HIGH PRICES DURING THE FRENCH^WARS 211 



obtained either by improved methods of cultivation or by bringing 

 untilled land under the plough. The one method powerfully 

 stimulated the progress of agriculture, which may be summed up 

 in increasing the yield and lowering the cost of production ; the 

 other was the valid justification of the rapid enclosure of wastes, 

 open-fields, and commons. Much of the land that now was sown 

 with corn could only be tilled at a profit when prices were high, 

 because the outlay on its tillage was greater, and the return from 

 its cultivation was less, than on ordinary land. Yet, as prices then 

 stood, even this inferior soil was able to bear a rent, and by each 

 step towards the margin of cultivation, the rental value of land 

 of better quahty was enhanced. Thus Napoleon proved to be 

 the Triptolemus or patron saint not only of farmers but of land- 

 lords. 



Another cause of the high prices of the time was the state of the 

 currency. When gold is cheap, commodities are dear. Any great 

 increase in the production of gold for a time raises prices ; the 

 sovereign becomes of less relative value ; it buys less than before, 

 and more gold has to be paid for the same quantity. But this 

 direct effect of gold discoveries was not then in operation ; it had 

 spent its force, and at the close of the eighteenth centur}^ did not 

 materially affect prices. Similar results were, however, produced 

 by the immense extension of that system of deferred payment 

 which is called credit. Paper money was issued in excessive 

 quantities, not only by the Bank of England but by the private 

 banks all over the country. A new medium of exchange was 

 created. This addition to the circulating medium raised prices in 

 the same kind of way as an actual addition to the quantity of coin. 

 But there was this important difference. Paper money is only a 

 promise to pay ; it is only representative monej^, and, unless it 

 is convertible into gold, the credit which it creates is fictitious and 

 may be excessive. The immense development of manufacturing 

 industries and of the canal system, in the years 1785-92, required 

 increased facilities for carrying on commercial transactions. But 

 bankers, in their eagerness to create business, made advances on 

 insufficient or inconvertible securities, discounted bills \vithout 

 regard to the actual value of the commodities on which the trans- 

 actions were based, and issued notes far beyond the amount which 

 their actual funds justified. In 1793 came the first crash. The 

 Bank of England, warned by the fall of the exchanges and the 



