brought into productive use by sheep and cattle farming, it is improbable that the total area of agricultural land has altered very much, in spite of the variation in the corn acreage, which clearly shows that the whole area has not been consistently used for a uniform purpose. The diminution of the agricultural population merely indicates that less labour is being put into the land. Some account must, however, be taken of the improvement in mechanical appliances and the progress of science. Since agricultural rents, contrary to the agricultural population, absolutely increased in amount, although only slightly, the annual produce of agriculture must have increased, or it would not be possible to derive an enhanced rent from the land. The position of the agricultural landowner has thus improved during the century, in spite of the decline in number of agricultural labourers and the actual decline of the industry as a proportion of the total industrial undertakings of the country.

Apart from this absolute increment which has accrued to the landlords from the agricultural industry itself, there has been an increment from each of several other sources, and, although that has no immediate reference to the present subject, some indication of its nature may not be inappropriate. The most obvious is derived from house property. The rent of houses assessed to income tax rose from not quite 14 millions 1 in 1811 to 196,300,000 a century later. As a percentage of the total income, it has risen from just under 9 per cent. to about 20.5 per cent., while the population itself has only increased from 10 millions to 36 millions. The increment in rent may be derived from two sources: first, an actual increase in the number of houses, and second, from an absolute increase in the rent of each house; both these factors have influenced this figure, and it is quite clear, from the ratio between the increment in house rent and the increment in population, that the value of house property has increased about four times as rapidly as the population.

The fact that the total income assessed to income tax rose from about 155 millions 1 to about 948 millions during one hundred years shows to what extent the industrial undertakings of the country have enhanced the annual income. The total income has thus increased about 600 per cent. This, however, bears but little relation to the activities of the agricultural land

1 These figures are not those of an isolated year, but are the average, so far as that can be obtained, for the ten-year periods 1807-16, 37-46, 47-56, etc., grouped about each decennial census. They are taken from official publications.

owner, whose position is at least on a parity with that of his ancestors. Although the assessed rental of agricultural land is very little greater than it was one hundred years ago, it is now almost identical, in its relation to the total assessed income of the country, with the percentage of population employed in the industry.

Table showing Relation of Number of Persons employed in Agriculture to Total Population and Average Rental of Land and Houses for each Decennial Period in relation to Average Total Income assessed.

1 The census for this year gives number of families only, and, as was then usual, the figure has been multiplied by five and, alternatively, by three.

2 Number of persons over ten years of age, and so for each census to 1911. 3 Increase partly due to amended instructions and consequent more accurate returns.

The average in this case is one of six years only, as no official figures can be discovered for the earlier years.

The average in this case is one of two years only.

• The average in this case is one of seven years only.

N.B.-The average total income has been taken for the same years as the rents, and consequently is for the same number of years in each of these three

cases.

G. E. FUSSELL

THE BEGINNINGS OF THE LIVERPOOL COTTON TRADE In a previous article (ECONOMIC JOURNAL, Vol. XXXIII. pp. 362-373) the recorded beginnings of the Liverpool cotton trade were carried back to 1735. The present addendum is intended to adduce fresh evidence which relates to a period even thirty years earlier. The interest of this is not to be found in the mere prosaic business of attaching a date-label to a particular

phase of commercial development, but rather in the fact of these early signs of an interdependence, often overlooked, yet of prime importance in regard to the manufacturing changes of the eighteenth century, between the commercial emporium and its industrial hinterland.

The triangular trade of 1735 between Liverpool, Africa and the West Indies has already been described, and it was previously suggested that such trade might have been in existence after the gradual relaxing of the African Company's privileges, a process which apparently became more clearly marked after 1730. Support was given to this suggestion from the accounts of the commencement of the Liverpool slave trade, given by local historians: 1 in 1730 fifteen ships were despatched, whereas before 1730 only a single small venture in 1709, on the part of a barque of 30 tons, is recorded. The African trade, however, had been opened in 1698 to those who paid certain duties to the Company, and there are now indications 2 that Liverpool ships were taking some part in the trade in 1700 and 1701, perhaps in accordance with the conditions offered, perhaps as mere interlopers. The latter is the more probable, and may account for the absence of direct evidence.

The ships which sailed in those years were specially instructed to bring home sugar and cotton from the West Indies. During the succeeding two years cotton was certainly received and marketed at Liverpool, but whether as the product of the triangular trade, or of a direct trade with the West Indies, does not appear. What was probably a typical consignment is described in a letter of 1703: "102 hhds Sugr. 19 baggs cotten & 10 tuns logwood as also some matters on all yo' privat adventures." 3 It is unfortunate that this excerpt and those that follow are taken simply from the letters received by one merchant from the three or four others who were concerned with him in his ventures, and that, therefore, though they give a fragmentary outline of the course of trade, they give no indication of its volume.

A letter of 1702 tells that " ye Cotton men not yet come to town to pay their money,' "4 and the custom seems to have been

1 Cf. T. Baines, History of the Commerce and Town of Liverpool (1852), p. 694; J. A. Picton, Memorials of Liverpool (1875), i. p. 193.

2 Norris Papers, ii. 567. The Norris MS. are best known from the selection of the more interesting letters contained in the ninth volume of the publications of the Chetham Society (Old Series). The present quotations, however, are from some of the unpublished letters which have been hitherto passed over.

for the Manchester manufacturers to come to Liverpool and make their purchases direct. It was not a business lightly to be undertaken. Even seventy years later, when coaches were running, the journey took nine hours, and manufacturers travelled one day, supplied themselves with cotton on the next, and returned to Manchester on the third day.1

The century whose close saw the dominance of an established Liverpool market saw also, at its beginning, the existence of the clumsiest conditions of buying and selling. The method of bargaining was crude, and the Liverpool merchants were evidently more accustomed to the handling of tobacco-then regarded as the staple import and sugar than of cotton. In illustration, a letter of 1703, relating to a sale of water-packed cotton, may be quoted: "I have sold about 10° [cwt.] of Dam[aged] Cotton at 7d p. lb. you'l say a poore price one of ye baggs wch was about ye bulk of a pack of Tobacco weighed 3o 2qrs it was not worth ld per lb had it come clear of Damadge Mr Tayler would have given 12a p.lb.' Since cotton was reported to be 10d. per lb. in the West Indies during the earlier part of the year, it was not a very promising trade.

"2

A letter from Mr. Edward Byrom 3 of Manchester shows the reverse side of a similar bargain, made earlier in the year: "Yesternight I returned from London to find yrs of 6 Aug Noting you Draw on mee for thirteen pounds . . . & that for the rest we shall agree amicably. I hope so too & the reason is so great on my part it strange to mee Merchts of such honnor as yr Partners are should need Persuasion to do a thing of that Reason & Equity truth is I have already paid you for more Neat Cotton than ever I recd & this 13 is in great part for tare & Damaged Cotton of no account to mee." The postscript which follows is of special interest: "I Presume you are satisfyed it is the Custom in London to alow 10 p.ct upon Cernes & in yr Bill Is but 4 & afterwards you but counted it 6 p.ct to mee So judge you the matter." 4

"Cerne "-literally "circle "-must here be used in the sense of "covering" or "binding," and it may be a reasonable assumption that an allowance "upon cernes" is simply another expression for tare.' If the statement be correct that the London

1 L. H. Grindon, Manchester Banks and Bankers, p. 13.

2 Norris Papers, ii. 289.

It seems not unlikely that this was the same Edward Byrom who was a member of the famous Manchester family of merchants and linen-drapers, and was the father of John Byrom the poet.

▲ Ibid., i. 227.

allowance was ten per cent., it seems excessive and over-generous; an allowance of four per cent. was probably more reasonable if the customary rate of tare was to correspond with the actual tare. On the other hand, it is unlikely that there was at that time much uniformity in the materials and methods employed in bagging the cotton. Postlethwayt's Dictionary (1766) declares that "the tare abated in the Antilles is three in the 100."

There is no further evidence of the Liverpool custom until the end of the century; an examination of some existing accountbooks of that time shows that then Liverpool brokers made allowance at the rate of one in twenty-eight. The maintenance of such a ratio depended chiefly upon its admirable simplicity: the gross weight of the consignment-less the "draft allowance " of one lb. per bag—was translated into quarters avoirdupois, and abatement made at the rate of one lb. for each quarter. STANLEY Dumbell

University of Liverpool.

CURRENCY AND BANK CREDIT

It is highly interesting to readers of the EcONOMIC JOURNAL to have before them the views of Prof. Cannan and Mr. Keynes on an acute problem of the day; and disconcerting to find that while as might be expected from the high standing of the controversialists—there is nothing one would venture to describe as incorrect in either article, they lead to contradictory conclusions. May I, with due diffidence, offer a contribution which, starting from a different point, seems to suggest a partial reconciliation ?

The point of departure is to ask, What are the dangers from which we have to protect ourselves? Are we thinking of an indefinite inflation such as that which took place in Germany; or that which France is now endeavouring, with doubtful success, to avoid? or of an exaggerated and disastrous trade boom such as that of 1919-20? or are we thinking of plans to minimise the disturbance due to trade cycles of the moderate character known to the nineteenth century? The intimate correlation between bank credit and the supply of cash is not in dispute; it is rather a question of initiative, and perhaps the question in the minds of the two writers is not quite the same, on account of the practical application which is subconsciously present to each of them.

If we were afraid that the British Government would embark on a career of extravagance, and finance itself by the use of the