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Show 4·98 ON tf,HE IM1\IEDIATE CAUSE·S [e n. YJL The state of Europe and An1erica 1nay perhaps be said, in so1ne points, to rese1nble the case here supposed; and the stagnat~on whic~ has been so <Yenerall v felt and con1pla1ned of s1nce the \Var, ~ppears 'to me inexplicable upon the princip.les ~f those \Vho think that the po\ver of production Is the only ele1nent of \Vealth, and \V ho co~se qu en~ly infer that if the po\vers of production be Increased, wealth 'vill certainly increase in proportion. No~ .. it is unquestionable that the povvers of production \Vere increased by the c~ssation of war, and that more people and more capital were ready to be employed in productive labour; but notwithstandino- this obvious increase in the pow·ers of producti~n, we hear every where of diilicultics and distresses, instead of ease and plenty. In the United States of Arnerica in particular, a country of extraordinary physical resources, the diffi~u~ties \vhich have been experienced are very st~Ilong, and such certaiuly as could' hardly haYe been expected. ,.fhese difficulties, at least, cannot be ~ttributed to the cultivation of poor land, _res~nctions upon con1merce, and excess of taxSL~wn. i\.ltoo·ether the state of the cotnn1ercial world, since 5 . the war, clearly she\vs that son1ething else JS ne-cessary to the continued increase of \Vealth besides an increase in the po\vcr of producing. . · That the transition fro1n war to peace, of which so much has been sa1. d, I· s a tnan· 1 cause of the effects observed, vvill be readily allo\vcd, ?ut not as the operation is usually explained. It IS ge~e: rally said that there has not been time to tralis et SEC. X.] OF THE PROGRESS OF WEALTH. 499 capital frotn the eznploy1nents \Vhere it is redundant to those where it is deficient, and thus to restore the proper equilibriutn. But I cannot bring myself to believe that this transfer can require so n1uch titne as has now elapsed since the war ; and I would again ask, where are the under-stocked employn1ents, 'v hich, according to this theory, ought to be nun1erous, and fully capable of absorbing all the requndant capital, which is confessedly glutting the n1arkets of Europe in so n1any different branches of trade? It is well kno\vn by the owners of floating capital, that none such are no\v to be found ; and if the transition in question fs to account for \Vhat has happened, it n1ust have produced some other effects besides that which arises fron1 the difficulty of moving capital. This I conceive to be a gr~at diminution of the vvhole an1ount of consun1pt1on and detnand. The necessary changes in the channels of trade would be effected in a year or t\~ro ; but the general diminution of consu1nption and demand, occasioned by the transition frorn such a war to a peace, may last for a very considera~le time. The returned taxes, and the excess of Individual o·ains above expenditure, which were so b . largely used as revenue during the war, are now 111 part, and probably in no inconsiderable part, saved. I cannot doubt, for instance, that in our own country very many persons have taken the opportunity of saving a part of their return~d ~roperty-tax, particularly those who have only hfe~tncomes, ~nd who, contrary to the principles of JUSt taxation, KK2 |