The Sun.
London, England, 1841-08-10 00:00:00

COMMERCIAL DISTRESS.
(From the City article of the Chronicle.)
Sir Robert Peel says that the Joint-Stock Banks
during the last two years have fostered improvident
speculations ; the cause, he maintains, of that alarming
stagnation of trade which all acknowledge to be general.
This way of answering will not serve the proximate
Premier long.:when he assumes the reins of office ;
neither is it consistent with the results exhibited by an
examination of the circulation during the period referred
to. The amount of notes payable on demand now in
circulation, issued by banks of all denominations, is
about 3,700,0001. less than the gross amount two years
back, and the action of all denominations of banking
establishments, with few exceptions, has been ex-
tremely stringent since the autumn of 1838, or, more
correctly dating, since the spring of 1839.
The extent to which over-trading can have been car-
ried on under such a contracted state of the currency;
must necessarily have been of a local character, while
the' depressed condition of trade has spread over tha
entire country, and affected all classes throughout the
empire having capital embarked in commercial enter-
prise. Allowing every reasonable weight, therefore, to
the particular and well-known instances of over-trading
of which some of the Joint-Stock Banks have been
guilty in the manufacturing districts during the last two
years, it is manifest that such general and wide-
spread results cannot have been produced by such
partial and circumscribed causes. The notorious fact
that some Joint-Stock Banks in Lancashire and York-
shire departed from the legitimate purposes of banking,
and became involved With the dead weight of masses
of unsaleable securities, in consequence of unjustifia-
ble advances, is not a sufficient reason to account for
the general stagnation and. decay of our export trade, nor_
would a more prudent and cautious line of policy, on the
part of these arid other banks, restore its energies, or
give employment to the destitute masses in our manufac-
turing towns. Over-banking, doubtless, may have par-
tially taken place, notwithstanding the decrease in the
circulation, for supply and demand are merely relative
terms, and it is true that, although the circulation be now
nearly 3,700,000/. less than it was two years back, over-
issues have been made in some well-known cases, because
the legitimate demands of trade have not even required so
much paper money as has been issued, and is now afloat •
Some joint-stock banks in the manufacturing districts did
issue more paper than they ought to have done. They
dealt largely, also, in re-discounts and accommoda
tion drafts upon their London agents ; but the cause
of this, the root and origin of these instances of over-
banking, is traced beyond all eavil to the depressed con •
dition of our manufacturing interests, consequent upon
the sudden fall of prices occasioned by the stringent ac-
tion of the Bank of England on the currency, atter the
extraction, of her bullion to pay for foreign corn follow-
ing the bad harvest of 1838. Sir Robert Peel seems to
expect that the depression in trade is temporary, and
that it will gradually disappear ; that we are only suffer-
ing from the shadow of a passing " summer cloud," and
that the evil will cure itself. Messrs. Herries and Goul-
burn struck that very note during the late debate on the
Budget, and the proximate Premier was content to play
second fiddle to them on the same kind of strain. But all
this is mere mockery and delusion. The depressed condi-
tion of our manufacturing interests has been produced by
fixed and long existing causes, by the failure of the de-
mand from the Continent of Europe, occasioned by the
supply Drought now to market by native industry in the
Continental States. That supply is increasing, and will,
increase steadily, until our goods are completely shut
out from the markets of Europe, unless our legislators
and statesmen turn the stream by active and determined
measures. Sir Robert Peel said some twelve months
back,, that the rivalry of British manufactures now dis-
played by the people of Germauy was the mere natural
result of increased knowledge and civilisation ; that it
was absurd to expect that'the people of Germany would
remain stationary while we *made such rapid and gigantic
strides in all the branches of productive industry. There is
some truth in this remark, but, like all statements
of that politician, it gives only a portion of the .
truth, and leaves the most important portion entirely
unnoticed. No mention is made of the consideration ho*
far we ourselv'es have fostered this rivalry on the part of
Continental nations, by our restrictive commercial tariff,
and the refusal to receive their staple articles of produce
on payment of moderate duties. The soil and climate
of the countries bordering on the Baltic are specially
fitted for the growth of corn and timber. Providence has
as clearly pointed out that the inhabitants of these coun-
tries should turn their attention to agriculture, as their
chief article of export, as it has told the natives of
Great Britain to seek for theirs by calling to account
the mineral wealth which lies hid beneath the surface,
and in thus developing the superior skill and industry
of the British nation. When we find, then, the Ger-
man, and other neighbouring States, employing
themselves in endeavouring to compete with us in
manufactures, and the people of England occupied,
on the other hand, in devising legislative and other
artificial means to compensate their agriculturists by
protective duties against the natural defects of soil and
climate, it is manifest that nature and art are placed in
direct collision, and that the whole system is opposed to
the declared intentions of the great Architect of the Uni-
verse. This separation of interests is at variance with
all sound views of commercial intercourse, and cannot be
maintained with permanent public advantage, to any of
the parties concerned. Class interests and individual
views may be so worked up in the existing system as to
make these parties view any step of change to a better
one with fear and aversion. No great public improve-
ment was ever proposed that did not encounter ob-
stacles from similar sources ; but opposition of that
character ought only to secure for the measure the
more active and unflinching support of the patriot and
enlightened statesman. Every impartial person who
considers the operation of our navigation laws and co-
lonial system, and the restrictive and prohibitory cha-
racter of our fiscal commercial code, must admit that
they refuse to deal with other countries on mutual
principles of justice. The natural result is that
other countries have retaliated, and that we have thus
compelled them to become our rivals. The demand
fer our manufactures has thus declined. Our manu-
facturers have been compelled to submit to heavy losses,
and to keep their hands working far beyond the legi-
timate demand, merely to keep 'their machinery em-
ployed. This is the real cause of the distress which
afflicts the country, and not over-banking. The remedy
is equally plain with the disease. Monopoly has bred
the contagion, and flee trade must drive it away. The
only objection of any weight yet attempted against the
revision of our complex import tariff is, that the Conti-
nental nations would not reciprocate ; that they would
take nothing from us but bullion in payment for
their corn and timber. The answer is, that this state-
ment is entirely at variance with the evidence given be-
fore the Committee on Import Duties ; and besides this,
it is Contrary to the self-interests of the parties con-
cerned, for the superior skill and local advantages pos-
sessed by the British manufacturers will always enable
them to compete successfully, under a free tariff, with
those of any nation whatever. On the principe, there-
fore, of buying at the best and cheapest market, and sell-
ing at the dearest, the people of the confluent would find
tieme effort at
their profit in taking the manufactures of England in
exchange for their corn and timber. They would,
therefore, cease to struggle against
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