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Chapter LVII, of Cassells Illustrated History of England, Volume 7 page 3


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The cause of the free traders received at this period a valuable aid from the report of the select committee appointed on the 5th of May, 1840, on the motion of Mr. Hume, to inquire into the duties levied on imports, and to determine how far the duties were for the so-called protection of British industry, and how far for revenue only. The very words of the instructions to the committee indicated the great progress that had been made in the practical adoption of the maxims of political economy; for it may be safely said that, half a century earlier, the distinction would hardly have been understood by the bulk of members in the House. Committees of this kind are frequently granted as a matter of course, and are commonly regarded as a convenient mode of getting rid of troublesome questions, by shifting on to a select committee the labour of inquiry. In the great majority of instances their reports lead to no result; but in this case, such a mass of valuable evidence was collected, and made the text of so able a summary by the committee, of the results of the inquiry, that the Import Duties Blue Book at once became the text-book of all those members who professed the most enlightened views on commercial freedom. In submitting the evidence to the serious consideration of the House, the committee stated their persuasion that it could not be attentively examined without producing a strong conviction that important changes were urgently required in our Custom House legislation. They told the House that the tariff of the United Kingdom presented neither congruity nor unity of purpose. The schedule to the Act for Consolidating the Customs' Duties enumerated no fewer than 1,150 different rates of duty chargeable on imported articles, all other commodities paying duty as unenumerated; and very few of such rates appeared to have been determined by any recognised standard. It was difficult for any person unacquainted with the details of the tariff, to estimate the probable amount of duty to which any given commodity would be found subjected. There were cases where the duties levied were simple and comprehensive; others, where they fell into details both vexatious and embarrassing. The tariff often aimed at incompatible ends. The duties were sometimes meant to be both productive of revenue and for protective objects, which were frequently inconsistent with each other; hence they sometimes operated to the complete exclusion of foreign produce, and in so far no revenue was of course received; and sometimes, where the duty was inordinately high, the amount of revenue became in consequence trifling. Instead of making the receipt of revenue the main consideration, they allowed that primary object of fiscal regulations to be thwarted by an attempt to protect a great variety of particular interests, at the expense of the revenue, and of the commercial intercourse with other countries. Whilst the tariff had been made subordinate to many small producing interests at home, by the sacrifice of revenue in order to support these interests, the same principle of preference was found to be largely applied, by the various discriminatory duties, to the produce of our colonies, by which exclusive advantages were given to the colonial interests at the expense of the mother country.

The Committee found that there were in the tariff no less than 349 articles which produced less than £100 each per annum of customs duty - all the trouble and vexation involved in the maintenance of these 349 taxes being incurred for the sake of a total revenue of only £8,050. They found also 132 articles producing only from £100 to £500 each, 45 producing from £500 to £1,000 each, and 107 producing only £1,000 to £5,000.

The total amount of customs' revenue received in the United Kingdom in the year ending January, 1840, was £22,962,610, of which total amount 17 articles, each producing more than £100,000, produced 94 per cent., or £21,700,630. " These 17 articles," observe the committee, "affording the largest amount of customs' revenue, are articles of the first necessity and importance to the community - viz., sugar, tea, tobacco, spirits, wine, timber, corn, coffee, butter, currants, tallow, seeds, raisins, cheese, cotton wool, sheep's wool, and silk manufactures; and that the interests of the public revenue have been by no means the primary consideration in levying the import duties is clear, inasmuch as competing foreign produce is in some instances excluded, and in others checked by high differential duties, levied for the protection of British colonial interests." In many cases, such differential duties did not answer the object proposed, for it appeared, in the case of foreign clayed sugars, where it was obviously intended they should be excluded from the British market, that the monopoly granted to British colonial sugars had so enormously raised the prices in our market, that they had lately come into consumption, though charged with a duty of 63 per cent., while our plantation sugars paid only 24s.

Another inconvenience which the differential duties created was, that they offered a premium for evading the intention of the Legislature. Foreign coffees were charged Is. 3d. per lb., colonial coffees only 6d., while coffees imported from the Cape of Good Hope paid 9d. As might be expected, large quantities were shipped from the Brazils and Hayti to the Cape, and thence re- shipped to England; the English consumer thus paying the increased duty, and the difference of freight, while the foreign coffee was not excluded from the British market, though it was obviously the purpose of the law to exclude it.

The committee concluded their masterly report as follows: -

"Your committee cannot refrain from impressing strongly on the attention of the House that the effect of prohibitory duties, while they are, of course, wholly unproductive to the revenue, is to impose an indirect tax on the consumer, often equal to the whole difference of price between the British article and the foreign article which the prohibition excludes. This fact has been strongly and emphatically urged on your committee by several witnesses; and the enormous extent of taxation so levied cannot fail to awaken the attention of the House. On articles of food alone, it is averred, according to the testimony laid before the committee, that the amount taken from the consumer exceeds the amount of all the other taxes which are levied by the Government. And the witnesses concur in the opinion that the sacrifices of the community are not confined to the loss of revenue, but that they are accompanied by injurious effects upon wages and capital; they diminish greatly the productive powers of the country, and limit onr active trading relations.

" Somewhat similar is the action İf high protective duties. These impose upon the consumer a tax equal to the amount of the duties levied upon the foreign article, whilst they also increase the price of all the competing home-produced articles to the same amount as the duty; but that increased price goes, not to the Treasury, but to the protected manufacturer. It is obvious that high protective duties check importation, and, consequently, are unproductive to the revenue; and experience shows that the profit to the trader, the benefit to the consumer, and the fiscal interests of the country, are all sacrificed when heavy import duties impede the interchange of commodities with other nations. The inquiries of your committee have naturally led them to investigate the effects of the protective system on manufacture and labour. They find, on the part of those who are connected with some of the most important of our manufactures, a conviction, and a growing conviction, that the protective system is not, on the whole, beneficial to the protected manufacturers themselves. Several witnesses have expressed the utmost willingness to surrender any protection they have from the tariffs, and disclaim any benefit resulting from that protection; and your committee, in investigating the subject as to the amount of duties levied on the plea of protection to British manufactures, have to report that the amount does not exceed half a million sterling; and some of the manufacturers, who are supposed to be most interested in retaining those duties, are quite willing they should be abolished, for the purpose of introducing a more liberal system into our commercial policy. Your committee gather from the evidence that has been laid before them, that while the prosperity of our own manufactures is not to be traced to benefits derived from the exclusion of foreign rival manufactures, so neither is the competition of continental manufacturers to be traced to a protective system. They are told that the most vigorous and successful of the manufactures on the Continent have grown, not out of peculiar favour shown to them by legislation, but from those natural and spontaneous advantages which are associated with labour and capital in certain localities, and which cannot be transferred elsewhere at the mandate of the legislature or at the will of the manufacturer. Your committee see reason to believe that the most prosperous fabrics are those which flourish without the aid of special favours. It has been stated to your committee that the legislation of Great Britain, whenever it is hostile to the introduction of foreign commodities, is invariably urged by the foreign states that produce such commodities, as a ground and a sanction for laws being passed by them hostile to the introduction."

The effects of this remarkable storehouse of free trade facts and principles were not long in showing themselves, both in the speeches of members of Parliament and in the writings and discourses of public men out of doors.

But the time had not arrived when a Ministry could count on the support of the House in inaugurating a sweeping reform of the tariff. We have already given our readers a narrative of the defeat of the Government of Lord Melbourne in 1841, of their appeal to the country, and final downfall in the month of August of that year. Although the free traders had given up the hope of any substantial relief from the Whig Government in the then condition of parties in the House, there was much in the course of events to dishearten men less earnest. The Whigs had shown a disposition, at least, to test the question of how far free trade might be made a rallying cry. In the speech from the throne, on the assembling of the new Parliament in September, the question of protection had distinctly been brought forward, and it soon became evident that the Ministry contemplated proposing at last a mitigation of the evils so forcibly pointed out by the Import Duties Committee. On the other hand, the party headed by Sir Robert Peel were deeply pledged to the support of the corn laws, and were little friendly to the views of the political economists. The very occasion of the accession of his party to power was apparently a triumph over the fiscal reformers. The country was alarmed at the condition of the revenue. The expenditure had constantly increased. During the six years Lord Melbourne had been in power the yearly estimates for the defence of the country had risen from £11,730,000 to £15,536,000. Every year there had been a considerable deficiency of income. In 1838 this deficiency was £1,428,000; in 1839, £430,000; in 1840, £1,457,000; and in 1841 it was announced as being £1,851,000. But a more alarming feature was the evidence that the revenue returns appeared to afford that the extreme limit of taxation had been reached, and that new burdens imposed upon the people, instead of bringing more to the exchequer, operated only to destroy industry, and to dry up the sources from which the resources of Government are obtained. An act had been passed in the previous year granting 5 per cent, additional duties on customs and excise, and 10 per cent, additional on assessed taxes. The revenue officers carried out the law, but as well might the farmer have directed his dairymaids to take 10 per cent, more milk for that year from all the cows on his farm. The scheme brought scarcely any additional revenue - an evidence of the truth of those principles of taxation which had been laid down by Sir Henry Parnell, not less striking than the rapid increase in the revenue which followed upon the reductions in taxation of two years later. The alterations in the duties on corn, sugar, and timber, proposed by the Whig Government in 1841, could hardly be expected to revive their popularity in the face of facts like these. Their scheme was to reduce the duty on foreign sugar from 63s. to 36s. per cwt.; by which they calculated that the revenue would gain £700,000 - a curious evidence of the wickedness and folly of the existing law. By reducing the charge on Baltic timber from 55s. to 50s., and raising that of colonial growth from 10s. to 20s., a gain was anticipated of £600,000; and finally it was proposed to substitute for the mischievous and vexatious sliding scale a fixed duty on corn of 8s. a quarter. The latter change would undoubtedly have been an improvement; but the Whig Government was too unpopular to regain strength by a few tardy proposals of this kind. Sir James Graham denounced the eight-shilling duty as an afterthought, and blamed the Government for stirring a topic so inflammatory. "It was," he said, " the most dangerous course a government could pursue with reference to the most dangerous subject. Desperate tenants," he added, sarcastically, in allusion to the extreme weakness of the Ministry, " under notice to quit, set fire to the premises which they are compelled to evacuate. Pirates, when they are no longer able to defend their vessel, rush with torches to the magazine. We are told of the strong man in despair who hit upon the stratagem of turning loose three hundred foxes with firebrands at their tails among the standing corn of the people. This is an exact representation of the Government, who at a dissolution will send forth their torches and their firebrands." It reads strangely in these days when we find a statesman denouncing, with all the dignity of a great moral teacher, the Ministers who proposed to give a suffering people permission to buy their corn where corn was abundant, and to exchange the products of their labour with those who were anxious to buy them; but it looked ominous for the free trade party when men with these views found increased strength in a general election. If the free-traders could obtain nothing through the Whigs, who had always, to some extent, been identified with commercial interests and the middle classes, how could they hope to attain their objects through the instrumentality of the representatives of the great landed proprietors, the professed enemies of trade and trade-made men? Such reasoning to many, in 1841, must have seemed conclusive; but there was one remarkable exception, in Mr. Poulett Thompson, afterwards Lord Sydenham, a member who had represented Manchester, and who, before he became trammelled with the shifty policy of office, had rendered services to the free trade cause of the highest importance. As far back as September, 1839, he had written in his private journal, "At the Exchequer all that can be hoped is to get through some bad tax. There is no chance of carrying the House with one for any great commercial reforms in timber, corn, sugar, &c. Party and private interests will prevent it. If Peel were in, he might do this, as he could muzzle or keep away his Tory allies, and we should support him. If he got in and had courage, what a field for him! But he has not." The passage reads almost like a prophecy; for there could have been few persons at that time so far-seeing as even to imagine in the great Protectionist leader of 1839 the reformer of our tariff and the repealer of the iniquitous corn law. The truth must be told. Sir Robert Peel was not one of those statesmen who ground their policy in the great principles of morality and justice. His view, as is abundantly proved in his " Memoirs," was constantly directed to the management of his party in the House. He became the instrument of great reforms; but he initiated none. The habit of contesting for power, and of keeping it when obtained by the ordinary tactics of Parliamentary men, was stronger than his better instincts. The Leaguers knew this, and hoped for nothing from his hands; but the progress of a movement founded upon a great principle is, in a great degree, independent of party statesmen. While the free-traders appeared to have received a check, they were, in fact, making progress. The appeal made by the Ministers to the country on the question of free trade had been answered by giving increased strength to the Opposition; but those who took this for a proof that the agitation which had so long disturbed the tranquillity of the monopolist party was at end, soon found that the unpopularity of the Whigs was far from securing to their opponents a license to stand still. The country was still suffering from great depression. Gloom and discontent were throughout the land; and the Home Secretary of the new administration afterwards stated that there was hardly a day during this period when he had not found it necessary to have personal communication with the Horse Guards, as well as with the heads of the police in the metropolis, and in the manufacturing districts. There seemed, indeed, to be no limit to the distress of the people. In Carlisle, a committee of inquiry into the state of the town reported that one-fourth of their population were living in a state bordering on absolute starvation. In a population of 22,000, they found 5,561 individuals reduced to such a state of suffering, that immediate relief had become necessary to save them from actual famine. Terrible accounts from other and far distant neighbourhoods showed how wide spread was the evil. The manufacturers of the West of England appointed a committee to consider the distressed state of that district. Taking the town of Bradford, in Wilts, as an example, the committee reported that of the nineteen manufacturers carrying on business there in 1820, nine had failed, five had declined business from want of success, one had taken another trade, and two only remained. Of 462 looms, 316 were entirely out of work, and only 11 in full employment; and this distress, it must be remembered, could not be traced to one great overwhelming cause, like that of the failure of the cotton supplies of the present day. The blight which had spread over the field of British industry was to most men a puzzle; but the West of England committee, after reporting that the same condition of things existed at Chalford, Stroud, Ulley, Wotton, Dursley, Frome, Trowbridge, &c., did not hesitate to declare that the depression of trade which was destroying capital, and pauperising the working classes, was attributable to the legislation op the principle of protection. A public meeting was held at Burnley in the summer of 1842, to memorialise the Queen on the prevailing distress. At a great public conference of ministers of religion, held in Manchester in the previous autumn, it had been resolved that the existing corn laws were "impolitic in principle, unjust in operation, and cruel in effect; " that they were " opposed to the benignity of the Creator, and at variance with the very spirit of Christianity." This conference, which extended over an entire week of meetings, held both morning and evening, was attended by nearly 700 ministers. Their proceedings filled an entire volume, and attracted considerable attention throughout the kingdom. Similar conferences were afterwards held in a great number of towns.

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Pictures for Chapter LVII, of Cassells Illustrated History of England, Volume 7 page 3

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