CHAPTER III. Wars, Politics, and Industry

WARS, POLITICS, AND INDUSTRY

§ 1. ENGLAND’S INDUSTRIAL ADVANTAGES IN 1763--If we look at the state of the European powers after the conclusion of the Seven Years’ War by the Treaty of Paris in 1763, we shall see that England had achieved a very favourable position for the growth of her internal industries. It is true that along with the rest of Europe she had adopted the policy of endeavouring to secure a sole market for her goods, and though that policy was a ruinous mistake she was not alone in her error, and since other powers were doing the same, it was just as well that she should hold the lead among them. And, as Professor Rogers has remarked, since we are paying interest upon the heavy national bills which we ran up at that time, we may profitably examine what we gained thereby.

In the first place, England had seriously crippled her powerful commercial rival, France, both in her Indian and American possessions. By the Seven Years’ War we had gained Canada, Florida, and all the French possessions east of the Mississippi River (except New Orleans); while in India our influence had become supreme, owing to the victories of Clive. French influence in India and America was practically annihilated. Spain, the faithful ally of France, lost with her friend her place as the commercial rival of England in foreign trade. Germany was {168} again being ravaged by the dynastic struggles in which Frederick the Great bore so prominent a part, between the reigning houses of Austria and Prussia. Holland was similarly torn by internal dissensions under the Stadtholder William V., which gave the rival sovereigns of Prussia and Austria a chance of making matters worse by their interference. By 1790 the United Provinces had thus sunk into utter insignificance. Sweden, Norway, and Italy were of no account in European politics, and Russia had only begun to come to the front. Hence England alone had the chance of “the universal empire of a sole market.” The supply of this market, especially in our American colonies, was in the hands of English manufacturers and English workmen. The great inventions which came, as we saw, after 1763 were thus at once called into active employment, and our mills and mines were able to produce wealth as fast as they could work without fear of foreign competition.

§ 2. THE MISTAKE OF THE MERCANTILE THEORY--But unfortunately our capitalists made a great mistake in their policy. The commercial mind of England was dominated by what is known as the “Mercantile Theory.” It was a theory that had grown up naturally out of the spirit of Nationalism, of self-sustained and complete national life, that was our heritage from the Renaissance and the Reformation. It was not altogether wrong, for its object was national greatness, an object laudable and harmless enough. But the believers in the policy of increasing our national greatness also believed that it could only be attained in one way, and that was at the expense of our neighbours. In one form and another the theory frequently crops up even to-day, though we are supposed to have repudiated it. The measures adopted to attain this end were various and not always unsuccessful. True, {169} our commercial forefathers made the mistake--not uncommon even now--of believing that national wealth consisted chiefly in holding large stores of gold and silver, and hence they prohibited the export of bullion, till the East India Company demonstrated the futility of this scheme. They endeavoured, too, to obtain a supply of the precious metals by prohibiting the purchase of foreign manufactures, and encouraging only the imports of raw material, that we might sell our own manufactures for foreign silver and gold. Hence proceeded wars of tariff, as for instance when we prohibited the import of gold-lace from Flanders, and the Flemish in revenge excluded our exports of wool. But the most famous of the restrictions imposed by this theory were the Navigation Acts of 1651, by which it was ordered that no goods from Asia, Africa, or America were to be imported into England or her colonies, except in ships belonging to English subjects, and no goods of any European country were to be imported except in English vessels, or ships belonging to the country from which the goods came. Of course these Acts resulted in collision with Dutch interests, for the Dutch were at that time the ocean carriers of the world. We were driven out of neutral ports, and lost the Russian and Baltic trade, because of the high charges of English ship-owners, to whom this protective scheme gave a monopoly of freights. But at the same time our shipping trade gained a great stimulus, and our commercial supremacy grew with it. Of course, however, this protective measure made the country at large pay a higher price for this privilege than was necessary, and we could probably have done better without it. Nevertheless these Acts, coupled with the development of our Indian and American trade, resulted in giving us a position of undoubted {170} commercial supremacy. Many other Protective measures, of a worse kind than this, were passed owing to the dictates of this theory, as for instance when in 1750 Parliament forbade the importation of pig and bar iron from our American colonies. But the Nemesis of this Protective policy was sure to come, and come it did in that fatal folly which caused us to lose those very colonies which we had defended against the French in the Seven Years’ War.

§ 3. THE LOSS OF THE AMERICAN COLONIES--The way in which English statesmen looked upon our colonies in the last century was that they owed everything to England, and that therefore it was only fair that they should be exploited in the interests of the mother-country. Thus all imports to our colonies from any other country of Europe except England were forbidden, in order that our manufacturers might monopolize the American market. The criminal folly of our legislators went even further than this, for every attempt was made to discourage the colonists from starting manufactures at home. The American woollen industry was practically suppressed; all iron manufactures, as just mentioned, were forbidden in 1750; even colonial hatters were not allowed to send hats from one colony into another.

Nevertheless the American colonists evaded the regulations that forbade them to trade with any but the mother-country, and did, for instance, a considerable trade with South America. But in George III.’s reign, Grenville, a Whig minister, was foolish enough to try and stop this. Moreover, he sought to raise money wherewith to pay for the American portion of the Seven Years’ War by taxing the colonists upon the stamps on legal papers (Stamp Act, 1765). The idea that the colonists should pay part of the expenses of the war undertaken in their defence was just enough; but that these expenses should be defrayed by a {171} system of taxation in which they had no voice was exactly the reverse. It is to the credit of Pitt that he protested against this taxation without representation, and exerted his influence for the repeal of this Act (1766). Thus the feelings of the colonists were soothed for a time, and in 1770 Lord North took off all taxes except that on tea. The colonists refused to buy tea: the East India Company, whose trade naturally suffered, tried to force their tea into America, and matters culminated in the celebrated emptying of a shipload of it into Boston harbour by the citizens of that port (1773). North tried to punish the Bostonians by decreeing that their port should be closed, and that the charter of Massachusetts, their colony, should be annulled. Of course war was now imminent. We need not here go into the details of that unfortunate conflict, though we must mention the heroic endeavours of Pitt, now Lord Chatham, to make England give full redress to her offspring. His efforts were in vain. France eagerly took the opportunity of assisting the Americans against the English, and England had to pay very dearly for her adherence to the Mercantile Theory.

§ 4. THE OUTBREAK OF THE GREAT CONTINENTAL WAR--But although the War of Independence cost us a great deal, it did not greatly affect the development of our home industries. The Industrial Revolution went steadily on, and for just thirty years (1763–93) the country, though not entirely at peace, was yet sufficiently undisturbed to make rapid progress in the new manufacturing methods. But in 1789 the French Revolution broke out, and for over twenty years Europe was plunged into a disastrous and exhausting conflict. At the first outbreak of the Revolution, England looked on quietly. Many men were openly glad that the downtrodden masses of the French nation had overthrown the tyranny of an upper class whose only {172} idea of their duty in life was to extort the last farthing from those below them, in order to spend it in irresponsible debauchery. Statesmen like Fox gloried in it; the younger Pitt was anxious not to interfere. But Pitt was forced into action by the capitalists, who now were equal with the land-owners as the two ruling powers of England. He saw that the conquests which the new French Republic was already beginning to make might help France to secure again her old position as the most formidable rival of English commerce. If now this rival could be finally struck down, England was sure of the control of the world’s markets. It was obviously the policy of England to check the power of France, and when war was declared by the young Republic, England was not slow to answer the challenge. After this England was plunged headlong into the great European struggle of Monarchy against Republicanism. Pitt gained the support of all classes at home. The merchants and manufacturers were only too glad to see their old rival ruined; the land-owners and nobility were of course indignant at seeing the “lower classes,” even of a foreign nation, rise against their lords, even though their lords perhaps deserved their punishment. It was generally believed, and it was largely true, that England was fighting for the great principles of Monarchy and Religion, exemplified by a foolish king and a corrupted priesthood. For a time everyone supported Pitt’s policy. But the French Revolution had found many sympathizers among the working classes, and after the country had felt the first severity of the burdens imposed by the war, a spirit of discontent manifested itself. But the nation at large was against this opposition, and drastic measures were taken to silence it. Pitt was indomitable till his death (in 1805), and under his guidance England often fought single-handed against the world. {173} At times, as in 1796, she was threatened with invasion by the French, and the Irish, or a certain section of them, assisted her would-be invaders. At another time (1806), English industry was threatened with ruin by Napoleon’s Berlin Decree, forbidding Continental nations to trade with us. But at last the great inspiring genius of England’s enemies was defeated, and the long years of war came to a close in 1815.

§ 5. ITS EFFECTS UPON INDUSTRY, AND THE WORKING CLASSES--When peace came at length, it found the resources of the nation sorely tried, but not yet exhausted. All classes had suffered somewhat, but the working classes worst of all. The French Revolution, and the consequent wars, had retarded to some extent the development of our industries, for it took nearly all the wealth produced by the new industrial system to pay for them. But in one thing we possessed a great advantage over Continental nations, for our island was the only country in which war was not actually going on, and hence our manufactures were undisturbed. Consequently England was by no means so exhausted as the other participants in the struggle, and she had, moreover, the ocean-carrying trade left secure to her by our undisputed naval supremacy. But yet her finances had been tried and stretched to an enormous extent. The total cost of the war with France had been £831,446,449, to meet which Pitt was compelled to turn to almost every expedient that his financial ingenuity could suggest. Taxation became more and more heavy, and £600,000,000 was added to the debt which we have since been engaged in paying off. The currency had been placed in the most abnormal condition; cash payments were (in 1797) suspended by the Bank of England; and it became a necessity, as soon as {174} the war was over, to put an end to the circulation of a practically inconvertible paper currency by the resumption of them in 1819.

But the working classes had suffered the most, in spite of the fact that our manufactures prospered and exports increased all through the war. In 1793 the exports were officially valued at over £17,000,000; for every year afterwards they were at least £22,000,000, often more; in 1800 over £34,000,000, and in 1815 had quite doubled their value at the beginning of the war, being then over £58,000,000 (official value). But the profits all went into the hands of the capitalist manufacturers, while taxation fell with special severity upon the poor, since taxes were placed on every necessity and convenience of daily life. Even as late as 1841 there were 1200 articles in the customs tariff. The price of wheat, moreover, rose to famine height; from 49s. 3d. per quarter in 1793, to 69s. in 1799, to 113s. in 1800, and 106s. in 1810. At the same time wages were rapidly falling, and thus the chief burdens of the war fell upon those least able to pay for them. But the poverty of the poor was the wealth of the land-owners, who kept on raising rents continually and grew rich upon the starvation of the people; for they persuaded Parliament to prohibit the importation of foreign corn except at famine prices (cf. p. 200), and shifted the burden of taxation, as was not unnatural, upon other shoulders. It was owing to their influence that Pitt raised fresh funds from taxes on articles of trade, manufacture and general consumption. The result was seen in the deepening distress of the industrial classes, and in 1816 riots broke out everywhere--in Kent among the agricultural labourers, in the Midlands among the miners, and at {175} Nottingham among the artisans, who wreaked their vengeance upon the new machines which they thought had stolen their bread. They should have blamed those who did not allow them to participate in the wealth they had helped to create.

§ 6. POLITICS AMONG THE WORKING CLASSES--Such were the economic effects of the war upon English society--the enriching of the capitalists and land-owners at the expense of the working classes. So dire was the distress of the workmen that they felt something must be done to make their voice effectively heard in the government of the people. William Cobbett, in his Weekly Political Register, taught them to believe that a reform of Parliament would cure their evils. The influences of the French Revolution and the Industrial Revolution also combined to arouse an active political feeling amongst them; for the former excited a sympathetic feeling of revolt against unjust oppression, from what source soever it might come, and the latter brought home to them in their daily lives the new and sharp distinctions between the capitalist autocrat and his hundreds of workpeople bound to him only by a cash nexus, and as yet powerless to resist his endeavours to keep down their wages. Indistinctly, but none the less keenly, the working classes began to feel that they too must be consulted in the councils of the nation, and as a preliminary step must gain an influence over political events. But their early endeavours were sharply and severely repressed, and the legislation following on the (so-called) Manchester Massacre of 1819, crushed them for a time. But the Great War had roused the political feelings of the masses, by the misery it had inflicted upon them and by the industrial conditions which it had brought more fully into play. For although at first it retarded them, it gave a direct stimulus to the new {176} manufactures and to the new manufacturing system, by leaving England the only nation not too exhausted to continue her commerce. During its progress England had definitely become the workshop of the world, her industry had definitely completed its transition from the domestic to the factory system. Of this system, with its enormous advantages but also enormous evils, we must now speak.