Chap. £200. Though that reduction is only of a fifth of his x' entire income, it will draw after it a reduction of that 1822. 0f expenditure over which he has a control to

the extent of a half; and if he does not draw in to that amount, he will very soon become bankrupt. 14J "The repayment of the Bank advances by Government Continued, has been the measure on which this reduction in the quantity of money, and the consequent increase in its value, was founded. Since 1817, no less than £15,000,000 has been repaid to the Bank by Government. When the Bank got these repayments, they did not re-issue them again, as they had been accustomed to do in former days, but they retained them in their coffers, and thereby withdrew them from circulation. These proceedings have produced a regular progressive reduction of prices, irrespective altogether of any excess in the production. If the Bank were to advance again this £15,000,000, or any considerable part of it, to Government, and were enabled to do so by the necessary alteration in the Act of 1819, the effect would be an immediate return to the scale of prices which existed in 1818 and during the war. "Such is the evil tinder which we are now labour


concluded, ing, and which will suffer no abatement so long as the causes which produced it continue in operation. We have been occupied with changes in our pecuniary system, and it is precisely since they were commenced that our difficulties have been experienced. To enhance the value of money, to raise the price of gold, we have lowered that of all other commodities, while at the same time we have left the great payments of the nation raised from the sale of these commodities! Strange, indeed, would it be if such a system was not to have produced the general and long-continued distress which we see around us. The reduction effected in the amount of money in circulation has been nearly one-half of that employed in supporting agricultural, commercial, and manufacturing industry. Hence these classes are unable to obtain much more than half the return they obtained Chap. for their industry before the alteration took place, and v

yet all their great money engagements remain the same! 1822, This is the origin of that state of things which in its result leaves the landowner without rent, the merchant, Deb without profit, the labourer without employment or wages, 898, which revolutionises property, and disorganises all the 1007.' different relations and interests of society."1

Dr Arnold said that Sir Robert Peel "would yield to pressure on everything except the currency." It is Repeat^ not surprising it was so; for determination to adhere on Minuterein that one point necessarily drew after it concession on coJmion!.of every other. The distress produced by the general fall of all prices 50 per cent had become such among the producing classes, that no combination of the leaders of the opposite parties, and no efforts on the part of Ministers, were able any longer to avert its effects. It was in the loud and fierce demand for a reduction of taxation that the public voice, in the House of Commons, first made itself heard in an unmistakable manner. Several ominous divisions, presaging total defeat in the event of any further resistance to the demands of the country in this particular, took place in the early period of the session. A motion by Mr Calcraft, for the progressive diminution of the salt-tax, by taking off a third in each of the next three years, was only thrown out by a majority of four, the numbers being 169 to 165. This near Feb. 28. approach to a defeat was the more remarkable, that Lord Londonderry and the Chancellor of the Exchequer had loudly declared that this tax was essential to the maintenance of the Sinking Fund, and that its repeal would be the signal for the entire abandonment of that fund.

March 1

This doubtful conflict was soon followed by decided de-, D'eb feats. On the very next day, on a motion made by Sir j5,-8,6',;881' John Osborne, for a reduction of two of the junior lords 312; Ann. of the Admiralty, Ministers were left in a minority of u?'' 54, the numbers being 182 to 128.2 This was soon after

Chap. followed by another defeat, on the motion of Lord Norx' inanby for the reduction of one of the two joint Post1822 . masters-general, which was only thrown out by a majoMarchia. rity of 25, the numbers being 184 to 159. The same motion, put in a different form, was, in a subsequent period of the session, carried against Ministers by a majority of 15, the numbers being 216 to 201.

These disasters were sufficient to convince Ministers Great re- that, however ignorant they might be of the real source totunin- of their difficulties, and however tenacious they might Minuted be of the monetary bill of 1819, the distresses of the country had become such that relief, in some form or another, was indispensable; and that, if they would not give it in the form of measures calculated to raise the remuneration of industry, they must give it in the form of a reduction of its burdens. The effect of the shake they had received soon appeared in the financial measures which, in a subsequent period of the session, they brought forward. Although, in February, Lord Londonderry had declared that the retention of the salt-tax was indispensable to the upholding of the Sinking Fund to the level of £5,000,000, which the House had solemnly pledged itself, in 1819, to maintain inviolate, he was yet cornMay 24. pelled to bring forward, on 24th May, a motion for its reduction from 15s. a bushel to 2s., which occasioned a loss to the revenue of £1,300,000 a-year. This was followed by a reduction of the war-tax on leather, which occasioned a further loss of £600,000 a-year. The tonnage-duty and Irish hearth-tax were also abandoned, which produced between them £400,000 yearly. These great reductions, amounting, with the annual malt-tax, which brought in £1,500,000 a-year, and which Government had announced their intention of abandoning at an early period of the session, amounted together to £3,500,000 a-year, being half a million more than the wA8i!'c* amount of the new taxes, imposed in 1819, to keep up the Sinking Fund to £5,000,000 yearly.1 There can be no doubt that the taxes thus removed were judiciously Chap. selected, as they were those which bore most heavily on X' the labouring classes of the community; and still less 1822, that their distress had become such as to render a considerable reduction of the taxes pressing on them indispensable; for, measured in quarters of wheat, their true standard, the poor-rates of England were now twice as heavy as they had been in 1812.* But the necessity of removing these taxes, and thereby abandoning the very )^°\f*e' foundation of the Sinking Fund, afforded the most deci- i«; p«ri! sive evidence both how widespread the distress had be-1407, H'i3: come, and how entire a revolution it had already induced 496?bes'v'' in the financial system and policy of the country.1

The budget was brought forward on 1st July, and its leading feature was the reduction of the Sinking The budget. Fund from £13,000,000 to £7,500,000, by appropriating £5,500,000 to the current service of the year. This signal and calamitous departure from the form even of our former policy, in this vital particular, was sought to be justified by the Chancellor of the Exchequer on various grounds; but it was evident that it was imposed upon him by sheer necessity, and was a direct abandonment of the solemn resolution to maintain a real surplus of £5,000,000 over the expenditure, which Parliament had unanimously adopted only three years before; for, as the nominal Sinking Fund was reduced to half its former amount, it was plain that the real redemption of debt was virtually abandoned. The expenditure of the present year, however, as the great reduction of taxation made in the course of it had not taken effect, was nearly £5,000,000 below the income, leaving that sum appli


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cable to the diminution of debt—a striking and melancholy proof of what the resources of the country really were at this period, had the ruinous contraction of the currency not imposed upon the present and all future governments the necessity of remitting the indirect taxes, by which alone the Sinking Fund could be maintained. It is not surprising it was so. A hundred millions a-year is not cut off from the remuneration of productive labour, in a country the source from which its entire wealth must be drawn, without producing lasting effects upon its financial situation and ultimate destiny.1*

Two measures, the one of the most unquestionable, the other of very doubtful wisdom, were brought forward during this session of Parliament, and carried into effect. The first of these was the reduction of the navy 5 per cents to 4 per cent. About £156,000,000 stood in this species of stock; consequently, any reduction in the interest payable on it was a very great relief to the national finances. The condition proposed to the holders was, that for every £100 of their existing stock they should be inscribed for £l 05 in a new stock bearing 4 per cent interest. Those who signified their dissent before 1st March 1823 were to be paid off. So high were the Funds, however, that those who took advantage of

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Grand Total,

—Parliamentary Paper in Annual Seguter, 1823, pp. 215-217.


Charges of Collection,
Interest on Funded Dobt,
Interest on Unfunded do.,
Naval and Military Pen

sions, .
Civil List and Expenses,

Navy Pensioners,
Ordnance, .
Miscellaneous, .
Lesser Payments,
Surplus applicable to Debt,

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{ The loans went to discharge Exchequer Bills.

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