The present fall in the price of bullion, and the improved state of our exchanges, proves, in my opinion, that a much greater part of the difference between gold and paper was owing to commercial causes, and a peculiar demand for bullion than was supposed by many persons; but they by no means prove that the issue of paper did not allow of a higher rise of prices than could be permanently maintained. Already a retrograde movement, not exclusively occasioned by the importations of corn, has been sensibly felt; and it must go somewhat further before we can return to payments in specie. Those who let their lands during the period of the greatest difference between notes and bullion, must probably lower them, whichever system may be adopted with regard to the trade in corn. These retrograde movements are always unfortunate; and high rents, partly occasioned by causes of this kind, greatly embarrass the regular march of prices, and confound the calculations both of the farmer and landlord.
With the cautions here noticed in letting farms, the landlord may fairly look forward to a gradual and permanent increase of rents; and, in general, not only to an increase proportioned to the rise in the price of produce, but to a still further increase, arising from an increase in the quantity of produce.
If in taking rents, which are equally fair for the landlord and tenant, it is found that in successive lettings they do not rise rather more than in proportion to the price of produce, it will generally be owing to heavy taxation.
Though it is by no means true, as stated by the Economists, that all taxes fall on the net rents of the landlords, yet it is certainly true that they are more frequently taxed both indirectly as well as directly, and have less power of relieving themselves, than any other order of the state. And as they pay, as they certainly do, many of the taxes which fall on the capital of the farmer and the wages of the labourer, as well as those directly imposed on themselves; they must necessarily feel it in the diminution of that portion of the whole produce, which under other circumstances would have fallen to their share. But the degree in which the different classes of society are affected by taxes, is in itself a copious subject, belonging to the general principles of taxation, and deserves a separate inquiry.
NOTES:
1. I cannot, however, agree with him in thinking that all land which yields food must necessarily yield rent. The land which is successively taken into cultivation in improving countries, may only pay profits and labour. A fair profit on the stock employed, including, of course, the payment of labour, will always be a sufficient inducement to cultivate.
2. J.B. Say, Traite d'economie politique, 2nd ed., 2 vols.
(Paris, 1814) ii, p. 124. Of this work a new and much improved edition has lately been published, which is highly worthy the attention of all those who take an interest in these subjects.
3. J.C.L.S. de Sismondi, De la richesse commerciale, 2 vols.
(Geneva, 1803), i, p. 49.
4. Adam Smith, An inquiry into the nature and causes of the wealth of nations, ed. D. Buchanan, 4 vols. (Edinburgh, 1814) iv, p. 134.
5. Smith, Wealth of nations, iii, p. 212.
6. It is, however, certain, that if either these materials be wanting, or the skill and capital necessary to work them up be prevented from forming, owing to the insecurity of property, to any other cause, the cultivators will soon slacken in their exertions, and the motives to accumulate and to increase their produce, will greatly diminish. But in this case there will be a very slack demand for labour; and, whatever may be the nominal cheapness of provisions, the labourer will not really be able to command such a portion of the necessaries of life, including, of course, clothing, lodging, etc. as will occasion an increase of population.
7. I have supposed some check to the supply of the cotton machinery in this case. If there was no check whatever, the effects wold show themselves in excessive profits and excessive wages, without an excess above the cost of production.
8. Smith, Wealth of nations, iv, p. 35.
9. The more general surplus here alluded to is meant to include the profits of the farmer, as well as the rents of the landlord;and, therefore, includes the whole fund for the support of those who are not directly employed upon the land. Profits are, in reality, a surplus, as they are in no respect proportioned (as intimated by the Economists) to the wants and necessities of the owners of capital. But they take a different course in the progress of society from rents, and it is necessary, in general, to keep them quite separate.
10. According to the calculations of Mr Colquhoun, the value of our trade, foreign and domestic,and of our manufactures, exclusive of raw materials, is nearly equal to the gross value derived from the land. In no other large country probably is this the case. P. Colquhoun, Treatise on the wealth, power, and resources of the British Empire, 2nd ed. (1815), p. 96. The whole annual produce is estimated at about 430 millions, and the products of agriculture at about 216 millions.
