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• The Works and Life of Walter Bagehot, Volume Viii
• Physics and Politics. (1872.)
• No. I.: The Preliminary Age.
• No. II.: The Use of Conflict.
• No. III.: Nation-making.
• No. IV.: Nation-making.
• No. V.: The Age of Discussion
• No. VI.: Verifiable Progress Politically Considered:
• Article I.—THE Currency Monopoly. ( From “ the Prospective Review, ” 1848. First Essay Published By Walter Bagehot. )
• Article II.—PRINCIPLES Of Political Economy. ( From “ the Prospective Review, ” 1848. the Second Article Published By Walter Bagehot. )
• Essay On the Comparative Advantages of the Study of Ancient and Modern Languages. ( Written At the Age of Sixteen. )
• Thoughts On Democracy. ( Written In Early Youth. )
• On the Character of Mirabeau and His Influence On His Age. ( Written In Early Youth. )

No. VI.

VERIFIABLE PROGRESS POLITICALLY CONSIDERED:

The original publication of these essays was interrupted by serious illness and by long consequent ill-health, and now that I am putting them together I wish to add another which shall shortly explain the main thread of the argument which they contain. In doing so there is a risk of tedious repetition, but on a subject both obscure and important, any defect is better than an appearance of vagueness.

In a former essay I attempted to show that slighter causes than is commonly thought may change a nation from the stationary to the progressive state of civilisation, and from the stationary to the degrading. Commonly the effect of the agent is looked on in the wrong way. It is considered as operating on every individual in the nation, and it is assumed, or half-assumed, that it is only the effect which the agent directly produces on every one that need be considered. But besides this diffused effect of the first impact of the cause, there is a second effect, always considerable, and commonly more potent—a new model in character is created for the nation; those characters which resemble it are encouraged and multiplied; those contrasted with it are persecuted and made fewer. In a generation or two, the look of the nation becomes quite different; the characteristic men who stand out are different, the men imitated are different; the result of the imitation is different. A lazy nation may be changed into an industrious, a rich into a poor, a religious into a profane, as if by magic, if any single cause, though slight, or any combination of causes, however subtle, is strong enough to change the favourite and detested types of character.

This principle will, I think, help us in trying to solve the question why so few nations have progressed, though to us progress seems so natural—what is the cause or set of causes which have prevented that progress in the vast majority of cases, and produced it in the feeble minority. But there is a preliminary difficulty: What is progress, and what is decline? Even in the animal world there is no applicable rule accepted by physiologists, which settles what animals are higher or lower than others; there are controversies about it. Still more then in the more complex combinations and politics of human beings it is likely to be hard to find an agreed criterion for saying which nation is before another, or what age of a nation was marching forward and which was falling back. Archbishop Manning would have one rule of progress and decline; Professor Huxley, in most important points, quite an opposite rule; what one would set down as an advance, the other would set down as a retreat. Each has a distinct end which he wishes and a distinct calamity which he fears, but the desire of the one is pretty near the fear of the other; books would not hold the controversy between them. Again, in art, who is to settle what is advance and what decline? Would Mr. Ruskin agree with any one else on this subject, would he even agree with himself or could any common inquirer venture to say whether he was right or wrong?

I am afraid that I must, as Sir Wm. Hamilton used to say, “truncate a problem which I cannot solve”. I must decline to sit in judgment on disputed points of art, morals, or religion. But without so doing I think there is such a thing as “verifiable progress,” if we may say so; that is, progress which ninety-nine hundredths or more of mankind will admit to be such, against which there is no established or organised opposition creed, and the objectors to which, essentially varying in opinion themselves, and believing one one thing and another the reverse, may be safely and altogether rejected.

Let us consider in what a village of English colonists is superior to a tribe of Australian natives who roam about them. Indisputably in one, and that a main sense, they are superior. They can beat the Australians in war when they like; they can take from them anything they like, and kill any of them they choose. As a rule, in all the outlying and uncontested districts of the world, the aboriginal native lies at the mercy of the intruding European. Nor is this all. Indisputably in the English village there are more means of happiness, a greater accumulation of the instruments of enjoyment, than in the Australian tribe. The English have all manner of books, utensils, and machines which the others do not use, value, or understand. And in addition, and beyond particular inventions, there is a general strength which is capable of being used in conquering a thousand difficulties, and is an abiding source of happiness, because those who possess it always feel that they can use it.

If we omit the higher but disputed topics of morals and religion, we shall find, I think, that the plainer and agreed-on saperiorities of the Englishmen are these: first, that they have a greater command over the powers of nature upon the whole. Though they may fall short of individual Australians in certain feats of petty skill, though they may not throw the boomerang as well, or light a fire with earthsticks as well, yet on the whole twenty Englishmen with their implements and skill can change the material world immeasurably more than twenty Australians and their machines. Secondly, that this power is not external only; it is also internal. The English not only possess better machines for moving nature, but are themselves better machines. Mr. Babbage taught us years ago that one great use of machinery was not to augment the force of man, but to register and regulate the power of man; and this in a thousand ways civilised man can do, and is ready to do, better and more precisely than the barbarian. Thirdly, civilised man not only has greater powers over nature, but knows better how to use them, and by better I here mean better for the health and comfort of his present body and mind. He can lay up for old age, which a savage having no durable means of sustenance cannot; he is ready to lay up because he can distinctly foresee the future, which the vague-minded savage cannot; he is mainly desirous of gentle, continuous pleasure, whereas the barbarian likes wild excitement, and longs for stupefying repletion. Much, if not all, of these three ways may be summed up in Mr. Spencer’s phrase, that progress is an increase of adaptation of man to his environment, that is, of his internal powers and wishes to his external lot and life. Something of it too is expressed in the old pagan idea “mens sana in corpore sano”. And I think this sort of progress may be fairly investigated quite separately, as it is progress in a sort of good every one worth reckoning with admits and agrees in. No doubt there will remain people like the aged savage, who in his old age went back to his savage tribe and said that he had “tried civilisation for forty years, and it was not worth the trouble”. But we need not take account of the mistaken ideas of unfit men and beaten races. On the whole the plainer sort of civilisation, the simpler moral training, and the more elementary education are plain benefits. And though there may be doubt as to the edges of the conception yet there certainly is a broad road of “verifiable progress” which not only discoverers and admirers will like, but which all those who come upon it will use and value.

Unless some kind of abstraction like this is made in the subject the great problem “What causes progress?” will, I am confident, long remain unsolved. Unless we are content to solve simple problems first, the whole history of philosophy teaches that we shall never solve hard problems. This is the maxim of scientific humility so often insisted on by the highest inquirers that, in investigations, as in life, those “who exalt themselves shall be abased, and those who humble themselves shall be exalted”; and though we may seem mean only to look for the laws of plain comfort and simple present happiness, yet we must work out that simple case first, before we encounter the incredibly harder additional difficulties of the higher art, morals and religion.

The difficulty of solving the problem even thus limited is exceedingly great. The most palpable facts are exactly the contrary to what we should expect. Lord Macaulay tells us that “In every experimental science there is a tendency towards perfection. In every human being there is a tendency to ameliorate his condition;” and these two principles operating everywhere and always, might well have been expected to “carry mankind rapidly forward”. Indeed, taking verifiable progress in the sense which has just been given to it, we may say that nature gives a prize to every single step in it. Every one that makes an invention that benefits himself or those around him, is likely to be more comfortable himself and to be more respected by those around him. To produce new things “serviceable to man’s life and conducive to man’s estate,” is, we should say, likely to bring increased happiness to the producer. It often brings immense reward certainly now; a new form of good steel pen, a way of making some kind of clothes a little better or a little cheaper, have brought men great fortunes. And there is the same kind of prize for industrial improvement in the earliest times as in the latest; though the benefits so obtainable in early society are poor indeed in comparison with those of advanced society. Nature is like a schoolmaster, at least in this, she gives her finest prizes to her high and most instructed classes. Still, even in the earliest society, nature helps those who can help themselves, and helps them very much.

All this should have made the progress of mankind—progress at least in this limited sense—exceedingly common; but, in fact, any progress is extremely rare. As a rule (and as has been insisted on before) a stationary state is by far the most frequent condition of man, as far as history describes that condition; the progressive state is only a rare and an occasional exception.

Before history began there must have been in the nation which writes it much progress; else there could have been no history. It is a great advance in civilisation to be able to describe the common facts of life, and perhaps, if we were to examine it, we should find that it was at least an equal advance to wish to describe them. But very few races have made this step of progress; very few have been capable even of the meanest sort of history; and as for writing such a history as that of Thucydides, most nations could as soon have constructed a planet. When history begins to record, she finds most of the races incapable of history, arrested, unprogressive, and pretty much where they are now.

Why, then, have not the obvious and natural causes of progress (as we should call them) produced those obvious and natural effects? Why have the real fortunes of mankind been so different from the fortunes which we should expect? This is the problem which in various forms I have taken up in these papers, and this is the outline of the solution which I have attempted to propose.

The progress of man requires the co-operation of men for its development. That which any one man or any one family could invent for themselves is obviously exceedingly limited. And even if this were not true, isolated progress could never be traced. The rudest sort of co-operative society, the lowest tribe and the feeblest Government, is so much stronger than isolated man, that isolated man (if he ever existed in any shape which could be called man), might very easily have ceased to exist. The first principle of the subject is that man can only make progress in “co-operative groups”; I might say tribes and nations, but I use the less common word because few people would at once see that tribes and nations are co-operative groups, and that it is their being so which makes their value; that unless you can make a strong co-operative bond, your society will be conquered and killed out by some other society which has such a bond; and the second principle is that the members of such a group should be similar enough to one another to co-operate easily and readily together. The co-operation in all such cases depends on a felt union of heart and spirit; and this is only felt when there is a great degree of real likeness in mind and feeling, however that likeness may have been attained.

This needful co-operation and this requisite likeness I believe to have been produced by one of the strongest yokes (as we should think if it were to be reimposed now) and the most terrible tyrannies ever known among men—the authority of “customary law”. In its earlier stage this is no pleasant power—no “rose-water” authority, as Carlyle would have called it—but a stern, incessant, implacable rule. And the rule is often of most childish origin, beginning in a casual superstition or local accident. “These people,” says Captain Palmer of the Fiji, “are very conservative. A chief was one day going over a mountain-path followed by a long string of his people, when he happened to stumble and fall; all the rest of the people immediately did the same except one man, who was set upon by the rest to know whether he considered himself better than the chief.” What can be worse than a life regulated by that sort of obedience, and that sort of imitation? This is, of course, a bad specimen, but the nature of customary law as we everywhere find it in its earliest stages is that of coarse casual comprehensive usage, beginning, we cannot tell how, deciding, we cannot tell why, but ruling every one in almost every action with an inflexible grasp.

The necessity of thus forming co-operative groups by fixed customs explains the necessity of isolation in early society. As a matter of fact all great nations have been prepared in privacy and in secret. They have been composed far away from all distraction. Greece, Rome, Judæa, were framed each by itself, and the antipathy of each to men of different race and different speech is one of their most marked peculiarities, and quite their strongest common property. And the instinct of early ages is a right guide for the needs of early ages. Intercourse with foreigners then broke down in states the fixed rules which were forming their characters, so as to be a cause of weak fibre of mind, of desultory and unsettled action; the living spectacle of an admitted unbelief destroys the binding authority of religious custom and snaps the social cord.

Thus we see the use of a sort of “preliminary” age in societies, when trade is bad because it prevents the separation of nations, because it infuses distracting ideas among occupied communities, because it “brings alien minds to alien shores”. And as the trade which we now think of as an incalculable good, is in that age a formidable evil and destructive calamity; so war and conquest, which we commonly and justly see to be now evils, are in that age often singular benefits and great advantages. It is only by the competition of customs that bad customs can be eliminated and good customs multiplied. Conquest is the premium given by nature to those national characters which their national customs have made most fit to win in war, and in many most material respects those winning characters are really the best characters. The characters which do win in war are the characters which we should wish to win in war.

Similarly, the best institutions have a natural military advantage over bad institutions. The first great victory of civilisation was the conquest of nations with ill-defined families having legal descent through the mother only, by nations of definite families tracing descent through the father as well as the mother, or through the father only. Such compact families are a much better basis for military discipline than the ill-bound families which indeed seem hardly to be families at all, where “paternity” is, for tribal purposes, an unrecognised idea, and where only the physical fact of “maternity” is thought to be certain enough to be the foundation of law or custom. The nations with a thoroughly compacted family system have “possessed the earth,” that is, they have taken all the finest districts in the most competed-for parts; and the nations with loose systems have been merely left to mountain ranges and lonely islands. The family system and that in its highest form has been so exclusively the system of civilisation, that literature hardly recognises any other, and that, if it were not for the living testimony of a great multitude of scattered communities which are “fashioned after the structure of the elder world,” we should hardly admit the possibility of something so contrary to all which we have lived amongst, and which we have been used to think of. After such an example of the fragmentary nature of the evidence it is in comparison easy to believe that hundreds of strange institutions may have passed away and have left behind them not only no memorial, but not even a trace or a vestige to help the imagination to figure what they were.

I cannot expand the subject, but in the same way the better religions have had a great physical advantage, if I may say so, over the worse. They have given what I may call a confidence in the universe. The savage subjected to a mean superstition, is afraid to walk simply about the world—he cannot do this because it is ominous, or he must do that because it is lucky, or he cannot do anything at all till the gods have spoken and given him leave to begin. But under the higher religions there is no similar slavery and no similar terror. The belief of the Greek

the belief of the Roman that he was to trust in the gods of Rome, for those gods were stronger than all others; the belief of Cromwell’s soldiery that they were “to trust in God and keep their powder dry,” are great steps in upward progress, using progress in its narrowest sense. They all enabled those who believed them “to take the world as it comes,” to be guided by no unreal reason, and to be limited by no mystic scruple; whenever they found anything to do, to do it with their might. And more directly what I may call the fortifying religions, that is to say, those which lay the plainest stress on the manly parts of morality—upon valour, on truth and industry—have had plainly the most obvious effect in strengthening the races which believed them, and in making those races the winning races.

No doubt many sorts of primitive improvement are pernicious to war; an exquisite sense of beauty, a love of meditation, a tendency to cultivate the force of the mind at the expense of the force of the body, for example, help in their respective degrees to make men less warlike than they would otherwise be. But these are the virtues of other ages. The first work of the first ages is to bind men together in the strong bond of a rough, coarse, harsh custom; and the incessant conflict of nations effects this in the best way. Every nation is an “hereditary co-operative group,” bound by a fixed custom; and out of those groups those conquer which have the most binding and most invigorating customs, and these are, as a rough rule, the best customs. The majority of the “groups” which win and conquer are better than the majority of those which fail and perish, and thus the first world grew better and was improved.

This early customary world no doubt continued for ages. The first history delineates great monarchies, each composed of a hundred customary groups, all of which believed themselves to be of enormous antiquity, and all of which must have existed for very many generations. The first historical world is not a new-looking thing but a very ancient, and according to principle it is necessary that it should exist for ages. If human nature was to be gradually improved, each generation must be born better tamed, more calm, more capable of civilisation—in a word, more legal than the one before it, and such inherited improvements are always slow and dubious. Though a few gifted people may advance much, the mass of each generation can improve but very little on the generation which preceded it; and even the slight improvement so gained is liable to be destroyed by some mysterious atavism—some strange recurrence to a primitive past. Long ages of dreary monotony are the first facts in the history of human communities, but those ages were not lost to mankind, for it was then that was formed the comparatively gentle and guidable thing which we now call human nature.

And indeed the greatest difficulty is not in preserving such a world but in ending it. We have brought in the yoke of custom to improve the world, and in the world the custom sticks. In a thousand cases—in the great majority of cases—the progress of mankind has been arrested in this its earliest shape; it has been closely embalmed in a mummy-like imitation of its primitive existence. I have endeavoured to show in what manner, and how slowly, and in how few cases this yoke of custom was removed. It was “government by discussion” which broke the bond of ages and set free the originality of mankind. Then, and then only, the motives which Lord Macaulay counted on to secure the progress of mankind, in fact, begin to work; then “the tendency in every man to ameliorate his condition” begins to be important, because then man can alter his condition while before he is pegged down by ancient usage; then the tendency in each mechanical art towards perfection begins to have force, because the artist is at last allowed to seek perfection, after having been forced for ages to move in the straight furrow of the old fixed way.

As soon as this great step upwards is once made, all or almost all, the higher gifts and graces of humanity have a rapid and a definite effect on “verifiable progress”—on progress in the narrowest, because in the most universally admitted sense of the term. Success in life, then, depends, as we have seen, more than anything else on “animated moderation,” on a certain combination of energy of mind and balance of mind, hard to attain and harder to keep. And this subtle excellence is aided by all the finer graces of humanity. It is a matter of common observation that, though often separated, fine taste and fine judgment go very much together, and especially that a man with gross want of taste, though he may act sensibly and correctly for a while, is yet apt to break out, sooner or later, into gross practical error. In metaphysics, probably both taste and judgment involve what is termed “poise of mind,” that is the power of true passiveness—the faculty of “waiting” till the stream of impressions, whether those of life or those of art have done all that they have to do, and cut their full type plainly upon the mind. The ill-judging and the untasteful are both over-eager; both move too quick and blur the image. In this way the union between a subtle sense of beauty and a subtle discretion in conduct is a natural one, because it rests on the common possession of a fine power, though, in matter of fact, that union may be often disturbed. A complex sea of forces and passions troubles men in life and action, which in the calmer region of art are hardly to be felt at all. And, therefore, the cultivation of a fine taste tends to promote the function of a fine judgment, which is a main help in the complex world of civilised existence. Just so too the manner in which the more delicate parts of religion daily work in producing that “moderation” which, upon the whole, and as a rule, is essential to long success, defining success even in its most narrow and mundane way, might be worked out in a hundred cases, though it would not suit these pages. Many of the finer intellectual tastes have a similar restraining effect; they prevent, or tend to prevent, a greedy voracity after the good things of life, which makes both men and nations in excessive haste to be rich and famous, often makes them do too much and do it ill, and so often leaves them at last without money and without respect.

But there is no need to expand this further. The principle is plain that, though these better and higher graces of humanity are impediments and encumbrances in the early fighting period, yet that in the later era they are among the greatest helps and benefits, and that as soon as governments by discussion have become strong enough to secure a stable existence, and as soon as they have broken the fixed rule of old custom, and have awakened the dormant inventiveness of men, then, for the first time, almost every part of human nature begins to spring forward, and begins to contribute its quota even to the narrowest, even to “verifiable” progress. And this is the true reason of all those panegyrics on liberty which are often so measured in expression but are in essence so true to life and nature. Liberty is the strengthening and developing power—the light and heat of political nature; and when some “Cæsarism” exhibits as it sometimes will an originality of mind, it is only because it has managed to make its own the products of past free times or neighbouring free countries; and even that originality is only brief and frail, and after a little while, when tested by a generation or two, in time of need it falls away.

In a complete investigation of all the conditions of “verifiable progress,” much else would have to be set out; for example, science has secrets of her own. Nature does not wear her most useful lessons on her sleeve; she only yields her most productive secrets, those which yield the most wealth and the most “fruit,” to those who have gone through a long process of preliminary abstraction. To make a person really understand the “laws of motion” is not easy, and to solve even simple problems in abstract dynamics is to most people exceedingly hard. And yet it is on these out-of-the-way investigations, so to speak, that the art of navigation, all physical astronomy, and all the theory of physical movements at last depend. But no nation would beforehand have thought that in so curious a manner such great secrets were to be discovered. And many nations, therefore, which get on the wrong track, may be distanced—supposing there to be no communication—by some nation not better than any of them which happens to stumble on the right track. If there were no “Bradshaw” and no one knew the time at which trains started, a man who caught the express would not be a wiser or a more businesslike man than he who missed it, and yet he would arrive whole hours sooner at the capital both are going to. And unless I misread the matter, such was often the case with early knowledge. At any rate before a complete theory of “verifiable progress” could be made, it would have to be settled whether this is so or not, and the conditions of the development of physical science would have to be fully stated; obviously you cannot explain the development of human comfort unless you know the way in which men learn and discover comfortable things. Then again, for a complete discussion, whether of progress or degradation, a whole course of analysis is necessary as to the effect of natural agencies on man, and of change in those agencies. But upon these I cannot touch; the only way to solve these great problems is to take them separately. I only profess to explain what seem to me the political prerequisites of progress, and especially of early progress. I do this the rather because the subject is insufficiently examined, so that even if my views are found to be faulty, the discussion upon them may bring out others which are truer and better.

ARTICLE I.—THE CURRENCY MONOPOLY.

(From “The Prospective Review,” 1848. First essay published by Walter Bagehot.)

• 1.Capital, Currency, and Banking; being a collection of a Series of Articles published in the Economist in 1845, on the Principles of the Bank Charter Act of 1844, and in 1847, on the Recent Monetarial and Commercial Crisis, concluding with a Plan for a Secure and Economical Currency.
• 2.The Principles and Practical Operation of Sir R. Peel’s Bill explained and defended against the Objections of Tooke, Fullarton, and Wilson. By R. Torrens, F.R.S.
• 3.A History of Prices and of the State of the Circulation from 1839 to 1847 inclusive; with a general Review of the Currency Question, and Remarks on the Operation of the Act 7 and 8 Vict., c. 32. By Thomas Tooke, Esq., F.R.S.

Not only do the circumstances of the recent mercantile crisis naturally create an interest in the subject of currency, but there is also a deeper and a more permanent reason why it should occupy the minds of those who live in the present age. It cannot be denied that the success of the Free Trade agitation in England has now familiarised the majority of educated Englishmen with a scheme of political doctrine which at any previous time would have been deemed, to say the least, eccentric and paradoxical. Almost all in any other generation would have regarded even the characteristic truths of the laissez-faire system as utterly strange and incredible; and even the most far-seeing would have thought its characteristic errors too futile to need a detailed refutation. In our time, however, it has been clearly and convincingly argued, that when no blinding passion prevents individuals from discerning what is their greatest pecuniary interest; when their pecuniary interest coincides with that of the nation at large; and when also the pecuniary interest of the nation is coincident with its highest interests and highest duties,—the welfare of the nation will be better promoted by leaving every man to the exercise of his own unfettered discretion, than by laying down a general legislative rule for the observance of all. We do not think that when the boundaries of the argument are thus guarded and defined, the proof of the laissez-faire system can rightfully be gainsaid. To us it appears evident that a Government cannot exercise that minute inspection of details, and will not devote to them that continuous attention, which are essential to the success of trading speculations: nor even if the whole detail of cases were laid before them, have the habits of rulers in general trained them for coming to a decision so correct as that of mercantile men: nor, what is more to the point than all, can any law drawn up in vague and general language supply a universally beneficial rule for the multifarious and ever-varying operations of commerce. From an habitual contemplation of these truths, a sentiment of dislike to the interference of Government has grown up in the minds of money-making men: those of them especially who have most accurately studied the machinery by which capital and labour are transmitted to their most profitable employment are prone to speak contemptuously of Government interference as though it were proposed that those who were wholly ignorant of the construction of a nicely adjusted machine should have the discretionary privilege of placing a clog upon its working. This sentiment is useful and healthy when confined to its legitimate function, viz. when watching that Government does not assume to know what will bring a trader in money better than he knows it himself; but it is a sentiment very susceptible of hurtful exaggeration: in the minds of many at this day it stands opposed to the enforcement of a moral law throughout the whole sphere of human acts susceptible of attestation: to the legislative promotion of those industrial habits which conduce to the attainment of national morality or national happiness at a sacrifice of national wealth: to efforts at a national education, or a compulsory sanatory reform: to all national aid from England towards the starving peasantry of Ireland: to every measure for improving the condition of that peasantry which would not be the spontaneous choice of the profit-hunting capitalist. Whoever speaks against these extreme opinions is sure to be sneered at as a “benevolent sentimentalist”: and economists are perpetually assuming that the notion of Government interference is agreeable only to those whose hearts are more developed than their brains: who are too fond of poetic dreams to endure the stern realities of science. Under these circumstances, the opponents of the laissez-faire system will be interested to inquire whether there be no exception to it within the limits of Political Economy itself; whether instances cannot be found where the pecuniary interest of individuals, though not guiding them to actions morally wrong, does nevertheless come into collision both with the pecuniary and with the real interest of the nation; where the sedulous attention of a Government is needed to guard the elaborate machinery of national industry against the disturbing agency of individual selfishness. Such a subject, according to an immense preponderance of authority, according to the almost universal belief of the greatest nations, is the subject of currency. The vast majority of nations have vested in the hands of Government the monopoly of what in the hands of individuals would be a lucrative branch of industry, viz. the trade of coining metallic money. The progress of opinion in this country has during the last few years sensibly tended towards following the example of several continental nations, and giving to Government, of course with due respect to vested interests, the monopoly also of the issue of paper money. In the following essay it is proposed, after a brief preliminary notice of the books before us, to indicate the grounds upon which we believe that there is a great wisdom in acknowledging this exception to the principles of Free Trade: to defend the practice of confining to Government both the coining of the precious metals, and, as far as possible, the utterance of money destitute of intrinsic value: and also to notice some interesting points of currency theory which incidentally arise in the progress of the discussion, and which are treated of at length in the works under review.

These works have all arisen out of the terrible monetary crisis of 1847, and for their main and characteristic object to decide whether it were alleviated, caused, or aggravated by the Bank Bill passed at the instance of Sir R. Peel in 1844. This measure had a fourfold purpose: it was designed to limit to 14,000,000 sterling the amount of paper money issuable by the Bank of England on securities; to divide the Bank of England into two Departments, in one of which, called the Issue Department, there should be bullion for all bank notes over and above the before-mentioned 14,000,000, either in the till of the other or Banking Department, or in the hands of the trading public of England; thirdly, to preclude the existing country banks of issue from going beyond the issue of a certain maximum of notes founded on a particular average of the previous circulation of each; fourthly, to provide against the establishment of any new banks of issue, and for the substitution of Bank of England paper in the room of the circulation of any existing banks who may consent to it. This Act is clearly an approach to the principle of a Government monopoly of paper money: most obviously by its last provision, but not less by the constitution of a separate Issue Department, which as a mere piece of mechanism to keep bullion in reserve to represent notes in circulation, and to give bullion in exchange for them on demand, is beyond the control of Bank Directors, and might as well be in the hands of National Commissioners appointed by the Crown. Under this law the monetary affairs of the country were transacted, until October 25, 1847, when a letter from Lord John Russell and the Chancellor of the Exchequer empowered the Bank of England “to enlarge the amount of their discounts and advances upon approved security,” at the rate of 8 per cent., at the risk of an extraordinary issue of bank notes unrepresented by bullion; thus abolishing pro tempore that portion of Sir R. Peel’s Bill which limited the amount of notes not represented by bullion in the Issue Department. On this measure, and on the deviation from it, there is every kind of difference of opinion; but those most entitled to respect are adequately represented by the three works at the head of this Article. Mr. Wilson, the editor of the Economist, has here embodied in a permanent form several very able and instructive articles, first published in that newspaper during last year. He is a decided opponent of the Bill of 1844, and in his own words “has never been able to discover any good ground for the objections which appear to exist in the minds of a portion of even the most uncompromising free traders against the application of the same principles to banking, and especially to notes payable on demand”. He enumerates five assumptions which, he thinks, are contained in the Act of 1844; and professes to refute them at great length. These are, first, that bank notes, though payable in coin at the option of the holder, are still liable to be issued in excess, and are consequently subject to depreciation. Secondly, that convertibility of notes into coin at the pleasure of the holder alone is not a sufficient guarantee that a mixed currency of bank notes and coin shall conform in its variations to the same laws which regulate a purely metallic currency. Thirdly, that issuers of notes have power to increase or decrease the circulation at pleasure. Fourthly, that by an expansion or contraction of the issue of bank notes at pleasure, the prices of commodities can be increased and diminished. Fifthly, that by such an increase or diminution of prices, the foreign exchanges can be corrected, and an undue efflux or influx of bullion, as the case may be, corrected.1 Beside this elaborate attempt at the refutation of the principles of Sir R. Peel, Mr. Wilson has given us a dissertation on the distinction which he draws between capital and circulation, on the difference between floating and circulating capital, on railways, and on the principles of banking; so that the work forms altogether a very complete discussion of the causes which are asserted to have produced the crisis of 1847. On each of the five propositions which Mr. Wilson has enumerated, we shall be obliged to say something hereafter: they are evidently most material in deciding on the rule by which the issuer or issuers, whoever they may be, are to be guided in the management of the circulating medium. We do not imagine that his objections invalidate the essential argumentative supports of the Act of 1844; but we are quite ready to concede that he has effectually demolished certain outworks which had been reared by the excessive zeal of incautious defenders. We may be excused for remarking that we much wish that the book had been submitted to an attentive revision. There are, we think, many inaccurate expressions which would pass in a newspaper without occasioning either remark or mistake, but which occasion perplexity and even error when submitted in a permanent work to the eyes of attentive students and acute opponents. Mr. Wilson concludes with a plan of his own for a secure and economical currency; the principal feature of which is a “substitution” of one pound notes for sovereigns, with the view of obtaining a convenient purchase-money for the foreign corn imported last year.

Colonel Torrens’ pamphlet (if 177 pages do not make a book of too great magnitude for a name so trivial) shows in the strongest light the peculiar talents of its author. Although long, in consequence of the number of the subjects which it discusses, it is by no means prolix or diffuse; for the style is marked by that distinctness and precision which characterise a writer who has a clear and scientific acquaintance with the subject which he handles. No English economist with whose works we are acquainted has at all equalled Colonel Torrens in the literary skilfulness which results in the emphatic statement of abstract truths.1 His well-known controversial ability has never been more strikingly displayed than in his present production. He has been thoroughly roused by the objections to the principles of the Act of 1844, of which he is the greatest theoretical expounder; and he has the advantage of contending against adversaries more eminent for diligence, good sense, and acquaintance with the actual course of business, than for the faculty of scientific abstraction. Colonel Torrens is not, however, so great a worshipper of the Act of 1844 as to disapprove of the interposition of Ministers in October last. On the other hand, he regards this Act of the Government as a masterpiece of political sagacity, conceived with great speculative ability, and executed with first-rate practical dexterity, neither begun too early nor deferred too late.

Mr. Tooke’s book cannot be looked on as a masterpiece of literary skill. It is swollen with quotations which those who are interested in the subject will most probably have read in the works from which they are selected, and which will not always be intelligible to those who meet them here for the first time. The style is prolix and diffuse; very different from what the author of the London petition of 1820 and the previous volumes of the History of Prices has at times shown himself capable of. But Mr. Tooke claims respectful attention on grounds which allow him to sacrifice the attractions of verbal elegance. He began his career as an economical author, many years ago, by writing in defence of the currency doctrines maintained by Ricardo and the Bullionists of 1810; but by a more detailed attention to the condition of England from 1793 to 1839 he was led first to modify, and afterwards to discard, this celebrated scheme of economical theory. At the present time this circumstance is particularly important, because the principles of the Bill of 1844 are, according both to friends and opponents, logically correct deductions from the tenets of Ricardo. Mr. Tooke’s own substitute for these views has been embodied for some years in the History of Prices, of which the work before us is the concluding volume.

It will be more convenient to describe these new speculations in connection with those parts of the subject to which they particularly refer. We are not prepared, with Colonel Torrens, to designate the History of Prices as “the most illogical work which has ever been contributed to the world on a scientific subject”: but we are still less ready to hail Mr. Tooke as the discoverer of principles that will supersede everything yet advanced upon the subject of currency. He appears to us simply an able and industrious collector of facts, who has done a great service to Political Economy by a narrative of the rise and fall of English prices during the present century. He does not appear to us to understand what are the necessary supports of the theory on which the Act of 1844 is grounded. He continually alleges facts as “obvious disproofs” of that theory which, in reality, are perfectly consistent with it, and seem to us sometimes confirmatory of it. Mr. Tooke is a much more violent opponent of the principles of Sir R. Peel’s Bill than Mr. Wilson. It will go down to posterity in this volume of the History of Prices that the interference of Ministers with the working of that Act in October last was a manifest indication of utter falsity of principle, and that the Act itself has been “a total, unmitigated, uncompensated, and, in its consequences, a lamentable failure”. The greatest cause of the diversity of opinion prevailing on the subject of currency, and conspicuous even in the books which we have just described, is an indistinct conception of the circumstances affecting exchangeable value. Money is, for commercial purposes, the standard of value, and no one ought to wonder that mistakes as to value itself may cause that which measures it to be misapplied. A few words, therefore, on elementary principles will not be thrown away if they clear from the minds of any, misconceptions as to the fundamental truths on which almost all political economy is grounded. In doing this, we shall follow the rule of science and common sense, by considering first the most simple cases, and then advancing to those more complicated; first computing the effects due to the principal and constant causes, and then going on to the consideration of secondary and disturbing agencies. We may state that in our judgment, there is a consensus of economists for what we shall advance: particular writers, as Mr. Tooke and Mr. Wilson, take exception to particular tenets; but the prevailing course of teaching, as exhibited in the writings of the most accomplished economists, tends to a united belief in the proposition we are about to maintain. As the simplest possible mode of conducting mercantile business is by barter, we are met at the threshold of Political Economy by the question much discussed some thirty years ago—viz. what, under this simple system, regulates exchangeable value. The doctrine generally received at present, and, as we think, the true one, is as follows: the price universally is regulated by the quantity brought to market, and the demand for it; by the scarcity of the article, and its utility: that is, by its scarcity, and by that power of satisfying human wants of which the market-demand is the sole attainable evidence. Hence it is assumed as an axiomatic truth that articles equally in demand, exchange one against another inversely as their supply: and articles of which the supply is the same, exchange one against another in direct proportion to the demand. But it is obvious that these causes, viz. demand and supply, cannot, in the case of articles capable of being produced in indefinite quantity by human labour, be an ultimate regulator of exchangeable value. The supply of such articles is not a simple casualty: men have some motive for producing when they do produce, and for ceasing when they cease; and this motive it is the business of Political Economists who have in view the discovery of the mental laws affecting the Production as well as the Consumption of wealth, to exhibit with clearness and fulness. Nor in all ordinary cases is that motive hard to seek: since those articles exchange one against another which are equally in supply and equally in demand, it is obviously the interest of every man to supply that one among equally desired articles which he can supply with the greatest ease. Hence, cases of monopoly excepted, articles which it is easy to produce will be supplied in inverse proportion to their cost of production; because producers will flock to those branches of trade which are attended by an extra facility of production: and will keep clear of those where there is an extra difficulty. And therefore it appears as a final result, that in all pursuits open to unlimited competition, articles for which the demand is the same will have an exchangeable value directly proportioned to their cost of production: that is, to the labour and capital expended upon bringing them to market. It is important to call attention to the fact that this result is brought about by alterations in the quantity of articles offered for sale, so that diminution of the cost of production would cause a fall in exchangeable value; until producers shall have suited themselves to the new state of circumstances, and until a general increase in the quantity of the commodity throughout all its uses and all its products shall have so glutted the market as to render it too abundant to bear its old value.

A speculative thinker would expect to find that the main course of trade would not be much altered after the improvement superinduced upon the system of barter by the introduction of a general instrument of interchange under the name of money. When men find out an instrument to facilitate the performance of any work, they will generally take care not to overlook the end in a superfluous anxiety about the means. Mankind are a race of beings wiser in action than in speech: the mass of energetic intelligence which is concentrated on the industrious occupations of practical life, though unrepresented in books and often undervalued by literary men, will generally keep mere instruments in due subservience to their ultimate ends. So it is obviously with metallic money. Gold does not cease to have its value determined as before because everything is purchased with it, and all debts are paid in it. Though a convenient it is a misleading expression to speak of the state of barter as having ceased; in point of fact, gold is bartered for everything and everything is bartered for gold. Just as in the state of things before the introduction of money to expedite the transfer of commodities, a diminution in the cost of production is followed by an increase in the quantity of it that is brought to market, and consequently by a reduction of value. Everybody, in plain English, could have it more easily: the supply of it would increase: the quantity of it made into plate would be greater, and the value of plate less: the quantity made into sovereigns would be increased, and the purchasing power of sovereigns would be diminished. And here it is important to remark that it is an increase in the amount of the circulating medium that raises the prices which are estimated in that medium: that the quantity of money in circulation is the cause of that rise, and not the consequence of it: that a facility in obtaining the medium of interchange raises the price when measured in that medium. Nor will the case be altered when bullion is imported from foreign countries: an influx of bullion will cause an additional quantity to be made both of plate and sovereigns: by causing that increase of quantity it will also cause a diminution in their purchasing power. Nor is the case altered by the foundation of banks of deposit. The necessity of these arises thus: every man has to keep a certain amount of coin ready to meet demands upon him: “Money,” says Aristotle, “is barren”: no man gets a profit on what is in his till; and a natural desire arises in consequence to reduce its amount to the minimum consistent with safety and solvency. This desire is partially satisfied by an offer from a person whose respectable character and pecuniary means afford the public what they think an adequate guarantee for his not becoming insolvent, to receive the superfluous cash of individuals, and to pay it back either upon demand or upon the receipt of a certain notice. A part of this money he lends out again, at a profit to himself; a part he holds as a reserve to meet demands upon him.

Now under the influence of a cheapening of bullion it appears that both the money in the hands of the public and in the bankers’ reserve will increase. Sovereigns and plate, as we so often say, will be multiplied, and wherever either is used there will be an increased supply of them. It is a very secondary question whether, with Colonel Torrens, we shall say that money in bankers’ reserve is in circulation, or, with Mr. Wilson, confine that appellation to money in the hands of persons not bankers. Mr. Wilson’s distinction seems to us very arbitrary:1 the reserve of money is an equivalent for a larger amount, which if there had been no banks of deposit would have been in the hands of the public; if the keeping one-fifth of the currency of a country in a bankers’ reserve enables it to dispense with the employment of two-fifths, it seems confusing to apply the name circulation to the three-fifths in previous use, and not to apply it to the one-fifth which is substituted for them. What renders the difference of opinion important is the doctrine of the exchanges. When there is an influx of bullion, the exchange is, in conformity with certain old mercantile superstitions, called favourable, and also unfavourable when there is an export of bullion. Now the theory of Sir R. Peel’s bill assumes that with the influx of bullion there would be an increase in the quantity of a purely metallic circulation, because as a rule that influx would be attended with a cheapening of bullion, and mutatis mutandis a similar proposition is thought to hold if an efflux. Also it is stated as a fact of experience, that drains of bullion, for the purpose of supplying an adverse exchange, act first on the reserves of bankers; and Mr. Wilson reasons that these reserves are not circulation, and that, as the drain acts on them, the circulation is not reduced by it; and he believes himself to have thus overthrown a material support to the Act of 1844. Even, however, if it were admitted that the drain acted only on the reserves, we should answer that they were as much in circulation in the till of the banker as in the till of a merchant: but we altogether doubt if a drain could act on them only. A reserve in general ought to bear a fixed proportion, say a third, to the deposits which it is kept to meet: if a half of the reserve were drawn out, the deposits would evidently be reduced only a sixth, and the reserve would only be one-fifth of the deposits. A prudent banker would, in such a case, increase his money reserve by the sale of securities and an abstraction of the proceeds from the money in the hands of the general public. On the whole we cannot but regret that Mr. Wilson should have suffered a point of detail like this to obscure his perception of the principle that an influx of bullion will be attended by a cheapening of bullion: and that the latter will, when the number of monetary transactions has undergone no diminution, be accompanied by an increase of circulation. We quite concede to Mr. Wilson that it may happen that the transactions of the country may be simultaneously diminished with an import of bullion and increased simultaneously with an export. The amount of transactions depends of course on the amount of commodities in the country and on the wish to interchange them. Circumstances could no doubt be imagined, which might, by affecting these, reduce the mercantile business of the country, just when bullion was fast flowing into the country; but this admission obviously does not affect the principle which we have here advanced. It is also proper to remark, that we have been all along speaking of a purely metallic currency, where all barter was extinct, and all bargains were effected by the passage of so much coin from hand to hand. We are quite willing to concede to Mr. Wilson, that if any remains of a system of barter should have lingered long after the rest of it was abandoned, and if this last remnant of the primitive state of things were swept away during an adverse exchange and an efflux of bullion, an increase in the circulation of a purely metallic currency will be coincident with a foreign drain of bullion. As Mr. Wilson himself remarks in a recent number of the Economist, the downfall of the conacre system, and the introduction of money wages into many parts of Ireland, may have last year rendered necessary an increase of Irish silver currency, although there was simultaneously a drain of bullion from the whole United Kingdom to pay for foreign corn.

It is obvious that the introduction of a metallic currency induces the practices of estimating the prices of articles in money, or, as it is phrased, makes money the standard of value.

On this account it very early became necessary to know what amount of gold is being paid and received at any given time: so that when the price purports to be a certain quantity of gold, no more and no less should be paid and received. For this purpose, either Governments or individuals of sufficiently respectable character must place a stamp or other mark on the bullion to intimate what it consists of: and this is the prerogative or privilege of coining. It has been extensively believed that Governments were the only persons who were competent to give a credible assurance that metallic money contained a certain amount of bullion. Nevertheless, at Rome, the patricians had, for a long period, the right of coining money, and it is evidently an infraction of the principles of Free Trade and unlimited competition to vest in Governments the monopoly of stamping metallic money. It is evident that trade would go on if Baron Rothschild’s head were on our coin instead of Queen Victoria’s; and Mr. S. J. Loyd’s assurance that £3 17s. 10½d. of his currency contained an ounce of gold and no more, would be as good as a similar assurance from the Master of the Mint. Such a system might be worked under a severe law against instances of fraud, and under legislative provisions, enumerating what coins should be allowed by law to be a legal tender, and what amount of gold and silver they should respectively contain. These provisions would be necessary in order to free us from the confusion of different systems of coinage, with different names, and with the same names and different weights, whose complexities would rival those of the Swiss batzen. So long as the pieces of coin really contained that amount of bullion which they were certified to contain, no effect would be produced except that the expense of coining, now defrayed by the State, would be borne by the public in the shape of a permanent difference of value between the manufactured article—sovereign, and the raw material—bullion, and that the coiners would get the ordinary rate of profit on the capital employed in their business. But if debasement were once introduced, if sovereigns did not contain that amount of bullion which they were certified to contain, but only a less amount, sovereigns would be supplied, by the fraudulent producer, with less cost and in greater quantity than by others, would be issued by him upon loan, and in purchase, resale, or consumption, to an undue extent. New purchasers would be brought into the market, who would not have come there if the currency were undebased. The price of goods would rise; the rise in the price of goods would act as a stimulus to production; the stocks of goods for sale would be largely increased; at last the debasement would be discovered; the debased coin would be at a discount; prices would return to their original metallic standard, and would, in consequence, undergo a considerable nominal fall; and that fall would probably go beyond its true limits, because few like to make purchases in a falling market, and most hang back in expectation of an impending additional fall of prices.

Here there is obviously considerable derangement of industry, and considerable evil arising out of the custom of coinage by individuals. Besides this it must be remarked that the chief utility of unlimited competition is its quality of reducing the cost of production to the minimum which Nature admits of. In all mechanical processes, for example, unlimited competition produces continually new inventions and additional economy in the working of old ones; and in general, this has the advantage of supplying human wants at the least possible sacrifice of labour and capital. But improvements in the process of coining brought about by the competition of individual coiners would have a different and less beneficial effect. What is wanted in money is fixity1 of value.

The discovery of a new mine is a very questionable advantage, if it should throw others out of employment, and reduce the cost of production of bullion, and thereby diminish its exchangeable value. All money prices would rise 10 per cent. in consequence of such an alteration in the cost of money to the extent of 10 per cent.; the cause would not at first be recognised as prices rise: the rate of production will be accelerated and the stock of goods on hand augmented: the course of events in fact would exactly resemble that rise of price and extension of supply which we have shown to be a consequence of a debasement of the coinage by individual competing coiners. It has been contended that this is no evil: that the quantities of all goods in the market are equally augmented: and that therefore, as in a state of barter, each would soon find out what he wanted to exchange his own commodities for, so, in the present more artificial state of things, every one would sell at the reduced rate, and would buy what he wanted and no more. The value of commodities in relation to one another, it is contended, has not been affected, and the rise in their money prices, it is therefore legitimately deduced, would only be nominal and immaterial. This argument is so far correct, that the rise of the prices of all commodities to the extent of 10 per cent. in consequence of a corresponding fall in the value of money, being common to all articles, does not affect their relative value. But the increased rate of production which we have shown to be consequent on that rise has a very different effect: an addition of 10 per cent. to all the commodities in a market very materially alters their relative exchangeability. The effect of a very small supply of some articles is enormously to lower their value, while a much larger supply of others hardly diminishes the value at all. For instance, of those articles of which only a limited amount is wanted, a small increase above that amount will cause a great reduction of price. There is a certain amount of plain food, for example, which will thoroughly feed a population: the demand for it, as Adam Smith long ago observed, is limited by the narrow capacity of the human stomach. A series of very plentiful harvests which should produce a quantity of corn exceeding, in however small an amount, this fixed maximum of demand, would bring down the price of corn enormously. On the other hand, articles of more luxury are often indefinitely desired. A fall in the price of jewellery of ¼ per cent. might bring it within the reach of a new class, and might be a consequence of an increase of 1 per cent. or more in quantity. Therefore it is plain that an increase in the quantity of all commodities would not equally affect the value of them all, but would change their relations to each other very considerably. We must also bear in mind that all articles are not produced in the same time. A rise in the price of one will insure an immediate change in the quantity of it which is produced and brought to market: but it takes years to affect the quantity of an article which it takes years to manufacture. So that not only would an equal increase in the quantity of produce cause a difference of value, but also an equal increase in the rate of increase of all commodities does not immediately ensure an equal augmentation in their supply: and both these it appears are the consequence of a diminution in the value of the currency. Hence it appears that fixity of value is the only essential in the standard of value: that the improvements which competition would introduce into its manufacture would not compensate for the derangement of industry with which they would be inevitably accompanied: that what is wanted is not the cheapest money, but the money whose value is most stable: that what we wish is not to diminish the cost of production of coin, but to render it a constant quantity. Moreover, by giving Government the monopoly of coining we can not only give coin a fixity of value by the difference between the progressive improvements of individual competitors and the conservative habits of an uninventive monopolist; but we can do away altogether with the whole source of alteration in the value of money arising from its having to go through the mechanical process of being coined. Government coins gratis. The nation defrays the expense out of the taxation. Coin is the only manufactured article of no greater value than the raw material out of which it is made.1

Hence beside debasement by individual coiners we find another great source of destruction—derangement in the machinery of industry, which is entirely closed up by giving to Government the monopoly of coining metallic money. On these grounds Governments have deemed it necessary to keep the issue of metallic money in their own hands. To us they appear amply sufficient: but we regard with wonder that no thorough-going disciple of the anti-corn-law league has yet advanced the proposition that there ought to be Free Trade in Sovereigns. The derangement which debasement introduces into the pursuits of industry is in our view a sufficient reason for keeping it out of hands in which there is a risk of possible fraud. But there is such capital ad captandum case by appealing to what our pound was originally, by pointing out how much our Government has in past times debased it, by insisting on the expense and mismanagement of the national Mint, and the want of new openings for national capital, that we really wonder exceedingly at not hearing any one claim for individual industry the lucrative employment of coining the precious metals. We especially wonder that those who with Mr. Hume are so strenuous for unlimited free trade in paper money should not take bolder ground, and assert that Government is overstepping its proper limits in meddling with money at all. We shall proceed now to give reasons for believing that all the grounds for entrusting the Government with a monopoly of coining money hold with increased force for giving them a monopoly of the issue of paper money.

We have seen that the introduction of banks of deposit enables a smaller amount of coin to do the work of a larger. The first effect of this, if the introduction were sudden, would undeniably be to throw coin on the market in increased quantity as compared with the transactions of the country, and therefore to depreciate it. Whatever economises the amount of coin in use must inevitably cause a temporary superabundance of it: on this will come a reduction of value, and on this again, if it goes far enough, a melting of coin: the depreciation of bullion itself, in consequence of the additional supply, and consequently an exportation to foreign countries not affected by this local diminution of exchangeable value. Now exactly this very same course of events appears to take place in consequence of the introduction of paper money, which has also the effect of economising the use of coin. In its origin paper money is a promise to pay specie. It is used by a banker in purchases for consumption, in loans and in discounts. Of course it is his interest to pay in promises when he would otherwise have paid in coin, because he thus obtains the use of the coin where his promises would have been useless. Also there is a likelihood that he will lend it when he would not have lent coin, because he will get interest on a loan without having to find intrinsic value to the amount lent. Now the effect of both these courses of action is to bring new purchasers into the market; and thereby to raise prices. We before explained that a facility of obtaining bullion as the medium of interchange had a tendency to raise the price when measured in that medium. The case is not altered when media is written for medium.1 The increased facility of obtaining bargain-making instruments would cause more persons to attempt to make bargains; new buyers would come into the market when they could obtain more easily the means of buying. The coming of new buyers into the market while the quantity of commodities remains the same will raise the price of those commodities. The ensuing effects are exactly those which we have shown to arise from a debasement of species by fraudulent competing coiners: viz. a great derangement of industry, an increased rate of production, a rise in the value of articles not quickly supplied in additional quantities as compared with those which are of speedy growth and quickly made; a fall in the value of articles much affected by small increase of supply, as compared with others comparatively insensible to this source of fluctuation. These effects are, we admit, only temporary. The debasement of the coin is found out, and so is the depreciation by means of the issue of paper. The rise in the price of commodities affects the price of bullion as a commodity; the good coin is melted down; bullion itself is depreciated; and if the extent of the depreciation be sufficient to cover the cost of carriage, becomes an article of export to other countries. One way of obtaining coin for export or melting is by returning notes on the issuers for coin; and it is evident that the return of one-half the notes issued, and the withdrawal of the coin thus obtained from circulation, would bring the currency back to its former quantity, and prices to their former level. The injurious effects of depreciation by convertible paper and of debasement by individual coiners are exactly the same: both productive of extensive mischief while they last. One great difference is, that debasement is a matter that can be tested by the senses: whereas depreciation by paper may continue for a long period of time, without any sign that will certainly convince all inquirers, and controversies concerning it may be multiplied indefinitely by the confusion of philosophers and the mistake of self-interested traders. Another great difference however is, that when the final result has been the substitution of paper for coin, a good effect is produced, which is not produced by the discovery of a debasement: a machine produced with very little labour has been made to do work before only to be accomplished by one of very considerable cost; human exertion is economised, and the empire of man over the powers of external nature is extended and confirmed by an increase in the efficacy of his industry.

The debasement of the coin by a monopolist like Government has a somewhat different effect. It is in general known from the first, though its effects in detail have rarely been correctly interpreted: there is seldom any law compelling a return to the original standard, as we have supposed to be the case with competing coiners: and in the great majority of cases there is no return to the state of things in existence previous to the depreciation. If issued, as it always is, where good coin was not obtainable by the Government, it gives an extra facility of obtaining the media of interchange to the extent of the difference between the cost of production of the debased and the undebased coin. Its effect on industry is therefore similar to that before explained: prices rise and money is depreciated. There is an exactly similar case with a particular kind of paper money issued by the Government, or a monopolist bank, or set of banks. This kind is generally in form a promissory note, but it is not so in reality: it is not payable in anything: it is in intentional language inconvertible. Of this kind were the French Assignats, and such are the notes of the Bank of France at the present moment. As its cost of production is nothing compared with the cost of producing gold, an issue of inconvertible paper may be considered as a debasement without limit. Obviously, therefore, the monopolist can issue as much as he pleases: he will find people always to take the money: the only limiting causes to depreciation are the habits of issue to which he conforms voluntarily. If by an infallible instinct he found out what quantity of purely metallic money would have sufficed for the wants of the community, and used only that amount, there would be no depreciation. We know that there is no such instinct, and we do not believe that there is any means of calculating the demand for a purely metallic currency, except by the use of it, or of something not more easily attainable than it. Again, if this inconvertible currency were issued by persons who used to issue a convertible currency, and if, trade happening to be pretty steady, they issued only that amount of currency which they had been accustomed to issue when obliged to give gold in exchange for their notes, no effect would be produced by the law empowering them to issue inconvertible paper. But this state is clearly one of unstable equilibrium: if trade altered, this fixed amount of currency would become redundant or insufficient: in no way has it any tendency to right itself after receiving the slightest derangement. There is indeed a certain theory known by the name of the “Law of Reflux,” by which Mr. Wilson contends that the quantity of an inconvertible currency suits itself immediately to that of a convertible currency to the quantity of a purely metallic circulation. In substance it is this: that when issued upon loans, they are returned to the issuer if not wanted for the general transactions of the country: thus Mr. Fullarton says very perspicuously: “Bank notes are never issued but on loans, and an equal amount of notes must be returned to the Bank whenever the loan becomes due. Bank notes, therefore, can never clog the market by their redundance. The Bank has only to take care that they are lent on sufficient security, and the reflux and the issue will in the long run balance each other. Perfect convertibility is no doubt one essential condition of every sound and perfect system of currency. It is the only effectual protection against internal discredit, and the best preventive against any violent aberrations of the exchange with other countries. But it is not so much by convertibility into gold, as by the regularity of the reflux that in the ordinary course of things any redundancy in the bank-note issuer is rendered impossible.” And both Mr. Tooke and Mr. Fullarton have elsewhere written copiously to the same effect. But it is hardly true as a fact that all bank notes are issued as loans. They are, we believe, not unfrequently issued by country bankers in purchases for consumption. Also on the general question Colonel Torrens well writes: “Mr. Fullarton reiterates this argument through several pages, innocently unconscious of the fact that, in order to give it any weight and validity, it is necessary that the loans should be repaid on the instant they are granted. Allow any interval to elapse between the loan and the repayment, and no regularity of reflux can prevent redundancy from being increased to any conceivable extent.” It is certainly very strange to find a distinguished practical man of business like Mr. Wilson, laying down the old doctrine of the Bank directors that inconvertible bank notes could not be depreciated, no matter at how low a rate of interest they are issued. Why those who hold this doctrine do not go further, and maintain that everybody should be allowed to issue debased coin adlibitum, is more than we can understand. Every argument here alleged is at least equally valid for coin of less intrinsic value than it purports to be, as it is for paper which is almost destitute of intrinsic value: and Mr. Hume is ever ready to give ample evidence of the management of the National Mint. Mr. Tooke, who is more moderate though perhaps less strictly logical, contends for the law of reflux only when the notes are lent at the existing rate of interest. But to select one objection out of many, is it to be supposed that the competition of issuers, or the self-interest of the monopolist Bank, will not delay the rise of the rate of interest by continuing to offer loans and discounts at the market rate, and then at least quantities of money, which Mr. Tooke admits to be excessive, will be issued upon the market, and will have the effect so often insisted on in raising prices and depreciating money? Moreover, it is quite unproved that the facility for lending afforded by the privilege of issuing money destitute of intrinsic value will not cause quantities of it to be issued which would not have been issued under less favourable circumstances: the obvious presumption is, that they will be issued. The market rate of interest is affected by very many different circumstances, many of them quite unconnected with money and is therefore an unsatisfactory guide for regulating issue of it—especially since the quantity issued has a reflux effect on the rate of interest. Mr. Wilson, we doubt not, would reply that more money would not be kept out than the transactions of the country require: we venture to oppose to his great authority the still greater authority of Mr. Ricardo: “The plea that no more is issued than the wants of commerce require is of no weight; because the sum required for such a purpose cannot be defined. Commerce is insatiable in its demands, and the same portion of it may employ ten millions or one hundred millions of circulating medium; the quantity wholly depends on its value. If the mines had been ten times more productive, ten times more money would the same commerce employ.” “Money,” says Mr. Senior, “is abstract wealth:” anyone who wants anything, wants that which will buy everything. Once lessen the difficulty of obtaining money, and there will be no want of claimants for the use of it.

Mr. Tooke has another theory which is, we believe, peculiarly his own, so far as writers of any name and authority are concerned. It is sometimes stated in the form that “changes in the amount of circulation do not affect prices at all”. Upon this point we can only refer our readers to what we have said before: we have nothing new to say, and we must not repeat arguments already wearisomely insisted on. Circulation is bartered for commodities, and commodities are bartered for circulation. Mr. Tooke strenuously maintains everywhere in his History of Prices, that the quantity of commodities brought to market affects their price as measured in circulation; and why the commodity circulation should not be depreciated by super-abundance and appreciated by scarcity, is to us inscrutable. Another of Mr. Tooke’s dicta is, that an increase of circulation is a consequence, not a cause, of a rise of prices. We believe that sometimes it is a cause and sometimes an effect. We have pointed out various instances, as the debasement of the coin, in which our increase of circulation is a cause and not a consequence of a rise of prices. But we fully concede to Mr. Tooke, that if money circulates at an unaltered rate,1 the same amount of commodities might require a greater amount of money to circulate them at some times than at other, because there would be periods of speculation in which there was a great wish to interchange commodities, and times of depression in which the desire to interchange is comparatively weak. There are also, no doubt, cases in which a slight diminution in the supply of articles of primary necessity causes a great increase in their price, not immediately counterbalanced by a corresponding fall in other articles; and this might cause a general rise of prices, and require more money to circulate them. All this, and several other cases of a similar character, may be admitted by the staunchest advocate for the Bill of 1844; although Mr. Tooke not unfrequently argues that any increase of prices not caused by an increase of circulation is fatal to it. No one denies that if a case can be found of a general rise of prices not originating in such a scarcity as would counterbalance the rise of price by the diminution of quantity, either an increase in the quantity of circulation or an enhancement of its value will necessarily take place. But it is proposed, also, to lay down that a general fall of prices will ensue on an increased difficulty of obtaining money. Few will allege that alterations in the value of money are more than disturbing causes; few will deny that the alterations in the supply and demand of commodities are the main constant causes of their exchangeable values.

Nevertheless, though we cannot concur in the extravagant eulogiums which some writers have recently lavished upon the opinion of Mr. Tooke, we are not disposed with Colonel Torrens to put them aside as worthless, or treat them as a “psychological study”. The evidence of a distinguished practical man of business against any law, the working of which he has minutely studied, will rarely be found entirely destitute of instruction. On one point we think he is decidedly victorious over Colonel Torrens. Mr. Tooke contends that though no new purchasers can, under the present law, be brought into the market by an undue issue of bank notes, nevertheless other media of interchange can be found, such as bills of exchange and book credits, that will do the work, if not so conveniently yet not with intolerable inconvenience. Mr. John Mill has well said that “Bank notes are to credit what coin is to bullion”: they are, that is, the most convenient and efficacious mode of employing it. But Mr. Mill urges that a banker can find other means of giving his customers credit when he pleases: there are other ways of bringing new purchasers into the market who would not have come there if the banker had been obliged to procure coin to make the necessary advances. On this point Mr. Tooke writes:—

“When the Bank of England or a country banker makes an advance, or discounts a bill, the borrower or discounter is asked how he wishes to have the amount. In the case of the Bank of England the borrower, when the discount or loan is agreed on, has the option of receiving gold or notes or a book credit. In by far the larger proportion of instances I believe the book credit is preferred; a cheque on the Bank is passed, and placed by the borrower to his account with his banker, who as between himself and the Bank of England sets off the amount against acceptances to bills or cheques upon him held by the Bank, or simply places it to the credit of his deposit account with the Bank. In this case not a single note is created or issued, against several millions of securities upon which advances are made either to individuals or to governments.”

Evidently so long as transactions take place between customers of the Bank of England the transfer of certain figures from one man’s account to another is enough to transfer a very large amount of wealth through any number of consecutive hands. Again, it is a well-known fact that bills of exchange were media of interchange competing against bank notes in Lancashire, and were for a time in great measure successful. Now these substitutes, we admit, take away considerably from the advantage of giving to the Government a monopoly of the issue of bank notes and coin; their existence is a very serious set-off against the utility of Sir R. Peel’s measure. But we cannot make, with Mr. Tooke and Mr. Mill, the next step, and deduce that they entirely destroy that utility. Bank notes are by very much the most efficacious and customary substitute for coin; for one transaction performed by means of bills of exchange or book credit, perhaps a large number are performed by means of notes payable on demand.1 Few facts can show this more clearly than the fact that able men very familiar with the course of events have been accustomed to ignore these substitutes altogether, to treat notes and specie as the only media of interchange requiring the attention of speculators and legislators. Bank notes and coin circulate from hand to hand without endorsement, and therefore finally close transactions at once, while bills of exchange do not close them until finally paid. Coin and notes are capable of being used by those who do not keep their accounts with the same bankers, and in this are far more efficient than book credits. Although therefore we admit that these substitutes for the use of coin and notes exist, and that they must of necessity be left in the hands of individuals; although we also concede that a habit of giving excessive credits of long duration will derange industry in the same manner as a depreciation of paper or a debasement of the coin, we still feel disinclined to give the issue of either coin or bank notes (for the argument tells, it will be observed, equally against both) to the haphazard of unrestricted competition; we must not allow more potent instruments of derangement to work unimpeded, because less potent ones are working side by side with them; it is the duty of a wise State to secure the mass of the nation against evils produced by the selfishness of individuals so far as it is possible: to bring within Government control even the most limited causes of commercial convulsion.

A verbal puzzle also is raised and prolixly argued by Mr. Tooke as to what constitutes money: he confines the word to coin and inconvertible paper, and maintains that convertible paper and bills are only forms of circulating credit. The terminology is not, in our view, very interesting; yet we may observe, that in our eyes it is a superfluous subtlety to say that metallic money does not circulate on the credit of the coiners: the Government stamp is an assertion concerning the amount of bullion contained in the coin, and the user of it uses it on the faith that this assertion is true, and it is hard to draw the line between this and credit. Again, inconvertible paper for the most part circulates, because it is believed that no issue of it in quantities sufficient to cause depreciation will immediately take place: no trader who could help selling would take assignats in exchange for his goods if he knew that the Government were going to issue immediately an enormous amount of them. We think it inexpedient to draw this fine distinction between trust and credit in the definition of a word so often to be used. Colonel Torrens, as we think, says truly, that in ordinary speech a payment in bank notes is a ready-money payment: and that

“The terms money and currency have hitherto been employed to denote those instruments of exchange which possess intrinsic or derivative value, and by which, from law or custom, debts are discharged and transactions finally closed”.

We should somewhat differ from Colonel Torrens as to what this definition would include; but as we would not weary our readers with mere questions of nomenclature, we shall only add that, even if Colonel Torrens could make out that bills of exchange and book credits are not currency in the technical sense of the word, this would not justify his inference that their operation upon the transfer of commodities is so different from that of bank notes as not to interfere with the consequences of leaving the issue of the latter in the hands of Government alone.

In answer to Mr. Tooke and Mr. Wilson’s objections to Sir R. Peel’s measure, we may use an argumentum ad hominem of some plausibility. Both these writers admit that the “convertibility” of bank notes into coin is an essential condition of their safest and most beneficial employment. It is also clear that the failure of individual issuing bankers reduces to a nullity the legal obligation to give coin in exchange for notes. While the issue of notes is a matter left to unrestricted competition, and when, as Mr. Wilson’s principles of Free Trade in Banking and Currency imperatively demand, no more care is taken to secure the convertibility of notes than to secure the payment of deposits, a very serious fraction of the “circulation credit” of the realm is mischievous credit, founded on no real basis, but resting on a belief in the riches of insolvent bankers. Even with the restricted number of individual issuers, admitted by the present law, there have been four failures of issuing banks in the counties west of London, and some of these appear in the papers as having “almost no assets”. If new banks of issue had been allowed to spring up during the railway mania, who can doubt that a large number of insolvent concerns would have come into existence, and have gone down at the first appearance of depression, leaving the holders of their notes with papers not only inconvertible, but valueless? Even were it admitted that issues of convertible paper can never depreciate coin, we should still contend that there would be a case for the interference of Government to secure the convertibility of the coin; and as an argumentum ad hominem against Mr. Wilson, we hold it to be perfect.

These reasons appear to us to answer the objections of Mr. Tooke and Mr. Wilson to the Bill of 1844, which relate to the internal transactions of the country. With respect to our foreign relations we shall speak presently, and also with respect to the interference of Government in October last. But first we shall sum up what we have already advanced in the assertion, that the issue of money is a fit case for a Government monopoly, because the object aimed at is not to reduce the cost-price, but to render it fixed: because fluctuations in value are attended with a great derangement of internal commerce; because the interests of individual coiners and issuers is at variance with the interest of the community, and because as a result of the whole, the principle of individual self-interest cannot here be trusted to as a security for the welfare of the community.

We hope we have made good our assertion, that the arguments which are held to be sufficient in relation to a Government monopoly of coining are equally good for a Government monopoly of paper money. And this is the more worthy of remark, because we have not as yet availed ourselves of one of the most powerful arguments against those who purpose to superadd to our present system of metallic money a “free trade” in paper currency. At present the whole expense of procuring money from the mine is borne by the community at large, and the expense of coining is defrayed by the State. Surely it appears but fair that those who bear the expense of providing this costly instrument should derive the advantage accruing from the use of an equally efficient but more economical substitute. Nevertheless, under the system of “Free Trade in Banking” the profit derived from the substitution of paper for gold goes to the banker and not to the community: it resembles the profit of debasement by individual coiners of which we have spoken so often: it is as if one partner were to derive the whole advantage from an economy of the paid-up capital belonging to the whole mercantile concern.

The arguments which we have here used are based entirely on the internal circumstances of the country, and we think they afford ground for saying that unless serious dangers arise out of its external relations, the principles we recommend are worthy of adoption. That no such dangers exist is presumable from the fact, that the advocates of the measures of 1844 are prone to select these external relations as the stronghold of their argument. The object of our propositions, our readers will remember, has been to preserve fixity of value in the currency, and it remains to be seen whether the effects upon foreign trade of those depreciations and appreciations of which we have been speaking are injurious or beneficial: if they are injurious, they will be confirmatory of our case; if beneficial, a set-off against it. The state of this part of the case we believe to be as follows: If all the world used the same coins, and regarded the same precious metal as the standard of value, the trade between two nations would not, so far as currency is concerned, differ from that of the same nation; the trade between London and Paris would be like that between London and Glasgow, except that, as in the territories of the German Zollverein, the same coin would in every different place bear the stamp of its own special Government. Nor is the case materially altered when the currencies of two countries are not the same but different, but when the same metal is the standard of both: an equation is then settled by estimating the amount of the standard metal (the Government stamp counting of course for nothing beyond its own territories), and this equation is called in mercantile language the par of exchange. When two different metals are used as the standard, the par consists of the quantities of the two which exchange one for another in the market; and here the par is not as in the first case an invariable physical fact ascertainable by the senses, but something which depends on the fluctuations of the market, and can only be known by noting down the results of each day’s bargaining. Now it is plain that in either of these cases the depreciation of what in one country is the standard of value will tend to cause its exportation; and similarly its appreciation will act as a premium on its importation. If English bullion goes abroad to a country having no previous debt due from England, something must return in order to pay for it; and in this case depreciation of the currency, by providing a profitable article of export, will act as a premium upon import. If bullion is exported to a country having a credit on England, there is no occasion why any commodity should return in order to pay for the bullion, because the latter is really transmitted to pay off a debt. There is no special inconvenience in these events in themselves; but one particular case exists in which they certainly aggravate very serious evils. If from any cause, as a deficient harvest, bullion and coin are being drained out of this country, there is a certain point at which they would be so elevated in value as to render it no longer profitable to export them. But if by an issue of paper simultaneously with the continuance of the drain we provide an efficient substitute, the supply will seem not to be diminished, the value will not rise, coin will be exported instead of commodities; the drain of bullion will not cease where it would have ceased under a purely metallic circulation; it will be for a longer period the most profitable article of export. Such a management of the paper circulation is at variance with the first principle of a metallic currency, which we have shown to be that, cæteris paribus, the circulation should increase with the cheapening and diminish with the appreciation of bullion. Also, if the paper circulation were augmented by the increase of the notes of issuing bankers competing with one another, another serious inconvenience will of necessity arise. It appears to be an attested fact of experience, that the deposit reserve of banks is the first place from which bullion is obtained for exportation: a continuance of a foreign drain is therefore accompanied with a steady drain on the deposits, and this we are now to suppose accompanied by a steady increase of the note circulation. We believe that no one will deny the great danger of such a course to the solvency of the bank. If the circulation were to get out of credit, the danger would be most serious: all the most available resources are expended in meeting the drain on the deposits; all that can be most advantageously, or at least disadvantageously, sold has been sold to meet this drain: and if a new drain were added in the shape of a run caused by discredit of the circulation, the solvency of the banks, and the convertibility of the notes in the hands of the public would be instantly threatened by a danger from which it would be difficult to escape. These two serious difficulties arising out of the foreign relations of the country appear to us to strengthen the argument against the system of competing issuers which was derived from those internal circumstances which are affected by the depreciation of the currency. But because we are prepared to defend the measure of Sir R. Peel on this ground, it is the more incumbent on us to state that we are quite at issue with certain persons who, as Mr. Wilson has concisely stated, loudly proclaim to the world “that the great and leading principle of the Act of 1844 is that, in the event of adverse exchange against their country, our system has a self-acting principle of contraction by which the prices of commodities shall be reduced so that they may be exported in preference to gold”.

We believe it to be a demonstrated truth of science, that rises and falls of price caused simply by a contraction and enlargement of the circulation do not of themselves affect foreign trade at all. The depreciation of bullion provides a more profitable article of export; but if it were profitable to export commodities before, we believe it will be profitable still: the appreciation of bullion provides a more profitable article of comfort, but if before it were profitable to import commodities, no diminution of profit will ensue on the change of price due to a contraction of the currency. A mode of conducting business important to be noticed in this connection is thus described by Mr. Blake: “The merchant is regulated in the conduct of his business by a comparison of the prices which commodities bear in the home and in the foreign market; his attention is directed to the prices current, accounts of which are constantly published, and immediately communicated to his correspondents abroad. If he finds that the price of the same commodity abroad is so much higher than in the home market, that its sale abroad will pay the expense of freight and insurance, and at the same time leave him an adequate profit for his trouble, he will immediately purchase and export the commodity in question. As soon as the bill of lading is received by his correspondent to whom the goods are consigned, he will draw his bill upon him for the amount; and if the exchange be at par, will have no difficulty in procuring money equal to the value specified in the bill by negotiating it in the market at home. But if the exchange be not at par, it is evident that his calculations upon the profit he is likely to derive from the export must include the premium or discount which he will receive or pay in the disposal of his bill.”1

Now it appears clear that any cause which raises or lowers the prices of all commodities will also raise or lower the price of bills of which the value is regulated by the same causes as the value of all other kinds of merchandise. For example, an increased facility of obtaining money will bring new purchasers into the bill market just as into all other markets, and the price of bills will rise in consequence. Hence although a merchant wishing to export would receive a discouragement from the rise of prices 10 per cent. in consequence of a depreciated currency, nevertheless by the mode of conducting business above described he would obtain a premium of 10 per cent. on his bill. Similarly an increased difficulty of obtaining money will not only lower the premium on bills, but perhaps change it into discount. So that a depreciation of the currency does not lessen the profit on the exportation of commodities, nor when the merchant looks to deriving a part of his profit from the sale of his bill does the appreciation of the currency increase that profit in the least. Again, in the foreign bill market the depreciation of English currency will lower the price of bills in England. All persons who wish for English coin to purchase goods in England for exportation or immediate consumption will be less willing to bid for the money-order when the purchasing power of that money is diminished. Hence it is clear that the depreciation of English currency reduces the price of bills on England in the foreign market; so that a foreigner might be no less ready to export commodities from England after than before the rise in the price of goods owing to a depreciation of the currency, and obtain by the less price he pays for a bill a profit corresponding to the loss occasioned by the additional price which he has to pay for his commodities. It may therefore be laid down that the price of bills of exchange on foreign countries in the home market rises and falls with the prices of commodities when these are affected by alterations in the value of the currency: that is, the price of such bills varies directly with the price of commodities: while the price of bills on England in the foreign markets varies inversely with the price of articles, here increasing when they diminish, and diminishing when they increase. Therefore an exporting merchant who sells his bill at home will sell it for more when the price of commodities rises; and if he buys his bill on England in the foreign market he will pay less for it; and an importing merchant who sells his bill abroad will have to pay less for it, and will be able to get less for the bill on foreign countries which he might sell in the English market. Therefore it is evident that when the business is managed by means of bills, alterations in the value of the currency do not of themselves act as premiums on the export or import of commodities: they neither increase nor diminish the profit of the merchant. When therefore the currency cannot be itself exported, its effect on foreign trade is nothing at all. The depreciation of French assignats was not of itself calculated either to increase or to diminish the French imports. When the currency consists of articles of intrinsic value like bullion, which are capable of export, its depreciation of course, as previously stated, will be a bounty on its export, and therefore often on the import of commodities returning to pay for it: and similar propositions mutatis mutandis are true of appreciation. Foreign trade then is barter like other trades; and the depreciation of one article has an effect not only on the profitableness of its export, but leaves unaffected the profit on the export of these. Money is but a single commodity, and changes in its local value only cause its export, but have no tendency to diminish the profit or the export of other commodities. Men have not allowed themselves to be mastered by their own instrument; what trade was before money existed, it is still in the main and essentially. One article has attained an additional useful property, and the demand for it is subjected to another cause of fluctuation; but this has not power enough to alter the general course of international commerce.

It is evident that the exportability of coin is oftentimes a source of variations in its value: so much may be exported to pay for a deficient harvest, that what remains may be dearer. It has therefore often enough been proposed to provide a currency independent of the exchange, and not susceptible of this species of appreciation and depreciation. We have never seen any plan which appeared to us successful to meet this object, and we doubt whether there is any one both theoretically unobjectionable and practically feasible. Those plans which propose a currency with intrinsic value have failed, because the material which they have proposed was possessed of other useful properties besides serving as currency, and could therefore be exported like bullion. Those plans which adopt a currency without intrinsic value seem as yet defective in laying down any thoroughly satisfactory rule for regulating its amount. One method of arriving at the end desired is, by finding some commodity which only has utility, in consequence of the convention of a particular state to use it as money, but of which nevertheless the supply is determined by the cost of production. This could not be exported, because its value would be limited by the frontiers of the country which agreed to use it as currency; and yet its amount would be determinable just as gold and silver now are. No such commodity, however, appears to exist, and the conception of it is only a theoretic dream as to what would constitute the best currency for the internal traffic of a nation.

Mr. Tooke has a violent philippic against Ricardo for having dared to assert that coin was never exported except from a redundancy in the currency; and objects that the facts of 1847 are of themselves enough to prove that coin is exported to pay for a deficient harvest. But we would ask, what is Ricardo’s test of a redundant currency? We believe that he would have called any currency redundant when coin became the most profitable article of export: so that this controverted proposition reduces itself to the simple truth, that coin is not as a rule exported when there is any other more profitable article of export. To this we do not think Mr. Tooke has offered any valid objection. It is quite indisputable that the tendency of trade sets most strongly toward those transactions which yield the greatest pecuniary return. The reason is, that there is an immense amount of capital not used by its owners, but lent to those who will bid highest for it;—of course those whose trade yields them the greatest return will bid most for the capital which aids them in carrying it on. We are bound, however, to concede to Mr. Tooke that Ricardo has not expressed with sufficient clearness the proposition that the risk of sudden falls of price is one element in the determination of the profit requisite to ensure the entrance on a mercantile speculation. In the case of a deficient harvest, we are obliged to ransack countries for our subsistence which are unused to employ our manufacturers to any great extent. It is therefore certain that a small increase in their quantity will produce a glut of them and a great fall in their value, and therefore a great loss to the merchant. But bullion, as Mr. Blake has well observed, is the article of the steadiest possible value: a very slight lowering of its price very greatly increases the quantity of it employed, and therefore the risk of exporting coin is less than the risk of bullion. Hence is it that bullion leaves the country before the price current alone would seem to render it advisable; therefore is it that bullion merchants seem to trade on smaller profits than other mercantile men. As a result, then, of what has been said, it appears that so far from the foreign relations of the State affording any objection to fixity in the standard of value, at least one serious danger arises out of one case of depreciation, viz. an undue prolongation of a foreign drain of bullion; an export, that is, of bullion, when commodities would have been otherwise exported: as a consequence of this, an increase in the home stocks of commodities, an alteration of their prices, and, as has been shown, a considerable derangement of domestic industry. Here then we find an additional reason to approve of the Government monopoly of the currency, and of the Act of 1844, as an approximation to that system.

In deference to the censures of Mr. Tooke we pass to a consideration of the interference of Ministers in October last, which he considers a convincing proof of the failure of Sir R. Peel’s Act. The measure of Sir C. Wood and Lord J. Russell may be defended on two distinct grounds: one resting on consideration of currency; the other on considerations derived from banking. The currency argument is this—It is a great defect of a purely metallic circulation that the quantity of it cannot be readily suited to any sudden demand; it takes time to get new supplies of gold and silver, and, in the meantime, a temporary rise in the value of bullion takes place. Now as paper money can be supplied in unlimited quantities, however sudden the demand may be, it does not appear to us that there is any objection on principle to sudden issues of paper money to meet sudden and large extensions of demand. It gives to a purely metallic circulation that greater constancy of purchasing power possessed by articles whose quantity can be quickly suited to the demand. It will be evident from what we have said before, that this power of issuing notes is one excessively liable to abuse, because, as before shown, it may depreciate the currency; and on that account such a power ought only to be lodged in the hands of Government, and not of a body of traders deriving profit from the increase of their note circulation. It should only be used also in rare and exceptional cases. But when the fact of an extensive sudden demand is proved, we see no objection, but decided advantage, in introducing this new element into a metallic circulation. We see here only one other case of Government intervention to ensure steadiness in the standard of value. Now something like this happens in periods of extensive discredit, especially under the present system of provincial banks of issue. Every banker is obliged to keep a new reserve to meet the augmented danger of a run for his paper. This requires a large increase of circulation, and it is difficult to obtain gold to satisfy so unexpected a demand. Also no merchant knows whom to trust: he is not disposed to give his banker so much credit as heretofore, but to keep in his till money which he would otherwise have put into the bank, and this materially restricts the economy which banks of deposit introduce into the circulation; and when the currency has suited itself to the business of the country under a system of economy, it becomes difficult to make it do the same work under a system comparatively costly. We here see an additional reason for giving Government the sole issue of paper money, because the discredit of individual bankers so much aggravates other species of discredit as to require the issue of additional Bank of England notes. This principle, we would say in answer to Mr. Tooke, is recognised in the Act of 1844. It provides that Bank of England notes may be issued in a extra amount in the place of country paper, which, from an apprehension of its falling into discredit, its issuers may be desirous to relinquish altogether. The intervention of Ministers, therefore, so far from being a proof of failure in the Act, is but a further extension of a principle which it recognises: an application to one case of apprehended distrust of the very remedy which the Act itself prescribes for another.

A further and still more urgent reason arose from the condition of the Banking Department. “On the 30th of October their reserve was reduced,” says Colonel Torrens, “below £2,000,000 against liabilities amounting to £14,200,000, and it was believed that at a later period the coin and notes in the till of the Banking Department fell short of £1,600,000.” Such a state of things was obviously a near approximation to failure. Moreover, the failure of the Bank of England would be equivalent to a temporary stoppage of the mercantile business of the country. Colonel Torrens again writes: “The stoppage of the Bank of England would be tantamount to a general stoppage of the London private banks and discount houses. This great establishment, from the vast amount of capital at its disposal, from its being the depository of the public revenue and of the banking reserve of the subordinate banking establishments of the metropolis, wields a tremendous power, the misdirection of which might lead not only to its own insolvency, but to a general insolvency of all subordinate concerns, and to a national bankruptcy.” No Government would be justified in allowing this to come about while there remained a chance of preventing it by the use of any means whatever. That the Bank directors were excessively to blame, we have no doubt at all. They run a risk of failure which might have injured the proprietors of Bank stock, whose agents they are; under similar management, any smaller banking establishment would have been utterly ruined.

No doubt this interference of Government to support the Banking Department is very different from the currency regulations of which we have spoken before. It goes far beyond the intervention of Government to give fixity to the standard of value; it amounts to the admission that Government may settle when money of fixed value shall be lent to one man and borrowed from another. A person well instructed in the principles of free trade will be apt to wonder at this. He will ask, “Why is the whole mechanism of industry liable to be set wrong by the misconduct of one body of men?” In no other trade but banking are we dependent on the conduct of one firm. Either what I have been taught is a mistake, and trade will not manage itself without external superintendence, or there has been some previous derangement by former laws; either the intervention of Government to keep trade in a right course is always and essentially necessary, or we are now suffering from the evil consequences of former mistaken interventions. History supplies the answer in a sentence. Government for a long period gave the Bank of England almost a monopoly of Banking in London. They gave privileges to a single corporation which enabled it to put all competitors at defiance. The experience of Scotland would in itself be a strong argument that this interference was the cause of the excessive preponderance of the Bank of England over the other establishments. In Scotland there has been no monopoly, but all other circumstances are pretty similar, and there we are not dependent on the good management of a single overgrown establishment, but on the prudential skill of a moderate number of tried, trustworthy, and experienced corporations. The deductions of the theory come to confirm the inductions of experience. In the competition of capital against capital, each has, up to a certain point, an advantage proportioned to its comparative magnitude. Thus Mr. Babbage writes, in his Economy of Manufactures: “When, from the peculiar nature of the produce of each manufacture, the number of processes into which it is most advantageous to divide it is ascertained, as well as the number of individuals to be employed; then all other manufactories which do not employ a direct multiple of this number will produce the article at a greater cost”. The same is true of the extra risk which small capitals run in comparison with large ones. When the insurance premium is 10 per cent. a man with twenty ships, of equal value, and running equal distinct risks, can obviously insure himself: it is the same thing to him whether he loses one ship or pays the insurance; and the same with any multiple of twenty. Similarly, if taking the whole of any business its risks are as 10 to 100 on a perpetual average, that is, if ten of its transactions fail in every hundred, a man who, under any run of luck, can always go through one hundred transactions would gain an advantage over those with less; and no one would have an advantage over him. The tendency of things is toward capitals arranged on a certain scale, with a fixed minimum and multiples of it. So that we may lay down that the natural government of all trades, including banking, is an oligarchy according to the strict Aristotelic conception of it, where a few govern because of their wealth; but the Bank of England is obviously a τύραννος, who has obtained aid from without to overthrow the constitution and establish his own rule.

These considerations weigh strongly with us against the system of Mr. Tooke. He wishes it to be a law, or almost a law, that there should always be a reserve of £10,000,000 in both departments. This, it seems to us, is perpetuating that system of Government interference with banking from which so many evils have arisen. We quite admit that it may be necessary to interfere again because we have interfered before; but a permanent system should, in our judgment, be founded on permanently right principles: the effects of past misconduct will wear out in the course of time; but Mr. Tooke proposes to found a lasting system on the rotten basis of antiquated errors, to transmit unimpared to posterity the evils which we have, to our misfortune, inherited from our fathers.

In conclusion we cannot refrain from remarking that the adoption of the measure of 1844 so nearly contemporaneously with the commencement of the Free Trade Legislation in this country, is another very remarkable instance of the practical sagacity of the English people, and of that soundness of understanding which comprehends the widest principles and yet discerns their true limits, which is able to stand the most searching test of the thorough comprehension of a principle, viz. the knowing what are its exceptions and what are not. The English are far excelled by the French in logical accuracy and in the taste for symmetry of construction. But we never heard a Frenchman’s jokes against the bizarreries of the English constitution without bearing in mind that the distaste for sweeping generalisation and the habit of deciding on each case in and for itself, which have produced such a mass of unsystematised legislation, are nearly allied to a deep conviction of the necessary incompleteness of all system, and of the necessity for constant watchfulness to avoid the application of a formula to cases not comprehended in its proof.

P.S.—Since this essay left the hands of the writer, the first report of the Committee of the House of Commons appointed to investigate the causes of the last crisis has been laid on the table of the House. It states that, after a careful review of the evidence, the committee are of opinion “that it is not expedient to make any alteration in the Bank Act of 1844. They approve, however, of a recent change in the constitution of the Bank of England, by which a permanent governor is appointed in place of the old system of annual election. The committee decidedly approve of the intervention of Government in October last; and decline to suggest any machinery which might obviate for the future the necessity of a recourse to the Deus ex machinâ.” This is disappointing to us, as we had hoped that some unexceptionable “expansive clause” might have been framed to save future Chancellors of the Exchequer from the anxiety which Sir Charles Wood has so feelingly described. This problem, it appears, is considered beyond our present means of solution, and must be left to future times.

We also desire to say, that when insisting so strongly on the necessity of fixity of value in the circulating medium, we have omitted to make use of the most obvious argument in favour of it, viz. that changes in the standard of value introduce frauds into all fixed contracts. Thus the depreciation of coin is an advantage to debtors who have to pay fixed sums, and a disadvantage to creditors who have to receive them. This is too obvious to need statement in detail, but its practical importance requires at least that it should be mentioned.

ARTICLE II.—PRINCIPLES OF POLITICAL ECONOMY.

(From “The Prospective Review,” 1848. The second article published by Walter Bagehot.)

Principles of Political Economy, with some of their Applications to Social Philosophy. By J. S. Mill.

The work on which we are about to comment, seems to us unavoidably to present great difficulties to a reviewer. The admirable qualities of mind displayed in it, and the extensive research out of which it has sprung, make it necessary for the critic to practise a humility to which he is perchance but little accustomed. Moreover, the great size of the work, the number of valuable discussions which it contains, and, more than all, the great importance of almost the whole of its subject-matter, exact from us a difficult selection of topics, in order that our article may not be unpleasing to our readers or altogether unworthy of the work under review.

The course which we shall take will be first to mark Mr. Mill’s position among economical and, so far as a few words will go, among general thinkers: and after this introduction to select a single large class of considerations, viz. those bearing on the condition of the labouring classes, and to devote our attention to these exclusively. We choose this branch of the subject, not only because of its own intrinsic interest, but also because it contains a large proportion of Mr. Mill’s peculiar and characteristic ideas. He is the first among great English Economists who has ventured to maintain that the present division of the industrial community into labourers and capitalists is neither destined nor adapted for a long-continued existence: that a large production of wealth is much less important than a good distribution of it: that a state of industry in which both capital and population are stationary is as favourable to national well-being as one in which they are advancing: that fixed customs are perpetually modifying the effects which unrestrained competition would of itself inevitably produce: that a large body of peasant proprietors is usually a source of great national advantage: and that a system of emigration on a great scale would be productive of much benefit to the English peasantry by raising their habitual standard of comfort, and therefore putting a check on the reckless increase of a miserable population. These propositions (which are not all that might be set down) will be enough to prove that the subject we have selected for discussion with Mr. Mill contains a sufficient number of his peculiar opinions, and therefore asking our readers to acquiesce in our selection of a special topic, we shall pass on to the general and introductory portion of our article.

In the preface to his work Mr. Mill states that he wishes his work to comprise both the theoretic exposition of purely economical doctrine, and also the extraneous considerations most necessary for its correct application to the real world in which we have to live and act. This he says, because he habitually bears in mind that Political Economy is founded on certain assumptions of which it is very convenient to trace out the consequences separately, but which being seldom accurately true, and being often very wide of the mark, will lead logically to consequences that it may be hazardous to apply without correction to the actual condition of mankind. Thus it is perpetually assumed that men will always buy what they want as cheaply as they can; whereas in matter of fact, vanity, liberality, and indolence are perpetually preventing purchasers from beating down prices to the full extent of their ability.

The existence of such exceptional considerations distributes economists into two classes. What we may call common-sense thinkers have always seen that these extraneous influences were very important matters for their attention wherever actual practice was at all concerned. Adam Smith, for example, is the most striking specimen of this class of thinkers. He is very eminent in making short inductions from admitted facts, and in applying them with consistency and skill. He is not eminent for precision of statement or for microscopic accuracy of thought; but he is in general very successful in rather vague descriptions of conspicuous phenomena, and in tracing them back to the most influential of their proximate causes. It is evident that a mind so habitually starting with observed facts would be unlikely to neglect important agencies or to bind itself by purely hypothetical assumptions. Ricardo on the other hand is the most important of what may be called the abstract thinkers on the philosophy of wealth. He sets out from certain primitive assumptions, and from these he proceeds to evolve all his results by mere deduction. He but rarely comes into contact with the actual world at all: but frames a hypothetical one which exists nowhere out of his own imagination. Accordingly his views of his subject must be called deep rather than wide: explaining a little very well, but leaving much without remark: giving a little truth which it was difficult to arrive at, rather than a comprehensive summary of all the principles that modify the phenomena which he is considering. In reference to these peculiarities of their minds, it is certainly very remarkable that Adam Smith should have been a recluse student, during his whole life almost exclusively with abstractions, and that Ricardo, who is so eminently an abstract thinker, should have been bred up in actual business, and should have attained his powers of deductive reasoning without any early philosophical discipline. It would certainly have been expected, if we had not known how little outward circumstances avail against the intrinsic aptitudes of a strong mind, that Adam Smith would have looked on nature principally “through the spectacles of books,” and that Ricardo would have taken that general, vague, but in the main sufficient judgment upon matters of fact which is generally called “common sense,” and which alone among the higher intellectual gifts is habitually exercised in everyday practical life.

In that part of his preface to which we just now alluded, Mr. Mill has substantially expressed his intention of conciliating the two modes of dealing with his subject; that is, of combining the abstract deduction and logical accuracy which are exemplified in Ricardo with that largeness of view and thorough acquaintance with diversified matters of fact for which the Wealth of Nations is so eminently remarkable.

And this great undertaking he has, so far as we can judge, admirably accomplished. The principal applications of abstract science are here treated of with a fulness of information, an impartiality of judgment, and a command over general principles, any one of which would have by itself been enough to make the work take rank as one of eminent merit, and to the union of which we have never seen anything in an economical writer, even approximating equal . No great subject within the range of Political Economy appears to us to have been wholly omitted, and if we acknowledge that all the larger considerations which we could wish for, are not on all occasions introduced, we also admit that minds trained in different schools of thought, and seeing life generally under a somewhat different aspect, must inevitably form conflicting judgments as to what was, and what was not, relevant to particular social problems. We are bound to add, that in almost all cases there is evidence that Mr. Mill has given much and earnest attention to all kinds of argument which seemed to him capable of being opposed to his opinions. Nor with the exception of the System of Logic have we read any contemporary publication in which the desire for the mere discovery of truth was either so strong in itself or so immensely preponderant over every other consideration. The false colours of prejudice and passion have no place in an intellect so thoroughly achromatic.

We feel it, therefore, to be almost presumption in us to attempt, as we promised, a description, even in the most general way, of Mr. Mill’s position in the list of general thinkers. Yet it seems to us incumbent on the critic of such a man to try his hand at some such task. Mr. Mill has treated with first-rate ability of subjects which involve a discussion of many problems which concern most intimately the highest interests of man; and if we give a notion of the place he appears to us to occupy among important thinkers, it will be seen why, in some instances, we differ from him, and agree with those whom we should place higher on the scale of worth. Mr. Mill then belongs, we think, to the Aristotelic or unspiritual order of great thinkers. A philosopher of this sort starts always from considerations of pure intellect. He never assumes the teachings of conscience: he never, that is, treats as primordial facts either the existence of a law of duty independent of consequences, nor a moral government of the world, nor a connection either between virtue and a reward, or between sin and retribution. He may have a great mastery over trains of reasoning, a great skill in applying comprehensive principles to complicated phenomena; he may have robust sense like Locke or Adam Smith, a power of exhausting a subject like Aristotle or Bentham, or subtlety like the former, or definiteness in scheming like the latter: but whatever be his merits or deficiencies, this remains as his great characteristic, that the light of his intellect is exactly what Bacon calls “dry light”; it is “unsteeped in the humours of the affections”; it rests on what is observed to be: it never grounds itself on any inward assurance of what ought to be: it disregards what Butler calls the “presages of conscience,” and attends only to the senses and the inductive intellect. In Physical Science and in Metaphysics, the views of such men may be extensive, subtle or profound: in Politics also they may and often will excel in tracing the different kinds of administrative machinery: they will in general be excellent judges of means, though not well fitted to appreciate what a thinker of a different order would be apt to consider, the highest ends of Government: in morals their views will in general be vague and not seldom erroneous, for their conscience is not luminous enough to give them vivid or well-defined convictions on the subject of duty; and on religion it is well if their tone be not that of Protagoras: Ὦ γενναι̑οι παι̑δές τε καὶ γέροντες, δημηγορει̑τε συγκαθεζόμενοι, θεούς τε εἰς τὸ μέσον ἄγοντες, οὓς ἐγὼ ἔκ τε του̑ λέγειν καὶ του̑ γράϕειν περὶ αὐτω̑ν, ὡς εἰσὶν ἢ ὡς οὐκ εἰσίν, ἐξαιρω̑.

Such are the leading characteristics attaching to the school of thinkers, of whom Locke and Aristotle are perhaps the most attractive representatives, and among whom Auguste Comte is assuredly the least valuable specimen compatible with any remarkable ability. It would lead us too far from our subject to explain at length, that the extreme opposite of that school of thinkers is to be found in the school of Plato, and Butler, and Kant, who practically make the conscience the ultimate basis of all certainty; who infer from its inward suggestion the moral government of the world; the connection between shame and fear, and between sin and retribution: from whose principles it may perhaps be deduced, that the ground for trusting our other faculties is the duty revealed by conscience, of trusting those of them essential to the performance of the task assigned by God to man: thinkers, in short, whose peculiar function it is to establish in the minds of thoughtful persons that primitive Theology which is the necessary basis of all positive Revelation.

To what may be called the moral genius of these writers the author before us makes no pretension; he would, we apprehend, indeed, deny that it was possible for any man to possess what we reckon as their characteristic merits. On the other hand, in all the merits of the purely intellectual class of thinkers, we must travel far back into the past before we can find anyone whom we know to be possessed of them in an equal measure. Our author is not indeed in our judgment eminently qualified either to perceive or to appreciate nice and exquisite distinctions; he does not therefore at all make pretension to that combination of metaphysical subtlety and practical shrewdness which so many ages have agreed to wonder at in Aristotle; but nevertheless we hardly know of anyone who has so much of that union of sense and science so remarkable in the Aristotelic treatises on the business of mankind. And in the firmness of grasp with which his understanding retains whatever has once come within its range, and in the undeviating consistency with which he applies every principle that he esteems ascertained, to every case that fairly comes within its scope, we know not where to find his equal.

From the shortcomings habitual to the school to which he belongs, we cannot hold him altogether exempt; but we are bound to add that these blemishes have rarely been presented in a form so little calculated to offend those whose conception of life may be cast into a somewhat different form. It is, as we have hinted, always evident that Mr. Mill has studiously endeavoured to master the opinions of those from whom he differs: to master them we mean not in order to collect all arguments that may possibly be made available in their confutation, but what is much rarer, with a view of eliciting from them, if possible, the latent truth which all large masses of human belief may be charitably supposed to contain. With these few words we must abruptly conclude a train of thought which would not stop of itself until our limits were exhausted. It is seldom indeed that in this age of books we come into contact with a mind worthy to be compared with the few great authors of the past; and it is seldom, therefore, that we are called to begin a discussion such as the brief one which we are in the act of ending.

We shall now go on to the more special purpose of our Article, namely, of describing and, so far as we can, discussing those of Mr. Mill’s speculations which most intimately concern the condition of the labouring classes. We shall first discuss the question on the supposition that the population which we are considering is like that of England divided into the three classes of rent-owners, capitalists, and labourers: each with separate interests, and each capable of separate and, with respect to the others, antagonistic action. And this discussion will naturally subdivide itself into two parts: first, what settles the rates of wages in a country with any given amount of capital and any given number of labourers; secondly, what is the law of the growth of capital, and what the law according to which population is augmented. We shall afterwards make some remarks on the changes which Mr. Mill would introduce into the social framework of Great Britain and Ireland: inasmuch as he has two plans for altering the present threefold division of the productive classes, and one plan for raising the wages paid to the hired labourer under the present system or under any other at all similar to it.

The first question then before us is, What in such a community as England settles the rate of wages when the number of labourers and the amount of capital are both given? On this point we think Mr. Mill’s exposition much less complete than in any other equally important portion of his work; and it will therefore be most convenient to us to state shortly our own view, and then to show what portions of the truth seem to us to be omitted in Mr. Mill’s solution of the problem.

Among the circumstances which would first strike a philosophical observer of a country possessing much accumulated wealth, one we think is that the portion of the existing accumulation which is employed in obtaining new additional wealth naturally divides itself into two classes: one which may be called the Co-operative, and which assists and economises the productive agency of man; and another which may be fairly called the Remunerative, the characteristic function of which is to reward the exertion of human labour, by subsisting, for example, the labourer and his family, or by conferring on them any enjoyments in which their habitual circumstances enable them to find a pleasure. The most obvious instance of co-operative capital are steam-engines, power-looms, and machinery in general. Remunerative capital (or what is sometimes called the wages-fund of a nation) consists of corn and clothing, tea and sugar, and other similar commodities which the labourer consents, for the sake of their intrinsic qualities, to receive as a compensation for his mental or muscular exertion. It is obvious that in considering the rate of wages the latter kind of capital is the one more certainly to our purpose. These two commodities, Labour and Remunerative Capital, come into the market and exchange one against the other, and their relative value seems to be settled exactly, as in other cases, by the supply of each and also the demand for it: if there be an additional supply of corn or coarse clothing, and the demand for labour be unaltered, the working classes will be able to command more of these articles; if their supply be less, the same classes will certainly, more or less, be straitened. The intervention of money makes no difference here: it is the same thing, except for convenience sake, whether the capitalist purchase the commodities desired by the labourer and barter them directly for their labour, or whether he gives the labourers money-tickets, by presenting which they will obtain from certain sellers those identical commodities.

Also it is to be borne in mind that the quantity of such commodities and of labour is not the only point which it is necessary to consider: the demand for these commodities also deserves much careful attention. If an additional number of unproductive consumers were to come into a nation and were not to employ any of its labourers, it is apparent that their consumption entrenches on the fund set apart for the maintenance of the industrial classes, unless the evil be corrected by the importation of corn from abroad, or by increased economy in the unproductive classes previously forming part of the nation. On the other hand, if those unproductive consumers were to bring with them a stock of necessaries adequate to their own consumption, and if they were to employ labourers on a large scale, and to pay them either in money or in commodities, it is evident that the command of labourers over wages-paying commodities would be increased, and that the unproductive classes must expend a larger sum in order to obtain the same quantities of the necessaries of life. Undoubtedly if in this instance there was no importation from abroad and no decrease in the consumption of the more opulent classes, the labouring classes would derive no benefit from the increase in the demand for labour: the demand for wages-paying commodities would have been also increased and their price would have risen; but as a rule that higher price would enforce a stricter economy in the more opulent classes, and thus the labourers would be benefited though not to the full extent of the increased demand for the article in which they deal. In the first case which we noticed, the remuneration for labour was attended by an increased demand in other quarters for wages-paying commodities; and in the second by an increased demand for labour itself at a time when the supply and demand for remunerative capital received—from other causes—neither increase nor diminution. The relative value of labour and wages-paying commodities is settled exactly as the relative value of Cloth and Hats is ascertained. The intervention of money complicates the phenomena in either case, but, as every one acquainted with the elements of the subject will admit, without introducing any new matter of fundamental principle.

Before proceeding further we shall quote Mr. Mill’s observations on this portion of the subject. The following passage does not strike us as a complete rationale of the entire topic: but it contains a valuable summary of our author’s opinion:—

“Wages like all other things may be regulated either by competition or by custom; but the last is not a common case. A custom on this subject could not easily maintain itself in any other than a stationary state of Society. An increase or a falling off in the demand for labour, an increase or diminution of the labouring population, could hardly fail to engender a competition which would break down any custom respecting wages by giving either to one side or the other a strong direct interest in infringing it. We may at all events speak of the wages of labour as determined in ordinary circumstances by competition.

“Wages then depend upon the demand and supply of labour, or, as it is often expressed, on the proportion between Population and Capital. By Population is here meant the number only of the working class, or rather of those who work for hire, and by Capital only circulating capital, and not the whole of that, but the part which is expended in the direct purchase of labour—to this, however, must be added all the funds which without forming a part of Capital are paid in exchange for labour, such as the wages of soldiers, domestic servants, and other unproductive labourers. There is unfortunately no mode of expressing by one familiar term the aggregate of what may be called the wages-fund of a country, and as the wages of productive labour form nearly the whole of that fund, it is usual to overlook the smaller and less important part, and to say that wages depend on population and capital. It will be convenient to employ this expression, remembering, however, to consider it as elliptical and not as a literal statement of the entire truth.

“With these limitations of the terms, wages not only depend upon the relative amount of capital and population, but cannot be affected by anything else. Wages (meaning thereby, of course, the general rate) cannot rise except by an increase in the aggregate funds employed in hiring labourers, or a diminution in the number of competitors for rise; nor fall, except either by a diminution of the funds devolvable on paying labour, or by an increase in the number of labourers to be paid.”

We think the simpler formula which we have ventured to lay down will obviate the necessity of a recourse to an expression which is not correct, and which is calculated to throw a mist over the real relations between machinery and manual labour. Mr. Mill is also inconsistent with himself in speaking of the wages-fund as a part of “circulating capital,” for he has defined the latter to be “the portion of capital which is only capable of being used once”: now food is the only wages-paying commodity of importance that is only capable of a single use; in every sense in which machinery is capable of being used, often clothing and cottages are so too. Ricardo, it is true, uses habitually language of this sort, but then he defines circulating capital to be all capital rapidly perishable, and the error is therefore in him much less considerable, but nevertheless it is on every account undesirable to pay such special attention to that shortness of duration which is at best but an accidental quality of remunerative capital.

From this passage, in spite of the ambiguity in its concluding formula, it is evident that Mr. Mill must in consistency hold that an increase of machinery may be injurious to the lower classes. In other parts of his work he fully explains that such is his opinion, and in this we entirely agree with him. If, for example, a shifting of industrial relations should ever diminish the remunerative kind of capital, and at the same time increase the co-operative, the proportion, as it is phrased, of labour and capital has indeed remained unaltered; but the amount of that portion of capital which is set apart for the compensation of human industry has undergone a diminution which may be very serious. Again, if capital has been transferred from Agriculture to the production of Railroads, or Steam Engines, there is no question but that cæteris paribus the working classes will be straitened by the change: their labour was before devoted to increasing the fund out of which labour would be remunerated; after the alteration it is devoted to manufacturing articles which, though perpetually productive of new wealth, do not in the same degree contribute to the maintenance of a labouring population.

In this case machinery has been shown to be hurtful to the lower classes, because its creation has diverted resources which would otherwise have been employed in remunerating labour to the essentially different function of aiding the production of commodities which the labourers do not consume. It is also quite possible that the introduction of machinery may be injurious to the lower classes by diminishing the demand for their labour. If machinery be substituted for manual labour in any manufacturing employment, common sense, as Mr. Mill observes, sees that the labourers are worse off in that particular employment, and the onus probandi clearly lies upon those who assert that the labouring classes are not worse off generally for the change. What is usually said is, that the wages-fund or remunerative capital of the country remains the same: the use of a certain portion of it is rendered unnecessary in a particular department of industry; but the same aggregate amount exists: it can (it is said) only be shifted from one employment to another, and it is believed that the depression of a sort of labourers will infallibly be compensated by the extra remuneration of another. But it is in our judgment an entire mistake to contend that remunerative capital if released from one employment is necessarily employed in a similar capacity in some other. It is one of the points in which this description of capital differs from the co-operative sort, that the latter, if not used for its own characteristic function of aiding human labour, cannot be put to any other use. Machinery if not worked as such in producing wealth, can never be made to produce pleasure to any one; but remunerative capital, which consists of food, clothing, and other commodities adapted to satisfy certain primitive wants of man, can at once be turned in part at least to the production of transitory enjoyment. This sort of capital, when released from one manufacturing employment, is evidently capable of being used in satisfying the wants of unproductive consumers. The process would be, that less money-wages would be paid in consequence of the substitution of machinery for manual labour; that the working classes would have less to spend on such articles as food and clothing: that these commodities would therefore fall in price: that the fall in price would cause an increased consumption by the unproductive classes, and that their extra consumption would entrench on the fund that previous to the introduction of machinery was set apart as a compensation for industrial exertion. On this point we have some reason to think that Mr. Mill would agree with us; though this is inconsistent with his general principle which we have quoted, and with many arguments which assume that the demand for labour is not an effective force operating on the rate of wages. But our author is continually right in detail where his formulæ would lead him wrong; and we know of no intellectual quality more thoroughly characteristic of a first-rate thinker.

There is, we believe, also another case in which the introduction of machinery is detrimental to the labouring classes. It was pointed out by Mr. Senior several years ago. Mr. Mill has omitted all consideration of it, probably because its practical importance is exceedingly slight. This case is, where the machinery consumed more wages-paying commodities than the labourers whose exertions it has superseded. Of this kind it is supposed that certain employments of the lower animals may be reckoned; these creatures being for our present purpose simply animated machines, and it being perfectly possible that they might consume more food than the labourers whose work they were employed to perform. The peculiarity of this case is an additional demand for remunerative capital consequent on the increased use of machinery. The price of the former would consequently rise, and a certain portion of it be put beyond the reach of those labourers who would otherwise have consumed it.

Another mode exists besides that just now mentioned in which the substitution of co-operative for remunerative capital may be effected, and in which that substitution might be detrimental to the interests of the labouring classes. Ricardo was, it is believed, the first who worked out this view of the subject, which is somewhat more recondite than any consideration with which we have yet had to deal. His instance is in principle as follows: Suppose that a manufacturer of remunerative commodities should be in the habit of employing £1,000 per annum in paying labourers; then if profits were 10 per cent. it is clear that he would have a revenue of £1,100 annually; but if instead of so doing, he chose to expend the same sum in the purchase of a machine, which will last ten years, it is apparent that his thousand pounds will be returned to him together with the ordinary profit by a revenue of £110 per annum, and it is clearly immaterial to him as a capitalist which course he decide to pursue. But if the commodities represented by the £110 be not so numerous as those represented by the £1,100, the consumer of those commodities will obviously be worse off than before. In the case we are supposing the subjects of manufacture are wages-paying commodities, and the consumers we are speaking of are the labouring classes. It is clear, therefore, that they are straitened by whatever diminishes the aggregate annual proceeds of agriculture and of what may be called for shortness wages-making manufactures; but that the capitalist is benefited only by the profit which is left after deducting the expense. In mercantile language this is expressed by saying that the consumer is dependent on the gross and the capitalist on the net return; in more popular phraseology it may be said that the consumer has only to heed the amount of commodities produced, whereas the capitalist is exclusively concerned with the pecuniary excess of income over outlay. It is evident that the operating cause is, as we said, the substitution of co-operative for remunerative capital; there was a certain amount produced to support the labourers during the ensuing year; there is in lieu of them a machine of equal pecuniary value: the national capital is the same in amount and the capitalist obtains as before his accustomed profit; but nevertheless the condition of the labourer and the consumer is deteriorated because they have a diminished supply of articles adapted to satisfy their wants.

To sum up, then, the three cases in which the increase of machinery is detrimental to the labouring population are, first, when its introduction diminishes the supply of remunerative capital; secondly, when the introduction increases the demand for such capital; thirdly, when the demand for labour is diminished by the change. We are very far from thinking that any one of these cases is of frequent occurrence, or that any part of the present depressed state of the lower orders is in any considerable degree owing to an extension of machinery. In our judgment Mr. Mill has ample grounds for contending that by far the greater part of new machinery is merely an investment for the annual savings of the country; and being on that account a new creation of wealth does not diminish the existing amount of remunerative capital: nor do wages-paying commodities, except in the not very important instance of coal, appear to be consumed to any considerable extent by existing machinery. We should also hold, contrary to the opinion of Mr. Mill, that the increased demand for labour sometimes eventually caused by the introduction of machinery is decidedly beneficial to the lower orders. The cotton trade is an obvious instance of this; there is no reason, however, for wearying our readers with an examination of our differences on this point from Mr. Mill, because our reasons are only the reverse side of those which we have already exhibited in behalf of our opinion that any decrease in the demand for labour from a similar cause is detrimental to the real interests of the labouring classes.

We have now examined the whole of what Mr. Mill calls the statics of the subject; that is, we have inquired what in any given state of capital and population adjusts the remuneration of labour; and we have found that the two efficient causes were the supply and demand for labour and the supply and demand for a particular species of capital. We have now to treat of what in the continuation of the new scientific metaphor is called the Dynamics of Political Economy; in other words, we must consider the Laws according to which Capital is augmented and Population increases. We shall incidentally treat of a problem which Mr. Mill has omitted formally to consider; viz. what in a progressive state of capital apportions how much of it shall be of the remunerative and how much of the co-operative sort. It is obvious that in our view this question is of great importance in reference to the interests of the labouring classes; we believe also that we shall show strong reasons for thinking that Mr. Mill’s omission to consider it has led him into somewhat serious error.

The growth of capital, which we select for first consideration, varies, it is clear, directly with the productiveness of industry and the disposition to save. The productiveness or efficiency depends on a variety of causes, of which only the principle can here be specified, and of which Mr. Mill has nowhere attempted a complete enumeration. However, it may be stated with sufficient truth for all really important purposes, that the efficiency of industry increases with the knowledge of the productive arts, the general intelligence of the people, and in agricultural communities with the natural fertility and favourable situation of cultivable land. Fifty years ago it might have been not unimportant to dwell on the importance of the cultivation of the productive sciences and their corresponding arts, but the prodigious and evident strides which the scientific arts have recently made and the existence of such conspicuous results as railroads and steam engines, and electric telegraphs, make it no longer necessary to dilate on what has become a matter of familiar and popular knowledge. It will now also be generally admitted that the intelligence of the workmen employed both in agriculture and still more in manufactures is an important element in the efficiency of industry. It is incumbent on us to remark that Mr. Mill has collected considerable evidence to prove that of all workmen the English stand particularly in need of some general education; other nations, the Italian it is said especially, seem to possess a natural quickness of perception, by which they are able readily to master, at any time of their lives, new single processes of manufacture. English labourers, on the other hand, have no such natural powers, but are, as a rule, indebted to a general education for whatever power they possess of working at any branch of industry save the particular one in which they have been brought up. The great authority for this observation is the evidence taken before the Poor Law Commission on the subject of the training of Pauper Children. There was, if we remember right, in the same evidence, and we are a little surprised that Mr. Mill omits to refer to it, a rather remarkable body of testimony to the effect, that though special branches and single processes of manufacture might be learnt by persons almost entirely uneducated, yet that the power of making general arrangements or superintending efficiently the work of others was almost always dependent on school teaching or on an equivalent self-education. These two elements in the productiveness of industry are in an advancing state of society almost always on the increase. It is very different with the third element, the intrinsic fertility of the soil. It is obvious that, as a rule, the most productive land will be the first taken into cultivation, those who have the first choice will in a general way choose the best. Moreover, the situation of land has an exactly similar effect, the lands from which the greatest produce can be most easily obtained are those nearest to the consumer; and these will in general be the first selected for cultivation. We may add, though it is a matter more of curiosity than of importance, that there is a case in which this last cause will counteract the effect of the first, viz. where the lands least favourably situated have the greatest natural fertility. Here it might happen that the additional labour required to bring food from a greater distance was exactly counterbalanced by the additional fertility possessed by the more distant soils, and therefore that their cultivation would not increase the cost price of food. But this case of exception is too improbable to need any particular attention, and in general it may be laid down that the first soils taken into cultivation will yield a greater return to the same labour than those that are left without tillage until a later period. It is also a fact of experience, and is deducible from similar considerations, that doubling the capital and labour on the same land will not double the produce in an unaltered state of agricultural knowledge. It is obvious that men will choose to use first the best means of cultivation which they know of. Hence it appears that in the progress of civilisation the productive art and the general intelligence of the country are in constant increase, but that this increase is ever in part counteracted and sometimes more than overbalanced by the constant necessity of resorting to the cultivation of poorer soils.

So much for the productiveness of industry, which is one cause of the increase of capital. The propensity to save, which is the other cause, means, in more distinct words, the disposition of the people to postpone a present enjoyment for the future advantage of themselves and others. This will obviously vary with the estimate which the people in question are able to form of what is distantly future—a kind of intelligence in which children, savages, and all uninstructed persons, are peculiarly deficient, and on the effects of which Mr. Mill has accumulated various interesting testimonies. The saving habit will also be fostered by a general security, that those who save to-day will be able to enjoy to-morrow, or at least be able to make over their enjoyment to whom they please; by a boldness to meet whatever risk there is that this event will not take place; and by the comparative desirableness of the station which is conferred by accumulated wealth. The two first seem as a rule to augment in strength during an advance of civilisation; the third is perhaps at its maximum in a rather rude and boisterous condition of society; the fourth attains its greatest efficiency in that state of purely commercial industry through which the mercantile and manufacturing classes of England, as well as the Northern States of the American Union, appear at present to be passing. To these four causes must be added the rate of profit which can be derived from the employment of capital. It is evident that men will be more likely to save, cœteris paribus, when they get 20 per cent. on their capital than when they get 2 per cent.: but the efficiency of this cause at different times and circumstances it will be better to consider after examining the subject of population. Then also we shall be better able to estimate the causes which apportion capital into the two divisions that have been before mentioned.

We have now then examined the disposition to save and the productiveness of industry. We have found that the great causes accelerating the growth of capital are the increase of foresight and productive power consequent on the advance of civilisation: the great retarding cause is the diminishing proportion of return with which the soil of the earth rewards the increasing industry of the cultivator. And this is all which can at present be said with advantage with reference to the growth of capital.

We now go to the subject of Population—a topic which is of obvious importance in reference to our peculiar subject, and about which there has been, and still is, a considerable amount of controversy. We are not, however, able to afford to it a portion of our space proportionable either to its interest or its difficulty. It may be broadly stated at the outset that Mr. Mill does not believe the doctrine of Malthus and Ricardo that an increase of the comforts or a decrease in the misery of the labouring classes is invariably followed by an accelerated increase of population; or, on the other hand, that a diminution of their comforts or an increase in their misery will invariably retard the increase of their number.1 Our author is habitually aware that extreme misery is a great stimulant to population, by begetting recklessness and improvidence: since it may be safely affirmed that an Irishman who is as badly off as he can be, and who has no hope and scarcely an opportunity of becoming better, will, as a general rule, practise no prudential restraint whatever.

Mr. Mill also holds what is less obvious, that a very great increase in the comforts of the population, though it may be an immediate stimulus to population, will nevertheless in all likelihood, on the whole, retard its increase. This proposition was admirably brought into view by Mr. Thornton, in his essay on Over-Population. It is still, however, opposed by many reasoners; there is in the minds of some Economists an inveterate idea, almost, if not quite, amounting to a prejudice, to the effect that the most comfortable classes will always increase the most rapidly. If this proposition were not a frequent assumption, silently or expressly taken for granted in many influential arguments, it would have no intrinsic merit requiring a particular notice. Few ideas on this or on any other subject can be more clearly opposed to very obvious facts. It might be urged that in Norway, where the population is nearly stationary, the mass of the population enjoy a degree of comfort certainly unsurpassed, and most probably unequalled, in any other portion of Europe. But far more obvious facts are in every country at hand to correct this very erroneous idea. Is it by the increase of the Noblesse that the population of any country is particularly augmented? Do the middle, the opulent, or the commercial portions of any nation increase too rapidly? It is clear that, as we ascend in the social scale, we pass through classes which have at each step of ascent a diminishing rate of increase; the fact being that comfort, the habitual sense of having something valuable to lose, and the desire of parents that their children shall not be below, but, if possible, above the position in which they themselves live, are all motives which operate most as a check on population among the opulent and comfortable classes.

This being so, it is clear that it is the habit of the several classes of mankind to have a rate of increase of their own, fairly determined by the desire of not falling themselves and not allowing their children to fall below the condition which they themselves have been used to occupy. As a consequence of this, it is contended, as we think justly, that though a large improvement in the condition of the people might be attended with an immediate acceleration in the rate of increase, yet the next generation would grow up in habits which they would be unwilling to forfeit by a general system of improvident marriage. As a practical question, Mr. Mill thinks that no prudential restraint is practised by the agricultural labourers, and that, if the increase of population were in the hands of that class only, the English people would increase as fast as the American. So that there can be no ground for saying that an increase of comfort would, in our case, at least, diminish the providence of the labouring class. On the means by which Mr. Mill would effect this desirable change we shall speak hereafter, and at present shall only add, that he would very largely increase the funds expended on national education, so as to obtain, if possible, not only the economic, but also the moral and intellectual requisites of a provident population.

As to the general doctrine, that a great increase in the comforts of the labouring classes is often a check to the increase of their numbers, it fortunately happens that there is a case in point to which Mr. Mill has an opportunity of appealing. An immense increase in the comforts of the French peasantry was, it is well known, an immediate consequence of their first Revolution. Over and above this, the depopulation and extra demand for labour caused by the wars of Napoleon were all circumstances tending to raise the rate of wages, and, therefore, according to the vulgar doctrine, to stimulate population. Yet the fact has been, that the increased comfort and the new distribution of landed property have produced a slackened increase of population, and that the French population increases very much more slowly than the average rate of European nations.

We have purposely used language which implies our assent to this portion of Mr. Mill’s doctrine. It is not, however, to be looked upon as a principle which, like a physical law, will certainly operate with an unvarying energy under all times and circumstances. The multiplicity of motives that incline men to contract marriages render the theory of population the most complex part of elementary political economy; the conclusions of science upon it are as yet very rough and general. Particular cases of natural habit and unlooked-for conjunctures of events may well render futile the best adjusted theory of human action. On this special subject political economy is more vague than perhaps it need be; but all that it can ever do is to indicate general rules; and no one can ever be exempted from the necessity of studying each case that occurs in practice with a due attention to disturbing agencies. On this particular point we may say that it is considerably more likely than not that a general increase of habitual comfort will slacken the advance of population, but not that it will do so of necessity and invariably.

In this chapter of Mr. Mill’s book, and also in some other parts of it, there seems to us to be a want of concise formulæ summing up and stamping on the memory the previous proof and explanation. We cannot attempt here fully to supply this deficiency; but we will set down a few brief sentences for the consideration of others. We do not mean that none of the principles which we are about to mention can be reduced to more elementary considerations; but we wish to see drawn out a set of intermediate principles to obviate the tiresome necessity of a continual resort to the first assumptions and axioms of science. It should be remembered that the founders of both the great schools of logic have combined to teach that in the skilful use of those axiomata media consists the practical utility of knowledge. It may then be perhaps said: First, That misery so extreme as to cause disease and death is an obvious check to the increase of population. Secondly, That extreme degrees of misery short of this stimulate population by producing recklessness; in technical Malthusian language, this is expressed by saying that the positive and preventive check never act together in any force. Thirdly, That the greatest economical preventive check on population is the desire of not falling in consequence of marriage into a state of society lower than that which when unmarried they have been accustomed to occupy; and next in efficiency is the desire that their children shall not occupy a position in life inferior to their own. Fourthly, That these desires, at least among the industrial classes, increase with amount of comfort enjoyed. Fifthly, That improvements in the condition of a people sufficient to raise the habitual standard of comfort act as a check, and, not like smaller improvements, as a stimulus to the increase of population; and the converse principle that an accession of misery and discomfort sufficient to depreciate that standard will be an incentive and not a check to such an increase. Sixthly, That the desire of preserving their own condition is a more and more efficacious preservative against over-population in proportion as persons feel that their own condition is dependent on themselves and not on others; and so also the desire for children’s welfare strengthens proportionably to the certainty of the children’s condition being dependent on the conduct of their own parents and not on the actions of other people.

This last consideration of the absence of uncertainty is a point on which Sismondi has powerfully enlarged in various of his writings. It is a great reason with him for preferring the status of a peasant proprietor to that of a hired labourer. The latter is at the mercy of the speculations of capitalists and the vicissitudes of commerce. Without knowing why, his trade may be depressed for years; neither his prosperity nor his adversity are of his own creation. Very different is the position of a peasantry who have a footing on the soil—if each man can cultivate his own land thoroughly, his position is secured; as he cannot be ruined by the conduct of others, his comfort is not dependent on either capitalist or landlord; he may suffer from the elements and from Providence, but so far as man is concerned, he has within reach the “Saxon Utopia,” a fair day’s wages for a fair day’s work.

Very similar is the effect of the two systems on population. A peasant proprietor feels that his children will certainly descend in the scale of society if his freehold be at his death divided among a numerous family. He either therefore does not have so many children, or he saves a fund out of which those who do not inherit the land may be provided for. He knows how many persons his land will maintain, and for how many he is likely to have other funds. It is of no importance at all to him what others of his class may do; if he is himself provident, the condition of his children is in the main secure. This kind of causes keeps the population of Norway, as the returns show, very nearly stationary. Far different is the position of a country like England where the lower orders are mere hired labourers, possessing, as a rule, no accumulated capital. All this class knows is that they are dependent on the present position of the labour-market, and that their children will be in like manner dependent on its future condition. Each individual feels that the number of his children is but a slight point in determining the condition of each. He has no reason at all to think that if he has only one child that one will necessarily or probably be better off than if he have a dozen. This depends on the conduct of the whole class to which he belongs, and he has no data, and at present no mental ability, to determine what that conduct is likely to be.

A capitalist, it should be observed, is in a position exactly similar to that of the peasant proprietor. If he can leave each of his children the amount with which he started in life, he has every reason to think that they will on an average be in a position not inferior to his own. It is no matter to him that his neighbours are not equally saving: if his children have capital they will not be worse, but possibly better off for their neighbours not being possessed of it too. This certainly is a main element in producing the providence in marriage, which perhaps even to an unfavourable extent is characteristic of the middle classes in England.

From this it is clear that if the working classes could be raised to a state in which saving was a preliminary to marriage there would be an efficacious obstacle to their reckless and indefinite increase. If dependence on mere wages could in any way be superseded by the habit of saving for themselves and for their children, if the working classes could be brought within the range of the motives which now act on the rest of the community, we might confidently anticipate a great immediate improvement in their physical condition. It is consolatory to remember that this is one of the points on which purely intellectual education is really most serviceable. Instruction is to the mind what the telescope is to the eye. To an uncultivated intellect what is distant will always be invisible, but a well-trained mind is habitually able to look into the future, and to deal with the absent as though it were present. It is to be hoped, and perhaps expected, that the present exertions for the spread of education will not fail in a few years to increase materially the forethought of the labouring classes.

Yet by itself this intellectual improvement will not be sufficient. Before people can save, they must have a surplus to save out of. It will be necessary to raise the conditions of the lower orders considerably above their present condition before they will become habitually a saving class. In the middle ranks a small amount of self-restraint will make a considerable difference both in their property and in their social position: but it would take much more than can be expected of mankind generally to make much improvement in the condition of the lower orders. Hesiod’s proverb that the half is more than the whole, amounts in Economics to saying, that the smaller the income the harder it is to save any given proportion of it.

Mr. Mill, however, we must pause to observe, is of opinion that population will be checked in a somewhat different manner. He expects that there will arise an unfavourable popular sentiment against those who overstock the labour market, and that operating as a penalty, this feeling will diminish the number of such offenders. We will not assert that this is impossible. Mr. Mill has pronounced that all who deny it are profoundly ignorant of the true motives of human action. When the teacher gets dogmatical, the learner becomes nervous, and we feel therefore inclined to be cautious. We only wish to observe, that there is as yet no sufficient basis of fact for us to look upon it as a very well-established doctrine. We doubt also if the act of overstocking the labour market be an act sufficiently marked and definite to excite popular reprobation. Mr. Mill admits that no such feeling anywhere exists now, not even where there is the greater amount of this sort of restraint; but as in these countries the labouring population are mainly peasant proprietors, there is no occasion and indeed no opportunity for any such popular sentiment. We can understand that where saving is an habitual preliminary to marriage, those will be looked down upon and disliked who neglect it. As to much more than this we are inclined to be sceptical. We do not know enough to speak confidently as to the factory population; but though we are not used to be over-timid in theorising, we are not bold enough to expect anything at all like this of English agricultural labourers. At all events it is safer and more practical to assert that the existence of a strong saving habit among the lower classes is both a necessary and a sufficient condition of their economical welfare.

We have now discussed the subject of the growth of Capital and the increase of Population. In the course of the discussion we omitted avowedly to consider two questions: What is the cause which divides Capital into its two distinct divisions? secondly, What are the causes regulating the rate of profit? We shall now discuss the former, which as we stated is omitted by our author. The latter it will be expedient still further to postpone.

We do not here enjoy the benefit of Mr. Mill’s guidance, but the problem does not appear to contain any peculiar difficulty. It is a principle in the theory of value, that articles producible at equal cost will be supplied in proportion to the demand for them: those most in demand will be most in number; those least in demand will be fewest in supply. For if the supply of any should fall short of this proportion, their price will rise, and an extra profit will be obtained by the producer, in consequence of which capital will be attracted to the employment, and the supply will be augmented. This principle applies to the case before us. The respective amounts in which equally costly portions of the two kinds of capital are supplied, will be determined by the demand for each. The demand for remunerative capital depends on the rate of remuneration (which will be discussed presently), multiplied by the number of labourers employed at that rate. The demand for the co-operative sort of capital depends on its efficiency in satisfying existing wants. If new discoveries in machinery make that portion of capital able to supply more readily any desirable articles, profit will be higher in the improved department of industry, and an increased portion of the annual savings of the country will be attracted towards it. Improvements in machinery may therefore be detrimental to the working classes, by drawing off some capital which would have been devoted to their maintenance to aid the production of commodities which they have no opportunity of consuming. All improvements which increase the supply of wages-paying commodities are of course beneficial to the labourer. It may also happen that as all machinery requires labour to work it, the demand for the latter may be a benefit compensating the labourer for the harm done in the way which we have pointed out. Other advantages of machinery might also be named, but each of them are consistent with saying that an increase in the efficiency of machinery may affect the distribution of capital between its divisions in a manner detrimental to the working classes.

The rate of remuneration has been mentioned above as a cause influential in deciding how much of a country’s capital shall be remunerative, and how much co-operative. It has been shown in our remarks on Population, under how many limitations it is true there is a certain amount of commodities which the lower classes will be content to receive, and without which they will not continue to increase. It has been shown that this minimum of remuneration is of two sorts, one physical, which is the minimum that will keep alive the existing number of labourers; secondly, a moral minimum, susceptible under proper circumstances both of increase and diminution. Now it is clear that if the demand for labour be unaltered, it is essential to the industry of the country that the working classes shall have the physical minimum of wages; and also that unless circumstances occur to depreciate the moral standard, they will receive what that standard metes out to them.

Although Mr. Mill has not inquired into the causes which determine how much capital shall take the form of wages-paying commodities, he has repeatedly declared his belief that the labouring classes will in general enjoy the comforts accompanying this latter variable minimum of remuneration. He has also in some places gone further, and attempted to show that they cannot permanently receive more. He has indeed an entire chapter on popular remedies for low wages, which is devoted to the elucidation of this opinion. The popular remedies to which he refers are those in which law or public opinion affords a higher remuneration to labour than would be given by unrestricted competition. Mr. Mill teaches that such laws or customs must be wholly inoperative. He appears to think that there is a primâ facie absurdity in attempting to support more labourers than the “capital” of the country will maintain, or to give the same number of labourers a large recompense for their exertions. Now if, as certain economists are prone to assume, all capital were of one sort, and if it could be used only for production, and were not consumable by unproductive consumers, if, in short, by some law of nature capital could only be used in supporting labourers, this argument would certainly be a good one. Nature would in that case have enacted that the remuneration shall be of such and such an amount, and no human legislature could go further, or impair her work.

But since remunerative capital can be consumed by unproductive consumers, this argument will not hold. If wages were raised 10 per cent. by law, wages-paying commodities would rise in price, and the more opulent consumers would probably restrict their consumption, and labourers would command more of the existing supply. Moreover, the rise of price would cause an increased production of wages-paying commodities. Capital which was going to be employed in manufacturing steam engines or plate, or some such articles, would be employed in agriculture, or in preparing the coarser kinds of manufacture which are used by labourers. Capital would be shifted from the manufacture of luxuries for the opulent to the production of necessaries for the indigent. How much the labouring classes would gain would depend on the agricultural circumstances of the time. If the new application of capital to the land only yielded such a return as would keep the price at the level which it occupied when the law came into operation, the labouring classes would obviously gain still exactly what they gained in that year, and no more. If, on the other hand, food could be supplied at the price it occupied previous to the enactment of the new law, it is obvious also that the labourers would gain by the full amount in which the law raised their pecuniary resources; the price would be as before, and their money-wages would be greater. In general, something intermediate between these two cases would happen; the labourer would gain more than in the first, and less than in the second. But in either case such a law would be advantageous to labourers: and in relation to all remunerative commodities except food, the most favourable contingency is almost certain to happen.

We do not defend such a law; not only because it could not be worked in any known system of industry, but also because it could not be urged on the capitalist as a duty to give so much additional wages. Something must be known of his position in life, his duties to his family and those dependent upon him, before any such principle could be affirmed. But it seems to us obvious that capitalists ought not to beat down labourers to the lowest possible amount. They have no more right to be greedy and avaricious than any other class; and it is discreditable in economists to teach that such conduct is not hurtful to the public and indefensible in itself.

The effect of such a law on population is a distinct question. Ricardo would of course assume that if it were for the benefit of the lower orders it would stimulate their increase, and wages would be reduced to their former standard. Even so, the wages-fund of the country is increased, the rate of remuneration is the same, but the persons paid are more. Mr. Mill reasons here after the manner of Ricardo. Nor do we pretend to say that any such law or custom could of itself and alone raise the rate of wages materially. But it may be one of many concurrent agencies in so raising it, and its existence may prevent its decline by counteracting other agencies that may be depreciating the labourer’s habitual standard of comfort; and therefore might be rather a check on population than a stimulus to it.

On the whole, therefore, as to the rate of remuneration, it may be said, without wearying our readers by unnecessary details, first, that when the demand for labour is unaltered, the physical minimum must be maintained; secondly, that moral minimum will always be maintained when the demand for labour is not much raised and much diminished, or when the supply of wages-paying commodities does not become much more easy or more difficult; thirdly, that the benevolence of the higher classes answers all the purposes of an extra demand for labour. These are the main principles regulating the rate of remuneration. The proportion between wages-paying and what may be called instrumental capital is settled, as has been seen by the demand for each sort; the demand for the first varying directly as the rate of remuneration multiplied by the number of labourers employed: the demand for the second being determined by the productive power of machinery in ministering to human wants.

Reviewing therefore what has been said, we find that we have considered the demand and supply of remunerative capital, and under the head of population we have discussed the supply of labour. The demand for labour, the only remaining factor of our original formula, will not perhaps detain us long. It depends as a whole on the power which each single act of immediate labour possesses to satisfy human wants, multiplied by the number of such acts which are desired. From this it is clear that it is more beneficial to the lower classes to be employed in quickly-recurring acts, than in acts which when once done do not require any second or at all events any but a deferred repetition. The pyramids of Egypt once built, no one cared about the builders: and it is to be feared they were put on reduced rations of onions. This is the ground of a part of the truth implied in Ricardo’s doctrine, that it was better for labourers that capital should be laid out in services than in commodities. Supposing that the labourer sold the commodities, this would only be true when the service required more frequent repetition than the acts necessary to the production of the commodities. When the capitalist sells the commodity, as is now most usual, it is not so good, if we look only to the interest of the labourers, to buy the article as to employ labour more directly; since the capitalist will not always, or indeed often employ the whole purchase-money for their benefit.

We have, therefore, now pretty nearly solved the problem with which we set out, namely, what under present circumstances regulates the rate of wages? We found that this was determined temporarily by the supply and demand for remunerative capital as compared with supply of labour and the demand for it. We have now inquired, so far as our limits will allow, what are the causes permanently determining the supply and demand both for remunerative capital and for labour. One problem has been omitted, viz. the cause of determining the rate of profit, and these will even now be treated of more conveniently hereafter.

We are now, therefore, able to go on to discuss Mr. Mill’s plans for the benefit of the lower orders. The difficulty is, that the rate of wages is so low; and the great problem for European and especially for English statesmen in the nineteenth century is, how shall that rate be raised, and how shall the lower orders be improved.

Whatever be the evil or the good of democracy, in itself it is evident that the combination of democracy and low wages will infallibly be bad. In all ages the rulers of mankind have for the most part agreed in having a predominating inclination for making themselves comfortable. If power be given to a miserable democracy, that democracy will above all things endeavour not to be miserable. This it will attempt by whatever schemes are congenial to minds and consciences, corrupted by ages of hereditary ignorance and hereditary suffering. And woe to those who, under such a Government, propound plans for the benefit of their rulers: Sævi proximis ingruunt. The favourite theorist of yesterday is punished to-day because the Millenniun is not yet come. Such is the lesson which the annals of Europe in the year 1848 teach to English statesmen. The only effectual security against the rule of an ignorant, miserable, and vicious democracy, is to take care that the democracy shall be educated, and comfortable, and moral. Now is the time for scheming, deliberating, and acting. To tell a mob how their condition may be improved is talking hydrostatics to the ocean. Science is of use now because she may be heard and understood. If she be not heard before the democracy come, when it is come her voice will be drowned in the uproar.

So great and so urgent is in our judgment the importance of plans for the improvement of the working classes: we regret, therefore, that so much of our space has been taken up with the explanation of the existing state of things in England, that we must be brief in our account of Mr. Mill’s schemes for the elevation of the labouring classes. He has schemes for both England and Ireland; and we will take the latter first.

The economical condition of Ireland is probably far worse than that of any other country possessing equal natural advantages. The rate of wages scarcely comes up to the minimum that will support life, and falls far short of that needful to maintain the human body in full working strength. The land tenure appears to be about the worst possible. It has nearly all the disadvantages both of la grande and la petite culture, without any of their corresponding advantages. This tenure is known as the cottier system, which Mr. Mill has here defined as the system in which the peasant rents by competition only, and not at all by fixed custom. It is not difficult to see, that in a country with a rapidly increasing population, and but a little non-agricultural employment, a great preponderance of such a land tenure ensures the utter misery of the labouring classes. Land is, in such a country, the first necessary of life, and the landlords have a monopoly of it. The peasants will promise to pay any rent in order to obtain possession of the soil. This nominal rent they will be unable to pay, and the landlord will take whatever more is produced than is necessary to give the tenant a bare subsistence. As population increases, the competition strengthens; the rents increase in amount, the tenant is more and more oppressed with debt, and he has to work harder and harder in order to obtain the most meagre sustenance. Necessaries are being bartered for luxuries, and those who need the former are at the mercy of those who possess them. It is obvious that what has been described as the prevalent practice of Irish landlords is morally unjustifiable. We do not charge all the Irish landlords with abetting such a system. The better part of them do not take into account the biddings of the peasants in settling the rent, but act on their own notion of what he is able and ought to pay: yet though the evidence taken before Lord Devon’s Commission shows that such more respectable landlords are not absolutely few, it seems also certain that they form an inconsiderable fraction of the whole rent-owning class. The ownership of land, however, gives no moral title to inflict suffering on its occupants. The landlord under this system takes habitually a cruel advantage of the necessities of the poor; and that such can be the constant course of events in a Christian country, shows how little the Jewish Prophets are heeded by those who profess at least to acknowledge their authority.

The question then arises, how are these cottiers to be got rid of? No man defends them; but it is difficult to devise plans for introducing a better system. Mr. Mill’s answer is that a large number of them may be provided for by making them peasant proprietors. There are in round numbers a million and a half1 of waste lands in Ireland, which there is every reason to think would repay tillage. This land is now lying useless, and it does seem a very obvious course to bring it into cultivation. To any such scheme as Mr. Mill’s there is, however, a strong dislike in very many English minds. It seems to us that the evils of Ireland have created a prejudice against this their appropriate remedy. An inveterate idea prevails that the existence of small holdings is the cause of Irish misery, and that the scheme of peasant proprietorship is a mode of perpetuating the existing system of land tenure. We feel sure that this is a fair statement of much influential opinion. But yet both these two propositions are ridiculously untrue. It is not the smallness of the holdings that is the cause of the evils of Ireland; for in Ulster, where the condition of Irish society is far better than elsewhere, the division of land is more minute than in any other portion of the country. Again, the system which now prevails is one of rack rents, where all surplus beyond the bare subsistence of the tenant goes of necessity to the landlord; the system proposed as a remedy is, that in some cases no rent at all should be paid; and in the case of more fertile soil, that a fixed sum should be reserved, a system which would obviously give the tenant a secure enjoyment of whatever surplus produce his industry might exact from the soil. Is there any connection therefore between the existing system and that proposed as a remedy for it? In the one the main feature is unlimited exaction; in the other the main feature is the fixity of the quit rent which is to be paid. This point of fixity is one which Mr. Mill has in all its bearings admirably elucidated, and as it seems to us with very great originality.

The only other remedy proposed for Ireland is the wholesale eviction system. Some persons who wish to adapt Ireland in all respects to the model of England have wished to introduce large tillage farms, and to make day labourers of the lower classes. We have before given some reason, and Mr. Mill has collected almost demonstrative evidence, that on grounds principally derived from the theory of population a nation of peasant proprietors is much preferable to one of hired agricultural labourers. But, putting this aside, there is strong reason peculiar to the individual case for preferring to introduce into Ireland the system of peasant proprietors. The Poor Law Commissioners for Ireland state “that agricultural wages vary from sixpence to one shilling a day; that the average of the country in general is about 8½d., and that the earnings of labourers come, on an average, to from 2s. to 2s. 6d. a week or thereabouts”. Now the number of the cottier population is exceedingly large, and it is evident that the addition of anything like it to the number of hired labourers would bring down the rate of wages enormously. It is obvious that, bad as the cottier system may be, this remedy for it is worse than the disease. Wages are now 2s. 6d. a week; what will they be after a great reduction?

It is said that capital will come from England to employ the additional labourers. But Mr. Mill justly replies that capital will not come from England until the social state of the lower classes is improved, and therefore if we adopt the scheme of large farms we are forced on the dilemma that capital will not come till the people are improved, and that the people will not be improved before the capital comes. Also there is no likelihood that a sufficient amount of capital would come. The Poor Law Commissioners state that there are in Ireland five agricultural labourers to the extent of soil which employs two in Great Britain. It is obvious that if the agriculture of Ireland is assimilated to that of England, this immense surplus of labourers would be thrown out of employment.

Moreover, the system of peasant proprietors has been tried in Ireland and has worked well. There exists in Ulster a kind of incipient copyhold, from which a tenant at will cannot be turned out so long as he pays a fixed customary rent. From this it is an obvious consequence that the consent of the occupying tenant must be purchased before a new one can have possession of the soil. It is this institution of tenantright which has made the people of Ulster so superior to those in other parts of Ireland. They have this system because being English and Scotch they were a better race of people in the beginning; but peculiarities of race act not by magic, but by creating social habits and institutions: the cause of a wellorganised industry when it is not improved from without must always be an appropriate disposition of the industrious classes, yet it is not the less true that the happiness of the labourers results immediately from the beneficial organisation. Hence it appears that the institution which it is proposed to extend has been already tried and has succeeded admirably.

As to the effect of peasant proprietorship on Irish population, there is every reason to believe that the class of people whom we are now concerned with practice no prudential restraint whatever, and there can therefore be no reason for saying that any new system will be productive of increased improvidence. It has also been shown that Mr. Mill has ground for saying that, against over-population, peasant proprietorship is the best preservative yet known. But, besides these two weighty considerations, there is reason to prefer this system to that of hired labourers, because Government may lay down rules to preserve the integrity of properties, and these rules may act as a check on population over and above the natural effects of peasant proprietorship. These rules should be enforced because “brute custom” is of great force in matters of population, and habits of improvidence cannot be suddenly eradicated. But on the opposite plan of replacing the cottiers by hired labourers, no check at all would be put to the increase of population; the labourers would be abandoned entirely to their own control, and as they most likely would not become a saving class, they would in all likelihood soon be no better off than at present, although we grant the false assumption that their condition would for a brief period be improved. On this account, therefore, we should hold that, whether or not the nominal proprietorship should be reserved for the Government, it would be certainly advisable to keep a watch over the subdivision of properties exactly as is now done by the more intelligent and respectable of Irish landlords.

These arguments are, it is obvious, quite independent of any opinion on the intrinsic merits of the small system of cultivation. All that it is necessary to show for our present purpose is, that there is no such enormous evil in the small system of cultivation as to overbalance that good which we hope would accrue from the institution of peasant proprietorship. Mr. Mill’s judgment seems, however, to us so admirable on this point, that we will sum it up and present it to our readers; a study of it will serve to remove from the minds of many economists those opinions which, where they are not mere prejudices, are conclusions drawn from a very limited and exceptional experience. Mr. Mill’s conclusions are, that the small system is a social nuisance when the rent is unfixed, and can be raised in consequence of the improvement of the property, and that it does more harm than good when the properties are too small to employ the whole time of the proprietor and those dependent on him; when the property is too small to give the owner a full security against any probable accidents of crop; and also that this system wastes much time when the properties do not lie in one place, but are divided into smaller holdings, between which the tenant has often to go to and fro. Also that in the case of crops not requiring very minute attention, the same labour will extract from the same land a greater return under the large system of cultivation, but that the small system will yield a larger gross produce than the large to the same number of hands employed, because of the greater industry and forethought which are developed in the minds of the peasant proprietors by the certain hope of enjoying the fruits of their own labour.

It is a consequence of this last proposition that the surplus produce available for supporting a non-agricultural population will be greater under a system of peasant proprietor than under any system of large farms on which the hired labourers are equally well fed. It is out of this surplus that all the most valuable portions of the community—all those whose trade it is to instruct, govern, and educate the community—are for the most part subsisted. When, therefore, the agricultural population have a fair share of comfort, this surplus is the real test of the advantages or disadvantages accruing from any agricultural system, but in any other case it is no test at all. There is no advantage but much evil is giving the labourers (as is done in Somerset1 and Wiltshire) less food than will keep men in full working condition, in order that a large surplus may be left to support non-agricultural classes. Large masses of men are always degraded morally by extreme physical suffering. In matter of fact a large portion of this surplus is expended on the producers of luxuries and on those non-productive classes who do nothing either for the wealth or the improvement of the community, and it is preposterous to benefit these at the expense of a more useful class. But even if the whole surplus were expended on the education of the community, it would be no adequate compensation for the moral degradation of a large portion of those who are to be educated. “Thou shalt not muzzle the ox which treadeth out the corn” is the true rule of Economics, and it is disgraceful that thinkers enough are found to hold and imply, if not in terms to state, a different doctrine.

On the whole, therefore, there is no ground for universally preferring the large system of cultivation, which, indeed, appears to be more beneficial only where it is necessary to enforce the utmost economy of labour. There is, therefore, no objection arising from the theory of agriculture against introducing the small system into Ireland. We have advanced strong positive reasons almost wholly derived from Mr. Mill’s work, for recommending their immediate introduction: we have only to add on this point, that if the waste lands should prove insufficient to provide for the whole of the cottier population, Mr. Mill would turn their present holdings, under proper restrictions as to size, into farms, at a fair quit-rent, tendering of course to the proprietors of the soil the fair market-value of the land; a measure which assumes no more powers over the soil than an ordinary railway bill, and which is certainly justifiable if experience should prove it to be necessary.

Such is Mr. Mill’s remedy for Ireland. For England he has two remedies: one, which we will mention first, is designed to modify the intense and angry feeling of competition between labourers and capitalists that is observable at present. This is the scheme which was first recommended for general adoption by Mr. Babbage, and which, according to Mr. Mill, has been tried with excellent results both in America and in France, and also in this country for a long time past, in the Northern Whale Fisheries and the Cornish Mines. It essentially consists in making the workman the partner of the capitalist; in other words, it is proposed to pay them not a fixed salary but a proportion of the profits. We need not here dwell much on the merits of this scheme because it was not long since discussed in this review by one more competent to the task. Its merits chiefly consist in giving the labourers an interest in the success of their work. From this it would ensue that industry would be stimulated and the gross produce be augmented both of manufacture and agriculture. A good feeling between labourers and capitalists would also facilitate all productive operations; and on this account there is every reason to believe that the adoption of this plan would raise to some extent the remuneration of labour, because the fund out of which labourers are paid would be greater than under the present system. But it is not in the least likely that this alteration in the mode of paying wages would in itself be adequate to meet the present difficulty. It may be doubted whether a plan could not be devised as a development of this scheme for combining the advantages both of the large and the small systems of cultivation, and also for making the condition of children as exclusively dependent on the actions of their parents, as is the case with the children of peasant proprietors. But whether this be so or not, it is clear the present rate of wages is too low to be sufficiently raised by any improvement in the mechanism of distribution. The additional amount produced would be quite insufficient to effect so great a change as is necessary.

Mr. Mill has therefore provided another scheme more capable of producing great and immediate effect. This remedy is a large scheme of Emigration. He recommends the transplantation of a number of labourers large enough to change the standard of comfort in which the remainder would live, and in which the next generation would be habitually reared. This plan is not to be confounded with that recommended by The Times newspaper, and extensively countenanced by many influential persons. This latter scheme apparently contemplates an annual emigration as a permanent outlet for the overflow of the population. This latter will not remedy the present state of the lower classes, though it might keep one which was always good from any deterioration. Mr. Mill’s scheme, on the other hand, is designed for the elevation of the lower orders as a whole. It will be evident that we are in constancy bound to maintain that no objections from the theory of population could be raised to this scheme, because we have laid down that large alterations in the standard of comfort generally raise what has been called the moral minimum of wages.

The only other important difficulty likely to be started is the expense, and this Mr. Mill has a theory to encounter . He remarks that it is of no consequence that taxation entrench on the capital of a country, if the capital appropriated by Government were about to expatriate itself on account of a prevailing low rate of profit. If Government borrow the money, the process is that the coming of a new trustworthy borrower into the market raises the rate of interest and keeps capital at home. If the amount is raised by taxation, the effect is, that a certain portion of capital which was on its way to the loan-market, and from thence to foreign countries, is intercepted by the Government, and transferred to purposes of a national instead of individual utility. In the case of England this argument certainly applies. It is a fact of experience that when the interest of money1 is 2 per cent. capital habitually emigrates, or, what is here the same thing, is wasted on foolish speculations, which never yield any adequate return. It would clearly be no national loss if this capital were appropriated by the Government for national purposes: the best mode, perhaps, being to take it direct from capital on a terminable annuity of thirty years’ duration. So that Mr. Mill has clearly answered those Economists and Manchester manufacturers who exclaim against entrenching on the National Capital for any purpose, however philanthropic. He has shown, by an argument which is so obvious when seen, as to disguise the merit of seeing it, that there exists an ample fund out of which all the higher interests of State can be satisfied, without diminishing the permanent opulence of the country. Nor is there any service so much needed from a political philosopher at the present time.

This argument, though weighty as it stands, cannot be fully appreciated, except by taking into account one or two general circumstances affecting the rate of profit, the consideration of which we accordingly postponed until the present time. The first of these propositions is, that an unlimited amount of capital cannot be employed in an old country without a diminution of the rate of profit. It has been shown that an increase of co-operative capital is of necessity accompanied by some increase of remunerative, because machinery cannot be worked without manual labour, and the extra demand for labour will require more funds to compensate for its exertion. But a large portion of remunerative capital consists of food, which as we have seen requires the application of capital to land under circumstances which in any fixed condition of the productive arts reduce the rate of return in proportion as the capital expended is from time to time augmented. The price of corn therefore rises, and it may be assumed that either the physical minimum of wages exists and must be maintained, or that the moral minimum exists and will be maintained. In either of these cases, the money-wages of labour must rise or the real remuneration of labour will fall off. Moreover, it is clear that if money-wages rise, and the price of commodities do not rise also, profits must fall. The capitalist has more to pay for getting his work done, and he has also less for himself in consequence. That prices cannot rise is clear, because the cause here assigned acts, with an exception here unimportant, equally on all employments. If money were produced in the country, the wages of the miners would rise, as well as the wages of other labourers, or the same cause which is supposed to operate to raise the value of commodities, as compared with money, is equally operative to raise the value of money as compared with commodities. It is obvious that no circumstance can change the relative value of two commodities which affect equally the supply of both, and does not at all affect the demand for either.

Therefore with an increase of capital it is proved that there must be an increase of food; that an increase of food is most frequently accompanied by an increased cost of hand work,1 and that an increased outlay on manual labour will be accompanied by a diminution of profit.

This assumes that the industrial arts undergo no improvement sufficient to compensate for the inferior return from poorer soils, and to prevent the price of food from rising. Mr. Mill is of opinion that in general the progress of industrial improvement is a less powerful force than the necessity of resorting to inferior land. The price of food from century to century is the obvious criterion of this fact, if only money be of an unaltered cost. Taking into account any deranging circumstances affecting the rate of wages, it is also clear that the history of the rate of interest will be an adequate indication of the forces respectively exerted by each of these two antagonistic agencies. The history of the rate of interest in England has yet to be written, and therefore we cannot find any complete test, by which to discover the relative progress of these two forces. Few subjects so interesting to a philosopher yet remain so thoroughly univestigated.

The obvious bearing of this theory on the emigration of capital is, that since the rate of profit is being gradually lowered in an old country, sometimes it will come to a point at which persons will rather seek a higher rate abroad. There is always a certain minimum rate for anything below which persons will not think it worth while to accumulate. That minimum varies indeed with the habits of a people, yet in any one generation there is a point beyond which it will not go; and there is obviously a minimum beyond which it will not go at all. In an old country like England this minimum rate will not bear much reduction, and therefore we must contentedly look for the emigration of capital, and, what is worse to the world, though nationally the same, its destruction by foolish speculations, of which commercial crises are the inevitable results.

Hence it is clear that there will be in this country, for many years, a fund from which the higher purposes of Government may be achieved without entrenching on the support of the labouring people or the real opulence of the nation. In reference to the Emigration scheme, it may be said, that the effect of Government interference simply is to determine, that capital, which was going to leave the country, shall go to that particular foreign country to which the labourer has been removed. It was before fixed that capital should emigrate: the direction of that migration is settled by the operations of Government. On such grounds as these, therefore, Mr. Mill contends that his scheme if adopted is in the highest degree beneficial. It is greatly preferable to any that we have ever seen proposed for remedying the economical wants of the lower classes; and its adoption is in our judgment the very best measure open to the selection of an English Government. To us it seems the best attainable means of attaining a necessary condition of all future social improvement.

We have now arrived at the end of our long labour. We have discussed the circumstances now affecting the condition of the labouring classes, and also the schemes proposed for their advantage. Of Mr. Mill’s speculations on this subject we have shown ourselves no lukewarm admirers. And on this account we are at liberty to say that his chapter on the future conditions of the labouring classes very much disappointed us. The lower orders are there treated as if they were beings of pure intellect. We do not for a moment deny that it is of great consequence to give the working classes intellectual cultivation, and to develop in their minds a relish for intellectual pleasures, yet we also think that the peculiar qualities of Mr. Mill’s mind have led him to assign to such considerations a space out of proportion to their importance. The most important matters for the labouring classes, as for all others, are restraining discipline over their passions and an effectual culture of their conscience. In recent times these wants are more pressing than ever. Great towns are depots of temptation, and, unless care be taken, corrupters of all deep moral feelings. The passions also act with more violence than elsewhere in the intervals of a monotonous occupation, and owing to the increasing division of labour the industrial tasks of mankind are every day becoming more and more monotonous. To these considerations Mr. Mill has not alluded, nor has he enlarged on the dangers of that union between democracy and low wages which in our view make his plans for the elevation of the populace of such urgent and practical interest. If Mr. Mill had been a mere political economist, no blame would have attached to him. But he considers, besides the abstract and isolated consequences of the mere desire for wealth, the application also of these consequences, with all necessary corrections, to the real world of human action. He was therefore bound to have noticed the deeper considerations we have named, and to have neglected to notice them is an omission not less unpleasing because decidedly congenial to a purely intellectual and secular thinker.

And now as we are in the act of concluding our remarks on this admirable work, it is full time to mention what is perhaps its most peculiar merit. It has been well remarked that a writer on detached points in a science need only show his reader where he has succeeded: the author of a systematic treatise must also show them where he has failed. The latter must follow the course of his subject, though it lead him to problems which he fails to solve—the former by selecting his favourite points may easily conceal from his readers that he has ever been vanquished at all. The most appropriate praise to this work is, that it evades no difficulty, and of the problems which occur solves rightly a proportion, on its peculiar subject, beyond all precedent large. No doubt a severe judge will decide that this book is far from perfect. He will, we think, find there some indistinctness of expression and some diffuseness of explanation, an occasional dogmatism where there is ground for doubt, an excessive averseness to subtle speculation, and a defective appreciation of some moral and religious considerations. But after all abatements have been made, the severest judge will unhesitatingly pronounce that though there have been in England many acute speculators who have by their economical writings gained much credit in their day and generation, three men only have by such means attained permanent rank among the great thinkers of their country, and that these three are Adam Smith, Ricardo, and John Mill.

ESSAY ON THE COMPARATIVE ADVANTAGES OF THE STUDY OF ANCIENT AND MODERN LANGUAGES.

(Written at the Age of Sixteen.)

The question, whether Ancient or Modern Languages are best adapted for our Study, considered with regard to the education of youth, possesses considerable practical importance. This is peculiarly the case at this time, when the recent formation of a new University conducted on less exclusive principles and a more extended plan than Oxford and Cambridge, will oblige these venerable institutions to include in their course of Study , subjects now beyond its limits, and to give up enough of their time-hallowed but now obsolete customs, to enable them to keep up with the Spirit of the age.

Before entering on this subject, it may not be amiss to enquire, what in this respect was the condition of the Ancients themselves, and whether they had any peculiar features, which may be derived from the circumstances, in which with respect to this they were placed.

The Greeks are an example of a nation rising to a high place in the scale of literature, without any acquaintance with writers in any tongue save their own. This singular fact formed at once their highest excellence by stamping on all their productions the mark of true genius, originality; and also gave rise to the greatest defect in the Greek mind, verbal quibbling and their great tendency to mistake similarity of expression for real resemblance. With the Romans the case was extremely different. Their standard of literature was partially lowered by too close imitation of their Greek instructors; and therefore with greater refinement of expression, they are very much their inferiors in that vigour which is the peculiar characteristic of original thought. We have not indeed any specimens of the old Saturnian verse; which, although undoubtedly harsh, might perhaps have atoned in part for this defect, by the vigorous conceptions it contained; and we know certainly from Horace, that in the Augustan age there was a great tendency to prefer these early and home-grown flowers, to the rich exotics which the bards of that period produced.

• “Hos ediscit, et hos arcto stipata theatro
• Spectat Roma potens, habet hos numeratque poetas,”

says Horace speaking of Ennius and the fathers of Roman song; and it must be remembered, that this was no transient impression but that it continued in full force through the best period of the Empire although exposed to the virulent satires of later bards. But be this as it may, the Æneid of Virgil is certainly a close imitation of the Iliad and Odyssey of Homer; and the best phrases in the odes of Horace are merely translations from Simonides and the other eminent lyric poets of Greece.

The Greeks then were a nation almost entirely destitute of acquaintance with foreign literature; and the Romans, a people whose writings were considerably impaired by imitation. And hence it may be concluded that a total disregard of foreign languages has a decidedly bad effect on the mind of a nation; and that a too close attention to one language has a tendency to upset original invention.

The case of our forefathers is another and far worse instance of excessive imitation; this however, was probably unavoidable. When the thick gloom which had hung over the regions of literature during the Middle Ages began to clear away, the only sources whence the requisite light could come was the Greek and Roman languages. Our ancestors studied them deeply, particularly the Latin, and perceiving the barrenness of their mother tongue in words to the literary ideas, and also with a view to make the resemblance of their writings closer to their elegant models, they adopted the Latin language, and but for Chaucer and our earlier bards, there might for a very considerable period have existed no English literature properly so called at all; but, for the cultivation of poetry, original invention is requisite; men never can become poets by mere imitation; and instead of imitating the style of the classic poets, these rugged bards struck out a line for themselves. They expressed their homely ideas in their native tongue—rugged and unharmonious, it was without doubt at that time; but still it was well calculated to express the forcible but unpolished truths which they sought to inculcate. They have at least the praise of originality, which poems in a dead language must always want; and in reading the simple descriptions of English life and manners which their writings contain, it should be recollected that if Chaucer had not formed our language, our annals would never have been graced by the names of a Milton, a Byron, or a Shakespeare.

The Reformation, and its parent the invention of printing, also produced great effects on the European languages. Luther throughout the whole of his undaunted struggle with the papacy published his tracts in German; and his opponents, rather than leave him in possession of the field, were forced to do the same. The course of events in the other reformed nations was precisely similar; and thus a necessity arose for engrafting on modern language terms expressive of literary ideas. This want was supplied in different ways; but in most cases, as in English and French, by deriving words from the Latin and Greek, or, as in German, by compounding words from the original elements of the language. From the era of the Reformation, modern literature has gradually arisen, although the learned hesitated to give up the use of Latin, and thus open to the mass of the people those stores of information which had before been their exclusive property. The diversity of national character, and other casual circumstances, modified in each state the development of these general causes.

Thus has arisen the difference of the prominent features which characterise the writings of the several states of Europe. At the commencement of the revival of learning, as has been seen, Latin was a kind of universal language to the learned men of Europe. This it has in a great measure ceased to be, and no other can arise entirely to supply its place in this respect; but the nearest approach made to it is by the French language. This tongue although the compositions it contains are neither so valuable nor so numerous as those which ornament the literature of some other European nations, is peculiarly adapted to conversation; and from this circumstance, and also from the influential position of France on the Continent, it is extensively known throughout the whole of Europe. Hence French is an indispensable acquisition to all who intend to travel beyond the bounds of their own land, and also to hold verbal intercourse with the learned of other nations.

The German contains the most voluminous literature which at present exists, so much so indeed, that a large proportion of the well informed among them are Authors, and the works of each generally extend to a considerable size. Their prose literature is generally devoted to commentaries on ancient writings, and the history of past ages; one reason for this may perhaps be, that their Government has prohibited all those discussions on events, occurring at the present time, which comprise so large a proportion of the British writings. Their poets are also voluminous, but contain great originality of thought combined with grace of expression. Schiller has been styled the most classic dramatist of modern times, and though he is inferior to Shakespeare in that original vigour of thought which is the prominent characteristic of that great dramatist, he excels him in taste and delicacy.

The Italian literature is almost entirely composed of poets, and most of these flourished two centuries ago; nor has the language received any improvement since their time, and the greater part of their modern productions are imitations of these old bards.

Nothing need to be said about the advantages of studying our native literature, and our language, with the three which have been briefly mentioned, are the chief literary languages of Europe. The books written in Russian and other northern tongues, are chiefly translated from French and English works; although the first of these contains some works of considerable reputation on various branches of scientific enquiry, which are indeed the only subjects on which the strict surveillance of their rulers over the press allows the national mind to exert its unshackled energies. These last mentioned languages then are little worth the trouble of learning, except to those who are going to travel in the North, or have other reasons of a casual nature for their acquisition.

Among the reasons for learning the modern languages, the first and most obvious one is that of communicating with foreigners easily. From what has been said of French as a universal language, it will be seen, that this is almost the only one which it is necessary to learn for this purpose. Another advantage is the insight which several modern tongues give into the roots of our own; in which respect the German is peculiarly important as a kindred tongue to the English; and the Norwegian still more so, as more closely connected with the old Saxon from which all are derived. A competent knowledge of French to all who wish to travel on the Continent, and an extensive acquaintance with German, is desirable for the learned, and is every day becoming more and more so, and a knowledge of Italian is a polite accomplishment which may be learned with considerable advantage; while the other languages are of no importance, except to those who intend residing in the countries where they are spoken.

After this short summary of the advantages attending the acquisition of modern languages, it will be necessary to take a brief review of the most prominent of those which arise from the study of classics.

The first and most important is the one which results from their effects on the youthful mind. It is in youth that most men must lay in the greater part of those stores of information which are in these days required to join with usefulness in society. Studious men must always be rare, and the short intervals which those who are engaged in active life can snatch for study and relaxation, will scarcely suffice for doing more than keeping up a knowledge with the course of passing events. Youth too, is the season of life in which the mind requires to be disciplined, and the intellectual faculties enlarged. What can be better for this than the study of classics; than extending our ideas by an acquaintance with the sublime works of antiquity, with the productions of those master minds which were our instructors in civilisation? Would not this be a sufficient reason for spending our time in acquiring them, even if, as is sometimes alleged, they are of no use in after life? But this is not the case—classical literature is always alluded to as a subject with which every well-educated man is supposed to be familiar; and they are of great service in giving the mind that polish without which it is impossible to give or receive pleasure in society, and what can compensate for the loss which they experience who are unable to study the writers of antiquity in their original languages? Translations only shine with a reflected light—and in proportion as this light is more or less bright, they present a more or less vivid image of the source whence they derive their borrowed splendour, and to which at best they bear but a pale and shadowy resemblance. But independent of these considerations of the effects of a classical education on the mind, another reason for it is the great assistance which it gives in studying modern languages; in most of which, but especially in French, a classic element has gradually blended with the original root divided from the northern barbarians who overthrew the Roman empire. The terms used in every branch of scientific enquiry are derived from the Greek and Latin, and without a knowledge of these, the meaning of such words will be liable to be constantly forgotten, or at best indistinctly remembered: while their significations are obvious on mere inspection to those who have a competent acquaintance with their primitives in the classic languages.

In the earlier portion of this Essay, those evils were exemplified, which accrued to the Greeks from a total neglect of every language but their own, and also those to which the Romans subjected themselves, by a too extensive study of one language; and in how much more aggravated form our forefathers experienced them, in consequence of their slavish imitation, and boundless admiration of the ancients. It has also been seen, that from the several reasons which render each of the modern languages in different ways important, that in these days to be unacquainted with them is a great hindrance to the scholar, and to all persons who either intend to travel in foreign lands, or to extend their knowledge to the literature of other nations. But reasons at least equally strong have been alleged to show that the classics are essential to every educated person, alike for their intrinsic elegance, and also for their extensive utility as a groundwork for other pursuits. And hence it may be finally inferred that too great application to the study of either is extremely prejudicial; but that a judicious mean between the two extremes of slavish imitation and total neglect is by far the most desirable course which mankind even in these days pursue. And this course of proceeding is so much the more desirable, as the study of several languages is likely to correct the evils and disadvantages which infallibly result from too close attention to one, however beautiful and elegant that one may be. But it must be remembered that the pursuits of foreign or ancient literature are at best but of secondary importance, and that an ignorance of the best writers of our own language is a neglect which cannot be excused by any acquaintance, no matter how extensive, with the productions of other lands, or older times.

THOUGHTS ON DEMOCRACY.

(Written in Early Youth.)

There is little use in attempting to deduce the superior advantages of liberal government from long and obscure metaphysical reasonings about the social contract, framed when men were in the fishing and hunting state; for I cannot but think it very doubtful whether anything like the whole mass of mankind were ever in that condition at once, and if they were not, the contract could not have been agreed to by the whole race, and consequently cannot be binding on them.

The deductions from the social contract are exactly adapted to be set-off against those from the divine right of kings, and in the following part of this paper it is by no means my purpose to rely on either. One great distinction, often lost sight of, but by calm enquirers necessary to be kept in view, is that between democracy and autocracy, between the rule of the people and the rule of the mob. But these two have very little in common, scarcely anything in fact but that the mob are often persuaded by their demagogue rulers to carry on their designs under the name of the people. Democracy, in its proper sense, is that form by which a wise and enlightened nation govern themselves; it is a government which guarantees equal political rights to all its members; it is a government which effectually provides for the equitable dispensation of justice, and grants, even to the most outrageous political criminal, a fair trial and an opportunity for defence. Autocracy, on the other hand, can scarce be called a government, since it provides no trial, no fair hearing for any criminal—tumultuary prejudice is to be the judge, tumultuary violence the executioner; in it there is no deliberation. The people disdain to govern themselves by the laws, they make their unstable whims their only guide. It is so far from being a free government that it is the only uncontrolled despotism in existence, for in the most unlimited monarchical despotisms there is the restraint, and it may be a very powerful one, that the people will take up arms to resist the tyranny of their sovereign; but when a mob rules, who can take up arms against them? whence can relief come? where must help be sought? I am aware that this is the topic most enormously insisted on by the opponents of political freedom in general; they reason as if all popular government must generally be of this nature, but I see not why. I do not see why a whole people should not be as likely to govern themselves well as a small knot of individuals could govern them: much more so indeed, for “in proportion as a greater amount of intelligence is directed to a subject” the more light is thrown on it. Those ideas which remained dormant as long as the mind in which they were destined to originate continued solitary may be struck out by the contact of different minds. Can a subject be darkened instead of illuminated by having the light of reason directed to it? does political science differ in this respect from all other sciences? would astronomical science have ever advanced so far if only the labour of one mind had been directed to it? One man must indeed be severally devoted to a particular branch of knowledge, but in a well-constituted mind this will never be to the exclusion of all others. Take the most favourable instance conceivable: Man was sent into the world to govern himself, but intense and exclusive devotion to that object would end in making us all maniacs. It is one great advantage of free government that it opens the way to eminence, to talent, in whatever station it be placed. This advantage is inestimable. Adversity is so much the best and most effectual instructor, that even absolute monarchs, when they have had opportunities of judging, have discovered that ministers selected from the lower ranks were in general more able to be useful in the prosecution of their designs than those whose noble birth and consequent high station have given to them an exemption from its teachings. But how can this choice which may depend on whim, very likely influenced by personal appearance, a gift so fortuitous as never to be relied on by any in the common affairs of life, how can such a choice be compared with that judicious selection of merit which must be the confidence of that merit showing itself? There are certainly certain qualities, certain classes of merit more adapted than others to gain popular favour: but where the predilection for these is the result of calm deliberation and not of hasty whim these qualities will generally be found to be the ones most useful for their stations. What members are of most estimation in the House of Commons? those whose capacity for business is most fully relied on, and the luminous clearness of whose statements immediately places that assembly and the country in a position to judge of their conduct and puts them in immediate possession of the knowledge requisite for deciding on the condition of affairs brought before them and for determining on the course to be pursued. Can it not be believed that these qualities are the ones of greatest utility in managing public business. The reservation which I made in the last paragraph, namely, “that the decision must be the result of calm deliberation, not of hasty whim,” contains matter of considerable importance. To secure this is said to be impossible. I deny the fact. The people will be more likely to judge rightly than a small body of individuals, if they can but be brought to give due attention to the subject. They are notoriously more liable to be led away from the path of their true interest, but if they are allowed time for lengthened consideration, they will soon return to it: this can only be secured by delegating to an assembly of moderate members those powers which a whole people cannot in a state of considerable diversity conveniently exercise; if the measures adopted by this assembly be good, when submitted to the judgment of the people they will be applauded. I say when submitted to the people, by this meaning when, as in the English House of Commons, by periodical elections the constituents are called to decide on the conduct of their members, whether they will or will not continue to be represented by them. In this way the decision of the people is the ultimate tribunal before which the rulers must be weighed, by which decision they must stand or fall.

ON THE CHARACTER OF MIRABEAU AND HIS INFLUENCE ON HIS AGE.

(Written in Early Youth.)

Mirabeau was the first great character brought to light by the French Revolution. He partook strongly of the peculiar spirit of the times. The new opinions, which claimed to the exclusion of all others the character of philosophical, had taken deep root in his mind, and had borne their most fatal fruit—religious scepticism. On political questions his views were far more correct, as far as they were fixed. He by no means went the extravagant length of Rousseau, and his more devoted followers, who scarcely tolerated the bonds of society itself, rejected without scruple all aristocratic distinctions and ridiculed the fundamental principles of monarchy and representation. Mirabeau’s views went no farther than the erection of a kingly commonwealth like that of England. He would have eradicated without scruple the oppressive pecuniary privileges of the feudal noblesse; he would have opened to the tiers état a chance of rising to the highest stations in the country, then wholly denied to them. But he would not have demanded of the nobility to coalesce with the commons, and to relinquish their right to vote in a separate chamber, which they possessed in England, the most democratic of feudal monarchies. Mirabeau seems to have shared the favour with which universal suffrage was then regarded in France. He seems to have regarded political power as a right, not as a trust: an error very excusable in a nation just emerging from despotism, who have experienced all the evils of exclusion from a share in the government; but very pernicious when those who hold it deem themselves obliged to extend any power to those classes of the community whose ignorance and credulity unfit them for its exercise. All are entitled to receive this trust who show themselves worthy of it, and those who have abused it may rightfully be excluded from its possession.

The bane of Mirabeau was his excessive vanity. The Grand Monarque in past times had been the idol of the French people. That age had passed away. D’Alembert, in 1780, on the birth of the Dauphin, said, “I am old enough to remember when such an event would have excited transports of joy, but the people now regard the birth of a new master with great indifference”. This homage, it was thought by Mirabeau, was more justly due to the leader in the national Assembly, and it was his aim to be himself that leader, and to engross the popular applause. He rose to be dreaded and feared; his sarcasm was the dread of his rivals, and the Assembly was led by his skill in selecting those topics that had most influence on their understanding, and those modes of presenting them most calculated to move their sympathy. But before his death, “The great treason of the Count of Mirabeau” resounded in the streets of Paris. At that momentous stage of the Revolution when in the Assembly the members of the Jacobin Club, thirty in number, and afterwards so fatally celebrated, dared to express disapprobation at his opposition to the cruelties towards the emigrants, he exclaimed, “Your murmurs are unavailing; to please you is my happiness, to warn you my duty; the popularity which I desire is not a feeble twig fanned by the breath of momentary favour; it is an oak whose roots are spread in the soil—that is to say, fixed on the immutable basis of justice and liberty. I understand the vexation of those who, now so ardent, or rather so perfidious, in their love of freedom, would be puzzled to tell when it arose in their bosoms.” At these concluding words, a violent uproar was made among the Jacobins. “Silence those thirty voices,” cried Mirabeau in a voice of thunder, and it was instantly quelled: such was his power when exerted in the cause of order, to which he wished to devote the last years of life. “I would not wish,” he said, “to be always employed in the work of destruction,” and with this view he had allied himself to the sinking cause of monarchy when death cut short his plans. If his life had been prolonged he might have preserved the throne. The boldness of his genius and the grandeur of his plans mark him out as the only man who was equal to the achievement. A part of his plan the King attempted to execute when deprived by death of his aid, and fled to Varennes. But it was in vain—the mainspring of the enterprise was gone—the head that had planned it was laid in the tomb, and the soul whose unrivalled daring alone was equal to its execution was fled for ever. When every incident is attractive, it is difficult to avoid tediousness, but some notice is required by the more prominent points of his career, and a few of his sayings must be mentioned to show the character of his eloquence.

On his death-bed, he exclaimed to Dumont, “How right were we, my friend, to oppose the tiers état in their attempt to adopt the title of States General; since that day they have done nothing but show themselves unworthy of it”. His whole death scene, though clouded by the dim uncertainty which his rejection of revelation shed over the future, is exceedingly affecting. It is the effort of a great soul by its own unaided strength to preserve that calmness which Christianity has placed within the reach of the weakest and the humblest.

The connection of Mirabeau with the Duc d’Orléans, “whose name is infamy,” has been a question much argued. That he had some intercourse with him can scarcely be doubted after a due examination of the evidence, but who can believe that he placed any reliance on a fickleness so wayward, or that he preferred the unmingled blackness of his character to the good intentions, mildness, and conscientious though mistaken patriotism of Louis? The influence of the Duke on the Revolution was unmixed evil, but that evil has been overrated. He squandered his fortune in corrupting the populace, but the despotism of centuries had laid the train; and though had he never existed, though the whole royal family had united round the King, some other sparks would have gone forth and scattered their league to the winds. The most unfortunate scene in Mirabeau’s career is the sitting of the 23rd of June. The King on that occasion presented a free constitution to France, and mainly through Mirabeau’s means it was refused. There is, it is true, another side to the question. No exculpation can be attempted for the fatal imprudence of the King, much less for the secret treachery of his courtiers whose dearest wish was the failure of the Revolution. The alterations from the draft which Neckar had prepared were so great that the Minister sent in his resignation and absented himself from the Assembly at the important moment when he was most wanted for its defence. At the conclusion of his speech the King desired the Assembly to break up for that day, and he himself immediately left the hall. The members of the tiers état did not follow him, for Mirabeau was addressing them on their wrongs in a speech of unequalled power. The master of the ceremonies, the Marquis de Breze, entered to remind them, as he said, of the King’s intentions. When his message had been delivered a murmur of disapprobation ran through the Assembly, but all hesitated to reply. Then Mirabeau started from his seat and exclaimed with the thunder of his powerful voice, “Yes, sir, we have heard the intentions of the King, and you who cannot be his agent at the States General, you who have here neither seat nor voice, are not the person to remind us of his speech. Go! tell your master that we are here by the power of the people, and that nothing save the point of the bayonet shall expel us!” With an official answer in this spirit, the messenger retired. There is something very spirited and undaunted in this reply, but was it wise? or was it even just? Even if the Assembly should be ultimately obliged to reject this constitution, ought the irrevocable resolution to have been taken in a moment of excitement? The question was a momentous one. It could never have been the proper moment for decision, when the plan was but just laid before them, and could not have been digested in their minds. The King should not, undoubtedly, have concluded with a proposition so unskilful as the order to adjourn immediately. A party decision was by this means rendered unavoidable, which the monarch’s interest most expressly forbade. But after all, should the Assembly have thrust back the King’s proffers with such disdain? Doubtless the plan was in some respects defective, but should they not have forgiven this as exactly what they had to expect, and trusted to the progress of time and the gradual diffusion of more enlightened views for their correction? The duty of the Assembly was to secure the firm establishment of a regular system of representation. When they had done this, they had done all that was absolutely needful; but they desired to do everything in a moment; time-hallowed opinions were swept away, ancient institutions interwoven with the people’s everyday life were overthrown, and the consequence was the reign of terror. But to return to Mirabeau—was his conduct on this occasion noble? surely not. He yielded to his passions when he should have restrained them with his whole strength; he should have stood between the prince and the people, and perhaps the plague might have been stayed, but he rather chose to scatter the seeds of the pestilence. Public obloquy is cast on the incendiary of a private dwelling, how much rather on him who wantonly lets loose the all-consuming fire on the constitution of a state! Mirabeau by no means deserves a censure so undiscriminating, but even his desire for the public good which was doubtless for the most part the most influential sentiment in his bosom, will not exempt him from a large portion of the censure due to those who helped to bring on the appalling calamities that ensued.

I have delayed perhaps too long on this incident, but it is an important and at the same time an attractive one. It will be unnecessary to dwell at any length on any subsequent occasion, though there are few in which the character of Mirabeau is not presented more favourably for his own fame. The principal points of his subsequent life are the following: The address for the removal of the troops whom the courtiers had persuaded the King to assemble round Paris, under pretence of quelling the disorders of the populace, but the real object of which in the plan of the Queen and her associates was to secure a return to the old régime by a counter-revolution or if necessary by a civil war. Here, his conduct was truly patriotic, and gave France a chance for liberty, which she squandered in her haste for an over-early enjoyment of its fruits. His next great measure was the Riot Act, which was founded on that of England, though it was more favourable to the magistrate, as it did not compel him to risk his life in reading it to the assembled mob, but required them to disperse on the display of a red flag placed in some conspicuous position.

This act was only executed once by the authorities during the Revolution, and then it completely quelled the disturbance and so daunted its chief author, Robespierre, that he implored his commune for protection. But he exacted a deep and a bloody revenge. Bailly, the presiding magistrate, on that occasion was for his obedience to the law executed during the reign of terror. If it had been rightly and regularly enforced, and combined with the suppression of the democratic clubs, France might have been preserved, and the cause of freedom would not have been stained with crimes and cruelties which must now be her reproach as long as history endures to tell of her shame. Mirabeau concurred in the reforms of the 4th of August, which redressed most of the real evils of France. The national debt is the chief exception, and to remedy this Mirabeau had also a scheme which, though obvious, would have been very beneficial. He prevailed on the Assembly to pass a decree in virtue of which one-fourth of the whole property of France would have been subscribed and converted into a fund for its liquidation. This proposition was at first very coldly received, but the eloquence of its author was excited to the utmost, and the bill was passed with great enthusiasm. The disorders of France, however, ensued; it was never acted on. The revolutionary leaders learned to despise public faith, and the debt was subsequently cancelled with no regard to the interests of the creditor.

This is but an instance of the general course of the Revolution. The views of the earlier leaders were wise and comparatively moderate, but the fury of the populace prevented all moderate and salutary reform, which they had been taught to despise. Mirabeau assisted in unloosing the people’s ancient chains, and he instilled into their minds the flattering notion that they were the rightful sovereigns of the earth. A wise and calm nation long inured to a free government and who had been trained up in equal laws and instructed in just and religious sentiments would have found it difficult to resist ideas so artfully insinuated and so seductive in themselves. The French nation has none of these characteristics, and much less the populace of Paris, who were the prime rulers of all events; the fitness of the latter for freedom may be judged from their indignant complaints against the Parisian magistracy for having with unwonted energy delivered out of their hands some miserable wretch whom they had doomed for no crime to a barbarous death: “Is this,” said they, “our freedom, when we can no longer hang whom we please?” I cannot refrain from adding one other illustration; it was the common tone of the drawing-room circles of Paris, what a “charming thing is a revolution”. No trait of French character is so unfavourable as this manner of treating the most awful question imposed on human responsibility, as this readiness to sound the depths of a gulf from whose shore the greatest and most wary statesmen retire with fear and dread and with a firm consciousness that their utmost skill cannot stem its breakers.

Mirabeau also supported the decree for the abolition of tithes. It is unnecessary here to enter on the general question of the sacredness attaching to property vested by past ages in the national church. It is amply sufficient to claim the right which has always been exercised in England for the State’s interference to prevent its extravagant increase, by whatever enactments it may think most fitting. But in all sudden changes of system regard must be had to the interests of those who have been induced by the long-standing and apparent firmness of the old system to devote their lives to the performance of whatever services it may require.

This the Constituent Assembly neglected to do. They confiscated at once ecclesiastical property to the amount of sixteen millions sterling, and made in requital but a very inadequate provision for religious instruction in future. The Church of France had become exceedingly corrupt; the very humble salaries of the curés and the extravagant incomes and unbounded luxury of the bishops attracted universal attention, and as the higher situations were only open to the nobles, the tiers état had no motive to preserve wealth to whose accumulation they contributed, but in the enjoyment of which they had no share. On the free passing of this decree Mirabeau made his celebrated observation, “There are but three ways of subsisting—to beg, to rob, and to be salaried”. He disposed of the difficulty of private property in a very summary manner. “Property,” he said, “is the price which society pays a man for the distribution he makes to others in the shape of his consumption and expenses.” The insecurity on which all the fruits of industry rest is not a little appalling. For if we have to beg them, they may be refused; if to rob for them, their acquisition may be rightfully resisted; and if they are a salary, as Mirabeau probably meant to assert, it is quite sufficient to say to any man that the State has no further need of his “consumption and expenses,” and whatever be his former fortune he may be rightfully left to starve on the public road. Very small safety is here provided for that on which, as a great writer has expressed it, “the consent of mankind has stamped the titles of Sacred and inviolable,” and on the stability of which every human action depends. If this was the view taken of private property, very little safety could be anticipated for that of the clergy, whom there was no disposition in the public mind to regard with favour.

The cruelty evinced towards the clergy is fully worthy the name of persecution, and would sully a fame otherwise far brighter than that of the Constituent Assembly. It was indeed reserved for its successor to applaud undisguised professions of atheism, but “those who sow the wind must reap the whirlwind”; they deprived the people of their pastors and of every means of instruction, and they erected no adequate substitute, and they had no right to be surprised at their appalling ignorance and their rejection of God. The heroic and almost saint-like conduct of the clergy was unappreciated by the Parisian mob, and they were the rulers of France. In the provinces, indeed, their sufferings excited more sympathy, but every noble, every natural chief of the peasantry was in exile, and their efforts in their pastors’ behalf were few, weak, and ineffectual.

It is impossible to keep from digression on themes so interesting and so attractive. Mirabeau’s career in public life was a brief one, though it was at a time when days did the work of years. No long time elapsed between these events and his junction with the court, the consequences of which have already been described as fully as the design of this essay will permit. The remainder of it will be devoted to an examination more in detail of the most marked features of his character.

It is not too much to say that a very striking resemblance of Mirabeau would be formed by the union of the best parts of the mind of Chatham with the worst parts of the mind of Sheridan. The fiery soul, the dauntless courage, the unpremeditated but heart-stirring eloquence of Chatham find their counterparts in Mirabeau, and the Phillipics against Walpole, and the “System of Subsidies” were not perhaps far inferior in execution to those which shook the court of Versailles and daunted the Jacobin Club; and their subjects were immeasurably inferior: but there was wholly wanting the stainless purity and the uncorrupt integrity which in an age of shameless profligacy raised the first William Pitt so far over every rival; and in their stead there was the laxity of principle and the undisciplined desires and unregulated passions which were so ill-combined with the lofty moral sentiments of his brighter moods, and which blighted the usefulness of Sheridan and sullied his fame. Mirabeau had a maxim that morality on a small scale was incompatible with its possession on one more extended, or as he enunciated it, “La petite morale était ennemie de la grande”; a very lamentable exhibition of the errors consequent on the rejection of a religion which prescribes the performance of private duties and the culture of the milder and domestic virtues as well as those more conspicuous ones that are exhibited to the eye of the world, and which, though by no means always more difficult, are always repaid with a far higher earthly guerdon. In common with Chatham, Mirabeau had a predominating influence on the Assembly whenever he put forth his whole mental power; with neither did any contemporary dare to measure himself in the direct conflict of sarcasm, neither could any adversary retort with effect to the lamentable inconsistencies which their conduct and opinions too often displayed.

Both were destitute of the qualities most requisite to form a great party leader. The manners of both were unconciliating and occasionally harsh, and the office demands more attention to individuals and more careful consideration for petty interests than either could be persuaded to bestow. For want of this, Chatham fell, and Mirabeau, though his life was too short to exhibit its full effects, felt it also. With Sheridan, Mirabeau had also in common that love of dramatic effect, the distinguishing bane of the French nation, but shared not that sparkling and epigrammatic wit which in early youth produced “The Rivals” and “The School for Scandal” and delighted the House of Commons in riper manhood. Mirabeau was distinguished by nothing so much as by quickness and rapidity of thought. His finest eloquence was without premeditation. Many of the best set speeches which he read from the Tribune were the composition of others. In most of his literary productions, he had the aid of those better acquainted with the subjects treated of than himself. From them he gained the facts, and in conversation with them obtained the clearest and best lights in which they could be regarded, but the nervous eloquence with which he clothed them was his own, and so was also the copious illustration by means of which he made the ideas which he wished to enforce as clear to others as to himself, and in these he has never been surpassed. In such a character it is easy for an invidious eye to scan defects without number. He had no power of patient attention—a short paroxysm of violent labour he could endure, hut be was wholly incapable of the long-continued exertion of mind necessary for the production of a great work. His appetite for praise was enormous, and his rejection of religion had shut him out from those higher motives of action which so much tend to check some part of its influence and to elevate the character of what remains. His ardent love of virtue did not preserve him from vicious indulgence. He wished for the advancement of truth, but avowed his conviction that her cause was not advanced by the martyrdom of her advocates, a doctrine which if true would go far to drive from the earth all the most hazardous and the noblest forms of virtue, but which is fortunately contradicted by experience whose testimony has uniformly shown that there is in human nature a disposition to look with favour on the doctrines of the oppressed, and that while contrasting their patient endurance with the cruelty of their persecutors, men are apt to call to mind that the truth is known by its fruits.

In the chequered scenes of his youth, Mirabeau had found a school of acquaintance with mankind, but it was not one fitted for high training in moral excellence. Nothing is so wonderful as that, thrown so much with the worst portion of mankind, he should have retained so much trust in the more elevated sentiments of human nature. Far less served to extinguish all sympathy with them in the breast of Napoleon.

His early instructors had inspired him with a hatred of the existing order of things, which made him share in the vast dreams which announced as close at hand a new era in political science and in the happiness of mankind; and his spirit—and there were not a few who sympathised in his feelings—brooked not that illusions so dazzling and beautiful should be dispelled by the light of the past whose more steady brilliancy would have shown the rottenness of the foundation as well as the grandeur of the fabric. A society was to arise brighter than Utopia in the eyes of its gifted author, a haven of rest more beautiful and more glorious than ever was pictured by Raleigh and his daring comrades in their fabled Eldorado. And all this was to take place when despotism had overshadowed France and Europe for ages, when, with the exception of our island and the distant shores inhabited by her sons, the state of political knowledge may be summed up in the emphatic declaration, “That darkness covered the earth and gross darkness the nation”. To have breathed such aspirations was worthy of Mirabeau, and to hold them up to the admiration and imitation of mankind was a work fitted to call forth the utmost efforts of his genius and the inmost resources of his eloquence; but to suppose that such glories were immediately to be realised in the existing circumstances of mankind is his reproach and condemnation. A feebler and more sordid soul would not have risen to their contemplation; a calmer and wiser mind would have foreseen the frequent failures, the long and arduous trials, the prolonged and solemn religious training by which alone the inhabitants of earth can be fitted for such an approximation to the purity and happiness of a higher sphere.

END OF VOL. VIII.

aberdeen: the university press

[Page 190, line 24,]for student, during read student, concerned during

[Page 191, line 12,]for anything read anything,

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[Page 192, line 9,]for nor . . . nor read or . . . or

[Page 194, line 6,]for them we mean not read them, we mean, not

[Page 195, line 10,]for one we think is read one, we think, is

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[Page 198, paragraph 2, line 11,]for used, often read used often,

[Page 214, line 13,]for each . . . are read each . . . is

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[1] These five assumptions ought to be only four; because Mr. Wilson admits that, if the third is granted, the fourth follows. Mr. Fullarton also thinks the inference legitimate.

[1] Mr. Loyd, the great practical expounder of the principles of Sir R. Peel, has explained the less theoretical parts of the subject with greater clearness than Colonel Torrens, and has dilated on some parts of the subject with an eloquence unexampled in currency pamphlets, and admirably adapted to the subject.

[1] Mr. Wilson appears to have been misled by not observing the difference between reserves held against circulation and reserves held to pay back deposits when called for. The former do not lessen the amount of circulation in the hands of the public, which is the essential characteristic of the latter. To reckon the former as circulation is reckoning the same sum twice over, and make out that the use of a representative medium increases permanently the amount of money in use throughout a country.

[1] The phrase “fixity of value” has been objected to by some on the ground that when the value of one thing alters, the value of all others is consequently changed; thus it is said, if cotton goods fall in price, the value of gold is affected, because it will exchange for less cotton than before. Mr. Senior has perspicuously expressed what appears to us to be the best definition of the words “fixed” and “steady” in the following extract from the Encyclopædia Metropolitana: “The fluctuations in value to which a commodity is subject by alterations in what we have called the extrinsic causes of its value, or, in other words, by alterations in the demand or supply of other commodities, have a tendency, like all other extensive combinations of chances, to neutralise one another. While it retains the same utility, and is limited in supply by the same causes, a given quantity of it, though it may exchange for a greater or less quantity of different specific commodities, will in general command the same average quantity as before of the general mass of commodities; what it gains or loses in one direction being made up in another. It may be said without impropriety, therefore, to remain steady in value. But the rise and fall which a commodity experiences in consequence of an alteration in its utility, or in the obstacles to its supply, is, in fact, entirely uncompensated. A commodity therefore which is strikingly subject to such variations is properly said to be unsteady in value.” When then the intrinsic causes of the value of a commodity have undergone no alteration, we shall hereafter say that its value is “fixed” or steady.

[1] Out of this arises the incidental advantage that circulation in England passes here at its value and in other countries also. Queen Victoria’s stamp is worth nothing in France; and by charging nothing for it here we do away with a permanent difference of value between the value of a sovereign in France and a sovereign in England. It should be remarked, however, that no interest is paid by the Government to those who have deposited bullion at the Mint, and this loss of interest during the time occupied by the process of coining amounts to a very small seignorage.

[1] This step in our reasoning is vehemently denied by Mr. Tooke. We shall say presently what seems to us sufficient in reply to him.

[1] The rate of circulation at diifferent times deserves, perhaps, a more accurate treatment than it has received. Since in times of speculation men are more eager to purchase, and money will circulate more rapidly, and if an undue issue of notes cause an increase of speculation, it appears that they will not only act on price by increasing the quantity of money, but also by increasing the efficiency of what were originally in circulation.

[1] Mr. Fullarton appears to think bank notes “insignificant” as compared with bills. We are glad to be able to oppose to him the authority of Mr. J. S. Mill, who states that as bills are more powerful forms of credit than book credit, so bank notes are more powerful than bills. This statement is given in his recently published Principles of Political Economy, after an elaborate examination of the subject, and is of the greater authority from the resemblance between the views of Mr. Mill and Mr. Fullarton on many parts of the subject. We regret that Mr. Mill’s book did not reach us before this article was written.

[1]Blake on the Exchange. The word Real has been omitted before Exchange as foreign to our present purpose.

[1] This was the original Malthusian doctrine, though its author much modified it in the later editions of the Essay on Population. Ricardo, however, who thought himself a Malthusian, asserts it in terms (Works, p. 248, Ed. M‘Culloch), and everywhere tacitly or avowedly reasons on the assumption of it.

[1] The exact numbers are:—

This is not the calculation of a theorist, but the estimate of Mr. Griffith the land-valuer for the Irish land-tax, who is not in any way pledged to the waste-land scheme. The figures are given in the report of Lord Devon’s Commission.

[1] Mr. Thornton, the best authority on the subject, states that recruiting-sergeants find a marked difference of muscular strength between the south-west of England and the better-fed counties of the north and east (Over-population, p. 24).

[1] See Fullerton on the Currency, p. 161.

[1] What we call in the text the art of work or hand work, is usually called the cost of labour; but this phrase expresses naturally the rate of a labourer’s wages per diem. The only use of a special phrase is to mark that the labourer is concerned with what he gets as pay for a given exertion during a given time, i.e. his wages; and that the capitalist is concerned with the result of that exertion, i.e. the work done. The common phrase seems to us to fail signally in working out this distinction.