Of this amount, probably fully one-half would be the actual loss sustained by makers and holders during the year. I am content, however, to set it down at £500,000. Something ought to be added for the deterioration of stocks throughout the country, the precise amount of which it is very difficult to ascertain. As, however, there are on hand, in Scotland alone, 350,000 tons of pig-iron, with no prospect of any serious decrease in the quantity, or improvement in price, for some time to come, unless the make is very materially reduced, I may very safely set down in this account an additional £200,000 for the depreciation throughout the kingdom—making thus a total loss upon iron of £700,000.

It must be perfectly obvious that the cheapness of all the necessaries and the luxuries of life, so much boasted of by the Manchester school of political economists, is not a healthy cheapness, or one which can coexist with the well-being of the mercantile classes. The consumer has, during the past year, been fed and clothed, to a considerable extent, at the expense of that class. The importer of foreign produce, like the farmer, has been living upon his capital; and, even under the most favourable circumstances, must for years to come feel the consequences. The inquiry, then, becomes an important one—what has been the cause, or the combination of causes, which has brought about this disastrous state of things? And another equally important inquiry follows this—What interest in the country has been in fault? The Free-Trader will, no doubt, tell us that the cause of our market for imports being glutted, has been over-importations. Yet the very increase of these importations is relied upon as the surest sign of the nation's advancing prosperity! In part, I admit that the mercantile classes have imported too largely; but, then, it was in anticipation of an increased power of the people to consume, which has not manifested itself to the extent required. For example, we imported, upon an already ample stock, 70,000 tons of sugar in 1851, more than in 1850. We consumed, however, only 15,600 tons more; and, as the result, we had on the 31st December last a stock on hand of 57,000 tons, or 50 per cent in excess of the stock of the preceding year. In coffee we had no increase; but the stock with which we commenced the year was equal to nine months' consumption, which ought to have deterred importations. Of tea we increased our imports by 23,700,000 lb. We only increased the deliveries, however, for export and home consumption 2,600,000 lb. Yet we had to commence the year with a stock equal to seven months' consumption, which we have increased by 13,500,000 lb. It will be said that our merchants have bought abroad at too high prices. I admit this too. Under the circumstances, as they have turned out on actual experience, we have paid as much too high as we have bought in excess of our requirements. This, however, is only a natural result of our boasted new system. We have increased our exports to nearly £69,000,000 sterling in 1851, against £65,750,000 in 1850; £59,000,000 in 1849, and £49,000,000 in 1848, regardless of the known fact that, in the long run, the whole of these vast sums would have to find their way back to this country in the shape of imported produce, which we had not, to anything like the required extent, increased our power to consume. We have paid high prices for produce abroad, from the very fact of our having so enormously increased our exports; for the effect of every arrival of a cargo in any foreign port is to create a demand for a remittance of some kind in return. If money is generally preferred, the rate of exchange rises against the parties remitting; and a demand is created for produce, as offering at least a chance of a profitable result. If, on the other hand, produce is recklessly competed for, the money remittance to the exporter is lessened, and the purchases of the importer are bought high, and arrive at a ruinously losing market. Messrs Littledale and Co., in their last annual circular, very lucidly and briefly illustrate this, when referring to the business of 1849 and 1850. "These years," they remark, "were confessedly prosperous to the merchant; and why? Simply because the disasters of '47, and the long pending disturbances of '48, had so effectually checked operations, that supply and demand were fairly equalised, both at home and abroad; the foreign market, not being deluged with exports, gave a fair profit on the outward goods, while reduced competition for returns enabled produce to be purchased at rates which again left a remunerating profit to the importer, and secured a ready sale." In another way, increased exports, aided by the privileges which we have given to foreign shipping, contribute to bring about a glut of imports. We have had proofs of this fact during the past year, in which shipments have been made to Great Britain from the East Indies, China, the Brazils, &c., at high prices, in consequence of the inducements to speculation in produce held out by a superabundance of vessels, both British and foreign, competing for freights at the most ruinously low rates.

But I must expressly guard myself against admitting that the disasters of the past year can be attributed to the misconduct of the British merchant, properly so termed. Our old-established houses, both in the home and foreign markets, have been elbowed at every turn by a new class of men who have rushed into extensive operations with very little discretion, and many of whom, during the past year, have paid the penalty of their want of prudence and mercantile knowledge. Nor have the manufacturing body themselves been guiltless in the matter. The home consumption of the past few years has been unequal to the office of taking off a fair portion of the increased products of our looms and our forges; and hence the accumulation of stocks of every kind has been poured without judgment, and far beyond their wants, into the markets of the foreigner. This has been especially the case with manufactured cotton goods, the quantity of which, exported in 1850, with fair boweds averaging 7½d. per lb. was 1,472,324,000 yards, against 1,169,000,000 yards in 1848 when the same cotton was only 4⅜d. per lb. During the past year, whilst a decline has been going on, which has reached nearly 3d. per lb., the exports have been 1,344,000,000 yards. Such a business as this could only be productive of one result; and I have not the slightest doubt that, if those who have been engaged in it would admit the truth, it would be found that their export operations during the past year have been the most unsuccessful on record. And not only to themselves has this been the case, but to every merchant carrying on a legitimate export business to foreign countries. Such merchants during the past year have been unable to discover a single article capable of being introduced into foreign markets with any reasonable hope of profit. Their shipments, however well purchased, and however well assorted to suit the wants of those markets, have arrived there when they were glutted with unsuitable trash of all descriptions, which the manufacturer had got rid of at any sacrifice to enable him to keep his machinery going, and which the adventurer has bought to enable him to keep his floating credit up, until a favourable turn in the price of the raw material should enable both to reap a fair reward for their enterprise. There is not a single market of importance—if, indeed, there be one at all—to which I can point as having returned cost price at home for the shipments of the year, taking them in the mass. If a few cases of individual profit have taken place, it has been when some favourable fluctuation in the rate of exchange has occurred to make up for the loss which would have accrued under an ordinary condition of the foreign money market. Such was the case last year with a small portion of our East India trade in particular. This market, however, and that of China, have been unremunerating generally during the whole of the year. The American market has only been saved from being disastrous by the impetus given to consumption by the Californian gold discoveries, and their effect upon the American banking system. The Brazilian trade, and that of the west coast of South America, have been losing ones, and would have been worse, but for the same stimulus, which, combined with that arising from the discoveries of gold in Australia, may be said to have affected favourably the trade of the eastern and western continents, and to have protected Europe and this country from—what must inevitably have occurred—a widely-spread monetary convulsion.

It would be a task utterly impossible, to ascertain precisely the amount of loss sustained upon our gross exports of the year, amounting to £68,490,659; but it is not difficult to perceive that it has been a very heavy one. In any case it must have been so, as far as regards our exports of manufactured cotton goods, which have amounted to £30,078,996; of metals, which have amounted to £8,905,894; of woollen manufactures, which have amounted to £9,856,259; and of silk goods, linens, &c., the export of which has confessedly been excessive, and with respect to the bulk of which, there has been a decline in the price of the raw material. The excess of our entire exports, however, over the legitimate wants of the foreigner, will account for a more considerable margin of loss—and that, too, upon all articles—than that which would have taken place under a decline in one or two raw materials alone. There has been a heavy loss sustained upon the labour and skill engaged in the composition of manufactured products; and I feel satisfied that I am not at all exceeding bounds in putting down the aggregate, from all the circumstances named, at fully 7½ per cent upon the total quantity shipped. This will make a loss to exporters of £5,250,000. It would not be fair, however, to treat the whole of this sum as the loss to the British merchant. I put down, therefore, the least I can do, viz., £2,500,000 as his share of his loss. In doing this, I know that I am much below the truth. There are secrets, however, fast locked up in the safes of too many of our importing merchants, to which I have not the key; and of many articles, such as metal of all kinds, coals, &c., so much is sent out on ship's account, the result of which is mixed up in the freight balance-sheet, that I am not disposed to run the risk of being accused of exaggeration, when no data are within my reach to appeal to in proof of my statements.

I think it will be admitted that I have pretty nearly substantiated the assertion with which I set out, viz., that the mercantile and trading interests were left poorer at the close of the year 1851, than they were at its commencement, by twenty millions sterling, and upwards. Let me recapitulate the items:—

Loss to Britishimporters onCotton,£4,000,000
""Sugar,2,150,000
""Coffee,371,000
""Tea,1,066,600
""Corn and Flour,500,000
""Dye-stuffs, Molasses, Silk, and
other miscellaneous articles,		}1,912,400
""Manufacturers of goods in
course of perfection, and
dealers and retailers of
stocks of produce, &c.,
depreciated,		}2,000,000
""Shipowners,4,700,000
""Iron manufacture,700,000
""by Exporters,2,500,000
—————
Total,£19,900,000
=========

It would have been perfectly easy for me to have performed more than the whole of my promise, had I not strictly guarded myself in every case against assuming anything which could call forth denial which I am not fully prepared to meet. My own conviction is—and there are many who will feelingly confirm it—that I have understated rather than overstated the disasters of the year.

Where, in the face of these facts, can be the "prosperity" of which the Free-Trader has been drawing such glowing pictures? It is not gladdening the eyes of the merchant and importer. It has not rewarded the enterprise of the shipowner. It has not filled the pockets of the small trader or the shopkeeper. The millowner and the manufacturer have not only not felt it, but I am confident that the majority of this class have suffered severely, as the result of the year's operations. The labourer and the artisan, with the men of fixed money incomes, have been the only parties benefited by the cheapness of the past year. But it will be said these losses have been exceptional, and will not occur again. The importer has been taught to confine his operations within the limits of legitimate demand; the manufacturer will produce no more than he can sell to a profit; and the exporter will cease to glut every foreign market. Prudence, indeed, suggests this course; but then, what will become of the statistical proofs, furnished us every month, of the nation's progress in well-doing? Our exports will no more be triumphantly pointed to as affording such proof; and our imports will cease to show that sort of prosperity, derived from the circumstance of a portion of the nation being enabled to live in abundance upon the losses of the remainder. If our exports and imports are reduced to the level of our power to sell at a fair profit, and to consume without the importer having to resort to sacrifice, the British shipowner, under our present system of competition with the foreigner, may lay up the larger portion of his ships in dock, and discharge his seamen to starve in our streets. It is idle, however, to talk now of confining our business within reasonable and profitable limits under our present system; and the Free-Trader durst not at this moment even contemplate such a course; for what would be its first results? If production of manufactured goods is to be checked; if a portion of our looms and spindles are to be stopped; if one-fourth of our iron furnaces are to be blown out, the first result must be to destroy the boasted elysium at present existing amongst our labouring classes engaged in manufacturing processes. This should have been done last year to produce a really healthy and remunerative trade; but then the operative classes would not have been enabled to benefit by the ruinous cheapness of imported food and other necessaries, which was existing around them. If imports are to be checked, as they must be checked in a corresponding ratio with exports; if the importing merchant is, by this course, to be enabled to sell at a profit, we must have comparative dearness coexisting with decreased means on the part of the labouring classes to purchase and consume. This important view of our position is well worthy of the serious consideration, not only of those who jump to the conclusion that the mercantile interest has been over-trading, but also of those who profess to see nothing but ruin and confusion as the result of the slightest enhancement of the price of any commodity which enters largely into the consumption of the people. Prudent trading during the past year would clearly have checked the productions of manufactures and other commodities, and with these the employment of labour. On the other hand, imports restricted to a prudent limit would as clearly have tended to raise prices against the home consumer.

We cannot, however, check our imports, for we have proclaimed that Great Britain, with her mighty capital and resources, shall become the depot of the merchandise of the world, and the foreign producers of that merchandise will hold us to our contract. So long as our ports are not closed against its admission; so long as the selfishness of capital prompts its possessor to seek gain; so long as shipowners, foreign as well as British, are under the necessity of earning freights, and merchants and brokers throughout the world are eager to secure commissions, the surplus produce of every clime will seek a resting-place, though it may be only a temporary one, in the granaries and warehouses of Great Britain. We had a proof of this fact last year in the arrival here of several cargoes of tea, the surplus imports of the United States, which were brought in American shipping, and thrown upon our already depressed markets, to be sold at any sacrifice; and this very transaction, by the way, exhibits in a very striking manner the suicidal folly which we have committed with respect to the Navigation Laws. The tea in question, brought from an American port, was admitted into our markets upon the same terms as if it had been direct from the country of its growth. If the same operation was to take place from any port in Great Britain, an additional duty of 20 per cent would be levied on the cargo in America, because of its having been imported in a British bottom. It is, in fact, the very principle of Free Trade to invite imports, and to bring about their cheapness. A low cost of the raw materials of life and of labour is the great end and aim of their policy. Every possible increase of our import of foreign productions, they have proclaimed again and again, was good, inasmuch as it cheapened those productions to the home consumer, and at the same time enabled the foreigner to take more of the manufactures of this country. But these men failed to perceive that they have not in themselves the control of the tyrannous machinery which they have set in motion; that, whilst seeking only their own selfish aggrandisement, they have placed in the hands of a giant power a rod of iron to scourge their backs; that Ixion was never bound more inextricably to his wheel, or Mazeppa to his wild steed, than they are bound to the incontrollable workings of that arbitrary power. These babes in political science omitted to consider the overriding influence of an inflexible money system in counteracting their short-sighted schemes of ambition and greed. The world, they designed, was to throw its treasures—its products of necessity and of luxury—at their feet, to be gathered by them at their own convenience, and at their own price. But the system, which they had overlooked, said, "No, you shall not do this: I must have my bond!" If, in exchange for the increased imports poured in upon us, and which we have no power to turn aside from our shores, we fall behind one step in the task of producing and exporting an equivalent in the shape of manufactured goods or British products, our entire monetary system collapses, and brings down devastation and ruin upon our heads. The producer of British commodities, heavily weighted as he is with responsibilities—holding large stocks, or having his capital invested in fixed property—can no more resist the tyranny of this system than he can turn back the tide or arrest an avalanche. He must go on producing and exporting—or his class, at all events, must—whatever be the price of the raw material upon which he works, or the certainty that its sale must result in heavy loss. He must go on, because a monetary crisis is infinitely more disastrous in its results than the most disastrous losses arising from glut in the foreign or the British markets.

There is gross indecency, and, indeed, impudence, displayed by those parties who proclaim that a policy, which has produced such results as I have detailed, is not even to be examined with a view to its possible modification. All other monuments of the wisdom of mere man are found to require occasionally the improving hand; but the policy dictated by the Manchester school of economists is pronounced to be irrevocable, and not to be reviewed by the light of experience. Although it has inflicted ruin upon the great mass of our agricultural community; although it has been pregnant with commercial and industrial disaster; although it has falsified in its operations all the predictions of its authors; yet it has produced "a cheap loaf" and "cheap imports;" and upon these it is deemed sacrilegious for the statesman to impose his amending hand. But the common sense of the community, I venture to predict, will not submit to an imposture and injustice so gross. For the intelligent mercantile classes, I can answer that they will not. These men know, from the lessons taught by their every-day transactions, that the existing miscalled system of Free Trade cannot be much longer persevered in without producing widespread ruin, and ultimate disaffection and anarchy. To enable us to increase our imports profitably, we must first have a corresponding increase of the ability of our own people to consume. To enable us to carry on a profitable trade in exports, we must first render the home producer of manufactures and other products less dependent than at present upon the foreign market; and this can only be done by enabling the masses of our own population, whether employed in agriculture or in other industrial pursuits, to consume more largely. To enable us to hold the position of being the merchants and brokers of the world, and the holders of its accumulated stores of wealth, we must first have provided for us a more expansive monetary system. The Free-Trader cannot, or will not, see the existence of these wants, obvious as they are, and necessary to be supplied, if his favourite policy is to be rendered a practicable one. The experience of the past six years of continually recurring disaster, from a share in which he has not been preserved harmless himself, appears to be entirely lost upon him. But it has not been lost upon the intelligent masses of the community; and I feel perfectly convinced that any attempt on the part of the manufacturing interest to raise an ignorant clamour of opposition to the efforts of the Earl of Derby's administration to snatch the country, by sound and patriotic legislation, from its present disorganised and suffering condition, will prove a ludicrous failure, and very justly draw down upon its authors the indignation and disgust of their fellow-countrymen.