It is useless at present to say much about the equivocating and blundering of the newspapers, relative to the cause of the fall. They are very shy, extremely cautious; become wonderfully wary, with regard to this subject. They do not know what to make of it. They all remember, that I told them that their prosperity was delusive; that it would soon come to an end, while they were telling me of the falsification of all my predictions. I told them the Small-note Bill had only given a respite. I told them that the foreign loans, and the shares, and all the astonishing enterprises, arose purely out of the Small-note Bill; and that a short time would see the Small-note Bill driving the gold out of the country, and bring us back to another restriction, OR, to wheat at four shillings a bushel. They remember that I told them all this; and now, some of them begin to regard me as the principal cause of the present embarrassments! This is pretty work indeed! What! I! The poor deluded creature, whose predictions were all falsified, who knew nothing at all about such matters, who was a perfect pedlar in political economy, who was “a conceited and obstinate old dotard,” as that polite and enlightened paper, the Morning Herald, called me: is it possible that such a poor miserable creature can have had the power to produce effects so prodigious? Yet this really appears to be the opinion of one, at least, of these Mr. Brougham’s best possible public instructors. The Public Ledger, of the 16th of November, has the following passage:—
“It is fully ascertained that the Country Banking Establishments in England have latterly been compelled to limit their paper circulation, for the writings of Mr. Cobbett are widely circulated in the Agricultural districts, and they have been so successful as to induce the Boobies to call for gold in place of country paper, a circumstance which has produced a greater effect on the currency than any exportation of the precious metals to the Continent, either of Europe or America, could have done, although it too must have contributed to render money for a season scarce.”
And, so, the “boobies” call for gold instead of country bank-notes! Bless the “boobies”! I wish they would do it to a greater extent, which they would, if they were not so dependent as they are upon the ragmen. But, does the Public Ledger think that those unfortunate creatures who suffered the other day at Plymouth, would have been “boobies,” if they had gone and got sovereigns before the banks broke? This brother of the broad sheet should act justly and fairly as I do. He should ascribe these demands for gold to Mr. Jones of Bristol and not to me. Mr. Jones taught the “boobies” that they might have gold for asking for, or send the ragmen to jail. It is Mr. Jones, therefore, that they should blame, and not me. But, seriously speaking, what a mess, what a pickle, what a horrible mess, must the thing be in, if any man, or any thousand of men, or any hundred thousand of men, can change the value of money, unhinge all contracts and all engagements, and plunge the pecuniary affairs of a nation into confusion? I have been often accused of wishing to be thought the cleverest man in the country; but surely it is no vanity (for vanity means unjust pretension) for me to think myself the cleverest man in the country, if I can of my own head, and at my own pleasure, produce effects like these. Truth, however, and fair dealing with my readers, call upon me to disclaim so haughty a pretension. I have no such power as this public instructor ascribes to me. Greater causes are at work to produce such effects; causes wholly uncontrollable by me, and, what is more, wholly uncontrollable in the long run by the Government itself, though heartily co-operating with the bank directors. These united can do nothing to arrest the progress of events. Peel’s Bill produced the horrible distresses of 1822; the part repeal of that bill produced a respite, that respite is now about to expire; and neither Government nor bank, nor both joined together, can prevent the ultimate consequences. They may postpone them for a little; but mark, every postponement will render the catastrophe the more dreadful.
I see everlasting attempts by the “Instructor” to cast blame upon the bank. I can see no blame in the bank. The bank has issued no small notes, though it has liberty to do it. The bank pays in gold agreeably to the law. What more does anybody want with the bank. The bank lends money I suppose when it chooses; and is not it to be the judge when it shall lend and when it shall not? The bank is blamed for putting out paper and causing high prices; and blamed at the same time for not putting out paper to accommodate merchants and keep them from breaking. It cannot be to blame for both, and, indeed, it is blameable for neither. It is the fellows that put out the paper and then break that do the mischief. However, a breaking merchant, whom the bank will no longer prop up, will naturally blame the bank, just as every insolvent blames a solvent that will not lend him money.
When the foreign loans first began to go on, Peter M’Culloch and all the Scotch were cock o’ whoop. They said that there were prodigious advantages in lending money to South America, that the interest would come home to enrich us; that the amount of the loans would go out chiefly in English manufactures; that the commercial gains would be enormous; and that this country would thus be made rich, and powerful, and happy, by employing in this way its “surplus capital,” and thereby contributing at the same time to the uprooting of despotism and superstition, and the establishing of freedom and liberality in their stead. Unhappy and purblind, I could not for the life of me see the matter in this light. My perverted optics could perceive no surplus capital in bundles of bank-notes. I could see no gain in sending out goods which somebody in England was to pay for, without, as it appeared to me, the smallest chance of ever being paid again. I could see no chance of gain in the purchase of a bond, nominally bearing interest at six per cent., and on which, as I thought, no interest at all would ever be paid. I despised the idea of paying bits of paper by bits of paper. I knew that a bond, though said to bear six per cent. interest, was not worth a farthing, unless some interest were paid upon it. I declared, when Spanish bonds were at seventy-five, that I would not give a crown for a hundred pounds in them, if I were compelled to keep them unsold for seven years; and I now declare, as to South American bonds, I think them of less value than the Spanish bonds now are, if the owner be compelled to keep them unsold for a year. It is very true, that these opinions agree with my wishes; but they have not been created by those wishes. They are founded on my knowledge of the state of things, and upon my firm conviction of the folly of expecting that the interest of these things will ever come from the respective countries to which they relate.
Mr. Canning’s despatch, which I shall insert below, has, doubtless, had a tendency (whether expected or not) to prop up the credit of these sublime speculations. The propping up of the credit of them can, however, do no sort of good. The keeping up the price of them for the present may assist some of the actual speculators, but it can do nothing for the speculation in the end, and this speculation, which was wholly an effect of the Small-note Bill, will finally have a most ruinous effect. How is it to be otherwise? Have we ever received any evidence, or anything whereon to build a belief, that the interest on these bonds will be paid? Never; and the man must be mad; mad with avarice or a love of gambling, that could advance his money upon any such a thing as these bonds. The fact is, however, that it was not money: it was paper: it was borrowed, or created, for the purpose of being advanced. Observe, too, that when the loans were made, money was at a lower value than it is now; therefore, those who would have to pay the interest, would have too much to pay if they were to fulfil their engagement. Mr. Canning’s State Paper clearly proves to me, that the main object of it is to make the loans to South America finally be paid, because, if they be not paid, not only is the amount of them lost to the bond-holders, but there is an end, at once, to all that brilliant commerce with which that shining Minister appears to be so much enchanted. All the silver and gold, all the Mexican and Peruvian dreams vanish in an instant, and leave behind the wretched Cotton-Lords and wretched Jews and Jobbers to go to the workhouse, or to Botany Bay. The whole of the loans are said to amount to about twenty-one or twenty-two millions. It is supposed, that twelve millions have actually been sent out in goods. These goods have perhaps been paid for here, but they have been paid for out of English money or by English promises. The money to pay with has come from those who gave money for the South American bonds, and these bond-holders are to be repaid, if repaid at all, by the South Americans. If not paid at all, then England will have sent away twelve millions worth of goods for nothing; and this would be the Scotch way of obtaining enormous advantages for the country by laying out its “surplus capital” in foreign loans. I shall conclude this subject by inserting a letter which I find in the Morning Chronicle, of the 18th instant. I perfectly agree with the writer. The Editor of the Morning Chronicle does not, as appears by the remark which he makes at the head of it; but I shall insert the whole, his remark and all, and add a remark or two of my own.—[See Register, vol. 56, p. 556.]
“This is a pretty round sum—a sum, the very naming of which would make anybody but half-mad Englishmen stare. To make comparisons with our own debt would have little effect, that being so monstrous that every other sum shrinks into nothingness at the sight of it. But let us look at the United States, for they have a debt, and a debt is a debt; and this debt of the United States is often cited as an apology for ours, even the parsons having at last come to cite the United States as presenting us with a system of perfection. What, then, is this debt of the United States? Why, it was on the 1st of January, 1824, this 90,177,962; that is to say dollars; that is to say, at four shillings and sixpence the dollar, just twenty millions sterling; that is to say, 594,000 pounds less than our ‘surplus capital’ men have lent to the South Americans! But now let us see what is the net revenue of this same United States. Why, 20,500,755, that is to say, in sterling money, three millions, three hundred and thirty thousand, and some odd hundreds; that is to say, almost to a mere fraction, a sixth part of the whole gross amount of the debt. Observe this well, that the whole of the debt amounts to only six times as much as one single year’s net revenue. Then, again, look at the exports of the United States. These exports, in one single year, amount to 74,699,030 dollars, and in pounds sterling £16,599,783. Now, what can the South American State show in this way? Have they any exports? Or, at least, have they any that any man can speak of with certainty? Have they any revenue wherewith to pay the interest of a debt, when they are borrowing the very means of maintaining themselves now against the bare name of their king? We are often told that the Americans borrowed their money to carry on their Revolutionary war with. Money! Aye; a farthing is money, and a double sovereign is no more than money. But surely some regard is to be had to the quantity; some regard is to be had to the amount of the money; and is there any man in his senses that will put the half million, which the Americans borrowed of the Dutch, in competition, that will name on the same day, this half million, with the twenty-one millions and a half borrowed by the South Americans as above stated? In short, it is almost to insult the understandings of my readers, to seem to institute any comparison between the two things; and nothing in the world, short of this gambling, this unprincipled, this maddening paper-money system, could have made men look with patience for one single moment at loans like these, tossed into the air with the hope and expectation of re-payment. However, let the bond-owners keep their bonds. Let them feel the sweets of the Small-note Bill, and of the consequent puffing up of the English funds. The affair is theirs. They have rejected my advice; they have listened to the broad sheet; and let them take all the consequences. Let them, with all my heart, die with starvation, and as they expire, let them curse Mr. Brougham’s best possible public Instructor.”
Uphusband (Hampshire),
Thursday, 24th Aug. 1826.
We left Burghclere last evening, in the rain; but as our distance was only about seven miles, the consequence was little. The crops of corn, except oats, have been very fine hereabouts; and there are never any pease, nor any beans, grown here. The sainfoin fields, though on these high lands, and though the dry weather has been of such long continuance, look as green as watered meadows, and a great deal more brilliant and beautiful. I have often described this beautiful village (which lies in a deep dell) and its very variously shaped environs, in my Register of November, 1822. This is one of those countries of chalk and flint and dry-top soil and hard roads and high and bare hills and deep dells, with clumps of lofty trees, here and there, which are so many rookeries: this is one of those countries, or rather, approaching towards those countries, of downs and flocks of sheep, which I like so much, which I always get to when I can, and which many people seem to flee from as naturally as men flee from pestilence. They call such countries naked and barren, though they are, in the summer months, actually covered with meat and with corn.
I saw, the other day, in the Morning Herald London “best public instructor,” that all those had deceived themselves, who had expected to see the price of agricultural produce brought down by the lessening of the quantity of paper-money. Now, in the first place, corn is, on an average, a seventh lower in price than it was last year at this time; and what would it have been, if the crop and the stock had now been equal to what they were last year? All in good time, therefore, good Mr. Thwaites. Let us have a little time. The “best public instructors” have, as yet, only fallen, in number sold, about a third, since this time last year. Give them a little time, good Mr. Thwaites, and you will see them come down to your heart’s content. Only let us fairly see an end to small notes, and there will soon be not two daily “best public instructors” left in all the “entire” great “British Empire.”