any cause, its numbers are diminishing. We believe that supply much more usually adjusts itself to demand than the demand to the supply. We do not mean to say that this is always the case, because novelty will tempt purchasers, and unusual abundance will, to a limited extent, increase consumption; but where the regular effect of increasing or diminishing numbers is not controlled by other causes, we think it evident that the course will be such as we have stated. Where there was previously an exported superabundance, the earlier effects of an increasing demand may, for some time, be hardly visible; or may even be counteracted, as to any particular commodity, by any circumstance which may act as a stimulus for producing it beyond the progressive consumption. This happened during the first half of the last century. For several years, till after the bankruptcy of the South Sea company, there was an extreme activity of circulation, and decreasing interest of debts, indicating that sort of plenty of money, or, more properly, facility of obtaining credit, which is commonly deemed a chief cause of increasing prices; yet they regularly declmed, and continued to do so for near forty years. But, during that period, the trade and manufactures of the country were by no means remarkably prosperous, a sure proof that they were not remarkably profitable. The increase of population was not inconsiderable, though far less than it has since been; but the profit of manufactures did not as yet entice it by high wages from agricultural employments. With the sudden and great change in that respect, which took place in consequence of the political ascendency that we acquired during the latter part of the seven years war, may be visibly connected a very rapid change from superabundance of agricultural produce to an actual deficiency. A public debt, which had increased fifty-fold between the revolution and the peace of Utrecht, had no visible effect on the value of money. A long peace, with very remarkable alternations of private credit, between extreme activity and a general stagnation of pecuniary transactions, had no remarkable effect on money prices of necessaries. The succeeding war, from 1740 to 1748, disastrous to our commerce, impeding our manufactures, and materially increasing our national debt, did not visibly alter the value of money. The causes of its diminished value, perhaps, began to operate several years before their effects were distinctly visible, but it was not till some time after the successful termination of the seven years war that the change became remarkable. During the American war the money prices of most things of extensive use considerably diminished; during the present war they have still more remarkably increased. We by no means infer that these circumstances may not have important and regular effects on the value of money, but only that other powerful causes may have produced these seeming anomalies; and also, that the great decrease in the value of money has been, in a considerable extent, occasioned by the concurrent increase of real wealth, and of the population employed in producing it. Soon after the middle of the last century, a great change began in the proportion of agricultural produce and its home consumption. . In about twenty years, during which the population appears to have increased about one million, a great surplus of corn, which had previously been exported, was changed to an average deficiency, which soon became constant, and has since very greatly increased. It is, therefore, evident that a great change was then beginning between the comparative numbers of persons employed in producing corn, and of those by whom it was consumed. With that change began one very efficient cause of the general depreciation of money. A deficiency of supply, which has never since overtaken the constantly increasing demand, has produced a progressive increase of prices, requiring higher wages for subsistence, giving greater profits to the farmer, leading him to give higher rents, and thus adding to the money price of lands, and, like all other movements, acting with increasing effect in proportion to its unimpeded duration. The advance of money price, however great, cannot restore the equilibrium, so long as it can be paid without difficulty by the great mass of consumers, which will continue while the profit of employing them in manufactures is great enough, and the sale of those manufactures extensive enough, to allow of paying adequately increasing wages. And the period during which this excess of profit, or one of its consequences, induces the employer to give adequate wages, is prolonged by the multiplied facilities of production which have, within a few years, been greatly improved, and many of them almost recently invented. In these a very large addition to the national capital is now invested, of which, like all other capital, the revenue depends altogether on the productive use; and on this account, the proprietors of this species of capital must continue to employ their workmen, or cease to derive any profit from it. So far as extends to internal consumption only, the demand for the produce of manufacturing industry can never be so excessive, but that, as long as room remains for increase or improvement of cultivation, a sufficient number of hands will remain to cultivate with adequate profit, and to an extent proportioned to the consumption. Nor could the diminution of the value of money, which results from an inadequate domestic supply of those things for which money is chiefly wanted, continue for any long space, were it not for such a profitable exportation of manufactures as entices too large a proportion of labour from its more useful employment in reproducing food. So long as only a surplus of labour beyond what is wanted for domestic use is thus employed, the very irregular demands of foreign markets, however inconvenient, will probably not materially affect the average value of money; but the case is materially different when a constant deficiency of the necessaries of life, creating, as before stated, of itself alone a constantly increasing money price for them, can only be supplied by a precarious exchange for things of very inferior use; of things subject to the caprice of fashion, and the control of adverse policy. Those who must buy cannot meet on equal terms in the market with those who are subject to no such necessity; and hence arises an obvious additional cause why the money prices of the food of a nation so situated must continue to increase so long as it has luxuries only, or things of which the purchase may be postponed, to give to foreigners in exchange for it. We are very far from intending to lessen the moral and political value of commerce, and of industry employed to furnish it with merchandise; but we have wished to explain an important cause of the modern change of money prices, which appears to us to have considerably resulted from an inconvenient disparity of profit between the cultivation of necessaries and the manufacture of superfluities. We are not aware that this cause of depreciation of money has been much considered, which must be our excuse if we appear to bestow on it a disproportionate "degree of attention. We need not explain those causes of it which are more generally, though we believe imperfectly, known. But if the population has doubled, if the real wealth has increased in more than a duplicate proportion, and if the money price of that real wealth, on an average, is three times greater than it was a hundred years ago, it strictly follows, that one million a year of public revenue at that time, bore as large a proportion to the means of paying it as more than six millions now; probably full seven millions*. * About the middle of King William's reign, Gregory King valued the whole private revenue of England and Wales, including labour, at 43,500,000 7. His authority is very great, and we may rely on this calculation as a near approximation. The long wars which followed, and various other circumstances, had diminished the population about one-twenty-sixth, but there was no remarkable change in money prices from the Revolution to the Peace of Utrecht. But, as 10 to 65 so is 43,500,000l. to 282,750,000 l. From the returns made in 1811, it is clear that the population of England and Wales must now exceed 10,500,000, probably 10,700,000. The earnings of the labouring classes of this population at the present wages are very moderately computed at 130,000,0007, a year. The We may apply these propositions in comparing the public debts contracted during the two wars which preceded the peace of Utrecht, and which have been since the year 1792. The debt, when that peace was made, is stated by Professor Hamilton to have amounted to 55,282,9781. of which all but about 1,054,9257. had been contracted in about twenty-five years, that is, after the revolution. This statement, if correct, probably included the floating debt unprovided for, and afterwards paid out of the unappropriated revenue; for it appears from an ex The property income, as ascertained by the tax assessments for England and Wales, will be found this year to amount to more than 140,000,000. With due allowance therefore for various profits which escape assessment, the present annual revenue must certainly exceed 280,000,000, and is probably little less than 300,000,000. And this remarkably agrees with the inference from the increase of population and of money-prices. The addition of Scotland must also be allowed for, which contributed very little during the former period; that is, in the reigns of King William and Queen Anne, until the peace of Utrecht. The population of Scotland is about a sixth, the extent about half, the cultivated extent about a sixth of the same in England and Wales; the wages are lower; but all taken together, the revenue of Scotland cannot be less than a tenth of that of England, nor can both together be computed at less than between 310 and 330,000,000 a year. By another statement, which differs very little from that adopted by Professor Hamilton, it appears that the debt contracted during the reign of King William, by a war which lasted almost nine years, was The debts contracted during the reign of Queen Anne, by a war which lasted almost eleven years, was £15,730,439 37,750,661 53,481,100 Comparing these debts with the money and means of the present times, by computing the increase of population as about twofold, the change of moneyprices about threefold, and the addition of Scotland about a ninth, it will be found that they were equivalent to the following sums in the present state of Great Britain: King William's debt multiplied by 6-45, and one-ninth added, The two united £112,385,247 272,643,662 £385,028,909 Since the beginning of 1793 to the 1st of August in the present year, and deducting the short interval of peace, during which the war expences never entirely ended, we have had very nearly the same duration of war, and the increase of debt reduced to a five per cent. stock at par, in order to make it more nearly correspond with the debts of King William and Queen Anne, which were even at a higher rate of interest, and, including the unfunded bills, has been nearly as follows: 1 The first war, including Imperial loan, about The second war, including Irish loan payable by Britain £195,600,000 117,927,890 £313,527,890 Neither of the two latter sums are accurate, but they are near enough to shew that when considered with due attention to the difference of national means, the debts incurred in the second period of warfare are by no means so heavy as in the first. chequer account presented to parliament, and dated March 14, 1716, that the principal money borrowed had been 47,268,8831. of which 665,7821. had been paid, and 46,603,1007. remained, at an annual charge of 3,118,448/. But this sum being a charge on less than half the present population, and taken from less than half the present real private revenue, and computed in money of three times its present value, was, therefore, in proportion to the means of paying it, quite as much as a debt incurred during the last twenty years would be, of more than three hundred and twenty millions borrowed, with more than twenty millions a year for its interest and cost of management. The annual charge, however, for the increase of both funded and unfunded debt since 1792, and to August the 1st, 1813, is only about 16,500,000l. being considerably less in proportion to the present real wealth of the country. It cannot, however, be denied that our exertions have been much greater and more expensive than in these proportions of interest for debt contracted. Our armies and navies have been much more than double, the equipments are intrinsically more costly, and we cannot venture to say that the expences have been managed with greater economy. The debt has not increased in equal proportion, because in two ways the exertions have been very great, by which its increase has been retarded. By the war-taxes, and by the sinking fund. But if the durable pressure has been lessened by them, the question which naturally follows is this: have the temporary burdens, and the subtraction of such immense numbers from productive employments, impoverished the nation, or altogether stopped its improvement? Had it been so, we should soon have seen the effect in falling prices, in a suspension of public works by subscription, and by many other unequivocal proofs. The reasons why we are now able to make such unexampled exertions have been already explained. In fact, nearly the whole resolves itself into increased facilities of production, into a substitution of inanimate for animated power, and, in a less degree, the substitution of the labour of cattle and horses for that of Not to mention many well known instances of inanimate movement, by fire or by water, of complicated machinery, one example of a recent improvement in rural economy may be produced, which will fuily explain the effect of this system. man. On a tillage farm of three hundred acres a threshing machine, if only moved by horses, on a very moderate estimate saves as much human labour as that of one man constantly employed, and far more if moved by water. The produce is the same, but the farmer saves so much expence in producing, and the nation |