At the general election of 1892 Mr Chamberlain was again returned, with an increased majority, for West Birmingham; but the Unionist party as a whole came back with only 315 members against 355 Home Rulers. In August Lord Salisbury’s ministry was defeated; and on the 13th of February 1893 Mr Gladstone introduced his second Home Rule Bill, which was eventually read a third time on the 1st of September. During the eighty-two days’ discussion in the House of Commons Mr Chamberlain was the life and soul of the opposition, and his criticisms had a vital influence upon the attitude of the country when the House of Lords summarily threw out the bill. His chief contribution to the discussions during the later stages of the Gladstone and Rosebery ministries was in connexion with Mr Asquith’s abortive Employers’ Liability Bill, when he foreshadowed the method of dealing with this question afterwards carried out in the Compensation Act of 1897. Outside parliament he was busy formulating proposals for old age pensions, which had a prominent place in the Unionist programme of 1895. In that year, on the defeat of Lord Rosebery, the union of the Unionists was sealed by the inclusion of the Liberal Unionist leaders in Lord Salisbury’s ministry; and Mr Chamberlain became secretary of state for the colonies. There had been much speculation as to what his post would be, and his nomination to the colonial office, then considered one of secondary rank, excited some surprise; but Mr Chamberlain himself realized how important that department had become. He carried with him into the ministry his close Birmingham municipal associates, Mr Jesse Collings (as under secretary of the home office), and Mr J. Powell-Williams (1840-1904) as financial secretary to the war office. Mr Chamberlain’s influence in the Unionist cabinet was soon visible in the Workmen’s Compensation Act and other measures. This act, though in Sir Matthew White Ridley’s charge as home secretary, was universally and rightly associated with Mr Chamberlain; and its passage, in the face of much interested opposition from highly-placed, old-fashioned conservatives and capitalists on both sides, was principally due to his determined advocacy. Another “social” measure of less importance, which formed part of the Chamberlain programme, was the Small Houses Acquisition Act of 1899; but the problem of old age pensions was less easily solved. This subject had been handed over in 1893 to a royal commission, and further discussed by a select committee in 1899 and a departmental committee in 1900, but both of these threw cold water on the schemes laid before them—a result which, galling enough to one who had made so much play with the question in the country, offered welcome material to his opponents for electioneering recrimination, as year by year went by between 1895 and 1900 and nothing resulted from all the confident talk on the subject in which Mr Chamberlain had indulged when out of office. Eventually it was the Liberal and not the Unionist party that carried an Old Age Pensions scheme through parliament, during the 1908 session, when Mr Chamberlain was hors de combat.
From January 1896 (the date of the Jameson Raid) onwards South Africa demanded the chief attention of the colonial secretary (see [South Africa], and for details [Transvaal]). In his negotiations with President Kruger one masterful temperament was pitted against another. Mr Chamberlain had a very difficult part to play, in a situation dominated by suspicion on both sides, and while he firmly insisted on the rights of Great Britain and of British subjects in the Transvaal, he was the continual object of Radical criticism at home. Never has a statesman’s personality been more bitterly associated by his political opponents with the developments they deplored. Attempts were even made to ascribe financial motives to Mr Chamberlain’s actions, and the political atmosphere was thick with suspicion and scandal. The report of the Commons committee (July 1897) definitely acquitted both Mr Chamberlain and the colonial office of any privity in the Jameson Raid, but Mr Chamberlain’s detractors continued to assert the contrary. Opposition hostility reached such a pitch that in 1899 there was hardly an act of the cabinet during the negotiations with President Kruger which was not attributed to the personal malignity and unscrupulousness of the colonial secretary. The elections of 1900 (when he was again returned, unopposed, for West Birmingham) turned upon the individuality of a single minister more than any since the days of Mr Gladstone’s ascendancy, and Mr Chamberlain, never conspicuous for inclination to turn his other cheek to the smiter, was not slow to return the blows with interest.
Apart from South Africa, his most important work at this time was the successful passing of the Australian Commonwealth Act (1900), in which both tact and firmness were needed to settle certain differences between the imperial government and the colonial delegates.
Mr Chamberlain’s tenure of the office of colonial secretary between 1895 and 1900 must always be regarded as a turning-point in the history of the relations between the British colonies and the mother country. His accession to office was marked by speeches breathing a new spirit of imperial consolidation, embodied either in suggestions for commercial union or in more immediately practicable proposals for improving the “imperial estate”; and at the Diamond Jubilee of 1897 the visits of the colonial premiers to London emphasized and confirmed the new policy, the fruits of which were afterwards seen in the cordial support given by the colonies in the Boer War. Even in what Mr Chamberlain called his “Radical days” he had never supported the “Manchester” view of the value of a colonial empire; and during the Gladstone ministry of 1882-1885 Mr Bright had remarked that the junior member for Birmingham was the only Jingo in the cabinet—meaning, no doubt, that he objected to the policy of laissez-faire and the timidity of what was afterwards known as “Little Englandism.” While he was still under Mr Gladstone’s influence these opinions were kept in subordination; but Mr Chamberlain was always an imperial federationist, and from 1887 onwards he constantly gave expression to his views on the desirability of drawing the different parts of the empire closer together for purposes of defence and commerce. In 1895 the time for the realization of these views had come; and Mr Chamberlain’s speeches, previously remarkable chiefly for debating power and directness of argument, were now dominated by a new note of constructive statesmanship, basing itself on the economic necessities of a world-wide empire. Not the least of the anxieties of the colonial office during this period was the situation in the West Indies, where the cane-sugar industry was being steadily undermined by the European bounties given to exports of continental beet; and though the government restricted themselves to attempts at removing the bounties by negotiation and to measures for palliating the worst effects in the West Indies, Mr Chamberlain made no secret of his repudiation of the Cobden Club view that retaliation would be contrary to the doctrines of free trade, and he did his utmost to educate public opinion at home into understanding that the responsibilities of the mother country are not merely to be construed according to the selfish interests of a nation of consumers. As regards foreign affairs, Mr Chamberlain more than once (and particularly at Leicester on 30th November 1899) indicated his leanings towards a closer understanding between the British empire, the United States and Germany,—a suggestion which did not save him from an extravagant outburst of German hostility during the Boer War. The unusually outspoken and pointed expression, however, of his disinclination to submit to Muscovite duplicity or to “pin-pricks” or “unmannerliness” from France was criticized on the score of discretion by a wider circle than that of his political adversaries.
During the progress of the Boer War from 1899 to 1902, Mr Chamberlain, as the statesman who had represented the cabinet in the negotiations which led to it, remained the object of constant attacks from his Radical opponents—the “little Englanders” and “Pro-Boers,” as he called them—and he was supported by the Imperialist and Unionist party with at least equal ardour. But as colonial secretary, except in so far as his consistent support of Lord Milner and his enthusiastic encouragement of colonial assistance were concerned, he naturally played only a subordinate part during the carrying out of the military operations. Among domestic statesmen he was felt, however, to be the backbone of the party in power. He was the hero of the one side, just as he was the bugbear of the other. On the 13th of February 1902 he was presented with an address in a gold casket by the city corporation, and entertained at luncheon at the Mansion House, an honour not unconnected with the strong feeling recently aroused by his firm reply (at Birmingham, January 11) to some remarks made by Count von Büllow, the German chancellor, in the Reichstag (January 8), reflecting the offensive allegations current in Germany against the conduct of the army in South Africa. Mr Chamberlain’s speech, in answer to what had been intended as a contemptuous rebuke, was universally applauded. His own imperialism was intensified by the way in which England’s difficulties resulted in calling forth colonial assistance and so cementing the bonds of empire. The domestic crisis, and the sharp cleavage between parties at home, had driven the bent of his mind and policy further and further away from the purely municipal and national ideals which he had followed so keenly before he became colonial minister. The problems of empire engrossed him, and a new enthusiasm for imperial projects arose in the Unionist party under his inspiration. No English statesman probably has ever been, at different times in his career, so able an advocate of absolutely contradictory policies, and his opponents were not slow to taunt him with quotations from his earlier speeches. As the war drew to its end, new plans for imperial consolidation were maturing in his brain. Subsidiary points of utility, such as the formation of the London and Liverpool schools of tropical medicine from 1899 onwards, were taken up by him with characteristic vigour. But the next step was to prove a critical one indeed for the loyalty of the party which had so far been unanimous in his favour.
The settlement after the war was full of difficulties, financial and others, in South Africa. When Mr Arthur Balfour succeeded Lord Salisbury as prime minister in July 1902, Mr Chamberlain agreed to serve loyally under him, and the friendship between the two leaders was indeed one of the most marked features of the political situation. In November 1902 it was arranged that Mr Chamberlain should go out to South Africa, and it was hoped, not without reason, that his personality would effect more good than any ordinary official negotiations. At the time the best results appeared to be secured. He went from place to place in South Africa (December 26-February 25); arranged with the leading Transvaal financiers that in return for support from the British government in raising a Transvaal loan they would guarantee a large proportion of a Transvaal debt of £30,000,000, which should repay the British treasury so much of the cost of the war; and when he returned in March 1903, satisfaction was general in the country over the success of his mission. But meantime two things had happened. He had looked at the empire from the colonial point of view, in a way only possible in a colonial atmosphere; and at home some of his colleagues had gone a long way, behind the scenes, to destroy one of the very factors on which the question of a practical scheme for imperial commercial federation seemed to hinge. In the budget of 1902 a duty of a shilling a quarter on imported corn had been reintroduced. This small tax was regarded as only a registration duty. Even by free-trade ministers like Gladstone it had been left up to 1869 untouched, and its removal by Robert Lowe (Lord Sherbrooke) had since then been widely regarded as a piece of economic pedantry. Its reimposition, officially supported for the sake of necessary revenue in war-time, and cordially welcomed by the Unionist party, had justified itself, as they contended, in spite of the criticisms of the Opposition (who raised the cry of the “dear loaf”), by proving during the year to have had no general or direct effect on the price of bread. And the more advanced Imperialists, as well as the more old-fashioned protectionists (like Mr Chaplin) who formed an integral body of the Conservative party, had looked forward to this tax being converted into a differential one between foreign and colonial corn, so as to introduce a scheme of colonial preference and commercial consolidation between the colonies and the mother country. In South Africa—as in any other British colony, since all of them were accustomed to tariffs of a protectionist nature, and the idea of a preference (already started by Canada) was fairly popular—Mr Chamberlain had found this view well established. The agitation in England against the tax had now blown over. The Unionist rank and file were committed to its support,—many even advocating its increase to two shillings at least. But Mr Ritchie, the chancellor of the exchequer, having a surplus in prospect and taxation to take off, carried the cabinet in favour of again remitting this tax on corn. Mr Chamberlain himself had proposed only to take it off as regards colonial, and not foreign corn,—thus inaugurating a preferential system. But a majority of the cabinet supported Mr Ritchie. The remission of this tax, after all the conviction with which its restoration had been supported a year before, was very difficult for the party itself to stomach, and on any ground it was a distasteful act, loyally as the party followed their leaders. But to those who had looked to it as providing a lever for a gradual change in the established fiscal system, the volte-face was a bitter blow, and at once there began, though not at first openly, a split between the more rigid free-traders—advocates of cheap food and free imports—and those who desired to use the opportunities of a tariff, of however moderate a kind, for attaining national and imperial and not merely revenue advantages. This idea, which had for some time been floating in Mr Chamberlain’s mind (see especially his speech at Birmingham of May 16, 1902), now took full possession of it. For the moment he remained in the cabinet, but the seed of dissension was sown. The first public intimation of his views was given in a speech to his constituents at Birmingham (May 15, 1903), when he outlined a plan for raising more money by a rearranged tariff, partly to obtain a preferential system for the empire and partly to produce funds for social reform at home. On May 28th in the House of Commons he spoke on the same subject, and declared “if you are to give a preference to the colonies, you must put a tax on food.” Considered in the light of after events, this putting the necessity of food-taxes in the forefront was decidedly injudicious; but imperialist conviction and enthusiasm were more conspicuous than electioneering tact in the launching of Mr Chamberlain’s new scheme.
The movement grew quickly, its supporters including a number of the cleverest younger politicians and journalists in the Unionist party. The idea of tariff reform—to broaden the basis of taxation, to introduce a preference, and to stimulate home industries and increase employment—took firm root; and the political economists of the party—Prof. W. Cunningham, Prof. W. Ashley and Prof. W.A.S. Hewins, in particular—brought effective criticism to bear on the one-sided “free trade” in vogue. The first demand was for inquiry. The country was still bearing an income-tax of elevenpence in the pound; it appeared that the old sources of revenue were inadequate; and meanwhile the statistics of trade, it was argued, showed that the English free-import system hampered English trade while providing the foreigner with a free market. Mr Chamberlain and his supporters argued that since 1870 certain other countries (Germany and the United States), with protective tariffs, had increased their trade in much larger proportion, while English trade had only been maintained by the increased business done with British colonies. A scientific inquiry into the facts was needed. By the Opposition, who now found themselves the defenders of conservatism in the established fiscal policy of the country, this whole argument was scouted; but for a time the demand merely for inquiry, and the production of figures, gave no sufficient occasion for dissension among Unionists, even when, like Sir M. Hicks Beach, they were convinced free-importers on purely economic grounds; and Mr Balfour (q.v.), as premier, managed to hold his colleagues and party together by taking the line that particular opinions on economic subjects should not be made a test of party loyalty. The Board of Trade was set to work to produce fiscal Blue-books, and hum-drum politicians who had never shown any genius for figures suddenly blossomed out into arithmeticians of the deepest dye. The Tariff Reform League was founded in order to further Mr Chamberlain’s policy, holding its inaugural meeting on July 21st; and it began to take an active part in issuing leaflets and in work at by-elections. Discussion proceeded hotly on the merits of a preferential tariff, and on August 15th a manifesto appeared against it signed by fourteen professors or lecturers on political economy, including Mr Leonard Courtney, Professor Edgeworth, Professor Marshall, Professor Bastable, Professor Smart, Professor J.S. Nicholson, Professor Conner, Mr Bowley, Mr E. Cannan and Mr L.R. Phelps,—men of admitted competence, yet, after all, of no higher authority than the economists supporting Mr Chamberlain, such as Dr Cunningham and Professor Ashley.
Meanwhile, the death of Lord Salisbury (August 22) removed a weighty figure from the councils of the Unionist party. The cabinet met several times at the beginning of September, and the question of their attitude towards the fiscal problem became acute. The public had its first intimation of impending events in the appearance on September 16th of Mr Balfour’s Economic Notes on Insular Free Trade, which had been previously circulated as a cabinet memorandum. The next day appeared the Board of Trade Fiscal Blue-book. And on the 18th the resignations were announced, not only of the more rigid free-traders in the cabinet, Mr Ritchie and Lord George Hamilton, but also of Mr Chamberlain. Letters in cordial terms were published, which had passed between Mr Chamberlain (September 9) and Mr Balfour (September 16). Mr Chamberlain pointed out that he was committed to a preferential scheme involving new duties on food, and could not remain in the government without prejudice while it was excluded from the party programme; remaining loyal to Mr Balfour and his general objects, he could best promote this course from outside, and he suggested that the government might confine its policy to the “assertion of our freedom in the case of all commercial relations with foreign countries.” Mr Balfour, while reluctantly admitting the necessity of Mr Chamberlain’s taking a freer hand, expressed his agreement in the desirability of a closer fiscal union with the colonies, but questioned the immediate practicability of any scheme; he was willing to adopt fiscal reform so far as it covered retaliatory duties, but thought that the exclusion of taxation of food from the party programme was in existing circumstances necessary, so long as public opinion was not ripe. At the same time he welcomed the fact that Mr Chamberlain’s son, Mr Austen Chamberlain, was ready to remain a member of the government. Mr Austen Chamberlain (b. 1863) accordingly became the new chancellor of the exchequer; he was already in the cabinet as postmaster-general, having previously made his mark as civil lord of the admiralty (1895-1900), and financial secretary to the treasury (1900-1902).
From the turning-point of Mr Chamberlain’s resignation, it is not necessary here to follow in detail the discussions and dissensions in the party as a whole in its relations with the prime minister (see [Balfour, A.J.]). It is sufficient to say that while Mr Balfour’s sympathetic “send off” appeared to indicate his inclination towards Mr Chamberlain’s programme, if only further support could be gained for it, his endeavour to keep the party together, and the violent opposition which gathered against Mr Chamberlain’s scheme, combined to make his real attitude during the next two years decidedly obscure, both sections of the party—free-traders and tariff reformers—being induced from time to time to regard him as on their side. The tariff reform movement itself was now, however, outside the purely official programme, and Mr Chamberlain (backed by a majority of the Unionist members) threw himself with impetuous ardour into a crusade on its behalf, while at the same time supporting Mr Balfour in parliament, and leaving it to him to decide as to the policy of going to the country when the time should be ripe. In his own words, he went in front of the Unionist army as a pioneer, and if his army was attacked he would go back to it; in no conceivable circumstances would he allow himself to be put in any sort of competition, direct or indirect, with Mr Balfour, his friend and leader, whom he meant to follow (October 6).
On October 6th he opened his campaign with a speech at Glasgow. Analysing the trade statistics as between 1872 and 1902, he insisted that British progress involved a relative decline compared with that of protectionist foreign countries like Germany and the United States; Great Britain exported less and less of manufactured goods, and imported more and more; the exports to foreign countries had decreased, and it was only the increased exports to the colonies that maintained the British position. This was the outcome of the working of a one-sided free-trade system. Now was the time, and it might soon be lost, for consolidating British trade relations with the colonies. If the mother country and her daughter states did not draw closer, they would inevitably drift apart. A further increase of £26,000,000 a year in the trade with the colonies might be obtained by a preferential tariff, and this meant additional employment at home for 166,000 workmen, or subsistence for a population of a far larger number. His positive proposals were: (1) no tax on raw materials; (2) a small tax on food other than colonial, e.g. two shillings a quarter on foreign corn but excepting maize, and 5% on meat and dairy produce excluding bacon; (3) a 10% general tariff on imported manufactured goods. To meet any increased cost of living, he proposed to reduce the duties on tea, sugar and other articles of general consumption, and he estimated that his scheme would in no case increase a working-man’s expenditure, and in most cases would reduce it. “The colonies,” he said, “are prepared to meet us; in return for a very moderate preference, they will give us a substantial advantage in their markets.” This speech, delivered with characteristic vigour and Imperialistic enthusiasm, was the type of others which followed in quick succession during the year. At Greenock next day he emphasized the necessity of retaliating against foreign tariffs—“I never like being hit without striking back.” The practice of “dumping” must be fairly met; if foreign goods were brought into England to undersell British manufacturers, either the Fair Wages Clause and the Factory Acts and the Compensation Act would have to be repealed, or the workmen would have to take lower wages, or lose their work. “Agriculture has been practically destroyed, sugar has gone, silk has gone, iron is threatened, wool is threatened, cotton will go! How long are you going to stand it?” On October 20th he spoke at Newcastle, on the 21st at Tynemouth, on the 27th at Liverpool, insisting that free-trade had never been a working-class measure and that it could not be reconciled with trade-unionism; on November 4th at Birmingham, on the 20th at Cardiff, on the 21st at Newport, and on December 16th at Leeds. In all these speeches he managed to point his argument by application to local industries. In the Leeds speech he announced that, with a view to drawing up a scientific model tariff, a non-political commission of representative experts would be appointed under the auspices of the Tariff Reform League to take evidence from every trade; it included many heads of businesses, and Mr Charles Booth, the eminent student of social and industrial London, with Sir Robert Herbert as chairman, and Professor W.A.S. Hewins as secretary. The name of “Tariff Commission,” given to this voluntary and unofficial body, was a good deal criticized, but though flouted by the political free-traders it set to work in earnest, and accumulated a mass of evidence as to the real facts of trade, which promised to be invaluable to economic inquirers. On January 18th, 1904, Mr Chamberlain ended his series of speeches by a great meeting at the Guildhall, in the city of London, the key-note being his exhortation to his audience to “think imperially.”