decided cause of a high price, from high freights and insurance, unconnected with the variations of the seasons.

We would intreat our readers to refer to the comparatively stationary population, the comparatively stationary exports, and the comparatively abundant supply of corn of home growth, during the four wars preceding that which commenced in 1793, and then ask themselves, whether the character and circumstances of the late war were not calculated to have a totally different effect on prices from those of the preceding wars? But if when a great rise of prices has been observed to take place, attributable to the seasons and other causes, and the other causes, according to the acknowledged principles of supply and demand, must have had a very powerful influence on these prices, it would be obviously most incorrect to attribute the whole, or nearly the whole effect to the seasons.

We cannot therefore go with Mr. Tooke to the extent of his opinions on the influence of the seasons upon the high and low prices of the last thirty years; but we decidedly think, that the facts which he has referred to, and the reasonings with which they are accompanied, clearly prove, both as a general truth, and in the particular instance considered, the second proposition stated by us, namely, that the supply of commodities as compared with the demand, is much more affected, and for a much longer period, by the variations in the seasons, than has hitherto generally been supposed.

In proceeding to consider the proofs which Mr. Tooke's work affords of the third fundamental proposition, we must previously notice an extraordinary passage with which he commences the 5th section of his Second Part. He observes—

Enough has been said to prove that war cannot operate in raising general prices through the medium of increased demand, the quantity of money, and its rate of circulation continuing the same.'

This, we own, appears to us a most strange limitation, and if adhered to, would convert a very interesting practical inquiry into a barren discussion of a suppositious case which, perhaps, it would not be too much to say could never be realized.

It is of the very nature of war, and of the obstructions which it occasions to supply, to influence the quantity of money in a country, and the rate of its circulation. And surely the proper inquiry for us, on the present occasion, is, the fact, whether the circumstances of the late war did really create an increase of demand as well as an obstruction to the supply, without precluding the natural means by which such a result would be effected. At any rate, we give our readers notice that our own inquiry is meant to be conducted without any such limitation, thinking, as we cer

tainly do, that it is the only way of making it of the least practical use.

Of the alterations in the proportion between the supply of commodities and the demand for them, during the last war, occasioned partly by obstructions to supply arising from the war, and partly from the unfavourableness of the seasons, there cannot, we believe, be two opinions. Our only question with Mr. Tooke, on this part of the subject, is, whether this state of the proportion between supply and demand does or does not occasion an increase of demand, which may properly be considered as positive as well as relative. This question, it appears to us, that the facts and general reasonings which he has brought forward clearly answer in the affirmative.

In Part I. Section VII. which contains a very able and useful explanation of the causes of the extension and contraction of private paper and credit, Mr. Tooke commences by saying, that

The circumstances most conducive to an enlargement and contraction of the circulation of private paper and credit are identical with those which give rise to a spirit of speculation and overtrading on the one hand, and to stagnation and despondency on the other. The circumstances which give rise to a spirit of speculation and overtrading are scarcity, or, in other words, a deficiency in the supply of some important article or articles compared with the average consumption, and the opening of new and extensive markets, or, in general, of any new sources of demand. Agricultural produce, which forms by far the largest portion, as well as the most valuable class of commodities, and which, as it includes the subsistence of the labourer, and supplies the raw materials of some manufactures, affects the value of many other commodities, is that, of which any casual scarcity most powerfully contributes to a temporary increase of the circulation of private paper.'

.

Further on, he says

Independent of the paper created on such occasions by the preva lence of a spirit of speculation, whether arising from deficiency of supply, or from increased demand, there is a further effect produced on prices in both cases by an extended substitution of mere credit in transactions of purchase and sale, in some branches of trade in which it is not usual to deal through the medium of acceptances; and it is clear that an increased use of credit for the purposes of purchase may operate on prices as effectually without, as with the intervention of paper.'

He concludes the section as follows

It is evident from this view, that a currency consisting as our's does of a considerable portion issued through the medium of credit, is subject to great variations in that proportion; that those variations originating,

originating, in most cases, in a spirit of speculation and the re-action from it, tend to extend the range and accelerate the rate of the consequent fluctuations in price, supposing that the rest of the currency, as dispensed by the Bank of England, were stationary in amount. If the Bank of England, under the circumstances described as tending to enlarge the circulation of country and private paper, should simultaneously increase its issues, whether through the medium of discounts or of advances to government, it is clear that the rise of prices would be greater and more rapid, as on the other hand a contraction of its issues, if it should coincide with a return of abundance, and with a re action from speculation, would aggravate the fall of prices and conse quent distress,'

For further information we refer the reader to the whole sec2 tion, which is well worthy of his attention: but we think that even the very short extracts which we have here given, not only clearly state that a deficiency of supply of some important article, compared with the average consumption, creates an increase of general demand, accompanied by a rise of prices; but they point out distinctly how this rise of prices may take place, even without an increase either of Bank of England paper or money.

In a subsequent section, which treats of the Effect of Quantity on Price, the increase of demand from deficiency of supply is placed in a still stronger light. After noticing the well-known fact that a small deficiency in the produce of corn, compared with the average rate of consumption, causes a rise in price very much beyond the ratio of the defect, he refers to some calculations of Gregory King, and confirms the principle on which they are founded, by a review of the state of the seasons and the state of prices from the year 1620.

In the next section (V. Part III.) he applies the principle of the effect of quantity on price' to the state of agriculture from 1793 to 1812. The first great burst of prosperity (he says) clearly followed the deficient harvests of 1794 and 1795;' and he then calculates, with much appearance of probability, that the rise in the price of grain occasioned by the deficiency of these two years, which was supposed to be about one-eighth, must have thrown into the hands of the agricultural interest in 1795 and 1796, when the prices were the highest, a clear profit of from 12 to 14 millions each year, or from 24 to 28 millions for the two years.

Now unless it can be distinctly shown, that this enormous increase in the price and value of the grain of the country, was counterbalanced by a proportionate diminution in the price and value of other commodities, it follows incontestably, that there must have been a great positive increase of demand in reference to the actual mass of products, that is, such a demand as would have

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have been effectual to the purchase of a larger mass of commodities than were consumed in 1793, on the supposition that they were sold at the same price. But Mr. Tooke does not attempt -to show that there was any such counterbalancing fall of prices in the goods of the other producing classes. Indeed, such a fall would have been quite inconsistent with the language which he makes use of, when he refers to these two years as the period of a great burst of prosperity; and if we look to the tables, at the end of his work which contain a list of the prices of goods, chiefly foreign, exclusive of duties, since 1782, and the quantities of some of the principal articles imported since the same period, we shall find no proofs whatever that the greater amount of currency expended on the corn diminished the amount of expenditure on foreign commodities. If we pursue the inquiry to the end of the war, it will appear that, partly from the frequent recurrence of unfavourable seasons, partly from the obstructions to the supply occasioned by the war, and partly from a rapidly increasing consumption, the market for corn was on an average rather understocked for nearly twenty years together. We in consequence imported largely for a considerable part of the time in spite of the obstructions of foreign decrees, and high freights and insurances. Comparing an average of the three years ending with 1792, and an average of three years ending with 1813, the currency price of corn, (according to the Eton table, and reckoning the paper price of gold for the latter three years at £5) appears to have risen from £2: 12s. 9d. to £5: 18s. 8d., and the bullion price from £2: 12s. 9d. to £4: 12s. Yet this very great increase in the bullion price of corn, so far from diminishing proportionably the prices of other commodities, was not only accompanied by increased prices but by a greatly increased amount of the quantity consumed.

It is extremely fallacious to estimate the increase of demand by the increase of consumption, if we refer only to short periods; because a considerable increase of consumption may take place for some years together, not from what can with propriety be called an increase of demand, but from an overabundant supply occasioned either by the seasons, or by unfounded hopes and expectations relating to the employment of capital. It is unquestionably true that nothing is produced, which some persous or other have not a fair right and title to consume. It may also safely be affirmed that all which is produced will be consumed in some way or other, sooner or later. But it is cold comfort to the manufacturer to tell him that, if he cannot sell his goods for a fair price, he is entitled to consume them himself. Nor can the farmer be much relieved by the assurance that, all the superabundant quantity of wheat which he has produced will certainly be

con

consumed in the course of the next two years, if in the meantime he is obliged to sell it at such a price, that, without other resources, he will not be able to employ above three-fourths of the labourers which he employed before. According to Mr. Tooke a succes-sion of two or three very abundant seasons at home, accompanied by similar seasons abroad, would necessarily produce a state of general stagnation and despondency. Yet during this period there would certainly be a greater consumption of corn than usual. But surely he would not designate as a time of brisk and increased demand the very same period which he would call a period of stagnation and despondency, that is, a period when the greater part of the commodities of the country were selling below what Adam Smith calls their natural price.

We cannot then, it is obvious, measure the increase of demand by the increase of consumption for a few years. But if we take a period of considerable length, and attend particularly to the rate at which the annual consumption increases, some judgment may no doubt be formed of the annual increase of effectual demand. Tried by this criterion, we believe it will be found, by a reference to Mr. Tooke's and other documents, that the products of the land, the labour, and the capital of this country, never in any period of our history increased for twenty-two years together with the same rapidity as in the twenty-two years from 1793 to 1814 inclusive. If we look to the corn and provisions, and recollect the very great increase of population which took place in the interval in question, between one-third and one-fourth, and amounting in England and Wales alone to above two millions and a half of people, we shall be compelled to acknowledge, that if we had the means of comparing with accuracy the agricultural products of the three years ending with 1792, with the agricultural products of the three years ending with 1814, it would be seen that the increase of them was absolutely unexampled in reference to any other period of the same extent in our history.

If we look to the quantity of imported commodities noticed in the second of Mr. Tooke's tables at the end of his work, we shall find that, although the natural tendency of war is to diminish the returns for our exported commodities, in order to furnish the means of foreign expenditure, yet the returns so diminished, indicate a great increase of home consumption. Comparing the imports of the nine articles which he has selected, sugar, coffee, cotton-wool, sheep's-wool, silk raw and thrown, tallow, hemp undressed, and flax, during the three years ending with 1792 and the three years ending with 1812,* it appears that the quantity of sugar imported

* The average ending with 1812 is taken on account of the failure in the returns of 1813, owing to the fire at the Custom House. P 2

has