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Wallace, Alfred Russeli 
The depression of trade 






By Alfred Russell Wallace. 





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. 



^^7 . / . Si 


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 


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 

A 2 

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." 


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 


— 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 


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. 


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 


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 


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 

A 3 


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 — 


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 


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 

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. 


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 


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 


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. 


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 

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 


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 


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. 


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 

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 


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 


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. 



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 


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. 


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 

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)" 


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 ? 


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- 


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. 


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 ; 


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. 


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- 


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 


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 


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. 




Wallace, Alfred Russel 

The depression of trade