with a tendency to a continued fall, to the close of

1822.

2. That, as relates to agricultural produce espe cially, an importation of corn beyond the occasion at the close of 1818 formed an excess of supply, which, concurring with a succession of productive crops of our own growth, could not fail of causing that reduction of the value of wheat, and of other agricultural produce, from 1817 to 1822, which has so unaccountably and gratuitously been ascribed to other causes.

3. That if it had been an object with the legislature, when the state of the currency was brought before it in 1819, to maintain the prices which had been the consequence of scarcity and speculation, no means were open to it but to degrade the standard by between 30 and 50 per cent. at a time when, by the ordinary tests of the price of gold and the exchanges, the utmost depreciation of the paper did not exceed between 3 and 5 per cent. It being to be borne in mind that a degradation of the standard to the extent supposed would have virtually defeated the operation of the corn laws, which, therefore, in the proposed view of keeping up prices, would have required a corresponding alteration.

ours.

4. That as the price of corn in France, and on the Continent of Europe generally, had, in 1816 and 1817, risen beyond the ordinary relative proportion to the prices in this country, so the fall of prices on the Continent, between 1817 and 1822, was more rapid, and to a much lower level, than If, therefore, the fall of prices in this country formed sufficient ground for calling upon the legislature to degrade the standard, there would have been at least equal reason why the landed interests, and debtors generally, in Germany, Holland, France, and Italy, should have called upon their respective governments for a similar degradation of the standard of their currencies.

5. That the fall of prices on the Continent of Europe in 1818, which had preceded and gone beyond ours, was accompanied by an efflux of bullion from this country; a circumstance which, according to the currency theory, ought to have had the effect of raising prices on the Continent.

6. That not only were the causes connected with the supply and demand sufficient to account for the fall of prices in this interval, without inferring a contraction of the Bank circulation as an originating or moving cause of that fall, but that, in point of fact, the issues of Bank notes and coin together, constituting the basis of the currency, were increased coincidently with the fall of prices.

7. That as an increase of the country circulation had been a consequence of the rise of prices from 1816 to 1818, so a reduction necessarily followed the fall of prices between 1818 and 1822.

8. That the prolongation, in the spring of 1822, of the term for the issue of country small notes to ten years from that time had not the effect ascribed to it of an immediate increase of the country circulation, and of a consequent rise of prices, inasmuch as all accounts agree in computing that the country circulation was rather reduced than extended during the twelvemonth following that measure, and inasmuch as the prices of corn continued to decline till the spring of 1823, a twelvemonth afterwards, when distinct grounds for an advance of prices occurred.

9. That whether looking to the state of supply and demand as regards production, or to the state of the circulation, whether of the Bank of England or of the country banks, or to the corresponding variation of bullion prices in the rest of the commercial world, the conclusion is irresistible that the act of 1819, for the resumption of cash payments, was perfectly inoperative upon the amount of the circulating medium, and upon

the state of prices in this country to the close of 1822.

10. That the accumulation of bullion in the coffers of the Bank in 1822 cannot be assigned as a cause of the low range of prices of agricultural produce at the close of that year, inasmuch as it will be seen in the next chapter that prices rose upwards of 50 per cent., coincidently with a further accumulation of no less than four millions in the year following.

The interval which has here passed under review has been confined to the four years ending in 1822, because the close of that year witnessed the depression of almost all articles to nearly as low a point as they have since again reached. Immediately after the close of 1822 there arose a fresh set of disturbing causes, the nature and extent of the operation of which we shall now proceed to examine.

CHAPTER VIII.

STATE OF PRICES AND OF THE CIRCULATION, FROM THE COMMENCEMENT OF 1823 TO THE CLOSE OF 1827.

THE epoch, upon the consideration of which we are now about to enter, comprises the memorable speculations of 1824-5, and the lamentable recoil from them, attended by an extraordinary derangement of the circulation, in 1825-6.

An advance in the prices of corn having occurred in the interval from 1822 to 1827 has been ascribed to the same general causes. But it will be seen, that although the prices of corn and of other provisions rose considerably, and were at a much higher range in that interval, than they had been in 1821 and 1822, the advance was not so coincident in point of time with the speculative rise in the prices of other produce and of shares, and of foreign loans, which characterised the speculations of 1824-5, as to admit of being brought within the same supposed influence.

SECTION 1. Variations of the Corn Trade in 1823, with reference to the asserted Influence of an enlarged Circulation of Paper in that Year.

A rise in the price of wheat of upwards of 50 per cent. which occurred in 1823, has been laid particular stress upon by the partisans of the currency theory, as being illustrative of the effects of an

enlargement of the circulation of the Bank of England, and of the country banks, such enlargement being confidently asserted to have been the originating and the chief, if not the only, cause of that rise. Assertions to this effect are to be found in nearly all the pamphlets and speeches of the supporters of that doctrine. In the minutes of evidence appended to the reports of the Lords' and Commons' committees, of 1836, on agricultural distress, the leading questions, and the general tenor of the answers imply a full persuasion on the part both of the examiners and the examined, that an increase of paper was the main, if not the sole, cause of the rise in the prices of corn in 1823.

Seeing therefore the importance that is attached to the state of the corn trade in this particular year, it is desirable to enter into a separate examination of the causes of the advance of the prices of provisions in 1823, with a view of being enabled to judge how far the variations of price admit of being accounted for by circumstances peculiar to that branch of trade, and then to examine the grounds for the alleged influence of the currency.

The rise which is observable in the average price of wheat, in the two first months of 1823, namely, to 40s. 8d. in February, was mainly the effect of the necessarily increasing proportion of the superior new to the very inferior old coming to market. And a part of the further advance was ascribed in the contemporary accounts, and with great probability, to the circumstance of purchases by persons who had previously sold their old wheat, with a view to reinvestment in the new. Some speculative purchases were also made at that time, in pursuance of an opinion which had become prevalent, that prices had seen their lowest; and the excellent quality and condition of the wheat of 1822, afforded additional inducements to act upon that opinion. The winter of 1822-3, although not memorable for