The Online Library of Liberty

A project of Liberty Fund, Inc.

• Notice.
• The Farrers of Budge-row.
• Chapter I.: Budge-row Again!
• Chapter II.: Being Roman At Rome.
• Chapter III.: Death-chamber Soothings.
• Chapter IV.: Gossiping Authorship.
• Chapter V.: How to Entertain Strangers.
• Chapter VI.: How to Entertain Borrowers.
• Chapter VII.: Farewell to Budge-row.
• Summary of Principles Illustrated In This Volume.
• Preface.
• The Moral of Many Fables.
• Part I.
• Part II.
• Part III.
• Part IV.

PART III.

The total wealth of society being distributed among three classes, according to the principles above announced, the next process is the exchange of commodities by individuals for purposes of individual enjoyment.

The complication of this process arises chiefly from the diversity of production which takes place on the earth, occasioning not only a wide difference in the amount of labour required to produce the same results in different regions, but a perpetual variegation and augmentation of commodities, which affect the demand, and render uncertain the transactions of trade.

This complication, however, involves no disastrous perplexity, unless meddled with by powers which bear no relation to it. All commodities will declare their own value, and obtain equivalents, to the ultimate satisfaction of the exchanging parties, if they are left to themselves; but when any power, which cannot regulate human wants and wishes, interferes to prescribe what provision shall be made for those wants and. wishes, there is not only a certainty that the relative values of commodities will be temporarily deranged, to the disadvantage of one of the exchanging parties, but an uncertainty when the natural relation of values will be restored, and whether disorder will not first spread into every other department of exchange. Since human labour is the universal commodity which is brought to market, to be given and taken under all forms, (since capital is only hoarded labour,) there is no safety in ticketing anyone commodity as containing more labour than it naturally includes, and thus destroying its balance with the rest, to the injury of its seller's credit, and its buyer's interest. This is what is done by every government which presumes to interfere with the barter of individuals, or authorizes such interference. The duty of government is precisely the reverse;—to secure the freedom of exchange as carefully as the freedom of labour, in the full assurance that it cannot determine relative values till it can determine the amount of labour and the extent of human wants in every region of the earth. This it may do when it has mastered the chemical and mechanical constitution of the globe, when it may not only gauge the rain in every region, but appoint the proportion of its fall.

There are two kinds of Value: value in use, and value m exchange.

Articles of the greatest value in use may have none in exchange: as they may be enjoyed without labour; and it is labour which confers exchangeable value.

This is not the less true for capital as well as labour being employed in production; for capital is hoarded labour.

When equal quantities of any two articles require an equal amount of labour to produce them, they exchange exactly against one another. If one re-quires more labour than the other, a smaller quan-tity of the one exchanges against a larger quantity of the other.

If it were otherwise, no one would bestow a larger quantity of labour for a less return; and the article requiring the most labour would cease to be produced.

Exchangeable value, therelbre, naturally depends on cost of production.

Naturally, but not universally; for there are influences which cause temporary variations in exchangeable value.

These are, whatever circumstances affect demand and supply. But these can act only temporardy; because the demand of any procurable article creates supply: and the factitious value conferred by scarcity soon has an end.

When this end has arrived, cost of production again determines exchangeable value.

Its doing so may, therefore, stand as a general rule.

Though labour, immediate and hoarded, is the regulator, it is not the measure of exchangeable value; for the sufficient reason, that labour itself is perpetually varying in quality and quantity, from there being no fixed proportion between immediate and hoarded labour.

Since labour, the primary regulator, cannot serve as a measure of exchangeable value, none of the products of labour can serve as such a measure.

There is, therefore, no measure of exchangeable value.

Such a measure is not needed; as a due regulation of the supply of labour, and the allowance of free scope to the principle of competition ensure sufficient stability of exchangeable value for all practical purposes.

In these requisites are included security of property, and freedom of exchange, to which political tranquillity and legislative impartiality are essential.

Price is the exponent of exchangeable value.

Nalural or necessary price,—regulated by cost of production,—includes the wages of the labourer, and the profits of the capitalist.

Market price varies from natural price with varia-tions of demand and supply, and in proportion to the oppressiveness of public burdens and commer-cial restrictions.

The more nearly and permanently market prices approach natural prices, the more prosperous is the state of commerce; and the two most essential requisites to this prosperity are social tranquillity and legislative impartiality.

The ancient error, that some mysterious quality inherent in gold and silver money constituted it wealth, almost to the exclusion of every other commodity, is now so universally dismissed by all who know anything of our science, that there is no occasion to controvert it further than by presenting the appropriate Summary of Principles; and the kindred modern error, that an enlargement of its quantity can do more than give a tempo-rary, and probably hurtful, stimulus to industry, requires now no more than a similar exposure. The sense of the country has lately been taken on this question; and the result proves that there is prevalent a sufficient knowledge of the philosophy and fact of the case to encourage a hope that no such hazardous sport with the circulating medium as the country has previously suffered from will be again attempted. The fate of the Berkeley∗ family, in consequence of actions on the currency, is only one instance from one class. A long series of sad stories might be told of sufferers of every rank, whose partial prosperity, enjoyed at the expense of one another's ruin, was soon swallowed up in the destruction which universally attends a shock to public credit. The injured might be found dispersed through every dwelling in the land; and, however loudly the richer might complain of the magnitude of their losses, the most cruelly injured were those who had the least opportunity of accounting for their gains and their losses, and therefore the least power of meeting the pressure of circumstances by prudence and forethought.

To stimulate the production of labour by the increase of the circulating medium, the fruits of which must be wrested away by an inevitable contraction, is a policy whose glory is not to be coveted; and surely no statesman will be found to adventure it till the last tradition of the consequent woes of our working-classes shall have died away. By that time, it is probable that the danger of such recurrence will be obviated by the adoption of some principle of security, which will give society the advantage of a free trade in money. It must be long before this can take place; for it must be long before the values of commodities are allowed to adjust themselves; and money must, from its importance, be very cautiously and gradually committed to the equalizing influences of the natural laws of demand. But, however long it may be, the woes of past convulsions will not till then be forgotten. That the time of arbitrary interference will, however, cease, can scarcely be doubted, if the following be true principles.

In exchanging commodities for one another directly, that is, in the way of barter, much time is lost, and trouble incurred, before the respective wants of the exchanging parties can be supplied.

This trouble and waste may be avoided by the adoption of a medium of exchange,—that is, a commodity generally agreed upon, which, in order to effect an exchange between two other commodities, is first received in exchange for the one, and then given in exchange for the other.

This commodity is Money.

The great requisites in a medium of exchange are, that it should be—

What all sellers are willing to receive:—

Capable of division into convenient portions;—

Portable, from including great value in small bulk;—

Indestructible, and little liable to fluctuations of value.

Gold and silver unite these requisites in an unequalled degree, and have also the desirable quality of beauty; gold and silver have therefore formed the principal medium of exchange hitherto adopted; usually prepared, by an appointed authoirty, adopted, in the form most suitable for the purposes of exchange, in order to avoid the inconveniences of ascertaining the value of the medium on every occasion of purchase.

Where the supply of money is left unrestricted, its exchangeable value will be ultimately determined, like that of all other commodities, by deter-cost of production.

Where the supply is restricted, its exchangeable value depends on the proportion of the demand to the supply.

In the former case, it retains its character of a commodity, serving as a standard of value in preference to other commodities only in virtue of its superior natural requisites to that object.

In the latter case, it ceases to be a commodity, and become a mere ticket of transference, or arbitrary sign of value; and then the natural requisites above described become of comparatively little importance.

The quality by which money passes from hand to hand with little injury enables it to compensate inequahties of supply by the slackened or accelerated speed of its circulation.

The rate of circulation serves as an index of the state of supply, and therefore tends, where no restriction exists, to an adjustment of the supply to the demand.

Where restriction exists, the rate of circulation indicates the degree of derangement introduced atesamong the elements of exchangeable value, but has no permanent influence in its rectification.

In proportion as the processes of exchange become extrusive and complicated, all practicable economy of time, trouble, and expense, in the use of a circulating medium, becomes desirable.

Such economy is accomplished by making aeknowledgment of debt circulate to place of the actual payment,—that is, substituting credit, as represented by bank paper, for gold money.

The adoption of paper money saves time, by making the largest sums as easily payable as the smallest.

It saves trouble, by being more easily transferable than metal money.

It saves expense, by its production being less costly than that of metal money, and by its setting free a quantity of gold to be used in other articles of production.

A further advantage of paper money is, that its destruction causes no dimintion of real wealth, like the destruction of gold and silver coin; the one being only a representative of value, the other also a commodity.

The remaining requisites of a medium of exchange—viz., that it should be what all sellers are willing to receive, and little liable to fluctuations of value, are not inherent in paper as they are in metallic money.

But they may be obtained by rendering paper money convertible into metallic money, by limiting in other ways the quantity issued, and by guarding against forgery.

Great evils, in the midst of many advantages, have arisen out of the use of paper money, from the neglect of measures of security, or from the adoption of such as have proved false. Issues of inconvertible paper money have been allowed to a large extent, unguarded by any restrictions as to the quantity issued.

As the issuing of paper money is a profitable business, the issue naturally became excessive when the check of convertibility was removed, while banking credit was not backed by sufficient security.

The immediate consequences of a superabuadance of money are, a rise of prices, an alteration in the conditions of contracts, and a consequent injury to commercial credit.

Its ulterior consequences are, a still stronger shock to commercial credit, the extensive ruin of individuals, and an excessive contraction of the currency, yet more injurious than its excessive expansion.

These evils arise from buyers and sellers bearing an unequal relation to the quantity of money in the market.

If all sold as much as they bought, and no more, and if the prices of all commodities rose and fell in exact proportion, all exchanges would be affected alike by the increase or diminution of the supply of money. But this is an impossible case; and therefore any action on the currency involves injury to some, while it affords advantage to others.

A sudden or excessive contraction of the currency produces some effects exactly the reverse of the effects of a sudden or excessive expansion. It lowers prices and vitiates contracts, to the loss of the opposite contracting party.

But the infliction of reverse evils does not compensate for the former infliction. A second action on the currency, though unavoidably following the first, is not a reparation, but a new misfortune.

Because the parties who are now enriched are seldom the same that were impoverished by a former change, and vice versa; while all suffer from the injury to commercial credit which follows upon every arbitrary change.

All the evils which have arisen from acting arbitrarily upon the currency prove that no such arbitrary action can repair past injuries; while it must inevitably produce further mischief.

They do not prove that liability to fluctuation is an inherent quality of paper money, and that a metallic currency is therefore the best circulating medium.

They do prove that commercial prosperity depends on the natural laws of demand and supply being allowed to work freely in relation to the circulating medium.

The means of securing their full operation remain to be decided upon and tried.

Nations exchange commodities as individuals do, for mutual accommodation, each imparting of its superfluity to obtam that in which it is deficient.

The imparting is therefore only a means of obtaining: exportation is the means of obtaining importation—the end for which the traffic is instituted.

The importation of money into a country where money is deficient is desirable on the same principle which renders desirable the supply of any deficient commodity.

The importation of money into a country where money is not deficient is no more desirable than it is to create an excess of any other commodity.

That money is the commodity roost generally bought and sold is no reason for its being a more desirable article of importation than commodities which are as much wanted in the country which imports it.

That money is the commodity most generally bought and sold is a reason for its being the commodity fixed upon for measuring the relative amounts of other articles of national interchange.

Money bearing different denominations in the different trading countries, a computation of the relative values of these denominations was made in the infancy of commerce, and the result expressed in terms which are retained through all changes in the value of theseare denominations.

The term by which, in each country, the original equal proportion was expressed is adopted as the fixed point of measurement, called the par of exchange; and any variation in the relative amount of the total money debts of trading nations is called a variation from par.

This variation is of two kinds—nominal and real.

The nominal variation from par is caused by an alteration in the value of the currency of any country, which, of course, destroys the relative proportion of its denominations to the denominations of tlle currency of other countries; but it does not affect the amount of commodities exchanged.

The real variation from par takes place when any two countries import respectively more money and less of other commodities, or less money and more of other commodities.

This kind of variation is sure to correct itself, since the country which receives the larger proportion of money will return it for other commodities when it becomes a superfluity; and the country which receives the smaller proportion of money will gladly import more as it becomes deficient.

The real variation from par can never, therefore, exceed a certain limit.

This limit is determined by the cost of substituting for each other metal money and one of its representatives—viz., that species of paper currency which is called Bills of Exchange.

When this representative becomes scarce in proportion to commodities, and thereby mounts up to a higher value than the represented metal money, with the cost of transmission added, metal money is transmitted as a substitute for bills of exchange, and the course of exchange is reversed, and restored to par.

Even the range of variation above described is much contracted by the operations of dealers in bills of exchange, who equalize their value by transmitting those of all countries from places where they are abundant to places where they places are scarce.

A self-balancing power being thus inherent in the entire system of commercial exchange, all apprehensions about the results of its unimpeded operation are absurd.

The crying philosophers of all times have mourned over the pertinacity of men and of nations in clinging to errors through all the sufferings thence arising; the suffering being ascribed to “fate, or Providence, or something,”—to any thing rather than to their favourite errors. The laughing philosophers cannot deny this; but, looking farther, they see that, error by error being exploded at length, there is no return to that which is clearly seen to be the cause of suffering,—unless such an experimental brief return as can only serve to confirm the truth. Commerce has now been instituted for a longer succession of ages than we have any distinct knowledge of;—ever since the first root-digger exchanged his vegetable food for the game of the first sportsman. From that time till now, an error has subsisted among all classes of exchangers which has caused enough of privation, of ill-will, of oppression and fraud, of war, pestilence and famine, to justify the tears of a long train of crying philosophers. But the error has been detected. Philosophers have laid their finger upon it; the press has denounced it; senates are preparing to excommunicate it; and its doom is sealed. This error is,—that commerce is directly productive. Hence arises the belief, that if one party gains by commerce, another must lose; and hence have arisen the efforts of clansmen to confine their exchanges within their own clan; of villagers within their own village; of citizens within their own state; of a nation within its own empire. Hence it arises that the inhabitants of one district have been afraid to enjoy the productions of any other district, and that they have been doomed by their rulers to pine and die in occasional dearth, and to quarrel with occasional superabundance when they might have had plenty in the one case, and an influx of new enjoyments in the other. Hence have arisen some of the most humbling scenes of human vice which have disgraced the species.

The atrocious practice of wrecking was formerly pursued, not only as a method of robbery, but as a means of impairing the commercial resources of foreigners. There was connivance at pilots who ran a rich vessel upon rocks; and protection for the country people who gave their exertions to destroy instead of to save. If the cargo went to the bottom, something was supposed to be gained to the country, though those who looked upon the disaster were disappointed of their plunder. Next came the ridiculous and cruel practice of making aliens engaged in commerce answerable for the debts and offences of each other; and as a kind of set-off against the advantages which they were supposed to take from the people among whom they lived, they were compelled to pay much heavier duties than natives for all articles of import and export.

The necessity thus arose for commercial treaties which should ensure the safety and proper treatment of commercial agents when any two powers agreed to exchange good offices. Edward II. made an agreement with Venice that its merchants and mariners should be permitted, for ten years, to come and go, and sell their merchandise in security, without having either their persons or goods stopped on account of other people's crimes or debts. From the time of such partial relaxation,—such narrow openings to a foreign trade,—the wants of the multitude of each civilized people have forced one after another of the barriers raised by national jealousy, while all parties remained under the influence of the error that commerce is directly productive, and of course an advantage to be denied to enemies, except when a very hard bargain can be driven with them. Perhaps the most curious specimens in existence of attempts at mutual overreaching, of laborious arrangement to secure what must naturally happen, and of an expensive and tyrannical apparatus for achieving what is impossible, may be found in the commercial treaties from the infancy of commerce till now. The only idea which never seems to have struck the negotiators is, that commerce is valuable,—not because production takes place in the mere exchange of commodities,—but because systematic exchange facilitates the most extensive division of labour and the closest economy of capital,—advantages which must be shared by both if experienced by either of the exchanging parties. On the same principle that the shoemaker makes no hats, and the hatter no shoes, and that both find an advantage in supplying each other, without any new product arising from the mere act of exchange, the growers of tea and the makers of hardware respectively profit by supplying each other; and they can afford to employ an intermediate class, the merchants,—to conduct their traffic, since they can go on preparing their tea and grinding their cutlery, while the process of exchange is being transacted. The saving of capital is mutual also. It must be mutual and incalculable as long as the regions of the earth differ in their productions, yielding a superabundance in one place of some necessary or comfort which is rare in another. No commercial treaty bears the least reference to the obvious final purpose of all commerce;—that the greatest number shall obtain the largest amount of enjoyment at the least cost. Such a recognition of the ultimate principle would, indeed, be inconsistent with the very existence of commercial treaties, except as far as they relate to the personal protection of traders. But, while the people of each country have shown the most decided inclination to obtain more and more of what they cannot produce at home, the aim of governments, and generally of merchants, has been to sell as much as possible to other nations; to take from them as little as possible but money; and to get the greatest possible quantity of that. In furtheranee of this view, money has been taken from the people at large, and given to their merehants to tempt them to go and sell at a loss, rather than not get hold of foreign money; and again, money has been exacted from foreigners who come to sell their goods in our ports. Nothing is gained by this to the nation, as the foreigners must be repaid these duties as well as the cost of their articles; and it is clear to every observer how much is lost to all the parties concerned. Yet such is the false principle on which commercial treaties have hitherto been founded. This child's-play of universal circumvention is pursued less vigorously than it was; and some of the players are so tired of the wasteful and wearying sport as to be ready to give it up: but, owing to the false belief that no one could yield without the rest, the absurdity has endured longer than might have been expected.

It was not perceived, till lately, that it is a good thing to any nation, as it would be to any man, to get what it wants, even if it be compelled to pay in money when it had rather pay in goods: especially when it is certain, from the ascertained self-balancing quality of money, that it will soon flow in from some other quarter in exchange for the goods wanted to be sold. When so plain a truth as this is once experienced, it cannot but spread; and fewer examples will be henceforth seen of nations keeping themselves poor, lest their neighbouriug customers should grow rich. How rapidly such truth runs, when once sent off on its career, may be seen from the following facts: it being borne in mind that nations are educated by the experience of centuries, as men are of years.

In 1703, a commercial treaty was concluded between Great Britain and Portugal, which was for many years lauded by the British as being in the highest degree iavourable to the interests of her manufacturing classes, at a very slight expense. Our woollens were then excluded from Portugal. Mr. Methuen, who managed the treaty, obtained a free admission for them, in return for a concession which was considered a mere nothing in comparison with the advantage obtained. It was merely promised that portwine should be admitted into Great Britain at one-third less duty thaaa French wines. As for the woollens, their admission into Portugal duty-free was a much greater advantage to the Portuguese than to us. They obtained cheap an article which they very much wanted, and which we were sure of selling inone quarter or another, if we could produce it at such a cost as made its production worth while. As for the wine,—the Portuguese and the British have both been suffering ever since for the arbitrary preference given to that of Portugal over that of France. Portugal has, and has always had, too little capital for the capabilities of the country and the wants of the people. By the monopoly of the British market being given to Portugal, too large a proportion of its small capital has been devoted to the growth of wine, and the whole country is in a more backward state than it would have been if its capital had been allowed to find its own channels. We, meanwhile, lost the French market for our woollens, brought upon ourselves retaliatory restrictions on otimr articles, and were compelled to drink inferior wine at a greater cost than if the trade had been left to itself. France grew more pettish; we grew resentful, and raised the duties again, and again, and again. Thousands, who had been fond of French wines, found that they could afford the indulgence no longer, and took to port. Thousands more, who had drunk port because they could not afford French wines, left off drinking wine at all. In three years the revenue from the wine-duties fell off by more than 350,000/., while the naturally wine-drinking population was increasing. The richest of our citizens, to whom the price of wine is not a very important consideration, had their cause of complaint. Guernsey was all this time receiving small quantities of wine, wasand sending out large quantities. A prosperous manufacture of wines was carried on there; and no gentleman could tell how much sloe-juice, apple-juice, and brandy he might be drinking under the name of wine. There is no good reason why a day-labourer should not drink French wines at his dinner instead of beer, if they are equally cheap; and no one knows how cheap they might have been by this time, if they had been allowed their fair chance; and tbe cheaper, and therefore the more abundant, those wines, the larger must be the quantity of our goods taken by the French in exchange. As it is, the Portuguese have profited where we meant they should not, and suffered where we meant they should be permitted to profit. Our Government has suffered a diminution of revenue; our rich men have drunk adulterated wines; our middling classes have been obliged to put up with dear port-wine or none; our working classes have been debarred from having wine at all, and have been shut out for more than a hundred years from one of the largest markets where their labour might have found its recompense.

Such are some of the consequences of the famous Methuen treaty, which was, for a considerable length of years, extolled as a model of commercial negotiation. These consequences, and others which followed similar blunders, wrought at length their natural effect upon the minds of those primarily interested in the principles and methods of commercial policy. On the 8th of May, 1820, the following petition from the merchants of London was presented to the House of Commons. It was signed by all the principal merchants of London;—a class whose opinions on this question could not but be respectfully regarded, if they had been announced with less dignity and precision than we find in this memorable address. The time may and will come when its propositions will be regarded as a set of truisms scarcely worthy of announcement under such circumstances of formality; but it should in fairness be remembered in those days that it was drawn up at the very period when silk and tobacco were being smuggled into hundreds of creeks along our shores; when bread and wine were taxed for purposes of unjust protection at home, taxed wicked oppression abroad; and when our houses and ships were being built of bad wood at a higher cost than need have been paid for the best, in order to favour a colony which, after all, would flourish much more through our prosperity than at our expense. No change of times and convictions can impair the honour due to those who concurred in the following petition:—

“To the Honourable the Commons, &e., the Petition of the Merchants of the City of London.

“Sheweth,

“That foreign commerce is eminently conducive to the wealth and prosperity of a country, by enabling it to import the commodities for the produetion of which the soil, climate, capital, and industry of other countries arc best calculated, and to export, in payment, those articles for which its own situation is better adapted.

“That freedom from restraint is calculated to give the utmost extension to foreign trade, and the best direction to the capital and industry of the country.

“That the maxim of buying in the cheapest market, and selling in the dearest, which regulates every merchant in his individual dealings, is strictly applicable, as the best rule for the trade of the whole nation.

“That a policy founded on these principles would render the commerce of the world an interchange of mutual advantages, and diffuse an increase of wealth and enjoyments among the inhabitants of each state.

“That, unfortunately, a policy the very reverse of this has been and is more or less adopted and acted upon by the government of this and every other country; each trying to exclude the productions of other countries, with the specious and well-meant design of eucouraging its own productions: thus inflicting on the bulk of its subjects, who are consumers, the necessity of submitting to privations in the quantity or quality of commodities; and thus rendering what ought to be the source of mutual benefit and of harmony among states, a constantly recurring occasion of jealousy and hostility.

“That the prevailing prejudices in favour of the protective or restrictive system may be traced to the erroneous supposition that every importation of foreign commodities occasions a diminution or discouragement of our own productions to the same extent; whereas it may be clearly shown, that, although the particular description of production which could not stand against unrestrained foreign competition would be discouraged, yet, as no importation could be continued for any length of time without a corresponding exportation, direct or indirect, there would be an encouragement for the purpose of that exportation, of some other produe . tion to which our situation might be better suited; thus affording at least an equal, and probably a greater, and certainly a more beneficial, employment to our own capital and labour.

“That of the numerous protective and prohibitory duties of our commercial code, it may be proved that, while all operate as a very heavy tax on the community at large, very few are of any ultimate benefit to the classes in whose favour they were originally instituted, and none to the extent of the loss occasioned by them to other classes.

“That among the other evils of the restrictive or protective system, not the least is that tile artificial protection of one branch of industry or source of production against foreign competition, is set up as a ground of claim by other branches for similar protection; so that, if the reasomng upon which these restrictive or prohibitory regulations are founded were followed out consistently, it would not stop short of excluding us from all foreign commerce whatsoever. And the same train of argument, which, with corresponding prohibitions and protective duties, should exclude us from foreign trade, might be brought forward to justify the re-enactment of restrictions upon the interchange of productions (unconnected with public revenue) among the kingdoms composing the union, or among the counties of the same kingdom.

“That an investigation of the effects of the restrictive system at this time is peculiarly called for, as it may, in the opinion of your petitioners, lead to a strong presumption that the distress which now so generally prevails is considerably aggravated by that system; and that some relief may be obtained by the earliest practicable removal of such of the restraints as may be shown to he most injurious to the capital and industry of the community, and to be attended with no compensating benefit to the public revenue.

“That a declaration against the anti-commercial principles of our restrictive system is of the more importance at the present juncture; inasmuch as, in several instances of recent occurrence, the merchants and manufacturers of foreign countries have assailed their respective governments with applications for further protective or prohibitory duties and regulations, urging the example and authority of this country, against which they are almost exclusively directed, as a sanction for the policy of such measures, And certainly, if the reasoning upon which our restrictions have been defended is worth anything, it will apply in behalf of the regulations of foreign states against us. They insist on our superiority in capital and machinery, as we do upon their comparative exemption from taxation; and with equal foundation.

“That nothing would tend more to counteract the commercial hostility of foreign States, than the adoption of a more enlightened and more conciliatory policy on the part of this country.

“That although, as a matter of mere diplomacy, it may sometimes answer to hold the removal of particular prohibitions, or high duties, as depending upon corresponding concessions by other states in our favour, it does not follow that we should continue our restrictions in cases where the desired concessions on their part cannot be obtained. Our restrictions would not be the less prejudicial to our own capital and industry, because other governments persisted in preserving impolitic regulations.

“That, upon the whole, the most liberal would prove to be the most politic course on such occasions.

“That, independent of the direct benefit to be derived by this country on every occasion of such concession or relaxation, a great incidental object would be gained, by the recognition of a sound principle or standard, to which all subsequent arrangements might be referred; and by the salutary influence which a promulgation of such just views, by the legislature and by the nation at large, could not fail to have on the policy of other states.

“That in thus declaring, as your petitioners do, their conviction of the impolicy, and injustice of the restrictive system, and in desiring every practicable relaxation of it, they have in view only such parts of it as are not connected, or are only subordinately so, with the public revenue. As long as the necessity for the present amount of revenue subsists, your petitioners cannot expect so important a branch of it as the customs to be given up, important to be materially diminished, unless some substitute less objectionable be suggested. But it is against every restrictive regulation of trade, not essential to the revenue, against all duties merely protective from foreign competition, and against the excess of such duties as are partly for the purpose of revenue, and partly for that of protection, that the prayer of the present petition is respectfully submitted to the wisdom of parliament.

“May it therefore, &c,”

In order to see how extensively and how effectually governments have interfered to pervert the natural distribution of the gifts of Providence, theit would be necessary to review almost the whole list of spontaneous and artificial productions; for there are few or none whose spread has not been arbitrarily stopped in one direction or another. What Great Britain alone,—the most enlightened of commercial countries,—-has done in damming up the streams of human enjoyment, doneinis fearful to think of. In the vineyards of France and Portugal, the grapes have been trodden to waste, and the vinedressers' children have gone half clothed, because wines were not permitted to be brought in, and cottons and woollens were thereby forbidden to be carried out, at their natural cost. During the long series of years that good tea has been a too costly drink for many thousands of our population, they would have been glad of the refreshment of chocolate, in some of its various preparations, if Spain had been permitted to send it to us from her colonies as cheap as Spain was willing to afford it. But the article has been loaded with a duty amounting to from 100 to 230 percent.; so that few but the rich could ever taste it; and they have been swallowing a curious compound of the nut, flour, and Castile soap. The silkworms of Italy would have wrought as busily for England as for France, if England had not been jealous of France, if thereby injured her own manufacture. England is wiser now, and new myriads of worms are hanging their golden balls on the mulberry trees, while the neighbouring peasantry are enjoying the use of our hardware, and looms are kept busy in Spitalfields. Time was when the northern nations welcomed our manufactures in return for their timber and iron of prime quality: but now, the ship and house-builders must pay higher for worse wood from Canada; and we have laid exorbitant duties on foreign iron, in order to encourage mining at home. The good people of Sweden and Norway, having nothing to offer us but timber and iron, must do without our manufactures; and thus are willing nations prevented from helping one another. Whatever may be thought of the indulgence of opium in this country, no one objects to its being used by the Hindoo and the Chinese as a stimulus use propriate to the climate in which they dwell. If we had allowed things to take their natural course, Persian husbandmen would have tended their vast poppy-fields, season by season, guarding the delicate plant from the injuries of insects, and sheltering it from unfavourable winds, while the Chinese and the Hindoos would have been busy preparing commodities to exchange with the Persian, and all would have been made rich enough by their traffic to keep British merchant-ships continually going and coming to supply their wants. But our India Company has chosen to force and monopolize the culture of opium. It has beggared and enslaved many thousands of reluctant cultivators; narrowed the demand; lessened its own revenue, year by year, and just lived to see China freely supplied with Turkey opium by American traders. Thousands of our lowly brethren in Hindostan and Ceylon have dropped unnoticed out of life because they have not been permitted to touch the crisped salt beneath their feet, or to pluck the spices which perfume the air they breathe. Millions more have sunk at the approach of famine, because no labour of theirs was permitted to. provide them with what might be exchanged for food from some neighbouring coast.

It is difficult to say whether we have injured China or Great Britain the most by our extraordinary fancy of sending functionaries invested at once with political and commercial power into a country where commerce is held by far too degrading an employment to be associated with political functions. This blunder was made by our monopolists, who were, but lately, keeping up a splendid establishment of important personages, who were regarded by the Chinese as being just above the rank of vagabonds;—no more respectable, in their possession of incomes graduating from 4000/. to 18,000/. a-year, than the American free-traders who turn their backs on the Hong merchants, and go into the open market, offering their furs with one hand, and receiving teas and nankeens with the other, cleverly stealing the trade of the British meantime with both. What wealth and comfort untold might the two vast empires of Britain and China have poured into one another by this time, if their original jealousies had not been per. petuated by English mismanagement! The Dutch and the Americans have both smuggled large quantities of tea into England, while the twelve supercargoes at Canton have been talking polities or yawning within the walls of their Factory! Truly did the Celestial Emperor say to our representatives, “Your good fortune has been small! You arrived at the gates of the imperial house, and were unable to lift your eyes to the face of heaven.” The day of exclusion is, however, over. It may be long before we can overcome the contempt of the nation, and make them forget that some of our politicians were traders: but we have the interests of the Chinese in our favour. They will import according to their needs; more of our weavers and cutlers will have money to buy tea with, and they will get more tea for their money; and no one can tell what new classes of productions may become common when the messengers of these two mighty empires shall go to and fro, and knowledge shall be increased.

Such are a few of the specimens which might be adduced of the misechiefs wrought in one hemisphere by interference with commerce. “To all things there cometh an end;” to all unjust and foolish things, at least. We are now in possession of so ample a stock of experience, that the day cannot be far off when all customs duties shall be repealed but those which are necessary for the purposes of revenue. There will be some half-objectors left; some importers who will admit the impolicy of protections of all articles but the one in which they happen to deal. Mr. Huskisson was pathetically appealed to to protect green glass bottles; and a last struggle may be tried with another minister in favour of liquorice or coral beads; but an immense majority of every civilised people are verging towards a mutual agreement to give, in order that to each may be given “full measure, pressed down, and shaken together, and running over.” Such is the plenty in which God showers his gifts among us; and such is the measure in which he would have us yield each to the other.

The countries of the world differ in their facilities for producing the comforts and luxuries of life.

The inhabitants of the world agree in wanting or desiring all the comforts and luxuries which the world produces.

These wants and desires ean be in no degree gratified but by meaIm of mutual exchanges. They can be fully satisfied only by means of absolutely universal and free exchanges.

By universal and free exchange,—that is, by cach person being permitted to exchange what he wants least for what he wants most,—an absolutely perfect system of economy of resources is established; the whole world being included in the arrangement.

The present want of agreement in the whole world to adopt this system does not invalidate its principle when applied to a single nation. It must ever be the interest of a nation to exchange what it wants little at home for what it wants more from abroad. If denied what it wants most, it will be wise to take what is next best; and so on, as long as anything is left which is produced better abroad. than at home.

In the above case, the blame of the deprivation rests with the prohibiting power; but the suffering affects both the trading nations,—the one being prevented getting what it wants most,—the ether being prevented parting with what it wants least.

As the general interest of each nation requires that there should be perfect liberty in the exchange of commodities, any restriction on such liberty, for the sake of benefiting any particular class or classes, is a sacrifice of a larger interest to a smaller,—that is a sin in government.

This sin is committed when,—

First,—Any protection is granted powerful enough to tempt to evasion, producing disloyalty, fiaud, and jealousy: when,

Secondly,—Capital is unproductively consumed in the maintenance of an apparatus of restriction: when,

Thirdly,—Capital is unproductively bestowed in enabling those who produce at home dearer than foreigners to sell abroad as cheap as foreigners,—that is, in bounties on exportation: and when,

Fourthly,—Capital is diverted from its natural course to be employed in producing at home that which is expensive and inferior, instead of in preparing that which will purchase the same article cheap and superior abroad,— that is, when restrictions are imposed on importation.

But though the general interest is sacrificed, no particular interest is permanently benefited, by special protections: since

Restrict regulations in favour of the few are violated, when such violation is the interest of the many; and

Every diminution of the consumer's fund causes a loss of custom to the producer. Again,

The absence of competition and deprivation of custom combine to make his article inferior and dear; which inferiority and dearness cause his trade still further to decline.

Such are the evils which attend the protection of a class of producers who cannot compete with foreign producers of the same article.

If home producers can compete with foreign producers, they need no protection, as, cW1teris paribus, buying at hand is preferable to buying at a distance.

Free competition cannot fail to benefit all parties:—

Consumers, by securing the greatest practicable improvement and cheapness of the article;

Producers, by the consequent perpetual extension of demand;—and

Society at large, by determining capital to its natural channels.

Colonies are advantageous to the mother-country as affording places of settlement for her emigrating members, and opening markets where her merchants will always have the preference over those of other countries, from identity of language and usages.

Colonies are not advantageous to the mother-country as the basis of a peculiar trade.

The term “colony trade” involves the idea of monopoly; since, in a free trade, a colony bears-the same relation as any other party to the mother-country.

Such monopoly is disadvantageous to the mother-country, whether possessed by the government, as a trading party, by an exclusive company, or by all the merchants of the mother-country.

It is disadvantageous as impairing the resources of the dependency, which are a part of the resources of the empire, and the very material of the trade which is the object of desire.

If a colony is forbidden to buy of any but the mother-country, it must do without some articles which it desires, or pay dear for them;—it loses the opportunity of an advantageous exchange, or makes a disadvantageous one. Thus the resources of the colony are wasted.

If a colony is forbidden to sell its own produce to any but the mother-country, either the prohibition is not needed, or the colony receives less in exchange from the mother-country than it might obtain elsewhere. Thus, again, the resources of the colony are wasted.

If a colony is forbidden either to buy of or sell to any but the mother-country, the resources of the colony are wasted according to both the above methods, and the colony is condemned to remain a poor customer and an expensive dependency.

In proportion, therefore, as trade with colonies is distinguished from trade with other places, by restrictions on buyers at home, or on sellers in the colonies, that trade (involving the apparatus of restriction) becomes an occasion of loss instead of gain to the empire.

If restrictive interference be impolitic,—oppressive,—impious, between empire and empire, it becomes absolutely monstrous when introduced among the different classes of the same country, The magistrates of a grazing county would do ill to prohibit intercourse with the manufacturing, and agricultural, and mining districts around; but much more oppressive and fatal would be the policy of a city corporation which should make the resources of the city depend on the will of the corn-dealers which it contained.— Such has been the policy of the rulers of Britain; and side by side with this restriction of the supply of food,—this abuse of eapital,—may be placed the curious perversion of labour which is caused not only by the forcing of agriculture at the expense of manufactures, but by the existence of exclusive and injurious privileges to trading corporations, of certain ancient laws respecting appremiceship, and of the iniquitous practice of the impressment of seamen.

The system of restricting the supply of food would exhibit as many sins under the head of Production as of Distribution. To make an ever-increasing population depend on graduating soils for its support, is at once to enact that either a certain number shall die outright of hunger, or that a much larger number shall be half-fed; and that, in either case, wazte of capital must be made in proportion to the inferiority of our newly-cultivated soils compared with those which might yield us their produce from abroad. From this waste arises another and equally destructive species of waste in the preparation of our manufactured articles. Wages are higher than they need be to purchase the same necessaries; therefore our manufactured articles are higher priced than they need be; therefore they have not a fair chance in foreign markets; and therefore our ill-fed manufacturing population is wronged. Such are some of the evils of a restricted trade in corn, considered under the head of Production. As for the distribution of this prime necessary of life,—the circumstance of its being loaded with an artificial cost suggests the deplorable scenes and narratives of suffering which may be verified in every street of all our cities. No arrangement can be more utterly unprincipled than that by which a necessary of life, of which the richest can scarcely consume more than the poorest, is made needlessly expensive. We may linger in vain to find a comparison to illustrate the iniquity. It is the worst possible instance of legislative injustice; and when it is considered that this injustice is perpetrated for the benefit of a particular class, which class is brought by it to the verge of ruin, and that the injury spreads to every other class in turn, it will be seen that no words can describe its folly. Add to this our provisions for diverting labour from its natural channels, and for making it stagnate in one spot, and it will appear as if we bad yet to learn the rights of labour and the uses of capital, or as if we openly defied the one, and abused the other. It is not so, however. The iolly came before the iniquity; and, in cases of false legislation, the folly, originating in ignorance, must be long perceived and polluted out,— i.e. must become iuiquity,—before it can be remedied. But the remedy is secured from the moment that the denunciation goes abroad. We have passed through the necessary stages, and the issue is at hand. Our grandfathers legislated about corn on false principles, through ignorance; our fathers clung to these false principles in a less innocent state of doubt. We have perpetuated them wickedly, knowing their disastrous results; and a voice is going up through all the land which will almost immediately compel their relinquishment.

Very little can be done to improve the condition of the people till the Corn Laws are repealed. All practicable retrenchments, all ordinary reduction of taxation, all reforms in the organization of Church and State, important as they are, are trifles compared with this. The only measure of equal consequence is the reduction of the Debt; and this ought to accompany or immediately precede the establishment of a free trade in corn. Day and night, from week to week, from month to month, the nation should petition for a free trade in corn, urging holy landlords, when freed from fluctuation of their revenues, will be able to bear their fair proportion of the national burdens; how the farmer, no longer tempted to a wasteful application of capital will cease the so-called ungratefid clamour with which he repays legislative protection; how the manufacturing class will prosper and will multiply our resources when they are allowed the benefits of the free competition in which their ingenuity qualifies them to hold a distinguished place: and how our labourers will be, by one comprehensive act, raised, every man of them, a grade higher than any laborious, partial legislation can raise any one of their classes. An act which must, at once, prevent the waste of capital and the misapplication of labour, unclog the system of manufactures and commerce, and obviate the main distresses of our agriculturists, must do more for the improvement of our revenue, and the union of onr nation than all less comprehensive measures put together. To untax the prime necessary of life is to provide at once a prospective remedy for all the worst evils of our social arrangements. This will scarcely be disputed by those who admit the principles of the following summary. It is important that such results of these principles sbould be traced out and made familiar to the mind, as it is certain that the days of free trading in corn are at hand.

As exchangeable value is ultimately determined by the cost of production, and as there is an incessant tendency to an increase in the cost of producing food, (mferior soils being taken into cultivation as population increases,) there is a perpetual tendency in the exchangeable value of food to rise, however this tendency may be temporarily checked by accidents of seasons, and by improvements in agricultural arts.

As wages rise (without advantage to the labourer) in consequence of a rise in the value of food, capi—talists must either sell their productions dearer than is necessary where food. is cheaper, or submit to a diminution of their profits.

Under the first alternative, the capitalist is incapacitated for competition with the capitalists of countries where food is cheaper: under the second, the capital of the country tends, through perpetual diminution, to extinction.

Such is the case of a thickly-peopled country depending for food wholly on its own resources.

There are many countries in the world where these tendencies have not yet shown themselves; where there is so much fertile land, that the cost of producing food does not yet increase; and where corn superabounds, orwould do so, if there was inducement to grow it.

Such inducement exists in the liberty to exchange the corn with which a thinly-peopled country may abound, for the productions in which it is deficient, and with which a populous country may abound. While, by this exchange, the first country obtains more corn in return for its other productions, and the second more of other productions in return for its corn, than could be extracted at home, both are benefited. The capital of the thickly-peopled country will perpetually grow; the thinly-peopled country will become populous; and the only necessary limit of the prosperity of all will be the limit to the fertility of the world.

But the waste of capital caused by raising corn dear and in limited quantities at home, when it might be purchased cheap and in unlimited qnantities abroad, is not the only evil attending a restriction of any country to its own resources of food; a further waste of capital and infliction of hardship are occasioned by other consequences of such restriction.

As the demand for bread varies little within any one season, or few seasons, while the supply is perpetually varying, the exchangeable value of corn fluctuates more than that of any article whose return to the cost of productiou is more calculable.

Its necessity to existence causes a panic to arise on the smallest deficiency of supply, enhancing its price in undue proportion; and as the demand cannot materially increase on the immediate occasion of a surplus, and as corn is a perishable article, the price falls m an undue proportion.

These excessive fluctuations, alternately wasting the resources of the consumers and the producers of corn, are avoided where “there is liberty to the one class to buy abroad in deficient seasons, and to the other to sell abroad in times of superabundance.

It is not enough that such purchase and sale are permitted by special legislation when occasion arises, as there can be no certainty of obtaining a suffi-cient supply, on reasonable terms, in answer to a capricious and urgent demand.

Permanently importing countries are thus more regularly and cheaply supphed than those which occasionally import and occasionally export; but these last are, if their corn-exchanges be left free, immeasurably more prosperous than one which is placed at the mercy of man and circumstance by a system of alternate restriction and freedom.

By a regular importation of corn, the proper check is provided against capital being wasted on inferior soils; and this capital is directed towards manufactures, which bring in a larger return of food from abroad than could have been yiekled by those inferior soils. Labour is at the same time directed into the most profitable channels. Any degree of restriction on this natural direction of labour and capital is ultimately injurious to every class of the community,—to land-owners, farming and manufacturing capitalists, and labourers.

Labourers suffer by whatever makes the prime necessary of life dear and uncertain in its supply, and by whatever impairs the resources of their employers.

Manufacturing capitalists suffer by whatever tends needlessly to check the reciprocal growth of capital and population, to raise wages, and disable them for competition abroad.

Farming capitalists suffer by whatever exposes their fortunes to unnecessary vicissitude, and tempts them to an application of capital which can be rendered profitable only by the maintenance of a system which injures their customers.

Landowners suffer by whatever renders their revenues fluctuating, and impairs the prosperity of their tenants, and of the society at large on which the security of their property depends.

As it is the interest of all classes that the supply of food should be regular and cheap, and as regularity and cheapness are best secured by a free trade in corn, it is the interest of all classes that there should be a free trade in corn.

The duty of government being to render secure the property of its subjects, and their industry being their most undeniable property, all interference of government with the direction and the rewards of industry is a violation of its duty towards its subjeets.

Such interference takes place when some are countenanced by legislation in engrossing labours and rewards which would otherwise be open to all; as in the case of privileged trading corporations:—

When arbitrary means of preparation are dictated as a condition of the exercise of industry, and the enjoyment of its fruits,—as in the case of the apprenticeship law;—

When labourers are compelled to a species of labour which they would not have chosen,—as in the case of the impressment of seamen.

The same duty—of securing the free exercise of industry—requires that companies should be privileged to carry on works of public utility which are not within the reach of individual enterprise,—as in the case of roads, canals, bridges, &c.; and also,

That the fruits of rare ingenuity and enterprise should be secured to the individual,—according to the design of our patent law.

In the first-mentioned instances of interference, the three grgat evils arise of

The restraint of fair competition in some cases;

The arbitrary increase of competition in other cases;

The obstruction of the circulation of labour and capital from employment to employment, and from place to place.

In the last-mentioned instances of protection, none of these evils take place.

The general principles of Exchange are so few and obvious that there would be little need to enlarge upon them but for their perpetual violation. To leave all men free to seek the gratification of their wants seems a simple rule enough; and universal experience has shown, not only that wants freely expressed are sure to be supplied, generally to the advantage of both parties, but that every interference of authority, whether to check or stimulate the want,—to encourage or discourage the supply, proves an aggression on the rights of industry, and an eventual injury to all concerned. All that governments have to do with the exchanges of nations, as of individuals, is to protect their natural freedom; and, if a system of indirect taxation be the one adopted, to select those commodities for duty which are not necessary enough to subject the lowest class to this species of tax, while they are desirable enough to induce others to pay the additional cost. It may be a question whether this method of raising revenue be wise: there can be no question that a government directly violates its duty when it grants privileges (real or supposed) to one class above another.

But, it is said, governments have always shown more or less of this partiality. May it be confidently anticipated that they will ever cease to transgress the legitimate bounds of their power?

Yes; very confidently. Such transgression is a feudal barbarism. The feudal system has died out in theory; and it is impossible that its practical barbarism should long remain. The progress of freedom has been continuous and accountable, and its consummation is clearly a matter of confident prophecy. Sovereigns, grand and pretty, individual or consisting of a small number compacted into a government, have first exercised absolute power over the lives, properties and liberties of their subjects: this despotic grasp has been gradually relaxed, till life, property, and liberty have been made to depend on law, and not on arbitrary will. Next, the law has been improved, from being the agent of such arbitrary will, to being the expression of a more extended and abstract will. From this stage of improvement the progress has been regular. The provinee of rule has been narrowed, and that of law has been enlarged. Whatever may have been,—whatever may still be,—the faults in the methods of making the law, the absurdities of the law in some of its parts, aml its inadequateness as a whole in every civilized country, the process of enlargement has still gone on, some unjust usurpation being abolished, some sore oppression removed from time to time, affording a clear prospect of a period when every natural and social right shall be released from the gripe of irresponsible authority. No king now strikes off heads at any moment when the fancy may seize him. No kings' councillors now plunder their neighbours to carry on their wars or their sports, or are paid for their services by gifts of patents and monopohes. No parliaments now make laws according to the royal pleasure, without consuiting the people; and, if they are slow to repeal some oppressive old laws with which the people are disgusted, it is certain that such laws could not at this day be proposed. What can be more eloquent than this language of events? What more prophetic than this progression? While the agents by which the advance has been achieved are multiphed and strengthened,—while its final purposes are more clearly revealed, day by day, what other expectation can be entertained than that it will advance more and more rapidly, till the meanest rights of industry shall be at length freed from the last aggressions of power? Then the humblest labourer may buy his loaf and sell his labour in what corner of the earth he pleases. Then legislators will no more dream of dictating what wine shall be drunk, moreand what fabrics shall be worn, and through what medium God's free gifts must be sought, than they now dream of branding a man's face on account of his theology. They will perceive that the office of dispensing the bounty of nature is not theirs but God's; and that the agents he has appointed are neither kings, parhaments, nor custom-house officers, but those ever-growing desires with which he has vivified the souls of the haughtiest and the lowhest of his children.

[∗]Berkeley the Banker.