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CHAPTER XI.

On the Causes of the present Depression, and of the

Fluctuations which have lately taken place, in the Price of Agricultural Produce.

I CONCEIVE that no man accustomed to consider the principles upon which the demand and the supply of the corn-market are regulated, and who recollects the history of the last two eventful years, can hesitate in pointing out, with a considerable degree of confidence, both the proximate causes of the present state of things, and the origin from which they sprung. It is demonstrable, as a general principle, that when markets are for any considerable period overstocked with an article, the importation of which is prohibited, the glut must nécessarily be produced by the existence of a surplus produce of domestic growth. A temporary effect of this nature may certainly be produced by distress among the growers, from want of accommodation arising out of a suspension of credit, or from a panic concerning the progressive detericration of prices. Either of these causes would induce them to pour their produce into the market in greater quantities than the demand would absorb, would reduce its price, promote a wasteful consumption; and, when the temporary effects had ceased, the natural result of such a process would be a subsequent and rather sudden elevation of price : for the country would be gradually exhausted of its produce, while the increased demand remained in full vigour. The waste

ful habits introduced by previous plenty would not be immediately corrected, and, when the stock to supply them began to fall short, a considerable rise of price would of course ensue.

That these causes have in some degree operated to produce the present glut in the market, and that those effects are reasonably to be expected, especially if the ensuing harvest be not very plentiful, is, I think, undeniable. The general want of that accommodation which the farmers have for years past experienced from the country Bankers, whose resources of credit have now failed, have rendered it necessary for tenants to force their corn into the market with a simultaneous effort, in order to procure money for the payment of their rent, their taxes, and other out-goings : while the consequent reduction of price renders it necessary to sell so large a quantity of produce, in order to realize the sums actually due from the cultivator to his creditors, that infinitely more than the fair proportion of the growth of the country has been prematurely forced into the market. At the same time, the general stagnation of credit, and want of money for speculation, have prevented the purchase of any large quantities of corn for the purpose of storing, with a view to resale at a profit. The alarm of the farmers, lest a still further depression should ensue, operating upon their conviction that, at all events, their produce must ere long be carried to market, must have hastened their efforts to anticipate this further depression by a speedy sale, and, by adding to the mass in an already overstocked market, must have tended, like most other effects of panic, to aggravate the danger it was the object to avoid. Under these circumstances it is not true,

as I have lately seen it asserted, that the consumption of corn does not increase in some proportion at least to the depression of its price. When cheap, it is converted to many purposes for which substitutes are used when it is dear. I have no doubt that grain has been used for many months past where potatoes are the usual food in ordinary times. The supply and the consumption having therefore both exceeded their usual proportion, it follows, as a strictly logical conclusion, that unless the future growth shall be equally in excess, the ultimate consequence must be a comparative scarcity and rise in price. And as there is no reason to conclude that the growth will be sufficiently in excess to counteract the effects of one unfavourable or even average harvest upon the diminished breadth of corn, to which the low price has induced the cultivator to contract his efforts for the ensuing crop, I have little doubt that a gradual rise in the corn-market will, ere long, be established, unless the next harvest should be uncommonly abundant.

In the mean time however it may be asked, how is the agricultural interest to be relieved from the distress consequent upon the depression in the price of produce, which has been proceeding in a constant state of aggravation for the last two seasons ? To this it may be answered, that in so far as they were entitled to, or could receive relief from, the unfair competition of the foreign grower, it was granted, though somewhat late, during the last session of parliament. In so far as their distress, notwithstanding that relief, is now to be attributed to an excess of the supply actually grown above the diminished demand in the market, the relief can only proceed from the

cure.

agriculturist himself. He must of course adapt his supply to the demand. This is obviously the only

The abolition of rent, of tithes, of taxes, of every other out-going foreign to the expenses of cultivation, can have no possible effect, till this necessary condition is fulfilled. For if the supply be greater than the demand of any article that must necessarily be brought to market within a given time, the price must of course sink below the cost of production, whatever that cost may be. The farmer would not gain one-half penny by getting rid of all those out-goings; but the price of corn would naturally sink, in the first instance, till it reached that point in the scale of loss, at which the most distressed cultivator should find himself obliged to dispose of his produce. It would in fact, however, soon sink much lower; for the ruin of the owners of the rent, of the tithes, of the taxes, who are the public creditors, would successively take so many consumers out of the market, that the forementioned point in the scale of loss would be continually lowering, until the gradually contracting supply should be no more than barely sufficient to answer the gradually decreasing demand in the market. But it is difficult to say, how many retrograde steps in the progress of society the country must in the mean time have made.

Now I think there are many circumstances which lead to the conclusion, that the growth of corn in the United Kingdom has been in excess above the demand for the last two years.

In the first place, the quantity of foreign corn brought into it, in addition to an abundant domestic supply, before the Corn Bill of 1815 began to operate, must have decreased quoud hoc the demand for grain of En

glish growth. In the next place, the demands of government for the army and navy, for the maintenance of prisoners of war, and the necessary waste of food in all the transfers of it incident to the operations of war, all of which have constituted very material items in the demand for many years past, and have therefore operated long enough to produce their effect on the agriculture of the kingdom, have on a sudden either partially or entirely ceased. “And as the difficulties thrown in the

way of the free circulation of corn by the continental system and our disputes with America obliged us to draw upon our domestic agriculture for the greater part of the abovementioned demands, the supply no longer wanted now preponderates as a dead weight on the unfavourable side of the balance in the market. Without entering into minute calculations of the quantities of corn thrown upon the market by the cessation of these demands, the fact that they have produced a surplus is capable of demonstration. For if the agriculture of the country was previously sufficient without material assistance to supply the wants of the domestic population as well as the foreign demands just alluded to, which is proved by the small amount of grain imported of late years, then it follows as an incontrovertible conclusion that, when the last quantity is added to the first in the home market, there must be upon the whole an excess of supply above the demand; and. this' excess being proved, I apprehend no man will hesitate in admitting that it can only be cured by reducing the supply to the demand. This necessary alteration of system is only one among many effects of the complete revolution in almost every course

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