300 
LAISSEZ FAIRE 
i finished wares obtained a sale, during times of war, when halt 
"manufactured goods, like cotton yarn, were no longer exported®. 
and the in- So far as the industrial population was concerned, the 
oh food keenest distress arose when the fortunes of war deprived us 
wpply, of access to regions from which food could be obtained, in a 
season when the home supply had fallen short. This was the 
case in the last years of the Revolutionary War (1801-2), 
and again in 1811. It is probable that the disturbed state 
of the country, which called forth the Combination Acts and 
expressed itself in the Luddite Riots, was more directly con- 
nected with this cause, than with political disaffection, or the 
introduction of machinery. 
and all While labour bore the brunt of the distress it cannot be 
capilalis®s said that capital went scatheless. In the latter part of the 
affected by oiohteenth century, the large employers of labour, both in 
fons in manufacturing and tillage, had become accustomed to rely on 
borrowed capital; the terms, on which bankers would be 
willing to make or renew advances, were of vital importance for 
the conduct of business affairs. The losses, which merchants 
and manufacturers sustained from the difficulties caused by 
the wars, in connection with the transport of goods, would 
have been comparatively trivial, if they had not served as the 
occasion for reckless speculation and subsequent contractions 
of credit. 
and the The alternation of peace and war gave rise to conditions 
tonsequént hich inevitably called forth a series of commercial crises. 
When prices are high and the prospects of trade are good, 
all merchants and manufacturers are inclined to increase their 
business as much as possible, and the banks are ready to 
advance them capital for the purpose on their personal credit. 
The bills which thus get into circulation are a practical 
addition to the paper-money of the country, and the issue 
and acceptance of so much paper tends to raise prices still 
farther, and to encourage merchants to engage in larger trans- 
actions. If the bankers are not alive to the danger of this state 
of affairs, they may foment the evil by continuing to lend 
readily ; they have it in their power to check the speculative 
snthusiasm by raising the terms on which they are prepared to 
1 See above, p. 634.