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Wallace, Alfred Russeli
The depression of trade
CLAIMS OF LABOUR LECTURES— No. 4.
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THE DEPRESSION OF TRADE,
ITS CAUSES AND ITS REMEDIES.
By Alfred Russell Wallace.
EDINBURGH
3-OPE^A'riVE PRIMING COMPANY LIMITED,
SRIST'p PLACE.
1886.
PRICE ONE PENNY.
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This Course of Lectures has been arranged on the basis of
representing all important sections of opinion on labour
questions, and while the Lectures will afterwards be published
in a collective form, it is understood that each writer has no
responsibility for any opinions contained in them beyond those
expressed in his own Lecture.
JAMES OLIPHANT, Trustee.
H
^^7 . / . Si
THE DEPRESSION OF TRADE, ITS CAUSES
AND ITS REMEDIES.
FOR about half a century past both our Govern-
ment and our mercantile classes have acknow-
ledged the importance of political economy, or the
science of the production of wealth ; and they have
made it their guide in trade, in manufacture, in foreign
commerce, and in legislation. During the same
period we have had such advantages that perhaps no
nation in the world's history ever enjoyed before. It
is during that time that steam has been applied to
railways ; during that time the great gold discoveries
which added so much to our wealth, and gave such an
enormous impetus to our trade, took place. We
especially profited by these things, because we had as
it were the start of other nations in possessing
enormous stores of coal and iron, in the working of
which we were pre-eminent. While the railway
system was being developed all over the world, it was
we who, to a large extent, supplied the coal and iron,
and also the skill and labour, used in making these
railways. During this same period, too, our colonies
have increased with phenomenal rapidity, and have
supplied us with customers for the commodities which
we produced, and they also afforded a magnificent
outlet for our surplus population. With such ad-
vantages as these — advantages which we shall in vain
search through history to find ever occurring before —
it might be thought that we should have got on very
well, and have had a period of continuous prosperity,
even if we had had no infallible guide to teach us
how to conduct our trade and commerce. Yet after
fifty years of these unexampled advantages, after fifty
years of following what was professed to be an
infallible guide, we yet find ourselves at the present
day in the terrible quagmire of this commercial
depression. All over the country trade is, and for
many years now has been, dull ; everywhere there are
willing workers who cannot find employment. In all
our great cities we have stagnation of business,
poverty, and even starvation. Certainly, according
to the doctrines of the political economy which we
have followed, none of these things ought to have
happened ; we ought to have had a continuous and
enduring course of success.
Now the need of a thorough inquiry into what are
really the causes of this commercial depression is very
great, because until we clearly perceive what has
produced it, we shall be virtually in the dark as to
how to find a remedy for it. I consider, then, that a
true conception of the various causes which have
brought about this state of things, which, according to
our professed teachers, ought never to have occurred,
will enable us to lay down more surely what ought
to be the radical programme of the future.
Last year when the matter became the subject of
extensive discussion in the press and in Parliament,
we had the most extraordinary chaos of opinion as to
what was the real cause. I noted at the time at least
eight different suggested causes. One great authority
in Parliament stated that there was no accounting for
it, — political economy did not explain it. Other great
authorities agreed in this view, and the result was
the formation of that Parliamentary Commission of
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Enquiry which is now sitting. Another suggestion
was that it was all a fallacy, and that there was really
no depression at all. This was put forward by an
eminent member of Parliament connected with the
city and connected with money-making. To this
class of people no doubt there was no depression ;
money-making and speculation of all kinds went
on as briskly as ever. Another suggestion — I am
sorry to say the one adopted by the Conference
of Trades Unions of England — was general over-
production, an explanation which hardly needs refu-
tation, it has been refuted so often. Other sugges-
tions, of course, were, that it was our free trade that
caused it, or that it was the protection which still
existed in foreign countries. Then, again, a very
general view, and to some small extent a true one, is,
that the continuous succession, for three or four years
at all events, of bad harvests had something to do
with it ; but then there was another remarkable
suggestion made, that the rather good harvest we had
some few years ago was the cause of the more recent
depression. That was seriously put forward in a
pamphlet published under the authority of the Cobden
Club, for it was stated that this good harvest rendered
it unnecessary to import so much corn from America,
and thus led to a depression in the shipping trade, and
that affected all other trades. The last of this series
of explanations was, that it was all due to the currency,
— that it was due in fact to there having been an
appreciation of gold and a depreciation of silver, one
or both.
The Main Features of the Depression.
Now it appears to me that a little consideration of
the true character, extent, and duration of the depres-
sion, will shew us that none of these causes can possibly
have been the fundamental cause of it, nor even all of
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them together. In the first place, the depression has
lasted almost continuously for twelve years. It com-
menced suddenly at the end of the year 1 874, and has
extended not only throughout this country but more
or less to every great commercial country in the
world. I think, taking into account this long con-
tinuance, that no such depression is on record, at all
events during the present century. Now the charac-
teristic features of this depression are, as I have said,
bad trade all over the country, both wholesale and
retail, and in every department of industry, with a few
exceptions which I shall point out presently. What
is bad trade ? Bad trade simply means that there is
a deficiency of purchasers. Why is there a deficiency
of purchasers ? Simply because people who ought to
be the purchasers have not got the money to purchase
with. It is simply diminished consumption, — univer-
sal diminished consumption, — and the only direct cause
of universal diminished consumption is poverty. Our
purchasers, both in foreign countries and at home,
have been less able to buy. There is not the slightest
reason to believe that they have not been willing to
buy, that they did not want the goods, but it was
simply that they were not able to purchase them.
This implies that whole communities are poorer than
they were. The home trade suffering as well as the
foreign trade shews that the great body of our own
people are poorer. I do not mean to say that the
entire country is not more wealthy, — I believe it is, —
but nevertheless the masses, who are always the chief
support of our home trade and our staple manufac-
tures, are poorer. The same thing is clear of our
customers in the different countries of the world,
the greater part of those that purchase from us are
also poorer. Curiously enough, just in the very
height of this depression, there appeared some autho-
ritative pamphlets by Mr Giffen, Mr Mulhall, and
Professor Leoni Levi, proving exactly the reverse,
demonstrating that the people were never so well off,
and that they were far richer than they ever were
before ; and we were told to believe this when at the
same time it was universally admitted that their pur-
chasing power had diminished to such an extent as to
cause this widespread diminution of trade!
This then, I say, is a statement of the immediate
cause of the depression, — universal impoverishment.
Now we must endeavour to ascertain what is the
cause of this universal impoverishment. To illustrate
more clearly the period when the depression began,
and what was its nature, I have drawn out a diagram
giving our imports and exports — the upper line show-
ing our imports, and the lower line our exports — from
the year 1856 to 1884.* If you look at this you will
see that our imports, with the usual minor fluctuations,
have gone on increasing steadily from the beginning
of the period to the end, but our exports follow a
totally different course. They went on increasing
pretty steadily and regularly, and then rather sud-
denly, and especially suddenly from 1870 to 1872.
The years 1872 and 1873 marked the culminating
points of our commercial prosperity. Then there
commenced — what I think cannot be found in all the
records of our export trade — a rapid and remarkable
decline, which continued right on, without any break,
down to the year 1879. From that time it began to
rise again, and has risen with fluctuations up to the
present time ; but even now it does not attain the
culminating point it reached in 1872, twelve years
ago. But owing to our increase of population and
progressive increase of total wealth, we ought to have
had a continuous increase of our exports much larger
than that which has actually occurred.
Another indication of the course of the depression is
* This diagram with others was exhibited at the lecture, and
is to be found in the lecturer's book entitled " Bad Times."
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afforded by the number of bankruptcies which took place
during that same period. I will state briefly what are the
facts. In the year 1870 — that is, during the period of
our prosperity — the annual bankruptcies were about
5000, including bankruptcies and compositions with
creditors. Shortly after the depression had commenced
in 1875 they had reached 7900. In the year 1879,
when the depression had reached its height, they had
amounted to no less than over 13,000. From that
time they diminished in number to 9000 in 1882
and 8500 in 1883, and in 1884 — almost all who
could become bankrupt having become so — they have
decreased to about 4000. These numbers illustrate
and enforce the diagram of exports, showing that
the bankruptcies began to increase just after the
culmination of our commercial prosperity, so that
there is no doubt whatever that the real depression
commenced about the year 1873 or 1874. This is
important, because many writers insist upon leaving
out of the question altogether this long continuance
of the depression, and they treat it as a comparatively
recent thing, which has entirely come on in the last
two or three years ; and, in fact, one of the two prize
essays which have been recently published by Messrs
Pears never said a word about the depression having
lasted ten or twelve years, but treated it as if it had
commenced within the last three or four years.
True Causes of the Depression.
Now that we have got at what are, I think, the main
facts, let us consider how we ought to set about to
find what are the true causes. First, then, a cause to
be worth anything must be a demonstrable cause of
poverty in some large body of the people. Another
essential point is, that it must have begun to act, or
at all events must have acted with increased intensity,
about the period when the depression commenced.
Another point is, that it must have affected not our-
selves alone, but several of the great manufacturing
countries of the world. Now unless any alleged
cause will answer to at least two out of these three
tests, I do not consider that we ought to admit it to
be a true cause ; and you will find, I think, that none
of those eight suggested causes which I summarised
at the beginning of my lecture will at all answer to
these conditions. After much consideration as to
what are the real causes which answer to these condi-
tions, and which are of sufficient importance and
extent to account for the whole phenomenon, I have
arrived at the conclusion that they are four in number.
The first is, the excessive amount of foreign loans that
were made about fifteen or twenty years ago ; then
there is the enormous increase of war expenditure by
all the countries of Europe that also occurred about
the same period ; another cause is, the vast increase
of late years (of which I shall give you proof) of
speculation as a means of living, and the consequent
increase of millionaires in this country ; and the last,
and one of the most important of all the causes, may
be summarised in one of the results of our vicious
land-system, the depopulation of the rural districts
and the over-population of the towns.
Foreign Loans.
Now let us take these four causes in succession, and
endeavour to see what was their extent, and how they
acted. First, then, as to the foreign loans, to the effects
of which very little attention has been paid. From the
year 1862 to 1872 there was a positive mania in this
country forforeign loans. The amount of these I endea-
vour to illustrate in this table by shewing simply the
new debts — the increase of former great national debts
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— created by the chief powers of Europe between 1863
and 1875 : —
New Debts created iS6j-iS/j.
France ,£500,000,000
Italy 200,000,000
Russia 400,000,000
Turkey 200,000,000
Egypt 80,000,000
Tunis 7,000,000
Central and South America 73,000,000
,£1,460,000,000*
You will see that the total sum amounts to nearly
£ 1, 500,000,000 sterling. Now a very large portion
of these loans were supplied by this country, and it
is very important to consider what effect they had.
First of all, you must remember what these loans were
for,' and what they were chiefly spent on. The greater
part of them were spent in war or preparation for war,
or to supply means for the reckless extravagance of
foreign despots. Now, as I have pointed out, we at
that time were the pre-eminent manufacturers in the
world, and held the first place much more completely
than we do now ; so, as we supplied a large part of this
money and had extensive commerce with all these
countries, the natural result — at all events, the actual
result — was, that a large part of this money was spent
with us. Whether it was war material or new rail-
ways that were wanted, or jewellery or furniture or
other luxuries required by the kings and despots who
got the loans, a large part of it was spent with us.
The consequence was that for a time everything
seemed flourishing. Our trade went on increasing, as
* England probably lent half of this amount ; and in five years
only, 1870-75, we lent about £260,000,000 to foreign States,
besides an enormous sum in railways and other foreign invest-
ments or speculations.
II
Mr Gladstone said, " by leaps and bounds," and cul-
minated in that wonderful period of apparent pros-
perity in the two years 1872 and 1873. About that
time the money was nearly all spent. What happened
then ? Not only was there a sudden diminution
in the demand, — that was natural, — but what was
worse, there was a great diminution in the normal
demand which had previously existed in those coun-
tries whose kings or despots had obtained these
loans, — for this reason, that up to that time the interest
on the loans was paid out of capital, but when the
money was all gone the interest had to be paid out of
taxation ; and from that moment, by the increasing
taxation upon these people whose governments had
obtained these enormous loans, they were all im-
poverished to that extent, and therefore became worse
customers to us and to every other country.
Now this is a real, an important, an inevitable
cause. Perhaps some of you will understand it better,
however, if I illustrate it by supposing a simpler case.
Let us suppose, for instance, that there is a country
town in which the people are tolerably well off, and
where trade is tolerably flourishing. There comes
into this country town a body of money-lenders, and
they offer everybody loans on easy terms. Not only
do traders and farmers and others get these loans, but
all kinds of spendthrifts and idlers. Of course they
spend the money they borrow, and during the few
years they are spending there is an enormous amount
of trade done in the place. Shopkeepers think there
is a kind of millennium coming, and increase their stocks
and expect to make fortunes. But after two or three
years the lenders see that no more money can be
safely lent and stop the supplies, and immediately
come down upon those who had the money for their
interest. We supposed that a very large portion of
the community had these loans, and the consequence
is they all suddenly become poorer by the amount of
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the interest they have to pay. Consequently not only
do the shopkeepers lose their temporary increase of
trade, but they do less trade than they did before that
increase began. The last state of these men is in fact
much worse than the first.
Increased War Expenditure.
We will now come to the next real cause of the
depression, and that is the enormous increase of mili-
tary and naval expenditure, which also began about
the same time, and has been continued almost up to
the present day. It is a curious thing that up to the
year 1874 our whole military expenditure had been
for many years stationary. It was stationary at about
£2 4,000,000, — some years it was a little more, some
years a little less. Then there commenced a sudden
increase, corresponding with that of all the other
nations of Europe, though not to so great an extent ;
and from that time — from 1874 till the present year —
it has increased rapidly till it is now ^29,000,000 or
^"30,000,000. But that is nothing to the increase
which has gone on with the other nations of Europe.
They also had previously a tolerably fixed amount of
war expenditure. But then two great events happened,
— one the Franco-German war, and the other the won-
derful and continuous progress in the applications of
science to war-like inventions. Not only did iron-clad
ships rapidly increase in size, weight, and cost, but
very soon steel began to be used, and cannons were made
larger and larger in size. Every kind of projectile was
improved till they have become works of art of the most
costly description. The torpedo was invented, and in
fact an amount of skill and science was devoted to this
one destructive art perhaps greater than has been
devoted to any other art in the world. The result was
that, owing to the dread of the increasing power of
Germany, and the necessity of rivalling her in the
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application of science to destruction, the great military
nations of Europe immediately commenced an enor-
mous increase in war expenditure, and a few figures
will show how great this increase was. I am speaking
now of the years 1874 to 1883. Austria increased her
expenditure from £7,000,000 to £13,500,000 ; France,
from £18,000,000 to £35,500,000, very nearly double ;
Germany herself, not so much, because she was in a very
fine position before, from £17,000,000 to £20,000,000 ;
Italy increased still more, from £9,000,000 a year to
£19,000,000 a year ; Russia, from £20,000,000 to
£30,000,000 a year. The total of these shews that
whereas up to 1874 these six great nations spent
£96,000,000 a year on their warlike material and ex-
penditure, in 1883 they spent £150,000,000. Here
was an increase of £54,000,000 sterling, all newly
added to the taxation of these countries, and, re-
member, the most utterly unproductive taxation that
it is possible to conceive.
Evil Results of War Expenditure.
Now it is not generally considered how varied and
extensive are the evil results of such expenditure.
The losses involved by it may be summarised under
three heads. We have, first, the large number of men
employed unproductively ; secondly, the increase of
taxation ; and, thirdly, the vast destruction and waste
in war.
First, as to the unproductive men. I find that
the European armies have increased since 1870 by
630,000 men, — more than half a million. The present
total is more than three and a-half millions of men,
and this is what they call a peace establishment.
Then it is not generally considered that this number
of men by no means represents the number of men
who are taken away altogether from productive work,
for in addition to those who do nothing but drill and
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prepare for the purposes of destruction, you must have
another army of men who are employed in supplying
these with the materials for destruction ; and I believe,
if we could follow out all the war material to its source,
and thus arrive at the total number of the men thus
employed and taken away from real production which
adds to the wealth of the community, it would be
found to constitute another army much larger than
this huge army of 3,500,000 men. For you must
remember that in one of our huge ironclads you do
not merely have the men engaged in its construction,
but you must go back to every ton of iron and coal
used, to the men engaged in extracting the ore from
the earth and in making the raw iron into its various
forms, to the men engaged in making the elaborate
machinery connected with it, — the engines of war,
and the wonderfully elaborate fittings so complicated
that one of these great vessels is almost like a city, —
and if you follow all these back to their primary
beginnings in all parts of the world, you will find that
there must have been an enormous army of men em-
ployed in the construction of a single iron- clad. Add to
that the wonderful machinery used in constructing our
guns and torpedoes, the munition, clothes, food, every-
thing that is used by these men ; and if we further
consider that armies waste perhaps more than they
consume, — taking all this into consideration, you will
find that it cannot be less, but probably is much
more, than another army of 3,500,000 men engaged
in the service of the actual army. So that we have
a total of 7,000,000 men at the present time entirely
occupied in preparing for the work of destruction.
If, as is admitted, the army itself has increased by
630,000 men, I think it more than probable that
the increase of this army who wait upon them has
been proportionally much greater, because the appli-
ances they require — the weapons, the ammunition,
and the scientific appliances of an army in the field —
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are so immensely more elaborate than they were forty
or fifty years ago, so that it will be necessary to
add near a million of men employed in this work, and
we shall have about a million and a half of men
whose labour is utterly wasted, in addition to those
actually engaged in the destructive, wicked, and useless
purposes of war.
We have a very striking indication, and to some
extent a measure, of this enormous waste of human
labour, in the increase of the total fiscal expenditure
of these six great powers. Taking the different esti-
mates of their annual expenditure for government
purposes from 1870 to 1884, I find that these six great
powers have increased their annual expenditure by
£266,000,000 sterling. That is the increase of the
six great powers of Europe, and that increase is
almost wholly due to this terrible war expenditure
which I have been trying to put before you. That
£266,000,000 means, of course, £266,000,000 of addi-
tional taxation beyond what there was before. Surely
this is a cause of the most terrible impoverishment,
and sufficiently accounts for people not being so well
able to buy as they were before. Then, again, we must
remember that whenever this great engine is put to
its destined use, there comes another loss in the actual
destruction of property and life. In every country
where war is carried on, as a necessary result towns
and houses are battered down, vineyards and fields are
rendered desolate, fruit trees are destroyed, and con-
sequently we have an overwhelming amount of destruc-
tion of property whenever this war machine is put into
motion ; and here again is a cause of poverty, and
therefore one of the most direct and immediate causes
of the depression of trade.
Now this machine has been put into action almost
continuously, either in greater wars or lesser wars,
and as we supply goods to almost every nation in the
world, it does not matter where the war is, one
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thing is certain, that a considerable number of our
customers are killed and a much larger number are
impoverished. Just consider; in 1872 we had the
great Franco-German war; in 1875, the Ashantee
war; in 1878, the terrible Russo-Turkish war; in
1879 and 1880, the Transvaal and Zulu wars ; in
188 1, the Afghan war; in 1883, the Egyptian war;
in 1884-85, the Soudan war ; and since then the French
Tonquin war and then the Mahdi war. Now we have
the Burmese war, and the Soudan war is still going
on. Every one of these wars kills or impoverishes our
customers ; and consequently, not only by the cost of
the huge armaments, but by the vast destruction of life
and property they bring about, the war expenditure of
Europe is the cause, to an unknown but enormous and
incalculable extent, of the existing depression of our
trade.
Now these two great causes, — loans to foreign
nations, at first inflating and then necessarily de-
pressing our trade by the impoverishment of the
people ; and the increase of war costs, which, as I have
shewn you, have been always enormous, and have
been of late years ever increasing, — these two may be
considered to be the great external factors which have
caused the depression of trade, by impoverishing our
customers all over the known world. The effects of
these two causes are clear as daylight ; the result is an
inevitable result ; and the amount of the evil is so
gigantic, that I think I am justified in placing them in
the front as the most important and inevitable causes
of the depression of trade. Yet, so far as I am
aware, during the many months that the Royal Com-
mission has sat not one word has been said about
either of these causes ; and I believe, when the final
report of the commission is issued, that you will
probably not find one word about them.
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The Increase of Millionaires as a Cause
of Depression of Trade.
I now come to another branch of the subject, that
which deals with our home trade, — with the causes of
the depression in our home trade in addition to that
produced in our foreign commerce. I have given the
increase of speculation and of huge fortunes made by-
speculation as one of the chief causes, and I will first
adduce a few facts to prove that it is really the case
that millionaires have been recently increasing.
The sums paid for probate duty have been published,
and they shew the amount of property on which pro-
bate duty is paid, but this only covers what is called
the personal estate, it does not cover the landed estate ;
consequently, whatever the valuation is, it represents
only a portion, and sometimes only a small portion, of
the whole estate. To make it simple I have divided
the results into two periods, — the ten years previous
to the commencement of the depression in 1874, and
the ten years subsequent to it. Between 1862 and
1873 I find that 162 persons died with fortunes of
over a quarter of a million. In the next ten years
they had increased to 208 persons who had died with
fortunes of over a quarter of a million. This is an
increase of over 29 per cent. The detailed figures
shew still more remarkable results, because they shew
that the increase was still more rapid in very great
fortunes, in fortunes over a million. In addition to
that a very considerable number of great landowners
have died who paid no probate duty, but whose
capitalised fortunes have been from one to five
millions sterling each. We have not the exact figures,
but still we know that their fortunes have been of late
increasing, owing to the increase of our large towns
and the enormous increase of ground rents which
have arisen in them. The main result is, that a few,
that is comparatively few, have become much richer
than they ever were before ; and it appears to me that
it is a demonstrable fact that, when those who are very
rich suddenly become more numerous and still richer,
without any increased power of wealth-creation inde-
pendent of labour, then, as a necessary result, those
who are poor become poorer.
This principle was laid down very clearly by Adam
Smith, strange to say, in the very first sentence of
his "Wealth of Nations," but I do not know that
much attention has been paid to it. The sentence
is this. He says : — " The actual labour of every
nation is the fund which originally supplies it with
all the necessaries and conveniences of life which it
actually consumes, and which consists always either
in the immediate produce of that labour or in what is
purchased with that produce from other nations."
This lays down a proposition perfectly clear, that
there is no other source whatever of wealth in the
country than the produce of the labour of its people.
Hence it follows absolutely and indisputably, that if a
larger proportion of that wealth goes to the few, a
smaller proportion must remain with the many. As
some people may not clearly see the bearing of this
statement of Adam Smith, let me just illustrate it by
a few particular cases. It is quite evident that all the
wealth of the country is produced by labour, or by
the use of labour and capital combined, and everybody
who gets wealth must get a portion of this total
amount. There is no other source from which he
can get it. Whether he obtains it in the form of
rent or from the taxes it comes exactly to the same
thing, it can only come out of the produce of labour.
In the same manner, whether he gets it in payment
of wages or remuneration for professional services,
those who pay it can only have got it, directly or
indirectly, by labour. Consequently the fact is in-
disputable, that the produce of our labour measures
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the whole available wealth produced by us in the
country, and that wealth has to be distributed by
various ways among the whole community. Conse-
quently if it is clearly proved, as I think it is, — to
prove it in detail would require a much more
complete examination of the statistics of the country,
but I think it can be proved, — that the large body of
the very rich have been steadily growing richer, then
it follows as a logical result that the remaining body,
or at least a portion of the remaining body, must have
been growing poorer.
A Proof of Increasing Poverty.
Of course this has been denied over. and over again,
but I have endeavoured to get some confirmation of
it by examining the information given in the census
returns. The full census report, as you are probably
aware, gives a great amount of detail as to the occu-
pations of the people at different times-, and I have
looked up the facts as to the increase of the persons
employed in particular trades and manufactures for
the purpose of seeing what light it would throw upon
this question, and I found that it supported in a
remarkable manner the statement which I have laid
down for your consideration, that is, that the great
masses of the people have been growing poorer while
the few have been growing richer. And it illustrates
it in this manner : — Whenever we have a manufac-
ture which depends mainly on the consumption of
the masses, we find that there has been either a
decrease of those employed in it, or at all events that
it has been stationary ; on the other hand, where
we have a special business or profession or trade
which is supported wholly or mainly by the wealthy,
we find an increase, and sometimes an enormous
increase. When I use the word increase or decrease,
I always mean an increase or decrease in proportion
20
to the total population. Thus I find, taking the
increase of population into account, between the two
censuses of 1871 and 1881 (the last we had) the
persons engaged in the cotton manufactures of this
country diminished 20 per cent, in that period ;
persons employed in the linen and woollen trade
diminished 1 5 per cent. ; metal workers remained
stationary ; and drapers diminished 7 per cent. Now
these are all businesses and manufactures which
certainly depend upon the consumption of the masses.
Now we come to those which more especially depend
upon the consumption of the wealthy. Milliners
increased 4 per cent., more than the whole population
increased ; carpet makers increased 9 per cent. ;
florists and gardeners increased 10 per cent;
musicians and musical instrument makers increased
23 per cent. These remarkable facts support my
contention, — and may almost be said to prove it, — that
the rich have grown richer and have been able to
indulge in greater luxuries, while the poor have grown
poorer and have been obliged to do with less of the
bare necessaries of life.
The Increase of Speculation.
The census also gives some remarkable illustrations
of what I stated some time ago as to the increase of
speculation as a business. In the same ten years I
find that persons registered as bankers or bankers'
clerks increased 21 per cent, and accountants 6 per
cent. ; and then there comes a most extraordinary
item, which the census authorities note and say they
are utterly unable to explain, and that is that persons
who call themselves insurance agents or brokers have
increased 300 per cent. I can only explain it by sup-
posing that there are an immense number of people
who live in the city by speculation who find it con-
venient to call themselves insurance agents or brokers.
21
I think, as far as I can judge from advertisements in the
newspapers, that this mania for speculation has been
going on at an increasing rate ; that is, that within
the last few years it has increased more rapidly, and
its effects therefore have been more injurious, than
ever.
I now wish to point out to you another indication, —
another field as it were, — in which this speculative
mania has produced the most deplorable results, and
has acted, in combination with other causes, so as to
increase the poverty of one class and the wealth of
another class, and has thus, as I shall shew you, tended
directly to produce depression of trade. Somewhat
more than twenty years ago an act was passed which
was considered by the whole commercial world as one
of the greatest boons ever given to it; this was the
Limited Liability Act. This act was universally ap-
proved of ; was supported and praised by such a great
and thoughtful writer and friend of the working classes
as John Stuart Mill. But I do not think he could
possibly have foreseen what would come out of it.
About two years ago a short parliamentary paper was
published giving a kind of summary of the results of
this act. It is a curious thing that this parliamentary
report seems to be totally unknown, for I inquired of
several friends in the city, particularly of one who is
an accountant in the city, and whose business largely
consists of winding up those companies, and he did
not know of its existence. The report g'ves us some
very startling facts. It covers a period of exactly
twenty-one years, and is thus easily divisible into
three periods of seven years each. In the first period
I find that 4782 companies were formed, being at the
rate of about 700 per annum. In the next period
the number increased to 6900, and in the last seven
years to 8643. Out of this total of about 20,000 distinct
companies formed in twenty-one years only 8000 are
now in existence, 12,000 having been wound up ! It
22
is also stated in this parliamentary report that the
actual paid-up capital — not the nominal capital — of
these 8000 companies was £475,000,000 ; that is about
£55,000 each on an average paid up, some of course
very much more, and some very much less. Now, not
to take an extreme estimate, suppose we reduce this
average of £55,000 down to only £10,000, and con-
sider that each of the wound-up companies involves a
loss to its shareholders of £10,000, I think everybody
who knows anything about them will think that
absurdly low, and yet that would involve a loss of
£120,000,000 sterling to the unfortunate shareholders.
Effect of Speculation in Depressing Trade.
Now let us think what is the effect of this continu-
ous loss — and in many cases absolute ruin of a large
number of persons numbering many hundreds of
thousands — by the failure of these companies? I dare-
say in this meeting there is not a person but knows
one, and most of you several, individuals who have
been ruined by such things. A great number don't
like to speak about the matter, and keep it secret, and
therefore nothing is heard of it ; but we have the
absolute fact that thousands of individuals, mostly
persons with small means, deluded by flattering pros-
pectuses, were induced to invest their means in these
companies, — persons of the middle class and small
means, very often officers and widows and country
clergymen, scattered over the country. These have
lost, at the very least, £120,000,000, and much more
likely three or four hundred millions sterling. Now
just think what is the effect of the ever-increasing
impoverishment of this large body of the middle
classes, and we will take it in connection with the
increasing mass of speculators who have become
millionaires from the losses of these men. The one
are counted by hundreds, and the other by tens of
23
thousands. Some people will perhaps say, " What
difference can it make to trade, if the money is there,
and the money is spent?" But I want to shew you
that this is a most delusive idea, and that it really
makes all the difference to trade. When you have a
thousand families of the middle classes impoverished,
it means that you reduce their outlay on all the staple
manufactures of the country. In clothing, furniture,
and everything in fact that makes life agreeable, they
are obliged to economise, simply because it is more
easy to economise in these than in absolute food.
Therefore all over the country there is a diminution
in the demand for the staple products of the country ;
but when this money is accumulated, and goes into
the hands of a few speculators, it is spent on different
things, — on ornaments, entertainments, yachts, horse-
racing, foreign travel, and hundreds of other ways, — it
is spent on that which all economists tell us, and
perfectly truly, is the most unproductive expenditure.
Consequently the loss to the manufactures and trade
of the country is enormous by every million of
money transferred from the industrious working or
middle classes to rich speculators, and is thus a real
cause of depression of trade. I think I am there-
fore quite justified in maintaining, that although
it is I believe certain that the aggregate wealth of
the country has been steadily increasing all these
years, still that wealth has been becoming more un-
equally distributed, and that inequality is the direct
cause of a large proportion of depression of trade.
Depression of Trade in America.
Now I did not mention it at first, — I passed over
rather too quickly from foreign to home trade, — but I
may mention now, that the reason is very clear why
the depression which affected us should affect all other
great commercial countries of Europe and America.
24
It is because all the causes which I enumerated as
producing depression of trade as regards our foreign
commerce would affect all those other countries just
as well, — that is, they have produced a real impover-
ishment of the peoples who were customers both of
ourselves and other manufacturing countries. There-
fore the causes acted with the same effect on France,
Germany, and America as they did with us, to the
extent that their manufactures went abroad to other
countries.
But there have been some special causes affecting
America which account for the remarkable fact that,
notwithstanding the advantages they possess in their
enormous territory, and the great energy and enter-
prise of the Americans, they have still suffered from
this depression perhaps as much as we have done.
The reason is to be found in the fact that with
them this last evil of speculation is greater and
far more gigantic than even with us. Everybody
has heard of the " corners " in America, by which a
lot of speculators get hold of the whole trade of the
country in a certain article, and get a monopoly and
manipulate it for their own purposes. This has been
applied to almost every industry. But the most
destructive cause of depression in America is the suc-
cessive railway manias which they have had. The first
was from 1867 to 1875. There was a continuous rail-
way mania during those years, — a mania for making
railways in America. In that period 40,000 miles of
new line were made, and in the one year 1872 no
less than 7000 miles of new railway were made. That
coincides with the culminating point of our prosperity,
and a large part of the iron for these lines was sent
from England. The larger part of these railways was
made merely for speculative purposes, and was very
largely unproductive. The shareholders were often
ruined, and consequently the exact effect was produced
in America that was produced in our country by the
limited liability mania. This railway mania, after a
lull, broke out again in America a few years ago, in
1880, and in 1882 no less than 11,500 miles of new
railway were made. It has been estimated by one
of the most able statisticians in America, that this
increase of the railway system went on four times as
fast as the increase of the produce to be carried on the
railways. That clearly shews that most of these rail-
ways have been failures, — so much money thrown
away, and those who lost it must have been impo-
verished. Here then you have a very widespread and
enormous cause of impoverishment, and therefore of
depression of trade in America. In fact, we hardly
need to go further.
Then, again, as to millionaires in America, I do not
know that they are greater in number, but they
exceed us in the gigantic sums they possess. While
our millionaires reckon by two or three millions, the
American millionaires get up to ten and twenty
millions. And of course the result is still more clear,
all this money must have been obtained out of the
purses of the community, and to that extent the
labourers who produced it are so much worse off than
if the money had gone into their own pockets instead
of into the pockets of the millionaires.
There is yet another source of poverty in America
which we have not to so great an extent in this country,
and that is the "rings" that sometimes get possession
of municipalities in America. You have heard of
that wonderful " ring " in New York which got
possession of the municipality, and plundered the
whole community. They kept it up for years by
wholesale bribery. That is a thing we do not hear
much of in this country, but we may be sure that
what was done so boldly in New York was imi-
tated in other towns, and the result may perhaps be
seen in the municipal debt piled up in America far
beyond what it is in this country. The municipal
26
debts of this country are held to be a great and grow-
ing evil, and help to occasion depression of trade.
But in x4merica it is worse. An estimate was given in
an American paper some time ago ; it may not be
correct, but it gives perhaps a fair approximation. It
compared American with English municipal debts.
It compared the fourteen chief cities in America with
fourteen large English towns, leaving out London, and
it was found that the average taxation per head in
America was fourteen dollars, whereas in England it
was only seven dollars ; and that while the municipal
debt in America was forty-one dollars per head, in
England it was only twenty dollars. In addition to
that, it was stated that the area over which this muni-
cipal indebtedness extended was greater in America
than in England ; that small towns in America — the
very smallest towns in the country — are often burdened
with debt, and even to a much greater proportion than
the large towns. It has often puzzled people why
America should have suffered from this depression,
but I think the few facts I have put before you give
a sufficient clue to it.
Depopulation of the Rural Districts.
I now come to what I consider to be by far the
most important part of our subject, because it is that
with which we are in the closest relation, and which is,
I believe, the most direct cause of widespread poverty
— rural depopulation. This rural depopulation has
been going on for probably a very long time, but it
was not seriously noticed till ten or twenty years ago.
Before that many of the counties seemed to be station-
ary in population, but in 1861 it was noticed that a
few counties had not increased, but rather diminished,
during the preceding ten years, in 1871 seven or
eight had decreased in population, and in 1881 fifteen
counties had decreased. But besides this decrease in
2/
certain counties, the census returns give very accurate
and detailed information as to where this depopulation
occurs, and to some extent how it occurs.
The whole of England is divided into registration
districts and registration sub-districts. These regis-
tration sub-districts are about two thousand in number,
and consist of an aggregation of parishes, roughly speak-
ing not very unequal in size, and probably not very
unequal in population. In towns they are of course
much smaller in area. The increase or decrease of
each of these registration sub-districts is given in the
census, and I took the trouble to go through the
tables and take out all the cases of decrease, and I
found that there has been a decrease over a very large
number of these sub-districts. I have endeavoured to
exhibit these in a diagram giving the total result. If
you suppose this square to represent the area of
England and Wales, then over the lower portion the
population is decreasing, — that is, over about half the
area of England and Wales there was actually less
population in 1881 than in 1871. But you must
remember that the population of the country has been
going on steadily increasing all that time. In the ten
years the population of the whole country has increased
fifteen per cent., and that is exclusive of those who
have emigrated, so that the actual rate of increase of
the population is somewhat more than that. Then,
again, it is perfectly well known that the rate of
increase — what we may call the natural increase — of
dwellers in the country is somewhat higher than that
of dwellers in the towns ; the birth-rate is higher, and
the death-rate lower.* Therefore it is a very low
estimate to consider that what may be called the
normal increase of people dwelling in the country is
seventeen per cent. Therefore the area that is actually
* See Dr Stark, in Tenth Report on Births and Deaths in
Scotland, quoted by Darwin in his " Descent of Man," p. 13S.
v/
28
decreasing will not represent the whole of the area
from which people have migrated into the towns ;
they have also emigrated from all those areas in
which the population has not increased so much as it
would normally have increased. That is, if in any
area there is less than seventeen per cent, of increase
of population since 187 1, it is perfectly certain some
of the people must have gone out of that area ; and if
we add to those which have actually decreased the
areas in which the population must have emigrated in
order to make the increase so little as it is, then we
shall find that the small space above the upper line —
perhaps one-fifth of the whole — will about represent
the area of increase up to and above the normal rate.
This increasing area consists almost wholly of the
great towns and the residential districts around them,
while all the rest of the country has been becoming
more or less depopulated. The amount of the decrease
of rural population is a distinct question. I find that
the actual depopulation that is the diminution of
inhabitants for the ten years in these decreasing sub-
districts, amounts to three hundred and eight thousand.
Then I take the amount the population of these areas
ought to have increased in ten years at seventeen per
cent., and that added to the actual decrease gives an
effective diminution of nearly a million from this
decreasing area. Then adding to this the emigration
from the area of small increase, I find that in. the ten
years the people who have migrated out of the county
districts into the town districts, with their natural
increase in the same period, amounts to about one
million and a quarter.
The Effects of the Depopulation.
Now let us consider what are the results of this
migration from the country into the towns. The
greater part of those people who have migrated are
not necessarily agricultural labourers. About one-
third are agricultural labourers, and the remainder are
what you may call villagers, — people who carried on
various trades and occupations of various kinds in
villages and small towns. The causes that led to
the labourers migrating affected them also, and they
migrated to a still larger extent, and the result is to
be seen in a most striking fact which has been brought
forward among others to prove the prosperity of the
country, and that is the enormous increase in the
import of certain articles of food. Most of you know
— at all events it is a well-known fact — that country
labourers and many other rural inhabitants are fond,
when they have the chance, of keeping pigs and
poultry, growing potatoes and other vegetables. Now
it is a most singular thing that if we compare the
years 1870 and 1883 there is an enormous difference
in the imports of these articles of food. It is so great
that it seems almost impossible ; but the figures
are taken from official papers. In 1870 we imported
less than a million — 860,000 — cwts. of bacon and
pork, whereas in 1883 it had risen to 5,000,000 cwts.
Of potatoes there were imported 127,000 cwts.
in 1870, and 4,000,000 cwts. in 1883 ; of eggs in
1870, 430,000,000, and in 1883, 800,000,000.
Now 1870 was in the midst of our period of pros-
perity ; we were supposed to be all well off; wages
were high, and men were all in full work. But 1883
is in our period of depression and distress, and it is
actually maintained by Mr Giffen and other statis-
ticians who put forward these figures to shew the
prosperity of the country, that we consume more to
this enormous amount when our trade is depressed
than we did during the period when it was most
prosperous ! It appears to me on the contrary that
these facts are due to a decreased production of food,
caused in part by the enormous emigration of people
out of the country into the towns ; and that means
30
a diminished production of wealth for the country,
and an enormous increase of pauperism and misery
in the towns where these people go.
Evidence of the Increase of Destitution.
It is very difficult to get direct evidence of this,
but there is one piece of indirect evidence — though
it may be almost called direct — which I adduced
some years ago, but can never find answered or
explained in any way consistent with that increase
of prosperity of the masses which is so persistently
alleged. In the reports of the Registrar-General
for London — and he takes in an enormous area
called Greater London — he gives the deaths in
workhouses and hospitals each year. In order to
arrive pretty fairly at what may be called the desti-
tute who die in these institutions, I have taken
the deaths in the workhouses and one-half of the
deaths in the hospitals. In 1872 they amounted to
8674, or 12*2 per cent, of the total deaths ; in 1 881 to
13*132, or i6'2 per cent, of the deaths. Now I want
to know, if the masses of the people of London and its
suburbs were better off, or even as well off, in 1881 as
in 1872,* why did 30 per cent, more of them die in
destitution ? If we take the proportion of deaths to
those living, we find this increase of 4458 deaths of
the destitute in these ten years means the addition of
107,000 to the destitute poor of London ! Now all
this, which shews a real and dreadful increase of
poverty, necessarily means depression of trade. If
there are 100,000 more destitute persons in London
now than there were ten years ago, there are so many
less customers for the staple products of the country.
* The year 1872 is taken because 1871 was the year of the
great epidemic of smallpox, when the number who died in
workhouses and hospitals was abnormally large.
3i
Then, again, if we turn to another country — the sister
country Ireland — we find that still more remarkable
and still more distressing events have occurred.
There the population has decreased half a million
since 1870, and during the same period the emigrants
have amounted to 883,000, so that though the popula-
tion has gone on slightly increasing, the increase has
been far more than counterbalanced by the enormous
number of emigrants ; and you must remember that
the emigrants are mostly men in the prime of
life. Those who are left behind are the women and
children and the old and the weak. We cannot
wonder, therefore, at the increase of poverty and
pauperism in Ireland. That increase is measured
very well by the cost of poor relief. In 1870 the
relief cost £814,000 ; in 1880 it cost £1,263,000, — an
increase of 50 per cent, on the cost of the poor, with
a decreasing population ! There, again, is a most
tremendous cause of the depression of trade. You
have got a much smaller population in Ireland, and a
population very much poorer than it was, and that
necessarily results in a depression of trade, because
we supply Ireland with most of the manufactures she
consumes.
Causes of Rural Depopulation.
It is, however, not sufficient to kno\ ■* the facts of
this rural depopulation, but we must say a few words
on its causes. These causes have been pretty clearly
made out by little bits of evidence that have been
found here and there in the reports issued by the last
Agricultural Commission. We find it clearly stated
by these official reporters that a considerable body of
the farmers of England have been ruined by excessive
rents. For many years past they have been paying
rent out of capital, hoping for better times. Not-
withstanding bad harvests and bad seasons, the)"
32
have kept struggling on as long as they could by
means of partial remissions from their landlords, but
a large number have been utterly broken down, and
have been obliged to give up their farms. The farms
have not found fresh tenants, because the landlords
will not let them, except on exorbitant terms, and
with the usual onerous conditions, and consequently
a large number of landlords all over the country have
been turning their lands from arable into pasture.
The reason they do this is that they can then obtain
a return at a minimum of outlay and risk. When
they have turned arable land into pasture, the annual
produce is not above one-tenth of the value that it
was before, but it is obtained with considerably less
than one-tenth of the outlay. The consequence is
that it means profit to the landlord ; but it also means
ruin to the country.* It is ore of the causes, perhaps
the chief cause, of the great exodus of population that
I have been pointing out t j you. It is estimated that
for every hundred acres of land thus converted from
arable into pasture two labourers must be discharged ;
and as at least a million acres of land have been so
converted between 1873 to 1884, that means that
20,000 labourers and their families were discharged
for this one cause alone. Along with them, of course,,
went numbers c. tradesmen who depended on them
for their suppct ; and mechanics and others who were
employed by '.he farmers and in the villages have also
left, partly for the same reason, and partly because it
has become more and more the custom for large
farmers to get all their work done and machinery
* It is stated by Hume in his " History of England," "that in
the year 1634 Sir Anthony Roper was fined ^4000 for depopula-
tion., or turning arable land into pasture land, under the pro-
visions of a law enacted in the reign of Henry VII." Cannot
this most just law, which has probably never been repealed, be
put into operation now ?
33
repaired in manufacturing centres rather than in the
villages by the local workmen.
Now the amount of food lost to the country by
this change from arable to pasture is enormous. I
have taken the estimates made by two or three of the
most authoritative writers. They give the average
produce of arable land at £10. 5s. per acre, and they
also give the average produce of pasture land at
£1. 9s. per acre; consequently there was a loss of
£8. 16s. on every acre converted. That means nearly
,£9,000,000 of loss to the country by this 1,000,000
acres that we know from official returns have been
changed from arable to pasture, and the change is
believed to be going on to this day far more rapidly
than ever.
But there is another cause of rural depopulation.
Just now the landlords are trying to persuade the
country that they are very glad to let poor men
have land, but hitherto it is notorious that they have
always refused to let them have it on any reasonable
terms. This is very well known to be the rule, and to
have been a chief cause of this terrible exodus of
labourers from the country to the towns. In addition
to this they will give no security to the farmers for
their improvements. They treat the farmers in every
respect exactly as they treat the labourers. If they
do offer the labourers land — as they are doing now
that there is a deal of excitement on the subject —
they never give it except on what are prohibitory
terms, — that is, as yearly tenants, and without any
security whatever for their labour and improvements.
Now the report of the Agricultural Commission, to
which I have already referred, contains some remark-
able evidence as to the results obtained in those few
cases where landlords really do their duty, and treat
the land as a trust rather than as property only.
There are two or three landlords in the country who
have done so, and in every case where such land-
34
lords' estates are referred to in these reports, it is
invariably stated that there is no depression in agri-
culture, that the farmers are well off, the labourers
are well off, and all are contented. That is remark-
ably the case in parts of Cheshire and Suffolk on Lord
Tollemache's estates. Lord Tollemache is almost
the only landlord in the country who not only gives
his farmers voluntarily perfect security of tenure, but
he also gives every labourer as much land as he can
cultivate, at a moderate rent, and on an equally secure
tenure ; and, what is more remarkable, he encourages
outsiders of decent character — anybody, in fact, who
likes — to come and settle on his estate. He offers
land to build a house, and a few acres in addition on
which to keep a cow, at a low rent. The result is
that on his estate everybody is well off; the farmers
are contented, the labourers are contented and prosper-
ous. The farmers say they have the best of labourers
to work for them, utterly disproving the common
assertion that if you let a labourer have land he will
not work for the farmer. At the same time the
labourers and the farmers find customers in those
persons who have come to live on the land, and small
communities are thus formed which are to some extent
self-sufficing. When we get a community of that
kind, consisting of various classes, all living together,
but scattered about on the land, they all tend to
support each other. Each one finds employment or
assistance from the other. There is a market at
hand, and we do not see that absurd system of sending
all the butter and poultry to a place a hundred miles
away, while a person who lives a mile from the farmer
is obliged to get his poultry and butter from the
town. That is what they call economy of production,
but it is certainly waste in distribution.
35
Results of Peasant Cultivation.
The amount of loss involved by this driving the
labourers from the country to the towns is also
brought out very strongly by the evidence of a Tory
landlord, who has repeated it several times, and I will
take it therefore as correct. In Buckinghamshire
Lord Carrington has land which he lets out in lots to
labourers. He has about eight hundred of these
allotments already in the hands of labourers and
others, and he has stated publicly that of these allot-
ments the average produce is ^"33 an acre more than
the produce of the same land in farms. Therefore, as
far as these allotments are concerned, there is a posi-
tive gain to the country on every acre of land to the
extent of ^"33 a year. Some years ago, in 1868,
when produce was not nearly so valuable as it is
now, there was a Government Commission on the
employment of women and children in agriculture,
and it obtained evidence that the average produce of
such allotments all over the country was £14 an acre
more than that of farms. Then, again, there is a
curious piece of evidence recently given by an English
clergyman (Rev. C. W. Stubbs), also living in Buck-
inghamshire, who has a large amount of glebe lands,
which he lets out to labourers in acre or half-acre
allotments, and it is a noticeable fact that the land of
the district being pretty good wheat land the labourers
all grow wheat upon their allotments. They have
been doing so for nine years, and Mr Stubbs has kept
an accurate account of the produce they get, and
although it is constantly asserted that it is impossible
to grow wheat on a small scale, yet these allotments
produce £4. 10s. more an acre than all the surround-
ing farms of Buckinghamshire. And what is more,
he finds that the labourers' produce per acre is higher
than that of the best scientific farmers in England ;
36
so that actually the poor labourer, working by him-
self on his own plot of land, can produce for us
more wheat per acre than the most scientific farmer
with all his skill* Take these estimates together — £33
per acre, £14 per acre, and £4. 10s. per acre, and that
gives an average of net gain to the country of £\j for
every acre of land cultivated by poor men in small
quantities compared with the same land cultivated by
farmers in large quantities. Now just think what a
gain that would be to the country if the people, instead
of being driven from the rural districts for want of
land, had been encouraged to remain and cultivate
the land for themselves. I have calculated the average
gain at £ij an acre. But if, to avoid any exaggeration,
we lower this, and say only £10 per acre, and if we
suppose that out of the fifty millions of acres of culti-
vatible land — a considerable part of which is now going
out of cultivation — only twenty millions of acres were
cultivated by poor men in this minute and careful
manner, and that they obtained £10 per acre of
increased produce, that would give us £200,000,000 a
year of extra wealth produced by poor men, and
almost every penny of that £200,000,000 would be
spent on the manufactures of the country.
Now that, in my opinion, indicates the method by
which we are finally to get rid of this terrible
depression of trade, which is still increasing and is
likely to increase, because we have been hitherto
falsely guided by the political economists and by the
great manufacturers, the speculators, financiers, and
others. We have always been led to believe that our
one line of business was manufacturing, that we were
to be the manufacturers of the world ; and while we
have been going on in this line, utterly neglecting
agriculture and the land, forbidding people to use it,
* See " The Land and the Labourers," by Rev. C. W. Stubbs,
1884. Swan, Sonnenschein, & Co.
37
and driving them out of it in order to increase the
men that manufacturers can employ, other nations
have not been standing still, and are now competing
with us in all the chief markets of the world.
There is a great deal of talk about finding fresh
markets, but these would be open to all the competing
countries, and would not make up for our increasing
population ever requiring fresh outlets for work ; and
therefore I maintain that the only real and substantial
mode of getting rid of the depression of trade, is to
utilise thoroughly that enormous store of wealth which
exists in our neglected fields and our miserably
cultivated soil.
Summary of the Argument.
I will now briefly summarise the points I have
brought before you. First of all, the enormous foreign
loans led to an abnormal and unnatural increase of
our trade, and then to a depression which was
exaggerated and increased by the impoverishment of
the people who had to pay the interest on these loans,
and you must remember that they had to pay for
millions which they never received, that never came
into their country but were absorbed by the financiers
in the cities, — they had to pay and are still paying all
this with interest upon it ; then we have the enormous
increase of speculation in our cities, favoured by every
act of the legislature and by every custom of the
country, and as the result we have the concentration
of wealth into fewer and fewer hands, and conse-
quently a proportionate diminution of wealth that
ought to be in the hands of the people ; we have
also the dreadful increase of war expenditure ; and
lastly, the evils directly produced by the system of
landlordism in this country, — a system which gives
a comparatively small body of men power to deter-
mine whether the land shall be used or abused, well cul-
3§
tivated or producing less than half of what it ought to
produce and will produce, — a system which drives the
people away from the country into the towns, and
turns into paupers men who would, if they were
permitted freely to use the land on fair terms, produce
an enormous increase of food, the prime necessity of
a nation's existence, and by their prosperity cause
such a demand for our manufactures as we have never
known in this country before. All this evil is caused,
and all this good prevented, by the direct or indirect
action of landlords under our vicious land system. I
maintain, therefore, that these are the real funda-
mental causes of the depression of trade, because
every one of them, as I have shewn, tends directly to
the impoverishment of the great masses of the people,
who are our best customers. Every one of them can
be shewn either to have begun about the period when
the depression shewed itself, or to have become greatly
intensified about that period, and therefore as a whole
they have worked together to produce this enormous
and long-continued and increasing depression of trade.
Remedies for the Depression of Trade.
The remedies, of course, are some of them difficult,
some of them comparatively easy. If you see and
understand what I have endeavoured to make you
see, that anything like a system of foreign loans
bolstered up by the Government of this country is
radically bad and immoral, then you ought to urge
upon your representatives that in no way whatever
should the Government lend its power or its in-
fluence to compel the oppressed populations to pay
these loans or the interest upon them. Another step
will be to stop all aggressive war on any pretence
whatever. I consider in the present state of the
world that there is only one class of wars that are
justifiable or will be justifiable for us, and that will be
39
a war to help a weak when oppressed by a stronger
power. It is a singular thing that this is the only
kind of war likely to do us good even in our trade,
for it would protect for us our customers as well as bind
them to us by the bonds of gratitude ; but it is the
kind of war that we never in any circumstances have
undertaken. Then, again, if we see clearly and dis-
tinctly that whatever facilitates the growth of abnormal
wealth in the few is bad for the rest of the community,
we certainly should favour all those steps which would
render it more difficult to accumulate such wealth.
It would take too much time now to go into all the
measures which I think would be advisable for that
purpose. One thing, however, would be certainly
advantageous, though I am afraid it will never be
done, and that would be to repeal the Limited
ility Act. I believe this Limited Liability Act
:>een a greater curse to the country than any Act
irliament ever passed, because it as much as says
the authority and voice of the Government to
Ik people, — You may enjoy the benefit and all the
ntages of commercial prosperity by simply sub-
ing your money towards these companies. How
ae people at large to know which are good and
1 are bad ? The mere fact that such an act was
I :d was an invitation to the people of the country.
: accepted the invitation, and for each one who
benefited by doing so a score have suffered.
: he last thing, and perhaps the most important
11, is to abolish the monopoly of land in this )
try. I believe no half measures will do any good
. The only thing will be to declare by law that
whole of the land shall revert to the state for the
• cfit of the people, but that no individual so far as
possible shall suffer any loss during his lifetime or
Irring the lifetime of any of those who have reason-
e expectations from him. If that were done no
downer would have a right to complain. He
40
would receive an income probably as great as he ha?
now for the rest of his lifetime and for the lives of al,
his children, while the nation would have the use of the
land and apply it for the benefit of the whole com-
munity, and thus lead to the production of an amount
of wealth probably two or three times greater than is
now derived from it. This increased wealth would b-
earned by men who are now poor or pauperised ; and
as it would almost all be spent in home manufacture:
it would in the most direct and speedy manner rcstor .
the prosperity of the country and abolish the Depression
of Trade.
HC
255
W25
Wallace, Alfred Russel
The depression of trade
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