Illustrations of political economy, Volume 5 (of 9)

by Harriet Martineau

Haleham had never been apparently so prosperous as at this time, notwithstanding the war, to which were referred all the grievances of complainers,—and they were few. Prices were certainly very high; much higher since Mr. Berkeley had joined the D—— Bank, and Mr. Cavendish opened the Haleham concern; but money abounded, taxation was less felt than when purses were emptier; and the hope of obtaining high prices stimulated industry, and caused capital to be laid out to the best advantage. At first, the same quantity of coin that there had been before circulated together with Cavendish’s notes; and as there was nearly twice the quantity of money in the hands of a certain number of people to exchange for the same quantity of commodities, money was of course very cheap; that is, commodities were very dear. As gold money was prevented by law from becoming cheap, like paper money, people very naturally hoarded it, or changed it away to foreign countries, where commodities were not dear, as in England. Even in the little town of Haleham, it was soon discovered that several kinds of foreign goods could be had in greater variety and abundance than formerly; Haleham having its share of the larger quantity of foreign commodities now flowing into England in return for the guineas which left it as fast as they could be smuggled out of the country in their own shape, or as bullion. If the quantity of money had now been let alone, prices would have returned to their former state as soon as the additional quantity of money had been thus drained away: but, as fast as it disappeared, more bankers’ notes were issued; so that the whole amount of money went on increasing, though the metal part of it lessened day by day. The great bank of all,—the Bank of England,—had obtained leave, some years before, to put out notes without being liable to be called upon to exchange them for gold upon the demand of the holder of the note. The Bank was now making use of this permission at a great rate; and for two years past had put out so large a number of notes, that some people began to doubt whether it could keep its “promise to pay” in gold, whenever the time should come for parliament to withdraw its permission; which, it was declared, would be soon after the war should be ended. No other banks had the same liberty. They were not allowed to make their purchases with promises to pay, and then authorized to refuse to pay till parliament should oblige them to do so at the conclusion of the war. But the more paper money the Bank of England issued, the more were the proprietors of other banks tempted to put out as many notes as they dared, and thus to extend their business as much as possible; and many were rather careless as to whether they should be able to keep their “promise to pay;” and some cheats and swindlers set up banks, knowing that they should never be able to pay, and that their business must break in a very short time; but hoping to make something by the concern meanwhile, and to run off at last with some of the deposits placed in their hands by credulous people. So many kinds of bankers being eager at the same time to issue their notes, money of course abounded more and more; and, as commodities did not abound in the same proportion, they became continually dearer.

There would have been little harm in this, if all buyers had felt the change alike. But as they did not, there was discontent,—and very reasonable discontent,—in various quarters; while in others, certain persons were unexpectedly and undeservedly enriched at the expense of the discontented. If it had been universally agreed throughout the whole kingdom that everybody should receive twice as much money as he did before, and that, at the same time, whatever had cost a guinea should now cost two pound notes and two shillings, and that whatever had cost sixpence should now cost a shilling, and so on, nobody would have had to complain of anything but the inconvenience of changing the prices of all things. But such an agreement was not, and could not be, made; and that the quantity of money should be doubled and not equally shared, while prices were doubled to everybody, was sure to be called, what it really was, very unfair. The government complained that the taxes were paid in the same number of pounds, shillings, and pence as before, while government had to pay the new prices for whatever it bought. There was, in fact, a reduction of taxation: but, before the people had the satisfaction of perceiving and acknowledging this, the government was obliged to lay on new taxes to make up for the reduction of the old ones, and to enable it to carry on the war. This set the people complaining again; so that the government and nation were actually complaining at the same time, the one of a reduction, the other of an increase of taxation; and both had reason for their murmurs.

None had so much reason for discontent as those classes which suffered in both ways,—those who received fixed incomes. To pay the new prices with the old amount of yearly money, and to be at the same time heavily taxed, was indeed a great hardship; and the inferior clergy, fund-holders, salaried clerks, annuitants and others, were as melancholy as farmers were cheerful in regarding their prospects. Servants and labourers contrived by degrees to have their wages, and professional men their fees, raised: but these were evil days for those whose incomes were not the reward of immediate labour, and could not therefore rise and fall with the comparative expense of subsistence. In proportion as these classes suffered, the productive classes enjoyed; and the farmers under long leases had as much more than their due share as the landlord, the public servant, and creditor, had less.

This inequality led to some curious modes of management, whereby some endeavoured to recover their rights, and others to make the most of their present advantages; and in Haleham, as in more important places where the state of the currency had been affected by the establishment of a bank, or by some other inlet of a flood of paper money, instances were witnessed of a struggle between those who were benefited and those who were injured by the new state of money affairs.

“You complain of my never having time to ride with you, Melea,” said Mr. Berkeley to his younger daughter, one fine October morning. “I am not going to D—— to-day, and we will ride to Merton Downs, if you can prevail upon yourself to lay aside your German Dictionary for three hours.”

Melea joyfully closed her book.

“Nay, I give you another hour. I must go down to the workhouse, and see the paupers paid off; but that will not take long.”

“Then, suppose you meet us at Martin’s farm,” said Fanny. “It is on your way, and will save you the trouble of coming home again. Melea and I have not been at the Martins’ this long while; and we want to know how Rhoda likes her place.”

“Not for a long while indeed,” observed their mother, as the girls left the room to prepare for their ride. “It is so far a bad thing for the Martins that Mr. Craig lodges there, that we cannot go and see them so often as we should like. It is only when he is absent for days together, as he is now, that the girls can look in at the farm as they used to do.”

“The Martins do not want anything that we can do for them, my dear. They are very flourishing; and, I am afraid, will soon grow too proud to have a daughter out at service. Did not I hear somebody say that Rhoda is growing discontented already?”