Chapter XI: Letter III: Spirits, Goblins, Ghosts (7)

Sorely perplexed with results so diametrically opposite to all their doctrines as to an increase of importation being necessarily attended with a proportionate increase of exportation, and of all apprehension of an undue pressure thence arising on the money market being chimerical, the Free-Traders lay it all upon the famine at home or abroad. The potato-rot, it is said, has _concealed_ the effects of free-trade: distress in foreign nations has disabled them to purchase our manufactures in return for their rude produce; the increase of British importation has come too soon to operate as yet on their purchase of our manufactures. Here again the facts come decisively to disprove the theoretical anticipations. So far has the increase of our importations been from being sudden, and come last year for the first time on foreign nations, it has been _remarkably gradual_, and has gone on for years, having received only a great impulse in the articles on which the duty was lessened or removed last summer. Our general imports have steadily advanced for the last three years; and in particular articles the same progress has been conspicuous.[9] How, then, has it happened that this general, continued, and steady _increase_ of imports has issued only in a _diminution_ to an alarming extent of exports? And observe, the countries from which we have imported so largely last year of grain and articles of subsistence, have not only not suffered by the scarcity general on the Continent, but have profited immensely by it. America has been blessed with a splendid crop of every species of grain; and, in consequence of the famine in Ireland and severe scarcity in France, prices of grain have risen to triple their former amount in the United States. It has risen so much in the southern states of Russia, that the Emperor of Russia has prohibited the farther exportation of it from the Black Sea. But all these floods of wealth flowing into the great grain states from the failure of the crops in France and Ireland, have been unavailing to produce any increased activity in our manufactures. On the contrary, they are all declining; and our immense importations of food are almost all paid for in direct exportations of the precious metals.

In truth, the general depression of manufactures in all the chief seats of our fabrics is so serious, that it is evidently owing to a much more general and stringent cause than the decline, considerable as it is, in our exports. It is not a decrease of two millions out of fifty-three millions--in other words, of less than a _five-and-twentieth_ part--which will explain the general putting of mills in Lancashire and Lanarkshire on short time, the fall in the value of all kinds of stock and general decline in the vent for all kinds of manufactured produce. It is in the _home markets_ that the real and blighting deficiency is experienced. And what is the cause of this decline in the home market? The Free-Traders are the first to tell us what has done it. It is the famine in Ireland. The total manufactured produce of the island is certainly not under L200,000,000[10] annually, of which somewhat above L51,000,000 is for the foreign markets of the world. What is a deficiency of L2,000,000 in such a mass? If that had been the _only_ decline that had taken place, it would have been scarcely perceptible, and would have left no visible effects on our commercial activity or general prosperity. It is clear that the great falling off must have been in the home market. Nor is it difficult to see how this has happened. Fifteen millions' worth of agricultural produce has disappeared; prices of wheat have risen in consequence to 80s. a-quarter, and oats in a still higher proportion; and an alarming drain upon the metallic resources of the country taken place. It is this which has paralysed the manufactures and depressed the commerce of the country. And when it is recollected that the home market now consumes little short of L150,000,000 a-year, it may easily be conceived what a serious check to industry a diminution to the amount of even an eighth or a tenth of the usual domestic purchases must occasion.

The Free-Traders say, that the famine in Ireland has _concealed_ the effects of the adoption of their system of policy; and that all the distress and suffering which has ensued is to be ascribed to that cause. From the observations now made, however, it is apparent that the effect of the famine has been, not to conceal the effects of free-trade, but to _accelerate_ them. For what has the famine done? It has simply caused fifteen millions' worth of domestic agricultural produce to be exchanged for fifteen millions' worth of foreign agricultural produce. The potato crop, which has perished in Ireland, is estimated at fifteen millions' worth; and, supposing that statement is a little exaggerated, it is probable that, taking into account the simultaneous failure in the crop of oats, both there and in Great Britain, the total amount of home agricultural produce that is deficient may amount to that value. _But foreign agricultural produce, to an equal or greater amount, has been imported._ Six millions of quarters, between grain of all sorts and flour, have been entered for home consumption in seven months preceding 5th February 1847. Taking these quarters, on an average, as worth fifty shillings to the consumer--which is certainly no extravagant estimate, seeing wheat is up at seventy-nine shillings--we shall have, then, six millions of quarters, worth fifteen millions sterling. The home agricultural produce that has failed is just equal in value to the foreign agricultural produce that has been imported. The distress that prevails, therefore, is not owing to any deficiency of food for man or animals in the United Kingdom, for as much has come in, of foreign produce, as has disappeared of domestic. It is entirely to be ascribed to the supplanting, _in the national subsistence, of a large part of home produce by an equally large part of foreign produce_. And in the social, commercial, and national effects which we see around us, we may discern, as in a mirror, not merely the probable but certain effects of such a substitution if perpetuated to future times.

This view of the subject is of such vast importance that we deem it impossible to impress it too strongly on our readers. We have been always told that the great thing is to secure a great importation; that such a thing must necessarily lead to a corresponding increase of exportation;--that all apprehension about the imports being paid in gold, and not in manufactures, are chimerical;--that the sooner the inferior lands in the British islands go out of cultivation the better;--that ample food for the inhabitants will be obtained from foreign states; and that the agriculturists thrown out of employment by the change will be rapidly absorbed, and more profitably employed in sustaining our extended manufactures. Well, the thing has been done, and the desired consummation has taken place, from an extraneous cause, even more rapidly than was anticipated. The Free-Traders contemplated the substitution of foreign for British agricultural produce to the extent of fifteen or twenty millions as a most desirable result; but they only lamented it could not be looked for for three or four years. It would take that time to beat down the British farmer; to convince the cultivators of inferior lands of the folly of attempting a competition with the great grain districts of the Continent. Providence has done the thing at once. We have got on at railway speed to the blessings of the new system. Free-trade was to lead to the much-desired substitution of six million quarters of home for six million quarters of foreign grain in three years. But the potato-rot has done it in one. The free-trade rot could not have done it nearly so expeditiously, but it would have done it as effectually. It is a total mistake, therefore, to represent the famine in Ireland and the West of Scotland, as an external calamity which has concealed the natural effects of free-trade. It has only brought them to light at once.

Had British agriculture, instead of being stricken with sterility by the hand of Providence, in the poorest and worst cultivated part of the two islands, been suffered gradually to waste away, under the effects of a great and increasing foreign importation in all parts of the empire, the destruction of home produce would have been equally extensive, but it would have been more general. It would have risen to as great an amount, but it would not have been so painfully concentrated in particular districts. Hundreds would not have been dying of famine in Skibbereen; seed-corn would not have been awanting in Skye and Mull; cultivation would not have been abandoned in Tipperary; but the cessation of agricultural produce over the whole empire would have been quite as great. Low prices would have done the business as effectually, though not quite so speedily, as the pestilence which has smitten the potato-field. Whoever casts his eye on the table of prices given below[11] for twenty years in London and Dantzic, must at once see that, under a free-trade system, as large an importation of foreign produce, and as extensive a contraction of home, as has taken place this year is to be permanently looked for. The exportation and return of the precious metals, and contraction of credit now felt as so distressing, may be expected to be permanent. Providence has given us a warning of the effects of our policy, before they have become irreparable. We have only to suppose the present state of commerce and manufactures lasting, and we have a clear vision of the blessings of free-trade.

Nor is there any difficulty in understanding how it happens that the substitution of a large portion of foreign, for an equal amount of home-grown produce, occasions such disastrous effects, and in particular proves so injurious to the commercial classes, who in the first instance generally suppose they are to be benefited by the change. If two or three millions of rural labourers in the poorest and worst cultivated districts of the island, are thrown out of employment, either by a failure in the vegetable on which alone, in their rude state, they can employ their labour, or by the gradual substitution of foreign for home produce in the supply of food for the people, it is a poor compensation to them to say that an equal amount of foreign grain has been brought into the commercial emporiums of the empire--that if they will leave Skibbereen or Skye, and come to Liverpool or Glasgow, they will find warehouses amply stored with grain, which at the highest current prices they will obtain to any extent they desire. The plain answer is, that they are starving; that their employment as well as subsistence is gone; that they have neither the means of transport, nor any money to buy grain when they reach the neighbourhood of the bursting warehouses. But then they will be absorbed in the great manufacturing districts, where their labour will be more profitable to themselves and others, than in their native wilds! Yes, there is a process of absorption goes on, on the occurrence of such a crisis; but it is not the absorption of labour by capital, but of capital by pauperism. Floods of starving destitutes inundate every steam-boat, harbour, and road, on the route to the scene of wo; and while the interior of the warehouses in the great commercial cities are groaning beneath the weight of foreign grain, the streets in their vicinity are thronged by starving multitudes, who spread typhus fever wherever they go, and fall as a permanent burden on the poor-rates of the yet solvent portions of the community.

And the effect of this importation of foreign grain, from whatever cause it arises, necessarily is to _prevent_ this absorption of rural pauperism by manufacturing capital, to which the Free-traders so confidently look for the adjustment of society after the change has been made. The nations who supply us with grain _do not want our manufactures_. They will not buy them. What they want, is our money. They have not, and will not have, the artificial wants requisite for the general purchase of manufactures for a century to come. Generations must go to their graves during the transition from rustic content to civilised wants. America has sent us some millions of quarters of grain this year, but there _is no increase in her orders for our manufactures_. On the contrary, they are diminishing. Even the Free Trade Journals now admit this; constrained by the evidence of their senses to admit the entire failure of all their predictions.[12] The reason is evident. They want our money, and our money they will have; and if they find our manufactures are beginning to flow in, in enlarged quantities, in consequence of our purchase of their grain, they will soon stop the influx by a tariff. This is what we did, when situated as they are--it is what all mankind will, and must do, in similar circumstances. It was distinctly perceived and foretold by the Protectionists that this effect would follow from free-trade, and that, unless something was done to enlarge the currency to meet it, a commercial crisis would ensue. These words published a year ago might pass for the history of the time in which we now live:--"Under the proposed reduced duties during the next three years, and trifling duty after that period on all sorts of grain, there can be no doubt that a very great impulse will be given to the corn-trade. It being now ascertained, by a comparison of the prices during the last twenty years, that there is annually a difference of from twenty to thirty shillings a-quarter between the price that wheat bears in the British islands and at the shores of the Baltic, while the cost of importation is only five or six shillings a-quarter, there can be no question that the opening of the ports will occasion a very large importation of foreign grain. It may reasonably be expected that, in the space of a few years, the quantity imported will amount to _four or five millions of quarters annually_, for which the price paid by the importers cannot be supposed to be less, on the most moderate calculation, than seven or eight millions sterling. The experience of the year 1839 sufficiently tells us what will be the effect of such an importation of grain, paid for, as it must be, for the most part in specie, upon _the general monetary concerns and commercial prosperity of the empire_. It is well known that it was this condition of things which produced the commercial crisis in this country, led to three years of unprecedented suffering in the manufacturing districts, and, as is affirmed, destroyed property in the manufacturing districts of Lancashire, to the amount of L40,000,000."[13]

Lastly, the famine has taught the empire an important lesson as to Irish Repeal. For many years past, that country has been convulsed, and the empire harassed by the loud and threatening demand for the Repeal of the Union, and the incessant outcry that the Irish people are perfectly equal to the duties of self-government, and that all their distresses have been owing to the oppression of the Saxon. The wind of adversity has blown, and where are these menaces now? Had Providence punished them by granting their prayer--had England cut the rope, as Mr Roebuck said, and let them go, where would Ireland have been at this moment? Drifting away on the ocean of starvation. Let this teach them their dependence upon their neighbours, and let another fact open their eyes to what those neighbours are. England has replied to the senseless clamour, the disgraceful ingratitude, by voting ten millions sterling in a single year to relieve the distresses which the heedlessness and indolence of the Irish had brought upon themselves. We say advisedly, _brought upon themselves_. For, mark-worthy circumstance! the destruction of the potato crop has been just as complete, and the food of the people has been just as entirely swept away in the West Highlands of Scotland, as in Ireland, but _there has been no grant of public money to Scotland_. The cruel Anglo-Saxons have given IT ALL to the discontented, untaxed Gael in the Emerald isle.

_Printed by William Blackwood & Sons, Edinburgh._

FOOTNOTES:

[7] Viz. 5-1/2 per cent on all advances on cash or current accounts, and 1/2 per cent commission on all sums overdrawn.

[8] Table showing the quantity of grain, including flour and meal, entered for home consumption, from 5th July 1846, to 5th February 1847, from the _London Gazette_ official returns:--

Quarters of grain (including flour and meal) entered for qrs.
home consumption, in the months from 5th July to 5th
January as reported, 1st February, 5,148,449
Quantity duty paid in month ending 5th Feb. 539,418
Do. do. flour and meal, 427,036 cwts. 142,345
_______ 681,763
_________
Quantity duty paid up to 5th January, 5,830,212

In bond, 5th February, 68,939
Do. do. flour and meal, 318,240 cwts. 106,080
_______ 175,019
_______
Quantity in qrs. of duty paid and presently in bond,} 6,005,231
from month ending 5th July to 5th Feb.} _________

[9] 1844. 1845. 1846. Imports, total official value, L75,441,555 L85,281,958 Sugar, cwts. " 4,139,983 4,880,780 5,231,818 Tea, lbs. " 41,369,351 44,195,321 46,728,208 Coffee, lbs. " 31,391,297 34,318,121 36,781,391 Butter, cwts. " 180,965 240,118 255,130 Cheese, cwts. " 212,286 258,246 327,490 Live animals, No. " 8,007 34,426 140,752 Brandy, " 1,033,650 1,058,777 1,515,954 Geneva, " 14,937 15,536 40,266 Rum, " 2,198,870 2,469,485 2,683,515

[10] In 1840, the total amount was estimated at L180,000,000, of which L47,000,000, at that period, was for exportation, and L133,000,000 for the home market. As this L47,000,000 had swelled, in 1846, to L53,000,000, it is reasonable to suppose that those for the home market had undergone a similar increase, and are now about L200,000 annually.--See _Speckman's Stat. Tables for_ 1842, p. 45.

[11]

_Table of Average Prices of Wheat in Prussia and in England, from 1816 to 1837._

|Average prices |Average prices|Average |Difference |Foreign Wheat | |in Prussia |in Brandenburg|prices per|between English|and Flour | |Proper including|and Pomerania |London |Prices and Mean|consumed in | |Dantzig and | |Gazette. |of Prussian |Great Britain.| |Konigsburg. | | |Prices. | | ----+----------------+--------------+----------+---------------+--------------+ | s. d. | s. d. | s. d. | s. d. | Qrs. | 1816| 36 9 | 44 6 | 76 2 | 35 6 | 225,263 | 1817| 52 7 | 60 9 | 94 0 | 37 8 | 1,020,949 | 1818| 49 6 | 53 5 | 83 8 | 32 2 | 1,593,518 | 1819| 34 3 | 37 6 | 72 3 | 36 4 | 122,133 | 1820| 27 3 | 30 0 | 65 10 | 37 2 | 34,274 | 1821| 25 6 | 28 9 | 54 5 | 27 3 | 2 | 1822| 26 0 | 26 8 | 43 3 | 16 11 | ---- | 1823| 24 2 | 26 9 | 51 9 | 26 5 | 12,137 | 1824| 18 6 | 20 0 | 62 0 | 43 3 | 15,777 | 1825| 17 3 | 17 9 | 66 6 | 49 0 | 525,231 | 1826| 18 6 | 21 0 | 56 11 | 37 2 | 315,892 | 1827| 22 3 | 25 9 | 56 9 | 32 9 | 572,733 | 1828| 27 2 | 28 9 | 60 5 | 32 5 | 842,050 | 1829| 32 3 | 35 0 | 66 3 | 32 7 | 1,364,220 | 1830| 29 6 | 34 0 | 64 3 | 32 6 | 1,701,885 | 1831| 39 6 | 39 0 | 66 4 | 27 1 | 1,491,631 | 1832| 34 0 | 33 6 | 58 8 | 24 11 | 325,435 | 1833| 25 0 | 23 6 | 52 11 | 28 8 | 82,346 | 1834| 23 9 | 23 0 | 46 2 | 21 10 | 64,653 | 1835| 23 0 | 24 0 | 39 4 | 15 10 | 28,483 | 1836| 21 0 | 23 0 | 48 6 | 26 6 | 30,046 | 1837| 22 6 | 26 0 | 56 10 | 32 7 | 244,085 |

[12] "The excessive consumption of these and other articles has, however, only led to a drain of bullion to the extent of three millions and a half, while, upon a moderate computation, they would appear to call for three times that amount. This is to be accounted for by two facts--The first being that we have not imported, and paid for as much as we have consumed, since, conjointly with our importations, we have been steadily eating up former reserves, so that our stock of all kinds--coffee, sugar, rice, &c., are low; and, next, because we have diminished our importations of raw material in a remarkable degree, and hence, while paying for provisions, have lessened our usual payments on this score. Here, too, in like manner, _we have been drawing upon our reserves_. Our manufactures have been carried on with hemp, flax, and cotton, which had been paid for in former years, and we have left ourselves at the present moment short of all these articles, the stock of the latter alone, on the 1st of January last, as compared with the preceding year, being 545,790 against 1,060,560 bales. We are not only poorer, therefore, by all the bullion we have lost, but by all the stock we have thus consumed.

"This _process cannot go on any longer_. We have now no accumulations to eat into, and must, consequently, _pay for what we use_. Concurrently, therefore, with our importations of corn and other provisions, (which are now going on at a much greater rate, and at much higher prices than in 1846,) and just in proportion as they beget a demand for our manufactures, we must have importations of raw material. Large purchases of hemp and flax are alleged to have been made in the north of Europe, for spring shipment, and cotton from the United States is only delayed by the want of ships. Wool from Spain, and the Mediterranean, saltpetre, oil-seeds, &c., from India, and a host of minor articles, have also been kept back by the same cause, and will pour in upon us to make up our deficiencies directly any relaxation shall take place (if such could be foreseen) of the universal influx of grain. In this way, just as one cause of demand diminishes the other will increase, and the balance will be kept up against us for a period to which at present it is impossible to fix a limit.

"_We thus see that no call that can possibly arise for our manufactures can have the effect of preventing a continuous drain of bullion_. That a large trade will occur no one can doubt, but at present it is scarcely even in prospect. From India and China each account comes less favourable than before; from Russia we are told that 'no great demand can be expected for British goods under the present high duties' in that country; while even from the United States, the point from whence relief will most rapidly come, we hear of a shrewd conviction that we are approaching _a period of low prices_, and that, consequently, for the present 'the less they order from us the better.'"--_Times_, March 10, 1847.

[13] _England in 1815 and 1845_, pp. v-vii. Preface to third edition, published in _June_ 1846.