Chapter I: Front Matter (1)

BLACKWOOD’S
EDINBURGH MAGAZINE.
NO. CCCCXV. MAY, 1850. VOL. LXVII.

CONTENTS.

FREE-TRADE FINANCE, 513
GREECE AGAIN, 526
THE MODERN ARGONAUTS, 539
MY PENINSULAR MEDAL. BY AN OLD PENINSULAR. PART VI., 542
GERMAN POPULAR PROPHECIES, 560
THE HISTORY OF A REGIMENT DURING THE RUSSIAN CAMPAIGN, 573
THE PENITENT FREE-TRADER, 585
TENOR OF THE TRADE CIRCULARS, 589
ALISON’S POLITICAL ESSAYS, 605
OVID’S SPRING-TIME, 621
DIES BOREALES NO. VII. CHRISTOPHER UNDER CANVASS, 622
LETTER FROM MAJOR-GENERAL SIR WILLIAM NAPIER, 640

EDINBURGH:
WILLIAM BLACKWOOD & SONS, 45, GEORGE STREET;
AND 37, PATERNOSTER ROW, LONDON.

_To whom all communications (post paid) must be addressed._

SOLD BY ALL THE BOOKSELLERS IN THE UNITED KINGDOM.

PRINTED BY WILLIAM BLACKWOOD AND SONS, EDINBURGH.

BLACKWOOD’S

EDINBURGH MAGAZINE.

NO. CCCCXV. MAY, 1850. VOL. LXVII.

FREE-TRADE FINANCE.

The Chancellor of the Exchequer has brought forward the Budget, and the Financial Measures of Government are before the public. It contains matter worthy of the most serious consideration. It is hard to say whether the admission it contains, or the measures it proposes, are most condemnatory of the system of Class Government which the Reform Bill has imposed on the country.

The statement of the Chancellor of the Exchequer, in a few words, is this:—“Last year, I calculated upon a small surplus of L.104,000 for the year ending 5th April 1850, but that surplus has swelled to L.2,250,000, by rise in the produce of the taxes, and reductions of the expenditure. Of this sum L.1,500,000 is to be regarded as the real surplus to be relied upon for the measures of this year.” Assuming this as the surplus to be dealt with, he proposes to apply L.750,000 in reduction of the last contracted part of the debt, and L.750,000 in reduction of taxation; L.400,000 a-year being applied to the reduction of the duty on bricks, and L.350,000 to that of stamps on conveyances. It is thus that he proposes to alleviate the agricultural distress which, he admits, prevails in the country.

Three things are especially worthy of observation in this statement.

In the first place, it affords another illustration, if another was needed, of the present deplorable subjection of Government to the pressure from without, which has so often and painfully been exhibited since the new system of government began. It is well known that, during the three disastrous years that preceded the present one, debt to a large amount was contracted. To mention two items only: eight millions were borrowed in 1847 to relieve the Irish famine; L.2,000,000 in the succeeding year, to carry on the current expenses of the year; and in 1841 the deficiency had been such, that no less than L.5,000,000 was borrowed to meet the ordinary expenses of the year. One would suppose, that when a surplus arose in the year 1849, the natural course would have been to have applied it, in the first instance, to extinguish, so far as it would go, the additional debt so recently contracted. Has this been done? Not at all. Only L.750,000 out of a real surplus said to amount to L.1,500,000, is to be applied in this way; and L.750,000 is to be devoted to reduction of taxes. L.10,000,000 is borrowed during two years of distress; L.750,000 only has been devoted to its reduction, in a year, we are told, of unparalleled commercial prosperity.

In the next place, to what object is the L.750,000 a-year of surplus available to reduced taxation, discovered for the first time after three years of deficit, to be applied? Is it to be devoted to remission of taxes pressing upon the agricultural interest, whom the measures pursued for behoof of towns have reduced to such a state of depression? Not at all. It is to be applied to reduction of the duty on _stamps and bricks_. The first may be admitted to be desirable, because, as so large part of the landed property in the kingdom will soon, to all appearance, change hands, it is an object to render the transfer as little costly as possible. But of what use is the reduction of the duty on bricks to the suffering cultivators? That it is a boon to the master-builders in towns, may be conceded; though it may well be doubted whether it will ever cause a reduction of price to the purchasers from them. But what the better will the farmers and ploughmen, the landlords and yeomen, be of the change? Additional houses are not wanted _in the country_; on the contrary, there will in all probability not be inmates for those that already are there, from the certain and experienced effect of Free-trade in diminishing the demand for rural labour. It is in the towns and villages that the building is going on; because Free-trade policy is daily more and more forcing the rural inhabitants into the towns in quest of employment or relief. In London, 200 miles of new streets, and 66,000 houses, are said to have been constructed, or to be in course of construction, during the last two years. Is there any increase of houses in the rural districts? Herein, then, lies the injustice of the present measures of Government, that, though prefaced with professions of a desire to relieve all parties, they in reality benefit one class only; and that, introduced at a time when it is admitted the agriculturists are in a state of extreme depression, and the manufacturers are asserted to be in a state of unexampled prosperity, they are mainly calculated to add to the prosperity of the latter, and take nothing from the sufferings of the former. It is not difficult to see where the Reform Bill has practically lodged the power of Government in the British Empire.

In the third place, and what is most material of all, the speech of the Chancellor of the Exchequer contains an admission in regard to the present state and past direction of our finances, since we have fallen under Liberal direction, of such moment, that we regard it as the most important statement that has ever yet been given in regard to the effect of the new measures on the national fortunes. It must be given in his own words, as reported in the _Times_ of March 16:—

“If honourable gentlemen will refer to what has taken place during the
last twenty years—the sums which have been borrowed on the one hand,
and the amounts which have been applied to the reduction of the debt
on the other—I think they will see that there is good reason for not
being indifferent on this subject. In 1835 and 1836, a sum of
L.20,000,000 was borrowed for the emancipation of the West Indian
slave population; to defray the deficiency, in the year 1841,
L.5,000,000 were borrowed; I was obliged to borrow L.8,000,000 to meet
the necessities of the sister country in 1847; and when the House
refused to increase the income-tax in 1848, I was obliged to borrow a
further sum of L.2,000,000, to meet the extraordinary expenditure.
Since the period I have mentioned, then, a sum of L.35,000,000 has
been added to the national debt. When I turn to the other side of the
account, I find that all the money which has been applied from surplus
income to the reduction of debt, in the course of the last twenty
years, amounts to only L.8,000,000; so that, _in a period of profound
peace, an increase of debt of no less than L.27,000,000 has taken
place_. (Hear, hear.) When, in 1848, the House refused to accede to
the proposal I made for an increased tax upon income, I certainly did
hope that, when a turn took place in our financial affairs, they would
not, the moment there was a surplus of income, instantly press that
the whole of that surplus should be devoted to the reduction of
taxation. What should we think of a private individual who acted in
such a manner (hear, hear)—a man who, whenever he found his income
fall short of his expenditure, borrowed the money necessary to meet
his liabilities, but who never thought of paying off that debt when,
by a fortunate turn of affairs, he happened to be in receipt of an
excess of income? (Hear, hear.) I must say that it will be hopeless
for us to maintain that character as a nation which we think
indispensable in an individual, if, in a time of profound peace,
instead of reducing our public debt, we go on adding to it from year
to year.”

Here it is admitted, by the Whig Chancellor of the Exchequer, that after twenty years of profound peace and unbroken Liberal government, (Sir Robert Peel was essentially Liberal,) not only has there been no reduction of the public debt, but AN INCREASE OF IT TO THE EXTENT OF TWENTY-SEVEN MILLIONS. It has been repeatedly demonstrated that, if the noble sinking-fund of L.15,000,000 a-year, which Mr Pitt’s policy left to the Administration at the close of the war in 1815, had been preserved unimpaired by keeping up the indirect taxes from which it arose, the whole national debt would have been extinguished in 1845. When the ruinous monetary act of 1819, and the increasing concession of successive Administrations to urban clamour had rendered that impossible, the semi-Liberal semi-Tory Governments from 1815 to 1830 still contrived to pay off L.82,000,000 of the public debt in fifteen years; and when the Duke of Wellington resigned in November 1830, he left, by the admission of all parties, a real sinking-fund, arising from an excess of income above expenditure, of L.2,900,000 a-year to his successors. But since that time, under his Liberal successors, not only has that surplus on an average of years disappeared, but during twenty years of profound peace L.27,000,000 has been _added_ to the total amount of the debt. Well may Sir Charles Wood say, “What should we think of a private individual who acted in such a manner?” Such is the rule of the urban constituencies, to humour whose fancies, and appease whose clamour, the whole efforts of Government for the last twenty years have been directed.

The important thing in the statement of the Chancellor of the Exchequer is, that it gives us the result of Whig government and Free-trade finance during so long a period. Every successive quarter, during these twenty years, we have been told by the Liberal press that the finances were in the most flourishing condition; that any deficiency that appeared was more apparent than real; and at any rate, in the most unfavourable view, it was sufficiently explained by temporary causes, and afforded no ground whatever for despondency in the future. Every successive Session, the Ministers came down to Parliament with the most flourishing accounts of the state of the country and of the public finances, and demonstrated to the satisfaction of every reasonable man in the nation that both never were in more hopeful and prosperous circumstances. Even when a deficiency of one or two millions stared the Chancellor of the Exchequer in the face, which was not unfrequently the case, there was always some temporary or transient cause to which it was to be referred. The China tribute had ceased, or some reduction of duties had come into operation, or revolutions in Europe had diminished our exports to the adjoining states. The Irish potato-rot was a perfect godsend to the Liberal financiers. It constituted their stock in trade for the next three years. The ruin of L.15,000,000 worth of agricultural produce in Ireland, out of at least L.260,000,000 worth in the two islands, explained the whole distress of the country and the exchequer for the next three years; and, strange to say, the very men who paraded so ostentatiously the ruinous effects of this comparatively trifling deficiency in a single year, made a boast soon after of their having destroyed L.90,000,000 of agricultural remuneration by the importations they induced of foreign grain.

But nothing is more certain than that error and delusion cannot, by any human effort, be prolonged for a very long period. With the advent of the time when the interest to deceive has ceased, or a new generation of deceivers has succeeded, the whole fabric falls to pieces. As certainly and mercilessly as the vices or follies of preceding monarchs are portrayed by those who have succeeded to the inheritance of their results, are the ruinous consequences of former delusions in democratic Governments exposed by succeeding Administrations who find themselves hampered by their effects. Many a popular Nero is cast down from his pedestal, almost before the vital warmth has left his body; many a republican Necker is exposed by a republican Bailly, when he finds the public finances rendered desperate by the measures which had been pursued with the cordial approbation of the whole Liberal party in the state. It is the same with our present Chancellor of the Exchequer. He finds the public finances, in the midst of boasted commercial and manufacturing prosperity, in so deplorable a condition, that he is fain to lay the whole blame upon his predecessors; and, after deploring the extraordinary fact, that during twenty years of profound peace, Liberal government, and retrenching Administrations, we have not only made no reduction whatever in the public debt, but added twenty-seven millions to its amount, he very naturally and justly observes, “What should we say to a private individual who should conduct his affairs in this manner?”

We have been so accustomed, during twenty years of Liberal and popular rule, to see every successive Administration live only from hand to mouth, and to be content if they can get over present difficulties, without bestowing a thought on the future, that the nation has almost forgotten what it was to have a prudent and foreseeing Government at the head of affairs: or rather, nearly the whole generations who have risen to manhood have come to think that such a system of government is impossible, and is to be ranked with the El Dorado of Sir Walter Raleigh, or the Utopia of Sir Thomas More. To enlighten their minds on this subject, we subjoin two Tables, showing what was done by the corrupt old Tory Governments—even during the anxieties and expenditure of a most protracted and costly war, or when the national finances were slowly recovering from its effects—to put the finances on a good footing, and lay, in present fortitude and sacrifice, a solid foundation for future relief and prosperity.

TABLE I., showing the growth of the Money
applied to the reduction of the Debt, and
the Sums paid off from 1792 to 1815, being
twenty-three years of war.

1792, £1,558,504
1793, 1,634,972
1794, 1,872,957
1795, 2,143,697
1796, 2,639,956
1797, 3,393,210
1798, 4,093,164
1799, 4,528,568
1800, 4,908,379
1801, 5,528,315
1802, 6,114,033
1803, 6,494,694
1804, 6,436,929
1805, 9,406,865
1806, 9,602,658
1807, 10,125,419
1808, 10,681,579
1809, 11,359,691
1810, 12,095,977
1811, 13,073,577
1812, 14,098,842
1813, 16,064,057
1814, 14,830,957
1815, 14,241,397
————————————
£186,928,399

—PORTER’S _Parl. Tables_, i. 1.

It is a total mistake to allege, as is often done, that this immense and growing sinking-fund was obtained entirely by borrowing with the one hand what was paid off with another. The _funds_ thus applied to the reduction of debt were obtained from the _indirect_ taxes set apart on the contraction of each loan, in amount adequate not only to defray its annual interest, but also to extinguish, within forty-five years after it was contracted, the principal of the loan itself. That part of the loan was applied in each year, especially during the latter years of the war, to keep up the sinking-fund, is true, but is immaterial. That was only because the taxes set apart for its support were absorbed, in great part, by the necessities of the contest; and when _the contest and loans ceased_, these taxes were amply sufficient to keep up the sinking-fund without any extraneous aid. This appears from the following Table, also taken from Mr Porter, exhibiting what was actually paid off of the public debt during the next fifteen years of Tory peace-government:—

TABLE showing the Money applied to the
reduction of Debt, Funded and Unfunded, from
1815 to 1832.

1816, £13,945,117
1817, 14,514,457
1818, 15,339,483
1819, 16,305,590
1820, 17,499,773
1821, 17,219,957
1822, 18,889,319
1823, 7,482,325
1824, 10,625,059
1825, 6,093,475
1826, 5,621,231
1827, 5,704,766
1828, 4,667,965
1829, 2,559,485
1830, 4,545,465
1831, 1,663,093
1832, 5,696
————————————
£162,682,256

—PORTER’S _Parl. Tables_, i. 1.

But the Reform Bill, passed in 1832, has entirely put an end to the reduction of the debt. Since that time, as Sir Charles Wood tells us, the debt, so far from having diminished, has increased £27,000,000.

That there was a substantial reduction of debt going on during the period included in the above table, and not a mere juggle, by transferring debt from one denomination to another, though not to the amount which these figures would indicate, is decisively proved by the following Table, showing the general result of the financial operations from 1816 to 1832, when the Whigs introduced the Reform Bill:—

Funded Debt on 5th Jan. 1816, £816,311,940
Unfunded do., 48,510,501
————————————
Total, £860,822,441

Total Debt on 5th Jan. 1832—
Funded, £754,100,549
Unfunded, 27,752,650
———————————— 781,853,199
————————————
Paid off in sixteen years, £82,969,242

—PORTER’S _Parl. Tables_, ii. 6.

In the next eighteen years, since the Reform Bill changed the Constitution, it has been seen the debt was increased by £27,000,000.

So prodigious and fatal a change in our financial system would be wholly inexplicable, considering the many able and patriotic men who, since that period, have been intrusted with its direction, if we did not recollect the vital change made since that time in the constitution of the country, and the new class which was brought up in overwhelming numbers to return representatives to the House of Commons. That class is the borough and shopkeeping interest, with whom the main object is to buy cheap and sell dear. Not only has this principle, since that time, formed the sole regulator of Government measures in general or commercial policy, but it has operated decisively on our finances, and is the main cause to which their present hopeless condition is to be ascribed. To cheapen everything became the great object; and this was to be done, it was thought, most effectually by taking taxes off articles of consumption. Under the influence of this principle, indirect taxes to the following enormous amount have been repealed since the peace, the magnitude of which renders it noways surprising that the sinking-fund has disappeared:—

TABLE showing the Taxes, Direct and Indirect, Repealed and Imposed from
1816 to 1847, both inclusive.

REPEALED. IMPOSED.
Year. Direct. Indirect. Direct. Indirect. Year.
1816, £15,000,000 £2,547,000 £320,058 1816
1817, 36,495 7,991 1817
1818, 9,564 1,336 1818
1819, 705,846 3,094,902 1819
1820, 4,000 119,602 1820
1821, 471,309 43,642 1821
1822, 2,139,101 1822
1823, 1,860,000 2,190,050 18,596 1823
1824, 1,704,724 45,605 1824
1825, 3,639,551 43,000 1825
1826, 1,973,812 188,000 1826
1827, 4,038 21,402 1827
1828, 51,998 1,966 1828
1829, 126,406 1829
1830, 4,093,955 696,004 1830
1831, 1,598,536 627,586 1831
1832, 747,264 44,526 1832
1833, 1,526,914 1833
1834, 1,200,000 891,516 198,394 1834
1835, 165,817 75 1835
1836, 989,786 1836
1837, 234 3,991 1837
1838, 289 100 1838
1839, 66,258 1,783 1839
1840, 18,959 2,155,673 1840
1841, 27,176 1841
1842, 1,596,366 £5,529,989 1842
1843, 1843
1844, 1844
1845, 4,535,561 23,720 1845
1846, 1846
1847, 1847
———————————— ———————————— ———————————— ————————————
£18,060,000 £33,523,623 £5,529,989 £7,743,962
Imposed, 5,529,989 7,743,962
———————————— ————————————
Taxation reduced, £12,431,011 £25,779,661

Thus the balance of indirect taxation, reduced since the Peace, has been above £25,000,000—of direct, above £12,000,000 annually; and till 1842, it was £15,000,000 yearly. Had the sinking-fund been kept up at its amount as it was in 1815—that is, at £15,000,000 sterling out of the indirect taxes, there might have been repealed £15,000,000 of direct, and £14,000,000 of indirect taxes, and still _every shilling of the public debt would have been paid off by 1846_. Why has this most desirable, most vital object for the national safety in future times, not been gained? Simply because the mania of cheapening everything has ruled the State. Successive Administrations, which have succeeded to the helm of affairs, have endeavoured to gain a fleeting popularity, by bidding against each other in the race for popularity, by the sacrifice of the best interests of their country; and because Parliament—composed, so far as its majority goes since 1832, of the members for boroughs—have shut their eyes entirely to the ultimate consequences of their actions, and looked only to the gratifying their buying and selling constituents by the incessant reduction of the indirect taxes, and lowering the remuneration of industry of every kind throughout the country.

In truth, the chasm made in the finances of the country by this incessant, uncalled for, and ruinous reduction of the indirect taxes, in pursuance of the mania to cheapen everything, under which the nation has been labouring during the last thirty years, has been far greater and more disastrous than the preceding figures, formidable as they are, would lead us to suppose. The taxes repealed are of course set down at the amount they were _at the time of their repeal_. But that is very far from what they would have produced if they had been kept up; because, in that case, of course they would have shared in the vast increase of wealth and population which has since taken place. At the time when a large part of these taxes were repealed, the British isles did not contain above from 20,000,000 to 24,000,000 of inhabitants—now they contain 29,000,000. Our exports and imports have more than doubled in amount since the income-tax was taken off in 1816. Beyond all doubt, at its original rate of ten per cent, it would now have produced, at the very least, £20,000,000 a-year. The duty on spirits, so fatally lowered in 1826, would now have produced, not £2,000,000, but £3,000,000 or £3,500,000 annually. There cannot be a shadow of doubt that the taxes, which in 1815 produced £72,000,000 a-year, would, if continued at the same rates, have been now producing 50 per cent more, or £110,000,000. There is no man in his senses who would think that the nation either could have borne, or ought to have borne, such a load of taxation. Relief, on the return of peace, was indispensable. But it is one thing to give relief in a reasonable and prudent degree; it is another, and a very different thing, to throw away the public revenue with a reckless prodigality, without either principle or foresight, and for no other reason but to win a temporary popularity for wasteful Administrations.

Indeed, the inevitable effect of the cheapening system, and especially of the repeal of the Corn Laws, in rendering the taxes unproductive, and payment of the interest even of the public debt ere long impossible, was distinctly foreseen and foretold not only by ourselves in this Magazine, but by the most decided apostles of the opposite set of opinions. Hear Mr Cobbett on the subject, in Vol. LI. of his _Register_, No. 2, July 10, 1824—a quotation for which we are indebted to that able and consistent journal, the _Standard_.

“‘The commercial world’ will, I believe, find it rather difficult to
persuade the landlords to ‘modify and alter the Corn-laws,’ much less
to ‘do away’ with those laws: but what now is to become of all the
pretty doctrine about the inseparable interests of manufacture and
agriculture? I trust we shall hear no more of that soft nonsense....

“Now mind, I do not say that the manufacturers ought not to be
permitted to get food from abroad; but I say—and what man in his
senses does not say, that in whatever degree this cotton body is
supplied with food from abroad, it must and will dispense with food
from our own lands....

“I would fain then see the two-legged animal who is quadruped enough
still to contend that the interests of the landlords and those of the
cotton-lords are inseparable. They are directly opposed to each other;
and opposed to each other they must be as long as this debt shall
last.

“It will be curious enough to observe how ‘the manufacturing mind’
will work upon ‘the agricultural mind.’ These two minds will now come
into direct contact with each other. It will be the business of the
cotton mind to convince the landlords that bringing in foreign corn
will not make their English corn sell cheaper; or, failing in this, to
convince them that wheat at 4s. a bushel will, ‘in the long run,’ be
better for the landlords than wheat at 8s. a bushel. A very long run,
I believe, indeed! In short, it is a question of rents or no rents.
With the present debt and taxes, and with wheat at 4s. a bushel, there
can be no rents; so that, when the cotton mind comes forward to get a
repeal of the Corn Bill, it comes in fact to pray that there shall no
longer be rents in England.

“The cotton-lords, and indeed all the lords of the loom and anvil, are
bestirring themselves, and collecting all their forces for a desperate
assault upon the jolterheads (the landlords) who cry aloud for
national faith. I wish them success. I will not absolutely join them;
but I wish them success; because that success would destroy the _whole
system_ (the system of paper-money, national debt, and oppressive
taxation) root and branch. The Corn Bill, the Small-Note Bill, the
laying out of public money in Ireland, the lending of money
occasionally to manufacturers and merchants, the Bank advancing money
upon big estates—all these shifts and tricks just keep the thing
agoing; but come a war, or repeal the Corn Bill, and you will soon see
what is to become of the system. Everything seems strained to its
utmost: and when that is the case, something must soon give way.”

The alleged advantage which the Free-trade party oppose to the obviously calamitous effects of this incessant surrender of the public revenue, and the now admitted abandonment of all attempts to pay off the public debt, is, that commodities have been cheapened thereby, and the weight which oppressed them taken off the springs of industry. We utterly deny this advantage. What is the good of this constant cheapening, when confessedly you cannot cheapen our debts and obligations? Is it anything else but diminishing the funds from which the interest of these debts and obligations is to be discharged, and running the nation into the most imminent hazard of incurring a general bankruptcy, public and private? Do not salaries and incomes fall, from the highest to the lowest, in consequence; and if so, what good does the fall of prices do, even to the individuals who apparently profit by it? Suppose we gained our object, and rendered everything as cheap here as it is in Poland or Norway—what should we gain by it, but that we should speedily become _as poor as them_, and that the realised wealth of this nation, now for the most part invested in situations where its interest is paid by the industry of the people, would be lost by that industry having ceased to receive a sufficient remuneration? And is that an object for which the national security should be endangered, and the means of maintaining our independence destroyed?

In truth,—with the exception of some manufactured articles, such as cotton and calicoes, in which the fall of prices has been prodigious, owing to the successive improvement of the machinery employed in their formation,—we are at a loss to see that this immense remission of indirect taxes, which has evidently been fatal to the national finances, has been attended with the slightest benefit to the country generally. We say the country generally—because there can be no doubt that it has been a very great advantage to the _master-manufacturers engaged in the trades affected by the taxes_, who have, in most cases, contrived to put the whole tax lost to the public into their own pockets. That is the real secret of the remission. Individual selfishness, the thirst for gain, was in most cases the moving spring. The parties interested besieged the Chancellor of the Exchequer with memorials, setting forth the hardships they sustained from the tax affecting their branch of industry, and the immense benefit the _public_ would derive from its abolition; but the public was the very last thing they were really thinking of. It was their own profits to which they were looking; and but for that, they never would have stirred in the matter. The immense fortunes made in many branches of manufactures, during the last quarter of a century, have been in great part owing to the tax remitted having been wholly gained to the master-manufacturers engaged in them. We pay the same now for our shoes and beer as we did thirty years ago, though, since its termination, the whole tax on leather and the war tax on malt have been repealed.

There is no doubt that prices have declined in most articles of consumption to a great degree during the last twenty-five years, and in some to a most extraordinary extent. But where the decline has been great—as, for example, in cottons or calicoes, which are now selling for a fifth of what they cost during the war—it is not owing to the remission of taxation, so much as to the extraordinary perfection to which machinery and the division of labour have been brought. The proof of this is decisive. The fall of price has been fully as great in branches of manufactures in regard to which no remission has taken place, or in a very slight degree, as in those in which it has been most considerable. And in regard to all commodities, the effect of the monetary bills of 1819, 1826, and 1844, must be taken into consideration. Those bills, by contracting the currency to _one half_ of what it previously had been in proportion to the industry and population of the country, have effected a revolution of prices so great, that nearly the whole reduction of the cost of articles prior to the last year is to be ascribed to it. The great organ of the money interest, the _Times_, boasts that recent legislation has doubled the value of the sovereign. Unquestionably it has; and of course it has also doubled the whole debt of the country, public and private. It has turned the national debt of £800,000,000 into £1,600,000,000; it has made the annual taxation of £52,000,000 as burdensome as £100,000,000 would have been during the war. Prices have generally fallen; but it is the contraction of the currency which has done that. As to the remission of taxation, with the exception of a few articles, such as salt and spirits, in which the remission, being very large, was immediately felt by the consumer, the reduction of prices has not been greater than necessarily flowed from the artificial scarcity of money, and would have been the same though no reduction of public duties had taken place. Generally speaking, the tax, lost to the public, has been entirely gained by the master-manufacturer.

Had the system of cheapening, carried into effect by the contraction of the currency on the one hand, and the extensive remission of duties on the other, been attended by beneficial consequences to the people, and resulted in general happiness and prosperity, there would at least have been some set-off against the ruin of our financial prospects which it has occasioned; and we might have consoled ourselves for the evident imposition of the public debt as a hopeless burden upon the nation, by the reflection that at least temporary wellbeing had resulted from the change. Has this been the case? Alas! the fact is just the reverse; and among the many mournful reflections which the present hopeless condition of our finances awakens, it is perhaps the most mournful, that the price paid for it has been, not public happiness, but general and unprecedented misery. In the long and varied annals of English history, there is beyond all question no period which has been marked by such repeated and widespread suffering as the thirty years which have elapsed since the cheapening system was begun, by the contraction of the currency in 1819, and the present time, when it has been carried into full effect by Sir R. Peel’s Free-trade policy in 1846. The three dreadful monetary crises of 1825, 1839, and 1847, followed, as each of them was, by several years of devastation and ruin to the trading classes; the repeated recurrence of agricultural distress, especially from 1832 to 1836, and in 1849; the unheard-of agonies of the Irish famine of 1846, perpetuated by the fall of prices, which rendered agriculture unremunerative over great part of that country,—are some of the leading features of an epoch which will ever be regarded as at once the most momentous and the most disastrous which the British Empire has ever known.

It has left its traces deeply furrowed and for ever marked in English annals. It has produced consequences which will never be forgotten, and to which the historians of future times will point as the turning-point of British story, an eternal warning to future ages. It has produced the Revolution of 1832; disfranchised our whole Colonies; displaced the government of property, talent, and intelligence in the ruling island, and installed that of buying and selling in its stead. It has severed the public policy from the protection of the Land and Native Industry, the real inheritance and only sure patrimony of the nation, and anchored it instead on the shifting quicksands of Commercial Prosperity. It has destroyed the West Indies beyond the possibility of redemption, and spread discontent so widely through our other Colonies, that it is universally known they are all only waiting for some serious disaster to the parent state, or the advent of a protracted and hazardous war, to declare themselves independent. It has rendered every seventh man in Great Britain and Ireland, taken together, a pauper. It has driven from 250,000 to 300,000 industrious citizens, for the last three years, annually into exile from their native land. It has raised the poor-rate in both islands to an unprecedented height, and, when measured by its true standard, the price of subsistence to double what it ever was before. It has implanted the seeds of ruin in our Mercantile Navy, by the rapid growth of foreign shipping as compared with British in carrying on our own trade. It has rendered our shores defenceless as they were in the days of the Saxon Heptarchy; and made one of our first admirals, Sir Charles Napier, thankful when the winter frosts closed the Baltic harbours, and secured our capital from the insulting visits of the successors of the sea-kings of the north. It has rendered our means of raising a revenue so hopeless, that the “greatest bill-broker in the world,” Mr Gurney, has declared that we must end in national bankruptcy; and the leader of the Free-traders himself, Mr Cobden, has publicly said that there is no resource but to disband our troops, sell our ships of war, and trust the national security to the justice and moderation of our enemies, and the total absence of envy in our rivals. Such, and not public and passing felicity, is the price which the nation has paid for the ruin of its finances, the abandonment of the sinking-fund, and the imposing of the public debt _for ever_, as a burden, hopeless of redemption, on the country.

The destruction of property which has taken place in the British Empire during the thirty years that this cheapening process was going on, exceeds probably anything recorded during a similar period in the annals of mankind. It has much exceeded all that was produced by the confiscations of the Convention, or the devastation of the wars of Napoleon. Each of the three great monetary crises of 1825, 1839, and 1847, occasioned the destruction at once of two or three hundred millions worth of mercantile property, and halved the fortunes of persons to double that extent. The intervals between them were, with the exception of a few brief gleams of perilous prosperity, periods of anxiety, gloom, and depression, during which all persons engaged in business, with the exception of the great capitalists, who were daily getting richer, found their property melting away under the ceaseless and progressive fall of prices. It was exactly the obverse of the vast impulse given to industry over the whole world by the discovery of the mines of Mexico and Peru, and the consequent rise of prices which everywhere ensued. One class, and one only, flourished amidst the general distress; but, unfortunately, in that class the government of the nation for the time was vested, viz., the _moneyed interest_. So immensely had this interest grown under the protective policy of the preceding hundred and fifty years, that it was able to set all other interests in the State at defiance, and to pursue the system of making the sovereign worth two sovereigns, despite the evident ruin which that system was bringing on all the industrious classes in the state. Future ages will ask what were the devastating wars, the stunning calamities, the loss of provinces, the severance of colonies, which inflicted such deep and irremediable wounds on the British nation during these memorable periods? and they will be answered, it was thirty years of unbroken peace at home, a series of brilliant colonial conquests abroad, and ONE SYSTEM.

But that one system was amply sufficient to break down the most wisely-conceived system of finance, to ruin the most flourishing revenue, to render beggarly the richest nation, to destroy the greatest empire. It is the system, originating with the Roman empire, as a necessary and just consequence of its universal conquest, of universal free-trade—a system which ruined the empire. It is the more dangerous that it recommends itself to the people in the first instance by the alluring prospect of cheapening everything, of making money daily go farther, rendering every one apparently richer and more comfortable than he was before. It is readily adopted by the shopkeeping and trading class, because it enables them, in the first instance, to purchase the goods at a less cost; forgetting that if they buy cheap they must also sell cheap, and that their customers’ means of payment are melting away from the effects of that very cheapness. It is long, however, before this truth, how obvious soever, is generally understood. It is by slow degrees, and after much suffering only, that it is discovered that this system of general cheapening does not stop short with people’s _expenditure_; that it speedily comes to affect their _incomes_ also, and that in a still greater degree; that, if shopkeepers buy cheap, they must sell little or sell cheap also; that wages must fall with the decline in the price of commodities; and that the last condition of the people is worse than the first. But while this great and eternal truth is in the course of being brought home to the nation by suffering, the national pre-eminence is lost, the national security is endangered, the national spirit is weakened. Multitudes become desperate in regard to their own and their country’s fortunes, from the scenes of suffering and distress which they perpetually see around them; the selfish feelings acquire a fatal preponderance, from the general experienced impossibility of indulging in the generous. Meanwhile the national income melts away under the effects of the general cheapening of the remuneration of industry—all steady or foreseeing system of finance is abandoned, and every successive Government, like a needy spendthrift, deems itself happy if it can get through the year without a financial crisis, never bestowing a thought on the future, either as regards the national security, its finances, or its means of defence.

One memorable instance of the way in which, under the cheapening system, the public revenue has been recklessly and needlessly thrown away, is to be found in the Penny Postage. It is well known that, prior to the change, the Post-office income, after paying _the whole charges of the Packet Service_, yielded a clear surplus revenue to the nation of £1,500,000 or £1,600,000 a-year. The postage of letters, however, was decidedly too high; a reduction was loudly called for by the public; and, if cautiously and judiciously applied, the increase of letters might have compensated the reduction of rates of postage, and a boon have been conceded to the community, without any detriment to the public service. A uniform 2d. or 3d., or even 4d., postage would have been hailed with unmixed satisfaction by the people, who had been paying 10d. or 1s. for their letters, and no material diminution of that important branch of the revenue experienced. Instead of this, what did the Government, urged on by the cheapening party, actually do? Why, they reduced the postage at once to a penny for all letters, from all distances within the two islands. We were told, that not only would there be no loss, but a certain gain, after a few years had elapsed, from the vast and certain increase in the number of letters that would be transmitted. How have these expectations been realised? The revenue set down as coming from the Post-office, immediately after the change, was only £500,000 or £600,000 a-year; and, after having been nine years in operation, it has only risen, in the year ending 5th April 1850, to £803,000; much less than half of what it would have been under the former system, when the increased population and transactions of the country are taken into consideration, if either the old rates had been continued, or a reasonable reduction to 2d. or 3d. had taken place. It is to the embarrassment produced by this great defalcation that we are mainly indebted for the renewal of the income-tax.

But this defalcation, great and serious as it thus appears on the face of the public accounts, was little more than _a half_ of what really occurred in consequence of the change. To conceal the effects of this great innovation, the Free-trading party, who had now got entire possession of the Government, had the address both to get the expense of the Packet Service, _previously borne by the Post-office, thrown upon the Navy_, and to keep that important change a secret among the Government officials. In this way a double object was gained. The disastrous effect of the reduction was kept out of view, and the increased charges of the Navy afforded a plausible ground for demagogues to assail the Government for alleged extravagance in that department. But that which one demagogue had done, another demagogue brought to light. Mr Cobden made so violent a clamour about the increase of expenditure in the Navy since 1835, when it had been reduced, under the pressure of the Reform mania, to its lowest point, that the Admiralty, in their own defence, let out the important fact, that, since the penny-postage system began, they had been saddled with the whole cost of the Packet Service, which they never had been before; and, in the debate on the Estimates, Lord John Russell stated that this cost now amounted to £737,000 a-year. Thus the real Post-office accounts stand thus:—

Apparent surplus for year ending 5th April 1850, £803,000
Deduct cost of Packet Service, thrown on Navy, 737,000
————————
Real Post-office revenue, £66,000

And it has been raised to this level only during a year of extraordinary manufacturing activity, when our exports turned £60,000,000. On the whole, since the postage was reduced in 1841, the Post-office has not yielded a farthing to the country, but, on the contrary, has occasioned a loss of some hundred thousand pounds.

We have heard enough from the Free-traders of the disasters which accumulated on the year 1848, and commencement of 1849, when a monetary crisis, the Irish famine, the European revolution, the Irish rebellion, and the Chartist sedition, combined to reduce the revenue to an unprecedented degree. We have heard enough, also, of the unexampled prosperity of the year 1849, when these extraneous disasters had ceased, and the blessings of Free-trade and the cheapening system were still in undiminished lustre. Be it so. Let us compare the public revenue of this year of unprecedented disaster with that obtained in the next year of unexampled prosperity, as appearing from the finance accounts of April 5, 1850:—

Year ending Year ending
5th April 1849. 5th April 1850.
Ordinary revenue, £48,490,002 £48,643,042
China money, 84,284
Imprest and other monies, 665,293 656,855
Repayment of advances, 427,761 553,349
——————————— ———————————
£49,667,430 £49,853,246
49,853,246
———————————
Increase in 1849, £185,816
—_Times_, April 1850.

So that the increase in a year of extraordinary and unprecedented prosperity, as we are told, over one of unexampled and overwhelming suffering, is _only_ £185,000, for £128,000 of which we are indebted to an excess in the repayment of advances in 1849 over 1848. We care not to what this extraordinary fact is to be ascribed, whether reduction of duties, the continuance of distress, or any other cause. We rest on the fact that Free-trade finance and the cheapening system have brought the revenue of the country, _in a year of what the Free-traders call its highest prosperity, to a level with what it had been in a year of its greatest adversity_. History cannot, and will not, overlook these facts. The leaders of the Free-traders say they live for posthumous fame. Let them not be afraid. Posterity will do them full justice.

The financial problem of the Free-traders is—“Given a cheapened nation, to extract an adequate revenue out of their unremunerated industry.” We recommend this problem to the study of the Free-trading Chancellor of the Exchequer. If he solve it, we shall assign him a place superior to Archimedes in physical—to Bacon in political science.

What a contrast to this mournful decay of the national resources, and ruin of the national strength, from the effects of a theory acted upon by the Legislature under the influence of a class majority in Parliament, would a truly catholic and national policy, protective alike to all interests, have afforded! An adequate but not redundant currency, cautiously administered, and relieved from the fatal liability to abstraction from a great increase of imports in any particular year, would at once have afforded free scope to national industry, and avoided the frightful vicissitudes in the demand for labour, which the opposite system of making the currency entirely dependent on the most evanescent of earthly things—gold—of necessity occasioned. The terrible monetary crises of 1825, 1839, and 1847, would have been unfelt. They would have been surmounted, as that of 1810 had been, by an extended issue of paper when the gold was for a time abstracted, without their existence being known to the nation. Industry, protected in every department by adequate but not oppressive fiscal duties, would have generally and steadily flourished. Periods of extravagant speculation and exorbitant wages, followed by commercial depression and general suffering, would have been unknown. The national revenues, sustained by an adequate currency and unbroken industry, would have afforded an ample surplus to Government, both for the public service and the promotion of objects of general utility, after providing for the maintenance of the sinking-fund. Emigration, supported, so far as the destitute are concerned, by the Government resources, and conducted in Government vessels, would have poured a ceaseless and prolific stream into the Colonies, at once vivifying their industry, and converting the paupers of England and Ireland into consumers of our manufactures, at the rate of six or seven pounds a-head per annum. Pauperism at home, relieved in the classes where it originates by this wise and paternal policy, would have been arrested. Crime itself would have been made to minister to the general good: the jails of Great Britain would have been converted into industrial academies for behoof of the Colonies. The industry of the Colonies, encouraged by the protective policy of the mother country, and supported by the ceaseless streams of its emigration, would have advanced with rapid strides, and afforded a rising and inexhaustible mart for domestic manufactures. The ocean would have become a British lake: the navy of England, the floating bridge which at once united and protected its distant dependencies.

Colonial discontent would have been unknown. The West Indies, Canada, and Australia, would have been the most loyal and contented, because the most flourishing and justly governed parts of the Empire. The foreign trade of the world would have been to the British Empire what Adam Smith justly called the most profitable of all trades, a home trade. We should have raised the raw material for all our staple branches of industry within ourselves; wool from Australia, cotton from the East and West Indies, grain from the British isles and Canada. Agriculture at home and abroad would have advanced abreast of manufactures; commerce and shipping would have risen with the increase of their productions; the Navy, fed by an ample and protected commercial marine, and sustained at an adequate amount by a well-filled treasury, would have secured our independence, and enabled us to attend to the interests and anticipate the wants of our remotest dependencies. We should have been alike independent of foreign nations for the materials of pacific industry, and superior to them in warlike resources. Great Britain, though grey in years of renown, would have retained for centuries the vigour of youth, because she would have been continually renovated by the energy of her descendants. The paternal hall would have been constantly cheerful and happy, because it would have been always filled with children and grandchildren, or enlivened by their exploits. Amidst general prosperity and unceasing progress, the National Debt—constantly encroached on by a sustained sinking-fund—would have disappeared. Before this time it would have been all extinguished; and the taxation of the Empire, reduced to £30,000,000 or £35,000,000 a-year, would have enabled us for ever to maintain the national armaments on such a scale as would have qualified us to bid defiance alike to the covert encroachments of our rivals, or the open hostility of our enemies. Under the opposite or cheapening system, the public debt has, on the admission of its ablest supporters, been virtually doubled; the sinking-fund has, amidst general and almost constant distress, disappeared; Colonial discontent threatens the Empire with dismemberment; agricultural distress will speedily render it dependent for its daily bread on its enemies; and the maintenance of the national independence, if the present system is persisted in, has been rendered, for any length of time, impossible.

GREECE AGAIN.

“If, Cassandra-like, amidst the din
Of conflict none will hear, or, hearing, heed
This voice from out the wilderness, the sin
Be theirs, and my own feelings be my meed.”
_Prophecy of Dante._

Greece is a most unfortunate country. She has only escaped the Turks to be plundered by her rulers and ruined by her protectors. Seventeen years ago, Lord Palmerston placed King Otho on his throne; he has since been occupied in making that throne an uneasy seat. King Otho refuses to answer Lord Palmerston’s letters; in revenge, Great Britain ruins a number of Greek shipowners, and leaves the Greek ministers unpunished. The Duke of Wellington has said that he never bombarded a town, and never saw the necessity for committing such an act of cruelty; and the saying does him even more honour than his long career of victory. We had hoped that no Englishman would ever have forgotten this saying; yet Lord Palmerston bombards the merchants of Greece for the faults of King Otho’s ministers. We are irresistibly reminded, by this last display of our Foreign Secretary’s warlike propensities, of Mr Winkle’s fight with the small boy.

Though much has been written on the subject of this quarrel, both at home and on the Continent, no clear statement of the exact relations between England and Greece has been published; nor can it be gathered even from the papers recently laid before Parliament.[1] We believe, therefore, that our readers will thank us for devoting a few pages to a serious examination of the political relations between the two countries, which will tend to place the recent coercive measures in their true light. This is the more necessary, because Ministers, both in debates and Parliamentary papers, have it in their power to conceal everything relating to the past; and the Opposition must hunt long before they can spring a single truth in the thickets of official deception. A view of the subject, under the guidance of truth and common sense, free both from party views and national prejudices, has been rendered necessary by the speech of Mr Piscatory, the late French Minister in Greece. The spoken pamphlet of Mr Piscatory was prepared with considerable skill; but it communicates hardly a single fact that has not been perverted by being removed from its true context, or by having only half its concomitant circumstances narrated. Indeed, Mr Piscatory having been bellows-blower in the disputes between Sir E. Lyons, the English envoy at Athens, and King Otho’s ministers, for four years, is not a famous witness; he has his own secrets to conceal. His oratorical display did not impose on the good sense of General Cavaignac, who parodied Sylla’s speech to a wordy Athenian ambassador, by hinting to the French ex-minister plenipotentiary, “that it seemed France had sent him to Athens to study rhetoric, not to collect information.”