that difference between the supply and demand? Obviously the blame is to be laid upon demand being smaller than it ought to be. The manufacturer, therefore, is put out in his calculations. But why is demand smaller than it ought to be? Obviously enough, because the price of bread consumes the major part of the labourer's wages. He spends more on his bread, and therefore less upon the produce of manufacture. See, then, how the poor manufacturer is to be pitied." 1

And if this had been (in the days of protection) the only cause of over-production, which we must point out is only an apparent one, the solution of this fascinating statement was very easy. You have only to reduce the price of bread, and the labourer buys more of the merchant's produce. Thus a channel is opened up for the outlet of this supposed excess of supply.

Whether or not we have gone beyond the limits of actual fact in thus presenting the reader with the freetrader's exposition of the cause of the manufacturers' distress, we leave the admirers of Cobden to determine, while at the same time we offer to them the perusal of certain passages in his work. If it be, as we believe it is, on the authority of those passages (appended in the footnote), the true statement of the great free-trader,

1 This was actually put by Cobden. The home market, he said, was the mainstay of the manufacturer. And he adduces the evidence of an "intelligent" labourer in Stockport to support this view, p. 129. Against one authority, we advance another. Huskisson stated that "two-thirds of our cotton manufactured goods were not made to meet the home consumption, but the foreign demand "—ii. 566.

2 P. 25: "Let the farmer perfectly understand that his prosperity depends upon that of his customers.' P. 131: "We of the middle

classes will continue to be his customers."

we submit to the reader, Is it a partial statement? Does it or does it not include all the causes of overproduction? Does it specify the nature of the particular over-production under consideration?

We are not going to deny the fact that both causes of over-production were in operation at the same time. But what we are going to deny is Cobden's accuracy in attributing to the labourer's deficient means the major cause of the manufacturer's distress.1 We are going to assert that Cobden left out of the account altogether the probability that the manufacturer's depression might be due to his own endeavours in supplanting his neighbours. We proceed to give two reasons why it is our belief that an actual over-production was the major element in the causation of distress; and that the inability of the labourer to pay for the manufacturer's goods, from the dearness of bread, was but a minor cause; and a cause, too, which did not act directly, but indirectly, as the effect of a much larger cause, brought into operation by a state of the markets leading to over-speculation.

The first reason is in the tendency of the manufacturer to produce a larger supply than he can dispose of. The excesses of supply gradually accumulate. We think it is evident that the manufacturer would be

1 The difference between 2s. 6d. and 1s., Cobden asserts, would be spent upon fustian jackets. Calculate the amount which the agricultural labourers would have to spend upon manufactured produce. Say each would expend £2 a-year more upon goods, and place their numbers at 2,000,000. The sum of £4,000,000 would then flow into the pockets of the merchants and the manufacturers! But where is the source nowadays from which this is to proceed? Where are the agricultural labourers? Experience has proved that the interest of the home market was not efficiently preserved by the free-traders.

impelled to produce more, owing to the favourable nature of his surrounding circumstances. Thus cheapness of bread and a distended labour market would enable him to buy labour cheap; and hence, it would be to his interest to produce as much as ever he possibly could while those circumstances lasted. He would thus produce at the smallest cost, and obtain thereby larger profits. But he could not expect to sell all his goods, unless he determined to lower the price of his articles. With a stock thus on hand, unless demand went on increasing at a rapid rate, he must soon contract his powers of production. Labour would be thrown out of employment, and hence distress arise;1 and, we presume, the labourers, thus unoccupied, would have less means of purchasing their former masters' goods.

Now the question arises, Did the manufacturers depend more upon the home than the foreign market for the demand of their goods? It is easy to perceive that, when the foreign market was against them, they might call attention to the disturbed state of home. consumption, owing to the inability (in particular as Cobden mentions) of the agricultural labourer to consume part of the supplies. But what proportion did that small figure have to the total demand? Could the comparatively small demands of the agricultural labourers be properly considered alongside of the great and increasing demand of the foreigner ?? The greed of the manufacturers forbade it.

2

1 On some of these occasions the prices of bread ruled high. It was thus a coincidence if distress existed with high price of provisions.

2 Cf. the £4,000,000 before mentioned with our export trade of £150,000 000 and upwards. Of course the manufacturers regarded the

But the increasing state of our export trade under protection shows that the demand of foreign countries was slowly and surely extending. What reason, therefore, was there to blame the home consumers for contracting their demand? If we examine the nature of that demand, one year with another, over a period of time extending from 1815, is it surprising to discover that it was fitful, just like the demand for labour, and that it was characterised by rises and falls? And yet, in spite of these rises and falls, the nation had gone ahead; for, if there was no other sign of prosperity, we had a flourishing export trade. Why, then, did the free-traders hit upon a time when the home demand for manufacturing produce was deficient? Had it not already been so on many previous occasions, without harm accruing to the manufacturers? Had it any appreciable influence upon the state of the export trade? That, we know, constantly increased. There must have been some ulterior motive which impelled the manufacturer to blame the deficiency in the demand of home supplies. What was that motive? The motive of being able to enlarge his field of production, if he could only get favourable conditions. He saw possible opportunities, which he desired to realise. With cheap bread at home1 he could undersell his foreign rivals.

larger sum with greater leniency. If the latter remained permanently high-and this was the stake for which they played-it mattered little what became of the former.

1 It must be understood that the effect of cheap bread upon our agriculture was to improve it, according to the opinion of the freetrader. But events have not fallen out as the free-trader anticipated. There was to have been an increasing demand on the part of agricultural labourers for manufactured articles. The external demand was also to continue a constantly increasing one.

By that means foreign demand would be artifically increased, and the increment would lead to a more extensive production of the "natural" produce of the country. To meet this increased production, all unemployed labour would be called into activity. And as, too, more capital and labour were to be compelled to the improvement of the soil, the wages of agricultural labour thereby increasing, the picture of the labourers' future prosperity was thus done in the brightest of colours.

The second reason is to be found in the growing state of our export trade. So long as that constantly increased, what complaint could the manufacturers justly bring forward? But complain the manufacturers did, whether they had just foundations or not. Now, what was the nature of that complaint? It consisted simply in this, that, instead of being content with a certain and secure1 foreign market, they were ambitious of gaining a complete monopoly of it. They saw the possibility of acquiring an ascendancy, and they looked about for the means to obtain their end. It was fortunate for them that they had the services of a man who, whatever errors he may have perpetrated (nor are they few and unimportant), was, nevertheless, honest in his belief in the justice of the end to be obtained, and who argued his case from a sincerity in the national 2 benefits to be derived from the new policy. Cobden saw that free trade would not only help the manufacturers in the furtherance of their object, but also that, by the

1 I.e., relatively to the ability of the foreigners to compete with them.

2 "Our object is what I have always declared it-the benefit of the whole community."-P. 48.