lar, sound, and satisfactory state than 65. That this extraordinary and unifrom the end of 1821 to the end of versal state of sound and apparently 1824." The advance in the value of durable prosperity was mainly, if not the public securities, and in property entirely, owing to the expansion of the of all sorts, was so great as to vindi- currency which had taken place from cate this eulogy of mercantile pros the operation of the Act of 1822, and perity at this period, and show it was the general confidence in the magnifounded on solid grounds. The Three tude of the supplies of gold which were per Cents rose in July 1825 to 96, an anticipated from the opening of the elevation which they had not previous- South American mines to British capily attained since 1792. The stocks of tal and enterprise, cannot be for a moall banks and joint-stock companies ment doubted. The Bank of England advanced in a similar proportion, many notes in circulation had advanced, since in a much greater; and such was the the change of the law in August 1822, rise in the price of all the principal from £17,464,790 to £20,132,120, and articles of merchandise, that scarcely paper under discount at the Bank from any speculation could be entered into £3,622,151 to £6,255,343 in August which was not, for the time at least, 1824, and £7,691,464 in August 1825. attended with profit, often to a very The country bankers' paper had auggreat amount. And the consump-mented in a still greater proportion: it tion of the raw materials made use of in the principal articles of manufacture had more than doubled in the last two years.+ had risen from £8,416,830 in 1822, to £12,831,332 in 1824, and £14,930,168 in 1825. Had this paper circulation been rested on a proper basis-that is, * PRICES OF VARIOUS ARTICLES OF MERCHANDISE IN THE YEARS 1824 AND 1825. had it been perfectly secured, duly guarded from excess of issue, and secured upon a foundation not liable to be withdrawn -this prosperity would have been durable, and Great Britain for the next quarter of a century would have enjoyed an uninterrupted period of peace and happiness. But, unhappily, this was very far indeed from being the case on the contrary, the currency of the empire was fixed on the most perilous and insecure of all bases, for it consisted in part of issues by irresponsible parties over whom Government had no control, and it rested in whole on the retention of the precious metals —the very thing which, under existing circumstances, could by no possibility be retained. Country bankers, to the number of some hundreds in the provinces, were at liberty to issue their own notes to any extent they pleased, which, in the high state of general credit, passed as cash from hand to hand; and in addition to this, two causes had now come into operation, which, while they immensely inflamed the fever of speculation on the one hand, proportionably augmented the danger of a collapse on the other. These were the formal recognition of the independence of the principal states of South America by Great Britain, and the great excess of imports over exports in this country, owing to the general internal prosperity which prevailed; and their united action before the end of the year involved the nation in the most dreadful calamities. ment was received with loud cheers from both sides of the House; and as this was an open recognition of Liberal principles on the part of the Government, the Opposition were not slow in claiming their share of credit as being the persons who had all along maintained these principles, and recommended these measures. Mr Brougham, in particular, was so loud in his declamation on this subject that it led to a celebrated rejoinder from Mr Canning, the felicity of which for the time withdrew the attention of the country from the undoubted fact, that Government and the Opposition had changed places, and that Great Britain had now taken the lead in the advancement of Liberal principles.* This official announcement, coming as it did at a time when the minds of men were already strongly excited on this subject, and the spirit of speculation had become very prevalent from the profits consequent on the general rise of prices, operated with magical effect on the moneyed classes. There was no end to the projects set on foot to work out the supposed inexhaustible mineral riches of South America, and for a time there seemed to be none to the profits realised by the fortunate shareholders. The gain made on the shares of some of the South American companies in a few months, at this period, exceeded "The honourable and learned gentleman," said Mr Canning, "having in the course of his parliamentary life supported or proposed almost every species of innovation which could be practised towards the constitution, it was the affairs of South America without seeming not very easy for Ministers to do anything in to borrow something from him. Break away in what direction they would, whether to the 'Oh,' said the honourable and learned gentleman, I was and 66. In January 1825, Mr Canning made a formal communication to the Foreign Minister, that his Majesty had come to the determination of appoint-right or left, it was all alike. ing chargés d'affaires with the states of Columbia, Mexico, and Buenos Ayres; and in the King's speech, on February 3d, it was declared, "In conformity with the declarations which have been repeatedly made by his Majesty, he has taken measures for confirming by treaties the commercial relations already subsisting between this kingdom and those countries of South America which appear to have established their separation from Spain.' This announce there before you: you would not have thought of that if I had not given you a hint.' In the reign of Queen Anne there was a sage in his old age, got it into his head that he grave critic of the name of Dennis, who, had written all the good plays that were acted at that time. At last a tragedy came forth with a most imposing display of hail claimed, That's my thunder! So with the honourable and learned gentleman, there was no noise or stir for the good of mankind any part of the world but he instantly claimed it for his thunder."-Parl. Debates xii. 24, 25. and thunder. At the first peal Dennis ex in 1500 per cent.* These extravagant hundred and seventy-six joint-stock profits spread a sort of madness through companies in existence in Great Briall classes. It seized upon the most tain, the subscribed capital of which sober and retired members of society, was no less than £174,000,000 sterpervaded all ranks, swept away all in- ling.+ tellects, and in the end ruined not a 67. The second circumstance whichfew fortunes. Joint-stock companies at once inflamed the general spirit of were set up in every direction, and for speculation, and augmented the danall imaginable undertakings. There gers with which it was attended, was the was nothing so absurd as not to be set great excess of imports over exports, on foot; scarce anything, in the end, which went on increasing through the so unfortunate as not for a few days or whole of 1823 and 1824, and at length weeks to realise large profits to the rose to the most portentous amount in original shareholders. When they had the end of 1825. The official value of got them off their hands, and landed the imports had come then to exceed them in those of the widow and the the declared value of the British and orphan, they were indifferent how soon Irish exports by nearly £6,000,000 they went to the ground. The country sterling. A great part of this differbankers, trusting to the unbounded ence of course required to be paid in supplies of specie expected from South cash, and this could end in nothing at America under English management, last but a drain upon the banks, and poured forth their issues without end, contraction of the paper circulation and their notes were universally re-issued upon their stock of bullion. ceived, amidst the general prosperity But in the mean time, and before the and sanguine spirit of the times. In payments required to be made, the the beginning of 1825 there were two vast amount of imports consequent on JOINT-STOCK COMPANIES, THEIR OBJECTS AND CAPITALS, IN JANUARY 1825. casioned, attended by a proportional drain upon the banks, and a monetary crisis rendered unavoidable by the very circumstance which had induced previous prosperity.* the general rise of prices, and the pro- | checked, because production has befits made upon them, augmented the come costly. Thus a large balance of prevailing rage for speculation; for imports over exports is at length octhere was scarcely anything brought into the market which was not sold at | a profit within it. This circumstance deserves to be particularly noticed, because it is of permanent application, and must, while our monetary laws continue on their present footing, render every period of prosperity and rise of prices the forerunner of a corresponding period of disaster. During the continuance of the former, prices rise and imports become excessive, because profitable; while exports are 68. The drain of bullion from the Bank of England, which is at all times the commencement of commercial distress under our present monetary system, was fearfully aggravated, during the latter part of 1824 and whole of 1825, by a circumstance the precise opposite of that which had been anti *VALUE OF EXPORTS AND IMPORTS FROM 1822 TO 1825. It is a markworthy circumstance that, up to the year 1822, the declared value of the British and Irish exports always exceeded the official value of the imports; while, since 1825, the reverse has invariably been the case. Also, that, up to the year 1819, the declared value of British and Irish produce always exceeded the official value; whilst, since that, the official has always vastly exceeded the declared value. It is much to be regretted that, previous to the year 1854, the computed real value of the imports and of the foreign and colonial exports was not taken; so that it is only since that period that they can be compared with the declared real value of the British and Irish exports. The method adopted by the author, as above, to obtain the difference of the exports and imports previous to 1854, he believes to give as near an approximation as can be made. The principle on which he has gone is as follows:-To compare the official value of the imports with that of the exports would be of no use, because it is proved by the published returns, that while the official value of the exports (owing to the cheapening effect of the application of capital and machinery to manufactures since the period when the official values were assigned) has, ever since 1819, been very much above the real value (since 1854 it is nearly double), the official value of the imports is from thirty to forty per cent below their real value.-(Compare Tables I. and II. infra.) But this excess of the real or computed above the official value of the imports is not very different from the official value of the exports of foreign and colonial merchandise (chiefly raw material). Allowing these two, therefore, to balance each other (that is, omitting the official value of the export of foreign and colonial merchandise on the one side of the account, in consideration of the depreciation existing in the official value of the imports on the other), he has compared simply the declared value of the British and Irish exports with the official value of the imports. To enable the reader to examine this question for himself, the following tables are given : TABLE I.-Excess of IMPORTS, as shown by the Computed and Declared Real Values of cipated. South America, which, it greater part of this export of gold was to South America, and the cause of that brings to light one of the most instructive and memorable facts recorded in history. It arose entirely from that revolution which Great Britain had for so many years laboured so assiduously to bring about. During the course of that terrible convulsion, which had endured under circumstances of unexampled horror for fourteen years, and deluged the whole country with blood, its whole capital had been destroyed; the mines unworked had in great part come to be filled with water; TABLE II.-Excess of EXPORTS, as shown by the Official Values of the Exports and Imports. TABLE III.-Excess of IMPORTS, as shown by comparing the Declared Value of British and Irish Exports with the Official Value of the Imports. From these tables it appears, that to compare the official value of the exports and imports would lead to a completely false conclusion; but that to compare the official value of the imports with the declared value of the British and Irish exports, leads to a result which errs only in understating the true amount of the excess of imports over exports (as proved by Table I.) For the purpose which the author has in view, it may therefore be adopted with confidence, as it is inaccurate only in understating the conclusion he wishes to prove. Moreover, the inaccuracy contained in it becomes less and less the nearer the years 1820-24 (when the comparative value of the official and declared values first changed sides) are approached. In considering the very large excess of imports shown by the comparison of the declared and computed real values of the exports and imports since 1854 (given in Table I.)—an excess which is every year increasing, and which in 1862 amounted to £59,000,000-it must be borne in mind that a portion of this only requires to be liquidated by actual payment in specie; for the British and Irish exports being entered in the tables at the value declared by the exporter-that is, at their cost price to him nearly-will be sold abroad at a considerably higher rate, to give him a profit and pay for freight and insurance. On the other hand, the imports being computed in the Custom-house at the estimated selling price of the several articles, their value includes the cost of freight and insurance, and a great part of the importer's profit. To make the comparison between the exports and imports fair, therefore, it would be necessary to add to the declared value of the exports the cost of freight and insurance, and the profit actually cleared by the exporter. This cannot be done; but, making every allowance for it, it is evident that there still remains in all ordinary years a considerable balance against this country, which must be liquidated in cash; and that this turns-in years in which a bad harvest necessitates large purchases of grain abroad, or foreign wars require to be fed by the exportation of guineas-into a very formidable drain upon our metallic resources, and one which, from the imposed dependence of our currency upon the retention of gold, often leads to most serious and calamitous results. |