Robert Peel in the July preceding. But it is rather too much to go on talking in December 1847, about the failure of the crop of 1846 in Ireland, four months after one of the finest crops in the memory of man had been reaped in the British dominions. This points to one great and lasting truth, the due appreciation of which by the people of Great Britain is of such paramount importance, that it will be cheaply purchased even at the cost of all the misery and destruction of property which the late crisis has occasioned in the British empire. This is, that the great importation of grain, and consequent abstraction of the precious metals consequent upon the free-trade system, may be ex pected to be permanent. We have repeatedly warned the nation in every possible form that this would be the case, but our warnings during the free-trade mania met with no attention. Now, however, it has been proved by the event that they were too well founded. The old and rich state will always be undersold by the young and poor one in the supply of grain for its own market. The grain-growing state never will take manufactures to any proportional extent, but always will take gold in exchange. This was the case with Rome in ancient days; this is the case with England in these times. The steam-engine and machinery do little or nothing for agriculture, though every thing for manufactures. The great grain states are always those nations in which the lalouringclass are poor, or have few artificial wants, and consequently take few or no manufactures. Poland, the Ukraine, the Valley of the Mississippi, are examples. Gold is what they want, and what they will have; for it is the cheapness of their production which enables them to export to advantage. So universal is this truth, of such paramount importance is it upon the fortunes of an old and highly civilised state, that, it may safely be affirmed, its existence in its old age depends on the requisite safeguards against the danger thence arising being established. Such are the effects of the constant drain of gold and importation of grain on such a state in its advanced stages, that even the

strongest nation will sink in time under the strain, as Rome did, if nothing is done to avert the danger.

The present dreadful crisis under which the nation is labouring, therefore, is not owing to a want of capital for all its undertakings, nor to any present deficiency in our native supply of food. It is in vain that Sir R. Peel, to throw the blame off the Bank Charter Act, says it is all owing to a deficiency of capital to carry on our undertakings. Has the Right Hon. Baronet forgotten that, so recently as March last, the Chancellor of the Exchequer borrowed £8,000,000 for the destitute Irish at £3, 7s. 6d. per cent.? Was this like a nation, the capital of which was exhausted? Has he forgotten that, till within these few months, the funds were from 88 to 90, and interest generally at 3 or 33 per cent.? What has come of all this capital since August last? Has it vanished before the genial showers and bright sun which gave us so fine a harvest? But if deficient capital has been the cause of our disasters, how has it happened that Lord John Russell's letter of 25th October, authorising the Bank to make advances beyond what the Act allowed, has already had a sensible effect in arresting the disorder, at least in the metropolis? Can it be said that that letter added one pound to the realised capital of the country? It might as well be affirmed that it added a cubit to every man's stature in it, or a quarter to the produce of every field it contained. Then how has it to some degree arrested the panic in London, raised the 3 per cents. from 79 to 86, and lowered the interest of money from 8 or 9 to 6 or 7 per cent.? Evidently by its effect upon CREDIT; because it begat a hope

not likely, we fear, to be realisedthat government had at last become sensible of the ruinous effect of the Bank Charter Act, and would speedily restore the circulation of the country to that amount, which the magnitude of its population and transactions imperatively required.

To illustrate the terrible and allpowerful operation of this deplorable Act on the best interests of the country, let it be supposed for a moment that the whole currency of the country,

without any change in its laws as affecting debtor and creditor, were to be withdrawn. What would be the result? Evidently that every man and woman it contained, from Queen Victoria and the Chancellor of the Exchequer downwards, would become bankrupt. A nation possessing real property, as the income-tax and poorrate returns show, of the value of £3,000,000,000 sterling, and moveable property of £2,000,000,000 more, would, without the exception of a single living creature in it, become bankrupt because £70,000,000 or £80,000,000 was withdrawn from its circulation, while its laws remained unchanged. By these laws, every debtor must discharge his liabilities in money; and therefore, if the whole money was withdrawn, 110 debt could be discharged at all, and universal bankruptcy would ensue.

Now, the contraction of the currency to any considerable extent operates, so far as it goes, in just the same way on general credit and the national fortunes. When money becomes scarce, no one can, without difficulty, discharge his obligations, because the banks, who are the reservoirs from which payment of all considerable transactions are drawn, cannot afford the usual accommodation. Those who are not in firstrate credit can get nothing from them at all, and at once become bankrupt. The sum-total of difficulty and embarrassment thus occasioned, is not to be measured by the amount of specie or bank-notes actually withdrawn from circulation by the Bank of England, though that on occasion of the present crisis has been very considerable. It is to be measured by the shock given to credit; the increase in the practice of hoarding, which a feeling of general insecurity never fails to engender; the reluctance in the country banks to make advances; the universal effort made to recover debts at the very time when the means of discharging them have been rendered most difficult; the rapid diminution in the private bills put in circulation from the experienced impossibility of getting them discounted. The contraction of the currency on the part of the Bank of England, from July 1816, when

it was £21,000,000, to September 1847, when it was only £17,840,000, was no less than £3,160,000. Including the simultaneous and consequent contraction by the country banks in Great Britain and Ireland, the diminution of the paper currency was above £5,000,000. But this, considerable as it is, was but a small part of the evil. The bills in circulation in Great Britain in 1839 were estimated by Mr Leatham, a most experienced Yorkshire banker, at £130,000,000. In 1845, it may safely be assumed, that they had reached £160,000,000 or £170,000,000. Without a doubt this immense sum was reduced by at least a fourth, probably a half, from the contraction of the currency consequent on the Bank Act of 1844. It is this prodigious contraction, the necessary consequence of the banks having been rendered unable or unwilling to discount bills, which is the real cause of the present universal distress and general stoppage of all undertakings. And it was the more ruinous from the circumstance, that it occurred at the very time when, from the vast encouragement given by government to domestic railways by the bills they passed, and to foreign trade from the abolition of the main duties protective of industry by them, the nation was landed in transactions of unheard-of magnitude, and producing an unparalleled strain upon its metallic resources.

The point

This last is a consideration of such paramount importance, that it is of itself adequate to explain the whole phenomena which have occurred; and yet, strange to say, it has hitherto met with very little attention either in or out of Parliament. to which we allude, and to which we crave, in an especial manner, the attention of the nation, is the progressive and now alarming disproportion between the money value of our imports and our exports which has grown up ever since Sir Robert Peel's tariff was introduced in 1842, and which has now, from the action of the free-trade in corn, risen to such a height as to be absolutely frightful. The declared or money values of our total exports and official value of our imports since Sir Robert Peel's tariff was passed in 1842, have stood as follows:

Three first quarters of

1847, Not made up. The imports for 1847 have not yet been made up, and cannot be till January next, when the year is concluded. But in the figures we have given, there is abundant room for the most serious reflection. The fact which the Chancellor of the Exchequer has mentioned as to the sums paid for grain alone, in fifteen months, having reached the enormous and unprecedented amount of £33,000,000, leaves no room for doubt that, in the year 1847, our imports will have reached £100,000,000, while our exports have sunk below £50,000,000.* Now, how was this fearful balance paid? The answer is evident. In cash. Here then, without going farther, is a balance on the exports and imports already returned, in 1846, of forty millions against the nation, on the transactions of the present year, of probably not less than FIFTY MILLIONS STERLING. Whoever considers these figures with attention, will be at no loss to perceive from what cause in the main the present disasters have arisen.

To give only one example of the way in which, under the system of free importation, the balance of trade has been turned against this country, we

39,240,000

subjoin the official returns of the progress of our trade with America since Sir Robert Peel's tariff was introduced in 1842, and for five years previously. From that it appears that the trade with that country, which in 1830 was £8,000,000 on each side, has now so immensely changed, especially since the tariff of 1842, that, while our exports to it in 1845 were £10,000,000, our imports from it were £22,000,000! How was the balance of £12,000,000 paid? The answer is, in money; and that money it was which enabled them to conquer the Mexicans. We shall look with anxiety for the returns of our exports to, and importations from America for the last two years. When they appear, it will at once be seen where the money, the want of which is now so severely felt, has gone, under the fostering influence of free trade.

Sir Robert Peel says that the Americans have tried the system of paper money, and they have had enough of it. We thank the Right Honourable Baronet for having reminded us of this example of the effects of a contracted currency. It appears that in 1836 the imports of English manufactures into the United

October 10,

1845.

1847.

sums paid for grain alone in the three months immediately following the finest harvest on record, have exceeded £14,000,000; that nearly all the railways in the country have been stopped from the necessary contraction which, under the existing law, this export of specie occasioned to the currency; that distress of dreadful magnitude pervades the mercantile and manufacturing classes; and that our exports have fallen off at the rate of a million a-month, and our revenue above six millions a-year.

Such are the principles and results of that splendid combination effected by modern wisdom-FREE TRADE AND A FETTERED CURRENCY.

And as these

results flow naturally and necessarily from the principles put in practice, it is evident that they may be expected in a less or greater degree to be permanent, so long as these principles regulate the policy of government.

Suppose a general at the head of one hundred thousand men were to double, by orders issued or licenses granted from head-quarters, the distance to be marched, and the work done by the men, and at the same time to establish a system which sent half of the commissariat stores out of the camp,-what could be expected from such a policy but starvation, discontent, and ultimate mutiny among the soldiers? Or suppose a master manufacturer, as a great improvement on the machinery of his mill, were to introduce a system which abstracted the oil in proportion to the quickened movement of the wheels, or diminished the moving power in proportion to the increase of the work to be done, what could be expected from such a change, but that the machine would stop when it had most work to do? And yet, is not a currency, and a sufficient currency, as necessary to an industrious nation as food to the soldier, or coals to the steam-engine, or oil to the wheels? Can we be surprised that such a system, when applied to a nation, terminated in disappointment and ruin? But one result of inestimable value has followed from its adoption; it is in periods of suffering that truth is learned, because the consequences of error are experienced. It is now seen what the true principles on the subject are,

because the effects of the opposite principles have been demonstrated. With truth may it be said, that Sir R. Peel is the philosopher who " HAS INSTRUCTED US IN THE CURRENCY."

It is the same thing, it is often said, whether we send specie abroad in return for imports or manufactures of our own creation, for specie is not the growth of this country, and it could only have been brought here in return for some produce of ours previously exported. The common sense of mankind, founded on experienced suffering arising from the abstraction of specie, has ever repudiated this doctrine of the schools; and present experience has amply demonstrated that, how specious soever it may appear, there is some fallacy in it. Nor is it difficult to see what that fallacy is. If we send manufactures abroad in exchange for specie, we make a fair exchange; but if, having got the specie, we send IT abroad again, instead of manufactures, to buy food, —we have only one export of British produce to set off against two imports of foreign. For instance, if we send £5,000,000 worth of manufactures to South America to buy that amount of specie, it is a fair exchange, and there is no unfavourable balance established against us. But if, having got the £5,000,000 worth of specie, we again send it to North America for grain, which is imported into this country, instead of sending £5,000,000 worth of manufactures, we have, on the whole, only exported £5,000,000 worth of manufactures for £10,000,000 worth of produce, bullion and corn imported: that is, there is a balance of trade to the amount of £5,000,000 established against us, which, to that extent, is a drain on our metallic resources. Had we sent £5,000,000 worth of manufactures instead of the same amount of specie to North America to buy food, our exports on the whole would have been £10,000,000 instead of £5,000,000; and the difference of £5,000,000, instead of being a deduction from, would have been an addition to the metallic resources, that is, the life-blood of the nation. It is because a great import of grain invariably leads to such an export of specie, that it is so hazardous a trade for a nation: it is because Sir R.