occur. Seasons of social trial, such as those of political excitement and popular distress, are seasons of passion, and when passion has the mastery, prudence is gone. At such times nothing will bear the strain but some old habit-something traditional and authoritative-some principle recognised as sacred, because it brings into the daily life of man higher and better influences than any that can ever flow from the weekly pay-table. Amongst a people so rich in moral capacities, the growth of these higher influences is not to be despaired of, if those who see and feel the need do what lies in their power. There is not, indeed, any time to lose. For schools in especial, invigorated by all the zeal that religious faith can infuse into them, the necessity is most urgent. But, if opportunities be not lost, there will be no need to look with regret to times gone by. We may yet realize something better than that chivalry which under its poetic mask concealed and sanctioned an abundance of brutality and disorder. To reform the criminal is, after all, a nobler thing than to lay the oppressor low, and the labours of Thomas Wright are a proof that even now souls heroic, in a higher fashion than any known to the Mannys or the Bayards, are to be found amidst the smoke of the cotton mills'.

Reactions from Over-Trading.

The manufacturing population is exposed to one class of dangers from the mere increase of wealth outstripping the development of those higher tastes which would use it for other than sensual indulgences. But it is also exposed to another class of dangers from the peculiar liability of manufacturing industry to checks and reactions whenever it is to any very great extent governed by speculation. The expansibility of the factory system, and its power of rapidly glutting new markets, have been already noticed. The causes now and for a long time to

See the highly interesting account of Mr. Wright, in Household Words for March 6, 1852. May he be able to adhere to the simplicity of his former life, in spite of the temptations which his recent fame will raise up in his path!

come likely to be in operation, are such as to stimulate excesses of this kind in every possible way. Such new gold as

may arrive in England will find all that difficulty that has been explained in getting absorbed into the currency. Not only must there be an increase of income prior to such absorption, but the increase must take place in those classes of income which gold is now chiefly used to distribute. A man who now

spends a thousand a year will probably not use a single additional sovereign when his income is doubled. He will carry much the same amount of gold and silver in his purse as heretofore, and all his larger payments will be made, according to the present custom, by cheques upon a banker. It is therefore quite below the mark to say, that to keep ten additional sovereigns in circulation, there will require at least an addition of one hundred a year to the aggregate of annual income. When with this fact is connected the other fact, that the gold which comes to England comes not as income, but as capital, nothing can be looked for but a constant accumulation in the hoard at the Bank of England. For every portion of the new metal which is poured into the basin of the circulation at one end, an equal portion of the mass will be flung out somewhere else. All that is thus rejected becomes dormant, or disposable money capital in that peculiar form which, from the nature of our monetary system, creates an exaggerated belief in the abundance of such capital, and has hitherto, sooner or later, produced all the mischievous varieties of speculation and overtrading.

Such is the conclusion to which an investigation, undertaken with a simple desire of arriving at truth, has brought the present writer. The dangers of which it opens the prospect may be in some degree lessened by a firm and bold legislative policy; but in the main they must be met by the wisdom and selfrestraint of the English people. May those high qualities not be absent now, when, more than at any former period, their exercise is required.

CHAPTER X.

SOLUTION OF THE PROBLEM.

"Wealth has accumulated itself into masses; and poverty also in accumulation enough lies separated from it; opposed, uncommunicating, like positive and negative poles."-CARLYLE, 1831.

Conclusions respecting Capital.

It may aid the reader to state briefly the results which appear to be established by the reasoning in the previous chapters.

1. It goes to prove that there is in England a uniform tendency to excess in the growth of money capital disposable for new employment.

2. That the accumulations thus arising have hitherto invariably led to speculative excitement and enterprises, which afforded temporary relief to the plethora of capital, but which were necessarily attended by great individual losses and much disturbance of commerce, credit, and employment, and the spread of that demoralization which gambling produces.

3. That such periods are soon followed by a replacement of the lost capital through new saving, and the great gains of some profiting by the losses of others, accompanied by a renewed and aggravated tendency to the same state of things as before.

4. That without the gold discoveries, the last railway outlay and the crisis of 1847 would of themselves have produced, and that, in fact, there has now again arisen, precisely that condition of capital and industry which has been so often experienced that condition, namely, of abundant monetary facilities, in which the heralds and precursors of another delusive and ruinous excitement are multiplying on every side.

5. That the effect of the new gold presenting itself here in the

form of money capital disposable for loans, and constituting an addition to that which without it would be in excess, must violently aggravate all the causes leading to speculation which it finds in existence.

To the above the remark may be added, that a powerful, though painful, corrective to speculation, heretofore arising from demands for gold from abroad, is not likely to come into play in the present position of foreign countries, and especially of France and the United States, where the hoards of the precious metals are as much higher than their usual average as our own accumulations in the Bank of England.

Theory of Depreciation.

Connected with the foregoing, and forming what may be called the Theory of Depreciation, the following conclusions are also regarded as established:

1. That the new gold, so far as it can enter the English currency, must do so chiefly through an action on prices and incomes, arising immediately from increased prices being paid for English commodities, or from an increased sale of them, or from both, in markets out of England.

2. That whatever be the addition thus made to the aggregate of money income in England, only a small fractional proportion of that amount of new gold will be drawn into the

currency.

3. That the amount of gold brought here to be spent as income is too small to be of any account.

4. That all gold brought otherwise, namely, by owners, to be invested or employed for profit, or as it will chiefly come in payment, direct or indirect, for exported goods, will, excepting the profit, be new money capital in its primary form, and will enter into competition with existing disposable capital for all kinds of investments.

5. That such capital can only affect prices by first increasing the aggregate of income, already pressed upon beyond its

power of profitably receiving or returning new capital, and that the efforts of the new capital to find employment are thus likely to produce repeated speculative movements of a convulsive and disastrous character.

Finally, the survey of our position has led to the conclusion that the only effectual preservative against such evils is to be found in the diffusion amongst the community at large of a higher tone of moral feeling, and a more correct perception both of the nature of the danger and of the mode of its approach.

In the second part of this work, the attempt will be made to show that, though legislation cannot avert, it may diminish, the evils of speculation, and that the foregoing conclusions warrant the adoption of a financial policy, which, though perfectly consistent with free trade in the food of the people, is not consistent with the exaggerated maxim of leaving the whole direction of industry to private interest, and is different from any that is at present popular.