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1651-1831 - Mercantilism

In the early period of expansion the royal government had no clearly defined or consistent policy. The first charters, however, laid down two principles which proved of permanent constitutional significance: those who crossed the seas, and their descendants, remained British subjects, and retained the "rights of Englishmen;" and those to whom the charters were granted could make any necessary laws not " repugnant" to those of England. Although the Stuarts several times planned to organize a centralized colonial system, troubles at home and resistance from the colonists defeated their intentions, and in an atmosphere of " salutary neglect " several generations of Englishmen overseas gained practice in managing their own affairs. The outstanding attempt at control was through the Acts of Trade and Navigation. These began under the Commonwealth in 1651, and embodied the current views on colonial policy.

The combined system of economic theory and practice which England shared with the rest of Western Europe goes by the name of mercantilism. The central idea was to make the national state self-sufficient from the economic point of view both in peace and war. To that end the production of all necessary food, materials and manufactures at home was encouraged, and their purchase from abroad was discouraged. Colonies were sought to supply materials not produced at home, as a market for home manufactures, and as possible sources of gold and silver. These last were regarded as the surest signs of national prosperity.

Hence arose the desire for mines, and the objection to imports, particularly luxuries, which would decrease the favorable balance of trade. To secure these ends governments controlled production and imports, confined national trade so far as possible to national shipping, and monopolized the import and export trade of the colonies. In trying to help shipping, to give English merchants the middleman's profit and English manfacturers the monopoly of colonial trade, the government had the interests of the mother country chiefly in mind. Yet there was no intention to oppress; the arrangement was supposed to be of mutual advantage. In fact, by evading the laws when it suited their interests, the colonists got on very well.

The Navigation Laws were directed at first against Holland, and they helped to produce trade wars, in which control of the Far East was also at stake. The epic struggle with France in the eighteenth century was partly concerned with the European balance of power, but particularly with the commercial, colonial and naval supremacy of the world. The victory of 1763 which left England mistress of the seas and predominant in North America and India was epochmaking in the history of the Empire.

In the New World this victory was soon followed by an internal crisis. War had shown the need of better imperial organization. But when the Ministry attempted to secure greater uniformity and efficiency by enforcing the Navigation Laws, by taxing the colonies for their share of imperial defense, and by strengthening control over governors and judges, the colonists reacted strongly, and ultimately fought for independence. The essential problem was one of division of powers between the central and the local governments. The relation for which the Americans of 1765 contended was substantially that which later prevailed between Britain and the Dominions, and its wisdom was recognized by Burke, Pitt, Fox and other leaders of the opposition in England.

Following the precedent of liberal treatment of the Dutch in New Amsterdam, the British government had already granted the French inhabitants of Canada religious freedom and the use of their own language and civil law. This common-sense toleration has come to be one of the great characteristics of British policy. When too late to avert the American Revolution, Parliament had agreed to " forbear " its right to tax the colonists, and this concession was embodied in the Canadian constitutions of 1791. Apart from this, little change in policy was apparent.

In fact, the experience with America was thought to show that grants of self-government would lead to independence. Canada was given representative institutions, but for the next half century they were denied to newly-acquired possessions like Australia, Ceylon and Cape Colony. British interest in colonial affairs declined, and the management fell largely into the hands of permanent under-officials " who displayed the most deplorable ignorance of the local requirements and temper of those whose destinies they insisted upon controlling." The colonists resented this, and came to distrust a government which appeared to be officious and indifferent at the wrong times.

The starting-point of the struggle which raged between the squire and the capitalist, between land and commerce, during the years 1826-46, is the Corn Law of 1815. To understand it is therefore to have the key to the whole controversy. A Corn Law was first introduced in Britain in 1804, when the landowners who dominated Parliament sought to protect their profits by imposing a duty on imported corn. During the Napoleonic Wars it had not been possible to import corn from Europe, which led to an expansion of British wheat farming and to high bread prices. Farmers feared that when the war came to an end in 1815, the importation of foreign corn would lower prices. This fear was justified and the price of corn reached fell from 126s. 6d. a quarter in 1812 to 65s. 7d. three years later.

The Corn Law of 1815 forbade foreign corn to be imported, until the price in England should rise to 80s. per quarter (8 bushels). During the passing of this legislation, the Houses of Parliament had to be defended by armed troops against a large angry crowd.

It attempted in the first place to give immediate temporary relief to those landlords who had unduly extended their areas of cultivation, because of the unnatural stimulation of prices during the war, and who had suffered terribly from the collapse in prices immediately after it. The Act was also framed, partly to give some permanent protection to the landed interest, partly with the wider and more national object of making the country self-sufficient in war-time. It had therefore a direct economic and an indirect political end.

In 1822 there was terrible agricultural distress, and some inconsiderable amendments were made in the Corn Laws. By 1826 circumstances had greatly changed since 1815. Only one-third of the population now worked on the land; commercial and capitalistic interests were stronger and more articulate. These considerations counted for much with Canning and Huskisson, who believed the future prosperity of England to depend not on agriculture but on commerce.

They were also influenced by the fact that, as the Corn Laws were the most noticeable part of the English tariff, foreign countries always refused to make concessions in commercial treaties on the ground that our corn duties showed no sign of reduction. In 1826 the scantiness of the harvest caused terrible distress; and the Government, acting on their own responsibility, at once placed the foreign corn (kept in bond until the price should rise to the required rate) on the open market.

As there was no country in Europe where the labourer held less land, the English labourer was more interested in the price of corn as consumer than as producer.




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Page last modified: 24-02-2016 20:03:00 ZULU