a period of comparative stagnation, with low profits, and very little encouragement to mercantile speculation.

We now proceed to consider the proofs which Mr. Tooke's work affords of the fourth proposition, namely, that when periods of abundant or deficient supply are of considerable duration, which is found by experience to be frequently the case, they are necessarily accompanied by a fall or rise of the value of the precious metals in the country where they take place, according to any mode of estimating their value which has ever been considered as approximating to the truth.

Mr. Tooke has clearly shown that the effects of the seasons in raising prices may last for twenty years together, so as very greatly to increase the average price of corn; and it has already been stated as a matter of fact, that taking an average of the three years ending with 1792, and the three years ending with 1813, the bullion price of wheat rose from £2: 12s. 9d. to £4: 12s. Now, though it is well known that a year of scarcity or even two years, may pass over without a rise in the price of labour, yet when the rise of provisions is very considerable in itself, and extends over a considerable period, a rise in the money price of labour must follow, or the population will be quite unable to support itself, and the prices of corn must fall again from the destruction of the consumers. In the case immediately under our consideration, we well know that this alternative did not take place. On the contrary, the population increased with extraordinary rapidity, which necessarily implies such a rise in the money price of labour as, combined with more general employment, and other advantages in the purchase of clothing and foreign commodities, would enable the labouring classes to bring up larger families than before.

We had then, it is allowed, a great and general rise in the bullion price of corn and all sorts of provisions, a great and general rise in the bullion price of labour; and, with few exceptions, a general, though more variable rise in the bullion price of other commodities. Now the question is, whether this state of things does not necessarily involve a fall in the value of bullion, according to any intelligible meaning which has ever been attached to the terms; or any mode of estimating the value of the precious metals which has ever been considered as an approximation to the truth.

Adam Smith in the fifth chapter of his first book, after explaining the distinction between the real and nominal price of commodities, has the following passage: Labour, therefore, it appears evidently, is the only universal as well as the only accurate measure of value, or the only standard by which we can

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compare the values of different commodities at all times and all places. We cannot estimate, it is allowed, the real value of different commodities from century to century by the quantities of silver given for them. We cannot estimate it from year to year by the quantities of corn. By the quantities of labour we can with the greatest accuracy estimate it, both from century to century and from year to year.' This is no doubt laying down labour as the measure of value in the most positive terms. But owing to some obscurity in the enunciation of this doctrine in other passages, and still more to his not adhering to it steadily and consistently in other parts of his work, it was not generally adopted. Mr. Malthus has lately revived it, with new proofs of its correctness, in a pamphlet entitled, The Measure of Valne stated and illustrated;' and as he does not seem likely to fall into the error of Adam Smith, in its application, it may be expected that it will receive a fair trial; and should it finally be established, it will, without doubt, give that distinctness and precision to all questions relating to value, of which it must be acknowledged they stand at present very greatly in need.

If, on these authorities, we should in the case before us take the labour which a commodity will command as the measure of its value, it will appear at once from the acknowledged rise in the bullion price of labour, that bullion had fallen just so much in value.

If we were to take corn, the measure unfortunately adopted in practice by Adam Smith, instead of his professed standard, it would appear that the value of bullion had fallen still more; and if we were to take a mean between the two, as was formerly suggested by Mr. Malthus, the fall would appear to be greater than if measured by labour, and smaller than if measured by corn. .' If we were to take Mr. Ricardo's measure-the labour worked up in a commodity, the same conclusion of a fall in the value of bullion would unquestionably follow. Indeed, on Mr. Ricardo's principles, this fall must have been very considerable. According to him, while gold retains its value, a rise in the price of labour is invariably accompanied by a fall of profits. We witnessed, however, a very great rise in the bullion price of labour, not only without a fall of profits, but with a decided rise of them. And this, it is evident, could only have happened in consequence of the rise in the bullion price of labour being occasioned exclusively by a fall in the value of bullion.

If, rejecting any single criterion, or the combination of one or two, we proceed to compare an ounce of gold with all the commodities of the country in succession, though the measure would be a most clumsy one, and by no means well calculated to deter

mine the degree of variation; yet we cannot for a moment doubt that the result would indicate a great fall in the value of bullion. As the great rise in the bullion price of labour is acknowledged, and as it must be allowed that profits had also risen compared with what they were in 1792, it is quite obvious that what Adam Smith calls the natural prices of all the domestic commodities of the country, in the production of which improvements had not been introduced, must have increased fully in the proportion of the increase in the price of labour. The only exceptions, therefore, to a general rise of this extent in the bullion prices of commodities would be imported commodities, and the commodities on which, on account of the improvements in machinery, a smaller quantity of labour had been employed. With regard to the first of these classes of commodities, though they would not probably rise so high as domestic commodities, yet they would necessarily rise considerably on account of freight, insurance, and taxes; and with regard to the second, as the extent to which improvements in the saving of labour may go is quite uncertain, and as such improvements might equally prevail under any value of the precious metals, it must be allowed that they are the last class of commodities which should be referred to, with a view to any estimate of value. Reckoning, however, the value of money as synonimous with the power of commanding the mass of commodities, including the effects of improved machinery, (which we do not think a just view of the subject,) still the value of bullion will appear to have fallen greatly.

Further, if we measure metallic money and other commodities by the relative conditions of their supply, the value of such money will appear still more strikingly to have diminished. The main conditions of the supply of commodities are allowed by political economists to be, the labour which it is necessary to employ both on the article, and on the portion of the capital used in producing it, together with the ordinary profits upon the advances. If either the necessary labour, or the ordinary profits of the time cannot be obtained, the supply will naturally fail.

Now let us try the variations and the relative values of commodities and of bullion by this general criterion. Taking the corn produced by the poorest land, in cultivation on which, the rent compared with the value of the produce, would be quite trifling, we shall find that the natural conditions of the supply of a quarter of corn from such land, during the three years ending with 1813, were not essentially different from what they were in the three years ending with 1792. Probably the quantity of labour employed was very nearly the same, but the profits of stock being higher, the quarter of corn, though it had cost in its production

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no more labour than in 1792, would necessarily command rather more, when brought to market. This was confirmed by the acknowledged fact, that the corn wages of labour, notwithstanding the great demand for men, and the great advance of money price, were rather lower than before the war.

If we proceed to the examination of cloth, leather, houses, ships, tin, &c.; or any commodities in the production of which no decided saving of labour had been introduced, it is obvious, that the natural conditions of their supply, must have been nearly the same as in 1792, with the exception of the rise of profits, which would cause all these commodities to exchange for rather more labour than before. But when we come to examine the conditions of the supply of bullion, the case is quite different. They will appear to have experienced such a change, as must necessarily lower its value, just as if a great saving of labour had been introduced into its mode of production. When countries which have no mines possess the precious metals, they must have been purchased by some exportable commodities; and we conceive that no man in his senses would knowingly send goods abroad, which he could sell for an ounce of gold at home, unless he could obtain for them, after exportation, the same value estimated in the same medium, with the addition of the necessary expenses of carriage. But at home the ounce of gold bullion, owing to the rise in the bullion price of labour, will command a much smaller quantity of labour than before, and it follows that the cotton goods which will exchange for an ounce of gold at home, and are destined to purchase more than an ounce of gold abroad, will also command a much smaller quantity of labour than before. But the quantity of labour which a commodity will command, is obviously the same as the quantity of labour worked up in it with the addition of profits, and therefore represents the natural and necessary conditions of the supply. Consequently the natural conditions of the supply of the muslins which were to purchase the ounce of gold were lowered. To use the language of M. Say, the productive services required to obtain gold in England were diminished, and the value of gold naturally fell.

It appears then, that, according to any mode which has ever been adopted for estimating the value of commodities, whether we take one object, a few objects, all objects, the labour worked up in commodities, or the quantity of labour and profits, which is the necessary condition of their supply, the value of bullion must, on an average,* have fallen considerably from 1792 to 1813, and

We say on an average, because there were unquestionably certain periods between 1809 and 1815, when the great demands of the government for its foreign expenditure,

and by the same criterions it will appear that the value of bullion must have risen considerably since 1813.

We are quite at a loss, therefore, to understand the grounds on which Mr. Tooke confines this fall and rise in the value of the whole currency, during the last thirty years, to the difference between paper and gold. He distinctly acknowledges the rise in the bullion price of corn in the great mass of labour, and in nu→ merous other articles, both domestic and foreign, during the war. He acknowledges also a state of prices directly opposite, since. the termination of it. But he strangely supposes that the natural: inference from these prices, in respect to the value of bullion, will be destroyed by his showing the specific causes of scarcity, freights, insurance, taxes, or, generally speaking, the obstruc tions to supply which occasioned these high prices, upon the principles of supply and demand. Now we are quite willing to agree with Mr. Tooke in all the causes of the high and low prices of the last thirty years, which he has summed up at the conclusion of his Third Part (pp. 83, 84). But we must strongly protest against his conclusion, that the statement of these causes leaves no ground for imputing to the alterations in our currency any effect beyond the difference be→ tween paper and gold.' Because the causes which he states are specifically those which, according to the principle of the effect of quantity on price, are calculated to raise bullion prices generally, or, in other words, to alter the value of bullion. Mr. Tooke, we repeat, has very happily explained how this is effected, by showing that a deficiency of supply calls forth at once an increased quantity of private paper and credit, without any necessary separation of the paper from the gold, thus making the gold conform itself in value to an increased quantity of currency divided among a diminished quantity of commodities. To this cause of the high prices of commodities occasioned by the sudden extension of private paper and credit, we should be strongly disposed to add a more rapid circulation of the currency, which, we believe, is the almost constant concomitant of what is called a brisk ‹demand. And we cannot help considering these two causes combined as of very great power, and as affording the true explanation of events which would be otherwise unintelligible.

To what extent bullion prices might rise from the causes just stated, called into action by a diminished proportion of the supply to

did really raise the price of gold in reference to its low preceding value. This is clearly shown by Mr. Blake in his late publication, and it is much to be regretted, that he should have mixed up with so many interesting and important observations, a proposition so entirely untenable, as that the average value of gold should rise amidst the acknowledged average rise of the gold price of labour, and of all other commodities.

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