currency, as connected with the regulation of the issues of the Bank of England, was an originating or accessary cause of that state of things. Divested of any reference to the state of the circulation, the peculiar circumstances which have been detailed, as presenting fresh fields of enterprise, so tempting to the restless spirit of adventure which then prevailed, will go far to account for the eagerness with which new schemes of every kind were entered into. The same feverish state of the public mind, with a still increasing activity, prevailed, subject only to occasional intervals of abatement, or rather pauses, through the whole of 1824. The excitement reached its height in the first four months of 1825.

It was then that speculations in goods came in aid of speculations in foreign loans, and in shares of joint stock companies. And although, for the reasons stated, the markets for agricultural produce had not participated in the spirit of speculation which prevailed in the markets for other produce and for shares, the prices of provisions were, from the combined effect of the season and the corn laws, at a high range compared with what they had been at three years before.

There was accordingly, in the spring of 1825, an almost universal activity pervading nearly all

sum actually invested. If, for instance, shares of 100l., on which 57. had been paid, rose to a premium of 40%., this yielded on every share a profit equal to eight times the amount of the money which had been paid. This possibility of enormous profit by risking a small sum, was a bait too tempting to be resisted; all the gambling propensities of human nature were constantly solicited into action; and crowds of individuals of every description, the credulous and the suspicious,-the crafty and the bold,-the raw and the experienced,-the intelligent and the ignorant, princes, nobles, politicians, placemen, patriots, lawyers, physicians, divines, philosophers, poets, intermingled with women of all ranks and degrees-spinsters, wives, and widowshastened to venture some portion of their property in schemes of which scarcely any thing was known except the name."

branches of industry, accompanied by all the outward and visible signs of prosperity which invariably mark periods of general excitement.*

But

* The consummation of the effects of that excitement is described in the subjoined extract, from the Annual Register, which refers to the early part of 1825:

"Nearly all property had risen greatly in pecuniary value, and every branch of internal industry was thriving. Agricultural distress had disappeared; the persons employed in the cotton and woollen manufactures were in full employment; the various departments of the iron trade were flourishing; on all sides new buildings were in the progress of erection; and money was so abundant, that men of enterprise, though without capital, found no difficulty in commanding funds for any plausible undertaking. This substantial and solid prosperity was stimulated to an additional extent, and was, in appearance, still further magnified, by the operation of the many joint-stock companies which had sprung into sudden existence in the former year. Some of these had put in motion a considerable quantity of industry, and increased the demand for various articles; and all of them, at their commencement, and for some time afterwards, tended to throw a certain sum of money into more active circulation, and to multiply the transfers of property from one hand to another. As these speculations still retained their popularity, the apparent prosperity arising from their artificial stimulus presented an imposing aspect. New companies were formed; day after day teemed with successive projects; and the shares of joint-stock companies not only sustained the absurdly high prices which they reached in the latter end of 1824, but even rose far higher. The madness which prevailed at this time cannot be shown more fairly or more conclusively than by the following statement, which specifies the amount of the instalments paid on each share, in five of the principal mining companies, and the market prices of these shares on the 10th of December, 1824, and the 11th of January respectively.

Dec. 10. Anglo-Mexican, 1007. 107. paid. 337. pr. Brazilian, 100l. 107. do. 10s. dis. Colombian, 1007. 107. do. 197. pr. Real del Monte, 4007. 70l. do. 550l. United Mexican, 40%. 10l. do. 351.

Jan. 11. 1587. 1157. 1257.

661. 70l. 447. pr. 821. 621. 591.

1350l.

155l. 1157. 1257.

"Some of these projects derived fresh popularity, and the general satisfaction with the measures of government was much increased, by an important step which was taken in fixing the foreign relations of the country.

"Mr. Canning made a formal communication to the foreign

the grounds for the great rise of prices in the markets, both for shares and for goods, were unsound, proceeding as they did upon incorrect information and exaggerated views, which had been allowed full scope by an undue enlargement and abuse of credit. The appearances, therefore, of prosperity proved to be delusive; and we have now to see the disastrous results of the overtrading which so remarkably distinguished the close of 1824, and the first few months of 1825.

SECTION 5.-Fall of the Prices of Goods after the Spring of 1825.

The speculations both in purchases of goods on the spot, and in overtrading in imports and exports, which had their origin mostly at the close of 1824, and continued through the greater part of the spring of 1825, terminated, in the course of the summer and autumn of that year, as such speculations commonly do terminate. The usual effects of prices driven up beyond the occasion soon manifested themselves in diminished demand *, and

minister accredited to our court, in which he stated, That, in consequence of the repeated failures of the applications of his Majesty's government to the court of Spain, relative to the recognition of the independent states of South America, his Majesty has come to a determination to appoint chargés d'affaires to the states of Colombia, Mexico, and Buenos Ayres; and to enter into treaties of commerce with those respective states on the basis of the recognition of their independence.' This measure, beneficial and popular in itself, was the more acceptable, because it was justly deemed prophetic of the course which would be adopted with regard to Chili, Peru, and Guatimala, as soon as stable governments should be created in those countries."

* The demand, on such occasions, is diminished in a greater degree than the actual consumption. When the conviction is once established, that there is an approaching relief, by a fresh importation, from the existing deficiency of supply, the manu

in advices of forthcoming supplies, large beyond the utmost previous computations. In the instance of several descriptions of produce, not only was the importation larger than on any former occasion, but supplies came in considerable quantities from new sources; or comparatively insignificant sources were greatly enlarged.*

Thus, to small stocks of goods had succeeded overwhelming importations, some of them from unusual sources; and a consequent accumulation beyond the utmost computed rate of consumption. At the same time there was a diminished export, most articles having risen beyond the price which the foreign consumer could or would afford to pay for them. But, as has been remarked, with refer

facturers and the dealers, both wholesale and retail, limit their purchases to merely what is absolutely necessary. The manufacturers work up, and the dealers and shopkeepers run off, their previously accumulated stocks, before they buy afresh; and this they do only, as it is termed, from hand to mouth. There is, in such cases, a postponement of demand, as, under the opposite circumstances of apprehended scarcity and rising markets, an anticipation of demand. And the difference between a postponed and anticipated demand, ought to be taken into account in all statements of quantities on hand, as compared with the rate of consumption.

*Thus, in the instance of cotton, the quantity which previously to 1824 had been imported from Egypt into this country was perfectly insignificant, reached in 1825 to 20,000,000 lbs. And the effect on opinion of the sudden increase from this source, was greater than the mere quantity relatively to the total supply, inasmuch as it operated on the minds of buyers, as opening a great and indefinite source of supply at a reduced cost. The excess of supply in 1825, of this and other raw materials of our principal manufactures, will be seen by the following comparative state

1824 149,380,122 22,564,485 3,051,979 742,531

1825 228,005,291 43,816,966 2,855,792 1,055,233 1,164,037 2,888,247

680,382 2,195,093

ence to former instances of a recoil of markets, from speculation and overtrading, there was a pause, and a resistance, of greater or less duration, to the fall; the greater or less resistance depending upon the nature of the articles, and the time in which the engagements for payment fell due.

The tendency downwards of most articles was manifest before the summer of 1825. The principal overtrading in goods, combining the extent of engagements with advance of prices, had occurred in the article of cotton, which is the most important of all others, as regards the magnitude of the capital embarked, and the interests involved in it. And in this article the reaction was first felt. Considerable failures, connected with the cotton trade, occurred in the United States, in the latter end of 1825. These were felt chiefly in Liverpool, where the commercial discredit preceded that of the metropolis. But the full effect of the depressing causes was not experienced till the spring of 1826; and it was not till then that failures and discredit of mercantile establishments became extensive and important.

The whole of the great fluctuations of the prices of goods were confined to the interval from the last few weeks of 1824 to June, 1826.

It may be requisite here to repeat, being a circumstance which will be found to be of importance in considering the question of the influence of the amount of the circulation on these fluctuations of prices, that the markets for almost every description of produce were dull and drooping till the summer, and, in several instances, till the autumn, of 1824; and that it was not till the close of that year that anything like a spirit of general speculation in produce of various kinds arose.