The whole of the trade circulars, indeed, both from Liverpool and Manchester houses, expressed similar views with respect to the prospects of the present year; and seemed to expect an increase in the aggregate manufactures of the country. In reviewing the actual state of things which has taken place, I would direct your attention particularly to the fact of spinners and manufacturers being “under contract” at this period, as stated in the first circular from which I have quoted. Such contracts could only have been entered upon, consistently with prudence at least, in the anticipation of a continuance of the then existing prices of the raw material, or upon the assurance of a stock already in hand. To a considerable extent spinners did hold stock sufficient for the fulfilment, profitably, of a portion of their contracts, as is shown by the circumstance that they have, since the commencement of the year, worked up about 40,000 bales of cotton more than they have drawn from the Liverpool market. That in the majority of cases, however, the stocks held were only sufficient to complete a portion of the contracts entered into is a fact which is quite beyond dispute; and these parties have consequently been driven into the market to purchase the raw material at the ruling prices of the day. In order to ascertain their position, it will be necessary to trace the relative prices of cotton and of goods during the interval between December 1849 and the present time. Up to the commencement of that month, the prices of the raw material had been gradually rising; and the almost universal complaint of spinners and manufacturers had been of the unwillingness of buyers to pay a proportionate advance upon goods. Thus, on the 1st of June last year, the price of fair bowed cotton was 4¼d. per lb., from which it advanced gradually, owing to reports of a short yield of the crop in America, until on the 1st of January this year it stood at 6⅜d., being an advance of 2⅛d. per lb. The price of best seconds water twist, No. 20 was on the 1st of June 6¾d., and on the 1st of January 8¼d. The price of best second mule, No. 40, was at the same dates respectively 8½d. and 10½d. We had therefore— Advance upon cotton, . 2⅛d. per lb. Do. upon yarn, No. 20, 1½d. „ Do. upon yarn, No. 40, 2d. „