THE COLONIST. NELSON, TUESDAY, OCTOBER 18, 1861.

Colonist, Volume IV, Issue 415, 15 October 1861, Page 2

THE COLONIST. NELSON, TUESDAY, OCTOBER 18, 1861.

'Three Effects of American Confusion upon England,' is the tide of a rather elaborate article in the Economist —a paper devoted to financial, commercial, and manufacturing matters, embracing also the whole range of political and social economy, and, as far as its Whiggishness will allow, international law; it has acquired great reputation throughout Europe on these sub' jects, and is universally and authoritatively quoted. The writer says that he had long since foretold his readers that, whether there would be civil war or not in America, there would be civil confusion. No great prophet was required to hint this of any large commercial or manufacturing country. In our own time England has been in civil confusion a score of times or so one way or another. :

He then inquires what effect such civil confusion will have on Great Britain. The first effect is the entire stoppage of the ordinary commercial relations between the North and the South. The Southern are the great exporting States, and the northern are the great hrqjorting States. Thus a debt is created from all the world to the South, and an opposite debt the whole world from the North.

In the three months ending 31st March, 1861, English imports from the South were '£9,136,186, whilst the exports to the South amounted only to £174,566. While in the same period the exports to the North from England have been £3,922,133, and the imports £4,697,868. Thus it will be perceived that it is a great fallacy to imagine that a country to be rich or happy must be a great exporting country. But this is an intricate question of political economy, which we merely mention at present, and give two examples to show that extreme poverty of the people is compatible with ail enormous export trade—lreland : and Poland. The latter was formerly the granary of Europe, yet the majority of her people were Wretchedly poor; the misery of the former has become proverbial: we know social and political causes existed which would in part account for this; but this does not alter the fact that exporting countries may be very poor and very miserable. The writer then says :— ■■..■..

How, then, are the two ' indebtednesses' cancelled, and how are the books closed ? In the most natural way possible. s By the North selling to the Southland the fcouth buying of the North. The South grows raw material, which it cannot manufacture, which it cannot enjoy, which it' cannot eat. It buys of the North all its luxuries, almost all its clothing, and: a very considerable part of its provisions. It obtains through the brokerage and agency of the North the goods of the rest of the earth. Such, at least, was the ordinary course of trade before the late disturbances. A.s might be expected from two communities so closely related by birth and politics, and so opposite in economical conditions and industrial habits, their commercial intercourse was one of the most unimpeded, beneficial, and important in the civilised world.

The reason why the southern inhabitants were such good customers of those of the north is thus explained:—

A less happy circumstance cemented tlie Union still more closely. ' The planters ' of the South, says her Majesty's Secretary of Legation truly, as all acquainted with them will allow, ' like the planters of the West India Islands in the times of slavery, are very improvident. They live in a style of reckless extravagance, and frequently spend the whole value of their crop before ifc has been brought to the market. The luxuries they require are most easily procured in the North, where the merchants give them credit on tile security of a bill upon the factors in the South who will sell their produce.'

Lightly come, lightly go. Credit and Slavery, or next to slavery—very lowwages, which will always keep a country poor and miserable, as the majority of the white population were prior to the war now waging there—poor, proud, and ignorant, ashamed to labor because slavery was there; whereas in the north labor is honorable and the laborer honored.

The writer next gives an elaborate account of the effect of the unhappy disruption on the banks and its paper currency, which everybody knows is one of the main mediums of trade in the States. As an example of the effect it has had on farming produce it may be mentioned that in Chicago corn dropped from 45 to 24 and wheat from 115 to 80 cents per bushel; whilst in the Illinois things are worse still. Let our warmongers ponder on this.

Of course, such a state of things is only possible where specie payments have been suspended, and the currency has fallen into consequent disrepute. In New York the banks stand firm, and their reserve in specie is more ample than ever it was. But in the rude West, and perhaps in what we must now call the, unknown South, there has been and is. a great depreciation of the old paper curren6y. The effect of this upon England must depend upon the extent to which it is carried. It is, as the writer from whom we have quoted expresses it, a golclen'opportunity to ' introduce gold.' Prices measured in, the precious metals which everyone is in search of, are forced down to very small figures. These, low money prices give a great stimulus to exportation ;' they tempt gold from other countries to buy corn, and gold in., consequence may flow thither with rapidity.

It is then stated that a precise statement of the extent to which, the present depreciation of the paper currency will have on the English gold market cannot be expected, but he

Can only lay down the familiar doctrines, that a 'subsidiary paper currency miist cause a demand for the primary currency of tho precious metals; that when the precious, metals -are very scarce, money prices—prices that are measured in those metals— must be very low: that such low prices act as a stimulus to exportation and as a discouragement to importation, and tend In both ways to attract the desired metallic money from several places and in unusual quantities.

We believe the Bank of England has not yet suspended specie payments, which she has heretofore done under somewhat similar circumstances, when the guinea was wonh 275.; so far from this being the case, in our latest advices from England it is announced that the Bank had lowered her discounts to five per cent. •

■The last and main difficulty, the writer says, is cotton. The South say that cotton

shall only leave the south by one exit, and the north says that cotton shall not leave the south by that exit. After alluding to the folly of the South smothering her own trade, the writer says :—

It sounds liko a bitter jest, but it is capable of documentary proof, that a somewhat numerous and an influential section at the South do not wish us to have their cotton. They have contracted by a long and strange history, and from a peculiar and lamentable state of society, an exaggerated idea of their own importance. Writers in the most respectable Southern journals advisedly say, that if England and France cannot obtain their cotton in consequence of the blockade imposed by the North, both England and France will interpose and "remove the blockade. The South fancy that we shall go to war in its aid, in conjunction with the French Emperor, if only our supply of raw material is straitened and obstructed. With this strange fancy in their minds, they are not inclined to send us their cotton by occult and recondite means ; they are not inclined to invest ingenious expedients for* breaking the blockade. On the contrary, they say, ' Let the blockade be effectual; the stricter the better i the sooner it will be over ; the sooner will rescue from Europe reach us; the sooner will the strong hand of the ' Old Country' remove all our difficulties.' • ■..

We learn, in the course of the article, that the cotton crop of the year is for the most part housed; and• the writer finishes his able but dry article by saying that the 'loss of one great commercial country: is the loss of all—that if one suffer, all others suffer with it in some degree' and to some extent—that we must not expect to be exempt from the calamities of those who are in a mercantile sense our neighbors.' If the last year's cotton crop is housed, England will have it somehow, to keep the busy hive of the north in wpjk; and" for the future she must look to other quarters for her cotton. Great attention has been paid to the growth of cotton in the East Indies/ where labor is plentiful and the population industrious. Our neighbors in Australia too are on the lookout, and great hopes are entertained that Queensland will prove a fine cotton-growing country; but then labor.is expensive and not plentiful. Some experiments have been tried in New South Wales in growing cotton, and it is said that the crop will pay better than maize. Lord Brougham brought the subject of the cultivation of cotton in the colonies forward in the House of Lords, and declared it to be absolutely necessary, independent of ~ the state of affairs in America, that her Majesty's Government should recommend the different colonial governments to encourage by all means the growth of this great staple. He: had received a sample. grown in Jamaica which would be amply, remunerative after paying all expenses: 600 lbs. could be grown on an acre, which at sixpence even would pay, leaving a clear profit of £8 an acre. Other noble lords likewise insisted on the necessity of immediate 'action being taken ' on this matter. Oar neighbors too seem alive to the benefit of taking advantage of the folly of war by an extensive cultivation of tobacco in Australia, as this product has been forbidden to be raised this year in Virginia—the land being required to grow corn, fo feed soldiers instead of industrious citizens. Gold too is being discovered in almost every British possession under the sun.

So that we think the writer is.., somewhat too gloomy in his anticipation of the • Three Effects' on Great Britain. It will be only turning her commercial relations to her own colonies, which will redouble their energies to produce everything the old country requires, and thus enable her still to maintain, her honorable position as the ' Workshop of the World.' '