COMMERCIAL PROSPECTS. T HE recent fall in the funds, a fall
which has lasted a week, reflects a genuine, though we think exaggerated, feeling in the commercial world. It is apprehended, on several different grounds, that very hard times are at hand, that trade will be still more depressed, and that money, now a " drug," will speedily be dear. The English harvest, it is said, has not quite answered expectation, while the French crop is unusually and dangerously small. The demand from France for our corn is already great—so great, that we hear of difficulties about storage, and the rate of discount in Paris has risen to six per cent. There is distress, too, in Lyons, and though the results of the new tariff must be beneficial, the transition stage is likely to create considerable incon- venience. France cannot suffer without England feeling the reflex effect of her disasters, and the prospects at home are not altogether favourable. The revenue returns show a decrease of two millions on the year, there is the paper duty still to come off, and no prospect of the termination of the American civil war. The cotton-mills have begun to work half time, and though half time does not mean destitution, it does imply diminished profits, half wages, and a reduction in almost every branch of revenue. Our American trade loses some fifty per cent. by the civil war, and there is no certainty that this state of affairs will speedily end. The lingering hope of the American cotton crop may be dis- appointed, and with it will disappear the last chance of a prosperous financial year. There is some truth at the base of these gloomy anticipa- tions, but it is never wise in England to rely upon unplea- sant prognostics. " Circumstances," the modern name for the ancient Fortune, are apt to favour a race who work the harder for gloom, and whose energy when shut out from one outlet is certain to make for itself another. The dangers of the coming season, if coolly examined, will be found to lose their proportions, if not to disappear, and we propose to pass them in review one by one, and see how far ap- prehensions are borne out by the known facts. 1. In the first place, it is by no means clear that there has been any real decline in the revenue. Of the apparent decline, much more than a third (868,0001.) is traced to the loss on the excise, and is owing to the failure of the hop and barley crops, a failure made up this year by a har- vest so abundant as to compel the brewers, the keenest mono- polists in England, to reduce their price all round. A still larger portion (1,290,0001.) is owing to the penny reduction in the income tax, and Mr. Gladstone's call of last year for two quarters at once. The remainder are trifling fluctuations, and the item of customs shows a positive increase (90,0001.), in spite of the alleged decay of trade. The reductions in taxation were allowed for in the budget, and as two quarters remain to be levied on hops and malt, there is as yet no evidence that the final account will show any unexpected deficiency. We consider only the facts, but the probabilities are that the result of the lower tariff in France, unless checked by the insufficient harvest, will more than remedy all the losses occasioned by the reduction of trade in other quarters. 2. The falling off in trade may, of course, come, but it has not come yet, in any dangerous form. The reduction in the American trade has been great (fifty per cent.), but it is almost made up by the increase in France, Holland, the Canadas, Italy, and some other quarters, and amounts, on the whole, to only five per cent. Against this have to be set the profits of the corn trade with France,—for though it be only a carrying trade, we importing to supply the defi- ciency, still a profit sticks by the way,—any addition the French treaty may make to certain branches of export, and the steady growth of those branches of commerce unaffected, or, like our trade with Bombay, positively benefited, by the American disasters. Predictions in such calculations are worse than useless, but as yet there is no definite ground for alarm.
3. Half time in the districts which are fed by cotton is by far the most serious prospect with which we have to contend, but even here there are facts to be considered which may materially diminish our losses. The future evil may be in- calculable, but it may also be very slight, and the present evil is by no means as yet unendurable. Halftime for a short period, with the foreign and especially the Eastern markets over supplied, is not an unmixed calamity. As far as com- merce is concerned, the manufacturer will, within reasonable limits, be no loser, for he may as well work half time as work at a loss, and if the reaction comes soon, clear markets will speedily restore his menaced prosperity. It is, of course, impossible to question that the reaction may come too late, and that the North may have to pass through a sharp period of suffering, or misery. But the balance of proba- bilities is all on the other side. The supply of cotton, accord- ing to the most careful calculations, will last for fourteen months, and within that period one of three events is almost certain to happen. The North may so far conquer the South as to obtain possession of great part of the cotton crop, and whether it be sold by victors or vanquished makes no difference to the consumer. The North, on the other hand, beaten a second time, may, in disgust, agree to terms which will at once set free the cotton. Or, no cotton being at hand from America, the gradual diminution of supply will send up the price till it attracts to our shores the whole Indian surplus—a supply adequate to remove all ap- prehension as regards quantity, and nearly sufficient to meet the less imperious demand for quality. It is at this point doubtless that our moat serious danger lies, but the balance of probabilities is still strongly in favour of ultimate safety. The only commercial disaster this country has at present to encounter is the deficient harvest in France, and the conse- quent tightness of the French money market, to be followed by a large diminution, not in the orders sent to England, but in the orders which might have been sent under the tariff.
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