whole country. In order to effect. this object, your lordship assigns another cause for the distress; because it would have been monstrous indeed to deny the existence of the distress, at the very moment that you were proposing to issue of the country) four millions of Ex(at the risk of driving the gold out chequer Bills to be lent to the parishes on an assignment of the poor-rates. This other cause brought forward by your lordship is, production," too great an abund 66 over Two Letters to the Earl of Liver-ance of food produced; and, now pool, in Reply to his Speech of LETTER I. Kensington, March 1, 1822. let us see the way in which you go to work to establish this monstrous proposition, at the same time that you assert the population to have increased from ten to fourteen millions during the last twenty years! There is something so unnatural, so contrary to all experience, in the idea, that the owners and occuMY LORD-I have read with piers of land should be distressed great attention the report of your by abundant crops, that the mind invery elaborate speech of the 26th voluntarily starts back from it. Is of last month. That speech, which the thing possible? Clearly it is was an answer to me, rather than to not; for, if the farmer grows in any body else, was not, and, in-good years 100 bushels of wheat deed, could not be, answered by upon a given piece of land, and it the Marquis of LANSDOWNE, be- then sell at 5s. a bushel, and if, in cause he holds, as to the main bad years, he grow 50 bushels and point of all, opinions equally erro- sell at 10s. a bushel, does he lose neous with those of your lordship; by the good crop, and gain by the and, if those opinions continue to bad one? Is it not, as far as price be acted upon for only a little goes, the while longer, the landlords of Eng- then, can abundant crops have same thing to him? How, land must inevitably fall before produced the distress, that is to say, the Mammon of the Stock-Ex-the inability to pay rent, in the farchange. The chief object of your speech was, to prove, that excessive taxation is not the cause of the "distress of agriculture," as it is called. There was some important collateral matter, which I shall notice as I proceed; but this was the main object that you had in view. Your speech was, in fact, an attempt to answer my rustic harangues, and especially those at Huntingdon, at Epsom, and at Chichester, which, as you well knew, had made a deep impression on the minds of the mer? But, I shall have occasion to return to this topic, after I have examined your arguments in support of the assertion that taxes do not cause the distress. Your lordship says, that, as a proof, that it is not excessive taxation which has produced the distress, the same distress exists all over Europe and in America. By distress you here mean low price; and, was it not clearly shown, in my third Letter to Landlords, that the drain of gold from those countries, which drain had been occasioned by 66 Peel's Bill, had produced the fall of " quantity.-Growing less and less.' price in those countries; while all "All paper payable in gold or the taxes, there as well as here, re- "silver.-No commercial failures. mained what they were before that"-State of things sound and drain of gold took place? You" good. Freights, good. - Shipproduce the evidence of a Mr." ping increasing; as a proof of JACOB, to show, that the agricul-" which a second line of Packetture of the Continent is in a state of " I ships had just been started, to distress. If we believe all he as- "sail between New York and serts, what does it prove? Only Liverpool, by Byrnes, Trimbe & that the landlords and farmers" Co.-Manufacturers, especially in other heavily taxed nations have" in cotton, making great progress, been plunged into a state of distress" and yielding great profit.-The by the fall of prices; and, in what" woollen manufacturers were also way is this to produce in our minds" doing very well.-Wages of daya conviction, that, with the prices "labourer at New York, a dollar of 1790, the land of England is able" a-day.-In the cotton factories to pay the taxes of 1822. How from eight to nine dollars a week. does that tend to show, that, with "In the woollen from nine to ten the prices of a time when the taxes" dollars.-Price of beef in New amounted to thirteen milions a "York market 3d. (English) a year, the land can pay its share of pound." taxes amounting to fifty-three millions a year? Supposing all Mr. JACOB's facts to be true (and that is supposing a great deal) what do they prove more than this: that the agriculture of the Continent is in distress from the full of prices with an undiminished taxation? 66 This, my Lord, is the state of America, where there are no taxes to pay. Where there are no taxes things soon "find their level." You will say, "I don't believe your facts." Why, then, am I to believe yours? Call witnesses, then! But, do you see, in any of the Your lordship included America; American news-papers, any combut, you cited no evidence. And, plaints of distress? Do you hear of why was it, that no evidence was any distressed people petitioning the produced before the Committee, Congress? How soon should we relative to America? Plenty of have such petitions before us, if witnesses, ready to be called! And such existed. Your post-office gets yet, none called! That was the mail-loads of American newscountry to appeal to. That was papers. Hunt them through, my the argument of experience in sup- Lord; and, if you can find a single port of your monstrous proposition, proof of the truth of your assertion, that heavy taxes do not produce the let us have it. But, the absence distress; and here you content of all evidence as to America, while yourself with assertion, bare asser-you produce such masses of evition; without a fragment of evidence as to other countries, is condence. Now, what are the facts as clusive. It can leave a doubt in to America? Why, that there are no taxes worth speaking of; and that, though farm-produce has fallen full two-thirds since 1817, there is no distress. The very day after the last Epsom Meeting, I saw an English merchant, who left New York in December; and from his mouth made these notes:"Bank paper reduced to a small the mind of no rational man, that, upon this point, you have nothing but bare assertion, which, in such a case, is not worth a straw; and can only be regarded as having been made for the purpose of propping up your fallacious argument. As I told my Lord Ellenborough, at Epsom, the case of America destroys your whole mass of matter. up to the last year of war; and that, since that time, eighteen millions of taxes have been taken off. Aware that, after the answer that I have so often given to this, the fact would not avail you without something further, you go on to say, that it has been contended, that this nominal reduction of taxation was nothing when compared with its real augmentation by the rise in the value of money. Precisely so! Precisely thus it has been contended; and how do you answer this propo therefore, as the taxes were reduced one-fourth in amount, the taxes could not now press more heavily than they did in the last year of the war, when agriculture pros There prices have fallen more than they have here; there, there was a temporary derangement upon the disappearance of the paper-money; but, there, the taxes being really next to nothing, and no tax at all upon any necessary of life, things found their level in a very short time; and all became steady, sound and prosperous. Here, the evil grows more and more frightful; the distress is swelled by time, just as I so often said it would be. Those in America, who, when Peel's Bill was passed, had mort-sition? Why thus, that the papergaged their land, or were deeply in money never was depreciated more debt, lost their land, or became in- than a fourth; that, therefore, the solvent. But, there the evil ended. money can have been raised no There are no leases of land in Ame-more than one-fourth in value; that, rica. The farmer who lost his land, was soon up again, or, became a labourer, and in that state was nearly as well off as before. So that the distress was not of a year's duration, and was never but mere-pered; and that, therefore, the ly partial, and wholly confined to taxes cannot be the cause of the premortgagers and debtors. Not so sent distress. This argument rests here; for here almost all is lease, entirely upon the original sin of or contract of some sort; and here Peel's Bill; namely, the most monthe government has its claw upon strous idea, that prices of produce every thing. Here the soldier, the would fall only in the degree that the sailor, the placeman, the pensioner, gold was, at the time of passing and fundholder, are all fastened upon the Bill, higher in value than the the land, and demand the same sum paper! This original sin has tainted from it as they did when wheat all the proceedings of the parlia was fifteen shillings a bushel! Prices ment, as to this subject, from that are now what they were in 1790, day to this. It was engendered in and now the parties just mentioned the head of Mr. RICARDO, and has demand more than four times as since found its way even into that much from the land as they did in of Sir FRANCIS BURDETT, who the year 1790. In America prices "cannot see how Peel's Bill can are now what they were in 1790; "have lowered prices of produce a but as the taxgatherer demanded|“ hundred per cent. when it has raisnothing then, and demands nothing" ed the value of money only four now, the state of the farmer is just" and a half per cent." Can he as good now as it was then. This "see," and can he tell me, what the is the state of the two countries; and is it not, after this, scandalous to pretend, that taxation does not produce the present distress! . But, your lordship gives some reasons, drawn from facts at home, why taxation should not be the cause of the distress. One of these is, that agriculture was prosperous market price of gold had, or has, to do with the matter? Does he not know, that gold as merchundise and gold as currency are two things very widely different? Does he not know, that, as long as paper and gold circulate together, and espe cially when the paper is (as it yet is here to a certain extent) a legal tender; does he not know, that that the market-price of gold is the when this is the case, the paper standard whereby to measure prices of "pulls down the gold," as PAINE so every thing, even in a case where well expresses it? Does he not paper is a legal tender. Look, my know, that to put paper out of cir-Lord, at Letters to Landlords, Letculation, you must draw gold from abroad, lessen the quantity there, and lower prices there, and that your own prices must, besides the fall caused by the diminution of the paper at home, take a further fall in pursuit of the foreign prices? Does he not know, that to take an ounce of gold, or 77s. 10d. out of circulation is quite another thing than to take an ounce of gold out of the market? No: he appears to know nothing at all of the matter, any more than your lordship; and to this blunder it is, that we owe all, or the greater part, at any rate, of the pertinacity with which the Parliament clings to the measures, which have ruined so many thousand upon thousands of persons engaged in commerce, trade, manufactures and agriculture. 66 In different parts of the Register I have explained this matter already, over and over again. So long ago as 1805, that is to say, 17 years ago, under the title of " Jacobin Guineas," I explained how it was, that the gold was really depreciated by the power of the paper. This article will be found in the Preliminary part of Paper against Gold." As soon as I heard, in America, of the passing of Peel's Bill, I said in the Registers then written, that the Parliament was deceived in expecting that prices of produce would fall only in the degree of the then difference between the value of gold and that of paper. But, as this is the great stumbling-block; as this error is the main basis of all the false hopes that your lordship and your colleagues are now holding forth to the landlords and the farmers, I will here, for, perhaps, the twentieth time, endeavour to root this error out of your minds. The erroneous position is this: ter V. paragraph 170, and then believe this position if you can, though it be still adhered to by, and whined out in the dying voices. of the EDINBURGH REVIEWS, by GRANNY MUSHETT; by Mr. RICARDO, and now, at last, by Sir FRANCIS Burdett. The notion is, that, because 81s. in paper would buy (in 1819) 77s. 103d. in gold, leaving a difference of about 4 per cent., the causing of the Bank to pay in gold on demand could not possibly lower prices of produce more than 4 per cent. But, the' fact is, that the gold in the market. had been, and then was, and still is, kept down in price by the papcr. The value of gold, as compared with that of commodities, must, like that of other things, depend on the demand for it; and must it not, then, sink in value, when it ceases to be called for, or, which is the same in effect, when its circulation is virtually prohibited in any particular country, as is the case when there is a legal tender of paper? It must, as one of my Correspondents well observes, not only sink in the country where such prohibition exists; but, as it emigrates for want of employment, it sinks in value (in comparison with commodities) in other countries, because, by such emigration, it adds to the quantity of money there. This is the way in which we are to account for the difference in the depreciation of our paper when compared with gold, and when compared with the value of the produce of the land. Had the use of gold, as common currency, never ceased, this difference never would have been heard of. But, when it ceased to act in that capacity, it was no longer a standard of value. It signifies not a straw, whether the use of gold, as currency, cease | the while, at a par with gold, and in consequence of positive law, or gold and paper circulated side by in consequence of other causes. side! What more do you want to The effect is the same. In Ame- prove, that paper-money pulls down rica, for instance, where there was the value of gold compared with no law of legal tender, coin had, in the value of commodities; though 1817, been nearly banished from the paper and the gold may, all circulation. There was no differ- the while, be at pur? What more ence, in any money transactions, do you want to convince you, that between the value of paper and you took a false standard when you that of Spanish dollars. Yet, as passed Peel's Bill? What more soon as the paper began to disap-do you want to expose the shalpear in the summer of 1819, prices lowness of Mr. Horner, the Edinof farm produce fell one-half; and, in burgh Reviewers, Mr. Ricardo, the fall of that year, fat hogs, which Mr. Peel, Sir Francis Burdett, had, only the year before, sold at and, I must add, of your Lord12 dollars a hundred pounds, sold ship's own-self? What more do at 5 or 6 dollars. Nothing can we of this great, troubled and disshow more clearly than this the tracted nation want, to convince power of paper-money to sink the us, that "stern-path-of-duty" men, value of gold and silver compared with dungeon-bill men, and six-Acts that of commodities. But, even with- men, are not the men calculated out any argument of experience, for restoring the nation to safety what indeed can be more clear? and prosperity? Suppose there to be a tenth part only of the currency of a country consisting of paper; suppose no law of legal tender; suppose the paper to be at par with the gold; and, then, suppose some circumstances to take out of circulation a half of the paper; will you contend that prices of produce will not full at all, because the paper was, before this circumstance took place, upon a par with gold? Yet, this, if you be consistent, you must contend if you persist in contending, that the prices of produce can have been lowered by Peel's Bill only in proportion to the difference between the value of paper and that of gold at the time when the Bill was passed. Why, my Lord, was not paper generally on a par with gold in this country up to the year 1797? And yet, will you contend, that the paper did not assist in proportion to its quantity, to raise prices from the fatal hour that the Bank was invented up to the year 1797? Do you not see prices rise at every emission of smaller Bank notes, during the whole of this period; and yet paper kept, all Could When about to pass an act to compel the Bank to pay in gold, you should have ascertained, if possible, not any thing about the then relative value of paper and gold, but the proportion in which the quantity of circulating medium would be diminished by that act of compulsion. This was the question that demanded (as I said at the time). all the mind that you had to apply to that, or to any, matter; and this is precisely what you seem to have paid no attention to. any man in his senses believe, that the circulating medium would be diminished only in the degree of 45 per cent? Could any man suppose, that, when the currency of this country came to be of the same nature as the currency of other countries, any thing nearly approaching the quantity of 1819 would be kept afloat; bearing in mind, as every man of sense must, that the gold drawn from other countries must lower prices in those countries, and that these would, of necessity, pull down our prices after them? Thus have I developed this ori |