120 REPORT— 1866. 



■wliicli, according to our present and in all probability our future appliances, such 

 deposits can be rendered available. It is farther admitted that the source of 

 motive-power is heat, and that coal is, for practical pui-poses, the sole material 

 from which heat can be derived. Should the consumption of coal in this country, 

 it is argued, progress at the same rate as now, the supph' will be exhausted at no 

 distant date, and with such an exhaustion there must ensue a cessation of most of 

 those industries which have hitherto characterized us. So energetically was this 

 alami seconded by one of our most distinguished economists, that a financial 

 operation was proposed, with a view to palliate some of the evils which might 

 be likely to ensue from such an event. 



It cannot of course be denied that a limited quantitj' of any natural product, the 

 demand for which is incessant, must ultimately be exhausted. But the real ques- 

 tion, it seems, is, when will the scarcity -price operate on consumption, and when 

 it does so operate, in what will the saving be etfected ? That the scarcity-price 

 is not yet operative is manifest from the increase in the aggregate consumption 

 of coal, and from the increased production of metals ; for it is in the smelting of 

 metals that the largest consumption occurs. Nor can it be doubted that when the 

 saving becomes necessary from enhanced price the economy will be exercised in 

 this direction. But the "total value of aU metals produced in this country in the 

 year 18G4 (the largest in value, though not the largest in anioimt, yet recorded) 

 was worth little niore than 16 millions, a great but not a dominant quantity in the 

 annual aggregate of British industry. It would seem, then, that the alarm, if it 

 be not premature, is certainly excessive ; that there will be abundant warnings of 

 future scarcity, and necessaiy economies in dealing with the residue, long before 

 that residue verges to exhaustion. 



Themateri al wealth of this country, it may be observed, greatly as it is related 

 to its manufactures, one of the raw materials of which is locally limited, is for 

 more fidly derived from its geographical position, and thereupon its trade, the 

 advantages and aids of which are permanent. Occupying, as Great Britain does, 

 the most central position between the New and the Old "\Vorld, it is and will be, 

 so long as its people are industrious and resolute, the highway and the mart of 

 nations. Its commerce, by virtue of causes which cannot be reft from it, increases 

 at a far more rapid rate "than its manufactiu-es ; and if that commerce remain 

 imfettered and uushaclded there seems no limit to the width which its markets 

 may attain. 



It would not become me, in an introductory addi-ess, to enter on the vexed ques- 

 tion of the cun-ency, and in particular to criticise the Act of 184-i. Opinions ai'e, 

 as is well known, broadly and sharply di-s ided on that famous measure. The Act, 

 as my readers are aware, is restrictive. It interferes peremptorily, on giounds, as 

 was asserted bv the late Sir liobert Peel, of the highest public expediency, with 

 the freedom of issuing paper credit. It secures the convertibility of a paper cur- 

 rency, not by the circumstances which a bank might be supposed to interpret for 

 itself, by guarding on its own account on the possible risk of seeing its paper dis- 

 honoured, but by the rigid yet not imbroken rule of a proportional issue. With 

 some thinkers this system is lauded as one of consummate wisdom ; with others 

 it is censured as one of needless and mischievous interference with that part of the 

 machineiy of trade which would be self-adjusting without it and which is not really 

 supported by it. As a rule, indeed, when one set of persons, confessedly competent 

 to form a judgment, decide that a law dealing with commerce is wise and usefid, 

 and another set of persons equally competent declare that it is foolish and mi.s- 

 chievous, it will generally be found, in course of time, that the latter are in the right. 

 Such was the case with the Colonial Svstem, with the Corn Laws, with the Naviga- 

 tion Laws, with the Sinking Fund, with the laws regulating or prohibiting the ex- 

 portation of Coin, with Bounties, with Export Duties, with the Favoured Nation 

 clause in Commercial Treaties. 



It has been slated, but not I think proved, that the cause of the present crisis 

 has been excessive, or over-trading. As far, however, as can yet be discovered, it 

 seems to be due far more to imprudent action on the part of certain banks, who 

 have made advances at long dates, or on securities not readily convertible. The 

 distrust which has followed on the failure of some among these banks has led to 



