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circumstances, the cultivation, so far as those are concerned, will be discontinued. So, on the other hand, if prices for some length of time be more than ordinarily remunerative, there will be an extension of the area of cultivation, and, according to the degree or proportion in which these causes of diminished or extended cultivation may be supposed to operate on the total of the sources of supply, will be the greater or less influence on the ultimate range of prices.”

In short, cost of production only affects prices when it becomes so high, relatively to the price which demand creates, as to cause those sources of production, which can not afford to produce at that price, to stop producing altogether, thus diminishing the supply. But in this case it is not the cessation of production that affects the price, but it is the price that causes the cessation of production.

46. Prices Rise in Disproportion to Scarcity.-Tooke confirmed by actual facts the theory of Gregory King that a decided deficiency of supply, especially in the case of breadstuffs (corn), is attended with an advance in price very much greater than the degree of the deficiency. The effect of this is to make the years in which the smallest agricultural crops are produced the most profitable to the agriculturist, and they bring him the largest returns, thereby supplying him with a profit on his capital which stimulates him to the largest possible production the next year, and so tends to bring on those years of abundance which bring relief to the food consumers, but debt and distress to the farmers. King had stated the ratio of increase of price to scarcity of crop as follows :

So that a deficit of one-third would treble the common price, and a deficit of one-half would raise it five-fold.

The very singular result which this rule, if true, would involve, is thus stated by Mr. Tooke*: "If the advance in price, from deficiency, increase the aggregate value of the smaller quantity, in some instances, to double or more than double the amount in

"Thoughts on Prices," p. 99.

money which the larger or average quantity would have produced, the fall in price from abundance may reduce the value in money of the larger, or more than average quantity, to a sum considerably less than the smaller would have produced. Thus, suppose that, with bad or scanty crops, the produce of all sorts of corn were 28,000,000 of quarters, which, one kind with another, fetched 60s. per quarter, or £84,000,000; and that, upon the full restoration of the ordinary produce, or 32,000,000 quarters, the price fell to the average rate of 40s., the 32,000,000 of quarters would be worth only £64,000,000, or less by £20,000,000 than the smaller quantity had been worth. In the same case, by the same sort of interior arithmetic by which the £20,000,000 additional, paid by the consumers to the producers of corn, had been considered as the creation of so much wealth, the mere cessation of that payment, by the restoration of an average quantity of produce, would be considered as the destruction of so much national capital."

This notion that scarcity of production might be an increase of capital, and abundance of production might work a diminution of wealth, would seem frightful to Bastiat, and to all who hold that glut can not be poverty, and scarcity can not profit the

consumer.

But Mr. Tooke applied the test to several periods. He found that in 1799, the deficiency as stated from the best data, in a Report of Committee to the House of Commons, was less than onefourth as to wheat, and still less as to other grains, the average crop being 8,000,000 quarters. Yet the actual rise in price of produce by the deficiency was from 50s. 3d. to 104s. 4d. average for the whole crop.

Here was a gross profit to the farmers of £11,000,000, by reason of being deficient 2,000,000 quarters on their wheat crop alone. But as the other food crops are double the value usually of the wheat crop, but were affected by a like rise in price, Mr. Tooke estimated the gross profit to the farmers on all at £33,000,000. One mark of an extension of cultivation, at this period, was an increase in the number of inclosure bills or acts of Parliament for inclosing land previously common. These bills rose from 63 in 1799

to 122 in 1801.

In 1617, with an average crop, the price had been 43s. 3d. (aver

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age). But in 1620-'21 abundant crops caused the price to fall to 278. As the result, Mr. Tooke shows, the whole crop went off at such a sacrifice that the farmers were generally unable to pay any rents at all, and the greatest suffering and distress prevailed throughout the farming populations.

Mr. Tooke finds that the enormous prices which attended England's contest with Napoleon, and made the farmers rich, were not due so much to the wars, or even to the inflation which attended them, as to the bad seasons. "In 20 years, from 1793 to 1812, included, there were 11 years of greater or less deficiency of produce, with long and severe winters."

Similar facts were shown by Henry C. Carey concerning our cotton crop, and Henry Carey Baird has pointed out that the short grain crop of 1881 brought to the farmers of the United States $25,000,000 more than it could have brought had it not been 700,000,000 bushels less than the average crop.

47. Permanent and Temporary Cheapness. - Cheapness in the sources of supply is more important, to every purchaser or purchasing country, than cheapness in the actual supply at any moment. The tendency of agricultural prices, in bad years, to rise to a point which would make the short crop more profitable than the average crop, and so furnish the farmers with a larger capital, and better inducement to plant largely the next year, acted as a stimulus to English, Irish, and Scotch farming, until the repeal of the corn laws withdrew protection against foreign competition from the British farmers in 1846 to 1849. Short crops would be followed by such increased planting, and dear meats by such increased cattle rearing, that, though the population never increased in so rapid a ratio, in the three kingdoms, as from 1780 to 1846, the farmers kept even pace with the consumers. There was no impairment of the permanent sources of supply. It was expressly to prevent this remuneration of the farmers in bad seasons, through a rise in the price of corn, that the duties on corn were repealed. They so attained the desired result that, after 1846, bad seasons to the farmers have not been attended by compensating prices.*

* Thus Broderick ("English Land and English Landlords," p. 273) says: "The agricultural distress of the year 1879-'80 will long be memorable in the economical records of the country, and may probably be remembered as marking a crisis in the history of the English land system. Its most obvious and principal cause was the occurrence of several bad seasons in succession, culminating in the coldest, wettest and least genial spring and summer that had been known within living memory. But this

On the contrary, each succession of bad seasons has effected a permanent displacement of British in favor of foreign farmers, as the ordinary sources of supply to the British people. The aggregate value of farm products, not including groceries, liquors and luxuries for the table, imported in Great Britain, quadrupled in 20 years, rising from £24,359,598 in 1859, to £95,996,249 in 1878, while the value per head of population had more than trebled, rising from 17s. to £2 16s. 10d. This, of course, implies that British cultivators are not only receding from furnishing a part of the supplies which they formerly furnished, but that they are furnishing a smaller aggregate value. The experiment of free importation of breadstuffs in Great Britain, therefore, is that of getting an immediately cheaper supply of corn, by demolishing their domestic sources of supply.

The actual cheapening in the price of breadstuffs in conse. quence of the repeal was both so transient in duration and so small in amount as utterly to falsify the predictions on which the measure was passed.* It is possible, indeed, by selecting peculiar periods, before and after the repeal, to seem to show that the repeal lowered the price by a third, or did not lower it at all, but raised

calamity was greatly aggravated as regards the interest of farmers, though mitigated as regards those of the public, by a singularly low range of agricultural prices, as well as by a general sense of insecurity due to a vast expansion of foreign competition. *Broderick, in "English Land and English Landlords," p. 292, says: "When the Corn Laws were repealed, it was never anticipated that agricultural prices could rise to their present level, and many rents were fixed upon the assumption that wheat in future would command an average price of 40s. per quarter; barley, 308.; oats, 208.; wool, 18. per pound; and butter, 10d. or 18. per pound, no account being taken of milk, for which the demand was then infinitely less than it now is."

Shadwell, in "System of Pol. Econ.," p. 499, says: "When the Corn Laws were repealed, the farmers did not cease to obtain remunerative prices for their produce, though they did to some extent abandon corn-growing in favor of pasture. This change was carried out to so large an extent in Ireland as to produce most serious consequences, and free trade may be justly charged with the great depopulation of that island which has taken place during the last thirty years. The Corn Laws placed so great an impediment in the way of the importation of foreign corn that they held out a great inducement to grow it in every part of the United Kingdom; and Ireland, which is better fitted for a pastoral country, was by their operation converted into an agricultural one. Agriculture requires that a much larger number of laborers should reside upon the land than is necessary in pastoral industry, and thus the effect of the Corn Laws was to cause that remarkable increase in the population of Ireland which continued as long as they were in force. When they were repealed, agriculture in its turn gave way to pasture, and the population of Ireland rapidly diminished. The potato blight and its consequent famine were the occasion of the commencement of the depopulation, but such a temporary disaster can not have been the cause of what continued long after the occasion had passed away. If, then, depopulation is to be considered an evil, free trade has certainly inflicted an evil on Ireland; but it must be re