year, for the taxes were reduced to £55,836,000, and Chap. wheat having risen to 94s. 9d., it follows that 11,786,000 x" quarters were sufficient for the payment of its taxes. Was 1622, this actually the case? If distress, bordering upon famine—if misery, bursting forth in insurrection, and all the other symptoms of wretchedness, discontent, and difficulty, are to be taken as symptoms of pressure upon the people, then is the year 1817 a year which no good man would ever wish to see the like again. On the other hand, the years 1815 and 1821, being the years of the severest pressure of taxation, according to this new mode of measuring its amount, are among the years when the labouring parts of the community have had least reason to complain of their situation.

"The proposition now boldly made is for a depreciation of the standard of the currency. How strange must Concluded, be the condition of this country, if it can only prosper by a violation of national faith, and a subversion of private property; by a measure reprobated by all statesmen and all historians; the wretched and antiquated resource of barbarous ignorance and arbitrary power, and only known among civilised communities as the last mark of a nation's weakness and degradation! Would not such a measure be a deathblow to all public credit, and to all confidence in private dealings between man? If you once, in an age of intelligence and enlightenment, consent, under the pressure of temporary difficulty, to lower the standard, it will become a precedent which will immediately be resorted to on every future emergency or temporary pressure, the more readily as credit, and every other more valuable resource, on which the country has hitherto relied, will be at an end. If the House entertain such a proposition by vote, the country will be in alarm and confusion from one end of it to another. All pecuniary transactions will be at an end; all debtors called on for immediate payment; all holders of paper will instantly insist for coin; all holders of gold and

Chap. silver be converted into hoarders! Neither the Bank,

nor the London bankers, nor the country bankers, could

1822- survive the shock! What a scene of strife, insolvency, stagnation of business, individual misery, and general tif"98Deb" disorder, would ensue! All this would precede the pass923.' ing of the proposed bill; what would it be after it had become a law ?"1

"The fall of prices," said Mr Attwood in reply, "has RepiybyMr not been confined to any one article, nor has it been of Attwood. pass;ng nature, as au are which arise from over-production or a glut in the market. It has been uniform and progressive since the monetary act of 1819 was passed, embracing all commodities, extending over all periods. Who ever heard of a fall in prices, arising from over-production, enduring for three years? It is invariably terminated in six or eight months, by the production being lessened. In the present instance all the leading articles of commerce have undergone a similar reduction, and in all it has continued without abatement during that long period. Wheat, which in the year 1818 was 84s., is now selling at 47s., showing a reduction of 37s., or 45 per cent. Iron, in 1818, was £13 the ton; it is now £8, being a fall of 40 percent. Cotton, inl818,was 1s. thepound; itisnow (3d., being a fall of 50 per cent. Wool, which in 1818 was selling at 2s. 1d., now sells for 1s. 1d., being a reduction of 50 per cent. These are the great articles of commerce, and the average of the fall upon them is 45 per cent, being exactly the reduction on the price of grain. This is recommended to the consideration of those who tell us of over-production and an excessive cultivation of corn-land. Mr Tooke has compiled a table exhibiting the fall between May 1818 and May 1822, and the fall is the same in all the articles, with the exception of indigo. The fall, therefore, is not peculiar to agriculture; it is universal, and has embraced every article of industry, every branch of commerce. How trade or production could by possibility be carried on with a profit, while a fall of such

magnitude was going forward, it is for the supporters of Chap. the opposite system to explain. x"

"This fall of prices must have been produced by one of J822, two causes: either the quantity of all commodities has Continued, increased, or the quantity of all money has diminished. One of these must of necessity have occurred, for the proportion is altered. Are we to believe that great changes have suddenly taken place in the productive powers of nature, or the resources of art, so as to account for this sudden and universal fall of prices? Is it likely that production in all branches of industry, agricultural and manufacturing, would go on for three years constantly increasing in the face of a constantly diminishing price? The thing is evidently out of the question. It is the quantity of money that must have been reduced. That this has really been the case is sufficiently proved by authentic documents, which show distinctly where the deficiency is to be found.

"The circulation of the country rests entirely upon that of the Bank of England; and its notes in circulation, continued, immediately preceding the Act of 1819, and the fall of prices, were, at an average, from twenty-nine to thirty millions. That was the amount in circulation for the last half of 1817 and first of 1818. If we take the circulation in the middle of each quarter, which Mr Harman states is the fairest mode of striking the average, it will appear that the diminution of the circulation has been nearly a third.* Nothing can be more regular, gradual, and uni

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Chap, form than the contraction of the currency immediately x* preceding and accompanying the great reduction in the 1822- rate of prices. It was altogether a forced and systematic contraction. It did not take place in consequence of the fall of prices; it preceded it. It worked silently but unceasingly through every branch of industry, till it had reduced them all to the same miserably low level. It was not effected by means of any lessened demand for banknotes; on the contrary, it took place in the midst of a constantly increasing demand for them, when population was rapidly augmenting, general peace prevailed, and the growing commerce and transactions of men were daily rendering more necessary an enlargement of the circulating medium by which they were to be carried on. The requisitions made to the Bank by the mercantile community were less at the time of its greatest circulation, in the last half of 1817, than they had been at any subsequent period when the circulation lias been so fearfully contracted. The Bank is now under greater advances to merchants with a circulation of only £23,000,000 than it was when its circulation was £30,000,000. The reduction in the circulation, therefore, has taken place in consequence of no decline in the demands of the mercantile community, but solely and entirely from the forced but yet regular and persevering measures of the Bank directors to reduce its circulation, first in preparation for, and next in consequence of, the Cash Payments Bill of 1819. "The reduction of prices has been in a much greater Continued, proportion than the contraction of the currency. The bank-notes have been diminished by about a fourth, but prices of every article have fallen a half. This is a very importantfact,forit indicateshow powerfully—much more so than could have been expected—a reduction in the amount of the currency affects prices, and through them the resources of all the producing classes in the community. The same is observable in regard to grain, or meat, or another article in universal and daily use: a failure of the

crop to the extent of a fourth or fifth doubles prices, and Chap. often more. It is not difficult to discover the cause of x' this anomaly. The bank-notes do work far beyond their 18J2amount in value: they conduct and turn over the whole transactions of the country. The payment of taxes and dividends, and all the innumerable transactions between man and man, are done bv their means. A diminution of their number, by lessening credit and the means of purchase or speculation over the whole community, affects prices far more extensively than the nominal amount of this diminution, for it affects the power of buying among all the persons through whose hands the notes pass in their circulation through the community.

"In addition to this, there are a great many payments which do not fall with a diminution on the circulating Continuedmedium of the community. The great and burdensome charges of the nation remain the same, however much the currency may be contracted and prices fall. The taxes, the interest of mortgages and bonds, jointures to widows, provisions to children, poor-rates, life insurances, and the like, undergo no diminution. Nay, there are several articles of consumption, as salt, tea, malt, sugar, and some others of equal importance, in which the tax bears so great a proportion to the price of the article, that its price cannot fall in any perceptible degree from a diminution in the demand. These heavy fixed burdens, and extensive articles of consumption, require the same amount of bank-notes for their discharge or payment under a reduced as amidst a plentiful circulation. Thus the whole effects of the reduction in the circulating medium are run into, and act upon, the sale of those articles of commerce in which a reduction of price is practicable; and as they are not half the entire expenditure of the nation, the effect upon them is proportionally greater. It is like a man with a fixed income, say £1000 a-year, who is burdened with fixed payments to the extent of £600, being deprived of one-half of the remainder, or

VOL. II. 2 K

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