A.D. 1823.]

FINANCIAL PROSPERITY OF THE NATION.

81

chilling fogs of despondency, and dissipating the gloom which had occurred during the continuance of the war. of the popular mind. In all the material articles there had been a considerable In opening the session of 1823 the king, referring increase. The export of cotton had increased ten per to this cheering state of things, said, "Deeply as his cent., and hardware seventeen per cent.; of linens twelve majesty regrets the continued depression of the agri- per cent., and of woollens thirteen per cent.; and the cultural interest, the satisfaction with which his majesty aggregate exports of 1822 exceeded those of 1820 by contemplates the increasing activity which pervades the twenty per cent., and of 1821 by seven per cent., notwithmanufacturing districts, and the flourishing condition of standing a deduction was to be made from the exports of our commerce in most of its principal branches, is greatly one great article, sugar, owing to a prohibitory decree of enhanced by the confident persuasion that the progressive Russia, amounting to thirty-five per cent." The result of prosperity of so many of the interests of the country can- this prosperous state of things was that, in 1823, the not fail to contribute to the improvement of that great new chancellor of the exchequer was enabled to present interest which is the most important of them all." And the best and most popular budget that had been laid before in the royal speech delivered in opening the session of parliament for many years, remitting a large amount of 1824, he referred to the same subject in a strain taxes that had pressed most heavily on the springs of of congratulation, saying, "Trade and commerce are industry, and inflicted the greatest amount of inconextending themselves both at home and abroad. An venience and privation upon the people. The revenue increasing activity pervades almost every branch of manuof the nation in that year was £57,000,000, and the expenfacture; the growth of revenue is such as not only to sustain diture was estimated at £49,852,786, leaving a surplus of public credit, and to prove the unimpaired productiveness of upwards of £7,000,000. Of this surplus, £5,000,000 was our resources, but to evince a diffusion of comfort among set aside for the reduction of the national debt, and the great body of the people. Agriculture is recovering the remainder for the remission of taxes. As the assessed from the depression under which it laboured, and, by the taxes were most oppressive, they were reduced fifty per cent., steady operation of natural causes, is gradually re-assuming a reduction which was estimated on the window tax alone the station to which its importance entitles it among the at £1,205,000. On the whole, the assessed taxes were great interests of the nation. At no former period has there reduced by £2,200,000. This included £100,000, the prevailed throughout all classes in this island a more cheerful total amount of assessed taxes in Ireland. In England the spirit of order, or a more just sense of the advantages whole of the window tax was removed from the ground which, under the blessings of Providence, they enjoy. In floors of shops and warehouses. In the following year the Ireland, which has for some time past been the object of chancellor of the exchequer had a still more agreeable achis majesty's particular solicitude, there are many indica- count to render to the nation. The emperor of Austria had agreed to pay £2,500,000 out of an old debt of £6,000,000, an agreement which nobody expected. There was also a surplus this year, which enabled the chancellor of the exchequer to devote £5,000,000 to the reduction of the national debt, and £1,250,000 to the remission of the duties on rum, coals, wool, silk, and law proceedings.

tions of amendment."

On the 12th of February, 1823, the president of the board of trade said, in his place in parliament:-" The general exports of the country in the four years from 1815 to 1819 had decreased £14,000,000 in official value; and he took the official value in preference to the declared, because it was from the quantity of goods produced that the best measure was derived of the employment afforded to the different classes of the community. In the year from the 5th of January, 1819, to the 5th of January, 1820, the exports of the country fell off no less than £11,000,000; and in looking at that part of it which more completely embraced British or Irish manufacture, he found that the difference in four years was £8,414,711; and that in the year from the 5th of January, 1820, to the 5th of January, 1821, there was a decrease of £8,929,629. Nobody, therefore, could be surprised that, at that period, the industry of the country appeared to be in a state of the utmost depression; that our manufacturers were most of them unemployed; that our agriculturists were many of them embarrassed; and that the country, to use the phrase of a friend of his in presenting a petition from the merchants of London, exhibited all the appearances of a dying nation. Though the condition of the agricultural interest was not as favourable as he could wish, still it was most satisfactory for him to state that not only did the exports of last year (1822) exceed those of all the years to which he had been alluding, but also those of the most flourishing year

Hitherto, everything connected with the public accounts and the national debt was involved in mystery. So great were the complications that it was difficult for even the best accountants to understand them, while they were almost unintelligible to the public. Mr. Robinson showed the strength and superiority of his mind by attempting to simplify the whole financial system, especially what related to the national debt, for the reduction of which he set apart the annual sum of £5,000,000. This was the "sinking fund," which, had it been preserved, would, in thirty years, with the growing interest upon interest, have paid off £300,000,000 of the public debt. But it was not preserved, and the national debt still remains almost in its integrity, absorbing nearly half the revenue to pay the interest on it. In 1824 government was able to spare £500,000 sterling for the building of churches in the manufacturing districts, £1,000,000 having been previously granted for the same purpose. The sum of £300,000 was voted for repairing and enlarging Windsor Castle, and £57,000 for the purchase of Mr. Angerstein's collection of pictures, which laid the founde tion of the present National Gallery.

In 1823 we behold the starting point of the liberal

system of commercial policy, for which not only England, alterations. The 3 George IV., cap. 41, repealed certain but the world, is so much indebted the rivulet, which statutes relating to foreign commerce which were passed gradually expanded into a mighty river, bearing incal- before the Navigation Act. Another act (cap. 42) reculable blessings upon its bosom to every nation under pealed that part of the Navigation Act itself which heaven. The appointment of Mr. Huskisson as a member required that goods of the growth or manufacture of Asia, of the government was an immense advantage to the Africa, and America should only be imported in British nation. He was a man of great abilities, which he had ships; and that no goods of foreign growth or manufacperseveringly devoted to the study of political economy. ture should be brought from Europe, except from the place He was a complete master of all subjects in which statistics of their production, and in the ships of the country prowere involved, and was universally looked up to as the ducing them. The next enactment prescribed certain highest authority on all financial and commercial ques-specified goods to be brought to Great Britain from any tions. As president of the board of trade, he had ample opportunities of turning his knowledge to account, and to him is mainly due the initiation and direction of the course of commercial policy which a quarter of a century later issued in the complete triumph of free trade. Mr. Huskisson was not only intimately acquainted with the whole range of economic, financial, and mercantile subjects, in their details as well as in their principles, he was also a powerful debater, a sound reasoner, and was animated in all he did by a spirit of generous philanthropy.

A law in force since the time of Cromwell had provided that no merchandise from Asia, Africa, or America should be imported into Great Britain in any foreign ships; and not only the commander, but three-fourths of the crew, were required to be English. In addition to this restriction of our foreign commerce to English-built and Englishmanned ships, discriminating duties were imposed upon foreign ships from Europe, which had to pay more heavily than if the goods were imported under the English flag. The object of this system, which prevailed for one hundred and fifty years, was to maintain the ascendancy of England as a maritime power. Adam Smith remarks, that the Navigation Act may have proceeded from national rivalry and animosity towards Holland; but he held that its provisions were as beneficial as if they had been dictated by the most consummate wisdom. He admits, however, that they were not favourable to foreign commerce, or to the growth of that opulence that can arise from it, remarking, "As defence is of more value than opulence, the Act of Navigation is perhaps the wisest of all the commercial regulations of England." But had Adam Smith lived in our time, he would have seen that the utmost freedom of commerce with foreign nations, and the most boundless opulence arising from it, are quite compatible with a perfect system of national defence; and whatever were the advantages of the restriction system, other nations could act upon it as well as England. America did so, and thus commenced a war of tariffs equally injurious to herself and the mother country, causing the people of each to pay much more for most of the commodities they needed than they would have done if the markets of the world were open to them. The consequence was, that both parties saw the folly of sending their ships across the Atlantic in ballast, and a commercial treaty was concluded in 1815, which put the shipping of both America and England upon an equal footing, and relieved them from the necessity of paying double freight. The reciprocity system was also partially adopted in our commerce with other countries. In 1822 Mr. Wallace had brought in four bills, which made other important

port in Europe, in ships belonging to the ports of shipment. Two other acts further extended freedom of commerce, and removed the vexatious restrictions that had hampered our colonial and coasting trade. In 1823 Prussia retaliated,

as the United States had done, which led Mr. Huskisson to propose what are called the Reciprocity Acts, 4 George IV., cap. 77, and 5 George IV., cap. 1, which empowered the king, by order in council, to authorise the importation and exportation of goods in foreign ships from the United Kingdom, or from any other of his majesty's dominions, on the same terms as in British ships, provided it should first be proved to his majesty and the privy council that the foreign country in whose favour the order was made had placed British ships in its ports on the same footing as its own ships. Since that time reciprocal treaties of navigation have been made with Prussia, Denmark, Hanover, Greece, Holland, France, Sweden, Austria, Russia, Portugal, and several other countries.

These enactments proved an immense advantage to the people of the nations affected by them, and gave satisfaction to all parties but the ship-owners, who cried out loudly that their interest was ruined. But their complaints were altogether unfounded, as will appear from the following figures. Under the restrictive system, from 1804 to 1823, the tonnage of British shipping had increased only ten per cent. Under the Reciprocity Acts and the free trade system, from 1823 to 1845, the increase rose to forty-five per cent. This result fully bore out the calculations and anticipations of Mr. Huskisson, in his answer to the arguments of the protectionists. They contended that the end of the free trade system would be to drive the trade of Great Britain into the hands of foreign countries; that other nations would not reciprocate in the same liberal spirit; that five-sixths of the carrying trade between Great Britain and America was carried on in American ships; and that it was quite impossible, without a repeal of the duties on Baltic timber, that British ship-builders could compete with foreign nations, who had wood at their own doors, and could navigate their ships for half the wages that the British ship-owners were obliged to pay to their sailors. Referring to the retaliatory measures of other countries, Mr. Huskisson said:-"In such a state of things it is quite obvious that we must adopt one of two courses. Either we must commence a commercial conflict through the medium of protective duties and prohibitions (a measure of impolicy which it is believed no man will now propose), or we must admit other powers to a perfect equality and reciprocity of shipping duties. The latter appears to be the course which we are bound to adopt. Its effect, I am persuaded, will be

A.D. 1823.]

PETITION OF THE LONDON MERCHANTS FOR FREE TRADE.

S3

to lead to a great increase of the commercial advantages of the country; while, at the same time, it will have a tendency to promote and establish a better political feeling and confidence among the maritime powers, and abate the sources of commercial jealousy. It is high time, in the improved state of civilisation of the world, to establish more liberal principles, and show that commerce was not the end, but the means of diffusing comfort and enjoyment among the nations embarked in its pursuit. Those who have the largest trade must necessarily derive the greatest advantage from the establishment of better international regulations. When England abandons her old principle, the united Netherlands, and the other powers who are now prepared to retaliate, will gladly concur in the new arrangement. I am prepared to hear from the other side that the proposed alteration will be prejudicial to the British shipping interest. In this observation I cannot concur. I think, on the contrary, that the shipping interest of this country has nothing to apprehend from that of other nations. When the alteration in the navigation laws was first projected, similar unfavourable prognostications were made by part of the shipping interest; but these anticipations have proved to be entirely unfounded. The shipping of Great Britain is perfectly able to compete with that of other countries. It is quite time to get rid of the retaliatory principle, which, if carried to the extreme of which it is susceptible, must injure every species of trade. One sort of shipping would be carrying the trade of our country, and then returning without any equivalent advantage, to make way for the countervailing regulations of another power, or else to return in ballast. What would be thought of our establishment if a wagon should convey goods to Birming-production of certain commodities, are ready to supply us ham and afterwards return empty? The consumer would, it was probable, be little satisfied with such a way of conveying his merchandise. The consequence would be that there would necessarily be two sets of wagons to do that work which was now performed by one, and that, too, at a considerable increase of price on the raw material. We are not now able to carry on a system of restriction, labouring, as we have for some time been, under many and unavoidable restrictions. Our trade and commerce, it is true, are rapidly improving, but they still require that we should adopt every measure by which either could be fostered or improved. What I propose is, that the duties and drawbacks should be imposed and allowed upon all goods equally, whether imported or exported in British or foreign vessels, giving the king in council a power to declare that such regulations should extend to all countries inclined to act upon a system of reciprocity, but reserving to the same authority the power of continuing the present restrictions with respect to those powers who should decline to do so." The great principle of free trade had been first distinctly enunciated, not by any minister of the crown, but by the London merchants, in a petition adopted by them in 1820, embodying the maxim of buying in the cheapest market and selling in the dearest, which regulates every merchant in his individual dealings, and which, they contend, is strictly applicable as the best rule for the trade of the whole nation, as it would render the commerce of the whole world an interchange of mutual advantages, and in

crease the amount of wealth and enjoyment among the inhabitants of each state. They remark that, unfortunately, a policy the reverse of this had been adopted, and more or less acted upon by the government of this and every other country, each trying to exclude the productions of other countries, with a specious and well-meant design of encouraging its own productions, thus inflicting on the bulk of its own people, who are the consumers, the necessity of submitting to privations in the quantity or quality of commodities, and thereby rendering what ought to be source of mutual benefit and of harmony among states a constantly recurring occasion of jealousy and hostility. They argue, that whereas the prevailing prejudices in favour of the protective or restrictive system arise from the supposition that the importation of foreign commodities occasions a diminution or discouragement of our own productions to the same extent, it may be clearly shown that though the production of one particular commodity might be discouraged because we could get it cheaper and better elsewhere, yet the production of other commodities would be encouraged to a far greater extent, so that the general industry of the country would be fostered and promoted by the more extensive and more beneficial employment of capital and labour. They pointed out, amongst the numerous evils of the protective system, the fact that the artificial protection of one branch of industry becomes the ground of a claim put forth by all other branches for similar protection; so that if the principle were fully carried out, it would tend to the exclusion of all foreign commerce, and cut off the nation from the enjoyment of the benefits which other nations, more favourably circumstanced for the

with on moderate terms. With enlightened views far in advance of the statesmen of Europe at the time, and perhaps in advance of some of its governments at the present time, the London merchants thus answer the leading objection against the principles of free trade :-" Although, as a matter of mere diplomacy, it may sometimes answer to hold out the removal of particular prohibitions or high duties, as depending upon corresponding concessions by other states in our favour, it does not follow that we should maintain our restrictions in cases where the desired concessions on their part cannot be obtained; our restrictions would not be the less prejudicial to our own capital and industry because other governments persisted in preserving impolitic regulations. Independent of the direct benefit to be derived by this country on every occasion of such concessions or recognitions, a great incidental object would be gained, by the recognition of the sound principle or standard to which all subsequent arrangements might be referred, and by the salutary influence which the promulgation of such just views by the legislature and by the nation at large could not fail to have on the legislation of foreign states. As long as the necessity for the present amount of revenue subsists, it cannot be expected that so important a branch of it as the customs should be given up, or materially diminished, unless some substitute for it less objectionable be suggested. But it is against every restrictive regulation of trade not essential to the revenue, against all duties merely protective, against foreign competition, and

against the excess of such duties as are partly for the pur-wards closed for centuries by the absurd and barbarous poses of revenue, partly for that of protection, that the policy of Spain, has, as it were, been re-discovered in our prayer of the present petition is respectfully submitted to days. The last remnant of the veil which concealed it the wisdom of parliament."* from the observation and intercourse of mankind has just been torn away, and we see it abounding not only in those metals which first allured the avarice of needy adventurers, but in those more precious productions which sustain life and animate industry, cheering the mind of the philosopher and statesman with boundless possibilities of reciprocal advantages in civilisation and commerce. The people of England felt and acknowledged their happiness; the public contentment was upon a level with the public prosperity. We have learned, too, from what source these blessings flow. All the complaints of the decay of our manufactures from the change of system have proved fallacious. longer dread the rivalry of the foreigner in our markets; we can undersell him in his own. The silk manufacture, since it was freed from shackles, has increased almost as fast as the cotton, which has been always free from them. We have now been fully taught that the great commercial prosperity of England has arisen, not from our commercial re

We no

This petition, which was drawn up by Mr. Tooke, contains a statement of the case against protection, which, for force and perspicuity, has never been surpassed by any subsequent writer. The effects of the commercial policy which the London merchants may be said to have originated were not confined to commercial matters. They embraced the whole system of government, and indicated the dawn of a brighter era in our national policy, when the system of toryism-which may be described as an organisation of class selfishness and national jealousy—was about to give way to the reign of liberality and Christian philanthropy in the legislation of the country. The ablest champion of protection, Sir Archibald Alison, frankly admits, while deploring, the importance of the change, which amounted to an entire revolution. "It indicates," he says, "the advent of a period when the commercial body were not content to take the regulations affecting their interests from the hands of the legislature, but thought for them-strictions, but in spite of them." The “Annual Register," selves, and approached parliament rather as teachers than suppliants. Its subsequent adoption as a part of the settled policy of the country proved that the time was approaching when the commercial interests were to gain the ascendancy over the producing, and when every other interest was to be sacrificed to those of cheapness in production and economy in consumption. Whatever may be thought of these principles, upon which the opinions of men will probably be divided to the end of the world, according as they belong to the buying and selling or producing class, one thing is clear-that they came from the country, not the government; and that they are not so much to be ascribed to the influence of any individuals, however powerful, as to the immense growth of the commercial class in society, which enabled it to command the press, influence the majority of parliament, and obtain the general direction of public opinion." †

Of course, the commercial changes introduced by Mr. Huskisson and Mr. Robinson excited loud murmurs of dissatisfaction from the interests affected, especially the shipping interest. But the best answer to all objectors was the continuous flourishing state of the country. At the opening of the session in 1825, lord Dudley and Ward, in moving the address in answer to the king's speech in the upper house, observed:-"Our present prosperity is a prosperity extending to all orders, all professions, and all districts, enhanced and invigorated by the flourishing state of all those arts which minister to human comfort, and those inventions by which man obtains a mastery over nature by the application of her own powers, and which, if one had ventured to foretell a few years ago, it would have appeared almost incredible. There never was a time when the spirit of useful improvement, not only in the arts but in all the details of domestic administration, whether carried on by the public or by individuals, was so high. That world, too, which had first been opened to us by the genius of a great man, but after

Porter's "Progress of the Nation," p. 382.

"History of Europe," from 1815 to 1852, vol. ii., p. 706.

which records this speech, goes more into detail on the same subject:-" Agricultural distress had disappeared; the persons engaged in the cotton and woollen manufactures were in full employment; the various branches of the iron trade were in a state of activity; on all sides new buildings were in a state of erection, and money was so abundant that men of enterprise, though without capital, found no difficulty in commanding funds for any plausible undertaking. This substantial prosperity was stimulated by the operations of the many joint-stock banks and companies which had recently sprung into existence." The "Quarterly Review" of that year gives a vivid picture of the prosperous state of the nation. "The increased wealth of the middle classes," says the great tory organ, "is so obvious that we can neither walk the fields, visit the shops, nor examine the workshops and store-houses without being deeply impressed with the changes which a few years have produced. We see the fields better cultivated, the barns and stack-yards more fully stored, the horses, cows, and sheep more abundant and in better condition, and all the implements of husbandry improved in their order, their construction, and their value. In the cities, towns, and villages we find shops more numerous, and better in their appearance, and the several goods more separated from each other-a division that is the infallible token of increased sales. The increase of goods thus universally diffused is an indication and exhibition of flourishing circumstances. The accounts of the bankers in the metropolis and provincial towns, small as well as large, with the balances of money resting in them, ready to embrace favourable changes in the price of any commodity, or to be placed at interest as beneficial securities present themselves, have increased to an enormous amount. The projects for constructing tunnels, railroads, canals, or bridges, and the eagerness with which they are embraced, are proofs of that accumulation from savings which the intermediate ranks of society have by patience and perseverance been enabled to form. The natural effect of this advancement in possessions has been