In the third place, the reduction of prices, and diminution in the remuneration of industry, which has taken place from the introduction of free trade, and the general admission of foreign produce and manufactures, raised in countries where production is cheap, because money is scarce and taxes light, to compete with one where production is dear, because money is plentiful and taxes heavy, cannot of course fail to be attended--and that from the very outset--with the most disastrous effects upon the general interests of the empire, and especially such of them as are engaged in trade and manufactures. Suppose that, anterior to the monetary and free-trade changes intended to force down prices, the annual value of the industry of the country stood thus, which we believe to be very near the truth:--
Lands and minerals, £300,000,000 Manufactures and commerce of all sorts, 200,000,000 ------------ Deduct taxes and local burdens, £80,000,000 Interest of mortgages, 50,000,000 ----------- 130,000,000 ------------ Clear to national industry, £370,000,000
But if prices are forced down a half, which, at the very least, may be anticipated, and in fact has already taken place, from the _combined_ effect of free trade and a restricted currency, estimating each at a fourth only, the account will stand thus,--
Land and minerals, £150,000,000 Manufactures, 100,000,000 ------------ Total, £250,000,000
Deduct taxes and rates, £80,000,000 Interest of mortgages, 50,000,000 ----------- 130,000,000 ------------ Clear to national industry, £120,000,000
Thus, by the operation of these changes, in money and commerce, which lower prices _a half_, the whole national income is reduced from £370,000,000 to £120,000,000, or _less than a third_. Such is the inevitable effect of a great reduction of prices, in a community of which the major and more important part is still engaged in the work of production; and such the illustration of the truth of the Marquis of Granby's observation, that, under such a reduction, the whole producing classes must lose more than they can by possibility gain, because their loss is upon their _whole_ income, their gain only upon that portion of their means--seldom more than a half--which is spent on the purchase of articles, the cost of which is affected by the fall of prices.