‘I return you No. 1019, of the “Bankers’ Circular,” with many thanks.
‘This delightful and timely change in the weather will do wonders for the country, and by producing an abundant and seasonable harvest, will save the country, and may save the Bank Charter Act; but it is pretty well settled that I am to give notice immediately after the holidays, of a resolution very much in the spirit of the memorial contained in the paper I am returning to you.
‘Things are better in the City and at Liverpool, and with this weather will continue to improve; but it seems to me any reverse in the weather, such as would occasion a late and deficient harvest, could not fail to bring the commerce of the country to a dead lock.
‘The opinion is gaining ground, that in the present state not only of Ireland, but of many districts in England, the government will not venture upon a general election till after the harvest, and not then, unless the harvest should prove favourable.
‘I am glad to read your opinion in opposition to Lord Ashburton’s, that railways keep the gold in the country, and do not send it out. Glyn gave strong evidence last year to this effect before the railway committee.’
Neither of the prospects in this letter was realised. The commercial and manufacturing interest, after the Whitsun recess, thought it advisable for reasons of great weight that Lord George Bentinck should postpone for a month or six weeks his intended motion on the Bank Charter, and the ministers resolved to dissolve Parliament before the harvest: thus it happened that the merchants and manufacturers lost their chance of relief from the yoke, and experienced the reign of terror in the autumn, the terrible events of which ultimately occasioned the assembling of the new Parliament in November.
Anticipating the immediate dissolution of Parliament, Sir Robert Peel had issued an address to the electors of Tamworth, justifying his commercial policy. In the opinion of Lord George Bentinck it set forth a statement as to the effect and operation of those financial measures which had taken place in the course of the last six years, which, if left altogether unrefuted, might have a dangerous tendency at the coming elections. The general effect of that statement was, that by the reduction of duties to a large extent, it was possible to relieve the people of this country of burdens amounting to more than seven millions and a half sterling with little or no loss whatever to the revenue. But the truth was, Sir Robert Peel in his reductions had dealt only with little more than ten millions sterling of the revenue of the country, and had left the remaining thirty-seven millions untouched. Now on that portion of the revenue with which alone he had dealt, there was a deficiency, through his changes, to the amount of five millions sterling, which loss was compensated by the increase on those very articles which Sir Robert had left untouched. It was the opinion of Lord George Bentinck that the conclusion which Sir Robert Peel had drawn from the comparatively barren results of the increased duties on imports carried by the Whigs in 1840, viz., that indirect taxation had reached its limit, and which was indeed the basis of his new system, was a fallacy, and that the anticipated increase of import duties had not accrued in 1840 in consequence of our having had three successive bad harvests, ‘and a bad cotton crop to boot,’ all of which had checked the consuming power of the community. Sir Robert Peel had been favoured by three successive good harvests and nearly £100,000,000 invested in six years in domestic enterprise. ‘The interposition of Providence,’ said Lord George, ‘is never a part of our debates.’
Under these circumstances, Lord George took occasion to review the commercial policy of Sir Robert Peel, on the 20th July, in the House of Commons, only three days before the prorogation, and in one of his most successful speeches. He was much assisted by the fact that the exports of all our staple manufactures had then greatly diminished, and of course he urged this point triumphantly. ‘If we had been indemnified for the dead loss of £650,000 on cotton wool by any great impulse given to our manufacturers, it would be a consolation which unfortunately we could not enjoy.’ He traced all the consumption to railway enterprise, and showed that it alone had compensated for the fruitless loss of revenue which we had incurred in vainly stimulating the exports of our manufactures, which had actually diminished. He was so impressed with the importance that, ‘on the eve of a dissolution, such a statement as that of Sir Robert Peel should not go forth to the country uncontroverted, as in that case the necessary result would be that the people would come to the opinion that they might abolish taxes altogether and yet maintain the revenue,’ that he sat up all night writing an address to his constituents, the electors of King’s Lynn, which took up nearly two columns of the newspapers, in which he presented his refutation to the public of the commercial manifesto of Tamworth, illustrated by the necessary tables and documents.
There is a sentence in this speech which, as a distinct expression of policy, should perhaps be quoted:
‘Sir, I am one of those who seek for the repeal of the malt tax and the hop duties. I am one of those who think that the excise duties ought to be taken off. But, sir, I do not pretend that you can repeal the malt tax or the hop duties, or remove the soap tax without commutation for other taxes. I will not delude the people by pretending that I could take off more than seven millions and a half of taxes without replacing them by others, and not leave the nation bankrupt. But I think these reforms of Sir Robert Peel have been in a mistaken direction; I think that revenue duties on all foreign imports ought to be maintained, and that a revenue equal to those excise duties which I have mentioned can be levied upon the produce of foreign countries and foreign industry, without imposing any greater tax than one which shall fall far short of Mr. Walker’s “perfect revenue standard of 20 per cent.” I say that by imposing a tax far less than 20 per cent. upon all articles of foreign import, a revenue might be derived far less burdensome to this country than that of excise, a revenue of which the burden would be largely shared in by foreign countries, and in many cases paid altogether by foreign countries.’