History of Free Trade

At length the obvious truths which Adam Smith, Ricardo, and others so clearly demonstrated - that restriction and prohibitions upon trade tended, in ninety-nine cases out of a hundred, to divert the national industry of the country from its natural and profitable pursuits into artificial and less productive channels - were recognised by the statesmen of this country. When the principles of free trade were adopted, and openly avowed by Lord Liverpool's Administration, the question of the justice or injustice of the corn laws assumed a new shape. Some preliminary steps had been taken, under the auspices of Mr. Wallace and Mr. Robinson, for the relaxation of the restrictions upon trade in 1822, when several new laws had been proposed by the Government, and Committees of the House of Commons had sat for inquiry into other matters connected with the further emancipation of our industry from the legislative trammels with which it had been beset. But it was not till Mr. Huskisson brought forward his measure for altering the laws relating to the silk trade, in 1824, that the full extent of the plans of Lord Liverpool's Cabinet became known to the public; and the following session, in which he made his famous exposition of the colonial, commercial, and shipping policy of the country, and brought forward and carried Government bills for altering and reducing the tariff of duties upon almost every article of foreign manufacture, stamped the year 1825 as the era of a commercial revolution, more important in its effects upon society than those political revolutions; which have commanded so much more attention from the historian.

Without entering into minute details, the extent "Of the alteration in the restrictive system which from time immemorial had prevailed in this country, may be estimated by a few items. Foreign silk goods, which had been entirely prohibited, were admitted at a duty of 30 per cent, on their value. Woollens, which had been, loaded with a duty of from £50 to £67 10s., were allowed, to be imported at 20 per cent. On gloves the duty, which had been prohibitive, was reduced to 30 per cent. The duties on linens, fluctuating from 40 to 180 per cent., were reduced to 25 per cent.; and earthenware, which had enjoyed a protecting duty of 75 per cent., was admitted at the trifling duty of 5 per cent.

No one who is familiar with the details of the French tariff, as settled by Mr. Cobden's negotiations, can fail to be struck with the similarity of these features. In fact, as regards our commercial system, England had arrived in 1825 exactly at the stage which France, tardily following our example, afterwards reached. That that country of vast resources - the land of the great Colbert, the Minister of Louis XIV., under whom the prohibitive system attained a development hitherto unknown in Europe - should adopt the principles of free trade is remarkable. But the Emperor Napoleon III. was actually induced to adopt them, much to the benefit of the country. It will not be wonderful, however, should the government of France, with a fatuity that occasionally distinguishes them, again return to the system of Protection. " The result of the alterations," said Mr. Huskisson, " which I have stated to the committee will be, that upon foreign manufactured articles, where the duty is proposed to protect our own manufactures, and not for the purpose of collecting revenue, that duty will in no instance exceed thirty per cent. If the article be not manufactured much cheaper or much better abroad than at home, such a duty is ample for protection. If that is not sufficient, my answer is, that a greater protection is only a premium to the smuggler, and that there is no wisdom in attempting to bolster up any manufacture which this degree of protection will not sustain." These propositions, with others of an equally liberal character, affecting the trade of the country - such as the repeal of the Spitalfields Acts, and of the act against the emigration of mechanics - passed the Houses of Parliament with scarcely a dissentient voice, notwithstanding that the utmost alarm was felt by the parties from whom protection was to be thus withdrawn. The silk manufacturers were allowed, at the bar of the House of Commons, to urge their plea against what they believed to be the total sacrifice of their interests, and 11,000 journeymen weavers signed a petition to Parliament against the repeal of the Spitalfields Wages' Act. The arguments used in Parliament to prevent the success of the interested parties opposing these measures, were of the soundest and most liberal kind, and strongly antagonistic to anything savouring of monopoly. Mr. Secretary Peel exhorted the House to firmness, reminding it that the eyes of Europe were upon it; and he warned Parliament how greatly those sound and irrefragable principles of commercial: policy, which they had heard so ably advocated, would be prejudiced if it were to yield to the fears of the timid or the representations of the interested: - a remarkable speech from the statesman who afterwards so strongly: opposed the advocates of free trade, and finally, in the close of his career, returning to his early opinions, left a name for ever identified with the final triumph of these principles. It is remarkable, indeed, that the Ministry, who at this time substituted for the celebrated navigation laws of Charles II. the modern reciprocity system, released the colonial trade from some of the trammels of the mother country, gave the British mechanic the legal right to carry his labour to foreign markets, repealed the combination laws, and neutralised the laws which forbade the exportation of machinery, was that which boasted Lord Eldon for Lord Chancellor, and the Duke of Wellington for Master - General of the Ordnance. In fact, it was the high Tory Government, of which Lord Liverpool was the chief, which opened to the commerce of France and other countries a means of trading with Great Britain. Nor did any portion of Lord Liverpool's Cabinet affect to remain neuter. On the contrary, these principles of commercial freedom were recommended to the favourable consideration of Parliament by the King in his speech at the opening of the session of 1825.

The principles which had been so eloquently advocated with reference to silks, woollens, and other articles, were now boldly pronounced by some members of the House of Commons to be equally applicable to those still more necessary commodities, corn, cattle, and the like. It was even thought that the rule should have been applied to them in the first instance, and afterwards extended to those articles of manufacture into the price of which the food of the artisan must necessarily enter. Impressed with these views, Mr. Whitmore, a gentleman of ancient family and large landed property, who, to his great honour, was among the earliest advocates of corn law repeal, brought forward a motion for the revision of the corn laws a month after the promulgation of the views of the Ministry upon the subject of trade. He was, however, opposed by Mr. Huskisson, on the ground that the motion was ill-timed; but at the same time the latter stated that it would be necessary, at a future time, to revise these laws; and he added that several foreign countries were in distress owing to our exclusion of their corn, and that they had in revenge shut out our manufactures, t The tendency of these remarks left no doubt in the minds of the more ardent free traders that Mr. Huskisson would, at an early period on behalf of the Government, present to Parliament a bill for reducing the duties on agricultural produce; but on the assembling of Parliament the expectations of the public were greatly disappointed at the announcement by Ministers that they did not intend during that session to propose any alteration in the existing law. Mr. Whitmore, however, again moved for a revision of the Corn Law. Mr. Huskisson, towards whom, as the champion of free trade, all eyes were now turned, avoided going into the discussion of the question, urging as a ground of postponement, that the last session of a Parliament was an unfit time for agitating so important a matter; and that he thought the subject ought to be reserved for the first session of the new Parliament. He pledged himself, however, to take the first favourable opportunity of calling the attention of the House to the whole subject. The commercial distress which prevailed in 1826, and the consequent want of employment for the manufacturing population, drew attention still more to the question of the Corn Law; and numerous petitions were presented at the meeting of Parliament for a reduction of the duty on foreign grain. During the recess Lord Liverpool and Mr. Huskisson had prepared a new Corn Bill, which, at the assembling of Parliament, the Cabinet resolved that Mr. Canning should introduce, in the absence of Mr. Huskisson, who was confined to his house by ill health. "But," says Mr. Cobden, in commenting on this fact, " whether his malady was occasioned by blighted hopes in finding himself forced at the behest of an insatiate and powerful aristocracy to adopt a scale of duties upon the first article of commerce prohibitive in all but the name, his biographer does not inform us." Nothing is more dangerous than the avowal of a great and comprehensive political principle by a selfish and partial government. It is like a two-edged sword, which, in its recoil, sometimes wounds the unskilful hand that wields it. The Administration of Lord Liverpool found themselves in this position, that after having in a great measure forced the free-trade policy upon the manufacturers and merchants of the country, after having thrown open our ports to the products of all the other manufacturing nations of the world, and removed from our statute book several hundred restrictive laws affecting the interests of the capitalists and workmen of the British empire and its colonies, they were now called upon to apply the same principle to the trade in corn. It was felt by the Cabinet which had passed those laws for withdrawing the heavy protections upon silk, linen, gloves, and other articles, that the cry raised throughout the country for a like removal of the monopoly enjoyed by ' the agricultural interest could no longer with decency be disregarded. On the 1st of March, 1827, Mr. Canning introduced the Government Corn Bill to the House of Commons; and so palpable and indisputable were the claims of justice, that the trade in corn should be placed under the same regulation as that in other commodities, that even this brilliant debater, whose whole political career had been marked by the talent for dazzling and diverting the minds of his hearers, did not upon this occasion venture upon the attempt to mislead them from the obvious conclusions of common sense. On the contrary, he avowed in the course of his speech, that "if the trade in corn was to be continued at all, it ought to be continued, as far as practicable, under the same principles as were applied to other species of trade." But when he came to unfold the Ministerial scheme, the free trade party were doomed to a bitter disappointment. Mr. Canning proposed that a duty of 20s. a quarter should be levied on foreign wheat when the price in the home market reached 60s.; the duty to diminish two shillings a quarter for every one shilling of increase in price, and to increase two shillings for every fall of one shilling in price. The result was to be that when the average price reached £3 10s. the quarter, all duty would cease; but on the other hand, when the price fell to £2 10s., the duty would be £2 a quarter. Mr. Canning's speech was full of professions of consideration for the landlords, by whom he was exclusively surrounded. He remarked, that if he were asked why he did not at once propose an absolute prohibition, he should answer that he did not think so strong a measure necessary either for the agricultural interest, or for the public generally - an observation which appeared to satisfy all but some ultra-zealots of the agricultural party, including Sir E. Knatchbull, Sir Thomas Lethbridge, and Lord Clive, who boldly declared for a complete monopoly. It is worth remembering that at this period, the vast towns of Birmingham, Manchester, and Leeds, in which the demand for cheap food was loudest, had no voice in the legislature, which thus, as was remarked, " defended the principles of free trade to enable the peeresses to visit Almack's and the Drawing-rooms, in the laces and silks of Paris and Brussels, and repudiated the same principles when they were advocated merely to place the abundant corn and provisions of Russia, Poland, and the United States within the reach of the mechanics and labourers of England."

This Corn Bill, which passed the House of Commons without alteration, was afterwards destined to be marked in its progress by the most serious disasters. Lord Liverpool, who had given notice of the day on which he should introduce the Cabinet measure into the House of Lords, was in the interval visited by that illness which terminated in his death. He was, as our readers know, succeeded by Mr. Canning, from whose Cabinet an important section of the Liverpool Ministry seceded. The Duke of Wellington, the most influential of these seceders, now opposed in the House of Lords the very same measure which he himself, as a Cabinet Minister, must have previously assisted in preparing. The Bill was lost in the Upper House, and Mr. Canning's death followed soon afterwards. During the short administration of Lord Goderich which followed, there was no attempt at legislation on this momentous question; but the Duke of Wellington, who was next called to the head of the Government, lost no time in introducing the Corn Law which existed unmodified up to 1842.

It may here be mentioned that prominent among those who paved the way for the repeal of the corn laws, was the name of General, then Colonel, Perronet Thompson. Having served for some time in the army, he subsequently became a man of letters and a politician. He contributed many of the ablest papers upon current questions that appeared in the Westminster Review; and twelve years before the corn law struggle commenced, he wrote the "Catechism of the Com Laws," which contained the substance of all that was subsequently advanced by Mr. Cobden and his coadjutors.

Between 1830 and 1840 some beneficial changes in our commercial and fiscal laws were introduced. The immense benefits conferred on the people by the modifications of the excise duties, chiefly during this period, may be said to have astonished even the most ardent advocates of the emancipation of domestic industry from the blighting influence of the exciseman. But the most important result of these reforms was the proof which they afforded of the correctness of the theories advanced by Sir Henry Parnell on the elasticity of the revenue. Government now learnt that the laying of new burdens on the people is not always the way to benefit revenue. It was found that the diminished consumption, and, above all, the diminished employment for the people which followed the imposition of new duties, and the interference with industry which these new duties always brought with them, went far to defeat the objects with which they were imposed. In short, statesmen came, by degrees, to perceive the important truth that taxes may be taken off, and relief afforded to the people, with far less loss to the revenue than had previously been supposed. Mr. Goulburn, who was avowedly a disciple of Sir Henry Parnell, relinquished in his budget of 1830 £3,110,000 of revenue, by sweeping away the complicated excise duties, ranging from Is. 9d. to 9s. 10d. per barrel on beer; £411,000 more by abolishing the excise duties on hides and skins; and £55,000 further by other remissions. In 1831 Lord Althorp repealed the excise duty of 3½d. per yard on printed cotton; yielding, on that portion of the printed cotton retained for home consumption, the enormous sum of £570,000 per annum, and, of course, operating enormously to diminish the amount of employment which was available for the Lancashire weavers and spinners. In 1832 £483,000 was relinquished on candles; in 1833 the soap duty was reduced one-half, at a loss to the revenue of £775,000. In 1834 the duty of 3±d. per pound on starch, yielding £117,000, was given up, and a reduction of Is. per gallon, yielding £408,000, was made on Irish spirits. The Budget of 1836 gave up £572,000 by reductions or repeals of excise duties on paper and spirit licences, and £300,000 by reduction of stamp duty on newspapers.