as they seem to have done, that the Bank began to prepare by a contraction of its issues in 1814, for a resumption of cash payments. The late Mr. Mundell brought forward similar tables in support equally of the doctrine of depreciation and appreciation, but as arising from a cause distinct from the alterations in the system of our currency. He, and some other writers with him, have ascribed the high range of prices of that period to the progressive increase of the produce of the American mines up to a certain time *, and the subsequent decline of prices to the falling off of the supply since that time.

But the facts of the case will not accommodate themselves to either theory. If the Bank restriction, or the increasing produce of the mines, is to account for the high prices of exportable produce and manufactures in 1814, how happened it that the prices should have been so low in 1810 and 1811, when both these causes of depreciation were at their height? and how happened it that while exportable productions were rising, corn and other European produce were falling? The causes of the rise of articles of export have been sufficiently shown in the extravagance of the spirit of speculation, which prevailed on the opening of the markets of the Continent of Europe by the peace. And we have now to see what were the causes of the great fall, between 1814 and 1817, of all the articles that had so risen.

*The rate of increase terminates in 1810, but the theory supposes that the full effect of the increase had not been felt till 1814, and that we have since felt the effects of the falling off of the supply. At the same time the remark that has before been made may here be repeated, namely, that whatever may be the influence ascribed to variations in the produce of the mines, they have not necessarily a bearing on the question of the effects of the Bank restriction.

SECTION 3.- Fall of Prices between 1814 and 1817 of Productions other than those of Corn.

A slight consideration will serve to show, that a reverse, from speculations so entered into and conducted as those which have been described; was inevitable.

The shippers found to their cost, when it was too late, that the effective demand on the Continent for colonial produce and British manufactures had been greatly over-rated; for whatever might be the desire of the foreign consumers to possess articles so long out of their reach, they were limited in their means of purchase; and accordingly the bulk of the commodities exported brought very inadequate returns. The low prices, which alone the consumers abroad were able to pay, were still further reduced in value by the advance in our exchanges, which was accelerated by the very extent of those shipments. And it is a well known fact, that the losses upon a large proportion of the goods shipped to the Continent, in the spring and summer of 1814, were very great; not less, I have reason to believe, from what I heard at that time of the result of many of them, than 50 per cent. In some few instances, by rare good fortune, there might be a gain, but in as many there was a total loss. Cases of more aggravated loss occurred where the shippers, unwilling to incur so heavy a sacrifice as would be entailed by remittances at an exchange becoming daily more unfavourable for them, were induced to receive returns in goods which, from this and other causes, coming in excessive quantities, could not be sold here within 30, 40, and sometimes 50 per cent. of the cost; a process by which, including loss of interest, it may easily be conceived that the whole value of the original investment might be nearly absorbed. The disastrous effects of these ill-judged and extravagantly extensive speculations

began to manifest themselves in the numerous failures which took place towards the close of 1814; these continued increasing in number, as the several losses were ascertained, through 1815 and the early part of 1816.

Among the articles that figured most in point of importance and value, in the tables which have been referred to, as exhibiting the prices of 1814 in contrast with the reduced rates which have since prevailed, were cotton goods. Now, as the price of raw cotton had risen between 1812 and 1814, on a twofold ground, namely, the war in which we had become involved with the United States of America, and the speculations on the opening of the Continental markets; so the return of peace with America, and the recoil of the speculations in exports, account for a great part of the subsequent fall. And a further fall is accounted for by the diminution, which was progressive for some time after, in the cost of production in the United States; the indisputable proof of which is in the great extension of the growth at the reduced prices. But the manufactured article has fallen, not only in its former ordinary proportion of value to the raw material, but in a much greater ratio in consequence of the wonderful progressive improvement of the machinery applicable to cotton goods.* Indeed, the progressive improvement of machinery applicable to every description of manufactures, accounts for all the reduction of the declared value in those tables, beyond that which is attributable to the difference in the cost of production of the raw material.t

See Mr. Baines's History of the Cotton Trade; Mr. M'Culloch's Commercial Dictionary; also his Statistics of the British Empire; Dr. Ure's Philosophy of Manufactures; and Mr. G. R. Porter's Progress of the Nation.

+ Mr. Babbage, in his extensively useful, and deservedly popular work on "The Economy of Manufactures," gives a variety of examples of the extraordinary reduction of cost in

It was not of cotton only, that there had been an increased supply. In the greater part of other raw materials, there was in 1814 and 1815, a transition from comparative scarcity to abundance.

The excess of the importations in those two years, as compared with 1811 and 1812 (the Custom-house returns of 1813 were destroyed by fire), will appear from the following statement of the official values which represent quantities:

being an increase of supply much beyond the utmost probable increase of the rate of consumption within so short a period.

This excess of importation, accompanied as it was by a general impression, that in consequence of the peace, not only was the cost of production by the lowered freights and insurance greatly diminished, but that fresh sources of supply, at a further reduction of cost, would be opened, rendered a fall of prices inevitable. There was not only an actual temporary excess at a reduced cost, but an anticipation of contingent supplies from extended sources, at a probably further reduction of cost.

the production of several articles, 'and more especially of some descriptions of hardware.

After enumerating several causes to account for the general fall of prices, he remarks: "The result of my own observation leads me to believe, that by far the most influential of the causes has been the invention of cheaper modes of manufacturing. The extent to which this can be carried, while a profit can yet be realised at the reduced price, is truly astonishing, as the following fact, which rests on good authority, will prove. Twenty years since, a brass knob for the locks of doors was made at Birmingham; the price at that time being 13s. 4d. per dozen. The same article is now manufactured, having the same weight of metal, and an equal, or in fact a slightly superior finish, at 1s. 94d. per dozen."-3d Edition, 1832, p. 158.

The following are specimens of the fall experienced in the markets for transatlantic produce:

In the recoil from the speculations of 1813 and 1814, in articles of export, copper, lead, and tin, which had then risen considerably, experienced a great decline in 1816, thus:

Of Baltic produce the fall had commenced when exportable productions were rising; the decline continued through 1815 and 1816.

The fall of prices of the different descriptions of produce here referred to was irregular; but in the greater number of instances the lowest point of depression in the interval between 1814 and 1817 was in 1816 and the early part of 1817 (when, as will be seen, the prices of corn had already experienced their greatest advance).

The shipping interest, too, was, in this interval between 1814 and 1817, undergoing a very considerable depression. There was, indeed, in consequence of the peace, a more extended sphere of employment of tonnage, inasmuch as the intercourse with the whole of the north of Europe, which had been carried on between 1807 and 1814 exclusively by foreign vessels, was now thrown open to British shipping. But this additional employment was inore than compensated by