George, then, was more sceptical than Pitt; and Grenville and Malmesbury soon had cause to believe the offer to be merely an effort of certain Frenchmen to speculate in the English funds. Nothing came of the matter. Melvill, O'Drusse, and Talleyrand on the French side, and Boyd in London, seem to have been the wire-pullers in this affair, which was renewed early in October; it may have been only a "bull" operation. The secret is hard to fathom; but Pitt and Dundas were clearly too credulous. Such was the conclusion of Malmesbury. It tallied with the pronouncement of Windham, who in one of his captious moods remarked to Malmesbury that Pitt had no knowledge of the world, and kept in office by making concessions, and by "tiding it over." Grenville (he said) thought more of the nation's dignity, but was almost a recluse. In fact, the Cabinet was ruled by Dundas, whom Grenville hated. Dundas it was who had sacrificed Corsica, which involved the loss of Italy.[467] Windham of course detested the author of the colonial expeditions, which had diverted help from the Bretons. In the Chouans alone he saw hope; for how could England struggle on alone against France if she could use all the advantages offered by Brest and Cherbourg?
Much can be said in support of these contentions; for now that the Directory threw away the scabbard, England felt the need of the stout Bretons, whose armies had become mere predatory bands. The last predictions of Burke were therefore justified. That once mighty intellect expended its last flickering powers in undignified gibes at the expense of Pitt and his regicide peace. Fate denied to him the privilege of seeing Malmesbury again expelled from France and whipped back "like a cur to his kennel." The great Irishman passed away, amidst inconceivable gloom, in his 68th year, at Beaconsfield (8th July 1797). In the view of Windham and other extreme Royalists, Burke was wholly right, and Pitt's weakness was the cause of all his country's ills.
We may grant that the summer of the year 1797 was one of the worst possible times in which to open a negotiation with triumphant France; for she was certain to exact hard terms from a power whose credit and whose prestige at sea had grievously suffered. Nevertheless, the mistake, if mistake it was, is venial when compared with the unstatesmanlike arrogance of the French Directors, who, when an advantageous and brilliant peace was within their reach, chose to open up a new cycle of war. Of late France had made use of the pretext that she must gain her "natural frontiers"—the Rhine, the Alps, the Pyrenees, and the Ocean—for the sake of security against the old dynasties. By rejecting Pitt's overtures, her leaders now proclaimed their resolve to dominate Italy and Germany and to secure supremacy at sea. Their intrigues with British malcontents and the United Irishmen also showed their determination to revolutionize our institutions. Thus England was to be abased and insulted, while France lorded it over all her neighbours and prepared to become mistress of the seas. The war therefore ceased to be in any sense a war of principle, and became for France a struggle for world-wide supremacy, for England a struggle for national existence; and while democratic enthusiasm waned at Paris, the old patriotic spirit revived everywhere in Great Britain. The newspapers were full of appeals for unanimity; and on 20th November appeared the first number of that bright and patriotic paper, the "Anti-Jacobin," under the editorship of Canning and Hookham Frere, which played no small part in arousing national ardour. On the next day the French Directory issued an appeal to France to bestir herself to overthrow the British power, and to dictate peace at London.
There was need of unanimity; for while France was stamping out revolt, and Great Britain felt increasingly the drag of Ireland, Pitt encountered an antagonist of unsuspected strength. Over against his diffuse and tentative policy stood that of Bonaparte, clear-cut, and for the present everywhere victorious. While Pitt pursued that will o' the wisp, a money-bought peace, the Corsican was bullying the Austrian negotiators at Udine and Campo Formio. Finally his gasconnades carried the day; and on 17th October Austria signed away her Netherlands to France and her Milanese and Mantuan territories to the newly created Cisalpine Republic. Bonaparte and the Emperor, however, agreed to partition the unoffending Venetian State, the western half of which went to the Cisalpines, the eastern half, along with Venice, Istria, and Dalmatia, to the Hapsburgs. The Court of Vienna struggled hard to gain the Ionian Islands; but on these, and on Malta, the young general had set his heart as the natural stepping-stones to Egypt. At the close of the year he returned to Paris in triumph, and was invited by the Director, Barras, to go and conquer England.
Some such effort, either directly against London, or by a deadly ricochet through Ireland, would have been made, had not Duncan, on 11th October, crushed the Dutch off Camperdown, taking nine ships out of fifteen. The consequences were far reaching. The Dutch navy was paralysed; and without it the squadrons at Cherbourg and Brest were not yet strong enough to attack our coasts, until the Toulon and Cadiz fleets sailed northwards. Bonaparte, who was sent to survey the ports in Flanders and the north of France, reported to the Directory on 23rd February 1798 that there were fitting out at Brest only ten sail-of-the-line, which moreover had no crews, and that the preparations were everywhere so backward as to compel Government to postpone the invasion until 1799. The wish was father to that thought. Already he had laid his plans to seize Egypt, and now strongly advised the orientation of French policy. A third possible course was the closing of all continental ports against England, an adumbration of the Continental System of 1806–13 for assuring the ruin of British commerce.
The news of Camperdown and Campo Formio added vigour to Pitt's appeal for national union in his great speech of 10th November, in which he gave proofs of the domineering spirit of the party now triumphant at Paris. Very telling, also, was his taunt at the Whig press, "which knows no other use of English liberty but servilely to retail and transcribe French opinions." Sinclair, who had moved a hostile amendment, was so impressed as to withdraw it; and thus at last the violence of the French Jacobins conduced to harmony at Westminster.
Already there were signs that the struggle was one of financial endurance. At the close of November 1797 Pitt appealed to the patriotism of Britons to raise £25,500,000 for the estimated expenses of the next year, in order to display the wealth and strength of the kingdom. He therefore proposed to ask the Bank of England to advance £3,000,000 on Exchequer bills; and he urged the propertied classes to submit to the trebling of the Assessed Taxes on inhabited houses, windows, male servants, horses, carriages, etc. The trebling of these imposts took the House by surprise, and drew from Tierney, now, in the absence of Fox, the leader of Opposition, the taunt that Pitt had to cringe to the Bank for help. A few days later Pitt explained that the triple duty would fall only upon those who already paid £3 or more on that score. If the sum paid were less than £1 it would be halved. Those who paid £3 or more would be charged at an increasing rate, until, when the sum paid exceeded £50, the amount would be quadrupled. Nor was this all. By a third Resolution he outlined the scheme of what was in part a progressive Income Tax. Incomes under £60 were exempt; those between £60 and £65 paid at the rate of 2d. in the pound; and the proportion rose until it reached 2s. in the pound for incomes of £200 or more.
Though Pitt pointed out the need of a patriotic rejoinder to the threats of the French Government, the new Assessed Taxes aroused a furious opposition. "The chief and almost only topic of conversation is the new taxes," wrote Theresa Parker to Lady Stanley of Alderley. "How people are to live if the Bill is passed I know not. I understand the Opposition are much elated with the hope of the Bill's being passed, as they consider Mr. Pitt infallibly ruined if it does, and that he must go out."[468] The patriotism of London equalled that of the Foxites. City men, forgetting that the present proposals were due to the shameless evasions of the Assessed Taxes, raised a threatening din, some of them declaring that Pitt would be assaulted if he came into the City. Several supporters of Pitt, among them the Duke of Leeds, Sir William Pulteney and Henry Thornton, opposed the new imposts, and the Opposition was jubilantly furious. Sheridan, who returned to the fray, declared that though the poor escaped these taxes they would starve; for the wealth which employed them would be dried up. Hobhouse dubbed the Finance Bill inquisitorial, degrading, and fatal to the virtues of truthfulness and charity. Squires bemoaned the loss of horses and carriages and the hard lot of their footmen. Arthur Young warned Pitt that if the taxes could not be evaded, gentlemen must sell their estates and live in town. Bath, he was assured, welcomed the new imposts because they would drive very many families thither. He begged Pitt to reconsider his proposals, and, instead of them, to tax "all places of public diversion, public dinners, clubs, etc., not forgetting debating societies and Jacobin meetings"; for this would restrain "that violent emigration to towns, which the measure dreadfully threatens."[469]
A sign of the hopes of the Opposition was the re-appearance of Fox. Resuming his long vacant seat, he declared Pitt to be the author of the country's ruin. For himself, he upheld the funding system, that is, the plan of shelving the debt upon the future. The palm for abusiveness was, however, carried off by Nicholls and Jekyll. The former taunted Pitt with losing all his Allies and raising France to undreamt-of heights of power, with failing to gain peace, with exhausting the credit and the resources of England until now he had to requisition men's incomes. As for Jekyll, he called the present proposals "a detestable measure of extortion and rapacity." The debates dragged on, until, after a powerful reply by Pitt in the small hours of 5th January 1798 the Finance Bill passed the Commons by 196 to 71. The Lords showed a far better spirit. Carrington declared that Pitt's proposals did not go far enough. Lord Holland in a maiden speech pronounced them worse than the progressive taxes of Robespierre. But Liverpool, Auckland, and Grenville supported the measure, which passed on 9th January 1798 by 75 to 6.
For a time the Finance Bill injured Pitt's popularity in the City. During the State procession on 19th December 1797, when the King, Queen, and Ministers went to St. Paul's to render thanks for the naval triumphs of that year, he was hooted by the mob; and on the return his carriage had to be guarded by a squadron of horse. Nevertheless, it is now clear that Pitt's proposals were both necessary and salutary. The predictions of commercial ruin were soon refuted by the trade returns. Imports in 1798 showed an increase of £6,844,000 over those of 1797; exports, an increase of £3,974,000. In part, doubtless, these gratifying results may be ascribed to renewed security at sea, the bountiful harvest of 1798, and the recent opening up of trade to Turkey and the Levant. But, under a vicious fiscal system, trade would not have recovered from the severe depression of 1797. Amidst all the troubles of the Irish Rebellion of 1798, Pitt derived comfort from the signs of returning prosperity.