THE NEW WEALTH
Commercial plutocracy not seen in England for the first time under
Queen Victoria, but dates from Queen Elizabeth or earlier. Wealth,
birth, intellect, often united in England. City traders being Lord
Mayors who from 1452 onwards have founded noble houses. The chief
elements in the new nineteenth century wealth considered. Gold
discoveries in California 1848, in Australia 1850. Their transforming
influences at home and abroad. Expert opinions of the period on the
consequences and the durability of the new gold. Different views and
calculations of Sir Archibald Alison, Sir Roderick Murchison,
Chevalier and Cobden. A new civilization resting on gold. Australian
millionaire farmers preceded millionaire gold diggers. Effects of new
gold upon circulating and fixed wealth of England tested by property
assessments.
'I respect the aristocracy of birth and of intellect. I do not respect the
aristocracy of wealth.' The remark is attributed to the great, or second,
Sir Robert Peel. It proceeds upon a confused view of the social principles
indicated by the words. It comes, somewhat inappropriately, from the
political successor of the William Pitt who bestowed more peerages upon
the possessors of mere wealth than any Minister before his time had done.
The distinction drawn by Sir Robert Peel between the different
aristocracies of England involves some misconceptions of social history.
In Austria there existed during the last century, there perhaps survives
faintly to this day, an antagonism between the principles of birth and of
wealth such as England has never known. With more than conventional
fitness is the Premier of the day, whether peer or commoner, the guest on
each 9th of November of the First Magistrate of London City. Within five
centuries, at least fourteen noble houses have been founded by ten Lord
Mayors.
In 1452 Sir Godfrey Feilding, mercer, was the Lord Mayor from whom the
Earls of Denbigh descend. Five years later another trader, Sir Godfrey
Boleine sat in the chair of Whittington. One of his lineage, a generation
or two later, as Earl of Wiltshire, gave Henry VIII. his second wife, and
England her first Protestant Queen. Some ninety years thereafter, Lord
Mayor Sir John Gresham, grocer, supplied from his numerous family a Duke
of Buckingham, and a Lord Braybrooke. In 1557 Sir Thomas Cooke, draper,
was installed in the Mansion House. To his descendants at least two
patents of nobility were granted, the peerages of Salisbury and of
Fitzwilliam. In 1570 a clothworker, Sir Rowland Heyward, became chief of
the City Corporation. He was the ancestor of the Marquises of Bath.
Fifteen years subsequently to this date, Sir Wolston Dixie, of the
Skinners Company, was at once the Sovereign of the City and the forerunner
of the peers bearing the titles of Compton or of Northampton. During the
earliest years of the seventeenth century there reigned to the East of
Temple Bar Sir John Houblon, a grocer. His descendants were to number
amongst them the Irish Viscounts who in the fulness of time gave to Queen
Victoria in Lord Palmerston the most popular and powerful Premier during
the first half of her reign. Within another hundred years Lord Mayor Sir
Samuel Dashwood, vintner, became a progenitor of future nobles only less
prolific than his sixteenth century predecessor, Sir Thomas Cooke. Those
who sprang from him obtained in due course the peerages of Warwick and
Brooke. When in 1711, as Tory Ministers, Harley and Bolingbroke dined at
the Guildhall, they were entertained by Sir Gilbert Heathcote whose
posterity was ennobled by the styles of Aveland and Donne. One of Lord
Salisbury's Christian names, and his second title, that of Viscount
Cranborne, perpetuate the memory of the Sir Christopher Gascoigne who was
Lord Mayor of London during the first Ministry of Henry Pelham, in 1753.
These instances serve circumstantially to remind us that the titled, like
the untitled aristocracy of the country has always represented, as it
represents to-day, in nearly equal proportions industry and intelligence
in enterprise, perhaps even more than antiquity of descent. The dramatic
circumstances of his rise and of his fall; the extent to which the latest
developments of science, adventure and speculation were embodied in the
person and in the career of the York linendraper's son, make George
Hudson, the 'railway King' specially conspicuous amongst those on whom
shrewdness and opportunity conferred material success. But the type is not
merely as old as the present century. It has existed as long as English
civilization itself.
When Queen Victoria came to the throne, there was little in the signs of
the times to betoken as near at hand the national prosperity which was
firmly established before she had been seated on her throne five and
twenty years. National depression followed the exhaustion of English
energy and finance which had been caused by the struggle with France. Long
after the heavy war taxation had ended with Waterloo, and the conqueror of
Waterloo had as ruler of the State reduced army expenses to an
unexpectedly low figure, the national fortunes were at an alarmingly low
ebb. Sinecures had been nearly abolished. A further saving of expense had
been expected by the partial or practical disbandment of the Yeomanry. But
between 1815 and 1845 the series of bad years was broken only in 1822-5.
Even then, English enthusiasm at the liberation of South America from
Spanish rule was followed by reaction consequent upon the sinking of
British millions in loans to the Spanish Republics of the New World.
During the first decade of the Victorian epoch, better harvests coincided
with the importation of gold in small quantities from the Ural mines. The
railway enthusiasm provided fresh employment for the working classes. More
even than by gold and railways was done by the fiscal reforms due to
Cobden, Bright, Peel, Villiers and Gladstone to give impetus to trade, and
commerce, and to make England the market of the world. Hence the origin
and multiplication of English millionaires. The country was thus
gladdened by fitful gleams of a long unknown prosperity. But budgets
continued to be bad, and Whig finance was in chronic disrepute. During no
small part of a century, English exports had remained almost stationary at
L51,000,000 a year. The distress was aggravated by the cotton spinning
failures of 1842-3. On the eve of these the Burnley guardians told the
Home Secretary of the inadequacy of their funds for the relief of local
necessities. So gloomy indeed seemed the national fortune, that the
Government of the day sold the Crown rights over Epping Forest. Nor as a
fact was it till the forty-fifth year of the Queen's reign that in 1882,
this historic pleasure ground presented those scenes with which it is
chiefly identified to-day.[3]
The first of the most striking transformations of the Victorian era took
place in the eleventh year of the Queen's reign and continued during two
or three years thereafter. The gold discoveries in California began in
1848. They differed from those which had preceded them elsewhere on
American soil in the circumstance that the new treasures were distributed
among the entire population, and were not confined to a small band of
despotic aliens, as had happened under the sway of the Spanish chiefs and
the Incas of Peru. In 1850-1 the same precious metal as three years
earlier had been yielded to diggers on the Californian slopes and on the
banks of the Sacramento River was found to exist in the alluvial plains of
Ballarat in our own Australian colonies. The practical value of these new
sources of wealth was variously regarded by political critics and
scientific economists. The French Chevalier, and our own Cobden predicted
as a result of the new gold supplies a fall in the value of money, a
revolution in property, the doubling of wages and prices and the
impoverishment of capitalists. Others foretold the speedy exhaustion of
the new gold mines. That view was sanctioned by the expert authority of
the famous geologist, Sir Roderick Murchison, who spoke of the limits of
the recently discovered gold as 'Nature's Currency Restriction Act.' Sir
Archibald Alison, not an incautious person, and certainly no friend to
innovation, elaborately supported a contrary opinion. He engaged in a
series of minute calculations for the purpose of showing that the gold
supply now available could not be used up within four centuries. When the
alluvial soil was drained of its precious deposits, there would, as Alison
argued, remain the parent rocks, the cost of working which seemed likely
to diminish and not to increase with time. Nor was this authority less
sanguine as to the beneficent effects upon all classes and interests of
the new gold. Commerce, he argued, would be promoted at every turn. With
increasing production there would be fresh employment, a practical
decrease in taxation, and generally in the payments made by the poorer
classes to the rich. Before the Australian discoveries of 1850, scarcity
of gold had, as Alison contended, raised the value of money, and
emphasized the difference between the rich and the poor. The Currency
Restriction Act had been passed in 1844. 'Nature's Grand Currency
Extension Act' was the name given by the historian to the fresh sources of
wealth revealed in Bendigo and Ballarat. The facts and figures were
something to the following effect. The discoveries of 1850-1 had added
sixteen or eighteen millions to the world's money in comparison with the
eight or ten millions which in the fifteenth century and onwards had been
provided by Mexico and Peru. On the other hand the economist Chevalier
anticipated that, as a consequence of the new gold, money in ten years
would fall by one half. 'In 1800,' so ran the argument of this economist,
'the annual addition to the gold of Christendom was barely two and a half
millions. In 1848 it amounted to thirty-eight millions. In 1858 the total
was a hundred and ninety millions. Hence,' he insisted, 'between 1858 and
1868 the additions to the world's available stock of the precious metal
would be at least as much as the aggregate of additions during the three
preceding centuries, that is four hundred millions sterling.' The stages
in this induction may be thus briefly epitomized. During the three and a
half centuries since the voyages of Columbus and of Cabot opened the New
World to the Old, two thousand millions sterling had been added to the
gold and silver of our planet. The hectolitre of wheat before A.D. 1492
cost in Paris from 2s. 6d. to 2s. 9d. Between 1848-58 it cost 16s. 8d. In
other words if the usual grain test be applied, money had fallen during
three and a half centuries to nearly one-sixth of its original value. It
was upon calculations like these as well as upon certain other
considerations that Chevalier based his argument that the fresh influx of
gold would make money fall again by three-fourths of its value. This was
in effect to say that to procure the same amount of subsistence as
hitherto four times as much gold would be required. Cobden's anticipations
were to the same effect. So general was the belief of an impeding
depreciation of gold and appreciation of silver that Holland actually
demonetized gold and adopted silver as its standard money. All these fears
were doomed to disappointment. The hopes were more than realized. The
third quarter of our present century has proved the most prosperous which
modern Europe or the world has ever known. A careful and voluminous writer
on this subject, the late R. H. Patterson[4] attributes this
miscalculation to the 'famous currency principle' which grew up after the
great war.
The agencies that have changed the material basis underlying the structure
of English society were thus fairly now in operation. They were
supplemented by other circumstances all tending to produce the same
result. Chief among these was the fact of the English coal supply
surpassing that of other countries in its abundance and its universal
distribution by land and sea. The character and the progress of the
Victorian era are due in no small degree to the sagacity and shrewdness of
the Prince Consort. He was now the first to recognize that the time had
come when the cultivation of the artistic sense was alone needed to make
the English workman the best in that world of which from the days of
Chatham onwards, his country had been pre-eminently the workshop. French
industry had not even yet recovered from the blow dealt to it by the
revolution of the last century. That effacement of an earlier regime had
differed in important particulars from all analogous movements in earlier
ages. The havoc, the massacres, the proscriptions and confiscations of
ancient Rome during her passage from a Republic to an Empire, had
seriously affected the highest classes alone. The substitution for the
French monarchy of a Robespierre first, of a Napoleon afterwards, had
involved all orders in a common ruin. The Queen's husband made it the
business of his life to insure the maintenance of the advantage which
history itself had thus given to English industry and manufacture, and
which the fresh supply of the precious metal directly favoured.
The universal attraction to Englishmen of the Australian gold fields may
be summarized in a very few facts and figures. In 1852 the English
emigrants to the treasure stores of the Antipodes were 369,000; a larger
number, that is, than was represented by the increase of the Queen's
subjects at home through the excess of births over deaths. Our population
in fact stood still in order that Australia, like California, might be
peopled. During the four or five years of the gold fever under the
Southern Cross, we sent out 1,356,000; more, in other words, than the
whole population of Scotland at the time of the Union. The annual average
of English emigrants was thus a trifle over a quarter of a million.
Somewhat later, the collapse of the railway mania in England and the
potato famine in Ireland, swelled the average total of this annual exodus
to nearly half a million.
Other results of the influx of gold during the second Victorian decade
remain to be epitomized. The precious metal in the Bank of England, from
less than eight millions in 1847, increased to twenty-two millions in
1853. The Bank rate during the whole decade was two per cent. The growth
of trade was suddenly but steadily promoted. During 1853, twenty millions
more of gold money than within any preceding twelvemonth changed hands
among the public. Incidentally, it should be mentioned that a belief in
the permanence of the low interest rate just mentioned caused Mr
Gladstone, when Chancellor of the Exchequer in April 1853, to bring
forward a scheme for the conversion of a portion of the three per cent.
Consols, into Consols bearing a lower rate of interest, and that the
interest on Exchequer Bills was a penny a day or one and a half per cent,
per annum. The harvests of 1853-4 in England had been bad. The fresh
purchases by the gold mine countries of English goods fully compensated us
for the loss from this cause. The value of that custom may be judged from
the figures which show the cost of life at the gold mines. In the early
fifties flour rose to four times, meat to five times their usual value. An
egg or a pill cost a dollar each.[5] For a miner in tolerable luck L2 were
not an exceptional day's earnings. Nor between the years 1849-55 and
onwards were the effects of the gold discoveries on foreign and domestic
trade less noticeable. Within a single period of twelve months, the value
of our exports increased by one-fourth. Most of these were required by
consumers in California or in Australia as the case might be. The rise of
wages owing to the rush to the gold fields amounted in 1851-2 nowhere to
less than twenty per cent.; in some trades it was twenty-five per cent. In
London the price of bricks was increased by fifty per cent. Liverpool,
Manchester, Birmingham shared the general prosperity. Agricultural labour
was not paid at a rate proportionate to its scarcity. The extent of that
scarcity may be judged from Sir Morton Peto's suggestion that the Militia
should be called in to complete the operations of harvesting which were
interrupted by the inducements offered by contractors to navvies at wages
varying between four shillings and threepence, and four shillings and
sixpence a day. Thus the competition of the gold fields industry was
directly instrumental, not only in increasing trade, and therefore
production and wealth in the mother country, but in improving the
condition of the industrial classes at home.
This rise in wages was not however a pure gain. Before the end of 1855
prices had increased by nearly one-half. The Preston strike of 1853-4
opened that campaign between industry and capital which has been paid for
by the representatives of both with so serious a deduction from their
profits. Before the Preston strike, the unions had been mainly political
organizations; thereafter they became industrial. Meanwhile on the other
side of separating oceans new Englands were being created with incredible
rapidity by the new gold. Already indeed Her Majesty's subjects, without
leaving their native land knew something of the Eldorado which Australia
constituted even before the treasures of Ballarat and Bendigo had been
unearthed. While as yet the nugget was a prize of the future, fortunes
were realized by the shearing of flocks. Long before the 1851 Exhibition
the Australian millionaire, returned to his native land, had become
familiar to Victorian London. He did not yet often live in Grosvenor
Square. He was to be found frequently in the best houses of the scarcely
less palatial Westbourne Terrace or at a later date in Rutland Gate. The
gold which enriched England created Australia, whose capitals can scarcely
be said to have existed before the thirteenth or fourteenth year of the
present reign. Gold gave to Victoria civilization and government. It
built Melbourne. The same omnipotent agency changed New South Wales from a
sparsely-inhabited tract to a populous and prosperous State. The extreme
youth, as national life is computed, of Australia will perhaps best be
realized when it is remembered that the founder of Melbourne, John Pascoe
Falkner was yet alive, and welcomed to his capital the Duke of Edinburgh
on the occasion of his visit to the Antipodes in 1860; and that Henty,
Falkner's associate and senior, survived at least to 1882.
In no department of industry were the immediate profits of Australian gold
more appreciable than in our transoceanic mercantile marine. During the
fifties European emigrants crowded every ship. Seamen's wages leapt up by
a bound to L4 a month.[6] Between 1851 and 1859 the annual rate of
emigrants was a hundred thousand. The gold raised during this period in
Victoria fell little short of eighty nine millions. Imports rose to thirty
pounds per head of the Victoria population, exports rose to fifty-six
pounds per head. Previously to 1851 New South Wales could not be said to
possess a foreign trade. In less than thirty years, by 1878, this commerce
was reckoned annually by thirteen millions of exports, fifteen millions of
imports. In New South Wales, too, the gold excitement was followed
immediately by prosperity in coal fields which yielded not less than a
million sterling. These are the circumstances that, rather than any
domestic speculations or industries, explain the growth of the London
plutocracy which has been so prominent a feature of the era now under
consideration. Under Queen Elizabeth and the Cecils, fortunes made by
lucky ventures in American and Indian trade were conspicuous. Under the
Georges, after the victories of our great Admirals Howe, Jervis, Anson,
foreign wealth was poured into England continuously long before large
revenues were realized by the development of our mineral wealth. It has
been already said that during some time after the Queen's accession there
prevailed general distress chequered by the influx of gold from Russia and
by the beginnings of railway enterprise. From the earliest fifties a
change for the better set in, with what results the income tax returns
will show. The impost was extended to Ireland in 1855. In that year the
assessed incomes were three hundred and eight millions. Ten years later
the amount was three hundred and ninety-six millions. After another decade
it was five hundred and seventy-one millions. In the financial year 1882-3
the figures were L612,836,058.