2nd. But our loans will be negociated in England, and are they not to a great degree at present; and, if they were entirely, would it be prejudicial to the kingdom?

Let us examine this point. The best method of employing capital is in the improvement of lands and of manufactures, and in the extension of commerce. Hence, when capital is not wanted for the State in times of peace, the nation improves.

In time of war, when capital is wanted for the State, it must be taken from its usual and better employment in the improvement of lands and manufactures, and the extension of commerce, and be diverted to the purposes of war; a stagnation consequently ensues in general improvement; and though the capital advanced for the purposes of war be chiefly spent in provisions, clothing, arms, and ammunition, and so far encourages agriculture and a certain class of manufactures, yet the diversion of capital from its usual and most beneficial employment to one less beneficial is severely felt, and all projects of national improvement are greatly checked by it. It is evident, then, that it would be highly advantageous to a State to procure the capital wanted for the purposes of war from a Foreign State, unless such a proceeding were attended with an inconvenience which overbalanced the benefit. This inconvenience is the regular drain of specie in the remittals of interest to the foreign country for capital so borrowed. We are then to consider whether this inconvenience is not less in proportion than the benefit received. Suppose the State wants to borrow one million, and makes the loan at home. In this case, one million is suddenly taken from the capital employed in general industry, a consequent stagnation ensues, and, though great part of it may be spent at home, a long period ensues before the loss of it can be supplied.

Now, suppose the million wanted by the State is borrowed from abroad, what follows? First, the million which, if the loan had been made in the home market, would have remained employed in the most beneficial manner, remains so employed,

increasing the industry and productive capital and exports of the country; and, secondly, an additional million of capital comes into the country, and gives life to all the provision trade and that set of manufactures which is connected with war, and becomes an addition, in its whole amount, to the general capital of the kingdom.

In the first case, however, the interest of the million is to be paid in the kingdom; in the second, it is to be sent out of it. The question then is, whether of the two millions the one which, by making the loan abroad, is not diverted from its usual beneficial employment, will not set at work so much productive labour, and produce such an increased export of commodities, as that the value of such increase shall exceed the amount of interest to be remitted abroad for the million borrowed. And if that shall be the case, the making the loan abroad will be more beneficial than making it at home. We may compare this proceeding to the case of every merchant. Every merchant trades partly in private, partly on borrowed or foreign capital. All discounts may be called foreign capital. But, as the employment of his capital produces a greater return than the interest of his discount, it is so far advantageous.

3rd. But it will not be possible for Ireland to transfer the capital it has borrowed in England to the Irish market.

This can only be effected in one way, which is the following, namely, to open, when peace returns, in the London market, loans to the amount of the capital owed by Ireland in the British funds, with a condition that the stock be Irish, and the interest thereof be paid in Ireland, and to apply the capital of such new loans in paying off the debt owed by Ireland in the British funds. But suppose this operation performed, if the subscribers to the new loan be residents in England, the interest will still be remitted thither, and, if they be residents in Ireland, the capital must be remitted to England, so that this idea of transferring the Irish debt from the British to the Irish market is fallacious.

With respect to the fourth objection, it seems reasonable that an opening should be left for Irish capitalists to subscribe to that part of future loans, which is to constitute the contribution of Ireland, and in that case to vest the sum subscribed in Ireland in Irish stock, the interest whereof should be payable in Dublin.

The plea for such a regulation is that many persons, unless they can get State security, will let their money lie dead; for, if all would employ their spare capital in increasing productive labour, there would be no reason for such a provision. As also great profits are made in the negociation of loans which produce accumulations of capital to individuals, it may be reasonable that Ireland should have a share in this kind of advantage.

To illustrate the general truth of the above observations, the present state of Ireland may be adduced. Ireland has been regularly improving in commerce and revenue during the present war, although about eight millions have been taken from its circulating capital at different periods. The stagnation which such a diversion of capital would have created has not been felt, because, during the same period, she has imported nearly the same amount of British capital; and though, when peace returns, she will be forced to remit a large sum annually to England for interest, she will have made, by the employment of the capital so imported, and of the capital which would otherwise have been diverted from general industry to war purposes, such an increase of product and export as to supply the interest wanted without real inconvenience and loss.

MEMORANDUM ON IRISH COTTON MANUFACTURES.

It appears by the Printed Account (No. 2 and 3, Irish) that the average value of Cotton Wool imported is.....

Ditto, of Cotton Yarn and Twist....

Total value...

117,348

85,294

£202,642

It is stated by the cotton manufacturers in evidence that the value of cotton manufactures made in Ireland is per annum £700,000. That the duty on British manufactures of calicoes and muslins (and little else is made in Ireland) is upon an average 50 per cent. That the English can undersell the Irish by 50 per cent.; that the consumers of Ireland pay 50 per cent. more for Irish cottons than if they imported them duty free from England; and it follows of course that the Irish consumers are taxed 50 per cent., or £350,000 a-year, to support the manufacture of Irish cottons.

If then British cottons were to supply the Irish market (they being 50 per cent. cheaper, and the consumption remaining the same as at present), we shall pay to England for cottons not £700,000 as we pay to the Irish manufacturer, but only £350,000. And as, in this case, we should save the price of the cotton wool, cotton yarn, and twist, now imported to the value of £202,642, our whole national outgoing for the consumption of cottons would be only £147,358, instead of £202,642.

It appears then, to prevent an importation of British cottons, the consumers of Ireland are taxed to the amount of £350,000 a-year, and the nation loses £55,000 a-year. And the computed loss of the nation and consumer being £405,000 on the value of £700,000, it follows that the cotton manufacture of Ireland is now carried on at the loss of that sum per annum to the consumers and the nation at large.

MEMORANDUM RELATIVE TO COTTONS.

By Mr. Francis French.

The manufacturers of cotton in England have more than once attempted to get the duty on East India muslin increased; it is at present £19 138. 9d. per cent. ad valorem. They contended that they could not rival a country where labour was

not one-sixth part of the price, owing in some measure to the religion of the natives, which forbids the use of animal food and fermented liquors; where cotton grew spontaneously, and where the climate was so very favourable to the manufacturer, that they were obliged, by artificial means, to bring their rooms to the same degree of warmth in England.

The difference of the price of labour was at length overcome by the invention of the Spinning Jennies, and the English manufacturer arrived at a great degree of perfection. Some time afterwards, during a temporary stagnation of the cotton trade, those concerned in it again complain that the East India Company were determined to ruin the English muslinmakers; that they were at that time selling the India muslins thirty per cent. below prime cost, which loss they added to the price of tea, of which they had a monopoly. These complaints were disregarded, and the English manufacture has continued to flourish.

Protecting Duties are the cause of high wages in the cotton trade they are a protection to idleness and drunkenness, to combinations against the employers by day, and against the Government by night. Mr. Grimshaw's evidence, page 28, proves, "that the weaver of cotton in Ireland receives 30 per cent. more than in England, and the printer 40 per cent. more." The Irish workman does not enjoy more comforts, but he works three days in the week instead of six, and he is protected in his idleness by the duty. A competition with England is supported by Ireland in fustians and other strong goods, with little protection; the duty on English fustians is £12 14s. ld., and the duty on the English twist from which they are made is above 11 per cent. on importation into Ireland, therefore they have very little protection; if the duty on twist was taken off, they would have a very sufficient protection.

It appears by the evidence of Mr. O'Brien, page 14-That the whole capital engaged in the cotton trade is from £300,000 to £400,000, and that the amount of the consumption of the