Yes, the whole world, and particularly the French and the Yankees, see very clearly the course of this fit of modesty and of liberality into which we have so recently fallen. They know well that a war would play the very devil with our national faith. They know, in short, that no ministers in their senses will think of supporting the paper system through another war. They know well that no ministers now exist, or are likely to exist, will venture to endanger the paper-system; and therefore they know that (for England) they may now do just what they please. When the French were about to invade Spain, Mr. Canning said that his last despatch on the subject was to be understood as a protest, on the part of England, against permanent occupation of any part of Spain by France. There the French are, however; and at the end of two years and a half he says that he knows nothing about any intention that they have to quit Spain, or any part of it.
[THE FINANCIAL CRISIS OF 1824 AND 1825.]
Source.—The Political Life of Sir Robert Peel, by Thomas Doubleday. London, 1856. Vol. I. pp. 329-331.
The most trustworthy account of the almost insane operations of 1824 and 1825 is perhaps that of Mr. Tooke, the well-known author of the treatise on "High and Low Prices," who in his "Considerations on the State of the Currency," published in 1826, immediately after the panic, thus describes the steps that led to it.[2] Speaking of the latter months of 1824 and the first six months of 1825, Mr. Tooke thus proceeds:
"Never did the public exhibit so great a degree of infatuation, so complete an abandonment of all the most ordinary rules of mercantile reasoning, since the celebrated bubble year of 1720, as it did in the latter part of 1824 and the first three or four months of 1825.
"The speculative anticipation of an advance was no longer confined to articles which presented a plausible ground for some rise, however small. It extended itself to articles which were not only deficient in quantity, but actually in excess. Thus coffee, of which the stock was increased compared with the average of former years, advanced from 70 to 80 per cent.; spices rose in some instances from 100 to 200 per cent., without any reason whatever, and with a total ignorance on the part of the operators of everything connected with the relation of the supply to the consumption.
"In short, there was hardly an article of merchandise which did not participate in the rise; for it had become the business of the speculators, or of the brokers, who were interested in the raising and keeping up prices, to look minutely through the general prices-current, with a view to discover any article which had not advanced, in order to make it the subject of anticipated demand. If a person, not under the influence of the prevalent delusion, ventured to inquire for what reason any particular article had risen, the common answer was, 'Everything else has risen, and therefore this ought to rise.'
"Whilst such were the transactions in the markets for goods, and whilst there was an extension of the system of loans to the transatlantic states, some of them affording little or no security, but almost all coming out at a premium, an enlarged field was presented for the spirit of gambling to enter upon. New mining, insurance, and other schemes, were set on foot, on the principle of joint-stock companies, in immense number.
"The earliest South American mining speculations or associations formed in this country had been entered into with considerable circumspection, the parties with whom they originated having, by local information and connexion, secured comparatively beneficial contracts, and priority of the working of mines known to be most productive. These apparent advantages being made known, attracted numerous persons to buy shares from the original subscribers at a progressively increasing premium. The great gains—or rather premiums in anticipation of gains—thus obtained by one or two of these associations, held out an inducement to the formation of new ones.