A History of England, Period III. Constitutional Monarchy

by J. Franck Bright

The expenses of the war had been enormous, perhaps inevitably so, and the taxes were proportionately heavy. During the last year of the war in taxes and loans upwards of £170,000,000 had been raised. The National Debt amounted to nearly £800,000,000, and to meet the necessities of the moment this had been raised by very expensive methods, so that the nominal sum on which interest was paid was considerably higher than the actual money which had passed into Government hands. Mr. Vansittart, who had had the management of the finances, had no real knowledge of financial principles, and had acted on the simple plan of increasing taxes when more money was necessary, and supplying the deficit by loans contracted in an extravagant fashion, or taken from the sinking fund. He did not see that doubling a tax by no means doubled the returns from it, as it inevitably compelled some people, and those the most numerous and poorest, to surrender the taxed article; and in common with many people at the time, he believed in the magical effect of the sinking fund, although the sum yearly paid to it was derived from loans contracted at considerably higher interest than the fund itself bore. The sinking fund indeed had, in the hands of the present Government, almost lost its original object, and was openly declared both by Vansittart and Castlereagh to be chiefly useful for supplying the ministry with an easy means of getting money to meet emergencies, instead of a sacred deposit to be used only for the extinction of debt. The ease with which all money demands of Government were granted during the war had also engendered a spirit of extravagance, and economy had been one of the earliest cries of the Opposition on the resumption of peace. At first the support of the large standing army which still remained on foot, and other expenses which were regarded as necessary, had apparently prevented any relaxation of taxes, but by degrees the universal discontent excited by their pressure had compelled Government to grant some relief, and a certain number of taxes had been taken off or reduced.

The resources of the country restricted by protective laws.

But all this time the real resources of England, the development of which would have largely increased the revenue, and at the same time have admitted of large decrease of taxation, had been restricted by unwise commercial legislation, having its origin in distant times and in a different state of society. The interests of the landowners and agriculturists were so closely connected with the predominance of the Tory party, and they had played so large a part in the conduct of England of late years, that the agriculturists had succeeded in making good the advantages of their class to the detriment of all others. They claimed nothing less than the exclusive right of supplying the whole nation with food, and by their clamour and influence in the House of Commons had succeeded in procuring corn laws which went far to secure them that monopoly. But meanwhile, within the last fifty years, the manufacturing interest, principally through the introduction of machinery, had relatively enormously increased. In the twenty years between 1811 and 1831, while the agricultural population increased but 2½ per cent., the manufacturing population had increased 31½ per cent. The time was rapidly approaching when the growing and increasing manufacturing and commercial element would of necessity claim its due position in opposition to the landed aristocracy. But at present the manufacturers themselves, ignorant of the true principles of political economy, were constantly seeking the benefit of their own class as distinguished from that of the general public, and restrictive, or, as they were called, protective, laws were extended over nearly every branch of industry.

Changes effected by Robinson and Huskisson.

Robinson, an exceedingly well-meaning man, had succeeded Vansittart as Chancellor of the Exchequer. But his plans and resources extended but little beyond those of his predecessor. He accepted and kept in operation some of his most unwise financial measures, and, without any change of general view, continued, what was no doubt a good thing in its way, to remit occasionally various small taxes. But he had beside him Huskisson as President of the Board of Trade, who acted in a very different spirit. Like his friend Canning, who gave him his full support, he was a self-made man, and belonging to none of the prominent ruling classes, was able to look at matters in a broader and more national light. And though, like his friend, he was constantly spoken of as an adventurer, and in consequence had to undergo much opposition, he was able by the reasonableness of his views, and by the success which attended their execution, to launch England upon a new course of commercial policy, as Canning had been able to do with regard to foreign affairs. As yet free trade as a whole was not to be thought of, but Huskisson took every advantage of the demands of various classes of industrialists to introduce small reforms. In his first year of office, though he indicated the tendency of his policy, he was not able to affect much except with regard to the navigation laws. The three great industries of England were wool, silk, and cotton. Of these cotton alone had been left unrestricted, and there alone had a very remarkable increase been seen. In the wool trade considerable depression having been felt, numerous petitions from manufacturers were presented begging for the free importation of foreign wool, but at the same time asking that the export of British wool should be forbidden; in other words, claiming to buy the raw material of their manufacture at a price artificially lowered. Government replied that the import tax was a valuable source of revenue, but that it should be willingly foregone if free export was allowed also. As the manufacturers declined this, the movement for the present dropped. In the same way an attempt was made to free the Spitalfields silk manufacture from restrictions, such as the settlement of their wages by the magistrates. It was plain that as long as wages were not allowed to change with the varying requirements of the trade, the manufacturers were under disadvantages as compared with their rivals elsewhere. But 11,000 of the journeymen petitioned against this change, and although the Bill passed the Lower House by small majorities, it was so altered by amendments in the Upper House that Huskisson thought fit to drop it.

Change of the Navigation Act. June 1823.

In dealing with the Navigation Act he was more successful. This law, passed in Cromwell's time, and completed in the 12th of Charles II., allowed the produce of Asia, Africa, and America to be brought to England in English ships only, and European goods only in English ships or in ships of the country producing the goods. The close of the American War had given the first blow to this system. American shipping, now become the shipping of a foreign country, was subject to the restrictions of the Act. The Americans retaliated, and the ships of both countries had to perform one half of the voyage empty; the consumers therefore paid double freight. This absurdity continued till the Treaty of Ghent in 1814, when the Governments agreed to drop their restrictions. The course which had been successful with America was subsequently adopted by the mercantile states of Europe. Portugal, the Netherlands, and Prussia, all raised the dues on British vessels, and Huskisson, on the 6th of June 1823, took the opportunity of introducing the Bill known by the name of the Reciprocity of Duties Bill, by which the ships of British and foreign powers were put upon an equal footing, the right being retained to keep up restrictive duties upon the ships of nations who rejected the reciprocal equality of trade thus offered. The outcry against this change was very great, especially among the shipowners, whose business was trammelled by the heavy duty on Baltic timber. Huskisson expressed a hope that this duty might shortly be remitted, and meanwhile offered to return to shipbuilders all the duties paid on their materials. The offer was declined, and the grumbling continued, nevertheless the increase of British ships was enormous; in the last nineteen years of the restrictive duties the tonnage had increased ten per cent.; in twenty-one years after their abolition it increased forty-five per cent.

Improvement in the silk trade. March 1824.

The first failure of his plans did not dishearten Huskisson, and the prosperity of the year 1824 enabled him to carry Bills for the relief both of the wool and silk trades. The silk trade had been principally established in England by the persecuted Protestants in 1685, and to support it laws had been passed excluding from England foreign silks, which had previously been admitted free. Early in the eighteenth century the spinning of silk in the Italian method had been introduced by two brothers of the name of Lombe; to protect them heavy duties were laid upon foreign-spun silk. The material for the manufacture of silk goods was thus raised in price, and the manufacture had languished for many years, especially after the introduction of cotton. The production of spun silk in India, whence it was very plentifully supplied, had lately improved this state of things; it was believed that at this time 400,000 people were employed in the manufacture of silk goods. But there was a distinct preference for silks of French manufacture, and the smuggling of such goods into England was a serious damage both to the trade and to the revenue. The silk manufacturers, especially those about London, had immediately, upon Huskisson's accession to office, petitioned for the removal of duties on spun silk, but at the same time, with true class feeling, were eager to exclude foreign manufactured silks. In the same way the silk spinners were eager for the removal of duties upon raw silk, but bitterly opposed to the introduction of spun silk, while the journeymen believed that ruin stared them in the face if foreign manufactured silks were introduced. Between these varying interests Huskisson had to steer his course. The duty on raw silk was immediately reduced to threepence from five and sevenpence halfpenny the pound. The clamour was too great to allow of a similar reduction in the duties on spun silk, which were lowered about half, from fourteen and eightpence to seven and sixpence; and similarly, though Mr. Huskisson wished for an immediate change, the admission of foreign manufactured silks was postponed for two years, when they were to be admitted at an ad valorem duty of thirty per cent. The outcry against the change was great; the workmen thanked the House for the temporary postponement of the day of their destruction; the manufacturers expressed a hope that they should get out of the trade before the fatal day arrived. But the event thoroughly proved the wisdom of Huskisson's plans, and the truth of his prophecy that competition only was wanted to enable English manufacturers to rival the French; ten years after the passing of the Bill England exported to France £60,000 worth of manufactured silk.

Improvement in the wool trade.