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with the spread of luxury and the upon the commercial classes, and growth of the population.

hurry them into ruin. This is a These are considerations for the very bold assumption. A theory Government and for the general which supposes insanity on the community. All that our trading part of the shrewdest and most classes have to think of is to ex- practical portion of the community tend their operations, and to do so certainly lacks, a priori, the air of in as profitable a manner as they probability. That, to the parties can. But they have apprehensions who hold this theory, our commerof their own-perils which primari- cial classes seem to perform acts of ly affect themselves, although the insanity periodically, may be true; whole community ultimately suffers but may not the appearance of inalong with them. The present sanity arise from the acts being year has been commercially pros- viewed through a wrong medium? perous almost beyond example: Suppose a person, walking up and yet shadows, as if of coming ca- down in front of our windows, lamity, have ever and anon flitted always as he passed a particular across the sunny scene, and ever pane of glass appeared to us to be and anon our commercial classes grimacing; would it not be sane have been filled with forebodings. on our part, before questioning his The City of Gold has been trou- sanity, to look whether there were bled. In Tennysonian phrase, “its not a flaw in the glass, which made dreams are bad.” The ease with him appear to be grimacing, when which evil reports find currency is in truth he was walking as soberly symptomatic of the prevailing ner- as usual? The first question, then, vousness. Only a week or two ago which naturally suggests itself is,

-in the beginning of September- Is it the fact that the commercial there was a panic on 'Change. The classes of the United Kingdom do failure of several extensive firms was actually, and in a manner suicidal said to be impending, and the money for themselves, go mad every ten market was seriously affected. The years or is there not something, alarming report was without foun- in the circumstances of the country, dation ; in part, at least, it is be- which at certain periods gives to lieved to have been set afloat by their operations a semblance of some unscrupulous jobbers who recklessness, when in reality they were “bearing" the market. But have no such character ? Before the panic which occurred serves to charging the whole commercial and show that the trading community manufacturing classes with fits of is by no means at its ease. Evil insanity in over-trading, we think which all men expect, says the pro- it right to ascertain whether there verb, never comes,-all men being be not some element in the case on the alert to prevent it. Let us which their libellers have overhope that such will be the issue in looked, and a consideration of the present case. But at the same which may place their conduct in time let us see what are the dangers a very different light. to which our trade is exposed.

“ Over-trading" is a charge of It is a common saying, in some recent date. The crisis of 1857 quarters, that the commercial classes was the first occasion on which in this country go mad every ten it was heard. Previous to that, years. The great crisis of 1825 was another cry had been in vogue to followed by the minor crises of account for the recurrence of com1837 and '39, these by the crisis of mercial crises. They were attri1847, and that in turn by the grand buted to "over-issues." That was crash in 1857. Periodical insanity the current theory from the beginis alleged to be the cause of these ning of the century down to 1844. calamities. An ever-recurring mania Even in 1847 the old cry was heard for over-trading is believed to seize in certain quarters, and the Bank was blamed for not having “con- all? Certainly, so far as regards tracted its issues”-i.e., reduced the the value of money on loan, instead amount of its notes in circulation. of depreciation, there has been a But that was the last of it. The most notable increase. theory would not hold water, and After the passing of the Act of it was abandoned. Facts were too 1844 these much-dreaded over-issues strong for it, and it became explod- were held to be no longer possible. ed. Judging by the light of subse- Moreover, attention having been quent experience, it seems marvel- given to the subject, it by-and-by lous that the theory kept its ground came to be seen that the importance so long. From the time of the Bul- which had been attached to fluctualion Committee downwards, “over- tions in the amount of the Bank's issues” was the bugbear which con- circulation was quite groundless. stantly haunted the imagination of The old cry was abandoned before our currency-doctors, and influenced 1857, and no one dreamt of revivall ourlegislation on monetary affairs. ing it when the great monetary crisis Notably, it was the cause of the of that year occurred. But if the Bank Acts of 1844-5. The increase Bank Act had rendered our moneof the circulation by a million ster- tary system perfect, what explanaling or so was thought capable of tion was to be given of this new producing the most momentous con- calamity! Then it was that the sequences. It “ depreciated” the theory of “over-trading" was procurrency, and was the parent of our pounded, and it has become as recurrent monetary crises. The current as the cry of“ overupholders of the theory, it is true, issues” used to be. The old cry never condescended to establish it has become exploded,has the new by a reference to facts. They never one any better basis of support ? demonstrated that in any case the It does not matter with what currency was depreciated, nor did parties the cry originated—we need they show how such depreciation not speculate whether it was the operated in producing our mone- result of an honest belief, or whether tary crises. They could not with it was adopted as a convenient reason maintain that the converti- means of shielding from scrutiny bility or value of our notes was im- our present currency-laws. All that paired,- for after the Act of 1819, we have to concern ourselves with every one who mistrusted the notes is, Is it true? could take them to the Bank and What has been may, and, if not get gold for them; and it is ab- guarded against, will occur again. surd to suppose that the public, If over-trading were the cause of with this option open to them, the terrible calamity of 1857, the would keep the notes in circulation more fully the fact is investigated if they did not maintain their full and exposed the better. If it were value in relation to gold. But not, then the sooner we disabuse “over-issues” was the cry of the ourselves of the idea, the sooner we day; a depreciation of the currency shall be in a position to discover was believed to follow every little the real cause of our commercial increase in the Bank's circulation, disasters. We must get off the and to occasion all our embarrass- wrong scent before we can find ments. The difficulty is to imagine the right one. The question is of how such a theory ever originated. momentous importance to the welWhat are we to think of it now, fare of our trade, and should be put when, with an addition of 300 beyond the influence of haphazard millions sterling of the precious conjectures. In so matter-of-fact a metals to the world's currency, it is department as trade and commerce, still doubted by many authorities it behoves one to eschew mere aswhether there has been any depre- sertions and vague generalities. In ciation of the value of money at commercial matters, above all things, let us have precision. Now, if over the sound and prosperous character trading were the cause of the dis- of British trade. “That this counasters of 1857, what was the amount try is intrinsically better off, as reof it, and when did it begin? In gards its obligations and financial the summer of that year—as every position," it said, “there can be one will remember who gives atten- no doubt." In another editorial artion to commercial subjects—all ticle in the same number upon our parties were agreed as to the sound- Imports, it was remarked, that one ness and prosperous condition of of the great sources of loss which our trade; and not a whisper was have attended former periods of heard of credit being overstrained commercial pressure, has been the to support it. Not only the mer- large accumulation of foreign procantile classes, but our most cool ducts in our warehouses-the conand observant economists held and sequence of extensive and improvi. expressed this opinion. How was dent importations, stimulated by it, then, that the trade which was bigh prices, and the necessary renot felt to be excessive in the action which took place at such summer, broke down so utterly at times ;” but that “this cannot be the end of autumn? How was it said, at the present time, of any of that the credit-system of the country, the chief raw materials, if we exwhich supported that trade buoy- cept the single one of silk.” Again, antly and prosperously in July and in a leader upon our Exports, in the August, proved utterly unable to same number, the editor put and sustain it in November ? Mani- answered the following decisive festly, in that short interval, there questions :-“Is there any evidence must have been a great change that the export trade of this couneither Trade must have experienced try during the last year has been a great expansion, or Credit must of a forced character ? Has there have become suddenly enfeebled. been any glut in the home market, Which of these things was it which either of raw materials or of manuhappened? In the altered relations factured goods, which could have between Trade and Credit, which led to such a trade? Has there not, caused trading to become or appear on the contrary, been a great scarover-trading, was it on the side of city of raw materials and a continuTrade or on the side of Credit that ally rising price, caused by an exthe alteration took place ? In the tending demand ? The mere fact brief period that intervened be that failures have taken place in tween the height of our prosperity the United States, which have led and the depth of our adversity, was to heavy losses in this country, in it Trade that extended itself, or no way affects the general arguCredit that became crippled ? - ment-unless it can be shown that

The storm came upon us from those failures have been caused by America : but when it was seen losses directly resulting from the raging on the other side of the At- imports from this country. No lantic, the journals which are the such proof exists. On the contrary," most observant critics of commer- &c. And in the same article, as if cial affairs — the Times' and the the real soundness of our trade 'Economist'-were unhesitating in could not be too often or too extheir assertions that a similar disas- plicitly stated, it was said :-“Unter would not extend to this country, like the crisis of 1847, we have in so firm and healthy was the condi- the present year, in common with tion of our trade. So late as the all Europe and the United States, 7th November, after several large instead of scarcity and famine, one failures had occurred - including of the most abundant harvests ever the exceptionally bad ones of Mac- known; and, unlike the crisis of donald and Monteith in Glasgow 1847, when we had obligations to the 'Economist' continued to reiter- the extent of more than £150,000,000 ate unhesitatingly its testimony to in the shape of railway-calls impending over the country, our com- of the latter which occasioned the mercial classes are now more free failure of the former. The cause from such demands upon their re- of the crisis of 1857 was not bad sources than they have been for trade, but a defective currency-law. many years."

It was not the fault of our comThese are weighty statements. merce, but of our monetary system. Here is a writer-a recognised au- After the crisis had done its work, thority-carefully considering the indeed, the impression became genwhole subject, and speaking with eral that our commerce had been all the official returns and private running wild ; and the numerous trade-circulars before him. Here is a bankruptcies and suspensions were man who, in the presence of a great appealed to as showing that such danger, anxiously scans all parts must have been the case. This was of our position, to see if there are an ex post facto argument of a most any weak points, and can find none. inconsequential kind. That thirty Again and again, the Times' ex- thousand soldiers died in a week's pressed a similar opinion. For ex- time--that week having witnessample, on the 9th October, when ed a battle- is certainly no proof the Bank began to raise the rate of that the army to which they bediscount, the leading journal in its longed was in a frightfully bad City article remarked : “As regards sanitary condition. Doubtless the the broad trade of the empire, it is ailing soldiers of an army are sure impossible to discern the cause of to be knocked over in a hand-tofear. Month by month our com- hand fight, but the proportion of mercial payments increase in mag- such cases is insignificant; and nitude, and yet are met with a thousands more perish who, but for punctuality never surpassed. All the battle, might have lived in the leading bankers will testify health and strength for the natural that thus far there is an absence term of existence. The country even of those premonitory symp- knows to its cost that the failures toms which invariably warn them and suspensions in 1857 were disof the possibility of a coming astrously numerous ; but the quesstruggle, long before the commun- tion remains, What was the cause ity at large have become awakened of them ? to it. Hence the belief may be The supporters of the cry of overconfidently indulged that, although trading founded their charge against with our universally diffused trans- the commercial classes on the fact actions we must necessarily parti. that the export trade in 1857 was cipate in every shock that occurs greater than it had ever been before. elsewhere, our commercial prosper- It had increased six millions above ity is destined still to continue a the highest amount in any previous marvel to the world.” The Times' year. True, in some of the previous and Economist' were right in years, there had been an increase these statements as to the sound- not only as great, but three times ness of our trade. What, then, greater. That was undeniable: but, caused their anticipations to be so said the supporters of the overlamentably falsified by the issue? trading theory, that does not Instead of remaining “a marvel to matter: it is now obvious that our the world," what caused our trade merchants and manufacturers have to break down utterly, covering carried trade beyond the limits the country with wrecks and mis- which the capital of the country ery? The Times' and 'Econo- can support. The amount of the mist' erred in their calculations increase on the year may have been simply because they looked only only six millions, but these six to the state of trade, and overlook- millions have been an excess. Anexed the effect which the American port-trade of 122 millions, they said, panic would produce upon our mo- is a forced and inflated trade, benetary system. It was the failure yond the requirements of the world, and greater than our accumulated and a half millions greater than in wealth can support. And when the 1857. Yet no crisis came : the exports fell-in consequence of the country was eminently prosperous, crisis, and of the stagnation of trade and every one rejoiced in the marwhich followed—they appealed to vellous expansion of our industry this fact as a proof of the justice of and enterprise. Even the terrible their opinion, and said that this cotton - dearth failed to reduce reduction in the amount of exports our exports to their amount in was simply owing to the country 1857; and if any such reduction having returned to its normal were to take place, it would justly amount of trade and of production. be regarded as one of the greatest For the time, they had it all their calamities which could befall us. own way. No one could bring A steady increase of trade on the positive proof that they were wrong. part of this country is what may It might be—though it was not naturally be expected, and is much probable—that British trade had to be desired. In truth, if we conreached and temporarily exceeded sider the annual increase of our the maximum which the require- wealth and of our population, and ments of the world permitted. But the increasing facilities for trade even if this had been the case, it was with other countries, it will be evicertainly unfair and ungenerous so dent that when the Board of Trade bitterly to taunt the commercial returns are no greater for one year classes, in the midst of their dis- than for its predecessor, such a fact asters, with recklessness and in- indicates not merely that we are sanity, merely because they had not gaining ground, but that we are exceeded a limit which-supposing losing it. When the amount of it had existence could not possibly labour in this country is annually be discovered save by actual ex- increasing, and better markets are perience.

being opened for the produce of But what is to be thought of such that labour, it is alike unnatural an allegation now? Actual expe- and unfortunate if our exports do rience has been acquired, and what not likewise show an annual indoes it show? Look back at the crement. column of “our Nilometer," which Although the “excess" of exwe give on a previous page, and see ports shown by the Board of Trade how insignificant was the increase of returns was the chief ground upon trade which was thought to be “reck- which the charge of over-trading less overtrading," and the cause was brought against the commercial of all our calamities, seven years classes in 1857, another circumago. Such an increase appears a stance, peculiar to the times, contribagatelle, and the ill-fated year, as buted notably to make the charge figured in the returns of its trade, popular with the general public. is passed over by the eye as a very This was the publicity then for the ordinaryone. Despite the limit first time given to the examination which theorisers assigned to it as of bankrupts. Failures, which preits ne plus ultra, British trade has viously would have passed unnoticed continued to increase, and to an ex- by the public, then began to be retent which throws all former years ported in full detail in the newspainto the shade. No sooner was the pers, and became the subject of conyear of stagnation, which necessar- versation in every city and marketily followed the crisis of 1857, at an place in the kingdom. Scandal-lovend, than trade not only resumed ers delighted to recount the extravaits old rate of progression, but be- gance of the bankrupt in his wines, gan to exceed it. In 1859 the ex- furniture, and housekeeping,-how ports were eight and a half millions much went to keep up his dog-cart, greater than those of 1857; in 1860 and how much was lavished on his they were fourteen millions greater; mistress ; while men of business and last year they were twenty-four dilated upon the nature and extent

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