be at a discount in that country, that is, below par; because there will be more bills for sale than are wanted to remit to England.

6. The same effect is produced by foreign loans negociated in England for any country; they occasion a greater weight of bills on England to be thrown into the market than the ordinary course of trade would require; and exchange on England consequently falls.

7. Precisely the same effect is produced by the bills drawn by absentees; they are so much thrown into the market over and above what the regular course of trade requires, and consequently tend to depress the course of exchange, that is, to lessen the value of bills on England.

8. If bills on England are high in any country, it shows that the value of our exports to that country is greater than the value of our imports from it.

9. If bills on England are low in any country, it shows that the value of our exports to that country is less than the value of our imports from it.

10. During the war with the United States, of 1812, when there were no imports of British goods into that country from England, but a vast export of cotton from the United States to England, by way of Amelia Island, Pensacola, Spain, and Portugal, bills on England in the United States were so abundant that they fell to 20, and even to 25 per cent. discount the exchange was so much against England, and in favor of the American merchants who owed money in England, who could thus pay 100%. with 751.

11. Exports of merchandise, or bullion, the proceeds of which are to be expended abroad by the exporter, have no influence on the rate of exchange, because no returns are required.

Take the case of a country with which England has no commercial intercourse, suppose Japan, and that her absentees, having obtained permission, choose to go to that country to reside, taking with them merchandise to sell there, for the purpose of defraying their expenses, reserving merely enough to bring these valuable patriots home again; it is evident there could be no rate of exchange produced by the expenditure of their incomes in Japan. '

"And what difference," say the advocates for absenteeism, "can it possibly make to the people of England, provided they supply the commodities, whether they are consumed in England, or in Japan?" I answer; theretail profit on those commodities is lost to England. The consumption is the same in either case; but the absentee would, I presume, purchase the commodities of wholesale dealers, at wholesale prices, for exportation; but if he were to consume them at home, he would probably purchase them of retail dealers, at retail prices. It is therefore the difference between the VOL. XXVII. NO. LIII. B

Pam.

12. The total amount of the exports from England to all parts of the world, in the year 1824, is stated to exceed 50,000,000l.

It is true, that all this immense trade is carried on with a total disregard of absenteeism. It is a subject about which the merchant never troubles himself: he exports merchandise to various countries, and receives their produce in return; which produce is manufactured into fresh goods, part of them for the home consumption, and part of them for exportation; thus the wheel of commerce turns round, apparently uninterrupted by absenteeism. The truth is, if the expenditure of absentees abroad is one million, it forms but a fiftieth part of the exports, or two per cent. But, taking the expense of transmitting specie to be one per cent, there will thus be a weight of one per cent. thrown on all the exports of the country, from which, Iconceive, it would be relieved if there were no absentees and, if such is really the fact, as I apprehend it is, it is obvious that our merchants labor under a burden of one per cent., from which it is desirable they should be relieved; as the foreign merchants will pay so much less for the bills which they purchase to remit to England, and the English merchants will have to pay so much more for the bills which they purchase to remit to foreign countries. And it operates exactly as if England were to give a premium of one per cent. to the merchants of other countries, on the merchandise she imports for her own consumption.

Such, I conceive, must be the effect of the expenditure of absentees, in whatever way their revenues may be conveyed to them.

13. The sellers of bills in England, it is true, are benefited by the remittances to absentees; for, if considerable sums are required for that purpose, bills on France, for instance, will be something higher on that account; but the exchange is, notwithstanding, very properly considered as being against England, because every English merchant who has to remit to France for wines, brandy, &c., will be obliged to give a premium for bills on France, and consequently to remit on more unfavorable terms to himself than if there were no bills required for absentees; while the exchange will be exactly so much in favor of the French merchants who have to remit to England.

14. If an absentee has his revenue remitted to him in France in bills of exchange, those bills must be drawn against property previously sent to France, and which, if it were not thus drawn for, would have to be remitted to England: the amount of those bills being received, and expended in France, there will be so

wholesale price and the retail price which, in this case, would be lost to England.

CL

much less needed in France to remit to England: France will owe so much less to England, but England will owe to France just the same as before. If therefore, the amount of bills required by absentees in a given time be 100,000l., France will not require so much by 100,000l. to remit to England, as England will require to remit to France; the commercial transactions of England with France, and of France with England, being supposed to be equal, or nearly so, in amount. Bills therefore on England will be lower in France, than bills on France will be in England: the exchange will be against England, because it will be impossible for all the persons in England who want to remit to France, to procure bills, absentees having absorbed them to the amount of 100,000l. The English merchants, however, must remit what they owe to France in one way or another. From the facility of transporting it, gold naturally presents itself as the most convenient commodity: indeed, it is not easy to devise any other mode in which the English merchants can make their remittances so eligibly; and it is obvious that they will require for that purpose gold to exactly the amount of the bills remitted to absentees, neither more nor less.

15. Absenteeism thus renders an exportation of gold unavoidable; for there is no other way so eligible left for the English merchant to remit what he owes to France; the source from which he ought to have been supplied in the regular course of trade being cut off by the purchase of bills of exchange for the expenditure of absentees.

16. If the exports of merchandise from England to the Continent of Europe be supposed to amount in one year to 20,000,000l., and the expenditure of absentees through the medium of bills of exchange to 1,000,000l., it would be equivalent, supposing the expense of transmitting specie to be 1 per cent., to a weight of 4 per cent. on the whole commerce of England with the Continent: but, as the rate of exchange has always an influence on the price of specie, the effect of its being 5 per cent. against England, would be to raise the value of specie in England; for the rate of exchange governs the price of specie; not the price of specie the rate of exchange. The price of specie invariably rises in England as the value of bills drawn on the Continent of Europe on England fall; and this rise will be so nearly equivalent to the fall of the rate of exchange as to leave but a very small profit on the transmission of specie. Specie, however, must be sent, because bills of exchange cannot be procured, absentees having absorbed them to the extent of 1,000,000l.; thus the expenditure of absentees, if 1,000,000l. sterling a year, is the cause of an annual drain of specie from England to that amount.

17. An advance in the price of specie will be no bar to its exportation if the fall in the rate of exchange exceeds that advance. In the United States of America, when the exchange is 10 per cent. or more above par, that is, in favor of England, it is always a matter of calculation with the importers of goods from England, whether they shall remit in produce, or in bills of exchange, or in United States' stock, or in specie.

18. We have seen that this continual demand for specie has a tendency to keep that commodity higher than it would be if no such demand existed; hence, little is ever to be gained by making remittances in gold, or in silver; as the price of each will invariably rise to an equality (taking the expenses of transportation into consideration) with the rate of exchange which the state of commerce produces. But the exchange itself still remains intractable, and is not by any possibility to be reduced by any other process than restoring the equilibrium, which has been disturbed, and to which the remittances for the use of absentees has very much contributed.

19. Individuals will, doubtless, vigilantly watch the rate of exchange, and the price of specie, and avail themselves of every opportunity that offers to export the latter to the Continent for the purpose of purchasing bills on England below par; and although the competition among these persons to obtain specie for that purpose will certainly enhance its price, so as to render the profit of exporting it very moderate, still a difference will exist, so as to leave a small profit on its exportation, sufficient to cause a continual drain of specie from England, and which the bills required for the use of absentees, whether drawn by or remitted to them, cannot fail to increase.

20. Such appears to be the effect of the expenditure of absentees on the rate of exchange and the price of specie, in time of peace in time of war, fleets and armies are the principal absentees, and produce the same effect. It cannot be doubted, that the immense foreign expenditure, particularly during the war in the Peninsula, did turn the course of exchange heavily against England, and consequently caused a great demand for specie.

Remarks on part of Mr. McCulloch's evidence.

Mr. McCulloch being asked,

"Would not the expenditure of their incomes amongst them be productive of a great deal of good?" replied,

"The income of a landlord, when he is an absentee, is really as much expended in Ireland, as if he were living in it."

We need not be surprised at the next question, viz.

"Will you have the goodness to explain that a little further?" which he does thus:

"When a landlord becomes an absentee, his`rent must be remitted to him in one way or another; it must be remitted to him either in money or in commodities. I suppose it will be conceded that it cannot continue to be remitted to him from Ireland in money, there being no money to make the remittance; for if the rents of two or three estates were remitted in money, it would make a scarcity of money, and raise its value, so that its remittance would inevitably cease. It is clear, then, that the rents of absentees can only be remitted in commodities. And this, I think, would be the nature of the operation. When a landlord has an estate in Ireland, and goes to live in London or Paris, his agent gets his rent, and goes and buys a bill of exchange with it now this bill of exchange is a draft drawn against equivalent commodities that are to be exported from Ireland; it is nothing more than an order to receive an equivalent amount in commodities which must be sent from Ireland. The merchants who get 10,000l., or any other sum from the agent of an absentee landlord, go into the Irish market, and buy exactly the same amount of commodities as the landlord would have bought, had he been at home; the only difference being, that the landlord would eat and wear them in London or Paris, and not in Dublin, or in his house in Ireland."

The reason why "the income of a landlord, when he is an absentee, is really as much expended in Ireland as if he were living in it," is here distinctly stated to be, because "rents can only be remitted in commodities."" His agent gets his rent, and goes and buys a bill of exchange with it: now this bill of exchange," Mr. McCulloch says, " is a draft drawn against equivalent commodities that are to be exported from Ireland."

It is surprising that it did not occur to Mr. McCulloch that this transaction is simply an exchange of capital. The agent gives the property of the landlord which is in Ireland, for the property of the merchant which is in England or France; and after the bill is remitted to an absentee, there is exactly as much property in England or France, as there was before; but if the landlord had staid at home, the English or the French merchant must have remitted the amount to Ireland, and then there would have been the whole amount of the bill more in Ireland, and the whole amount of it less in England or in France.

Let Mr. McCulloch choose his own mode of remittance to absentees, and whichever he chooses, the result will be, an export without an import; that is, an expenditure of Irish revenue in London, or in Paris, for which nothing ever comes to Ireland.

There appears to be a vague, undefined notion, afloat in the