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

by the Rev. T. R. Malthus, Professor of History and Political Economyin the East India College, Hertfordshire. 

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

Grounds, &c. 

The professed object of the Observations on the Corn Laws, which Ipublished in the spring of 1814, was to state with the strictestimpartiality the advantages and disadvantages which, in the actualcircumstances of our present situation, were likely to attend themeasures under consideration, respecting the trade in corn. 

A fair review of both sides of the question, without any attempt toconceal the peculiar evils, whether temporary or permanent, whichmight belong to each, appeared to me of use, not only to assist informing an enlightened decision on the subject, but particularly toprepare the public for the specific consequences which were to beexpected from that decision, on whatever side it might be made. Sucha 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 differentfrom those which had been promised by its advocates, or contemplatedby the legislature. 

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

These previous statements, however, having been given, and having, Ihope, shewn that the decision, whenever it is made, must be acompromise of contending advantages and disadvantages, I have noobjection now to state (without the least reserve), and I can trulysay, wit the most complete freedom from all interested motives, thegrounds of a deliberate, yet decided, opinion in favour of somerestrictions on the importation of foreign corn. 

This opinion has been formed, as I wished the readers of theObservations to form their opinions, by looking fairly at thedifficulties on both sides of the question; and without vainlyexpecting to attain unmixed results, determining on which side thereis the greatest balance of good with the least alloy of evil. Thegrounds on which the opinion so formed rests, are partly those whichwere stated in the Observations, and partly, and indeed mainly, somefacts which have occurred during the last year, and which havegiven, as I think, a decisive weight to the side of restrictions. 

These additional facts are--

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

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

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

In the Observations on the corn laws, I endeavoured to shew that, according to the general principles of supply and demand, aconsiderable fall in the price of corn could not take place, withoutthrowing much poor lad out of cultivation, and effectuallypreventing, for a considerable time, all further improvements inagriculture, which have for their object an increase of produce. 

The general principles, on which I calculated upon theseconsequences, have been fully confirmed by the evidence broughtbefore the two houses of Parliament; and the effects of aconsiderable fall in the price of corn, and of the expectedcontinuance of low prices, have shewn themselves in a very severeshock to the cultivation of the country and a great loss ofagricultural capital. 

Whatever may be said of the peculiar interests and naturalpartialities of those who were called upon to give evidence uponthis occasion, it is impossible not to be convinced, by the wholebody of it taken together, that, during the last twenty years, andparticularly during the last seven, there has been a great increaseof capital laid out upon the land, and a great consequent extensionof cultivation and improvement; that the system of spiritedimprovement and high farming, as it is technically called, has beenprincipally encouraged by the progressive rise of prices owing in aconsiderable degree, to the difficulties thrown in the way ofimportation of foreign corn by the war; that the rapid accumulationof capital on the land, which it had occasioned, had so increasedour home growth of corn, that, notwithstanding a great increase ofpopulation, we had become much less dependent upon foreign suppliesfor our support; and that the land was still deficient in capital, and would admit of the employment of such an addition to its presentamount, as would be competent to the full supply of a greatlyincreased population: but that the fall of prices, which had latelytaken place, and the alarm of a still further fall, from continuedimportation, had not only checked all progress of improvement, buthad already occasioned a considerable loss of agricultural advances;and that a continuation of low prices would, in spite of adiminution of rents, unquestionably destroy a great mass of farmingcapital all over the country, and essentially diminish itscultivation and produce. 

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

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

There is certainly no one cause which can affect mercantileconcerns, at all comparable in the extent of its effects, to thecause now operating upon agricultural capital. Individual lossesmust have the same distressing consequences in both cases, and theyare often more complete, and the fall is greater, in the shocks ofcommerce. But I doubt, whether in the most extensive mercantiledistress that ever took in this country, there was ever one fourthof the property, or one tenth of the number of individualsconcerned, when compared with the effects of the present rapid fallof raw produce, combined with the very scanty crop of last year. (2*)

Individual losses of course become national, according as theyaffect a greater mass of the national capital, and a greater numberof individuals; and I think it must be allowed further, that noloss, in proportion to its amount, affects the interest of thenation so deeply, and vitally, and is so difficult to recover, asthe loss of agricultural capital and produce. 

If it be the intention of the legislature fairly to look at theevils, as well as the good, which belongs to both sides of thequestion, it must be allowed, that the evidence laid before the twohouses of Parliament, and still more particularly the experience ofthe last year, shew, that the immediate evils which are capable ofbeing remedied by a system of restrictions, are of no inconsiderablemagnitude. 

2. In the Observations on the corn laws, I gave, as a reason forsome delay in coming to a final regulation respecting the price atwhich foreign corn might be imported, the very uncertain state ofthe currency. I observed, that three different importation priceswould be necessary, according as our currency should either rise tothe then price of bullion, should continue at the same nominalvalue, or should take an intermediate position, founded on a fall inthe value of bullion, owing to the discontinuance of anextraordinary demand for it, and a rise in the value of paper, owingto the prospect of a return to payments in specie. In the course ofthis last year, the state of our exchanges, and the fall in theprice of bullion, shew pretty clearly, that the intermediatealteration which, I then contemplated, greater than in the casefirst mentioned, and less than in the second, is the one which mightbe adopted with a fair prospect of permanence; and that we shouldnot now proceed under the same uncertainty respecting the currency, which we should have done, if we had adopted a final regulation inthe early part of last year. (3*) This intermediate alteration, however, supposes a rise in the value of paper on a return to cashpayments, and some general fall of prices quite unconnected with anyregulations respecting the corn trade. (4*)

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

3. I stated, in the Observations on the corn laws, that thecheapness and steadiness in the price of corn, which were promisedby the advocates of restrictions, were not attainable by themeasures they proposed; that it was really impossible for us to growat home a sufficiency for our own consumption, without keeping upthe price of corn considerably above the average of the rest ofEurope; and that, while this was the case, as we could never exportto any advantage, we should always be liable to the variations ofprice, occasioned by the glut of a superabundant harvest; in short, that it must be allowed that a free trade in corn would, in allordinary cases, not only secure a cheaper, but a more steady, supplyof grain. 

In expressing this distinct opinion on the effects of a free tradein corn, I certainly meant to refer to a trade really free--thatis, a trade by which a nation would be entitled to its share of theproduce of the commercial world, according to its means ofpurchasing, whether that produce were plentiful or scanty. In thissense I adhere strictly to the opinion I then gave; but, since thatperiod, an event has occurred which has shewn, in the clearestmanner, 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, whenthe advantages of a free trade in corn have been discussed, that thejealousies and fears of nations, respecting their means ofsubsistence, will very rarely allow of a free egress of corn, whenit is in any degree scarce. Our own statutes, till the very lastyear, prove these fears with regard to ourselves; and regulations ofthe same tendency occasionally come in aid of popular clamour inalmost all countries of Europe. But the laws respecting theexportation of corn, which have been passed in France during thelast year, have brought this subject home to us in the most strikingand impressive manner. Our nearest neighbour, possessed of thelargest and finest corn country in Europe, and who, owing to a morefavourable climate and soil, a more stationary and comparativelyless crowded population, and a lighter weight of taxation, can growcorn at less than half our prices, has enacted, that the exportationof corn shall be free till the price rises to about forty nineshillings a quarter, (5*) and that then it shall be entirelycease. (6*)

From the vicinity of France, and the cheapness of its corn in allyears of common abundance, it is scarcely possible that our mainimports should not come from that quarter as long as our ports areopen to receive them. In this first year of open trade, our importshave been such, as to shew, that though the corn of the Balticcannot seriously depress our prices in an unfavourable season athome, 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 fora 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 thefirst week in October, the average of which appears to be aboutthirty eight shillings a quarter;(7*) and this was afterdisturbances had taken place both at Havre and Dieppe, on account ofthe quantity exported, and the rise of prices which it hadoccasioned. 

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

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

With these prices so near us, and with the consequent power ofsupplying ourselves with great comparative rapidity, which in thecorn trade is a point of the greatest importance, there can be nodoubt that, if our ports were open, our principal supplies of grainwould come from France; and that, in all years of common plenty inthat country, we should import more largely from it than from theBaltic. But from this quarter, which would then become our main andmost habitual source of supply, all assistance would be at once cutoff, in every season of only moderate scarcity; and we should haveto look to other quarters, from which it is an established fact, that large sudden supplies cannot be obtained, not only for ourusual imports, and the natural variations which belong to them, butfor those which had been suddenly cut off from France, and which ourhabitually deficient growth had now rendered absolutely necessary. 

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

Such a species of commerce in grain shakes the foundations, andalters entirely the data on which the general principles of freetrade are established. For what do these principles say? They say, and say most justly, that if every nation were to devote itselfparticularly to those kinds of industry and produce, to which itssoil, climate, situation, capital, and skill, were best suited; andwere then freely to exchange these products with each other, itwould be the most certain and efficacious mode, not only ofadvancing the wealth and prosperity of the whole body of thecommercial republic with the quickest pace, but of giving to eachindividual nation of the body the full and perfect use of all itsresources. 

I am very far indeed from meaning to insinuate, that if we cannothave the most perfect freedom of trade, we should have none; or thata great nation must immediately alter its commercial policy, whenever any of the countries with which it deals passes lawsinconsistent with the principles of freedom. But I protest mostentirely against the doctrine, that we are to pursue our generalprinciples without ever looking to see if they are applicable to thecase before us; and that in politics and political economy, we areto 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 oflabour, as applicable to nations as well as individuals, dependsolely and entirely on the power of exchanging subsequently theproducts of labour. And no one can hesitate to allow, that it iscompletely in the power of others to prevent such exchanges, and todestroy entirely the advantages which would otherwise result fromthe application of individual or national industry, to peculiar andappropriate products. 

Let us suppose, for instance, that the inhabitants of the Lowlandsof Scotland were to say to the Highlanders, 'We will exchange ourcorn for your cattle, whenever we have a superfluity; but if ourcrops in any degree fail, you must not expect to have a singlegrain': would not the question respecting the policy of the presentchange, which is taking place in the Highlands, rest entirely upondifferent grounds? Would it not be perfectly senseless in theHighlanders to think only of those general principles which directthem to employ the soil in the way that is best suited to it? Ifsupplies of corn could not be obtained with some degree ofsteadiness and certainty from other quarters, would it not beabsolutely necessary for them to grow it themselves, however illadapted 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 onlyobtain the superfluities of their neighbours, and were entitled tono share of the produce when it was scarce, they could not certainlydevote themselves with any degree of safety to their presentoccupations. 

There is, on this account, a grand difference between the freedom ofthe home trade in corn, and the freedom of the foreign trade. Agovernment of tolerable vigour can make the home trade in cornreally free. It can secure to the pasture districts, or the townsthat must be fed from a distance, their share of the generalproduce, whether plentiful or scarce. It can set them quite at restabout the power of exchanging the peculiar products of their ownlabour for the other products which are necessary to them, and candispense, therefore, to all its subjects, the inestimable advantagesof an unrestricted intercourse. 

But it is not in the power of any single nation to secure thefreedom of the foreign trade in corn. To accomplish this, theconcurrence of many others is necessary; and this concurrence, thefears and jealousies so universally prevalent about the means ofsubsistence, almost invariably prevent. There is hardly a nation inEurope which does not occasionally exercise the power of stoppingentirely, or heavily taxing, its exports of grain, if prohibitionsdo not form part of its general code of laws. 

The question then before us is evidently a special, not a generalone. It is not a question between the advantages of a free trade, and a system of restrictions; but between a specific system ofrestrictions formed by ourselves for the purpose of rendering us, inaverage years, nearly independent of foreign supplies, and thespecific system of restricted importations, which alone it is in ourpower to obtain under the existing laws of France, and in the actualstate 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 systemsabovementioned, without overlooking their disadvantages, I havefully made up my mind as to the side on which the balance lies; andam decidedly of opinion, that a system of restrictions so calculatedas to keep us, in average years, nearly independent of foreignsupplies of corn, will more effectually conduce to the wealth andprosperity of the country, and of by far the greatest mass of theinhabitants, than the opening of our ports for the free admission offoreign corn, in the actual state of Europe. 

Of the resources of Great Britain and Ireland for the further growthof corn, by the further application of capital to the land, theevidence laid before parliament furnishes the most ample testimony. But it is not necessary, for this purpose, to recur to evidence thatmay be considered as partial. All the most intelligent works whichhave been written on agricultural subjects of late years, agree inthe same statements; and they are confirmed beyond a possibility ofdoubt, when we consider the extraordinary improvements, andprodigious increase of produce that have taken place latterly insome districts, which, in point of natural soil, are not superior toothers that are still yielding the most scanty and miserable crops. Most of the light soils of the kingdom might, with adequate capitaland skill, be made to equal the improved parts of Norfolk; and thevast tracts of clay lands that are yet in a degraded state almostall over the kingdom, are susceptible of a degree of improvement, which it is by no means easy to fix, but which certainly offers agreat prospective increase of produce. There is even a chance (buton this I will not insist) of a diminution in the real price ofcorn, (9*) owing to the extension of those great improvements, andthat great economy and good management of labour, of which we havesuch intelligent accounts from Scotland. (10*) If these clay lands, by draining, and the plentiful application of lime and othermanures, could be so far meliorated in quality as to admit of beingworked by two horses and a single man, instead of three or fourhorses with a man and a boy, what a vast saving of labour andexpense would at once be effected, at the same time that the cropswould be prodigiously increased! And such an improvement mayrationally be expected, from what has really been accomplished inparticular districts. In short, if merely the best modes ofcultivation, now in use in some parts of Great Britain, weregenerally extended, and the whole country was brought to a level, inproportion to its natural advantages of soil and situation, by thefurther accumulation and more equable distribution of capital andskill; the quantity of additional produce would be immense, andwould afford the means of subsistence to a very great increase ofpopulation. 

In some countries possessed of a small territory, and consistingperhaps chiefly of one or two large cities, it never can be made aquestion, whether or not they should freely import foreign corn. They exist, in fact, by this importation; and being always, in pointof population, inconsiderable, they may, in general, rely upon apretty regular supply. But whether regular or not, they have nochoice. Nature has clearly told them, that if they increase inwealth and power to any extent, it can only be by living upon theraw produce of other countries. 

It is quite evident that the same alternative is not presented toGreat Britain and Ireland, and that the united empire has amplemeans of increasing in wealth, population, and power, for a verylong course of years, without being habitually dependent uponforeign supplies for the means of supporting its inhabitants. 

As we have clearly, therefore, our choice between two systems, undereither of which we may certainly look forwards to a progressiveincrease of population and power; it remains for us to consider inwhich way the greatest portion of wealth and happiness may besteadily secured to the largest mass of the people. 

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

If I were convinced, that to open our ports, would be permanently toimprove the condition of the labouring classes of society, I shouldconsider the question as at once determined in favour of such ameasure. But I own it appears to me, after the most deliberateattention to the subject, that it will be attended with effects verydifferent from those of improvement. We are very apt to be deceivedby names, and to be captivated with the idea of cheapness, withoutreflecting that the term is merely relative, and that it is verypossible for a people to be miserably poor, and some of themstarving, in a country where the money price of corn is very low. Ofthis the histories of Europe and Asia will afford abundantinstances. 

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

I stated in the Observations, and more at large in the Inquiry intorents, (11*) that under the same demand for labour, and the sameconsequent power of purchasing the means of subsistence, a highmoney price of corn would give the labourer a very great advantagein the purchase of the conveniences and luxuries of life. The effectof this high money price would not, of course, be so marked amongthe very poorest of the society, and those who had the largestfamilies; because so very great a part of their earnings must beemployed in absolute necessaries. But to all those above the verypoorest, the advantage of wages resulting from a price of eightyshillings a quarter for wheat, compared with fifty or sixty, wouldin the purchase of tea, sugar, cotton, linens, soap, candles, andmany other articles, be such as to make their condition decidedlysuperior. 

Nothing could counterbalance this, but a much greater demand forlabour; and such an increased demand, in consequence of the openingof our ports, is at best problematical. The check to cultivation hasbeen so sudden and decisive, as already to throw a great number ofagricultural labourers out of employment;(12*) and in Ireland thiseffect has taken place to such a degree, as to threaten the mostdistressing, and even alarming, consequences. The farmers, in somedistricts, have entirely lost the little capital they possessed;and, unable to continue in their farms, have deserted them, and lefttheir labourers without the means of employment. In a country, thepeculiar defects of which were already a deficiency of capital, anda redundancy of population, such a check to the means of employinglabour must be attended with no common distress. In Ireland, it isquite certain, that there are no mercantile capitals ready to takeup those persons who are thus thrown out of work, and even in GreatBritain the transfer will be slow and difficult. 

Our commerce and manufactures, therefore, must increase veryconsiderably before they can restore the demand for labour alreadylost; for the and a moderate increase beyond this will scarcely makeup disadvantage of a low money price of wages. 

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

There is a difference between what may be called the usual price ofcorn and the average price, which has not been sufficiently attendedto. Let us suppose the common price of corn, for four years out offive, 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 theusual price will still be about L2, and it is by this price, and notby the price of a year of scarcity, or even the average includingit, that wages are generally regulated. 

If the ports were open, the usual price of corn would certainlyfall, and probably the average price; but from at has before beensaid of the existing laws of France, and of the practice among theBaltic nations of raising the tax on their exported corn inproportion to the demand for it, there is every reason to believe, that the fluctuations of price would be much greater. Such would, atleast, be my conclusion from theory; and, I think, it has beenconfirmed by the experience of the last hundred years. During thistime, the period of our greatest importations, and of our greatestdependence upon foreign corn, was from 1792 to 1805 inclusive; andcertainly in no fourteen years of the whole hundred were thefluctuations of price so great. In 1792 the price was 42s. Aquarter; 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 inthe short period from 1798 to 1803, it rose from 50s. To 118s. Andfell again to 56s. (13*)

I would not insist upon this existence as absolutely conclusive, onaccount of the mixture of accident in all such appeals to facts; butit certainly tends to confirm the probability of those greatfluctuations which, according to all general principles, I shouldexpect from the temper and customs of nations, with regard to theegress of corn, when it is scarce; and particularly from theexisting laws of that country, which, in all common years, willfurnish us with a large proportion of our supplies. 

To these causes of temporary fluctuations, during peace, should beadded the more durable as well as temporary, fluctuations occasionedby war. Without reference to the danger of excessive scarcity fromanother combination against us, if we are merely driven back atcertain distant intervals upon our own resources, the experience ofthe present times will teach us not to estimate lightly theconvulsion which attends the return, and the evils of suchalternations of price. 

In the Observations, I mentioned some causes of fluctuations whichwould attend the system of restrictions; but they are in my opinioninconsiderable, compared with those which have been just referredto. 

On the labouring classes, therefore, the effects of opening ourports for the free importation of foreign corn, will be greatly tolower their wages, and to subject them to much greater fluctuationsof price. And, in this state of things, it will require a muchgreater increase in the demand for labour, than there is in anyrational ground for expecting, to compensate to the labourer theadvantages which he loses in the high money wages of labour, and thesteadier and less fluctuating price of corn. 

2. Of the next most important class of society, those who live uponthe profits of stock, one half probably are farmers, or immediatelyconnected with farmers; and of the property of the other half, notabove one fourth is engaged in foreign trade. 

Of the farmers it is needless to say anything. It cannot be doubtedthat they will suffer severely from the opening of the ports. Notthat the profits of farming will not recover themselves, after acertain period, and be as great, or perhaps greater, than they werebefore; but this cannot take place till after a great loss ofagricultural capital, or the removal of it into the channels ofcommerce and manufactures. 

Of the commercial and manufacturing part of the society, only thosewho are directly engaged in foreign trade, will feel the benefit ofthe importing system. It is of course to be expected, that theforeign trade of the nation will increase considerably. If it donot, indeed, we shall have experienced a very severe loss, withoutanything like a compensation for it. And if this increase merelyequals the loss of produce sustained by agriculture, the quantity ofother produce remaining the same, it is quite clear that the countrycannot possibly gain by the exchange, at whatever price it may buyor sell. Wealth does not consist in the dearness or cheapness of theusual measure of value, but in the quantity of produce; and toincrease effectively this quantity of produce, after the severecheck sustained by agriculture, it is necessary that commerce shouldmake a very powerful start. 

In the actual state of Europe and the prevailing jealousy of ourmanufactures, such a start seems quite doubtful; and it is by nomeans impossible that we shall be obliged to pay for our foreigncorn, by importing less of other commodities, as well as byexporting more of our manufactures. 

It may be said, perhaps, that a fall in the price of our corn andlabour, affords the only chance to our manufacturers of retainingpossession of the foreign markets; and that though the produce ofthe 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 atthe probable effects of returning peace to Europe, it is impossibleto suppose that, even with a considerable diminution in the price oflabour, we should not lose some markets on the continent, for thosemanufactures in which we have no peculiar advantage; while we haveevery reason to believe that in others, where our colonies, ournavigation, our long credits, our coals, and our mines come inquestion, as well as our skill and capital, we shall retain ourtrade in spite of high wages. Under these circumstances, it seemspeculiarly advisable to maintain unimpaired, if possible, the homemarket, and not to lose the demand occasioned by so much of therents of land, and of the profits and capital of farmers, as mustnecessarily be destroyed by the check to our home produce. 

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

With regard to this great majority, it is impossible that theyshould not feel very widely and severely the diminution of theirnominal capital by the fall of prices. We know the magic effect uponindustry of a rise of prices. It has been noticed by Hume, andwitnessed by every person who has attended to subjects of this kind. And the effects of a fall are proportionately depressing. Even theforeign trade will not escape its influence, though here it may becounterbalanced by a real increase of demand. But, in the internaltrade, not only will the full effect of this deadening weight beexperienced, but there is reason to fear that it may be accompaniedwith an actual diminution of home demand. There may be the same oreven a greater quantity of corn consumed in the country, but asmaller quantity of manufactures and colonial produce; and ourforeign corn may be purchased in part by commodities which werebefore consumed at home. In this case, the whole of the internaltrade must severely suffer, and the wealth and enjoyments of thecountry be decidedly diminished. The quantity of a country's exportsis a very uncertain criterion of its wealth. The quantity of producepermanently consumed at home is, perhaps, the most certain criterionof wealth to which we can refer. 

Already, in all the country towns, this diminution of demand hasbeen felt in a very great degree; and the surrounding farmers, whochiefly support them, are quite unable to make their accustomedpurchases. If the home produce of grain be considerably diminishedby the opening of our ports, of which there can be no doubt, theseeffects in the agricultural countries must be permanent, though notto the same extent as at present. And even if the manufacturingtowns should ultimately increase, in proportion to the losses of thecountry, of which there is great reason to doubt, the transfer ofwealth and population will be slow, painful, and unfavourable tohappiness. 

3. Of the class of landholders, it may be truly said, that thoughthey do not so actively contribute to the production of wealth, aseither of the classes just noticed, there is no class in societywhose interests are more nearly and intimately connected with theprosperity of the state. 

Some persons have been of opinion, and Adam Smith himself amongothers, that a rise or fall of the price of corn does not reallyaffect the interests of the landholders; but both theory andexperience prove the contrary; and shew, that, under all commoncircumstances, a fall of price must be attended with a diminution ofproduce, and that a diminution of produce will naturally be attendedwith a diminution of rent. (14*)

Of the effect, therefore, of opening the ports, in diminishing boththe 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, socircumstanced as the landlords, can materially suffer withoutaffecting the interests of the state. 

It has been justly observed by Adam Smith, that 'no equal quantityof productive labour employed in manufactures can ever occasion sogreat a reproduction as in agriculture. ' If we suppose the rents ofland taken throughout the kingdom to be one fourth of the grossproduce, it is evident, that to purchase the same value of rawproduce by means of manufactures, would require one third morecapital. Every five thousand pounds laid out on the land, not onlyrepays the usual profits of stock, but generates an additionalvalue, which goes to the landlord. And this additional value is nota mere benefit to a particular individual, or set of individuals, but affords the most steady home demand for the manufactures of thecountry, the most effective fund for its financial support, and thelargest disposable force for its army and navy. It is true, that thelast additions to the agricultural produce of an improving countryare not attended with a large proportion of rent;(15*) and it isprecisely this circumstance that may make it answer to a richcountry to import some of its corn, if it can be secure of obtainingan equable supply. But in all cases the importation of foreign cornmust fail to answer nationally, if it is not so much cheaper thanthe corn that can be grown at home, as to equal both the profits andthe rent of the grain which it displaces. 

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

These considerations, which are not often attended to, if they donot affect the ordinary question of a free trade in corn, must atleast 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 bebenefited 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 affectedin a different manner; but their interests are not so closelyinterwoven with the welfare of the state, as the classes alreadyconsidered, particularly the labouring classes, and the landlords. 

In the Observations, I remarked, that it was 'an error of the mostserious magnitude to suppose that any natural or artificial causes, which should raise or lower the values of corn or silver, might beconsidered as matters of indifference; and that, practically, nomaterial change could take place in the value of either, withoutproducing both temporary and lasting effects, which have a mostpowerful influence on the distribution of property. '

In fact, it is perfectly impossible to suppose that, in any changein the measure of value, which ever did, or ever can take placepractically, all articles, both foreign and domestic, and allincomes, from whatever source derived, should arrange themselvesprecisely in the same relative proportions as before. And if they donot, it is quite obvious, that such a change may occasion the mostmarked differences in the command possessed by individuals andclasses of individuals over the produce and wealth of the country. Sometimes the changes of this kind that actually take place, arefavourable to the industrious classes of society, and sometimesunfavourable. 

It can scarcely be doubted, that one of the main causes, which hasenabled us hitherto to support, with almost undiminished resources, the prodigious weight of debt which has been accumulated during thelast twenty years, is the continued depreciation of the measure inwhich it has been estimated, and the great stimulus to industry, andpower of accumulation, which have been given to the industriousclasses of society by the progressive rise of prices. As far as thiswas occasioned by excessive issues of paper, the stockholder wasunjustly treated, and the industrious classes of society benefitedunfairly at his expense. But, on the other hand, if the price ofcorn were now to fall to 50 shillings a quarter, and labour andother commodities nearly in proportion, there can be no doubt thatthe stockholder would be benefited unfairly at the expense of theindustrious classes of society, and consequently at the expense ofthe 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-threeshillings; during the ten years ending with 1813, ninety-twoshillings; and during the last five years of the twenty, one hundredand eight shillings. In the course of these twenty years, thegovernment borrowed near five hundred millions of real capital, forwhich on a rough average, exclusive of the sinking fund, it engagedto pay about five per cent. But if corn should fall to fiftyshillings a quarter, and other commodities in proportion, instead ofan interest of about five per cent. The government would really payan interest of seven, eight, nine, and for the last two hundredmillions, ten per cent. 

To this extraordinary generosity towards the stockholders, I shouldbe disposed to make no kind of objection, if it were not necessaryto consider by whom it is to be paid; and a moment's reflection willshew us, that it can only be paid by the industrious classes ofsociety and the landlords, that is, by all those whose nominalincomes will vary with the variations in the measure of value. Thenominal revenues of this part of the society, compared with theaverage of the last five years, will be diminished one half; and outof this nominally reduced income, they will have to pay the samenominal amount of taxation. 

The interest and charges of the national debt, including the sinkingfund, are now little short of L40 millions a year; and these L40millions, if we completely succeed in the reduction of the price ofcorn and labour, are to be paid in future from a revenue of abouthalf 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 casebear on the labouring classes of society, and what proportion oftheir incomes all the active, industrious middle orders of thestate, as well as the higher orders, must pay in assessed taxes, andthe various articles of the customs and excise, the pressure willappear to be absolutely intolerable. Nor would even the ad valoremtaxes afford any real relief. The annual fourty millions, must atall events be paid; and if some taxes fail, others must be imposedthat will be more productive. 

These are considerations sufficient to alarm even the stockholdersthemselves, indeed, if the measure of value were really to fall, aswe have supposed, there is great reason to fear that the countrywould be absolutely unable to continue the payment of the presentinterest of the national debt. 

I certainly do not think, that by opening our ports to the freestadmission of foreign corn, we shall lower the price to fiftyshillings a quarter. I have already given my reasons for believingthat the fluctuations which in the present state of Europe, a systemof importation would bring with it, would be often producing dearyears, and throwing us back again upon our internal resources. Butstill there is no doubt whatever, that a free influx of foreigngrain would in all commonly favourable seasons very much lower itsprice. 

Let us suppose it lowered to sixty shillings a quarter, which forperiods of three or four years together is not improbable. Thedifference between a measure of value at 60 compared with 80 (theprice at which it is proposed to fix the importation), is 33 1/3 percent. This percentage upon 40 millions amounts to a very formidablesum. But let us suppose that corn does not effectually regulate theprices of other commodities; and, making allowances on this account, let us take only 25, or even 20 per cent. Twenty per cent. Upon 40millions amounts at once to 8 millions--a sum which ought to go aconsiderable way towards a peace establishment; but which, in thepresent case, must go to pay the additional interest of the nationaldebt, occasioned by the change in the measure of value. And even ifthe price of corn be kept up by restrictions to 80 shillings aquarter, it is certain that the whole of the loans made during thewar just terminated, will on an average, be paid at an interest verymuch higher than they were contracted for; which increased interestcan, of course, only be furnished by the industrious classes ofsociety. 

I own it appears to me that the necessary effect of a change in themeasure of value on the weight of a large national debt is alonesufficient to make the question fundamentally different from that ofa simple question about a free or restricted trade; and, that toconsider it merely in this light, and to draw our conclusionsaccordingly, is to expect the same results from premises which haveessentially changed their nature. From this review of the manner inwhich the different classes of society will be affected by theopening of our ports, I think it appears clearly, that very much thelargest mass of the people, and particularly of the industriousorders of the state, will be more injured than benefited by themeasure. 

I have now stated the grounds on which it appears to me to be wiseand politic, in the actual circumstances of the country, to restrainthe 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 torecover, it might be advisable to pass a temporary act ofrestriction, whatever may be the intention of the legislature infuture. But, certainly it is much to be wished that as soon aspossible, consistently with due deliberation, the permanent policyintended to be adopted with regard to the trade in corn should befinally settled. Already, in the course of little more than acentury, three distinct changes in this policy have taken place. Theact of William, which gave the bounty, combined with the prohibitoryact of Charles II was founded obviously and strikingly upon theprinciple of encouraging exportation and discouraging importation;the spirit of the regulations adopted in 1773, and acted upon sometime before, was nearly the reverse, and encouraged importation anddiscouraged exportation. Subsequently, as if alarmed at thedependence of the country upon foreign corn, and the fluctuations ofprice which it had occasioned, the legislature in a feeble act of1791, and rather a more effective one in 1804, returned again to thepolicy of restrictions. And if the act of 1804 be left nowunaltered, it may be fairly said that a fourth change has takenplace; as it is quite certain that, to proceed consistently upon arestrictive system, fresh regulations become absolutely necessary tokeep pace with the progressive fall in the value of currency. 

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

If, upon mature deliberation, we determine to open our ports to thefree admission of foreign grain, we must not be disturbed at thedepressed state, and diminished produce of our home cultivation; wemust not be disturbed at our becoming more and more dependent uponother nations for the main support of our population; we must not bedisturbed at the greatly increased pressure of the national debtupon the national industry; and we must not be disturbed at thefluctuations of price, occasioned by the very variable supplies, which we shall necessarily receive from France, in the actual stateof 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 generalprinciples, they belong to the opening of our ports, in the actualstate and relations of this country to the other countries ofEurope; and though they may be counterbalanced or more thancounterbalanced, by other advantages, they cannot, in the nature ofthings, be avoided. 

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

Those who promise low prices upon the restrictive system, take anerroneous view of the causes which determine the prices of rawproduce, and draw an incorrect inference from the experience of thefirst half of the last century. As I have stated in anotherplace, (18*) a nation which very greatly gets the start of itsneighbours in riches, without any peculiar natural facilities forgrowing corn, must necessarily submit to one of thesealternatives--either a very high comparative price of grain, or avery great dependence upon other countries for it. 

With regard to the specific mode of regulating the importation ofcorn, if the restrictive system be adopted, I am not sufficientlyacquainted with the details of the subject to be able to speak withconfidence. It seems to be generally agreed, that, in the actualstate of things, a price of about eighty shillings a quarter(19*)would prevent our cultivation from falling back, and perhaps allowit to be progressive. But, in future, we should endeavour, ifpossible, to avoid all discussions about the necessity of protectingthe British farmer, and securing to him a fair living profit. Suchlanguage may perhaps be allowable in a crisis like the present. Butcertainly the legislature has nothing to do with securing to anyclasses of its subjects a particular rate of profits in theirdifferent trades. This is not the province of a government; and itis unfortunate that any language should be used which may conveysuch an impression, and make people believe that their rulers oughtto listen to the accounts of their gains and losses. 

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

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

NOTES:

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

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

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

4. I have very little doubt that the value of paper in this countryhas already risen, norwithstanding the increased issues of the Bank. These increased issues I attribute chiefly to the great failureswhich have taken place among country banks, and the very greatpurchases 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 yetrecovered itself. The real exchange, during the last year, must havebeen greatly in our favour, although the nominal exchange isconsiderably against us. This shews, incontrovertibly, that ourcurrency is still depreciated, in reference to the bullioncurrencies of the continent. A part, however, of this depreciationmay still be owing to the value of bullion in Europe not having yetfallen 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 notbe executed: but I own I see no grounds for such an opinion. It isdifficult to execute prohibitions against the exportation of corn, when it is in great plenty, but not when it is scarce. For ten yearsbefore 1757, we had in this country, regularly exported on anaverage, above 400, 000 quarters of wheat, and in that year there wasat once an excess of importation. With regard to the allegedimpotence of governments in this respect, it appears to me thatfacts shew their power rather than their weakness. To be convincedof this, it is only necessary to look at the diminished importationsfrom America during the war, and particularly from the Baltic afterBonaparte's decrees. The imports from France and the Baltic in 1810, were by special licences, granted for purposes of revenue. Suchlicences shewed strength rather than weakness; and might have beenrefused, if a greater object than revenue had at that time presenteditself. 

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

8. It appears from the evidence, that the corn from the Baltic isoften very heavily taxed, and that this tax is generally raised inproportion to our necessities. In a scarce year in this country wecould 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 oflabour and capital which has been employed to procure the lastadditions which have been made to the national produce. In everyrich and improving country there is a natural and strong tendency toa constantly increasing price of raw produce, owing to the necessityof employing, progressively, land of an inferior quality. But thistendency may be partially counteracted by great improvements incultivation, and economy of labour. See this subject treated in Aninquiry into the nature and progress of rent, just published. 

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

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

12. I was not prepared to expect (as I intimated in theObservations) so sudden a fall in the price of labour as has alreadytaken place. This fall has been occasioned, not so much by the lowprice 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 theunwillingness of governments to allow the free egress of their corn, when it is scarce, that nations are practically so little dependentupon each other for corn, as they are found to be. According to allgeneral principles they ought to be more dependent. But the greatfluctuations 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 veryhigh price, which we paid for foreign corn, gave a prodigiousstimulus to our domestic agriculture. A large territorial country, that imports foreign corn, is exposed not infrequently to thefluctuations which belong to this kind of variable dependence, without obtaining the cheapness that ought to accompany a trade incorn really free. 

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

15. Inquiry into the Nature and Progress of Rent. 

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

17. It often happens that the high prices of a particular countrymay diminish the quantity of its exports without diminishing thevalue of their amount abroad; in which case its foreign trade ispeculiarly advantageous, as it purchases the same amount of foreigncommodities 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 ofgetting rid of that part of our high prices which belongs toexcessive issues of paper, and retaining only that part whichbelongs to great wealth, combined with a system of restrictions.