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[SECT. II.]—: OF THE CORN TRADE. - Dugald Stewart, Lectures on Political Economy, vol. 2 
Lectures on Political Economy. Now first published. Vol. II. To which is Prefixed, Part Third of the Outlines of Moral Philosophy, edited by Sir William Hamilton (Edinburgh, Thomas Constable, 1856).
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OF THE CORN TRADE.
In the slight view which I gave, at our last two meetings, of Mr. Smith’s reasonings in favour of an unlimited freedom of commerce, I purposely avoided all mention of the Corn Trade, as I was anxious to confine myself as much as possible to an illustration of general principles, without entering into the peculiarities of those cases, which, in the opinion of some, require an appropriated system, of regulations. Of this important subject, Mr. Smith has treated very ably in a long digression, which he has introduced in his Chapter on Bounties.* It appeared to me, however, to be more consistent with a distinct and systematical arrangement,—First, to state the general doctrine; and afterwards to consider what limitations of it may be necessary in particular combinations of circumstances. The Corn Trade, besides, being the most important of all the branches of commerce, seemed of too great magnitude to be considered merely as an appendix to a disquisition concerning one particular article of the Commercial system; more especially, as it has no peculiar connexion with this article, but what arises from the accidental and local policy of Great Britain. I propose, therefore, to consider this branch of commerce separately; flattering myself that, by this deviation from Mr. Smith’s plan, I may indulge myself, without impropriety, in some illustrations which might have been regarded as tedious, if introduced in the course of an incidental or episodical discussion.
The trade of the corn merchant is divided by Mr. Smith into four different branches, which, though they may sometimes be all carried on by the same person, are in their own nature four separate and distinct trades. These are, first, the trade of the inland dealer; secondly, that of the merchant importer for home consumption; thirdly, that of the merchant exporter of home produce for foreign consumption; and, fourthly, that of the merchant carrier, or of the importer of corn for future exportation.
Of the Inland Corn Trade.
Of the different branches of the Corn Trade, that which is carried on at home is incomparably the most important. According to the computation of the author of the Tracts upon the Corn Trade, [Charles Smith,] founded on a statement of imports and exports, during a long course of years prior to 1765, the proportion of the average quantity of all sorts of grain imported into Great Britain, to that of all sorts of grain consumed, does not exceed that of one to five hundred and seventy.
The average quantity of all sorts of grain exported from Great Britain does not, according to the same author, exceed the one and thirtieth part of the annual produce. Even in the highest year ever known, the year 1750, when the amount of the exports was 1,500,220 quarters, it did not exceed the seed one-twelfth part, supposing it one-tenth of the growth.1
These proportions, indeed, can by no means be relied on as perfectly accurate; and, in general, as Mr. [Adam] Smith remarks,* little stress ought to be laid on the results of what is commonly called Political Arithmetic. There can, however, be no doubt that the difference in point of extent between the foreign and the home trade in Corn is immense; and the numbers I have quoted may at least serve to convey an idea of the opinion of a very judicious and well-informed writer on the subject.
That in the case of the inland trade of Corn, the accommodation of the whole community is most effectually consulted by permitting an unlimited liberty of transportation, appears from this,—that even in years of the greatest scarcity, the interests of the inland dealer, and of the great body of the people, must be one and the same. The truth of this principle, it must be owned, is not self-evident; on the contrary, it is very strongly opposed by popular prejudices. But this only proves how expedient it is for a wise Government, not only to sanction by law the liberty of this branch of commerce, but to employ the most vigorous measures to render it effectual, by protecting the just rights of individuals against those unenlightened descriptions of men, who, from a partial or mistaken view of their own interests, may be disposed to infringe them.
The interests of the inland dealer (it was just now said) and that of the great body of the people, how opposite, soever, they may at first sight appear, must be at all times, even in years of the greatest scarcity, exactly the same. In proof of this, it is sufficient to observe, that the most effectual way in which the dealer can in a year of scarcity serve the public, is by raising the price of his corn as high as the real scarcity of the season requires, without raising it beyond this limit; and that this is the general principle on which he will act to the best of his knowledge, we have complete security in that prudential regard which we may presume every trader has to his own emolument.
It is abundantly obvious, that in a year of scarcity it is the interest of the people that their daily, weekly, and monthly consumption should be proportioned as exactly as possible to the supply of the season; and for this purpose, what means so simple and infallible as those which the corn dealer naturally employs? “Where the produce of an year,” says Mr. Hume, “falls so far short as to afford full subsistence only for nine months, the only expedient for making it last all the twelve, is to raise the prices,—to put the people by that means on short allowance,—and oblige them to save their food till a more plentiful season.”
By raising the price, accordingly, the corn-dealer discourages the consumption, and puts everybody, more or less, but particularly the inferior ranks of people, upon plans of economy and good management; while, at the same time, his knowledge of the state of the crop, and of his daily, weekly, and monthly sales, enables him better than any other person to regulate the price according to the circumstances of the country. The conduct which is thus prescribed to him by his own interest, is very happily compared by Mr. Smith to that of the prudent master of a vessel, when, from an apprehension of a want of provisions, he puts his crew on short allowance.* Though, from an excess of caution, this may be sometimes done, both in the one case and the other, without any real necessity, yet the inconveniences which the parties concerned are likely thus to incur, are inconsiderable in comparison of the danger, misery, and ruin to which they might eventually be exposed by a less provident conduct. In the case of the corn-dealer, his own interest acts here as a most powerful check on those exorbitant demands which might be suggested by a more unenlightened avarice;—not only as he will naturally strive to diminish as much as he can that popular odium which is attached to his profession, but as he must be sensible of the hazard of having on his hands a quantity of corn at the end of the season, which he might be obliged to dispose of afterwards at a much greater disadvantage.
Were it possible indeed for one great company of merchants to possess themselves of the whole crop of an extensive country, Mr. Smith acknowledges that it might be their interest to deal with it as the Dutch are said to do with the spiceries of the Moluccas, to destroy or throw away a considerable part of it, in order to keep up the price of the rest. But it is scarce possible, even by the violence of law, to establish such an extensive monopoly with regard to corn; and whenever the law leaves the trade free, it is of all commodities the least liable to be engrossed or monopolized by the force of a few large capitals, which buy up the greater part of it. Not only its value far exceeds what the capitals of a few private men are capable of purchasing; but supposing they were capable of purchasing it, the manner in which it is produced renders this purchase altogether impracticable. As in every civilized country it is the commodity of which the annual consumption is the greatest, so a greater quantity of industry is annually employed in producing corn than in producing any other commodity. When it first comes from the ground, too, it is necessarily divided among a greater number of owners than any other commodity; and these owners can never be collected into one place, like a number of independent manufacturers, but are necessarily scattered through all the various corners of the country. These first owners either immediately supply the consumers in their own neighbourhood, or they supply other inland dealers who supply those consumers. The inland dealers in corn, therefore, including both the farmer and the baker, are necessarily more numerous than the dealers in any other commodity, and their dispersed situation renders it altogether impossible for them to enter into a general combination. If, in a year of scarcity, therefore, any of them should find that he had a good deal more corn upon hand than, at the current price he could hope to dispose of before the end of the season, he would never think of keeping up this price to his own loss, and to the sole benefit of his rivals and competitors, but would immediately lower it, in order to get rid of his corn before the new crop began to come in. The same motives, the same interests, which would thus regulate the conduct of any one dealer, would regulate that of every other, and oblige them all to sell their corn at the price, which, according to the best of their judgment, was most suitable to the scarcity or plenty of the season.
With respect to the dearths and the famines which, during the course of the last three centuries, have occasionally afflicted the different countries of Europe, Mr. Smith lays it down as a general proposition, “that a dearth never has arisen from any combination among the inland dealers in corn, nor from any other cause but a real scarcity, occasioned sometimes, perhaps, and in some particular places, by the waste of war, but in by far the greater number of cases by the actual failure of the crops in consequence of the badness of the season; and that a famine has never arisen from any other cause than the violence of Government attempting, by improper means, to remedy the inconveniences of a dearth.”*
In an extensive corn country, between all the different parts of which there is a free commerce and communication, the scarcity occasioned by the most unfavourable seasons can hardly ever be so great as to produce a famine; and the scantiest crops, if managed with frugality and economy, will maintain through the year the same number of people that are commonly fed in a more affluent manner by one of moderate plenty. Not only does the weather differ widely, in most instances, in different parts of an extensive territory; but even when it does not, the mischief occasioned by excessive droughts, or excessive rains in lands which are naturally disposed to be too dry or too wet, is always compensated in some degree by the advantage gained in soils of an opposite description. “Lorsque les récoltes manquent en quelque lieu d’un grand Empire, les travaux du reste de ses provinces étant payés d’une heureuse fécondité, suffisent à la consommation de la totalité. Sans sollicitude de la part du gouvernement, sans magazins publics, par le seul effet d’une communication libre et facile on n’y connoit ni disette ni grande cherté.”1 If this remark fails at all, it is in rice countries, where the crop not only requires a very moist soil, but where, in a certain period of its growing, it must be laid under water. It is in such countries, accordingly, that the effects of excessive drought are most severely felt.
When the Government, in order to remedy the inconveniences of a dearth, orders all the dealers to sell their corn at what it supposes a reasonable price, it either hinders them from bringing it to market, which may sometimes produce a famine even in the beginning of the season; or it encourages the people to consume it so fast as must necessarily produce a famine before the end of the season. The only effectual security against these evils is an unlimited liberty of the corn trade; and the only respect in which Government is called upon to interpose its authority, is to maintain and protect this liberty against those assaults to which it is so peculiarly liable from the prejudices and passions of the unenlightened multitude.
In truth, there is no branch of trade whatever which at once deserves so much, and requires so much the protection of law; and there is hardly any of the interpositions of law which demand a greater degree of steadiness and vigour on the part of the magistrate. The general and the permanent interests of the community ought in this, as in all other cases, to be consulted in opposition to the suggestions of a more partial beneficence; and the temporary indignation and odium of the people disregarded, in order to establish a solid claim to their lasting gratitude.
In years of scarcity, those who attend only to the pressure of the present moment, are apt to impute their distress to the avarice of the corn merchant, who becomes, of course, the object of their resentment and hatred, and who is thereby exposed to the danger of having his magazines plundered and destroyed. It is in years of scarcity, however, when prices are high, that the corn merchant expects to make, and is entitled to make, his principal profit. He is generally in contract with some farmer to furnish him for a certain number of years with a certain quantity of corn at a certain price; a price which will be naturally settled according to the ordinary or average rate of the markets. In years of scarcity, therefore, the corn merchant buys a great portion of his corn for the ordinary price, and sells it for a much higher. That this extraordinary profit, however, is no more than sufficient to put his trade upon a fair level with other trades, and to compensate the many losses which he sustains upon other occasions, both from the perishable nature of the commodity itself, and from the frequent and unforeseen fluctations of its price, seems evident enough from this single circumstance, that great fortunes are as seldom made in this as in any other trade. On the contrary, in this as in the other branches of trade, which form the employment of the speculative merchant, bankruptcies are much more numerous than in those where the supply of the commodity can be more accurately and uniformly adjusted to the demand. In consequence of this circumstance, added to the effects of popular prejudice, merchants of character and fortune are averse to enter into the Corn Trade, and abandon it to an inferior set of dealers, destitute of a sufficient capital to deserve the credit of the farmers, as well as of that liberality of mind, and those enlarged views of their own interests, which are commonly to be found in men accustomed to the operations of an extensive commerce.
The prejudices which the lower ranks of men are apt to entertain in all countries, against a trade so peculiarly beneficial to themselves, instead of being discountenanced by the wisdom of law, were unfortunately encouraged and strengthened by those narrow maxims of Political Economy which influenced for a course of ages the policy of modern Europe. Of these maxims a leading one was, that the people would buy their corn cheaper of the farmer than of the corn merchant, who, it was supposed, would require over and above the price he paid to the farmer, an exorbitant profit to himself. It was thought expedient, accordingly, to hinder as much as possible, a middleman of any kind from coming in between the grower and the consumer.
Another circumstance too, it is probable, had some influence in dictating this policy. For many years after the Conquest, the greatest part of the inland trade of England was carried on in markets and fairs; all bargains of sale being prohibited excepting in public markets and in boroughs, in order to prevent theft. A very considerable part of the revenues of the Crown arose from the duties payable to the king upon the goods thus brought to sale, and similar duties were enacted by the barons on the goods sold at the fairs within their jurisdictions.1
When the farmers and merchants were bringing their corn and other necessaries, to be sold at the markets and fairs, people met them by the way, and purchased their provisions, in order to retail them at a higher price. By this means the king and the lord of the manor lost the several duties payable to them; while, at the same time, the price was raised upon the inhabitants, by lessening the quantity of provisions brought to market. Such were the original forestallers, against whom severe penalties were enacted, as the trade they carried on seemed to be equally prejudicial to the privileges of the great and to the general interests of the community.
In process of time the description of a forestaller came to be farther extended to “any person who should buy” any merchandise or victual, coming towards any fair or market, or towards any city, port, creek, or road, of England or Wales, from beyond sea, to be sold; or who should make any bargain for having the same, before the merchandise or victuals should be in the market to be sold; or who should make any motion for enhancing the price; or should move any person coming to the market to forbear to bring the things to be sold.”
In the same statute from which these words are quoted, (the 5th and 6th Edward VI.,) the title of regrator is applied to “any person who shall by any means regrate, obtain, or get into his possession, in any fair or market, any corn, wine, fish, butter, cheese, &c., that were brought to any market in England or Wales to be sold, and shall sell the same in any fair or markets holden or kept in the same place, or in any other fair or market within four miles thereof.” It is added, that “a person who shall engross, or get into his hands by buying, contract, or promise-making, any growing corn in the fields, or any other corn or grain, butter, cheese, fish, or other dead victuals whatever, with intent to sell the same again, shall be holden or reputed an engrosser.” The penalties for these offences, as might be expected from the spirit of the age, are abundantly severe. “That an engrosser (for example) should for the first fault suffer two months’ imprisonment, and forfeit the value of the corn; for the second, suffer six months’ imprisonment, and forfeit double the value; and for the third, be set in the pillory, suffer imprisonment during the king’s pleasure, and forfeit all his goods and chattels.”
In Scotland, laws to the same purpose were made against forestallers and regrators; and although the word engrosser does not appear in the laws, the description of an engrosser is fully comprehended under that of the forestaller and regrator, In the case of forestalling, the third criminal act infers escheat of moveables, (1592, c. 148.)1 The ancient policy of most other parts of Europe was similar, in this respect, to that of England and Scotland.
The same principles which led our ancestors to attempt the suppression of the trade of the corn merchant, induced them to impose restraints upon the trade of those whom they called kidders or carriers of corn,—a trade which nobody was allowed to exercise without a license, ascertaining his qualifications as a man of probity and fair dealing. In general, their object plainly was to discourage, as much as possible, any middle-man of any kind from coming in between the grower and the consumer.
On the important advantages arising from such an intervention, more especially from the trade of the extensive corn merchant, I shall have occasion afterwards to offer some observations. In the meantime, it may be worth while to remark, that this trade naturally arose from the improving agriculture of the country, and was a most unequivocal symptom of national prosperity; and that it had plainly been suggested, in part, by the experience of those very calamities which it seemed, on a superficial view, to threaten, and against which it is, in fact, the only effectual remedy. In the earlier ages of English history, the trade of a corn-dealer seems to have been unknown; nor, except in the Abbey Granges, do we meet with instances of corn being collected in large quantities.2 The natural consequence was, that the farmers without capital disposed of their crops at moderate prices soon after the harvest; purchasers, who only looked to their immediate wants, having corn cheap, were naturally prodigal and improvident in the consumption. The price, therefore, almost invariably rose as the year advanced, and was frequently at an enormous height just before harvest; and before a fresh supply could be obtained, the supply of the preceding year was often entirely exhausted. Stowe informs us, that in 1317, the harvest was all got in before the first of September, and that wheat, which had before been at £4 the quarter, fell to 6s. 8d., a twelfth part of that price. A detail of the prices of grain would furnish us with abundant proof, if proofs were wanting, of the extreme misery of those times, in which the only buyers of grain were the consumers. Five guineas a quarter is a price sufficiently grievous, even at a period when a labourer can earn 18d. a day; but between the Conquest and the accession of Edward the Third, the price of wheat varied from 8d. to £6, 8s. the quarter, to which almost incredible price (being equal to £19, 4s. of our present money,)1 it rose in 1270, and was attended with a famine. At this period, too, it must be remarked, a man’s day’s work in harvest was valued at a penny, and out of harvest at a halfpenny. On the other hand, that the conclusion may not be pushed too far, it is necessary to recollect that wheat was not the general bread corn of the peasantry. From a valuation of the moveable property in the borough of Colchester, made in the year 1296, preparatory to levying a subsidy of a seventh, for carrying on the war against France, it appears that among the petty tradesmen and artificers of that period, almost every family was provided with a small store of barley or oats, usually about a quarter or two of each; rye appears to have been very little used, and wheat scarcely at all. This circumstance is the more worthy of our notice, that it has been frequently overlooked by our economical writers, many of whom assume the price of wheat, when compared with the wages of labour, as a certain criterion for judging of the condition of the labouring classes at any given period. This, it is evident, can only hold good on the supposition, that this grain is wholly and entirely their ordinary food, which is not the case, even at this day, and was certainly very much otherwise in more early times. From the Household Book of Sir Edward Cooke, it appears that in 1596, rye bread and oat-meal formed a considerable portion of the bread of servants even in great families. In 1626, barley bread is stated, in a grant of a monopoly from King Charles, to have been the usual food of the ordinary sort of people.1 Nay, even so late as the beginning of the present reign, it appears from the supplement to [Charles Smith’s] Three Tracts on the Corn Trade, [1766.] that above one-third of the nation ate bread made of oats, rye, or barley.* He adds, that “some who have considered the matter with great attention, are inclined to think, that in the year 1764, one-half of the people could not be supposed to feed on wheaten bread.”†
Although, however, these considerations shew evidently the inaccuracy of many of our conclusions, founded on the price of wheat compared with the wages of labour, they do not invalidate the inference, formerly stated, [supra, p. 57,] of the extreme distress of the lower orders in 1270, and the other bad seasons already referred to. The fluctuations in the price of wheat must necessarily have been accompanied with corresponding (although, perhaps, not proportional) fluctuations in the prices of oats and barley, and whatever else formed the ordinary food of the people; and these fluctuations were the obvious consequence of the corn trade being entirely in the hands of farmers, without the intervention of extensive corn-dealers between the grower and the consumer. The evils arising from this circumstance were no doubt much aggravated by the imperfect police which then existed. “In the disorderly state,” says Mr. Smith, “of England under the Plantagenets, who governed it from about the middle of the twelfth till towards the end of the fifteenth century, one district might be in plenty, while another, at no great distance, by having its crops destroyed, either by some accident of the seasons, or by the incursion of some neighbouring baron, might be suffering all the horrors of a famine; and yet, if the lands of some hostile lord were interposed between them, the one might not be able to give the least assistance to the other.”2
These two causes, it is obvious, operated precisely in the same manner, by interrupting that natural course of things which provides in the plenty of one part of the country a relief for the scarcity of another. They are, therefore, equally illustrations of the same general principle.
In these calamitous times, it has been justly remarked, that the return of harvest must have been looked for with hardly less eagerness than that with which the Egyptian farmer is said to watch the overflowing of the Nile; and it has been conjectured, with considerable probability, that the enthusiastic joy with which the rustic feast of Harvest Home was anciently celebrated, arose from the circumstances of those ages, when a late crop or a bad season reduced the wretched cultivator to the extremity of want, and when the successful or unsuccessful management of this critical period decided the alternative of plenty or of famine.
I have been led into these remarks by the consideration of the statute of Edward VI., against forestallers and regrators,—a statute which was expressly calculated to deprive the country of those resources against dearth and famine which nature has so liberally provided for it, in the variety of its soils and climates, combined with the circumstance of its insular situation.
The rigour of this law was afterwards relaxed by several subsequent statutes, which permitted the engrossing of corn when the price of wheat should not exceed twenty, twenty-four, thirty-two, or forty shillings the quarter. At last, by the 15th of Charles II., the engrossing or buying of corn, in order to sell it again, as long as the price of wheat did not exceed forty-eight shillings the quarter, and that of other grain in proportion, was declared lawful to all persons not being forestallers, that is, not selling again in the same market within three months.
All the freedom which the trade of the inland corn-dealer has ever yet enjoyed, was bestowed on it by this statute; and, in the opinion of Mr. Smith, “it has contributed more (notwithstanding all its imperfections) both to the plentiful supply of the home markets, and to the increase of tillage, than any other law in the statute-book.”*
The statute of the 12th of the present king, which repeals almost all the other ancient laws against engrossers and forestallers, does not repeal the restrictions of this particular statute, which therefore still continue in force. It must also be remembered, that “the engrossing of corn, as well as the engrossing of any other commodity, with intent to sell it at an unreasonable price, (notwithstanding the repeal of statutes concerning them by the 12th George III.,) is an offence indictable and fineable at Common Law; the penalty for such offences being (as in other minute misdemeanours) discretionary fine and imprisonment.”
That the restrictions, in the statute of Charles II. now referred to, are absurd and impolitic, Mr. Smith has shewn very clearly; but it is unnecessary to follow him into his reasonings on this subject, as the argument already stated for the freedom of the inland trade of corn, if it proves anything, leads to the general conclusion, that this freedom should be unlimited.
It is pleasing to observe the gradual progress of light and liberality on these important subjects among men called to the administration of public affairs, and to perceive the influence which the writings of Turgot and Smith have insensibly assumed over the councils of nations.† The following quotation from a Representation of the Lords of the Committee of his Majesty’s Council for Trade, drawn up in the year 1790, states the substance of the foregoing argument so forcibly and concisely, that I cannot deny myself the pleasure of transcribing it. To those who are acquainted with the works of the two philosophers just mentioned, it is unnecessary for me to point out its striking coincidence with their writings, both in point of sentiment and of expression.
“The best market for corn in every country is the home market; and the circulation of it within every kingdom ought to be free, so that the surplus of one part may supply the deficiency of the other, and that the price throughout the whole country may be brought as near as possible to a level.
“To facilitate the circulation of corn, this kingdom enjoys peculiar advantages, which arise from its situation as an island, from the number of its canals, and the excellence of its roads; as by these the populous and manufacturing counties in some parts of the island, can draw the necessary supplies from other parts which are less populous, but more productive of corn.
“In other countries, magazines of corn are formed by their respective governments, or by the principal magistrates of great cities, as a resource in times of scarcity. This country has no such institution. The stores of corn are here deposited in the barns and stacks of wealthy farmers, and in the magazines of merchants and dealers in corn, who ought by no means to be restrained, but rather encouraged in laying up stores of this nature; as after a deficient crop they are thereby enabled to divide the inconvenience arising from it as equally as possible through every part of the year; and by checking improvident consumption in the beginning of scarcity, prevent a famine which might otherwise happen before the next harvest. The inland trade of corn, therefore, ought to be perfectly free. This freedom can never be abused. To suppose that there can be a monopoly of so bulky and perishable a commodity, dispersed through so many hands over every part of the country, is an idle and vain apprehension. The ancient laws of this kingdom, which, by a false policy, restrained the inland trade of corn, have in general been repealed. The 15th Charles II., which does not permit the buying corn to sell again, and the laying it up in granaries, except when the several sorts of corn are below certain prices therein mentioned, is the only law of this description which will now be found in our statute-book, and ought certainly not to remain there any longer.”*
In the same representation, indeed, there are to be found principles concerning the freedom of exportation, and some other articles in the corn trade, which are borrowed from a much more unenlightened system; and on which I shall have occasion afterwards to make some remarks. But the progress of truth in eradicating prejudices is slow and gradual; and we must console ourselves in the meantime, with observing in its progressive, though tedious advance, the certain presages of its future triumph.
Having mentioned, in the quotation just now read from the Representation of the Lords of the Council on the Corn Trade, the institution of public magazines, I shall take this opportunity of remarking how very imperfectly they supply the place of an internal freedom of trade. Magazines can do nothing more than private speculators; they can only buy when corn is cheap, and sell when it is dear; but they do this at such a vast expense, and with so little economy, that if they do not take an equal advantage of profit with private speculators, they must demand an enormous tax to enable them to carry on their business; and if they do take such profit, the people are never the better for them. Mr. Symonds, in his paper on the public Magazines of Italy, has proved them to be everywhere nuisances.1
In France, the prejudices against monopolizers (Accapareurs) seem to have been still more inveterate than in England; and restraints imposed by the law upon the inland trade of corn, have been much more numerous and oppressive. The attempts which, in later times, were made to correct these prejudices, and to introduce a more enlightened policy on the subject, are intimately connected with the political history of that country, and with the fortunes of some distinguished political characters; and, therefore, I shall make no apology for the length or minuteness of the following details, more especially as many of them afford additional proofs and illustrations of the general principles which have been already stated.
In the year 1763, under the administration of M. de Laverdi, a considerable step had been made towards an emancipation of this branch of commerce from the restraints which had so long fettered it;1 and, in particular, a freedom of trade, from province to province, had been established. But these indulgences were afterwards recalled by the Abbé Terray in 1770. At this time, M. Turgot was Intendant of Limoges, where he had experienced, in one of the poorest provinces of France, during two years of scarcity, the happy effects of maintaining, with all the influence and power which his station enabled him to command, that degree of liberty which the laws then allowed to the inland dealers in grain. The Minister of Finance having requested, on this occasion, the advice of the Intendants of the different Provinces, M. Turgot addressed to him Seven Letters, which are said to have formed a complete treatise on this important object of legislation.2 Of these Letters, only Four have been preserved;* the other Three having, by some unaccountable accident, been lost. The whole were composed in three weeks,3 during a tour which the author made through the province under his Intendance, and amidst the various minute avocations connected with his office. Some are even said to have been written in a single evening. And yet in this imperfect fragment, so hastily executed, he has left a lasting monument of the extent and justness of his political views, as well as of an admirable and almost unrivalled talent for a clear, methodical, and concise exposition of general principles. I think it may be questioned if the argument has been yet stated by any other writer with equal ability and force. As for M. Terray, we are told by Dupont in his Biographical Memoirs of Turgot, he “read the letters and admired them; extolled in the warmest terms the information, the talents, and the courage of the author; and concluded, by renewing the old prohibitive regulations.”† “It is indeed unfortunate,” as another friend of Turgot, [Condorcet ?] remarks in mentioning the same incident, “that in political discussions our judgments are less influenced by our reason than by the temper of our minds. Most understandings are able to perceive the truth, but few possess that force of character which is necessary for reducing it to practice. In such cases we naturally strive to disbelieve what we have no inclination to carry into effect; and it is only the few who feel that courage which virtue inspires, who openly avow opinions which impose on them the duty of combating prejudices and intrigues, and of sacrificing the paltry politics of self-interest to general utility.”
In 1774, a few months after the accession of Louis XVI., M. Turgot was appointed Controller-General of the Finances,1 in the room of Abbé Terray, and one of the first acts of his administration was to establish the freedom of the inland trade of corn through the whole kingdom. “To animate agriculture by the prospect of a ready and free market for the commodities it supplies; to increase at once the quantity of subsistence and the rents of lands; to prepare for the people the resources of an active and extended commerce against unfavourable seasons and local scarcities; to render their wages at all times equal to their wants by diminishing as much as possible the variations in the price of grain;—in one word, by the establishment of a certain and constant market, to secure the proprietors, the cultivators, the government, and the people at large, against all risk of losing any part of the produce of the land, as well as against the vexations, oppressions, and disorders which must occasionally arise from a system of restraints and prohibitions;—such were the avowed motives of this wise and salutary law.”2 M. Turgot has himself explained and justified them at considerable length in the preamble of the Edict,* which appears to have been drawn up with the view of obviating those objections which might present themselves against the expediency of the measure on a partial and superficial view of the subject. I would have introduced a translation of it here from a copy of his Edicts, which is in my own possession, if I had not been afraid of adding too much to the length of this digression. I must not, however, omit to mention, that although perfectly aware of the advantages to be expected from a free exportation, as well as from a free inland trade, he had the caution and good sense to confine himself, in the first instance, to the establishment of the latter; leaving the exportation of grain under the same prohibitions which had been enacted by the Abbé Terray. “His Majesty reserving to himself the satisfaction of bestowing marks of his special protection on such of his subjects as may import foreign grain into those parts of the kingdom where any symptoms of scarcity may appear; and forbearing at present, to make any alterations on the laws which exist against exportation.”1
Unfortunately the harvest of this year turned out ill, and some apprehensions of a scarcity were felt or pretended in the spring following. It was difficult to suppose that this could have been the effect of an inland freedom of transportation; nor did the enemies of the minister venture on such an assertion. They, however, took advantage of the agitation of the public mind,—declaimed upon the dangers of a free exportation, which then remained under the very same prohibition as before, and the ruin to be apprehended from speculative statesmen, willing to sacrifice the people to philosophical experiments. A sound and consequential logic is not very necessary in addressing the multitude upon subjects which interest their passions; and it was easy to associate in their minds the measures of the actual administration with the public distress which was felt or apprehended. A celebrated statesman and eloquent writer,2 who has since acted a conspicuous part on the theatre of Europe, has left a stain on his character, which will not be easily effaced, by the share which he had in promoting the public discontents against the salutary measures of Turgot and his friends. Misled, it is probable, by his own sanguine schemes of beneficence, he believed that he was serving his country by every step which facilitated his own advancement to power. Nor is it at all unlikely that he was really a dupe to his own ingenuity in his mistaken speculations on the legislation of grain. One thing is certain, that the argument in favour of the old prohibition system has been stated by no writer, either in France or in England, with equal force and plausibility. And we know, that at a later period of his life, when every object of his personal ambition was fully attained, he continued to act on the same narrow and erroneous principles.
Another work which, about this period, (or rather a few years before,) excited much attention in France, was the Dialogues on the Commerce of Grain, by the Abbé Galiani of Naples. The author was then living at Paris as secretary of legation to the Neapolitan embassy, and composed on this very unpromising subject, and in the French language, eight dialogues, which Voltaire (in a letter addressed to Diderot) pronounces to be worthy of the genius of Plato combined with that of Molière. The principles he maintained were nearly the same with those which were afterwards adopted by Necker, and produced so great an impression on the public mind, that a formal refutation of them was undertaken by the Abbé Morellet. The Marquis Caraccioli, in a letter from Paris to Galiani, who had returned to Naples previous to the publication of his book, mentions the opinions of Turgot with respect to its merits. “Turgot,” says he, “agrees perfectly with the Abbé Morellet in thinking, that no doctrines were ever calculated to do more mischief.” The Government, however, at this period, inclined to the opinions of Galiani, and prohibited the Abbé Morellet to continue the controversy.
I made some remarks, at our last meeting, on the Corn-trade, confining myself chiefly to the inland branch of it, but interspersing a few observations, which seemed to arise naturally from the subject, on the prejudices against a free exportation. The prosecution of this argument led me to take notice of the extreme difficulty of this article of Political Economy,—a difficulty not arising from any peculiar obscurity in which the truth is involved, but from the necessity under which a statesman must frequently find himself of yielding something to the prejudices and passions of those whom he governs. The history of France during the last forty years affords some memorable examples of this; and I refer to it in preference to that of our own country, both because the opposite opinions have been there carried to a greater extreme, and because I feel myself less under restraint in censuring the undue influence which these opinions have occasionally had on public measures.
I mentioned the steps taken (under the administration of M. de Laverdi,) towards an emancipation of this branch of commerce from the restraints which had so long fettered it. The king’s Edict, giving “permission to circulate corn and flour through the whole extent of the kingdom, free from all duties,” was dated at Versailles 25th May 1763. Another Edict, relative to the exportation and importation of grain, was given at Compiegne in the month of July 1764. The preamble is not undeserving of attention.
“The attention which we owe to everything that may contribute to the welfare of our subjects, hath induced us to give a favourable hearing to the petitions which have been presented to us from all parts, to establish an entire liberty in the Corn Trade, and to revoke such laws and regulations as have been heretofore made to restrain it within too strict bounds. After having taken the opinion of persons the best acquainted in the affair, we thought it necessary to comply with the solicitations which have been made to us for the free exportation and importation of corn and meal, as proper to encourage and increase the cultivation of land; to maintain plenty by magazines and the importation of foreign corn; to prevent corn from being at a price which discourages the grower; to banish monopoly by an irrevocable exclusion of all particular permissions; and in the end, by a free and entire competition in the trade, to keep up between different nations that communication of exchanging superfluities for necessaries, so conformable to the order established by Divine Providence, and to views of humanity, which ought to animate all sovereigns.”
The speech of M. de Carodeuc de la Chalotais, when he presented this Edict for registration to the Parliament of Brittany, may be found in the Supplement to the [C. Smith’s] Three Corn Tracts, [1766.]* It is valuable as it exhibits a view of the state of the corn-trade in France for more than a century preceding.
The revocation of these Edicts under the administration of the Abbé Terray, and the subsequent measures of Turgot, were stated in my last lecture with sufficient minuteness for my present purpose.
Of the origin and progress of this literary and political controversy in France, a circumstantial account may be found in various writers. The following rapid sketch is a faint translation from the light and inimitable pen of Voltaire. I quote it less on account of the information it conveys, than of the happy touches with which the author characterizes the enthusiasm and levity of his frivolous countrymen.
“About the year 1750, the French nation surfeited with verses, with tragedies, with comedies, with operas, with romances, with romantic histories, with moral reflections more romantic still, and with disputes on the mysteries of theology, betook itself to discussions on the subject of grain. The vineyards were forgotten, and nothing was talked of but wheat and rye. Volumes on volumes were written about agriculture, which everybody read excepting the husbandman. It happened to strike some one in his way home from the Opéra Comique, that France had immense quantities of grain to dispose of; the nation became clamorous, and obtained from the Government, in 1764, the freedom of exportation. The consequence was the same as in the reign of Henry IV. The exportation was carried a little too far, and a year of scarcity followed. The discontented ran from one extreme to the other, and declaimed against the exportation which they had solicited. Some men of genius and of the most disinterested benevolence wrote with equal sagacity and courage in favour of an unlimited freedom in this branch of commerce. Others not inferior in genius, and with motives not less pure, contended that this freedom should be subjected to regulations. Of this number was the Abbé Galiani of Naples, who discovered the secret of composing (and in the French language) dialogues as amusing as our best romances, and as instructive as our most serious performances. If this work did not lower the price of bread, it gratified the public in a way not less acceptable, by adding to the stock of its entertainment. The advocates for an unlimited exportation replied formally. The result was, that their readers knew no longer what to make of the controversy: The greater part began a course of novel reading, in hopes that three or four years of plenty might enable them to form a judgment. The ladies relapsed into their former ignorance of the distinction between rye and wheat; and the curates returned to their old belief, that the seed must die and rot before it quickens.”*
The same prejudices with respect to the corn-trade, which were employed so unjustly but so successfully as an engine of popular opposition to the administration of Turgot, appear to have existed in full force in many parts of France at the period when the late Revolution commenced. Of this a judgment may be formed from the Cahiers, or papers of instructions given by the different electoral bodies to their representatives. By one of these (the Tiers-état de Meudon) it is demanded, that as France is exposed to the rigours of famine, every farmer shall be obliged to register his crop of every kind, and also every month the quantity sold.” Another requires, “That the severest laws be passed against monopolizers, whose agency at present desolates the kingdom.” Fifteen demand the erection of public magazines; and even the author of the Cahier presented by the Tiers-état de Paris, demand “that the transport of corn from province to province should be prohibited.”1 Nor will the inveteracy of these prejudices in France appear so wonderful, when we consider that in that country the people live almost entirely on bread; that in consequence of the small farms which are everywhere prevalent, the quantity of corn in the markets is always, in Autumn, beyond the proportion reserved for supplying the rest of the year; and that the number of real speculators or accapareurs, is by far too inconsiderable to remedy this evil. From these causes the supply must necessarily be irregular and frequently insufficient; an insufficiency, however, wonderfully increased by that popular violence which has been so often encouraged and sanctioned by blunders of Government and by arrêts of Parliament.
Of this prejudice, deeply rooted in the minds of the French population, a very dexterous and but too successful advantage was taken by those anarchists who availed themselves of the revolutionary crisis as a fit occasion for wresting the government from the hands of their lawful masters: and it was by means of that violence so naturally inspired by such prejudices, that the lower orders were first stimulated to those sanguinary atrocities which have left so indelible a stain on the national character. A more striking example is not furnished in the whole range of history, of the expediency of correcting, in times of established tranquillity, whatever errors and misapprehensions on the part of the people seem most likely to furnish arms to ambitious and unprincipled demagogues, with which they may, in times of distraction and disorder, assail the authority of wisdom and virtue. They demonstrate the truth of the maxim of a French writer, speaking of religious enthusiasm—a maxim which may be extended with equal justice to all the duties of a government:—“Seize the moment when the tide is at the lowest ebb to repair and strengthen your dikes.”
With these views it may be proper to prosecute a little farther this account of the fluctuations of the French policy, in regard to the commerce of grain. In doing so, I shall be unavoidably led to anticipate some observations connected with another branch of our subject. But this apparent defect in arrangement, is the necessary consequence of the connexion which subsists between the different branches of the corntrade.
In the months of May and June 1789, after a harvest, which though not great, is allowed to have been but little under the common average, so extraordinary a dearness prevailed, that M. Necker thought it expedient to order immense cargoes of wheat, and every other sort of corn, to be bought up all over Europe. In a paper published by himself, entitled Mémoire Instructif, he states, that he has ordered to be bought 1,404,463 quintals of different sorts of grain, of which more than 800,000 were arrived. The expense of this importation amounted to 45,543,697 livres, (about £2,000,000;) and to such a length were plans of economy carried among the higher orders, that we are assured the king allowed only bread of wheat and rye mixed to be served at his own table.
It does not belong to our present subject to offer any opinion concerning the primary causes of this pretended scarcity. That it originated with the minister I am very far from supposing or believing, but that he contributed, by his indiscretion, greatly to aggravate the evil, while he was disinterestedly risking his own fortune in an attempt to counteract it, appears to be unquestionable. The following sentence in his Mémoire Instructif admits of no apology, and is perfectly in the style of the addresses made, of late, by the English judges to the grand juries.
“Monopolizing is the first cause to which the multitude naturally ascribes the high price of grain; and, in fact, there is often but too much reason to complain of the mischiefs occasioned in this way by the avarice of mercantile speculators.”1
The consequences were such as might have been expected,—a blind rage against Monopolizers, accompanied with various outrages and atrocities. In June and July the markets were not opened till troops arrived to protect the farmers from having their corn seized; and the magistrates, to prevent insurrections among the people, had recourse to the pernicious measure of regulating prices. The farmers, in consequence, refrained from going to market, in order to sell their wheat at home at the best price they could get, (which was, of course, much higher than the assize of the markets;) and an evil which, if left to itself, must, at the worst, have terminated in the inconveniences connected with a short or deficient crop, began to assume the awful appearance of an inevitable famine.
In the proceedings of Government on this occasion, nothing seems to have been more reprehensible than an imprudent disclosure of its own apprehensions and alarms. We are told by Mr. Arthur Young, who was engaged in an agricultural survey of France at this period, that the publication of M. Necker’s Mémoire Instructif, (in which he announced the steps he had taken for the importation of a suitable supply,) “instead of sinking the price, raised it directly and enormously: upon one market day at Nangis, from thirty-eight livres to forty-three livres the septier of two hundred and forty pounds, and upon the following one (July 1st) to forty-nine livres. On the next day, at Columiers, it was taxed by the police at four livres five sous, and four livres six sous the twenty-five pounds; but as the farmers would not bring it to market at that price, they sold it at their farms at five and a half livres and even six livres; that is, at the rate of fifty-seven livres the septier. At Nangis it advanced, in fourteen days, eleven livres a septier; and at Columiers a great deal more.”* Of these facts Mr. Young was an eye-witness; and as they took place in the vicinity of the capital, for which the great foreign provision was chiefly destined, they prove, in the most unequivocal manner, the mischiefs produced by the agitation thus excited in the public mind. A measure which cost the nation forty millions of livres, had the effect, in the two markets which Mr. Young attended, of instantly raising the price of grain twenty-five per cent,—a rise depending solely on opinion, as both the quantity of corn and of money in the kingdom remained the same as before. If no public step whatever had been taken, Mr. Young gives it as his opinion, that the price of wheat, in no part of France, would have been, in 1789, at so high a rate as thirty livres, instead of rising to fifty and fifty-seven livres.
From these circumstances, Mr. Young has drawn a conclusion which deserves the serious attention of all Governments,—“Never to express publicly any apprehension of a want of corn, by proclamations against exports, by regulations of sale, by laws against monopolizers, or by holding out hopes of importation.”* All these measures have the same tendency. They confirm amongst the people the apprehension of want and of famine; and this can never take place without, in some degree, realizing the evil apprehended. It is, therefore, the duty of a wise and enlightened government, if at any time they should fear a short provision of corn, to take the most private and cautious measures possible either to prevent export, or to encourage imports, and to avoid making any public decree or declaration. Of the truth of this M. Necker appears to have been aware, when he published his Treatise on the Legislation and Commerce of Grain. “Un des plus grands inconvéniens attachés aux permis d’importation; c’est qu’elle instruit avec éclat de l’inquiétude du governement, qu’elle accroit ainsi les alarmes et renchérit le prix.”1 From the occurrences which took place in our own country a few years ago, there is ground for suspecting that the truth of this maxim is, here, far from being universally admitted among our legislators. The result, too, was perfectly analogous to what was observed in France. But on this topic I forbear to enlarge at present.
As it is only the inland trade of corn which falls immediately under our consideration in this part of our argument, it would be foreign to the subject to examine particularly the wisdom of M. Necker’s system in prohibiting the export of grain, (which the Archbishop of Sens had permitted the year before,) or in attempting to relieve the apprehended scarcity by importing to so large an amount as has already been mentioned, [supra, p. 71.] I cannot help, however, taking this opportunity of remarking, as an illustration of what was formerly stated concerning the insignificancy of the foreign trade of corn when compared with the inland, that the supply obtained by M. Necker at the expense of two millions sterling, would not (according to Mr. Young’s calculation) add three days’ provision to the national stock.1 So completely ineffectual is importation on the largest scale as a remedy for famine, and so absurd is the idea of providing for the wants of a numerous community by means of a resource which must necessarily bear so trifling a proportion to their consumption.
Mr. Young ventures to push the conclusion, and to assert, that all great variations in the price of corn are engendered by apprehension, and do not depend on the quantity in the market. That this was the case in France in 1789, appears clearly from the facts already stated; but although I am very far from presuming to deny the truth of the general proposition, I am not quite prepared to admit it in its full extent without some farther illustration. One great source, according to this author, of the common mistakes on this head, is the extravagant calculations that have been offered to the public concerning the annual produce of different countries. The Abbé Rosier, for example, declares, “que la France récolte, année ordinaire, près du double plus de bled qu’elle n’en consume.” “If this be true,” Mr. Young asks, “what becomes of the surplus? Where are the other 26,000,000 of people who are fed with French corn? Where do the 78,000,000 of septiers go that France has to spare, a quantity that would load all the ships possessed by that kingdom, above thirty times, to carry it? Instead of the common crop equalling two years’ consumption, it certainly does not equal thirteen months’ common consumption; that is, such a consumption as takes place at an average price. And all the difference of crops is, that consumption is moderate with a bad harvest, and plentiful with a good one. The failure of a crop in one province, in a very small degree, which, under a good government and entire liberty of trade, would not even be felt, will, under a system of restrictions and prohibitions, raise the price through the whole kingdom enormously; and if measures are taken by government to correct it, they will convert the high price into a famine.”* Thus far Mr. Young, to whose opinion on the subject I am disposed to pay the greater deference, that it coincides with that of Sir James Steuart, an author of very extensive and accurate research on all questions connected with Political Arithmetic, and whose information, in point of facts, will be allowed even by those who think the most lightly of his speculations, to rest in general on very authentic documents. I shall transcribe the passage, (with a few retrenchments,) though at the hazard of repeating some ideas, which may occur elsewhere, in a different form, in the course of the discussion.
“I have often said that numbers are in proportion to the produce of the earth. I now say, that, in most countries of Europe, the food produced in the country is nearly consumed by the inhabitants; or, in other words, that the part exported bears a small proportion to the home consumption. I do by no means establish this as a universal proposition, but I say it is true, for the most part, and under certain limitations. I allow, for example, that Holland, not producing food for its inhabitants, must draw it from some country which produces a superfluity regularly. But let it be observed that Poland, Germany, Flanders, and England, with many other countries, contribute their contingents to supply the demand of the Dutch, as well as of several large trading towns which have small territories. This being the case, the quota furnished by each country must be in a small proportion to the respective quantity growing in it. . . .
“In farther confirmation of this conclusion, let us attend to the state of the fact in England,—one of the countries in Europe abounding, undoubtedly, as much as most others in grain. Nothing is more common than to hear that an abundant crop furnishes more than three years’ subsistence. Nay, it is advanced by an author of note, (Advantages and Disadvantages of France and Great Britain, &c., Art. Grain,) that a plentiful year produces five years’ nourishment for the inhabitants. . . . I am, on the contrary, apt to believe, that no annual produce of grain ever was so great in England as to supply the inhabitants fifteen months, in that abundance with which they feed themselves in a year of plenty. If this be the case, at what may we compute the surplus in ordinary good years? I believe it will be thought a very good year which produces full subsistence for fifteen months; and crops which much exceed this are, I believe, very rare. My reasons for thinking so are as follows:—
“I consider all the yearly crop of grain in England as consumed at home, except what is exported; for I cannot admit that any considerable quantity is lost:—that it may be abused, misapplied, drunk when it should be eat, I do not deny. These are questions which do not regard the present inquiry. Whether, therefore, it be consumed in bread, beer, spirits, or by animals, I reckon it consumed; and, in a year when the greatest consumption is made at home, this I call the abundance with which the inhabitants feed themselves in years of plenty. Now, I find, in the performance above cited, a state of exportations for five years, from 1746 to 1750 inclusive where the quantity exported amounts in all to 5,289,847 quarters of all sorts of grain. This is not one year’s provision, according to Sir William Petty, who, supposing the inhabitants of England to be 6,000,000, estimates the yearly consumption of grain of all kinds at about 6,000,000 of quarters.* The bounties on Corn (continues the same author) have amounted in one year to £500,000. Supposing this statement to be true, and that the whole exportation was made out of the produce of one crop, this sum does not answer to the bounty upon 3,000,000 of quarters, which, according to Sir William Petty, make six months’ provision. I calculate thus:—The bounty upon wheat is five shillings a quarter, that upon rye three shillings and sixpence, that upon barley two shillings and sixpence, these are the species of grain commonly exported; cast the three premiums together, and divide by three, the bounty will come to three shillings and eightpence at a medium, at which rate £500,000 will pay the bounty of 2,727,272 quarters of grain. An immense quantity to be exported! but a very inconsiderable part of a crop, supposed capable to maintain England for five years.” . . .
“On the other hand,” continues the same author, “I am apt to believe that there never was a year of such scarcity as that the lands of England did not produce greatly above six months’ subsistence, such as the people are used to take in years of scarcity. Were six months of the most slender subsistence to fail, I imagine all Europe together might perhaps be at a loss to supply a quantity sufficient to prevent the greatest desolation of famine.”*
In proof of this, Sir James appeals to a fact which (not having access at the time to the registers of the trade in grain) he states on the authority of a London newspaper. From this document it appears, that from the 9th of April to the 13th of August 1757, while great scarcity was felt in England, there were declared to be in the port of London no more than 71,728 quarters of wheat, of which 15,529 were not then arrived; so that the whole quantity there imported to relieve the scarcity was 56,199 quarters. Not one month’s provision for the inhabitants of that city, reckoning them at 800,000 souls.
Another fact, leading to the same conclusion, Sir James states from his own observation on what he saw in Germany during the year 1757, where, in the numerous armies which were then assembled, there was a universal complaint of scarcity. “When we compare,” says he, “the numbers of an army, let it be of 100,000 men, with a suit no less numerous, and 40,000 horses, what an inconsiderable number does this appear in proportion to the inhabitants of so vast a country as Germany! Yet let us observe the quantity of provisions of all sorts constantly coming down the Rhine, the Moselle, and many other rivers, collected from foreign provinces on all hands; the numbers of cattle coming from Hungary; the loads of corn from Poland; and all this in a year which has produced what at any other time would have been called an excellent crop. After these foreign supplies, must not one be surprised to find scarcity complained of in the provinces where the war is carried on, and high prices everywhere else? From such circumstances I must conclude, that people are generally very much deceived in their estimate of plenty and of scarcity, when they talk of two or three years’ subsistence for a country being found upon their lands at once. I may indeed be mistaken in my conclusions, but the more I have reflected on this subject, the more I find myself confirmed in them, even from the familiar examples of the sudden rise of markets from very inconsiderable monopolies, and of the sudden fall by inconsiderable quantities imported.”*
After these remarks, Sir James Steuart proceeds to resolve a difficulty which naturally arises out of the foregoing doctrine, and which seems at first view to suggest a strong objection against some of his conclusions.
“If it be true,” says he, “that a crop in the most plentiful year is nearly consumed by the inhabitants, what becomes of them in years of scarcity? for nobody can deny that there is a great difference betwixt one crop and another. To this I answer, first, That I believe there is also a very great deceit, or common mistake, as to the difference between crops: a good year for one soil, is a bad one for another. But I shall not enlarge on this, because I have no sufficient proof of my opinion. The principal reason upon which I found it is, that it is far from being true, that the same number of people consume always the same quantity of food. In years of plenty, every one is well fed; the price of the lowest industry can procure subsistence sufficient to bear a division; food is not so frugally managed; a quantity of animals are fatted for use; all sorts of cattle are kept in good heart; a people drink more largely because all is cheap. A year of scarcity comes, the people are ill-fed, and when the lower classes come to divide with their children, the portions are brought to be very small; there is great economy upon consumption, few animals are fatted for use, cattle look miserably, and a poor man cannot indulge himself with a cup of generous ale. Added to all these circumstances, that in England the produce of pasture is very considerable, and it commonly happens, that a bad year for grain, which proceeds from rains, is for the same reason a good year for pasture; and in the estimation of a crop every circumstance must be allowed to enter.”*
It may be worth while to take this opportunity of remarking, that in this country we have a resource against scarcity, not to be found in vine countries, that of stopping the distilleries. The expedient of stopping the manufacture of starch has also been occasionally had recourse to.
The foregoing quotations seem abundantly to confirm the truth of the general positions which they were brought to support, that in most countries of Europe the food produced in the country is nearly consumed by the inhabitants, (or in other words, that the part exported bears a small proportion to the home consumption,) and consequently, that all great variations in the price of corn are engendered by apprehension, and do not depend on the quantity in the market. Various other proofs of the same thing may be found in Vaughan’s Treatise on Commerce. Even M. Necker himself admits, that during half a century the importation into France has never borne to the whole consumption a higher proportion than that of one or two to a hundred;1 nor does he seem much disposed to call in question the accuracy of those who affirm, that during the three years which followed after the Edict 1764, establishing a liberty of exportation under certain limitations, the exportation never exceeded the hundredth part of the annual consumption.2
These truths cannot be too frequently or too strongly inculcated on the minds of the people; and in so far as Necker’s measures in 1789 had a tendency to encourage contrary ideas, they justly merit the censures they have received. The passage, in particular, formerly quoted [supra, p. 71] with respect to monopolizers, at a period when the force of Government was so incompetent for the protection of persons and properties, leaves a blemish on his character both as a man and a minister, which it will not be easy for his most partial admirers to remove. The facts, too, stated by Mr. Young, seem sufficiently to prove, that by several indiscretions both in his measures and in his writings, he contributed to aggravate instead of lessening the evil.
Notwithstanding, however, these concessions to M. Necker’s opponents, and my own conviction of the erroneousness of his general principles concerning the legislation of grain, I cannot without forfeiting all claim to candour, join with Mr. Young in an unqualified censure of the measures which he opposed to the scarcity, real or pretended, of 1789. The ordinary powers of Government, which, during the administration of Necker’s immediate predecessor, had completely lost their energy and almost their existence, were then supplied entirely by the commanding influence of public opinion, and by the enthusiastic confidence with which the great body of the nation looked up to the virtues of the Sovereign, seconded by an almost universal conviction of the patriotism and the talents of his minister. In such circumstances, it would be unfair to judge of the measures which were adopted, by the same maxims which apply to a nation in times of tranquillity, among whom the wise and equitable arrangements of an enlightened legislator can be established at once by the irresistible arm of the executive magistrate.
That the freedom of the corn-trade, although a wise and just measure considered abstractly, was rashly established in the year 1787, by the Archbishop of Sens, will, I believe, be readily granted by all who are well acquainted with the circumstances of the case. It was certainly not a time to shock popular prejudices upon a subject of so delicate and critical a nature; and of all men, M. de Brienne, who had been intimately connected with M. Turgot, ought to have avoided a step which could not fail to revive the old clamours that had been excited (however unjustly) against a far less violent reform, when hazarded by that minister. Nor does it afford any apology for this measure to observe with Mr. Young, that the trade which this freedom encouraged was more an import trade than an export one. The contrary was much more likely to be believed by the people, and although (as we shall afterwards shew) a freedom of exportation is no less beneficial to the community than a freedom of importation, the truth of this principle is far from being obvious to common understandings, and it requires a course of years to verify it by actual experience. Its first effects, so far as they extend, are certainly to diminish the subsistence of the people, and to enhance its price; and it was in a high degree impolitic at a moment when the whole fabric of the French Government was tottering to its fall, to risk this alarming inconvenience, although of a temporary nature, upon the speculative hope of a distant advantage, which nothing but the continuance of national tranquillity could realize. I apprehend, therefore, that M. Necker was fully justified in prohibiting the trade of exportation, from the regard which a wise minister must frequently feel it his duty to pay to popular prejudices, more especially as, in this instance, he did no positive harm, but merely abandoned a speculative principle. Nor am I even disposed to condemn, without many qualifications of the censure, the efforts which he made for the importation of grain. They tended, at least, to satisfy the people, that the scarcity which existed was not owing to the intrigues of Government, and thereby to support that popularity of the Sovereign, which then constituted the whole strength of the monarchy; and which, if the charm had not been broken by the fatal measure of Necker’s exile, would in all probability have continued to oppose an effectual barrier to the rage of violent innovation. It must be remembered, too, that however trifling the supply may appear when compared with the whole population of France, the case is very different when compared with that of Paris and the neighbourhood, where it was of the greatest consequence to allay the popular alarms. Even here, if the supply had been small in fact, it affords a sufficient justification of the minister, if his measure contributed to revive the public confidence.—I believe, indeed, that it actually failed in this respect, but it was not unnatural to expect the contrary; and at any rate, circumstanced as things then were, it was the only measure left for the Government to employ.
A remark which Mr. Young himself has made, ought always to be kept in view in judging of the measures which were adopted on this occasion. “The mass of the people in great cities are all alike, absolutely ignorant of how they are fed, and whether the bread they eat be gathered like acorns from a tree, or rained from the clouds; they are well convinced that God Almighty sends the bread, and that they have the best possible right to eat it.”*
Mr. Smith, too, with all his strong attachment to an unbounded freedom in this branch of commerce, candidly insinuates an apology for the absurd regulations which restrain the corntrade under almost all governments. “The laws concerning corn,” he observes, “may everywhere be compared to the laws concerning religion. The people feel themselves so much interested in what relates either to their subsistence in this life, or to their happiness in a life to come, that government must yield to their prejudices, and, in order to preserve the public tranquillity, establish that system which they approve of. It is, perhaps, on this account,” he adds, “that we so seldom find a reasonable system established with regard to either of those two capital objects.”†
The very same comparison between the laws respecting corn, and those which relate to religion, occurs in M. Necker’s Treatise on the Legislation and Commerce of Grain. In speaking of the free exportation of this article, he observes, that “although it were as favourable to the public prosperity, as he believes it adverse to it, it would be scarcely possible to maintain the authority of the law which should establish, in opposition to the prejudices and passions of the people.” “The bread,” says he, “by which the people are fed, the religion by which they are comforted, are ideas as simple as human nature, and inseparable from the human frame. The prosperity of the state, the interests of ages yet to come, the interests even of the succeeding generation, are words which produce no impression. The people feel themselves related to society by their sufferings alone, and of all that immense space which is called the future, the pressure of their wants prevents them from extending their views beyond a provision for to-morrow.
“It is thus,” he concludes, “that when the price of corn rises so high as to make their subsistence uncertain, a cry is naturally and necessarily raised against exportation, and against every law on which a pretence of blame can be thrown for the hardships and anxieties they suffer. In the midst of their daily toils, and of their ordinary indigence, they survey with tranquillity the indolence, the affluence, and the apparent happiness of the rich; they are accustomed to consider them as beings of a different species, and to be dazzled by the magical splendour of pomp and magnificence. But when an alarm, whether well or ill-founded, concerning the means of subsistence, lays hold of the imagination, and touches the great spring of all their movements, the whole of their energy rouses, and the same people who suffer themselves, with an infantine simplicity, to be easily guided by leading strings through all the spectacles which society presents of an inequality of prosperity, and through all the contrasts they see of want, on the one hand, and superfluity on the other, exhibit the ungovernable ferocity of a beast of prey when urged by the terror of famine.”
It is not, however, I presume, on these general considerations that M. Necker or his friends would wish to rest his vindication for the great importation he attempted in 1789. Nor do I suppose they would admit the conclusiveness of Mr. Young’s reasonings against it, founded on the inconsiderable proportion between the quantity imported and the whole population of France. I already said, that it is only with the population of Paris and the neighbourhood that it ought to be compared, as it was in this part of France that it was chiefly intended to operate. But abstracting entirely from this circumstance, Mr. Young seems to have overlooked completely one very important principle in this argument—that a very trifling difference in the quantity of grain in the market may occasion an immense fall or rise in the price. This observation was long ago made by Mr. King, in a passage quoted by Dr. Davenant, and has been more fully illustrated by the author [Mr. Charles Smith] of the Three Tracts on the Corn-Trade,* which I have already repeatedly referred to. M. Necker, too, in combating an assertion of a writer on the Commerce of Grain, that the price of that commodity varied proportionally with the quantity in the market, “so that to raise it a fifth or a tenth, a fifth or a tenth must be abstracted from the general supply,” asserts that the abstraction of a fifth or a tenth, or of much less, may, in certain circumstances, raise the price beyond all bounds. In particular, he asserts that the exportations after the year 1764, (which we are assured by the partisans of that measure never exceeded the hundredth part of the whole consumption,) raised, in several of the provinces of France, the price nearly a hundred per cent. “It is not,” he adds, “with the amount of grain left in the country that we must compare the quantity abstracted by exportation, but with the amount of that surplus, which experience shews to be necessary for keeping within bounds the speculations of monopolizers, and the alarms of the consumers.” Although, therefore, the quantity imported in 1789 had been much less than it was, it might still have produced a great reduction in the price, and would probably have done so if the public mind had not been agitated by a thousand other causes of a very different nature. The truth is, that the question concerning the expediency of this measure cannot be decided on any general principles of Political Economy, but turns entirely on the adaptation of the measure to the actual state of the public mind. On this point, whatever the result was, I have no doubt in preferring the judgment of the Minister to that of Mr. Young.
Still, however, we remain under very great obligations to this last writer for the stress he has laid on that very important fact which gave rise to this discussion,—That the import and export trade of corn are extremely insignificant in the case of a great country like France or England, when compared with that which is carried on at home. But although this demonstrates, that it is on the freedom of the inland trade that the subsistence of the people essentially depends, and that if the people were entirely under the government of reason, the export and import trades would be objects of very little consequence to the Legislator, it does not follow that they may be safely neglected by a statesman placed at the head of an unenlightened, prejudiced, and turbulent nation, over which he possesses little power but what is founded on public opinion. On the contrary, it appears from the fact, that an export or an import trade, however trifling the effects which they might be expected a priori to produce, may not only, in particular cases, materially affect the general tranquillity, but may actually produce a very great variation of price, by influencing the imaginations and passions of the multitude. In this point of view, they are objects of attention to the Legislator, no less than those causes of plenty and scarcity which may be subjected to the rigour of arithmetical computation; and in so far as this is the case, it will not be disputed, that the dexterous management of them requires a much nicer and more practised hand.
“It is a common and fatal error among systematical politicians (as Mr. Smith has well remarked in the last edition of his Theory of Moral Sentiments) to imagine, that they can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. They do not consider that the pieces upon the chess-board have no other principle of motion than that which the hand impresses upon them, but that in the great chess-board of human society every single piece has a principle of motion of its own altogether different from that which the Legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder. Some general and even systematical idea of the perfection of policy and law (the same author continues) “may, no doubt, be necessary for directing the views of the statesman. But to insist upon establishing, and upon establishing all at once, and in spite of all opposition, everything which that idea may seem to require, must often be the highest degree of arrogance.”*
These observations, while they serve to illustrate a distinction to which I have frequently referred, between what is abstractly right and practically expedient, will, if I am not mistaken, go a certain length in vindicating M. Necker’s measures; or, at least, to show, that where they were erroneous, the error did not arise from their want of conformity to the general principles of Political Economy, but from their being carried into execution in a way which tended rather to augment than to allay the ferment in the public mind. On this subject, both he and his opponents seem to me to have gone into extremes; the one too much engrossed with the details of a particular administration to rise to the contemplation of general principles; the other blinded by their admiration of what is theoretically true to the obstacles which present themselves in the actual conduct of affairs.
In a paper published a good many years ago,† I have said of M. Necker’s Eloge on the Administration of Colbert, “that although confined and erroneous in its general principles, it contains many important and just remarks of a practical nature.” After all that I have read and heard of this celebrated man, I am still disposed to retain the same favourable sentiments of his character and of his talents, and even where I differ the most widely from his systematical views, not only to acknowledge the purity of his intentions, but to admire the extensive influence which his genius and virtues so long gave him over the destiny of Europe. “Of his merits and measures as a statesman,” says Mr. Gibbon in his Memoirs, “various opinions may be entertained; but all impartial men must agree in their esteem of his integrity and patriotism.” At a later period, the same writer has said, in speaking of a visit which he paid to M. Necker in 1792, after his fall from power: “Of Necker I have really a much higher idea than I ever had before. In our domestic intimacy he cast away his gloom and reserve; I saw a great deal of his mind, and all that I saw was fair and worthy. He was overwhelmed by the hurricane; he mistook his way in the fog; but in such a perilous situation, I much doubt if any mortal could have seen or stood.”
I have only to remark farther at present, that those who advised the measure of sending Necker into exile immediately after the opening of the National Assembly, have themselves to blame for those misfortunes which afterwards overwhelmed themselves and their country. Till that period nothing could exceed the popularity of the king; and this popularity was the most powerful engine which Necker had to employ for the government of the nation. It became henceforth manifest, that the king was either not sincerely disposed to carry into effect those plans of reform which he had led the people to expect; or that his good intentions were frustrated by some secret influence over his counsels. A breach took place between the Government and the people; a violent insurrection demolished the Bastile; the military caught the general enthusiasm; and when M. Necker, after an absence of three weeks, was prevailed on by the solicitation of the king to resume the reins of Government, he found the people completely instructed in the fatal secret of their own strength, and under the direction of demagogues too turbulent and ambitious to submit to the control of any higher authority. If he had consulted merely his own tranquillity and reputation, he would have refused to obey the summons which was thus extorted by necessity from the authors of his recent disgrace; and would have put it out of the power of malignant and unprincipled men to involve him in any responsibility for events which from this moment no human wisdom could avert.
I shall make no apology for this short digression, which, I hope, is not altogether foreign to my subject, and from which I now return to the general argument concerning the legislation of grain.
In what I have hitherto said on the Inland Trade of Corn, I have considered chiefly in what manner an unlimited freedom operates as a palliative of the inconveniences of a dearth. I now proceed to observe that the same freedom is the best preventive of that calamity, by the encouragement it gives to an intermediate order of men between the grower and consumer, who contribute powerfully to the prosperity of the farmer, and to the increase of the annual produce.
I before said, that the ancient policy of Europe encouraged the popular odium against this beneficial trade, regulating thereby the Agricultural Commerce of the country by maxims essentially different from those which it established with regard to the Manufacturing Commerce of the towns. The Farmer was obliged to become a Corn Merchant, while the Manufacturer was, in many cases, forbidden to sell his goods by retail. The object of the one law was to make corn cheap; that of the other to encourage the business of shopkeepers. In both cases the means employed had an obvious tendency to restrain individuals in the employment of their capitals, while at the same time these means were altogether inadequate to the ends proposed. The manufacturer, though he had been allowed to keep a shop, and to sell his own goods by retail, could not have undersold the shopkeeper, for the capital placed in his shop must have been withdrawn from his manufacture, he must have had the profits of a manufacturer on one part of his capital, and those of a shopkeeper on the other. Though he might appear, therefore, to make a double profit on the same piece of goods, yet as these goods made successively a part of two distinct capitals, he made but a single profit upon the whole capital to which they furnished employment. For the same reason the farmer could not afford to sell his corn cheaper than any other Corn Merchant would have been obliged to do in the case of a free competition.
The dealer who employs his whole stock in one branch of business, has an advantage similar to the workman whose labour is employed in a single operation. This division in the employment of stock was forced on faster than it would naturally have taken place by the law which prohibited the manufacturer from exercising the trade of a shopkeeper. The law which obliged the farmer to exercise the trade of a corn merchant, endeavoured to hinder it from going so fast. Both were unjust, but the latter was the most pernicious. It forced the farmer to divide his capital into two parts, of which one only could be employed in the cultivation of land, and consequently must have tended to obstruct improvement, and to raise the price of corn.
After the business of the farmer, that of the corn merchant, if properly protected, would contribute the most to the raising of corn. It would support the trade of the farmer in the same manner as the trade of the wholesale dealer supports that of the manufacturer. It would enable the farmers to keep their whole capitals constantly employed in cultivation, and in case of accidents, would secure them a friend in the wealthy corn merchant, to diminish their dependence on the forbearance of their landlords.
But I have already insisted longer than was necessary on this part of the subject, as the truth of the foregoing observations is, I believe, almost universally acknowledged in this part of the island, by all who, in their examination of the question, have formed their judgments on principles of justice, or of general expediency. The old popular prejudices, however, still maintain their ground among various descriptions of the community, and will probably continue to do so, till the memory of our former laws is gradually obliterated by those more enlightened ideas which Philosophy has disseminated, and which have been lately sanctioned by a unanimous decision of our Supreme Court. In the other part of the United Kingdom, the progress of truth and of liberality does not appear, in this instance at least, to have been equally rapid. The following has been stated as part of an address to the Grand Jury at the Shropshire Assizes 1795, by a judge highly respectable for his private character, and eminently distinguished by his professional abilities:1 —“Since I have been in this place, gentlemen, a report has reached me, (without foundation I sincerely hope,) that a set of private individuals are plundering at the expense of public happiness, by endeavouring, in this most abundant country, to purchase the grain now growing on the soil. For the sake of common humanity, I trust it is untrue. Gentlemen, you ought to be the combatants of this hydra-headed monster. It is peculiarly your duty to see justice done to the country. In your respective districts, as watchmen be on your guard. I am convinced from my knowledge of you, that I have no occasion to point out your duty in this case; and that although the Act of Edward VI. be repealed, (whether wisely or unwisely, I take not upon me to say,) yet it still remains an offence at common law, coeval with the constitution; and be assured, gentlemen, whoever is convicted before me, (and I believe I may answer for the rest of my brethren,) when the sword of justice is drawn, it shall not be sheathed until the full vengeance of the law is inflicted upon them: neither purse nor person shall prevent it.”
In a cause tried before the Court of King’s Bench, 7th June 1800, the same judge is said to have expressed himself as follows:—“I am confident that the public do suffer greatly by machinations, which the Legislature cannot perhaps prevent. This is a very serious subject. Our ancestors thought it wise, in aid of the common law of our land, to enact a statute against forestalling the articles of food. This statute has been thought good policy, from the time of Edward VI. down to our memory; but which was repealed, I know not why. Certainly those who repealed it thought they were acting wisely: at the same time, I rather think it might have appeared otherwise, upon more mature deliberation. Men may form fine theories in their closets, but which men of a better knowledge of the world may know to be fallacious and delusive. A very eminent author published a very celebrated, and indeed an excellent work in many respects, the treatise On the Wealth of Nations, in which that ingenious author says, ‘forestalling and regrating are no more to be dreaded than witchcraft.’* Another person of high character, with some flaws in it,1 has since adopted that idea; and he was the man to whose exertion was owing the repeal of the statute of Edward against forestalling. Undoubtedly it would have been better if that statute had not been repealed. It is well the extent of the design in the repeal was not carried up to affect the common law of the land;—I wish the old statute to be re-enacted.”2
What effect these doctrines have had in encouraging the common popular prejudices on this subject, we may judge from the following observations quoted literally from a Newspaper, which has a very extensive circulation in every part of this island.
“Next to the baneful influence of forestallers and regrators, we conceive the enormous farms held by individuals as one great cause of the present high price of provisions. They are a most intolerable evil, as they cause, in the first instance, the neglect of cultivation, and the unproductiveness of the land, while they enable the farmer to withhold his produce from the markets, and to speculate upon the distresses of the people. But if it be really desired to arrive at the root, and remedy this enormous evil, there can be no better device than a public register of the produce of the harvest in every parish of the kingdom, and a return of sales with the prices, the times, and the buyers’ names. From Parishes, these registers should be sent and compared in the Hundreds, and from thence in the County Towns; and finally, the common aggregate return should be transmitted to the Secretary of State for the Home Department. Hence, it would at once appear whether there existed scarcity, or the danger of it, and in what degree it was felt or to be apprehended: hence, it would be known what counties were able to succour others which stood in need of it: hence, importation would be encouraged in time if it were needful, by a general competition and a plain calculation; and hence would an enormous part of our capital, now employed only to oppress and starve the public, be driven into the channels of a just and profitable commerce. Perhaps our commercial principles have carried us quite far enough. If we are governed by our capital instead of governing it,—we have the words of Mr. Burke himself for it, who realized the doctrines of Smith,—that it is the greatest of all calamities. Had this extraordinary man survived, he would have been the first to repeal his own statute, and to restore the salutary laws which he abrogated.
“So far as regards the interference of authority with private property, we must observe, that individuals have only a qualified property in articles of general use and necessity. The whole corn of a province cannot belong to a private granary by any sale or conveyance whatsoever. He can have no right or title to lock up his warehouses while his fellow-creatures perish with hunger. The public safety supersedes every private privilege; and the first duty of a government is to feed its people. The whole corn of the kingdom in the first instance is the property of the grower; but it is a qualified property, for it is not to be withheld from the people. He has undertaken to sell as well as to grow, and to provide corn for the mechanic and the soldier, who clothe and defend him and his family. He has then no right to detain his stacks from the market, nor to extort a price equivalent to detention. A just and free competition would induce every grower to seek a priority of sale, in order to lay out his profits upon his farms; when in steps a third man, who buys it in his barns, in order to withhold it from the market. But what better right can this interloper have than the proprietor himself, from whom he purchased, who has committed to him the care of regulating prices, and supplying with commodities that he does not produce? What pretence has he to interfere between the grower and the consumer? And if he has a pretence, how can Government want one, whose duty nay, whose first duty, is to fill the mouths of its subjects?”1 —[But this doctrine was not unopposed.]
“For some time past, some creatures of some of our ministers have been attempting to direct the discontents of the public, at the high price of provisions, against various useful classes of the community, in order to withdraw the odium from themselves and their ruinous measures. They want to devote to execration those very men who feed the public, tossing them overboard without remorse, as a tub to the whale, which they feared might threaten themselves. In the course of this project the most senseless arguments, and, at the same time, the most dangerous principles, have been avowed. These Jacobins have had recourse to everything absurd, and everything wicked, which the economical system of Robespierre ever enacted. The law of the maximum is but a part of what our Jacobins would establish.
“One of their writers who has broached an infinite deal of inflammatory nonsense on these points, now complains of large farms as the cause of the scarcity. He proposes registers of produce, buyers and sellers, &c., to be kept in parishes, hundreds, and so forth, till they are transmitted to the Secretary of State’s office. This is neither more nor less than to make the Secretary of State corn merchant general for the whole kingdom. These people tell us, likewise, of qualified property in articles of the first necessity, and so forth. We are tempted to think, that the fools who circulated such stuff are not quite aware of the extent to which their principles may justly be carried. If there be but a qualified property in corn, it is quite easy to show that there can only be a qualified property in that which raises corn,—land. Thus it is easy to prove, that large estates (more necessarily than large farms) are the cause of the scarcity, till the ignorant are at length convinced, by their false and absurd doctrines, that it would be just to rob the Marquis of Buckingham of his property, and to establish an agrarian law, because large estates are not favourable to cultivation. We notice these consequences of the monstrous speculations sent abroad, merely to show certain persons that they should have a care how they venture, for a temporary purpose, to teach doctrines and to enact laws which are in the worst spirit of Jacobinism. If the rage for interfering with all sorts of trade in articles of food be continued, a check will be given to all enterprise and improvement in agriculture; we shall see revived the ridiculous restrictions which ignorance established in the ages of barbarism. It will then be seen whether these speculators can feed the nation with parchment and wax, and their paper regulations, after they have banished all industry, capital, and enterprise from those trades on which the supply of the market depends.”1
From a late decision it would appear, that the rules of English law on this head are extended, by the judges, at present beyond the articles which constituted the necessaries of life when they were first introduced, to whatever articles have since come under that description, in consequence of the progress of luxury. During the last winter,* (according to the report of the newspapers,) a rule for a criminal information was granted in the Court of King’s Bench against Samuel Ferrand Waddington, accused of monopolizing hops. On this occasion, it was stated by the counsel for the prosecution, that “buying hops on the poles is an offence against the common law of this land;” and, in support of this position, the authority of Lord Coke is quoted, who says, “it is against the common law of England to buy corn in sheaves, for that the market is thereby forestalled.” Lord Coke adds, that “the forestaller should not be allowed to live in the habitations of mankind, being the oppressor of the poor, and the enemy of the community.”
The opinion of one of the judges is thus reported:—“I am glad that this motion is made. I know an idea has prevailed with regard to some modern Acts of Parliament, that by their enactments this practice has ceased to be an offence; that the old common law of the land with regard to forestalling and engrossing is at an end. This motion will correct a great deal of misconception upon that subject.—Certainly,” he adds, “this continues to be an offence at common law.”
For my own part, I am much inclined to agree with those authors who assert that no sort of monopoly can well be injurious to the public without the assistance of Government. “We have heard in England,” says Mr. Young, “of attempts to monopolize hemp, alum, and cotton, and many other articles; speculations that ultimately have not proved to be beneficial, as they have always ended in the ruin of the projectors. But to monopolize any article of common and daily supply and consumption, to a mischievous degree, is absolutely impossible; and in truth the natural and obvious effect of this very unpopular trade is in the highest degree useful to the community; to take from the market a portion when the supply is large, and to restore it to the market when the supply is small, so as to level as much as possible the inequality of prices. Government cannot do this without erecting granaries; which we know from the experience of other parts of Europe, to be a system at once expensive and pernicious. It can only be accomplished effectually by that description of men, to whom the odious name of monopolizer is commonly applied.” It is justly, however, observed by Mr. Young, that “in France the necessity for them is much greater than in England. In the former country, the prevalence of small farms emptying the whole crop into the markets in autumn, without making any reserve for summer; there is no possible remedy but many and great monopolizers, who are beneficial to the public exactly in proportion to their profits. But in a country like England, divided into large farms, such corn-dealers (though highly beneficial, as appears from Mr. Smith’s reasonings,) are not equally essential. The farmers are rich enough to wait for their returns, and keep a reserve in stacks to be thrashed in summer;—the best of all methods,” Mr. Young concludes, “of keeping corn, and the only one in which it receives no damage.”1
At the moment, indeed, when I now write, (June 1800,) a Bill is pending in Parliament, which, if it were to pass into a law, would establish a monopoly in this branch of commerce of a most dangerous and destructive nature. The object of the Bill is to incorporate certain persons, by the name of the London Company for the Manufacture of Flour, Meal, and Bread. The argument against it cannot be better stated than by copying part of “The Resolutions published by the General Meeting of the Owners and Occupiers of Mills, and others concerned in the Flour Trade,” in consequence of a unanimous agreement to oppose the Bill in question in all its stages.
“1. That in the confidence of the security which all the subjects of these realms enjoy alike under the laws, several millions of money have been embarked in the construction of mills, and in the manufacture of flour and meal; that these mills have of late years been greatly increased in number and capacity; that the canals by which the country is intersected have greatly facilitated and economized the circulation of grain; and that the number of persons engaged in this trade, unconnected with one another, dispersed over the whole kingdom, whose interests are constantly distinct, and even opposite, and the mediocrity of whose fortune obliges them to make rapid sales of an article which is in itself perishable, have given rise to a competition in the manufacture and sale of flour so wide, active, and incessant, as to give the best possible security to the public for a regular and ample supply at the most reasonable rate.
“2. That the Flour Trade has gradually grown up to its present perfect state by this open competition, derived from the freedom and security it has enjoyed; that from the abundance of mills, no obstruction by contrary winds, frosts, floods, droughts, or other accidents, has been found to interrupt a regular and ample supply; that no speculation, artifice, fraud, or combination, can now affect the markets, as the supplies come to the metropolis by so many channels, and from so many persons unknown to one another, that the wheat, by being purchased in small quantities, in different places, and in the most quiet and unconnected manner, is bought at the cheapest rate, the interest of the millers being the check between the grower and consumer for keeping down the prices, while the very great contention among the millers themselves serves to reduce the expense of the manufacture; so that the price of flour is almost invariably in the London market much under the proportionate rate of the price of mealing wheat.
“3. That the erection of one great corporate establishment, by Act of Parliament, with the enormous capital of £150,000 divided into 4800 shares, and which, in its progress, may be increased ad infinitum—the proprietors of which are to be absolved from all responsibility for their transactions, beyond the amount of their shares, may become the source of most serious calamity, and cannot possibly be productive of any benefit to the public.
“That it is called for by no proved or apparent necessity, since experience has shewn that the manufacture of flour, meal, and bread, may be satisfactorily carried on by men unconnected, and whose private fortunes are answerable to the community for their acts.
“That to grant a charter with exclusive privileges, to a numerous body of persons, who must confide in agents to carry on a trade which may be better conducted in an open manner by persons for the maintenance of themselves and families, would be inconsistent with the protection to which all tradesmen are entitled under the law, and by which they enjoy the fruits of their own labour, in return for the diligence, skill, and attention which they exert therein.
“That the first operation of this charter would be to annihilate all the small mills and bake-houses now dispersed over the town and country, by which not only great accommodation is given to the people in their vicinity, by the supply of offal for their domestic animals, and by a saving of time and fuel in the preparation of their victuals; but by which also the competition would be destroyed, which is the best security to the public, both for an ample supply at a reasonable rate, and for preventing all improper mixtures and adulteration of flour.
“That even if the views of the undertakers should be strictly adhered to, an establishment of such extent, and demanding at one spot such enormous weekly supplies, would necessarily govern the market. If all its stock should be purchased in London, it would frequently require to buy up the whole quantity exposed for sale, and must be at the mercy of the dealers as to price; or if it became its own importer, and drew its supplies from various quarters, it would take from the dealers all certainty of a sale in London, and would deprive the metropolis of a constant and regular corn-market.
“That if, in process of time, it should degenerate into a job, be left to a negligent direction, or be transferred to speculators, it might be productive of incalculable mischief to the metropolis, since being left in the Bill free from all restraints, (the objects of the institution even being undefined, except in the preamble,) tied down to no purpose, obliged to perform no one service, rendered perpetual as to duration, and the proprietors absolved from all responsibility in their transactions beyond £25 per share, they might enter into the most dangerous speculations, and create the most extensive and destructive monopoly; they might not merely dictate to the London Market, but intercept the transit of grain through the country. They might import quantities of foreign produce as substitutes for British wheat, to the injury of the national agriculture; and being relieved from all the checks of competition, and carrying on the joint trades of miller and baker under the same roof, they might impose any species of bread that they pleased upon the public at any price.
“That an establishment of so enormous a size, amassing under the eye of the people such a stock of grain, must in times of scarcity give rise to jealousies that would endanger its existence, after it had destroyed all the other sources of public supply; and finally, that it would be a most dangerous thing to trust to any one institution for so large a part of the subsistence of the people, since experience has proved that no precaution is sufficient to prevent the almost momentary destruction of the most stupendous work.
“4. That the said Bill, so unprecedented in its nature, and which strikes in its principle at the foundation of all legal security for trade, be therefore opposed in all its stages; and that the mill-owners and occupiers in every part of the kingdom, whose interests are equally threatened thereby, and whom it is not proposed to indemnify for the destruction of their property, be called upon to meet in their respective districts, and to shew its infallible tendency in their local markets, which constantly take their tone from that of London; and, in the meantime, that they confide in the wisdom and prudence of the representatives of the people in Parliament, that a bill of such magnitude, and pregnant with such evils, will not be hurried through the house until time shall be given to the country to deliberate and declare their sense thereon.”1
Of the Trade carried on by the Merchant Importer of Grain for Home Consumption.
The beneficial tendency of this branch of the Corn-trade to the great body of the people in such a country as Great Britain, by increasing the immediate supply of the home market, would appear, at the first view, to be too obvious to stand in need of any illustration.
It has, however, been imagined by many, that this advantage is only apparent; [1°·] that on the most favourable supposition, it is confined to manufacturers and the other classes who, living in towns, derive their supply of provisions from the country; while, in the same proportion, it is injurious to the cultivators of the land, both proprietors and farmers. Nay, [2°·] it has been alleged, that even to the mercantile interest it must be prejudicial in the end, by the discouragement it gives to that home agriculture from which the only regular and steady supply of the market can be expected.
With respect to the first of these objections, founded on the supposed injury which a freedom of importation does to the cultivators of the land, it is of great importance to remark, that although it may lower somewhat the average money price of corn, it cannot possibly operate to diminish its real value, or the quantity of labour which it is capable of maintaining. “If importation was at all times free, our farmers and country gentlemen would probably, one year with another, get less money for their corn than they do at present, when importation is, in general, virtually prohibited; but the money which they got would be of more value, would buy more goods of all other kinds, and would employ more labour. And, of consequence, their real wealth would be the same as at present, although it might be expressed by a smaller quantity of silver.”*
In proof of this position, it is only necessary to refer to what Mr. Smith has so ingeniously and satisfactorily established concerning the effect of the money price of corn in regulating that of all other commodities.
“It regulates the money price of labour, which must be always such as to enable the labourer to purchase a quantity of corn sufficient to maintain him and his family, either in the liberal, moderate, or scanty manner in which the advancing, stationary, or declining circumstances of the society oblige his employers to maintain him.
“It regulates the money price of all the other parts of the rude produce of land, which, in every period of improvement, must bear a certain proportion to that of corn, though the proportion is different in different periods. It regulates, for example, the money price of grass and hay, of butchers’ meat, of horses, and the maintenance of horses, of land carriage consequently, or of the greater part of the inland commerce of the country.
“By regulating the money price of all the other parts of the rude produce of land, it regulates that of the materials of all manufactures. By regulating the money price of labour, it regulates that of manufacturing arts and industry; and by regulating both, it regulates that of the complete manufacturer. The money price of labour, and of everything that is the produce either of land or labour, must necessarily either rise or fall in proportion to the money price of corn.”*
It appears, therefore, that although in consequence of a free importation the average money price of corn should fall, neither the circumstances of the farmer, nor those of the landlord, would be in the smallest degree hurt by the change.
On the other hand, it is abundantly manifest, that a free importation of corn, accompanied with a freedom of exportation, is the only effectual expedient for preventing those fluctuations in the money price of this article which take place under the present system. And it is surely more beneficial, both to the landed and commercial interests,1 that corn should be always at a steady and medium price, than that it should sometimes greatly exceed, and at other times fall greatly below that medium.
The steadiness in the money price of corn is beneficial to the landed interest; for, as the prices of labour and manufactures are regulated by the price of corn, the first would soon become uniform if the last were rendered so; and the value of corn would thereby be ascertained by a steady medium price of labour, instead of a money price subject to perpetual variations.
The same steadiness is for the interest of the manufacturers, as it prevents equally that poverty and distress to which their workmen are subject in dear years; and that dissipation and idleness which are the consequences of an extraordinary plenty.
At present, however, we shall confine ourselves to the freedom of importation, with respect to which it may be laid down as a self-evident proposition, that to prohibit the importation of corn, when it is at such a price as to disable a part of the community from buying a sufficiency, is to increase the misery of the poor, in order to add to the nominal opulence of the rich. In truth, a measure of this sort, adopted with a view to raise the price, is nearly the same as prohibiting the improvement of land, and consequent multiplication of the means of subsistence, in order to serve the owners of those lands that cannot be farther improved, or converting the half of the kingdom into a forest, in order to serve the proprietors of the other half.
There are strong reasons for believing, that a considerable part of the people in Great Britain are obliged to content themselves with a very scanty allowance of food when the prices are far below what admits of importation;1 and that as corn turns dearer, a greater and greater number must lessen their quantity. Indeed, if after a deficient crop, the whole people continued to subsist in the same liberal manner as in a year of plenty, provisions would rise beyond all bounds. The fact however is, that as provisions advance in price, more and more people lessen their allowance and give up the competition; and thus prevent prices from rising in proportion to the deficiency. It is owing to this that the price of butcher meat seldom varies above a half, while bread is often double or triple of its ordinary price. As the former article is a sort of luxury, the competition for it is sooner given up by the lower classes; whereas bread must be had by every person, though in small quantities, whatever the price may be. Hence, too, it happens, that in poor countries butcher meat is generally cheapest when corn is high, the lower classes not being then able to purchase any; and that in London, where the richness of the inhabitants keeps up the competition, the variation in the price of butcher meat is much greater than in the remote provinces.
The inference which I draw from these considerations is, that the variations in the price of corn, however great, are not always such as might be expected from the difference between a plentiful and a deficient crop; that, on the one hand, a very great rise of price may be occasioned by a very trifling deficiency in the harvest, accompanied with a general alarm; and, on the other hand, that there is reason for believing that numbers of people in Great Britain are sometimes obliged to put themselves on short allowance long before corn has risen to that rate which permits importation.
Let us now consider what effect a freedom of importation is likely to have on the agriculture of the country.
It has been already shewn, that in proportion as the money price of corn falls, the real value of silver rises, and that this must necessarily lower somewhat the money price of all commodities, so as to give the industry of the country, where it takes place, some advantage in all foreign markets. The tendency, therefore, of this fall in the money price of corn, is, so far, to encourage and increase that industry. It is evident, also, that the extent of the home market for corn (which, as was formerly observed, is, in every country, by far the most extensive and important market for that commodity,) must be in proportion to the general industry of the country where it grows, or to the number of those who are employed in producing something else, which they may give in exchange for this great necessary of life. That rise, therefore, in the real value of silver, which is the effect of lowering the average money price of corn, tends to enlarge the most extensive market for corn, and thereby to encourage instead of discouraging its growth. It encourages cultivation in the most effectual of all ways, by increasing the number of inhabitants upon the land, or, in other words, by providing customers to buy the produce at home, free of the expense of carriage, and who can furnish the proprietors with the manufactures which they may want, also free of this expense. Even the money income of the farmer (and, of consequence, the rents of the landlord) may, in this way, rise instead of falling, as the greatness of the quantity which he sells may do more than compensate, in point of pecuniary profit, the reduction in the price.
Nor is this the only circumstance that may operate in favour of the money income of the farmer and landlord, while the nominal price of corn is lowered; for, in so far as this reduction of price increases manufactures and population, it must raise the price of other productions of the land, which cannot be imported from foreign countries, such as butcher meat, poultry, milk, grass, hay, and various other articles.
This position does not rest upon theory only; it is abundantly confirmed by experience.1 It is well known, that every district where manufactures are established, must import the means of subsistence from those where there are no manufactures. And yet it will be admitted that land gives a higher rent, and is better cultivated, and people live better and are richer in manufacturing districts than in the less populous parts of the country; that is, the advantages are on the side of the districts which import, not on those which export; and, in like manner, in Holland, which imports the means of subsistence from every quarter of the world, the land gives a higher rent, and is better cultivated, and the people, how precarious soever the foundation of their National wealth, are individually richer than in any country of Europe.*
The rise in the rent of land in manufacturing countries, and also in the neighbourhood of towns, is not owing to the rise of corn, which is the greatest article of the labourer’s food, nor to the rise of wool, leather, wood, &c., which are the articles most needed for his clothing and conveniences. All these can be imported at a small expense; and none of them are much dearer in London, where they are all imported, than in the remote provinces. But the rise of rent, in the circumstances just stated, is owing to the demand for articles which it is impossible to import, and for some that cannot be imported but at a great expense,—for milk, garden stuffs, hay, straw, grass, for riding and carriage horses, poultry, lamb, veal, &c. Most of these articles are used by the higher classes, and their high prices do not affect the poor. They add to the money income of the farmer and landlord, without occasioning any inconvenience to the labouring classes. And (on the supposition that a perfect freedom of importation were established) the same effect would be produced, in some degree, over the country at large, by that rise in various articles of rude produce, which would be a necessary consequence of thriving manufactures.
If a free importation of corn had been allowed from the first settling of America, it is difficult to say what effects it might not have produced on the population and wealth of Great Britain. The Americans would thus have been induced to cultivate more and more land, and to produce more and more food and materials for manufactures, to supply the wants of the increasing numbers of people that have no land at home. The restraints on importation, which in times of moderate plenty amount to a prohibition, discourage the attempts of under-peopled countries to supply our deficiencies; for no cultivator will raise provisions for a market that may not be open for several years. Hence, even in America where land is so plentiful, they only cultivate so much as is necessary to supply the demand at home, and the common demand from Europe, but not for any extraordinary demand from such a nation as Britain, where the liberty of importation depends on contingencies which cannot be subjected to any calculation.
As I have made frequent references in the course of the foregoing argument to our own country, I ought perhaps to have taken an earlier opportunity of mentioning the state of our existing laws on the subject of importation. But I was unwilling to interrupt the general reasoning with local details; and it appeared to me more advisable to delay any historical statements that I had to offer with respect to particular systems of policy, till I had concluded what I had to say on the general principles by which they ought to be regulated. In the meantime, it may be proper to take notice of a few facts to which I have already had occasion to refer in the way of illustration, and of which a short statement may perhaps throw additional light on some of the preceding conclusions.
“By the 22d of Charles II. c. 13, the importation of wheat, whenever the price in the home market did not exceed fifty-three shillings and fourpence the quarter, was subjected to a duty of sixteen shillings the quarter, and to a duty of eight shillings whenever the price did not exceed four pounds. The former of these two prices has, for more than a century past, taken place only in times of very great scarcity, and the latter has not taken place at all. Yet till wheat had risen above this latter price, it was by this statute subjected to a very high duty; and till it had risen to the former, to a duty which amounted to a prohibition. The importation of other sorts of grain was restrained by duties proportionally high.
“The distress which in years of scarcity the strict execution of this statute might have brought upon the people, would probably have been very great. But upon such occasions its execution was generally suspended by temporary statutes, which permitted, for a limited time, the importation of foreign corn. The necessity of these temporary statutes sufficiently demonstrated the impropriety of this general one.”*
Notwithstanding, however, the inconsistency of this statute with the genuine principles of Political Economy, Mr. Smith acknowledges its necessity as a counterpart to the law which establishes a bounty on exportation. “If when wheat was either below forty-eight shillings the quarter, or not much above it, foreign corn could have been imported either duty free, or upon paying only a small duty, it might have been exported again with the benefit of the bounty, to the great loss of the public revenue, and to the entire perversion of the institution, of which the object was to extend the market for the home growth, not that for the growth of foreign countries.” . . . . “The restraints on importation, indeed, were prior to the establishment of the bounty, but they were plainly dictated by the same spirit, and by the same principles which afterwards enacted that regulation.”†
(Interpolation from Notes.)—It now only remains, before concluding this branch of our subject, to mention two miscellaneous particulars connected with it, which could not properly be introduced sooner.
I before remarked, how very inconsiderable the trade of the importer, and indeed of all the departments of the commerce of corn is, when compared with that which circulates the home produce in an extensive agricultural country like ours. According to the author of the Corn Tracts, the average proportion of all kinds of grain imported to those consumed, did not, in this country, exceed that of 1 to 570; and the average quantity of all sorts of grain exported, did not exceed the one-and-thirtieth part of the annual produce, even in the highest year ever known, 1750, when the exports amounted to 1,500,220 quarters.* Since the publication, indeed, of that valuable work, the circumstances of this country have undergone very material changes. But still the quantities of grain imported, how astonishing soever in their comparative extent they may be, and however creditable to the commercial enterprise of this country, bear but a small proportion to the quantities required for consumption. Even in the year 1800, when our importations were made at an expense of £15,000,000, these did not, according to a computation of the national consumption published in the Farmers’ Magazine, exceed one-sixth part of the whole supply; and according to the statements of Mr. Benjamin Bell,† did not exceed an eighteenth. And yet it is not many years since it was the general belief, that our importations had risen to a third or a fourth of the annual consumption, and in some instances even to a half. It may be worth while to add, that these estimates of our expenditure during the year 1801, turn out to be below its real amount; for it was expressly stated by Mr. Pitt, in arguing that the Bank of England ought to pay in specie, (7th February 1803,) that £20,000,000 sterling had been sent out of the country to purchase corn during the preceding scarcity.
The first writer who undeceived the public with regard to the amount of our importations, was the ingenious author of the Corn Tracts, [1758, &c.;] and much additional information on the same subject, brought up to the year 1801, may be found in the pamphlets published some time ago by Lord Sheffield* and Sir Thomas Turton.† Inconsiderable, however, as our importations are, compared with the demands of our population, they afford the most striking illustration of the commercial resources of this country.
It appears from Sir Thomas Turton’s pamphlet, that it was against this description of traders that the outcry was most violent during the time of the London disturbances; a memorable example of the inconsistencies and absurdities into which the multitude may be betrayed by ill-intentioned men when under the pressure of want. For a refutation of the prejudice, I refer to what Sir Thomas Turton has written with excellent good sense on the subject.
With respect to the countries from which these importations were obtained, I cannot now enter into any particulars. I shall just remark, therefore, that among the great granaries from which they are derived, the best are those of the North of Europe: Poland, Prussia, Russia, and Denmark, particularly the two former. A small quantity of corn, chiefly in the state of flour, was brought from Canada and the American States. With regard to the last of these, we are informed by Lord Sheffield, that part of the tobacco grounds in Virginia now produce wheat, but that Pennsylvania, which formerly raised a surplus for exportation, now grows hardly sufficient for its own consumption. We have but once imported grain from Africa; that was in the year 1796, when 30,000 quarters of corn were brought from the neighbourhood of the Cape of Good Hope. The quality of this grain was such, however, that great part of it is understood to have been re-exported. None has been imported from any part of the Mediterranean, in consequence of the regulations to prevent the introduction of the plague into this country.—(End of interpolation from Notes.)
Of the Trade carried on by the Merchant Exporter of Corn for Foreign Consumption.
That this trade does not contribute directly to the plentiful supply of the home market is abundantly evident. Its influence, however, is not the less real, that the process by which it operates is indirect and circuitous.
The supply of the home market can never be plentiful, unless the surplus can, in all ordinary cases, be exported; a prohibition to export necessarily limiting the improvement and cultivation of the country, to what the consumption of its own inhabitants requires. The freedom of exportation enables it to extend cultivation for the supply of foreign nations.*
The effectual encouragement which a free exportation gives to agriculture, and of consequence its indirect tendency in process of time to reduce prices, are well illustrated by an anecdote mentioned by the author [Charles Smith] of the Three Corn Tracts, on the authority of a friend who was an eye-witness of the facts.1
“In Turkey, the Grand Vizier, about twenty or thirty years ago,”—the Corn Tracts, I believe, were first published [at London] in the year 1758,—“suffered a more general exportation of corn to be carried on, and more openly than any of his predecessors had done, insomuch that three hundred French vessels, from twenty to two hundred tons, were, on one day, seen to enter Smyrna Bay to load corn, and wheat was then sold for less than seventeenpence, English, a bushel, with all the expenses in putting the same on board, included.
“From these open proceedings the Janizaries and people took the alarm, pretending that all the corn was going to be exported, and that they, in consequence, must be starved; and in Constantinople grew so mutinous, that they could not be appeased till the Vizier was strangled, and his body thrown out to them.
“His successor took particular care not to split on the same rock, and would suffer no exportation at all; many of the farmers, who looked on the exportation as their greatest demand, neglected tillage, to save their rents, which in that country are paid either in kind, or in proportion to their crops, to such a degree, that in less than three years the same quantity of corn which, in time of export, sold for not quite seventeenpence, was worth more than six shillings, and the distresses of the people in Smyrna were such, that every bakehouse and magazine of corn was obliged to have a military guard, which took care that no one person should have more than a fixed quantity; and so strictly was this order observed, that an English ship, in the Turkey trade, was detained for sailing some time for want of bread.
“The ill consequences of these proceedings were not removed in many years, and to this day the fate of the Vizier, as an unfortunate good man, is lamented.”
(Interpolation from Notes.)—In such small states as those of Italy or Switzerland, an unlimited exportation might perhaps be attended with danger, though even there it may be questioned whether this would be the case, were it not for the extraordinary demand from other countries, occasioned by their absurd regulations with respect to the Corn-trade. In such agricultural regions as Great Britain and France, exportation can never furnish a ground for any serious alarm. To a case of absolute necessity, indeed, if such case should ever occur, all other considerations must of course give way. But it is only in such a case that the statesman can have any apology to plead for violating that sacred principle of justice, which entitles the farmer, like any other merchant, to send his commodity to the most profitable market. In our own country, however, the general tendency of our regulations has plainly been to increase agriculture, by not only permitting exportation, but by rewarding it with a bounty when prices are low, checking, at the same time, the importation of corn by heavy duties; and, on the other hand, to prevent a scarcity, by prohibiting exportation when prices are high, and allowing importation at an easy duty. Of our regulations on this subject, the last permanent one was that of 1791, by which the whole maritime part of England was divided into twelve districts, for the purpose of regulating the imports and exports of corn, and the various rates of duties; the maritime part of Scotland being in like manner divided into four districts, making in all sixteen. This statute further enacted, that the exportation and importation of corn at the port of London should be regulated by the prices at the Corn Exchange, and that an inspector of corn returns should be appointed.
Notwithstanding the strong and obvious objections to which these very complicated arrangements are liable, few legislative acts have received higher panegyrics from a particular description of writers than the Corn Act of 1791. “All the elaboration of diligence,” says Mr. George Chalmers, (who, by the way, is understood to have had a chief share in preparing the statute,) “and all the wisdom of experience, were employed in forming this Corn Act.”* And yet the same writer acknowledges in the last edition of his Political Estimate, that “a continued succession of unfavourable seasons had rendered nugatory its judicious enactments.”†
Without entering into any statement of details on this particular subject, I shall mention only the very striking contrast which our policy of late presents to what it formerly was; forcing importation into an island from which exportation was so long rewarded with a premium. In consequence of a change in our national circumstances, which I shall not here stop to investigate, those considerations which influenced the Legislature at the period when the bounty was first established no longer exist; and the apprehensions lest our landed gentlemen and farmers should lose by a superabundant produce, have been converted into an alarm lest they should be undersold in our own markets by foreign farmers, cultivating their lands at a smaller expense. Though, however, this change of circumstances renders the laws relating to exportation of less interest than they formerly were, a history of them, and the inquiries with which they are connected, must be at all times interesting. I therefore shall make no apology for stating a few facts and observations relative to a branch of trade which has given rise to so much discussion, both at home and abroad.
The idea of rewarding exportation with a bounty, seems first to have occurred during the reign of Charles II., although it has been very generally referred to a period somewhat later, (12th Charles II., 15th Charles II., and 25th Charles II.) By the 1st William and Mary, the bounties on the several sorts of grain were established on the same footing on which they subsisted till the year 1773. Dr. Campbell in his Political Survey of Great Britain, says, that “though this statute is generally considered as the first Bounty Act, the regulations which it contains are the very same with those of the 25th Charles II.”* Its evident design was to raise the price of corn, which, indeed, is expressly stated in the Act to be too low; and it is commonly understood to have been passed as a return to the landed interest, for their exertions in placing the crown on the head of King William. As the bounty, too, was confined to corn exported in English ships, it operated in increasing the shipping and sailors of the country; and, in fact, while the exportation continued, gave employment, from the quantity and bulk of corn, to a much greater number of vessels than any other trade. In conformity with this last view of the Bounty Act, the Abbé Galiani, who is sometimes disposed, like many other foreigners, to discover reasons of remote expediency for English enactments, which really did not influence the Legislature, says, that it was to encourage our shipping that this Act was passed.
The high price of corn in 1751, occasioned much tumult and riot in different parts of the island, and gave a new turn to the speculations of the politician on this department of trade, particularly with regard to the expediency of the bounty. The popular clamour became still louder in the years 1765, 1766, and 1767; and in every instance of dearth, these disturbances have gone on increasing in violence to the present times. Two remarkable alterations of our law in this matter deserve particular notice. The first of these is the Act 1773, which was conducted through the House of Commons by Mr. Burke. With respect to this Act, it has been justly observed, that it effected a virtual repeal of the Bounty Act, though it retained the language of that statute, in compliance with the prevailing opinions, which it is sometimes easier to betray than to conquer. It has accordingly been pronounced by Mr. Smith, in conformity with his own system, to be like the laws of Solon, if not the best in itself, the best which the temper and situation of the times would admit. The second of these Acts, the Corn Bill of 1804, plainly implies a dereliction of those general principles which influenced the Legislature in passing the Act 1773.
The policy of the statute encouraging exportation by a bounty, has been the subject of so much controversy since the year 1751, that I shall enter very slightly into the discussion, more especially, as the actual circumstances of the country now render it of comparatively little importance. It is highly extolled by the French Economists, by the author of the Tracts on the Corn-trade, by Mr. Arthur Young, and by Mr. Dirom. Mr. [Adam] Smith has exerted great ingenuity on the other side of the question, and has found a very able supporter in Mr. Howlett,* who, after having yielded to the prevailing opinions concerning its expediency, confesses himself a complete proselyte to the doctrines of Mr. Smith. An examination of the reasonings of this part of the Wealth of Nations will be found in Dr. Anderson’s Observations on the Means of Promoting National Industry, in the Supplement to Mr. Dirom’s Inquiry, by Mr. Mackie of Ormiston, and in the last two editions of the Essay on Population by Mr. Malthus, [1803 and 1806.] This last author is by far the ablest advocate for the bounty who has appeared since the publication of the Wealth of Nations; and although I am by no means prepared to adopt implicitly his own conclusion in favour of the wisdom of the measure, yet I think it must be admitted, that he has clearly pointed out more than one vulnerable part of Mr. Smith’s argument. Some of his objections to Mr. Smith have been acutely controverted in an able article of the Edinburgh Review for October 1804. But admitting in the fullest extent the ingenuity of these reasonings, they do not appear to me to amount to a complete justification of Mr. Smith for arguing, so entirely as he has done, on abstract principles, a question which is complicated with so great a variety of local and temporary circumstances, as that which relates to the policy of the bounty. The other two writers on the same side, Mr. Dirom and Mr. Mackie, are far less formidable antagonists of the bounty system; and they have both of them, particularly the latter, fallen into some very palpable misapprehensions of Mr. Smith’s meaning. But neither of them seems to deserve the very contemptuous language which has been employed towards them by their adversaries; nor are they unworthy of the attention of those who wish to have a full view of this question.
In proof of the beneficial effects of the bounty on exportation, it has been urged, that since the period of the Bounty Act there has been at once a greater uniformity in the prices of wheat and other grain, and a reduction in the average price; the general and regular improvement of agriculture which has been the consequence of this artificial enlargement of the market, having been more than sufficient to counterbalance that enhancement of price, which in years of plenty is necessarily occasioned by the increased exportation. The fact unquestionably is, that since the establishment of the bounty, during the remainder of the seventeenth, and the first sixty-four years of the last century, the average price of grain has continued to fall, and that probably to a much greater extent than is commonly imagined, the depreciation of money not having been always sufficiently attended to in estimating that reduction.
On this important fact, however, all parties are agreed, and whatever conclusion we may form with regard to its cause, it seems to establish incontestably one general proposition, that the prosperity of agriculture depends much more on the steadiness of an adequate price, than upon the high amount of the average price computed during any inconsiderable period of time. On the other hand, that this reduction in the price of corn has not been the consequence of that legislative measure, has been inferred by different writers from the following circumstances;—that the very same effect has taken place in France, where no bounties are given, but where, on the contrary, during by far the greater part of the period in question, exportation has been prevented by the strictest prohibitions; and that a similar reduction of prices during the eighteenth century, appears to have taken place in the other markets of Europe.
The argument against the bounty urged by Mr. Smith, is founded on those general principles of freedom which characterized his system. “Bounties upon the exportation of any home-made commodity are liable, first, to that general objection which may be made to all the different expedients of the mercantile system,—the objection of forcing some part of the industry of the country into a channel that is less advantageous than that in which it would run of its own accord; and, secondly, to the particular objection of forcing it, not only into a channel that is less advantageous, but into one that is actually disadvantageous; the trade which cannot be carried on but by means of a bounty being necessarily a losing trade. The bounty upon the exportation of corn is liable to this further objection, that it can in no respect promote the raising of that particular commodity, of which it was meant to encourage the production.”*
On a review of the arguments alleged on both sides of the question, Mr. Smith is led to conclude, “that the fall in the price of corn during the first half of the eighteenth century, must have happened in spite of the bounty, and cannot possibly have happened in consequence of it.”† And of his reasonings on this subject, an unqualified approbation has lately been expressed by Mr. George Chalmers, an author who is not in general much disposed to be partial to any of Mr. Smith’s opinions.
“Now these facts not only confirm the reasonings of Smith and Howlett, but evince that the bounty went directly from the pockets of the consumers into the purses of the brokers, yet without benefiting the growers. From the first establishment of the bounty till its recent cessation, owing to natural causes, upwards of seven millions of money have been paid by the public, not for a good purpose, but for a bad purpose. It has, moreover, created a continued contest, by a struggle between avarice and want. And, to the scandal of the better judgment of the nation, a probable good has been allowed for more than a century to outface two positive evils: the probable good was the supposed fructification of our fields: the two positive evils were the payment of seven millions of money, for making corn dearer in the home market, without contributing to the manurance of the soil.”*
For my own part, although I would not be understood to express any decided opinion in opposition to Mr. Smith’s conclusion concerning the impolicy of the bounty, and far less to acquiesce in the opinion of those who think, that in the present circumstances of this country, any artificial expedient of this sort is calculated to operate very effectually in invigorating our agricultural industry, I must own, that there are some steps of his reasonings which do not convey full satisfaction to my mind. That, in general, the Corn-laws of this country have contributed less to the advantage of the grower than to that of the trader in that article, I am induced to believe from a variety of considerations; and if it should appear that this observation applies in all its extent to the law which established the bounty, certainly the very strong terms in which Mr. Smith has censured that measure are in no respect reprehensible. But it does not seem fair reasoning to oppose to a measure of this kind the unqualified argument against bounties in general, that they force some part of the capital of a country into a disadvantageous employment. This principle, certainly, does not apply fully to the trade of corn, on account of the essential pre-eminence of agriculture over all other species of industry, and the fatal consequences which are inseparable from its decline. Mr. Smith himself owns, that agriculture labours in this country under disadvantages peculiar to itself; in consequence of which, a much smaller proportion of the national capital is attracted to that employment of industry, than would be under a more perfect system of Political Economy. If it could be proved, therefore, that the bounty tends to the encouragement of agriculture, the argument in its favour would, in my apprehension, be complete on the same sound principle on which Mr. Smith himself justifies drawbacks, as tending not to destroy the natural course of things, but to counteract those causes by which that natural course is disturbed. To those who reflect on the circumstances by which agriculture is essentially distinguished from all the other employments of industry, these observations cannot fail to appear with much additional force.
As far as I am able to judge, the general interests of all the different parts of the world would be best attained by leaving the trade of corn perfectly open,—supposing that the liberty of commerce were established in every other instance, and of consequence, that agriculture were free from the influence of those laws which give a preference to the industry of the towns over that of the country. But in the present state of Great Britain, whatever regulations can be proved to be really serviceable to the cultivator of the ground, cannot, in my opinion, be censured as deviations from the general principles of freedom, as long as this most important of all employments labours under so many burdens, inseparable perhaps from the constitution of modern society. It gives me much pleasure to observe the coincidence between these remarks and the following passage, which occurs in a new edition of Mr. Malthus’s Essay:—
“If things had been left to take their natural course, there is no reason to think that the commercial part of the society would have increased beyond the surplus produce of the cultivators; but the high profits of commerce from monopolies, and other peculiar encouragements, have altered this natural course of things; and the body politic is in an artificial, and in some degrees diseased state, with one of its principal members out of proportion to the rest. Almost all medicine is in itself bad, and one of the great evils of illness is the necessity of taking it. No person can well be more averse to medicine in the Animal Economy, or to a system of expedients in Political Economy, than myself; but in the present state of the country something of the kind may be necessary to prevent greater evils. It is a matter of very little comparative importance, whether we are fully supplied with broadcloths, linens, and muslins, or even with tea, sugar, and coffee; and no rational politician, therefore, would think of proposing a bounty upon such commodities. But it is certainly a matter of the highest importance, whether we are fully supplied with food, and if a bounty would produce such a supply, the most liberal political economist might be justified in proposing it, considering food as a commodity distinct from all others, and pre-eminently valuable.”*
To the same purpose, this author elsewhere observes, that, “if throughout the commercial world every kind of trade were perfectly free, one should undoubtedly feel the greatest reluctance in proposing any interruption to such a system of general liberty; and indeed, under such circumstances, agriculture would not need peculiar encouragements. But under the present universal prevalence of the commercial system, with all its different expedients of encouragement and restraint, it is folly to except from our attention the great manufacture of corn which supports all the rest. The high duties paid on the importation of foreign manufactures are so direct an encouragement to the manufacturing part of the society, that nothing but some encouragement of the same kind can place the manufacturers and cultivators of this country on a fair footing. Any system of encouragement, therefore, which might be found necessary for the commerce of grain, would evidently be owing to the prior encouragements which had been given to manufactures. If all be free, I have nothing to say; but if we protect and encourage, it seems to be folly not to encourage that production which of all others is the most important and valuable.”*
While, however, I acquiesce in the general spirit of these observations, and consider them as a complete answer to Mr. Smith’s reasonings against the bounty, in so far as these reasonings are founded on those abstract principles which conclude universally in favour of a free trade, I am by no means so sanguine as Mr. Malthus and the other advocates of the bounty, when they lay any considerable stress on this or any other artificial expedient, as a remedy against the present acknowledged disorder in our agricultural resources. I would not go quite so far as Mr. Howlett had done, and question, “whether the Corn Laws have occasioned one single acre to be cultivated which would not have been done if they had not existed.”† But I am fully satisfied that the influence of all legal regulations with regard to the importation and exportation of grain is perfectly trifling, when compared with the permanent and overbearing influence of the state of agriculture in the country. The actual disproportion in this country between the produce and the consumption, is an evil of too great magnitude to be corrected by a feeble palliative of this sort; and one of its worst consequences is to withdraw the attention of statesmen from those just and enlarged principles of freedom, by the gradual operation of which alone a remedy can be provided for such an evil. What these principles are, I have already, in different parts of this course, had occasion to point out.
Of the Trade of the Merchant Carrier or Importer of Corn for future Exportation.
The last branch of the corn-trade mentioned by Mr. Smith, is that of the merchant carrier, or importer of foreign corn, in order to export it again. Mr. Smith despatches this branch of the subject in a very few sentences, and I have nothing to add to what he has advanced with regard to it.—(End of interpolation from Notes.)
Miscellaneous Observations upon the Corn-Trade.
The reasonings which have been already stated on the subject of the Corn-Trade, seem abundantly to justify our doubts, whether the interference of legislators in this branch of commerce has not, in most instances, aggravated the evils which they were anxious to correct; and whether, on the whole, the welfare of a great agricultural nation, such as ours, would not be most effectually consulted by leaving the course of imports and exports to be regulated entirely by the interested speculations of individuals, according to the variable circumstances of the market. As I am always apprehensive, however, of the dangers which may be incurred by an unqualified adoption of general political principles, I would not be understood to deny, that cases may occur, in the revolution of seasons, in which it may be necessary for Government to co-operate actively in providing for the wants of the people, either by holding out bounties to importation, or by temporary regulations, calculated to economize the general consumption of the necessaries of life. The exceptions justified by such extreme cases imply, in truth, nothing defective or erroneous in our general principles, the soundness of which is sufficiently vindicated if they are conformable to the ordinary course of human affairs, although they may not admit of a universal application to every possible contingency. The number of these exceptions, however, may be expected gradually to diminish, in proportion as the arrangements of Political Economy, by becoming more comprehensive and systematical, provide a remedy for the apparent anomalies of nature, in the uniformity of her general laws. In the instance, for example, now under our consideration, there is every reason to believe, that little occasion would be left for extraordinary interpositions of the Legislature, if agriculture were uniformly to hold the pre-eminent rank to which it is justly entitled, among the various objects of national attention.
I have been led into these reflections by our late experience of the general distress occasioned, all over the island, by the failure of the crop of 1799, in consequence of the rains which continued almost incessantly during the spring, summer, and autumn of that year,—“a year,” according to Mr. Young, “unparalleled in the meteorological annals of Great Britain.” The activity with which Government availed itself, on this occasion, of all the means it possessed to obtain information from every quarter, procured, it may be reasonably presumed, more accurate returns concerning the actual extent of the scarcity than were ever collected in any former instance; and the zeal with which its efforts to alleviate or to remedy the evil were seconded by various public-spirited and enlightened individuals, gave a certain degree of uniformity and system, not only to public measures, but to the exertions of private beneficence. A short summary, therefore, of the most important facts and conclusions which were thus brought under general discussion, may, at some future period, be an object, perhaps, not merely of curiosity but of use; and even at present, when it must necessarily possess an inferior degree of interest, from the lateness of the events to which it refers, it will not (I flatter myself) be considered as forming an improper conclusion to the speculations in which we have been lately engaged.
Among other writers whose abilities were called forth by the scarcity of last year, was that indefatigable veteran, Mr. Arthur Young, at the distance (if I recollect right) of about forty years from the date of his earliest publications. His pamphlet (which is entitled The Question of Scarcity plainly stated ) is valuable chiefly as a record of the information which he received concerning the deficiency of the preceding crop, in consequence of letters of inquiry which he addressed to his correspondents in every part of the kingdom. It exhibits the authorities upon which he founded the opinions delivered in his examination before the Committee of the House of Commons, and, in this point of view, is unquestionably a document which deserves a place in the collections of all those who turn their attention to researches of this nature.
The result of Mr. Young’s inquiries led him to conclude, on the whole, that the deficiency of the crop of wheat (including both quality and quantity) amounted to more than one-third.
“The original letters,” he adds, “are all in my possession, and may be consulted by any gentleman who wishes to examine them. I have very little reason to doubt that the accuracy is as great as can reasonably be expected in such investigations; and the number of counties reported is so large, that I have no great apprehensions of any material error affecting the general average,—the particulars being so numerous, that the error on one side may probably be corrected by counter-errors on the other.”
By the deficiency of a crop, (it is to be observed,) Mr. Young means, the rate at which it falls short of an ordinary or average crop. An average crop, in the case of wheat, he states in his examination before the Corn Committee, at something between twenty-two and twenty-four bushels per acre. In his own private opinion, he intimates in his pamphlet, it might be stated at twenty-four bushels nearly; but he expressed himself to the Committee with a certain degree of latitude, in order to avoid any suspicion of a wish to exaggerate the deficiency of the crop in question.1
In truth, this deficiency, great as it is, falls short of what most persons expected beforehand, from the general aspect of the season. In England (we are told) no year was ever too dry for wheat,—a plant which thrives well in Spain, where rain has been known to cease for twenty-two months together; and in the Greek islands, where the heat, as Tournefort observes, perfectly calcines the earth.2
By many, both in and out of Parliament, the accuracy of Mr. Young’s estimate was disputed; and it was very strongly asserted by some, that the deficiency did not exceed one-fourth. Without, however, ascribing any superiority to this gentleman either in point of information or of general correctness, it must, I think, be allowed, that, in the present instance, his conclusions are entitled to a peculiar degree of credit, in consequence of the extensive scale on which his inquiries were conducted. It is extremely possible, after all, that they may be wide of the truth; but they certainly possess an authority, in the determination of the question now under consideration, altogether different from what belongs to any local observations, however rigorously exact they may be in all their details. I mention this circumstance, because farmers, and even country gentlemen, are but too apt, on occasions of this kind, to appeal obstinately to their own individual experience, in opposition to those more comprehensive results which they conceive to be influenced by views of self-interest, or the spirit of theory; forgetting that the same circumstances which bestow on practical knowledge so inestimable a value in managing the little concerns of agricultural improvement, have a tendency to bias or warp the judgment in whatever relates to the general interests of an extensive country, diversified by numberless causes both moral and physical. One testimony in favour of the foregoing estimate it may be worth while to mention: it is that of the Speaker of the House of Commons, who in his speech of March 6, 1800, states it as a fact now very generally admitted, that the deficiency of the preceding crop amounted to one-third.1
With respect to the deficiency in Scotland, Mr. Young expresses himself with more diffidence. “If the accounts,” says he, “which I have received in conversation, be correct, the deficiency in the wheat crop amounts to one-half. That in the oat crop,” he adds, “is stated to be the same.”
After collecting every possible information concerning the deficiency of the crop in 1799, an important fact remained to be ascertained with respect to the stock in hand at the period of the harvest. This was estimated very differently by different individuals. A very able and respectable writer, Mr. Thomas Davis, of Wiltshire, asserted, that the stock in hand was equal to six months’ consumption. “If there was left of the old stock at harvest only enough for three months, (and I say there was double that quantity,) where is the cause for alarm?”1
Other writers stated it at three months. But even this estimate, moderate as it is, when compared with the preceding one, will appear obviously, on a little consideration, to go beyond the truth.
In considering the quantity of the stock in hand at harvest as a resource against the scarcity to be apprehended from a scanty crop, one circumstance deserves attention, which has been frequently overlooked; that a certain stock in hand is absolutely necessary at that season of the year to supply the market till the new crop is ready for use. Mr. Young states this “as probably not less than one month’s consumption of the whole kingdom.” The only part, therefore, of the stock in hand, which can be supposed to come in aid of the deficient crop, is the excess of the old stock (if there was any such) above what is necessary and common; and consequently, if there existed at the harvest a stock equal to three months’ consumption to form an object of commercial speculation, the whole stock then in hand must be understood to have been equal to four months’ consumption. The probability of such a supposition is strongly opposed by the extent of capital which such commercial speculations would necessarily require.
The whole population of England being then computed at 6,000,000. Since that time, the consumption of wheat in proportion to that of oats must have increased greatly; and the increase of population would appear to have been considerable. Mr. Young supposes it at present to amount to 10,000,000. His estimate is probably above the truth; but it is sufficiently accurate for the present argument. Of this number, Mr. Young supposes 8,000,000 at least to feed on wheat; and the other 2,000,000 to live on barley and oats. These numbers (he tells us) he fixes on, in order to avoid all charge of exaggeration; intimating, at the same time, that in his private opinion, the number of wheat eaters is in reality much greater, and that those who, in common times, live on barley and oats, are probably nearer to one than to two millions.
The annual consumption of wheat was estimated by the same gentleman (Mr. [C.] Smith,) from a careful collection and comparison of different authorities, at eight bushels per head, and that of oats at twenty-three;* and the inquiries of subsequent writers seem abundantly to confirm the justness of his conclusion. Mr. Young supposes, therefore, that at present eight millions of people consume as many quarters of wheat.
In August 1799, the price of wheat (upon the average of England) was above nine shillings the bushel, or £3, 12s. the quarter. Two millions [of quarters] at that price come to £7,200,000—a capital which it is scarcely conceivable should be scattered over the country, ready to be applied to a speculation so hazardous in the issue. Indeed, we may venture to assert, that, in by much the greater part of the kingdom, no such speculations could be made by millers and mealmen, either in the way of keeping or of buying. The truth is, that the number of those who are tempted to speculate when prices are very high, is at all times so inconsiderable that it may be laid down as a general fact, that speculative hoarding is proportioned to cheapness. Such speculations, too, it must be remembered, when attempted so late as the month of August, have but a small sphere to act in; the quantity of corn in the whole kingdom then being small, and every part of it necessarily possessing a share of that small portion. As for farmers, a still more direct appeal to the evidence of the senses:—“Every person,” says Young, “who is in the habit of travelling over England, knows perfectly well, that for one distriet where old wheat stacks abound in harvest, there are ten where you will look in vain for more than a few solitary ones in the hands of here and there a great farmer.” The assertions to the contrary in the evidence brought before Parliament, come from individuals, who, living in parts of the kingdom where farms are generally large, (such as Wiltshire and Dorsetshire,) have absurdly extended the result of their local observations to the island at large. Such is the assertion of Mr. Davis of Wiltshire, that there was left, of the old stock, at harvest 1799, enough for six months’ consumption,—although during that year the price had been ten shillings a quarter beyond the average, notwithstanding the importation of nearly half a million of quarters.1
Another circumstance which has frequently contributed to mislead individuals in their statements on this subject, is the business of thrashing wheat, which, in the neighbourhood of great towns where there is a regular demand for straw at all times, is often delayed till the spring and summer. The fact, however, undoubtedly is, that in by far the greater part of the kingdom (excepting in the case of the few farmers who are rich enough to speculate in price) wheat is thrashed during the course of the winter, when cattle thrive better on straw than they would do in spring. In winter 1799-1800, this must have been still more generally the case than in ordinary seasons, on account of the enormous price which straw yielded everywhere; which price (as Mr. Young has observed) must have operated, in addition to the high price of the grain, as a direct premium upon thrashing.
Of what happens in ordinary years a judgment may be formed from a fact which Mr. Young states with confidence; that in two years at least out of three, the summer price is higher than the winter,—a fact which is indeed no more than might have been expected a priori, from the prevalence of small farms in England, and from the necessity which small farmers are under, of carrying their corn early to market.
The following Table of the average prices for the year following the harvest of 1798, is extracted from Young,* and illustrates strongly the foregoing observations:—
This Table (admitting it to be correct) affords a demonstration that the number of great farmers in England, and of individuals able to speculate in grain, far from being so great as to put it in their power, on an average of the kingdom, to raise the price immediately after a scanty crop beyond its just proportion, is by no means sufficient to counterbalance the effects produced by the abundant supply of the markets, arising from the necessities of the little farmers. The consequence is, that the people do not put themselves on short allowance so soon as they ought, (their consumption being always more or less regulated by the price,) and the evil increases as the year advances. It would, in truth, be incomparably greater than it now is, were it not for those who are stigmatized with the odious name of Monopolizers, whose capitals enable them, to a certain extent, to equalize both price and consumption through the whole year, by withdrawing grain from the market when prices are low, and restoring it when prices are high. If the capital employed in such speculations was still greater, and divided among a greater number of capitalists, the remedy would be proportionally more complete.1
The Table just now exhibited deserves attention on another account, as it affords an additional argument to prove that the stock on hand at harvest 1799, has been, in general, greatly overrated. On a comparison between the average price of this year, and the average price of the twelve years preceding, it appears that the former was just ten shillings a quarter higher than the latter. After such a price, how is it conceivable that the stock on hand should have so far exceeded that which is found, in ordinary years, to exist at the same season?
The great and rapid fall which has taken place lately in the prices of grain, (July 1800,) furnishes no argument against the foregoing conclusions. The unprecedented height to which prices had risen, drove the people to the use of substitutes for their ordinary food, and to measures of economy formerly unknown. The demand was, of course, proportionally slackened, and a reduction in the consumption sunk prices far below that level at which they must have kept if the habits of the people had continued the same as in ordinary years. If these habits had changed completely at an early period of the winter, prices could not have remained so long at the enormous height which they reached.
To these considerations must be added the immense and unexampled quantities of grain imported into the island, and the near prospect we now enjoy of an abundant harvest.1 No inference can therefore be drawn from the present fall of prices, either to disprove the reality of the scarcity, or to justify the clamours which have been raised against those pretended monopolizers to whom the distressing of the poor have been most uncandidly and iniquitously ascribed.
It may appear to some to be superfluous to dwell so long on the details of a scarcity which is now over. But the history of such a year as the last is worth an hundred theories; and, if we should ever be again visited by a similar calamity, it may be of much use to us to have the means of calling to mind, not only the expedients which were suggested for lessening the pressure of the evil, but the prejudices which operated to mislead the public opinion. The same prejudices would not fail to be revived in the same combination of circumstances; and it is only by reflecting on them calmly, while the subject is yet fresh in our recollection, that we can hope to fortify our judgments completely against their future influence.
Among these prejudices, there is none more pernicious in its effects, and, at the same time, none more invariably prevalent in every season of scarcity, than an idea,—that the scarcity is not real, but created by jobbers and monopolizers. Such an idea is but too apt to occur, of itself, to that order of men who suffer the most severely from extravagant prices; and hence their disposition to retaliate by riot and violence upon the supposed authors of their sufferings. How short-sighted, therefore, were the views of those individuals who, from a laudable anxiety to tranquillize the public mind, were led, on the authority of one or two districts, to foster those misapprehensions which it was their duty to correct; by asserting both in and out of Parliament, that “the deficiency of the harvest 1799 did not exceed one-fourth, and that it was more than covered by the stock in hand!” This language was held by many who ought to have known better; while the statements of those who spoke the truth were stigmatized as approaching to sedition and mutiny.
I am abundantly sensible, that the means we possess at present of estimating the deficiency of a given crop, by information collected from individuals in different parts of the country, are far from being completely satisfactory; and that farmers may be justly suspected, on such an occasion, of a disposition to accommodate their calculations to their own interested purposes. This is undoubtedly an evil, in so far as their representations have a tendency to advance the price; but it is an evil incomparably less than might be occasioned by a contrary error; and in comparing the information thus collected, allowances are always made for such exaggerations.
It were much to be wished, that in a year of scarcity, the extent of the evil, all over the kingdom, could be ascertained with accuracy; and, I have no doubt, that more effectual means for that purpose might be devised than have yet been employed. But it is a difficult task for Government to decide, when such a calamity occurs, how to proceed; as the very inquiries which are instituted with a view to remedy the evil, have inevitably, in the first instance, the effect of adding to its magnitude. If no inquiry is made, ministers are accused of negligence; and, after it is undertaken, they are blamed for that enhancement of price which is the natural consequence of a general alarm.
The inconveniences of such inquiries are much increased in this country, by the circumstance of their being commonly conducted through the medium of Parliamentary Committees; by which means the factions of all descriptions are inevitably made parties to the discussion, and political passions and prejudices are superadded to those which are necessarily connected with a subject so deeply interesting to all, and of which so few are competent to judge. Mr. Young suggests, that they ought to have been made through the medium of the Board of Agriculture; and indeed, if the members of this society are not to be honoured with the public confidence in matters so intimately connected with the object of their institution, it will not be easy to justify the national expense which has been already incurred by the establishment.
The most effectual method of guarding against the alarm occasioned in a year of scarcity, by those inquiries which are necessary for ascertaining the actual state of the country, would be to make the same inquiries annually. In truth, they ought to be made regularly, under every Government, not only with a view to those interpositions which may be occasionally requisite on the part of the statesman, but as the means of ascertaining with accuracy, some of the most important facts, which enter as elements into all our reasonings connected with this article of Political Economy. The relation, for example, between price and the quantity of produce, is a point of a very interesting nature, on which little or nothing satisfactory has been hitherto advanced, and on which various speculations have obtained credit, which, there is reason to believe, have never been brought fairly to the test of experience. To this relation I have had occasion already to refer in different parts of this argument; and as it is intimately connected with the subject now under consideration; I shall make no apology for explaining a little more fully the scope of the question to which I allude.
I had occasion to take notice already of an erroneous opinion not yet completely exploded among political writers, that, in the case of a scanty harvest, the rise of price may be expected to be in the same proportion with the deficiency;* that the abstraction, for example, of a fifth or a tenth from the general supply, will raise the price a fifth or a tenth above the common rate; and I quoted what seems to me a very just observation of Necker’s, that the abstraction of a fifth or a tenth, or of a much smaller portion, may, in certain circumstances, raise the price beyond all bounds.
Mr. Young, in his last pamphlet,† is not very explicit on this point. In one passage (p. 53) he remarks, that “the experience of centuries may tell us, that the price of corn will not rise in exact proportion to the deficiency.” In another, (speaking of the enormous prices during the winter 1799-1800, after a crop supposed to be deficient by one-third,) he states it as an obvious principle, (p. 71,) that “a deficiency in the crop of thirty-three per cent. ought not to be attended with a rise of one hundred per cent.;” without, however, intimating on what grounds he rests this assertion, or even explaining in what sense he means the assertion to be understood. When it is said that “a deficiency in the crop of thirty-three per cent. ought not to be attended with a rise of one hundred per cent.,” does the author mean, that this rise is above the rate which the experience of a similar deficiency in former instances might have led us to expect? or that this want of correspondence between the actual rise and the degree of deficiency, indicates an undue avarice in the different classes of corn-dealers? From the clause which immediately follows, the latter interpretation would seem to be the more probable; for we are told, that “some measures ought to be adopted, difficult as they may be, to prevent an inequality so oppressive to the poor.” And yet I don’t know how to reconcile these words with the sentence immediately preceding, in which it is asserted, that “the high price at present arises entirely from the seasons.” The whole paragraph is as follows:—
“The high price at present I consider as entirely arising from the seasons; but as a deficiency in the crops of thirty-three per cent. ought not to be attended with a rise of one hundred per cent., some measures ought to be adopted, difficult as they may be, to prevent an inequality so oppressive to the poor.”1
Upon this subject (the relation between price and the quantity of produce) there is a very curious passage in the works of Davenant, of which it is proper for me to take notice both on account of the high reputation of that excellent writer, and of the stress which has been laid upon it by different authors from his time.
“It is observed that but one-tenth defect in the harvest may raise the price three-tenths; and when we have but half one crop of wheat, which now and then happens, the remainder is spun out by thrift and good management, and the use of other grain; but this will not do above one year, and would be a small help in the succession of two or three unseasonable harvests; for the scarcity even of one year is very destructive, in which many of the poorest sort perish, either for want of sufficient food, or by unwholesome diet.
“We take it,” the same writer continues, “that a defect in the harvest may raise the price of corn in the following proportions:—
“So that when corn rises to treble the common rate, it may be presumed that we want above one-third of the common produce; and if we should want five-tenths or half the common produce, the price would rise to near five times the common rate.”1
The passage now quoted may be found in Davenant’s chapter, “On the Land of England and its Product;” in which, as in other parts of his Essay on the Balance of Trade, he professes to found his speculations on certain calculations communicated to him by Mr. Gregory King,—a person of whose skill in Political Arithmetic he speaks in the strongest terms, and in the opinion of the ablest judges, most deservedly. Whether this particular observation rests on his own authority or on that of Mr. King, does not appear from anything that he has stated. I confess I should rather lean to the former supposition, from the manner in which the observation is introduced; although I find it generally referred to Mr. King by modern writers on Political Economy,2 I mention this circumstance, because Mr. King’s skill and accuracy which have become proverbial among this class of authors, serve to account for the facility with which this very extraordinary statement has been received.1
In what manner the numerical proportions specified in Davenant’s Table were obtained we are not informed, whether they were inferred from any train of reasoning a priori, or were deduced from a series of actual observations on the relation between price and produce. As the former of these suppositions, however, seems to be altogether absurd, we may safely conclude, that (however inaccurate and imperfect the induction may have been) it was by some of the latter description that the conclusion was formed.
We are also left in uncertainty about another very important particular, whether the proportions specified by Davenant are such as are observable in particular markets; or whether they are meant to exhibit the relation between the national produce and the average price of grain over the whole country. There, too, it seems reasonable to conclude in favour of the second supposition; for the author speaks of the effect produced by a defect in the harvest, not of those arising from a failure in the supply which a particular market may occasionally afford.
There is yet another point, about which I am more at a loss in conjecturing Davenant’s meaning. Taking for granted that I am right in the last interpretation which I have now given to his words, Does his proposition state the average price through the whole year, or the average price at a particular period? And in the latter supposition, what period may we presume this author to have had in view? For some time after the harvest, it seems impossible (in the case of a deficient crop) that any exact relation should obtain between the degree of deficiency and the augmentation of price; for how should the extent of the evil be guessed at with any accuracy? And afterwards we almost invariably find prices changing from month to month, in consequence of collateral circumstances, through the whole progress of the year.
I am inclined therefore to think, that the price referred to by Davenant is the average price of the whole year over the whole kingdom. But surely at the time when that author wrote, returns of prices were not made with such accuracy as to furnish a ground-work for any such calculations. Even at present the corn returns are acknowledged to be inadequate for the purpose;1 and till the 23d and 31st of George III., no plan for ascertaining the average price of corn had been thought of which could afford any tolerable approximation to the truth.2
Nor is this all. Supposing the proportions assigned by Davenant to have been just at the time he wrote, what reason have we to conclude that the same proportions obtain at present? On the contrary, have we not the best reasons for inferring, that if they were just then, the case now must be widely different? How great must have been the effects produced by the gradual emancipation of the inland trade of corn from the fetters imposed by the old prejudices against forestallers and regrators?—By the increased capital now employed in this branch of commerce?—By the facility and economy in the circulation of grain, arising from the canals with which the country is everywhere intersected?—By the substitutes for bread, and the other improvements lately made in the art of nutrition?—not to mention the various fluctuations in our policy concerning importation and exportation. During the extreme dearth of last winter, another circumstance operated, the effects of which it is plainly impossible to subject to any rule; I mean the exertions made in favour of the poor by the more opulent classes of the community.* From overlooking this contingency, Sir James Steuart was long ago led to say, that in the case of the necessaries of life there is a limit determinately fixed to price by the faculties or means of the lower orders. This at least he lays down as a maxim in an industrious country; for he acknowledges that the contrary may happen where multitudes depend on the charity of others. His reasoning on the subject is not undeserving of our attention.
“The number of buyers of subsistence nearly determine the quantity sold; because it is a necessary article, and must be provided in a determinate proportion for every one; and the more the sale is frequent, the more the price is determinate. Next, as to the standard: this I apprehend, must depend upon the faculties of the buyers; and these again must be determined by the extent of those of the greatest number of them; that is to say, by the extent of the faculties of the lower classes of the people. This is the reason why bread, in the greatest famine, never can rise above a certain price; for did it exceed the faculties of the great classes of a people, their demand must be withdrawn, which would leave the market overstocked for the consumption of the rich; consequently, such persons who in times of scarcity are forced to starve, can only be such whose faculties fall, unfortunately, below the standard of those of the great class. Consequently, in countries of industry, the price of subsistence never can rise beyond the powers to purchase of that numerous class who enjoy physical necessaries; consequently, never to such an inordinate height as to starve considerable numbers of the people,—a thing which very commonly happens in countries where, industry being little known, multitudes depend merely on the charity of others, and have no resource left as soon as this comes to fail them.”1
As this reasoning proceeds on the supposition that the poor have no resources but in their own industry, it is plainly inapplicable to the history of the late scarcity, when such unexampled exertions were made, in every part of the country, for the assistance and relief of the lower orders. In consequence of these exertions, the competition was kept up much beyond what the unassisted faculties of the poor could have produced; and the operation of those circumstances was fortunately checked, which, if things had been left to follow their own course, would have limited prices, long before they had approached to the height which they reached. Numbers must have been found to perish for want of food; and a melancholy remedy would have been found against the exorbitancy of price in a diminishing competition.2
Before concluding this subject, I shall touch very slightly on some of the most important measures which were adopted or proposed as palliatives of the general distress.3
The historical sketch which I have now finished relative to the scarcity after the harvest of 1799, appeared to me to be the more necessary, that from a variety of circumstances there is reason to apprehend, that occasions may again occur (not, it is to be hoped, accompanied with the same aggravated difficulties) when the benevolent interposition both of the Legislature and of individuals may be necessary for the assistance of the people. It seems now to be universally admitted, that the advancement of cultivation for some time past has by no means kept pace with our growing numbers; and the dependence of this island on other countries, for the means of subsistence, during an uninterrupted series of years, has been justly considered as a most alarming fact, by all who are able to judge of the best interests of the nation. To the effects produced by our growing population, must also be added those which result from the astonishing increase of horses during the last thirty or forty years. In such circumstances any considerable deficiency in a single crop, must necessarily produce the most serious inconveniences.
The increase of population undoubtedly operates powerfully by the demand it occasions, to provide an adequate supply; but experience has shewn that this is counteracted by various causes, particularly by the increased demands for the products of grass, occasioned by the immense wealth of the kingdom. The multiplication of enclosures and other agricultural improvements, though they cannot fail to diminish greatly the evil, do not as yet promise a speedy and effectual remedy.
The wastes and commons of the kingdom (it has been observed by many) afford ample resources for a much greater population than we possess; and the remark is perfectly just. Every exertion for their improvement may be ranked among the wisest national measures; and, so far as the end can be accomplished, the most solid of all additions is made to the independent wealth, and to the real greatness of the empire.
In the meantime, some measures are called for, the operation of which may be more immediate, and which, without interfering with other more general schemes of utility, may add to the resources which we can at present command.
Of these, the most effectual is to reconcile the poor, as much as possible, to those cheaper modes of sustenance, which the ingenuity of scientific men, stimulated by the pressure of the times, has suggested. Improvements of this sort in their ordinary cookery may reasonably be expected, as one of the consequences of those public kitchens which are now so prevalent in every part of the kingdom; and although alterations, such as affect the general habits of a people, must, of course, be gradual, it ought to be remembered, that every step which is gained in introducing a wholesome and nourishing substitute for bread, forms an important accession to the mass of material opulence.
In the country, the general use of milk and potatoes affords a resource of still greater importance. If every country labourer had his potato ground and a cow, the extremity of want would be as little known as it is said to be among the lower orders in Ireland. The peculiar advantages attending potatoes as a food for the body of the people, are well known; and what inestimable advantages a poor family may derive from the possession of a cow, may be learned from the Memoirs published by Lord Winchelsea. Mr. Young informs us, that of seventy labourers about Burley having gardens and grass for one or two cows from this nobleman, only two widows have applied, on occasion of the scarcity during the winter of 1799-1800, for parochial relief.
One measure of unquestionable efficacy might be easily carried into execution, to prohibit, by legislative authority, all parochial relief in any other mode than by potatoes, rice, or soup. This measure has been recommended not merely as a temporary expedient, but as a permanent regulation;1 and it would certainly produce important consequences. It would secure an extensive cultivation of potatoes, or a great and regular import of rice; and it would operate irresistibly in altering the habits of the lower orders, in some particulars, equally prejudicial to themselves and to the public.
It is undoubtedly painful to mention plans which seem to imply new economical arrangements on the part of the inferior classes of the community; but nothing that has been hitherto said affects their real comforts, and, in truth, tends only to substitute what they may regard as a more homely plenty, instead of the scanty enjoyments of their accustomed fare. At any rate, the circumstances of the country (from causes which I shall not stop now to investigate) recommend imperiously some alteration in our national modes of subsistence, more especially as we find a similar reform likely to gain ground among those whom we have been taught to regard as our national rivals and enemies.
The following facts (which I mention on the authority of Arthur Young, a writer who will not be accused of partiality to the French Revolution,) is not unworthy of attention at the present moment. It is extracted from a pamphlet published as lately as March 1800.
“The farming bailiff I sent to the Duke of Liancourt ten years ago, is now in London, having left France but a fortnight, and has given me many accounts of French husbandry; one circumstance of which deserves notice, that every scrap of waste and neglected land is converted into little possessions by the poor, and cultivated most assiduously; much,” it is added, “by means of potatoes.”1
I cannot help adding here, (although the observation is not immediately connected with our present subject,) that in years of moderate plenty, a very great part of the distress experienced by the lower orders in this island, must be ascribed to their own pernicious habits; habits, however, which, I am afraid, are likely long to remain the subject of our unavailing regrets. It is remarked by Dr. Currie in his Medical Reports, that “the want of a diet sufficiently nutritious is doubtless one of the causes that promote the typhus and other diseases among our poor. . . This,” he continues, “does not seem to arise in general from the price of their labour being inadequate to furnish such a diet, but from their ignorance in the most advantageous modes of cookery, and still more from their indulging in articles that consume their means without adding to their sustenance. In the 1800 cellars in Liverpool, there are many in which animal food is not tasted more than once a week, but there are very few in which tea is not drunk daily,—it is often indeed drunk twice a day. The money spent on tea,” the same author adds, “is worse than wasted. It is not only diverted to an article that furnishes no nutrition, but to one that debilitates the empty stomach, and incapacitates for labour. Hence the vast number of dyspeptic complaints among our patients of the public charities, which are almost all to be traced to the use of tea or spirits, often indeed assisted by depression of mind.”
The miserable effects produced by the unfortunate appetite for intoxicating liquors, so prevalent among the lower orders of this country, have been often discussed. I shall not attempt to investigate its origin, nor to ascertain how far it ought to be regarded as a cause, or how far as an effect of their poverty. It is certainly much more easily explicable than the origin of that appetite for tea which is now become so general among the poorest classes of the community both in Scotland and England. That it is an unfortunate circumstance in many respects, and which justly deserves the reprobation which Dr. Currie bestows on it, must be granted by all;—but although something may be fairly ascribed to the ignorance and want of foresight, and absurd imitation of those who indulge themselves in this expensive and hurtful beverage, is there not reason to apprehend, that here too, as in the case of spirituous liquors, the source of the evil lies deeper than is generally apprehended? A late writer who has stood forward as an advocate for labourers in husbandry, has asserted that “teadrinking is not the cause, but the consequence of the distresses of the poor;” and his observations on the subject (although I would not be understood to subscribe to them in their full extent) seem to me not undeserving of attention.1
The reasonings of Mr. Davies receive some confirmation from the fact, that in other instances where the distresses of the poor have been great, they have been led to betake themselves to similar resources. In a very interesting account published some time ago, of the management of the poor at Hamburgh, we are told that previous to the enlightened attempts that have been lately made for their relief, “the indigent classes in that city had been habituated to live almost entirely on a miserable beverage which was called coffee, and sold in messes, with about half-a-pound of indifferent bread. This wretched substitute for food they took twice a day.”1 It is pleasing to add, on the authority of a Report published in 1798, that by the introduction of Count Rumford’s soups, a saving of nine parts in sixteen, or rather more than half the former expense of their food, has been gained in the maintenance of the poor at Hamburgh, while a visible improvement in health and strength (particularly in the case of children) has accompanied this reformation.
A very melancholy fact which has been mentioned by Dr. Beddoes in one of his medical publications, adds to the weight of some of the foregoing considerations. What I allude to is the use of opium among some descriptions of our poor. “Whether,” he observes, “it was first taken to recruit the labourer after excessive toil, or occasionally to cheer the gloom of despondence, or to make up the deficiencies of that abominable water-gruel and potato diet, by which the joyless being of so many pale, meagre, shivering women and children is prolonged, I am not informed. I had known,” he adds, “the fact for some time, and lately received the following account from a medical observer.”2
I shall not draw any particular inference from these facts, but must be allowed to remark, that when such habits become generally prevalent, they justify the conclusion, that whatever share of blame may be due to the individuals who adopt them, all is not right in the Political System.
[* ] [Wealth of Nations, Book IV. chap. v.; Vol. II. p. 263, seq., tenth edition.]
[1 ] Pp. 144, 145. [Edition 1766.]
[* ] [Wealth of Nations, Book IV. chap. v.; Vol. II. p. 310, tenth edition.]
[* ] [Wealth of Nations, Book IV. chap. v.; Vol. II. p. 292, tenth edition.]
[* ] [Ibid. p. 295.]
[1 ]Théorie de Luxe, Tom. I. p. 5, quoted by Young in his France, p. 482.
[1 ] Hume, Vol. II. p. 126.—Dirom, p. 29.
[1 ] Erskine’s [Institutes,] p. 488.
[2 ] Eden, On the Poor, Vol. I. p. 18.
[1 ] Smith, Vol. I. p. 277.—[Book I. chap. xi. Vol. I. p. 288, tenth edition.]—See the Table of Prices in the Wealth of Nations, [Vol. I. p. 398, seq.]
[1 ] Eden, On the Poor, Vol. I. p. 60, seq.
[* ] [P. 182, seq.]
[† ] [Ibid.]
[2 ] Vol. I. p. 277, Irish edition.—[Book I. chap. xi.; Vol. I. p. 288, tenth edit.]
[* ] [Ibid. p. 309.]
[† ] [The preceding sentence stood originally thus:]—“Nor is it unamusing to those who reflect on the unrestrained abuse which the circumstances of our own times have so long encouraged in the ignorant and unprincipled, against the best benefactors of the human race, to perceive the secret influence which the writings of a Turgot and a Smith begin to assume over the councils of nations.”
[* ] [In the Notes taken of this course in a subsequent year by Mr. Bridges, another Report of a Committee of the House of Peers is referred to, as having been quoted by Mr. Stewart;—that, to wit, on the Dearth in 1799-1800. This, however, it is not thought necessary to adduce articulately.]
[1 ]Annals of Agriculture, Young’s France, p. 483.
[1 ]Nouvel Abrégé Chronologique de l’Histoire de France, T. H. pp. 81-184.
[2 ] Dupont, p. 86.—[Œuvres de Turgot, Tome I. p. 95.]
[* ] [Œuvres, Tome VI. pp. 120-291.]
[3 ] Condorcet, p. 49.
[† ] [Œuvres de Turgot, Tome I. p. 99.]
[1 ] He had before been appointed Minister of the Marine, but held the office only five weeks. Abrégé Chron. Vol. II. p. 178. Dupont, p. 124.—[Œuvres de Turgot, Tome I. p. 145.]
[2 ] Condorcet, p. 73.
[* ] [See Œuvres, Tome VII. p. 10, seq.]
[1 ] “Se reservant au surplus sa Majesté, de donner des marques de sa protection spéciale, à ceux de ses sujets qui auront fait venir des blés étrangers dans les lieux du Royaume où le besoin s’en seroit fait sentir; n’intendant sa Majesté statuer quant à présent et jusqu’à ce que les circonstances soient devenues plus favorables, sur la liberté de la vente hors du Royaume.”—[Œuvres, Tome VII. p. 27.]
[2 ] Necker.
[* ] [I have not been successful in finding the speech in the place designated. The edition which I have examined is dated London, 1766.]
[* ] [The original will be found in the Dictionnaire Philosophique, Art. Blé, Sect. iii.]
[1 ] Young’s France, p. 482.
[1 ] “Les accaparemens sont la premiere cause à laquelle la multitude attribue la cherté des grains, et en effet on a souvent eu lieu de se plaindre de la cupidité des spéculateurs.”
[* ] [Trave’s in France, p. 477.]
[* ] [Ibid. p. 476.]
[1 ] P. 293.
[1 ] Young’s France, p. 479.
[* ] [Travels in France, p. 485, note.]
[* ] [This calculation Sir James Steuart takes from a previous part of his work, Book I. chap. viii.; Works, Vol. I. p. 53, seq.]
[* ] [Political Œconomy, Book I. chap. xvii.; Works, Vol. I. pp. 143-146.]
[* ] [Ibid. pp. 148, 149.]
[* ] [Ibid. pp. 149, 150.]
[1 ] I state this on the authority of Vaughan, for I have not been able to find the passage in Necker.
[2 ]Sur La Législation des Grains, p. 58.
[* ] [Travels in France, p. 484, seq.]
[† ] [Wealth of Nations, Book IV. chap. v.; Vol. II. p. 318, tenth edition.]
[* ] [P. 47, seq. et alibi.]
[* ] [Part VI. chap. ii. sect. 2, sixth and later editions.]
[† ] [Account of the Life and Writings of Adam Smith, 1793, sect. iv.; infra, Vol. X. p. 64.]
[1 ] Lord Kenyon.—See Ferguson’s Memorial.
[* ] [Book IV. chap. v.; Vol. II. p. 309, tenth edition.]
[1 ] Mr. Burke.
[2 ] See the Newspapers of the above date.
[1 ] From the Star for 4th August 1800; but at second hand, but from what original newspaper is not stated.
[1 ] From the Morning Chronicle, August, 1800.
[* ] [1800? No reference for this case has been given.]
[1 ] [Travels in France,] pp. 480, 481, note; [not an exact quotation.]
[1 ] “London Flour Company.”—“The Earl of Liverpool rose, he said, to move two or three clauses, with a view to satisfy the minds, and quiet the apprehensions of those who seemed to be alarmed at the idea of the Company having so long a term of duration, before they could be dissolved, as ten years; the first clause, therefore, that he should move, was a clause to enable his Majesty, with the advice of his Privy Council, to dissolve the said Company at six months’ notice, whenever it should be made appear to him that they had abused their powers, or been guilty of practices injurious to the public; and to make room for that clause, he would previously move to leave out all the words of limitation, and to insert the clause he had drawn up in place of them.—Agreed to.
“The next clause his Lordship said he should move, went to put an end to the jealousy stated to prevail, lest the Company should become corn merchants and corn importers, which they themselves professed they had no intention or inclination of doing, and which, indeed, the very words of the Bill would be found not to warrant. As, however, it must be thought right that the Company should have a power to sell their damaged wheat, or wheat under particular circumstances, in the clause that he was about to move, the Company were restricted from selling more than 1000 quarters in any one week. His Lordship moved a clause to that effect, which was agreed to.
“The third clause which he meant to introduce, was to gratify the wishes of the bakers respecting the standard wheaten bread. His Lordship said it was a singular circumstance, that it was asserted that such bread was not suited to the taste of this vast metropolis, though speaking with respect to the common people, it was fitted for individuals from all the different provinces and counties in the kingdom, in many of which no other than household bread was ever tasted. Yet these very individuals, if the fact were true as asserted, changed their taste on coming to town, and nothing, forsooth, but fine white bread could be relished by them, though according to the opinion of many judges, it was a worse and less wholesome bread than the brown bread. His Lordship said, however, as the assize of bread stood at present, the standard wheaten bread could not be made by the common baker, and therefore the bakers apprehended that the sale of brown bread near their shops would lessen their custom, as it would be substituted in lieu of their fine bread. He owned, he thought, there was some weight in this apprehension, though the effect of it would be trifling indeed, as he had seen from a variety of calculations upon the subject. He would, however, move a clause, enabling the bakers to make the standard wheaten or household bread, in the same manner as the Company were authorized to do by the Bill, by enabling the Magistrates to set an adequate assize thereon. This would add to the competition, and at the same time that the increased consumption of the household bread would lessen the consumption of the fine bread, as it would go farther, so would it, in a certain proportion, diminish the necessity for so large an importation of foreign wheat, which certainly was an object extremely desirable. Having thus explained the object of the clause, his Lordship moved it, and it was agreed to.”
“The Earl of Liverpool said, he wished to say but a very few words: and first he declared, that after the fullest consideration of the Bill in every point of view, he was satisfied that the principle was right, and he trusted that under the provisions of the Bill and the clauses that he had moved, not only that all alarm and apprehension of danger from it would be set at rest, but that the effect of the measure would be found to be what the gentlemen who projected sincerely meant it to be, of great use and advantage to the public. He would therefore move that the Bill be read a third time, The Bill was read a third time, passed, and ordered to be sent down to the Commons, with the amendments.”—[Cut from a Newspaper, but no reference given.]
[* ] [Wealth of Nations, Book IV. chap. v.; Vol. II. p. 311, tenth edition.]
[* ] [Wealth of Nations, Book IV. chap. v.; Vol. II. pp. 268, 269, tenth edition.]
[1 ]Report of the Committee of the Town-Council of Glasgow on the Corn Bill, &c. &c., 1791.
[1 ] See Dawson’s Thoughts, &c.
[1 ] Dawson’s Thoughts, &c. See also Report of the Town-Council of Glasgow, [on the Corn Bill, 1791,] pp. 7, 8,—(both very confused on this head.)
[* ] [See Joseph Scaliger’s Epigram, De Mirandis Bataviæ, supra, Political Economy, Vol. I. (Works, Vol. VIII.) p. 284.]
[* ] [Wealth of Nations, Book IV. chap. v.; Vol. II. pp. 312, 313, tenth edition.]
[† ] [Ibid. p. 313.]
[* ] [Pp. 144, 145, edit. 1700.]
[† ] [See above, Political Economy, Vol. I. (Works, Vol. VIII.) p. 202.]
[* ] [Remarks on the Deficiency of Grain occasioned by the Bad Harvest, 1799, 1800.]
[† ] [An Address to the Good Sense and Candour of the People in behalf of the Dealers in Corn, &c., 1800.]
[* ] [Wealth of Nations, Book IV. chap. v.; Vol. II. p. 313, seq., tenth edition.]
[1 ] P. 33.—[Lond. ed. 1766; p. 29, Edin. ed. 1758.]
[* ] [Political Estimate, Chap. xii. p. 264, edit. 1812.]
[† ] [Ibid.]
[* ] [Book II. chap. iii.; Vol. II. p. 67, footnote.]
[* ] [Dispersion of the Gloomy Apprehensions, &c., 1797, p. 37, seq.]
[* ] [Wealth of Nations, Book IV. chap. v. p. 278, seq., tenth edition.]
[† ] [Ibid. p. 264.]
[* ] [Political Estimate, Chap. xii., p. 259, seq., edition, 1812.]
[* ] [On Population, Book III. chap. ix.; Vol. II. p. 235, seq., third edition, 1806.]
[* ] [Ibid. Book III. chap. x.; Vol. II. p. 272, seq., third edition.]
[† ] [Dispersion, &c., p. 38.]
[1 ] According to Mr. Young, the average produce of wheat, as hitherto ascertained by the Board of Agriculture, appears to be 23 bushels per acre. From the minutes which he himself collected thirty years ago, in the course of three agricultural tours through England, (extending to about 5000 miles,) he was led to state it at twenty-four bushels; and the result of his remarks during various tours, made during the last fifteen years, was precisely the same, confirming the accuracy of his former inquiries to a degree which exceeded his expectations.
[2 ] Young’s Pamphlet, [Question of Scarcity, &c.,] p. 42.
[1 ] Young, [Question of Scarcity, &c.] p. 56.
[1 ] Quoted by Young, [Question of Scarcity, &c.,] p. 56.
[* ] [Ibid. Supplement, chap. v. pp. 198, 199, edition, 1766.]
[1 ] Young, [Question of Scarcity, &c.] p. 56.
[* ] [Ibid.]
[1 ] That occasional inconveniences and hardships may be felt in consequence of improper combinations among corn-merchants, (such as those which have been lately so loudly complained of in the London market,) cannot be denied; but the possibility of these combinations arises from the general prejudices against the Corn-trade, which keep it in the hands of a comparatively small number of speculators, who may be presumed, from the very circumstance of their engaging in it, not to regard character as their principal object.
[1 ] The summer of 1800 has been the most remarkable for drought and heat of any I remember. The harvest is already (August 13) considerably advanced. Last year, on the 2d of October, I saw the greater part of the barley in Berkshire still standing and, more than three weeks afterwards, a considerable proportion of the crops in Yorkshire in the fields.
[* ] [Supra, p. 84.]
[† ] [Question of the Scarcity, &c., 1800.]
[1 ] In Mr. Young’s Political Arithmetic, (published in 1774,) he expresses himself more explicitly on this point. See p. 194.
[1 ] Davenant’s Works by Whitworth, Vol. II. p. 224.
[2 ] See [C. Smith’s] Tracts on the Corn Trade, [1766,] p. 50; and Young’s Political Arithmetic, p. 194.
[1 ] On the margin of a copy of Mr. Young’s Pamphlet, On the Scarcity, (lent to me by Lord Lauderdale,) Davenant’s statement now under consideration is transcribed, but without any comment. See p. 71 of that copy.
[1 ] Arthur Young, Pamphlet, On the Scarcity, [1800,] p. 71.
[2 ] Chalmers’ Estimate, pp. 273, 274. [Chap. xii. p. 259, edition 1812.]
[* ] [From the Notes of Mr. Bridges, it appears that Mr. Stewart adjourned all consideration of the influence of these exertions to a subsequent part of the course,—the chapter, to wit, on the Poor Laws,—which seems to have been, for the most part at least, written at a later date than the existing manuscripts of these Lectures. At the risk of a little repetition, these further observations will be given afterwards from the Notes of Mr. Bridges. The following additional remarks on Davenant’s Table are also supplied from the same source:]
(Interpolation from Notes.)—After what has been now said, it is hardly necessary for me to add anything with respect to the Table itself. The use, however, which has lately been made of it by Mr. Brand, induces me to add, in farther confirmation of what has been already urged with regard to it, that if it is to be understood as furnishing a rule of computation in this country at all periods, it must on the same principle be equally applicable to all countries. So far, however, is this from being the case, that I may venture to assert, that the relation between produce and price, or to speak more explicitly, the relation between a deficiency of the former and an increase of the latter, will everywhere vary according to the political condition of nations, the established system of law with regard to the commerce of grain, the habits of the people in the article of food, the methods of economizing it which they possess, the measure of the public charity, and many other circumstances. The following facts I mention, on the authority of a traveller, of whose accuracy and judgment I have the highest opinion. It is directly in point to the question; and I have no doubt that the same conclusion to which it leads, would be confirmed in every case where inquiries were made. “The summer of 1799, when I was in Sweden, must have been a very fatal one. In the provinces bordering on Norway, the peasants called it the worst that they had ever remembered. Cattle had all suffered extremely during the winter, from the drought of the preceding year; and in July, about a month before the harvest, a considerable portion of the people was living upon bread made of the inner bark of the fir, and of dried sorrel, absolutely without any mixture of meal to make it more palatable and nourishing.” I have borrowed this statement from an Essay on Population,* and it seems to authorize me in concluding, that the degree of scarcity then prevailing in Sweden, was greatly beyond anything which has occurred within memory in this country. And yet it appears from a pamphlet published a few years ago by the same author, [An Investigation of the Cause of the present High Price of Provisions, 1800,] that the price of rye, which may be considered as the chief article of food in Sweden, had not risen above double the usual average; whereas, in this country, wheat rose, at the same time, above three times its usual price.
On what conceivable principle, then, shall Dr. Davenant’s Table be applicable to all the different variations of circumstances in this country, when it appears that the relation between price and produce varies so widely in the course of the same year in different parts of Europe?
These considerations strike me so forcibly, that if by any accidental coincidence Dr. Davenant’s Table should be found to correspond with what has actually been the case, I should only consider it as an additional proof of the vagueness of the data upon which it was formed.
The Essay of Mr. Brand, above alluded to, is entitled, A Determination of the Average Depression of the Price of Wheat in War below that of the preceding Peace, from the Revolution to the end of the last Peace. The chief, and indeed the professed design of this author, who is a clergyman of the Church of England, is to demonstrate by mathematical calculations, the happy influence of war on the internal prosperity of the country. The general result of his investigations is, that war reduces the prices of all necessaries, in so far as these are not directly taxed. In ascertaining the prices of every particular year, he has availed himself of what mathematicians call the method of Interpolation; by means of which, when judiciously employed, many things which it may be difficult to determine by actual observation at the moment of their occurrence, are determined, accurately enough, by certain observations made before and after that period. A similar method of investigation had, before the publication of Mr. Brand’s pamphlet, been introduced into Political Economy by a late very ingenious writer, Sir George Shuckburgh, in the construction of a Table, published in the Philosophical Transactions,* entitled, A Table exhibiting the Prices of Various Necessaries of Life, together with those of Day-Labour, at different Periods from the Conquest to the Present Time; deduced by Interpolation.
To such an application of this method, supposing always that due allowances are made for all the various circumstances by which our data may be influenced, no reasonable objection can be made. And whatever doubt may be entertained with respect to the justness of this author’s results, it must be owned that his idea was happy and philosophical; and the prosecution of it may in time throw light upon various questions connected with this branch of science. How far the same method has been applied with judgment and fairness by Mr. Brand, it is not necessary for me to inquire particularly. It is amusing, however, to observe with what mathematical precision his inferences in several instances correspond with the actual state of the market when he published. But however little faith is to be given to his different conclusions, I flatter myself that some good may result from his work, as a new attempt to bring this question again under discussion, should it lead to nothing more than a correction of the public apprehensions, arising from the belief, that the increase of prices is always in proportion to the deficiency, and that when they rise beyond that rate, there is ground to suspect undue practices on the part of farmers and corn merchants. In process of time, something still more advantageous may result from the inquiry. At all events, the attempts of Mr. King and Dr. Davenant, to collect general rules on this subject, are highly meritorious; and although the data on which all such inquiries proceed must necessarily be very precarious, their example is sufficient to encourage a renewal of the investigation, with the help of those additional lights, how imperfect soever they may be, of which we are now in possession. Mr. Chalmers remarks, that “if the statutes of the 31st and 23d of the present King, had produced no other benefit to the country than establishing an effectual mode for ascertaining the average price of corn, and thereby prevented causeless alarms, they had merited the praise of most useful regulations.”* I do not mean to affirm that the means provided for ascertaining prices by these acts, particularly those which relate to Scotland, are well fitted for accomplishing their purpose. But the object surely is not of very difficult accomplishment; nor indeed does anything more than the will of the Legislature seem necessary for obtaining an accurate account of the number of acres sown with wheat and other grain, in every parish of the kingdom, in order to infer an average of the prices of the kingdom. From these data, if regularly ascertained for a series of years, some results might be deduced of great practical utility.
The passage in Dr. Davenant which led me into these observations, has been again referred to of late by Mr. Thornton, in his Inquiry into the Nature and Effects of the Paper Credit of Great Britain. While this author, with that soundness of judgment which appears to me to characterize all his speculations, avails himself of Dr. Davenant’s Table, he does this, as he expressly mentions, merely for the purpose of giving some general idea of the vast effect which a very small failure in the supply of corn produces on the price of that necessary of life.
Having mentioned this publication of Mr. Thornton, I take this opportunity of recommending it to your perusal, as containing the clearest and most satisfactory illustration which I have ever yet met with, of some of the most important fundamental principles connected with the theory of paper credit. A variety of misapprehensions, into which Mr. Smith, Mr. Hume, and Montesquieu, had fallen on this subject, are corrected by Mr. Thornton, with due respect to the merits of these eminent authors, and many interesting details are introduced by him, which nothing but a perfect acquaintance with the particular operations of merchandise could have enabled him to give. A few of his conclusions, to which I cannot altogether assent, I could have wished to have examined here, particularly the effects of a fluctuation in the quantity of the paper currency on the price of commodities; [See above, Political Œconomy, Vol. I. App. ii.;] but the advanced period of the season will hinder me from entering into this and some other interesting subjects of inquiry.—(End of Interpolation from Notes.)
[* ] [By Malthus, Book II. chap. ii.; Vol. I. p. 345, third edition.]
[* ] [Volume for 1798, p. 176.]
[* ] [Political Estimate, Chap. xi. p. 204, edition 1812.]
[1 ] Vol. I. pp. 397, 398.—[Political Œconomy, Book II. chap. xxviii.; Works, Vol. II. pp. 82, 83.]
[2 ] See Arthur Young, Question of Scarcity, p. 62.
[3 ] [Author’s Memorandum.]—Leave twenty pages blank.—Public Kitchens.—Edinburgh.—See volume marked on the back Howlett’s Pamphlets.—[See, however, the interpolation on the Poor Laws from the Notes of Mr. Bridges, postea.]
[1 ] Young’s Pamphlet.
[1 ] With respect to the advantages of rice as a substitute for flour.—See Reports on the Poor, p. 187.
[1 ] See Davies, p. 37. [Case of Labourers in Husbandry Stated and Considered, 1795, by David Davies, Rector of Barkham, Berks.]
[1 ] Paper by the Bishop of Durham.
[2 ] Beddoes’ Lectures, &c., p. 69.