the overthrow of France was no nearer than before the Spanish uprising; the United States were seriously discussing war, and however loudly a few interested Englishmen might at times talk, the people of England never wanted war with the United States. Canning found himself obliged to suppress his irritation, and so far from checking the spirit of concession to America, was drawn into new and more decided advances. Spencer Perceval felt the same impulse, and of his own accord proposed other steps to his colleague, after Pinkney's letter of December 28 had been read and considered by the Cabinet. With the impression of that letter fresh in the minds of both, Canning wrote to Perceval on the last day of the year: 1

"We have given quite proof enough of our determination to maintain our principle to enable us to relax, if in other respects advisable, without danger of being suspected of giving way. The paragraph in my letter to Pinkney, of September 23, prepares the world for any relaxations that we may think fit to make, provided they are coupled with increased severity against France; and though this last consideration is something impaired by my last communication to Pinkney, yet the manner in which he has received that communication (with respect to which reception I partake of the fury which you describe as having been kindled in Hammond) leaves us quite at liberty to take any new steps without explanation, and exempts us from any hazard of seeing them too well received."

1 Canning to Perceval, Dec. 31, 1808; Perceval MSS.

The year 1809 began with this new spirit of accommodation in British councils. The causes which produced it were notorious. From the moment Europe closed her ports, in the autumn of 1807, articles.commonly supplied from the Continent rose to speculative prices, and after the American embargo the same effect followed with American produce. Flax, linseed, tallow, timber, Spanish wool, silk, hemp, American cotton doubled or trebled in price in the English markets during the years 1807 and 1808.1 Colonial produce declined in the same proportion. Quantities of sugar and coffee overfilled the warehouses of London, while the same articles could not be bought at Amsterdam and Antwerp at prices three, four, and five times those asked on the Royal Exchange. Under the Orders in Council, the whole produce of the West Indies, shut from Europe by Napoleon and from the United States by the embargo, was brought to England, until mere plethora stopped accumulation.

Debarred from their natural outlets, English merchandise and manufactures were forced into every other market which seemed to offer a hope of sale or barter. When Portugal fell into Napoleon's hands, and the royal family took refuge in Brazil under British protection, English merchants glutted Brazil with their goods, until the beach at Rio Janeiro was covered with property, which perished for want of buyers and warehouses. The Spanish trade, thrown open soon afterward, resulted in similar losses. In 1 Tooke's History of Prices, i. 274-279.

the effort to relieve the plethora at home, England gorged the few small channels of commerce that remained in her control.

These efforts coincided with a drain of specie on government account to support the Spanish patriots. The British armies sent to Spain required large sums in coin for their supplies, and the Spaniards required every kind of assistance. The process of paying money on every hand and receiving nothing but worthless produce could not long continue without turning the exchanges against London; yet a sudden call for specie threatened to shake the foundations of society. Never was credit so rotten. Speculation was rampant, and inflation accompanied it. None of the familiar signs of financial disaster were absent. Visionary joint-stock enterprises flourished. Discounts at long date, or without regard to proper security, could be obtained with ease from the private banks and bankers who were competing for business; and although the Bank of England followed its usual course, neither contracting nor expanding its loans and issues, suddenly, at the close of 1808, gold coin rose at a leap from a nominal rate of 103 to the alarming premium of 113. The exchanges had turned, and the inevitable crash was near.

The political outlook took the same sombre tone as the finances. The failure of the Spaniards and the evacuation of Spain by the British army after the loss of Sir John Moore at Corunna, January 16, destroyed confidence in all political hopes. Lord Castlereagh,

as war-secretary, was most exposed to attack. Instead of defending him, Canning set the example of weakening his influence. Aware that the Administration had not the capacity to hold its own, Canning undertook to reform it. As early as October, 1808, he talked freely of Castlereagh's incompetence, and made no secret of his opinion that the Secretary for War must go out. Whether his judgment of Castlereagh's abilities were right or wrong was a matter for English history to decide; but Americans might at least wonder that the Convention of Cintra and the. campaign of Sir John Moore were not held to be achievements as respectable as the American diplomacy of Canning or the commercial experiments of Spencer Perceval. Canning himself agreed that Perceval was little, if at all, superior to Castlereagh, and he saw hope for England chiefly in his own elevation to the post of the Duke of Portland.

Although no one fully understood all that had been done by the Portland ministry, enough was known to render their fall certain; and Canning saw himself sinking with the rest. He made active efforts to secure his own safety and to rise above the misfortunes which threatened to overwhelm his colleagues. Among other annoyances, he felt the recoil of his American policy. The tone taken by Pinkney coin

1 Brougham to Grey, Nov. 25, 1809, Brougham's Memoirs, i. 417; Temple's Courts and Cabinets, iv. 276, 283; Canning to the Duke of Portland, March 24, 1809; Walpole's Spencer Perceval, i. 347, 350.

cided with the warlike threats reported by Erskine, and with the language of Campbell's Report to the House of Representatives. Erskine's despatch of November 26, in which Campbell's Report was enclosed, and his alarming despatches of December 3. and 4 were received by Canning about the middle of January,1 at a time when the Ministry was sustained only by royal favor. The language and the threats of these advices were such as Canning could not with dignity overlook or with safety resent; but he overlooked them. January 18, at a diplomatic dinner. given by him on the Queen's birthday, he took Pinkney aside to tell him that the Ministry were willing to consider the Resolutions proposed in Campbell's Report as putting an end to the difficulties which prevented a satisfactory arrangement.2 Pinkney, surprised by Canning's "more than usual kindness and respect," suggested deferring the subject to a better occasion; and Canning readily acquiesced, appointing January 22 as the day for an interview.

The next morning, January 19, Parliament met, and American affairs were instantly made the subject of attack on ministers. In the Lords, Grenville declared that "the insulting and sophistical answer " returned by Canning to the American offer, persuaded him "that the intention of the King's government is

1 Canning to Erskine, Jan. 23, 1809; Cobbett's Debates, xvii, cxix.

2 Pinkney to Madison, Jan. 23, 1809; Wheaton's Pinkney, p. 420.

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