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Mr. Ricardo. Mr Canning brings forward the question on Thursday (March 1), chiefly that the President of the Board of Trade may have the detail, reply of facts, and official documents, and to spare “ Gaffer” Gooch and others the occasion of taunting the ostensible proposer of the changes with flagrant inconsistency of opinion. You see Gooch said in the House last night (26th), that he would rest the whole case upon Mr. Huskisson's letter to his constituents in 1814. That is but the signal gun of what will be fired upon the Right Honorable Gentleman throughout the discussion.

Adam Smith. Inconsistency and love of specious paradox infect the whole modern tribe of Political Economists. Look at their currency legislation---a crusade against experience and common sense. Even you, David, are not free from the taint. When that would be Chancellor of the Exchequer, young Peel, was going it on the "col“ lective,” in 1819, you (erroneously maintaining the price of gold to be alone the true index of a depreciated currency) stated, this week, that the depreciation did not amount to more than 3 per cent., next week 10, and then Auctuated between 7 and 20; while Baring, Attwood, and Ellice (the Greek steam-boat jobber), took it, with more truth, to be from 30 to 50.

Mr. Ricardo. On that point, Doctor, I subsequently confessed my error, and the imperfectness of my data.

A. Smith. I know you did, I knew you would; but still your opinions were not the less inconsistent with your sounder ones upon the currency, nor less injuriously influential upon the decision of the legislature. Peel's bill, and its consequences, followed your declaration. You were, besides, like all Cockney writers, partial to the paradoxical phrase of a proposition. You dissent. Do you forget the manner in which you propounded a fact, explained by me in the “ Wealth of Nations," that a rise in the price of labor (sometimes) lowers the price of a large class of commodities---a proposition, per se, paradoxical and untrue; but, taken into consideration with the quickness of returns on fired capital, important and incontrovertible.

Mr. Ricardo. I remember what you speak of; but deny your inference. The truth is, you, Adam Smith, a full, lucid, writer, not less than your humble disciple, a precise and somewhat elliptical scribe, are more talked of than read, and more read than thoroughly understood. But of this every standard author on any abstruse subject with which it is supposed every educated man is acquainted, might complain with equal justice. 'Tis the sin of the age---one, the seeds of which were sown by popular periodicals, and which, I fear, will be nurtured by their Literary and Scientific Institutions. But this is leading us away from the Corn Laws; upon which, allow me to say, the bias of your inind must render your opinion adoptable

cum grano salis. Your early rural excursions with the gypsies*, your rooted dislike to commercial legislators, your strong aversion from the “sneaking arts of underling tradesmen," and the flatteries of Turgot and Quesnai, make us rather suspicious of your arguments, where the so

agricultural interest” is concerned. A. Smith. I confess I agree with Cicero, that “ Agro bene “ culto, nil potest esse, nec usu uberius, nec specie ornatus;" but still I fatter myself with being philosophically impartial, and am ready to contend, that even upon your own showing, a case may be made against you-the Abolitionists. I will discuss the matter, intus et in cute, with you, when Mr. Canning's resolutions shall have been made known to us. At present, I mean to say a word or two explanatory on rents and currency, and will subsequently endeavour to prove to you, my Stock-Exchange-bias friend, David Ricardo, that according to your own views of both, and from your admissions, " that all tithes fall exclusively on the agricultural interest t; that “ tithes, a portion of the poor rates, and one or two other taxes, are peculiar to the growers of corn, and tend to raise the price of raw “ produce to an extent equal to their peculiar burdenst; and that " on every principle of justice, and consistently with the best in“ terests of the country, the demand of the home grower to the extent of his peculiar burdens, should be acceded to ş”—that prohibitory duties are essential to the prosperity, I will not say of the agricultural interest alone, but of all the great interests of the empire.

Mr. Ricardo. I shall have no objection to your conclusion, if well founded : my motto has always been with him in Juvenal-patriæ sit idoneus, et utilis agris. Besides, I have laid it down as a principle, in my Protection to Agriculture, (pp. 12 and 13.) “ That any cause “ which operates in a country to affect equally all commodities, does “ pot alter their relative value, and can give no advantage to a “ foreign competitor; but that any cause which operates partially

on one, does alter its value to others; if not counteracied by an " adequate duty; it will give an advantage to the foreign competitor, “ and tend to deprive us of a beneficial branch of trade,” thus reudering your task easier.

A. Smith. I will begin with an observation that cannot too often be repeated, namely, that Political Economy is not a science capable of mathematical proof, nor, consequently, of mathematical certitude; that its agents are as changeable and soaring as the passions and interests of man; as variable and complicated as the qualities of the soil from which he draws his subsistence; that its general principles, therefore, as in moral science, admit of extensive interpretation, and of numerous exceptions, and receive their distinctive

The immortal Author of the Wealth of Nations was stolen away when a child by a group of gipsies in Leslie Wood, near Strathendy, and was with difficulty rescued by his uncle ; who thus (says Dugald Stewart) was the bappy instrument of preserving to the world a genius, which was destined not only to extend the boundaries of science, but to enlighten and reform the commercial policy of Europe.

+ Par. Hleb. vol. viii. p. 455. Protection to Agriculture, p. 15. § Ib. p. 16.

and applicable coloring from surrounding circumstances. now enter into a controversy upon the assumed improvements in the doctrine of rent: it would be a squabble about words. I admit the accuracy of the received definition, that rent is the difference between the return made to the more productive portions, and that which is made to the least productive portions, of capital, employed upon the land ; that that difference is determined by the fertility of the soil, and that it is regulated altogether by the cost of growing it on that land which pays no rent. The last proposition is the vaunted improvement or discovery of you and Mr. Malthus, and your disciples. I will not now gainsay it, but merely notice an inference adduced from it by one of your pupils expressly contradictory to your own declared opinions, and illustrative of my preliminary observation. It is, that a tax on rent, therefore, can have no effect on the price of corn ; it cannot operate as a discouragement to its production, and, by consequence, needs not be accompanied by a counteracting duty; all which logical inferences from your improved doctrine of rent, are distinctly denied and disproved by you and Mr. Malthus, its logical promulgators. The immediate cause and proportion then of rent is the excess of price above the cost of production. That excess is consequent upon, first and mainly, that fertile quality of the soil, by which it is enabled to yield a greater portion of the necessaries of life,---a support of labor, than was consumed in its cultivation; and, secondly, that quality peculiar to its produce-a necessary of life; of being able when properly distributed, to create its own demand* ; that is, to generate a quantity of consumers in proportion to its supply. According to the rate of the first and chief cause of excess of price over cost of production; that is, according to the relative fertility of the soil, will be the amount and proportion of rent. Where the whole land in cultivation is fertile, there will be little or no rent, but that of advantageousness of situation. Where there is a variety in the fertility of the soil in cultivation, there will be a variable scale of rents. The different rates of fertility have been happily likened by Mr. Malthus to machines of different power, with the most important and characteristic difference of employment: that, whereas, in manufactures every successive machine employed in their production tends more and more to diminish their cost (the quantity of capital and labor expended in their production) every successive machine employed in the production of corn, tends to raise its cost; that is, to augment the expenditure of capital and labor necessary to its production. These successive machines, or differently fertile soils, are only employed according as the consumers exceed in proportion the quantity grown for them on the best soils (or first machines); and nobody will of course resort to an inferior machine or less fertile soil, unless the demand is such; that is, unless the prosperous cir

This fact shows that cheap corn, if obtained easily (as its advocates contend), would effect its own cure by adding to the population. This effect to them must be terrific, if they knew it. But more of this anon. It is taken for granted in this (and the subsequent) dialogue, that the reader is not totally unread in economical science.

cumstances of the (State, or) consumers are such as not only to remunerate the outlayer of capital and labor on the best soils, but also to afford a profitable return for the additional outlay and capital expended on the less fertile soils. Now the employer of the best machines would have a great and unfair advantage (a monopoly of the worst species) over the worker of inferior machines, unless the owner of both, the landlord, charged the former in proportion to this advantage, or fertility of soil, so as to put him upon an equitable footing with the latter. This compensating charge is rent, and it matters nothing to the argument whether, as I maintained in the Wealth of Nations, the use of the most inferior machine in the raising of raw produce from the soil pays any thing to the owner of the machine for its use, or, as you contend, the cultivator of the poorest soil in cultivation pays nothing. You may say I am repeating undeniable truisms. I am, but mark the consequences. Smattering lecturers at the Mechanics’ Institute have charged the apparent inconveniences consequent upon this variable fertility of the soil, upon the owners and cultivators of that soil, forgetting, or ignorant, that that variable fertility is not the work of man, but the gift of nature; they have denounced the rent of the landlord as an unjust monopoly, forgetting, or ignorant, that that rent is the necessary and only check upon a most unjust monopoly; and that, in its nature, it is contradistinguished to commercial monopoly, from being defined and limited by the fertility of the soil last taken into calculation; and they have condemned the taking into use the inferior machines, forgetting, or ignorant, that the very necessity of the cultivation of less fertile soils, is the necessary consequence and index of a prosperously increasing population, of an improving condition of society. The truth and most pregnant consequences of these principles will appear evident to the most Aippant repeater of both our names, when I shall come to apply them to the Corn Laws. Sufficient now if it appears, that the rent of land is but a partial monopoly, and that it is the consequence, not the cause, of a high price of our produce; that is, of the diminished return to the capital and labor expended in the production of that produce; that is, of the necessity of having recourse to inferior soils for the growth of corn, and that rent is, in the words of Mr. Malthus, a clear indication of a most inestimable quality in the soil, which God has bestowed on man, the quality of being able to maintain more persons than are necessary to work it.

Mr. Ricardo. I subscribe to all principles, and to most of your inferences. I will explain the grounds of my dissent, when we are actually engaged in the discussion of the politics of the Corn Laws. But what about the currency? your countryman, Joseph Hume, says it has nothing whatever to say to the Corn Laws.

A. Smith. Hume knows nothing about either. Let him keep to his pence-table, or read the clever pamphlet, not always right, of my other countryman, Sir James Grahame of Netherby. In what I have laid down, my object was to make it appear, that a high price of corn precedes, and does not follow, high rent; that it is

the cause, and not the consequence, and that it is the index of a thriving condition of the other interests of the state. I mean now briefly to show, that a high price of corn is the necessary consequent of the quantity and quality of the currency that a National Debt occasions, leaving out of account, the burdens of peculiar taxation that you have alluded to, and which you have admitted, require an “adequate • protection.” The principle, more clearly laid down by Mr. Locke, than any man since his time, is briefly this---(I need not explain to you, the effect of a war and high taxation in augmenting the paper ratio of the currency.)—The property, (the trade in its widest sense,) of a country, requires for its circulation a certain amount or stream of currency--the representation of value of which, it is evident, will be as its proportion to the quantity of the property it circulates. Now a National Debt swells this stream of currency in two ways. In the first, by the necessary tendency of all taxation, to convert dormant wealth into active capital or transitive property; and in the next, by the manner (which no man more perfectly understands than you) in which the government bills, or acknowledgement of their debt, add to the paper currency, thereby affecting the value of the precious metals. I shall say more on these points when discussing with you all, and our friend Mr. Horner, the Currency Acts, since his Bullion Report was submitted to the House of Commons. For the present, taking the market average price of gold as a general index of the value (or amount) of the currency, I contend, that 60s. per quarter for wheat, in 1904, (with mere reference to the amount of the circulating representatives of property) was as high a price for corn as 107s. in 1813, or 75$. in 1816, or 945. in 1817, or 72s. in 1819, and so on; as the following crude table will show.

Amount of Unredeemed Average Amount of Average Price Average Price Year.

Bank of England
Notes in circula.


d. 1804....533,644,814 ......17,623,680...... 80 0.... 69 1813....716,090,573. .24,177,145.... 110 .0....107* 1816....864,822,8 +0. ..26,681,398.. 93

75 1817....818,282,477......29,210,035.... 80 . 0.... 94 1819....844,962,321......24,697,407 ..v... 81 6.... 72

The slight discrepancies in this document are explained by the state of the crops, and the abrupt tampering with the country paper currency. They are sufficient for my present purpose of showing the connection of the Currency and the Corn Laws.

Mr. Ricardo.I always admitted it, and am now ready to apply your principles to Mr. Canning's resolutions.


of Gold per

of Wheat per


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“ 'Tis ten long years since last I beard this strain,

By echo answer'd from her sylvan seat;
Say Forester, how past such lapse of time,
I hear the self-same air, as soft, as sweet?"

# Failure in crop this year.

3 L

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