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WHY IS FLOUR SO DEAR? - William Leggett, Democratick Editorials: Essays in Jacksonian Political Economy 
Democratic Editorials: Essays in Jacksonian Political Economy, Foreword by Lawrence H. White (Indianapolis: Liberty Fund, 1984).
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WHY IS FLOUR SO DEAR?
December 3, 1836.
This question is in every body’s mouth, and the following paragraph hints the answer which the writer seems to think will explain the difficulty:
. . . Is it a scarcity of the article of flour in the market, which raises the price to ten dollars per barrel, at a moment when money is worth two per cent a month? Or have those who had the control of money facilities combined to buy up all the wheat at moderate prices, with the design of speculating by a monopoly of one of the necessaries of life? Mechanicks and others have been indicted for combining to raise the price of labour; and it might be well to inquire whether combinations to raise the price of wood, pork, flour, and other necessaries of life, beyond a fair profit, are not equally offences against society.
The foregoing is from the Albany Argus. The information it conveys in relation to the amount of the wheat crops is valuable. But the measure which it suggests for the purpose of reducing the price of flour is at utter variance with the principles of free trade, and with the natural rights of citizens. If mechanicks combine to raise the price of wages, they but hold forth an invitation to competition from beyond the sphere of combinations, and competition will soon arrange prices according to a just scale of equivalents. If merchants combine to raise the price of flour by purchasing all in the market, they but provoke competitors in foreign ports, whose rivalry will soon set matters right. The laissez nous faire maxim applies here as forcibly as in any other concern of trade. The true way is to leave trade to its own laws, as we leave water to the laws of nature; and both will be equally certain to find their proper level.
We already find that, incited by the high prices of bread stuffs here, foreign competitors are sending supplies across the ocean, and underselling our agriculturists at their own doors. Part of the cargo of the Bristol, which was wrecked at Rockaway a fortnight ago, was English wheat; and we notice in the accounts of importations in the newspapers that frequent mention is made of large quantities of foreign grain. Why is this? Why are prices so high in this country that the wheat growers of Europe can incur all the expenses of transportation, freight, insurance, commissions, and storage, and still undersell us in our own markets? Does the Argus really suppose that this result is brought about by a combination among the dealers in flour, “with the design of speculating by a monopoly of one of the necessaries of life?” The cause, let it rest assured, lies deeper than this. The monopoly is one of a worse character, of greater power, of more ruinous operation. Short crops may do something; combination may do something; but the high prices are mainly the result of the monopoly of banking. They are the natural and inevitable consequence of the wretched system which places the currency of the country completely under the control of a comparatively few specially privileged chartermongers, who avail themselves of the speculative disposition of the people to flood the country with a paper circulation, till the influx produces its natural effect of causing a vast depreciation of money, or appreciation of money prices, which is the same thing, and attracts competitors from all parts of the world to our market. These competitors do not take in payment, and carry away with them, the spurious currency which the monopoly banks have issued, but demand specie; and then comes the necessity of sudden retrenchment, followed by wide spread commercial distress. Prices then begin to fall; and at this point we are now arrived. Flour must soon go down, despite of all combinations, fancied or real; produce of all kinds must go down; rents must go down, and labour must go down; and all things must gradually adjust themselves to the retrenched state of the currency. When this period of depression is past, and the crops of the next year have paid up the deficit occasioned by overtrading during the present, the banks will begin to be liberal again, (munificent institutions!) and, urged on and stimulated by them, the people will act over again the same scenes of mad speculation, till the drama again concludes with a catastrophe of disastrous revulsion.
We should be glad if the Argus would turn its attention to the monopoly which is the true source of our high prices and all our financial difficulties. It will find that our exclusive bank system is the cause of the evil, and the repeal of the restraining law the only effectual remedy.