Part 229

The Whig administration under Lord Melbourne gave way in August, in 1841, to one formed by Sir Robert Peel. On the opening of the session in February, 1842, "The Queen's Speech recommended Parliament to consider the state of the laws affecting the importation of corn and other commodities. It announced the beginning of a revolution which few persons in England thought possible, although it was to be completed in little more than ten years. On the 9th of February Peel moved that the House should resolve itself into a Committee to consider the Corn Laws. His speech, which lasted nearly three hours, was necessarily dull, and his proposal was equally offensive to the country gentlemen and to the Anti-Corn Law League. It amounted merely to an improvement of the sliding-scale which had been devised by the Duke of Wellington's Cabinet [See above: A. D. 1815-1828], and was based on the axiom that the British farmer, taking one year with another, could not make a profit by growing corn if foreign corn were admitted at a price of less than 70s. a quarter. By a calculation of prices extending over a long term of years, Peel had satisfied himself that a price of 56s. a quarter would remunerate the British farmer. He proposed to modify the sliding-scale accordingly. … Peel retained the minimum duty of 1s. when corn was selling at 73s. the quarter; he fixed a maximum duty of 20s. when corn was selling at from 50s. to 51s. the quarter, and he so altered the graduation in the increase of duty as to diminish the inducement to hold grain back when it became dear. … So general was the dissatisfaction with Peel's Corn Law that Russell ventured once more to place before the House his alternative of a fixed 8s. duty. He was defeated by a majority of upwards of 120 votes. Two days later Mr. Villiers made his annual motion for the total repeal of the Corn Laws, and was beaten by more than four votes to one. The murmurs of Peel's own supporters were easily overborne, and the Bill was carried through the House of Commons after a month spent in debates. As soon as it had passed, and the estimates for the army and navy had been voted, Peel produced what was really his Budget, nominally Mr. Goulburn's. … In every one of the last five years there had been a deficit. … Peel therefore resolved to impose an income tax." He also raised the duty on Irish spirits and on exports of coal, besides making some changes in the stamp duties. "With these and with the income tax he calculated that he would have a surplus of £1,900,000. Peel was thus able to propose a reduction of the tariff upon uniform and comprehensive principles. He proposed to limit import duties to a maximum of 5 per cent. upon the value of raw materials, of 12 per cent. upon the value of goods partly manufactured, and of 20 per cent. upon the value of goods wholly manufactured. Out of the 1,200 articles then comprised in the tariff, 750 were more or less affected by the application of these rules, yet so trivial was the revenue raised from most of them that the total loss was computed at only £270,000 a year. Peel reduced the duty on coffee; he reduced the duty on foreign and almost entirely abolished the duty on Canadian timber. Cattle and pigs, meat of all descriptions, cheese and butter, which had hitherto been subject to a prohibitory duty, he proposed to admit at a comparatively low rate. He also diminished the duty upon stage coaches. So extensive a change in our system of national finance had never before been effected at one stroke. … Immense was the excitement caused by the statement of the Budget. … Every part of Peel's scheme was debated with the utmost energy. … He procured the ratification of all his measures subject to some slight amendments, and at the cost of a whole session spent in discussing them. Little or nothing else was accomplished by Parliament in this year. Peel had returned to power as the Champion of protection. His first great achievement was the extension of the freedom of trade."

_F. G. Montague, Life of Sir Robert Peel, chapter 8._

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"Notwithstanding the objections which free traders might raise, the Budget of 1842 proved the first great advance in the direction of free trade. It did not remove the shackles under which trade was struggling, but it relaxed the fastenings and lightened the load."

_S. Walpole, History of England from 1815, chapter 18 (volume 4)._

ALSO IN: _S. Walpole, Life of Sir Robert Peel, volume 3, chapter 5._

_J. Morley, Life of Richard Cobden, volume 1, chapter 11._

TARIFF: (United States): A. D. 1842. An Act to provide a necessary increase of revenue, with incidental protection.

"There had been a lull in tariff legislation for ten years. The free-trade party had been ascendant; and amendment of the law, save in the slight ways mentioned, had been impossible. During the decade, a financial tornado had swept over the country; the United States bank had ceased to be; the experiment of keeping the government deposits with the State banks had been tried, and had failed; the government had kept them several years without authority, but finally a bill had been passed which authorized keeping them in that manner. The time had now nearly come for reducing the duties [by the gradual scaling down provided for in the Compromise tariff act of 1833] to their lowest point. Manufactures were drying up at the root. A material augmentation of the national revenue from some source had become necessary. … Whatever difference of opinion existed respecting the necessity of additional protection to manufacturers, some expedient, it was universally conceded, must be adopted to increase the public revenue. As no one favored direct taxation, a revision of the tariff was the only mode of enriching the treasury. … The committee on manufactures did not report to the House until the last of March, 1842. … The leading provisions of the bill reported by the committee were the following:

1. A general ad valorem duty of 30 per cent, with few exceptions, where the duty was on that principle.

2. A discrimination was made for the security of certain interests requiring it by specific duties, in some instances below, in others above, the rate of the general ad valorem duty.

3. As a general principle, the duty on the articles subject to discrimination was made at the rate at which it was in 1840, after the deduction of four-tenths of the excess on 20 per cent by the Act of 1833. …

The subject was discussed at great length by the House, although the time was drawing near for making the last reduction under the compromise law of [1833]. Something must be done. Accordingly, Fillmore, chairman of the committee of ways and means, reported a bill to extend the existing tariff laws until the 1st day of August, 1842, which was immediately passed by the House; but the Senate amended the bill by adding a proviso that nothing therein contained should suspend the operation of the Distribution law,—a law passed at the extra session of the preceding year, distributing the proceeds of the sales of the public lands among the States. … In the debate on this bill the proviso became a prominent topic of discussion. The distribution Act contained a proviso, that, if at any time the duties under the compromise tariff should be raised, the distribution should cease, and be suspended until the cause of the suspension were removed. … Those who were in favor of high protective duties desired the removal of the proviso of the distribution Act in order that the tariff might be raised without interfering with distribution. The House having rejected an amendment proposing to strike out the proviso which prohibited the suspension of the distribution law, the bill was passed by the House, and afterward by the Senate, but vetoed by the President. Another tariff bill was introduced by Mr. Fillmore, drawn by the Secretary of the Treasury,—to which, however, the committee added a proviso that the … proceeds of the public lands should be distributed, notwithstanding the increase of duties,—which passed both Houses after a short debate. This contained a revision of a considerable number of duties, and was also vetoed by the President. Impelled by the necessity of providing additional revenue, a bill was rapidly pushed through Congress, similar to that previously passed, with the omission of the proviso requiring distribution, and further modified by admitting free of duty tea and coffee growing east of the Cape of Good Hope, imported in American vessels. This bill was approved by the President. A separate bill was then passed, repealing the proviso of the distribution Act, and allowing the distribution to take place, notwithstanding the increase of duties; but the bill was retained by the President and defeated. Thus ended a long and bitter controversy, in which public sentiment expanded, and hardened against the chief Executive of the nation. … That tariff remained without change during the next four years."

_A. S. Bolles, Financial History of the United States, 1789-1860, book 3, chapter 6._

TARIFF: (England): A. D. 1845-1846. The Repeal of the Corn Laws. Dissolution of the League.

"The Anti-Corn-Law agitation was one of those movements which, being founded on right principles, and in harmony with the interest of the masses, was sure to gather fresh strength by any event affecting the supply of food. It was popular to attempt to reverse a policy which aimed almost exclusively to benefit one class of society. … The economic theorists had the mass of the people with them. Their gatherings were becoming more and more enthusiastic. And even amidst Conservative landowners there were not a few enlightened and liberal minds who had already, silently at least, espoused the new ideas. No change certainly could be expected to be made so long as bread was cheap and labour abundant. But when a deficient harvest and a blight in the potato crop crippled the resources of the people and raised grain to famine prices, the voice of the League acquired greater power and influence. Hitherto they had received hundreds of pounds. Now, thousands were sent in to support the agitation. A quarter of a million was readily contributed. Nor were the contributors Lancashire mill-owners exclusively. Among them were merchants and bankers, men of heart and men of mind, the poor labourer and the peer of the realm. The fervid oratory of Bright, the demonstrative and argumentative reasoning of Cobden, the more popular appeals of Fox, Rawlins, and other platform speakers, filled the newspaper press, and were eagerly read. {3075} And when Parliament dissolved in August 1845, even Sir Robert Peel showed some slight symptoms of a conviction that the days of the corn laws were numbered. Every day, in truth, brought home to his mind a stronger need for action, and as the ravages of the potato disease progressed, he saw that all further resistance would be absolutely dangerous. A cabinet council was held on October 31 of that year to consult as to what was to be done, and at an adjourned meeting on November 5 Sir Robert Peel intimated his intention to issue an order in council remitting the duty on grain in bond to one shilling, and opening the ports for the admission of all species of grain at a smaller rate of duty until a day to be named in the order; to call Parliament together on the 27th inst., in order to ask for an indemnity, and a sanction of the order by law; and to submit to Parliament immediately after the recess a modification of the existing law, including the admission at a nominal duty of Indian corn and of British colonial corn. A serious difference of opinion, however, was found to exist in the cabinet on the question brought before them, the only ministers supporting such measures being the Earl of Aberdeen, Sir James Graham, and Mr. Sidney Herbert. Nor was it easy to induce the other members to listen to reason. And though at a subsequent meeting, held on November 28, Sir Robert Peel so far secured a majority in his favour, it was evident that the cabinet was too divided to justify him in bringing forward his measures, and he decided upon resigning office. His resolution to that effect having been communicated to the Queen, her Majesty summoned Lord John Russell to form a cabinet, and, to smooth his path, Sir Robert Peel, with characteristic frankness, sent a memorandum to her Majesty embodying a promise to give him his support. But Lord John Russell failed in his efforts, and the Queen had no alternative but to recall Sir Robert Peel, and give him full power to carry out his measures. It was under such circumstances that Parliament was called for January 22, 1846, and on January 27 the Government plan was propounded before a crowded House. It was not an immediate repeal of the corn laws that Sir Robert Peel recommended. He proposed a temporary protection for three years, till February 1, 1849, imposing a scale during that time ranging from 4s. when the price of wheat should be 50s. per quarter and upward, and 10s. when the price should be under 48s. per quarter, providing, however, that after that period all grain should be admitted at the uniform duty of 1s. per quarter. The measure, as might have been expected, was received in a very different manner by the political parties in both Houses of Parliament. There was treason in the Conservative camp, it was said, and keen and bitter was the opposition offered to the chief of the party. For twelve nights speaker after speaker indulged in personal recriminations. They recalled to Sir Robert Peel's memory the speeches he had made in defence of the corn laws. And as to his assertion that he had changed his mind, they denied his right to do so. … The passing of the measure was, however, more than certain, and after a debate of twelve nights' duration on Mr. Miles's amendment, the Government obtained a majority of 97, 337 having voted for the motion and 240 against it. And from that evening the corn law may be said to have expired. Not a day too soon, certainly, when we consider the straitened resources of the country as regards the first article of food, caused not only by the bad crop of grain, but by the serious loss of the potato crop, especially in Ireland."

_L. Levi, History of British Commerce, part 4, chapter 4._

"On the 2nd of July the League was 'conditionally dissolved,' by the unanimous vote of a great meeting of the leaders at Manchester. … Mr. Cobden here joyfully closed his seven years' task, which he had prosecuted at the expense of health, fortune, domestic comfort, and the sacrifice of his own tastes in every way. … Mr. Cobden had sacrificed at least £20,000 in the cause. The country now, at the call of the other chief Leaguers, presented him with above £80,000—not only for the purpose of acknowledging his sacrifices, but also to set him free for life for the political service of his country."

_H. Martineau, History of the Thirty Years' Peace, book 6, chapter 15 (volume 4)._

ALSO IN: _W. C. Taylor, Life and Times of Sir Robert Peel, volume 3, chapters 8-10._

_J. Morley, Life of Richard Cobden, volume 1, chapters 15-16._

_M. M. Trumbull, The Free Trade Struggle in England._

_A. Bisset, Notes on the Anti-Corn Law Struggle._

_Debate upon the Corn Laws in Session 1846._

TARIFF: (United States): A. D. 1846-1861. Lowered duties and the disputed effects.

"In 1846 was passed what we will call the 'Walker tariff,' from Robert J. Walker, then Secretary of the Treasury. It reduced the duties on imports down to about the standard of the 'Compromise' of 1833. It discriminated, however, as the Compromise did not, between goods that could be produced at home and those that could not. It approached, in short, more nearly than any other, in its principles and details, to the Hamilton tariff, although the general rate of duties was higher. From that time up to 1857 there was a regular and large increase in the amount of dutiable goods imported, bringing in a larger revenue to the government. The surplus in the treasury accumulated, and large sums were expended by the government in buying up its own bonds at a high premium, for the sake of emptying the treasury. Under these circumstances the 'tariff of 1857' was passed, decidedly lowering the rates of duties and largely increasing the free list. The financial crisis of that year diminished the imports, and the revenue fell off $22,000,000. It rallied, however, the next two years, but owing to the large increase of the free list, not quite up to the old point."

_A. L. Perry, Elements of Political Economy, page 464._

"The free-traders consider the tariff of 1846 to be a conclusive proof of the beneficial effect of low duties. They challenge a comparison of the years of its operation, between 1846 and 1857, with any other equal period in the history of the country. Manufacturing, they say, was not forced by a hot-house process to produce high-priced goods for popular consumption, but was gradually encouraged and developed on a healthful and self-sustaining basis, not to be shaken as a reed in the wind by every change in the financial world. Commerce, as they point out, made great advances, and our carrying trade grew so rapidly that in ten years from the day the tariff of 1846 was passed our tonnage exceeded the tonnage of England. The free-traders refer with especial emphasis to what they term the symmetrical development of all the great interests of the country under this liberal tariff. {3076} Manufactures were not stimulated at the expense of the commercial interest. Both were developed in harmony, while agriculture, the indispensable basis of all, was never more flourishing. The farmers and planters at no other period of our history were in receipt of such good prices, steadily paid to them in gold coin, for their surplus product, which they could send to the domestic market over our own railways and to the foreign market in our own ships. Assertions as to the progress of manufactures in the period under discussion are denied by the protectionists. While admitting the general correctness of the free-trader's statements as to the prosperous condition of the country, they call attention to the fact that directly after the enactment of the tariff of 1846 the great famine occurred in Ireland, followed in the ensuing years by short crops in Europe. The prosperity which came to the American agriculturist was therefore from causes beyond the sea and not at home,—causes which were transient, indeed almost accidental. Moreover an exceptional condition of affairs existed in the United States in consequence of our large acquisition of territory from Mexico at the close of the war and the subsequent and almost immediate discovery of gold in California. A new and extended field of trade was thus opened in which we had the monopoly, and an enormous surplus of money was speedily created from the products of the rich mines on the Pacific coast. At the same time Europe was in convulsion from the revolutions of 1848, and production was materially hindered over a large part of the Continent. This disturbance had scarcely subsided when three leading nations of Europe, England, France, and Russia, engaged in the wasteful and expensive war of the Crimea. The struggle began in 1853 and ended in 1856, and during those years it increased consumption and decreased production abroad, and totally closed the grain-fields of Russia from any competition with the United States. The protectionists therefore hold that the boasted prosperity of the country under the tariff of 1846 was abnormal in origin and in character. … The protectionists maintain that from 1846 to 1857 the United States would have enjoyed prosperity under any form of tariff, but that the moment the exceptional conditions in Europe and in America came to an end, the country was plunged headlong into a disaster [the financial crisis of 1857] from which the conservative force of a protective tariff would in large part have saved it. … The free-traders, as an answer to this arraignment of their tariff policy, seek to charge responsibility for the financial disasters to the hasty and inconsiderate changes made in the tariff in 1857, for which both parties were in large degree if not indeed equally answerable."

_J. G. Blaine, Twenty Years of Congress, volume 1, chapter 9._

TARIFF: (England): A. D. 1846-1879. Total abandonment of Protection and Navigation Laws. The perfected tariff of Free Trade.