has much more than doubled, the quantity of coffee increased more than ten times, the quantity of cotton-wool more than three times, and the quantity of sheep's wool more than twice, while the otheṛ articles have increased in various proportions short of doubling.

If we look to the British produce and manufactures exported during the war we shall find that they rose to above double their former amount, although, in previous wars, the general effect was a decided diminution of them, and although in the thirty years preceding, they had not increased so much as one half.

If, from the imports and exports, we turn our view to the quantity of domestic industry set in motion, we believe that in no former period of the same extent has there ever been any approach to the same increase of draining and inclosures, roads and bridges, canals and harbours, paving and other local improvements, machinery, shipping, and exciseable commodities. We are quite at a loss, therefore, to understand on what grounds the great increase of consumption during the war is denied by Mr. Tooke. The conversion of capital into revenue which was taking place during the whole of the period must have powerfully co-operated with the seasons and the obstructions to importation, in occasioning a brisk consumption of all the produce brought to market, so as, with few and slight exceptions, to leave little on hand; and as it appears from all the documents which can be referred to that the yearly additions to this produce were unusually large, it follows necessarily that the consumption during the war was unusually great.

It is true, however, that the consumption has been still greater since the peace. This was certainly to be expected: first, on account of the continuance of that rapid increase of population which was occasioned by the war demand for labour and the great and increasing power to pay for it; secondly, by the sudden abundance of capital and labour thrown out of employment by the peace which would change the former proportion between productive and unproductive consumption; and thirdly, by the natural consequence of the last cause combined with favourable seasons, namely, an excessive supply of all sorts of produce, and such a fall of prices and of profits as occasioned a greater degree of distress, and for a longer period, among the main body of producers than had ever before been experienced. These causes, while in full operation, could not fail to be accompanied by a very great consumption. But if, instead of looking merely at the quantity produced and consumed during the first eight years of the peace, we consider the rate at which the quantity and value of the produce seems to have been increasing, the result will be of a very different character. Taking an average of the total exports from Great Britain during the years 1814, 15 and 16,

valued officially, and therefore representing quantity, and comparing them with the exports during the years 1819, 20 and 21, it appears that the quantity of exports had decidedly diminished, the former three years amounting to £56,275,000 and the latter only to £52,696,000; and even taking the specific articles contained in Mr. Tooke's table of quantities exported, it appears that, with the exception of cotton and sheep's wool, for which new and increasing markets have been opened, there is not, we believe, one of which the quantity exported has not decreased, and some of them considerably. His table of quantities of imported articles presents no doubt a more favourable aspect. The war expenditure abroad being over, our imports ought greatly to increase; yet, notwithstanding this, the imports of four out of the nine articles noticed seem to have diminished rather than increased, terminating the average of the latter three years with the year 1822, which Mr. Tooke has given.

If from the quantities of goods exported and imported we turn to their prices and value, the falling off will appear to be greater and more general. Such has been the depression of prices since the war, that whereas formerly it was the custom to add fifty per cent. to the official value in order to get the real value, it is now said that the real or declared value is actually lower on an average than the official; and, according to a statement before us, the declared value of the exports of Great Britain of home produce and manufacture was, in 1818, £48,904,000, and, in 1821, had fallen to £35,826,000.

But, whatever may have been the favourable or unfavourable changes which have taken place since the peace, the period, though very long for a crisis of distress and unnaturally low profits, is much too short to be compared with the period of the war; and it may still most safely be said that in no twenty-two years of our history of which we have authentic accounts has there ever been so rapid an increase of production and consumption, both in respect of quantity and value, as in the twenty-two years ending with 1814.

The specific and immediate cause of this great stimulus to continued production has, it appears to us, been very clearly explained by Mr. Tooke in the principle which he has laid down on the Effect of Quantity on Price, and the numerous instances which he brings to show that this principle is well founded. The principle is, that whenever there is a relative diminution of supply, from whatever cause it may arise, it is immediately followed by a briskness of demand for the remaining produce, accompanied by a rise of prices and of profits which never fails to occasion a great stimulus to subsequent production. This process we have always

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always been in the habit of considering as the great remedial law of nature in regard to production and consumption; and it will be observed that it is a remedy of very great power. Whenever, within certain limits, a portion of the produce of a country has been diminished, by the seasons, by obstructions to importation, or by an increase in the proportion of unproductive consumption, not only does the power of setting fresh industry in motion remain unimpaired, but by the universal law of the effect of quantity upon price it is greatly increased. The farmer who, in consequence of a deficiency of his crops of one eighth, sells them for nearly a third more than the usual price before the money wages of labour have risen, is obviously able to set in motion a much greater quantity of industry than before. The specific funds destined for the maintenance of labour, though diminished in quantity, are by this happy provision of nature increased in their efficiency to recover the loss that has been sustained, and to increase the produce of the next year; while the labourers, although they unquestionably sustain some privation, are, in a considerable degree, recompensed by the great and general increase of employment. There is, in the language of Mr. Tooke, a burst of prosperity to the producing classes; and we should certainly add, without a proportionate diminution in the prosperity of the labouring classes.

This doctrine of Mr. Tooke on the effect of quantity on price, is, it must be allowed, directly opposed to the doctrine of M. Say, in his chapter Des Debouchés, which teaches that all increase of demand depends upon increase of supply, and diminution of demand on diminution of supply. If this were so; if it were true, that when the produce of a country had been in part destroyed, the will and power to increase what was left was immediately diminished, we do not see how the recovery of the loss would be practicable within any moderate compass of time; and such an increased difficulty thrown in the way of restoration to plenty would be so directly contrary to all the usual healing processes of nature, and is so directly opposite to all experience, which shows with what rapidity losses are recovered, that we can only feel astonishment that such opinions should be held by men of distinguished ability.

The specific source of M. Say's error and of those who have followed him is, the not being aware of, or the not allowing sufficient weight to the principle of the Effect of quantity on price and value. As long as the increase of quantity increases the value of the funds specifically destined for the maintenance of labour, so long of course it increases effective demand, and gives a stimulus to production; and in reference to any length of time,

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and the absolute necessity of a great and continued increase of produce to a great and continued increase of population, it is obvious that the increase in the power of setting industry in motion at the end of fifteen or twenty years must depend mainly upon the increase of production. But whenever this production so exceeds the actual state of the demand, whatever that may bẹ, as to disable the producers from putting in motion the same quantity of industry as before, to that extent exactly is the effective demand for a further increase of produce diminished and the stimulus to the increase of wealth abated.

This limitation to the principle of the effect of quantity on price and value is so simple and intelligible; it so clearly shows that in all ordinary cases the increase in the wealth of other countries, or new employments at home, must give a great stimulus to our industry, (a result which M. Say erroneously thinks is peculiar to his own views relating to production,) while at the same time it explains so distinctly and specifically the causes of the few exceptions which are observed to occur, that the principle thus restricted, and its particular application to the power of setting industry in motion, may be safely laid down, as one of the most universal and constantly operating principles in political economy. We decidedly think indeed that, without allowing due weight to this principle, the phenomena of the last hundred years, but more especially the phenomena of the last thirty, are absolutely inexplicable. Certainly nothing but the union of a greatly increased activity of general demand, a greatly increased power of commanding labour, a great increase of encouragement to the use of machinery, and a great increase of profits, particuJarly in agriculture, all owing mainly to the peculiar state of the -supply compared with the demand in a country of great resources and great ingenuity, could possibly have occasioned so rapid a recovery of the immense mass of capital consumed by the government during the war, and have given at the same time such a prodigious extension to almost every department of industry and improvement.

As we have always been of opinion, therefore, that the sole use of political economy is its application to practice, and that no theories are entitled to confidence in reference to the future, which will not give a satisfactory solution of past phenomena, we were disposed to hail Mr. Tooke's work as specifically calculated to set aside a theory which is directly contradicted by the most general experience, and as far as it has prevailed has wrested the science of political economy from its only just and safe foundation. What then was our disappointment to find that, although Mr. Tooke has written in such a way as, we trust, will convince

others, he does not seem to be convinced himself! In a noté to the last Part of his work (Part IV. p. 5.) he still declares his adherence to the doctrine of M. Say on supply and demand as explained by Mr. Mill in his Elements of Political Economy.* This, we own, puts us in mind of the declaration of the learned editors of the Jesuits' edition of Newton's works, (see the note P: 163 of this Number,) who after having co-operated with the illustrious author on whom they were commenting, in proving, beyond the possibility of doubt, that, from the universal law of gravity, the earth must necessarily revolve round the sun, still professed it to be their creed that the sun revolved round the earth. To us it appears that Mr. Tooke has distinctly and luminously proved both by a correct train of reasoning, and what is of much more importance a constant appeal to a crowd of well-attested facts, that a small diminution in the proportion of the usual supplies of such a country as this, invariably calls forth a larger amount of currency and credit, and increases very decidedly the general demand for produce, or the power of devoting such a value to the purchase of the whole mass, as without the rise of prices occasioned by the deficiency, would command a much greater quantity; yet in the note above referred to he professes to believe that the aggregate of demand must always be equal to the aggregate supply, which if it means any thing beyond the very futile proposition, that all which is produced will sooner or later be consumed, must mean something. directly opposed to the whole spirit and bent of his work. We must however take leave to consider Mr. Tooke's work as better authority than this inadvertent declaration; and to this work we can confidently refer the reader as containing the most satisfactory proofs of the third proposition stated, namely, That when the supply of commodities is in some degree deficient compared with the demand, whether this arises from increase of demand, or diminution of supply, the state of trade is brisk, profits are high, and mercantile speculations are greatly encouraged; and on the other hand, when the supply is abundant compared with the demand, there is

The fallacy of Mr. Mill's argument depends entirely upon the effect of quan tity on price and value. Mr. Mill says that the supply and demand of every individual are of necessity equal. But as supply is always estimated by quantity, and demand only by price and value; and as increase of quantity often diminishes price and value, it follows, according to all just theory, that so far from being always equal, they must of necessity be often very unequal, as we find by experience. If it be said that reckoning both the demand and supply of commodities by value, they will then be equal; this may be allowed; but it is obvious that they may then both greatly fall in value compared with money and labour; and the will and power of capitalists to set industry in motion, which is the most general and important of all kinds of demand, 'may be decidedly diminished at the very time that the quantity of produce, however well proportioned cach part may be to the other, is decidedly increased.

a period