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probably impelling thousands. Confident in his own good fortune, the adventurer leaves a business to which he had been bred, and with which he was well acquainted, to enter as a competitor on a new and untried arena, while those who are already engaged in the advantageous business, stretch their credit to the utmost, in order to acquire the means of extending their concerns, and of increasing the supply of the commodity in unusual demand. The result, that every unprejudiced observer would anticipate, almost invariably takes place. A disproportionate quantity of capital being attracted to the lucraiive business, a glut of the market, and a ruinous depression of prices, unavoidably follow.

Every merchant must be aware of the truth of what we have now stated. And such of our readers as will investigate the history of industry, either in this or any other country, will find, that a period of peculiar prosperity in any one branch, is the uniform harbinger of mischief. If we turn, for example, to the history of agriculture, the alternation between periods of high prices and great agricultural prosperity, and of low prices and great agricultural distress, is so striking, that it cannot fail to arrest the attention of every one. The high prices of 1800 and 1801 gave a most extraordinary stimulus to agricultural industry. Nearly double the number of acts of Parliament were passed in 1803 for the enclosure and drainage of land, that had been passed in any previous year. A great extent of old grass felds was at the same time subjected to the plough. And in consequence of this extension of cultivation, and of the other improvements that were then entered upon and completed, the aupply of corn was so much increased in 1804, that prices sunk considerably below the common level; and an act was then passecl, in consequence of the representations made by the agriculturints of their distressed condition, granting them additional protection against foreign competition. The high prices of 1810, 1811, 1819, and 1873, had a precisely similar result. They attracted so much additional capital to the land, and occasioned such an extension of tillage, that we grew in 1812 and 1813 an adequate supply of corn for our own consumption. And it is certain that, under such circumstances, the price of corn must inevitably have fallen, in consequence of the unusually abundant harvest of 1814, though the ports had been entirely shut against importation from abroad. *


The following Tables extracted from the official accounts laid before Parliament of the average price of wheat in England and Wales, and the pumber of enclosure bias passed each year from

The history of the West India trade may also be referred to as affording the most convincing proofs of the truth of this principle. The devastation of St Domingo by the Negro insurrection, which broke out in 1792, by first diminishing, and in a very few years entirely annihilating, the supply of about 115,000 hhds. of sugar, which France and the Continent had previously drawn from that island, occasioned an extraordinary rise of prices, and gave a proportional encouragement to cultivation in the other islands. So powerful was its influence in this respect, that Jamaica, which, on an average of the six years preceding 1799, had exported only 83,000 hhds., exported in 1801 and 1802 upwards of 286,000, or 143,000 a year! But the duration of this prosperity was as brief as it was signal. The same rise of price which had produced such effects in the British islands, occasioned a similar, though less rapid, extension of cultivation in the colonies of the Continental powers. The increased supplies of sugar and coffee that were in consequence obtained from Cuba, Porto-Rico, Martinique, Guadaloupe, Brazil, &c. became, in no very long time, not only sufficient to

1791 to 1820, both inclusive, sets the principle we have been endeavouring to elucidate in the clearest point of view. The stimulus given by a high price one year to the extension of cultivation in the next, as evinced in the encreased number of enclosure acts, is uniform and striking. Average Price No. of 1

Average Price No. of of Wheat Enclosure

of Wheat Enclosure Years. per Quarter. Acts. Years. per Quarter. Acts.

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fill up the vacuum caused by the cessation of the supplies from St Domingo, but actually to overload the market. The great foreign demand for British plantation sugar, which had been experienced after the destruction of the St Domingo trade, gradually diminished until 1805 and 1806, when it almost entirely ceased; and the whole extra quantity raised, in consequence of this demand, being thrown on the home market, its price, which had been 66s. per cwt. in 1798, exclusive of duty, fell in 1806 to 34s.—a price which the Committee, that was then appointed by the House of Commons to inquire into the distresses of the planters, state, was not only insufficient to yield them any prolit, but even to indemnify them for their actual outlay! And, we may add, that, owing to the ill-advised measures that were soon after adopted for creating a forced and unnatural demand for sugar, its supply was prevented from being diminished in proportion to the dimination of the effective demand; so that, some short intervals only excepted, the planters have ever since been involved in distress and difficulties.

The history of the silk-trade, of distillation, * and, indeed, of every branch of industry, furnishes but too many proofs of the constant operation of this principle of compensation. The greater and more signal the peculiar prosperity of any one department, the greater infallibly is the subsequent recoil. Such an increased demand for any commodity, as would raise its price 10 per cent. above its common level, would certainly cause it to be produced in excess, and would in consequence occasion a revulsion. But were the price to rise 30 or 40 per cent. above the common level, the temptation to invest addi. tional capital in it would be so very great, that the revulsion would both take place sooner, and be incomparably more severe.

The revulsions to which we have now alluded will necessarily continue to occur, to a greater or less extent, under any system of public economy. But there is nothing that would tend so much to lessen their frequency and violence as the establishment of a perfectly free intercourse with other countries, and the withholding of all relief, on the part of Government, from


those who enter upon any improvident speculation. Were a perfectly free intercourse with other countries established, we should engage only in those branches of industry, for the prosecution of which we had some natural or acquired advantage; and which would, for that very reason, be in a great measure secured against those unfavourable contingencies that are always affecting such branches as are fenced round with restrictions. Suppose, to illustrate this principle, that a really free trade were established in silks: We should, under such circumstances, export a part of all those mixed fabrics of wool and silk, and of gloves and hosiery, in the production of which we have an advantage, to foreign countries, at the same time that a considerable part of our demand for other descriptions of silk goods would be supplied from them: If, on the one hand, therefore, the demand for silks should, in consequence of a change of fashion, or of any other cause, suddenly increase, the competition of the foreign manufacturers would prevent prices attaining any very extravagant height, and would thereby prevent both the inordinate extension of the manufacture and the subsequent recoil: And if, on the other hand, the demand for silks in this country happened to decline, the various foreign markets to which our manufacturers would then be accustomed to resort, would enable them to dispose of their surplus goods at a comparatively small reduce tion of price, to what must necessarily take place when they are restricted, as has hitherto been the case, to the home market.

We do not know whether this will be called theoretical reasoning; but we are quite sure that it is consistent with the most comprehensive experience. There is not a merchant in London who is not ready to admit, that fluctuations in the price of corn would be very much diminished, and the condia tion of the agriculturists rendered infinitely more secure, were the restrictions on the corn trade abolished. But this is a principle that does not hold in one trade only, but in all. Restrica tions and prohibitions are, in every instance, productive of uncertainty and fluctuation. Every artificial stimulus, whatever, may be its momentary effect on the department of industry to which it is applied, is immediately disadvantageous to others, and ultimately ruinous to that which it was intended to promote. No arbitrary regulation, no act of the Legislature, can add any thing to the capital of the country; it can only force it into artificial channels. Besides, after a sufficient supply of capital has flowed into these channels, a reaction must commence. There can be no foreign vent for their surplus produce; and, whenever any change of fashion, or fluctuation in the taste of the

ats, occasions a falling off in the demand, the warehouses are sure to be filled with commodities which, in a state of free, dom, would never have been produced. The ignorant and the interested always ascribe such gluts to the employment of machinery, or to the want of sufficient protection against foreign competition ! The truth is, however, that they are the necessary and inevitable result of acting on an artificial and exclusive system; and of the application of those poisonous nostrums, by which the natural and healthy state of the public economy is vitiated and deranged.


It will be observed, that the foregoing remarks apply only to the case of an excessive production in some particular branch of industry. We have, on several previous occasions, endeavoured to show, that an universal glut of all sorts of commodities is quite impossible. Indeed, the very idea of such a glut involves a contradiction and an absurdity. It is admitted on all hands, that however much the powers of production may be increased, such commodities as are produced in the view of being direcıly consumed by their producers, without the intervention of an exchange, can never be in excess ;-for to suppose that they should be in excess, would really be to suppose a production without a motive-an effect without a cause! It is only when commodities are carried to market, and offered in exchange for others, that they can be in excess. But such commodities as are carried to market, are produced only in the view of obtaining others in exchange for them; and the fact, that any description of them is in excess, is of itself an unanswerable proof that there is a corresponding deficiency in the supply of those they were intended to exchange for, or buy. The fault is not in a too great aggregate production; but in producing particular commodities, which are either not in demand by those to whom we wish to sell them, or which we cannot ourselves. consume. If we attend to these two grand requisites—if we produce such commodities only as can be taken off by those to whom we offer them for sale, or such as are directly available to our own use, we may increase the powers of production ten, or ten thousand times, and we shall be quite as free of all excess as if we diminished them in the same ratio. A glut invariably originates in the circumstance of those who are engaged in a particular business having increased the supply of their peculiar produce beyond its due proportion. The distresses of the West India planters in 1807, of the agriculturists in 1816, and, more recently, of the silk manufacturers, were all a consequence of their having added disproportionally to the quantity of their peculiar produce. It was this that sunk its-value as compared with other things, the supply of which

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