ENGLAND: REFORM OF COMMERCIAL POLICY
=430. Burden of tariff on trade and manufactures.=—After this survey of
the development of English trade in the first half of the century we
must attend to a most important change in English commercial policy,
which lies mainly in this period. We shall consider three groups of
topics: the reform of the general tariff; the repeal of the corn laws,
protecting agricultural products, especially wheat; and the repeal of
the navigation laws, protecting shipping.
England entered the nineteenth century with a cumbrous mass of tariff
regulations inherited from the past, from which only the worst excesses
had been pruned by statesmen like Walpole and Pitt. Customs laws had
accumulated for 500 years to the amount of 1,500 statutes, “often
confused, often contradictory, sometimes unintelligible.” Hardly any
ware which was obtainable abroad, whether it was a raw material or a
manufactured product, escaped the duties levied under one or another of
these laws. The duties were heavy and were enforced with unreasoning
severity; a man who imported a mummy from Egypt was told that it was
a non-enumerated manufacture, dutiable at nearly $1,000. Internal
taxes reached articles which escaped the customs tariff. The taxes
on the publication of books were so heavy that they amounted on an
ordinary edition to one seventh of the whole cost, and exceeded the
remuneration of the author. The cotton manufacturer had to pay not
only an import duty on his raw cotton (higher when it was brought in a
foreign ship); he had to pay an excise or internal tax on calico which
he printed; and he had to pay taxes, in one form or another, on all
the important materials he used in manufacture,—flour, starch, leather,
soap, dyestuffs, paper, timber, brick, tiles. A man could not build
a factory, or run it, or feed and clothe his workmen, without paying
taxes at every step.
=431. Prevalence of smuggling.=—A partial relief from the burden of
the customs was obtained by smuggling. Tariffs could hinder but could
not absolutely stop the natural movement of commodities. Smuggling was
a regular profession, with a tariff modeled on the regular tariff,
but enough lower to invite business; the smuggler’s charge varied
ordinarily from 15 to 40 per cent ad valorem. Large numbers of the
common people were leagued with the smugglers to defy the law, and the
upper classes, even the legislators themselves, accepted smuggling as
a matter of course. A member of the House of Commons once flourished
his silk bandanna handkerchief before the House, saying: “Here is a
foreign ware that is totally prohibited. Nearly every one of you has a
similar illicit article in his pocket. So much for your prohibition.”
The government framed its duties with an eye to the ease of evading
them; it laid a higher duty on fancy silks than on plain, because the
smugglers were at a disadvantage in handling the former, which had to
be brought in at once, before the fashions changed, while plain goods
could wait the smuggler’s convenience.
=432. Beginning of the reform movement, 1820.=—More and more as time
went on, and England’s commercial capacity increased, were the evils
and abuses of the system appreciated. By 1820 the times were ripe for
a change, and the movement to reform was initiated in that year by
a petition from a group of London merchants. The petition urged the
principle of free trade which the economist Adam Smith had supported
in his “Wealth of Nations” (published in 1776), and prayed that all
restrictive regulations, not imposed on account of the revenue,
including all duties of a protective character, might be repealed at
once.
=433. Reform of the tariff under Huskisson.=—The early stages of tariff
reform, effected under the leadership of Huskisson about 1825, included
the following: (1) The simplification and condensation into manageable
form of the customs laws. (2) Reduction or removal of the duties on
raw materials. (3) Reduction of the duties on manufactures, generally
to 30 per cent or less, on the principle that such a duty was ample
for protection, if a ware could be made at home to advantage. (4) The
removal of most of the restrictions on export. These restrictions had
affected raw materials, partly manufactured goods, and even artisans
themselves. The government had tried to keep skilled workmen at
home, but found that it merely made them discontented, forced them
to evasions, and kept them from coming back when they had once left
the country: it left them henceforth free to emigrate. It was still
unwilling to allow machinery to be exported freely, for fear that
other countries would build up a competition in manufactures, but it
recognized the difficulty of making its restrictions effective, and
relaxed them greatly.
=434. Results and later completion of the reform.=—The results of the
reform exceeded anticipations. Not only did those industries benefit
which (like cotton, for instance) had previously been taxed for the
support of others, but the protected industries themselves gained by
the revision of the laws. The export of woolen stuffs increased rapidly
after the removal of the prohibition on the export of raw wool. The
silk manufacture, which had made slow progress and secured only a small
market under the system of high duties and prohibitions, advanced more
rapidly now in a decade than it had done before in a century.
The work of reform was, however, still far from complete; the tariff
retained many incongruities and was felt still to be oppressive by the
business interests of the country. The second stage in the advance to
free trade was effected under Sir Robert Peel, who in 1842 secured the
reduction of duties on 750 articles, and in 1845 abolished 430 out of a
total of 813 import duties. Peel’s reforms left still a considerable
element of protection in the tariff, and the final acceptance of free
trade waited till Gladstone’s laws of 1853 and 1860, which lowered and
then swept away import duties by the hundred, and left the English
tariff substantially in its present shape. The system of “free trade”
which England has since maintained does not imply a complete lack
of import duties; more than one fifth of the total revenue from
taxes is now yielded by the customs. Import duties, however, have
been restricted to a very few commodities, and are “revenue,” not
“protective” duties, in the sense that they do not encourage the
production in England of anything which can be produced more cheaply
abroad.
=435. The corn laws and their effects.=—Previous to the great changes
which turned England into a manufacturing country, the agricultural
interests which controlled Parliament had assured themselves a good
measure of protection in framing the tariff laws. The importation of
grain was prevented by high duties; and the export was favored by
bounties when the supply was relatively plentiful and the price fell
below about $1.50 a bushel. Export became more and more rare as the
home demand for foodstuffs grew with the increase in the industrial
population; and toward the close of the eighteenth century it became
ever a more serious question whether England could produce at home
sufficient food for her growing people. An attempt was made to arrange
the laws so as to keep the price of wheat steady at about 48s. a
quarter ($1.50 a bushel), but the laws did not succeed in preventing
violent fluctuations in the price. At the close of the great wars, in
1815, English agriculturists demanded a continuance of the protection
which the stoppage of commerce had afforded them and the import of
foreign wheat was prohibited so long as the price at home did not
rise above 80s. (about $2.50 a bushel, or about $.30 for the quartern
loaf of bread). Landlords got high rents as a result, but farmers who
leased their land suffered when prices fell to a reasonable level,
and consumers were forced to pay extortionate prices for a prime
necessity. Hundreds of thousands of the working classes were brought to
the verge of starvation in 1817 by the price of wheat rising to 112s.
(about $3.50 a bushel).
=436. Movement of English manufacturers for a repeal of the corn
laws.=—The House of Commons, even after the electoral reform of 1832,
afforded but little representation to the manufacturing and mercantile
classes; four fifths of its members belonged to the landed interests,
and though they made some slight concessions they refused to grant
adequate relief. It was necessary for the opposition, which organized
under the name of the Anti-Corn-Law League, to carry on its campaign
outside of Parliament; it could report, at the annual meeting of
1843, that nine million tracts had been distributed, and meetings had
been held in 140 towns. Inside of Parliament the movement engaged the
energies of orators like Cobden and Bright, who saw in it a question of
life and death for English manufactures. How was the manufacturer to
pay the wages which such a costly food supply required? To whom was he
to sell his goods when so large a proportion of English incomes had to
be expended for bare necessaries, and when England refused to take from
foreign countries the commodities which they offered in exchange? Even
among the agricultural classes the landlords were the sole gainers. The
agricultural laborers were wretchedly poor; Cobden asserted that none
of them spent more than about $7.50 a year in manufactured articles, if
shoes were excepted, and that they bought a smaller amount of English
manufactures than the people of Brazil.
=437. Repeal of the corn laws and its significance.=—With the passage
of time and with the growth of the industrial population conditions
changed from bad to worse. The combination of a bad harvest and bad
times in business in 1841 forced thousands of the manufacturing
population to seek poor relief, while other thousands were estimated to
be earning on the average less than a shilling a week. It needed only
a shock like that given by the crop failure in the first year of the
Irish famine, 1845, to force the change which had come gradually to be
recognized as inevitable. Peel’s act of 1846 left a slight protection
for a few years; but after 1849 only a nominal duty was to remain, and
even this was abolished later.
The repeal of the corn laws was a momentous act in English history.
It marks the formal and final recognition that England had grown
from an agricultural to an industrial and commercial state. It threw
England, as an English economist said, from corn to coal as the staple
product of the country. Manufactures and trade thenceforth developed
freely. Even the agricultural interest gained in ways which it had not
foreseen: the consuming population increased rapidly both in numbers
and in purchasing power, and demanded increasing quantities of meat,
dairy produce, vegetables, and fruit. The full effect of the change on
commerce will be apparent when we review the history of the last half
of the century.
=438. Reform of the navigation acts.=—This survey of the course of
English policy in the first half of the nineteenth century will be
closed by the consideration of a third topic, the laws protecting
shipping. Reference to a previous chapter will show how severe were
the restrictions meant to prevent the competition of foreign shipping,
in the seventeenth and eighteenth centuries. The period now under
consideration was marked by the removal of all these restrictions, and
by a great growth, notwithstanding, in the English merchant marine.
The establishment of the independence of the United States, and later
of the Spanish American republics, overthrew the colonial theory on
which many of the navigation acts were based, and forced numerous
revisions. The long wars of the Napoleonic period, also, led England
to grant privileges to neutral powers in the carrying trade. Important
breaches, therefore, had been made in the old system before the century
was far advanced, and it was in no condition to withstand the assaults
directed against it by people both abroad and at home whose interests
it injured. The United States adopted a policy of reprisal which
forced England to admit American ships freely to English ports, and
threats of similar action by European countries led in 1824 and the
years immediately following to a series of treaties putting foreign
ships on an equality with English.
=439. Final repeal of the navigation acts.=—The navigation acts had
grown into a most complicated system, and it is impossible to describe
in detail their gradual relaxation. By 1830 English ships had lost
all their privileges except in the coasting trade, and in the trade
with and between the colonies. Even this amount of protection came to
be regarded as a burden not only on commerce but on shipping itself,
and was abolished in 1849 and 1854. Every step in the reform of the
navigation acts was bitterly fought by adherents of the old system, who
prophesied ruin to English shipping if it were denied protection and
left to make its own way. How groundless were the fears of those who
opposed reform can be seen in the following table, giving in millions
the tonnage of English ships in the period 1800-1850: 1800, 1.6; 1810,
2.2; 1820, 2.4; 1830, 2.2; 1840, 2.5; 1850, 3.5.
QUESTIONS AND TOPICS
1. Are all taxes of equal amount equally burdensome? Would a country
fare as well if it raised its revenue by taxing saws and chisels
instead of cigarettes and playing cards?
2. What are the effects of smuggling on (_a_) the public revenue,
(_b_) honest merchants, (_c_) consumers?
3. How do the rates of the English tariff, as established at this
time, compare with the rates of the present tariff of the United
States?
4. On what articles are import duties still levied in Great Britain?
[See Statesman’s Year-Book, index, Great Britain, customs.]
5. The corn laws and their effects. [Morley, Cobden, chap. 7; Rand.
Ec. hist., chap. 9.]
6. English agriculture under the corn laws. [Traill, Soc. England, 6:
75-84, 211-217.]
7. The agitation for repeal of the corn laws. [McCarthy, vol. 1, chap.
14; Morley, Cobden, chap. 6.]
8. The repeal of the corn laws. [McCarthy, vol. 1, chap. 15.]
9. English agriculture after the repeal. [Traill, Soc. England, 6:
404-421, 599-607.]
10. What were the main features of the navigation acts? [See above,
sect. 358, or study the main provisions in Rand, Ec. hist., appendix
1.]
11. Conditions at the time when the Acts were repealed. [Lindsay, vol.
3, chap. 6.]
12. Development of the merchant marine. [Traill, Soc. England, 6:
392-404; Ward, Reign, 2: 111-118.]
BIBLIOGRAPHY
The best single source on the topics of this chapter is Bernard
Holland, **The fall of protection, 1840-1850, London, 1913. Of more
comprehensive and more elementary books may be mentioned Mongredien,
*History of the free-trade movement, and Armitage-Smith, **Free-trade
movement, which is well suited to topical assignment. Similar in scope
is W. Cunningham, **Free-trade movement, with concluding chapters on
recently projected changes.
The best account of the corn laws is to be found in Morley’s **Life of
Cobden, and George Macaulay Trevelyan’s **Life of John Bright, London,
1913. Graphic pictures of conditions of life under the corn laws are
provided by The hungry forties: life under the bread tax, London,
1904; and J. K. Snowden’s Corn law memories, in Contemp. Review, 1905,
88: 64-71. J. S. Nicholson, *History of the English corn laws, London,
1904, is a thoughtful study in brief compass, but is not suited to
topical reading.
The navigation acts are treated by Holland, and at considerable length
in the third volume of Lindsay. The best recent contributions on the
subject are in periodical literature: John Rae, **English shipping
under protection, in Contemporary Review, 1905, 87: 666-675; J. H.
Clapham, ** The last years of the navigation acts, English Hist. Rev.,
1910, 25: 480-501, 687-707.