TOOKE'S HISTORY OF PRICES.

THE leisure of a dull autumn has enabled us to bostow an atten- tion upon this valuable work, which it would have been vain to attempt giving on its first appearance, during the height of the book season ; and the importance of the subject, its hearing upon actual circumstances, and its masterly treatment, wmlfl have de- manded a notice of some length, had it been merely a second edition, instead of a new work.

Waiving the difficult question of what is the inmost nature of price, the author takes up the subject on the common practical

ground which we all acknowledge, as the money to be given for a

commodity we want. His primary object is to disi»se of the fallacious theories which have attributed the high prices of the war and the depression since the peace, to the war, or the currency, or both together. His secondary, but, in a scientific view, far more important purpose, is to show that, practically, price depends upon supply. In accomplishing the first purpose, he effecta the second;

and, in our opinion, clearly establishes the important doctrines- that price is altogether regulated by the actual or apprehended

supply in relation to the demand ; that war, abstracting taxation, has no further effects upon the price of commodities, than the demand it creates for certain articles, (as saltpetre,) or the obsta- cles it interposes in the way of supply ; and that a depreciation of the currency is limited in its effects upon prices to the extent of the depreciation, The manner in which these valuable scientific results are evolved, is by historical induction,-the mode which Anent Sutra followed in his TVealth of Nations, and which is indeed the only sure method of establishing practical principles. Alter a general exposition of his views and purposes, Mr. Tomtit gives an histo- rical sketch of the character of the seasons and of the prices of agricultural produce from the earliest periods of our history, but in some detail from 1692 to 1793; in the course of which he shows, that, let other circumstances fluctuate as they might, wheat was always cheap when it was plentiful, and clear when it was scarce-=or in other words, that the price of corn depends upon the harvest. He then examines theoretically the man- ner in which war or currency can operate upon price; and, lastly, traces in quinquennial periods the history of prices and circulation from 1793 to 1837. In executing this laborious and extensive task, he first states the prices, and comments upon the fluctuations of agricultural produce ; describes the variations of the seasons, and how they operated month by month or quarter by quarter upon the market ; tells the quantity and quality of the crop both at home and abroad ; quotes the quantities imported when a Continental surplus rendered impor- tation possible; and estimates the cost of the various obstacles which the war threw in its way. His second section is devoted to currency ; which is treated in an analogous manner; and in which he maintains the doctrine, that though the issues of the Bank during the period of the restriction were regulated upon a false and absurd* principle, yet, being steadied by the accidental rate of interest, the currency was kept artificially equal to the internal wants of the country, though it left the foreign trade, which depended upon the exchanges, exposed to enormous de- rangements. The third part of each quinquennial period contains an examination of the history of other commodities; showing how some of them rose and others fell, irrespectively of the war or the depreciation of the currency, but governed by causes which resolve themselves into a real or apprehended scar- city, dependent upon actual or anticipated demand. Applied statistics, sometimes arithmetical or tabular, some- times narrative, is therefore the character of the book : and it possesses nearly all the qualities which such works re- quire, - extensive and patient research, a considerable collec- tion of facts bearing upon the points at issue, much judgment in applying, with sufficient skill in marshalling them, and a deep knowledge of the science of political economy, under the guidance of sound sense and an extensive practical acquaint- ance with affairs. Something more of force or vivacity might give greater readableness to parts of the volumes; and the critical eye will perceive passages which a more skilful composition would have made clearer, or at least more readily apprehended. These, however, are inconsiderable defects : the History of Prices is to be rated amongst the most valuable contributions to political eco- nomy, on a limited range of subjects, whilst it is both curious and instructive as a history of an important branch of commerce. This general praise will not be understood as implying implicit acquiescence in all that Mr. TOOKE advances. For example, we think that, in endeavouring to estimate the effects of war upon price, he does not allow sufficient weight to the sudden and violent ab- • That the demand for the discount of goad bills at 5 per cent. Was to govern the issues. Traction of labour from productive to unproductive employments; nor does he seem to appreciate the influence of its disturbing effects upon society. Nor, we conceive, in the various revulsions that have taken place from over-trading, does he attribute suffi- cient to the ill-judged issues of the Bank of England in fostering (not originating) rash speculations. To exhibit in detail Mr. Tooxes views, or to give examples of his mode of proof, would be beyond the compass of our columns. The nearest approach we can make to the latter, will be to avail ourselves of the various facts contained in the work, for the com- pilation of a table showing the average prices of wheat. frcm 1790 to 1826, with the nature of the seasons, the depreciation of the currency, and the duration or suspension of hostilities. We can- not, of course, show the weatherly fluctuations of price; or how the plenty of one year influenced the deficiency of the next ; or bow occasional importations, stimulated by bounties, operated upon price; or, in a tabular form, even describe the seasons ac- curately. The reader will bear in mind, when looking at a high average price with a favourable harvest, (or the reverse,) that the principal operation was in the following year.

Sear.

Average of Wheat. per Quarter.

Character of the Season.

Years of War or Peace.

Gold, per ounce. Oh To . o ii o o .:a-

1:. ..h.. k. Ca` ;

„.,

- o a.:1 , E 2 zi 'w o

to..

• c a 1.

s. d.

A s. d. X. r. d.

A s. d.

1790

6q 21

Indifferent Peace. 3 17 10,1

100 0 0

nil.

1791 49 4 Very favourable

1792

47 11

Had

.

....

1793 49 61 Summer dry Feb•War .:

1791 54 0 llot and dry--a drought • - ..

..

1795 41 6 Very batl• - . .

.

1796 80 3 Favourable - • •

....

1797 62 0 Indifferent - . •

1798 54 0 Moderately favonrable -

..

1799 75 8 Very bad throughout the year 4... - ....

• ...

1800 1801 127 0 128 6 nail the crop injured by wet 1. Favourable - 1, Oct. •••• 4 5 0

91 12 4

'' • ' 8 7 8 1802 67 3 Favourable . Peace.

4 4 0

92 14 2 7 5 10 1803 611 0 Favourable War. 4 0 0 97 6 10 2 13 2 1804 69 6 Had, from blight and mildew - 4 0 0 97 6 10 2 13 9 1805 84 0 ludifferent - 4 0 0 97 6 10 2 13 2 1806 88 0 Average - 4 0 0 97 6 10 2 13 2 1807 78 0 Hardly un average - 4 0 0 97 6 10 2 13 2 1808 83 3 Hut summer, wet autumn - 4 0 0

97 6 10 2 13 2

1809 106 0 Wet summer and autumn -

4 0 0 97 6 10 2 13 2

1810 112 0 Deficient in quantity - 4 10 0 86 10 6 l3 9 6 1811 108 0 Deficient, and Inferior in quality - 4 4 6 92 3 2 7 10 10 1812 118 0 Under the average - 4 15 6 79 5 320 14 9 1813 120 0 Very favourable= -.. 5 1 0

77 2 0.12 18 0

1814 85 U Under an average War 5 4 0 74 17 6 25 2 6 1815 76 0 Favourable and 4 13 6 83 5 9 16 14 3 1816 82 0 Very unfavourable ; deficient both in quantity and quality Peace. 4 13 6 83 5 9l6 14 3

1817

116 0 Nearly an average, but of inferior quality

} Pence.

i 0 0 97 6 10 2 13 9

1818

94 0 Deficient , - 4 0 0 97 6 10 2 13 2 1819 78 U Average - t 1 6 93 11 0 4 9 0 1820 76 0 Very abundant - 3 19 11 97 8 0 2 12 0 1321 71 0 Average

3 17 10, 100 0 0 nil.

1822 53 0 Full average

.• .

....

1823 57 0 somewhat deficient

.

.

1824

72 0

Deficient

.

182: 84 0 Early, and average - .

.

1826 73 0 Early, and full average

..

Let us pause a moment upon the mere facts of this tab e. Ill the first' period of eleven years, there may be reckoned three of peace and eight of war, without any depreciation of the currency ; yet within this time we have the lowest and almost the highest prices that were reached during the whole period of thirty-six years. In 1790, the peace price of wheat was 56s. a quarter. In 1798, after five years of war, it was only 54s.; having risen in the interval as high as 818. 6d. For seven years at the beginning of this century, the depreciation of the currency was stationary at 21. 138. 2d. per cent., and the war was con:inuous ; but wheat varied with the varying seasons, from 60s. to 106s. In other words, whilst war and the currency-the two alleged causes of high prices-were in uniform operation, wheat fluctuated from 70 to 80 per cent., and that not progressively, but up and down. In 1812-13, when the currency was depreciated 201. 14*. and 22/. 188. per cent., wheat was 118s. and 120*. per quarter. In 1814, the depreciation had risen to 25/. 2s. 6d.; but wheat had fallen to 85s. In 1817, war had ceased, and the currency was within 2/. 139. 2d. of par; but wheat, after an unfavourable harvest, was up to 116*. Two years after, the currency had depreciated to 41. 9s. per cent.; yet wheat had fallen to 85s.

Passing to points of more immediate application, it will be seen from the table, but more convincingly by the examination of Mr. Tooka's historical narrative from about 1670 to the present time, that seasons, whether favourable or unfavourable, mostly follow each other in regular succession-years of plentiful or average crops being followed by the reverse. This uncertainty in the seasons is increased by causes inherent in the laws of supply ; less corn being sown after plentiful harvests, but increased cultivation tajting place upon scarcity occurring. As these changes, however, cannot be brought into immediate operation, it often happens that

• The years 1;94-95 are the two unfavourable years which produced Btraxx's Thoughts on Scarcity: it is needless to say that he attributed the scarcity to natural atlases. It is singular, or. looking with a more scrutinizing eye, to see how Parr and Boasts had almost anticipated some of Mr. Tousta's conclusious, iu a general anti paUiUg nay. 1799-1800 were the celebrated famine yenta,. when. by a species of seltdenying ordinances. 'amities were put upon shott allowance. and bakers tint nut make beat bread. Thu rise in the price of necessaries was aceompatied by *Alt iu Transatlantic produce. Wheat. in August 1913, was al 1190 , and in Deeember at 734.6d. In France, Isietween 1819 and 1814, wheat fell from 34f. 33c. the hectolitre to 17t 73e. These isetanees will show Ow nseesaity of referring to Mr. TOOKII'S volumes for a thorough view of the subjeet. a plentiful crop follows an increase of culture, and a &hie v, falling-of. For these inevitable fluctuations the landed interest kg' able seasons to provide against deficient ones, besides deprimo. Great Britain of the chance that a scanty harvest here may lea favourable or an average one abroad. The effect of Lord do not responsible ; but their Corn-laws aggravate the evil, by ckstk- ing cultivation abroad, and thus diminishing the surplus of favour. able minant," has been to strengthen the hands of an oligarchy which RUSSELL'S Reform Bill in rendering the landed interest "oreL stands between a nation and its daily bread. " What is the natural price of wheat in England?-that price which can be gotten after a plentiful harvest at home, or, including the costs of importation, from abroad ? and is the price of this prime necessary uniform, like metals, including the costs of trans. port?"-is a curious but a difficult subject of inquiry, owing to the many collateral causes which must be taken into consideration, As a slight assistance towards this inquiry, we will note some oi the leading facts connected with the corn-trade for the last 160 of 170 years.

From 1670 to 1673 were years of plenty, and the " predoml. nant interest" prohibited importation by prohibitory duties; but notwithstanding this temporary corn-law, the price of wheat at Lady-day 1673 was 35*. 6d. One hundred and sixt■-two years after, (December 1835, January 1836,) and, in despite of a per- manent corn-law nearly as prohibitive, wheat was 34*. 11d.* On the average of seven years from 1666 to 1672, both years included, the price was 36*. In the six years ending 1691, it was 298.5d.; but for the four years it was only 27s. 7d.; and during the first half of the next century still lower. See, however, the effects of bad harvests. The average of seven years from 1673 to 1679 is 46s., being a rise of nearly 30 per cent: and for the four years ending 1699, the price was 56*. 6d. In 1710, after very low prices at the beginning of the century, it was 81*. 9d.- much higher than in 1803-4, when we were at war with Naponeox.

The fifty years following 1715 were remarkable for a general low range of prices, the average being 348. 11d.; exactly that to which wheat had fallen in 1835.36; and during the few years of comparative dearth, the price never rose higher than 56*. From 1765 to 1690, the seasons were more unfavourable, and prices rose. On an average of five years ending 1770, wheat was 48s., and at Ludy-day 1775 it was 598.; but a favourable harvest reduced it at Michaelmas to 438. 7d. Two favourable years, 1778-9, brought it down to plenty price, 35*. 11d. The reader who would pur- sue the subject further or in greater detail, must recur to the volumes ; but we may observe, that whenever nature was boun- Md, the " predominant interest" was clamorous : ruin was said to be their certain portion, unless they were helped by corn-laws; which availed them nothing in times of plenty, and being tem- porary., (such was the less skilful practice of those days,) were inoperative in times of scarcity; during which, to do the feelings of the old squirearchy justice, they seem to have been tolerably ready with bounties upon importation, or bills to prevent ex- portation.

Does this constant dabbling with commerce, whether in corn or o: her commodities, tend to any thing but mischief? Do the Corn-laws benefit the agricultural interest-meaning farmers as well as landlords ? One great advantage of the volutnes before us is, to impress upon their readers, that except in cases of peculiar taxation, the only sound commercial basis is perfect freedom; for trade has then only to contend with natural obstacles, whereas artificial attempts at remedy merely aggravate and multiply the evils which they can never prevent. As regards the Corn-laws, we shall not be silly enough to hold that they benefit nobody, any more than we should say that all the money staked at a gaming-table is altogether lost ; somebody belonging to the " predominant interest," no doubt, gets the amount of which the public are directly plundered. But the amount is not profit, but booty; and it is a matter of lottery to whose share it will fall. If the farmer has calculated his rent upon scarcity prices, and plenty follows, the landlord gets no rent, or he gets it from his tenant's capital ; who is injured either way, if not ruined. If an average has been taken, there is a chance that whilst low prices will not enable him to pay his rent from his farm, a bad year may be followed by an influx of corn from abroad ; which reduces what, on the rotten basis of his artificial calculation, should be his remunerating years, to the level of an average crop. How splen- didly such a prize as a bad harvest, coupled with a scanty surplus at home and abroad, may operate in filling the pockets of the agriculturists, can be shown by an extract from Mr. Tomtit. It relates to a curious subject-the extent to which a defect in the supply oderates to raise prices above the proportion of the deficiency. The fact that a small deficiency in the produce of corn, compared with the average rate of consumption, occasionally causes a rise in price very much be- yond the ratio of the defect, is obvious upon the slightest reference to the his- tory of prices at periods when nothing In the state of politics or of the cut• rency could be suspected to have had any influence. Sonia writers have attempted to deduce a strict rule of proportion between given defect of the harvest and the probable rise of price. The rule of this kind that has been most commonly referred to, is one by Gregory King, which is introduced in the following passage by D'Avenaot: " It is observed, that but one-tenth the defect iu the harvest may raise the price three-tenths; and when we have but half our crop of wheat, which son and then happens, the remainder is spun out by thrift and good roanagemeatI and eked out by the use of other grain : but this will not do for above use year, and would be a small help in the succession of two or three unseasonable • The Imperial quarter was 36s. Taking the value of money into Ilia account, this prios was perhaps fully the lowest that has moaned fur the lot two hawked yews.

of one year is very destructive, in which many for want of sufficient food or by unwholesome the harvest may raise the price of corn in the harvests For the scarcity even of the poorest sort perish, either diet

0 We take it that a defect in following proportions

Defect.

I tenth 2 tenths 3 tenths r 4 tenths

5 tenths 4.5 tenths.

So that when corn rises to treble the common rate, it may be presumed that we want above one-third of the common produce ; and if we should want tive- tenths, or half the common pi oduce, the price would rise to near five times the common rate."—(D'Arenont, Vol. Ii. pages 224 and 2'2.5.) It is perhaps superfluous to add, that no such strict rule can he deduced : at the ume time, there is some ground for supposing that the estimate is not very wide of the truth, from observation of the repeated occurrence of the fact, that the price of corn io this country has risen from 100 to 200 pet cent. and up- ward, when the utmost computed deficiency of the crops has not beeu more than between one-sixth and one-third below an average, and when that defi- ciency hu been relieved by foreign supplies. All that can be said, therefore, in general terms, is, that a decided deficiency d supply is commonly attended in the case of corn, more than in that of moat other articles, with an advance in price very much beyond the degree of the deficiency. And the reason of the fact is as clear, upon a little reflection, as the fact itself is upon the slightest observation. The process by t hich the rise beyond the proportion of defect takes place, is the struggle of every one to get his accustomed share of that which is neces- sary for his subsistence, and of which there is not enough or so much as usual for all. Supposing a given deficiency, the degree in which the money price any rise, will depend upon the extent of the pecuniary means of the lowest "lasses of the community. In countries where the pecuniary means of the bent classes are limited to the power of obtaining a bare subsistence in ordinary .times, as in Ireland and on many parts of the Continent, and where neither the Government, as in France, nor the Poor-laws and contri- billions by wealthy individuals, as in England, conic in aid of those means, a proportion of the population, according to the degree of scarcity, must perish, or suffer diseases incidental to an insufficient supply of food, or to a substitution of bit:editr and unwholesome diet. And the increased compel- lion of purchasers being thus limited to the classes above the lowest, the rise in price may not be very considerably beyond the defect of quantity. But in Prance, when it is a part of the general policy of the Government to provide be the purchase of cern, in times of dearth, for the subsistence of the lowest slams, and particularly for that of the inhabitants of Paris,—and in this country, where the Poor-laws create a fund for the maintenance of the lowest Hers, at the expense of all the classes above them,—where moreover, the ',Notary wastribations of richer individuals swell that fund,.---it is clear that lie competition of purchasers would be greatly increased ; while the supply being limited, the price would rise very considerably beyond the ratio of the de- ficiency. The final effect of a rise in price so much beyond the defect of the *bps, when that increased rise is produced by the causes mentioned, is to limit the consumption and to apportion the privations resulting from scarcity over a larger part of the population ; thus diminishing the severity of pressure upon the lowest class, and preventing or tending to prevent any part of it from perish- i14, as it might otherwise do, from actual want of food. -It is of the utmost impol lance to bear in mind the operation of the principle d the great increase of price beyond the degree of deficiency, with a view to accounting not only for the high range of prices, but likewise for the extraordi- nary prosperity which attended the agricultural interest • during the first half d the period that will come under consideration ; and which cannot, in my opinion, be accounted for in any other way.

It is clearly through the medium of prices raised beyond the ratio of defi- ciency, that farmers gained such great profits pending the term of their leases, and that landlords obtained such greatly advanced rents at the granting of new lease"

If prices of produce had risen only in exact proportion to the deficiency of growth,—thus, if in commonly good years an acre of wheat produced 33 bushels, which sold for 6s. per bushel, or 9/. 18s., but in a bad season produced aoly two-thirds of a crop, or 22 bushels, which sold for Os. the bushel, or W. 18s., supposing the expenses of getting in the crops to be the Forme in both asses,—the farmer would be neither gainer nor loser by the deficiency of his stop, that deficiency being here assumed to be general. The deficiency would be a general calamity, and farmers and landlords would bear their shares of it in their quality of consumers.

But, upon the principle here stated, the case would be widely different. In the event of a deficiency of one-third of an average crop, a bushel of wheat might rise to 18s. and upwards.t Now, '22 bushels, at 18s. per bushel, would be worth 19/. 16s.; whereas the 33 bushels, at (is., were worth only 91. 18s., making a clear profit to the grower of 100 per cent. This, of course, is an ex- treme case, and cannot, in general, be of lung duration : it supposes no great earplug from former years, and no immediate prospect of adequate relief from importation. While the deficiency exists, however, whether in reality or only in apprehension, such and still greater may be the effect.

For the sake of illustration of the mode and degree in which a deficiency in the crops, compared with an average produce, is calculated to affect the condi- tion of the agricultural interest, let us suppose that the average produce of corn in this country were 32 millions of quarters of all kinds, which would sell at 401. per quarter all round LIP a remunerative price, making an amount of 64,000,0001. to be distributed as wages, profit, and rent, including tithe; but by the occurence of a bad crop, deficient one-eighth, uncompensated by a cur- plot from the former season, the price advanced to 60s.: theme would theu be 28 millions of quarters, at 60s., making 84,000,000/., being a clear addition of 20,000,000/. to be distributed among the farmers and landlords, and receivers of tithe in kind, in the first instance. Eventually, increased wages would form some deduction, if the advance in price, from the continuance of deficiency, 'uteri for more than one season ; or if, by the recurrence of deficiency at short intervals, the advance were, on an average, in the same relative proportion. If the deficiency were one quarter, and the price were to rise, as it infallibly would, Coat least double, the gain among those classes would be

32.000,000 of quarters, at 403.=64,000.000/.

24,000,000 80s.=96,000,0001.

By agricultural interest. I mean exclusively farmers and landlords and oo ners of tithes, a ho are alone benefited by an advance of price resulting from scarcity. The condition of the labout lug classes, even of those employed in littstiantirv, o ell know n to be deteriorated in periods of tleat th, as the wages of labour do not rise tu full pro. prtion to the advauce lo the price of provisions. t Considering the institutions of this country relative to the maintenance of the poor, if there should be a deficiency of the crops amounting to oue.t Idol, without any 4'7114 from a former year, and without any chance of relief by importation, the price might rise Ilve, six, or "ten tenfold. f It was computed by Dr. Collpthoun that the consumption of all kinds of grain in this kingdom amounted iu 11.2 to 35 'millions of quarters. exclusive of seed. Mr. 11•Culloeld estimates that, in 1:134, the consumption might be computed at 44 million. .*elusive of seed, and 52 millions including seed.—See Article, " Cons laws and Corn- trifle," in his Commercial Di i

Dictionary.

Above the common rate. 3 tenths 8 tenths aises the price 1 6 tenths

2.8 tenths

There can be little doubt that, in such a state of things, the agricultural:in- terest would enjoy not only the appearance but the reality of prosperity. But It II clear, that the increased income distributed among the agricultural interest must, with the exception of the increased expenses incurred by the landlords and farmers in their quality of consumers, be at the expense of the other order* of the community.

We are well aware, that in unavoidable scarcity, this enormous loss to the community is a necessary evil, not unattended with good; for in an article of such universal demand as wheat, it is probable that an increase of price in strict proportion to the defective supply would not operate as a sufficient cheek to husband a scanty store— that ten or eleven months' supply, for instance, instead of being pretty equally eked out by means of short commons through the whole year, would be eaten as usual during six or seven months, leaving famine prices. or famine itself, for the latter part of the period. What we complain of is, that this necessity should be artificially aggravated, for the sake of a gambling gain to any " predominant interest."

Another evil of the Corn-laws is their tendency to produce, or at least to aggravate, a pressure upon the currency, always caus- ing loss to the commercial world, frequently ruin to many of its members, and in unfavourable conjunctures liable to end in panic. Under a free trade in corn, whatever was regularly im- ported would be paid for in British manufactures, for which the grower would acquire a taste capable of ready extension; and though their surplus store of corn to supply any sudden scarcity might be partially paid for with gold, yet much of it would be bought with increased exports. Now there is no export but gold. When foreign corn is wanted in large quantities, a drain begins upon the Bank ; which, if it properly conducted its business according to its own professed rule, would immediately reduce the circulation pro tank, and which it is obliged to do in self-defence if the demand for gold is considerable or a simultaneous drain is going on for other objects. Had the harvest for I83G failed in the South as it did in the North. Mr. Tomtit conceives the late con- vulsion in the monied and commercial world would have been much more disastrous. After a searching investigation and severe censure of the conduct of the Bank of England during the period of the late difficulties, he thus proceeds— The Bank having scrambled shreugh:its difficulties into a pairicia of safety., may naturally claim merit from this event. There were, however, two eircometances of possible awl sot at all impre- bable occurrence, is the reduced state of the Bank coffers, between the summer of 1836 and the summer of l837, which might have rendered she position of the Bank still more grittiest than it was, and rendered its eacapefrom suspension more doubtful.

One of the contingencies alluded to was that of a had harvest in 1836. If the weather in the Routh of the kingdom had been as adverse fur the securing of the crops as it had been in the north, when the inclemency of the season was little short of that of 1816, the necessity for a large importation of foreign corn, but more especially the exaggerated apprehension of the largeness of the supplies requisite, would have operated powerfully in depressiug the exchange*, and consequently in aggravating the other causes of dram on the Bank coffers. The other contingency was of a still more formidable description,—namely, that of the banks in the United States of America having taken all the men- sure, of precaution which were open to them, and which they ought to have availed themselves of for putting themselves into a position of security, not only against the effects of the President's celebrated specie circular, which wee issued in July 1836, but also against the effects, which must have been obvious to them soon after, of the tendency to a contraction of the currency in this country. The clear and proper course for them to have pursued, was resolutely to contract their ; and if they had done so to the requisite extent, the exchanges must have been in such degree and duration against this country as would have gone far towards the exhaustion of the reduced treasure of the Bank of England. To their great discredit, they did not adopt measures of due precaution ; and we have seen the consequences in their disgraceful suspeo- don. It would be foreign, however, to the purpose of this work, to enter upon the question of the American banking system : the only reason for this incidental reference to it has been, to point out how narrow was the escape of the Bank of England, and how much more than to its own merit the escape was owing to the demerit of the American banks.

Having touched upon the subject of banking, we will close- with an extract upon the recent conduct of the Joint Stock Banks, especially as there is some talk of legislation upon their affairs ; and Mr. TOOKE pointedly, though incidentally, shows himself averse to Mr. CLAY'S scheme of limited responsibility. Having exposed the fallacy, or rather the artful falsehood, that the Joint Stock Banks had defeated the attempts of the Bank of England to control the currency, he thus passes judgment on the final event— But although, upon a fair investigation, it does not appear that thereinto any such excess of the country bank issues of notes either in England or eves in Ireland, as to justify the charge brought against them of having, by those issues, interfered with the due regulation of the currency by the Bank of Eng- land, the Joint Stock Barka appear to have been instrumental in an undue and mischievous exteneion of credit, by discounts, sad rediscounts, and advances on personal security. At the same time, it is an important fact, with referents to the vast mass of bills of exchange which were the subject of discount and rediscount, with the endorsements of the Joint Stock Banks, that, in the collapse of credit which has followed the late excessive expansion, there has been as little of failure or discredit, excepting among houses connected with the Ame- rican trade, and excepting, of course, the two flagrant instances of the Agricul- tural and Commercial Bank in Ireland, and the Northern and Central Bank in 51al cluster. It is very probable that, in other instances less flagraut, there may have been much mismanagement, and much loss to the proprietors by bad debts, from the improvidence with which the credits must, in some instance., have been granted. But still there is no doubt of the fact, that no derangement wha.ever, analogous in kind, or approaching in degree, to that which occurred in 1792-3, 1796, 1810 to 1812, 1814 to 1816, and, lastly, in 1823.6, is charge- able upon the country circulation in 1836-7. And 1 must here confess, that this is a result different from that which I had anticipated in the spring and summer of I836, when I heard on all sides of the immense magnitude of the opera- tions of the Joint Stock Banks.

That those operations were too extensive to be consistent with a doe regard, on the part of the managers, fur the interests of their proprietors and the

public—that, in short, they participated too much in the spirit of overtrading then prevalent—and, perhaps, in their turn, gave additional impulse to that *pule, cannot, with the experience which we have had, well be questioned. But the comparative exemption from failures, and from consequent disturbance of the circulation, under circumstances so trying as those which occurred a twelvemonth ago, must, in fairness, be admitted to form no slight ground for in- ference in favour of the system on which the country bank establishments, both private and joint stock, have been conducted since 182.5.6. The private banks seem to have profited by the lesson, and by the purification which they then received ; and the Joint Stuck Banks appear, upon the whole, to have justified the policy which led Government and the Legislature to promote the establishment of them. How far the principle of unlimited responsibility, which (with the exception of the Bank of England and the Bank of Ireland, and two of the Chartered Banks of Scotland) pervades the whole of the banking system of this country, may have contributed to the solidity which it has been proved, by the ordeal it has recently passed through, to possess, I will not stop to discuss, because it is not within the immediate scope of this inquiry : I will only on this point observe, that the system, such as it is, stands out in preeminently advantageous contrast to the discreditable exhibition of the American Banks, with their State charters and limited responsibility.