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It was observed by Sir Robert Peel, in his speech on the subject of free trade in the House of Commons, in the last session of Parliament, that those who reproached the new system with all the suffering the country had undergone during the last three years, forgot or concealed the fact, that that system was partially introduced by the tariff of 1842, which so materially diminished the import-duties on rude produce in that year; and that the three following years (those of 1843, 1844, and 1845) were the most prosperous that Great Britain has ever experienced. Is it then just, he added, when quasi free trade in 1842 produced such beneficial results, to charge complete free trade in 1846 with the subsequent distress which has occurred ? the more especially as adventitious causes—in particular, the Irish famine of 1846, and the European revolutions of 1848amply account for the change, without supposing that the same principles, when carried into practice in 1846, produced such widely different results from those which had attended their adoption, to a certain extent, four years before.

The observation is a fair one, and apparently of material weight in the great question now at issue in the nation. When properly considered, however, it gives no countenance to the free-trade measures which the right honourable baronet has introduced, but only shows that it is to the combination of those measures with another element of still more general and potent agency, that the disaster has been owing. In the interval, be it recollected, between 1842 and 1846, the new currency restriction bills were passed, and free trade


received its full development. The Bank Charter Bill of England received the royal assent in 1844, that of Scotland and Ireland in 1845. Free trade in grain was introduced in July 1846 ; in sugar in May 1847; in shipping in May 1849. The harvests of the years from 1846 to 1849 have been, as usual in this climate, chequered : that of 1846 was fair in grain, but sadly deficient in potatoes ; that of 1847 was above an average in both ; that of 1848 deficient in the south of England in corn ; that of 1849 generally very good. The years from 1842 to 1846, therefore, were not a trial of free trade and a restricted currency, acting simultaneously

—they were a trial only of semi-free trade, without the new monetary laws, co-existing with a railway mania in the palmy days of its progress, and other favourable circumstances, which concealed, as will be immediately shown, its actual tendency. Real free trade has begun to act, along with a restricted currency, for the first time, in 1846. The harvests since have been, on the whole, average onesneither better nor worse than generally may, in this variable climate, be expected in future years. It is since 1846, therefore, that we are to look, in this country, for the real proof of the effects of the combined free trade and currency measures which Sir Robert Peel has introduced ; and unless they are taken together, the practical tendency of both will be entirely misunderstood. The right honourable baronet has done a great service to the cause of truth, by pointing out the difference in the state of the country before and after 1846 ; and we shall endeavour to follow up the subject by tracing the difference to its real source, and endeavouring to detach from the question the simultaneous circumstances which have been so often referred to as explaining the phenomena. The inquiry is the more important, that the Protection party as a body bave, with a few striking and illustrious exceptions, * never seen the currency question in its true light, as accompanied with that of free trade, and, by not doing so, have both voluntarily relinquished the most powerful lever wherewith to shake the strength of their opponents, and failed in instructing the public mind either

* In the highest rank of which we may place the very able member for the North Riding of Yorkshire, Mr Cayley.

in the real causes of their sufferings, or the means by which they are likely to be alleviated.

Various circumstances have been studiously kept out of view by the free-trade party, in reference to the years from 1842 to 1846, which really were mainly instrumental in producing the prosperity of that period. And many others have been emphatically dwelt upon, in reference to the years since 1846, which really bad very little hand in producing these disasters.

The first circumstance which had a powerful influence in producing the prosperity from 1842 to 1846, was the return of fine seasons after five bad harvests in succession, which closed in 1841. The summer, and still more the autumn, of 1842, was a long and unbroken period of sunshine, which gladdened the hearts of men after the long series of dreary and cheerless years which had preceded it. The subsequent years, from 1842 to 1846, were very fine seasons, the harvests of which were all above an average. This is decisively proved by a comparison of the average prices of grain for the years from 1839 to 1841, and from 1842 to 1845.* The tariff of 1842 without doubt contributed to bring about, in some degree, this reduction of prices; but still, as the sliding-scale was then in operation, and the import duties were in general 8s. and 9s. The quarter, the effect must have been mainly owing to the succession of fine seasons. No one can have lived through that period, without recollecting that this was the case. But the cheap prices which result from abundant harvests and improved cultivation at home, are the greatest of all public blessings, as much as the cheap prices arising from extended importation from abroad and the consequent depression of agriculture at home, are the greatest of all curses. The first enriches the manufacturer, by the previous comfort of the farmer, and the plenty diffused through the land by his exertions; the last gives a temporary stimulus to the manufacturer, by the cheapness which is fatal to the domestic cultivator, and, by abridging the home market, speedily makes the manufacturer share in his ruin. * Average price of wheat in London in1838,




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1839, 1840,

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The second circumstance which tended to produce the prosperity from 1842 to 1845, was the glorious successes which, in the first of these years, succeeded to the Affghanistaun disasters. We all recollect the throb of exultation which beat in the breast of the nation when the astonishing news arrived, in November 1842, that a single Delhi Gazette had announced the second capture of Cabul, in the centre of Asia, and the dictating a glorious peace to the Celestial Empire, under the walls of Nankin. Not only was our Indian empire secured for a long period, by those astonishing triumphs, but its strength was demonstrated in a way of all others the best calculated to insure confidence in its future prosperity. The effect of this upon our manufacturing and commercial prosperity was great and immediate. Confidence revived from so marvellous a proof of the resources and spirit of the nation, which had so speedily risen superior to so terrible a disaster. Speculation was renewed on a great scale, from the sanguine ideas entertained of the boundless markets opened for our manufactures in the centre of Asia, and in the Chinese dominions. Sir Robert Peel is entitled to great credit for the glorious turn thus given to our Eastern affairs, and the gleam of sunshine which they threw upon the affairs of the nation ; for his fortitude, when the previous disastrous news arrived, was mainly instrumental in producing it. But free-trade principles, and the tariff of 1842, had no more to do with it than they had with the affairs of the moon.

The third circumstance which tended to bring about the prosperity from 1842 to 1845, was the revival in the home market, which, on the first gleam of returning prosperity, arose with redoubled energy from the very magnitude of previous deterioration and suffering. During the long train of disasters which followed the great importation of grain, and consequent exportation of the precious metals, in 1839

—which compelled the Bank of England, for the first time recorded in history, to have recourse to the Bank of France for assistance—all classes of the people had undergone very severe privations. The depression had been general in extent, and unprecedented in duration, till it was entirely thrown into the shade by the effects of the terrible monetary crisis of October 1847. Stocks of goods were reduced

to the lowest amount consistent with the keeping up even a show of business ; comforts of various sorts had been long abandoned by a large portion of the middle and working classes. At the same time, capital, in great part unemployed, accumulated in the hands of moneyed men, and the competition for safe investment lowered the rate of interest. It was soon down to 3 and 2, per cent. In these circumstances, the revival of trade, owing to the Eastern victories and fine harvest of 1842, acted immediately, and with the most vivifying effect, on the home market. A rush took place to replace worn-out garments, to revive long abandoned but unforgotten enjoyments. This result always ensues, and is attended with very important effects, after a long period of depression and suffering. It is beginning, from the same causes, amongst us at this time. But no opinion can be formed, of the extent or probable duration of such revived activity, from its intensity on its first appearance.

The last, and, without doubt, the most important circumstance which produced the great prosperity from 1842 to 1845, was the monetary change produced by the Bank Charter Act of 1844.

Sir Robert Peel admitted, in the debate on the currency at the opening of last session of parliament, that the Act of 1844 had failed in one of its principal objects—viz., the discouraging of perilous and irrational speculation. He might have gone a step farther, and admitted that it had been the greatest possible encourager, for a short season, of the most absurd and dangerous undertakings. The proof of this is decisive. The Bank Charter Act was passed in May 1844, and from that time till the first check experienced in October 1845, was, beyond all comparison, the wildest and most absurd season of speculation ever known in English history. Among others, railways, to the amount of £363,000,000 sterling, received the sanction of the Legislature, within two years after the new Bank Charter Act had passed. And so far was Government from giving any check to these undertakings--the results of which, monstrous when co-existing with a fettered currency, are apparent in the present wreck of railway property—that they gave them the utmost encouragement, both by lowering the sum required for deposits from ten to five per cent, and

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