After-War Finance
Financial Reconstruction in England, 1815.4822. By A. W. AcwOrth. (P. S. King & Son. 8e. 6d. net.) READER% of the Times have been reminded lately by the ex- tracts quoted from issues of a century ago of the distress and financial upheavals due to the Napoleonic wars and still overwhelming the victors eleven years after Waterloo.. The country had been at war for -a longer time than we were from '1914 to 1918, but war was .then still an affair of governments, navies and armies rather than of whole nations and in propor- tion less exhausting. Yet the price of victory more nearly ryined the country-then.. The change from living on credit to Paying off debt was the. same.... Unetnployment-was. propor- tionately acute and the _sufferings of the poor, urban and rural, were such as, thank Heaven ! we can scarcely imagine to-day. They are apparent in Mr. Acworth's-book, though he deals with financial rather than with sdeial-queStions. The ramifications of distress may be gauged by those whO understahit when they read Of two luiidied and. forty 'country banks 04 of 'C,.ven hundred stopping payment in 1814-16. No precedent guided the Government or their advisers in dealing with the vast load of internal debt. The debts then owed to us from abroad have perhaps saved ifs by their example front counting Orr sire!' help to-day. Great Britain did get about £5,000,000 of the French indemnity, but of some #x"7,000,000loans to Allies " s. provided by u hardly anything was repaid. Hence Brougham's caustic remark that 2s. ikl. in the pmmd was " not a very handsome composition for an Emperor." Van, sittart tried to patch up and extend Pitt's old Sinking Fund when new and drastic measures were vitally needed, and few people would squarely face the principle stated by Hamilton in 1813 that " the excess of revenue above expenditure was the only sinking' fund by which public .debt could be dis- charged." Then there was the great question of the return to the gold standard, and the other, distinct though so often confused, of the return to a gold currency. There was the trouble that arose from repayment. at gold rates of huge debts contracted during depreciation ; there were proposals for conversion of loans into terminable annuities ; there was the poverty of old customers who needed our exports but could not pay forthem and even put up tariff barriers against them. Change the dates by a hundred years and the names, add three or four noughts to magnify the figures, and you have a statement of our problems of to-day, with two important differences. First, a gold-absorbing creditor, the United States, is a new fattor. Secondly, instead of our trade being hampered by Protection which had to be gradually destroyed, we have a Free Trade system which carried us through the War and to which lip-service at any rate is still given. If the Protectionist creditor in America seems to make our recovery harder, we must remember the salvation of the Allied finances in 1917 and 1918 which entailed a debt that we must honour however it is expressed in terms of gold. On the second point, there can be little doubt that without Free Trade we should not be making what recovery we are making: That we should now have more people earning wages in this country than in 1913 would have seemed an impossible dream to the weary and haggard men who were vainly seeking for the recovery of British trade a century ago, a quite incredible happiness to those who had their experience. And in those days there was no mitigation of suffering by insurance or the forms of public assistance which are so lavish compared with the old Poor -Law. - - - . - - Mr. Acworth makes none of these comparisons, but they are irresistible to any reader who follows his story, which is largely a patchwork of quotations from contemporary sources. He does not often illuminate his tale with criticisms, though it becomes apparent that he sets Ricardo high among the writers and parliamentary theorists, and is attracted by his " Ingot Plan," based on the principle that the Bank of England should have been selling gold rather than buying it. In tracing the return to the gold standard he makes it plain hoW the country benefited. Then as now most people were agreed that it had to be done and that it would entail inevitable hardship. Nobody agreed, then as now, upon the exact pace at which deflation would do most good and make the hardship most tolerable. The Government and the Bank did in 181'1 slip into a temporary course of inflation which did harm_ in the long run and they had to retrace their steps with pain two years later. - Mr. Acworth has drawn upon a good bibliography of con- temporary writings, though we miss any reference to Lord Liverpool's book ; ..his speeches are often, quoted. He does not go back to the philosophers of finance such as Locke or Berkeley, nor, when he deals with the resumption of gold coin,- does he refer to writers like -Ruding, who were so intensely interested in the reeoinage when the guinea finally disappeared before the sovereign. The Treasury and the Bank are--not likely to make any serious mistakes over the return of the gold sovereign, but it would be extremely interesting and educative if an abridgment of the Reports of the Committees of the Lords and Commons on the Resumption of Cash Payments (1819) could be published. We shall be curious to see how the public takes it when it domes ; probably with just the same grumbles that were Made in 1914 over those beastly bits of paper." That is our privilege when any change is thrust upon us. . _
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