FINANCIAL CRISES 213 



sequently the materials which we imported were paid for in cash 

 instead of in goods, and the vessels which conveyed them to our 

 ports returned in ballast. There was thus a constant drain of gold 

 from the country. So long as the power to issue inconvertible 

 notes was sparingly used, the paper currency maintained its nominal 

 value. But from 1808 onwards such large quantities of paper were 

 issued, not only by the Bank of England but by country banks, 

 that it rapidly depreciated as compared with gold. It is probable 

 that from 1811 to 1813 one-fifth of the enormous prices of agri- 

 cultural produce were due to the disordered state of the currency. 

 In 1814, owing partly to the abundant harvest of the previous 

 year, partly to the collapse of the Continental blockade, prices 

 rapidly fell. A financial crash followed which caused even more 

 widespread ruin in country districts than the paroxysm of 1793. 

 Of the country banks, 240 stopped payment, and 89 became bank- 

 rupt. The result was a wholesale destruction of bank-paper, the 

 reduction of thousands of famihes from wealth to destitution, and 

 the gradual restoration of the equiUbrium of the currency. 



The seasons, the war, the growth of population, the disorders of 

 the currency, combined to raise and maintain at a high level the 

 prices of agricultural produce in Great Britain. At the same 

 time the prohibitive cost of transport prevented such foreign sup- 

 plies as were then available from reducing the prices of home-grown 

 corn. Circumstances thus gave British agriculturists a monopoly, 

 which, after 1815, they endeavoured to preserve by legislation. 

 Land was not only a most profitable investment, but the fate of 

 speculators had again and again convinced both landlords and 

 tenants that land was the safest bank. Thus business caution, as 

 well as business enterprise, prompted the outlay of capital on agri- 

 cultural improvement. Economic ideas pointed in the same direc- 

 tion. The doctrine of John Locke,^ that high rents were a symptom 

 of prosperity stiU prevailed among politicians. It was also main- 

 tained that high rents were a necessary spur to agricultural progress. 

 So long as land remained cheap, farmers rested satisfied with 

 antiquated practices ; the dearer the land, the more energetic and 

 enterprising they necessarily became. Young went so far as to 

 say that the spendthrift, who frequented London club-houses and 



^ " An infallible sign of your decay of wealth is the falling of rents, and the 

 raising of them would be worth the nation's care " (Works, ed. 1823, vol. v. 

 p. 69). 



