MONTHLY FINANCIAL AND COMMERCIAL ARTICLE. THE general state of commercial affairs has now been gradually and favorably progressing for nearly three years, that is, if we take the latter part of 1841 and the first few months of 1842 as the lowest points of depression, resulting from the breaking down of overwrought credits throughout the commercial world. That period was marked by the most extensive failures throughout the continent, as well as in England, of banks and individuals; a most extreme depression also pervaded all business which had depended in a greater or less degree upon bank facilities. Several of the individual banks of France had stopped, riots in Nantes and Lyons had been put down by force of arms. The National Bank of Austria had collapsed its credits, involving the failure of large Italian houses as well as in Vienna. The Bank of Belgium failed, as also the great firm of Cockerill & Co., of Liege, an iron house, whose liabilities were 15,000,000f., and the ramifications of whose connections were such as to oblige the king and his ministers to come forward and advance sufficient to relieve them. In England numerous explosions were daily taking place, and in Lancashire, Yorkshire, Staffordshire and Cheshire a general insurrection of laborers seemed to threaten the existence of the Government. The Paris Journal Des Debats remarked at that time: "England at this moment presents a great enigma. It is impossible to tell whether she will seek safety in war or emigration-whether she will throw off the weight which oppresses her by some sort of explosion, and, as it were, disgorge her produce and population-or whether, courageously compressing her own expansion, she will endeavor to set bounds to her unbridled excess of industry and speculation, which throws disorder into her economical system, and threatens to shake the very foundations of her social system." These conjectures were thrown out at a time when the complete prostration of every description of business, re sulting from the overwrought action of In fact, it more frequently results from the perfection of ruin than from any other cause. It is a proceeding attended with danger in various ways. From the nature of the work, and from the cooling of the iron. the whole costly fabric of the furnace is for ever ruined to the master. Many of the furnaces are kept in blast, burning without intermission for fifty years. The stoppage of a mill is a mere stoppage. To commence operations is "hoist the flood-gates," or to but to To put a furnace out get up steam. of blast is to condemn to ruin the whole affair, which cannot be renewed without an extraordinary outlay of capital for its entire re-construction. When we remember, therefore, that out of 120 furnaces in blast in South Staffordshire, yielding 8,400 tons of pig iron weekly, but 74, yielding 5,680 tons weekly, were in blast in January, 1842, and of these 42 were put out of blast previous to September, 1842, leaving but 32, producing 2,240 tons per week in operation-thus throwing out of employ some hundreds of thousands of per sons in that district alone-some idea 1842. From that time there has been of the extreme and all-pervading dis- a gradual recovery throughout the tress may be gathered. In the cotton world. Not only have the markets in districts of Lancashire the same ex- India been restored, but China offers a treme distress was manifest, not only in new field of operation. The markets riots and disturbances, but in the stop- of Europe have absorbed much larger page of mills, the discharge of hands, quantities of English goods, notwithand the depreciation of mill property. standing the enactment in 1842 of six The number of hands employed in hostile tariffs by as many nations of EuManchester in the cotton mills had rope. All the foreign markets present been reduced from 2,262, in 1839, to 871, a greatly enhanced consumption of the in beginning of 1843. These difficul- products of British industry, and they ties have very generally been attributed are not borrowed for paper promises, to the failure of the harvest, operating by but paid for in equivalent values. raising the price of bread, to diminish They are not consumed on the credit the means of the people at large appli- of labor to be performed, but are paid cable to the purchase of cotton goods. for with the proceeds of that already This cause no doubt was a great and done. This is a state of affairs not potent one, and lay with oppressive so much dependant upon the state of weight upon the energies of the the London money market; and its inpeople. But this cause derived most fluence imparts to all branches of Briof its potency from the unhealthy state tish industry great activity at a time of the paper credit system, to break when money is exceedingly abundant, down which was the first consequence and is in process of liberal expenditure of the short harvest. The high price for the construction of railroads in Engof bread in England could clearly not land. It is not being sent to all quardiminish the consumption of English ters of the world on credit, but is progoods in those countries whence the moting the activity of labor at home. bread was purchased, if that consump- All these circumstances come in aid of tion did not depend upon unsound paper unusually low prices of the raw matecredits, the withdrawal of which was rial and great reductions in the duties the first consequence of the depletion of on many articles of first necessity, to coin from the Bank to pay for foreign promote or at least to sustain the congrain. That the foreign consumption sumption of cotton in the face of a rise of English goods did depend mainly in food consequent upon a deficient upon credits emanating from London, crop. The following is a table of the became evident when the universal in- highest price of wheat in each year, solvency of banks and the failure of with the corresponding price of cotton, those credits resulted in the ruin of the cloth, wheat, rate of interest in Lontrade, added to which were the hostili- don, bullion in the Bank, and annual ties in Asia. All these events com- import of wheat and cotton taken for bined to produce the state of affairs to consumption. which we have alluded as existing in 28 yards, 04 0 43 0 31 0 13 021 Rate dis. pr. cent., Now, it is observable that wheat rose from August, 1837 to Feb., 1839, about 19s. per quarter, yet cotton rose also, as did clothes and the rate of interest. In the following year cotton fell, but the crop had increased more than 50 per cent. In the succeeding year cotton rose and wheat also. The price of cotton seems to have been greatly more dependant upon the extent of the crop than upon the state of the harvest. Notwithstanding this great and pal pable change in the general state of affairs, the failure of the harvest now has been looked to with an interest scarcely less great than that which it excited before, when so many collateral causes conspired to heighten its effects. That the artificial enhancement of the price of any article of necessary consumption diminishes the consumption of most other articles less necessary to sustain life, is certainly true, and such is eminently the case with the corn of England, which now is the only article that enjoys the "protection" of the Government. The protection afforded to corn by legislative enactments is so closely interwoven with the social structure of Great Britain as to make its modification a matter of extreme delicacy. To counteract its effects in times of a short harvest, very important reductions have in the last three years been made in other articles of consumption. The amount of taxes thus remitted is over £5,000,000, or $25,000,000— nearly equal to the whole customs revenue of the United States; and the leading articles that have been bene fitted by it are sugar and cotton. On the latter the duty removed was about twelve per cent., the general principle being to promote consumption by diminishing the cost of production, that is to say, by bringing a greater quantity of necessary articles within the cash wages of the consumers. This principle is not only fully recognised and acted upon in England, but in the United States the largest commercial operations are governed by it. A failure of the English crop is universally looked upon as a calamity, because its effect is acknowledged to be to diminish the consumption of cotton, and by so doing to reduce the price of the raw material, and thereby undermine the means of the planters. Now, the consumption of cotton in England, that is, by the inhabitants of Great Britain, is not greater than that consumed by those of the United States. This is indicated from official returns, as follow: Net weight consumed in England, with manufacturers' stock. This is equal to a consumption of all sorts in Great Britain of 345,000 bales, at an average of 400 lbs. each. The quantity taken by the United States manufactures last year was stated at 389,006 bales, and the import was about 23,000,000 yards, about equal to the quantity exported. Now it is observable that the increase of the consumption in the United States is not more than equal to the increase of the population, as thus: The decennial increase of the population of .1,126,008 302,588 .1,428,596 the United States, from 1820 to 1830, was 33.26 per cent.; from 1830 to 1840, 32.67. This would give a ratio of increase from 1840 to 1850 at 32, which would give an increase of 14.89 for five years on the population of 1840, which was 17,069,453. The increase is, therefore, 2,541,641, making the population of 1845, 19,611,094. The quantity taken for consumption reduced to yards, at the rate of 3 1-5 yards to a pound, shows a consumption in the United States as follows: It is observable that the quantity laments the casualty which reduces the taken for consumption in the United English consumption of cotton 100,000 States is the whole quantity taken by bales; but many regard with indifferthe manufacturers; and the stocks ence a course of government policy they hold this year are represented as which checks the consumption here very large, that is to say, eight months' 150,000 bales. It has become the consumption; and the exports have in- policy of the English Government, creased by all the surplus made above notwithstanding its great financial nethe wants of the home market. Now cessities, to remove entirely the duties the effect of the tariff has been artifi- upon those articles the great consump cially to sustain the price of cotton tion of which is necessary to the nagoods far above the natural level they tional industry. Raw cotton was such would find proportionally to agricultu- an article, and it abolished a duty ral produce, if left to a free competi- which produced a net revenue of tion. The effect of this artificially high £680,000, or $3,400,000. The object of price has been to diminish the consump- so great a reduction was, by reducing the tion of cotton in the United States to an cost of goods, to promote the consumpextent quite as great as that produced tion of cotton. If now we reflect that in England by a failure of the harvest the great evil of the South has been a there. The markets, therefore, pre- superabundant production of the raw sent the singular contradiction of a material-that is to say, that they have universal lament over the effect of the turned out quantities greater than even harvest on cotton, while a cause exists the vast capital of England, and the here in the operation of the tariff great machinery of her colonial governequally as potent in reducing the value ment, could find a market for-it beof the great staple as that complained comes apparent that it is the duty of there. It will be remembered, in of the United States Government to what we have shown in the first part promote the consumption of cotton by of this article, that, from the sound con- all means in its power. Now if the dition of commercial credits now as principle that low prices promote concompared with 1837, the effect of the sumption is true, and we are not aware deficiency in the harvest is confined to that it is disputed in any intelligent the actual diminution of consumption quarter, the examples of British imin England. The consumption there ports being far too numerous, it certainis equal to 340,000 bales; in the United ly becomes a matter of urgent necessity States, 380,000 bales. The failure of for the United States to remove any the harvest there may reduce the con- obstructions that may stand in the way sumption 100,000 bales, and the high of an extended consumption of the raw prices caused by the tariff here checks material in the United States. Such it probably 150,000 bales. That is to an obstruction most certainly does exist say, with a good harvest in England, even to the point of prohibition in the and a low tariff here, the consump- existing tariff upon cotton goods. In tion in the two countries will be 250,000 illustration of this, we will give, from bales greater than when the harvest is actual transactions, the duties paid on deficient there: and high duties raise cotton goods at this port at three pethe prices of the goods here far above riods, viz., in the spring of 1842, under their relative value to the products of the last reduction of the Compromise the industry of the consumers. Now Act. in 1842, and under the present every merchant in the United States tariff: Pk'gs. Invoice in Sterling. IMPORTED SPRING OF 1842. Invoice. Sq. Yards colored. White Amount cost Duty paid. Duty on same yards. over 35 cts. 652 £26,949 15s. $119,776 785,791 48,420 $2,670 $40,042 Duty per cent. on first cost 334 goods now. $75,078 623 This invoice was mostly of fine sent tariff, would have been much worsted and cotton goods. Had they higher. been all cotton, the duty, under the pre The average cost and duty on several descriptions of goods are as follow: |