A fic r t1.is explanation of the stoppage of the Aincri en tal zradc, it remains that we trace its effects on tIe state of our money system. The illustration ill bt est by conveying an idea of the complicated structure of trade, and of the fallacious nature of first impressions in regard to it. Notwithstanding the at tachment to France, and the antipathy to this country, produced by the war, for American independence, the mercantile intercourse, consequent on the peace of 83, was chiefly carried on with us. Britain alone possess ed the capital indispensable to the length of credit re quired by a newly settled country ; and while we obtain ed the almost total supply of manufactured goods, France and the other parts of the continent have been confined, in their intercourse with the United States, to the sale of their particular articles of produce. Such was the di vision of American trade twenty-five years ago, and such did it continue, with little variation in proportion, how ever increased in magnitude, till the issuing of our or ders in council. The more the imports into the continent from the United States were augmented by the prolut. gation of the war, the larger became the exportations of British merchandise to America. More than half the proceeds of the American produce sold on the continent was remitted to London, and appropriated to the pur chase of our manufactures. To ascertain with precision the amount of these remittances is no easy matter ; but from the official documents laid before congress in 1806, they appeared, for some time back, to be from four to five millions sterling annually, or nearly 100,000/. a week. Such was the fund which, as IVIr. Baring re marks,* had of late formed the support of our continental exchange. Little did cur government, in meditating the suspension of neutral trade, anticipate the wound they Were inflicting on our own resources ; and little were the bank directors aware of the effect of the Ameri can remittances on the exchange, when they forbore to raise their voices in opposition to this favourite measure. The privation of this aid was not immediate ; for although the stoppage of American arrivals in the continent took place in February 1808, the sale of goods and remit tances to England continued till the autumn of that year. We were then deprived of this ample fund, and the ex change underwent a depression, from which it has not yet recovered.
The next cause of the fall of our foreign exchanges in 1808 was of a very different nature, and consisted in the pecuniary aid contributed by us to rescue Spain and Portugal from Bonaparte's usurpation. This drain, se rious from its magnitude, was doubly so from its occur ring at a time when, by our measures against neutral trade, we had, in a great degree, stripped ourselves of the means of providing for it. The funds which would otherwise have been supplied from American bills, were now to be furnished by the export of new specie ; and it appears by the Appendix to the Report of the Bullion Committee, (p. 232.) that no less than two millions and a half Were sent to the peninsula, between May and De cember 1808. Tne transmission of specie, since its scar city among ourselves, has necessarily undergone a dimi nution, and almost total cessation ; but the heavy ex pellees of the war continue to destroy the equilibrium of the exchange, notwithstanding the vast quantity of stores sent from this country, and paid for by government in bank notes.
The third cause which has operated in aggravation of this evil, is the same which, in former years, was pro ductive of so much mischief, we mean the inadequacy of our harvests. From the unfortunate prejudice against Teases throughout the greater 'tart of England, the im of our I as by no means Lein puce with the increase of our population. Ilan' a cwt's) ago, we produced num. Coln than we consunied, and wyre in the habit of exporting a 1)1'010)1'61M to 011I' hours. Exportation gradually ceased, and, in the course of time, was succeeded by silt h all VX(Tbli in our WalitS alms e our means, that, since the beginning of the present century, we have annually import«I, on an average, near a million and a half or quarteN of corn, forming- a yearly value of 3,700,00W., exclusive of occasional supplies from lie
land. Our harvests in 1805, 1806, and 1807, yielded their usual produce ; in 1808, thcre was a 51111(11 defi ciency, succeeded unfortunately by a much greater one in 1809. In that veal-, as in 1799, a crop, not scanty in itself, was exposed to damage in reaping-, by a long con tinuance of rain. It became necessary, therefore, to have recourse to importation, at a time when, from the causes already mentioned, bullion was at 41. Ws. an otn•c•, and the Ifamburgh exchange fifteen pet• cent. against us. Of the two evils, a farther depression of exchange, or an addition-al rise in the mice of corn, the latter appeared to government the more to be dreaded, and licences were accordingly granted for importation. When we find that the sum paid to foreigners for corn in 1810, amounted, as appears by parliamentary docu ments, to 7,077,865/., we cannot fail to consider this as a great additional cause of the fall of the exchange. The favourable harvest of 1810 came most opportunely to our relief ; hut the deficiency of that of last year, though only partial, has again reminded us of the necessity of depend ing on foreign vilifies.
The obstruction to our continental trade, by the en forcement of Bonaparte's prohibitory decrees, which to many appear the great and sole source of the evil, rank only fourth in our catalogue of causes. Serious as these obstructions have now become, their operation has been of much later date than the majority of the public are aware of. Bonaparte felt, at every step, the injury which they created to himself, in revenue as in popularity, and used to connive at their evasion, after having nomi nally enjoined their execution in the most positiv e terms. The year 1809, though posterior to his vehement procla mations, was a season of vc•y.active intercourse between England and the continent. This intercourse was main tamed during the first half of 1810 ; and it was not until the continued depression of our exchange, and the nail tittide of our mercantile failures, inspired him with the hope, that a rigorous enforcement of his decrees would complete the measure of our embarrassments, that lie began to act up to the letter of his edicts. Accordingly, it was only in the winter of 1810 that seizures of British property were made in the Prussian harbours, and that the ridiculous extreme of burning our goods was resort ed to in his own domini(ms. If we look to the magnitude of our exports to the continent of Europe, down not only to 1810, hut to the present date, we shall have rea son tobe surpristd, that they so much exceed the limited calculation, which a sense of the multiplied impediments would lean us to form. St 11, however, a trade conducted under such disadvantages of expencc and hazard, must be Infinite() less productive than if direct and unrestrain ed. In regard to tl c exchange. it will he found, when tate-fait ely scrutinized, to operate less as an original cause of nvalauy than as a prevention of cure. But free transtni. Ion ol commodities, which forms nom 1 remedy to all unequal exchange. i5 now I Lull( ti u ; d (Ix ct NVII( II once in prog•e,s from otlo I I •t.,, is, is maintained in all its virulent e by the (Aft ( t of lo, dectTes. Among minor cense of the 1. Il ol change, might be I numerated the 1.1 s) snms paid lor Ircight to foreign shipma•'et Bon. p•lo-'s prohibitiol of remitting bills to England, and the unosual amount of foreign prop( sly (1,01 sold Out of otir hinds, and remitted to the coil:Mean ill Is It). But moil! 11 has bit n In ought forward to at( ount for the ot IIITCIICU of this dis tressing event, and it now reinsins to explain its elfecu on the state of our money s)stuio.