Letter to the Right Honourable Lord Viscount Melbourne on the Cause of the Higher Average Price of Grain in Britain than on the the Continent. Grant Suttie George

      Letter to the Right Honourable Lord Viscount Melbourne on the Cause of the Higher Average Price of Grain in Britain than on the the Continent

      LETTER

      The average price of grain in Britain has, for a long series of years, been higher than in the neighbouring countries of Europe. It is of the utmost importance to ascertain the cause or causes of this higher price. The following appear to be the principal: – 1st, Scarcity, the effect of monopoly; 2d, The higher rate of taxation in this than in the neighbouring nations; 3d, The higher rate of the real wages of labour in this than in the other countries of Europe.

      If it can be proved, that the first is the only cause of the higher average price of grain in Britain, there can be no doubt that it is the interest of every class in the community to have it removed: If the second cause, the higher rate of taxation in Britain, has the slightest influence on the price of grain, the question assumes a very different aspect: And if the third cause, the higher real wages of labour in Britain, has any connection whatever with the higher average price of grain in Britain, the question of the Corn Laws would then evidently connect itself with the best interests of the country. Those who advocate the abolition of the Corn Laws, assume it to be proved, that the higher average price of grain in Britain arises from scarcity, the effect of monopoly: as, therefore, the cause of the higher price of grain in Britain would be removed by the abolition of the Corn Laws, they assert that the price here would be brought nearly to a level with the price on the Continent, and that the evils which they consider Britain labours under from a scarcity of food would be removed. Now, I believe it will be admitted, that at no period of the history of Britain has the average price of grain so far exceeded the price on the Continent as during the present century; and I think it will also be admitted, that at no period of the history of Britain, or of any other nation, has so rapid an increase taken place in the amount of the population, in the wealth, and, above all, in the amount of taxation actually levied from the people. The state of the case is this: It is asserted, that, for the last thirty-eight years, the inhabitants of Britain have been labouring under the evil effects of a scarcity of food, as proved by the higher average price of grain in Britain, when compared with the price on the Continent. During the same period, the population has increased in a greater degree than during any former period; and the wealth of the country has increased to such an extent as to excite the wonder and envy of the world; and the substantial nature of this wealth is proved by the amount of the revenue raised from it by taxation, greatly exceeding the revenue of any other country. This view of the question must, I think, dispose any dispassionate person to doubt, that an absolute scarcity of food for the last thirty-eight years in Britain has been the sole cause of the higher average price of grain during that period. In order to prove that a certain effect is produced by a given cause, it is desirable to shew, that the same effect could not be produced by any other cause; and this naturally leads me to consider how far the higher average price of grain in Britain may arise from the other two causes. I think it is admitted, even by those who advocate the abolition of the Corn Laws, that the price of grain is influenced by taxation in the same way, but only to the same extent, as the price of manufactures. They admit that the wages of the labourers must be increased in proportion to the increase by taxation on the price of commodities consumed by them; and the great leading cause of complaint at the present moment on the part of the abolitionists and manufacturers, is, that in all articles requiring much manual labour, Britain is at present, and must continue to be, undersold in future by the cheaper labour of the Continent. Now, it will not be denied, that manual labour enters to an infinitely greater extent into the production of food than into the production of any other manufacture. If, therefore the manufacturers complain, with justice, that the higher rate of taxation, by raising wages, prevents them from competing with continental manufacturers, the same argument applies to the agriculturist, only with infinitely greater force, in proportion to the trifling assistance which machinery has as yet afforded to manual labour in the production of food. The whole population of Britain would not be able to do for the manufacturers in a year what the steam engine does for them in a day; but coal, the food, or moving power of the steam engine is absolutely cheaper in Britain than in any country in the world. If it is admitted that the higher rate of taxation has any influence whatever in raising or maintaining the price of grain in this country, it must also be admitted, that some degree of protection is just and necessary. With respect to the higher real wages of labour, if there should appear the slightest ground for thinking that a higher rate of real wages has any tendency to raise or maintain the average price of grain in Britain above the average price of the Continent, any attempt to reduce that price by enabling foreign grain to supplant that of British growth in the home market, must be deprecated as an experiment of the most dangerous nature for the labouring classes of the community. I am aware that I am not entitled to assume, that the real wages of Britain are higher than the real wages of the Continent. Those who advocate abolition of the Corn Laws, point unceasingly to the difference in price between the principal continental markets, such as Hamburgh, Danzig, Berlin, and this country. I might, in the same way, point to the wages in Britain as being at least four times the wages of these countries; but neither would be a fair mode of arriving at the true state of the case. Divide the quarter of wheat, at the average price of each country, by the wages of each country, that will give the real wages of each. Fortunately, Mr Jacob's report on the Corn Trade affords the most satisfactory means for instituting a comparison both as to the price of grain and the rate of real wages in Britain and in those countries. From his report it appears that the average price of the quarter of wheat for five years, ending with 1824, was 27s. in Prussia. The average price of Britain was, for the same period, 55s. The wages of Prussia are stated to be 2s. 6d. per week, and of Britain, 10s. per week. The real wages, therefore, the quantity of wheat the labourers could purchase, was double in Britain what it was in Prussia. In a national point of view, labour is the true standard of value; if it is admitted that labour in Britain exchanges for a greater quantity of grain than it does in Prussia, it follows that grain is cheaper in Britain.