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The Grounds of an Opinion on the Policy of Restricting the
Importation of Foreign Corn; intended as an Appendix to
"Observations on the Corn Law"

by the Rev. T.R. Malthus,

Professor of History and Political Economy
in the East India College, Hertfordshire.



London: Printed for John Murray, Albermarle Street, and J. Johnson
and Co., St. Paul's Church Yard, 1815.






Grounds, &c.


The professed object of the Observations on the Corn Laws, which I
published in the spring of 1814, was to state with the strictest
impartiality the advantages and disadvantages which, in the actual
circumstances of our present situation, were likely to attend the
measures under consideration, respecting the trade in corn.

A fair review of both sides of the question, without any attempt to
conceal the peculiar evils, whether temporary or permanent, which
might belong to each, appeared to me of use, not only to assist in
forming an enlightened decision on the subject, but particularly to
prepare the public for the specific consequences which were to be
expected from that decision, on whatever side it might be made. Such
a preparation, from some quarter or other, seemed to be necessary,
to prevent those just discontents which would naturally have arisen,
if the measure adopted had been attended with results very different
from those which had been promised by its advocates, or contemplated
by the legislature.

With this object in view, it was neither necessary, nor desirable,
that I should myself express a decided opinion on the subject. It
would hardly, indeed, have been consistent with that character of
impartiality, which I wished to give to my statements, and in which
I have reason to believe I in some degree succeeded.(1*)

These previous statements, however, having been given, and having, I
hope, shewn that the decision, whenever it is made, must be a
compromise of contending advantages and disadvantages, I have no
objection now to state (without the least reserve), and I can truly
say, wit the most complete freedom from all interested motives, the
grounds of a deliberate, yet decided, opinion in favour of some
restrictions on the importation of foreign corn.

This opinion has been formed, as I wished the readers of the
Observations to form their opinions, by looking fairly at the
difficulties on both sides of the question; and without vainly
expecting to attain unmixed results, determining on which side there
is the greatest balance of good with the least alloy of evil. The
grounds on which the opinion so formed rests, are partly those which
were stated in the Observations, and partly, and indeed mainly, some
facts which have occurred during the last year, and which have
given, as I think, a decisive weight to the side of restrictions.

These additional facts are--

1st, The evidence, which has been laid before Parliament, relating
to the effects of the present prices of corn, together with the
experience of the present year.

2dly, The improved state of our exchanges, and the fall in the price
of bullion. And

3dly, and mainly, the actual laws respecting the exportation of corn
lately passed in France.

In the Observations on the corn laws, I endeavoured to shew that,
according to the general principles of supply and demand, a
considerable fall in the price of corn could not take place, without
throwing much poor lad out of cultivation, and effectually
preventing, for a considerable time, all further improvements in
agriculture, which have for their object an increase of produce.

The general principles, on which I calculated upon these
consequences, have been fully confirmed by the evidence brought
before the two houses of Parliament; and the effects of a
considerable fall in the price of corn, and of the expected
continuance of low prices, have shewn themselves in a very severe
shock to the cultivation of the country and a great loss of
agricultural capital.

Whatever may be said of the peculiar interests and natural
partialities of those who were called upon to give evidence upon
this occasion, it is impossible not to be convinced, by the whole
body of it taken together, that, during the last twenty years, and
particularly during the last seven, there has been a great increase
of capital laid out upon the land, and a great consequent extension
of cultivation and improvement; that the system of spirited
improvement and high farming, as it is technically called, has been
principally encouraged by the progressive rise of prices owing in a
considerable degree, to the difficulties thrown in the way of
importation of foreign corn by the war; that the rapid accumulation
of capital on the land, which it had occasioned, had so increased
our home growth of corn, that, notwithstanding a great increase of
population, we had become much less dependent upon foreign supplies
for our support; and that the land was still deficient in capital,
and would admit of the employment of such an addition to its present
amount, as would be competent to the full supply of a greatly
increased population: but that the fall of prices, which had lately
taken place, and the alarm of a still further fall, from continued
importation, had not only checked all progress of improvement, but
had already occasioned a considerable loss of agricultural advances;
and that a continuation of low prices would, in spite of a
diminution of rents, unquestionably destroy a great mass of farming
capital all over the country, and essentially diminish its
cultivation and produce.

It has been sometimes said, that the losses at present sustained by
farmers are merely the natural and necessary consequences of
overtrading, and that they must bear them as all other merchants do,
who have entered into unsuccessful speculations. But surely the
question is not, or at least ought not to be, about the losses and
profits of farmers, and the present condition of landholders
compared with the past. It may be necessary, perhaps, to make
inquiries of this kind, with a view to ulterior objects; but the
real question respects the great loss of national wealth, attributed
to a change in the spirit of our legislative enactments relating to
the admission of foreign corn.

We have certainly no right to accuse our farmers of rash speculation
for employing so large a capital in agriculture. The peace, it must
be allowed, was most unexpected; and if the war had continued, the
actual quantity of capital applied to the land, might have been as
necessary to save the country from extreme want in future, as it
obviously was in 1812, when, with the price of corn at above six
guineas a quarter, we could only import a little more than 100,000
quarters. If, from the very great extension of cultivation, during
the four or five preceding years, we had not obtained a very great
increase of average produce, the distresses of that year would have
assumed a most serious aspect.

There is certainly no one cause which can affect mercantile
concerns, at all comparable in the extent of its effects, to the
cause now operating upon agricultural capital. Individual losses
must have the same distressing consequences in both cases, and they
are often more complete, and the fall is greater, in the shocks of
commerce. But I doubt, whether in the most extensive mercantile
distress that ever took in this country, there was ever one fourth
of the property, or one tenth of the number of individuals
concerned, when compared with the effects of the present rapid fall
of raw produce, combined with the very scanty crop of last year.(2*)

Individual losses of course become national, according as they
affect a greater mass of the national capital, and a greater number
of individuals; and I think it must be allowed further, that no
loss, in proportion to its amount, affects the interest of the
nation so deeply, and vitally, and is so difficult to recover, as
the loss of agricultural capital and produce.

If it be the intention of the legislature fairly to look at the
evils, as well as the good, which belongs to both sides of the
question, it must be allowed, that the evidence laid before the two
houses of Parliament, and still more particularly the experience of
the last year, shew, that the immediate evils which are capable of
being remedied by a system of restrictions, are of no inconsiderable
magnitude.

2. In the Observations on the corn laws, I gave, as a reason for
some delay in coming to a final regulation respecting the price at
which foreign corn might be imported, the very uncertain state of
the currency. I observed, that three different importation prices
would be necessary, according as our currency should either rise to
the then price of bullion, should continue at the same nominal
value, or should take an intermediate position, founded on a fall in
the value of bullion, owing to the discontinuance of an
extraordinary demand for it, and a rise in the value of paper, owing
to the prospect of a return to payments in specie. In the course of
this last year, the state of our exchanges, and the fall in the
price of bullion, shew pretty clearly, that the intermediate
alteration which, I then contemplated, greater than in the case
first mentioned, and less than in the second, is the one which might
be adopted with a fair prospect of permanence; and that we should
not now proceed under the same uncertainty respecting the currency,
which we should have done, if we had adopted a final regulation in
the early part of last year.(3*) This intermediate alteration,
however, supposes a rise in the value of paper on a return to cash
payments, and some general fall of prices quite unconnected with any
regulations respecting the corn trade.(4*)

But, if some fall of prices must take place from this cause, and if
such a fall can never take place without a considerable check to
industry, and discouragement to the accumulation of capital, it
certainly does not seem a well-chosen time for the legislature to
occasion another fall still greater, by departing at once from a
system of restrictions which it had pursued with steadiness during
the greatest part of the last century and, after having given up for
a short period, had adopted again as its final policy in its two
last enactments respecting the trade in corn. Even if it be
intended. Finally, to throw open our ports, it might be wise to pass
some temporary regulations, in order to prevent the very great shock
which must take place, if the two causes here noticed, of the
depreciation of commodities, be allowed to produce their full effect
by contemporaneous action.

3. I stated, in the Observations on the corn laws, that the
cheapness and steadiness in the price of corn, which were promised
by the advocates of restrictions, were not attainable by the
measures they proposed; that it was really impossible for us to grow
at home a sufficiency for our own consumption, without keeping up
the price of corn considerably above the average of the rest of
Europe; and that, while this was the case, as we could never export
to any advantage, we should always be liable to the variations of
price, occasioned by the glut of a superabundant harvest; in short,
that it must be allowed that a free trade in corn would, in all
ordinary cases, not only secure a cheaper, but a more steady, supply
of grain.

In expressing this distinct opinion on the effects of a free trade
in corn, I certainly meant to refer to a trade really free--that
is, a trade by which a nation would be entitled to its share of the
produce of the commercial world, according to its means of
purchasing, whether that produce were plentiful or scanty. In this
sense I adhere strictly to the opinion I then gave; but, since that
period, an event has occurred which has shewn, in the clearest
manner, that it is entirely out of our power, even in time of peace,
to obtain a free trade in corn, or an approximation towards it,
whatever may be our wishes on the subject.

It has, perhaps, not been sufficiently attended to in general, when
the advantages of a free trade in corn have been discussed, that the
jealousies and fears of nations, respecting their means of
subsistence, will very rarely allow of a free egress of corn, when
it is in any degree scarce. Our own statutes, till the very last
year, prove these fears with regard to ourselves; and regulations of
the same tendency occasionally come in aid of popular clamour in
almost all countries of Europe. But the laws respecting the
exportation of corn, which have been passed in France during the
last year, have brought this subject home to us in the most striking
and impressive manner. Our nearest neighbour, possessed of the
largest and finest corn country in Europe, and who, owing to a more
favourable climate and soil, a more stationary and comparatively
less crowded population, and a lighter weight of taxation, can grow
corn at less than half our prices, has enacted, that the exportation
of corn shall be free till the price rises to about forty nine
shillings a quarter,(5*) and that then it shall be entirely
cease.(6*)

From the vicinity of France, and the cheapness of its corn in all
years of common abundance, it is scarcely possible that our main
imports should not come from that quarter as long as our ports are
open to receive them. In this first year of open trade, our imports
have been such, as to shew, that though the corn of the Baltic
cannot seriously depress our prices in an unfavourable season at
home, the corn of France may make it fall below a growing price,
under the pressure of one of the worst crops that has been known for
a long series of years.

I have at present before me an extract from a Rouen paper,
containing the prices of corn in fourteen different markets for the
first week in October, the average of which appears to be about
thirty eight shillings a quarter;(7*) and this was after
disturbances had taken place both at Havre and Dieppe, on account of
the quantity exported, and the rise of prices which it had
occasioned.

It may be said, perhaps, that the last harvest of France has been a
very favourable one, and affords no just criterion of its general
prices. But, from all that I hear, prices have often been as low
during the last ten years. And, an average not exceeding forty
shillings a quarter may, I think, be conclusively inferred from the
price at which exportation is by law to cease.

At a time when, according to Adam Smith, the growing price in this
country was only twenty eight shillings a quarter, and the average
price, including years of scarcity, only thirty three shillings,
exportation was not prohibited till the price rose to forty eight
shillings. It was the intention of the English government, at that
time, to encourage agriculture by giving vent to its produce. We may
presume that the same motive influenced the government of France in
the late act respecting exportation. And it is fair therefore to
conclude, that the price of wheat, in common years, is considerably
less than the price at which exportation is to cease.

With these prices so near us, and with the consequent power of
supplying ourselves with great comparative rapidity, which in the
corn trade is a point of the greatest importance, there can be no
doubt that, if our ports were open, our principal supplies of grain
would come from France; and that, in all years of common plenty in
that country, we should import more largely from it than from the
Baltic. But from this quarter, which would then become our main and
most habitual source of supply, all assistance would be at once cut
off, in every season of only moderate scarcity; and we should have
to look to other quarters, from which it is an established fact,
that large sudden supplies cannot be obtained, not only for our
usual imports, and the natural variations which belong to them, but
for those which had been suddenly cut off from France, and which our
habitually deficient growth had now rendered absolutely necessary.

To open our ports, under these circumstances, is not to obtain a
free trade in corn; and, while I should say, without hesitation,
that a free trade in corn was calculated to produce steadier prices
than the system of restrictions with which it has been compared, I
should, with as little hesitation say, that such a trade in corn, as
has been described, would be subject to much more distressing and
cruel variations, than the most determined system of prohibitions.

Such a species of commerce in grain shakes the foundations, and
alters entirely the data on which the general principles of free
trade are established. For what do these principles say? They say,
and say most justly, that if every nation were to devote itself
particularly to those kinds of industry and produce, to which its
soil, climate, situation, capital, and skill, were best suited; and
were then freely to exchange these products with each other, it
would be the most certain and efficacious mode, not only of
advancing the wealth and prosperity of the whole body of the
commercial republic with the quickest pace, but of giving to each
individual nation of the body the full and perfect use of all its
resources.

I am very far indeed from meaning to insinuate, that if we cannot
have the most perfect freedom of trade, we should have none; or that
a great nation must immediately alter its commercial policy,
whenever any of the countries with which it deals passes laws
inconsistent with the principles of freedom. But I protest most
entirely against the doctrine, that we are to pursue our general
principles without ever looking to see if they are applicable to the
case before us; and that in politics and political economy, we are
to go straight forward, as we certainly ought to do in morals,
without any reference to the conduct and proceedings of others.

There is no person in the least acquainted with political economy,
but must be aware that the advantages resulting from the division of
labour, as applicable to nations as well as individuals, depend
solely and entirely on the power of exchanging subsequently the
products of labour. And no one can hesitate to allow, that it is
completely in the power of others to prevent such exchanges, and to
destroy entirely the advantages which would otherwise result from
the application of individual or national industry, to peculiar and
appropriate products.

Let us suppose, for instance, that the inhabitants of the Lowlands
of Scotland were to say to the Highlanders, 'We will exchange our
corn for your cattle, whenever we have a superfluity; but if our
crops in any degree fail, you must not expect to have a single
grain': would not the question respecting the policy of the present
change, which is taking place in the Highlands, rest entirely upon
different grounds? Would it not be perfectly senseless in the
Highlanders to think only of those general principles which direct
them to employ the soil in the way that is best suited to it? If
supplies of corn could not be obtained with some degree of
steadiness and certainty from other quarters, would it not be
absolutely necessary for them to grow it themselves, however ill
adapted to it might be their soil and climate?

The same may be said of all the pasture districts of Great Britain,
compared with the surrounding corn countries. If they could only
obtain the superfluities of their neighbours, and were entitled to
no share of the produce when it was scarce, they could not certainly
devote themselves with any degree of safety to their present
occupations.

There is, on this account, a grand difference between the freedom of
the home trade in corn, and the freedom of the foreign trade. A
government of tolerable vigour can make the home trade in corn
really free. It can secure to the pasture districts, or the towns
that must be fed from a distance, their share of the general
produce, whether plentiful or scarce. It can set them quite at rest
about the power of exchanging the peculiar products of their own
labour for the other products which are necessary to them, and can
dispense, therefore, to all its subjects, the inestimable advantages
of an unrestricted intercourse.

But it is not in the power of any single nation to secure the
freedom of the foreign trade in corn. To accomplish this, the
concurrence of many others is necessary; and this concurrence, the
fears and jealousies so universally prevalent about the means of
subsistence, almost invariably prevent. There is hardly a nation in
Europe which does not occasionally exercise the power of stopping
entirely, or heavily taxing, its exports of grain, if prohibitions
do not form part of its general code of laws.

The question then before us is evidently a special, not a general
one. It is not a question between the advantages of a free trade,
and a system of restrictions; but between a specific system of
restrictions formed by ourselves for the purpose of rendering us, in
average years, nearly independent of foreign supplies, and the
specific system of restricted importations, which alone it is in our
power to obtain under the existing laws of France, and in the actual
state of the other countries of the continent.(8*)

In looking, in the first place, at the resources of the country,
with a view to an independent supply for an increasing population;
and comparing subsequently the advantages of the two systems
abovementioned, without overlooking their disadvantages, I have
fully made up my mind as to the side on which the balance lies; and
am decidedly of opinion, that a system of restrictions so calculated
as to keep us, in average years, nearly independent of foreign
supplies of corn, will more effectually conduce to the wealth and
prosperity of the country, and of by far the greatest mass of the
inhabitants, than the opening of our ports for the free admission of
foreign corn, in the actual state of Europe.

Of the resources of Great Britain and Ireland for the further growth
of corn, by the further application of capital to the land, the
evidence laid before parliament furnishes the most ample testimony.
But it is not necessary, for this purpose, to recur to evidence that
may be considered as partial. All the most intelligent works which
have been written on agricultural subjects of late years, agree in
the same statements; and they are confirmed beyond a possibility of
doubt, when we consider the extraordinary improvements, and
prodigious increase of produce that have taken place latterly in
some districts, which, in point of natural soil, are not superior to
others that are still yielding the most scanty and miserable crops.
Most of the light soils of the kingdom might, with adequate capital
and skill, be made to equal the improved parts of Norfolk; and the
vast tracts of clay lands that are yet in a degraded state almost
all over the kingdom, are susceptible of a degree of improvement,
which it is by no means easy to fix, but which certainly offers a
great prospective increase of produce. There is even a chance (but
on this I will not insist) of a diminution in the real price of
corn,(9*) owing to the extension of those great improvements, and
that great economy and good management of labour, of which we have
such intelligent accounts from Scotland.(10*) If these clay lands,
by draining, and the plentiful application of lime and other
manures, could be so far meliorated in quality as to admit of being
worked by two horses and a single man, instead of three or four
horses with a man and a boy, what a vast saving of labour and
expense would at once be effected, at the same time that the crops
would be prodigiously increased! And such an improvement may
rationally be expected, from what has really been accomplished in
particular districts. In short, if merely the best modes of
cultivation, now in use in some parts of Great Britain, were
generally extended, and the whole country was brought to a level, in
proportion to its natural advantages of soil and situation, by the
further accumulation and more equable distribution of capital and
skill; the quantity of additional produce would be immense, and
would afford the means of subsistence to a very great increase of
population.

In some countries possessed of a small territory, and consisting
perhaps chiefly of one or two large cities, it never can be made a
question, whether or not they should freely import foreign corn.
They exist, in fact, by this importation; and being always, in point
of population, inconsiderable, they may, in general, rely upon a
pretty regular supply. But whether regular or not, they have no
choice. Nature has clearly told them, that if they increase in
wealth and power to any extent, it can only be by living upon the
raw produce of other countries.

It is quite evident that the same alternative is not presented to
Great Britain and Ireland, and that the united empire has ample
means of increasing in wealth, population, and power, for a very
long course of years, without being habitually dependent upon
foreign supplies for the means of supporting its inhabitants.

As we have clearly, therefore, our choice between two systems, under
either of which we may certainly look forwards to a progressive
increase of population and power; it remains for us to consider in
which way the greatest portion of wealth and happiness may be
steadily secured to the largest mass of the people.

1. And first let us look to the labouring classes of society, as the
foundation on which the whole fabric rests; and, from their numbers,
unquestionably of the greatest weight, in any estimate of national
happiness.

If I were convinced, that to open our ports, would be permanently to
improve the condition of the labouring classes of society, I should
consider the question as at once determined in favour of such a
measure. But I own it appears to me, after the most deliberate
attention to the subject, that it will be attended with effects very
different from those of improvement. We are very apt to be deceived
by names, and to be captivated with the idea of cheapness, without
reflecting that the term is merely relative, and that it is very
possible for a people to be miserably poor, and some of them
starving, in a country where the money price of corn is very low. Of
this the histories of Europe and Asia will afford abundant
instances.

In considering the condition of the lower classes of society, we
must consider only the real exchangeable value of labour; that is,
its power of commanding the necessaries, conveniences, and luxuries
of life.

I stated in the Observations, and more at large in the Inquiry into
rents,(11*) that under the same demand for labour, and the same
consequent power of purchasing the means of subsistence, a high
money price of corn would give the labourer a very great advantage
in the purchase of the conveniences and luxuries of life. The effect
of this high money price would not, of course, be so marked among
the very poorest of the society, and those who had the largest
families; because so very great a part of their earnings must be
employed in absolute necessaries. But to all those above the very
poorest, the advantage of wages resulting from a price of eighty
shillings a quarter for wheat, compared with fifty or sixty, would
in the purchase of tea, sugar, cotton, linens, soap, candles, and
many other articles, be such as to make their condition decidedly
superior.

Nothing could counterbalance this, but a much greater demand for
labour; and such an increased demand, in consequence of the opening
of our ports, is at best problematical. The check to cultivation has
been so sudden and decisive, as already to throw a great number of
agricultural labourers out of employment;(12*) and in Ireland this
effect has taken place to such a degree, as to threaten the most
distressing, and even alarming, consequences. The farmers, in some
districts, have entirely lost the little capital they possessed;
and, unable to continue in their farms, have deserted them, and left
their labourers without the means of employment. In a country, the
peculiar defects of which were already a deficiency of capital, and
a redundancy of population, such a check to the means of employing
labour must be attended with no common distress. In Ireland, it is
quite certain, that there are no mercantile capitals ready to take
up those persons who are thus thrown out of work, and even in Great
Britain the transfer will be slow and difficult.

Our commerce and manufactures, therefore, must increase very
considerably before they can restore the demand for labour already
lost; for the and a moderate increase beyond this will scarcely make
up disadvantage of a low money price of wages.

These wages will finally be determined by the usual money price of
corn, and the state of the demand for labour.

There is a difference between what may be called the usual price of
corn and the average price, which has not been sufficiently attended
to. Let us suppose the common price of corn, for four years out of
five, to be about L2 a quarter, and during the fifth year to be L6.
The average price of the five years will then be L2 16s.; but the
usual price will still be about L2, and it is by this price, and not
by the price of a year of scarcity, or even the average including
it, that wages are generally regulated.

If the ports were open, the usual price of corn would certainly
fall, and probably the average price; but from at has before been
said of the existing laws of France, and of the practice among the
Baltic nations of raising the tax on their exported corn in
proportion to the demand for it, there is every reason to believe,
that the fluctuations of price would be much greater. Such would, at
least, be my conclusion from theory; and, I think, it has been
confirmed by the experience of the last hundred years. During this
time, the period of our greatest importations, and of our greatest
dependence upon foreign corn, was from 1792 to 1805 inclusive; and
certainly in no fourteen years of the whole hundred were the
fluctuations of price so great. In 1792 the price was 42s. a
quarter; in 1796, 77s.; in 1801, 118s. a quarter; and, in 1803, 56s.
Between the year 1792 and 1801 the rise was almost a triple, and in
the short period from 1798 to 1803, it rose from 50s. to 118s. and
fell again to 56s.(13*)

I would not insist upon this existence as absolutely conclusive, on
account of the mixture of accident in all such appeals to facts; but
it certainly tends to confirm the probability of those great
fluctuations which, according to all general principles, I should
expect from the temper and customs of nations, with regard to the
egress of corn, when it is scarce; and particularly from the
existing laws of that country, which, in all common years, will
furnish us with a large proportion of our supplies.

To these causes of temporary fluctuations, during peace, should be
added the more durable as well as temporary, fluctuations occasioned
by war. Without reference to the danger of excessive scarcity from
another combination against us, if we are merely driven back at
certain distant intervals upon our own resources, the experience of
the present times will teach us not to estimate lightly the
convulsion which attends the return, and the evils of such
alternations of price.

In the Observations, I mentioned some causes of fluctuations which
would attend the system of restrictions; but they are in my opinion
inconsiderable, compared with those which have been just referred
to.

On the labouring classes, therefore, the effects of opening our
ports for the free importation of foreign corn, will be greatly to
lower their wages, and to subject them to much greater fluctuations
of price. And, in this state of things, it will require a much
greater increase in the demand for labour, than there is in any
rational ground for expecting, to compensate to the labourer the
advantages which he loses in the high money wages of labour, and the
steadier and less fluctuating price of corn.

2. Of the next most important class of society, those who live upon
the profits of stock, one half probably are farmers, or immediately
connected with farmers; and of the property of the other half, not
above one fourth is engaged in foreign trade.

Of the farmers it is needless to say anything. It cannot be doubted
that they will suffer severely from the opening of the ports. Not
that the profits of farming will not recover themselves, after a
certain period, and be as great, or perhaps greater, than they were
before; but this cannot take place till after a great loss of
agricultural capital, or the removal of it into the channels of
commerce and manufactures.

Of the commercial and manufacturing part of the society, only those
who are directly engaged in foreign trade, will feel the benefit of
the importing system. It is of course to be expected, that the
foreign trade of the nation will increase considerably. If it do
not, indeed, we shall have experienced a very severe loss, without
anything like a compensation for it. And if this increase merely
equals the loss of produce sustained by agriculture, the quantity of
other produce remaining the same, it is quite clear that the country
cannot possibly gain by the exchange, at whatever price it may buy
or sell. Wealth does not consist in the dearness or cheapness of the
usual measure of value, but in the quantity of produce; and to
increase effectively this quantity of produce, after the severe
check sustained by agriculture, it is necessary that commerce should
make a very powerful start.

In the actual state of Europe and the prevailing jealousy of our
manufactures, such a start seems quite doubtful; and it is by no
means impossible that we shall be obliged to pay for our foreign
corn, by importing less of other commodities, as well as by
exporting more of our manufactures.

It may be said, perhaps, that a fall in the price of our corn and
labour, affords the only chance to our manufacturers of retaining
possession of the foreign markets; and that though the produce of
the country may not be increased by the fall in the price of corn,
such a fall is necessary to prevent a positive diminution of it.
There is some weight undoubtedly in this argument. But if we look at
the probable effects of returning peace to Europe, it is impossible
to suppose that, even with a considerable diminution in the price of
labour, we should not lose some markets on the continent, for those
manufactures in which we have no peculiar advantage; while we have
every reason to believe that in others, where our colonies, our
navigation, our long credits, our coals, and our mines come in
question, as well as our skill and capital, we shall retain our
trade in spite of high wages. Under these circumstances, it seems
peculiarly advisable to maintain unimpaired, if possible, the home
market, and not to lose the demand occasioned by so much of the
rents of land, and of the profits and capital of farmers, as must
necessarily be destroyed by the check to our home produce.

But in whatever way the country may be affected by the change, we
must suppose that those who are immediately engaged in foreign trade
will benefit by it. As those, however, form but a very small portion
of the class of persons living on the profits of stock, in point of
number, and not probably above a seventh or eighth in point of
property, their interests cannot be allowed to weigh against the
interests of so very large a majority.

With regard to this great majority, it is impossible that they
should not feel very widely and severely the diminution of their
nominal capital by the fall of prices. We know the magic effect upon
industry of a rise of prices. It has been noticed by Hume, and
witnessed by every person who has attended to subjects of this kind.
And the effects of a fall are proportionately depressing. Even the
foreign trade will not escape its influence, though here it may be
counterbalanced by a real increase of demand. But, in the internal
trade, not only will the full effect of this deadening weight be
experienced, but there is reason to fear that it may be accompanied
with an actual diminution of home demand. There may be the same or
even a greater quantity of corn consumed in the country, but a
smaller quantity of manufactures and colonial produce; and our
foreign corn may be purchased in part by commodities which were
before consumed at home. In this case, the whole of the internal
trade must severely suffer, and the wealth and enjoyments of the
country be decidedly diminished. The quantity of a country's exports
is a very uncertain criterion of its wealth. The quantity of produce
permanently consumed at home is, perhaps, the most certain criterion
of wealth to which we can refer.

Already, in all the country towns, this diminution of demand has
been felt in a very great degree; and the surrounding farmers, who
chiefly support them, are quite unable to make their accustomed
purchases. If the home produce of grain be considerably diminished
by the opening of our ports, of which there can be no doubt, these
effects in the agricultural countries must be permanent, though not
to the same extent as at present. And even if the manufacturing
towns should ultimately increase, in proportion to the losses of the
country, of which there is great reason to doubt, the transfer of
wealth and population will be slow, painful, and unfavourable to
happiness.

3. Of the class of landholders, it may be truly said, that though
they do not so actively contribute to the production of wealth, as
either of the classes just noticed, there is no class in society
whose interests are more nearly and intimately connected with the
prosperity of the state.

Some persons have been of opinion, and Adam Smith himself among
others, that a rise or fall of the price of corn does not really
affect the interests of the landholders; but both theory and
experience prove the contrary; and shew, that, under all common
circumstances, a fall of price must be attended with a diminution of
produce, and that a diminution of produce will naturally be attended
with a diminution of rent.(14*)

Of the effect, therefore, of opening the ports, in diminishing both
the real and nominal rents of the landlords, there can be no doubt;
and we must not imagine that the interest of a body of men, so
circumstanced as the landlords, can materially suffer without
affecting the interests of the state.

It has been justly observed by Adam Smith, that 'no equal quantity
of productive labour employed in manufactures can ever occasion so
great a reproduction as in agriculture.' If we suppose the rents of
land taken throughout the kingdom to be one fourth of the gross
produce, it is evident, that to purchase the same value of raw
produce by means of manufactures, would require one third more
capital. Every five thousand pounds laid out on the land, not only
repays the usual profits of stock, but generates an additional
value, which goes to the landlord. And this additional value is not
a mere benefit to a particular individual, or set of individuals,
but affords the most steady home demand for the manufactures of the
country, the most effective fund for its financial support, and the
largest disposable force for its army and navy. It is true, that the
last additions to the agricultural produce of an improving country
are not attended with a large proportion of rent;(15*) and it is
precisely this circumstance that may make it answer to a rich
country to import some of its corn, if it can be secure of obtaining
an equable supply. But in all cases the importation of foreign corn
must fail to answer nationally, if it is not so much cheaper than
the corn that can be grown at home, as to equal both the profits and
the rent of the grain which it displaces.

If two capitals of ten thousand pounds each, be employed, one in
manufactures, and the other in the improvement of the land, with the
usual profits, and withdrawn in twenty years, the one employed in
manufactures will leave nothing behind it, while the one employed on
the land will probably leave a rent of no inconsiderable value.

These considerations, which are not often attended to, if they do
not affect the ordinary question of a free trade in corn, must at
least be allowed to have weight, when the policy of such a trade is,
from peculiarity of situation and circumstances, rendered doubtful.

4. We now come to a class of society, who will unquestionably be
benefited by the opening of our ports. These are the stockholders,
and those who live upon fixed salaries.(16*) They are not only,
however, small in number, compared with those who will be affected
in a different manner; but their interests are not so closely
interwoven with the welfare of the state, as the classes already
considered, particularly the labouring classes, and the landlords.

In the Observations, I remarked, that it was 'an error of the most
serious magnitude to suppose that any natural or artificial causes,
which should raise or lower the values of corn or silver, might be
considered as matters of indifference; and that, practically, no
material change could take place in the value of either, without
producing both temporary and lasting effects, which have a most
powerful influence on the distribution of property.'

In fact, it is perfectly impossible to suppose that, in any change
in the measure of value, which ever did, or ever can take place
practically, all articles, both foreign and domestic, and all
incomes, from whatever source derived, should arrange themselves
precisely in the same relative proportions as before. And if they do
not, it is quite obvious, that such a change may occasion the most
marked differences in the command possessed by individuals and
classes of individuals over the produce and wealth of the country.
Sometimes the changes of this kind that actually take place, are
favourable to the industrious classes of society, and sometimes
unfavourable.

It can scarcely be doubted, that one of the main causes, which has
enabled us hitherto to support, with almost undiminished resources,
the prodigious weight of debt which has been accumulated during the
last twenty years, is the continued depreciation of the measure in
which it has been estimated, and the great stimulus to industry, and
power of accumulation, which have been given to the industrious
classes of society by the progressive rise of prices. As far as this
was occasioned by excessive issues of paper, the stockholder was
unjustly treated, and the industrious classes of society benefited
unfairly at his expense. But, on the other hand, if the price of
corn were now to fall to 50 shillings a quarter, and labour and
other commodities nearly in proportion, there can be no doubt that
the stockholder would be benefited unfairly at the expense of the
industrious classes of society, and consequently at the expense of
the wealth and prosperity of the whole country.

During the twenty years, beginning with 1794 and ending with 1813,
the average price of British corn per quarter was about eighty-three
shillings; during the ten years ending with 1813, ninety-two
shillings; and during the last five years of the twenty, one hundred
and eight shillings. In the course of these twenty years, the
government borrowed near five hundred millions of real capital, for
which on a rough average, exclusive of the sinking fund, it engaged
to pay about five per cent. But if corn should fall to fifty
shillings a quarter, and other commodities in proportion, instead of
an interest of about five per cent. the government would really pay
an interest of seven, eight, nine, and for the last two hundred
millions, ten per cent.

To this extraordinary generosity towards the stockholders, I should
be disposed to make no kind of objection, if it were not necessary
to consider by whom it is to be paid; and a moment's reflection will
shew us, that it can only be paid by the industrious classes of
society and the landlords, that is, by all those whose nominal
incomes will vary with the variations in the measure of value. The
nominal revenues of this part of the society, compared with the
average of the last five years, will be diminished one half; and out
of this nominally reduced income, they will have to pay the same
nominal amount of taxation.

The interest and charges of the national debt, including the sinking
fund, are now little short of L40 millions a year; and these L40
millions, if we completely succeed in the reduction of the price of
corn and labour, are to be paid in future from a revenue of about
half the nominal value of the national income in 1813.

If we consider, with what an increased weight the taxes on tea,
sugar, malt, leather, soap, candles, etc., etc. would in this case
bear on the labouring classes of society, and what proportion of
their incomes all the active, industrious middle orders of the
state, as well as the higher orders, must pay in assessed taxes, and
the various articles of the customs and excise, the pressure will
appear to be absolutely intolerable. Nor would even the ad valorem
taxes afford any real relief. The annual fourty millions, must at
all events be paid; and if some taxes fail, others must be imposed
that will be more productive.

These are considerations sufficient to alarm even the stockholders
themselves, indeed, if the measure of value were really to fall, as
we have supposed, there is great reason to fear that the country
would be absolutely unable to continue the payment of the present
interest of the national debt.

I certainly do not think, that by opening our ports to the freest
admission of foreign corn, we shall lower the price to fifty
shillings a quarter. I have already given my reasons for believing
that the fluctuations which in the present state of Europe, a system
of importation would bring with it, would be often producing dear
years, and throwing us back again upon our internal resources. But
still there is no doubt whatever, that a free influx of foreign
grain would in all commonly favourable seasons very much lower its
price.

Let us suppose it lowered to sixty shillings a quarter, which for
periods of three or four years together is not improbable. The
difference between a measure of value at 60 compared with 80 (the
price at which it is proposed to fix the importation), is 33 1/3 per
cent. This percentage upon 40 millions amounts to a very formidable
sum. But let us suppose that corn does not effectually regulate the
prices of other commodities; and, making allowances on this account,
let us take only 25, or even 20 per cent. Twenty per cent. upon 40
millions amounts at once to 8 millions--a sum which ought to go a
considerable way towards a peace establishment; but which, in the
present case, must go to pay the additional interest of the national
debt, occasioned by the change in the measure of value. And even if
the price of corn be kept up by restrictions to 80 shillings a
quarter, it is certain that the whole of the loans made during the
war just terminated, will on an average, be paid at an interest very
much higher than they were contracted for; which increased interest
can, of course, only be furnished by the industrious classes of
society.

I own it appears to me that the necessary effect of a change in the
measure of value on the weight of a large national debt is alone
sufficient to make the question fundamentally different from that of
a simple question about a free or restricted trade; and, that to
consider it merely in this light, and to draw our conclusions
accordingly, is to expect the same results from premises which have
essentially changed their nature. From this review of the manner in
which the different classes of society will be affected by the
opening of our ports, I think it appears clearly, that very much the
largest mass of the people, and particularly of the industrious
orders of the state, will be more injured than benefited by the
measure.

I have now stated the grounds on which it appears to me to be wise
and politic, in the actual circumstances of the country, to restrain
the free importation of foreign corn.

To put some stop to the progressive loss of agricultural capital,
which is now taking place, and which it will be by no means easy to
recover, it might be advisable to pass a temporary act of
restriction, whatever may be the intention of the legislature in
future. But, certainly it is much to be wished that as soon as
possible, consistently with due deliberation, the permanent policy
intended to be adopted with regard to the trade in corn should be
finally settled. Already, in the course of little more than a
century, three distinct changes in this policy have taken place. The
act of William, which gave the bounty, combined with the prohibitory
act of Charles II was founded obviously and strikingly upon the
principle of encouraging exportation and discouraging importation;
the spirit of the regulations adopted in 1773, and acted upon some
time before, was nearly the reverse, and encouraged importation and
discouraged exportation. Subsequently, as if alarmed at the
dependence of the country upon foreign corn, and the fluctuations of
price which it had occasioned, the legislature in a feeble act of
1791, and rather a more effective one in 1804, returned again to the
policy of restrictions. And if the act of 1804 be left now
unaltered, it may be fairly said that a fourth change has taken
place; as it is quite certain that, to proceed consistently upon a
restrictive system, fresh regulations become absolutely necessary to
keep pace with the progressive fall in the value of currency.

Such changes in the spirit of our legislative enactments are much to
be deprecated; and with a view to a greater degree of steadiness in
future, it is quite necessary that we should be so fully prepared
for the consequences which belong to each system, as not to have our
determinations shaken by them, when they occur.

If, upon mature deliberation, we determine to open our ports to the
free admission of foreign grain, we must not be disturbed at the
depressed state, and diminished produce of our home cultivation; we
must not be disturbed at our becoming more and more dependent upon
other nations for the main support of our population; we must not be
disturbed at the greatly increased pressure of the national debt
upon the national industry; and we must not be disturbed at the
fluctuations of price, occasioned by the very variable supplies,
which we shall necessarily receive from France, in the actual state
of her laws, or by the difficulty and expense of procuring large,
and sudden imports from the Baltic, when our wants are pressing.
These consequences may all be distinctly foreseen. Upon all general
principles, they belong to the opening of our ports, in the actual
state and relations of this country to the other countries of
Europe; and though they may be counterbalanced or more than
counterbalanced, by other advantages, they cannot, in the nature of
things, be avoided.

On the other hand, if, on mature deliberation, we determine steadily
to pursue a system of restrictions with regard to the trade in corn,
we must not be disturbed at a progressive rise in the price of
grain; we must not be disturbed at the necessity of altering, at
certain intervals, our restrictive laws according to the state of
the currency, and the value of the precious metals; we must not be
disturbed at the progressive diminution of fixed incomes; and we
must not be disturbed at the occasional loss or diminution of a
continental market for some of our least peculiar manufactures,
owing to the high price of our labour.(17*) All these disadvantages
may be distinctly foreseen. According to all general principles they
strictly belong to the system adopted; and, though they may be
counterbalanced, and more than counterbalanced, by other greater
advantages, they cannot, in the nature of things, be avoided, if we
continue to increase in wealth and population.

Those who promise low prices upon the restrictive system, take an
erroneous view of the causes which determine the prices of raw
produce, and draw an incorrect inference from the experience of the
first half of the last century. As I have stated in another
place,(18*) a nation which very greatly gets the start of its
neighbours in riches, without any peculiar natural facilities for
growing corn, must necessarily submit to one of these
alternatives--either a very high comparative price of grain, or a
very great dependence upon other countries for it.

With regard to the specific mode of regulating the importation of
corn, if the restrictive system be adopted, I am not sufficiently
acquainted with the details of the subject to be able to speak with
confidence. It seems to be generally agreed, that, in the actual
state of things, a price of about eighty shillings a quarter(19*)
would prevent our cultivation from falling back, and perhaps allow
it to be progressive. But, in future, we should endeavour, if
possible, to avoid all discussions about the necessity of protecting
the British farmer, and securing to him a fair living profit. Such
language may perhaps be allowable in a crisis like the present. But
certainly the legislature has nothing to do with securing to any
classes of its subjects a particular rate of profits in their
different trades. This is not the province of a government; and it
is unfortunate that any language should be used which may convey
such an impression, and make people believe that their rulers ought
to listen to the accounts of their gains and losses.

But a government may certainly see sufficient reasons for wishing to
secure an independent supply of grain. This is a definite, and may
be a desirable, object, of the same nature as the Navigation Act;
and it is much to be wished, that this object, and not the interests
of farmers and landlords, should be the ostensible, as well as the
real, end which we have in view, in all our inquiries and
proceedings relating to the trade in corn.

I firmly believe that, in the actual state of Europe, and under the
actual circumstances of our present situation, it is our wisest
policy to grow our own average supply of corn; and, in so doing, I
feel persuaded that the country has ample resources for a great and
continued increase of population, of power, of wealth, and of
happiness.




NOTES:

1. Some of my friends were of different opinions as to the side,
towards which my arguments most inclined. This I consider as a
tolerably fair proof of impartiality.

2. Mercantile losses are always comparatively partial; but the
present losses, occasioned by the unusual combination of low prices,
and scanty produce, must inflict a severe blow upon the whole mass
of cultivators. There never, perhaps, was known a year more
injurious to the interests of agriculture.

3. At the same time, I certainly now very much wish that some
regulation had been adopted last year. It would have saved the
nation a great loss of agricultural capital, which it will take some
time to recover. But it was impossible to foresee such a year as the
present--such a combination, as a very bad harvest, and very low
prices.

4. I have very little doubt that the value of paper in this country
has already risen, norwithstanding the increased issues of the Bank.
These increased issues I attribute chiefly to the great failures
which have taken place among country banks, and the very great
purchases which have been made for the continental markets, and,
under these circumstances, increased issues might take place,
accompanied even by a rise of value. But the currency has not yet
recovered itself. The real exchange, during the last year, must have
been greatly in our favour, although the nominal exchange is
considerably against us. This shews, incontrovertibly, that our
currency is still depreciated, in reference to the bullion
currencies of the continent. A part, however, of this depreciation
may still be owing to the value of bullion in Europe not having yet
fallen to its former level.

5. Calculated at twenty-four livres the pound sterling.

6. It has been supposed by some, that this law cannot, and will not
be executed: but I own I see no grounds for such an opinion. It is
difficult to execute prohibitions against the exportation of corn,
when it is in great plenty, but not when it is scarce. For ten years
before 1757, we had in this country, regularly exported on an
average, above 400,000 quarters of wheat, and in that year there was
at once an excess of importation. With regard to the alleged
impotence of governments in this respect, it appears to me that
facts shew their power rather than their weakness. To be convinced
of this, it is only necessary to look at the diminished importations
from America during the war, and particularly from the Baltic after
Bonaparte's decrees. The imports from France and the Baltic in 1810,
were by special licences, granted for purposes of revenue. Such
licences shewed strength rather than weakness; and might have been
refused, if a greater object than revenue had at that time presented
itself.

7. The average is 16 francs, 21 centimes, the Hectolitre. The
Hectolitre is about 1-20th less than 3 Winchester bushels, which
makes the English quarter come to about 38 shillings.

8. It appears from the evidence, that the corn from the Baltic is
often very heavily taxed, and that this tax is generally raised in
proportion to our necessities. In a scarce year in this country we
could never get any considerable quantity of corn from the Baltic,
without paying an enormous price for it.

9. By the real growing price of corn I mean the real quantity of
labour and capital which has been employed to procure the last
additions which have been made to the national produce. In every
rich and improving country there is a natural and strong tendency to
a constantly increasing price of raw produce, owing to the necessity
of employing, progressively, land of an inferior quality. But this
tendency may be partially counteracted by great improvements in
cultivation, and economy of labour. See this subject treated in An
inquiry into the nature and progress of rent, just published.

10. Sir John Sinclair's Account of the Husbandry of Scotland: and
the General Report of Scotland.

11. "Inquiry into the Nature and Progress of Rent, and the
Principles by which it is regulated."

12. I was not prepared to expect (as I intimated in the
Observations) so sudden a fall in the price of labour as has already
taken place. This fall has been occasioned, not so much by the low
price of corn, as by the sudden stagnation of agricultural work,
occasioned by a more sudden check to cultivation than I foresaw.

13. I am strongly disposed to believe, that it is owning to the
unwillingness of governments to allow the free egress of their corn,
when it is scarce, that nations are practically so little dependent
upon each other for corn, as they are found to be. According to all
general principles they ought to be more dependent. But the great
fluctuations in the price of corn, occasioned by this unwillingness,
tend to throw each country back again upon its internal resources.
This was remarkably the case with us in 1800 and 1801, when the very
high price, which we paid for foreign corn, gave a prodigious
stimulus to our domestic agriculture. A large territorial country,
that imports foreign corn, is exposed not infrequently to the
fluctuations which belong to this kind of variable dependence,
without obtaining the cheapness that ought to accompany a trade in
corn really free.

14. See this subject treated in An Inquiry into the Nature and
Progress of Rents.

15. Inquiry into the Nature and Progress of Rent.

16. It is to this class of persons that I consider myself as chiefly
belonging. Much the greatest part of my income is derived from a
fixed salary and the interest of money in the funds.

17. It often happens that the high prices of a particular country
may diminish the quantity of its exports without diminishing the
value of their amount abroad; in which case its foreign trade is
peculiarly advantageous, as it purchases the same amount of foreign
commodities at a much less expense of labour and capital.

18. Inquiry into the Nature and Progress of Rent.

19. This price seems to be pretty fairly consistent with the idea of
getting rid of that part of our high prices which belongs to
excessive issues of paper, and retaining only that part which
belongs to great wealth, combined with a system of restrictions.