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Real Values in British Foreign Trade, 1798–1853

Published online by Cambridge University Press:  03 February 2011

Albert H. Imlah
Albert H. Imlah
Affiliation:
Tufts College and the Fletcher School
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Extract

In 1696 the British began to keep records of their imports and exports in terms of money values. For this purpose, tables of prices were prepared first for England, and subsequently for Ireland and for Scotland, with the rates based, it is said, on market conditions at the time. Some adjustments in the initial valuations were made in the early years, but thereafter, for over a century and a half, the same prices were used in calculating “official” values. For imports and re-exports they supplied the sole basis for computing money values throughout this period. For exports of domestic produce and manufactured goods, however, a concurrent series of declared values was begun when a convoy tax was imposed ad valorem in 1798; but this series, though continued after the war, has been overshadowed by the “official” valuations which attained something of the respectability of a time-hallowed tradition. Year after year through peace and war, dearth and plenty, high prices and low, the clerks meticulously multiplied their quantities by these unchanging rates. In other words, British “official” trade values became progressively more useless as measures of current market values until the system was reformed in 1854. As a result, historians and economists are faced with frustration or distortion in any question dependent on a fairly accurate knowledge of the course, or the terms, or the balance of British trade in the period.

Type
Articles
Information
The Journal of Economic History , Volume 8 , Issue 2 , November 1948 , pp. 133 - 152
Copyright
Copyright © The Economic History Association 1948

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References

1 Clark, G. N., Guide to English Commercial Statistics, 1696–1782 (London: Royal Historical Society, 1938), pp. 8–12, 40–41.Google Scholar

2 Even after a new method of valuation was set up in 1854, the old system was continued simultaneously and the results printed for another fifteen years for the benefit, perhaps, of the devotees of the old order. Eighteen sixty-nine was the last year in which the writer was able to find die “official” valuations in their accustomed place in Parliamentary Papers, “Accounts and Papers (1) Financial: Trade and Navigation.”

3 The lists were published in Parliamentary Papers, 1826 (385), XXII, 3–10.Google Scholar

4 Officials in the Board of Trade realized the limitations of these statistics. See, for example, Porter, G. R., The Progress of the Nation, 3 vols. (London: Charles Knight & Co., 1836–43), II, 98–100Google Scholar. Porter was chief statistician in the Board of Trade from 1834 to 1840. But the peculiar character of the “official” values was not explained in the annual publications seen by Parliament and public.

5 Two examples will suffice. Hall, W. P. and Davis, W. S., The Course of Europe since Waterloo (New York: D. Appleton-Century Co., 1941), p. 148Google Scholar, cites “official” values of exports for 1821, 1831, 1841, and 1851 to demonstrate “an unparalleled record” of growth. Actually the increase for a later thirty-year period, from 1841 to 1871, is almost as dramatic in real values as this one in fictitious values. A very serious statistical case, widely quoted, is Page, William, Commerce and Industry (London: Constable and Company, 1919), II, 71Google Scholar. Page cites the “official” values from 1815 to 1853 with the completely misleading notation that for exports declared values are given “throughout.”—Ibid., II, xi. Even Elie Halévy is misled by this unfortunate error.— History of the English People, 1830–1841 (New York: Harcourt, Brace & Co., 1937). p. 284 n.Google Scholar

6 Both “official” and declared values are given in Tables 1 and 2 below.

7 Parliamentary Papers, “First Report of the Commissioner on Customs,” 1857 [2186], III, 121–22.Google Scholar

8 The few heavy export taxes were specific duties, for example, 17s. on each cauldron of coal, affording no motive for misrepresenting real value because it had no bearing on the tax. Ad valorem export duties, payable for many years after 1815 on some commodities, were extremely light—0.5 per cent—too trivial to encourage undervaluation. See customs schedules in Parliamentary Papers, 1898, LXXXV.

9 A fine of £ 20 and detention of the goods.—53 Geo. III cap. 98.

10 Parliamentary Papers, “Third Report,” 1859, sess. 2 [2540], XIV, 16–17Google Scholar.

11 Parliamentary Papers, “Commercial Accounts,” 1800, pp. 5–11, 43–51. Irving was inspector general of imports and exports for Great Britain; Marshall held the same office for Ireland. Another possible exception is the effort of William Irving, inspector general of customs, made in the first decade of the nineteenth century. It is difficult from the data given to appraise the accuracy of his results, but his import values seem too low, his re-exports too high, though in the latter case he may have included English re-exports to Ireland.—Parliamentary Papers, 1812 (63) (271) and (281), X. He stated to the Bullion Committee that he secured his prices from merchants. His very brief evidence, however, rather suggests that he was anxious to show a favorable balance of trade.—Parliamentary Papers, “Bullion Report,” 1810, III, 137–38, 144–46.Google Scholar

12 Morgan, E. V., “Some Aspects of the Bank Restriction Period, 1797–1821,” Economic History, III (1939), 205–21.Google Scholar

13 Schlote, Werner, “Entwicklung und Struckrurwandlungen des englischen Aussenhandels von 1700 bis zur Gegenwart,” Probleme der Weltwirtschaft (Jena, 1938), p. 62.Google Scholar

14 Unfortunately the series is marred by some statistical inconsistencies. British imports from Ireland seem to be included for the years 1805 to 1819 but excluded for the years 1820 to 1821; British re-exports to Ireland included for 1805 to 1817 but excluded for 1818 to 1821; and in the export series of declared values, British exports to Ireland are included for 1805 to 1816 but United Kingdom figures used for 1817 to 1821. No notation is made of these curiously selected shifts.

15 The real value of West Indian cotton in 1805 was over three times the “official” rate of 7.3/4d. per pound. That of East Indian cotton was over twice the “official” rate of 7d. Coffee, on the other hand, was listed at £7 per cwt. but ordinary Jamaica sold in bond at an average of only £7/16/– in 1805.

16 Silberling, Norman J., “Financial and Monetary Policy of Great Britain During the Napoleonic Wars,” The Quarterly Journal of Economics, XXXVIII (1924), 229Google Scholar.

17 Schlote, Probleme der Weltwirtschaft, pp. 33–37 and Appendix, Tables 2 and 3. In estimating real values for the years 1801 to 1812 for which he did not have quantity data, Schlote multiplies the total annual “official” value by Jevons' general index and a price ratio based on his estimate of total real values for 1814.

18 Parliamentary Papers, “Accounts and Papers (1) Financial: Trade and Navigation.”

19 In most cases, 1858–60, when the new system was well established, were used as base years. The years 1854–57 and 1861–69 were used to test the results against the customhouse returns of real values. In a few cases, 1854–56 were used as base years.

20 By using a price ratio based on the new computed real values of 1858–60, instead of the simpler method of quantity multiplied by price current, I make some allowance—the same as the customhouse in those years—for the different qualities of a commodity imported and re-exported. Undoubtedly the proportions changed from year to year, but it is not possible to make very exact allowance for this except in a few cases like cotton and wool where data on country of origin afford an indication of quality and permit more adequate annual allowance. There is sometimes another limitation on strict accuracy. This derives from the fact that the prices of the various qualities of a commodity do not always move in the same direction or at the same rate as the prices of the single quality used in the price series.

21 “Official” values had to be used here since they supplied the only ready means of making some allowance for the differing relative values and the differing standards of measurement of the variety of components. “Official” values also took account of those articles admitted by value rather than by quantity, though the amount here was very small.

22 In most cases the articles dropped between 1814 and 1854 were latecomers in trade. In other cases the volume diminished to trivial importance, too small to be listed separately in the annually published returns by “official” values.

23 In each such case, the price ratio of the residue was recomputed to allow for the price ratio of the commodity thus dropped from separate treatment and added to the residue.

24 Measured by real values or estimated real values, the proportions represented by these commodities diverged very slightly from proportions by “official” values. They were as follows:

25 Sauerbeck, Augustus, “On the Prices of Commodities and the Precious Metals,” Journal of the Statistical Society. XLIX (London, 1886), 632–48.Google Scholar

26 I am particularly indebted to Mrs. Schwartz for the loan of typescript copies of many of these series over a period of several years for recurrent reference, and for much valuable advice also.

27 Parliamentary Papers, 1898, LXXXV, 203–5.Google Scholar

28 Cole, A. H., Wholesale Commodity Prices in the United States, 1700–1861 (Cambridge, Mass.: Harvard University Press, 1938), I, 154CrossRefGoogle Scholar; II, 168, 359.

29 I am indebted to the Social Science Research Council for a grant-in-aid which made this possible. I am indebted also to Miss Ruth Crandall for the care and patience with which she performed almost the whole of this arduous task.

30 Possibly because importers bought a little ahead of the price rise. In the method followed here, the imports and re-exports for the year as a whole are related by the price index to the annual average of the monthly quotations. A precision method would require at least monthly quantities with monthly quotations.

31 Whether the estimates tend to be high or low in these years is hardly possible to determine. The test years show a tendency for import estimates to be high in years of rising prices. On the other hand, a comparison with Thomas living's detailed estimates (see above, p. 137) for the years 1796–98, when prices were high and fluctuated almost as much as from 1804 to 1812, tends to indicate that my estimates on imports for these years may be as much as 5 per cent too low. This comparison was made by deriving enough quantity data from Thomas Irving's published report to cover by my method as many commodities as in the years 1804 to 1812.

32 Above, p. 137. Irving's calculations are not indexed and were discovered late in this study when the writer was searching through the Parliamentary Papers of these years, volume by volume, in the hope of finding more data.

33 It was thought best to follow the customhouse practice in this series, not only to preserve continuity, but also to offset the work of that illicit free trader, the smuggler. Almost certainly the value of goods smuggled into the United Kingdom—spirits, laces, linens, silks, and tobacco—exceeded the value of the reverse flow during the years of this series. Probably it more than compensates for any undervaluation of re-exports and for such listed imports as the products of the British whale fisheries, which were scarcely imports when the international trade balance was in question.

34 For 1807–64 from Parliamentary Papers, 1898 [8706], LXVIII, 45Google Scholar. For 1798–1806 adjusted approximately to a United Kingdom basis from data in the annual statements on “Ordinary Revenue and Extraordinary Expenditure.”

35 The highest quinquennial period was 1825–29 with an average of 38.1 per cent; and the highest single year was 1826 with an average rate of 45.2 per cent. The average in the boom year 1825, in contrast, was 28.2 per cent.