Blackwood's Edinburgh Magazine, Volume 66, No. 410, December 1849

So much for the working of free trade and a restricted currency in the Emerald Isle. One would suppose, in reading these melancholy accounts, we were not dealing with any people in modern times, but transported back to those dismal periods, after the fall of the Roman empire, when the contemporary annalists contemplated the extinction of the human race, from the desolation of some of its provinces.

This dreadful state of things in Ireland is but a repetition of what, under the operation of these causes, aided by the fatal step of unqualified emancipation, has for some years been going on in the West Indies. We have not room to enlarge on this prolific subject, teeming as it does with facts illustrative of the effects of the free-trade system. They are generally known. Suffice it to say, the West Indies are totally ruined. British colonies, on which £120,000,000 sterling has been expended, and which fifteen years ago produced £22,000,000 worth of agricultural produce annually, have been irrecoverably destroyed. The fee-simple of all the estates they contain would not sell for £5,000,000 sterling. We know an estate in the West Indies, which formerly used to net £1500 a-year, and to which £7000 worth of the best new machinery was sent within the last five years, which the proprietor would be too happy to sell, machinery and all, for £5000.

Canada has lately shared largely in the moral earthquake which has so violently shaken all parts of the British empire. We subjoin an extract from the temperate and dignified statement of their grievances, lately published by 350 of the leading men at Montreal, to show how largely free trade enters into them.

"Belonging to all parties, origins, and creeds, but yet agreed upon the advantage of co-operation for the performance of a common duty to ourselves and our country, growing out of a common necessity, we have consented, in view of a brighter and happier future, to merge in oblivion all past differences, of whatever character, or attributable to whatever source. In appealing to our fellow-colonists to unite with us in this our most needful duty, we solemnly conjure them, as they desire a successful issue, and the welfare of their country, to enter upon the task, at this momentous crisis, in the same fraternal spirit.

The reversal of the ancient policy of Great Britain, whereby she withdrew from the colonies their wonted protection in her markets, has produced the most disastrous effects upon Canada. In surveying the actual condition of the country, what but ruin or rapid decay meets the eye? Our provincial government and civic corporations embarrassed; our banking and other securities greatly depreciated; our mercantile and agricultural interests alike unprosperous; real estate scarcely saleable upon any terms; our unrivalled rivers, lakes, and canals almost unused; while commerce abandons our shores, the circulating capital amassed under a more favourable system is dissipated, with none from any quarter to replace it! Thus, without available capital, unable to effect a loan with foreign states, or with the mother country, although offering security greatly superior to that which readily obtains money both from the United States and Great Britain, when other than colonists are the applicants: – crippled, therefore, and checked in the full career of private and public enterprise, this possession of the British crown – our country – stands before the world in humiliating contrast with its immediate neighbours, exhibiting every symptom of a nation fast sinking to decay.

With superabundant water-power and cheap labour, especially in Lower Canada, we have yet no domestic manufactures; nor can the most sanguine, unless under altered circumstances, anticipate the home growth, or advent from foreign parts, of either capital or enterprise to embark in this great source of national wealth. Our institutions, unhappily, have not that impress of permanence which can alone impart security and inspire confidence, and the Canadian market is too limited to tempt the foreign capitalist.

While the adjoining states are covered with a network of thriving railways, Canada possesses but three lines, which, together, scarcely exceed fifty miles in length, and the stock in two of which is held at a depreciation of from 50 to 80 per cent – a fatal symptom of the torpor overspreading the land." —Times, Oct. 31.

In what graphic terms are the inevitable results of free trade and a restricted currency here portrayed by the sufferers under their effects! Colonial protection withdrawn; home industry swamped by foreign; canals unused! banks alarmed; capital dissipated; rivers and harbours untenanted; property unsaleable! One would have thought they were transcribing from this magazine some of the numerous passages in which we have predicted its effects. And let England recollect, Canada now employs 1,100,000 of the tonnage of Great Britain. Let it be struck off, and added to the other side, and the British tonnage, employed in carrying on our trade, will, in a few years, be made less than the foreign.31

One would have thought, from the present state of Canada, that our colonial secretary had followed the advice of Franklin in his "Rules for making a great Empire a small one."

"If you are told of discontents in your colonies, never believe that they are general, or that you have given occasion for them; therefore, do not think of applying any remedy or of changing any offensive measure. Redress no grievance, lest they should be encouraged to demand the redress of some other grievance. Yield no redress that is just and reasonable, lest they should make another demand that is unreasonable. Take all your informations of the state of your colonies from your governors and officers in enmity with them…

If you see rival nations rejoicing at the prospect of your disunion with your provinces, and endeavouring to promote it – if they translate, publish, and applaud all the complaints of your discontented colonists, at the same time privately stimulating you to severer measures – let not that alarm or offend you. Why should it? You all mean the same thing." – (Rules 16 and 17.)

If our rulers had followed the advice of the sages of former times, instead of the theories of modern bullionists and interested parties, they would have avoided this unparalleled accumulation of disasters. Hear the greatest and wisest of men, Lord Bacon, on the subject: —

"'For the home trade I first commend to your consideration the encouragement of tillage, which will enable the kingdom to provide corn for the natives, and to spare for importation; and I myself have known more than once, when in times of dearth, in Queen Elizabeth's days, it drained much coin of the kingdom to furnish us with corn from foreign parts.'

He added also —

'Let the foundation of a profitable trade be so laid that the exportation of home commodities be more in value than the importation of foreign, so we shall be sure that the stocks of the kingdom shall yearly increase, for then the balance of trade must be returned in money.'

And Lord Bacon went on to give this wholesome piece of advice: —

'Instead of crying up all things which are either brought from beyond sea or wrought by the hands of strangers, let us advance the native commodities of our own kingdom, and employ our own countrymen before strangers.'" —Bacon's Essays.

"Trade," says Locke, "is necessary to the production of riches, and money to the carrying on of trade. This is principally to be looked after, and taken care of; for if this be neglected, we shall in vain, by contrivances among ourselves, and shuffling the little money we have from one hand to another, endeavour to prevent our wants: decay of trade will quickly waste all the remainder; and then the landed man, who thinks, perhaps, by the fall of interest, to raise the value of his land, will find himself cruelly mistaken, when, the money being gone, (as it will be if our trade be not kept up,) he can get neither farmer to rent, nor purchaser to buy, his land."…

"If one-third of the money employed in trade were locked up or gone out of England, must not the landlords receive one-third less for their goods, and, consequently, rents fall – a less quantity of money by one-third being to be distributed amongst an equal number of receivers? Indeed, people, not perceiving the money to be gone, are apt to be jealous, one of another; and each suspecting another's inequality of gain to rob him of his share, every one will be employing his skill and power, the best he can, to retrieve it again, and to bring money into his pocket in the same plenty as formerly. But this is but scrambling amongst ourselves, and helps no more against our wants than the pulling of a short coverlid will, amongst children that lie together, preserve them all from the cold —some will starve, unless the father of the family provide better, and enlarge the scanty covering. This pulling and contest is usually between the candid man and the merchant." – Locke's Works, v. 14, 70, 71. Considerations on Rate of Interest and Raising the Value of Money.

We add only the opinion of a great authority with the Free-traders, Mr Malthus, which seems almost prophetic of what is now passing in this country. We are indebted for it to the Morning Post, which has consistently argued the doctrines of protection and an adequate currency since they were first assailed.

"If the price of corn were to fall to 50s. a quarter, and labour and other commodities nearly in proportion, there can be no doubt that the stockholder would be benefited unfairly at the expense of the industrious classes of society. During the twenty years, beginning with 1794, and ending with 1813, the average price of wheat was about 83s.; during ten years, ending with 1813, 92s.; and during the last five years of this same twenty, the price was 108s. In the course of these twenty years, government borrowed near £500,000,000 of real capital, exclusive of the sinking fund, at the rate of about five per cent interest. But if corn shall fall to 50s. a quarter, and other commodities in proportion, instead of an interest of five per cent., the government will really pay an interest of seven, eight, and nine, and for the last £200,000,000, of ten per cent. This must be paid by the industrious classes of society, and by the landlords; that is, by all those whose nominal incomes vary with the variations in the measure of value; and if we completely succeed in the reduction of the price of corn and labour, this increased interest must be paid in future from a revenue of about half the nominal value of the national income in 1813. If we consider with what an increased weight the taxes on tea, sugar, malt, soap, candles, &c., would in this case bear on the labouring classes of society, and what proportion of their income all the active, industrious middle orders of the state, as well as the higher orders, must pay, in assessed taxes and the various articles of custom and excise, the pressure will appear to be absolutely intolerable. Indeed, if the measure of value were really to fall as we have supposed, there is great reason to fear that the country would be absolutely unable to continue the payment of the present interest of the national debt." —Malthus's Essays.

This was Mr Malthus's anticipation of the effect of wheat falling to 50s. What would he have said of it at 40s., its present average price? We recommend the concluding paragraph to the notice of the fund-holders, by whose influence the late changes have mainly been introduced.

But let the Free-traders be of good cheer – they have done marvellous things. They have accomplished what no British statesmen, since the days of Alfred, have been able to effect. They have stopped the growth of our population, and, for the first time for four centuries, rendered it retrograde. They have sent from two hundred and fifty to three hundred thousand people yearly out of the country, for three years, in search of food. They have lowered the Irish circulation of notes a half. They have, with one blow, swamped the Poor-law Amendment Act in England, and rendered rates higher, even with prices extremely low, than they ever were in English history. They have extirpated 200,000 cultivators in Ireland. They have cut £80,000,000 a-year off from the remuneration of cultivation and the encouragement of the home market to our manufactures in Great Britain. They have lowered railway property more than a half. They have destroyed, at least, a half of the whole commercial and trading wealth of the manufacturing towns. They have made the nation dependant, in two years, for a fourth of its subsistence on foreign states. They have rendered the maintenance of the national independence, if the present system is persisted in, impossible. They have destroyed £100,000,000 worth of property in the West Indies. They have sown the seeds of revolt in Canada, and rendered its separation, at no distant period, from Great Britain a matter of certainty. They have repealed the Navigation Laws, and thereby cut off the right arm of our naval strength. They are fast laying the seeds of dismemberment in our colonial empire. They will soon reduce, if unchecked in their career, the immense empire of England to two islands, oppressed with taxes, eaten up by paupers, importing a third of their annual subsistence from foreign states, brought in in foreign bottoms. These are the effects of FREE TRADE AT ITS ZENITH. What will they be at its Nadir?

19

Average price of wheat in London in —

20

Rate of discount of first-class bills at the undermentioned periods: —

21

23

24

– Porter's Progress of the Nation, 158; 2d edition.

25

In the eight months up to the 5th of September 1849, the quantities of foreign food taken out for home consumption have been —

All these amounts are largely, and the most important of them very largely, in advance of the imports of the first eight months of 1848.

Abstract of grain imported in quarters in seven months of free trade —

26

Quarters of wheat and wheat-flour imported into Britain from 1807 to 1836, both inclusive: —

32. Bad seasons.

33. Five bad years in succession.

– Porter's Progress of the Nation, 137, 138, second edition.

28

Take as an example the importation into London, from 24th to 29th September 1849: prices being – wheat, 41s. 9d.; barley. 27s.; oats, 17s. 10d.

31

The repeal of the Navigation Laws in 1847 gave such an impulse to foreign shipping, that, in the first year after the loss of Canada, the foreign shipping employed in our trade would exceed the British, even supposing we only lost two-thirds of Canadian trade by its independence.