CHAPTER VI.
Witnesses examined by Mr. Ricardo’s Committee: Mr. J. S. Lefevre, Mr. Macgregor, Mr. G. R. Porter—Their extreme views not conclusive to the Committee—Evidence adduced by the shipowners—Ships built more cheaply abroad—Evidence of Mr. G. F. Young, and his general conclusions—Mr. Richmond’s evidence—Asserts that shipping is a losing trade—Replies to the charges against shipowners—Views as to captains of merchant ships—Praises their nautical skill and capacity—His character of common seamen—Attacks Mr. Porter—Offers valuable details of ship-building—Is prepared to go all lengths in favour of Protection—His jealousy of the Northern Powers—Evidence of Mr. Braysher, Collector of Customs in London—General effect of the Navigation Laws on the Customs—With the Northern Ports and America—Difficulty about “manufactured” articles—Anomalies of the coasting and internal trade—Committee’s last meeting, July 17—General dissatisfaction with the results of the inquiry—Commercial panic and distress of 1847—Suspension of Bank Charter Act.
Witnesses examined by Mr. Ricardo’s Committee.
Having now laid before my readers the substance of the state of the Navigation Laws at the time of the appointment of Mr. Ricardo’s Committee in February 1847, I shall proceed to state generally the principal facts put forth by the leading witnesses on the side of the Free-traders and of the Protectionists respectively.
Mr. J. S. Lefevre.
Mr. Macgregor.
On the side of the former, Mr. John S. Lefevre, Mr. Macgregor, and Mr. G. R. Porter, officers of the Board of Trade, and decidedly inclined to the total repeal of the Navigation Laws, were the chief witnesses brought forward to make out a case against the existing system. Of these, the first—a distinguished mathematician as well as a lawyer of sound learning—was eminently fitted to work out, calmly and dispassionately, the intricate points connected with the complex system then prevalent. The other two were strong partisans. Mr. Macgregor, a somewhat superficial person, gave the most off-hand answers to questions, though profoundly ignorant of their tendency, therein committing the most egregious blunders, and urging many inaccuracies about the Reciprocity Treaties, their effect on commerce, and the injury Great Britain had sustained through her ancient Navigation Laws. On the question of the maritime relations between this country and the United States, Mr. Macgregor gave evidence, also, at great length, a considerable portion of which was, however, erroneous as to matters of fact, while many of his conclusions were fallacious.
Mr. G. R. Porter.
Mr. G. R. Porter, Secretary of the Statistical Department, and well known as entertaining the strongest convictions that the Navigation Laws were as injurious to the shipowners themselves as they had been to the nation, was an industrious hard-working man, but he was at the same time committed by many previous publications to the most extreme opinions on Free-trade: of real practical commerce he had no experience. Mr. Porter had, however, studied the whole question with care, and, while enthusiastic in favour of an entire change, and sanguine with regard to the beneficial results to follow from the repeal of these laws, he gave strong and valid reasons for his bold opinions. Their repeal, he showed, would tend, materially, to develop and increase the warehousing system of Great Britain, making it, in fact, a vast depôt for supplying the wants of the people of all nations. Not that the existing laws presented any impediment to warehousing goods, but that facilities would be afforded for making advances on foreign produce by the removal of restrictions. In answer to numerous and varied questions from those members of the Committee who were opposed to his views, he gave a clear and decided opinion that the trade of England had not been benefited in any one of its branches, shipowning included, by the Navigation Laws: and he could not for a moment admit that these laws had operated beneficially even for the “encouragement of a commercial marine.” He rested his arguments on the economical principle that the shipping trade of this country, as a trade, could be conducted on no other principles than those whereby trade, generally, was carried on; he contended that no more ships would be built than it was expected would be required, so as to yield a profit to the persons who built them; that, in the long run, there could be no larger amount of profit derived from shipowning than from any other trade, as other persons would, of course, come in to share the profit with the existing shipowners; and that, unless shipping yielded the ordinary rate of profit to be derived from the commerce of the country, deficiencies in shipping from losses would not be, from time to time, supplied. It was well known, he remarked, that the trade of the country had gone on increasing; that, from year to year, more ships had been built; and, further, that, though shipowners had certainly been at times loud in their complaints and fears as to their future prospects, they had still continually added to the amount of their tonnage. Mr. Porter then put in the strongest light the groundless fears they had so long entertained by quoting their Report for 1833,[61] wherein they state that “the long-continued and still existing depression of the shipping interest, the partial production, and great aggravation of distress caused by continual changes in our navigation system; the utter impossibility of the successful maintenance of an unrestricted competition with foreign navigation; the gross injustice of the imposition of peculiar and exclusive burdens on maritime commerce for purposes purely national, while exposed to that competition; the declining quality and estimation of British tonnage; the embarrassment, decay, and ruin of the British shipowner, may now be viewed as incontrovertible positions.” In reply to this desponding statement, Mr. Porter directed attention to the official returns, showing that in 1833 the amount of British tonnage on the register was 2,634,577 tons, whereas in 1846 it was no less than 3,817,112 tons, an increase of 1,182,535 tons. So that, to the melancholy “facts” of the shipowners in 1833, Mr. Porter opposed his prosperous “figures” of 1846. Such discordant views could not by any means be reconciled; but shipowners of all countries and in all ages have ever had the most evil forebodings on the subject of the withdrawal of protection.
Mr. Porter did not fail to hold out the threat that Prussia, at the head of the Zollverein States of Germany, would still further carry out its restrictive principles, and impose differential duties on foreign shipping; and that Hamburg and Bremen were, at that time, deliberating whether they should join the Zollverein under one flag, as far as concerned shipping. He, nevertheless, expressed the most sanguine hopes that, when foreign nations discovered beyond all doubt, that England was advancing in the path of Free-trade, they would gladly follow her example, and that commerce throughout the whole of Europe and the world would be unshackled.
It appeared, further, from his evidence, that Mr. Porter was for a complete abrogation of the English Navigation Laws, without any reservations as to reciprocity, and that, from the general conviction that these restrictive laws were rather injurious than beneficial to us, independently of the policy of other nations.
Their extreme views not conclusive to the Committee.
It cannot, however, be said that, in 1847, the repeal party had succeeded in convincing the majority of even the Committee of the soundness of their opinions. The shipowners, as a body, endeavoured to controvert, and with considerable show of success for the time, the theories propounded by the Free-trade party, so strenuously supported by the officers of the Board of Trade. The cold imperturbable evidence of Mr. (now Sir) John Shaw Lefevre, who was intimately connected with the Free-trade party, contrasted strikingly with the impetuosity of such men as Mr. Macgregor, and even with the testimony of Mr. Porter.
Evidence adduced by the shipowners.
The shipowners, on the other hand, put forward their most practical and intelligent witnesses[62] to prove that the repeal of the Navigation Laws would cause an immediate depreciation of thirty per cent. in the value of their property, and of shipping, generally, throughout the United Kingdom; that, if the British shipowner were deprived of his privileges, already greatly curtailed by the system of reciprocity, it would be decidedly to his advantage to invest his capital in foreign ships, and to navigate them by foreign seamen: Englishmen, they alleged, would own, in conjunction with foreigners (if possible), foreign ships, in order to secure the privileges still attaching to foreign flags, since British ships would still be excluded from many foreign ports, even though the Navigation Laws were abrogated. It was shown, as they conceived incontestably, that a ship could be built at Dantzig at a much less cost than in England,[63] and that, if the foreign trade were thrown open without restriction, no one would think of building British ships; the result being, that a great number of persons dependent on shipping—shipwrights and others—must be thrown out of employment, with great general distress ensuing. The difficulty of manning the Royal Navy, under such untoward circumstances (a standard argument), was, of course, dwelt on with great force as an unmitigated national evil. It was further urged, that the relaxation of the laws, so far as to allow Asiatic and African produce to be admitted to Great Britain for home consumption from ports in Europe, in all bottoms, must deprive the British shipowner of his most valuable privilege, and destroy the very essence of the ancient law.
Ships built more cheaply abroad.
The argument, that these laws ought to be abrogated in the interests of the consumer was met by the counter-assertion, that any difference of freight, if such indeed existed, would make no appreciable difference in the price of consumable articles. Even the excessively high freight of 8s. per barrel from the United States, which had been paid on an emergency, would, they held, amount to only one halfpenny per pound on the flour, so that when freight was reduced to its usual rate, a very slight increase of value was the consequence. The witnesses against repeal spoke of various other articles[64] in a similar manner, arguing that the reduction would be so small that it could never reach the consumer.
Evidence of Mr. G. F. Young,
Of all the witnesses examined before the Committee, no one was more opposed to the repeal than Mr. George Frederick Young, a shipbuilder and shipowner in the port of London. He was quite as strong a partisan in favour of leaving things as they were as Mr. Ricardo and Mr. Porter were in favour of Free-trade. He would admit no further innovations of any kind, contending, that, even the reciprocity system had been in the highest degree detrimental to the interests of the British shipowners: indeed, he asserted that if the Navigation Laws were repealed, it would be seen that the interests of the merchants would be quite as much compromised as those of shipowners, as it was under the operation of these laws that importations were so largely directed into the emporium of England. He apprehended that this repeal would substitute certain conveniently-located foreign ports as depôts for imported produce for the supply of England, in lieu of British ports. He fortified this opinion by elaborate calculations, showing an enormous difference in the warehousing charges at Amsterdam, Rotterdam, and Hamburg, leading, as he apprehended, to this inevitable conclusion, that a British merchant would find it more to his interest to establish depôts at those places, than to import commodities for the supply of his own country, to be lodged in the St. Katherine or West India Docks, or in other similar establishments.
With regard to the subject of the Whale Fisheries, and the way in which they might be affected by a repeal of the Navigation Laws, Mr. Young pointed out that the trade of the northern and southern fisheries had been for many years past a declining one: but this decline, he said, though in a great degree traceable to other causes, received an accelerated impetus from the course pursued by the Legislature in discouraging these trades, while the Americans, on the other hand, had received from their Legislature every possible support. So far as regards the relative cost of navigating British ships, Mr. Young brought forward a mass of figures[65] for the purpose of showing that the difference in every case was in favour of foreign shipowners, but more especially in the case of those of the United States, Holland, the Hanse Towns, Sweden, and Prussia.
and his general conclusions.
By the various reciprocity treaties Mr. Young considered the Navigation Laws were virtually repealed with regard to those countries with whom we had concluded such conventions: but, while maintaining that these treaties had proved highly prejudicial to Great Britain, he did not recommend a retrograde policy; and we gladly admit that, whatever opinions might be entertained of the ardent Protectionist principles he propounded, his political adversaries bore full testimony to the ability with which he advocated his cause during the days he was under examination, and to the large amount of practical knowledge he brought to bear on the subject. He displayed, too, great tact, and, I must add, great patriotism, viewing the contemplated change in the light he did, when he wound up his evidence by asserting, unequivocally, that the Navigation Laws were framed for the paramount and political purpose of assisting in the defence of this country, as well as for encouraging maritime commerce; that these objects, in his judgment, could never have been obtained and maintained without these great Acts; and that he fully and completely declared his concurrence in the opinion given by Adam Smith, which we have already quoted. “I have no hesitation in declaring,” remarked Mr. Young, in concluding his evidence, “my perfect conviction, that it has been, through the operation of our navigation system entirely, that the maritime power of this country has been raised to its present height, that the country has been defended, and all the evils which would have resulted from its being made the seat of war have been providentially averted.”
Mr. Richmond’s evidence.
Asserts that shipping is a losing trade.
As considerable uneasiness had been felt by those who advocated the policy of Protection with reference to the competition which might be anticipated from the shipping of the three Hanse Towns—Lubeck, Bremen, and Hamburg—although on inquiry it was shown that the whole tonnage of sea-going ships belonging to these ports was only about 150,000 tons register, it is advisable here to refer to the testimony of Mr. William Richmond, who was deputed by the shipowners of the borough of Tynemouth to appear before the Committee.[66] This gentleman had been a shipowner for nearly fifty years, and, at his advanced age, was reluctant to appear: but zeal for a cause to which he had devoted great energy during a long life, together with the importance of the subject, induced him to come forward to rescue, so far as he could, the shipowners from “impending destruction.” It is unnecessary, however, here to follow him through his elaborate history of the Navigation Laws, but, as an exponent of the views of many shipowners in the north of England, the points he urged most strongly ought not to be overlooked. Strange, however, to say, his first contention was that, for the preceding twenty-five years, the shipping trade had been a losing one, those employed in the Baltic during the whole of that time having made no money whatever. When, naturally, he was asked to explain how it had come to pass that a losing trade should be so long maintained, Mr. Richmond entered into details, which, though not satisfying the Committee as to the whole force of his assertion, threw considerable light on the actual state of the merchant shipping at that period.[67]
Replies to charges against the ship owners.
It had been charged against shipowners, as we have seen,[68] that their ships were unseaworthy, while the masters had been condemned in no measured terms. These accusations he indignantly repelled; his explanation as to the permanence of a losing trade being substantially this—that a distinct class of men existed who were shipowners, and not merchants, whose fathers had been shipowners for successive generations, and had left them ships as their only inheritance; and that, as they could not readily divest themselves of this property, and had no means of buying ships of an improved description fit to compete with vessels of more modern date,[69] their commercial career generally ended with the Gazette.
Views as to captains of merchant ships.
With regard to the qualifications of captains of merchant vessels, Mr. Richmond said that sixty years ago, when he went to sea, very young in life, it was customary for respectable and even wealthy people, in the maritime districts, to send their children to sea: indeed, no matter whether they were shipowners or merchants, agriculturists or manufacturers, one of the family was sent to sea, because it was considered a line in which there was a fair chance of prospering. “But no respectable people send their children to sea now,” he exclaimed, “as it is a profession which, in all probability, would lead them to beggary.”
Praises their nautical skill and capacity.
In nautical skill, Mr. Richmond held the British captain of the present day fully equal to the captain of former days; while he, also, thought, that the ruder the man, on his admission into the hardy profession he was to adopt, the more advantageous it might be to him, at least in the discharge of the rougher part of his professional duties. In the pursuit of freights abroad, on the “seeking system,” these captains, he admitted, might be inferior to some continental captains; but the business of chartering a ship belonged more strictly to the shipbroker; the captain, in his opinion, being in a relation not unlike that of the driver of a coach.
His character of common seamen.
With regard to British seamen, he considered that they, like all other classes, had become more temperate of late years, but were always less a spirit-drinking people than the Germans. The bad accommodation for the common sailor on board merchant ships might destroy his comforts, but not his morals; and honourable testimony had been given by an American captain,[70] that he would prefer the English seaman to any in the world, even to Americans. Every person, he thought, must concur with him in the opinion that our seamen were, what they had ever been, “a danger-defying, skilful, thoughtless, improvident, and perhaps a turbulent race:” and Mr. Richmond appealed confidently to Admiral Dundas, who sat on the Committee, whether he would not rather go into action with 100 British seamen than 200 seamen of any other nation?
Attacks Mr. Porter.
It is unnecessary to enter into the details of the elaborate and curious tables[71] Mr. Richmond prepared to show that there were as many ships as formerly, and that their increase had kept pace with the population between 1816 and 1846. Having explained these tables, he then, in no very measured terms, charged Mr. Porter with “cushioning,” or covering up for an unfair comparison, the merchant navies of surrounding nations, and especially that of the United States. He accused that gentleman distinctly of giving unfairly all the ships engaged in the foreign, coasting, and colonial trade of England, in his return of British tonnage; while the ships of the United States, engaged in the foreign trade only, were given in that of the American tonnage. By these means, an attempt was made to prove that a large mass of tonnage of foreign nations was “cushioned” up, or kept out of sight of the English people, because it would alarm them, if they were to see such an immense tonnage of foreign vessels rising around them, “as the day would come when they would knock at our doors.”
Offers valuable details of ship-building.
Elaborate tables of the prices of articles used in ship-building, furnished by Mr. Richmond, on the authority of the most competent persons engaged in the respective branches of this trade, will be found in his evidence; and, here it may be desirable, as a record of facts, to give an extract from a communication from the principal agent of Lloyd’s, which Mr. Richmond read to the Committee, in reply to a query with reference to the cost of new first-class ships, as it appears that sales were effected at the prices therein named.[72]
The price per ton declined 1l. per ton, according to the years for which the vessel was classed; and according to the North Country Club Rules, 3l. 10s. per ton may be added to these prices for a Baltic outfit—that is, for a ship when ready for a Baltic voyage. As a corollary to these prices, which were, indeed, much lower than the London rates (bad as well as good ships being built in Sunderland), a list was given of the shipbuilders who had failed in Sunderland within the short period from 1841 down to 1847. The list comprised no less than 40 names—a melancholy catalogue—many of them were men whose fathers and grandfathers had moved in good circles: yet these men had all failed owing to the depression of business then prevalent.
Is prepared to go all lengths in favour of Protection.
On the question of Reciprocity, about which there was, subsequently, so much discussion, Mr. Richmond declared, that there could be no prosperity in England till the Reciprocity Treaties, as well as all the Orders in Council enforcing them, were totally repealed. He looked with extreme jealousy at the beautiful and well-appointed ships frequenting Newcastle from Russian and Swedish Finland: but, he saw that no fairer class of merchant ships came to any port; their dimensions, their rigging, everything about them was admirable; while their commanders and officers inspired respect from their general competency. Their log-books were beautifully kept in English: and, from the education the younger population, who were destined for the sea, received, no better disciplined nor more orderly or sedate crews could be seen than on board these ships.
His jealousy of the Northern Powers.
No doubt, these northern maritime countries could be regarded in no other light than that of formidable rivals. Therefore Mr. Richmond and his fellow-shipowners saw with alarm any efforts made to throw open the trade of the Empire, as the increasing success of these foreign rivals must obviously dispossess English shipowners of an immense portion of the carrying trade. Mr. Richmond, therefore, demanded, that not only the Reciprocity Treaties should be annulled, but that the law of Charles II. should be adopted, which enacted that “no goods or commodities whatsoever of the growth, production, or manufacture of Africa, Asia, or America, or of any part thereof, or which are described, or laid down, in the usual maps or cards of those places, be imported into England, Ireland, or Wales, the islands of Guernsey, Jersey, or the town of Berwick-upon-Tweed, in any other ship or ships, but in such as do truly, and without fraud, belong only to the people of England,” &c.
Such were the extreme views promulgated by many of the advocates of Protection. Indeed, the majority of the shipowners, especially of the eastern ports, would not have hesitated to retaliate on the vessels of the northern nations with hostile tonnage duties. Nor was their feeling less hostile against France, though the trade with that country was insignificant except for the conveyance of coals; as, in all the French contracts, it was stipulated that coal should be transported thither in either French or English vessels. The extreme Protectionists asserted that the Spaniards and Italians were monopolising a large portion of the trade from Liverpool; and that American merchants, in sending an order for goods to be executed in England, “gave special orders that they should be shipped on board an American liner.”
Evidence of Mr. Braysher, Collector of Customs in London.
As, however, the object of this work is rather to show the practical working of the old Navigation Laws than to dwell on the political opinions propounded in this controversy, it is desirable to allude to the evidence given by Mr. Braysher, at that time the Collector of Customs in London,[73] who stated that in the discharge of his duties it was requisite to see that the Navigation Act was duly enforced.
General effect of the Navigation Laws on the Customs.
With the Northern ports,
Some curious results were developed in the course of his evidence with regard to the working of these laws. Thus the second clause of the Act relating to the trade between Europe and England gave certain privileges in the carrying of twenty-nine “enumerated” articles, all of which, with two exceptions, were raw materials, and, therefore, only importable from Europe in British ships. The intention of the law had been, originally, to permit the importation of raw materials only; and, till recently, all manufactured goods were either positively or virtually prohibited by the imposition of the high duties. It appeared, however, that butter and cheese, and also the spirit named geneva, could be imported in foreign ships, but no advantage was taken of this privilege. The timber trade differed, as that article could be imported in a ship of the country where it grew, or in a ship of the country from which it was usually brought, but this privilege, with these exceptions, was given entirely to British vessels. Nevertheless, British ships did not generally bring timber from the Baltic ports to England; while in the unprotected trade of butter and cheese, which was considerable, British shipowners, by means of steamers, monopolised the chief part of it.[74] The inference from these circumstances was drawn that Protection had very little to do in controlling the course of this trade. Russia was, however, an exception, as the vast proportion of that trade was carried on by British ships; and this, necessarily, arose from the provisions of the second clause of the Navigation Act, because tallow, hemp, flax and pitch, the chief produce of Russia, could only be brought in British or Russian ships; and, as there was not a sufficient Russian mercantile marine to maintain the trade, a virtual monopoly of it fell to British ships, partly through the Navigation Law and partly through the relative circumstances of the merchant marine of the two countries.
and America.
Much stress was laid on the fact that goods, the produce of “America,” could not be brought from Europe; thus, by this clause, American cotton once landed at Havre[76] could not be brought over for the consumption of the manufacturers, whatever demand might exist for the article. It was, however, proved that this clause was framed long prior to the American independence, and, hence, had no special reference to cotton, nor, indeed, any political tendency.
Difficulty about “manufactured” articles.
It appeared, however, unquestionable, taking the two Navigation Laws together, the American Law and that of England, so far as the trade between the United States and Great Britain was concerned, that we had decidedly the worst of it. Again: the fifth clause of the Navigation Act was the cause of much question at the Customs, and occasioned great inconvenience; this clause ran thus: that all “manufactured” goods shall be deemed to be the produce of the country of which they are the “manufacture.” Thus, coffee imported at Hamburg from its place of growth in Asia or America was roasted and ground there; but, when merchants attempted to bring it into England as a manufactured article, the claim was refused by the law officers of the Crown. Again, mahogany, cut into veneers, was at first not allowed to be a manufactured article; but this decision was afterwards reversed, and veneers were deemed manufactures. In like manner, ostrich feathers, brought from Africa and manufactured in France, offered a very doubtful case, and was, in fact, left undecided, though the impression was, on the whole, adverse to their admission. Refined sugar was deemed a manufacture; and, thus, while raw sugar, the growth of Brazil or Cuba, could not come in from Holland, it could, when refined, be imported. A recent Act required that refined sugar should not only be the produce, but the growth of the country from which it was imported, thereby causing a new difficulty, and showing that the law discouraged the refining of sugar in Holland, and discouraged it at the place of growth.
Anomalies of coasting and internal trade.
Again: it was shown that, from the earliest period, foreign ships which could not carry goods from London to Plymouth, could, nevertheless, carry passengers, as such a trade was not considered by the Customs authorities to be trading coastwise. Nay, it further appeared that foreign vessels could have engaged in the internal trade of the country, there being no legal impediment to prevent a Dutch vessel from plying, either with goods or passengers, between London and Gravesend. The like principle might have prevailed on any of the rivers of the kingdom; but a foreign vessel would not have been allowed to carry goods from one port to another. The interdiction against foreign vessels carrying “passengers” was only inserted for the first time in the 8 & 9 Vict., cap. 88 (1845), and, previously to this period, there was no law to prevent a foreign steamer carrying passengers between two English ports; while, even in 1847, a vessel built in Norway could have plied in the Thames. Foreigners, however, either were ignorant of the law, or did not avail themselves of it, considering it a barren advantage.
With Mr. Braysher’s evidence may be brought to a close the extracts necessary to be given from the mass of conflicting statements and documents laid before Mr. Ricardo’s Committee, and I may now proceed with the general history of the measures pursued and subsequently adopted.
Committee’s last meeting, July 17.
General dissatisfaction with the results of the inquiry.
On the 17th of July, the Committee of the House of Commons held its last sitting; and as a dissolution of Parliament was impending, the Committee, after having published four successive reports, strictly confined to the minutes of the evidence taken before them, came to the conclusion of closing the inquiry. The Protectionist shipowners complained that this abrupt termination of the inquiry was brought about with the view of suppressing the evidence of Mr. D. C. Aylwin, an intelligent merchant connected with the Calcutta trade, who was in attendance to give counter-testimony to many of the Free-trade witnesses. It was also patent that, during the investigation, while twenty-five witnesses had been examined in favour of the repeal of the Navigation Laws, on the other hand, for their defence and maintenance, only nine persons had been called to give their testimony. It was therefore urged that the proceedings of the Committee and the abrupt termination of the inquiry were anything but fair, the more so that no practical results had been obtained, though the evidence procured was, ultimately, of considerable importance.
Thus ended this important inquiry in a manner scarcely satisfactory to either party; nor was the investigation again revived in the committee-rooms of the House of Commons, the scene of the contest being transferred elsewhere. On the 23rd July, 1847, Parliament was dissolved; and at the subsequent general election the Free-trade party was triumphant everywhere, Mr. Cardwell gaining his election at Liverpool, while Mr. Cobden was returned in his absence for the West Riding of Yorkshire, as well as for Stockport; Mr. C. P. Villiers, on whose motion the Corn Laws had been repealed, being also doubly returned for South Lancashire and Wolverhampton, both these elections affording thereby unmistakable evidences of the feeling of the country in favour of unfettered commerce. With so great an accession of strength to the Whig Government, further progress in Free-trade measures became inevitable, and the greatest uneasiness prevailed among shipowners as to their future destiny.
Commercial panic
Though events of a calamitous character to general commerce intervened, the shipping interest escaped, and, indeed, flourished. Beyond the large quantities of corn necessary to import, so as to meet the urgent wants of the famishing people of Ireland, it was found by the end of December, 1846, that the deficiency of grain in France, Belgium, and Germany, as well as in the south of Europe, was greater than had been apprehended, and, consequently, prices rose throughout the Continent, the average reaching 75s. per quarter in England.[77] Suddenly, large quantities of shipping were again required to execute orders received from France and Belgium for purchases made at advanced prices. The alarm lest the scarcity should still further increase became general; and, in consequence of this, together with apprehensions for the home crops, the average price of wheat rose in May (29th), 1847, to 102s. 5d.[78] Such prices naturally led to great speculation; while the efforts made to bring corn from the most distant regions gave an enormous impulse to the carrying trade, both in Europe and elsewhere.[79]
and distress of 1847.
Suspension of Bank Charter Act.
But a frightful reaction soon followed. Corn was poured into the ports of Great Britain from all parts of the world with astonishing rapidity. The docks of Liverpool exhibited a quantity of flour that, perhaps, had never been, at any previous period or in any country, imported by merchant vessels to one market. Prices fell to 56s. per quarter for wheat, and heavy commercial disasters ensued. Money advanced in value; in August and December the pressure for it increased to a panic. The Bank rate of interest rose to 10 per cent.; and the discount of the best paper became almost impossible. Numerous failures followed; and as representations were made that the credit of the country itself was seriously threatened, Government, on the 25th October, reluctantly stepped forward to arrest further disasters, and took upon themselves the responsibility of risking the violation of the provisions of the Bank Charter Act of 1844; Lord Russell, as First Lord of the Treasury, and Sir Charles Wood, then Chancellor of the Exchequer, advising the Bank to enlarge the amount of its discounts and advances to a minimum of 8 per cent., promising if any infringement of the law should result that Government would secure a Bill of indemnity for the Bank on the meeting of Parliament.
The measures taken by Government produced a salutary effect on commercial circles; and as no actual infringement of the Bank Act of 1844 had occurred, Ministers, considering the purpose they had in view by their letter of October 25th fully answered, intimated that it was unnecessary any longer to continue in force this letter of relief and indemnity.