pay their rents only by hard cropping, and by drawing from
their capitals. This description, he says, applies to nearly all parts of the
country; and in this opinion he is, for the most part, fully borne out by
fourteen other witnesses, all of them practical men.
f
REPORT ON THE POOR LAWS.
319
families, a subsistence equal to that which it has been
considered requisite to allow to paupers and felons.
This fact being proved, it becomes a matter of surprise
that a still greater number of labourers do not entitle
themselves to the superior subsistence. But what is
the cause--the active operating cause of honest industry
being placed in this unfortunate state? It was not the
business of those who made this report to advert to the
cause. They have contented themselves with exhibiting
the injurious effects of diverting those funds to the
support of the pauper which should flow to the inde-
pendent labourer. They shew that the farmer, having
but a limited amount of capital to disburse, when he is
compelled or induced to pay a part of this to support
the pauper, has so much less left to pay to the inde-
pendent labourer; but they do not shew how it happens
that the amount of capital possessed by the farmer is
so small that he cannot possibly give the independent
labourer such wages as will enable him to support
himself and family decently, and also to afford requisite
assistance to sick and aged relatives, who are now
obliged to take refuge in the poorhouse, where, however,
they intercept and absorb a part of what should flow into
his hands as wages. But, though the commissioners
have not explained this, they have incidentally furnished
some facts which throw considerable light on the sub-
ject, and to these we will briefly advert.
The parish of Lenham, in Kent, is the first place of
which an account is given. The report is from Mr.
Majendie he says, "Lenham contains 6,523 acres; is
an extensive agricultural parish; much of the land is
of a poor quality, still there is a considerable quantity
of a fair average; some is out of cultivation.
A large
estate has been several years in the hands of the
320
A LABOUR RATE.
proprietor,* and a farm of 420 acres of good land, tithe
free, well situated, has been just thrown up by the
tenant of another landowner." The pressure of the
poor's rate on the farmers, in this parish, amounting, in
1832, to £4,299. has been so great as to induce them
to try a labour rate, which is done according to the
following plan :-" There are, in the parish, 115
married men, 75 single men, and 40 boys above the
age of twelve. The wages of these, calculating the
married at 13s. 6d. per week, single at 8s. and boys at
3s. would amount to about £500, a month. This sum
has been assessed on the respective occupiers, according
to the different value of the land ;-the poor arable at
1s. 6d. per acre per month, the superior arable at 2s.
hops at 5s. meadow, pasture, and wood, at 10d. and the
great tithes, 9 men at 9s. 6d. small tithes, 3 men at
9s. 6d. making £5. 14s. per week. The amount is
either to be worked out, or paid to the overseer at the
end of the month. The farmers now seem to think
that there are not too many hands in the parish to cul-
tivate the land properly. The parish consisting of
6,500 acres, the sum of £500. per month amounts to
about £1. per acre per annum; and, according to
general information, the labour required, in fair farming,
must be equal to that expenditure. The experiment
is but just commenced. The rental of the parish is
£6,423."
Now here we have an agricultural parish which had
been so much distressed by poor's rates, as to be
obliged, as we are told, to borrow £100. from the
Maidstone bank, and driven to try a labour rate. This
* Proprietors practically keep up rent by holding their lands until a
tenant will take them at the current rate of rent.
321
parish had, in 1831, a total population of 2,197, and has
6,523 acres, much of the land of poor quality, though
some produces hops, and 190 men and 40 boys are
considered fully equal to its cultivation. Taking 3
boys as equal to one man, we shall have, say, 203 men
employed in cultivation, at £500. per month, or
£6,000. a year; and this, we are told, is all the capital
that the farmers can continue to raise for the payment
of labour; and the question with them is, how this
limited quantity can be best laid out on labour. It
is felt to be so little, that, manage in whatever way
they may, it is difficult to make it meet the wants of
the labourers. But, amidst these difficulties, let us
mark one fact, which is given, it is true, by Mr.
Majendie, but it is not afterwards noticed, this parish
yields a rental of £6,423. a year! a sum equal to the
whole that is paid to all the labourers employed in
cultivation ! Now, taking the labouring cultivators,
including their families, at, say, 900 individuals, here
we have the owners of these 6,523 acres of land, much
of which is poor, receiving more than supports these
900 persons!
PARISH OF LENHAM.
The farmers evidently have their power of paying
wages and poor's rate reduced and kept down by having
so large a sum to pay as rent. Suppose the rent to be
reduced one-half, or £3,000. a year, would not the
power of the farmers to pay wages be immediately in-
creased 50 per cent.? Yes, and they then might give
such wages as would fully enable the labourers to
sustain themselves, independently of pauper relief.
And if such a reduction of rent were to become general,
the farmers, in time, would be induced, or compelled by
circumstances, to raise wages equal to the reduction of
the rent. For, what other use could they, as a body,
Z
322
PARISH OF LENHAM.
make of the £3,000.? If some of them attempted to add
it to their own profits, and spend it as revenue, others, by
offering higher wages, would tempt their labourers
to leave them, and thus compel them to advance wages.
The course which circumstances would urge the farmers
to take would be, to expend the money in improving
the cultivation; and this would require additional
labour. Industry would be in demand; and those who
possessed it in a superior degree would be sought out,
and secured by higher wages. The increased quantity
of landed produce which would be the result of this
process would furnish additional subsistence to the
whole community; and labourers generally would feel
that their condition was improving,—that superior
industry would command good wages; and their effici-
ency and independence would be increased. In short,
all things would proceed in the opposite direction to
that in which they have been moving for the last 40
years. During that time the quantities of produce
abstracted from labour have been increasing, and the
condition of the agricultural labourers has been declin-
ing, notwithstanding that the poor laws have assisted
in sustaining them, until, at last, the evils peculiar to
those laws themselves begin to operate. But, if you
could reduce the quantities of wealth taken from
labour in the shape of high rents, the labourers would
recover; and the evils of the poor laws might then be
soon corrected.
In this parish, too, where the rental alone was more
than the wages, we find that a tithe was exacted, which,
when the labour rate was imposed, paid towards that rate
£296. a year. As this was voluntary on the part of the
tithe owner, it is reasonable to suppose that the tithe was
worth, at least, four times that sum, but we will put it
RENT AND WAGES.
323
down at £1,000. a year. Here, then, we have another
£1,000. which had been taken from wages! and how
was it possible that wages could be high when so much
was taken from the fund which supplied them? The
labourers have to put up with the amount that is left,
after rent and tithe have been furnished; and, in this
case, as far as we have gone, this amount was only six
out of thirteen, and these six are all that they can pos-
sibly get, whether it comes in the shape of wages or of
parish relief, because there is no more for them. In
the case of Lenham, indeed, the farmers contrived to
get back a part of the tithe, in the form of a labour
rate; but this mode of reaching tithe is complained of
generally by the commissioners, as an injustice to the
tithe owners, The 203 labourers, in this parish, aided
by capital, produced wealth from which was paid an
average per man, for rent only, of £31. 12s. a year ;
for tithe, we suppose nearly one-sixth of that sum,
making a total approaching £37. a year, furnished, on
an average, by each labourer, while the amount left
for the wages of each labourer, on an average, was
only about £30. a year! Is not the operating cause
of low wages very clear ?*
One of the evils springing from the poor-laws is the
obstructions which they present to the free circulation
of labour, and the local superabundance of labouring
population, which they occasionally appear to exhibit,
has probably given rise to, and certainly countenances,
the prevailing opinion that the aggregate labouring
* This case may be taken as a sample of the whole country, and it shews
how absolutely necessary a knowledge of the real nature of rent and tithe
is, to enable us to judge of the causes of the condition of the labourers. The
present erroneous opinions, on those subjects, tend to keep the labourers
in misery.
324
FUND FOR WAGES.
population is in excess. It was supposed to be so in
Lenham, until, through an arrangement, all the la-
bourers were taken by the farmers, and then they dis-
covered that there were not more than were requisite
in fair farming! The strangest thing is, that they
should ever have been, by people capable of reflection,
thought too numerous. These 203 labourers, besides
furnishing to the farmers the ordinary returns for their
employed capital, and keeping up the necessary stock
of cattle, implements, and seed, raise from the land
produce which yields to the land and tithe owners
£7,000. while they have only £6,000. for themselves;
and yet these highly productive people were thought
too numerous! Why, each labourer consumed only
a small part of what he produced, and yet emi-
gration to a foreign country was looked to as a
remedy! Suppose 53 of the Lenham labourers had
emigrated, would the remaining 150 have been able
to raise produce enough to keep up the stock, remune-
rate the farmer for the use of his capital, furnish the
£7,000. of rent and tithe, and create for themselves
additional wages? Or might not the fund left for
wages, instead of being increased, be reduced in a
greater degree than the labouring population had been
reduced? The sum of £4,500. would yield about the
same wages to the 150 which the £6,000. did to the
203, but might not the sum be reduced to £4,000. or to
£3,000.? And then would not the farmers and over-
seers find it still more difficult to provide for the 150
than it was for the 203? Another emigration would
then become equally or rather more necessary, which
would lead to a third!
The real evil, however, most clearly is, a decline in
the fund for the payment of wages, as compared with
325
the number of the labouring population; and this
decline is attributable, not to the excessive numbers of
that population, but to the absorption of too large a
proportion of the whole wealth in rents, tithes, and
taxes. The case may be, and no doubt is, rendered
worse by the obstructions presented to the free circula-
tion of labour, and by the partial decline of industry,
consequent on the poor-laws; but the evil originates in,
and is perpetuated by, excessive exaction, and can be re-
moved only by the removal of that exaction. Highly
productive labourers can be impoverished only by having
too much of the produce of their labour taken from
them; but if that is done, although palliatives may,
for a time, mitigate the evil, though benefit societies
may provide local funds to relieve those who first break
down, or parish funds may be applied where want is
the most pressing, still, only let the exaction be carried
beyond a certain point, and the miserable harassed
labourer will become more intent on scrambling for an
immediate share of the funds, than on obtaining, by
steady exertion, a scanty subsistence from wages. The
account of the parish of Lenham presents a valuable
lesson to those who have to direct the affairs of Great
Britain.
EFFECTS OF LOW WAGES.
The second case, given in these reports, is that of
Eastbourn, in Sussex, having 4,597 acres of land, with
a rental of £6,288. and an expenditure of poor's rate
amounting to £4,250. The population, in 1831, was
2,726. This place is represented as possessing great
natural advantages, and as having made an effort to
keep down the poor's rate, which failed. Pauperism
exhausted the funds provided, and the overseers were
obliged to borrow £150. from the Lewes bank.
the year 1830 a considerable reduction of wages had
"In
326
PARISH OF EASTBOURN.
taken place, many men were out of work, and the
wages to single men, on the parish, did not exceed 7d.
a day. A general spirit of discontent broke out, and
incendiarism prevailed to a frightful extent."
"Under
these circumstances a meeting was called, and an
agreement made, that the wages should be 2s. a day
for an able bodied married man; ls. 6d. for a single
man of 18; and from 3s. 6d. to 5s. per week for boys
from 15 to 18. Proportionately increased allowances
were made from the rates to the unemployed."
"The
effects of this forced rise of allowance were soon
apparent: the sale of the farmers' produce could not
suffice for both wages and rates, and a most injurious
transfer took place of a portion of the sum expended on
labour to the account of the rates. The principal
occupier in the parish states the relative proportions
on his farm to stand thus, in round numbers:

Paid for labour
Paid for rates
·
In 1830. In 1831.
£
700
500"
£
900
300
Thus it appears, the parties receiving obtained no
more than before, but received merely the same amount,
although partly in another form. The fact seems to
have been, that this farmer had no more than £1,200.
to pay to labour; and if his rates increased £200. a year,
he was obliged to expend £200. a year less in wages.
Under the high rate system 300 able bodied persons
were paupers! But we ought to remember, and to
give due importance to the fact, that, in this parish, no
less a sum than £6,288 was paid as rent!—about
£1. 7s. per acre on an average. Now, if a fourth part,
EXTRAORDINARY EXPEDIENT.
327
or a half of this, had been left with the farmers, their
funds for the payment of wages would have been just
so much larger, and wages would have been just so
much higher. Of tithes, in this parish, nothing is said.
Some of the labourers, it appears, have attempted to
extricate themselves from the adverse circumstances
under which they were placed.
"Allotments of land
have been furnished to them by Mrs. D. Gilbert, com-
mencing in 1830 with 35, and increasing the number
since to 117. The tenants pay their rents with punctu-
ality; and such is the conviction of the benefit derived,
that some other labourers have made a voluntary offer
to give up a part of the parish allowance, if allotments
were let to them. A remarkable experiment has also
been made by Mrs. Gilbert, a portion of the shingle on
the sea shore has been covered with clay, dug from an
adjoining marsh, and some good soil afterwards spread
on the surface; this land was hired by labourers at 3d.
per rod, i. e. at the rate of 40s. per acre, which ex-
ceeds the rent of the best arable land in the parish, and
a crop of potatoes was raised in the autumn from that
which in the spring was unproductive beach.”—See the
report, p. 16.
Can these people be said to be idle? Here is a place,
the total population of which is 2,726, and which pays
a rental of £6,288. and yet, after having done that, a
part of the labourers create new land on-absolutely
carry it to, the sea shore! This is a striking instance
of high rent, on the good land, not merely driving
labour to poor land, where it is less productive, but of
driving labour to make for itself new land! Such a
fact speaks volumes on the influence of high rent on
production. Through its influence, labour is driven
from its natural course, the cultivation of the best
328
EFFECTS OF HIGH RENT.
lands by independent and energetic labourers, and
compelled to take refuge in such strange expedients as
that above named; and it would not be surprising if
the occupants of the best land were hereafter to be
taxed to pay a part of the high rent charged for this
expensively formed land on the sea shore.
It is often said by political economists that high rent
does not lower wages, because there are lands under
expensive cultivation for which scarcely any rent is
paid. But the answer to this is, that such lands would
not be cultivated, if wages had not been previously
reduced by the high rent charged for the superior land.
The cultivation of such poor land, therefore, where
labour is so little productive as barely to realize low
wages, is itself an effect of high rent on better land.
Labour has, in fact, been driven from the good land by
high rent, and merely takes refuge on the poor land.
Such poor land would not be cultivated in the United
States, where rent is low.
When rent is raised, the profit of the farmer having
previously been barely the common rate, he may retain
his ordinary profit, and pay the additional rent in one of
three ways. First, he may at once lower wages equal
to the rise of the rent; secondly, he may discharge a
part of the labourers, and thus save the rent, or a part
of it, out of wages, while the diminished production
would raise the price of landed produce; or, thirdly,
he may adopt partly the one and partly the other of
these plans. Practically the third is the course generally
taken. One labourer out of, say, ten is dismissed,
labour is then gravely said to be redundant; and the
unemployed man, having no other resource, offers to
work at lower wages. This forms an inducement to,
and is made a pretext for, lowering the wages of the
INCREASE OF POOR'S RATE.
329
others, while the choice of labourers, which is thus
given to the farmer, enables him to stimulate them to
do more work; and thus he may possibly get as much
work done by the nine as had been previously done by
the ten men. In this way, the whole additional rent
may be wrung from the labourers, while the unemploy-
ed are pointed at as evidence of the excess of popula-
tion. This is, however, not only a cruel, but a very
dangerous course, and cannot be pursued beyond some
certain point without the worst effects resulting.
Stimulants to a given extent may produce greater ex-
ertion; but that energy of character, which makes the
labourer highly productive, may be destroyed by being
pressed upon too far, and then all parties must suffer,
the proprietors and farmers, as well as the labourers.
Poor-laws may modify these results, but cannot prevent
them from finally arriving.
A parliamentary paper represents that, in the year
ending March 25, 1832, the amount of poor's rate had
increased on the preceding year, in all England, 3 per
cent. In Berks, Buckingham, Cambridge, Durham,
Kent, Northumberland, Oxford, and the east riding of
Yorkshire, the increase was 5 per cent. In Monmouth
and Norfolk, 6 per cent.; in Surrey and Wiltshire, 7
per cent.; and in Sussex and Somerset, 8 per cent.
A more effective country police is called for in many
parts of these reports. Indeed, to prepare the public
mind for an alteration of the police appears to have
been one of the objects of those who have put out this
publication. Some of the particular evils arising out
of the present state of the country, may, it is very
likely, be partially remedied by a numerous police.
The labourers may be more completely prostrated, and
left to be dealt with at the discretion of the farmers, who
330
NEW COUNTRY POLICE.
may, in competition with each other, go on giving in-
creasing rents for the lands, and paring down wages to
the lowest possible point, awarding to each individual
of the labouring class the smallest possible quantity of
the cheapest food; but after all this is done, will such
a system improve the character, or increase the pro-
ductive power of the labourers? It is not asked
whether such an alteration could or could not be
effected-whether property or life would continue safe,
but, if effected, whether the country would be in a
better state? The occupiers of land might possibly be
made a kind of incorporated body, and have the power
to half-starve or flog the labourers, to compel them to
work; they might use the same means as those em-
ployed in the West Indies to goad the slave to exer-
tion; but still the question recurs, would the country
be in a better state? Let those who have ascertained
the respective productiveness of slave and of free labour
answer the question.
Nearly all the complaints made of the bad working
of the poor-law system in England shew, that excessive
exaction is at the bottom of the evil. The working of
that system only exhibits the particular forms which
the evil takes under its influence. But if the evil did
not shew itself in these forms, it would in some others.
In Ireland, where there are no poor-laws, excessive ex-
action is met in other ways; such as, resistance to the
payment of tithes, or the murder of the collectors;
with combinations to prevent lands from being taken at
advanced rents, or to burn the houses of those who
take them, and too often to murder the offenders. The
evil is of the same kind in the two countries, and the
poor-laws merely cause it to break out in a different
way in England. In France, before the revolution,
331
similar causes produced similar effects. In Italy, the
poor cultivator has long bowed to his fate: the Con-
tadini (country labourers) were there so degraded that
their testimony was not evidence in a court of justice.
But what is Italy now ?-the slave of Austria. The
landowners get a very high proportional rent for their
land, it is true; but they cannot properly call it their
own, as they are slaves to foreigners, who permit them
to enjoy such portion only as they please. It is
often remarked that the labour employed on land of
equal quality has been more productive in England
than in the other three named countries. But why
has it been so? Because English land was formerly
cultivated by better paid labour; and if exaction has
at last deteriorated English labour, adhering to, or in-
creasing, that exaction, will not improve it, however
strict may be the police. Take away the appeal from
the overseer to the magistrates; prohibit relief from
the poor's rate to those in employment, or even to all
the able bodied; and cover the country with a well
organized police-an Irish constabulary force, or a
French gens d'armerie; reduce the English labourer
to as orderly and submissive a state as such means can
reduce him to; still you cannot, at the same time,
make him an able, energetic, and highly productive
labourer. From numerous statements in these reports,
the productive power of English labour appears to have
partially declined; and there are no means of recover-
ing it, but by leaving a better reward for those labour-
ers who are dependent solely on their own exertions.
The information given in these reports is of a partial
character: the object appears to have been merely to
expose those parts of the workings of the poor-laws
which have the worst effects. But, to enable any one
LIMITED POWER OF A POLICE.
332
REPORTS' PARTIAL.
to judge correctly of the whole case, other facts should
be given. In the first place, a table should be made
out to shew the number of acres of land in the parish
in productive use, and also the number of acres of poor
or unproductive land; the annual value of the produce
raised; the portion of that value required for keeping
up the stock of cattle, implements, seed, &c.; the por-
tion paid as rent, as tithe, as profit on the capital em-
ployed by the farmer, including remuneration to him
for superintendence; the portion paid by the farmers
as poor's rate, and for other taxes; and, finally, the
amount paid as wages. Such a table as this, of a few
parishes in each district, would enable any one to
analyze the state of society, and to point out any
peculiarities in the distribution of the produce or of
the value of it; and, in the end, remedies for any exist-
ing evils might possibly be discovered, in the adoption
of which all parties might concur. But, in nearly all
these “extracts" from the reports, excepting Mr.
Majendie's, not even the amounts of rent are given.
Similar tables might also be made out from documents
and other evidence, to shew the amount and distri-
bution of the produce at preceding periods, say, at
the commencement and conclusion of the war. The
causes and their effects at the different periods might
then be compared, and the working of each particular
cause might be more distinctly traced to its final
result.
THE
In a table, given in the Companion to the Almanac
for 1834,** page 86, it is shewn that a very great altera-
tion has taken place, in the last twenty years, in the
* This publication having a kind of half official character, I prefer
quoting it as an authority.
1
DECLINE OF AGRICULTURISTS.
333
relative numbers of the different classes which con-
stitute the entire community in England. At the
three periods of 1811, 1821, and 1831, the whole of the
families, divided into three classes, were, in numbers,
as follow:-
Families chiefly employed
in agriculture..
Families chiefly employed
in trade, manufactures,
and handicraft
..
All other families not com-
In1811. In 1821. In 1831.
697,353 773,732 761,348
923,588 1,118,295 1,182,912
prised in the two preceding 391,450 454,690 801,076
classes
Here we see that, while the families employed in
agriculture increased only in a very small degree from
1811 to 1831, and were absolutely reduced in number
in the ten years from 1821 to 1831, the families not
employed in agriculture or manufactures, in the twenty
years, more than doubled their numbers; and, in the
latter ten years,—those years in which the agriculturists
positively declined, these unemployed increased no less
than 76 per cent.! The base of society is contracting,
while the superstructure is swelling into enormous di-
mensions; and yet, according to the fashionable doctrine
of the day, those who constitute the base are too
numerous, and their numbers must be further reduced!
The pyramid of society is becoming inverted, but that
cannot be done in the social, any more than a similar
thing can be done in the physical world, without en-
dangering the whole structure.
The declining state of the farmers may be seen in
the reduction of their stocks of wheat. Mr. Jacob
334
stated to the agricultural committee, in 1833, that im-
mediately before the harvest of 1816, there was 6
months' consumption in hand. In 1817, there was 4
months', in 1818, 5 months', in 1819, 5 months', in 1820,
3 months', in 1821, 3 months', in 1822, from 4 to 5
months', in 1823, nearly 4 months', in 1824, about 5
weeks'; but since that it has scarcely equalled a month's
consumption; and, in 1829, it was so much reduced,
that no period was fixed to it in the computations.
If such are the reductions in the stock of wheat, we
may be assured that there is also a considerable reduc-
tion in other kinds of agricultural stock. It is stated
in various parts of the reports on the poor-laws, that
the farmers are frightened into giving an advance of
wages: and that they are paying it from their stock,
or what should be their permanent capital. If this
prove to be correct, it cannot last long. Cultivation
will decline, landed produce will become scarce and
again comparatively dear, and then will come another
period of distress among the manufacturing classes.
It may, however, be possible, that wages are approach-
ing more nearly to equality in the departments of
agriculture and manufactures, and that those of com-
mon farming labour are rising a little. The taxes that
have been repealed recently must have left so much
more wealth to be enjoyed by the producers, and as
farming wages had been previously the most reduced,
they may have recovered a little. But we should never
forget what the real causes are of the degree of dis-
tress which exists, whatever that degree may be. Many
persons speak and write as if they thought that no
efforts should be made to benefit the great mass of the
people, unless it can be proved that they are either
actually in, or are sinking into, a state of misery. But
AGRICULTURAL PRODUCE.
JUST CLAIMS OF LABOUR.
335
this is a position most insulting to the people. Accord-
ing to every principle of right and justice acknow-
ledged by mankind, the people are entitled to have all
the fruits of their labour left for their own enjoyment,
excepting only those parts which are requisite for
maintaining social order, and for keeping up the pro-
ductive power of the country. Admitting for a moment
that through the repeal of taxes, and the reduction of
the general rate of profit on capital, common real wages
may have risen a little, is that any reason why the
people, or those who plead their cause, should be
satisfied? Certainly not! Their condition should not
only be improved, but it should be improved as far as it
can be by doing them full and complete justice, and
anything short of that ought to be exposed and re-
probated.
When speaking of the sums taken as net wealth
annually, it is difficult to find terms to convey an
adequate idea of their magnitude. We speak of millions,
and the word millions is as easily pronounced and
written as hundreds or thousands, and the differences
between the quantities of wealth expressed, are neither
clearly seen nor forcibly felt. The annual interest of the
debt, including the expenses of collecting it, is not less
than 30 millions sterling.* This enormous sum is drained
from all parts of the country, and is quietly paid in
London. The receivers, who are distributed over the
country, and intermixed with the rest of the population,
unobservedly obtain the means to enable them to
consume very large quantities of wealth without pro-
ducing anything themselves. But as they are not
collected in a body, it is difficult to figure to the mind
-
With the dead weight it is 33 millions, independent of the collection.
336
Perhaps a com-
the magnitude of the operation.
parison may assist.
The extent and importance of the cotton manufacture
of this country have excited the admiration of all
enquirers into such subjects. It is to be found of con-
siderable magnitude in Ireland, of more gigantic
growth in Scotland, and in England it rears its tower-
ing head far above all other manufactures. It is
principally through the cotton manufacture that Man-
chester, and the country forty miles around it, contain
two millions of inhabitants; and yet the probability is
that all the people, both capitalists and labourers,
engaged in this great manufacture, either directly or
indirectly, do not obtain in return for their capital and
labour an amount of wealth on which to subsist, and
through which they are enabled to carry on their im-
portant trade, the arms of which embrace the world,
greater than that which is regularly received and con-
sumed by the idle and unproductive fundowners, who
make no return whatever to society for it.
Mr. M'Culloch, in his 'Commercial Dictionary,' com-
putes the numbers and incomes of those engaged in
this great manufacture as follows:-
THE COTTON MANUFACTURE.
G
833,000 weavers, spinners, bleachers, &c.
at £24. a year each..
111,000 joiners, engineers, machine ma-
kers, &c. at £30. each ...
Profit, superintendence, coal,
and materials of machines....
944,000
£20,000,000.
3,333,000.
6,667,000.
£30,000,000.
Of the 63 millions, 2 millions are supposed to
go for coal, iron, and other materials, for
machinery and other outgoings, which would
give employment, at £30. a year each, to
66,666, making a total, of people employed, of....
1
•
COMPARED WITH THE DEBT.
337
1,010,666. If, to these, we add one half the number of
children, aged, &c. dependent on those who
work, or an additional....
505,330, we shall have a total, supported on wages, of
1,515,996 persons. Add to these those who are sup-
ported, directly or indirectly, by the 43 mil-
lions of profit, at £20. a head..
233,350, and we have a total population of.
1,749,346 persons supported by the 30 millions obtained
in the cotton manufacture. For this 30 millions, a
large part of the world is supplied with useful and
beautiful fabrics for garments, &c. and returns are ob-
tained of the products of the various commercial coun-
tries to which those fabrics are sent. But with what
do the consumers of the 30 millions of dividends supply
the world? Nothing:-they are mere consumers, and
produce nothing in return. They, in fact, absorb,
through taxes, a considerable part of the 25 millions
of wages paid to those engaged in the cotton manufac-
ture, and materially reduce the amount of commodities
which that sum would otherwise command.--“ Look on
this picture, and on that!—like a mildew'd ear blasting
his wholesome brother,'
""
•
In page 306 is given a table, furnished by Marshall,
from which it appears that, in the year 1831, there were
employed, in cultivating the lands of Great Britain,
800,000 families, six persons to a family, making a total
of 4,800,000 persons; and, from the reports published
by the commissioners for enquiring into the workings
of the poor laws, it appears that these families probably
do not receive more, on an average through the year,
than ten shillings a week each, making a total weekly
receipt, by the whole number, of just £400,000. Now,
by multiplying this by 52, the number of weeks in a
338
LIMITED FUND FOR WAGES.
year, we discover that they receive, in the year, only
£20,800,000. being about two-thirds of the sum regu-
larly raised to pay the interest of the national debt.*
The £20,800,000. it should be borne in mind, is all
that the employers of these 800,000 families have to
pay wages with. If they are compelled to pay a part
in the shape of poor's rate, they have so much less left
to pay in the form of wages, as was shewn in the instance
of Eastbourn. In some way or ways, by the landlord,
the tithe owner, or the tax gatherer, or altogether, the
farmers have been stripped of all the wealth which
they and their labourers produced, excepting what is
just sufficient to keep up their stock, to support them-
selves, and to pay these £20,800,000. as wages, or as
wages and poor's rate; yet, at the same time, upwards
of 30 millions are taken from the people to pay the
interest of the debt, and these 30 millions are as flip-
pantly and familiarly talked of as if they were only so
many pounds!
At least twice the amount of 30 millions are annually
abstracted from labour in various ways, beyond what
is paid on account of the debt, and it is the large
collective amount which oppresses the British labourer,
and is the real source of British weakness. It is the
cancer that is eating into the body politic, and which
may, at last, destroy it. Nations have always sunk
when they have carried exaction from industry to too
great an extreme. The Eastern monarchies--the Roman
Empire, Italy, Turkey, all bear witness to that truth.
It signifies but little in what form excessive ex-
action comes, it is the amount which strips and paralyses
* If we suppose each family to receive 12s. a week, the aggregate would
be only £24,960,000.
339
industry. An army may sweep the country in Asia;
or multiplied taxes and rents may strip the labourer,
as was done during the Roman Empire; excessive
rents may be taken, as they have been for centuries in
Italy; or a Pacha may seize the produce of labour
wherever he can find it, as in Turkey; but these par-
ticular forms of exaction are not more certain of weak-
ening and destroying a country, than is excessive ex-
action, conducted according to the most approved rules.
In addition to the burdens arising from tithes, rents,
and taxes, the people of England have others of a more
local nature. The county rate is a considerable tax;
and over it the people have no controul.* Corporations,
in many towns, have formidable powers, which they
use for their own aggrandisement, and to the injury of
the people. Numerous local abuses exist, arising out
of the retention of old customs, belonging to another
state of society. The law is utterly unintelligible to
the great mass of the people, and so dear as to be
beyond their means. The assizes being held in the
old county towns, justice is commonly too far off to be
obtained by any but the rich. These evils press heavily
on an already overburdened people; and they all fall
finally on the labouring class. The high duties too,
levied on numerous imported articles, by giving birth
to smuggling, detach many persons from productive
AGGREGATE BURDENS.
* The county rate collected in England, for 1827, the latest year of full
returns, was £709,580.
+ In the town of Manchester, the lord of the manor, as the sole and ex-
clusive proprietor of the markets for the sale of meat and fish, in charging
for his stands and erections, has the power of taxing the people of Man-
chester, as he prevents any person from selling those articles in the
township without paying toll to him. And the malt used in the town must
be ground at the Soke mill, belonging to the Grammar School.
340
DEPENDENT STATE OF LABOUR.
industry; and the whole of the aggregate burdens
have, consequently, to be borne by a smaller number
of primary labourers. These, although, if each be
taken separately, they may appear of small moment,
have, collectively, an important effect, and, it is well to
bear in mind, that it was the last feather that broke
the over-laden ass's back. Wages, we have seen,
are dependent on what is left, after all other claims on
the annual produce of labour are paid; and every one
of these claims has its degree of effect in reducing the
amount left, and, consequently, in reducing the wages
of labour.
Into the particular remedial measures that should
be adopted in order to increase the prosperity of the
country, and restore it to a healthful and vigorous
state, I do not, at present, propose to enter. It is
desirable that the precise nature of the disease should
be fully known before the remedies are applied.
J. PIGOT AND SON PRINTERS, MANCHESTER.
NON
CIRCULATING

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