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millions, its amount at the end of the war. This plan, therefore, of equalizing the Income and Expenditure, has, in point of fact, proved, like the Sinking Fund, to be a great delusion. It was, no doubt, eminently successful in supplying the Exchequer with money, and in enabling Government to go on without difficulty in providing for the expenses of the war; but it has probably contributed, more than any other measure, to promote that waste of our treasure which has involved us in our present difficulties.
Although the Bank Restriction had originally no other object than to relieve a temporary pressure on the Bank,--from the moment that this pressuré ceased, it became a mére financial measure to assist ministers in carrying on the war. On each renewal of the Restriction act, the public were told how many benefits the nation had derived from substituting paper for cash; how much our trade, manufactures, agriculture and revenue, had been increased by the aid of Bank discounts; what gigantic efforts we had been enabled to make in carrying on the war with vigour; and how utterly impossible it was that the nation could ever suffer any ultimate inconvenience from the most extended use of paper money.
But if we look calmly at the events which have actually happened, we shall find the benefits of the Paper system rather more questionable even than those of the Sinking Fund and the War Duties. We have experienced, in the course of the last eight years, three periods of universal distress, viz. the years 1812, 1816, and 1819; and although many circumstances may have concurred to produce it, there can be no doubt that the general practice of overtrading, which was the natural consequence of the paper system, has been the main cause of that glut of goods, and also of labour, in the market, which has occasioned the fall of prices and of wages, which is at the root of our present distress. Another great evil of the system has been the necessity in which it has placed us of paying many millions of debt at the rate of 20s. in the pound, though no more than 15s. or 16s. were received from the lenders. A still greater evil 'has been, that mass of manufacturing population which it has forced into existence, beyond the means of the country, when it shall be restored to a healthy state of currency and capital, to provide with employment. The measures adopted by Parliament in the last Session, for the gradual resumption of cash payments, has arrested, we trust, the growing evils that threatened us from this prolific source. But, like other remedies that have been too long delayed, there is Feason to fear that some additional suffering may be the con
sequence of its first application ;-and it is at this moment a question of infinite importance, whether the taxes are likely to yield the same, or any thing like the same revenue, with a currency of the legal value, that they have yielded, up to this time, with one so greatly depreciated. For our own part, we cannot help apprehending that prices must still come down much lower than they now are; in which case, we take it to be pretty obvious, that a great falling off in the Revenue will necessarily follow. It appears from tables of prices, of the best authority, that, from about the year 1636, when the discovery of the American mines had produced their full effect on the value of the precious metals, up to the year 1797, when the Bank Restriction took place, little or no change had occurred in the value of the precious metals, or in the general prices of commodities. The price of the quarter of wheat, of 9 bushels, from 1636 to 1701, was 5ls. 13d.;--from 1700 to 1765, 40s. 6d. ; *-from 1764 to 1794, the quarter of 8 bushels was 44s. 7d. + The following prices of other things, for the period from 1728 to 1798, are taken from the Appendix to the Lords' Bank Report. Those items have been selected which are the least affected by direct taxation.
D. Flesh per cwt. was
1 Bricklayers' wages per day 2 6 Butter per lib. 05 Masons' ditto
2 8 Cheese
2 10 It is worthy to be remarked, that the price of the quartern }oaf, previous tó 1797, varied from 4d. to 6d. ;-and
few instances had occurred of its having exceeded the latter sum.
Now, let us see what have been the prices, since 1797, of the same commodities.
For eight years, from 1797 to 1805, the quarter of wheat was 73s. 6d. ; from 1804 to 1813, 88s. 11d.; and the general average price of the whole period, from 1797 to 1819, has been $4s. Sd.
Flesh per cwt, for this
Bricklayers' wages per period, has been
day Butter per lib. 1 0} Masons' ditto
5 2 Cheese ditto 7 Plumbers' ditto
5 2 If the prices of a hundred, or a thousand other commodities, were taken, it would be found that they had all of them ad
* Wealth of Nations, I. 358.
Lords' Bank Report.
vanced in the same ratio; and the comparison gives this general result, that the prices of the last 22 years have exceeded those of the preceding 161 years by about 100 per cent.
From this state of things, the two following questions arise; first, What have been the causes of this great rise ? and, second, What grounds are there for supposing, that these new and high prices will revert to the old rates, which had continued, without any great interruption, for so many years previous to 1797 ?
To the first question it may be answered, That the rise of prices, since 1797, has been occasioned, 1st, by taxation; 2dly, by an increasing demand for commodities, arising from the increasing wages of labour, giving the people the means of paying larger sums for what they desired to have; 3dly, by a depreciation of the currency. To the second question it will be safe to reply, That prices will fall, or remain high, in proportion as these three causes cease or continue to operate in time to come. Now, the effect of depreciation has in a great measure ceased, and also the effect of the high wages of labour; therefore, taxation alone remains as a permanent cause to keep them high. If we could exactly ascertain in what proportion each of these three causes operated originally to produce the rise, we should have no great difficulty in determining, now, how far prices will still fall; but as we have no data for such an equation, we shall content ourselves with saying, that, in our apprehension, the restoration of a metallic currency will have a greater effect in producing such a fall than has generally been imagined, or may seem proportionate to the estimated amount of the depreciation. To account for this, we must beg leave to remind our readers, that about the same time that this country had recourse to a paper money, it appears, from the evidence before the Bank Committees, that all Europe and North America did exactly the same thing; and that, in this way, a prodigious quantity of gold was thrown into the bullion market. It is generally supposed that 30 millions of gold was withdrawn from circulation in this country alone; and as this great supply occurred at the time when ihe demand for gold to be made into coin had nearly ceased, it must be presumed that a considerable fall in its real value must have been the consequence; in which case, our bank paper must not only have been of less value than in 1797, by the amount of its depreciation below the value of gold, but also by the diminution which had actually taken place in that of gold itself. But it also appears, from the evidence already referred to, that other countries are, at this very time, tracing back their steps, as well as ourselves from a paper to a metallic currency; and therefore, it can scarcely fail to follow, that the demand for gold will be greatly increased, and that its value will rise, in all probability, up to its original levels the consequence of which must be, a still further depression of prices, and an increased difficulty in paying the numerical amount of our great permanent taxation.
Having thus cursorily examined the three great finance measures of the war, which served each, for its day, to persuade the public that the resources of the country were inexhaustible, we shall proceed to compare the actual state of those resources with their condition at the beginning of that war in 1793. And here we are exempted from any risk of error, by being enabled to refer throughout to the successive Reports of two Committees of the House of Commons, on the State of the Income and Expenditure. First, then, as to the public Income, it appears, from the Report of 1791, that the Permanent Taxes, at that time, produced 13,472,286l, and that the annual taxes produced 2,558,0001.; making the whole of the income of 1790 16,030,2861.+ And now it appears, from the 1st Report of the Committee of Finance of the last Session, that the total income of Great Britain, excluding Ireland, in 1818, was 48,982,9601.: So that the taxes are now greater than they were in 1791, by 32,952,6741., or something more than two-thirds. Secondly, in respect to the Public Expenditure, the comparison appears from the following statement, taken from the same Reports, to stand thus
1790. Interest and charges of the public
debt, including the annual mil- L. 10,317,972 L.44,940,834
lion for the sinking fund Unfunded debt
260,000 2,000,000 Civil list
898,000 1,190,692 Other charges on the consolidated fund
105,385 1,269,274 Navy
2,000,000 6,436,781 Army, including Militia
1,844,153 8,900,000 Ordnance
375,000 1,191,000 Miscellaneous services, including
168,668 1,851,301 appropriated duties
+ Calculated upon the average produce of the last three years, and exclusive of any additional, allowance for the Teas imported in 1789, or for the increase upon Tobacco.
From this statement it appears, that the annual charge for the Funded and Unfunded debt is greater now, than it was in 1790, by 36,362,8621.; and that the Peace establishment for the army, navy, ordnance, and miscellaneous services for 1819, exceeds that for 1790 by 13,991,2611. Thirdly, and lastly, as to the Public Debt, it will be found, by reference to official documents, that in the year 1792, the whole debt was 238,231,218l.; and that it amounted, excluding Ireland, to 700,000,0001. at the beginning of last year.
The following may be considered as an accurate exposition of the actual state of our income and expenditure at the commencement of 1819. The total income of the United Kingdom for this year, taking the produce of the taxes as in 1818, would be For Great Britain
L 54,061,937 € Which sum, set against the expenditure of 67,779,8821., makes the Deficiency of the income 13,725,945l. for the year 1819.
In this state of things, the Chancellor of the Exchequer, in the course of last Session, proposed the three following resolutions to the House of Commons. * • 1. That the existing re• venue applicable to the supplies, cannot be estimated at more • than 7,000,000l., leaving the sum of 13,500,000. to be rais
ed by loan, or other extraordinary resources. 2. That the sink. ing fund applicable to the reduction of the national debt, in the 6
present year, may be estimated at about 15,500,0001.; exceeding the above sum necessary to be raised for the service of the * year, by about 2,000,0001. only. 3. That to provide for the
exigencies of the public service, to make such progressive re• duction of the national debt, as may adequately support pub
lic credit, and to afford to the country a prospect of future re• lief from a part of its present burthens, it is absolutely necessary that there should be a clear surplus of the income of the country, beyond the expenditure, of not less than 5,000,0001.: and that, with the view to the attainment of this most important object, it is expedient now to increase the income of the
+ 'Ist Report, Committee of Firiance, 1819
Debates, Vol. XL. p. 915.