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 THE ECONOMIC INTERPRETATION 
 OF HISTORY.
 
 Ex Libria 
 C. K. OGDEN 
 
 THE ECONOMIC 
 INTERPRETATION OF HISTORY 
 
 (LECTURES DELIVERED IN 
 WORCESTER COLLEGE HALL, OXFORD, 1887-8) 
 
 JAMES E. THOROLD ROGERS 
 
 PROFESSOR OF POLITICAL ECONOMY IN THE UNIVERSITY OF OXFORD AND 
 
 OF ECONOMIC SCIENCE AND STATISTICS, KING'S COLLEGE, LONDON, 
 
 AUTHOR OF "SIX CENTURIES OF WORK AND WAGES,'' 
 
 "A HISTORY OF AGRICULTURE AND PRICES IN 
 
 ENGLAND," ETC. 
 
 T. FISHER UNWIN 
 
 26 PATERNOSTER SQUARE 
 NEW YORK: G. P. PUTNAM'S SONS 
 
 MDCCCLXXXVIII
 
 PREFACE. 
 
 THE lectures contained in this volume were delivered in the hall of 
 the author's College (Worcester, Oxford) in his capacity as lecturer 
 in Political Economy to that Society. They were open to all 
 members of the university, and were very numerously attended. 
 I mention this, because, being printed as they were read, the fact 
 may explain or excuse the various local allusions which they con- 
 tain, and the occasional repetitions of statement which will be 
 found in them. The business of a lecturer is to teach as best he 
 can. 
 
 I should be the last person to deny that there are economical 
 generalities which are as universal in their application as they are 
 true. Such, for example, are those which affirm that the indi- 
 vidual has an inalienable right to lay out his money, or the pro- 
 duce of his labour to the best advantage, and that any interference 
 with that right is an abuse of power, for which no valid excuse 
 whatever has been, or can be, alleged. In other words, there is no 
 answer to the claim of free exchange. Of course I am well aware 
 that an answer has been attempted, and that civil government con- 
 stantly invades the right. The invasion is brigandage under the 
 forms of law. Other illustrations can be given, as that the police 
 of society must always regulate the trade in instruments of credit, 
 that certain services are part of the function of government, that 
 the satisfaction of contracts, under an equitable interpretation, 
 must be guaranteed, that the only honest rule in taxation is 
 equality of sacrifice, with what such a rule implies or involves, and 
 BO on. It is very likely that in practice government violates these 
 economical principles, and gives more or less plausible reasons for
 
 vi PEEFACE. 
 
 its misconduct. And as wrongs done by government have an endur- 
 ing effect, it is difficult, if not impossible, to interpret any problem 
 in political economy, without taking into account those historical 
 circumstances of which the present problem is frequently the result, 
 and occasionally to examine the present political situation. In brief, 
 any theory of political economy which does not take facts into ac- 
 count is pretty sure to land the student in practical fallacies of the 
 grossest, and in the hands of ignorant, but influential people, of the 
 most mischievous kind. I could quote these fallacies by the dozen. 
 Some have been over and over again refuted ; others still possess 
 vitality. Some are slowly losing their hold, especially in practical 
 politics, which is becoming every day more economical. Many of 
 these errors die hard, especially when they assume the form of a 
 vested interest ; sometimes they are maintained as part of the con- 
 tinuity of policy ; sometimes they are defended by bold and baseless 
 assertions. In time, they become the subjects of parliamentary 
 compromise, at last they are swept away and repudiated. Any 
 student of the economical laws which can be found in the historical 
 statute book, will constantly find that the wisdom of one genera- 
 tion is the folly of another. 
 
 Many years ago I began to suspect that much of the political 
 economy which was currently in authority was a collection of 
 logomachies, which had but little relation to the facts of social life. 
 Accident, and some rare local opportunities, led me to study these 
 facts in the social life of our forefathers, facts of which the existence 
 was entirely unsuspected. I began to collect materials, chiefly in the 
 form of prices, and at first of the necessaries of life. But I soon 
 widened my research, and included in my inquiry everything 
 which would inform me as to the social condition of Englishmen, 
 six centuries ago and onwards. Gradually, I came to see how 
 Englishmen lived through these ages, and to learn, what, perhaps, 
 I can never tell fully, the continuous history of social life in this 
 country, up to nearly recent times, or at least till that time in 
 which the modern conditions of our experience had been almost 
 stereotyped. By this study, I began to discover that much which 
 popular economists believe to be natural is highly artificial ; that 
 what they call laws are too often hasty, inconsiderate, and in- 
 accurate inductions ; and that much which they consider to be
 
 PREFACE. vii 
 
 demonstrably irrefutable is demonstrably false. I have often had 
 to conclude that the best-intentioned thinkers and writers have 
 been supremely mischievous, and that in attempting to frame a 
 system, they have wrecked all system. It must, I think, be 
 admitted that political economy is in a bad way : its authority is 
 repudiated, its conclusions are assailed, its arguments are com 
 pared to the dissertations held in Milton's Limbo, its practical 
 suggestions are conceived to be not much better than those of the 
 philosophers in Laputa, and one of its authorities, as I myself 
 heard, was contemptuously advised to betake himself to Saturn. 
 Now all this is very sad. The books which seemed to be wise are 
 often compared to those curious volumes of which the converts at 
 Ephesus made a holocaust. And the criticism is just. 
 
 The distrust in ordinary political economy has been loudly ex- 
 pressed by working men. And, to speak truth, one need not wonder 
 at it. The labour question has been discussed by many economists 
 with a haughty loftiness which is very irritating. The economist, 
 it is true, informs them, that all wealth is, the product of labour, 
 that wealth is labour stored in desirable objects, that capital is the 
 result of saved labour, and is being extended and multiplied by the 
 energies of labour. Then he turns round, and rates these workmen 
 for their improvidence, their recklessness, their incontinence in 
 foolishly increasing their numbers, and hints that we should be all 
 the better off if they left us in their thousands, while there are 
 many thousands of well-off people whose absence from us would be 
 a vast gain. I have never read in, any of the numerous works which 
 political economists have written, any attempt to trace the 
 historical causes of this painful spectacle, or to discover whether or 
 no persistent wrong doing has not been the dominant cause of Eng- 
 lish pauperism. The attempts which workmen have made to better 
 their condition have been traduced, or ignored, or made the subject 
 of warnings as to the effects which they will induce on the wage 
 fund, this wage fund, after all,, being a phantasm, a logomachy. In 
 the United States the case is worse. A writer will publish a book 
 on wages, and deliberately ignore the effect of the American tariff 
 on the real wages of workers. If he knows anything at all of what 
 he is writing about, and is not merely writing for office, he should 
 be aware that no fertile customs revenue can come from anything
 
 viii PREFACE. 
 
 but the expenditure of the poor, and should not need that Mr. 
 "Washbourne, the late Minister of the Union at Paris, should tell 
 him, that smuggling is an all-devouring passion with the wealthy 
 American, and the corruption of revenue officers the constant 
 machinery for the practice. 
 
 Two things have discredited political economy the one is it& 
 traditional disregard for facts ; the other, its strangling itself with 
 definitions. The economist has borrowed his terms from common 
 life. Now, unless the words one uses are strictly limited in mean- 
 ing, as those are which express geometrical forms, or chemical 
 compounds, no word, and for the matter of that no definition of 
 the word, ordinarily covers what the man who uses the word intends 
 by it. He gives, may be, a definition of the thing or thought, and 
 succeeding writers who inherit his word begin to expand or vary it, 
 not taking counsel with the facts, but only with their own experiences 
 or impressions. Now word-splitting and definition -extending is a 
 most agreeable occupation. It does not require knowledge. It is 
 sufficient to be acute. Persons can spin out their definitions from 
 their inner consciousness by the dozen, aye, and catch the unwary 
 in the web. But, above all things, the economist claims to be 
 practical. He is engaged, as he tells you, in the analysis of social 
 man, from a particular point of view. This view is especially the 
 function of government and the state. If his conclusions are taken 
 rightly, they are, or should be, the basis of Parliamentary and 
 Administrative action. But it is appalling to think of what the 
 consequences would have been, if some so-called economical verities 
 had been translated into law. It is grievous enough to note what 
 the consequences have been, when some of these rash inferences 
 have been accepted as guides in statesmanship. I have attempted 
 to illustrate what I mean in these lectures. 
 
 The lawyer gives an arbitrary meaning to words or phrases, 
 and will not suffer these meanings to be traversed. Unless he 
 did so, the practice of law would be an impossible chaos. It 
 does not signify to him that a conveyance to a man and his heirs 
 was meant to give two estates. He insists that in his language 
 it only gives one, in the first place, probably, for Biblical reasons. 
 The same fact applies to the meaning which it assigns to 
 words implying certain commercial instruments. Mr. Justice
 
 PREFACE. ix 
 
 Byles defines the legal meaning of a bill of exchange, and his defi- 
 nition is accepted as conclusive, as regards drawer, acceptor, and 
 negotiators. It is no use to wrangle whether the judge's definition 
 is capable of amendment. It is sufficient that the interpretation is 
 fixed, beyond cavil or dispute. But there are subjects of the pro- 
 foundest human interest in which no such final authority is 
 accepted. These have been strangled by dogmas, definitions, 
 logomachies, till the spirit of the whole matter evaporates in airy 
 metaphysics. Now in the midst of this idle and unprofitable strife 
 of tongues, it is not wonderful that there are people who think that 
 the Gallios ought not to be censured for indifference. But where 
 authority is not allowed to define words, the wrangle as to their 
 meaning is perennial. 
 
 My treatment, then, of my subject is as follows. You have a 
 number of social or economical facts, many of them containing 
 problems of a serious and urgent character. So serious are they that 
 many persons an increasingly large number of persons demand,, 
 if no other solution is to be given, that society must be recon- 
 structed on new lines, as Frankenstein made his man, or monster. 
 To meet these people with the law of supply and demand, to point 
 out to them the bliss of unrestricted competition, and to rebuke 
 them with the Malthusian law of population, the Eicardian theory 
 of rent, and the margin of unproductive cultivation, is to present 
 them with logomachies which they resent. They believe that 
 economists are uttering optimism to order. In a vague way, they 
 are under the impression that the greater part of the misery which 
 they see is the direct product of laws, enacted and maintained in 
 the interest of particular classes. And, on the whole, they are in 
 the right. Most of the problems which vex society have an his- 
 torical origin, sometimes a present cause, though more rarely. 
 
 Now I made it my business in these lectures, as I have done in 
 others, since I have been restored to an office of which I was de- 
 prived because I traced certain social mischiefs to their origin, 
 twenty years ago, to examine into and expound the history of social 
 facts. Of course I am almost entirely the authority for the facts 
 which I cite, with one notable exception, i.e., the economical laws 
 in the Statute Book. These laws are not to be found in the volumes 
 which go by the name of the statutes at large, for when the law has
 
 x PEE FACE. 
 
 been repealed, or become obsolete, or was temporary only, it is 
 dropped out of these collections, and very few lawyers know anything 
 of the history of law. They are to be found only in the collection 
 which was published at the beginning of the century, and was 
 continued to the accession of the House of Hanover. These lec- 
 tures, then, are mainly founded on the facts which are collected in 
 my history of prices, and I presume that even the most arrogant of 
 the metaphysical economists will allow that the facts of social life 
 go for something in the solution of economical questions. If he 
 does not, I will leave him, like the poet in Horace, to his mad- 
 ness. 
 
 My reader will find that I occasionally refer to the experiences 
 which I gained when I was in the House of Commons. Many of 
 my audience were young men, to whom this kind of position is 
 likely to be an early object of ambition. Now I am not one of 
 those who deprecate party strife. I know that rightly taken, party 
 is the perpetual struggle of good against evil, and I have a tolerably 
 clear instinct, fortifiedinto conviction, of where the evil always is with 
 which the good battles. But the experience of Parliamentary life, 
 to him who will learn, teaches one how just but angry discontent is 
 baffled, of how one must wait for opportunities in order to undo 
 wrong-doing, and how, under the name of compromises, one has to 
 accept half for whole truths. And besides, the sphere of political 
 action is so vast and so complicated, the forms of our Constitution 
 give so enormous a power to the Administration, and all administra- 
 tions are so enamoured of the possible, instead of the true, that no 
 more instructive education can be given one than to watch 
 and take part in the battle of Parliamentary forces. To the his- 
 torical economist, the lesson is invaluable. I think I have almost 
 exhausted the lesson in my own person, or at least to my own 
 capacity. 
 
 It is no doubt more profitable to an economist to be an optimist or 
 an alarmist, to dilate on the numbers and the wages of the working 
 classes with one, to predict the exhaustion of coal with another, and 
 to dwell on the margin of cultivation with a third. But the pro- 
 gress of the working classes is exceedingly unsatisfactory, and has 
 been enormously exaggerated by those who have written on it ; 
 while the exhaustion of coal and the margin of cultivation are scares,
 
 PREFACE. xi 
 
 which, I think, I have generally disposed of in these pages. But, in 
 point of fact, these economists have generally been fairly well-to-do 
 people, who have only had a lofty sympathy with those who struggle 
 for a living. And the worst of it is, that they are so profoundly 
 ignorant of the social facts on which they profess to be dogmatic. 
 A man will chatter over the margin of cultivation who does not 
 know a field of wheat from a field of barley ; of the exhaustion of 
 coal deposits when he does not know their extent, and is not aware 
 of the economies of their use ; of the condition of workmen, when 
 he is entirely unacquainted with the fact that they were cruelly 
 oppressed up to recent times. For political economy like this I 
 have, and I trust I always shall have, the heartiest contempt. 
 
 Of course a resolute determination to look into and substantiate 
 the causes which have so mightily hindered the economic progress of 
 my countrymen is unpopular with the least deserving and least 
 valuable, but often most powerful, classes of the community. I had 
 some time ago to demand of the chivalrous Lord Iddesleigh, that 
 he should substantiate a charge of communism which he made 
 against me, by reference to anything which I had said or written in 
 favour of a violent reconstruction of society. He was constrained 
 to admit that he had found, and could find nothing, and politely 
 congratulated me on not being associated with such a platform. 
 But I have constantly noticed that men who are entirely devoid of 
 any sense of political and social justice are fond of charging their 
 critics with sinister designs against property and order. So I am 
 told that some of the frantic advocates of violent reconstruction 
 allege that I am a socialist without knowing it. But I know very 
 well what is the issue, the natural, just, and inevitable issue, of all 
 attempts to cure wrong-doing by violence, and to meet the misdeeds 
 of government by a propaganda of anarchy. 
 
 The strength of communism lies in the misconduct of admini- 
 strations, the sustentation of odious and unjust privilege, and the 
 support of what are called vested interests, i.e., what is in the main 
 an indefensible position or an indefensible claim to economic 
 existence. I have pointed out what is the nature of some among 
 these grave social evils in the following pages, and though I cannot 
 foresee that the English people will be induced to accept the 
 theories of those who would recast society by the forcible appro-
 
 xii PREFACE. 
 
 priation of land and capital, yet it is quite reasonable to predict that 
 they who have hitherto taken an unfair advantage of their position 
 and their influence, may hereafter get less than justice from in- 
 structed discontent. The policy which puts all local taxation on 
 occupiers, which allows the owners of mansions and parks to be 
 judges of their own contributions to taxation, the rapine which con- 
 fiscates improvements under the pretence of free contracts, will 
 sooner or later be met with a reversal which will be far from agree- 
 able to those who profit by present conditions. In nothing is this 
 more visible than in agriculture, where the confiscation of the 
 tenants' capital has been followed by the destruction of British 
 agriculture, and as yet by ignorant discontent. But it is clear that 
 the control of the landowner's power in the disposition of his rights 
 is imminent, that it is nearly completed in Ireland, that it is mak- 
 ing great progress in other parts of Great Britain, and that it is 
 rapidly coming within the range of practical politics. The joint 
 ownership of landlord and tenant, in which the interest of the 
 former is to be fixed, that of the latter is to be improvable, is 
 already advocated by persons of no mean influence. The Agricultural 
 Holdings Act is an instalment, a compromise, the complement of 
 which is not far distant. The claim made to the unearned incre- 
 ment is met by the demand that this very increment should be the 
 object of exceptional taxation, and the demand is daily becoming 
 more minatory and coherent. Englishmen are beginning to see 
 that their domestic troubles are mostly of their own making, and 
 when they learn the causes, they will be wholesale in their remedial 
 measures. 
 
 Political economy, rightly taken, is the interpretation of all social 
 conditions. It is justly distrusted if it is suspected of being a de- 
 fence of abuses. In the theory as to how wealth is distributed, the 
 true centre of all economical inquiries, the suspicion that it 
 deliberately advocates an unjust distribution, hopelessly discredits 
 it. And when men despair of equity, the just rights of those who 
 have strained those rights are in danger. I cannot agree with Mr. 
 George, but I am amazed to find how popular his theory is. It is 
 entirely the outcome of economical fallacies, hitherto treated as 
 indisputable truths. The unearned and, according to Mr. George, 
 the entirely undeserved increment is the key to the passionate and
 
 PREFACE. xiii 
 
 seductive proposals of " Progress and Poverty." Now the impulses 
 bred by this remarkable book are not met by definitions and logo- 
 machies. They may be explained away in great part by historical 
 facts, and by the accurate analysis of present conditions. But they 
 never will be as long as people cling to Eicardo, and to obsolete 
 theories of an analogous kind. The instincts of men revolt against 
 a doctrine which teaches that a limited class of property holders is 
 to take an increased toll on the earnings of capital and labour ; that 
 there is no escape from this bondage ; and that the more intelligent 
 and acute labour becomes, the more heavy will be the tribute which 
 the idle and worthless can exact from society. There is no more 
 mischievous person living than a rapacious landlord, who uses to 
 the full all the powers which existing law gives him. But, on the 
 other hand, there is no more useful and deserving person than a wise 
 and just landlord, who respects his neighbour's true rights, while 
 he preserves his own. Unluckily the former are common, the latter 
 are rare. The contrast may be extended into other forms of pro- 
 perty and other callings ; and the result is, that the doctrine of 
 laissez faire is on its trial In some quarters, the verdict has been 
 already given. 
 
 These lectures were compiled in 1887, though some were 
 delivered in the early part of 1888. I mention this in order to 
 designate the date to which some allusions in the text refer. 
 
 OXFORD, 
 
 June, 1888.
 
 CONTENTS. 
 
 i. 
 
 PAGE. 
 THE ECONOMICAL SIDE OF HISTORY . . 1 
 
 II. 
 
 LEGISLATION ON LABOUR AND ITS EFFECTS . . .23 
 
 III. 
 THE CULTIVATION OF LAND BY OWNERS AND OCCUPIERS . . 46 
 
 IV. 
 
 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS . . .6$ 
 
 V. 
 
 DIPLOMACY AND TRADE . . . . . .92 
 
 VI. 
 THE CHARACTER OF EARLY TAXATION W . .-115 
 
 VII. 
 
 THE DISTRIBUTION OF WEALTH IN ENGLAND AT DIFFERENT 
 
 EPOCHS . . 188
 
 CONTENTS. 
 
 THE HISTORY OF AGRICULTURAL RENTS IN ENGLAND . .160 
 
 IX. 
 
 METALLIC CURRENCIES , . . . . .183 
 
 X. 
 
 PAPER CURRENCIES 205 
 
 XI. 
 THE ORIGIN AND PROGRESS OF ENGLISH PAUPERISM . . 227 
 
 XII. 
 
 HISTORICAL EFFECTS OF HIGH AND LOW PRICES . . . 249 
 
 XIII. 
 DOMESTIC MANUFACTURES ..... 272 
 
 XIV. 
 THE GUILD AND APPRENTICE SYSTEM .... 295 
 
 XV. 
 THE RISE AND PROGRESS OF THE COLONIAL TRADE . . 818 
 
 XVI. 
 
 LAISSEZ FAIRE; ITS ORIGIN AND HISTORY . . . 341 
 
 XVII. 
 
 THE HISTORY OF THE PROTECTIONIST MOVEMENT IN ENGLAND 365 
 
 XVIII. 
 
 THE INTERPRETATION OF EXPORT AND IMPORT TABLES . '. . 889
 
 CONTENTS. xvii 
 
 XIX. 
 
 PAGE 
 
 THE ESTATE OF THE CROWN, AND THE DOCTRINE OF RESUMPTION 412 
 
 XX. 
 
 PUBLIC DEBTS . . . . . . . 434 
 
 XXI. 
 
 THE THEORY OF MODERN TAXATION .... 45G 
 
 XXII. 
 
 THE OBJECT AND CHARACTER OF LOCAL TAXATION IN ENGLAND 479 
 
 XXIII. 
 THE POLICY OF GOVERNMENT IN UNDERTAKING SERVICE AND 
 
 SUPPLY ...... 501 
 
 INDEX . 525
 
 ERRATA. 
 
 Page 13 line 14 from bottom, for friend read view. 
 
 ,, 13 ,, 17 ,, for were read was. 
 
 15 16 for three read these. 
 
 ,, 17 ,, 17 for labour, capital read labourer capitalist. 
 
 25 ,, 3 for Lowland read Lombard. 
 
 ,, 60 ,, 10 from bottom, for rescue read reserve. 
 
 71 5 ,, for Canosa read Canossa. 
 
 73 ,, 14 for heighth read height. 
 
 74 12 after tenets, " of " omitted. 
 
 154 ,, 17 for fours read four. 
 
 ,, 172 ,, 13 for persons read parcels. 
 
 ,,218 ,, 11 for depends read depend. 
 
 ,, 221 ,, 16 for even read every. 
 
 284 ,, 14 " of " omitted at end of line. 
 
 284 16 for Kitchen read Kitchin. 
 
 ,, 293 ,, 7 for was read were. 
 
 303 ,, 4 from bottom, for work read week. 
 
 ,,309 ,,13 after supplied insert "and". 
 
 ,, 349 ,, 14 at end of line " of " omitted. 
 
 462 ,, 6 from bottom, after distributed, insert " it >: 
 
 480 ,, 11 for waged read raged.
 
 THE ECONOMICAL 
 INTEEPKETATION OF HISTORY. 
 
 i. 
 
 THE ECONOMICAL SIDE OF HISTOKY. 
 
 Narrow views on history and political economy The abundance of 
 materials The philosophy of history Speculative political 
 economy The political influence of English wool 1278-1603, 
 and the conquest of Egypt by the Turks, illustrations of the aid 
 given to history by economical facts Early English institutions in 
 parishes and towns Self-government in the villages Famines 
 Labour and capital : their several functions Incidents of labour 
 and capital The wages of labour and the profits of capital iden- 
 tical in principle The Great Plague of 1349, and the insurrection 
 of 1381. 
 
 IN nearly all histories, and in nearly all political economy, the col- 
 lection and interpretation of economical facts, by which I mean 
 such records as illustrate social life and the distribution of wealth 
 at different epochs of the history of mankind, have been habitually 
 neglected. But the neglect renders history inaccurate or at least 
 imperfect, political economy a mere mental effort, perhaps a mis- 
 chievous illusion. Every historian will tell you that no history is 
 
 2
 
 2 THE ECONOMICAL SIDE OF HISTORY. 
 
 worth preserving which does not at once illustrate the progress of a 
 race, or a permanent influence. So a political economist who does 
 not, in his estimate of present industrial forces or agents, take into 
 account the circumstances which have created or modified these 
 forces would, except by a miracle, assuredly blunder in his in- 
 ferences. History, which does not attempt to distinguish the relative 
 importance of facts, and does not inquire how any contemporaneous 
 set of facts can be pressed into the interpretation, is a mere disordered 
 and imperfect dictionary. Political economy, when it disdains the 
 correction of evidence, is a crude metaphysic, which gives a very 
 artificial and erroneous account of actual life. I hope to be able to 
 illustrate these positions by numerous instances. 
 
 I have said that nearly all history, and nearly all political 
 economy, is in this condition. But the barest annals recognize 
 some of these facts, even when they fail to interpret them. Every 
 historian, for instance, notices the great plague of the fourteenth 
 century. He observes that the English kings, in their attempts on 
 France, invariably strove to get the Netherlands on their side. He 
 records the fact that there was a formidable insurrection in England 
 in the last quarter of the fourteenth century, an embittered civil war 
 in the fifteenth, a serious weakening of English reputation in the 
 sixteenth. But these historians have never attempted to discover 
 whether any economical facts contributed powerfully to these 
 events. So entirely was the seventeenth century absorbed in the 
 great struggle of that time, that it has simply left unrecorded all 
 facts of an economical character, which in any other country, even 
 the rudest, would have arrested attention. The political history of 
 this century has been written over and over again. Its social or 
 economical history has been entirely neglected. To the study of 
 this aspect of history I have given the best years of my life. I 
 hope in these lectures to introduce you to some of the facts and 
 ,some of the inferences which I have collected, and I think I shall 
 be able to show that very often the cause of great political events 
 and great social movements is economical, and has hitherto been 
 undetected. 
 
 By far the largest amount of the materials which I have collected 
 for my purpose are from documents which have probably never been 
 read alter the immediate object for which they were compiled was
 
 VIEWS ON EISTOliY AND POLITICAL ECONOMY. 3 
 
 satisfied. Farming accounts, elaborate accounts of buildings and 
 the materials purchased for their erection, with the labour paid for, 
 have been examined, audited, and laid aside. It may be asked, Why 
 were such documents preserved at all after their use was over ? The 
 answer is that, up to recent times, the facts which they recite might 
 be useful as evidence of property. Two generations ago a title to 
 land might be impugned or defended by evidence adduced on either 
 side for six centuries and a half, and, therefore, all proof of title 
 might be valuable. We owe the vast mass of records preserved in 
 public and private collections to a barbarous rule of law. It is 
 likely that what prudence first dictated became a habit, and all 
 papers and documents were preserved because it was necessary to 
 treasure some. 
 
 I do not make my charges against the historian and economist 
 -without reason. At the latter end of the eleventh century a most 
 remarkable document was compiled, a survey of nearly all England. 
 It is rightly deemed to be one of the .choicest antiquarian and 
 historical treasures which the nation possesses. It has long since 
 been printed. It has frequently been examined for antiquarian 
 purposes. But it has never been analysed. My friend, Professor 
 Freeman, has published a very copious history of the Norman Con- 
 quest. He has, I do not doubt, collected every scrap of history, in 
 the common meaning of the word, which could be procured from 
 very source, domestic and foreign, and commented on them with a 
 fulness which is almost overwhelming. But he has made little use 
 of Domesday Book, which, after the skeleton of facts is arranged, 
 contains far more genuine living material than all his other au- 
 thorities. 
 
 Due weight has been given by some writers to the habits and life 
 of primitive communities. But it is to be regretted that more atten- 
 tion has not been bestowed on their later development. The evidence 
 on this, in the court rolls of manors, is exceedingly abundant in 
 England. These documents are remarkably illustrative of village life 
 and of the surviving relics of the communal system, and especially 
 of that local self-government which has, perhaps, been disadvan- 
 tageous^ superseded by the later expedients of justices and quarter 
 sessions. But I should have learnt little of the life which our 
 ancestors lived centuries ago, of the mutual liabilities of the villagers,
 
 4 THE ECONOMICAL SIDE OF HISTORY. 
 
 of their local courts, and their very effectual administration of justice, 
 civil and criminal, if I had not read these manor rolls by hundreds. 
 Mr. Hallam once regretted that we could not recall the life of a 
 single medieval village. But the means for doing so exists in 
 abundance, and the student of these documents must have a dull 
 imagination indeed if he cannot picture to himself the life of an 
 Englishman in the days of the Plantagenets from his cradle to his 
 grave, realize all the persons "with whom he was necessarily brought 
 in contact, and give their weight to all the elements of the little 
 society in which he lived. 
 
 Again, the materials for the history of administration of govern- 
 ment and of finance are exceedingly abundant, but have been very 
 inadequately pressed into the service of the historian. England has 
 an enormous wealth of diplomatic instruments ; not perhaps so^ 
 copious as the great collection of Muratori, or the monumental work 
 of Dumont, but still of remarkable fulness. The mass of financial 
 records is absolutely prodigious, for the pipe rolls exist in an unbroken 
 series from the days of the first Plantagenet king down to the fifth 
 of the Hanoverian house. But they are hardly explored. Their 
 volume would, I admit, daunt the boldest student. But there should 
 be nothing to prevent the historian from examining the rolls of 
 Parliament. I venture on asserting that if he did so, he could 
 sweep away many ancient delusions as to persons and events, delu- 
 sions which seem to be permanently imbedded in the popular- 
 histories. 
 
 I do not deny, I gladly acknowledge, that the solid study of his- 
 tory has made considerable progress. The narrative is no longer 
 merely one of war and peace, of royal genealogies, of unrelated 
 dates, of those annals about which the adage was uttered that happy 
 is the nation which has no history. History has begun to include 
 the study of constitutional antiquities, though even here there is too' 
 strong a tendency to anticipate a late development in early begin- 
 nings, and to lay too much stress on doubtful meanings. History, 
 again, has begun to recognize the progress of jurisprudence, though 
 it has rarely recognized the economical conditions to which the 
 development of jurisprudence was due. It has touched lightly, very 
 lightly, on social history, on the condition of the people, 011 the vary- 
 ing fortunes of land and labour, and on the circumstances under
 
 ABUNDANCE OF MATERIALS. 5 
 
 ^vhich industries have been naturalized and developed amongst us. 
 The seventeenth century is an age of intellectual and political 
 giants, who carried on a long and unbroken warfare. It will always 
 be studied. It is the favourite topic or theme of writers. But as it 
 has been hitherto written, it is nothing but the record of their 
 drama, the estimate of their characters, who were the agents of this 
 colossal strife. To me the century has another and a very different 
 aspect the history of the people, whose fortunes have hitherto been 
 passed over in silence. 
 
 In one direction, indeed, history has made great strides. I refer 
 to that philosophy which seeks to interpret the characters and 
 motives of statesmen and of princes, when princes were statesmen. 
 It is almost needless to say that such writers, according to the 
 vigour of their powers, are constantly open to the charge of partisan- 
 ship or paradox. The historian may be honestly convinced that he 
 is drawing a faithful picture of the men and their times, and he 
 may be as faithful as he believes he is. But the more vigorous his 
 imagination is, the better stored and more orderly it is, the more 
 liable he is to the charge of overcolouring his picture, perhaps to 
 the risk of its life. Latterly I have been engaged in an inquiry into 
 the early years of the Bank of England, as I discovered some un- 
 known and unexpected information as to the fluctuations in the 
 price of its stock. I had to go for a few years, with the limited pur- 
 pose of illustrating the fortunes of the Bank, over the same ground 
 which Macaulay had traversed, and to use some of the same au- 
 thorities which he used. My inquiry was simply into a new and 
 great commercial adventure, not into the complicated problem of 
 Kevolution politics. As' in duty bound, I bore testimony, for I had 
 proof before me, to the cautious fairness of the historian. But a 
 friend of mine, a very eminent statesman, demurred to my eulogy. 
 " The vast colouring power of his fancy," he said, " was against his 
 accuracy." 
 
 In the philosophy of history it is difficult to avoid partisanship ; 
 impossible, I believe, to escape the imputation of it. The volcano 
 may be extinct, the crust of the lava may be crossed by the way- 
 farer, but deep in the crevices of the cooling mass there may remain 
 .a dull red glow. The criticism of great men in past times is sure to 
 be interpreted as implying analogies in the present. The dispute
 
 6 THE ECONOMICAL SIDE OF HISTOBY. 
 
 about the virtues and vices of Mary Stuart is not yet hushed. The 
 reputation of Penn is still angrily defended. There are honest 
 apologists for Wentworth, for Laud, for Shaftesbury. Some of you 
 know that Mr. Gardiner has latterly shown not a little skill in exhibit- 
 ing the first two of these historical personages in a new light, and even 
 of suggesting a fresh aspect to the great Parliamentary struggle. I 
 cannot, indeed, quite accept the ingenious inferences of this able 
 writer. I do not want indeed to be told that Wentworth was not a 
 mere adventurer. I do not take my estimate of him from Baillie 
 or Clarendon. I do not want to be told that Laud was not a mere 
 driveller. I do not get my opinion of him from the coarse invec- 
 tives of Prynne or the coarse eulogies of Heylin. Nor has Mr, 
 Christie removed my suspicions, well-founded suspicions I believe, 
 as to the motives and character of Shaftesbury. Still, it is some- 
 thing that in the days of the second Charles a man could have held 
 office under the Crown without becoming portentously and indispu- 
 tably wicked. I could multiply these illustrations. I will only add 
 that, as great historians of the philosophic school can hardly escape 
 the imputation of partisanship, so the meaner masters of the craft 
 almost invariably fall into transparent paradox and grotesque 
 exaggeration. There is a further stage, in which an attempt is 
 made to draw a likeness, and the failure is complete. I cannot 
 accept Lord Stanhope's portrait of anybody. 
 
 The student of history who attempts the less ambitious but more 
 laborious task of economical interpretation occupies a safer, a more 
 unchallengeable position. If I can point out to you that the price 
 of wheat rose frequently, in the first half of the seventeenth cen- 
 tury, to 55s. and more a quarter, and that the peasant's wages were 
 forcibly kept down, by the best expedient that the administration 
 could devise, to less than sixpence a day, I am not concerned at 
 the criticism of those who would deny that this was oppression. 
 If I can show you that agricultural land let a generation ago at ten 
 times the amount which it let at in the same first half of the seven- 
 teenth century, I shall not be deterred by a legion of Kicardos, into 
 expressing the gravest doubts as to whether that eminent person 
 gave an exhaustive account of the rent of land. Such corrections 
 of popular political economy have constantly come before me. 
 
 The political economist of the later school has thoroughly carried
 
 THE PHILOSOPHY OF HISTORY. 7 
 
 out in his own person the economical law which he sees to be at 
 the bottom of all industrial progress ; that of obtaining the largest 
 possible result at the least possible cost of labour. He has, there- 
 fore, rarely been at the pains of verifying his conclusions by the 
 evidence of facts. He has, therefore, constantly exalted into the 
 domain of natural law, what is after all, and at the best, a very 
 dubious tendency, and may be a perfectly baseless hypothesis. His 
 conclusions have been rejected by workmen, and flouted by statesmen. 
 The former have accused him of partisanship, the latter of unreality. 
 He is not infrequently inconsistent with himself and his own theory. 
 In one page he insists on the intrinsic wisdom of free competition, 
 in another he accords the privilege of protection to young and rising 
 communities. One of the less judicious of these writers may 
 advocate, nay, has advocated, a regulated issue of notes under one 
 set of circumstances, and counselled the discretionary issue of 
 paper money at another, when the latter situation was wholly 
 indefensible. Men have written about the " law of diminishing 
 returns," without having given a moment's attention to the practice 
 of agriculture, and getting a fraction of the experience which may 
 be derived from witnessing that practice, and have rated the 
 British workman for improvidence and recklessness, without having 
 troubled themselves to discover the very traceable historical causes 
 which have induced that character on him. Perhaps the most 
 remarkable Nemesis which has come on the speculative economist 
 is that the definition of Population by Malthus, and the definition 
 of Eent by Eicardo, have been made the keystone to Mr. Henry 
 George's theory, under which he demands the confiscation of Eent 
 in the interests of Population. 
 
 The truth, when the economist has tested, and as far as possible 
 verified his inferences or hypothesis by the evidence of facts, he 
 may be able to- predict. His predictions may be exceedingly 
 accurate, and may be exceedingly alarming. He may show, for 
 example, by a study of the conditions under which agricultural rent 
 has been developed and increased in this country, that a revival of 
 agricultural rent, unless the conditions of occupancy are wholly 
 altered, either by the spontaneous and reawakened intelligence of 
 the landowners, or by the operation of law, in the probable absence 
 of such intelligence, is not only unlikely, but that matters will go
 
 8 THE ECONOMICAL SIDE OF HISTOEY. 
 
 on from bad to worse, without any visible hope of recovery. The 
 economist has satisfied his function when he has justified his pre- 
 diction. Then begins the position of the statesman, whose duty it 
 is to say, and that speedily and peremptorily, " What you say and 
 prove will happen, must not happen, but law must be invoked, if 
 obstinacy and stupidity requires its intervention." The student of 
 the conditions of health alleges, and with perfect truth, that given 
 such and such circumstance, disease and loss of life are inevitable. 
 The statesman gives effect to his demonstration by passing sanitary 
 laws, and enforcing their satisfaction. 
 
 The wise habit of developing inferences from evidence has been 
 cultivated by at least one modern writer. The range of Mr. Giffen's 
 speculations is not wide, and in some investigations which he has 
 made, he has not, I am confident, gone far enough back in his 
 researches. But in those which bear on monetary science and trade, 
 his method leaves nothing to be desired, and the student, who 
 is anxious to go beyond the common chatter of text-books and 
 manuals, will learn more and better political economy from Mr. 
 Giffen's essays than he would if he browsed for ever on the thorns 
 and thistles of abstract political economy. I commend, in par- 
 ticular, to your notice, the essays contained in the second series. 
 
 I will now proceed to show by way of illustration how 
 economical facts lend themselves to the interpretation of history. I 
 stated just now that the Plantagenet kings always used Flanders 
 as the fulcrum from which to make their attacks on France, and 
 that our Edward III. and Henry V. sedulously cultivated the 
 friendship of the Flemings and their rulers. The means which 
 they employed to further these diplomatic ends, was the free or 
 restrained exportation of English wool. From the thirteenth to 
 the sixteenth century, " wool was king." A quarter of a century 
 ago, the seceding states of the American Union avowed that " cotton 
 was king," and that a stint of this necessary material of British 
 industry would assuredly effect a diplomatic revolution in England, 
 enforce the acknowledgment of Southern independence, and con- 
 strain the inhabitants of the United Kingdom to reconsider their 
 hatred of slavery. The cessation of a cotton supply induced great 
 misery, but, for reasons which will appear further on, the partisans 
 of the South erred in their reckoning.
 
 THE POLITICAL INFLUENCE OF ENGLISH WOOL. 9 
 
 England was the only wool-producing country in Europe. To 
 some extent, this remarkable industrial phenomenon is due to its 
 climate and soil, though some parts of England are, and have been 
 for centuries, more fitted for this product than others. In a 
 petition to parliament presented in 1454, it is suggested that certain 
 kinds of wool, forty-four in number, should not be exported, except 
 at the prices named in the schedule. These prices range from 260s. 
 the sack, the value assigned to a certain kind of Hereford wool, to 
 52s., that assigned to Suffolk produce. These are, beyond doubt, 
 to use a modern phrase, brands well known in the wool trade of the 
 time. More than a century before this time, permission was given 
 to export wool in certain quantities at certain prices, the prices not 
 being quite so high as those in the schedule of 1454. It is possible 
 that the object of the petition was to encourage the English cloth 
 trade, it is equally probable that it was intended, had the prayer 
 been granted, to force the Flemings into active co-operation with 
 those designs on France which had been so disastrously disap- 
 pointed the year before, when Shrewsbury had been defeated and 
 slain at Chatillon. 
 
 The practical monopoly which the English possessed of the wool 
 supply was less due to the climate and soil of England, than it was 
 to the maintenance of order in the kingdom. For a long time, 
 -every one in England, from the king to the serf, was an agriculturist. 
 After the landowners had been constrained to give up arable 
 farming, they still remained sheep masters, produced wool and sold 
 it. Now when, owing to the diffusion or distribution of property, 
 every one is interested in maintaining the rights of property, there 
 is very little temptation given to theft or violence, and every incli- 
 nation to detect and punish it. Hence Englishmen could keep 
 sheep, the most defenceless of agricultural animals. Every one 
 who knows anything about the state of "Western Europe from the 
 thirteenth to the seventeenth century, knows that the husbandman 
 did not keep sheep, for they would have certainly been plundered 
 of them by the nobles and their retainers if they had. The king's 
 peace was the protection of the sheep master. 
 
 England then had a monopoly of wool. The monopoly was so 
 complete, and the demand for the produce so urgent, that the 
 English Parliaments were able to grant an export duty on wool
 
 10 THE ECONOMICAL SIDE OF HISTOEY. 
 
 equal to more than the market value of the produce without 
 diminishing its price. In other words, the export duty was paid by 
 the foreign consumer, a financial success which every government 
 has desired, which many governments have tried, and in which all,, 
 with this English exception, have failed. The reason is, that in 
 order that an export duty should be paid by the foreign consumer,, 
 four conditions, very rarely satisfied, have to be in existence : 1. The 
 article must be a necessary of life. 2. There must be absolutely 
 no other source of supply, except the country from which it is 
 derived. 3. There must be no substitute for the article in question, 
 4. There must be no appreciable economy possible in the use of it. 
 These conditions were satisfied in the case of English wool during; 
 the period tbat it was so powerful a diplomatic force. During the 
 course of my economic studies, I have not seen them satisfied in 
 any other commodity whatever, and I submit that this aspect of 
 the relation of England to Flanders and its rulers, is incomparably 
 more instructive than the pedigree of the Dukes of Burgundy, or 
 the barren account of military operations on the French frontier of 
 the Low Countries. The best wool in England was worth 20s, 
 a tod in the fifteenth century, i.e., about four quarters of wheat. 
 Three centuries later, when other prices had risen from nine to- 
 twelve times, English wool of excellent quality was sold at less 
 than half the sum which it had been appraised at in the period 
 which I have taken for illustration. 
 
 I will take another example by way of proving to you how much 
 the interpretation of history gains by the study of economic facts. 
 In the twelfth and thirteenth centuries there were numerous and. 
 well-frequented routes from the markets of Hindostan to the 
 Western world, and for the conveyance of that Eastern produce 
 which was so greatly desired as a seasoning to the coarse and often 
 unwholesome diet of our forefathers. The principal ports to which 
 this produce was conveyed were Seleucia (latterly called Licia) hi 
 the Levant, to Trebizond on the Black Sea, and to Alexandria. 
 From these ports this Eastern produce was collected mainly by the 
 Venetian and Genoese traders, and conveyed over the passes of the 
 Alps to the Upper Danube and the Ebine. Here it was a source of 
 great wealth to the cities which were planted on these waterways, 
 from Eatisbon and Nurenberg, to Burges and Antwerp. The stream
 
 THE CONQUEST OF EGYPT BY THE TURKS. 11 
 
 of commerce was not deep or broad, but it was singularly fertilizing, 
 and every one who has any knowledge of the only history worth 
 knowing, knows how important these cities were in the later 
 Middle Ages. 
 
 In course of time, all but one of these routes had been blocked 
 by the savages who desolated Central Asia, and still desolate it ; 
 the most hateful and mischievous of these races being still en- 
 camped in what was once the most prosperous part of the world,. 
 Greece and Asia Minor, and keeping it in hopeless savagery. It 
 was, therefore, the object of the most enterprising of the Western 
 nations to get, if possible, in the rear of these destructive brigands, 
 by discovering a long sea passage to Hindostan. All Eastern trade 
 depended on the Egyptian road being kept open, and this remaining 
 road was early threatened. The beginning of this discovery was 
 the work of a Portuguese prince. The expedition of Columbus was 
 an attempt to discover a passage to India over the Western sea. By 
 a curious coincidence, the Cape Passage was doubled, and the New 
 World was discovered, almost simultaneously. 
 
 These discoveries were made none too soon. Selim I. (1512-20), 
 the Sultan of Turkey, conquered Mesopotamia and the holy towns 
 of Arabia and annexed Egypt during his brief reign. This con- 
 quest blocked the only remaining road which the Old World knew. 
 The thriving manufactures of Alexandria were at once destroyed. 
 Egypt ceased to be the highway from Hindostan. Selim had all 
 the energy of the race to which he belonged, and more than all of 
 its vices. I discovered that some cause must be at work which had 
 been hitherto unsuspected, in the sudden and enormous rise of price 
 in all Eastern products, at the close of the first quarter of the six- 
 teenth century, and found that it must have come from the conquest 
 of Egypt. 
 
 The river of commerce was speedily dried up. The cities which 
 had thriven on it were gradually ruined, at least in so far as this 
 source of their wealth was concerned. The Nile became flumcn 
 epotum Medo in a commercial sense, and the trade of the Danube 
 and the Rhine ceased. The Italian cities fell into rapid decay. The 
 German nobles, who had got themselves incorporated among the 
 burghers of the free cities, were impoverished, and betook themselves 
 to the obvious expedient of reimbursing their losses by the pillage
 
 12 THE ECONOMICAL SIDE OF HISTORY. 
 
 of their tenants. Then came the Peasants' War, its ferocious inci- 
 dents, its cruel suppression, and the development of those wild sects 
 which disfigured and arrested the German Eeformation. The battle 
 of the Pyramids, in which Selim gained the Sultanate of Egypt for 
 the Osrnanli Turks, brought loss and misery into thousands of homes 
 where the event had never been heard of. It is such facts as these 
 which the economic interpretation of history illustrates and expounds. 
 I shall have occasion in the course of these lectures, to supply you 
 with a multitude of examples as significant as these two which I 
 have quoted. I am not, I hope, too much absorbed in the study 
 which I have pursued for so many years, as to overvalue the facts 
 which I have discovered and marshalled. But I am convinced that 
 to omit or neglect these economical facts is to make the study of 
 history barren, and its annals unreal. With every effort that can 
 be given to it, the narrative of the historian can never be much 
 more than an imperfect or suggestive sketch. We may get the 
 chronology correct, the sequence of events exact, the details of cam- 
 paigns precise, the changes of frontier reasonably accurate, but may 
 still be far off from the controlling motives of public action, may be 
 entirely in the dark as to the real causes of events. Nor shall we 
 be greatly helped by the more or less successful criticism of the 
 career and purposes of public men. During the great drama of the 
 wars of religion, we may make a more or less intelligent estimate 
 of Philip II. and William of Orange, of Henry of Navarre and 
 Elizabeth of England, of Maurice, Barneveldt, Eichelieu, Bucking- 
 ham, of the English Puritans, of Laud and Strafford, of Eliot, Pym, 
 Hampden, Falkland, Cromwell, of Ferdinand of Styria, Maximilian 
 of Bavaria, Gustavus Adolphus, and Wallenstein ; but we shall never, 
 with all our pains, obviate the revision of our judgments. But when 
 we have economical facts of great and far-reaching import to guide 
 us, we can arrive at conclusions which cannot be modified, because 
 they cannot be disputed. I shall not pretend to say that I have 
 discovered the meaning of many among the facts which I have 
 collected. It has been always my opinion, an opinion which I 
 have constantly avowed, that my researches will very possibly yield 
 in other hands more than I have been able to infer, and will serve 
 to illustrate and interpret the past and present to a greater extent 
 than I have been or shall be able to effect.
 
 EARLY ENGLISH INSTITUTIONS. 13 
 
 I mentioned in an early part of this lecture, that Hallam had 
 lamented the disappearance of the annals of the poor, the recovery 
 of which would throw so much light on the past. This excellent, 
 laborious, and conscientious writer, whose works are more profitably 
 studied than others of more antiquarian pretensions, derived all his 
 information from printed books. His powers of inference and his- 
 torical construction were therefore limited by his materials, and 
 none of the writers which he consulted, with the exception of Madox, 
 had drawn information from original documents. Madox, too, 
 appears to have consulted very little beyond some of the Pipe rolls, 
 and those cursorily. There were printed authorities, such as Fitz- 
 herbert's treatises, from which Hallam might have gathered much. 
 
 Some English institutions have had a most tenacious existence. 
 It has been observed that the vestry or parish meeting is in direct 
 succession from the assembly of freemen in the Teutonic mark. 
 The system of grand and petty juries had their beginning in the 
 presentments of the minor courts, and the levy of fines, sometimes 
 of the highest penalties, on offenders. The penalties of treason are 
 copied from the punishments inflicted on offenders against the 
 sanctity of the mark and its boundaries. The peculiar position of 
 the steward or seneschal of the manor, when he sat on the judgment 
 seat were similar to, and a precedent for, the circuits and authority 
 of the judges of assize. The perambulation of the boundaries and 
 the attendance of the boys at this ceremony seems to be the survival 
 of the friend of frank pledge and registration in the decenna. The 
 taxing rolls of the Plantagenets, in which the owners of all personal 
 property in the several parishes are named, would with a little care 
 serve as a census of the parishes at the time when the assessors 
 visited the inhabitants. 
 
 The parish held from thirty to one hundred inhabitants or more. 
 It contained one or two lords of manors, for sometimes the parish 
 was divided among two or more overlords. This lord was frequently 
 non-resident, and only visited his domain and tenants occasionally. 
 The most important functionary was the rector or parson, practically 
 the head man of the village, and when the lord or steward were not 
 holding court, the permanent chairman of the village gatherings. 
 If his tithes had not been appropriated by some monastery, his 
 income derived from these and from offerings and dues, ordinary
 
 14 THE ECONOMICAL SIDE OF HISTORY. 
 
 and extraordinary, was for the time considerable, and it was common 
 lor him to select, educate, train, and send to the university some 
 bright and intelligent village lad, even though he might be of 
 servile birth, in order that he might become a priest. In the same 
 way, without regard to his origin, an ambitious and courageous 
 youth might enter the king's army; and the former might become a 
 learned doctor and bishop, as Grostete became, the latter a captain 
 and knight, as Sale did, both having been of mean birth. 
 
 The houses of the villagers, built of wattles, smeared inside and 
 out with mud or clay, were crowded near the church, in the street 
 of the settlement, though there were in large parishes, outlying 
 homesteads. In all cases the church was the common hall of the 
 parish, and a fortress in time of danger, occupying the site of the 
 stockade which had been built when the first settlers occupied the 
 ground. In the body of the church were frequently stored produce, 
 corn and wool. Here too, I believe, the common feasts of the 
 parish were held, till such time as the proceeds from the local guild 
 enabled the people to erect their own guild-house. The only houses 
 of any pretension in the village were the lord's, the parson's, and 
 the miller's, who by prescription took toll of all the inhabitants, who 
 were bound to grind at his mill, who is a busy, and according to 
 current report, not an over- scrupulous personage in his dealings 
 with his fellow villagers. 
 
 Most of the villagers held land as freeholders under fixed rents, 
 and copyholders under no less fixed services. The arable land was 
 in open fields, strips of which, divided by balks on which the grass 
 was left growing, were, in greater or less quantity, the property of 
 the lord, the parson, and the tenants. When the scanty harvest 
 was gathered, the arable land became for a time common pasture. 
 Beside these fields were the commons, the lord's waste, and the 
 lord's wood, the latter being generally on the village bounds. Some 
 of the villagers had only cottages with curtilages, and were the 
 hired labourers in husbandry ; though the small farmer, when his 
 work on his small holding was done, was ready to better himself by 
 taking work. All, as I have said, paid rent, in money, in kind, or in 
 labour; but in the historical period, the labour, rents, and ultimately 
 the rents in kind were always commutable for money, the money 
 equivalent being always less than the ordinary rate of wages.
 
 SELF-GOVEENMENT IN THE VILLAGE. 15 
 
 Beyond their agricultural labours, the villagers met informally in 
 council, under the presidency of the rector, and formally at the 
 times, generally three times a year, when the lord's courts \vere 
 held. In these courts they were trained in habits of self-govern- 
 ment, some presenting offenders, some sitting as a jury of com- 
 purgators. For in early times, at least, it seems that no stranger 
 could be harboured in the settlement, a breach of the rule beyond 
 a certain time being punishable with a fine. Most villages of any 
 -size had an annual fair. Then there were markets and fairs in 
 other towns. The earliest writer on English husbandry, Walter de 
 Henley, allows several days for periodical visits to these places of 
 business and pleasure. Few parishes were probably without guild 
 lands from which the aged and the poor were nourished, till, on the 
 plea that they were devoted to superstitous uses, they were stolen, 
 under an Act of Parliament, by Protector Somerset. 
 
 The surroundings of these villagers' houses were unclean and 
 unwholesome, just as they are near an Irish cottier's house in our 
 own time, and it was the lord's interest to encourage the drain from 
 the cottager's middens over his own meadows, which generally lay 
 near the village stream. Perhaps the life of a mediaeval Englishman 
 was less uneventful than that of the modern peasant. He had to 
 :get all that he wanted, beyond what he procured by his own labour, 
 for himself and his family, at three periodical fairs, or less ad- 
 vantageously at the shops of the few and small towns which he was 
 able to frequent. Here he sold his surplus produce, in order to pay 
 his dues, and to get what he needed for farm and homestead. 
 Apart from these periodical absences from home, he learnt the news 
 from the numerous itinerant priests who constantly visited the 
 villages. In later times, if he sympathized with Wiklif and his 
 poor priests, he would take counsel with these migratory preachers, 
 confide in them his troubles and discontents, and even concert with 
 them the means of armed resistance, resistance which once nearly 
 shook England to its foundations. 
 
 The essence of contracts for the occupation of laud, if these 
 nncient tenures could be called contracts, was that the liabilities of 
 the tenant should be fixed and unchangeable. This idea of a fixed 
 rent in an estate of inheritance pervaded all relations of landlord 
 and vassal. It affected the subsidies granted to the Crown, the
 
 16 THE ECONOMICAL SIDE OF HISTORY. 
 
 county valuations of which appear to have been unchanged from, 
 the days of the Plantagenets to the days of the Stuarts. So with 
 the fee farm rents paid by freeholders, the labour, and subsequently 
 the commuted rents paid by the copyholders. The principle that a, 
 tax should be unchanged was adopted in William III. land tax,, 
 an assessment which has never been revised after the lapse of nearly 
 two centuries. So in arguing in the House of Commons, in 1881, 
 in favour of a produce rent in Ireland, which the expectants of the 
 unearned increment refused to accept, I ventured on predicting that 
 an arbitrated money rent, that which the House of Commons ulti- 
 mately adopted, would never be raised, but might be diminished. 
 Time has shown that my prediction is verified. 
 
 I believe, indeed, that under ordinary circumstances the means- 
 of life were more abundant during the Middle Ages than they are- 
 under our modern experience. There was, I am convinced, iiO' 
 extreme poverty. His dues paid, the small farmer's property and 
 profits were as secure as the landlord's domain. In this the condi- 
 tion of the English peasant was in marked contrast to the lot of the- 
 French roturier and the Teutonic bauer. There was but a small 
 surplus population quartered on the products of the soil. The 
 labour of the husbandman was not constrained, as in later times,, 
 to support a mass of idlers and consumers. But in other respects- 
 his condition was far less satisfactory. His diet, owing to the lack 
 of winter food and nearly all vegetables, was unwholesome during 
 half the year, when he was constrained to live on salt provisions.. 
 Leprosy and scurvy were common diseases in mediaeval England.. 
 In the fourteenth century it is probable that life was healthier in 
 the towns than it was in the country. In the seventeenth these 
 conditions were reversed. In healthy seasons the death rate in 
 London was 41^ per thousand, in unhealthy times the deaths were- 
 double the births. In this same century, the deaths in country 
 places were calculated at 29 in the thousand. 
 
 England suffered from occasional famines. Of these by far the 
 most formidable were the harvest failures of 1315, 1316, and 1321, 
 when incessant rain in summer destroyed the crop, as incessant 
 rain always does. It would seem that at this time there must have 
 been a considerable loss of human life. This is told us, indeed, by 
 the chroniclers of the age, but there is a stronger proof than their
 
 FAMINES. LABOUR AND CAPITAL. 17 
 
 narrative supplies, for the rate of wages rose 10 per cent, after the 
 occurrence of the calamity. In this case, and in the far graver 
 events which followed on the pestilence of 1349, the greatest 
 increase was effected in what was previously the worst paid kind of 
 labour, as, for instance, threshing oats and women's labour, for it 
 is a law of prices which I have constantly verified by an examina- 
 tion of facts that, whenever a scarcity occurs in any necessary agent 
 or product, the rise among the severally related forms of the service 
 or product is always greatest in that which had hitherto been the 
 lowest. Thus, in materials, when a scarcity occurred a quarter of a 
 century ago in cotton, Surat produce rose vastly more than Sea 
 Island did. Thus, after the plague to which I have just referred, 
 the rise in the cost of threshing wheat was 33 per cent., of oats. 
 88 per cent., while women's labour was paid double or treble its 
 old prices. 
 
 It may assist us in illustrating the facts which will perpetually 
 occur in dealing with economic history, if I state briefly what are 
 the relations of the labour and the capital. Wealth is of two kinds, 
 passive or unproductive, and active or productive, the former being 
 constantly and regularly a reserve on which the latter may draw. 
 This double function of wealth explains the rapidity with which in 
 times of exalted demand wealth is readily turned into the active 
 form, profits increase, workmen are employed, and finally wages 
 rise. Mr. Mill has alleged, and no doubt has puzzled you greatly 
 by the allegation, that demand for commodities is not a demand for 
 labour, a statement which contravenes all experience. Mr. Mill's 
 error, and an error he acknowledged this famous paradox to be in the 
 later years of his life, arose from his believing that wealth destined 
 to active uses was at any given time a fixed quantity, just as at any 
 given time a balance at a banker's is. But, in point of fact, the 
 wealth available at any given time for the purpose of affording con- 
 tinuity to industry is a very indefinite qiiantity, is capable of 
 great and sudden extension, especially in the form of loanable 
 wealth. 
 
 The function of capital is to secure the continuous employment 
 of labour, and as far as possible to equalise prices and profits. The 
 labourer lends his labour for a week or a fortnight, or longer, to the 
 employer, and it is easy to conceive, when a turnover is rapid, that 
 
 8
 
 18 THE ECONOMICAL SIDE OF HISTORY. 
 
 the employer has secured his profit long before he repays his work- 
 men for the advance which the latter has made to him. In the 
 great majority oi cases, however, the profit of the employer is post- 
 poned till long after he has repaid his workman. But the principal 
 service which the employer does is to give the labourer the prospect 
 of continuous employment, and as the division of employments is 
 developed, and human labour is aided, or perhaps displaced, by 
 costly machinery, the expediency of finding continuous employment 
 for labour is stimulated by the knowledge that the cessation of 
 
 ( employment would be a rapidly growing loss. Again, it is the 
 business of the capitalist employer to maintain as far as possible an 
 equal money value or price. The most violent fluctuations of price 
 
 - occur when the producer is constrained to sell at the discretion or 
 demand of the buyer. But the capitalist dealer withholds his goods 
 from the market until such time as he can command his price, and 
 the shrewdest producer or dealer, the man who in the long run 
 commands the best service, and gains the largest profits, is he 
 who can anticipate with the greatest accuracy the demand of the 
 market. 
 
 I refer to these facts, in which what I am stating will not be 
 found to differ materially from the views entertained by most 
 economists, because, at the present time, the crudest ideas are 
 afloat about the relations of labour and capital, in .which the 
 functions of the latter are vilified, and a violent competition is 
 proposed between the state on the one hand, that is, all who have 
 no property, and the private capitalist on the other. The experi- 
 ment of the state, or rather the taxpayer, finding competitive 
 capital has been tried. It was the theory of Elizabeth's last 
 poor law, and it failed disastrously, to the condign misery of the 
 workman, a misery prolonged for centuries, as I hope to show. 
 Nothing is gained by exaggerating the benefits which capital 
 confers. Nothing will be gained by depreciating its real services. 
 It has been shrewdly observed that capital and labour are like the 
 two blades of a pair of scissors, powerless apart, but apt to their 
 function when properly fitted. 
 
 Now all economists agree, that profits in the general sense are made 
 up of three elements, interests on advances, whether made from his 
 property by the capitalist agent, or supplemented by loans from
 
 INCIDENTS AND LABOUR AND CAPITAL. 19 
 
 those who, being imable to employ their own wealth, are willing for 
 a consideration to lend it to others. The rate of interest is high 
 when loan capital is scarce, low when loan capital is abundant. 
 But it is always a measurable quantity. A second element is risk, 
 a quantity which cannot be measured, for if it were measureable it 
 would cease to be risk, but must be estimated. It varies exceed- 
 ingly in different callings. It is probably greatest in the case of 
 the agriculturist, particularly if his principal culture is exposed to 
 numerous unforeseen accidents. I mention this mainly to show how 
 serious an element risk is, in the tender of an agricultural rent. In 
 the course of these lectures I shall be able to give numerous illus- 
 trations from economical history of the disturbance which this 
 contingency has caused. The third is the labour of superintendence ; 
 the time, toil, anxiety, skill which the capitalist employer must 
 give to the details of his business. To these one may add a fourth, 
 which is, perhaps, only a modification of the second, the inevitable 
 'wear of implements, and the rapidity with which machinery becomes 
 obsolete or comparatively inefficient. Now it will be plain that, in 
 the language of logicians, the first two elements of profit are objec- 
 tive, i.e., they are external to the agent, and determined by condi- 
 tions which the agent cannot control. The third, his own labour, 
 is subjective, and it is plain that on this his real profits depend. 
 -Our analysis, therefore, shows that the capitalist employer is a 
 labourer, and that his remuneration depends entirely on the 
 efficiency of his labour. Whether or no he gets too much in the 
 distribution of the gross value is another question, but the more 
 necessary workmen make him, by being as much as possible unlike 
 him, the greater will be his share. 
 
 Now let us turn to the recipient of wages, the labourer or work- 
 man strictly so called. The Greek philosophers, by a happy 
 generalization, called him t^v^ov opyavov, a living machine, and the 
 phrase is far more significant to us than it was to them, for they 
 degraded labour by permitting slavery. The labourer in our days 
 is a machine which has been constructed at no little cost; but far 
 more important than the cost is the aptitude, whether it be heredi- 
 tary or imitative, with which the civilized man grapples with 
 industrial avocations. You have all of you seen many of those 
 wonders of mediaeval art, the great cathedrals and churches of this
 
 20 THE ECONOMICAL SIDE OF HISTORY. 
 
 country, indeed of Western Europe. In most cases, the architects 
 of these marvellous works are unknown, for the very sufficient 
 reason that they were designed by workmen. The mason or 
 carpenter who can draw out his plot, i.e., furnish the design of the 
 structure which his hands set up, is mentioned over and over again 
 in our early Statute Book. Familiar as I am with agriculture, I am 
 constantly amazed at the numerous accomplishments of a first-class 
 farm-hand, who is most fit by the multiplication of, his employ- 
 ments, as the artizan or factory hand is by their division. He will 
 draw a furrow across a hundred-acre field with a precision of an 
 artist, and prove the correctness of his eye, by the completeness- 
 with which he finishes the field. To make a serviceable ditch with 
 its proper inclination is no slight feat. To build and thatch a rick 
 squarely, to trim a hedge neatly, to reap and mow evenly require 
 much practice and skill. The shears which the shepherd plies are 
 rude instruments, but in practised hands they do their work deftly 
 A good farm-hand generally knows as much practical husbandry as- 
 his employer, and is as skilful in the treatment of cattle as a farrier. 
 On such training as this interest has to be paid, as surely as on the 
 property or loans of the employer. The form it takes is in sufficient 
 income for the industrial education of his successors, and the 
 fortunes of a country will decline if the successor is not forthcom- 
 ing, or if folly drives him away from his native soil. 
 
 The element of risk, the inevitable wear, and the ultimate extinc- 
 tion, of this living instrument are manifest enough. His remunera- 
 tion must cover this contingent charge, or it must be covered at the 
 expense of others. The machinery of the English poor law enables 
 the employer, who reaps the profit of the workman's labour, to 
 transfer to the shoulders of all occupiers the insurance of the 
 labourers' risk. To be sure, with commendable forethought, the 
 best workmen, either through benefit societies or labour partnerships r 
 seek to effect their own insurance. In the Middle Ages they did it 
 through their guilds, purchasing lands and houses all over England 
 for charitable service to their own order. Unluckily for them, as 
 the piety of the age considered prayers for the dead to be a charity, 
 these guild lands were confiscated on the plea that the use was 
 superstitious, and people wonder that workmen became improvident. 
 The London guilds made ransom, with the result that the charitable
 
 LABOUR WAGES AND CAPITAL PROFITS IDENTICAL. 21 
 
 and social funds which were given by traders and artisans have been 
 appropriated by those who are in no other sense their successors. 
 
 The costs of training and the risks of the calling are, as in the 
 ease of the employer, objective charges ; the remuneration for work 
 actually done is subjective. So that we come to the conclusion, 
 that the wages of the employer and of the workmen are generically 
 identical and only specifically different. The question between the 
 two parties engaged in the joint product is, what is the share which 
 each party shall receive, the cost of materials being deducted in the 
 residual distribution. Here, of course, the problem is insoluble 
 as long as each is the interpreter of his own value. In old days the 
 distribution was determined by an oppressive authority, the resistance 
 to which was naturally unreasoning violence. Gradually both 
 parties began to see that the question was arguable, and they fre- 
 quently had recourse to arbitration. We are beginning to hope 
 that masters' unions and labour partnerships will ere long settle 
 their differences by some self-acting machinery. 
 
 Now I have referred to these elementary economical principles, 
 not only because a right conception of them is essential towards 
 the interpretation of all economical problems, but because, in these 
 lectures on the economical interpretation of English history, I shall 
 have frequent occasion to show how the industrial partnership and 
 the subsequent distribution of the product have been warped from 
 their natural bias by legislative violence. 
 
 Five or six centuries ago, the industry of English life was very 
 simple. Three-fourths of the people were husbandmen, cultivating 
 their small farms. There was always, it seems, a certain number of 
 agricultural labourers, who sought work in the villages. It is clear 
 that during the harvest all but the very few men of leisure were 
 engaged in field labour, for the rule against strangers was relaxed 
 in the case of the harvest man. Employers purchased materials, 
 iron, steel, lead, lime, stone, timber, which the craftsmen worked 
 up, as they do in Hindostaii now. When it was possible, piece- 
 work was the rule. It is highly probable, nay, almost certain, that 
 even the artisans were during parts of the year husbandmen. I have 
 seen frequent evidence of the fact. 
 
 Suddenly a great plague, the like of which was not recorded, 
 attacked Europe almost simultaneously. Like most plagues, it was
 
 22 THE ECONOMICAL SIDE OF HISTORY. 
 
 much more deadly at first than it was subsequently, though it held 
 its own in England for more than three centuries. It probably 
 killed a third of the population. The wages of labour were instantly 
 doubled, and the ruin of the great proprietors seemed imminent. The 
 profits of capitalist agriculture sank from 20 per cent, to near zero. 
 Now, the great proprietor saw no harm in a high price for what he 
 had to sell, but deemed that a high price in what he had to buy was 
 a grievous wrong. So he made use of the constitution that is, of 
 the Administration and Parliament in order to secure or recover 
 his fortunes. It is true that the means by which unfair or impossible 
 contracts were enforced was not brought to the perfection which we 
 witness in modern times, and for a long time the employers of 
 labour were baffled. 
 
 The fact is, a new criticism of existing institutions had been 
 encouraged. The riches and the immunities of the monastic 
 orders caused much dissatisfaction. Why should not the opulent 
 monks be made to pay a large share of taxation ? Why should the 
 Pope be allowed to levy toll and tribute in England ? These dis- 
 contents found frequent expression, and the radical reformer and 
 his emissaries were welcomed and caressed in high places. But in 
 course of time, the same bold theorists began to examine into the 
 moral title of all property, to declare that lordship was founded in 
 grace, that is, on deserts, and to dispute all other claims to ownership. 
 They even declared that useful labour was more valuable than 
 birth, and rhymed on the relative antiquity of honest work and 
 gentle blood. They became the mouthpiece, the agents, the 
 organizers of the peasantry, and they managed their function with 
 secrecy and efficiency. At last, out of a clear sky, in June, 1381 r 
 the storm burst, and England was in insurrection simultaneously 
 from Southampton to Scarborough. The insurrection was quelled,, 
 the leaders were executed, the teaching which was once so popular 
 was branded as heresy, and the secular arm was constrained to 
 support the clergy, but lately so unpopular, with fire and faggot. 
 But the solid victory remained for nearly three centuries with the 
 peasants, till at last a combination of circumstances reversed the 
 situation, and the employers became the masters of the field. It is 
 to the history of this long battle that I intend on the next occasion 
 to invite your attention.
 
 II. 
 
 LEGISLATION ON LABOUR AND ITS EFFECTS. 
 
 The effects of the Great Plague Regulation of prices by authority 
 customary when there were labour prices The first Statute of 
 Labourers Successive Statutes of Labourers The appeal of the 
 workmen to Domesday The events of 1381 Legislation of Henry 
 IV., V., VI. Guilds of artificers Henry VII. and Henry VIII. 
 Habits of the latter His issue of base money The position of 
 Elizabeth The Elizabethan Statute of Labourers The object* 
 of the statute Indirect resources of labourers Wages actually 
 paid Assessments more generous under the Commonwealth. 
 
 IT is inevitable, in a series of lectures like the present, where far- 
 reaching and present effects are traced to distant causes, that one 
 should seem discursive when one strives to be connected. The war- 
 fare of capital and labour in England has been more prolonged than 
 any other historical struggle. Dynastic wars, wars of religion, wars 
 on behalf of the balance of power, wars for supremacy in commerce 
 have been, as you well know, waged in Europe for lengthened 
 periods. But none has been so lasting as that between employer 
 and labourer. None has hitherto been BO obscure. The history of 
 the contest is to be extracted from the Statute Book, in laws long 
 since repealed or modified, or become obsolete, in laws which no 
 modern edition of the statutes at large reprints. I doubt 
 whether they exist in any other printed form than in the numerous 
 folio volumes in which all, or nearly all, the English laws ever 
 enacted were published, by authority of Parliament, in extenso, but 
 are found, I believe, only in the greatest of our public libraries.
 
 24 LEGISLATION ON LABOUR AND ITS EFFECTS. 
 
 These laws, however, would be only indefinite, incoherent, and 
 more or less effectual explosions of wrath and discontent, were it 
 not for the contemporaneous evidence of wages actually paid, evi- 
 dence which I have been able to supply, having long been an 
 assiduous and solitary worker in this field of research. The law 
 and the facts illustrate each other. But I must say, with some 
 regret, that the inferences which I am constrained to draw, 
 inferences which are genuine and irrefutable history, have not 
 increased my reverence for the machinery by which the social state 
 of England has been developed. There is, I must confess, a sordid 
 side to the most energetic efforts of collective, I do not say 
 individual, patriotism, and the student of the economical history of 
 England has to prepare himself for painful experiences, even during 
 the most heroic ages of our political history. At the same time, 
 men are not to be blamed for taking advantage of what law accords 
 them. It is to their credit that, in course of time, they became 
 more merciful than the law, as I have found that they constantly 
 were. They never, to be sure, when they made the machinery of 
 their discipline, and what they called law and order, more searching 
 and more severe, declared that they had created 110 new crime, when 
 their principal and successful effort was to render it impossible, by 
 studiously demoralizing the agents of law, to distinguish between 
 innocence and guilt. 
 
 I have referred, in the last lecture, to the magnitude of the 
 calamity known as the Plague, and more recently, it seems, as the 
 Black Death. Before this event, and the consequences which 
 ensued from it, these consequences having been almost immediate, 
 every one, from the king to the serf, cultivated land for his own 
 profit. It is impossible to conceive any social condition which 
 would be so certain to breed a reverence for law and property as one 
 in which every person was possessed of property, which, unless pro- 
 perty were respected, was so open to marauders as agricultural pro- 
 duce was. I have no doubt that the singular respect for property 
 in agricultural produce which so distinguished Englishmen in the 
 fourteenth century, and, for the matter of that, onwards, and the 
 honour in which husbandry was held, had a good deal to do with 
 the formation of the early English character among all classes. 
 Even in the severest time I can give the negative testimony of my
 
 THE EFFECTS OF THE GREAT PLAGUE. 25 
 
 own inquiries it was rare indeed that farm produce was stolen. I 
 <lo not mean to say that, outside the jurisdiction of the local courts, 
 the foreign trader, the Lowland exchanger, or even the Pope's 
 emissary, could traverse the king's highway in complete safety. I 
 will not even assert that abbots and priors were always able to con- 
 vey their cash and valuables without risk of Eobin Hoods. But 
 the insurance on the conveyance of money is very low when it is 
 put into the hands, as it often is, of the common earner, and I 
 have never found the record of a loss from, robbers in the many 
 thousand collegiate and monastic accounts which I have read. 
 Englishmen were very prone to defend their rights, real or supposed, 
 by insurrection, and even to depose bad or weak kings, and change 
 the succession, but they rarely broke the king's peace. Even during 
 the civil wars of the fifteenth and seventeenth centuries there was 
 little marauding. In 1461, the Northern army of Margaret took to 
 pillaging, and Edward was instantly called to the throne. In the 
 Parliamentary war, 1642-5, the Royalists of the west showed an 
 imperfect appreciation of the rights of property, and they had to 
 meet the resistance of the clubmen. 
 
 On the other hand, it was the custom of the age to regulate 
 prices by authority. The assize of bread and beer is so old that it is 
 undated. For centuries afterwards local authorities were empowered 
 to fix prices. The Vice-Chancellor of Oxford, in the seventeenth 
 century, put out his list of maximum prices for meat, poultry, and 
 wine, and even of the fares on the new stage coaches. The law 
 did not affect to regulate the prices of wheat and malt. Such a 
 function was beyond the power of the legislator, and, it must be 
 added, against his interests. But the law regulated the price at 
 which wheat could be turned into bread and malt into beer. The 
 Statute Book is full of regulations as to the price of meat and cloth- 
 ing. Nor does it seem that these regulations caused discontent. 
 It was probably considered an advantage that certain services 
 regularly needed should be put under a local police, which should 
 see that statutable prices were not exceeded. Not a little of the 
 criminal business transacted at the manor court is that of present- 
 ments and fines in the case of the baker and brewer and the 
 fraudulent miller, who have broken the assize or cheated the 
 tenants. The landowners, then, were not attempting to enforce
 
 26 LEGISLATION ON LABOUE AND ITS EFFECTS. 
 
 an absolute novelty when they demanded and obtained the Statute 
 of Labourers. 
 
 In the first instance the king addressed a proclamation to William 
 the Primate, as the urgency was great, ordering that workmen 
 should labour at the old wages. This act of the king's is a curious 
 illustration of the situation. Death, the new death, or as the 
 Scotch called it, though only for a time, the foul death of the 
 English, had been busy with the Church, and Edward had offered 
 the see of Canterbury to William Edyndoii, the predecessor of 
 William of Wykeham in the see of Winchester, and Edyndon had 
 declined it. The ultimate occupant was Simon Islip. Parliament 
 was at once summoned, and the first Statute of Labourers, 23 Ed. 
 III., was enacted. 
 
 The preamble of the Act recites the fact and the effects of the 
 Pestilence, the straits to which masters were put by the consequent 
 scarcity of servants, who will not work except at excessive wages. 
 It then provides that every person under sixty years of age who^ 
 does not live by merchandise, exercises no craft, who has no means 
 of his own, or proper land for his occupation in tillage, and who is 
 not serving any particular master, shall be bound to serve in hus- 
 bandry, whoever may require him, at the wages customary in the 
 twentieth year of the king's reign. Lords who have bond-men and 
 bond- tenants have a prior claim to their services a proof that when 
 the dues were paid which were annexed to such persons' holding, 
 they were free to work for whom they pleased. Any two men could 
 denounce the person who refused to work to the sheriff, who could 
 imprison him. To use a modern phrase, "if a servant in hus- 
 bandry struck work," he should be imprisoned, and the employment 
 of such a person after his liberation should involve the same penalty 
 on the employer. If higher than customary wages were taken, a. 
 penalty of double the amount given and received should be in- 
 flicted, the process being taken in the Lord's court. But if the lord 
 himself gives more than the law allows, he is to be prosecuted in 
 the county wapentake, tithing, or other court, and treble penalties 
 are to be inflicted 011 him. Artificers, many kinds being named, and 
 a general clause including all others being added, are also to expect 
 the wages of 1846. Then comes a clause declaring that provisions 
 shall be sold at reasonable rates, under penalties, the administration
 
 THE FIRST STATUTE OF LABOURERS. 27 
 
 of this part of the law being put into the hands of mayors and 
 bailiffs in the several cities and towns, and no gift is to be made to 
 beggars who can work, under pain of imprisonment. The Act is to 
 be published by archbishops and bishops in all churches of their 
 several dioceses, and the parochial clergy are bidden to see that the 
 law is enforced. 
 
 The legislation of 1 349 was a total failure. It is probably the 
 case that the reference to the Lord's court, in which a formal pre- 
 sentment of offenders had to be made first, and the cases to be tried 
 by a jury next, was the cause of the ill-success of the legislation. 
 There arose a custom of entering the amount of the labourer's 
 demand in the account, then running it through with a pen and 
 substituting the statutory amount. The bailiffs kept the letter of 
 the statute, but paid the higher wages. 
 
 In 1350-1, 25 Ed. III., Parliament, with the assent of prelates, 
 earls, barons, and other great men, descants 011 the malice of ser- 
 vants, asserts that they pay 110 respect to the older statute, and 
 refuse to work except at double or treble wages. New provisions 
 are therefore enacted. The money wages of all kinds of workmen, 
 servants in husbandry, and artisans, are fixed at certain rates, as 
 long as wheat is under 6s. 8d. a quarter. The jurisdiction of offences 
 is transferred from the Lord's court to the justices, who are to meet 
 for the purpose of hearing and adjudicating on offences at least four 
 times a year, and are empowered to inflict forty days' imprisonment 
 for the first offence, three months for the second, six for the third, 
 as well as levying the fines of the first statute, the penalties to go 
 to the exchequer. Servants flying from county to county were to 
 be arrested. Contemporary writers assure us that this became a 
 common practice, workmen no doubt seeking those localities in 
 which labour was most required, and developing an organization for 
 information and action. In fact, we are told that associations 
 exactly like those of modern trade unions were entered into, the 
 members subscribing for purposes of defence and for paying such 
 fines as might be imposed. In a subsequent statute, 25 Ed. III. 
 cap. 7, provision was made for paying the fines and estreats into 
 the exchequer. 
 
 The Act was again a failure. If we can infer from the next legis- 
 lation, the ill-success of the measure was due to the fines being
 
 28 LEGISLATION ON LABOUR AND IT'S EFFECTS. 
 
 payable to the Crown. There was and there remained a scarcity of 
 workmen. The void was not satisfactorily filled by imprisoning 
 the obstinate, and the aggrieved person, the employer, was not 
 particularly active in levying fines which "should go to the king. 
 Besides, the landowners soon despaired of carrying on the old 
 system of cultivation with their own stock, under bailiffs, and 
 rapidly devised a new relation between themselves and their 
 lords, the stock and land lease, under which the landowner let his 
 stock with the land for a time to a tenant farmer. Under 31 Ed. 
 III. statute 1, caps. 2 and 7, the fines enacted for breaches of the 
 statute were to go to the lords, and London, the Cinque Ports, and 
 all other franchises were brought under the general law. 
 
 The office of justice of the peace was remodelled by an Act of 34 
 Ed. III. The fine on the recalcitrant labourer was abolished, for 
 the action of the lord was now superseded. But imprisonment was 
 to remain, and the offence was to be no longer bailable. Artisans 
 are to be included in the new legislation. Wages are to be by the 
 day, not the week, but persons may contract in gross for work to be 
 done. Then the statute throws a curious light on the organizations 
 which artisans had entered into, when it declares that the " alliances, 
 covines, congregations, chapters, ordinances, and oaths made or to 
 be made by masons and carpenters shall be void and annulled." 
 The 'freemason of our day may detect in these associations the 
 germ of his lodge, the economist may allow this view, but sees in 
 them the trades union of the fourteenth century. The policy of the 
 labourers is further illustrated by a clause in the Act, under which 
 fugitive labourers, by whom must be meant other than serfs, since 
 these could always be reclaimed, were to be outlawed, and branded 
 with the letter F. Furthermore, mayors and bailiffs are constrained 
 to deliver up all fugitive labourers, under a penalty of 10 to the 
 king and a hundred shillings to the aggrieved party. By the 36 Ed. 
 III. cap. 8, domestic chaplains are brought under the Statute of 
 Labourers, and their wages are fixed. Five marks, 3 6s. 8d., were 
 declared to be a sufficient stipend for such persons. By 42 Ed. III. 
 it is ordered that the Statute of Labourers should be enforced by the 
 justices. 
 
 The reign of Richard II. gives us fresh information as to the 
 course of the struggle. " Villains," the preamble says, " withdraw
 
 SUCCESSIVE STATUTES OF LABOURERS. 29 
 
 their services and customs from their lords, by the comfort and 
 procurement of others, their counsellors, maintainers, and abettors, 
 which have taken hire and profit of the said villains and land- 
 tenants, by colour of certain exemplifications made out of Domes- 
 day, and affirm that they are discharged, and will suffer no distress. 
 Hereupon they gather themselves in great routs, and argue by such 
 a confederacy that every one shall resist their lords by force." The 
 justices are to take cognizance of such practices, imprison the 
 offenders, and inflict fines to king and lord 011 the counsellors of 
 such persons. This is an Act of the 1 Eic. ; in the next year the 
 Statute of Labourers is confirmed. 
 
 This remarkable preamble refers no doubt to the company of poor 
 priests, whom Wiklif had appointed, and who were the channel by 
 which communications were kept up among the disaffected serfs. It 
 is clear, too, that they had taken and paid for legal advice, and that 
 the purport of this advice was, that according to the most ancient 
 and venerable authority, Domesday, the satisfaction of the legal 
 obligations of the tenant in villenage was a bar to the claim of any 
 further sendee on the part of the lord, and especially to that part 
 of the Statute of Labourers which gave a prior claim, at the old 
 rates, of the serf's extra services, to the lord on whom he depended. 
 It is not a little singular that the administration and Parliament 
 were entirely in the dark about the danger which was menacing 
 them. The preamble of this statute supplied me, more than twenty 
 years ago, with the key to Tyler's and Littlestreet's insurrection in 
 1381. The lords had attempted to make claims on the serfs, and 
 were indeed backed, by Parliament, which would have practically 
 enlarged the liability of their tenures. They had claimed the old 
 labour rents, which had long been commuted for money payments, 
 so long that no memory went back to the more ancient custom, and 
 had demanded further sacrifices from them. There was no villenage 
 in Kent, but Tyler, of Dartford, had made common cause with the 
 workmen, and probably had far more ambitious ends than the 
 removal of social grievances. It appears, too, that some of the 
 nobles, notably Montacute, Earl of Salisbury, were in sympathy 
 with the insurgents, and we know that some of the city aldermen 
 favoured them. The ostensible object of the insurrection was the 
 total abolition of all the incidents of villenage.
 
 SO LEGISLATION ON LABOUR AND ITS EFFECTS. 
 
 The story of Tyler's insurrection is told with sufficient details in 
 all the ordinary history books, and those of modern date have 
 accepted in silence the proof that I published more than twenty 
 years ago as to the causes and consequences of the insurrection. The 
 late Mr. Tom Taylor told me that when he discovered the real facts 
 of the case, as I had narrated them, he was exceedingly struck with 
 the situation, and that he meditated writing an historical drama on 
 the subject. In point of fact, the whole political and social consti- 
 tution of England was imperilled, and there was great reason in 
 what the young king told his mother, after the events of Smithfield, 
 that he had lost and recovered his crown on that day. 
 
 Notwithstanding the harsh language to the discomfited rebels, 
 which the chroniclers put into the young king's mouth, it is clear 
 that he wished to concede to the demands of the serfs. He con- 
 sulted Parliament as to whether he should give effect to the charters 
 of manumission which he had granted, and when Parliament indig- 
 nantly refused, as it often does to this day refuse to listen to wise 
 counsel, the judges, I am persuaded at the king's instance, gave the 
 most favourable constructions possible on these servile tenures, and 
 protected the serf from arbitrary action. Eichard himself, too, 
 refused to bind the yoke more strictly, and when Parliament peti- 
 tioned that the sons of serfs should be declared incompetent of holy 
 orders, he flatly and peremptorily rejected their petition. He had 
 no mind to provoke the risks of another Mile-end or Smithfield. 
 Henceforth the characteristics of tenure in villenage and serfdom 
 became slighter and more indistinct, though faint traces of personal 
 disability can be detected as late as the sixteenth century. Tenure 
 by villenage is rapidly called tenure by copy, and any discredit 
 attaching to the tenant of bare lands is speedily lost in the land- 
 hunger of the fifteenth century, when copyholds were purchased by 
 nobles and knights. 
 
 General pardons were speedily issued, at first to those who had 
 been guilty of illegalities in suppressing the insurrection ; next to 
 the insurgents themselves, though a long list of exceptions is pub- 
 lished, the majority being Londoners. In one case the insurgents 
 of Edmundsbury were pardoned, but were constrained to plead 
 their pardon and give security to the Abbot of Bury. You will find 
 the narrative of the serfs' acts and claims in Walsingham, and the
 
 THE EVENTS OF 1381. 31 
 
 expedients which the reluctant abbot adopted in order to elude the 
 insurgents. There is however an Act of this reign, 9 Kic. II. cap. 2, 
 under which provision is made, that if villains and niefs (female 
 serfs) bring fictitious suits against their lord, he is not to be fore- 
 barred by answering at law. By the ancient custom, if a lord 
 pleaded against a serf of his own in a court of law, he admitted by 
 implication the serfs manumission, and was held to have enfran- 
 chised him. 
 
 I have given this slight sketch of the events of 1381, because the 
 gradual emancipation of the serfs, dating unquestionably and pro- 
 ceeding progressively from the great Insurrection, must have had 
 its effect in strengthening the hands of all labourers in resistance to 
 these interested statutes. The free labourers had made common 
 cause with their meaner fellow-countrymen, and were now rein- 
 forced by those whom they had helped to emancipate. Fortunately 
 for human progress, there are, and we trust there always will be, 
 many, who being in no appreciable peril themselves at the hands of 
 those who wield power selfishly or claim rights injuriously, by the 
 aid of their dependents and their sycophants, undertake the cause 
 of the oppressed, and gain victories in which they win no spoil. 
 Beyond doubt, even in that day, there were many men who, having 
 freedom and rights themselves, thought it their duty to aid those 
 whose freedom was imperilled and whose rights were assailed. 
 
 It was not to be imagined, because king and Parliament relaxed 
 the feudal lord's grasp on the serf, that they were likely to yield 
 without further efforts to the claims of the labourer. The statute 
 12 Eic. II. cap. 4, while it re-enacts the original Act of Edward, 
 introduces some new provisions into the law. Alleging that " ser- 
 vants and labourers will not, nor for a long time would serve 
 without outrageous and excessive hire," it proceeds to fix the wages 
 of those servants in husbandry who were lodged and boarded by 
 their employers. But it also introduces a passport system. It 
 enacts that servants going from one employment to another hiring 
 shall carry letters testimonial from their late employer, puts the 
 obligation to carry passports on pilgrims and beggars, punishes 
 those who are without such letters of credit with the stocks, and 
 those who forge them with imprisonment, at the discretion of the 
 justices. It also provides that such persons as have been engaged
 
 32 LEGISLATION ON LABOUR AND ITS EFFECTS. 
 
 in husbandry up to twelve years of age shall be incapable of being: 
 apprenticed to trades or handicrafts, and declares their indentures 
 void. It compels artisans to labour in the fields at harvest time y 
 and puts increasing fines on those who give or receive more than 
 the legal rates. 
 
 The 4 Hen. IV. cap. 14 prescribes that labourers should be hired; 
 by the day and not by the week, that they should not be paid for 
 holidays, nor for the eves of feasts, and that they who quit work at 
 noon, should be paid for only half a day. The Act puts a penalty of 
 20s. on the labourer who takes more than the statutory payment. 
 It is remarkable that in 1408 Henry pays four carpenters at "Windsor 
 sixpence a day for 365 days in the year. But the statute, as I have 
 proved conclusively, was kept by neither king nor subject. 
 
 Under 7 Hen. IV. cap. 17, re-eiiactiiig the Statute of Labourers,. 
 Henry gave an answer to a petition presented by Parliament, to the 
 effect that no person should be allowed to bind his or her son 
 apprentice, unless he had 40s. a year in land or rent, an income 
 from land, which up to recent times would have represented at 
 least 80 a year. The draftsman of the petition, after stating that 
 there was great scarcity of labour owing to the practice of appren- 
 ticeship, enacts that the limit should be 20s. a year, and puts a 
 penalty of 100s. on any person who takes such an apprentice, any 
 person being permitted to inform against offenders. But the Act 
 allows parents to put their sons or daughters to school at their 
 discretion. 
 
 By 2 Hen. V. cap. 4 the Statute of Labourers is again confirmed, 
 and order is taken that it should be exemplified and sent to the 
 sheriffs for publication in the county court. A new clause is added 
 under which workmen and employers may be examined on oath, as 
 to wages given or received, and a further power is given to the 
 justices of issuing writs for the reclamation of fugitive labourers. 
 By a further Act of the same reign (4 Hen. V.) the penalties for re- 
 ceiving excessive wages are hereafter to be levied from the receiver? 
 only. 
 
 Legislation on the wages of labour is abundant and inoperative - 
 during the next reign, the long minority of Henry VI. In the 
 second year, the Statute of Labourers is re-enacted, and a new clause 
 added, one which was hereafter to bear such evil fruit, that the.
 
 LEGISLATION OF THE HENEIES. 83 
 
 justices in quarter sessions should be empowered to regulate the 
 rate of wages. But the Act was temporary. In the next year, 
 3 Hen. VI. cap. 1, the confederacies and yearly congregations of 
 masons in general chapters and assemblies are forbidden, and the 
 punishment of fine and ransom and imprisonment denounced against 
 offenders. 
 
 By 6 Hen. VI. cap. 8 the labour statutes of Richard are re- 
 enacted, and the clause permitting the justices of peace to fix the 
 rate of wages re-enacted and enlarged. The justices in every county 
 and the mayor in every city and town are to make proclamation 
 every Easter and Michaelmas fixing how much each workman or 
 artificer is to have, with or without food, and these proclamations 
 are to have the force of statutes. But the statute is again temporary. 
 It is re-enacted by 8 Hen. VI., and is to endure " till the king hath 
 otherwise declared his will in Parliament." By 11 Hen. VI. the 
 Statute of Apprenticeship is again enacted, but London is exempted 
 from the 20s. a year clause, by which " the Londoners are grievously 
 vexed and infuriated." 
 
 By 15 Hen. VI. cap. 6 the guilds of artificers and other labourers 
 are attacked. It is stated that " guilds interpret their own charters 
 for their own profit, and to the damage of others." The new law 
 enacts that hereafter all letters patent and charters of guilds shall be 
 registered before the justices of the peace in counties and the chief 
 governors of towns. A penalty of 10 is to be inflicted on every 
 ordinance which is not in accordance with the charters. You will 
 notice that county or village guilds must have been numerous, or 
 they would not have been made the subject of legislation and in- 
 spection. By 18 Hen. VI. cap. 11 the qualification of the justice 
 is raised to 20 a year in land. 
 
 By the 23 Hen. VI. cap. 12, the law provides that a servant 
 shall give notice to his employer that he intends to leave his service, 
 " so as to let him provide a new one." The Act also gives a schedule 
 of wages, in which the rates now become customary are all but 
 acknowledged. It also declares that hirings in husbandry shall be 
 for a year certain. There is no legislation on the subject of labour 
 during the reigns of Edward IV. and Richard III. The labourers 
 had won the day. In Henry VII. 's reign the rule about the quali- 
 fication of apprenticeship is rescinded in the case of Norwich by 
 
 4
 
 34 LEGISLATION ON LABOUR AND ITS EFFECTS. 
 
 11 Hen. VII. cap. 11 ; and by cap. 22 of the same year, a schedule 
 of wages is given, which, considering the cheapness of the time, is 
 exceedingly liberal. At no time in English history have the earn- 
 ings of labourers, interpreted by their purchasing power, been so 
 considerable as those which this Act acknowledges. But the day is 
 twelve hours from March to September, from daybreak till night for 
 the rest of the year. It is certain that fifty years before the labour- 
 day was one of eight hours only, and the wages paid were far in 
 excess of what was the statutable rate at the time. 
 
 There is but little legislation of labour during the reign of Henry 
 VIII. His Acts remit the penalties on employers who give higher 
 wages than the statute allows, and re-enact the rates which his 
 father's law had prescribed. By 7 Hen. VIII. cap. 5, labourers in 
 London are exempted' from the Statute of Labourers, and by 28 Hen. 
 VIII. cap. 5, no corporation or company was allowed to restrain 
 apprentices when their time was up from trade, or to exact more 
 than such legal fees for their freedom as were permitted under 
 existing laws. 
 
 I am sensible that the recital which I have made of these ancient 
 laws is dry and dull. But you cannot study the history of any 
 civilized country to any profit without taking note of its laws, still 
 less that of England, in which the course of legislation seems to be 
 so much a matter of compromise and immediate expediency, but in 
 which it is therefore more immediately connected with its history, 
 least of all in the economical interpretation of history, where law 
 is to the social state what chronology and geography are to the 
 political estimate of a nation. During all this time the mass of 
 English labourers, by no means claiming more than the reasonable 
 reward for their services, were thriving under their guilds and trade 
 imions, the peasants gradually acquiring land, and becoming the 
 numerous small freeholders of the first half of the seventeenth 
 century, the artisans the master hands in their craft, contractors in 
 the same period for considerable works, planning the solid and hand- 
 some structures in what is known of the Perpendicular style, and 
 withal working with their own hands on the buildings which tbeir 
 shrewdness and experience had planned. It is true that at the very 
 best age of the workman a ruin was impending, the causes of which 
 J have been able to collect, and shall now proceed to expound.
 
 HENRY VIIL, HIS HABITS. 35 
 
 During the whole of English history, there never was a sovereign 
 so outrageously and wantonly extravagant as Henry. He inherited 
 an enormous fortune from his thrifty father, as fortunes in the 
 sixteenth century went, and dissipated it speedily. His wars and 
 alliances in which subsidized the needy Emperor of Germany, and 
 was baffled and foiled in all which he undertook cost him much, 
 but his expenditure during time of peace was prodigious. He had 
 twenty or thirty palaces, on all of which pulling down and building 
 was perpetually going on, in which an army of workmen, often by 
 night and day, ' on Sundays and on the highest festivals of his 
 Church, were incessantly employed. The cost of his establishments 
 was enormous. He seemed to have an idea that it was splendid 
 and safe to entertain his nobles, and he made them quarter them- 
 selves on his numerous palaces. The establishment of Mary, till 
 he disowned her, of the infant Elizabeth, of the infant Edward was 
 each more costly than the whole annual charge of his father's living, 
 as the extant wardrobe books testify. He built huge ships which 
 would not sail, huge palaces which were the whims of the hour, and 
 were soon left to decay. If he could have got at it, he would have 
 spent all the private wealth of all his subjects, and he made every 
 effort to get at it. Whatever he procured, borrowed, raised was 
 soon like the bag of gold which Bunyan, in his vision, saw poured 
 into the lap of Passion. He was popular in a way, for wasteful 
 people generally are, even when they waste what does not belong to 
 them. 
 
 The smaller monasteries went, and he soon came to an end of 
 tlieir accumulations. The larger ones he spared, declaring them to 
 be the seats of piety and religion. He pledged himself that the 
 spoil of the monasteries given him, he would ask his people for no 
 more taxes, not even for necessary wars. Soon the greater monas- 
 teries went. I believe that, foreseeing the storm, the monks had 
 granted long leases of the lands, so that much of his plunder was 
 reversionary. But the accumulated treasures of ages came into his 
 clutches. A long array of waggons carried off the gold, silver, and 
 precious stones, which for nearly four centuries had accumulated 
 round the shrine of Becket. This shrine was no doubt the richest 
 in England, perhaps in Christendom. But there were others more 
 . ancient and nearly as wealthy, at "Winchester, at Westminster, at a
 
 36 LEGISLATION ON LABOUB AND ITS EFFECTS. 
 
 hundred sacred places. It is exceedingly probable that the accumu- 
 lations of these holy places were, as bullion, equal to all the money 
 in circulation at the time. It vanished like snow in summer. 
 Nothing stayed with him apparently for a longer time than he 
 could hurl it away. The lands of the monasteries were said to 
 have been a third of the English soil. 
 
 After these exploits he seems to have hardly dared to ask his 
 people for money. But there still remained a way in which he 
 could most effectually attack their pockets. He began to issue base 
 money, at first with very little alloy beyond what had been cus- 
 tomary. He soon became shameless, for his mint kept issuing 
 baser and baser coins. He is the only English sovereign who has 
 ever committed this peculiarly mean and treacherous crime, for 
 Charles only thought of it. I reckon the continuance of this vile- 
 practice under his son as his act, for he had the credit of breeding 
 and bringing up the infamous knaves whom he appointed as his 
 son's guardians. At last, when the wretch was sinking into his 
 grave, worn out by his vices and debaucheries at a comparatively 
 early age, bloated and shamefully diseased, he bethought himself 
 of robbing the labourers and artisans, by confiscating their guild 
 lands. He would have confiscated all the property of the universi- 
 ties had he lived, but fortunately Mr. Froude's patriot 1 king died,, 
 the Yitellius and Nero of English history. 
 
 The mischief begun by Henry was continued by the guardians 
 of his son. It is impossible to speak with too much contempt of 
 the crew whom Henry left to watch over and advise tbe yoimg 
 prince. Bad men, especially bad men to whom the interests of 
 nations are entrusted, make their instruments worse. The chief 
 of tbe gang was Somerset, who soon got rid of his brother Seymour 
 at Tower Hill. Somerset completed the confiscation of the guild 
 lands which Henry contemplated. By a- political law that in such 
 a time the greatest villain gets the mastery, Northumberland got 
 Somerset out of the way, and for a time seemed master. He was 
 on the point of dismembering England and creating for himself a 
 principality or kingdom north of the Trent when Edward died ; the 
 angry and impoverished labourers rallied to Mary Tudor, and 
 Northumberland fell. On the scaffold he added one more vice to 
 his catalogue, for he pretended to repent. But he was so bad a
 
 THE POVERTY OF ELIZABETH. 87 
 
 man that it may be doubted whether hypocrisy could have made 
 him worse. 
 
 When Elizabeth came to the throne both sovereign and people 
 were miserably poor. The base money had driven the working 
 classes to beggary, and England, once the most powerful of Western 
 States, was of little more account in the policy of Europe than a 
 petty German princedom was. The queen's first task and first duty 
 was to reform the currency. But she could not afford to make good 
 her father's and brother's dishonesty. It would have cost her five 
 years of her revenue. The details of Henry's crime, and the details 
 of Elizabeth's remedy, I must postpone till I deal with the question 
 of metallic currencies in England. It was necessary that I should 
 say as much as I have said in order that we may have light where- 
 with to follow the fortunes of the English labourer. His guild 
 lands, the benefit societies of the Middle Ages, which systematically 
 relieved destitution, were stolen by the greedy leader of the new 
 aristocracy, he had suffered eighteen years' experience of a debased 
 currency, prices rose 150 per cent., and the wages of labour were 
 almost stationary. Wages do not rise with prices. To assert that 
 they do, or will, is either ignorance or dishonesty. During the few 
 years which followed on the great American Civil War, and a crew 
 of sharpers, among other dishonest actions, had insisted on, and for 
 a time maintained, an inconvertible paper currency, the condition 
 of workmen in the United States was very distressful. But it was 
 not so bad as the condition of the working classes was in England 
 after the great queen's accession in 1558. There were people at 
 that time who wished to continue the circulation of base money, as 
 they made a large profit on discounting it. In the American case 
 an Englishman, seated as an economist in an academical office, was 
 tempted, because his vanity was flattered, to defend the practice of 
 the Wall Street junto of soft money gamblers. In the days of the 
 English base money, Sir Thomas Gresham, financial agent of the 
 English court at Antwerp, formulated the law which has sub- 
 sequently gone by his name, that it two kinds of money declared 
 by authority to be of equal value, but discovered in the course of 
 trade to be of unequal value, are put into circulation simultaneously, 
 the over- valued money will speedily drive that which is under-valued 
 out of circulation.
 
 38 LEGISLATION ON LABOUR AND ITS EFFECTS. 
 
 After reforming the currency, Elizabeth and her advisers passed 
 a new Statute of Labourers. In the Statute Book it is known as 
 5 Eliz. cap. 4. It began by repealing all the statutes which had 
 regulated labour since 23 Edward III., over two centuries before. 
 It then took all that was most stringent from the statutes which 
 I have already referred to, and put them into a comprehensive 
 enactment, which was hereafter to regulate the relations of em- 
 ployer and labourer. I do not indeed believe that Elizabeth and 
 her counsellors intended to deal unjustly by the workmen ; some 
 indeed of the clauses of the Act are intended for the working man's 
 protection, but the mischief of the Act was in the machinery by 
 which it would be carried out, and in the terribly depressed condi- 
 tion of the labourer. He was handed over to the mercy of his 
 employer at a time when he was utterly incapable of resisting the 
 grossest tyranny. The Government of the day probably remem- 
 bered the uprisings of Tyler and Cade, certainly that of Ket, and 
 they determined to make use of an instrument, the justices in 
 quarter sessions, who would be able to check any discontent, even 
 the discontent of despair, and might be trusted, if necessary, to 
 starve the people into submission. We shall see how completely 
 success attended their efforts. 
 
 In certain employments servants were to be hired by the year. 
 Every unmarried person under the age of 30, and not having 40s. 
 a year of his own, nor otherwise employed, was compellable to 
 serve at a yearly hiring in the craft to which he was brought up. 
 You will note here that the limit of private income, the old franchise 
 of Henry yi.'s law, suggests that the framers of the statute are of 
 opinion that the old prices would recur, and that calling a coin a 
 shilling, when it only contained about the third of a shilling, would 
 enable it to buy as much as when it was three times its present 
 weight. The servant hired for a year could not be dismissed except 
 upon cause allowed by two justices, nor at the end of the year with- 
 out a quarter's notice. Next, all persons between the ages of 15 
 and 60, and not otherwise employed or apprenticed, were made 
 liable to serve in husbandry. Masters unduly dismissing their 
 servants were to be fined 40s., and servants unlawfully quitting 
 their employment were to be imprisoned. Servants were not to 
 quit city or parish without a testimonial, if they do so they are to
 
 THE ELIZABETHAN STATUTE OF LABOURERS. 39 
 
 be imprisoned, and if they have a forged testimonial they are to be 
 whipped. Masters taking a servant without a testimonial are to be 
 fined 5. The hours of labour are defined, as in earlier laws, at 
 twelve hours a day during the summer months, and from daybreak 
 to night in the winter. Absence from work is to be punished with 
 a fine of a penny an hour. A strike is to be visited with a month's 
 imprisonment and a fine of 5, a sum which appears to be a blow 
 against what might be surviving of the old trade unions. 
 
 The justices are to hold a rating sessions (they generally held it 
 a little after Easter), in which they are to fix the rate of wages in 
 all employments, summer and winter, by day or year, with board 
 or without board. These rates are to be certified in Chancery, 
 approved by the Privy Council, and proclaimed by the sheriff, who 
 is. to call attention to the penalties in the Act. The justices are to 
 be paid 5s. a day for their attendance, and those who are absent 
 from the rating sessions are to be fined 10. The penalty on giving 
 higher wages than the scale is 5 and ten days' imprisonment, on 
 the receiver twenty-one days, the contract being declared void. 
 Workmen assaulting a master are to be imprisoned for a year or 
 more. Artificers may be compelled to do harvest work. 
 
 Workmen are allowed to migrate from county to county in 
 harvest time. Women between twelve and forty years old, if 
 single, can be compelled to work by the year, week, or day, at the 
 option of the hirer, and certain persons are allowed to take appren- 
 tices in husbandry. Householders in towns may take apprentices 
 for seven years terms, and each may have two, if they be children 
 of artificers, and an artisan may have as an apprentice the son of a 
 person who has no land. The apprenticeship must be for seven 
 years, under a penalty of 40s. a month for all the period short 
 of this time. But merchants are not to take apprentices, except 
 from parents having 40s. a year in freehold land, and in certain 
 specified callings, notably in the trade of woollen cloth weaving, 
 unless they possess a freehold of 3 a year. One journeyman must 
 be hired with every three apprentices, and if more than three are 
 indentured, one journeyman to each additional apprentice. But 
 persons refusing to be apprenticed are to be imprisoned. Kunaways 
 are to be imprisoned. 
 
 The justices are to inquire periodically into the execution of the
 
 -. 
 40 LEGISLATION ON LABOUE AND ITS EFFECTS. 
 
 Act, and to revise their rates according to the cheapness or dearness 
 of the necessaries of life. The Act further recognizes the common 
 informer, who is to have half the penalties, the other half going 
 to the Crown. Thirty-three years later the Act was amended. The 
 liabilities of the Act were extended to weavers, the justices were 
 empowered to issue their rates in divisions of the shires, and the 
 rates are to be published by 'the sheriff, but the obligation of cer- 
 tifying them to the Privy Council through Chancery is abrogated. 
 They are henceforth to be presented by the Gusto Kotulorum. As 
 was commonly the custom at that time, the Act was temporary, 
 but was constantly renewed in the last chapter of the Parliamentary 
 roll. Thus it was re-enacted in 1601 and 1603. In all, between 
 23 Edward I. and 1 James, thirty-seven Labour Acts were passed 
 by Parliament. 
 
 The justices soon set to work. The first assessment extant is 
 dated June 7, 1563, and is for the county of Rutland. The original 
 is in the great collection of Elizabeth's proclamations, a volume 
 that certainly belonged to Burghley and his son Robert Cecil, after- 
 wards Earl of Salisbury. This assessment was, I make no doubt, 
 to be a guide for counties south of the Trent, as one of 1595, and 
 also printed in the same collection, is for those which are north of 
 the Trent. Altogether I have found thirteen of these assessments 
 between the years 1563 and 1725. I believe that they were dis- 
 continued during the eighteenth century, not because the law was 
 neglected, but because the assessment had effectually done the work 
 for which it was designed, the labourer's wages being now reduced 
 to a bare subsistence. 
 
 The object of this celebrated or infamous statute was threefold 
 (1) to break up the combinations of labourers, (2) to supply the 
 adequate machinery of control, and (3) by limiting the right of 
 apprenticeship, to make the peasant labourer the residuum of all 
 other labour, or, in other words, to forcibly increase the supply. The 
 courts of law, if the justices were slow to act, could be quite relied 
 on for enforcing the statute, for the most prejudiced lawyer cannot 
 deny that the Stuart judges were, with some exceptions, timid, 
 servile, and cruel. Attempts have been made to argue that the 
 Stuart kings wished to rule strictly by law. But their apologists 
 forget that law is no abstract proposition, but a highly practical
 
 THE OBJECTS OF THE STATUTE. 41 
 
 condition of social life, and that procedure is as much law as 
 the penalties which a statute enacts, and the rights which law 
 professes to guarantee. To keep to the letter of the law and corrupt 
 its procedure, is a far greater treason against law and freedom than 
 it is to enact a law of Draconian severity. Now the Stuarts made 
 the judge's patent run during the pleasure of the Crown, and gave 
 the judge abundant warnings that they would be ejected from office 
 if their rulings or interpretations of law displeased authority. It 
 was from this point of view, I venture to affirm the true one, that 
 the answer of the aged Serjeant Maynard was made to William III. 
 " You must have outlived all the lawyers," said the king. " Yes, 
 sir," he replied, " and if your Majesty had not come hither, I should 
 have outlived all the law." But the Stuarts did not repeal laws, 
 they only 'perverted their administration by the hands of wicked 
 judges. They did not even punish Chief Justice Vaughaii for 
 affirming the immunity of juries. At last the judges got freeholds 
 in their offices, and became incomparably more honest. 
 
 The justices in quarter sessions took no note, as the statute 
 instructed them, of "the cheapness or dearness of provisions." 
 Their object was to get labour at starvation wages, and they did 
 their best to effect their object. The law gave them the power, and 
 provided no appeal from their decision. It may be said that the 
 framers of tbe statute imagined that the magistrates could adopt a 
 eliding scale, like that which was evidently contemplated under 25 
 Edward III., and as evidently was before the mind of Parliament when 
 it framed its own scales in the fifteenth century, particularly in 1495. 
 
 Some time since, in a work of mine, entitled, " Six Centuries of 
 Labour and Wages," my information as to the amount of wages paid 
 and the price of food having been far less copious than it now is, 
 I was able to show that while the Act of 1495 enabled an artisan, 
 in prices of that time, to procure a certain amount of food and drink 
 with a fortnight's labour, at the rates of the statute, and an agri- 
 cultural labourer to obtain the same with three weeks' labour, the 
 justices' assessment rarely enabled the peasant to obtain the same 
 quantities with a whole year's labour, and would sometimes have 
 required two years' incessant labour. For it must be remembered 
 that though the law pressed hardly on the artisan, it was intended 
 to press far more hardly on the peasant, cheap agricultural labour,
 
 I 
 
 42 LEGISLATION ON LABOUR AND ITS EFFECTS. 
 
 in the absence of any notable, as I shall show hereafter, any possible 
 improvement in the art of agriculture, being, as was seen clearly 
 enough, the best means by which, concurrently with a high price 
 of produce, agricultural rents could be raised. 
 
 Now the researches which I have made subsequently to the 
 the publication of my work, have abundantly confirmed the 
 inferences which I drew as to the intention of the quarter sessions 
 assessments. I have discovered more of these documents than were 
 before me a few years' ago, and have been able to trace the conse- 
 quences of the system. It is true that in some particulars the 
 position of the peasant was not so bad as it now is. He was rarely 
 without his patch of land. The Allotments Act of 31 Elizabeth cap. 
 7, under which an attempt was made to check the growing evil of 
 building cottages without curtilages, which provided that no cottage 
 should hereafter be built, unless four acres of land were attached to, 
 for the peasant to work on his own account, and forbad under 
 penalties that more than one family should inhabit the same tene- 
 ment, is, to my mind, conclusive as to what had been a practice, and 
 that the practice had been recently abandoned. I can trace the 
 continuity of this practice and its beneficial effects during the early 
 part of the eighteenth century. In the latter half of this century, 
 the Act was repealed. Its duration was a hindrance to the fashion 
 of enclosures then so prevalent. 
 
 Again, beyond the plot which he held in severalty, the peasant 
 had more or less extensive rights of common. The common, even 
 if it did not afford herbage for his cow, was a run for his poultry, 
 and assured him the occasional fowl in. the pot. When the system of 
 enclosures was in full vigour, people commented on the very different 
 treatment received by the man who stole the goose from the common 
 and the man who stole the common from the goose. The gradual 
 appropriation of these indirect advantages, however much the policy 
 of enclosures may have increased the productiveness of agriculture, 
 was an insensible aggravation of the peasant's lot, and a cause of 
 increasing distress to him. 
 
 Again, as there were large tracts of open and swampy country, 
 the England of two and more centuries ago swarmed with wild 
 animals. From the earliest times of which we read, some of these 
 animals were protected for private amusement or consumption,
 
 INDIRECT RESOURCES OF LABOURERS. 43 
 
 as stags and deer, hares and wild boars. In later times, 
 especially in James the First's reign, game laws, restraining the 
 practice of sporting, on the plea that the practice of fowling and 
 snaring made the labourers idle, were enacted. But it is certain that 
 the laws were inoperative. I have examined many accounts of the 
 sixteenth and seventeenth centuries, which register the domestic ex- 
 penditure of several noblemen of rank and fortune, and of corpora- 
 tions. The amount of game, winged and ground, which is bought, 
 especially in winter, is prodigious. Many purchases are made of 
 birds which are not, I believe generally found on tables now. But 
 if the sole right of netting and fowling had been reserved, as the 
 statute of James prescribes, these items could not have appeared 
 in the accounts. They were doubtlessly supplied by the small farmers 
 and peasantry. Now, what they sold at the great house, they might 
 have consumed themselves. 
 
 These advantages which one discovers by studying the social 
 legislation and habits of the time, existed to an equal or a greater 
 extent in the time of the first Tudor sovereign. It is the gradual 
 deprivation of them, without any compensation beyond the conces- 
 sion of a bare subsistence which marks the economical history of 
 the poor as the centuries pass on. It is, I think, most probable 
 that the practice of the quarter sessions assessment ceased in the 
 south of England at the close of the seventeenth century, and in the 
 north at the beginning of the eighteenth. It would be strange if 
 the practice was continued, while agricultural history, now getting 
 full of comments 011 the situation, is entirely silent on the subject. 
 But, in fact, the justices had done their work. They had made low 
 wages, famine wages, traditional, and these wages, insufficient by 
 themselves, were supplemented from the poor rate. 
 
 We have an account or return of the poor rates, actually 
 collected and expended in every English county, at the end of 
 Charles the Second's reign. Its heaviest incidence is in the 
 counties south of the Trent. The sum, to our modern experi- 
 ence, is hardly a tenth of that now raised and expended 
 in England and Wales. But this gives an inadequate idea 
 of its character. It is in amount more than a third of the 
 whole revenue in time of peace. If the money expended for 
 the relief of the poor in the present day stood in the same
 
 44 LEGISLATION ON LABOUR AND ITS EFFECTS. 
 
 ratio to the public expenditure, interest on debt being not 
 reckoned in the revenue, it would reach nearly twenty millions. 
 In fact, the estimate which Gregory King makes of an agricul- 
 tural labourer's income at the end of the seventeenth century, 
 and I know from actual payments made and wages earned, that 
 King's estimate is pretty accurate, the income had invariably 
 to be supplemented from the poor rate. It is true that King 
 exhibits his inference in a curious way. He makes out that 
 the landowners and officials alone contribute to the annual 
 increase of wealth, because they got the largest share, and save 
 some of it, but that the whole class of labourers are, from the 
 character of their incomes, a burden on the national resources, 
 though he was not blind to the fact that they made all the 
 wealth. 
 
 But there are two facts on which comment should be made. 
 The rate of wages actually paid to workmen is always higher than 
 that prescribed by the justices. I cannot say, indeed, that the 
 wages which I have registered were paid for (say) fifty weeks in 
 the year, but neither is it certain that the quarter sessions rates 
 by the day are. Now I will take eight different kinds of labour at 
 weekly rates, and strike an average of the eight from the justices' 
 assessments, and another from the wages which I have registered 
 are actually paid to the different kinds of workmen, five being 
 artisans, and three unskilled and agricultural. The average of the 
 justices' eight is 5s. Id. a week, between 1593 and 1684. The average 
 actually paid over the same period, and from the same years in 
 which the rate is published is 6s. 6d. The employer was more 
 merciful than the magistrate. 
 
 The other fact is that the assessments were far more generous 
 during the Commonwealth than they are under the monarchy, 
 whether we take the period before that form of government was 
 affirmed or after it. Even under these circumstances the assess- 
 ment is below the wages actually paid, though not much, only 
 4d. in 1651 and 2d. in 1655. After the Eestoration the 
 magistrates go back to the old scale, and prescribe 3s. a week less 
 than was actually paid. The Puritans were perhaps stern men, 
 but they had some sense of duty. The Cavaliers were perhaps 
 polished, but appear to have had no virtue except what they
 
 WAGES ACTUALLY PAID. 45 
 
 called loyalty. I think if I had been a peasant in the seventeenth 
 century, I should have preferred the Puritan. 
 
 In 1825, the whole of the labour laws were swept away, chiefly 
 by the agency of the late Mr. Joseph Hume. The early Statute 
 Book is full of legislation on labour. There is no word in Hansard 
 of any debate whatever on the abolition of the system. The 
 statute of Elizabeth was obsolete, because it had done its work, 
 and had permanently degraded the peasant. Thenceforward the 
 whole subject was remitted to the common law, and to the 
 dangerous interpretations which judges have given of what they 
 are pleased to call constructive conspiracy, the most elastic instru- 
 ment of tyranny which can be devised.
 
 III. 
 
 THE CULTIVATION OF LAND BY OWNERS AND OCCUPIERS. 
 
 The consequence of agricultural success The Duke of Argyll 's 
 illustration of rent The history of progress The errors of 
 theory The history of agricultural produce- The accuracy of 
 ancient accounts Gregory King's law of prices English famines 
 Agriculture in the seventeenth and eighteenth centuries The 
 survey of Gamlingay Common fields Pasture Commons - 
 The regular clergy and agriculture Primogeniture The land 
 i and stock lease Development of new tenancies, terms of years, 
 life, and on rack-rent. 
 
 THE development and progress of agriculture is the first and 
 most convincing proof that a particular race can rise above 
 barbarism. It is true that the practice of agriculture is com- 
 patible with and may be characteristic of an unprogressive stage, 
 one in which civilization is early and strangely arrested. But such 
 an arrested growth can almost always be explained by the presence 
 of definite causes, which it costs the publicist little trouble to 
 detect and expound. 
 
 1. The success of agriculture measures the numbers of any 
 given community who, in the absence of foreign importation, can 
 be maintained on the soil. When foreign importation is free and 
 copious, the whole trading world must be taken as one community, 
 and the rule will be found to apply with equal accuracy. We in 
 England do not produce, perhaps could not produce enough food
 
 THE CONSEQUENCE OF AGRICULTURAL SUCCESS. 47 
 
 from the land, wherewith to feed all its inhabitants, though this 
 inability, for reasons which will be given further on, is disputable. 
 But as it is we draw our supplies from various parts of the world, 
 not a little of that which we import being in liquidation of 
 liabilities which foreign nations or our own colonies have con- 
 tracted with their English creditors. If by any ill-advised act we 
 should check the imports of these countries, we should ruin them, 
 or, what is more probable, compel them to repudiate their debts. 
 It is infinitely more dangerous for a free trade country to reverse 
 its policy, than it is for one which is protectionist to abandon that. 
 To fall into a vice is mischievous, to abandon a vice is, economically, 
 progressive. 
 
 2. The success of agriculture measures the extent to which other 
 industries than agriculture can subsist, or generally other persons 
 besides agriculturists can live. The husbandman, at least in the 
 -early stages of his craft, when he is not forced to occupy barren 
 land, on which he can perhaps by unremitting toil induce fertility, 
 can even with the rudest implements produce more than is 
 sufficient for the wants of himself and his household. It is 
 inevitably the case, as he is the most defenceless of all workmen, 
 that either on pretence of defending him, or by taking ransom 
 from him for abstaining from robbing him, he will have to pay 
 toll to armed persons who constitute themselves his superiors. 
 His labours, with more reason, supply the maintenance of 
 those whose industry affords him more convenient means for 
 carrying on his calling, or relieve him from undertaking bye- 
 employments when the labour of the fields is over or is for a time 
 suspended. The success of his industry is therefore of profound 
 interest to all, especially when the home supply is the entire or 
 principal source of maintenance to the inhabitants of any country. 
 Even when it is not, the interest in successful agriculture 
 should still be keen, for the agriculture of a country is the chief 
 home market of a country, and the trade with one's own fellow 
 countrymen is the safest and least risky trade of all. Everything 
 therefore, be it law, practice, or custom, which discourages 
 agriculture or checks its development, is a public nuisance, however 
 venerable the law, practice, or custom may be. There has been, 
 and there is, considerable discouragement put on agriculture, and
 
 48 THE CULTIVATION OF LAND. 
 
 it is the duty of statesmen, without delay, to remove, or at least 
 to mitigate, the causes of this discouragement. 
 
 8. The success of agriculture is the measure of rent. Kent is 
 undoubtedly the payment made for the use of a natural instru- 
 ment, the use of which is necessary to human society the 
 effectual and successful use of which is of profound interest to 
 human society. The Duke of Argyll, a great, perhaps an over- 
 confident eulogist of landowners, has compared the hire of 
 agricultural land to the hire of a musical instrument. The com- 
 parison is ingenious and not inaccurate, but I do not think that the 
 Duke saw the full force of his comparison. Perhaps if he had, he 
 would not have quoted it. Let us admit that the hire of a piece of 
 land is like the hire of a Straduarius violin. In the hands of most 
 .of us, certainly in my hands, the rent I would give for the violin 
 would not be a penny a year ; I could make no profitable music by 
 it. But in the hands of Herr Joachim, the rent of such an 
 instrument might be worth many pounds a year, for he could dis- 
 course most excellent music by it. And this is just the case with 
 land. It needs the skill, experience, education, intelligence of the 
 occupier. This has been till recent times, is in some parts of the 
 United Kingdom, of the highest capacity and efficiency. I have 
 studied the agriculture of Europe on the spot over the greater part 
 of its western, countries, that of America from the seaboard to the 
 Eocky Mountains, and northward to the Great Lakes. I have 
 never seen any husbandman equal to the English farmer. But I 
 shall have occasion hereafter to dwell on this at more length and 
 with more precision, when I handle the economic history of rent.. 
 At present I need only say that rent is the result of two forces. 
 Ordinary economists have generally dwelt on only the first of them. 
 The one is the natural powers of the soil, sometimes called 
 original and indestructible, foolishly so, because one hardly can tell 
 what are the original powers, and no one can allege what are 
 indestructible, except it be such as certainly do not contribute to 
 fertility. The other, and the vastly more important one, is the 
 acquired capacity or skill of the tenant the power, to revert to 
 the Duke's illustration, of playing with effect on the violin. Unfor- 
 tunately, the acquired capacity and skill of the tenant are very 
 destructible, and have been destroyed.
 
 KENT. THE HISTORY OF PROGRESS. 49 
 
 Economists tell us, inter alia, that they busy themselves with the 
 laws which regulate or govern the production of wealth ; though 
 when they deal with details they display the grossest ignorance about 
 the production of the most necessary and important of human 
 products, those of agriculture. The laws which primarily go vein 
 the production of wealth are laws of nature, and by discovering 
 them, following and using them, human industry confers utility oil 
 matter. Some are obvious and simple. No husbandman sows com in, 
 midsummer, expecting to reap in midwinter. The earliest artisans, 
 miners, metallurgists knew certain natural laws, attention to which 
 was essential to their industry. But some natural laws have only 
 been arrived at by long observation, by profound study, by cautious 
 research. The shortening of a voyage out and home from an 
 English port to one in Hindostaii and back again, from two years 
 to four months, is the result of an infinite study of natural laws 
 some gathered on the ocean itself, some in the workshop, some 
 in the laboratory, some, and these not the least, in the mathe- 
 matician's study. Wrought iron cost in money of the four- 
 teenth century 12 a ton. Twelve is generally a fair multiple 
 for prices of that time, taking one thing with another, when we 
 compare them with modern experience. Why has iron fallen in 
 price from 144 to 4, but by the discovery and adaptation of 
 natural laws ? 
 
 The production of wealth, then, is the selection and adoption of 
 natural laws, through the agency of human intelligence, which is 
 progressive. We cannot tell what are the limits of human intelli- 
 gence and consequently of its power. We are amazed at what it 
 has done, and cannot guess what it may do. To have predicted a 
 century ago, that a power would convey passengers over roads at 
 the rate of sixty miles an hour, would have seemed as absurd as 
 the nocturnal and aerial voyage of Borak. To have predicted that 
 the most delicate colours would be. procured from coal tar, and 
 flavours and essences from the same material, would have been 
 deemed the talk of a Bedlamite. There are no doubt arid and 
 unprofitable statements constantly made, such as that men will 
 never travel as fast as light, or in organic chemistry make synthesis 
 as easy as analysis. There is no subject on which impossibilities 
 have been predicted with more unfortunate assurance by economists 
 
 5
 
 50 THE CULTIVATION OF LAND. 
 
 as those on production, and especially on agricultural production 
 and its congeners. 
 
 We, who have to read those books in which the speculative element 
 obscures the practical side of political economy, are treated to many 
 alarmist predictions about the margin of cultivation, the law of 
 diminishing returns, and the exhaustion of fertility, and this 
 constantly by people who are profoundly ignorant of the practical 
 side of that on which they dogmatize. But no one except in a 
 general way has ever discovered the margin of cultivation, has ever 
 seen the law of diminishing returns in operation, or has witnessed 
 the exhaustion of fertility. It is because they know nothing about 
 the facts that they are so strangely and, at times, so mischievously 
 confident. As yet we know that wheat will not grow on a granite 
 rock, though if this rock be disintegrated it makes the most fertile 
 of soils, and that you could not on grounds of physical space and 
 botanical conditions grow 150 bushels of wheat to the acre, and 
 that you can by an indefinite number of croppings of a certain kind 
 extinguish and annul the indestructible powers of the soil, but no 
 one ever saw these results. Unfortunately the reputation of those 
 who talk and write nonsense, sometimes induces most mischievous 
 fallacies of practice on the mind of those who do not see through 
 the nonsense, and great hostility to the professors and teachers of 
 a science which men of the world, who have to interpret the system, 
 declare to be unpractical and intolerable verbiage. 
 
 I do not indeed purpose, in this lecture, to deal with the econo- 
 mical history of rent. The treatment of this most important fact, 
 in what economists call the laws which govern the distribution of 
 wealth, will be reserved for a subsequent occasion, for I hope that 
 we shall be able, as I go on with these several subjects, to proceed 
 from what I may call the general treatment of economical history 
 to those concrete cases, in the true interpretation of which such 
 serious consequences are involved, and such necessary appeals are 
 made to the interposition of law. For as the laws which govern 
 the distribution of wealth, by which an economist means the share 
 which each person in the great industrial partnership receives, are 
 merely or mainly of human origin, it is plainly part of the functions 
 of the statesman to remedy any injustice which may be traced to 
 this adventitious origin, to determine what contracts should be
 
 THE EREOBS OF THEORY. 51 
 
 permitted, and the extent to which contracts, which may be condi- 
 tionally permitted, shall be practically enforced. 
 
 This much I ought to say here. Rent, as Adam Smith did not 
 see, and he may well be pardoned for not seeing it, is not a cause of 
 value, but a consequent of value. It is because agricultural and 
 analogous produce fetches more in the market than it cost to pro- 
 duce, outlay and average profit considered, that rent, i.e., economical 
 rent, arises. Hence, if we admit, as we must by the fact that every 
 producer seeks to obtain the maximum result with the least possible 
 expenditure of nervous and muscular energy, personal or supple- 
 mentary as the case may be and economical labour is not in itself 
 a desirable thing it necessarily follows that the ideal of the econo- 
 mist would be a state of things in which the produce necessary for 
 human life could be obtained so regularly, so readily, and with so 
 little labour, and consequently so cheaply, that no rent could arise. 
 I cannot dispute the claim of the landowner to the rent which he 
 receives. I think that the theory which would deprive him of it by 
 law is unjust and odious. I hold that to have bought him out, 
 when Mr. Mill first ventilated the doctrine of the unearned incre- 
 ment would have been ruinous, as I insisted to that distinguished 
 person that it would have been when he advocated it ; and as for 
 the nationalization of land, by which I suppose is meant the violent 
 acquisition of it by the State, I must have a far better idea of any 
 human administration than I have ever been able to form, before I 
 hesitate to conclude that such an expedient would be the beginning 
 of a series of perpetual and nefarious jobs. Land was nationalized 
 under the Roman Republic, and we all know what became of it, and 
 of the Roman Republic too. 
 
 If I have made myself at all clear you will conclude that the 
 fortunes and history of English agriculture are the key to the 
 interpretation of the gravest social questions which have arisen in 
 English economical history, probably of the present situation, 
 possibly of difficulties in the near future. For it cannot be too often 
 remembered and inculcated that we, in the present day, are not only 
 the descendants of an ancient nation, with a long and connected 
 history, but that we inherit the consequences of the folly as well as 
 of the wisdom of our ancestry, and are what we are by virtue of 
 causes which have had an historical beginning, and in some cases
 
 52 THE CULTIVATION OF LAND. 
 
 an enduring influence. Not only is this the case, but the analyst 
 economic history soon discovers that effects endure after causes 
 have, to all appearance, wholly passed away ; and that he is con- 
 strained, if he makes an adequate interpretation of the present 
 situation, to modify the ancient maxim, Cessante causa, cessat effectus. 
 In my last lecture I illustrated this fact very fully by showing that 
 the quarter sessions assessments had an enduring influence on the 
 conditions of labour long after they were disused and forgotten. In 
 the course of this inquiry we shall have cumulative evidence of the 
 same facts, or of facts similar to them. 
 
 Now there are certain historical facts which have had from time 
 to time great influence on the progress of English agriculture. 
 Such, to take some of its principal, are the great change in the 
 occupancy of land after the middle of the fourteenth century, on 
 which I have already made certain comments, the singular exhibi- 
 tion of agricultural prosperity in the fifteenth, the change of owner- 
 ship after the dissolution of the monasteries, and the great extension 
 of sheep-farming in the sixteenth, the development of rack-renting 
 in the seventeenth, and the enclosures and experimental husbandry 
 of the eighteenth. I do not know whether I shall have opportunity 
 on the present occasion to refer to the remarkable reaction of the 
 nineteenth, and in particular to the existing condition of agriculture. 
 I shall have to make reference to most of these facts in my lecture of 
 to-day, and perhaps the best and most obvious way in which to 
 make them clear is to give you the information which I have been 
 able to collect as to the rate of production at different epochs of 
 agricultural history. 
 
 Now in 1333-6, by which I mean 011 this occasion, four years, 
 though the document contains part of six years, Merton College in 
 Oxford had a return made to the fellows of the seed sown, and the 
 produce threshed 011 ten of their estates, all these lands being in their 
 own hands, cultivated by their own capital, and under the superin- 
 tendence of their own bailiffs. Wheat is not grown 011 all the 
 estates in every one of the four years, but it is so generally, tnat I 
 am sure the omission points to a fallow. The largest breadths are 
 sown on the best land. Now the average produce in cheap, that 
 is, abundant, years, as all these years are, is nine bushels of wheat 
 and fifteen of barley, the seed being two bushels of the former and
 
 THE HISTORY OF AGRICULTURAL PRODUCE. 53 
 
 four of the latter grain. This produce is therefore in excess of the 
 average, and the oldest writer on English agriculture, Walter 
 de Henley, expressly states that, unless the farmer reaps full six 
 bushels an acre, he is cultivating at a loss, giving reasons for his 
 estimate. This series of four years' produce precedes the great 
 change in occupancy which I referred to as occurring in the middle 
 of the fourteenth century, and as consequent on the plague. 
 
 The next account of production to which I invite your attention 
 is one of after the middle of the fifteenth century. It is at Adisham, 
 in Kent, between Canterbury and Dover, and presumably therefore 
 a favourable specimen of agriculture. Here the produce of wheat 
 is twelve bushels, of barley sixteen, of peas and vetches eight, and 
 of oats twenty. The year is abundant,' and prices are below the 
 average. In 1655 Hartlib tells us that the average production of 
 wheat was from twelve to sixteen bushels an acre, but Gregory 
 King, about 1693, says that the produce for all kinds of grain was 
 not more than a dozen bushels. I think that King has given a more 
 correct estimate than Hartlib has, whose experience was to some 
 extent of the new agriculture. In the early part of the eighteenth 
 century the rate all round was certainly twenty bushels, and perhaps 
 a little more. 
 
 Now from these and similar facts, for I am only giving you a 
 specimen,! concluded that the average wheat produce of England and 
 Wales, from the accession of Edward III. to the end of the sixteenth 
 century, could not have been more than two and a half millions of 
 quarters, and that the population was as numerous as the quarters, 
 for in those days wheateii bread was the food of the people all 
 through England, and there was little else that could be used in 
 substitution for it, since winter roots were unknown. This in- 
 ference of mine was practically confirmed by one of the poll taxes 
 of the fourteenth century, which is virtually a census, and gives 
 the same amount, and by an actual census of certain hundreds of 
 Kent in the sixteenth century, where the same conclusion, when 
 a contrast is made with the present population, is distinctly 
 arrived at. 
 
 I have already mentioned that the distribution of land was very 
 general, most persons holding a little farm, and the poorest a decent 
 curtilage. Evidence of the distribution of land is derived from about
 
 54 THE CULTIVATION OF LAND. 
 
 1257, and continuously onwards. It cannot be by accident that in 
 the numerous accounts of private estates, none are found before this 
 period, and that they are abundant after it. The custom of keeping 
 accounts of agriculture and of manor rolls must have commenced 
 about the period of strong political disaffection, and, I may add, of 
 generally low prices. The lord ordinarily owned about half the 
 estate or manor ; but it is from his bailiff's accounts only that I 
 have been able to collect any evidence. The records of no peasant's 
 holding have survived, even if any account was taken of them. But 
 beyond question such; persons, having before them the method on 
 which the lord cultivated his estate, profited by his example, by his 
 successes and failures. In many ways the landowners of the 
 thirteenth, and the first half of the fourteenth centuries must have 
 been the instructors of the poorer cultivators, just as in a more 
 recent and stirring time the best English landowners, and they 
 were then many, instructed English tenant farmers in the new 
 agriculture. 
 
 Nothing can be more carefully and more exhaustively drawn 
 than the bailiff's account. He made rough notes of his receipts and 
 expenditure, and from these notes, which occasionally survive, the- 
 audit was based and the roll engrossed. It is almost always in 
 Latin, and the writing was certainly the work of the mendicant 
 clergy. But it is absurd to imagine that the bailiff would have 
 rendered his account in an unknown tongue. The English bailiff, 
 generally a small farmer, often a serf, must have been at least 
 bi-lingual. Everything is accounted for, all receipts, including 
 those from the manor court, all rents and all produce. The acreage 
 sown, the seed required for the purpose, the live and dead stock on 
 the farm are carefully noted, even to an egg, a peck of tail corn, or 
 a chicken, all losses are given, all allowances recorded, and the 
 audit completed, and the quittance admitted ; and then the bailiff 
 began in the same methodical way to register for his next year's 1 
 balance-sheet. If two consecutive years of these accounts are 
 preserved, one can easily discover what the rate of production wa& 
 from the previous cultivation. 
 
 Now at this time the English people lived on. the produce of their 
 own country. There might have been occasionally imports of grain 
 from the Baltic seaboard, and there are occasions, late in the middle
 
 THE ACCURACY OF ANCIENT ACCOUNTS. 55 
 
 period, in which notice is taken of such trade, from which, by the 
 way, came that peculiar measure, the last or double ton, traceable 
 as a local measure in the Eastern counties to the early part of the 
 eighteenth century at least. The administration was alive to the 
 expediency of prohibiting the export of corn to foreign countries 
 when the home supplies were short. Thus in 1438-9, the only 
 famine of the fifteenth century, when' Parliament petitioned for a 
 relaxation of the restraints on inland water carriage, the petition 
 was rejected, on the plea that the Government were convinced 
 that the concession would be interpreted as a license of ex- 
 portation. 
 
 You are perhaps acquainted with Gregory King's law of prices, 
 one of the most important generalizations in statistics, and applic- 
 able to all values whatever. King applies it to the harvest only, 
 and states that a defect in produce raises prices in a different ratio 
 from that which characterizes the dearth. Thus, a defect of 
 
 1 tenth raises the prices above the common rate 3 tenths 
 
 2 tenths . 8 tenths 
 
 3 tenths ,, ,, ,, 1-6 tenths 
 
 4 tenths 2-8 tenths 
 
 5 tenths ,, 4-5 tenths* 
 
 This rule operates in depressing as well as in exalting prices, and is 
 not thought of in times of high and low prices as it should be. It 
 applies to all articles in demand, but the depression is more marked 
 in the case of over-supply in articles of voluntary use, and the 
 exaltation more marked in the case of under-supply in articles of 
 necessary use. Hence the particular phenomenon which King 
 wished to comment on, the effects of scarcity, are more visible in 
 the principal grain than in any other. Nor must it be inferred 
 that King has gathered his ratio of increase from an actual survey 
 of fo,cts. He merely means to imply that the rise will be in some- 
 thing like this proportion. I cannot, indeed, linger on this subject, 
 for I have made it the subject of a special lecture to be given here- 
 after, but I may mention here that a small margin of excess and 
 defect will produce results which are entirely disproportionate to the 
 amount of excess or defect. Of course, too, when the population 
 * Davenant, ii. 224.
 
 66 THE CULTIVATION OF LAND. 
 
 is relatively dense, in comparison with the success of agriculture, 
 scarcity may be of frequent recurrence. We shall find that it was 
 BO in the seventeenth century, and between 1795 and 1819. In both 
 these periods the population increased rapidly, by virtue of well- 
 ascertained causes, and in both there were severe and continued 
 famines. 
 
 A register of prices, and especially of prices dated through the 
 year, the highest prices being generally those of May, when the 
 harvest of the previous autumn was getting scanty, and the prospects 
 of the coming harvest were uncertain, is nearly equal in exactness to 
 a meteorological register, and is even more suggestive. Taking the 
 agricultural year from Michaelmas to Michaelmas, the only way in 
 which agricultural produce can be annually isolated and satisfactorily 
 examined, it will always be found that when there is an anticipation 
 of a defective harvest, the ordinary high prices of May is gradually 
 enhanced, and if the anticipation, is verified, prices go on increasing 
 up to the ensuing May, when the same estimate of probabilities is 
 made, with analogous results, the price rising if they are unfavour- 
 able, falling if they are satisfactory'. 
 
 The severest famine ever experienced in England was that of the 
 two consecutive years of 1315 and 1316. In both these years the 
 famine was occasioned by excessive wet and defective solar heat, the 
 corn hardly ripening in the ear. These causes have always produced 
 dearth in England. Our ancestors always cut their corn high on the 
 stalk, and generally used the sickle for all kinds of grain. They had 
 good reason for the practice. By cutting high they could reap and 
 carry their produce in nearly all weathers, and they could dry it with 
 comparative ease. They avoided cutting weeds with their wheat, 
 and under a system of fallows without root crops their land inevit- 
 ably became foul, and they could, and did, cut the stubble at their 
 leisure, and use the straw, unbruised by threshing, for fodder and 
 thatching. 
 
 In 1315, the price at harvest time is high, but not excessive. It 
 rapidly rises to four or five times its ordinary value by May, and 
 hardly drops in July and August. In the next year it is scarcely 
 ever below three times its ordinary price, and rises, not indeed to the 
 extreme famine rates of the previous year, but to even four times its 
 usual price. Nor does the hope of the ensuing harvest come till late.
 
 ENGLISH FAMINES. 57 
 
 The weather must have changed for the better in the month of July 
 or August, and happier times followed. The greatest scarcity of 
 modern times, and the highest recorded price of wheat, is in 
 December, 1800, when it was rather more than double that which 
 had at that time become customary. In 1315, it reached more than 
 the highest estimate of increase, which is suggested in Gregory 
 King's table given above. Scarcities, or famines, almost as serious 
 occurred, for only single years, in 1321, 1351, and 1369. There 
 was only one year of great scarcity during the fifteenth century, that 
 of 1438, already referred to. In the sixteenth the dear years were 
 1527, 1550 and 1551, 1554, 1555 and 1556, when the base money 
 was in circulation, and worst of all in 1595 and 1596, when the 
 privation was nearly as severe as it was 280 years before. Now we 
 may be quite certain that the same cause was at work in all these 
 cases, excessive rain and deficient solar heat in summer. There is 
 a curious confirmation of these inferences in the price of salt. A bad 
 harvest is always a dear year for salt, either immediately or subse- 
 quently. The reason is that all the salt consumed in England, and 
 it was a real necessary of life, as for half the year people lived on 
 salted provisions, was obtained by solar evaporation only. The price 
 of salt is therefore an indirect register of the amount of solar heat in 
 any given year. 
 
 The interpretation of the facts in the seventeenth century is far 
 from easy. In no period of previously recorded history was scarcity 
 so recurrent and so prolonged. But though public affairs were of 
 such absorbing interest, very little note is taken in contemporary 
 authors of the terrible straits to which the working classes were 
 reduced. I should weary you if I gave you a list of all the famine 
 years. But sometimes they continued for a lengthened period. The 
 five years, 1646-1651 inclusive, were of unbroken dearth; the 
 middle year, 1648, being, as is usually the case, the worst. A simi- 
 larly calamitous period occurs in the four years 1658-1C61, the last 
 year being in this case the worst, not only of this epoch, but of the 
 whole century. Lastly come the seven years of scarcity, as they 
 were called at the end of the century, 1692-98 inclusive. 
 
 Now during the seventeenth century, the population was certainly 
 doubled. The cause of this was partly immigration from France, 
 Flanders, and Germany, of refugees from the wars of religion and
 
 58 THE CULTIVATION OF LAND. 
 
 persecution, partly the great development of the woollen industry, 
 mostly the settlement of England north of the Trent, which began 
 after the union of the two Crowns, and the peace of the Border. By 
 the end of the century, as we know from the hearth tax, the north 
 of England was nearly as populous as the south, though it was- 
 far poorer and more backward. Now there can be no doubt that 
 owing to this last cause the area of cultivation was extended, though 
 it is certain that the agriculture was rude. The invariable comment 
 of writers on agriculture in the seventeenth century proves that the 
 farmer was grievously rackrented (low, as I shall show in a later 
 lecture, as the rents were, according to our modern experience), and 
 was therefore at once impoverished and deterred from making im- 
 provements. It is true that the labouring peasant suffered even 
 more severely than the farmer, for the landowners knew well enough 
 that if they could compel cheap labour, they could raise their rents, 
 and they acted steadily on that conviction in their assessments. As 
 I have already stated, the justices during the commonwealth raised 
 the wages in their assessments quite 50 per cent., and though their 
 successors after the Eestoration tried to revert to the old rates, 
 employers paid the new. It is satisfactory to discover that during 
 the great part of the period between the Eestoration and the second 
 Eevolution, the price of wheat was low. 
 
 In the first half of the eighteenth century, except for two years, 
 the prices of all the necessaries of life were even lower than they had 
 been in the seventeenth, but this was due to the praiseworthy and 
 patriotic energies of the great landowners, who betook themselves 
 generally to the new agriculture, and encouraged the tenants by 
 their own example to follow. A vast amount of land was enclosed, 
 partly what had been open fields, partly what had been common, 
 and there is no doubt that the bounty granted on exported corn had 
 its effect. In point of fact the bounty stimulated the least objection- 
 able kind of gaming, gambling for the bounty, by endeavouring to 
 increase the produce. But after the foolish and obstinate war with 
 the American plantations, and still more during the prolonged Con- 
 tinental war, comes an era of wild finance, of enormous debt, of 
 oppressive indirect taxation, never profitable unless it attacks the 
 consumption of the poor, and the abandonment of landlord culti- 
 vation. But I shall have occasion to deal with this subject
 
 THE CHAEACTER OF ENGLISH AGRICULTURE. 59 
 
 more exactly when hereafter I handle the history of agricultural 
 rents. 
 
 The system under which land was cultivated was one of very re- 
 mote antiquity, was possibly prehistoric. It has not become entirely 
 extinct till very recent times, for I have myself seen it still in opera- 
 tion in Warwickshire and elsewhere. No doubt closes and meadows, 
 usually the private estate or demesne of the lord, were in existence 
 in very early times. But the land of the parish or manor, these 
 closes or meadows excepted, was generally distributed as follows. 
 There were a number of large common fields, in which each owner 
 or occupier had a certain number of furrows more or less frequently 
 repeated. Between each set of furrows ran an uncultivated balk, a 
 foot or so in breadth, which formed a boundary or landmark, and for 
 some time of the year a pasture. The distribution and arrangement 
 of such a common field is described with sufficient accuracy by Fitz- 
 herbert in his treatise on surveying, published in the first quarter of 
 the sixteenth century. 
 
 But you will understand the system better, after you have inspected 
 the volume which I have by me, and will send round for your in- 
 spection. This is an exact copy of a survey (the original is still in 
 existence) made of the parish of Gamlingay in Cambridgeshire in!603, 
 by one Thomas Langdon, and for which Merton College, to whom the 
 original and copy belong, paid him 12, stating, with justice, that he 
 had most beautifully drawn it. It certainly is not only the most 
 ancient survey which I have seen, but by far the most exact and 
 elegant. Gamlingay is a large parish on the western boundary of 
 Cambridgeshire. It contains 8,755 acres, and has been partly in the 
 possession of Merton College by gift of the founder from the begin- 
 ning of that college. It is a curious coincidence, that the earliest 
 endowed college in Oxford, and the latest endowed college in 
 Cambridge, Merton here, and Downing there, are interested in 
 Gamlingay. 
 
 The college had two manors in the parish, one which goes by the 
 name of Mertonage, the other by that of Avenells. The enclosures, 
 meadows, and woods belonging to the college by its possession of 
 these two manors amount to a little over 816 acres. There was a 
 third manor in the parish, that of Woodberry, which had belonged 
 to the Abbot of Saltreye. The college is the principal lord, but
 
 60 THE CULTIVATION OF LAND. 
 
 there are other considerable proprietors as the Queen ; Captain 
 Merton, Clare Hall, in Cambridge ; the Vicar of Waresley, in 
 Hunts ; the parish of Waresley ; and a Mr. St. George. With the 
 family of this last-named proprietor the college had ancient quarrels, 
 for they went to law with a William St. George, of Gamlingay, in 
 1344 and 1345, and spent no inconsiderable sum of money in these 
 years with the view or plea of expediting justice, and according to 
 modern notions in a very suspicious manner. This survey was 
 drawn up in order that it might be produced in court, and a note in 
 the original is to the effect that it was put in as evidence in a suit 
 for realty. 
 
 You will notice that each one of these fields is divided into very 
 numerous strips, and that the dimensions of each with the name of 
 the owner or occupier are duly given. You will see that there are 
 some thousands of these strips. Langdon's survey gives thirty-four 
 houses in the village, and the population in 1601, would, therefore, 
 be from a hundred and fifty to a hundred and seventy persons. At 
 present the inhabitants are over two thousand, and the increase is 
 in accordance with what I have suggested was the population of 
 England in the sixteenth century. 
 
 The cultivation of the common fields was necessarily that of two 
 grain crops and a fallow. Even if the art of cultivating roots and 
 artificial grasses, already practised in Holland had been known, it 
 could not have been practised on the open fields, for after the har- 
 vest was gathered, all the sheep and cattle of the parish were turned 
 into the fields to feed on the balks and what they could pick up 
 among the stubbles. In this case the owner of several or private 
 pastures had a great advantage, for he could send his cattle into the 
 common field with those of the other occupiers, and rescue the 
 aftermath at least, or rowens as it is sometimes called, of his own 
 meadows, till the common field was eaten bare. No doubt a great 
 deal of injustice was done by the enclosures of the eighteenth 
 century, but the new agriculture would have been impossible without 
 them, and the new system was the making of English agriculture, 
 and, when Sir J. Sinclair carried it further north, of the Scottish. 
 
 The owners or occupiers of these common fields had other advan- 
 tages in the commons of pasture and the lord's woods. These 
 commons of pasture seem to have been, in early times, almost uni-
 
 COMMON FIELDS. 61 
 
 versal. They were, it would appear, that part of the settlement 
 which was least convenient for the plough, least accessible, and least 
 defensible. A modern English village, with its street and its church, 
 and its very few outlying houses, is a distinct survival of the 
 earliest occupation. In my native place in the Meonwaras I have no 
 manner of doubt that many of the village houses have been sites for 
 habitation during a dozen centuries, and that homesteads in the 
 parish but away from the street are comparatively modern occupan- 
 cies. Now in this common of pasture, there was generally no 
 stint. When the stint of pasture was the rule, it was either because 
 the common was of limited extent, or was merely the same thing 
 as saying that the tenant of a small holding could not have, and 
 therefore should not have, an excess of beasts or sheep on the 
 common pasture. The case of the lord's woods, and the pannage 
 of pigs was a different affair. This was only a qualified right on the 
 part of the tenants. They had no right to send their hogs under 
 the common swineherd, except under payment, but I am sure 
 that every tenant who paid pannage, generally a half-penny an 
 animal, had the right to send them into the wood, to browse on the 
 acorns or beech mast. This at least I have gathered from the manor 
 accounts, where the fines on defaulters are recorded, but no charge 
 of trespass made. 
 
 I have already referred to the enormous, the prohibitive price of 
 iron. The plough was rude, though if one can trust the earliest 
 writers on husbandry, an acre a day was a moderate amount for a 
 first ploughing. But the ground, I suspect, was only scratched. Deep 
 ploughing was a thing of the remote future. The peasant farmer, 
 even in the sixteenth century, could not afford an iron harrow. The 
 teeth of this implement when he used it, especially when the ground 
 was stony, were oaken pins carefully dried and hardened at the fire. 
 The cart was generally supplied with solid wheels, bored out of a 
 tree trunk, for iron was too dear for tires, even after the cost had 
 been considerably reduced, for I have found such wheels well into 
 the sixteenth century, when iron was half the price at which it was 
 purchased in the fourteenth. 
 
 The cattle on these farms were small and stunted by the priva- 
 tions of the winter. There was no attempt to improve breeds. Cows 
 are a good deal cheaper than oxen, bulls a good deal cheaper than
 
 432 THE CULTIVATION OF LAND. 
 
 cows. Nor does there seem to have been any attempt of a general 
 iincl to improve the breeds of sheep. I have found some dear rams, 
 but they are quite exceptional. There was to be sure temptation 
 enough. Certain wools from the neighbourhood of Leominster were 
 eight times dearer than wool from Suffolk. Even as late as the play 
 of Friar Bacon and Friar Bungay, Leominster wool is quoted as 
 superlative. In 1734 Lord Lovell only gets 3d. a pound, or 7s. a tod, 
 for Norfolk wool. It is true that at this time, the old monopoly of 
 English wool had passed away. But in the fourteenth century wool 
 was often three times the nominal price of Lord Lovell's sales. The 
 fact is there was no winter feed, and unless the farmer can keep his 
 live stock continually in condition, it is idle to talk of breeds, or to 
 make any attempt to perpetuate or select them. I do not believe 
 that, on the average, any material increase was made in the market- 
 able ox, between the fourteenth and the eighteenth centuries, and 
 but little in the size of the marketable sheep. 
 
 In the agricultural economy of the Middle Ages, the regular clergy 
 were of no little importance and value. The Benedictines, apart 
 from their learning, were the great agents in making such improve- 
 ments in husbandry as the age could effect, the Cistercians in sheep- 
 breeding and wool- dealing. It is quite possible that in early times, 
 the fatal gift of wealth had demoralized the earlier orders, as ap- 
 parently the habit of simulated poverty did the Franciscans and 
 Dominicans. But the social civilization of England would have 
 been greatly retarded had it not been for the efforts and the labours 
 of the regular clergy. Thousands of acres were reclaimed by the 
 industrious monks, and estates of great value, acquired in later times 
 by the favourites and accomplices of Henry VIII. were turned from 
 desert into garden by the ancient orders. They continued up to 
 the Dissolution to be indulgent landlords, partly, perhaps, because 
 they had become unpopular, and retained the stock and land lease, 
 out of which the tenant had become enriched and independent, after 
 the landowner was constrained or induced to abandon it. They 
 were the principal agents in keeping the roads in repair, for as their 
 estates were scattered, and their rents were taken in kind, or valued 
 in money and taken in kind, it was an object with them to make 
 access to the monastery easy and safe. It is certain that after the 
 Dissolution roads got out of repair, though I do not think that even
 
 THE EEGULAE CLERGY AND AGEICULTUEE. 63 
 
 the king's highway was in so scandalous a condition in the reign of 
 Elizabeth, as it was two centuries afterwards in the reign of George 
 III. 
 
 You will of course understand that in the age which I have 
 attempted to describe, and in describing which I have accumulated 
 and condensed a vast mass of unquestionable facts, the rate of pro- 
 duction was small, the conditions of health unsatisfactory, and the 
 duration of life short. But, on the whole, there were none of those 
 extremes of poverty and wealth which have excited the astonish- 
 ment of philanthropists, and are now exciting the indignation of 
 workmen. The age, it is true, had its discontents, and these dis- 
 contents were expressed forcibly and in a startling manner. But of 
 poverty which perishes unheeded, of a willingness to do honest work 
 .and a lack of opportunity, there was little or none. The essence of 
 life in England during the days of the Plantagenets and Tudors was 
 that every one knew his neighbour, and that every one was his 
 brother's keeper. My studies lead me to conclude, that though there 
 was hardship in this life, the hardship was a common lot, and that 
 there was hope, more hope than superficial historians have conceived 
 possible, and perhaps more variety than there is in the peasant's 
 lot in our time. 
 
 Perhaps it may be well to say a little on the effect which the 
 English system of agriculture induced 011 the social system of the 
 country, and especially on the landowners. I have already stated, 
 that where everybody was an husbandman, everybody was interested 
 in keeping the peace, and making everybody else keep it. It is true 
 that the law of primogeniture had been long a settled principle in 
 the jurisprudence of the common law. But in the fourteenth cen- 
 tury the stock on a well-tilled farm, and every landowner tilled his 
 land, and on the whole tilled it according to the best knowledge of 
 the time, the stock of a farm was worth at least three times that of 
 the fee simple, as, unless some wisdom supervenes, it seems likely 
 -soon to be in our days, for land was constantly sold at six, eight, 
 and twelve years' purchase, with sixpence an acre rent. But though 
 the land went to the eldest son, the personal estate went to all the 
 children equally, or was made the subject of a will. William the 
 Norman had, for administrative pin-poses, enforced the concentra- 
 .tion of land on the representative of a family against the half-
 
 64 THE CULTIVATION OF LAND. 
 
 conquered and discontented English : for equally politic reasons, he 
 had striven to scatter the estates of the nobles, so as to make him 
 powerful against them, but he had not attempted to induce the law 
 of entail on personal property. He was too shrewd to do so, and 
 his successors shared his intelligence. 
 
 For some centuries, then, the younger son of a great estate was 
 unknown. He shared in the stock, and I have little doubt that the 
 motive of the famous statute which did away with subinfeudatioii 
 was to facilitate the independent acquisitions of the younger son, to- 
 enable him to purchase without dependency on his elder brother. 
 The king had 110 objection, for it multiplied his chances of escheat. 
 The entail, though chronologically earlier, was economically later, 
 for it is clear to me, from the documents which I have examined, 
 that entails were not general, at least on large estates, till the civil 
 wars of the fifteenth century, and not common even then. 
 
 After the great plague, and still more notably after the French 
 war had endured for a generation or two, the younger son becomes 
 a social inconvenience. The landowners, now landlords who let 
 their land at a rent, were the sole inheritors. The younger sons 
 sought their fortunes in the church and in the army. The cadets 
 of noble families appear among the bishops, and men, sometimes 
 not of noble birth, rose to knighthood and nobility through the 
 army, for not a few of our oldest titles were won by military adven- 
 turers. Some of these warriors became large purchasers, as 
 Fastolfe in the fifteenth century. Some, like Cromwell, Henry 
 VI.'s treasurer, rose to rank by the Administration. But these were 
 lucky people, the select of the fittest, or unfittest, as the case might 
 be. The less fortunate became, as an only resource, military par- 
 tisans, and were the stimulators and victims of the so-called war of 
 succession in the fifteenth century. It was really a faction fight, in 
 which the Yorkist party strove to reform the Government, and the 
 Lancastrian to appropriate the spoils. 
 
 When the great plague, and the consequent deamess of labour 
 made landlord cultivation impossible, the landowners established 
 the stock and land lease. It was probably borrowed from monastic 
 usage. The monasteries were wealthy, and were obliged to be ready 
 to hold themselves at ransom. The inmates were under vows of 
 poverty, the abbot was, if I can judge from his table and his per-
 
 THE STOCK AND LAND LEASE. 65 
 
 sonal expenditure, of which I have seen much, under no such 
 restraint. But he husbanded the goods of the monastery, and 
 among them its savings. Some who had been reckless in their 
 expenditure were degraded or displaced, occasionally bringing ruin 
 on the establishment whose affairs they administered. To abbots 
 who wished to invest the property of the monastery safely and 
 profitably, especially at a crisis like that of 1349, the stock and land 
 lease offered great attractions. 
 
 In the stock and land lease, the owner of the soil, who had pre- 
 viously been its cultivator, let a farm, furnished with seed corn, 
 and stock, live and dead, to a tenant for a term, the condition 
 being that the tenant should, at the end of the term, deliver the 
 stock scheduled to him, in good condition, or pay the money at 
 which they were valued when the lease commenced. The valua- 
 tion is generally low, and when I first came across this kind of lease 
 I thought that the landowner let his tenant only the inferior articles 
 on his own farm. But on inspecting the items, I came to the con- 
 clusion that the low valuation was employed partly to attract 
 tenants, partly to cover a very serious risk, which I subsequently found 
 that landlords regularly incurred, that of compensating their tenants 
 for losses by disease among their cattle and sheep, certainly the 
 latter, when the loss was above a particular percentage, all below 
 falling on the tenant. The value of the live stock is, of course, the 
 principal item in the valuation, which is always written out annually 
 on the bailiff's roll. I have found, too, that under this system, the 
 landlord, if no exceptional loss occurred, did nearly as well as on the 
 old system of landlord cultivation. 
 
 The stock and land lease generally prevailed for about seventy 
 years after the owner had put it into operation on his own estate. 
 Thus Merton College let most of its land on this principle, shortly 
 after the Great Plague, and continued it to about the end of the first 
 quarter in the fifteenth century. New College earned on farming 
 on its own account, at least on some of its estates, up to the 
 end of the first quarter of the fifteenth century, and continued 
 the lease till the end of the century. But the monasteries 
 had it in operation up to the time of the Dissolution, and a 
 considerable part of the assets of these institutions in the time of 
 Edward VI. consisted of stock let to tenants for various terms. 
 
 6
 
 -66 THE CULTIVATION OF LAND. 
 
 Now I am disposed to believe that the landowners would not have 
 abandoned the system, from which they got so good an income, 
 voluntarily, and that this kind of lease was dropped by the tenant, 
 who accumulated, during the prosperity of the fifteenth century, 
 the means for buying stock for themselves, and even land. On the 
 other hand, the monasteries would have offered easier terms as time 
 went on. It is, of course, also possible that the armed factions of 
 the fifteenth century were in want of money, and therefore made 
 advantageous sales of stock to their tenants ; or that their tenants, 
 taking advantage of the purchase clauses in the lease, elected to 
 forfeit the prices, rather than restore the stock. 
 
 The system of landlord cultivation, though it became rare, did 
 not entirely disappear. The monasteries generally had one or two 
 farms in their own hands, near to them, from which they drew sup- 
 plies. In these cases, it was the invariable practice of the bailiff to 
 debit them, and take credit to himself for the sales which he effected 
 with his own employers. Thus Battle Abbey held two estates in 
 their own hands, one at Appledrum, the other at Lullington in 
 Sussex, produce from which was regularly sent to the monastery. 
 The great convent of Sion, too, retained Isleworth in their hands for 
 similar purposes. It is pretty clear that, till they were squeezed 
 out of it by the first Lord Bedford, the abbot and monks of West- 
 minster held their estate of Convent Garden, north of the Strand, 
 and now the London property oi the Eussells, for the same pur- 
 pose. Again, Faetolfe, the well-known military adventurer of the 
 war in France, of the fifteenth century, cultivated an extensive 
 barley estate in Norfolk, and traded largely in malt with the Low 
 Countries. Waynflete, the Bishop of Winchester and founder of 
 Magdalene College, was made Fastolfe's executor, and contrived to 
 divert a portion of the estate which the deviser intended for other 
 charitable purposes to the college which he was founding. I sus- 
 pect that the transaction was very suspicious, for this pious founder 
 was truly described by his contemporaries as nefarius iste episcopus. 
 But for all this, he has had the best of it with posterity. 
 
 The next stage is the lease for terms of years. But the peculiar 
 character of this lease, especially in the fifteenth century, is, I think, 
 a proof that the position of the tenants is improving, and that the 
 accumulation of occupancies in their hands was gradual. Most of
 
 DEVELOPMENT OF LAND TENANCIES. 67 
 
 the tenancies are of numerous parcels, the lease of each parcel 
 being determinable at different years. Sometimes a tenant \vill 
 have a dozen of them, spread over as many years. This kind of 
 tenancy must have made distraint for rent very difficult, when there 
 was nothing but cattle to distrain on. I cannot but think that the 
 other forms of action by which rent was recoverable were expe- 
 dients adopted in order to obviate the difficulty of distraining on 
 land which was held under many grants. 
 
 Tenancies for life were, no doubt, not infrequent. When, about 
 the middle of the fifteenth century, Franks, the Master of the Eolls, 
 devised a thousand pounds to Oriel College, the existing body of 
 fellows, with commendable self-denial, purchased the reversion of an 
 estate in Berkshire, held by a man and his wife, for the term of 
 their natural lives. The man died soon after the purchase ; the 
 widow was disagreeably vivacious. The college made all sorts of 
 offers to her, temporal and spiritual; for the fellows of Oriel, before 
 the Keformation, had a very active and successful trade in religious 
 offices. But the widow was inexorable, and the college had to wait 
 for her demise. If I remember rightly, she lived till near the end 
 of the century, probably outlived all the purchasers. 
 
 The last was the tenancy at will, or at rack-rent. Up to the 
 beginning of the seventeenth century there was little chance of such 
 .a rent, and the casual or irregular gains of the overlord were chiefly 
 derived from practising sharp manor custom on his copyholders and 
 freeholders, as Fitzherbert broadly intimates, a form of oppression 
 which Norden's treatise on surveying, published early in the seven- 
 teenth century, reluctantly allowed to have been charged frequently 
 against his principals. But it is during the seventeenth century 
 that rack-renting and rent-raising became so general as to arouse 
 indignant remonstrance at the hands of nearly every person who 
 writes on seventeenth- century agriculture, the special complaint 
 being that it discourages all progress. But into the particulars of 
 this stage I shall enter when I treat, in a subsequent lecture, of the 
 economical history of rent. 
 
 To this occasion, also, I must defer what I should, had time per- 
 mitted, have commented on in this lecture the remarkable de- 
 velopment of English agriculture during the eighteenth century. 
 .It is almost worthy of separate treatment. But in these outlines I
 
 68 THE CULTIVATION OF LAND. 
 
 am seeking to give those leading features of economical history 
 which have been so conspicuous in our own country. The par- 
 ticulars, though of profound economical significance, rather belong 
 to that history of English agriculture which I have been the first 
 to discuss and expound.
 
 IV. 
 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS. 
 
 Europe after tlie fall of the Western Empire The Church and the 
 monasteries the only Jiope of civilization, especially the Bene- 
 dictines The three parties in the English Church, official, national, 
 andpapal The situation in Wiklif's days His Summa Theologies, 
 and its purpose The poor priests and the peasantry The con- 
 ditions of religious movements The teaching of Pecolc The 
 sects of the Reformation The Independents and the Revolution 
 of 1688 The movement of the Wesleys The ancient prosperity of 
 Norfolk. 
 
 You will of course anticipate that in dealing with the subject before 
 me to-day, " The Social Effect of Eeligious Movements in English 
 History," I do not pretend to discuss the religious tenets which have 
 from time to time been inculcated by those who have been prominent 
 actors in these Stirling events. There may, indeed, be a few particu- 
 lars which I must deal with, in order to elucidate my estimate of the 
 results which have from time to time been brought about in the 
 social and economical history of England, by religious impulses. 
 I am indeed disposed to believe, that however much a later habit of 
 mind has repudiated what was once thought necessary and true, the 
 promulgation and acceptance of such tenets, the defence of them, 
 and even as we may now think the enormous crimes perpetuated in 
 order to enforce them, were acts of good faith, and were honestly 
 believed essential to the safety of society. The historian who com- 
 ments on the violence of Hildebrand, on the cruelties of Dominic, 
 on the arrogance of Innocent, on the migration to Avignon, on the 
 epoch of the Councils, on the causes of the German and the
 
 70 THE SOCIAL EFFECT OF EEL1GIOUS MOVEMENTS. 
 
 Genevan Reformation, on the rise of Loyola, on the religious wars 
 which endured from 1550 to near a century later, on the last great 
 outrage on our modem notions, the expulsion of the Huguenots, 
 and the Penal Code of Ireland, may justly point out that infinite 
 mischief has arisen from the policy which these circumstances 
 indicate, but he errs as mischievously, if he thinks that the designs 
 of those who promoted them were consciously dishonest. 
 
 I have always regretted that in this place the authorized in- 
 structor in ecclesiastical history rarely travels beyond the first four 
 centuries of our era, and as far as I can learn, rarely gives a satis- 
 factory exposition of what occurred in that time. For up at least 
 to the fifteenth century, the development of theological dogma and 
 discipline is a continuous process, every stage of which bears upon 
 the history of the age ; the reaction from which, begun in this 
 country, and earned thence to Eastern Europe, culminated at last 
 in the schools of Luther and Calvin. I cannot see, in short, how 
 men can understand the Reformation, unless they understand what 
 it resisted, what it attempted to reform, what were the compromises 
 to which it was constrained to submit, and why it was so con- 
 strained. The attack and defence of the old creed and practice in- 
 volve the profoundest political, moral, and social effects, and the 
 interpretation of these effects is obscured rather than assisted by 
 limiting one's inquiry to the faith, the discipline, and the practice of 
 the Early Church. 
 
 The administration of the Roman Empire made total havoc of 
 ancient civilization. The ruin would have been earlier but for the 
 Empire, but it was inevitable that the Empire should bring the 
 ruin. In this universal chaos two powers survived the Church and a 
 few municipalities. But the latter were weak, and almost exhausted ; 
 the former had to be concentrated, and to claim large authority, in 
 order that it might continue to exist as a social force. The ceno- 
 bite and industrial life which the Church assumed were necessary 
 towards the revival of civilization. The Teutonic irruption adopted 
 the vices of the later Empire without inheriting its discipline and 
 subordination. It was essentially lawless in the fact that it did 
 not acquiesce in any central and legal authority. It rapidly de- 
 generated even from ancestral custom. The picture of the early 
 Frankish monarchies, given by Gregory of Tours, and less clearly by
 
 EUROPE AFTER THE FALL OF THE WESTERN EMPIRE. 71 
 
 Fredegarius, is sufficient to show how early and how complete the 
 anarchy was. 
 
 There was for many a century only one Power which could make 
 head against this recurrent chaos, for the empire of Charles the 
 Great, carefully organized as it was, had as brief a duration, and 
 became as utterly chaotic as the Frankish monarchy which it super- 
 seded. This was an orderly community, having a universal rule 
 and a guiding centre, which was loyal to the source of its own 
 authority, and yet could be kept wholesome, even if the source 
 became depraved. Such was the great Benedictine order, which 
 preserved the relics of ancient literature and ancient law, restored 
 agriculture, was an asylum against lawlessness, monarchical or 
 aristocratic, and was able to survive the scandalous profligacy which 
 characterized the Papacy in the tenth century, and even to be a 
 great agent in the reformation of it, under Hildebrand. The 
 philosophy of history proves that the monastic orders were the 
 centre and the life of a reviving civilization. Though I confess that 
 I cannot see in the "Monks of the West" all that Montalembert 
 saw, I can discern that we owe to their example that habits of law, 
 the dignity of labour, the promotion of education, and the record of 
 history, were not lost during the six centuries of their early career. 
 Nor do I wonder that, from the point of view of the public interest, 
 apart from the strength which it gave the central power, all 
 ecclesiastical authority favoured the cenobite at the expense of 
 the regular clergy. Had the influence of Odo and Dunstan been 
 enduring, Saxon England would have probably held its own against 
 foreign invaders. 
 
 The policy of William the Norman was to establish an indepen- 
 dent Church, ruled by his nominees. But he was resolute and 
 successful in checking foreign ecclesiastical aggression, however 
 defensible it might be in theory in the hands of a reformer such as 
 Gregory VII. was. William was a very different person from Henry 
 IV. of Germany, and never needed to go an inch on the road to- 
 Canosa. It is singular, but an illustration of what I have been 
 saying, that during the nineteen years in which William's grandson 
 was king, though lawlessness was everywhere, more monasteries 
 were founded than in any other reign. But evil as were the 
 times of Stephen, they developed a set of circumstances which
 
 72 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS. 
 
 were rapidly made manifest during the more vigorous reign of 
 liis successor. 
 
 From the time of Henry II. and onwards to the Eeformation in 
 England, three sections, or, as the ancients would have called them, 
 schools, are always visible in the English Church. The first is the 
 official section, which I may call by a prolepsis the Erastian party, 
 which maintained the authority of the executive, and could always be 
 depended on by the king. These men were generally the principal 
 officials of the exchequer, the ancient description of which, first 
 printed by Madox, purports to be written, at the dictation of one of 
 them. To this party belonged most of the bishops in Becket's 
 time, and the clerical chancellors and treasurers of succeeding 
 centuries. 
 
 The second is what I may call the national section or Anglican. 
 To this belonged such men as Becket, Langtoii, and Grostete. 
 They were especially characteristic of the sixteenth century, in the 
 person of such men as Gardiner, who, if the tenets of the old faith 
 were left unimpaired, were perfectly willing to sanction and assist 
 Henry in freeing himself from the authority of the Papacy. It is 
 a striking fact, and one rarely referred to, even by ecclesiastical 
 historians, that Gardiner and Bonner resisted and protested against 
 the rescissory Act of Mary Tudor's reign, under which all Acts of 
 Parliament denying the authority of the Roman See were abrogated 
 in a lump at the instance of Cardinal Pole. 
 
 The third was the Papal or Ultramontane party. As a rule, 
 this party was chiefly found in the monasteries, and at last ex- 
 clusively. The origin of the regular orders was Papal, or if this 
 were doubtful, the privileges and exemptions which the monasteries 
 enjoyed were of Papal origin and Papal grant. There was nothing 
 which the monks desired more than exemption from episcopal 
 discipline, and there was nothing which the bishops resented and 
 resisted more than these exemptions. There is an amusing illus- 
 tration of conflicting opinion in Matthew Paris. He is, unlike most 
 monks, strongly Anglican in his sentiments, and criticises un- 
 sparingly the king for his impolitic action, and the Pope for playing 
 on Henry's weakness. In so far, therefore, as Grostete resisted the 
 Papal nominations, he is a credit, in the eyes of Paris, to the English 
 Church and the episcopate; in so far as he strove to extend
 
 TEE THREE PAETIES IN THE ENGLISH CHUBCH. 73 
 
 episcopal discipline over the monasteries in his diocese, he was an 
 enemy to the Church, and to be condemned. 
 
 Sometimes, as in the fifteenth century, the Anglican party was 
 almost absorbed in the official, when hardly a bishop was found in 
 liis diocese, but most often were in attendance on the Court. Some- 
 times the secular clergy made common cause with the regular, as 
 when they all concurred in getting from Boniface the Eighth, the 
 famous Bull, Clericis Icdcos, and thereafter were entirely reduced to 
 submission by the king. But I am disposed to believe that the 
 secular clergy would have made little stir, had the movement of the 
 foiirteenth century anticipated, as it was close upon "doing, the 
 Dissolution of the sixteenth. The older orders had become wealthy 
 and negligent, and though the two orders of begging friars were at 
 the heighth of their reputation in the thirteenth century, it is plain 
 that they became unpopular in the fourteenth, not perhaps by the 
 direct possession of wealth, from which the rules of their order ex- 
 cluded them, but by the trusts which were created on their behalf, 
 on the enjoyment of which they entered, as freely and fully as 
 those of the other and older orders did on their endowments. In 
 the fifteenth century the pious and learned Gascoigne has not a 
 good word to say for any of them, but counsels their suppression. 
 
 It was necessary for me to give this sketch of the state of the 
 clergy, regular and secular, in England, up to at least the middle of 
 the fourteenth century, because one cannot, without it, explain the 
 force and persistence of that singular movement which began, as 
 usual, at Oxford in the fourteenth century. I am referring, of 
 course, to the political, polemical, and social career of Wiklif. It is 
 not a little remarkable that all the great religious movements in 
 England, from the earliest to the latest, had their origin in Oxford. 
 &ome of the earliest intimations which we get of the existence of a 
 university or of schools of teaching in this place is the narrative of 
 the discovery made of some heretics at Oxford in Henry the Second's 
 reign, who were expelled and outlawed from Oxford, and perished 
 because no one dared to shelter them. The University of Oxford, 
 when under the influence of Grostete, appears to have welcomed the 
 begging friars, of whom the Bishop of Lincoln had so high an 
 opinion. In the next century the opinions of Wiklif were developed 
 here. In the following century Pecok, the premature advocate of
 
 74 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS. 
 
 Rationalism, was an Oxford man ; and at the end of the century, 
 the revival of letters in England, distinctly associated with Church 
 Reform, but with an unaltered creed, in the hands of Erasmus, Colet r 
 and More. The splendid schemes of Wolsey, intended to give effect 
 to this reform, but rendered abortive by his sudden disgrace, were to- 
 have been carried out at Oxford. After the reformation was accom- 
 plished, the Puritan movement under Sampson, and the literary 
 one under Laurence, were commenced in Elizabeth's reign. Later 
 on it is the home of the Laudian reaction. In the eighteenth 
 century it originated a movement, by the action of the brothers 
 Wesley, which has had well-nigh as wide and lasting an influence 
 as that of Wiklif, and simultaneously developed the deistical tenets 
 Tolaiid and Tindal, which were certainly not as obscure and unim- 
 portant as some have made them. Lastly, it was the origin and 
 centre of the Anglican movement, which, however it has been 
 criticised, has affected the action, if not the ritual, of those churches 
 which have declared the strongest antagonism to it. The cause of 
 this singular phenomenon was probably, for the most part, the extra- 
 ordinary privileges and exemptions which the University enjoyed. 
 It was certainly self-governed, and its authority over its own students 
 was declared to be independent of bishop and pope. Many, too, 
 believed that the course of its studies, under which the most sacred 
 questions were customarily attacked and defended, lent no little aid 
 to the sceptical tone which characterized the writings and conversa- 
 tion of its members. 
 
 In 1305, Philip le Bel, who had quarrelled with Boniface VIII. r 
 contrived, after the short reign of the successor of Boniface, to secure 
 the election of a pope who would be entirely devoted to the French 
 king's interests. This was the Archbishop of Bordeaux, who took 
 the name of Clement V., and migrated to Avignon. His successors r 
 up to the epoch of the great Schism in 1378, were all Frenchmen, 
 and all resident at Avignon. This was not, indeed, part of the 
 French king's possessions, but it was hemmed in by them. Now 
 during the last thirty-five years of this period, Edward III. was a, 
 claimant of the French throne, under a title which many jurists, and 
 French jurists too, thought valid, and the Avignon Pope was very 
 generally deemed to be the English enemy, using his spiritual power 
 for the purpose of aiding and abetting the French usurper. Attacks,
 
 THE SITUATION IN WIKLIF'S DAYS. 75 
 
 therefore, on the authority of the Pope were likely to be tolerated, if 
 not welcomed. 
 
 The regular revenues of the Roman see were impoverished or 
 suspended during the Babylonish captivity, as the residence at 
 Avignon was described, and the pontiffs cast about for some new 
 sources of extraordinary revenue. They brought causes to the Papal 
 courts of law, for I have discovered and published the details of 
 some among them, original and appellate, where the delay was great 
 and the costs excessive. The fees paid to lawyers, all licensed by 
 the Pope for a round sum paid down, were for the times very high. 
 They created places for life, in consideration of present payment, 
 and quartered such people upon their spiritual subjects in order to 
 secure the income promised. One of them invented the doctrine of 
 firstfruits, under which he reserved to himself the first year's 
 revenue of all benefices in Christendom. But the greatest grievance 
 of all was the habit which the Pope got into of putting his nominees 
 into vacant benefices, without regard to the rights of patrons, and 
 even, by what were called letters of provision, nominating persons in 
 expectancy or succession to these benefices, before they were vacant. 
 The vast sums obtained by these means were transmitted to Avignon 
 by bills drawn on Flemish merchants, who traded with the English 
 sheepmasters, and the English public indignantly insisted that the 
 Pope regularly extorted on one plea or another as much money out 
 of England as the king's own revenue came to. It seems, too, that 
 other nations used to laugh at the patience with which England 
 allowed itself to be plundered. And when we add to this the real 
 or reputed leaning of the French Popes to the French king's cause, 
 it is plain that there were all the elements of a pretty quarrel hi 
 existence. I suspect, had the English Companies caught the Pope, 
 they would have treated him as harshly during the war as Nogaret 
 did Boniface VIII. 
 
 Wiklif is supposed to have been born at a Yorkshire village of 
 that name in or about the year 1324. His collateral relations are 
 said to have dwelt there, some generations after the Reformation, 
 and to have remained staunch adherents of the old faith. The day 
 of his death is certainly known, the last day of the year 1884. I 
 suspect his birth was at an earlier date than that ordinarily alleged. 
 He was educated at Oxford, where is not known. He was certainly
 
 76 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS. 
 
 a fellow of Merton, and probably master of Balliol. He was an ex- 
 ceedingly popular person at Oxford, where he received from the 
 University the title of Doctor Evaiigelicus. 
 
 In imitation of Aquinas, perhaps with the purpose of superseding 
 him among his Oxford pupils, Wiklif, before his political career 
 began, wrote his Summa Theologife, under the title of "De Dominio 
 civili." Some of the tenets promulgated in this work were familiarly 
 quoted, notably his famous maxim that Dominion is founded in 
 Grace. I felt convinced many years ago that he meant by this that 
 all human authority was conditioned by the worthiness of the person 
 exercising it, and that proved unworthiness was a valid reason for 
 withdrawing one's allegiance. I can well imagine that as long as 
 this was supposed to refer only to the French Pope at Avignon, who 
 was making incessant claims on England and English benefices, 
 the language might pass unchallenged, and be even acceptable. 
 But when, in course of time, the tenet was applied to authorities 
 nearer home, it excited at first a reasonable alarm, and ultimately 
 undisguised hostility. 
 
 This work of Wiklif s was long supposed to be lost. Most of his 
 writings have perished, for after his memory was condemned at the 
 Council of Constance, some thirty years after his death, and his 
 bones dug out of his grave at Lutterworth and burnt, diligent search 
 was made for his writings, and those which were found were 
 destroyed. Still, as late as 1453, books of Wiklifs were bought at 
 Oxford, and for high prices too, for Oxford University in the fifteenth 
 century was reputed to be full of Lollards. But the original work 
 has latterly been found at Vienna, and has been partly published. 
 Many of his works, it is well known, were taken to Bohemia by 
 some Oxford students, where they were eagerly studied by the sect 
 who were afterwards known as the Hussites. After the battle of the 
 White Mountain in 1620, the Hussite books were captured and 
 carried to Vienna, where they probably owe their preservation to 
 neglect. 
 
 I have read what has been published of this treatise, and I confess 
 that Wiklifs style is not attractive. It is involved, full of iteration, 
 and is disappointing from the frequent hesitation, not to say evasions, 
 of the author in stating the conclusion which he evidently has in his 
 mind. But I could not doubt that even at this early part of his
 
 WIKLIF'S SUMMA THEOLOGIZE. 77 
 
 career, be Lad intended to imply, by his famous adage, the interpre- 
 tation which I set on it. Wiklif's doctrine on property and its 
 rights is obscurely but unmistakably communistic. But the imme- 
 diate application of his doctrine is to the Church and the monastic 
 foundations in particular, then reckoned to have absorbed one-third 
 of the land of England. Now these tenets would not be unpopular 
 in Oxford, where the majority of the members detested the monks, 
 and put every possible academical disability on them. Nor would 
 they be unacceptable to public men, who were impatient of the 
 continual costs of the French war, and were anxious to make Church 
 property contribute far more largely to public purposes than it was 
 wont to do. Wiklif gained the friendship of John of Gaunt, Salis- 
 bury, and Pembroke. 
 
 The opinions of Wiklif, as yet to all appearance only political, 
 gained him public employment. In July, 1374, he was sent in 
 company with several other English ecclesiastics to negotiate with 
 Gregory XI. on the practice of Papal provisions. The meeting was 
 at Bruges, and was apparently successful. Most of the negotiators 
 were provided for with preferment, and Wiklif was presented to the 
 living of Lutterworth, where he died. But hostile as he became to 
 the Pope and finally to the Pope's doctrines, he remained strongly 
 Anglican in his sympathies. In the book which I have referred to, 
 his special admiration is reserved for Becket and Grosette, and he 
 particularly recommends the former for refusing to acquiesce in the 
 constitutions of Clarendon, and particularly the last, which pro- 
 hibited the ordination of villains' sons without the assent of their 
 lords, for Wiklif strongly argued against the naturalness of civil 
 inequality. 
 
 But shortly after his return from Bruges, Wiklif took the im- 
 portant step of making provision for the dissemination of his tenets, 
 which became more anti-papal and sceptical as time went on. The 
 expedient seemed simple enough, and justified by numerous 
 precedents. He founded a new order of poor priests, in imitation, 
 it would seem, of the mendicant friars, who had now become 
 entirely unpopular with the reforming party. These priests were 
 to preach Wiklif s social and theological doctrines, to spend their 
 lives among the poor, and especially the upland folk, as the 
 peasants were called, to be clad in russet, i.e., coarse undyed brown
 
 78 THE SOCIAL EFFECT OF EELIGIOUS MOVEMENTS. 
 
 wool, and to be constantly moving from place to place. Their 
 religious character and migratory habits disarmed suspicion, and no 
 one guessed, perhaps Wiklif least of all himself, what dangerous 
 emissaries they soon became. They seized with avidity on that 
 tenet which I have referred to, the unnaturalness of civil 
 inequality, and disseminated it everywhere. They were under no 
 central authority, were responsible to no chief, abbot, or general, 
 but were simply held to teach evangelical doctrine, which, if the 
 superiors of the peasants had heard them, would have filled such 
 people with horror. It appears that they acted as treasurers to the 
 common fund which the workmen collected, and to have had pass- 
 words and a jargon of their own. By their agency the action 
 of the peasants was concerted from the north to the south of 
 England. 
 
 Now let us briefly glance at the condition of England during the 
 early years of Kichard II. The war with France was languishing ; 
 the king was a child, but married to Anne of Bohemia, who was 
 reputed for many a year afterwards to be a firm favourer of 
 Wiklif s doctrines. People were tired of the war, not im- 
 poverished by it. The labourers were generally prosperous. The 
 higher wages which they had struggled for, and at last obtained, 
 were sufficient not only for them to live in such plenty as would 
 leave them enough to subscribe to their common fund, but even to 
 save from. There was a considerable growth of manufactures in 
 ( the eastern counties, owing to the immigration of the Flemings, 
 and these woollen manufactures were spreading over the east, south, 
 and west of England. These people eagerly embraced the doctrine 
 of the poor priests, who taught them the tenets of religious 
 equality and natural freedom, and pressed into their service the 
 lessons of the Old Testament, in which they alleged that the true 
 polity of a religious nation was described with the fidelity and truth 
 of inspiration. Nothing could be more invigorating than the Old 
 Testament story, where kings were made to bow before the inspired 
 prophet and teacher, who when kings were remiss was zealous even 
 to slaying. Wiklif had, among his other labours, translated the 
 Bible from the Vulgate version into English, and his book became 
 the teaching of thousands, and a treasure to those who could 
 acquire it.
 
 THE POOR PRIESTS AND THE PEASANTRY. 79 
 
 "While the peasantry were being stimulated by this new doctrine, 
 and fortified in their judgments by the examples of the Old 
 Testament, especially those culled from the heroic age, when every 
 one did that which was right in his own eyes, the lords strove to 
 make their burdens heavier, to revive the long-commuted right of 
 predial servitude. Here, we may be sure, the peasants were told of 
 the young Kehoboam, surrounded by foolish counsellors as that 
 foolish king was, and despising the wiser counsellors of his father, 
 the Sahsburys and the Pembrokes. To your tents, Israel! Then 
 came the rising, and the slaying of the priest who was over the 
 tribute, the victories of the Bridge, the interview at Mile End, and 
 the tragedy at Smithfield. 
 
 I need not tell you the history of the insurrection of 1381, its 
 collapse, and the practical success of the peasantry in the struggle. 
 The insurrection seemed to be suppressed, but its ends were 
 obtained. The leaders of the people were attainted and executed. 
 Two hundred and eighty-five are mentioned by name in the Act of 
 Parliament, four of them being beneficed clergymen in Suffolk ; 
 but the final stroke was given to the system of serfage. The nobles 
 were frightened, and deserted the cause of the peasants ; the poor 
 priests were proscribed. But they were welcomed and hidden by 
 the Norfolk weavers. One of them, William White, who was said 
 to have been sent forth by Wiklif himself, seemed to have a 
 charmed life. Incessantly hunted, he continued to elude his 
 pursuers. At last, in his old age, in 1427, he was caught, and 
 burnt with two others, his companions, in the Lollards' pit, outside 
 the Bishop's Gate at Norwich, and on the other side of the 
 Wansum. 
 
 In European history, discontent with existing religious institu- 
 tions, and the acceptance of heresy on speculative topics, have 
 always been characteristic of manufacturing regions. It was the 
 case in Toulouse in Southern France, in Flanders, in Eastern 
 England. The French Huguenots were the manufacturers and 
 merchants of that country in the seventeenth century, and when 
 they were expelled, earned with them their skill and their 
 capital. Only Italy is an exception, and Italy profited so greatly 
 by the Papacy that it was not disposed to quarrel with the institu- 
 tion, though it had no love for the representative of it. The
 
 80 THE SOCIAL EFFECT OF BELIGIOUS MOVEMENTS. 
 
 Lollard was no doubt like the Puritan of two centuries later, sour, 
 reserved, opinioiiative, and stiff. But he saved money, all the more 
 because he did not care to spend on priest or monk, friar or 
 pardoner. He sometimes played savage tricks 011 objects of 
 popular worship. He cut down crosses, burnt images, and gave 
 scurrilous names to sainted and holy persons. He might have 
 taken part in the murder of Bishop de Moleyns at Portsmouth in 
 1450, and of Bishop Aiscough in the same year at Edyndon. 
 Lollardy in Eastern England was apparently suppressed, but by m> 
 means extirpated. The Lollards of the fifteenth eagerly embraced 
 the Eeformation of the sixteenth century, and \vere the most 
 frequent victims of the reaction. They aided the Yorkist party 
 from sheer hatred to the persecuting Lancastrians, and when the 
 Yorkist was victorious they had for a time peace in their dwellings^ 
 As time went on, they swelled the ranks of Cromwell's Ironsides. 
 The latest historian of Norfolk country life dwells on the distrust 
 which the East Anglian peasant has for parochial clergymen. 
 
 In the researches which I have made into the economical con- 
 dition of England for the last six centuries, and in the numerous 
 facts which I have accumulated, I have constantly noticed that 
 religious movements have had social effects under two definite con- 
 ditions. The evidence on the subject is so cumulative, the facts 
 are so clear, and the inference so obvious, that what I have 
 to say on the subject appears to me to be a measure of the 
 success with which a religious revival or propaganda may be 
 anticipated. 
 
 In the first place, the effort of the missionary must needs be 
 directed to the mateiial as well as the moral amelioration of the 
 persons or classes which are to be the subject of the mission. If 
 the teacher is suspected of being mainly the agent of the civil, 
 power, of intending to assist the present status, of supporting the 
 purpose of the magistrate, the success of an institution, or the 
 policy of a form of government, he will be distrusted and will fail. 
 A Court preacher may encourage partisans, may stimulate a 
 persecuting spirit, may rouse that which is already in sympathy 
 with him, but will not gain new followers. But in all historical 
 religions, however much they may have been subsequently 
 corrupted by priestcraft and statecraft, the preacher has held.
 
 THE CONDITIONS OF RELIGIOUS MOVEMENTS. 81 
 
 out hopes to his hearers that he will better them. This is the 
 secret of the success which attended the teachings of Zoroaster 
 and Buddha, of early Christianity and early Islam. They take 
 advantage of existing discontent, and preach freedom, the loosening 
 of chains, the opening of prisons, and the natural equality of man, 
 the manifest duty of the secular ruler. They always allege, though 
 in varied phrase, that dominion is founded on grace. They may 
 counsel indifference or even obedience to the secular ruler, but they 
 always propose compensation for this concession. The constant 
 reproach against the Anglican Church, I do not say justly, is that 
 it is the creature of compromise, constituted and maintained by the 
 secular power and in the interests of the secular power only. This 
 is what Selden meant when he commented cynically on the con- 
 tempt with which the public looked at the downfall of the episcopal 
 clergy in the seventeenth century. " It," people said, "is a mere 
 instrument created by ecclesiastics, courtiers, and king, and i& 
 intended for secular uses." What English clergyman has a 
 thousandth part of the influence possessed by the Irish parish 
 priest, and freely conceded to him ? The Lollard teachers, the 
 Bible men, the known men, as their password went, strove to enlist 
 the converts to their new creed by profound sympathy and ready 
 aid to them in their old struggles. 
 
 The next fact is, that it is in vain to attempt a social revolution, 
 a material improvement in the condition of those whom the teacher 
 approaches, except in times when prosperity or at least some degree 
 of comfort is general. I am speaking of new agencies, not of 
 those which are long-standing and as long trusted. In the history 
 of the world, I know nothing so unwearied and so sedulous as the 
 labour of the Irish priests has been, from the dark days of the 
 Penal Code to this last time, in which the Irish are beginning to 
 believe that the eastern sea will bring them justice in place of 
 oppression. I am thinking of and referring to a different set of 
 facts. The mission of the poor priests would have had no audience 
 in an age of despair and misery. The forces of society make short 
 and easy work of the outbreaks which despair occasionally instigates. 
 The insurrection of the Jacquerie in France in the fourteenth 
 century, of the peasants in Germany in the sixteenth, were futile 
 struggles, full of ferocity and reprisals, but completely repressed, 
 
 7
 
 82 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS. 
 
 the population sinking back into greater misery than that was which 
 they strove to shake off. The peasants' war in England was an 
 outcome of the time in which wages were high, and prices were 
 low. The peasant of that age was better off than his father or 
 grandfather, and had the prospect of seeing his children better off 
 than himself. They claimed at Mile End to be free, themselves, 
 their heirs, and their lands, and to be no more bond, nor so 
 reputed. There is no good in preaching social equality to the 
 indigent and destitute, to the' man who asks for bread or work. 
 Men combine and organize when they are not obliged to be con- 
 stantly anxious about their daily bread ; when that is lacking or 
 uncertain, their worst language, heaven help them, is that of 
 impotent menace. The message of Wiklif's priests would have 
 seemed a mockery to the destitute. It was because they had some- 
 thing to lose, much to lose, that they resolved on striking a blow 
 to gain more. It was, I believe, from the consciousness of how 
 dangerous fairly prosperous men are, that the English administra- 
 tion, its first burst of wrath over, treated the peasants so gently, 
 and silently granted their demands. 
 
 The peasant of the fourteenth century struck a blow for freedom 
 in the fashion which noblemen and merchants had taught him or 
 his fathers over and over again, against John and Henry and the 
 .second Edward ; as they were soon going to show him against 
 the king round whom they now rallied, and in whose company 
 on that Smithfield day was the young cousin who was to depose, 
 perhaps to murder him. He struck a blow, and he won. His 
 descendants through the long night of the last half of the 
 .sixteenth and the seventeenth centuries were to sink deeper and 
 deeper by the operation of well-devised machinations into the 
 apathy of despair, from which many of them have not even yet 
 risen. The peasant of the nineteenth century has neither the 
 ispirit or the hope which called together the Men of Kent, of the 
 East, of the North, in 1381. The times indeed are changed ; 
 other instruments are employed now than those which were 
 customary when making war on the king was believed to be the 
 right of the aggrieved subject. The struggle is more civil, the 
 victory is more humane. But the man who works will always 
 have to struggle for his own against the man who spends, and
 
 THE TEACHING OF PEC OK. 83 
 
 iieeds all his energy, for his rival is an organization, and he is too 
 apt to be a mob. 
 
 .A strange wave came over the fifteenth century, its wonderful 
 prosperity, and the incredible ferocity and bloodthirstiness of its 
 nobles, in the rationalism of Bishop Pecok. His work, the archa- 
 isms of style and fact excepted, reads to me like the apologetic 
 latitudinarianism of the eighteenth century, or the sweet reasonable- 
 ness of the nineteenth. " Our lot has fallen in pleasant places, 
 why disturb us ? You may be right, but it is quite as likely that 
 you are in the wrong, and you must not be vexatious and dogmatic. 
 To quarrel over religion is foolish, to attack established forms and 
 practices is impertinent. Whenever a man finds an occupation 
 which suits him, he is quite as probably doing God and man service 
 as you think that he is not." I know nothing stranger than the 
 sight of this bishop, born long before his time, preaching the 
 .gospel of indifference just at the beginning of a furious, a bloody, 
 an implacable civil war, in which the nobles of the age were to 
 tear each other to pieces, the ecclesiastics of the age were all to be 
 siding with the victorious party, as one side or the other was 
 uppermost, and all were hurrying down the rapids to the Niagara of 
 Henry VIII. 
 
 The teaching of Pecok was proscribed, as the teaching of Wiklif 
 was, by the pious, unworldly founder of Eton and King's College, 
 anibridge. Henry VI., during his whole life, was incapable of 
 forming a judgment, and the clauses of his statutes in which 
 the heretical bishop and the heretical preacher were impartially 
 condemned were suggested by some adviser of the poor king. But 
 the two systems were in violent contrast. On the one side were the 
 secret teachers of Norwich weavers and small farmers, inculcating 
 vigilance, thrift, secrecy, contempt for ecclesiastical pretension, con- 
 centration on the business of life, but with a high ideal of personal 
 religion. On the other was the well-to-do bishop, apologizing for 
 his easy and well-to-do brethren, intreating his English reading audi- 
 ence to let well alone, and enjoy the benefits which a wise Providence 
 and a beneficent constitution had bestowed on them. Out of the 
 teaching of the Lollard priests was to come in the fulness of time, 
 the stem Puritanism which piled up wealth and wrath ; out of the 
 teaching of the others, which was in reality a reflection from the
 
 84 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS. 
 
 practice and purposes of the Anglican Church in his day, of time-* 
 serving, greed, and suppleness, was to come the horrible chaos of the 
 civil war of succession, the ruin of English prosperity, the enormous 
 waste and crimes of Henry's administration, and the hopeless 
 beggary of the English peasant. 
 
 The English Reformation, such as it was, owed very little to the 
 clerical caitiffs who waited on Henry's caprices. All its strength 
 was due to the secret Lollardy which seemed to be extinguished, 
 and was so active. It was in the eastern counties that Lollardy 
 was the popular religion, that the Reformation of Edward's time 
 flourished, that the martyrs of Mary's time came, that the resistance 
 to Elizabeth's compromise was organized, that the Puritan move- 
 ment, the Independent movement, was consolidated, that the regi- 
 ments of the New Model, the Ironsides were trained, that Marstoii 
 Moor and Naseby, Duiibar and Worcester were won. ' ' 
 
 The Puritan movement was essentially and originally one of the 
 middle classes, of the traders in the towns, of the farmers in the 
 country. The confusion and loss which followed on the debasement 
 of the currency by Henry, and the restoration under Elizabeth, 
 when the money was to be taken by tale instead of weight, and 
 prices consequently rose, affected principally the landowners who 
 lived by rent, and the labourers who lived by wages. The former were 
 stinted, because the social and economical situation was as yet a bar 
 to competitive rents, and the latter were finally impoverished by the 
 quarter sessions assessments. But the inconvenience was lightest to 
 the small farmer, who cultivated his field or the portion of the 
 common field which he held at a low fixed rent, whether his estate 
 was one of inheritance or on a renewable term, and who lived, in the 
 main, on the produce of his own field and his own hands. To such 
 persons, money prices are of less significance than they are to any 
 other class, for but little of their produce is really exchanged for 
 money. And if, as is highly probable, the weaving of coarse 
 woollens and linens was a bye-industry in the small farmer's house 
 (it certainly was in more considerable mansions, such as those of 
 Shuttleworth, in Gawthorp Hall, and Lord Pembroke's at Worksop), 
 the profit on the weaving would make up for the exalted price which 
 was required for implements and materials, just as in Ulster, when 
 linen weaving was a universal domestic industry, the peasant
 
 THE SECTS OF THE REFORMATION. 85 
 
 farmer, as long as lie could pay his rent out of liis weaving, was 
 generally indifferent to its amount. But I am sure that the labourer 
 and artisan had 110 interest, as they had no part in the marvellous 
 drama of the seventeenth century, when the war between the 
 prerogative and the people began with Cecil's book of rates, and 
 ended with the second Eevolution of 1688. 
 
 The stir of the first Eevolution in 1642 brought into existence, 
 perhaps in many cases only brought into prominence, a number of 
 new sects, the most important of which were the Quakers and the 
 Independents. The former, in the end, generally settled in the 
 country and betook themselves to agriculture, the latter aggregated 
 in the towns. The Society of Friends, quiet, self-restrained, pains- 
 taking, and parsimonious, who cut away from then: lives all super- 
 fluous and some innocent enjoyments, became the most enterprising 
 of farmers, and had not a little to do with the success of the new 
 agriculture in the eighteenth century, when their harmless and 
 unobtrusive lives, perhaps the success of their industry, caused them 
 to be generally respected. Some of the best agricultural reports in 
 Young's collections are the work of Quaker farmers. But in the 
 end, resistance to the payment of tithes, which seems, at first, to 
 have been a pious opinion, subsequently exalted into a religious 
 dogma, was found incompatible with a pursuit for which the Friends 
 were peculiarly fitted. It appears that the abandonment of agri- 
 culture as a calling by the Quakers, took place generally in the 
 early part of the present century. 
 
 The Independent movement had a far more important economical 
 history. The Independents, as the reader of English history knows, 
 were the Kepublican party of the seventeenth century. The 
 Presbyterians were moderately royalist, the Cavaliers vehemently 
 royalist, the clergy were eager to avenge their losses in the civil 
 war, and the labourers apathetic and indifferent. The Presby- 
 terians were tolerated in consideration of the services they did at 
 the Kestoration, were even endowed to a small extent, or allowed 
 to be endowed. They are now represented by the small and scattered 
 Unitarian congregations in out-of-the-way villages, and by a more 
 numerous and compact sect in the North of England. Independency 
 became the religion of the large towns, especially of London. The 
 sect, of course, was the most hateful to the restored monarchy and
 
 80 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS. 
 
 the restored Church. Had it been possible, they would have been 
 visited with the utmost severity of the Clarendon persecuting Acts. 
 But these sectaries rapidly grew rich, and out of the trade whicli 
 flourished exceedingly in the last quarter of the seventeenth century,, 
 they became the moneyed interest of London. No doubt Charles 
 would have gladly pillaged them, as he pillaged his own adherents 
 in 1672, when he shut up the exchequer. But the boundless extrava- 
 gance of his Court always kept him poor, and he had no mind, as he 
 said, to go on his travels again, as I am pretty certain he would, had 
 he lived much longer, as he assuredly would if he had attempted his- 
 father's pranks of illegal taxation. The Independent sect of the 
 city of London gave stability, because it gave money, to the second 
 ^Revolution. It gave its money on loan, in a business-like way, and 
 it took security, as is the custom of merchants. The Presbyterians 
 of the first Revolution gave their money freely to the Parliamentary- 
 cause. Now the creation of the Public debt gave a diffused interest- 
 to the New Settlement. 
 
 The Independents were the principal founders of the Bank of 
 England. Among the first directors were Abney, the patron of 
 Dr. Watts, three of the Iloublons, who had originally been Flemish 
 exiles, and were firm adherents of Calvin's discipline, and a host of 
 other names who can be identified with London Nonconformity. To> 
 do business, State business, with such persons, and to visit them 
 with penalties for their creed and discipline was an absurdity. 
 Toleration was the necessary outcome of the new finance, as it 
 was of the new political system. The landed interest hated them, 
 but their hatred was impotent. Once they tried to ruin the Bank 
 with a scheme of their own, the collapse of which made them more 
 furious and helpless. The sons of Zeruiah, as the High Church 
 clergy confessed, were too strong for them. 
 
 There was still an institution which was almost entirely in the 
 hands of the monied Tories who had, I believe, finally parted com- 
 pany with the Stuarts, but who hated the Whigs and the Dissenters. 
 Under a charter from Elizabeth, the East India Company had 
 grown from small beginnings to what was then a mighty trade. 
 Their stock often sold four or five times its nominal value, when 
 profits were high. But Parliament had affirmed that it alone was 
 empowered to confer monopolies of trade. The old Company saw
 
 THE INDEPENDENTS AND THE REVOLUTION. 87 
 
 the ground cut from under their feet, after they had spent in vain 
 large sums in bribing members of the House of Commons, among 
 them the Speaker, and the members of the House of Lords. In. 
 1692, its stock reached 158 ; in 1696, it fell to 88. 
 
 The "Whigs determined on constructing a new and rival East India- 
 Company, the stock of which was readily and rapidly subscribed by 
 the London Dissenters. It soon shot well ahead of the old society, 
 though, strange to say, the old company bettered itself considerably 
 during the period of rivalry, which only lasted a few years. Perhaps 
 they distributed their dividends honestly instead of using their profits 
 for the sake of political corruption. In the autumn of 1708, just 
 before England had taken decided action in the war of the Spanish 
 succession, the stock of the old company was at 134, of the new 
 at 219. 
 
 The traditions of the Kevolutionary period, and the attitude of the- 
 city men towards Nonconformity and the principles of 1688, re- 
 mained active during the eighteenth century. Wilkes was a Non- 
 conformist, and no great credit to any sect. The city took up his 
 defence, sheltered him from pursuit, baffled the House of Commons 
 in their attempt to protect their debates from publication, forced 
 Bute out of office, and administered bold rebukes to the king him- 
 self, after making very offensive demonstrations against his mother. 
 
 In a minor degree, the principal business in the other large towns 
 was in the hands of the same theological and political party, and 
 not a little of the remarkable material progress which characterized 
 the eighteenth century was due to these agencies. Mr. Gladstone 
 has disputed the accuracy of the picture which Macaulay drew of 
 the beggarly and sordid condition of the clergy in the seventeenth 
 and early part of the eighteenth centuries. I can only say that my 
 researches entirely confirm the historian's description. Their in- 
 fluences lay through the traditions of the Parliamentary war, with 
 the country landowners and those of their tenants who deferred to- 
 them. I do not think that the Squires Westerns honoured the 
 Church in the person of Parson Trulliber, as neither of them were 
 any great credit to the country party and the Church, but they voted 
 together, and I am old enough to remember country clergymen of 
 whom Parson Trulliber was hardly a caricature. The grievances of 
 a standing army, a public debt, and the land tax, were till the great
 
 88 THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS. 
 
 rise in prices, rents, and tithes at the end of the eighteenth century, 
 sufficient to weld together the political interests of Church and 
 land. 
 
 The Eevolution of 1688 would, I believe, have been followed by 
 a reaction, possibly a restoration of the Stuarts, had it not been for 
 monied Whigs of the great towns, and especially of London. The 
 public men of the period were corrupt, were always looking out for 
 questionable official gain, and the first two kings of the house of 
 Hanover were not respected and were not respectable. Now the 
 country party would probably have been as bad as the Whigs if they 
 had had the chance, and the Whigs, who in one shape or the other 
 were in office from the accession of the first till the death of the 
 second George, were not likely to attack the most solid supporters 
 which their party had. So the occasional Conformity and the 
 growth of Schism acts soon went, and though the disability of the 
 Dissenter remained, as long as he did not present a qualification 
 the enforcement of which was a public scandal, means were found 
 by which the clergy, for a solid consideration, gave their testimony 
 that the requisite appearance and participation had been satisfac- 
 torily fulfilled, when the person who promised it had not entered the 
 church. 
 
 The movement which the brothers Wesley began and carried out 
 was chiefly among the labouring classes. It is well known that 
 Wesley intended to merely introduce a reform among reputed mem- 
 bers of ,the Church of England, and that the intolerance of those 
 who were offended at his tacit rebuke of their sloth and indifference 
 drove him reluctantly from his purpose. But I am strongly con- 
 vinced that Wesley, who laboured with so much success and effected 
 so powerful an organization in the eighteenth century, would have 
 wasted his labour in the seventeenth. During the first half of the 
 eighteenth century, and indeed further on, prices were far lower than 
 in the previous century, wages rose slightly, but were only slightly 
 raised, and it is clear that most labourers were small occupiers as 
 well, perhaps under the Act of 1589. There was therefore in the 
 -comparative plenty of the time an opening for a religious movement 
 among the poor, and Wesley was equal to the occasion. It survived 
 the terrible period of the Continental war, when nearly all the taxa- 
 tion of the country, so universal were the excise and customs, fell
 
 THE MOVEMENT OF THE WESLEYS. 89 
 
 on the poor earnings of the working classes, for it is a maxim in 
 finance that there is no tax so productive as that which is collected 
 from universal consumption. At the present time the protective 
 taxes on clothing levied in the United States are easily evaded by 
 the rich, the profits of the manufacturer are extracted from the 
 consumption of those who cannot go abroad to buy. 
 
 I do not doubt that the remarkable progress of the working 
 classes in. the fourteenth, fifteenth, and first half of the sixteenth 
 centuries were intimately connected with the destructive criticism 
 which Wiklif and his followers brought to bear on the established 
 creed and its representatives. All outward show of the opinions 
 which these sectaries entertained was repressed, particularly during 
 the Lancastrian epoch. But they were understood to be still 
 secretly cherished. Pecok, the defender of the existing order of 
 things, examines and attacks the tenets which seemed to have been 
 uprooted. This attack betrays a suspicion that the unseen in opinion 
 is not always unfelt. I do not doubt then that the views of the 
 early reformers were still prevalent among the weavers and farmers 
 of Norfolk. It is possible to extirpate a religion. Calvinism was 
 destroyed in Flanders and Spain, almost entirely in France, to a 
 great extent in Southern Germany. But the process was effected 
 by an elaborate system of espionage, and the relentless punishment 
 of the accused offenders. In the same way Romanism was extir- 
 pated in Scandinavia, and by expedients as harsh and severe. Cruel 
 and violent as our laws on religion have been, they have not been, 
 and, unless the character of the English were entirely altered, could 
 not have been, effective. The High Commission Court was a very 
 poor equivalent of the Spanish Inquisition. 
 
 The opulence of Norfolk during the epoch of Lollardy and the 
 textile manufactures is shown in the assessments it paid. The soil 
 of Norfolk is not particularly fertile, being mostly light. Much of 
 its present acreage is reclaimed from the sea by gradual accretion ; 
 much of its existing surface is covered with water, and was covered 
 to a still greater extent five centuries ago. But when the wool tax 
 was levied in 1341, the taxation of Norfolk to the acre, London for 
 the moment being taken out of Middlesex, was higher than that of 
 any English county, and second to Middlesex with London. Next 
 to it comes Oxford, probably the most fertile of the English counties,
 
 90 THE SOCIAL EFFECT OF EELIGIOUS MOVEMENTS. 
 
 as it lias so much natural pasture, and so little waste. In 1375 
 when another assessment is made, the rate per acre is slightly higher 
 in Oxford than it is in Norfolk, but these two counties are greatly 
 richer than any other. Now there was hardly any part of England 
 which suffered so severely by the plagues of the fourteenth century 
 as Norfolk did. In 1453, and again in 1503, it occupies 'the same 
 position, a little below Oxfordshire, but far above any other county. 
 These are the only assessments which I have found in the pre- 
 Eeformation period. Part of the decline is no doubt due to the 
 extension of the woollen manufacture over other parts of England, 
 for the assessments are of a fixed grant, and are therefore relative. 
 The growing wealth of a county heretofore backward would reduce 
 the contingent of another, which had not indeed declined, but had 
 not increased as the other had in the interval. 
 
 It cannot, I think, be doubted that the continuous position of 
 Norfolk during the space of more than a century and a half, 
 between the first and last of these assessments, was due to the 
 habits which the religious and social tenets of the Lollards infused 
 into the minds of those weavers and farmers. Many of them were of 
 Flemish descent, indeed in catalogues of persons which I have found 
 in the eastern counties, I have been struck with the frequency of 
 distinct Teutonic names. They kept up a close intercourse with 
 Flanders. They could not do much in the way of wool. Their 
 produce was not deemed worthy of a price. But that from Suffolk 
 is the cheapest in the kingdom, and probably the worst. But they 
 exported their barley largely to the Low Countries, and received in 
 return the hop, which they appear to have been the first to use, 
 nearly a century before it became general in England, and recovered 
 the art of making brick, which had been lost in England since the 
 days of the Romans. This progressive skill, in which they out- 
 stripped the rest of the country, was due to special causes, and, in 
 my judgment, it was due to their religion. 
 
 I have nowhere discovered, to my great regret, any assessment 
 between 1503 and 1636, when the charge of ship money was im- 
 posed. Norfolk is now ranked as the twenty-fifth of the counties. 
 It is seventh in 1641 and 1649, eighteenth in 1660, twelfth in 
 1672, nineteenth in 1695. But in the only two assessments which 
 I have seen of towns, in 1641 and 1649, Norwich is the second
 
 THE ANCIENT PROSPERITY OF NORFOLK. 91 
 
 city of the kingdom. No doubt part of this change is due to the 
 migration of its industries, as the revival at the time of the Parlia- 
 mentary war is to the development of a new industry in the county. 
 In the days of Lollardy it prospered greatly, but when, in spirit 
 if not in name, the principles which Wiklif taught were accepted 
 by the Anglican Church, and Wiklif was styled the morning star 
 of the Eeformation, the special prosperity of Norfolk had passed 
 away. But, for a long time, a " weaver " was the familiar synonym 
 for a heretic.
 
 V. 
 DIPLOMACY AND TRADE. 
 
 Copiousness of diplomatic literature Tlie effect of the intercourse of 
 nations Fallacies about money, and its place in commerce Ex- 
 ports and imports How does a nation spend more than it earns 
 Proof of such a state of things Early trade of England, the 
 Hanseatic League Trade with Flanders and elsewhere Routes 
 from the East The discovery of the New World, the Cape Passage, 
 and the conquest of Egypt by the Turks Inherent errors in 
 the Dutch trade The Intercursus Magnus Commercial treaties 
 1. That of Mr. Methuen. 2. That of Mr. Eden. 3. That of Mr. 
 Cobden. 
 
 IT will be obvious to you that I can treat this vast subject only in 
 outline. There is very little printed literature which is more copious 
 than that which deals with diplomacy and trade. The great work 
 of Dmnont proposes to give up to the middle of the eighteenth century, 
 the various treaties, political and commercial, which have been 
 negotiated between the different states of Europe. The numerous 
 volumes of Eymer, historiographer to Charles II., are a selection from 
 the public papers which are preserved in the national archives. But 
 neither of these authors is as copious as Muratori, whose volumes 
 are a repertory of the infinitely various relations which subsisted 
 from time to time between the numerous Italian cities. The col- 
 lection of Muratori is not only interesting to the student of modem 
 history, but is valuable as it enshrines in it many scattered pieces 
 of information about ancient commercial law, the most ancient and 
 continuous of all law, for it is probable that this branch of inter- 
 national custom and comity reaches back to the time when the Rome
 
 EFFECT OF THE INTEECOUESE OF NATIONS. 93 
 
 of the kings and the early republic made treaties with Carthage and 
 the other colonies of Tyre. 
 
 The economical benefits of trade, and of that understanding 
 between nations which leads to the exchange of products, which 
 protects merchants and merchandize, and gives temporarily to the 
 foreigner, under more or less easy conditions, the opportunities of 
 commerce, are obvious and trite. The distribution of products to 
 the greatest possible reciprocal advantage is the first and most 
 enduring stimulant to trade. In all acts of exchange the buyer has 
 the strongest inducement to get what he most needs, and in com- 
 merce both parties buy and both parties sell. Trade is again the 
 most efficient instructor as to the natural benefits of soil, climate, 
 and material, and it teaches this with the greatest rapidity and 
 accuracy. The greatest service which unimpeded trade does to a 
 community which has accepted it, is that it informs the people, who 
 desire to exchange their products, what are the best kinds of material 
 on which to exercise their industry, and develop that utility which 
 is the sole end of economical labour. Hence it supplies the answer 
 to the important problem Has the industry in which a country is 
 engaged been determined on in the most productive direction, does 
 it produce the greatest possible results with the least possible ex- 
 penditure of force ? Hence it acts as a stimulant for the discovery 
 of labour-saving instruments, and of cost-saving processes, for any 
 waste is labour needlessly and unprofitably expended. It leads to 
 the discovery of natural resources, as in this country coal, salt, and 
 iron, the last two of which, before certain discoveries were made, 
 were imported into this country. In the fifteenth century it was 
 supposed that if the exportation of French salt was prohibited 
 or even hindered, a most powerful instrument for checking English 
 progress, or crippling England's domestic life, would be put into 
 operation. 
 
 Trade, again, is an effective means for the development of inter- 
 national morality, for the sense of reciprocal benefit teaches the 
 reality of reciprocal rights, and the recognition of rights in the 
 people of a foreign country is obviously a means by which people 
 are instructed in that sense of justice and the satisfaction of obliga- 
 tions which is the earliest, and, it would seem, the most difficult 
 lesson of civilization. The difficulty there is in inculcating the force
 
 94 DIPLOMACY AND TRADE. 
 
 of reciprocal obligations appears to me to be the reason why, in the 
 early ages of jurisprudence, the law enforcing contracts has con- 
 stantly been so severe, that in course of time the severity imperils 
 the very foundations of society itself, and it becomes necessary to 
 modify the ancient code by enacting a law of usury, in which relief 
 is given to the debtor, and in modem times, by what is equivalent 
 in its effects and virtually in its principle, a law of bankruptcy or a 
 revision of contracts. The international morality which has been 
 induced by trade in course of time develops that which is called 
 international law, i.e., international comity, the force of which is 
 public opinion and the censure of other nations, an expedient by 
 which, it may be hoped, as these forces become more effectual, war 
 may become itself an anachronism. Perhaps in past times, the 
 English people, by insisting on extravagant rights on the high 
 seas, have been the greatest hindrance to the development of inter- 
 national comity ; but of late years, and apparently from conviction, 
 we ourselves have been among the foremost to suggest that the 
 barbarisms of ancient warfare shall be discarded by international 
 consent. 
 
 Few nations are so barbarous as not to recognize the importance 
 of trade. But as that which they sell is by the very act of exchange 
 that which they desire less than that which they receive, they are 
 naturally most interested in exports. Another circumstance, how- 
 ever, has led to a further anxiety to increase exports, the motive of 
 which is more obscure. 
 
 It is clear that to a person engaged in trade, the mere retention 
 of money is not desirable. There is no reason to believe that by 
 holding it he will gain an advantage, for by the very terms of its 
 use as a means of exchange, it varies least of all in value within 
 measureable time. Except, then, as it gives a sense of security 
 against unforeseen emergencies, a risk, on the hypothesis that the 
 trader is solvent, which is progressively diminished in civilized com- 
 munities, to hoard is to lose. As the machinery of trade becomes 
 more complicated or, to be more accurate, to be more nicely adjusted, 
 movements of specie from country to country, or from merchant to 
 merchant, become rarer, and the transmission of the precious metals 
 ceases to be the business of the trader, for the function of adjusting 
 the wants of the money market, either for internal circulation or for
 
 FALLACIES ABOUT MONEY. 95 
 
 the purpose of the foreign exchanges becomes the special office of 
 the bullion dealer. This view of the entirely secondary functions of 
 money in trade, and of its being to the dealer a mere temporary in- 
 strument to be got rid of as soon as possible in trade, if profit is to 
 be made, was seen very early in the history of economic literature ; 
 for it is stated clearly enough in a treatise by Nicholas Oresme, 
 Bishop of Lisieux, in the fourteenth century. Money is a convenient, 
 the only convenient measure of exchange value ; it has a temporary 
 convenience in effecting certain exchanges, but the trader retains it 
 in his possession for the shortest possible time. In brief, he takes 
 it, only to get rid of it. 
 
 The case is entirely different with a government, particularly with 
 a government in the time at which Oresme wrote. Here, and for 
 the reason given above, as a reserve against unforeseen emergencies, 
 the acquisition of money, the creation of a treasure, the value of a 
 hoard, were instant and obvious. In the nature of things a govern- 
 ment produces nothing, gets no profits. It may be in the highest 
 degree necessary and useful, but in the nature of things, it exists 
 only to spend. It knew, at least in the time of which I am writing, 
 that the strongest power was that which had or could get most 
 money. Centuries after Oresme, Louis XIV., when he was pressed 
 by the reverses of unsuccessful war, consoled himself by saying, 
 " After all, it is the last pistole that wins." In the sixteenth cen- 
 tury, all Europe was aghast at the designs of Philip II. of Spain. 
 He had the great mines of the New World, or at least levied a heavy 
 tax on their produce. He seemed to be possessed of inexhaustible 
 riches. He was baffled, beaten, made bankrupt by the Dutch, in 
 whose country there was not an ounce of natural gold or silver, who 
 got all their money by trade, except when they occasionally captured 
 their enemy's treasure fleet, and were rapidly becoming the richest 
 nation of Europe, when Philip had ruined Spain and brought down 
 the Genoese traders, on his declaring himself bankrupt. 
 
 European governments interpreted the interests of their subjects 
 by the view which they took of their own interests. Merchants 
 knew then as they know now, that money has a temporary use only 
 to the individual. But the government, seeing the permanent use 
 of money to itself, strove to make it permanent in the community 
 whose affairs they administered. So they devised the doctrine of
 
 96 DIPLOMACY AND TEADE. 
 
 the balance of bargain, which Adam Smith afterwards called the 
 mercantile system, insisted that in cash transaction with foreign 
 merchants, there should be a balance payable to the English dealer, 
 limited transactions in certain important English products to towns 
 which they called staple towns, and appointed a great officer, whom 
 they called the King's Exchanger, who should see in his own person,, 
 or by deputy, that this desirable balance was secured. 
 
 Of course they did not succeed. In the existing state of the 
 police of the ports, they might as well have tried to keep in the 
 wind, or to limit a falling shower to English soil. Bigger things 
 than money are smuggled, and when the merchants knew that they 
 could only carry their business on by getting rid of the money they 
 had received, and the balance of bargain too, why they got rid of 
 both. If the royal policy had been successful, there would have 
 been a general rise of prices. There would have been more money 
 in the country than was wanted, and to get rid of what they did 
 not want, they would have had to give more of it for goods. But no 
 rise of prices, on that I can speak confidently, ensued ; the money 
 flowed out to where it was wanted, like rivers to the sea, as Oresme 
 said, and the King's Exchanger with his attendants was a mere 
 cumber in the business of life. 
 
 But what no merchant would admit for himself, he affirmed for 
 the whole country. The balance of trade, the balance of bargain, 
 the mercantile system became a trouble for centuries, and when this 
 country was fast becoming the first commercial centre of the world, 
 honest people tortured themselves about the excess of imports over 
 exports, said that England was going to ruin, and that we were 
 all spending more than we were earning. I am afraid that the 
 amount of exports were cooked, in order to comfort these worthy 
 dreamers. 
 
 The exports of a country always pay for its imports. If they did 
 not, the importing country would be contracting debts, and the debt 
 would be taken in lieu of imports. It is always possible to discover 
 whether a country is spending more than it pays for. If it does, it 
 begins to export securities. A country may very wisely spend more 
 than it pays for. It may very necessarily spend more than it 
 pays for. But it must always pay for its imports in goods or 
 securities, and there are plenty of people who can detect the opera-
 
 EXPORTS AND IMPORTS. 97 
 
 tion when it takes place. But the operation is not always plain to 
 the unpractised observer, and I am afraid that latterly, some persons, 
 who know a little, have, for reasons of their own, practised on the ill- 
 informed. When a country is not borrowing and has a fair share in 
 the carrying trade, an honest return of the money value of goods 
 exported and imported, always shows an excess in value of imports 
 over exports. I am assuming, of course, that the trade is exclusively 
 between country and country, and that there is no roundabout 
 settlement through a third country. 
 
 The reason is obvious. In trade, we value what we receive at 
 more than what we give, or there would be no profit. This is the 
 case with every country. A Frenchman values English coals more 
 than he does French wines, and the Englishman values French 
 wines more than he does English coals. If each did not, there 
 would be no trade ; the Frenchman had better keep his wine, the 
 Englishman his coals. Then the wine and the coals have to be 
 carried. If the Englishman does both journeys, the value of the 
 coals in France is more by the freight, the value of wine in England 
 also more by the freight. In England, the coal is valued less the 
 carriage, and the wine more the carriage, and what may be a very 
 profitable transaction may seem to those who do not understand the 
 figures a very losing transaction. 
 
 Now let us take a step further. Let us analyse what occurs every 
 day. An English vessel takes cloth to Hamburgh, carries leather 
 thence to Bordeaux, and takes wine to England. The only thing 
 which appears in the exports and imports are the cloth and the wine. 
 But the two articles bear the three freights, and, as far as they are 
 concerned, the imports again seem ruinously above the exports. In 
 the fifteenth century people understood the machinery of trade 
 better than some do now, for they saw what the profit was which 
 the English mercantile marine gained by the carrying trade, and 
 in France especially wished to check it by a sharp Navigation Act. 
 But the power of kings, and even of parliaments, is no match for 
 the instincts of trade. 
 
 Under the ordinary conditions of trade, then, merchants do not 
 find it to their interest to further the designs of Government in 
 securing a treasure, or even an available surplus or over- supply of 
 money. However honest the Government is in the management 
 
 8
 
 98 DIPLOMACY AND TRADE. 
 
 of its mint, and very few European Governments have been even 
 decently honest in this direction, but, on the contrary, most flag- 
 rantly dishonest, merchants will not keep more money than they 
 want, will not sell, if they can help it, at a disadvantage, which, 
 being put into the language of the custom house returns, will 
 always make their imports exceed in value their exports. If they 
 do not do so, they get no profits. There are to be sure persons 
 when prices are low, and profits are low, who play on the credulity 
 of those who do not understand the ordinary course of business, 
 because they know that, if they could alter the course of English 
 trade, they would for a time get higher prices and higher profits, 
 and pay lower wages, but the dishonesty of their purpose is trans- 
 parent. 
 
 The interpretation of -trade is more difficult still when in a 
 country like our own, an enormous and incredible mass of foreign 
 and colonial securities is held by British investors. I am confi- 
 dently assured, by those who know the facts well, that at least two 
 thousand millions sterling of such securities are held in Great 
 Britain, and ear-marked on the Stock Exchange. We in Eng- 
 land hold all or nearly all the Colonial securities, the Indian Debt, 
 and so large a mass of foreign debt, that no large purchase can 
 be made of such foreign debt on any but the London Stock Ex- 
 change. Now interest must be paid on such liabilities, and of 
 course, in accordance with the rule laid down before, the ordinary 
 way in which such an amount of interest is paid, as is implied in 
 the above-stated indebtedness, is by goods, the amount or value of 
 which makes the aggregate of imports appear to be vastly in excess 
 of the aggregate of exports. To ignorant persons these figures 
 appear very alarming, and dishonest persons play on the alarms of 
 the ignorant. In fact, the annual interest which the borrowers 
 contract to pay is expressed in the currency of the United Kingdom, 
 or in the currency of the borrowing state and community, and in 
 theory such debtors are bound to pay in money. In practice, 
 however, they pay in goods, generally in raw materials, or in 
 articles which our climate will not allow to be produced, or 
 not to be produced in so useful a form. Hence a country like 
 our own, to whom other countries are largely indebted, always 
 gets its raw materials, and some other articles, at the cheapest
 
 HOW DOES A NATION SPEND MORE THAN IT EAENS ? 99 
 
 rates possible, a great advantage to capitalist, labourer, and 
 consumer. 
 
 There is one infallible test by which we may discover whether a 
 country is spending more than it earns. It begins, as private in- 
 dividuals do, to contract debts, and the proof that it is contracting 
 debt is given incontestably in the export of securities. It may be 
 wise to contract debts, when, for example, a colony borrows money 
 for the purpose of constructing beneficial railways at a rate of 
 interest lower than that at which it can borrow at home. It may 
 borrow of necessity, as when a country, which still has sufficient 
 resources to meet the interest on its loans, is constrained by the 
 charges of war, or any other expenditure 011 which the loan is 
 wholly destroyed and consumed, to borrow from its neighbours. It 
 may borrow foolishly, as when a country, not yet able to take 
 advantage of its natural resources, borrows to construct railways, 
 which will remain so long unproductive that it would have been 
 better to have gone without them. When it borrows it exports 
 securities and takes goods in exchange. In theory, the lender lends 
 money; in fact, he lends manufactures, as rails, carriages, and 
 similar products. If the country which borrows and takes goods 
 puts a tax on the goods it takes, it has to pay a higher price for 
 them ; if the country which receives interest puts a heavy tax on 
 the only articles in which the debtor country can pay, it may make 
 such a country incapable of paying at all. Lastly, if a country 
 wants to borrow, and will not take the goods of the lender at all, it 
 must pay the interest in its own products, and at increasingly lower 
 prices than it would have sold them at if it allowed trade to be 
 more free. No doubt the debtor may repudiate, but that, is fatal 
 to his reputation as a borrower, for they who can lend never forgive 
 a bankrupt state. But as long as he keeps good faith, the debtor 
 is at the mercy of the creditor who can always elect how he 
 will be paid. A state which holds many debts in its own hands 
 has always a greater command over international money than a 
 state which has few or none, and moreover is in debt to its 
 neighbours. 
 
 I give you this sketch of international trade, of exports and im- 
 ports, and their meaning, because some foolish or dishonest persons 
 Are trying to turn figures, which really prove the existence of a
 
 100 DIPLOMACY AND TRADE. 
 
 profitable trade, into evidence that this country is declining, and 
 should reverse its trade policy. It is very likely that such people 
 are as uninfluential as they are shallow. It is, however, to the 
 purpose to show that if we did reverse our policy, we should inflict 
 incredible injuries on ourselves, as manufacturers and consumers, 
 and should bring those who have lent their money to foreign coun- 
 tries, and especially to our colonies, within measurable distance 
 of the risk of repudiation and the total loss of their property. 
 People who try to keep our goods out of their market no doubt 
 do us an injury, but they do themselves more. If we were to 
 retaliate, and seek to exclude those materials in which alone 
 they can pay their way, we might ruin them, we should cer- 
 tainly damage ourselves, and we should very probably give a 
 shock to public credit which it would not recover for a century 
 or more. 
 
 The earliest trade of England was with the Baltic and the Low 
 Countries. For more than two centuries, and to a greater or less 
 extent for three, England had important possessions on the south- 
 west coast of France, from which she exported wine and salt, the 
 former of which could not be produced in England to any advantage, 
 and the latter, at the time, not nearly so cheaply and so well. The 
 principal districts with which England traded in early times were 
 the towns of the Hanseatic League, with the Flemish cities (then 
 the principal region of textile manufactures, and the carriers of 
 Eastern produce], and the duchy of Guienne. 
 
 The Hanseatic League was a combination of free cities on the 
 shores of the Baltic and the German Ocean, who associated together 
 for the purpose of defending commerce from marauders. It is 
 probable that to their efforts Western Europe owes the extinction 
 of that piracy on the ocean, and those piratical settlements on land, 
 which were the scourge of Western Europe for centuries. It appears 
 that for a time at least the seat of the administration, such as it 
 was, of the Hanseatic League was Bergen, in Norway. Their 
 treasury was said to have been at Wisby, in the isle of Gottland. 
 A branch of the association was early and long settled in London, 
 itself a principal member of the League, under the name of the 
 alderman and merchants of the Steelyard, in a place near the Tower. 
 It is to be regretted that the history of the League has not been
 
 THE HANSEAT1C LEAGUE. 101 
 
 better written. The works of Werdenhagen, Mallet, Schlozer, and 
 Lappenburg, are very poor productions. 
 
 Many charters, thirty-five have been collected, were granted to 
 the Hanseatic League between 1235, when I have found the first, 
 to 1567, the last. In 1578 Elizabeth abolished the League as far 
 as England was concerned. Most of the cities were overpowered 
 and absorbed by the rising monarchies of Northern and Eastern 
 Europe, and at last the League was represented by Hamburgh, 
 Lubeck, and Bremen only. Their position as a trading association 
 is most marked during the fifteenth century, during which twenty- 
 one out of the charters above recorded were given. The character 
 of the trade carried 011 by the Hanse towns with England is, I 
 conclude, designated in that part of the " Libel of English Policy " 
 which deals with what the author calls the Danske trade. It 
 appears that England was supplied with furs, cloth, feathers, occa- 
 sionally wheat and rye, iron, tar, glass, wax, and other products 
 of a similar character. There was a time in which it seems that 
 even the produce of the farthest East was conveyed by land car- 
 riage across Asia, through the Baltic towns ; and that fragments of 
 ancient porcelain found occasionally in the extreme West, are relics 
 of trade which is now entirely extinct and forgotten. 
 
 The trade with the Flemings began early and was of the highest 
 importance to England and the Low Countries till Flanders was 
 ruined by the Spanish war and the Spanish Inquisition. The 
 Flemish cities grew wealthy from the woollen and linen trade, from 
 the former especially, the whole raw material of which came from 
 England. Hence friendly relations with England were of the 
 highest importance to Flanders, and the English monarchs, while 
 they engaged in their attempt to conquer France for thePlantagenets, 
 saw the necessity of having Flanders or its rulers as their ally. 
 This fact explains the friendship of Edward III. with Arteveldt, of 
 the alliance of Henry V. with the Duke of Burgundy, who had now, 
 by marriages and usurpations, obtained nearly the whole of the 
 Low Countries, the Yorkist alliance with Charles the Bold, and the 
 Intercursus Magnus of Henry VII. The inheritance of the 
 house of Burgundy has made what we now call Belgium the 
 battle-ground of Western Europe, from the days of Philip the 
 Second to those of the Continental war. Its commercial sig-
 
 102 DIPLOMACY AND TBADE. 
 
 nificance has passed away, its political importance is still great, 
 and it is believed to be in no small degree the key to the Western 
 situation. 
 
 The woollen produce of Flanders, with the various kinds of silk- 
 workers and linen manufacturers, were the occupation of most of its 
 towns. It was so densely peopled, that, like Holland a century later, 
 it was unable to support its own people from the produce of its soil, 
 and imported large quantities of wheat and barley, the latter notably 
 from the eastern counties of England. It was the mart of Eastern 
 produce, which came to it by a route which I shall presently 
 describe. Spices and foreign fruits were articles greatly in demand, 
 and were purchased chiefly at Bruges. We shall see hereafter how 
 this part of the Flemish trade was effectually destroyed. In 
 Flanders, too, and especially in Antwerp, was earned on an active 
 trade in bills of exchange, those instruments of credit by which, as 
 was alleged, the wealth of England was poured by a thousand 
 channels into the Papal treasury, and England was impoverished 
 by spiritual tributes. During the whole of this period there were 
 bickerings and occasional disputes, for the Flemings were turbulent 
 by nature and by reason of their municipal privileges, and the rulers 
 of England and Flanders frequently sacrificed commercial benefits 
 to political jealousies and interests. As I have said, the trade 
 between England and Guienne and its port of Bordeaux was chiefly 
 in wine and salt, and these two articles were abundant and cheap as 
 long as the political connection between England and Guienne lasted. 
 As is well known, in 1450, France had recovered the whole of her sea- 
 board from the English. It appears that the French king tried to in- 
 troduce his fiscal system among the Gascons ; it is known that they 
 rebelled, that they were succoured by the English under Talbot, 
 Earl of Shrewsbury, and that the Earl and his son were defeated 
 and slain at the battle of Chatillon. With this victory, all the 
 ancient possessions of the Plantagenet kings except Calais were lost. 
 But long after all idea of attempting their recovery was given up, it 
 was a common practice for the English sovereigns to stipulate for the 
 free export of wine and salt from France. 
 
 The Baltic, the Flemish towns, and the French seaboard were 
 the limits of English maritime enterprise up to near the end of the 
 fifteenth century. But towards the close of this period the Spanish
 
 TRADE WITH FLANDERS AND ELSEWHERE. 103 
 
 kings of Aragon and Castile, now united, had achieved the conquest 
 of all the Moorish Principalities in the South. Hence the English 
 passed along the Portuguese and Spanish coast, and traded as far 
 as the quay of Seville. They do not appear for some time to have 
 entered the Mediterranean, still less to have ventured on exploring 
 the regions which Henry of Portugal had visited. Hence there was 
 some colour for the Bull of Borgia, under which all the world to the 
 west of the Atlantic was bestowed upon Spain, all the east on 
 Portugal. But the English penetrated to the north. The fishing 
 grounds near Iceland had long been visited by the Yorkshire navi- 
 gators. In the fifteenth century the Bristol merchants, trusting 
 to the mariner's compass, reached the same goal through the 
 Hebrides. 
 
 An Act of 82 Henry VIII. cap. 14, reciting an earlier Act of his 
 father, attempts to regulate the trade of England with those parts 
 of Europe where England had commercial relations. Even in early 
 times its position was good. A debate between two heralds-at-arms, 
 written in the fifteenth century and published lately by a French 
 antiquarian society, confesses, on the part of the French patriot, that 
 the mercantile marine of England was large and active, and allows 
 that England has a great geographical position for trade with the 
 Baltic provinces and South-western Europe, but charges the 
 English with piracy on French, Spanish, Danish, and Scottish 
 vessels, asserts that they wish to appropriate the trade of the world, 
 dwells on the supreme importance of French products to English 
 trade and consumption, and threatens the culprits with the penalties 
 and police of a stringent Navigation Act. From internal evidence, 
 it is plain'that this treatise must have been written after the capture 
 of Bordeaux in 1453, and before the death of Charles VI. in 1461 
 The admission as to the character of the English mercantile marine 
 is, to my judgment, more trustworthy than the stories which are 
 told about the maritime decay of England in the fifteenth century, 
 'and the gibes of the Flemings on the downfall of English supremacy 
 on the seas. 
 
 The English attempted to reach Kussia from the north, indeed, 
 at that time, the sixteenth century, Russia had no accessible 
 European port. One of the ships reached what was afterwards 
 called Archangel in 1555, and the embassy had an interview with
 
 104 DIPLOMACY AND TBADE. 
 
 Ivan the Terrible 1533-1584. It seemed that prosperous trade 
 would be developed between Astrachan and Archangel. But after 
 the death of Ivan, and the disturbed reign of his successor, came 
 a period of confusion and revolution, and the enterprise of the 
 English adventurers was arrested. It was not till after the middle 
 of the sixteenth century that English vessels entered the Mediter- 
 ranean. Even then for a long time the trade was capricious and 
 disappointing. The Turk could destroy, but could not renew, still 
 less create a trade. He has turned the fairest part of the earth's 
 surface into a howling wilderness, and as long as he is permitted 
 to exist, there is no hope of renovation. It is upon his exploits that 
 the history of Central and Western Europe turns, that the old 
 centres of trade were abandoned, or fell into decay, and that a 
 new course was discovered in which the energy of the Western 
 nations could enter. 
 
 The first definite or accurate information which we get as to the 
 course of trade from the east to the west, is in the work of Sanuto 
 the Venetian, in an address or remonstrance laid before one of the 
 Avignon Popes, John XXI., in 1321, and published in a collection 
 entitled Secreta Fidelium Crucis. How Sanuto can have imagined 
 that any interest beyond his own would have been entertained by 
 this most rapacious and sordid of the French Popes we are not told, 
 but probably Pope John was to him only a channel through which 
 he could advertise to the mercantile world what were the perils to 
 which, in his opinion, the traffic to the East was nearing. Con- 
 certed action in Western Europe was hopeless. The experience of 
 the Crusades had proved how frail a bond enthusiasm was, and the 
 failure of Louis IX. might have assured the most sanguine of men, 
 one would have thought, that the day was past in which armed 
 intervention would revive foreign trade. 
 
 According to this author, the ancient depot of Eastern, i.e., of 
 Indian produce was Bagdad, and it would seem that this view was 
 confirmed by the evidence given in the writings of early travellers, 
 and of romances, as long as Bagdad was under the rule of the 
 Abassid Caliphs, and was practically the centre of Islam. But in 
 course of time, Central Asia was overrun by divers barbarian hordes, 
 and the routes of the caravans were interrupted. Two of these are 
 known to Sanuto by memory. The one passed from Bagdad over
 
 EOUTES FEOM THE EAST. 105 
 
 the plains of Mesopotamia and Syria to Licia, the ancient Seleucia, 
 and the produce by this land route was purchased and distributed 
 by the principal maritime cities of Italy Venice, Genoa, Pisa, and 
 Florence. It appears that this, the earliest and shortest route, was 
 early attacked by the savages who crowded down into Central Asia 
 from the Great Plateau, which lies between the eastern side of the 
 Caspian and the Chinese Empire, irruptions of whom destroyed what 
 remained of the ancient civilization in the great plains, and made all 
 transit too dangerous to be possible. A second caravan route, also 
 starting from Bagdad, followed the Tigris to its sources in Armenia 
 and Azerbijan, and going along the road which had been explored 
 for the first time in history by the memorable Ten Thousand, 
 reached the same point which they did at Trebizond or Trepezus. 
 This was the more difficult, but the safer route, though perilous 
 enough, and traversed conveniently only during the summer. But 
 this route had also been interrupted, though while it lasted it was 
 welcome to the Italian cities, and especially to Venice, who had 
 several factories in the Black Sea. 
 
 Now Sanuto tells us that Eastern produce was collected at two 
 ports in the great peninsula of its origin, which he calls Mahabar 
 and Cambeth, and thence had generally been shipped to certain 
 ports on the Persian Gulf and the river, the Tigris. A smaller 
 portion was sent to Aden, for transit through Egypt. In conse- 
 quence of the circumstances referred to above, Aden had become the 
 only port, and the Egyptian the only route. From Aden he says 
 there was a nine days' journey across the desert to Chus, as he calls 
 it, on the Nile. Thence it went by the river for fifteen days to 
 Babylon, a name which the mediaeval writers gave to Cairo. From 
 Cairo it went by canal to Alexandria, whence it was shipped to 
 Europe, after being taxed up to a third of its value by the Sultan. 
 The cost of the articles was greatly enhanced, and the quality greatly 
 deteriorated by this mingled sea and land passage, and by frequent 
 transhipments. Even under existing circumstances, some persons 
 braved the perils of the old routes, and brought small parcels of 
 these precious goods by the Asiatic road to the Mediterranean. If 
 they escaped robbers their gain was great, for the articles were 
 always in much better condition. 
 
 The spices of the East were exchanged at Alexandria for
 
 106 DIPLOMACY AND TRADE. 
 
 European produce. The articles most in demand were tlie metals r 
 among which Sanuto enumerates quicksilver, wood and pitch, coral 
 and amber, and the shrewd Venetian gives the taxes levied on imports, 
 6f per cent, on gold, 4^ to 8i on silver, and from 25 to 20 on other 
 metals and other products. Egypt was not a country of varied 
 products. It depended entirely on foreign countries for metals, 
 for timber, and many familiar conveniences of life. The writer, 
 therefore, concludes that if all commercial intercourse with Egypt 
 were forbidden, and a sufficiently large navy could be collected in 
 order to meet the possible effects of the Sultan's resentment, that 
 potentate would be obliged to revise his tariff, and the old routes 
 from Bagdad to Licia and Antioch might be revived. 
 
 The remonstrances of Sanuto were ineffectual, and the trade with 
 the East was carried by the Egyptian route only. But it is clear 
 from the fall in prices during the fifteenth century, that the Sultan 
 must have seen that it was wise not to press too grievously on the 
 trade which was so important to his dominions. Pepper, the most 
 important and familiar of these Eastern condiments, was generally 
 procurable at a low price during this century, and a local manu- 
 facture of sugar at Alexandria made this article so cheap, that at 
 the beginning of the sixteenth century it was little more than an 
 eighth of the price at which it stood at the beginning of the 
 fifteenth. 
 
 Now stories as to the occupation of a wide and fertile region in the 
 Far West, curious and novel products of which were cast by the 
 great ocean wave, which we now know as the Gulf Stream, on the 
 western coasts of the country, were rife. The voyages and discoveries 
 of Henry of Portugal, more than a generation before, fired the 
 imagination of mariners, and one of them, who was convinced that 
 there was a western passage to the Indies, importuned every Court 
 in Europe to supply him with the means of discovery. Unsuccessful 
 with one after another, Columbus found a patron in Isabella of 
 Castile, and discovered the New World in 1492. The Portuguese 
 monarch was not much behind the Queen of Castile. In 1497, Vasco 
 di Gama doubled the Cape, and the waterway to India was made out. 
 In 1496 occurred the voyage of Sebastian Cabot from Bristol, and 
 the discovery of Newfoundland. But for many a long day England 
 left the field of enterprise to the Spaniard and the Portuguese. The
 
 THE DISCOVERY OF THE NEW WORLD, ETC. 107 
 
 first Tudor king was too thrifty, the second too lavish for any real 
 enterprise, and when the second was dead there was nothing left for 
 a time on which enterprise could be founded. 
 
 The discoveries of Spain and Portugal were not undertaken a day 
 too soon. At the beginning of the sixteenth century Selim, the 
 most able and the most savage of the Turkish Sultans, overran 
 Mesopotamia, got possession of the holy places, with the title of 
 Caliph for his family and descendants, and in 1516 conquered Egypt 
 at the battle of the Pyramids. Selim was the incarnation of all 
 Turkish energy at its best, and all Turkish vices at their worst. The 
 trade of Alexandria was destroyed, the route with the east broken, 
 and the protracted impoverishment of the Nile valley commenced, 
 an impoverishment which will never cease until the Turk is expelled 
 from Egypt. The produce of the East, not yet procured in sufficient 
 plenty by the long sea voyage, rose to famine prices, the Italian, 
 the South German, and the Rhenish cities were impoverished, and 
 for a long time the Flemish marts were deserted. 
 
 During the sixteenth century Spain was conquering kingdoms 
 and collecting treasure in the New World, kingdoms to be depopulated 
 and degraded as the Turk had done by the Old World, where he set 
 his foot, treasures to be rapidly wasted in impossible projects. 
 Portugal was engaged in planting factories, in extending its influence 
 over some of the Spice Islands, and in conquering others, both 
 nations acting under the authority of Borgia's Bull. In course of 
 time England and Northern Europe generally revolted from the Pope, 
 and the wars of religion began, and lasted near a century, from the 
 revolt of the Netherlands to the peace of Westphalia. Slowly, and 
 as soon as they felt strong enough for the enterprise, these northern 
 people began to doubt the authority of Borgia's Bull. 
 
 If we call men by their proper names, Drake and his associates in 
 enterprise or discovery were pirates, constantly and avowedly 
 engaged in plundering the trade of a monarch with whom England 
 was nominally at peace, but greatly at variance. I do not doubt the 
 ultimate usefulness of Drake's career, but for a long time English 
 rovers had a very bad reputation, and were actually of the character 
 which the French herald-at-arms ascribed to the whole English 
 nation more than a century before. The usefulness consisted perhaps 
 in encouragement to English enterprise, and the proof of English
 
 108 DIPLOMACY AND TRADE. 
 
 courage. It was probably of great military value and significance 
 in the coming struggle with Spain, but the candid inquirer into men 
 and acts is constrained to set down the exploits of Drake in the 
 same class of transactions wifh those for which Captain Kidd and 
 his comrades were hanged at Execution Dock, little more than a 
 century after the naval hero of the Plymouth Hoe ended his 
 career. 
 
 The charter of the East India Company was granted on the last 
 day of the sixteenth century, December 81, 1600. The principal 
 person among the new adventurers was Clifford, Earl of Cumber- 
 land, an old buccaneer, which was for a time the polite equivalent 
 of a pirate. The practice of buccaneering, especially among the 
 Spanish possessions in the New World, was long a favourite field of 
 energy. Paterson, the reputed founder of the Bank of England, 
 is sometimes said to have been a missionary in the Antilles, some- 
 times described as a pirate, and it has been suggested that he was 
 probably both by turns. Long after Paterson, an English clergy- 
 man, who rose to be Archbishop of York, is said to have pursued 
 the lucrative and invigorating calling of a buccaneer in his earlier 
 days. So it was said of Archbishop Blackburn in his lifetime, and 
 I never heard that this dignified prelate resented, much less refuted, 
 this charge against him. The East India trade was tainted in 
 its beginnings by the vices of those who followed it, and not a little 
 of the trouble which the commerce of England incurred in the East, 
 quarrels with the Dutch, high-handed proceedings at Amboyna, and 
 the like, is to be explained by the lawless and piratical character of 
 those who founded British commerce in the Eastern seas, and began 
 the Eastern Empire. 
 
 The Dutch East India Company was founded in 1603, with a 
 capital at least eight times as large as that of its English rival. 
 Soon indeed the objects of the English company became different 
 from those of the Dutch. The English strove to establish themselves 
 on those parts of Hindostan which were not occupied by the Portu- 
 guese, from 1580 to 1640. Subjects of the Spanish crown, the 
 Dutch sought to secure a monopoly of the spice islands, and par- 
 ticularly of those where the clove grew. Now such a policy included 
 a good deal of costly fighting, and the Dutch merchant vessels were 
 as much men-of-war as traders. There have been few objects on
 
 INHERENT ERRORS IN THE DUTCH TRADE. 109 
 
 which more blood has been shed than on the exclusive right to sell 
 cloves. Two centuries and a half ago they were the most valued of 
 spices, and according to the notions which people then had of trade, 
 the action of the Dutch was thought to be consummately prudent 
 and patriotic, though very irritating to other nations. But the 
 objects of the Dutch in achieving their cardinal policy, to procure a 
 monopoly of produce in the East, and a monopoly of markets in the 
 West, loaded the Dutch East India Company with debt, and brought 
 down in the ruin of that great trading corporation, another trading 
 corporation, the great Bank of Amsterdam, which had been for 
 more than a century and a half the commercial centre of the civilized 
 world. The exposition of the situation and the exposure of the error 
 are so easy, and the lesson drawn is so striking, that I am bound to 
 explain it. 
 
 The object of a prudent trader is to keep prices up to profits, i.e.* 
 to sell at such an advantage as will give him on his transactions the 
 profit which he anticipated when he made his purchase or manu- 
 factured his goods. But the object of the prudent trader is likewise 
 to enlarge his market, to increase the area or number of his customers, 
 and to effect this he will sacrifice a portion of his possible profits, 
 for he knows that if business is procured it is apt to prove permanent, 
 and that it is better to have fifty transactions at 5 per cent, within 
 the same time than to have five at 10, since the proportion between 
 the two is as 250 to 50. In the competition of traders this practice 
 is what modern experience has inculcated. But when the producer 
 neglects to increase the number of his customers, and increases the 
 expenses of production, he is on the road to ruin, and may be so 
 without knowing it. 
 
 Now this last policy was that of the Dutch. They kept up prices 
 and so limited consumption. They strained every nerve, exhausted 
 their credit in the effort to keep by main force other traders out of 
 the field, experience proving that the only way in which one can 
 check competition is by lowering prices. In the expectation of get- 
 ting one large profit on each transaction they succeeded in making 
 a small profit or even a loss on their whole transactions put together, 
 for it cost more to protect a designedly narrow trade than it would 
 to establish and render permanent an intentionally wide one. In 
 brief, they narrowed their market and so narrowed their profits.
 
 110 DIPLOMACY AND TRADE. 
 
 The folly of the Dutch is the folly of many a tradesman, who, in 
 order to get rapid profits out of high prices, discourages custom. 
 
 The late Mr. MacCulloch, whose opinions on economical subjects 
 were never of much consequence, and are now of none, hazarded an 
 opinion which could have easily been refuted from the figures which 
 he used to collect and pretended to handle. It was that the low rate 
 of interest in Holland was due to the heavy taxation of the country. 
 But if taxes dimmish the amount of loanable capital they cause the 
 rate of interest to rise. If they stimulate in their expenditure new 
 kinds of industry, they raise the interest 011 advances in other kinds 
 of industry. Nothing is more familiar than the depression of 
 existing stocks, in other words, the exaltation of the rate of interest, 
 when new loans of large amount are brought out. That which 
 lowers the rate of interest is the accumulation of savings at a faster 
 rate than the opportunities of investment present themselves. Now 
 this was precisely what happened in Holland. The Dutch were a 
 very saving people, who deliberately, but through ignorance of the 
 true principles of trade, narrowed the opportunity for the invest- 
 ment of Dutch capital. Hence the rate of interest in Holland sank 
 to 2 per cent., and this at a time when the East India Company 
 was borrowing desperately from the Bank of Amsterdam. I do not 
 say that English merchants were wiser than Dutch traders were, 
 but they did not get the opportunity for such extravagant blundering. 
 What they would have done if they had got the Dutch monopoly it 
 is idle to forecast. 
 
 There was no great struggle between England and Holland in 
 India, though the two peoples have fought there. There was 
 between England and France during the Seven Years' War, the most 
 disastrous struggle in which France was ever engaged, according to 
 the opinions then entertained. For all the wars in Europe, from 
 the peace of Utrecht to the outbreak of the great Continental war, 
 were waged on behalf of monopolies of commerce, or, to be more 
 accurate, monopolies of market, for success meant the exclusion of 
 the beaten nation from the markets now secured by the victorious 
 rival. At the end of the Seven Years' War France was stripped of 
 nearly every colony she possessed. At the beginning of it she was 
 the rival of England in North America and in India. At the end of 
 it she had scarce a foothold in either. In less than twenty years
 
 THE INTEBCUBSUS MAGNUS. Ill 
 
 after the Seven Years' War was over, England had lost her most 
 important colonies, and people thought that her place among nations 
 was gone. In the end the loss proved to her how unwise it is to 
 make war in order to secure a monopoly of markets. 
 
 The Intercursus Magnus of 1496 is the first, and, on the whole, the 
 most instructive type of these numerous commercial treaties which 
 have been negotiated from that to recent times. Henry VII. had a 
 political motive in it to check Yorkist intrigues in the Low Countries. 
 He was shrewd enough to know that when you make it the interest 
 of a nation to discourage foreign adventurers, who seek to make 
 their asylum the home in which to hatch plots, you are more 
 secure from such people than you would be if you disregarded such 
 interests. The first clause of this famous treaty conceded free trade, 
 provided a license or passport was produced ; the second allowed 
 ships to be armed though engaged in trade ; the third allowed a free 
 fishery in waters claimed by the English. By the fourth clause no 
 pirate or privateer was allowed access to the harbours of either 
 nation ; and by the fifth, refuge from storm or war was permitted 
 to merchant vessels. By the sixth enemies' goods were prohibited 
 access ; and by the seventh the law of wreck was greatly improved. 
 By the eighth Flemish merchants were permitted to reside in Eng- 
 lish, English in Flemish towns; and provision is made that the levy 
 of customs should be made without damage to the goods liable. 
 There was to be no compulsory sale of goods, and security might 
 be given for debt by the tenth and eleventh clauses. By the twelfth 
 the barbarous custom of reprisals is abandoned, and legal process 
 substituted for it, with, of course, the assurance that the decisions 
 would be respected. And, lastly, the trade in foreign bullion was 
 declared free. 
 
 The liberality and wisdom of these agreements, many of them 
 anticipating by nearly four centuries what civilized nations have 
 professed to agree on as rules for future practice, are sufficiently 
 surprising. They lasted unfortunately no longer than the agree- 
 ment was itself of importance to the contracting parties. In less 
 than a century the granddaughter of Henry, and the great-grand- 
 son of Maximilian were to be in bitterest feud, and every one of 
 these principles was cast to the winds. But the Intercursus was a 
 monument and a protest ; a monument of monetary wisdom, and
 
 112 DIPLOMACY AND TRADE. 
 
 a protest against the infinite barbarism with which the wars of 
 religion threatened the world. It deserves the praise which the 
 more enlightened men of that and succeeding ages bestowed 
 on it. 
 
 I have mentioned more than once that the wars of the eighteenth 
 century were mainly wars for the monopoly of markets. The 
 treaties partook of the same nature, and the most significant and 
 typical of them is the Methuen treaty, negotiated in 1703, between 
 England and Portugal. In the^great war of the Spanish succession, 
 it was of importance to the allies to get the accession of Portugal, 
 and there were reasons why the Kings of Portugal should take that 
 side. In the first place, the dynasty was only sixty years old, and 
 the result of a successful revolt from Spain on behalf of a pretender 
 of doubtful legitimacy. We may be certain that the hereditary 
 rights of the crown of Spain were not forgotten. In the next, it gave 
 the guarantee of the allied powers to the Portuguese succession. 
 In the next, it secured the Portuguese East Indies from Dutch 
 aggression, possibly from Dutch intrigues, for Holland was profoundly 
 interested in the war of the Spanish succession, since it involved the 
 Dutch frontier. Now it was possible to found a treaty on the basis 
 of reciprocal monopoly markets. England was to exclude French 
 wine, and take Portuguese. Portugal was to give a free market to 
 English woollens. But the discontent of those who had to give up 
 claret and take to port found loud expression. It seems that the 
 English Government imagined that by prohibiting French imports 
 they would cripple French resources. So hereafter French wine 
 was not found in the books of the customs. But in some way or 
 other, it got to the cellars of the consumers. I would not decry 
 patriotism, but I am convinced that it is not always superior to 
 opportunities, especially when the opportunity is very obvious, and 
 the patriotism is expensive and distasteful. The Methuen treaty 
 remained a type of commercial diplomacy up to nearly the end of 
 the eighteenth century. 
 
 After the close of the American War, a new form of commercial 
 treaty was set on foot, that of reciprocal customs, and a clause under 
 which the contracting parties were included under the most favoured 
 nation advantages. Such a treaty was that negotiated by Mr. Eden 
 between Great Britain and France in 1786. It was, to be sure, to
 
 METHUEN'S, EDEN'S, AND COB DEN'S TREATIES. 113 
 
 "be of short duration, for its life was even briefer than that of the 
 Intercursus Magnus near three centuries before. But it was eagerly 
 accepted, and the fashion spread. A treaty of the same kind was 
 set on foot between France and Eussia, and soon afterwards between 
 the United States and Prussia. In a short time Europe would have 
 been armed with a network of treaties, and these, so fondly do 
 people believe in the spread of humanity and civilization among 
 statesmen and kings, were supposed to be a guarantee of inter- 
 national peace. But within eight years after Mr. Eden's labours, 
 the French Revolution had broken forth. France precipitated 
 herself on astonished and unprepared Europe, and statesmen and 
 kings were tumbling about altogether. 
 
 The treaty of 1786 was the model of the treaty negotiated between 
 France and Great Britain in 1861. This was carried out by my 
 friend Mr. Cobden. Himself an advocate of free trade in its broadest 
 sense, as the true economical interest of nations, and being entirely 
 and most lucidly in the right in his convictions, he was not un- 
 willing to accept a part of what he would have gladly claimed in 
 its entirety. Nor was he discouraged by his natural distrust of the 
 very singular person who went by the name of Napoleon III. He 
 told me that he should have been, had he been a Frenchman, in 
 constant opposition to that man's government. But he saw no 
 reason why he should not, being an Englishman, avail himself of 
 an authority which, as he believed, would do good to English and 
 French trade, and assist English and French amity. Some persons, 
 being doctrinaire free traders, objected to the negotiation of half 
 truths. But until, all men being wise, every man sees how hollow 
 and unsatisfactory political and social compromises are, compromises 
 must be made. The sphere of the speculative economist is one 
 which the practical man might envy, were not the practical man 
 constrained to act. Men who have lived for years, as he lived, as I 
 have lived, in an atmosphere of compromises, learn that such a neces- 
 sity is rarely logically, perhaps rarely morally, justifiable. It seldom 
 occurs to any one, even in a long public life, to assist in a final 
 change, one from which there can be no progress, and can be no 
 retrogression. I cannot say that the treaty of 1861 was the best 
 arrangement conceivable, but I am convinced that it was the best 
 arrangement possible. And though nine years afterwards came the
 
 114 DIPLOMACY AND TRADE. 
 
 furious storm which swept the French emperor from the place which 
 he had so grossly abused, I am sure that the treaty of 1861 had 
 its place in lightening the enormous calamities which overtook 
 France, calamities to which a less elastic nation might have suc- 
 cumbed, in which a less hopeful nation might have despaired.
 
 VI. 
 THE CHAEACTEE OF EAELY TAXATION. 
 
 Turgofs canons of taxation The first the most important Adam 
 Smith's word, "enjoy" under the protection of the State Tlie king's 
 estate The consent of the taxpayers alivays necessary The growth 
 of parliamentary poiver Customs on a large scale impossible 
 Graduated income taxes The assessment of Tandridge in 1600 
 The subsidy and its frequency in war times Taxes on towns 
 Tallages The income taxes of 1435 and 1450 The houses of 
 Lancaster and York Grants by the Commons, origin of the 
 custom The grants of 1453 and 1503 The growth of the Com- 
 mons Cecil's book of rates The ship money. 
 
 THE history of English taxation in early times is totally unlike 
 anything in modern experience. It was exceptional, not regular, 
 was the hardest task which the monarch and his advisers could 
 undergo, and frequently provoked the bitterest resentments and 
 outbreaks. At the same time, the annals of parliamentary finance 
 are full of the strangest precedents, of procedure which would be 
 thought impossible now, of Acts which modern traditions would call 
 violent invasions of property, of sacrifices willingly made by certain 
 classes, which these classes have at least been long unused to, of 
 expedients which, unluckily for the financier, have entirely passed 
 away, as human societies have grown more alike, or as special 
 advantages, once entirely local, have been diffused over the world. 
 Of course, the economical principles which regulate or interpret 
 taxation were the same then as now, and these principles should be 
 before us. 
 
 The famous canons of taxation which Adam Smith borrowed 
 from Turgot, are four in number. Taxation should be equal, on
 
 116 THE CHARACTER OF EARLY TAXATION. 
 
 which presently. It should be certain, not capricious ; should be 
 taken at a time when it is most conveniently paid ; and should be 
 collected as economically as possible. It is clear that the last three 
 canons are only subordinate forms of the first. An uncertain tax 
 is plainly unequal. If a tax is levied on A from which he cannot 
 escape, and the same tax on B from which he can escape, it is 
 uncertain or capricious. For example, a succession duty levied on 
 the natural heirs of a man who is not rich, cannot be evaded, for 
 the present owner cannot sacrifice as long as he lives his mainten- 
 ance from his property. But a succession duty levied on a man 
 who is very rich may be evaded, for he may make, and often does 
 make, a donatio inter vivos, and may still leave ample means for his 
 own wants. Again, a tax on property is always certain, a tax on in- 
 comes is always uncertain. Instances could be multiplied without 
 taking one's examples from mere rapine, such as Adam Smith 
 probably had before his mind when he framed his second canon. 
 Of course where this kind of uncertainty prevails, society has 
 degenerated into brigandage. 
 
 Again, inconvenient times of payment are an element of inequality. 
 When in the old epoch of the customs duties, the full tax was paid 
 011 the imported article when it reached the port, and the article was, 
 it may be of necessary, but of uncertain demand, the dealer had to 
 recover his outlay on the tax, and the purchaser had to pay for the 
 delay of the market. Without giving a decision here on the merits 
 of indirect as opposed to direct taxation, it is obvious that to in- 
 tervene the shortest possible time between the levy of the tax by 
 the dealer, and its payment by the purchaser or consumer, is a 
 benefit, and therefore its reverse is an injury. But injuries are 
 always unequal. To make the taxpayer contribute more than a 
 sufficient cost for collection is certain to be an inequality, for even 
 the most righteous schemes of taxation will press more heavily on 
 some individuals than others, and an expensive collection augments 
 the burden. 
 
 If the last three canons of taxation are only illustrations of the 
 first, it is obviously on the criticism of the first canon that a clear 
 view of the subject can be obtained. But the language of Adam 
 Smith, like the language of Turgot, is exceedingly, perhaps in- 
 evitably, ambiguous. It is the misfortune of political economy, a
 
 TUBGOT'S CANONS OF TAXATION. 117 
 
 misfortune which seems special to it, that no ordinary language 
 supplies it with a sufficiently correct nomenclature, and that defi- 
 nitions of words, apparently plain enough, are essential in order to 
 a true interpretation and conception of the ideas which they are 
 intended to convey. Thus the four cardinal words in this science 
 or philosophy production, distribution, exchange, consumption 
 popular and obvious as they seem, require careful limitation, if one 
 would obviate contradiction. 
 
 The words in Smith's canon are as follows : " The subjects of 
 every state ought to contribute towards the support of the govern- 
 ment, as nearly as possible, in proportion to their respective 
 abilities ; that is, in proportion to the revenue which they respec- 
 tively enjoy under the protection of the state." And Smith goes 
 on to compare the place of the contributories to that of the joint 
 tenants in a great estate, and I cannot but think obscures rather 
 than explains his meaning. For it is plain that, if any of these 
 tenants receives no more than is necessary for his bare maintenance, 
 he cannot, without perishing, contribute anything. Now such a 
 state of things, as I shall show when I come to deal with pauperism, 
 has been artificially brought about in English economical history. 
 It may be that in the distribution of the joint products, he has been 
 violently or fraudulently deprived of a portion of that which is justly 
 due to him, but it is clear that he cannot contribute. 
 
 It has always seemed to me that the critical word in the above 
 canon is "enjoy." To have used the word "receive" would be open 
 to the fatal objection which I have just referred to. You cannot 
 tax what a man must spend without destroying his industry or him, 
 and by "must spend," I mean the quantity which is absolutely essen- 
 tial to his labour or his life, and from which no deductions can be 
 made. In order to be taxed, every one must have something beyond 
 this bare margin. But what a person need not spend, he can save 
 or enjoy. I should certainly prefer, instead of enjoy, to see the ex- 
 pression " can save " in the definition, for I am sure it would have 
 relieved the ambiguity of the canon, and, which is more important, 
 have made clear some important fallacies in the practice of finance, 
 which one may despair of seeing corrected in practice, but which 
 should be constantly exposed and refuted. Besides, a man may en- 
 joy, in the mere physical sense, that which he is obliged to spend,
 
 118 THE CHARACTER OF EARLY TAXATION. 
 
 and, perhaps, the less he has which he must spend, the keener is 
 his enjoyment in spending it. The bread of a labouring man is 
 sweet, but it may be absolutely necessary for his life. 
 
 I have referred to these facts because they are of necessary rela- 
 tion to all systems of taxation, early and recent, though so great is 
 the power of administrations in our time, and so slight is the check 
 which can be put on them, that resentment at expenditure or anger 
 at improvident taxation are not found to be checks, while gross and 
 palpable unfairness in the imposition of taxes provokes little com- 
 ment beyond impotent indignation. There is no tax so unfair as 
 the English income tax. It adds to the sense of unfairness when 
 one knows that half of it is imposed in order to relieve landowners 
 of liabilities and expenditure without which their property 
 would have no value at all, which, till recent times, have always 
 been paid by them ; while in the assessments of their own mansions 
 to rates, income tax, and succession duty, they are most iniquitously 
 exempt. 
 
 The aggregate of taxation, except that which is levied for local 
 purposes, is considered, however appropriated, as a grant to the 
 Crown. This is a tradition from the earliest times, when the grant 
 to the king was supplementary to the ordinary revenue from the 
 king's estate. For it is in the interpretation of what the king's 
 estate was, that not a little of the social history of our forefathers is 
 contained. It was because he did not live on his estate, and satisfy 
 the high duties of his office from the proceeds of that estate, that 
 discontent was openly expressed ; that in many cases discontent 
 grew into insurrection, and to the deposition of kings, so that the 
 English, from their constant and loudly expressed dislike to this 
 form of misgovernment, so unintelligible to foreigners, got the name 
 of the disloyal nation. The feeling was not extinct till after the 
 Eevolution, when a check was put on William III.'s grants, and 
 Davenant wrote on the doctrine of Resumptions. 
 
 The king's estate was the great mass of property, scattered over 
 England, which went by the name of terra regis, of ancient demesne, 
 an estate described and valued in Domesday. The English people, 
 including Norman baron, franklin, and burgher, expected that, ex- 
 cept in times of extraordinary pressure, this estate, with its numerous 
 incidents, should suffice for the adequate maintenance of the king's
 
 THE KING'S ESTATE. 119 
 
 dignity, of his own forces or guards, unless their service was due by 
 tenure, of his household, of his judges, of the officials connected 
 with the exchequer, of, in short, the whole machinery of civil 
 government. No doubt, because the clergy were the only literary 
 or educated class, or at least nearly so, the officials were generally 
 drawn from the clerical order, but as the king was the principal 
 patron of benefices, and had a commanding influence in election to 
 the higher dignities of the Church, the convenience of selecting 
 officials from the clergy, and of rewarding them with preferment, 
 was obvious and economical. Besides the profits of his estates, which 
 the king cultivated by his bailiffs, just as the nobles and the corpora- 
 tions did, the king had divers other casual advantages, as aids, reliefs, 
 escheats, and forfeitures the character of which can easily be 
 gathered from ordinary books on the practice of early English law. 
 Besides this, the king had small customs on exports and imports, 
 fee farm rents from the towns which were directly subordinated to 
 him, and as soon as the courts of law were developed from the 
 machinery of the exchequer, fees of courts, and fines on offenders. 
 From this revenue the king was supposed to guarantee the peace, 
 to protect the narrow seas, and to provide for such other charges as 
 were the duties of his dignity. 
 
 But he expected and obtained, on extraordinary occasions, extra- 
 ordinary or exceptional assistance from his people. He claimed, 
 beyond the obligation imposed on all free men of serving in the 
 militia at their own charges, the personal attendance of all his 
 tenants in chivalry for a definite time, a service which was early 
 commuted for a money payment when the service was foreign. This 
 commutation, which is said to have been suggested by Becket, had 
 most important results. The concession of it was the origin of that 
 remarkable English army, which did such exploits on foreign mili- 
 tias in the fourteenth and fifteenth centuries, and was undoubtedly 
 the reminiscence on which Cromwell founded and developed his 
 New Model. It contained also, by implication and in course of time, 
 the principle of parliamentary grants, for it is obvious, that if the 
 king could at his will determine the occasions on which liis tenants 
 should ransom their personal sendee, he could speedily have been 
 able to perpetuate a discretionary tax on all his subjects. 
 
 The king appears to have exercised this discretion without res-
 
 120 THE CHAEACTER OF EARLY TAXATION. 
 
 traint on his own demesnes, and the towns which were in his own 
 hand, or, in the language of the time, could tallage them. But even 
 here it is plain that a limit had to be put on extortion ; and that 
 the patience of the burghers could not with safety be too sorely 
 tried. It was part of the theory of that relation of ranks and 
 classes, which is called still, for want of a better phrase, the feudal 
 system, that while duties were reciprocal, dues were fixed. As soon as 
 ever contemporary economic history can be constructed from con- 
 temporaneous documents, we find that all liabilities, from those of 
 the serf to those of the noble, were fixed and definite ; that they 
 were registered in instruments which had authority, and could not 
 safely be strained. The type of these enrolled liabilities was 
 Domesday, from which we are told, in the laws of the time, the serfs 
 of the last quarter of the fourteenth century deduced legal arguments 
 in favour of their own freedom. 
 
 The duty of the dependant owner appears to have been practically 
 unlimited in a case of great emergency. All the chroniclers of 
 Kichard I.'s reign bear testimony to the crushing weight which the 
 country had to endure when the king was ransomed from his Ger- 
 man captivity. Nor, throughout its history, did the people or the 
 Parliament refuse to bear charges for vindicating the honour, enfor- 
 cing the rights, maintaining the estates, or protecting the person of 
 the king. 
 
 I have hot space or inclination to go through those obscure hints 
 which are given us as to the restraint of arbitrary taxation during 
 the times of the early Plaiitagenet kings. They are collected and 
 commented on, with more or less ingenuity and accuracy, by con- 
 stitutional antiquaries, whose conclusions as to the meaning of the 
 facts or hints which they find are derived from evidence of very 
 various value. In my opinion the consent of the taxpayer to 
 extraordinary grants had to be obtained at all times, and the framers 
 of the Great Charter were not putting new limitations on the power 
 of the Crown when they drew up the memorable clauses in that 
 ancient instrument, but were simply affirming what was customary 
 or notorious. I am satisfied and convinced that discretionary taxa- 
 tion by the king was utterly alien to the genius of such institutions 
 as were established by the Teutonic settlers of Saxon England, and 
 were merely changed in name by the Norman adventurers. I am
 
 THE CONSENT OF THE TAXPAYER NECESSARY. 121 
 
 persuaded that a more or less formal appeal, but generally an 
 effective appeal, was made to popular consent before and after the 
 days of the Great Charters of John and Henry. 
 
 Of course the most characteristic and significant of these appeals 
 was after the unlucky, the fatuous attempt to procure the kingdom 
 of Sicily for Henry's second son, Edmond. This brings out what 
 must have been the practice, the occasional convention of taxpayers 
 through their proctors, representatives, or agents, for the purpose 
 of making and assessing grants. Substituted service, guarantees, 
 vicarious responsibility, were of the essence of early English social 
 life. The principle of suretyship or transferred liability was pre- 
 sent in every village. The jury of compurgators is one illustration, 
 and of the most significant kind. The liability of a host for his 
 stranger guests was another. The system of giving vicarious security 
 for debts is a third. The old law of collective attornment is a fourth. 
 The representative theory was at the bottom of much in village 
 life, and must have been familiar. We may be sure that the early 
 custom of appointing numerous assessors for the award of parlia- 
 mentary grants was in succession from practices antecedent to the 
 formal and regular summons of these assemblies, which in their 
 particular form were characteristic of the constitutional history of 
 England. 
 
 The experiment of Simon de Montfort, in 1258, has always ap- 
 peared to me to be an attempt on the part of this remarkable man 
 to commit by their proxies or representatives whatever English sym- 
 pathizers he could get in support of his policy. He must have 
 known that the alliance which he had formed was a rope of sand, 
 united solely by indignation at existing discontents, and not entirely 
 trustworthy for that. The dissent and revolt of those who were asso- 
 ciated with him, and the rapid change in his position, from apparently 
 overwhelming strength to hopeless weakness and defeat in detail, 
 must have been in part anticipated by the shrewd and sagacious 
 head of the Barons' War. It would have seemed that henceforward 
 the very name of a representative assembly would have been odious 
 to royal ears, and perhaps the period of over thirty years which 
 elapsed between the summons of De Montfort 's Parliament and the 
 first recorded of Edward may be due to this dislike. 
 
 Edward was far too sagacious a person, however, to be affected by
 
 122 THE CHAEACTEE OF EAELY TAXATION. 
 
 names. He was engaged in a great project ; one which, so far as. 
 part of his purposes is eoncemed, was frustrated the complete 
 subjugation of Wales and Scotland. The former he may be said 
 to have effected, in the latter he failed. Of course his purpose was 
 to annex Scotland south of the Tay, or perhaps east of the line now 
 traversed by the Caledonian canal. It has always seemed to me 
 that the frequency with which he styled himself, or allowed himself 
 to be styled, Edward III. was intended to indicate that he con- 
 ceived himself heir to the pretensions of the Anglo-Saxon kings. 
 He saw that, in the great necessity which he had for extraordinary 
 grants, 'that it was desirable that there should be a fair and search- 
 ing assessment of taxable property when these grants were made, 
 and that a formal assent, with a careful appointment of assessors, 
 would obviate discontent. His plan was a novel one. The chattels 
 of every one, free and serf, were assessed ; generously, I am con- 
 vinced, for I have compared valuations with actual prices, the 
 record of these valuations existing in the public archives to a con- 
 siderable extent, and when they are complete being a virtual register 
 of lay householders. It was a subordinate, but not an unimportant 
 part in the new system that the representatives were encouraged to 
 present petitions, and to assent to the legislative designs of the 
 sovereign. That Edward cared much less for the assent of his 
 parliaments than he did for their usefulness as assessors is, to my 
 mind, proved very conclusively by the expedient which he used to- 
 make the clergy submit to him, when they refused him grants and 
 appealed to the Bull Clericis laicos, which they had procured from 
 Boniface VIII. Never was victory more complete. 
 
 Nothing is more remarkable than the progress of the power which 
 Parliament assumed between the first summons of the House of 
 Commons in 1291, and the Statute of York thirty years later. But 
 the result was inevitable. The occasions on which grants were de- 
 manded were criticised, petitions were presented, grievances were 
 discussed, and redress claimed, and finally the statute to which I 
 have referred, enacted that no valid Act of the legislature could be 
 affirmed, except with the consent of the two Houses. The Statute 
 of York was, to be sure, announced at the instance of the king, 
 who wished to declare on authority that the sentence on the 
 Despensers was illegal. But the form was of great constitutional
 
 THE GROWTH OF PABLIAMENTARY POWERS. 123 
 
 importance, and its significance is suggested by the universal tran- 
 scription of it in the legal handy-books of the period, several of 
 which I have examined. 
 
 Now, by the necessity of things, nearly all ancient taxation was 
 direct. It would have been impossible, had the trade of the coun- 
 try been far greater than it was, to have collected customs of any 
 significant amount on exports and imports, even if the principle of 
 the staple towns, on which I have something to say hereafter, had 
 been recognized. Southern England, then the most settled and 
 best cultivated part of the island, swarms with natural harbours ; 
 harbours safe and accessible to the light craft of the time. Any 
 attempt to levy solid duties would have been defeated. Centuries 
 after the time of the first Edward, when the population was at 
 least double the number that it was at the end of the thirteenth 
 century, it was admitted that heavy duties were impossible. In 
 the arithmetic of the customs, said Swift, two and two do not 
 make four. In the eighteenth century the costs of collecting indirect 
 taxation in Scotland were in excess of the product collected, for 
 every Scotchman who could smuggled or connived at smuggling. 
 The relations of Dirk Hatteraick and Ellangowan in Scott's novel 
 are historical, as most of Scott's pictures of local life during the 
 times of his memory and his experience are. The pious and 
 patriotic Scotchman, who identified the loss of claret with the loss 
 of the Scottish Parliament, felt that the best way to denounce the 
 " sad and sorrowful union," as weU as the most agreeable and 
 economical, was to defraud the revenue of Great Britain. I am 
 half a Scot myself, and can realize the pleasure derived from the 
 combination of patriotism and good business. In the nineteenth 
 century, when the fiscal system of England was designed to protect 
 and foster home industries, smuggling was an organization, with 
 its own capital and its own warehouses its operations being pro- 
 tected by the sympathy of the gentry and the farmers. I was 
 brought up in a Hampshire village, which in my childhood was 
 familiar with and shared in the successes of the contraband trade. 
 A wiser system of finance in England has generally improved the 
 smuggler off. But I very much doubt whether he is extinct in 
 remote parts of the United Kingdom. 
 
 Now direct taxation is always irritating, and is always more
 
 124 THE CHARACTER OF EAELY TAXATION. 
 
 unequal than indirect. It exacts equal ransom from unequal 
 means. Two persons with the same amount of property are 
 unequally taxed, if the one has a wide margin over the necessary 
 charges of his household and the other a narrow one. In modern 
 England this unfairness is characteristic of all direct taxation. One 
 man lays out 100,000 on a house, surrounds it with a park, and 
 accumulates amenities about it. It is quite certain that under the 
 Act of William IV., the assessment Act, he will neither in local 
 taxation as an occupier, or in income tax as an owner, or in house 
 duty as a householder, or in succession duty as a devisor, pay more 
 than a quarter per cent, of its annual value to local and imperial 
 taxation ; while another man, who has laid out 1000 on his house, 
 will have to pay in proportion twenty times as much on his occu- 
 pancy and ownership. And then good easy people are astonished 
 at socialist talk, and at projects for the appropriation of the un- 
 earned increment, and at doubts freely enough expressed as to 
 whether the machinery of Parliament and the Constitution are 
 not employed, under the well-known economical fact, that the laws 
 which regulate the distribution of wealth are of human institution 
 only to make the rich richer, and the poor poorer. 
 
 To do them justice, our ancestors in England were free from these 
 sordid and dishonest practices. They recognized that a graduated 
 property tax was just and right, even in the Upper House ; and 
 they acted on the conviction, as I shall take occasion to show. In 
 the poll tax which was levied in 1377, the Duke of Lancaster was 
 rated at 520 times the payment of the peasant. In 1435 and 1450, 
 a graduated income tax was levied at the rate of 2^- per cent, on 
 small incomes, of 10 per cent, on large. And the same principle 
 regulated local taxation a century and a half later. In March, 
 1600 I am referring to the original MS. preserved in the Bodleian 
 library (Eawlinson Papers, C. 642) a committee of the inhabi- 
 tants of Tandridge, in Surrey, a village near the borders of Kent, 
 met to survey and assess the parish for a rate for the relief of the 
 poor, for maimed soldiers, for the Surrey prisons and hospital, and 
 for a composition in lieu of purveyance. The unit is a penny per 
 acre, the acreage of the parish being returned at 2,391. Now the 
 justices of the peace agree and rule that the rate should be paid only 
 once a year by occupants under ten acres, not more than twice by
 
 GRADUATED INCOME TAXES. 125 
 
 occupants under thirty acres, and that all further charges, if 
 required, should be borne by those who have over thirty acres in 
 this case, fourteen occupiers out of fifty-five. But the magistrates 
 add this significant clause : " Provided always that our intent and 
 meaning is that those who, be owners and men of ability and have 
 little occupying, shall be charged according to their ability by the 
 justices' discretion towards the relief of the poor, notwithstanding 
 the said rates aforesaid." It is a common practice with country, 
 gentlemen to demand that rich men with a small occupancy should 
 be rated on their^aneans. Let the country gentlemen begin with 
 an honest rating of their own mansions and parks, as the country 
 gentlemen of 1600 did. 
 
 The distrust felt at extraordinary grants was therefore very keen, 
 when the proposal was made at a time of no particular emergency. 
 Hence the public looked on royal favourites with great dislike, because 
 they knew that the impoverishment of the Crown would be a plea 
 for grants. This explains the disfavour with which, in Henry III. J s 
 reign, the people, nobles, burghers, and peasants alike looked on 
 the aggrandisement of his half-brothers and his wife's relations by 
 the king. There was mixed with this feeling a little of the dis- 
 like which Englishmen have felt to such foreigners as get a footing 
 in England, and presume to meddle with its public business, either 
 by the front or back stairs. So the English hated Gaveston and 
 the Despensers in Edward II.'s time, though the latter belonged 
 to the ranks of the Norman English. So in the days of Edward's 
 great-grandson the people rose against De Vere, and, later on, 
 against the obscurer favourites which Eichard honoured. The 
 extreme favour which was shown to the Poles and Beauforts had a 
 good deal to do with the feeling which led to the deposition of the 
 house of Lancaster. The riches of the Seymours and the Dudleys 
 roused even the Lollards of Norfolk against the Keformation, for 
 they were collected from public plunder. Buckingham was the 
 beginning of that political opposition to Charles, which ended with 
 the tragedy of Whitehall ; and I am convinced that if the second 
 Charles had lived much longer, he would, like his brother, have 
 been driven out of England. The gravest error in policy which 
 "William committed was his incomprehensible fondness I speak 
 the opinion of the time for Bentinck and Keppel, and the enor-
 
 126 THE CHAEACTEE OF EAELY TAXATION. 
 
 mous grants which were heaped on the former, making him, from 
 the status of an inferior Dutch noble, one of the richest men in 
 England. It was in order to give effect to the public feeling enter- 
 tained about these scandals, that Davenant tried to revive the old 
 doctrine of Kesumptions. 
 
 The theory that the Crown could not be permitted to impoverish 
 the king's estate was universally entertained through the Middle 
 , Ages, and far down into modern history. The statutory restraint, 
 it is true, was enacted when the Crown had little left to give, and 
 Parliament, by appropriating the civil list, and leaving the sove- 
 reign a moderate allowance for the privy purse, intended that it 
 should give nothing. The principle of the Eevolution was that the 
 Crown should be, even for the private expenditure of the sovereign, 
 entirely dependent on Parliament. This principle was formally 
 abandoned in 1850 ; on which occasion Lord Brougham made a 
 remarkable protest, in which the constitutional theory was very 
 forcibly stated, and the inferences from a violation of it were very 
 plainly predicted. 
 
 Edward I. saw very clearly that arbitrary taxation, even if 
 it were possible, was less likely to be fruitful than taxation by 
 consent. His maxim, it is said, was that what concerned all 
 should be shared by all ; and he certainly intended to tax all, for, 
 as I have said, his taxing bills amount to a census of families. But 
 when the grants were agreed to, there intervened that inveterate 
 determination or custom of the English to grant only a fixed 
 quantity and distribute it rateably. It is said that a subsidy, as 
 the parliamentary grant came to be called, was originally 100,000. 
 In Elizabeth's time it had sunk to 50,000 or less. The fact is, 
 remissions were made, additions could not be made. Some of these 
 remissions appear to be personal, for petitions were constantly 
 made to the Crown praying for exemptions ; the general answer to 
 such petitions being, it appears, a reference to an inquisition, tech- 
 nically called ad quod damnum the question being to what extent 
 would the revenue of the Crown suffer by such a concession. In 
 the fifteenth century, too, a custom grew up of remitting the opera- 
 tion of the subsidy in the case of certain towns or villages which, 
 for a more or less permanent reason, were incapacitated from con- 
 tributing. So it seems that the Universities of Oxford and Cam-
 
 THE SUBSIDY, AND ITS FREQUENCY IN WAR TIMES. 127 
 
 bridge, and the college sites therein, with the two ancient schools 
 of Winchester and Eton, were exempt from the local assessment, 
 though it does not appear that their estates were. 
 
 During the long wars of succession between England and France, 
 continued, except in the reigns of Eichard II. and Henry IV. for 
 a hundred years, these parliamentary grants were incessant. Even 
 during the reign of Henry IV., when there were only civil dis- 
 turbances to deal with, the king was constantly appealing to 
 Parliament for assistance, and was constantly constrained in con- 
 sequence, to listen to very unwelcome counsel. Many of these are 
 to be found in the rolls 'of Parliament. But for the fourteenth 
 century, I am sure the rolls of Parliament are defective. There 
 are parliaments, of whose proceedings no record is preserved. 
 There are grants of taxes, for which no existing document gives 
 authority. I have found them, however, among its items of ex- 
 penditure duly entered in the bailiff's account, and such an entry 
 is conclusive as to the fact, especially when the document adds 
 that it was a grant to the king. The memory of the employer or 
 lord was certainly to be trusted at the annual audit. 
 
 Now all these taxes were property taxes. The assessment was 
 made by numerous commissioners, in order that the valuation 
 might be taken at as simultaneous a time as possible. The 
 farmer's stock and crops were not taxed, but what had been stored 
 and was for sale became liable, his corn, for instance, and wool 
 in the barn. The landowner's rent and value was taxed. The 
 stock-in-trade of the dealer, never, I suspect, any great matter, 
 was taxed, as were also the household goods of the poorest as well as 
 the richest. It appears that personal apparel was not valued. I 
 have examined many of these assessments, and I speak from 
 memory, but confidently, when I say that the valuation was from 
 30 to 40 per cent, below the value of the goods appraised. It 
 would have, I think, been dangerous to have exacted the tax from 
 the full value. 
 
 The taxes levied on the towns were peculiar. They had been 
 held in a certain sense to be the property of the king, or under his 
 immediate lordship, or to have stood in the same relation to some 
 secular or ecclesiastical chief. For example, the town of Oxford 
 was under the Crown, the town of Bury was under the great Abbot
 
 128 THE CHAEACTEE OF EAELY TAXATION. 
 
 of St. Edmund. These personages granted charters, or Confirmed 
 privileges for a sum of money down, and for an annual rent or 
 farm, which went by the name of the firma burgi, and was like 
 other charges, fixed and unalterable. Hence the grant of the fee- 
 farm rent of a town was a common benefaction of king or lord. 
 The fee-farm rent of Oxford was in early times constituted a gift 
 to the almshouses of St. Bartholomew in Cowley Marsh. Edward 
 II. transferred it to Oriel College, with the lands and house of the 
 bedesmen, on condition that the fellows should maintain these 
 mendicants. The fee-farm rent of Scarborough was granted by 
 Edward III. to the King's Hall of Cambridge, a foundation now 
 fused into Trinity College as part of its endowment. And in the 
 same way licenses to found guilds in towns, especially in London, 
 were granted for a consideration. Privileges of all sorts, the right 
 to manage their own affairs, to appoint their own judges, to be 
 lords over their own manor, were bought, and often re-bought, on 
 confirmation. One of our colleges here, Magdalene, paid a con- 
 siderable sum on the accession of Henry VIII. for a renewal or 
 confirmation of its charter. In short, there is no ancient right of 
 special jurisprudence, or property, or license, which has not in 
 time past, we may be sure, been paid for, the times considered,, 
 handsomely. 
 
 But beyond this annual, or occasional, or recurrent liability, the 
 towns in . early times were liable to what were called tallages. 
 That the feudal superior had the power to claim a contribution 
 from the towns dependent on him, as often as he pleased, or to 
 what extent he pleased, is not to be believed, for it would be 
 equivalent to the surrender of all the townsfolks' goods. But that 
 application was made for an exceptional but fixed contribution from 
 time to time, which the town had some discretion in refusing or 
 evading, is certain. At last, in an indirect way, at the conclusion 
 of the thirteenth century, Edward formally renounced the claim of 
 tallage, or was reputed to have done so, and though, I believe, 
 antiquaries have found traces of the usage at a later time, the last 
 attempt being in 1382, it became settled custom that such grants 
 could be made by Parliament only. Ten years before, in 1322, the 
 last scutage was levied. In point of fact the free will of the 
 grantor was always a presumption, and sometimes a reality. Thus.
 
 TAXES ON TOWNS. TALL AGES. 129 
 
 in 1255 the Londoners refused to submit to a tallage, and though 
 they afterwards yielded, the resistance had a serious meaning, as the 
 king learnt at Lewes. 
 
 Just as in country districts, villages, hundreds, and shires, the 
 assessment was made by commissioners appointed in the grant, 
 who, as I have found occasionally, were bribed to show considera- 
 tion to the contributories, so in towns the local authorities 
 distributed the assessment or tallage. On the ground that this 
 assessment was levied unfairly on the poorer citizens, Fitzozbert or 
 Long Beard in Eichard the First's reign appears to have headed a 
 party and resisted the authorities. He lost his life. But, on the 
 whole, I conceive that the taxation was equitable. I should have 
 certainly found some record of dissatisfaction had it not been just, 
 as I conclude from the almost total silence of the accounts up to 
 the great change in the value of money, that the ancient right of 
 purveyance and pre-emption was not used harshly and dishonestly 
 by the king's officers. 
 
 The long war with France induced the king's officials to bethink 
 themselves of other sources of revenue, besides the ordinary 
 subsidies. But as I have already stated, unless the places of 
 export and import were strictly defined, as they ultimately were by 
 the staple towns, it was impossible to collect any certain or regular 
 revenue from articles of merchandise. Hence the first efforts in the 
 direction of taxation on purely English products were rather in the 
 nature of the excise than a customs duty. Such, for example, was 
 the tax of 40s. a sack on wool in 1297, and the levy of nearly 
 21,000 sacks in 1341, the proportion of which, down to quarters 
 of pounds of the article, was distributed by Parliament over the 
 several counties, and as I know from the records of estates on 
 which no sheep were kept, was payable in money at a fixed rate 
 per sack. Such were the poll taxes which began in 1877, and 
 were continued till after the Eevolution. 
 
 But after the establishment of Calais as the staple town for the 
 sale of wool, or at least as the port of delivery, the financiers of 
 the fifteenth century began to discover that this article could 
 become a fruitful source of occasional revenue. The English 
 people, and with reason, believed, on grounds which I have stated 
 in an earlier lecture, that the foreign consumer would pay the tax. 
 
 10
 
 130 THE CHAEACTEB OF EABLY TAXATION. 
 
 Besides, they were under an impression, probably a premature 
 impression, that the export duty would materially assist the home 
 manufacture of woollen goods. Hence over and over again, during 
 the second war of succession with France, taxes of 100 per cent. 
 are laid on wool and wool-fells, and borne without difficulty, while 
 it was soon found that exported hides would only bear a slight 
 duty. The English had a practical monopoly of wool, but no 
 such advantage in hides and leather. 
 
 In the same epoch, very remarkable income taxes are levied 
 on those who possessed fixed sources of personal revenue, the 
 legislature never dreaming of putting such a tax on precarious 
 incomes. The first of these, as far as the rolls of Parliament 
 instruct us, was in 1435. The immediate occasion of the impost 
 is to provide for the king's debts, which had increased to an 
 enormous amount (the king was about fourteen years old) and 
 represent the plunder which went on during his minority. The 
 tax was graduated, 6d. or 2^ per cent, on incomes from fixed 
 sources between 5 and 100 a year; 8d. or 3-33 per cent, on 
 incomes between 100 and 400 a year, and 2s. or 10 per cent. 
 on all incomes in excess of 400 a year. In 1450, when the 
 French possessions were practically lost, another income tax was 
 imposed in which the taxable unit was taken lower. Between 
 20s. and 20 of income, the rate is a 2^ per cent. ; between 20 
 and 200, 5 per cent. ; and on all incomes above 200 a year, 10 
 per cent. In both cases, the excess of income over 400 and 
 200 is only chargeable to the higher rate. These taxes are not 
 indeed without precedent. In 1382, the " landowners " put a tax 
 on themselves only on the plea " of the poverty of the country ; " 
 and in 1404 a special tax of 5 per cent, was granted by the lords 
 temporal, for themselves, their ladies, and others who had over 
 500 marks a year. In the reign of Henry VIII., income taxes 
 levied on earnings were imposed. These were disappointing, for 
 the taxes yielded less than a third of what was expected, and in the 
 next year, when the tax was reirnposed, it was even more unfruitful. 
 I have found no further attempt to impose a general income tax 
 till the time of the younger Pitt. 
 
 It is clear that the financiers of the fifteenth century consciously, 
 but by a just instinct, had adopted that principle in practice, which
 
 THE INCOME TAXES OF 1435 AND 1450. 131 
 
 Turgot and Adam Smith formulated in the first of the received 
 canons of taxation. There was an apology for Pitt's income tax, 
 in the desperate straits to which this person was reduced in 1799. 
 In his plan the tax of 10 per cent, was levied on incomes of 
 .200 a year and upwards and varying rates on incomes below 
 .200 up to 60. I cannot but think that he had in his mind 
 Tresham's budget of 1450. Addiiigton, who repealed Pitt's income 
 tax during the short peace of Amiens, re-imposed it within a year, 
 and did away with the graduated character of it. It was abolished 
 impatiently at the end of the war, with ignorant impatience, as the 
 financiers who liked the impost said. In 1842 it was reimposed 
 by Peel, and as a condition to those fiscal reforms, which have in 
 themselves enormously increased the revenue, and has continued 
 ever since. At present, as I pointed out in a motion on direct 
 taxation, which I carried by a substantial majority on March 23, 
 1886, nearly half the receipts of the income tax are appropriated to 
 relieve landowners from the ancient and traditional liabilities which 
 were chargeable directly or indirectly on their estates, the outlay on 
 which is essential, in order that these estates should have any 
 economical value whatever. The contribution of these taxes in 
 relief of landowners is about as just as it would be to levy a tax 
 from the public in order to manure or drain a landowner's fields. 
 
 Peel's plea for reimposing this detestable and intrinsically 
 iniquitous tax, as formulated by Mr. Gladstone, was to the effect 
 that the remission of taxation conceded in 1842 and onwards was 
 a saving to the taxpayer, and should therefore be met with a 
 corresponding sacrifice on the part of those whose spending income 
 was increased by the remissions. But, in the first place, Peel's 
 principal remissions, omitting a host of grotesque customs duties 
 which produced next to nothing, were of excises on domestic manu- 
 factures the effect of which was exceedingly injurious to workmen 
 and employers, but the remission of which was an almost un- 
 appreciable benefit to consumers. Besides, the customs and excise 
 on articles generally consumed was for a long time hardly reduced, 
 was even heightened on some so-called luxuries, and the rapid 
 increase of revenue, while it made up for all anticipated loss on 
 the remission, is a sufficient answer to the plea on which the tax 
 was imposed. To have permanently justified it, it was necessary
 
 132 THE CHAEACTEB OF EARLY TAXATION. 
 
 to show that it really was no bar to the increase of income, artel 
 there is cumulative and unfortunately increasing evidence that no 
 such proof can be alleged. It is 110 doubt a particularly easy 
 expedient in the hands of a stupid financier, who is able, without 
 intelligence or even thought, to oppress with ease the most helpless 
 class in the country, those who live on precarious incomes, and 
 have no opportunity whatever, as traders have, of transferring the 
 tax from themselves to others, their customers. 
 
 The house of York made application to Parliament for very few 
 grants. The malignant sycophants, who wrote under the Tudor 
 sovereigns, tried to blacken Edward's character, and shallow 
 historians, who repeat commonplaces, have made Edward 
 rapacious, sensual, and cruel. I can only say that the rolls of 
 Parliament, during his reign, are full of petitions from Lancastrian 
 nobles and gentry, praying for the removal of their attainders, and 
 that the prayer is always granted, though not a few of these 
 suppliants deserted and made war on him in 1470-1. It is true 
 that he invented a new impost, and perhaps a disagreeable one, 
 in the extension, I can hardly say the invention, of benevolences. 
 No doubt, though these were nominally loans, they were virtually 
 gifts, which the fashion of the age, and the fashion of two centuries 
 later, did not make it sordid for the king and his ministers to- 
 follow. Benevolences were really special income taxes on wealthy 
 persons, and the principle of them was exactly followed in the 
 earliest poor laws, till it was found that free giving was less pro- 
 ductive than compulsion. As I have said already, the fifteenth 
 century was familiar with the principle of graduated property 
 taxes. Kichard III. abandoned the practice of benevolences. 
 Henry VII. revived the practice, and by 11 Henry VII. cap. 10 
 made the promise a recoverable liability. 
 
 The origin of the custom, now part of settled constitutional 
 usage, under which money grants originate in the House of 
 Commons only, a practice which has been adopted in all civilized 
 communities, even when the Upper House is elective, is exceedingly 
 obscure. It was not finally settled in England till the time of the 
 Pensionary Parliament, and then was the result of a drawn battle 
 between the Lords and Commons, under which the Lords re- 
 tained their appellate jurisdiction, and gave judgments which
 
 GRANTS BY THE COMMONS. ORIGIN OF THE CUSTOM. 133 
 
 excited the wonder and contempt of the lawyers, who refused to 
 report, or be bound by these precedents, and the Commons were 
 admitted sub silentio to have the sole right of originating and 
 altering money bills, though the Lords, a very questionable 
 usurpation, claimed the right of rejecting them. I will venture to 
 put before you my interpretation of the custom. It seems to me 
 to be the inevitable outcome of the constitution of the two Houses. 
 It is almost needless to say that the circumstances do not apply 
 to modern legislative assemblies, between which and the two 
 English houses, there is only an external resemblance. 
 . The old House of Lords, I speak of that which sat before the 
 Beformation, and even for nearly a century after that event, was 
 a very shifting and uncertain body. In theory, it was the king's 
 council, his advisers, whose presence he could claim at his 
 pleasure as their duty, whose absence or neglect he could and did 
 construe as disaffection, or even rebellion. So intrinsic was this 
 doctrine to the constitution of the Lords, that Henry VIII., who 
 had his own reasons for compelling the attendances of all whom 
 he wished to keep in hand, invented the system of proxies, which 
 was originally a guarantee of each by some of his own order, 
 temporal peers by temporal, spiritual by spiritual peers. Then 
 the summons to sit was issued irregularly and capriciously. In 
 the Plantagenet period, the composition of no two sessions is alike, 
 and glad enough was a peer who escaped a writ of summons. The 
 spiritual peers too far exceeded the possible temporal peers, and 
 they were taxed in a different house, and on different principles. 
 It was only till the time of Charles I. that the peers claimed a 
 writ of summons as of right, or rather, in the cases of Aruudel and 
 Bristol, the liberation of two of their number from prison. Charles, 
 who had no mind to quarrel with both houses at once, tacitly 
 conceded their claim to a writ. Now in this assembly the king 
 was always supposed to be present, and very often actually was. 
 Could so incongruous, shifting, incompetent an assembly, where 
 two-thirds of the sitting members could have no judgment in the 
 taxing of laymen, and all would find the discussion of the king's 
 necessities intolerable in his presence, undertake money bills ? 
 And if they did, with what colour could the consent of the tax- 
 payer be alleged for their schemes ?
 
 134 THE CHAEACTEB OF EABLY TAXATION. 
 
 The Commons, on the other hand, were from the first summoned 
 to make grants. They were the delegates of the towns and 
 counties who sent them, were instructed by their constituents 
 before they went, were instructed by their constituents while they 
 sat. As they were representative of their constituents, so their 
 elected Speaker was representative of them. He it was who drew 
 up the budgets, to use a modern phrase, and announced the grants. 
 His address to the Crown on his election, in which he deprecates 
 offence, and as the mouthpiece of the Commons, begs for the 
 most favourable construction of his words and acts, is a ceremonial 
 survival, now grotesque and out of place, of a period when those 
 words meant a good deal. Besides they alone, who were com- 
 missioned to give or withhold, could make a binding promise. 
 Of course, if the Lords resolved, of their own motion, to levy a tax 
 on their own Order, as they did in 1404, who could say them nay ? 
 I imagine that even now, if the Lords resolved on paying a triple 
 income tax, which is very unlikely, and paid it, which is still more 
 improbable, the House of Commons would hardly interpose its 
 constitutional veto. Grants originated in the House of Commons 
 because it is inconceivable that they could have originated any- 
 where else. The confirmation of Parliament of grants by Convo- 
 cation, and the admitted illegality of the grant without assent of 
 Parliament, is, I am sure, a disguised usurpation, for which a very 
 plausible but not very agreeable reason was found, though not 
 always expressed. 
 
 There are two taxes of curious significance, exceedingly interesting 
 for a reason which I shall give in my next lecture, but presenting 
 features on which I may make a brief comment here, for I am deal- 
 ing, as you will remember, with early taxation only. These are the 
 special grant in 1453, never indeed paid for reasons which will be 
 seen, and demanded under similar conditions which were never satis- 
 fied in 1472 ; and the special grant of 1503, which Henry was not 
 likely to forego, and indeed was calculated with scrupulous anxiety, 
 for he got, no doubt, to his great delight, a few pounds more than 
 was given him. 
 
 In 1450, Guienne was lost, Cade's rebellion broke out, and the 
 Parliament which was sitting at Coventry was dispersed in disorder. 
 In 1452, it seemed that Guienne could be recovered, for the Gascons,
 
 THE GRANTS OF 1453 AND 1503. 135 
 
 irritated at arbitrary taxation, had revolted, and old Shrewsbury 
 was dispatched with a force to aid them. The Commons caught at 
 the chance, and gave by vote a force of 20,000 archers (the king's 
 advisers accepting 13,000 only) to be paid by a levy on each county, 
 the contingent of each county being settled by Parliament, with 
 wages of sixpence a day, the full day's pay of an artisan. The grant 
 was made in vain, for, before it could be raised, Shrewsbury and 
 his son were defeated and slain before Chatillon, and the war was 
 suddenly at an end. This tax was to be levied on the supposed 
 capacity of all the counties and some of the towns, all the counties 
 except Chester being rated. In 1472, Edward had resolved to invade 
 France, the protection and assistance given to Margaret being the 
 plea, and Parliament renewed the grant of nineteen years before. 
 Now this tax for the levy and support of an army was undoubtedly 
 inforced on all the lay population. 
 
 The tax of 1503 was a still more marked departure from ancient 
 usage. In this year Henry, who neglected no means of raising 
 money, determined on reviving two ancient aids, those payable by 
 feudal custom by all tenants in knight service on the occasion of the 
 knighting of the king's eldest son, and the marriage of the king's 
 eldest daughter. Margaret, to be sure, had been married to James 
 IV., of Scotland, some time before, and Arthur was recently dead. 
 No king's eldest son had been knighted during his father's lifetime 
 since the time of the Black Prince, more than a century and a half 
 ago, and Henry IV., whose eldest daughter married the Duke of 
 Bavaria, made no claim on that occasion. But the bereaved father 
 determined to console himself by taxing his subjects. Now the only 
 persons liable to this aid were the military tenants. With the con- 
 sent of Parliament it was imposed on all, tenants in chivalry, 
 socagers, and copyholders alike, and the king who asked for 30,000, 
 got 1,006 4s. 7d., more than was promised him. 
 
 With the growth of English trade the customs began to increase. 
 They were treated, though an ancient source of royal revenue, as a 
 parliamentary grant, and were always given for the sovereign's life 
 in his first Parliament. Elizabeth put out a new book of rates, in 
 which the percentages were levied on the new values or prices 
 which characterized the greater part of her reign. The new book 
 of rates which James put out at Cecil's instigation, or with his con-
 
 136 THE CHARACTER OF EARLY TAXATION. 
 
 iiivance, varied the amount levied as well as readjusted them to 
 prices. With this action began the quarrel, so well known to 
 historians, which ended at Whitehall nearly forty years afterwards. 
 It was a singular House, that of Cecil in the seventeenth century. 
 The first Lord Salisbury instigated the war between king and Par- 
 liament ; the next was a regicide in fact, for he sat in the Lords on 
 the memorable 30th of January; the third was a Papist, and abetted 
 some of the worst acts and purposes of James II., was committed 
 to the Tower and only saved by the clemency of William, after the 
 devolution. The elder branch became and remained obscure. 
 
 Ship money was levied on all the counties for five years, begin- 
 ning with 1636. The assessment was laboriously equitable, whatever 
 may be said about the legality of the tax, about which I presume all 
 historians, even those of the modern or apologetic school, are agreed. 
 It is well known that the impost was due to a suggestion of At- 
 torney-General Noy, who, fortunately for himself, a renegade and 
 tool, died before the tax was actually put into operation. It is said 
 that Noy discovered precedents in the Tower records. Of course 
 maritime towns and counties were bound to the defence of the sea. 
 The privileges of the Cinque Ports were based on this service. Mer- 
 cantile vessels could be pressed for the service of war ; Edward III. 
 made such a requisition before the victory of Sluys and the invasion 
 of France. But it was generally believed that the extension of the 
 tax to the inland counties was an after-thought, for which no prece- 
 dent could be alleged. But I have seen traces of the practice in the 
 fourteenth century. I have found a few examples where estates in 
 the inland counties have been taxed pro warda maris, and this im- 
 post can hardly be distinguished, except by the systematic adoption 
 of it, from Noy's famous expedient. 
 
 The great struggle of 1642 had to be waged at first with the old 
 finance. Parliament had from the beginning an enormous advantage. 
 London, which had more than half of the available wealth of the 
 country, that which could be drawn on for war, was resolutely and 
 undisguisedly on the side of Parliament, and at first the supplies 
 came almost exclusively from London. Against this, the plate of 
 the malignants (the roundheads in derision called the proceeds 
 thimble money) was of little avail. But for some time only the 
 seven associated eastern counties were unreservedly on the side of
 
 THE GBOWTH OF THE CUSTOMS. SHIP MONEY. 137 
 
 Parliament, though Charles could hardly be said to have had a 
 single county unanimously on his side. The urgency of a new 
 finance was manifest. The records of the war of independence in 
 Holland supplied a precedent and a pretext, and from this repertory 
 Parliament borrowed the excise. It was searching, general, and 
 lucrative. The method consisted in levying a tax on the purchaser 
 at the time of his buying any excisable article, and making the 
 vendor responsible for collecting it. It was, in short, a wide octroi 
 duty, levied at all times and places. The king and the Cavaliers 
 denounced it as an unheard-of tyranny, and speedily adopted, it 
 themselves wherever they could collect it. It was denounced at the 
 Restoration, and made hereditary in order to enable the great land- 
 owners to emancipate their estates from feudal dues at the expense 
 of the general public. 
 
 With the excise comes the epoch of modern finance. Some of 
 the old expedients continued up to the Revolution and even after it. 
 In one case the principle of the old taxation was continued. The 
 land tax of our own day is paid on the valuation of near two 
 centuries ago. But the equity of this valuation is very often 
 adversely criticized, and a revision of it is frequently demanded.
 
 VII. 
 
 THE DISTRIBUTION OF WEALTH IN ENGLAND AT 
 DIFFERENT EPOCHS. 
 
 The importance of this subject in following the progress of the nation 
 in wealtJi and population Modern estimates of local wealth 
 Self-government in the village The 'magnitude of the churches, 
 and the true inference from the fact The richest and poorest 
 counties Assessments in 1341. 1375, 1453, 1503 The wealth of 
 Norfolk and Oxfordshire The relative wealth of the towns 
 Assessments in the seventeenth century The valuations of 1660 
 and 1672 The population of England and Wales Homes and, 
 hearths in 1690 The progress of Northern England. 
 
 THERE is hardly any topic more interesting to the student of the 
 economic history of England, than that of the distribution of its 
 wealth at different epochs in its political and social life. There are in- 
 deed few questions which are more obscure, none in which positive 
 information on which the student can rely is more scanty and broken. 
 I have been engaged in the search after matter of this kind for a, 
 good deal over a quarter of a century, and though I can, in what I 
 have collected, throw a considerable amount of light on certain 
 epochs in history, there are long intervals of extreme obscurity, 
 during which I have vainly sought in printed volumes and in 
 manuscripts for the requisite evidence. For example, I have found 
 nothing trustworthy on which I can depend during the long and 
 eventful period which begins with the reign of Henry VIII. and con- 
 cludes with the events which immediately preceded the civil war of 
 1642. I have a strong distaste, which I wish was more general 
 among historians, for those vague declarations as to social conditions
 
 IMPOETANCE OF THE SUBJECT. 139 
 
 which one reads of among contemporary historians, from monks 
 like Matthew Paris, to historians like Clarendon, who were, after all, 
 unable to supply one with any evidence on which to test their state- 
 ments. Clarendon, for example, speaks of the growing economical 
 prosperity which intervened during the eleven years in which all 
 parliamentary action was suspended. I am convinced from the 
 comparison which I have been able to make between wages, rents, 
 and prices, that it was a period of excessive misery among the mass 
 of the people and the tenants, a time in which a few might have 
 become rich, while the many were crushed down into hopeless and 
 almost permanent indigence, an age in which the sufferings of the 
 English nation were greater than they ever were, except during the 
 time of the great Continental war. 
 
 If we could arrive at precise information about the distribution of 
 wealth in England at different epochs of history, we should be in- 
 formed as to how those industries which make wealth are developed, 
 and the extent to which homebred or imported intelligence was able 
 to avail itself of the opportunities which the natural products of the 
 country offered, of the advantages which the climate afforded, and 
 of the skill with which the English people were able to utilize the 
 results of their agriculture, and the wealth of their minerals. We 
 should be able to define the localities of industry, and interpret 
 the ease or difficulty with which manufactures spread from their first 
 home into other parts of the island. We should know, in part at 
 least, what were the hindrances to the development of what ,in our 
 modern experience has been so abundantly exhibited, and should, 
 for example, be able to learn what was the efficiency of government 
 for internal police and for- external defence ; and in particular be 
 able to trace the effects of legislation on the industry which it pro- 
 fessedly strove to foster, and the material prosperity which it was 
 certainly anxious to promote. And lastly, if we knew the distribu- 
 tion of wealth, we should be able to make a reasonable estimate as 
 to the amount of population in England at different periods of its 
 history, and even to conclude as to its distribution over the country. 
 I shall indeed, in the course of this lecture, exhibit and comment on 
 such evidence as I have been able to discover, and I shall, I trust, be 
 able to show some substantial results on the topic which I have 
 taken for this day's lecture.
 
 140 THE DISTRIBUTION OF WEALTH IN ENGLAND. 
 
 Even at the present time, when statistical information is so 
 abundant as to be overwhelming by its magnitude, it is by no means 
 easy to expound the present distribution of wealth. We have 
 decennial returns, from the commencement of the present century, 
 of the population contained in the United Kingdom. But these 
 returns, even when tabulated, are of little use in determining the 
 relative prosperity or decay of particular districts. We should 
 generally conclude, that if population is lessening in any locality, 
 the relative importance of the district was declining, or if the num- 
 ber of the inhabitants was increasing, that its industrial activity 
 was increasing also. But, unfortunately, even this test is an un- 
 certain. Districts may have a congested, and thereupon an 
 impoverished, population, where a diminishing return may imply a 
 real progress. An increasing population may not necessarily imply 
 an improving social condition, or the growth of a race which is to 
 be successful in the economical competition of the world. Near our 
 own shores we have had an experience of a race which grew in 
 numbers indeed, but has sunk in misery ; how caused, this is not the 
 place or time to inquire. We may have population increase, and 
 industry be arrested, or at least carried on under apparently un- 
 favourable conditions. The investigation of such social and economical 
 problems as are before us, even when the facts are, to all appear- 
 ances supplied, is full of difficulty, full of controversy, is often made 
 more obscure by prejudice and passion. 
 
 The two most trustworthy elements in the calculation of the 
 question in what manner is wealth distributed in England at 
 present are the rateable value of property, and the income tax 
 returns when digested and formulated. But neither of these aids 
 can be safely relied on. The principles on which property is rated 
 are neither satisfactory nor uniform. The legislature has conferred 
 all final authority in rating, even in the case of property in cities 
 and towns 011 the county magistrates, and the grossest partiality has 
 followed. Vast mansions are valued at a nominal yearly rent, on 
 the plea that such mansions have little or no letting value, the test 
 suggested by the Eating Act of William IV., and therefore these 
 valuations, as far as they go, are no test. Then in some places, all 
 property is valued at close upon its gross rental, and in some other 
 places at much less than its gross rental. Some kinds of property
 
 MODERN ESTIMATES OF LOCAL WEALTH. 141 
 
 pay an indirect rent, because the lessor of the property has a 
 monopoly of supply to it, and therefore can obtain a far greater 
 profit from the occupant than his rent suggests. Such kinds of 
 property again disturb one's estimates as to the distribution of 
 wealth, because for rating purposes every effort is made to under- 
 value them. 
 
 Again, the income tax returns, when digested into the several 
 counties, give us in modem times some idea as to how wealth is 
 distributed in England. But setting aside the obvious anomalies of 
 this impost, particularly those of the farmer's schedule, the return 
 of income, if it be taxed at the place of receipt, when the place of 
 receipt is not the same as that in which the income is earned, is 
 misleading. A man derives a large profit from a factory, or from 
 productive works in one county, and receives his profits in another. 
 The distribution by counties gives an erroneous idea as to the dis- 
 tribution of productive industry. This ambiguity is heightened in 
 the case of those localities where the spending class is more nume- 
 rous than the productive class, as is the case with London and many 
 other towns : still more markedly, where people who have ceased to 
 be producers, or never have been, and are to a great extent, not even 
 traders, but live on income. The population of Yorkshire or 
 Lancashire probably represents a larger production of wealth than 
 that of Middlesex or Surrey does, and yet in the interpretation of the 
 problem before us, as to the distribution of wealth in England, ap- 
 pears to denote a lower average of industry than the district in 
 which income accumulated from savings is spent. It is exceedingly 
 difficult then, from the statistician's point of view, to decide from 
 any figures set before one, how to interpret the distribution of Eng- 
 lish wealth, even in our own day. 
 
 The difficulty was less in antiquity, but, unfortunately, we are 
 not in possession of information, except as I shall show inferentially. 
 There is indeed one ancient document, not quite exhaustive, but for 
 all, as far as it goes, copious and accurate, in which an account of 
 English society is given from the point of view which I am at pre- 
 sent considering. Domesday purports to give a complete statement, 
 for the region which it surveys, of the property which it registers. 
 It is intended to state with minuteness what were the resources of 
 every lordship, parish, and manor, the owners and inhabitants, with
 
 142 THE DISTRIBUTION OF WEALTH IN ENGLAND. 
 
 the civil status of all those whom it enumerates and describes. 
 The survey is not only particular, but unique. I do not remember 
 that its parallel exists in the archives of any country, and it was the 
 first and last effort of the kind in England. It is the more interest- 
 ing and remarkable, because it contrasts England at the end of the 
 eleventh century, with England in the middle of the same century 
 to the no small advantage of the latter, in what seemed to be the 
 good old times, those of Edward the Confessor. But Domesday Book 
 has never been analysed from the statistician's point of view, and 
 especially from that before me, the distribution of wealth in England 
 during those wild archaic times. 
 
 Of course, when the elements of society were far fewer, and the 
 relations of the people to each other were far more direct, the 
 solution of the problem would be, in the presence of the requisite 
 information, far more easy than it is now. The circle in which the 
 peasants and burghers lived was narrow. In his parish or manor the 
 former was at home among his comrades, who lived under a system 
 of reciprocal responsibility, and a sufficiently active administration 
 of customary law. Everywhere else he was a stranger, except for 
 his occasional participation in the action of the hundred and the 
 County Court. There was on the boundaries of nearly every village 
 a tract of no-man's land, sometimes a tract of great extent, in which 
 landless men lived. The traditions of outlaws living in the forest 
 and maintaining themselves by poaching and plunder, amenable if 
 they were captured, to an infinitely more severe law than that which 
 prevailed in the settled villages, and from whose depredations the 
 villagers were secure, are not only presented to us in ballads, but in 
 sober narratives. Such, for example, is the story told us by Matthew 
 Paris of the robbers of Alton, in Hampshire, who carried on their 
 depredations extensively 011 the tract of forest extending through the 
 middle of Hampshire to Southampton, raids Henry the Third 
 found it no way easy to put down, in which many of his own house- 
 hold were associated. The road from Southampton was the principal 
 highway by which French merchants transmitted their goods, and I 
 think it highly probable that the ancient settlements 011 the Hamp- 
 shire rivers, though they did not, and by their customary law could 
 not, harbour the malefactors, were very indifferent to their doings. 
 
 Any one who has studied, even superficially, the records of Manor
 
 SELF-GOVEENMENT IN THE VILLAGE. 148 
 
 Courts in the fourteenth century, when the ancient jurisdiction of 
 the Court leet with its grand and petty jury was in full vigour, will 
 see how effective and how full of reciprocal checks the system was. 
 As the king appeared in his own courts of law by his deputy only, 
 so the lord of the manor did not sit in judgment himself, but by his 
 steward or seneschal. Before this personage, offenders were pre- 
 sented, for the steward could take 110 official notice of local offences, 
 except the offender were presented. If the offence was very grave, 
 and the court had the high jurisdiction a jury was empanelled to 
 try the offence. I printed myself, many years ago, an example of a 
 trial for a capital offence, in the manor of Holywell, the conviction 
 of the offender, the sentence and its execution, as late as 1337. In 
 this case the felon is described as a vagabond, and without chattels 
 of his own. As he was caught red-hand in the commission of the 
 theft for which he was executed, the injured party recovered his pro- 
 perty. When the offence was proved, the steward settled the 
 penalty, the fines being part of the lord's dues. Now if the official 
 were too severe, the jurors of the village were discouraged from pre- 
 senting offenders, and the lord's revenue suffered. If he were too 
 lax, which was not likely, as he had, on his lord's behalf, a pecu- 
 niary interest in the penalties, the discipline of the manor suffered. 
 On the whole, I believe that the justice of the old Manor Court was 
 more effective and more satisfactory than that which superseded it, 
 and in order to coerce the labourer in the matter of wages was made 
 very effective, the justice room of the magistrate. 
 
 In these villages, as I have already stated, the principal employ- 
 ment of the people was agriculture. There were, I make no doubt, 
 in nearly all villages, some persons who either added another calling 
 to that of husbandman, though few, I think, were without land 
 which they tiUed. Such were especially the miller and the com- 
 mon carrier, the latter being frequently mentioned as well as the 
 former in the record of manorial discipline, the former generally 
 presented for abusing his position, the latter for negligence or fraud 
 as a bailee. I take it, too, that the spinning-wheel was found in 
 most homesteads high and low, and the hand-loom in many. The 
 clothing of these rustics was, as a rule, homespun. This is manifest 
 from the invariable assortment of wool into ordinary merchantable 
 wool, and locks, the latter being sold at cheap rates for domestic
 
 144 THE DISTEIBUTION OF WEALTH IN ENGLAND. 
 
 manufacture. In early times, too, it was customary for the hus- 
 bandmaii to sow small plots of hemp and flax. In the reign of 
 Henry VIII., w T hen there seemed a likelihood of this kind of agri- 
 culture going out of fashion, it was enforced by penalties. But 
 besides this domestic manufacture, spread it would seem over the 
 whole island, there were special manufacturers of linen and woollen 
 cloth. The original home of this was Norfolk, a county which had 
 early, continuous, and close relations with Flanders. Not a few of 
 these Flemings emigrated to Norfolk and settled there, the English 
 kings encouraging them, in the view of their skill as weavers. The 
 Norfolk weaving was carried on all over the county, in villages 
 which grew into towns, though they never obtained the advantages 
 of incorporation. Indeed it appears that the Norwich guilds exer- 
 cised a sort of jurisdiction over all Norfolk weaving, wherever it 
 was settled. I have no doubt that the settlement of the textile 
 industries in Norfolk was due to the geographical position in which 
 it stood to Flanders. It was not otherwise well suited to the weaving 
 of woollen goods, for the climate is the driest of England, and suc- 
 cessful woollen weaving needs a moist atmosphere and an equable 
 temperature. But it is certain that the density of the population 
 was, for the time, great in Norfolk. There is still a memory that 
 towns like Aylsham and Cromer were far larger and more populous 
 than they now are, that they owed their population to the weaving 
 trade, and their waste to the ravages of the great plague of 1349. 
 The great churches of Norfolk were often pointed to as a proof, in 
 an ill-informed age, that population in mediasval England must have 
 been far greater than was generally supposed. But, in fact, the 
 church of the parish was, at least as far as the nave was concerned, 
 the parish hall, where meetings were held, and often where valuable 
 agricultural produce, such as wool, was stored. The idea that a 
 church was a sacred place, in which after Divine service was over, 
 no business was to be transacted, is not older than the movement 
 which Laud instigated. Here in Oxford, St. Mary's Church was 
 till the time of that prelate, the convocation house of the University, 
 in which academical meetings were held, decrees conferred, lectures 
 given, disputations carried on, and indeed all the secular business of 
 the University was transacted. 
 
 The English midland counties, the eastern counties, and one of
 
 THE EICHEST AND POOREST COUNTIES. 145 
 
 the southern, Kent, were the richest parts of England. They con- 
 tain the largest amount of natural pasture and of easily worked arable 
 land. The western counties, the counties on the Welsh marches, 
 and the northern were the poorest, and of these, as a rule, and 
 invariably in the earlier times, Devon and Cornwall, Yorkshire, 
 especially the North and West Ridings, and particularly Lancashire, 
 Westmoreland, Northumberland, and Cumberland. They were 
 naturally backward and remained backward, the poverty of the district 
 being aggravated by the incessant wars on the Scottish, and for a, 
 while on the Welsh, border. It is true that York was a very consider- 
 able city, occasionally taking second rank after London. But the rest 
 of England, north of the Humber, was backward, scantily peopled, 
 and insecure. It contained rich and well-garrisoned monasteries, 
 and fortified castles. But the towns were very small. Manchester and 
 Liverpool were really no bigger than fair -sized villages. The West 
 Riding of Yorkshire was little else besides barren moors on the 
 hills, and sluggish morasses in the valleys. In order to check 
 marauders, short and sharp justice was done, of which the Halifax 
 Maiden is a specimen. The practices of those rude northern men 
 were distasteful to their southern countrymen, for when, after Wake- 
 field battle, Margaret, in the early part of the year 1461, led her 
 army from the north into the South of England, she could not keep 
 them from pillaging, and the excesses of these freebooters rapidly 
 brought about the deposition of the house of Lancaster. As late as 
 the end of the seventeenth century, it is said that the northern 
 counties were overlightly taxed, under the new system of finance 
 which the government of the Revolution, the war of English suc- 
 cession, the public debt, and the responsibility of Parliament 
 made necessary. 
 
 The principal, perhaps the only, source from which one may 
 gather information as to the distribution of wealth in England 
 is the assessments which have been made of the several counties 
 at different periods of English history, when Parliament accorded 
 a special tax. Direct taxes, especially during war, and under 
 the names of tenths and fifteenths were frequently granted. 
 But the tax was a fixed quantity, which was not altered, except 
 that sometimes a remission was granted to certain towns 
 and villages which had suffered from some great calamity, or 
 
 11
 
 146 THE DISTEIBUTION OF WEALTH IN ENGLAND. 
 
 had fallen into permanent decay. Hence, however accurate 
 the first imposition of the tax was, and however just its original 
 distribution, it is no more, as time goes on, significant of the 
 condition of England from our present point of view, than the 
 Land Tax of 1693, which has similarly remained unaltered, is of 
 the distributed wealth of modern England. The occasions on which 
 assessments are given, which do indicate such a distribution, are 
 comparatively few ; and after long search, continued for years, I have 
 been unable to find a valuation for the latter part of the sixteenth 
 and the first quarter of the seventeenth century, a period in which 
 great economical changes occurred in England, in the dissolution of 
 the monasteries and the consequent changes of tenure which fol- 
 lowed, and in the influx of bullion from the New World. I have 
 however found eleven assessments of the whole or nearly the whole 
 country, the majority of them having been taken in the seventeenth 
 century. What I have found are exceedingly suggestive. I will 
 state in detail what were the circumstances under which the grant 
 was conceded, and the assessment made. 
 
 In 1341, afew years before the Great Plague produced such serious 
 effects on Europe, and in particular on England, our Edward III., 
 who had formulated his claim to the French throne, against the 
 house of Valois, applied to his parliament for an extraordinary 
 grant, and Parliament granted him a subsidy in wool, distributing 
 the tax up to quarters of pounds, over the several counties, two 
 excepted, Durham and Chester, which were under a special adminis- 
 tration. Four cities or towns are separately assessed, London, 
 Newcastle-on-Tyne, Bristol, and York, and their quotas are in the 
 order which I have given. From numerous entries in accounts of 
 the time, I find that the payment was not necessarily made in kind, 
 but was constantly paid in money, the roll of Parliament from which 
 I have extracted my facts, being silent as to the value to be assigned 
 to the sack. I have taken the average price of wool at the time, 
 4 the sack, and shown what was the sum of money under this 
 hypothesis at which the counties are severally assessed. This 
 enables me, taking the present average of the counties, to indicate 
 how many acres in each county go to a pound sterling of taxation, 
 and I have employed the same process in all the other assessments. 
 In 1375, when the Great Plague had induced all the social and
 
 ASSESSMENTS IN 1341, 1375, 1453, 1503. 147 
 
 -economical effects which were derived from it, when the machinery 
 which Wiklif had devised was in full operation, and the peasants 
 were perfecting that organization which was to exhibit its formidable 
 power in the revolt of 1381 ; Edward, now sinking into premature 
 decay, and having lost nearly all his conquests, and even his 
 hereditary possessions in Guienne, appealed to his Parliament for 
 an extraordinary grant. Parliament gave him a fixed sum of 
 money, and, as before, assessed its contribution on every one of the 
 counties, and 011 five cities and towns, London, Bristol, York, 
 Kiiigstoii-oii-Hill, and Bath. 
 
 In 1453, after the loss of all those English possessions in France, 
 which had been gained by the second war of succession, the Gascons 
 had revolted, and pledged themselves to restore the English king's 
 authority in Aquitaine. The old Earl of Shrewsbury and his son 
 were sent to assist them, and an appeal was then made to Parlia- 
 ment. The Commons determined on granting a considerable army of 
 English archers, and send it to Talbot's assistance. They agreed to 
 pay these archers sixpence a day for six months, and again distributed 
 the number of archers among the English counties. On this occa- 
 sion they assessed Durham, and ten cities or towns London, York, 
 Norwich, Bristol, Coventry, Newcastle-on-Tyne, Hull, Lincoln, 
 .Southampton, and Nottingham. The force was never raised, and 
 the tax was never paid, for Talbot's expedition came to ruin almost 
 before the grant was even made. Nineteen years later, the 
 Commons made the same offer to Edward IV., but on conditions 
 which also were never fulfilled. 
 
 In 1503 Henry VII. claimed from his Parliament the payment of 
 the ancient aid for knighting his eldest son, and marrying his eldest 
 -daughter. This aid was really leviable only on the king's tenants- 
 in-chief; but it had not been claimed for more than a century and a 
 half, and I have not found that it was claimed after 1503, during 
 the period in which this feudal liability continued. Henry claimed 
 it from the whole nation, and a fourth assessment was made. On this 
 occasion seventeen cities or towns were separately assessed London, 
 Bristol, York, Lincoln, Gloucester, Norwich, Shrewsbury, Oxford, 
 .Salisbury, Coventry, Hull, Canterbury, Southampton, Nottingham, 
 Worcester, Southwark, and Bath. It is probable that in this assess- 
 ment all the towns which were deemed considerable enough to be
 
 148 THE DISTRIBUTION OF WEALTH IN ENGLAND. 
 
 specially rated were taken, and that in this list we practically have 
 all the larger towns. On other occasions it seems that those only 
 were assessed which were what is called counties of towns, that is,, 
 towns which had a considerable area of country included in their 
 bounds, who had more extensive jurisdiction than other corpora- 
 tions possessed, and to whom the justices of assize had a special 
 commission. 
 
 Now these four assessments taken before the Dissolution, and the 
 fall in the value of money, indicate, during the space of 163 years,, 
 when considerable social changes had taken place, what was the 
 relative wealth, according to the judgment of persons interested in 
 acting fairly, of the several English counties and some few cities 
 and towns. Of course it does not follow that the wealth of a 
 county was materially lessened because it goes down in the list. 
 It- may be that the resources of some other county have been more 
 extensively developed during the interval. Again there are oceas- 
 sional hints given us as to the falling off in the contingent which 
 the several localities paid, due to temporary, perhaps to permanent, 
 causes. I see no reason, then, why we should not entirely rely on 
 these estimates, or doubt either the good faith or capacity of those 
 who made the valuations. It will be expedient to deal generally 
 with these assessments, and then to point out what particular or 
 noteworthy facts there are in each. 
 
 Of course the assessment of Middlesex with London is greatly in 
 excess of that imposed on any other county. Without London, 
 Middlesex does not occupy a very high place, and London up to the 
 middle of the sixteenth century was almost entirely confined within 
 its ancient walls, where it had a considerable number of gardens 
 and open spaces. Indeed, a very large part of the City estate of our 
 day is derived from spaces now built over, of which the City autho- 
 rities possessed the freehold; the most considerable space which the 
 City possesses to the west of London having been a grant made to 
 them for establishing reservoirs, which occupied the site which lies 
 just west of St. James's Street. The population of London was 
 certainly under 50,000 persons, but the people who lived in London, 
 and carried on trade and manufactures there, were far more wealthy 
 than the merchants and craftsmen of other cities. Without London, 
 Middlesex ranges from the third to the ninth.
 
 THE WEALTH OF NORFOLK AND OXFORDSHIRE. 149 
 
 In the first assessment, Norfolk has the second place, and is 
 separated by a considerable interval from the next county, which is 
 that of Oxford. But in the second, third, and fourth Oxford is 
 second, though the interval between the two counties is not con- 
 siderable. Now, beyond question, the supremacy of Norfolk was 
 due to her local manufactures, in which the county remained 
 superior to any other English county during the period before me. 
 Norfolk is not, agriculturally speaking, a rich county. In 1860, 
 under Schedule A of the income tax it stood twenty-fifth out of 
 thirty-seven counties, those, namely, which were valued under the 
 assessment of 1341. In our day, its ancient industry has almost 
 entirely migrated. At the same date Oxford was seventeenth, and 
 if we exclude the two manufacturing and trading counties from the 
 comparison, the seventh, and if we add Kent, which is greatly 
 suburban, and not a little manufacturing and trading, sixth. 
 
 The explanation of the position occupied by Oxford is not difficult. 
 In the first place, it had but little waste land within its area, com- 
 pared with many other counties. In the next, it has a considerable 
 amount of fertile arable land, some of its corn land being of 
 remarkable excellence. But the true explanation of its early agri- 
 cultural wealth is in the large amount of natural pasture it possesses 
 in the northern and north-western part of the county from the city of 
 Oxford onwards. Now pasture in the Middle Ages, and indeed down 
 to the time when winter roots and artificial grasses were generally 
 cultivated, bore a very high relative rent. In the period before us 
 this rent was between eight and twelve to one compared with arable. 
 There is no reason to believe that the hay crops produced in the 
 wide stretches of pasture on the Upper Thames, the Evenlode, the 
 Windrush, and other streams of North-west Oxfordshire were less 
 five hundred years ago than they are now, and I can vouch for it, 
 that the demand for pasture, in economical language, was far more 
 urgent than it is in recent times. The next five counties are gene- 
 rally Bedford, Kent, Berks, Eutland, and Cambridge. But some- 
 times Kent falls out of the series, and the place is taken by 
 Hunts. 
 
 In the first assessment Lancashire is the poorest English county, 
 afterwards Cumberland occupies that place, and Lancashire gets up 
 only above it and Northumberland. The assessment of the West
 
 150 THE DISTRIBUTION OF WEALTH IN ENGLAND. 
 
 Riding of York is also very low. The valuation of Oxfordshire is; 
 about ten times as high, acre for acre, as the three poor counties 
 are, and its assessment is nearly double that of the whole West 
 Riding of York, rather more than half the area of the whole of that 
 great county. The low assessment of Stafford shows how little the 
 mineral resources of that county were known in early times. 
 Devonshire, too, is one of the poorest counties. The centres of 
 modern English opulence were then wild barren regions, inhabited 
 by a rude race. The Mersey was a silent estuary, the Irwell a 
 mountain stream. The hills and valleys of the West Riding, now 
 active with a thousand industries, had a little trade in cloth at Brad- 
 ford and Leeds, and a rude manufacture of steel weapons at 
 Sheffield. For the greater part of that which is produced there 
 now, and travels over the known world, the England of the 
 fourteenth and fifteenth centuries depended on the Baltic provinces, 
 Flanders, and Spain. 
 
 In 1341, the contribution of London to the wool tax was less than 
 a fourth of that at which Norfolk was assessed. In 1453 it contri- 
 buted more than Norfolk to the charge of the archers. But in the 
 first half of the fifteenth century the city of London made remark- 
 able progress. The " Libel of English Policy " is proof as to how its 
 trade had grown, the relics, still surviving from the Great Fire, of the 
 City Companies' archives show how considerable had become, 
 relatively speaking, the wealth of the London traders. Most of these 
 people had, it is true, risen from comparative poverty to wealth. But 
 Wai worth and Whittington in the fourteenth, the Chicheles and Caii- 
 nyngs in the fifteenth, are illustrations of the rapidity with which 
 successful trade earned wealth in those early times. In 1453 the con- 
 tribution of London is three times that of Oxfordshire. In 1503 the 
 contingent of Oxfordshire is nearly twice as much as that of London. 
 But in this year great part of London was burned to the ground, a 
 fact which shows why the falling off took place and that the assess- 
 ment was equitable. London and Norfolk, too, were very severely 
 visited by the sweating sickness. Bristol was the third city in 
 1341, the second in 1375, the fourth in 1453, and the second again 
 in 1503, while Norwich falls from the third place in 1453 to the 
 sixth in 1 503. In the last year Gloucester is the fifth in order, 
 But there is no doubt that thes-e ports of the Avon and Severn were
 
 THE TOWNS AND THE WEAVING DISTRICTS. 151 
 
 early and actively engaged in the traffic with Spain and Portugal, 
 if they did not venture on following up Cabot's discoveries of 1497, 
 he having sailed from Bristol. But it should be remembered that 
 the cloth and linen manufacture was of the county, and not of the 
 city. 
 
 Between 1503 and 1636 I have been unable to find a single 
 assessment. I greatly regret the lack of information, and I despair 
 of any discovery in future. Now the facts which would have to be 
 considered with the assessments, were any such forthcoming, are 
 the dissolution of the monasteries, the decay of the towns, the stint 
 of agriculture, the extension of sheep farming, the growth of the 
 native woollen manufacture, the debasement and degradation of the 
 currency, the wars of religion, the prostration of Flanders, the 
 immigration of the Flemish weavers, and the rise and consolidation 
 of the Dutch Kepublic. In the later part of the time occurs the 
 most disastrous epoch of the Thirty Years' War, and the utter im- 
 poverishment of Germany. Now some of these foreign and domestic 
 events are admitted to have greatly affected the distribution of wealth 
 in England, and all must have done so, though no information is 
 given us. Among local events, the insurrection of Ket in Norfolk 
 had, we are told, the most disastrous effects on that county's pros- 
 perity, though I believe that already it had been discovered that the 
 eastern counties were not, by reason of their climate, the best 
 district in England in which to produce textile fabrics. Even in 
 the fifteenth century 'cloth-weaving on a considerable scale was 
 pursued in small towns and villages. Fastolfe bought cloth for years 
 together for his soldiers at Castle Combe, Dorset. Bishop Fitz- 
 james, warden of Merton at the end of the century, bought for his 
 fellows and himself at Norton Mandeville in Essex. 
 
 The ship money valuation of 1636 was said to have been 
 studiously equitable, and to have been made the basis of similar 
 assessments in later times. Charles and his advisers were not 
 willing to add injustice to illegality, though it must be admitted that 
 some of the assessments were not a little puzzling. Norfolk, which, 
 133 years earlier, had occupied the third place, was sunk to the 
 twenty-fifth ; Oxford, which was formerly second to Middlesex, is now 
 seventeenth. Cambridge, which was always among the first eight, 
 is now twenty-third. The first eight are now Middlesex, Herts, Beds,
 
 152 THE DISTRIBUTION OF WEALTH IN ENGLAND. 
 
 Bucks, Northhants, Berks, Leicester, and Hunts, of which only 
 three were in the first rank before ; Middlesex increasing rather 
 than diminishing its contingent. The reason is to be, found, I 
 believe, in the departure of manufactures from Norfolk, and owing 
 to the exalted price of wheat, the great importance of arable farming 
 over pasture. The poorest county is Cumberland, then Lancashire, 
 then Westmoreland, next Durham with Northumberland. Middle- 
 sex is assessed in amount at 141 times per acre more than Cumber- 
 land, and nearly as much over Lancashire. 
 
 The next assessment is the distribution of 400,000 over the 
 counties and towns of England and Wales (no Welsh town is 
 separately assessed) for the purpose of suppressing the Irish re- 
 bellion. The vote is taken in 1641. I do not pretend to account 
 for the extraordinary items in this assessment. Devon is, it seems, 
 most unfairly treated, being rated in the sixth place among the 
 contributory counties. Norfolk, which five years before was the 
 twenty-fifth, is now the sixth ; Kent, formerly the fourteenth, is 
 here the fourth ; Suffolk, previously tenth, is now third ; and 
 Surrey, once eighteenth, is now second. On the other hand, Rut- 
 land goes from the eleventh place to the twenty-fourth ; North Hants, 
 from the fifth to the twenty-sixth; Leicester, from the seventh to 
 the twenty -eighth. The poorer counties remain in nearly the same 
 order, only Lancashire rises from the thirty-ninth to the thirty-fifth 
 place. I cannot but think that this was a hasty, and therefore a 
 capricious, assessment. I do not think it was designedly unfair, for 
 Parliament put heavy burdens on some of the counties which were 
 strongly 011 their side. 
 
 Similar to this is the assessment of March 25, 1649. This was 
 a levy of 90,000 a month for six months, for the purpose of pay- 
 ing the forces. It was admitted to be the best valuation which could 
 be made under the circumstances, but that it should last for six 
 months only, during which time a searching and careful valuation 
 would be made. This removes some of the inequalities of . the 
 assessment made eight years before. Devon is put in the twelfth 
 place ; Essex raised from the ninth to the fourth ; Cambridge, from 
 the tenth to the sixth ; Surrey, from the second to the tenth ; 
 Sussex goes from the twenty-third to the ninth place. This last 
 change is due, I think, to the fact, that at this time the Sussex iron
 
 ASSESSMENTS IN THE SEVENTEENTH CENTURY. 153 
 
 works were at the height of their activity and prosperity. But the 
 furnaces soon exhausted the wood, and though iron was manufac- 
 tured in the county up to the beginning of the eighteenth century, 
 the industry was a declining one. 
 
 On December 25, 1649, Parliament published its new assessment. 
 This, as I have said, was taken with great care, and appears to 
 have been generally followed in 1672. In this assessment Suffolk 
 still holds the second place, though its assessment is a little more 
 than a tenth of that put upon Middlesex, the third place being that 
 of Surrey. The other five are Herts, Kent, Essex, Bedford, and 
 Rutland. It appears that, partly owing to the fact that the eastern 
 and home counties were not adversely affected by the war, which 
 was now practically over, partly because the relations between 
 England and the Continent, especially Holland, were for a time 
 increasingly with the eastern counties ; partly because there was 
 a revival of' the woollen industry in Essex, Eastern England was 
 found to have greater resources than before. Norfolk is ninth, and 
 is followed by Cambridge. But Sussex sinks from the third to the 
 twenty-fourth place. It should be added that the difference of 
 assessment per acre is very slight in the first fifteen after Middle- 
 sex. The relation of the poorer counties suffers scarcely any change. 
 Altogether the valuation appears to be scrupulously fair. The towns 
 under this new valuation are in the following order London, 
 Norwich, Southwark, a proof that London wealth was flowing into 
 *Surrey, Bristol, Gloucester (the trade of the Severn towns was 
 growing), Coventry, Chester, Southampton, Hull, Haverfordwest, 
 Newcastle-on-Tyne, and Poole. The Northumbrian town had suf- 
 fered severely during the occupation of the Scots. For a time its 
 coal trade was almost suspended. 
 
 In 1657 an assessment of 6,000 a month was levied on Scot- 
 land, 9,000 a month on Ireland, these countries being added to 
 England by the Act of 1654, and being entitled to send repre- 
 sentatives to Westminster. Every burgh in Scotland is assessed ; 
 from Edinburgh at 334 12s. a month to New Galloway with 10s. 
 In Ireland only one city, Dublin, is separately assessed. If this 
 assessment be a just one, which there is no reason to doubt, Dublin 
 was the second city in the British Islands. It is rated at more than 
 twice the amount at which Edinburgh is put, and Edinburgh is
 
 154 THE DISTRIBUTION OF WEALTH IN ENGLAND. 
 
 more than three times as wealthy as Dundee, the second Scottish 
 town, Glasgow being the third. 
 
 On Nov. 8, 1660, Parliament recognized the impossibility of 
 reviving the old feudal liabilities, but they were in a difficulty as to 
 how to provide for the deficiency in the royal revenue. No one 
 seems to have been struck with the obvious equity of distributing the 
 reputed income of the Crown from these sources, 100,000, over the 
 estates which were liable to it. At last, as is well known, landlords 
 emancipated their estates by the hereditary excise, i.e., at the cost of 
 consumers in towns, for the excise only applied to the public brewer. 
 In the interval, however, they projected a plan of distributing it 
 over all real estate in the form of a land tax, and made a valuation 
 which w r as levied on the ship money assessment, and indeed was 
 almost a reproduction of that project. But the scheme was dropped, 
 because it was manifest that they whose estates had never been 
 liable to the impost, viz., the socagers and copyholders, would not 
 tamely submit to what at that time would have been a tax of about 
 4fd. in the pound, and it was not expedient at that crisis to make 
 any representatives of the landed interest, even those who had 
 collected their estates by the fortune of war in Oliver's time, dis- 
 satisfied with the Eestoration. There was a great deal of cautious 
 steering to be done in the fours years which followed the re-establish- 
 ment of monarchy, and, as we all know, Clarendon was sacrificed 
 because he was prudent, and Charles was selfish. 
 
 Though the assessment of 1660 is professedly founded on 
 that of 1636, it differs from it in some important particulars, and 
 therefore seems to be almost an independent valuation. The second 
 county is Suffolk, as in 1649 ; the third is Bedfordshire, the fourth 
 Kent, the next Hertfordshire, the sixth Essex, the seventh Eutland r 
 the eighth Sussex. But of these Kent is fourteenth in 1636, Essex 
 fifteenth, Rutland eleventh, Sussex twenty-ninth. Between the 
 second and seventh, there is not to be seen a very marked difference; 
 or, at least, not one which is serious, in short, it is about the dif- 
 ference between the second and seventh in 1636, close upon 20 
 per cent. The contingent of Middlesex is again not quite so high 
 as in previous valuations. Perhaps it was felt too absurd to rate 
 the City of London strictly to a feudal obligation. 
 
 In 1672, by vote of February 4th, a million and a quarter was
 
 THE VALUATIONS OF 1660 AND 1672. 155 
 
 granted to Charles to assist him in the utterly unprovoked and 
 nefarious war which he waged on the Dutch. After he had got the 
 grant, he stole the goldsmith's money. The tax, in accordance with 
 the tradition of the Commonwealth period, was raised by monthly 
 contributions on the counties, including Durham and Cheshire, and 
 on nine cities and towns. In this assessment, Middlesex, apart from 
 London, is the largest contributor in proportion to its acreage, a 
 proof that- London had spread far beyond the City walls. Next 
 comes Suffolk, but Surrey is close upon it. The next five are Herts, 
 Kent, Bedford, Essex, and Somerset. Middlesex, apart from Lon- 
 don, is assessed at three times the amount per acre of the nearest 
 county. The contribution of the City of London, despite the plague 
 and the fire, is considerably above any other county, for the con- 
 tingent of Yorkshire, the largest in area, though in the rate per 
 acre it is near the bottom, is 1,600 less than that of London. 
 Bristol is now the second city in the kingdom, for it has got pos- 
 session of the plantation trade, but Norwich is not far behind it. 
 Exeter, Worcester, Gloucester, Haverfordwest, Lichfield, and Poole 
 are also separately assessed. 
 
 Here again there are considerable changes. Surrey is third, the 
 place it had in 1649. Somerset, which was fourteenth in 1649, is 
 eighth now, a change which is, I make no doubt, due to the spread 
 of the cloth industry in the west, and especially in this county. 
 Essex was sixth, and now seventh, being but little behind the 
 county which precedes it. The baize industry had become an 
 important manufacture at Colchester. Norfolk occupies the twelfth 
 instead of the ninth place. Generally, however, it seems that the 
 advantages which were secured for the eastern counties by the fact 
 that they hardly suffered in the civil wars still remain. The asso- 
 ciated counties still remain the most wealthy. The poorer counties, 
 as far as the assessment goes, are very little changed, but Wales is 
 getting relatively poorer, or which is the same . thing, the other 
 counties are gradually making head. Though their place is nearly 
 the same the contribution of the poorest among them is increasing. 
 
 These facts are brought out still more plainly in the last assess- 
 ment which I have to deal, that of the 4s. in the pound land 
 .tax, as granted by Parliament. This was to produce nearly two 
 millions, of which Middlesex and London contributed nearly a
 
 156 THE DISTRIBUTION OF WEALTH IN ENGLAND. 
 
 sixth. Tins -tax, though granted by the authority of Parliament, 
 was not assessed by the commissioners appointed in Parliament, and 
 the distribution of the sum was left to the local authorities. It is 
 therefore said, and with some colour for the statement, that those 
 who favoured the Kevolution put their contribution at a true valua- 
 tion, those who affected Jacobite and nonjuring sympathies put 
 theirs at a low estimate. The tax was unaltered in amount till, 
 nearly a hundred years after its first imposition, it was. made per- 
 petual by the younger Pitt, and the basis of a financial operation. 
 In the original return the cities and towns are included in the 
 schedule printed in Pitt's Act, for the valuations are given in extenso, 
 and I remember that the valuation of the city of Oxford, then 
 strongly Whiggish was, in comparison with other towns, remarkably 
 high ; and that of the colleges, which were undoubtedly Jacobite, 
 though not markedly nonjuring, as this manner of expressing their 
 convictions would have involved pecuniary losses, was as markedly 
 low. The university and colleges of this ancient city have been 
 very faithful to reactionary principles, and perfectly willing to profit 
 by their occasional ascendency, but they have been exceedingly 
 unwilling to make any sacrifice on behalf of them, when such 
 principles have been under a cloud. When there were hopes that 
 the Stuarts would be restored, half the beneficiaries, ecclesiastical 
 and academical, were in correspondence with St. Germain, but they 
 took every oath required by the usurping powers, satisfied their 
 consciences, and kept their preferments. Atterbury and Jane, 
 Smalridge and the rest, were no doubt anxious not to deprive the 
 local world of letters of their presence. 
 
 In the assessment of 1693 Surrey takes the second place, and at 
 a considerable interval above Hertford, the third. Oxford, which 
 was rated fifteenth in 1672, is eighth in 1693. Bucks is the fourth, 
 Bedford the fifth, Berks the sixth, and Essex the seventh. Somerset 
 has gone from the eighth place to the thirteenth, Kent from the fifth 
 to the ninth. Suffolk was second in 1672, and is tenth now. Other 
 changes, equally startling, are to be found, and a survey of the facts 
 suggests that the old charge of partiality is made out. On the whole, 
 however, there is a greater approach to equal rating. The dis- 
 crepancy between the proportion to the acre in the midland and 
 northern counties is not so marked. Salop, for instance, is thirty-
 
 THE POPULATION OF ENGLAND AND WALES. 157 
 
 second, York thirty- third. But the rate per acre in Suffolk is not 
 double that of Shropshire, and not treble that of York. In 1672 
 the contribution of York, then thirty-second, is a good deal less 
 than a third of the Suffolk tax by the acre. 
 
 Many years ago I stated it as my opinion, and gave my reasons, 
 that the population of England and Wales, from the beginning of 
 recorded economical history to the end of the sixteenth century, was 
 never in excess of two and a half millions, and was 'often less. At 
 the end of the seventeenth century it was from five to five and a 
 half millions. I will proceed to point out to you how these figures 
 are arrived at. 
 
 Every logician and every economist will allow that if you arrive, 
 from different premises or data, at the same conclusion, it is cumu- 
 lative testimony, and the probability of your conclusion being correct 
 is as high as any evidence of fact can make it. Now I arrived at my 
 conclusion as to the population of England and Wales during this 
 long period by three processes. The first was derived from the rate 
 of production. The average production of wheat from cultivated 
 land was eight bushels an acre, and I came to the conclusion that 
 the possible average wheat-growing acreage of the country was three 
 millions. Now I knew that a quarter of wheat every year for every 
 person, especially at a time when, other vegetable products fit for 
 human food were unknown, was a fair allowance. Then deducting 
 one-sixth for seed, I got my two and a half millions, as the maximum 
 population, with a high probability, as the allowance for seed is 
 rather short, that two and a quarter is the more correct figure. Next 
 I took the figures in the poll tax of 1377. The tax-paying popula- 
 tion can be calculated at a little above one and a half millions. Now 
 adding a third for the children, for the tax is exigible on persons 
 above fourteen only, and making a liberal allowance for ecclesiastics 
 and mendicants, no less than a little over 162,000, they being also 
 exempt, you again get two and a half millions. In the third place, 
 I compared an actual census of a certain district in Kent, taken in 
 the sixteenth century, with the census of the same district in 1861, 
 and found that it was almost exactly a sixth of the later number. 
 The district contained no large towns then and contains none now. 
 Again, I found that one-sixth of the population of 1861 gave me, by 
 comparison with the total population of England, exactly the same
 
 158 THE DISTRIBUTION OF WEALTH IN ENGLAND. 
 
 result for the whole, viz., two and a half millions. I was a good 
 deal criticised when I made my calculations by the first method. 
 But long experience has taught me that no time is so entirely lost 
 as that consumed in controversy with disputants who have no facts, 
 but only convictions. 
 
 Now at the end of the seventeenth century there are similar kinds 
 of indirect evidence to guide us. The wheat -growing area is extended, 
 for the price was very high, so high as to stimulate agricultural pro- 
 duction to the utmost. The produce is now said to be thirteen 
 bushels, but it was no longer exclusively the food of the people, for 
 rye, barley, and oats were occasionally substituted for it. I inferred 
 that, making proper deductions for seed, the soil would, though with 
 an inferior diet, maintain five millions. Next, we have a return 
 under the hearth tax of the number of houses and hearths in the 
 several English counties and in Wales, in 1690. Allowing a little 
 more than four to a family this gives a little over five millions. An 
 estimate of the various religious sects gives under five and a quarter 
 millions. And in recent times a calculation by an actuary of the 
 possible population, from baptisms, marriages, and burials, gives 
 under five and a quarter millions. Here, again, the evidence is cumu- 
 lative, and I think conclusive. 
 
 Two other facts may be briefly commented on in conclusion. I 
 have referred to the hearth books of 1690. This return gave the 
 number of houses hi each county and the number of hearths in each 
 county; for certain houses, rented at no more than 20s. a year, were 
 exempt from the tax. Now the most sparsely-peopled counties are, 
 as might be expected, Westmoreland and Cumberland ; the most 
 densely Middlesex, and Surrey. In the first two the acreage to each 
 house is 70-55 and 63*66 acres. In Middlesex and Surrey the same 
 analysis gives 1-619 acres and 11-79 acres. It is easy to see, then, 
 why Middlesex yielded so much to taxation on an assessment of 
 property. But I was exceedingly struck when I worked out the 
 figures at the comparative density of the northern population as far 
 as houses go, and the meanness of the buildings as far as hearths 
 go. The population of Durham and Northumberland, taking the 
 facts of the acres to the house, is denser than that of Dorset, Lin- 
 colnshire, Sussex, and Hampshire ; the proportion of hearths to the 
 house is a good deal less than that of any other county. There are
 
 HOUSES AND HEARTHS IJN 1690. 159 
 
 more houses in Lancashire, taking the same proportion, than in 
 Berkshire, Cambridge, Cheshire, Derby, Devon, Essex, Hunts, 
 Notts, Kutland, and several others. And the same facts are visible 
 with certain other northern counties, though in all it is plain that 
 the standard of comfort was much lower. For instance, there are 
 twice as many hearths to a house in Devon and Dorset than there 
 are in Durham. 
 
 The growth of population must have therefore been most rapid in 
 the north during the seventeenth century. Two causes contributed 
 to this : the pacification of the Scottish border and the growth of 
 textile industries in the north, if indeed one can separate the causes. 
 On the latter of these I shall have to comment in a later lecture. 
 
 The other point to which I may make a very brief reference for 
 this, too, will be the subject of another lecture is the incidence of 
 the poor rate in the several counties at the end of Charles II. 's reign. 
 A return of this impost is given by contemporary writers. Of course 
 it is highest to the acreage in Middlesex, being nearly 1 to every 
 ' three acres. It is high in the old manufacturing county of Norfolk. 
 It is high in some of those counties which had most peace during 
 the civil war. But it is disproportionately low in the northern 
 Bounties, and in those which lie on the line of the Parliamentary 
 conflict with Charles I. I conclude that much of the population 
 during the troubles migrated to the more peaceful and settled dis- 
 tricts. There is no doubt that the inhabitants of the north were 
 more penurious, more habituated to low wages, and to a lower 
 standard of living, more given to bye-industries. It was no doubt 
 in order to check this migration that the law of parochial settlement 
 was enacted. In course of time the exigencies of a growing manu- 
 facture led to the practical repeal of this law of settlement in the 
 manufacturing districts, and the growing industries of the north 
 relieved, a century later, the congested population of those southern 
 counties which were now falling behind in the distribution of wealth 
 and population. v
 
 VIII. 
 THE HISTOEY OF AGEICULTUEAL EENTS IN ENGLAND. 
 
 The disctission as to the origin of rent The " indestructible qualities " 
 of the soil Selden and tithes Interest, wages, and rent The- 
 landowners and labour in history Civilization and government 
 Early agriculturein England The rent of meadow -land Rentals 
 The landlord's duties The New College (Oxford) house property in 
 the fifteenth century Landlord cultivation and its effects Compe- < 
 tition rents, late in coming The law of distress, competitive and 
 famine rents The seventeenth century rents Bye-industries - 
 The landowners of the eighteenth century Arthur Young's com- 
 ments Lord 'LovelVs agriculture The rise of rents Wool and 
 stock prices The colleges of Oxford and Cambridge. 
 
 NOTHING has exercised the ingenuity of economists more than the 
 analysis of rent has. The position of rent and its relation to industry 
 and taxation were problems which occupied the attention of the 
 physiocrats ; of the teachers (in so far as he was taught by any one) of 
 our Adam Smith, and very curious and wild conclusions were arrived 
 at by some of those excellent thinkers. Smith gave his own account 
 of rent, and a slip which he made in his analysis, under the circum- 
 stances a somewhat pardonable one for a man who lived in the days 
 of corn laws and bounties, that rent enters into the price of commo- 
 dities instead of being a product of them, and of another exceedingly 
 important factor, which the critics unaccountably overlooked, was 
 duly commented on. The theory of Smith was amended by Eicardo, 
 and his definition of the origin and increment of rent received, 
 for very sufficient reasons, a most thankful acceptance. The merits 
 of Ricardo in making or announcing his discovery were challenged
 
 THE DISCUSSION AS TO THE ORIGIN OF RENT. 161 
 
 by MacCulloch, who divided the original honours between a Mr. West 
 and a Mr. Anderson and, with excusable patriotism, claimed priority 
 for the Scotchman. The doctrine of Kicardo, with many riders, such 
 as the law of diminishing returns, the margin of cultivation, the 
 land that pays no rent, and the like, has been accepted, and forms 
 the staple of most dissertations on political economy. I am con- 
 strained to conclude that there is little credit to be got for the re- 
 piited discovery ; that it is partly a truism, partly a fallacy, and that 
 its acceptance as a sufficient analysis of rent is one of the peculiar 
 hindrances which obstruct the way when we have to solve a present 
 difficulty of no common magnitude. British agriculture has fallen 
 during the last eight years on evil days. Its decline, and with it the 
 decline of the home trade, is a most formidable fact. Its restora- 
 tion, in some form or other, is a matter of urgent interest. But 
 nothing tends to retard that restoration more than false notions as 
 to the nature of rent. 
 
 In dealing with this controversy, and in dealing with it in my 
 own way, under the light of economical history, but with constant 
 reference to the demonstrable, almost axiomatic, principles of 
 economic science, I can claim some special advantages. I am the 
 only person who has examined rents historically. I have studied 
 the history of the same estates in some cases for 'more than six 
 centuries, estates the "indestructible powers" of which, to use 
 Eicardo's expression, have not varied during that long period, the 
 rents of which, however, compared with any other value, which 
 is measurable by money, have been subjected to considerable, to 
 astonishing changes. I can state, with perfect certainty, what 
 this land produced in corn six centuries ago, and I can also state 
 what it produced at different periods between that remote starting- 
 point and the present time. I know that while the value of its 
 corn produce has risen in money units or symbols about eight 
 times since my investigation began, the rent, in the same units 
 or symbols has risen eighty times. I may believe a great deal in 
 " the indestructible powers of the soil," though I should be very 
 credulous if I held that the fertility of any soil was indestructible,, 
 as I think every practical agriculturist would be, too. But I am 
 sure that something else is wanting besides these powers to account 
 for so striking an elevation. I find, too, that while so remarkable 
 
 12
 
 162 HISTORY OF AGRICULTURAL RENTS IN ENGLAND. 
 
 a price lias been paid for the license of using arable land, nothing 
 near so disproportionate a rise of price is discernible in the rent of 
 of natural pasture, -which never has been, and never could be, 
 under arable crops, and which therefore approaches the indes- 
 tructible more nearly than any land which is under the plough. I 
 shall try in the course of this lecture to point out the circumstances 
 which have brought about the change. Mr. Henry George has 
 accepted Ricardo's theory, and inferred from it to the confiscation 
 of all rent by the State. I repudiate Eicardo's theory, and dissent 
 from Mr. George's conclusions, for reasons which I hope to give 
 hereafter. But it is not a little remarkable that a theory which 
 assigns a providential origin of rent should be pressed into the ser- 
 vice of the theorist who wishes to annul it ; while the inference 
 which I draw from the facts of the case, and in which I give the 
 historical events which have developed it, is that it would be not 
 only a blunder and an injustice, but an amazing folly, to accept Mr. 
 George's conclusion. There is a parallel to my position. The 
 clergy in the time of James I., perhaps some of the clergy in the 
 days of Victoria, believed in the Divine origin of tithes. Selden 
 believed that .the origin was human, and proved his point. The 
 clergy were very angry, and got Selden put into prison for his 
 pains, a contingency which is not entirely remote, if one presses 
 too strongly the truly conventional origin of rent in our day. 
 But when, a few years afterwards, the Divine right of the clergy 
 was repudiated for a time, and the tithes seemed likely to go with 
 the Divine right, the clergy gladly embraced the inferior title which 
 Selden proved was theirs. The moral can be easily gathered. I 
 am no more an enemy of rent than I am of any other natural 
 result. But I decline to give it a transcendental authority or to 
 imagine that, like every other part of the theory which economists 
 call the distribution of wealth, it is other than a human institution, 
 recognized because, within proper limits and under intelligible con- 
 ditions, it has a human utility. 
 
 Economists are perfectly correct in saying that the common 
 product of capital, labour, and land is distributed among the three 
 several agents or partners as interest, wages, and rent. By wages 
 I mean, as I have previously explained, the labour of the capitalist 
 as well as the labour of the workman,' for no logical distinction
 
 SELDEN AND TITHES. INTEREST, WAGES, AND RENT. 163 
 
 <;an be drawn between the wages of superintendence and the wages 
 of manual labour; for both to be effective, imply what physiologists 
 <;all nervous and muscular waste. The order in which the distri- 
 bution is effected is that labour is paid first. The payment of 
 labour is essential to industrial life, and both interest and capital will 
 be lost if the necessary claims of labour are not met, while rent could 
 not accrue. In this partnership, the economist says, except these 
 ;abide in the ship you cannot be saved. Labour paid, I do not say 
 satisfied, interest is paid, and this being presumably a contract 
 quantity, little need be said about it. Last comes rent. In com- 
 mon language, interest on capital appears to be paid first. That 
 it is not is proved by the fact that no one would be silly enough 
 to lend on a security which brings in no revenue, unless it was 
 clear that the advent of the revenue is very near. For the sake of 
 'brevity, I will call interest A, wages B, and rent C ; and I must 
 remind you that the laws which govern the distribution of wealth 
 are mainly of human institution. 
 
 It is a common-place in practical politics that they who own 
 the land of a country make its laws. The statement, of course, is 
 -at best a strong tendency. In a country like our own, where 
 tradition and habit, to say nothing of positive institutions, have 
 long deferred to the judgment of landowners, the common-place 
 has been, till recently, an admitted verity. There are symptoms 
 that the sentiment is losing its force, bat no one who has the 
 smallest knowledge of social history in England can doubt that it 
 was once overwhelmingly strong. Now it is in human nature that 
 when, in the distribution of wealth, human institutions accord 
 extraordinary authority to the recipients of rent, they will use their 
 advantages to the full, and be indignant with those who dispute 
 the justice of these advantages. I will venture on illustrating my 
 position from my own case. I have very strong opinions on the 
 relations of landlord and tenant in Ireland, and have expressed 
 them, I trust with moderation, before a more august assembly than 
 that which is hearing me to-day. But I will candidly own that, if 
 I possessed a reputed 30,000 a year in Irish rents, I should 
 find it exceedingly hard to reconcile my -opinions with my 
 interests. In the absence of passion and self-interest, says the 
 English moralist, men are disposed to be just towards each other.
 
 164 HISTORY OF AGRICULTURAL RENTS IN ENGLAND. 
 
 In the course of English economical history C has striven, and 
 with no little success, to use the force of law in order to better 
 himself at the expense of B. In a former lecture I gave you an 
 elaborate, almost an exhaustive, account of the various labour 
 statutes. These were attempts to make the laws of human 
 institution available for an unequal distribution of wealth. I shall 
 have to point out in the course of this lecture how contemporary 
 writers accuse C of extending the same operation over B in another 
 capacity, i.e., as a tenant farmer. I should exhaust the time at 
 my disposal if I were to show you how C has contrived to mulct 
 B all round, especially in local taxation and in the transference of 
 local taxation to imperial taxes. I shall have to show you how, 
 during the seventeenth century, when C was very much in the 
 ascendency, he did a good many things which have been very 
 severely criticised since, and that I have discovered other practices 
 of his with the same object. He did not, for the reasons which I 
 have given, that interest is a contract price, succeed quite so well 
 with A. But usury laws and the equity of redemption in a 
 mortgage, when it is foreclosed by non-payment of interest, are 
 illustrations of the same inclinations. It was because he noticed 
 such facts as these that Adam Smith called rent a tax, and because 
 he saw that the avowed object of many laws existing in his time 
 was to raise the rent of land through the machinery of prices, that 
 he considered, and not without colour of reason, that rent entered 
 into prices. 
 
 A country is not civilized or safe unless it accepts and obeys a 
 central administration, whose first business it is to aggregate all 
 the force which is necessary for the protection of society from 
 external and internal foes. England for a long time after the Con- 
 quest needed such a central authority. In their efforts to con- 
 solidate France, the French kings were always thwarted by their 
 nobles and aided by their other subjects. Even the American 
 Eepublic finds itself constrained to strengthen the Federal adminis- 
 tration at the expense of State rights. But there is always a 
 danger that the forces of government, the action of Parliaments, 
 the power of law, may be made more injurious to a community 
 than foreign and domestic foes are. Ancient civilization was 
 wholly destroyed by the administration of the Roman Eepublic
 
 CIVILIZATION AND GOVERNMENT. 1G5 
 
 and Empire. Bad Governments ruined Spain ; bad Governments 
 nearly mined Italy. It may be well feared that even now many 
 European Governments are doing the work of Frankenstein, 
 creating monsters whom they cannot control. The reason has 
 been that Governments have used their powers, which they call 
 the Constitution, not as a public trust, to be faithfully executed for 
 the public good, but as agents for their own gain. We in Eng- 
 land have had copious and continuous experience of this breach of 
 trust. The people of Ireland have had no other experience. The 
 historian of social life, who knows that effects do not cease when 
 the causes are removed, is therefore engaged in seeking out past 
 causes for present distresses, and may be seem to shallow persons 
 to be needlessly indignant with bygone misdeeds, and to be unduly 
 alarmed, when he urges that you cannot trust human nature to 
 legislate from the point of view of its own interests. 
 
 Now the capital fact in the history of rent is that agriculture, 
 however rude the industry may be, can always produce more than 
 is necessary for the husbandman's maintenance and that of his 
 family. I find that in early English agriculture, as in modern, a 
 workman to twenty acres is a liberal allowance of labour. ' Give 
 the labourer five persons to his family, and assign a third of the 
 land to the supply of human food, the other two-thirds to fodder 
 and the maintenance of cattle, and let the produce be a quarter 
 to an acre, and he will grow seven quarters of food for the con- 
 sumption of five persons. But five quarters are sufficient for 
 them. The remaining two over and above will supply seed and 
 rent. I leave out, for the sake of simplicity, the same set of facts for 
 the remaining two-thirds. Now, historically, it was on this overplus 
 that the ancient lord laid his hands, and called it rent, and Adam 
 Smith was again justified in calling rent a tax. 
 
 An ideal state of society is one in which there is no rent at all, 
 in which land is so fertile and so abundant in its produce that the 
 price which the produce commands would be only sufficient to 
 pay interest, recoup outlay and secure wages. Rent is of no interest 
 whatever to any one but the landowner. If it were extinguished 
 by natural causes, no one but he need lament. But this state of 
 things never exists. If the ownership of land remains in private 
 hands, and it would be an evil time should it cease, to be in private
 
 166 EISTOEY OF AGRICULTURAL RENTS IN ENGLAND. 
 
 hands, the inexorable law which limits profits to an average on the 
 calling would develop rent. On the hypothesis that capital and 
 skill are ready for agriculture, people will pay for an agricultural 
 advantage which secures profits above the average. Even if 
 agricultural land were indefinite in quantity and indefinite in 
 fertility, some would be in an economical sense more fertile than 
 other land ; say by proximity to the market only, and the 
 lessened charge of freight. So far Eicardo is right, but thus much 
 was known in the days of the Egyptian and Babylonian kings. 
 Kent is not sacred, but it is natural. Friction is not sacred, but 
 it is natural. One would be glad to see friction reduced to a 
 minimum, but it would remain a very appreciable quantity. And 
 if in the economy of human society, the cost of production and 
 the cost of freight are so diminished, that we are a little nearer 
 the ideal state than we were twenty years ago, it would be as 
 rational for us to mourn as it would be to persist in going by a 
 canal or a high road when a railway is ready for our use. I may 
 be sorry for the man who has put his capital into a canal, or ha& 
 lent his money to road trustees, when the tolls cease to pay the 
 interest, but only in the way that I am sorry for any one who has 
 suffered reverses of fortune. But if the two parties alleged that 
 the canal and road were sacred, and that I must use them and pay 
 for them, my compassion soon gives way to resentment. 
 
 Of course I do not mean to imply that English land will not 
 hereafter pay a rent, that the corn fields of Western America and 
 Northern India have rendered its cultivation unprofitable and im- 
 possible; but I am sure that the present, or rather the traditionary 
 system of landlord and tenant has broken down, and that a new 
 departure must be sought. English agriculture has faced in time 
 past far more formidable difficulties than it has to face now, and 
 has overcome them. But I am entirely convinced that if land- 
 owners, and they who counsel landowners, do not take the pains 
 to understand the situation, and prepare themselves for the future, 
 with fresh knowledge, a new policy, and a new departure, the 
 outlook as time goes on, will be progressively more gloomy. Nor 
 will any return to agricultural protection, an entirely hopeless wish 
 on the part of some politicians and their dupes, relieve the state of 
 things which is now induced on husbandry.
 
 EARLY DAYS OF ENGLISH AGRICULTURE. 167 
 
 From the earliest period of recorded agriculture, by which I 
 mean of such accounts as give us an insight into the occupation 
 of land till some time after the middle of the sixteenth century, 
 i.e., for fully three centuries, the rent of agricultural land remains 
 unaltered at from 6d. to 8d. an acre. This is the rate paid by 
 tenants on lease, by socagers or free agricultural occupiers, with 
 fixity of tenure, and invariable rents under a superior lord and 
 serfs, whom the pedantry of the lawbooks described as holding at 
 the will of the lord ; whom the records of Manor Courts show to have 
 had a permanent holding, though with certain disagreeable and 
 precarious incidents. I shall take occasion to show in a future 
 lecture how unchangeable the families were in a manor or parish, 
 what ^significant economical consequences flowed from this fact, 
 and in particular how it checked the development of certain 
 tendencies for centuries. It seriously affected also the creation of 
 competitive rents, and suggested to the inhabitants of a parish, 
 that while it was not easy to import a stranger into the number of 
 those who lived on the manor, it was in the last degree improper 
 for one occupier to overbid another, and that the traditionary rent 
 was as much as the landowner had a right to expect. In course of 
 time one of the ways in which the landowner tried to raise rents 
 in the face of rising prices was by the fines on admission or 
 renewal. There is evidence, too, that they strove at the beginning 
 of the seventeenth century to exact increasing fines from their free 
 and customary tenants, to take advantage of any neglect or default 
 in order to raise the old rents against the freeholders, and to greatly 
 increase the dues on copyholders when they succeeded to their 
 holdings, or made a conveyance by surrender. 
 
 The rent of meadow land was far higher. Many years ago, I 
 collected the rents paid for those parts of Holywell parish, in 
 Oxford, which lie near the Cherwell, i.e., the low lying ground 
 which extends from the northern extremity of the university park 
 to the boundary of Magdalene- College, on the west bank of the 
 Cherwell, for twenty-four years, between 1295 and 1388. The 
 practice was to let the first cutting for the making of hay, and to 
 make the aftermath or rowens, called rewannum in the accounts, 
 the occasional subject of a second letting. The maximum price which 
 I have registered of the first letting is 9s., the maximum of the second
 
 168 HISTORY OF AGRICULTURAL RENTS IN ENGLAND. 
 
 2s. 8d. an acre, generally it may be taken at 6s. for the first, Is. 6d. 
 for the second, or 7s. 6d. an acre for meadow land all the year 
 through. Similar cases have been discovered in the fifteenth and 
 sixteenth centuries. The explanation is easy. Natural pasture 
 was let at far higher rates than arable, partly because there was no 
 cost of cultivation, or a trifling cost, and partly because winter 
 forage was so scarce. In the seventeenth century the rent of arable 
 land varied from 3s. 6d. to 6s. an acre. I have here, and can show 
 you, three illustrations of what I have said. This volume is a list of 
 all the rents paid on the Coke estate at Holkham, between 1629, 
 when the great Chief Justice retired early from active political and 
 forensic life, and 1706, when the estates were in the hands of one 
 of his descendants. During the whole of this period there is very 
 little change in the rent, which from some twenty large holdings 
 which I have taken is a little under 6s. an acre. This volume has 
 been lent me by the present Lord Leicester. 
 
 The second of these rentals was procured for me by Lord John 
 Manners. It contains the rentals of the Belvoir estate up to 1692, 
 and afterwards. The land comprised in this rental is very well 
 known to me. The average rent is 3s. 6d. before 1692, and about 
 3s. lOd. for a time after 1692. The noble family of Manners has 
 been traditionally indulgent to their tenants, and the lettings on the 
 Belvoir estates are very low, though the quality of the land is good. 
 The third is a rental of certain lands possessed by Pierrepont, Earl 
 of Kingston, in 1689. This rental comes from the Pepys Papers in 
 the Eawlinson Collection. I do not know why Pepys had the list. 
 This Earl of Kingston died in 1690, and was succeeded by his 
 brother, who afterwards became Marquis of Dorchester and Duke of 
 Kingston. The rental of this estate is apparently very high, but 
 a considerable part of it, more than half, is pasture and meadow, 
 which stih 1 bore a relatively high price to arable. Only two small 
 tenancies are entirely arable, and in these, including a house in 
 each case, the rent is 6s. 8d. an acre. On the whole, I believe 
 that fairly good arable land was about 4s. 6d. an acre during 
 the seventeenth century, and that there was a special reason, 
 to which I shall presently refer, for the high rate of the Coke 
 lettings. 
 
 From the very earliest times in English life, rural and urban,
 
 ItENTALS. TEE LANDLOBD'S DUTIES. 169 
 
 the landowner or house-owner, being the ground landlord, effected 
 all permanent improvements and did all repairs. The buildings 
 had been originally erected at his expense, and were maintained by 
 him after he ceased to cultivate the land himself, and procured 
 tenants, first on a stock and land lease, then on an ordinary tenancy 
 for years or at will. In letting agricultural land, the landowner of 
 the fifteenth century even insured his tenant against extraordinary 
 losses. Thus New College let one of its estates in Wilts, and 
 covenanted to indemnify its tenant in case more than 10 per cent, 
 of his sheep died in the course of the year, for the whole excess. 
 The risk was not slight. In two consecutive years, 1447 and 1448, 
 the college paid for 73 and 116 sheep on this single farm. In 1500, 
 Magdalene College, which pursued the same system, paid for no less 
 than 607 sheep to its tenants. The liabilities of the landowner 
 were by tradition very heavy, and he was expected to make them 
 good. The law of clerical dilapidations is a survival of a custom or 
 practice which was once universal. Even in later times, this 
 liability of the landowner to do repairs and effect all permanent 
 improvements was so characteristic of English tenancies that they 
 are distinguished as being under the English system. A totally 
 different practice prevailed till recently in Scotland, and still pre- 
 vails in Ireland, where it is the almost invariable rule that all 
 buildings and permanent improvements have been effected at the 
 instance of the tenant, a practice which has given rise to the 
 recognition by Parliament of a joint ownership between landlord 
 and tenant in Ireland, under the name of tenant right. 
 
 This English tradition is curiously illustrated from the records 
 of house property in towns during the fifteenth century. New 
 College possessed in 1453, house property to the annual value of 
 58 Is. Id., from which fixed charges amounting to 12 11s 7d., 
 and payable to divers persons, chiefly ecclesiastics, were deducted. 
 Its net income would therefore appear to be 45 9s. 6d. But the 
 expenditure on the tenements is very large. Every repair is paid 
 for, even to signs for inns, the well buckets and rope, and 
 latchets and locks for doors. What with these expenses, and with 
 void tenements, the college only gets 3 5s. clear for the year. 
 The possession of house property in towns during the fifteenth 
 century, and for more than two and a half centuries afterwards,
 
 170 HISTOEY OF AGBICULTUBAL EENTS IN ENGLAND. 
 
 was very unlike what it is at the present time, when town rents 
 have been singularly swollen. 
 
 But before I deal with the further rise in rents, it is well to refer 
 briefly to the system of agriculture in England to the end of the 
 seventeenth century. I have already dwelt on it, but I must 
 remind you here of a few particulars. The economist who deal* 
 with facts is constantly constrained to cite his facts, to repeat 
 his facts, because they serve to illustrate various results in the 
 economy of society. 
 
 You will remember that for a long time, certainly for a century, 
 perhaps for longer, the landowner was also a cultivator, owning a 
 considerable capital, interested in the adequate cultivation of the 
 soil, and, being possessed of property which might easily be stolen, 
 convinced that it was necessary to keep the peace. I am sure 
 that for the latter result, the existing machinery was effective. 
 In the very numerous accounts, many thousands, that I have read, 
 it is very rarely indeed that any loss by theft is recorded, any dread 
 of possible theft expressed, even in times of famine. The educa- 
 tion of the English people in the principle of respect for property was 
 very effective. It is true that everybody had property, and there- 
 fore everybody was interested against thieves and pilferers, and in 
 respect for personal rights. I believe that the custom adopted by 
 landowners of cultivating their own estates grew up during the 
 long, peaceful, prosperous reign of Henry III., and the complaints 
 against his government, the criticism on his policy, and, in the end, 
 the armed resistance to it and him arose from the fact that 
 England made great material progress during the first sixty years 
 of the thirteenth century. To this Matthew Paris, one of the 
 few chroniclers who is able to interpret social phenomena, bears 
 witness. 
 
 The agriculture of the time was rude, and the produce scanty. 
 But the best agriculture was undoubtedly that of the landowners, 
 and their bailiffs. They could show the smaller tenants all they 
 knew, and in their way could make experiments. Now one of the 
 most costly of these experiments was their marling of land. It 
 was a costly process, for the expense was constantly equal to the 
 fee simple of the land, as I know from the charges incurred in the 
 undertaking. Marl is an earth partly calcareous, partly argillaceous
 
 LANDLORD CULTIVATION. COMPETITIVE BENTS. 171 
 
 which is of great service to stiff and to thin soils, breaking the one 
 and giving substance to the other. " It naends any kind of land," 
 says a writer on husbandry in the early sixteenth century. It 
 is curious that when the new agriculture of the eighteenth 
 century was adopted, the most enterprising of the landowners 
 revived the policy of the thirteenth and fourteenth. I am dis- 
 posed to believe also that these ancient landowning agriculturists 
 sometimes strove to improve the breed of sheep, a matter of 
 supreme importance when wool was so dear, produce was so 
 accurately estimated, and local breeds were of such various 
 value. This is, I think, proved by the high prices, prices beyond 
 parallel, occasionally given for rams. When landlord cultiva- 
 tion ceased, marling was abandoned, it was too costly for the 
 risk, and sheep-breeding suffered at least some deterioration. 
 I have already explained the cause why landlord cultivation was 
 abandoned, and the stock and land lease adopted. The social results 
 which followed were many and various. 
 
 There is no trace of competition rents during the whole of the 
 fifteenth century, nor do I think that they come into practical 
 existence during the sixteenth. There is evidence however that 
 eviction or famine rents, or compulsory exaltations of rent under the 
 threat of eviction, or by colour of law, were practised in the 
 sixteenth century. Fitzherbert, who wrote in the early part of 
 Henry VIII's. reign, and Latimer, who preached his sermons 
 towards the end of it, and up to the middle of the century, speak, 
 the one on the peril which the improving husbandman fears from 
 a rapacious landlord ; the other on the contrast between the tenure 
 of his own father's holding, and that of the occupier who has 
 succeeded him, and is being ruinously rackrented. The complaints 
 of the husbandman in Stafford's pamphlet published in the last 
 quarter of the same century, suggest a similar grievance. But 
 in all cases, the complaint is that the tenant is overcharged by the 
 landowner, or made to pay rent on his own improvements. This 
 could only be operative under threat of eviction and loss, and 
 though in the simple husbandry of the times eviction had no 
 such serious meaning as it now has, it was still seen, apart from 
 competition, to be a powerful means of extorting rent. I do 
 not doubt, too, that the Act of 157C, under which the universities
 
 172 HISTORY OF AGRICULTURAL RENTS IN ENGLAND. 
 
 and colleges, with the two historic schools of Winchester and 
 Eton, were empowered or rather constrained, to take a third of 
 their rents in kind, or in kind turned into money, was intended 
 to assist their corporations to procure, in an indirect way, some 
 of the advantages of a competitive rent. 
 
 No one, who knows anything about early economical history, 
 can doubt that rent was originally, and for centuries, a tax, 
 imposed by the strong on the weak, in consideration of a real or 
 pretended protection of the tenant. The invariable and fixed 
 character of the tax seems to rne to prove this, and the fact that 
 no attempt was made to alter the fixed rent, except by open or 
 disguised violence or fraud is to me conclusive. Nay, the terms on 
 which precarious or terminable holdings were granted appears to 
 me to be strong collateral evidence, for I do not find that the 
 rent per acre varied very much from the old customary rates. 
 Indeed it could not well be, for at the end of the sixteenth century, 
 I inferred from prices that land would bear but a slight increase 
 of rent, and, after making my calculations, I found that I was 
 almost exactly correct, by the register of rent actually paid for the 
 holding, whose possible rent I was estimating. 
 
 And here I may observe that the remedy of the landlord, for 
 an overdue rent, by distress, was very imperfect. By the law, the 
 rent issued out of the tenure, and upon this tenure only could 
 the landowner distrain. Hence, if he lost count of the tenure (an 
 easy thing under the system of open fields, where each occupier 
 had in succession only a few persons, as I showed you in the 
 Gamlingay survey), he could not venture on distraint for fear of 
 trespass. I have constantly found in the fifteenth century 
 accounts, that rents, though recorded for near a century, are 
 declared to be irrecoverable, because the bailiff did not know on 
 what land to distrain. Hence the law of distress, to the ultimate 
 injury of the agriculturist, was supplemented, by the action of debt 
 and the action of covenant being grafted on them, and the 
 insidious principle that rent is a secured debt, avoidable by no 
 length of time was retained in connection with these new 
 methods of recovery. Now there is no doubt that of late years, 
 the difficulties of the farmer were seriously enhanced by the law 
 of distress, which by giving priority to the landlord's claim,
 
 COMPETITIVE AND FAMINE RENTS. 173 
 
 his principal creditor, weakened his credit elsewhere, and notably 
 with the country bankers, who began in a declining or unprosperous 
 market to be alarmed about their security. 
 
 No human skill can draw the line between a competitive and a 
 famine rent. In theory, a competitive rent is one in which the 
 farmer is not only perfectly free to occupy or leave alone, but is 
 able to extricate his capital from his holding as readily as he can 
 transfer a balance from one banker to another, or his savings from 
 one public security to another. Unfortunately most political 
 economists, misled by their abstract method and habitual 
 disregard for facts, treat the movements of capital as all equally 
 fluid or nearly so. A competitive rent, in the economical sense of 
 the word, only exists for a moment, even under the most favourable 
 times. Undoubtedly at the moment of the contract for occupancy, 
 the intending tenant may seem to be entirely able to take it or 
 leave it alone. I say may seem, for it is perhaps necessary for him 
 to continue his calling, because to abandon it is to abandon the 
 means of a livelihood, and he is therefore no more a free agent in 
 the contract than a purchaser is in a besieged and straitened 
 town. But the moment that he has agreed to the contract, and 
 entered on his occupancy, his freedom ceases. He cannot, with- 
 out serious loss, extricate himself from his holding, for no man 
 can withdraw intact agricultural capital from a farm. I set down 
 the loss at 10 per cent., but my friend, Sir James Caird, who is 
 certainly better informed as to the economical position of the 
 British farmer than any man whom I ever met, says that it should 
 be at least 15. Now it is on this certainty that rapacious 
 landowners and their mischief-making agents have screwed up 
 rents, and reduced agriculture to its present distressful condition, 
 a condition from which as yet I see no escape. Let me put the 
 facts in a concrete form. A man has taken a farm of five hundred 
 acres, at 500 a year, and brings on it, the quantity necessary for 
 first-class husbandry, a capital of 5,000, or one-third of its selling 
 value at the best of times. Now let us imagine that his landlord 
 determines to raise his rent to 22s. 6d. an acre, and gives him 
 notice to agree to this or quit. His loss by migration will be at 
 least 500, or according to Sir James Caird 750 at least, and the 
 better agriculturist he is, the surer is his loss. This he knows,
 
 174 HISTORY OF AGRICULTURAL RENTS IN ENGLAND. 
 
 and if it had been the habit of a farmer to keep accounts, lie 
 would have seen the meaning of the alternative, for I am assuming 
 that the sums I named are the maxima from which agricultural 
 profit can be expected. But as he does not he argues thus : " If I 
 go I shall lose from 500 to 750 down ; if I stay at the increased 
 rent I shall have to pay 62 10s. more. I'll risk it, prices may 
 improve, I can save a bit one way or the other, and make both 
 ends meet." Had he kept accounts he could at once have seen 
 that he is losing his capital as surely as if he had quitted his 
 holding. 
 
 No just landlord ever exacts a strictly competitive rent from his 
 tenant, and recent experience proves that no wise landlord will 
 exact what no just landlord will. It is the business of a landowner 
 to learn what rent land will bear, how to adjust it to the market, 
 and it is no excuse to allege that foolish tenants have offered him 
 rents which they could not possibly pay. A sensible banker, if a 
 borrower offers him 15 per cent, for a loan, could have no better 
 reason than the offer for declining the advance without a moment's 
 hesitation. 
 
 The rents of the seventeenth century, small as they seem to us, 
 began with competition rents which rapidly slid into famine rents, 
 by which I mean rents which leave the occupiers with a bare main- 
 tenance, without the power of either improving or saving. The 
 earliest writer on husbandry in the seventeenth century admits the 
 fact of competition rents, defends the lord's action in taking what 
 is offered him, and treats the farmer's remonstrances with ill- dis- 
 guised contempt. One would think in reading this author's argu- 
 ments, that one was hearing the mischievous chatter of the modem 
 surveyor. The agricultural writers of the seventeenth century 
 point out in vain how lucrative is the new agriculture of Holland 
 and Flanders, how easy it is to follow it, how deplorably backward 
 in all that makes his art is the English husbandman, and then 
 passionately denounce the ill-judged rapacity of the landlord. 
 Their rents to be sure were poor enough, but as the position of the 
 tenant was precarious, they were more than the cultivator could 
 bear, and an absolute bar to agricultural progress. At the end of the 
 century, Gregory King, who makes an estimate of incomes which 
 is, I am persuaded, on the whole correct, while he credits a bishop
 
 BYE-INDUSTRIES. 175 
 
 with the largest power of saving out of his official income, viz., 
 .400 a year from 1,300, assigns the least capacity of saving to the 
 farmer, for he credits him with a saving power of only 25s. a year 
 out of an income of 42 10s. 
 
 There was, however, in some parts of England, notably in the 
 eastern counties, in the west and north, a bye-industry of suf- 
 ficient importance as to make the tenant-farmer comparatively 
 indifferent to accretions of rent. This was the linen and woollen 
 industry, carried on, I am persuaded, in most farmhouses in 
 certain districts of England, the products being collected and pur- 
 chased by travelling agents. Such, almost if not quite within living 
 memory, were the woollen, particularly the flannel, industry of 
 some parts of Lancashire and Yorkshire. Such was a generation 
 ago the universal practice of Ulster, and I have recently been told 
 by those who can well remember the universality of the practice, 
 that the small farmers of Northern Ireland were comparatively 
 indifferent to the magnitude of their rents, out of all proportion as 
 I know to the value of their holdings, if their spinning-wheels and 
 looms produced enough to pay the spring and autumn gale. When, 
 however, the larger manufactories extinguished in part (for the 
 industry is still carried on) domestic weaving, the rent to which 
 the peasant was indifferent became a famine rent, and absolutely 
 unbearable. 
 
 Every civilized community in Europe has found it necessary in 
 one way or other to regulate the relations of landlord and tenant, 
 and to save the latter from the capricious and ruinous rapacity of 
 the former. In France it was effected at the Eevolution, and with 
 terrible suddenness in the autumn of 1789. In Germany, Stein 
 and Hardenberg saw that a change was imperative after the 
 humiliation of Jena. In Holland it was a later reform, as it was 
 in Scandinavia. In Denmark, which forty years ago was as miser- 
 able and as turbulent as Ireland, it was the benevolent work of 
 Bishop Monrad, the enlightened minister who had to bear the brunt 
 of the scandalously unjust Schleswig-Holstein War. In Eussia, it 
 was the work of the late emperor. I do not say that in every case, 
 the reform was done in the best way, but I am assured that the 
 reform had to be done. 
 
 In the early part of the eighteenth century, the rent Of agricnl-
 
 176 EISTOEY OF AGRICULTURAL RENTS IN ENGLAND. 
 
 tural land, according to Je.thro Tull, one of the earliest advocates, 
 from the evidence of his own practice and experience of the new 
 agriculture, was on an average of 7s. an acre. At the beginning: 
 of the last quarter, according to Arthur Young, who traversed the 
 greater part of England, it was .a little below 10s. The rise was- 
 the work of the landowners, was entirely deserved, and is most 
 instructive. The average price of wheat during the seventeenth 
 century was 41s. a quarter. It was a good deal less in the first 
 half of the eighteenth, and rents were doubled. Other agricultural 
 prices were not higher, some were as people would say now-a-days 
 ruinously low, for wool was only 3d. a pound for a considerable 
 period, i.e., at a less nominal price that it often was in the fourteenth 
 and fifteenth centuries. The rise in rent during the eighteenth 
 century proves that rent depends in a slight degree on the natural 
 powers of the soil, and to a limited extent, these natural powers 
 being easily exhaustible, and a great deal on the acquired capacity 
 of the cultivator this cause of rent depending on the general dif- 
 fusion of agricultural skill. In short, to use a logical expression, 
 which is, I doubt not, familiar to most of you, what in Eicardo's- 
 definition of rent is made objective; to those who know anything 
 whatever of the history of agriculture, is subjective. 
 
 I do not imagine that the singular and ail-but universal passion 
 for practical agriculture, which seems to have taken possession of 
 the country gentlemen of England during the eighteenth century, 
 had in view the improvement of the tenants' experience. " The 
 farming tribe," says Arthur Young, when writing about the later 
 manifestations of the fashion, " is made up of all ranks, from 
 a duke to an apprentice." In some classes of society, as I well 
 remember, the passion for farming had not passed away in my 
 youth. It was, I make no doubt, an intelligent appreciation of 
 the profit which might be made of the new agriculture. It is not 
 unlikely that the country gentleman, seeing how rapidly the new 
 aristocracy of trade was growing in wealth and influence, deter- 
 mined to see whether they could rival the men whom they despised 
 and disliked. The English aristocracy of the eighteenth century 
 was peculiarly infected with the pride of rank. I have been amused 
 at one scheme of the Lords. They planned the foundation of an 
 academy for their own order, to be established by Act of Parlia-
 
 LOED LOVELL'S AGEICULTUEE. 177 
 
 ment, and maintained at the public expense, but closed to any but 
 the noble, and twice referred the scheme to a select committee. 
 Now there was very little to be got out of Walpole, and still less 
 out of Newcastle. So they very wisely and usefully betook them- 
 selves to agriculture. " There have been," says Young, " more 
 experiments, more discoveries, and more general good sense dis- 
 played within these ten years in agricultural pursuits than in a 
 hundred preceding years." He might, had he taken in the second 
 quarter of the eighteenth century, have said, with perfect accuracy, 
 than in all recorded history. " And," he adds, " if this noble spirit 
 continues, we shall soon see husbandry in perfection, and built 
 upon as just and philosophical principles" his comparison is 
 whimsical enough for his time " as the art of medicine." 
 
 It is invidious and unfair, when one comments on the singularly- 
 useful career of the English landowners during the eighteenth cen- 
 tury to dwell exclusively on the view of their personal interest. That 
 they intended to better themselves is probable, but they did the 
 highest public service, in throwing themselves with such enthusiasm 
 into that noble art which possesses such peculiar attractions to those 
 who have prudently practised it. Least of all would I complain 
 that their gains were large, and that they took pride in the business 
 on which they entered with such zeal. Lord Lovell, whose 
 farminglbook I have in my hand, lent me by his public- spirited 
 descendant and heir, the present Lord Leicester, was one of the 
 earliest and certainly one of' the most comprehensive of the new 
 " farming tribe." He grew corn, he was the butcher of the neigh- 
 bourhood, and did not disdain to supply his noble neighbours and 
 take their money. He is the maltster, the brick- burner, the lime- 
 burner to the district. He superintends the whole farm, checks 
 all the accounts, examines every item, and after making a reason- 
 able deduction from his profits for his rent, paying his workmen 
 liberally for the time, and making considerable and expensive 
 improvements on the estate, by marling a portion of it, declares a 
 profit of over 36 per cent, on his first year's expenditure. 
 
 We may be sure that there was a good deal of talk in North 
 Norfolk about the noble lord's experiments. The gossip of the 
 time is not recorded, but we may be certain that the men of the 
 old school shook their heads, imagined that Lord Lovell had gone 
 
 13
 
 178 HISTORY OF AGRICULTURAL RENTS IN ENGLAND. 
 
 crazy, spoke of the turnip-fields as his folly, and wondered what 
 he thought could be got by the new-fangled grasses. And we may 
 be sure that the bailiff who, when the scheme was first begun, 
 wagged his head with the wisest of the farmers, but perhaps held 
 his peace when the year's profit was declared, bragged of the work 
 that had been done, and took some of the credit to himself. For 
 you may have noticed that the incredulous are generally the first 
 to welcome success, and to deny that they ever suffered from incre- 
 dulity. The commonest of all fabulists is the man that tells you 
 that he all along believed matters would come right, though your 
 ears may still be deafened by his lugubrious predictions of failure. 
 
 The farmers saw and slowly followed the new system. It is 
 true that fifty years later, there was much slovenliness in practice, 
 and, above all things, as Arthur Young complains, " one cannot 
 get the farmers to keep accounts." I have often thought how 
 delighted this excellent and judicious person would have been 
 could he have seen, inspected, and have read a bailiff's account of 
 the fourteenth century, with its exhaustive recital of particulars 
 and careful balancing of receipt and expenditure. Of course the 
 rise of rents, though by no means considerable at first, ensued, and 
 most justly. No men had more fairly earned the bettering of their 
 improved position than the English landowners had earned theirs 
 in the eighteenth century. * 
 
 There were still serious impediments to the new agriculture. 
 The custom of open fields, on which it wasimpossible to practise it, 
 was general, and the enclosure of such fields, by which I do not 
 mean the appropriation of the common lands, was exceedingly 
 costly, dilatory, and uncertain. Many of these enclosures were 
 effected, however, in the eighteenth century. Others, infinitely less 
 excusable, were the work of the nineteenth, the plea being the 
 increase of arable culture, an argument as germane as that of 
 the man who picks your pocket on the plea that he can make a 
 more profitable use of your money than you can. I have myself 
 seen common fields in Warwickshire, but I presume that the system 
 is now completely extinct, though I believe lammas lands, in which 
 there was private property in the soil from Lady Day to Michael- 
 mas, and general property for the other six months of the year, 
 subsist.
 
 THE RISE OF EENTS. WOOL AND STOCK PRICES. 179 
 
 The rents of 3s. 6d. an acre in 1692 rose to 36s. 8d. in 1854. 
 Agriculture was still progressive, the cost of materials was greatly 
 reduced, while the cost of production (in agriculture the proportion 
 of cost to the market value of the produce) was greatly diminished, 
 the price of products being exceedingly high, and the rate of wagei 
 being disgracefully and dishonestly low. Hardly a year passed 
 without the trial of some new experiment. I well remember an old 
 acquaintance, who came out of Wiltshire into Hampshire, a sheep 
 drover, who had saved a little money, and hired a small farm, with 
 a good deal of down in his holding. He ploughed the downs, burnt 
 the turf, manured the ground well, sowed turnips and oats succes- 
 sively, knowing that chalk is a sponge which holds and gives back 
 all it receives, kept accounts, made a fortune, and died a wealthy 
 banker and landowner. 
 
 There are one or two points in this history of rent, which 1 will 
 employ the rest of my time in commenting on. I have mentioned 
 more than once that the price of wool was exceedingly high in the 
 Middle Ages. But there is no trace of a rise in rent being conse- 
 quent on a rise in the price of wool, though wool is eminently an 
 agricultural produce. But the operation of those laws which 
 determine rent is far less operative over that capital of the farmer 
 which can be transferred with little loss from one locality to another 
 than it is over that which, from necessity, must be committed to 
 the soil. Diffused skill in cattle-breeding and sheep-raising can be 
 far less easily mulcted by rent agencies than diffused skill in growing 
 crops. The principal lever in the elevation of rents has been the 
 loss consequent upon dispossession. This is the real " unearned in- 
 crement." No doubt, to let a man hold land at much less rent than 
 the land will bear, as Arthur Young constantly complains, is to en- 
 courage indolence ; and among the indirect benefits which have come 
 from rackrenting, as an offset to its fatal injuries is, that up to a 
 certain point it calls forth energy, forethought, and thrift. Of 
 course it may bring discontent and despair. But within a certain 
 limit it equalizes unequal opportunities. But, on the other hand, 
 cattle- and sheep-raising are matters of personal rather than of 
 general skill, and it is clear that in the Middle Ages, as sometimes in 
 our time, the operation was exceedingly hazardous. In the absence 
 of winter roots, and the stint of hay, a dry summer followed by a
 
 180 HISTOBY OF AGBICULTUBAL BENTS IN ENGLAND. 
 
 hard winter would have had very serious effects on the sheep 
 master. In the same way, the rent of land, let to so capricious and 
 risky a produce as the hop is, bears no proportion to the occasional 
 gains, and the invariable hopes of the hop grower. 
 
 I thought that I could have detected the rent of land through the 
 reserved rents and fines of the colleges in Oxford and Cambridge, 
 and in the estates of "Winchester and Eton Colleges. But after much 
 pains taken, I found that my research was disappointing. These 
 corporations for a long time were in great peril. Had Henry lived 
 longer, he would have devoured them. The bishops of Elizabeth's 
 reign were plundered by her nobles, with the Queen's connivance. 
 The Cecils took no little ransom from the see of Peterborough. 
 Exeter was reduced from a rich to a poor bishopric by the western 
 nobility. Every one knows the story of Hatton and the Bishop of 
 Ely, and Elizabeth's threats. At last the Queen, perhaps at the 
 instance of Parliament, came to the rescue of the prelates and 
 passed the disabling statute. 
 
 The Colleges had much reason to be alarmed. Though I do not 
 find that they lost their estates, they became exceedingly poor after 
 the Eeformation and the rise in prices. I can hardly see a change 
 in their revenue when everything became trebled in price. The fact 
 is these corporations leased their lands on very beneficial terms to 
 great men. Cecil and Derby took estates at one half their annual 
 value from King's College. Similar leases were granted by the 
 Oxford corporations. The Crown came to the rescue with the Act of 
 1576, the Eeserved Corn Kents Act, and the Colleges began to exact 
 fines on renewals, at first timidly and always ignorantly. They were 
 put to great straits as time went on to find out what their property 
 was worth, and to fine accordingly, though under the mark \vlien 
 they did know. They never got its value, and the lessees made 
 great profits from the difference between their own rents and that 
 of the under-tenants. 
 
 Arable rents have risen, in the course of the last two and three 
 quarter centuries, in many cases, eighty times, while wheat has risen 
 eight times. Pasture has risen about ten times. Now if there be 
 such a thing as the indestructible powers of the soil, it is more 
 characteristic of pasture, which cannot profitably be ploughed up, 
 than of anything else. But the cause of the first elevation, as I
 
 COLLEGE BENTS, OXFORD AND CAMBRIDGE. 181 
 
 hope I have now sufficiently pointed out, is diffused agricultural 
 skill, and competition for business profits. This is not indeed the 
 cause of all rent, for, as I have said, there is a famine rent, under 
 which the landowner by familiar processes takes from the cultivator 
 of the soil all but a bare subsistence. During the seventeenth century 
 the English farmer had experience of a famine rent. For tbe last 
 eight years, it has been renewed. The Irish farmer, who is in nine cases 
 out of ten a labourer paid in land, has had no other experience than 
 that of a famine rent. The Nemesis has come in both countries, 
 and even the nineteen years lease, which the Duke of Argyll thinks 
 the quintessence of human wisdom, gilded by the most perfect 
 justice, is discredited. When will people learn, that high prices do 
 not make high rents, that folly may destroy what it can never re- 
 cover, and that the best way to extinguish all human interest in rent 
 is to deny that it is a matter of human institution, while it is the 
 result of an intelligence possessed by the occupier and not by the 
 landowner, except under peculiar circumstances, and is in no sense 
 divine or providential ? 
 
 One of the ways in which the owners of land have striven to main- . 
 tain artificial rents has been, first, by starving the peasant, next by 
 putting the cost of his necessary maintenance on other people. I have 
 already described to you how this system was developed. It has 
 been most disastrous to those who devised and carried it out. I 
 don't know whether the farmer and landowner will ever find out 
 that low wages do not mean cheap labour ; but it is a common-place 
 even with economists of the stupid school, and a truth which they 
 have been able to grasp, for they learnt so much from Adam 
 Smith. But that their misery was to be an ever-increasing cause 
 of rent, was left for the genius of a London stockbroker to 
 enunciate, for the economists and country gentlemen to accept, 
 and to be refuted by facts. More than twenty years ago I pointed 
 out the nature of the problem and its inevitable solution. I suffered 
 the ordinary fate of those who are more far-sighted than the people 
 among whom they live no great feat here. I might perhaps, if time 
 permitted, discuss with you what must be the rent of the future, 
 for that of the past is vanishing, and for reasons which you might 
 gather, and probably will, from what I have said. Or I might fortify 
 myself with the example of a great man of my youth, the late Sir
 
 182 HIS TOBY OF AGBICULTUBAL BENTS IN ENGLAND. 
 
 Eobert Peel, and decline to commit myself to a prediction and a 
 remedy till I am called in. This, however, is perfectly certain 
 the landowners of the eighteenth century made the British farmer 
 the best agriculturist in the world ; the landowners of the nine- 
 teenth have beggared him.
 
 IX. 
 
 METALLIC CUKBENCIES. 
 
 Early English money The mark and the pound Changes in the 
 weight of the penny Silver produced in England The King's 
 Exchanger The ratios of silver and gold Causes affecting these 
 ratios Bimetallism Gresham's Law Payments made by weight 
 not by tale Seasons proving this The debasement by Henry VIII. 
 The foreign exchanges The recoinage in 1696 The suspension 
 of cash payments Seigniorages on coins The} efficiency of the 
 currency Currency kept for two objects, internal . and foreign 
 trade. 
 
 THE subject on which I am to lecture to-day is rather technical. 
 It can only be understood when some figures are mastered, and 
 there are some figures, as I shall show in the course of what I 
 have to say, which would be wholly deceptive, if they were not 
 explained away. The right apprehension of what the English 
 currency was is absolutely essential towards the interpretation of 
 money values in the economical history of England, and the 
 interpretation of that economical history gives meaning and 
 vitality to constitutional and political events, transforming them 
 from disconnected and unrelated annals into a cohesive and con- 
 tinuous vitality. I hope that the laborious antiquaries who dig 
 out what they call the facts of the English constitution, and edit 
 the opinions which they discover, will take no offence at what I 
 say. Their work has a high value, because it is the collection of 
 materials, and without materials, no man, except a metaphysician, 
 can build. But there is really nothing constructive in constitu- 
 tional and political history. The proof lies in the fact that the
 
 184 METALLIC CUEEENCIES. 
 
 most ingenious theories are liable to destructive criticism, even 
 when propounded by men of real genius. 
 
 Those Teutonic nations which were never brought under the 
 direct influence of the Eoman administration had a unit of^ 
 money which they called the mark. Those parts of Western 
 Europe which were brought under the direct administration of 
 Borne had a unit which they called the pound, livre, lire. Some- 
 times, as in England, the two systems were used in calculations, 
 and in early times quantities were expressed in marks almost as 
 frequently as they were in pounds. From a very early date the 
 mark was reckoned at two-thirds of the pound. Neither the 
 pound or the mark was ever coined. They were simply money of 
 account. Moreover, the only currency employed in circulation for 
 a long time was silver, and in many countries silver remained the 
 only currency till very recently. In some communities, gold has 
 been substituted for silver. In some, paper has taken the place of 
 silver. In England, the pound of silver, called the Tower or 
 Saxon pound, contained 5,400 grains. In 1527, Henry VIII. 
 eubstituted the Troy for the Tower pound, containing 5,760 
 grams. The penny then contained 22^ grains of the older, 24 
 grains of the later pound. The fineness of the standard was, in 
 theory, 11*1 pure silver and *9 alloy ; and the king's officers at 
 the exchequer took care that the money paid should be up to 
 the standard of fineness, as we learn from that very ancient 
 financial treatise " The Dialogue on the Exchequer," first printed 
 by Madox. 
 
 Nobody knows in what nation or in what place, the capital 
 invention of the coin was made whether it was in Greece, or 
 Sicily, or Italy, where, by the way, the ancient currency was 
 copper, a metal more frequently found native in a pure state 
 than any, excepting gold. We know that there were countries far 
 advanced in civilization which had no coins. There were none in 
 Egypt, in Assyria, in Babylonia, in the old Phoenician colonies ; for 
 coins are sure to be lost now and then, and are exceedingly indes- 
 tructible. None have been found in the ruins of these countries, 
 and yet it appears, from recent research, that Babylonia had an 
 elaborate system of banking, and all the machinery of transferring 
 balances from one account to another. In the same way, though
 
 EARLY ENGLISH MONEY. 185 
 
 there is a small currency in China, there is no silver coinage ; for 
 it is said that Mexican dollars, which serve, or did serve, to liquidate 
 balances, are melted into ingots when they get into the native 
 merchants' hands, these ingots being stamped with the trade mark 
 of the merchant who casts and re-issues them. Such, probably, 
 were the means by which exchanges were made in early times, and 
 among those nations which never adopted a money currency. 
 Some measure of value is needful for business of a rudimentary 
 kind, but we see, from the example of these ancient peoples, that 
 great progress can be made without coined money. 
 
 I need not trouble you with the common-places which you will 
 find in all books on political economy, as to the motives which 
 have induced nations to adopt the use of gold and silver coins. 
 The economists have interpreted these functions with great pre- 
 cision and clearness. It is not wonderful that they have, for many 
 of them who have written on the subject have been engaged in 
 what is called the money market, or have been familiar with those 
 who have been so engaged. I have thought it .my duty to speak 
 with exceeding plainness about the Eicardian theory of rent, 
 because I hold it to be so exceedingly incorrect, and so trans- 
 cendently mischievous, since it encourages men to hope for 
 impossibilities. But on money and banking, on currency questions 
 generally, and especially on the most abstruse of them, Kicardo's 
 authority is of the highest character. Here he was in his element, 
 for he was an exceedingly acute stock-jobber, in the days when a 
 prosperous stock-jobber was almost a strategist, as you may learn, 
 if you like, from biographies about successful people in this calling. 
 Eude and comparatively savage races imitated currencies. I know 
 nothing more ingenious and more conclusive than the manner in 
 which Mr. Evans, the numismatologist, has traced the British 
 -gold coinage, which is tolerably abundant in collections, to the 
 imitation of a Macedonian stater of one of the later Temenid 
 kings. 
 
 If you take up books in which the English currency is treated, 
 you will find the following statement of facts. The original 
 standard of weight in the silver penny may be taken at 8. In 
 1299, Edward I. reduced it to 2-871 ; in 1844 Edward III. reduced 
 it to 2-622, in 1346 to 2-583, and in 1853 to 2-325. In 1412,
 
 186 METALLIC CUBRENCIES. 
 
 Henry IV. lessened it to 1-937 ; and in 1464 Edward IV. to 1-55. 
 In 1527, Henry VIII. brought it down to 1-378, and in 1543 to 
 1-163. In 1560, after the restoration of the currency by Elizabeth, 
 it is at 1-033, and in 1601, she brought it to exactly one-third of 
 the weight it stood at 303 years before. I am obliged to supply 
 you with these details because they are essential to ray criticism on 
 the inference which is drawn from them. In one particular they 
 are exact. The proportionate weights of what is called the silver 
 penny correspond to these registered mutations. I have, long ago, 
 put this fact to the test, by weighing clean and unworn coins in 
 chemical scales. I hope that I shall be able to prove to you that I 
 threw away my time and trouble. 
 
 Now silver, up to the great change in money values, was pro- 
 duced largely in England. The commonest ore in which silver is 
 found is galena, the native suphuret of lead, in which ore it is said 
 to be always present, though some is even now too poor to bear the 
 cost of refining, and much must have been then, when the refiners' 
 art was rude. In the various works which I have read on the 
 early trade of England, and in the statistics regulating that trade, 
 I have never met with imports of lead. I have no doubt that 
 England supplied France, and not a little of Western Europe with 
 this metal, which was comparatively cheap, and greatly used for 
 church roofing. The greater part of the silver of Western Europe 
 was also, I believe, derived from England, despite the restraints- 
 put by statute on its exportation. If there be any truth in the 
 constantly recurring story about the enormous and incessant 
 exactions of Papal avarice in England, not a little of it went to 
 Rome and Avignon, and then again to Eome. If we give credit to- 
 the complaints, for even the monks, generally friendly to the Pope,, 
 make them, the overflow of money to the Pope's court, in the 
 palmy days, was annually equal to the royal revenue. But the 
 English did not become impoverished by the efflux. Lead, the 
 ore of silver, falls in price during the fifteenth century, and there 
 is no reason to believe that the art of metallurgy was improved, 
 and at that time, it was rather dangerous to have a scientific 
 reputation, for experiment was liable to be confounded with 
 sorcery, the most deadly charge that could be made against 
 any one.
 
 SILVEE PRODUCED IN ENGLAND. 187 
 
 For reasons which are explained elsewhere, the Government of 
 England made strenuous efforts to prevent the exportation of 
 silver, and I am quite sure that the payments made to the Pope 
 and his court, turned public feeling against the supremacy of 
 the Eoman Pontiff, and hastened the breach of the sixteenth 
 century. Perhaps, had the Pope been acquainted with monetary 
 science, in so far as it is understood by every one now, and had 
 grappled with the economic heresy which treats it as the only 
 wealth, he might have mitigated the feeling. But more than any 
 sovereign of the Middle Ages, the Pope spent wealth. 
 
 The opinion of English statesmen was, that in order to secure 
 and retain abundant wealth, it was necessary that on every article 
 exported, a balance in specie should be paid to the English dealer. 
 The Government, therefore, limited the market for certain impor- 
 tant English exports to certain towns, called staple towns, of which 
 Calais, for wool, the principal and most valuable of English 
 exports, was the chief. But as the merchants might prefer their 
 own profits to the theory of the administration, a high officer of 
 state, called the King's Exchanger, was appointed, whose duty it 
 was, by himself or deputy, to see that a balance of money was 
 paid on each transaction. The first of these officials was De la, 
 Pole, in the time of Edward III., the ancestor of those Earls and 
 Dukes of Suffolk who had so tragic a history in the fifteenth 
 century. This official foolery went on till the time of Charles L, 
 who appointed Eich, Earl of Holland, to the office. But the 
 London merchants, from whom Charles was perpetually borrowing 
 money, resented the absurdity, declared that the patent was 
 illegal, at Selden's instance, and induced Charles to revoke it. I 
 speak of the policy as it deserves, but there are people in our own 
 clay, who might know better, who are foolish or dishonest enough 
 to allege that the character of our trade proves that gold and silver 
 are leaving us. In form, the prohibition on the exportation of 
 gold and silver coin continued till 1816. It had a curious effect. 
 People were allowed to export gold in bars, foreign coin, and 
 bullion, the produce of foreign coin, and an oath had to be taken, 
 that exported bars were of this character. People were hired to 
 swear that they were, and sworn-off gold, as it was called, was 
 worth three halfpence an ounce more than other gold was, which
 
 188 METALLIC CUEEENCIES. 
 
 had not been subjected to the ceremony. You will see that 
 three halfpence an ounce was the bullion dealer's payment for 
 perjury. 
 
 Of course the operation of the King's Exchanger was nugatory. 
 Very much more bulky things than silver were easily sent out of 
 and into the country, at a time when ships were small, harbours 
 numerous and easy of access, and prevention impossible. The 
 merchant of the fourteenth and fifteenth centuries, and for many 
 a century afterwards, did not want to keep useless money by him, 
 especially when he saw that there was a profit in getting rid of it. 
 So he laughed at the staple and the exchanger with perfect im- 
 punity. Had the operation been effectual, it would have heightened 
 prices, because money would have been in excess. But during the 
 time when this machinery was at work, especially in the fifteenth 
 century, prices were falling all round, a fact of which I shall be 
 able to make notable use by and by. It is, however, possible 
 that the prohibition may have been treated as a risk, and have 
 thereupon increased the cost of discounting bills. At any rate, 
 
 am convinced that in later times such was the effect of 
 the law. 
 
 I have said that silver was for a long time the only currency. 
 There is a story, told by the annalists and repeated by Euding, that 
 in 1257, Henry III. issued a gold coinage at the rate of 10 to 1, but 
 that the London citizens resented the practice, and that the king 
 took it back at the proportion proclaimed, exchanging it however 
 into silver at a charge of 2 per cent. But the reality of this issue 
 has been doubted. No specimen has ever been found of the coin, 
 and it is probable that Henry only intended to give currency to 
 some foreign gold coins. In 1262, Henry bought some gold florins 
 and byzants for the purpose of making plate, at from 9 and 10 
 to 1. Thirty years later, Edward I. purchases a considerable 
 quantity of gold, for the purpose of gilding parts of the crosses 
 which he set up in memory of his queen, Eleanor of Castile. Here 
 the proportion is a little over 12 to 1. In 1345, Edward III. 
 issued gold coins in the proportion of 18 J to 1. According to Lord 
 Liverpool, in his "Coins of the Eealm" (a work which I have 
 heard was actually composed by Euding), during the fifteenth and 
 sixteenth centuries the proportion fell to between 10J and 11-8 to 1.
 
 THE RATIOS OF SILVER AND GOLD. 189 
 
 In the seventeenth the ratio was 15 to 1. At the resumption 
 of cash payments, the rate was recognized as 15 to 1 ; but 
 silver as a legal tender was demonetized. At the present time it is 
 about 22 to 1. 
 
 The ratio of gold to silver, cceteris paribus, depends on their 
 use in currency. Many years ago, I was a good deal struck with 
 the rapid rise in the relative value of gold in 1296, over that in 
 1262. But an examination of Muratori's invaluable antiquities 
 explained it. During the last quarter of the thirteenth century, 
 and through the greater part of the fourteenth, numerous Italian 
 citie? adopted a gold currency. Their trade was with the East, 
 where gold currencies were customary. A demand for the metal 
 occurred, and the price of necessity rose. This gold currency 
 was even more general in the fourteenth century. For example, 
 that of Avignon, then the seat of the Popes, was gold, and people 
 who brought silver to the curia, as I have shown, had to pay 
 handsomely on the exchange. I have myself little direct evidence 
 as to the causes which depressed the value of gold in the fifteenth 
 and sixteenth centuries. Of course the relations of Europe with 
 the East were greatly modified as the Eastern empire 'decayed, 
 and finally fell, and the old roads over Central Asia were effectually 
 blocked. 
 
 When the new money came in from the West, the ratio of 15 to 1 
 was established. The ratio was not free from serious fluctuations, 
 which some of the bimetallists have not sufficiently studied, when 
 they dwell so complacently on its steadiness in some of their pub- 
 lications. At one time gold was found to be overvalued, and silver 
 disappeared ; at another silver, and gold disappeared, so that finan- 
 cial operations were resorted to in order to restore the equilibrium. 
 In 1853, M. Chevallier thought that silver would disappear from. 
 France, owing to the gold discoveries in Australia and California, 
 and Mr. Cobden translated his book. After the war of 1870, Ger- 
 many determined on establishing a gold currency, and a few years 
 afterwards Italy followed her example. Instantly commenced a 
 fall in the price of silver, which has continued since. The States 
 of the Latin Union diminished their silver issues at their respective 
 mints, and the fall became more rapid. If Austria and Kussia had 
 retired their paper currencies the downward movement might
 
 190 METALLIC CUBRENCIES. 
 
 have been in part, if not in whole, arrested. If China were to 
 adopt a silver currency for her enormous and populous empire, the 
 ratio would be totally altered. There are rumours that such a 
 scheme is contemplated. I will venture on predicting that what I 
 have said would be rapidly fulfilled if the scheme takes effect. 
 
 It is impossible to say to what extent a government may regulate 
 its internal currency as long as that currency is unaffected by the 
 foreign exchanges, which treat coin as mere metal, as soon as it 
 becomes what Adam Smith calls the money of the great mercantile 
 republic. It is said that the paper currency of Eussia circulates at 
 its nominal value, though in the exchange it is only half the value 
 of the silver rouble, and the silver rouble suffers from its own de- 
 preciation. But with the outer world Eussia deals in gold only. 
 It claims all its import duties in gold ; it makes what foreign pur- 
 chases it needs in gold. So with India. I have been told that the 
 purchasing power of the rupee is not diminished in the peninsula. 
 But the relations of England to India, as a creditor country, are 
 gold relations. The pensions of its civil and military retired 
 officers are indeed paid in silver, and have to bear the loss of the 
 exchange. But its external debt is a gold-bearing debt. 
 
 Some time ago I had an opportunity of talking with Mr. Fre- 
 mantle, the Master or Deputy-Master of the Mint. I asked him 
 whether, with so prodigious a seignorage on the English silver 
 coins, now over 30 per cent, above their gold value, there was in 
 his opinion any private coming of genuine silver money. He told me 
 that the Mint authorities had naturally had their attention directed 
 to the risk. But they had found no evidence of the practice. The 
 machinery for coining genuine money would be expensive, the 
 manufacture of dies would hardly escape notice, and if these diffi- 
 culties were surmounted, that of getting rid of any amount worth 
 the risk would arise. The movements of metals, especially of 
 coins, are well known, and any interruption in their ordinary flow 
 would be suspicious. If in our day the alchemist could realize his 
 dream of transmutation, he would find it difficult to get rid of his 
 produce. Let me illustrate what I mean. Perhaps the University 
 Press requires about 200 a week in silver money for wages. The 
 efflux and influx of this silver money is as well known and provided 
 for as a Great Western train. Conceive, for a moment, that the
 
 BIMETALLISM. GEE SHAM'S LAW. 191 
 
 local operation suddenly ceased, and the Press went on paying 
 wages as usual, no one knowing where it got its silver coin from. 
 The mystery would be soon followed by suspicion, the suspicion 
 would be followed by inquiry, and the Mint would discover the 
 origin of the new process. I am convinced that the authorities of 
 this department would have a quicker scent after such an affair 
 than the Ordnance had after the origin of the flexible bayonets and 
 the fragile swords. 
 
 I may, on a future occasion, find it in my power to deal with 
 the question of bimetallism, i.e., of the simultaneous legal tender of 
 two different metallic currencies. The subject is exercising a good 
 deal of ingenuity at present, and though I have not heard that any 
 person of eminence in monetary science or finance, or even in the 
 bullion trade, has declared his adhesion to the theory, it is sup- 
 ported by names respectable enough for consideration. It is due 
 to such persons that the theory should not be put off in an obiter 
 dictum. But thus much is certain. It is necessary, before an 
 opinion is formed on the subject, which is entitled to serious dis- 
 cussion ; first, that much more should be known of the historical 
 ratios of the two metals than has hitherto been collected ; next, 
 that a careful estimate should be formed of what are the real 
 forces of a government, which is invited to give an artificial value 
 to any of its coins ; and next, if it be found necessary, as most 
 advocates of bimetallism confess, that there should be not an 
 understanding only, but a binding agreement among civilized 
 countries, as to the limits on the issue of an overvalued currency, 
 what is the machinery by which they expect that the agreement 
 will be enforced. I will not, however, on this occasion, pursue 
 the subject further. 
 
 Now reverting to the statements which I made in the early part 
 of this lecture, the gradual degradation of the penny in weight be- 
 tween 1297 and 1600, most people who have dealt with prices 
 imagine that payments are made by tale, and that these prices, in 
 so far as details were known to them, accommodated themselves to 
 the new and degraded coinage, that of course, in accordance with 
 Gresham's law, that an overvalued and an underrated currency 
 never circulate simultaneously in a country, but that the un- 
 dervalued ones instantly disappear, immediately on the appearance
 
 192 METALLIC CUBRENCIES. 
 
 of the new and degraded coins, the better currency being hoarded 
 or exported. This was Adam Smith's opinion. He thought 
 that during the fifteenth century silver was gradually getting 
 dearer, and that prices, without let or complaint, at once accom- 
 modated themselves to the new and lighter coin. Now Smith had 
 scarcely any information on prices. All that had been published 
 in his day was Bishop Fleetwood's " Chronicon Preciosum." 
 Meetwood had been a fellow of Eton, and in his day was fond of 
 studying finance. He had a reputation, and a fellow of All Souls, 
 who had a private estate of over 5 a year (the limit which the 
 founder allowed to his fellows), and was therefore threatened with 
 a declaration that his fellowship was vacant, consulted Fleetwood 
 as to what should in equity be the interpretation of 5 in Henry 
 the Sixth's time, according to prices in the reign of Anne. Fleet- 
 wood answered this case of conscience by collecting what informa- 
 tion he could procure, or thought necessary for the contrast, and 
 published his results. For a long time his book was the only 
 authority on the subject, and the Eton wheat and malt prices were 
 frequently referred to in Parliament and by authors, such as Adam 
 Smith, who printed them. The work, as far as the fellow of All 
 Souls was concerned, was published in vain. The fellows, as I 
 learn from Hearne's Diary, rightly declared his place vacant. The 
 discovery was a shock to me, as I had to give up, among the 
 " Worthies of All Souls," what I had imagined was a conscientious 
 worthy. But as for Fleetwood's facts, I can allege that I have 
 printed more information on prices for any one year, than can be 
 found in the whole of Fleetwood's collection. 
 
 Now let us take one century, the fifteenth. According to the 
 table which I gave you, in 1412, Henry IV. took a sixth part 
 away from the silver pennies which he issued, as compared with 
 those put into circulation by Edward III. in 1353. In 1464, 
 Edward IV. takes away a fifth of what was contained in the 
 penny of Henry IV., and these are part of a series of changes 
 which at the last date had reduced the penny to almost exactly 
 half of its ancient weight. But no material change of prices 
 takes place in England for the 280 years during which the re- 
 ductions in weight were made. No change, which is still more 
 remarkable takes place in the years which follow the change.
 
 PAYMENTS MADE BY WEIGHT, NOT TALE. 193 
 
 Between 1410 and 1414 inclusive, prices of corn are singularly 
 uniform, between 1462 and 1467 inclusive, they are nearly as 
 uniform. Twopence are taken out of the shilling on the first 
 occasion, nearly 2^d. on the second, but prices remain low. The 
 prescience which could have made such a reduction and could 
 have foreseen that no effect would have been induced on prices, 
 would be simply miraculous. 
 
 But the patience of the people would have been even more 
 remarkable. Not a single complaint is uttered as to these acts 
 of the administration. Henry made the change when he was 
 peculiarly unpopular ; Edward, when he had just obtained his 
 kingdom, and had to employ all his energies in baffling the 
 intrigues of a discontented and beaten faction. The purchasing 
 power of money did not, it is true, change for English goods. 
 Neither did it for foreign, on which the exchanges would be 
 certain to operate. But every one who knew anything about it, i.e., 
 all who took money (for it was a period when money scales were part 
 of the furniture of all houses), must have known that within 52 
 years 4d. worth of silver had been taken out of every shilling. 
 It was an epoch of fixed rents and of fixed dues. There was 
 hardly an estate from which one or more pensions did not issue, 
 Agricultural rents from tenants at will or on lease were practically 
 fixed. Taxes, tenths and fifteenths, were fixed amounts. It is 
 not credible that the king, his lords, the whole body of land- 
 owners, the recipients of fixed incomes rising from land, would 
 have acquiesced without a murmur in an operation which reduced 
 those incomes nearly 40 per cent. The old money too did not 
 disappear. No one says it did, and in the eighteenth century, 
 writers on the exchanges inform us, that coins of the Plantagenet 
 kings often came into their hands. 
 
 The English people were by no means patient, especially when 
 their pockets were affected. They hated favoiurites, who got hold 
 of the king's money, with exceeding bitterness, and when the 
 king was incurably bent on impoverishing himself they were very 
 apt to depose him, and acquiesce in his rapid disappearance. All 
 our early revolutions, I do not see why we should not even include 
 the later, have had a financial or economical reason at the basis 
 of them. The revolt of Tyler, the insurrection of Cade, the rising 
 
 14
 
 194 METALLIC CURRENCIES. 
 
 of Ket, in the fourteenth, fifteenth, and sixteenth centuries, to 
 say nothing about the Pilgrimage of Grace, can be connected with 
 financial and social discontent. I suspect that the affair of 1688 
 was quite as much associated with economics as it was with 
 religious discontent. The philosophy of history is far too apt to 
 neglect the former cause. But the philosopher has the excuse of 
 ignorance, and the advantage of imagination. 
 
 I felt convinced, then, that the view commonly taken of these 
 successive degradations of the currency was an erroneous one, 
 and could not possibly be accepted. To be true, they who 
 manipulated the mint must have been preternaturally wise, or 
 preternaturally foolish, and though the English race is not 
 naturally quick or inventive, it is not incapable of discovering and 
 avenging a grievance. Now the conclusion which I arrived at, 
 and that many years ago, was that payments were made by 
 weight, and not as now by tale, that whatever was the weight of 
 the pieces issued by the Mint, a man who covenanted to receive 
 or pay a pound of silver, for goods, services, or dues, received 5,400 
 grains up to 1527, and 5,760 afterwards, and that this system 
 lasted from the earliest records down to the restoration of the 
 currency under Elizabeth. On no other hypothesis could the 
 facts be interpreted, and the question before me was, how could 
 the hypothesis be verified ? 
 
 1. The history of general prices entirely agrees with this 
 hypothesis. They are nearly unchanged for 280 years, if the 
 whole space be taken, though they are affected for a time by such 
 events as the great plagues of 1348 and 1361, when the value of 
 an article is mainly due to the labour expended on it. Now, wheat 
 for the first 140 years is 5s. lOfd. a quarter, i.e., from 1261 to 1400, 
 and 5s. llfd. for the next 140 years from 1401 to 1540. On the 
 other hand, certain prices, notably those of foreign produce and 
 foreign goods, decline rather than increase, especially toward the 
 conclusion of the fifteenth century. Now it is certain that there 
 is no traceable economy in the cost of production, and no dis- 
 coverable reduction in the cost of freight. And again, English 
 wool is rather lowered than heightened in price, though there 
 is no evidence whatever that any foreign country competed 
 against English wool, or indeed could have competed against it.
 
 REASONS PROVING THE ABOVE. 195 
 
 2. The price of silver plate. This is very extensively pur- 
 chased. The purchase of plate, in point of fact, was a very 
 common kind of hoarding. The cost of shaping it was low, and 
 the article was readily pledged or sold. The purchase money 
 is constantly expressed in pounds, ounces, and pennyweights; 
 the raw silver or finished goods being plainly weighed in the 
 scale against coins of all sorts and sizes. Now "when the coins 
 in 1462 had been reduced, according to the tale theory, to a little 
 over half what they stood at in the earlier ages, Oriel College, in 
 1493, bought 33f ounces of silver plate, some of which was gilt, 
 at 2s. 9^d. an ounce, a price entirely impossible by a tale payment, 
 for the pence and farthing fairly represent the cost of workman- 
 ship and gilding. I might multiply evidence of this kind, for I 
 have it in abundance, and it all points to the conclusion which 
 I have arrived at. 
 
 3. In 1462 gold was bought at 30s. the ounce, the ratio according 
 to Euding between the two metals being as 11-2 to 1 at the time. 
 Such a price is intelligible if the estimate is taken by weight, 
 quite inconsistent with the facts if it is taken by tale. 
 
 4. We are expressly told that the principal loss of the base 
 money which was put into circulation between 1543 and 1553 
 inclusive, and remained in circulation for near twenty years, fell 
 on those who lived by wages. ,The merchant could weigh it 
 and test it, indeed could not carry on his business unless he did, 
 and perhaps gain an advantage by his knowledge. But as the 
 issues were of very various degrees of baseness, the man who 
 received his wages, even by weight, would find that one piece 
 went further than another, owing to its being less alloyed, and that 
 another was almost a dead loss. 
 
 5. The record of the restoration by Elizabeth is conclusive. 
 The amount of base money which Henry and his son's guardians 
 put into circulation was 631,950 Ibs. in weight. The currency 
 value was 638,115, the difference being no doubt seiguorage, or 
 a charge for coining, to defray mint expenses. The amount of 
 silver in it was 244,416 Ibs. indicating a debasement of near 60 per 
 cent. But out of this silver Elizabeth coined by tale 733,248. 
 She said she lost by the process, though there seems a balance 
 to her advantage of 95,133. Whether she spoke the literal
 
 196 METALLIC CUEEENCIES. 
 
 truth is a question, which some persons who have studied 
 Elizabeth's utterances might very confidently answer. But she 
 had to refine the wretched stuff, and the separation of copper 
 from silver was in that day by no means an easy business, and 
 we know that the adulteration was copper, from stories of the 
 time. Then there was the charge of coining and the seignorage. 
 It is said that tlfe slag was intractable, and was employed to mend 
 the roads. 
 
 6. There is no reason to believe that the Spanish occupation 
 of Mexico and the discovery of Potosi were followed by any 
 notable influx of silver into England. It is only by the foreign 
 exchanges, i.e., by trade, that these exchanges can operate, and in 
 the sixteenth century English trade was exceedingly curtailed. 
 Now the rise in the price of commodities between the date at 
 which the currency was reformed, and the period at which the 
 new silver unquestionably began to modify English prices, is 
 exactly, or almost exactly, the difference between the old or Tower 
 pound with the old prices by weight, and the new prices 2 - 75 to 
 1. When the reform was over Elizabeth was evidently aghast 
 at the consequences. She could not afford to make good the 
 fraud committed in her father's and brother's reign. To have 
 done so would have cost her at least six years of her average 
 income, an impossible sacrifice, for in strict justice, the bank- 
 ruptcy of the exchequer was more thorough than at any period 
 of English history. She did bethink herself of a plan. A pro- 
 clamation was drafted (or copy of it is in existence in the great 
 collection of her proclamations) reducing the tale value of the 
 new coins 50 per cent. But it was never issued, I presume 
 because she was advised that it was sure to be misinterpreted. 
 
 I may seem to have spent too much time and given too many 
 proofs of my hypothesis. But the issue before me is considerable. 
 On the truth of my hypothesis, entirely verified as I think it is, 
 depends the rational interpretation of English prices, and the 
 significance of the first departure from them after 1563. How 
 significant prices are in the economical interpretation of history is, 
 I trust, by this time fully clear to you. It is because currency is 
 practically unchanged in English history, except at one important 
 epoch, that it is possible to construct an intelligible Jiistory of
 
 THE DEBASEMENT BY HENRY VIII. 197 
 
 prices in England. In other European countries despotism has 
 played fast and loose with the currency. The pound was the unit 
 in France as well as in England. The late cui-rency of Elizabeth 
 reduced it to a third of its ancient and traditional value. The 
 French livre is, now under the name of the franc, l-72nd 
 part of its original value. In Scotland, which was a despotism 
 tempered with assassination during the reigns of the earlier 
 Stuarts, it sank to a twentieth. But I think it would have been 
 dangerous had any English monarch played the pranks which 
 John the Good, as they called him, in France did. The English 
 people have been slow to move or to be roused. It is exceedingly 
 difficult to determine when they are roused. But history proves 
 with great frequency how dangerous they are when the unexpected 
 occurs. 
 
 The debasement of the currency was only deliberately committed 
 once. The patriot king, after squandering all that he could get 
 hold of, after ruining his people, after pledging himself that if they 
 gave him the monasteries he would ask his Parliaments for no more 
 grants, ordinary and extraordinary, began to debase the currency. 
 Mr. Froude, the apologist of this monster, the type of the 
 philosophic historian, and at present the advocate of the Liberty 
 and Property Defence League, has described this transaction as of 
 the nature of a loan. How obliged coiners and smashers must be 
 to him for so courteous a description of their calling ! Most of 
 us are accustomed to consider the coiner of base money as a 
 peculiarly scoundrelly criminal, because the success of his calling 
 depends mainly on his being able to cheat the poor. Except by 
 the magnitude of his crime, Henry is on a level with the meanest 
 of knaves. The crime is heightened by the fact that it is the first 
 duty of a ruler to keep the currency up to standard. Such men 
 as our Henry the Eighth, and such men as Ernest of Saxe Coburg, 
 who was, I believe, the last European sovereign who issued base 
 money, and repudiated it, ought to be gibbeted in history. 
 
 At first the increase of debasement was not large. The standard 
 is 11-1 in 12. The issue of 1543 was 10 in 12. In 1545 it became 
 only G in 12. In 1646 it was 4 in 12, two-thirds being alloy. In 
 1549 Somerset, Edward's guardian, put out an issue of 6 in 12, 
 and in 1551 one of 3 in 12. This was virtually the last issue of
 
 198 METALLIC CUEEENCIES. 
 
 base money. The credit of the country was entirely gone, and 
 Gresham, the king's agent at Antwerp, plainly told the Court that 
 such was the fact, formulating at the time that law which I have 
 quoted to you, which is known by his name, that if two currencies 
 of unequal value, but declared by authority to be of equal value, 
 circulate together, the undervalued coin is sure to disappear. Two 
 issues, one nearly up to sterling, the other quite, were coined in 
 1552 and 1558, not for circulation in England, but for the Ant- 
 werp exchange. Mary would have restored the currency, but all 
 her energies were occupied in restoring the old religion. She died, 
 the day of her death being long kept as a holiday, under the decent 
 pretext of its being the date of her sister's accession, and Elizabeth 
 restored the currency. Since that time it has never been debased, 
 though Charles I. was with difficulty restrained from this crime, 
 for which he had, probably from the constitution of his moral 
 nature, a strange hankering, for Charles would have rather cheated 
 his subjects than have oppressed them, for this is the meaning of 
 the defence made for him, that after having packed the court and 
 terrorised the judges, he preferred to proceed by the letter of the 
 law. 
 
 Now I have alluded to the effect of the foreign exchanges. When 
 countries trade with each other, it is the obvious interest of mer- 
 chants to buy as well as to sell, because under such circumstances 
 they make a double profit But commercial transactions I am 
 taking them in their very simplest form rarely exactly balance 
 goods against goods. There is a difference. Now, from early 
 times, these differences have been expressed in bills of exchange, 
 i.e., orders on the person who owes, to pay at a more or less 
 deferred date, whatever difference is due and accepted by him. 
 From very early times it has been found profitable for certain per- 
 sons to trade in these bills or orders or acceptances, and traders 
 have found it convenient to recognize such intermediaries. If such 
 brokers of bills find it expedient to take money for the bill when 
 due they will do so, but like merchants, they generally find it 
 expedient to take bills against bills, because there is a double 
 profit on the transactions. Now it is by these instruments that 
 money is distributed among different countries which have trade 
 relations, because at times it is more expedient to take money than
 
 THE FOEEIGN EXCHANGES. 199 
 
 to take bills. It is always, for example, expedient to take money 
 from a country which obtains from its own mines a greater supply 
 of the precious metal than it needs for its own domestic use, 
 because such metals are cheaper there than they are in any other 
 place. 
 
 Now in early times the operation of the foreign exchanges was 
 yery marked in England. Our forefathers had two kinds of 
 produce the one a monopoly, wool ; the other, a most important 
 produce, silver. It is plain that the principal place at which Eng- 
 lish produce, bills for England and bills on England were negotiated 
 was Antwerp. But after it became dearer to get silver from Eng- 
 lish mines than elsewhere this trade declined. After the Flemish 
 trading cities were ruined, the trade in wool declined. After the 
 rise in prices occurred, unaccompanied by a rise in wages, profits, 
 and rent, the power of purchasing foreign goods declined. I have 
 no doubt that in Elizabeth's reign the foreign trade of England, 
 and by implication the movements of the currency, were not a 
 fifth what they were a century before. Everybody was distressed 
 who had fixed or quasi-fixed incomes, for the state of rural society 
 in England was such that there was little chance for competitive 
 rents. The Oxford and Cambridge Colleges were terribly dis- 
 tressed. They cut down their chapel services, for all that may be 
 said about Elizabeth's advertisements, to the meanest forms. 
 They ceased to buy books. They abandoned wine for small beer, 
 with occasional draughts of a more generous malt liquor. The varied 
 and more unctuous feasts of two or three generations before were 
 exchanged for plain beef and mutton, with rations of salt fish. 
 The spice box was locked up, except on gaudies. Their diet and 
 life would have rejoiced a protectionist or fair trader, for it was 
 strictly that of Horace's Sabine. But it must be doubted whether 
 the protectionist or fair trader would have been jubilant with their 
 experiences. Some small relief was given to the colleges by the 
 Act of 1576, under which a third of their rents was to be paid in 
 corn, at the best price of the day. 
 
 In the seventeenth century prices rapidly rose, and the mint 
 began to coin gold extensively, mainly, I suspect, for foreign trade. 
 Eents at last began to rise, but only as a consequence of prices, 
 i.e., on the principle of Eicardo. Payments were made by tale,
 
 200 METALLIC CURRENCIES. 
 
 and at last a new trouble came. Towards the end of the century 
 it was found that the dimensions of the coin were shrinking, that 
 the silver money, a very clumsy product of the mint, was worn 
 and clipped. Every day it was getting worse, and for a long time 
 people puzzled themselves with the cause. Some said it was the 
 Jews, and that Oliver the Usurper had, among his many crimes, 
 allowed the Hebrew race to settle in England. Some said it was 
 the goldsmiths, the commercial progenitors of our London private 
 bankers, probably because they made money very fast. All agreed 
 that, whosoever began the mischief, it was continued by starving 
 wretches, who made a trade by selling the clippings. The men 
 were hanged and the women burned by dozens. But these 
 remedies were ineffectual. Half-crowns were clipped into shillings, 
 shillings into sixpences, and sixpences were rapidly becoming 
 spangles, before Parliament, which always will try punishment 
 before it tries remedies, resolved 011 re-coining and reforming the 
 currency. 
 
 There arose a great struggle. An attempt was made to degrade 
 the currency, to put ninepennyworth of silver into a coin and call 
 it a shilling. There were people in that day who thought, as there 
 are people in our time who think, that the name of a shilling would 
 be same as the fact of a shilling. But fortunately, Montague, then 
 Chancellor of the Exchequer, had two invincible allies in the 
 Oxford Locke and the Cambridge Newton, for the two Universities 
 at that time possessed, and to some extent encouraged, men of 
 proved capacity. So the new milled coin, which it was all but im- 
 possible to mutilate, was issued in full weight and fineness. It 
 was a costly piece of honesty, for the charge was equal to two 
 years of the ordinary revenue in time of peace. Perhaps had the 
 charge been exactly anticipated, it would have been too much for 
 the virtue of the nation, and the arguments of Locke and Newton. 
 As it was, never was expenditure more wisely incurred. It main- 
 tained public faith, and it afforded an invaluable precedent. 
 
 Since the re-coinage at the end of the seventeenth century, the 
 country has always kept up the standard of its metallic currency, 
 and has incurred the charge of wear. It has found it possible to 
 do this without so much hanging and burning as was thought 
 expedient in olden days. But it has had to protect itself in an in-
 
 THE EECOINAGE OF 1696. 201 
 
 direct way. It first of all made silver a legal tender up to 40 
 only, and subsequently up to 40s. only. It then very much over- 
 valued silver, making it a token coin for internal circulation only, 
 and, as I have said, for small amounts only. It has done the same 
 with its copper and bronze coinage. This was in 1816. But 
 before that time it had not thought of large payments in copper, 
 and made no provision against them. When Lord Cochrane was 
 degraded and fined 1,000 for an offence of which he was after- 
 wards declared innocent, his admirers subscribed the amount of the 
 fine in penny pieces, took them to the Bank of England, and ob- 
 tained a note in exchange. With this Lord Cochrane paid the 
 fine, having written an explanation of the facts on the back of the 
 note, and some reflections on the Government of the day. The 
 note was paid into the Bank, and is now preserved as one of the 
 curiosities. 
 
 In 1797 the country was engaged in a very costly war. Pitt, who 
 hired the European monarchs in succession, and made very 
 unsuccessful bargains, was draining every sovereign out of the 
 country to pay these people with. The Bank could find no more 
 money, and Pitt determined to establish a forced paper currency by 
 making Bank of England notes a legal tender. The nature and 
 consequences of this action will be treated of in my next lecture. 
 Of course gold was hoarded, and disappeared from ordinary 
 currency, for Gresham's law came into full force. This state of 
 things went on till the war was over, and longer. Then Peel, who 
 had evidently studied the precedent of 1697, determined 011 re- 
 storing the metallic currency. But there were many people then, 
 like the people one hundred and twenty years before, who thought 
 that the name of a sovereign would carry the fact of a sovereign, 
 and wanted to reduce the weight of the pound. It was, I am sure, 
 during the debates on that subject that Peel thought out that 
 famous question of his, which he put in the House of Commons, 
 and with which he so utterly puzzled his audience. The question 
 was, What is a pound ? The answer, I am giving you my own, 
 and I don't think a better can be given, is 113 r ^ T grains of pure 
 gold in a coin. Depend on it, when you hear people talk nonsense, 
 you can often dispose of them by asking them for a definition of 
 the leading words they use.
 
 202 METALLIC CURRENCIES. 
 
 Almost all nations but ourselves levy a seignorage on gold, i.e., 
 a small charge for coining. Now directly a coin leaves the country 
 of its origin it becomes bullion, a piece of metal, it is true, of 
 accredited weight and fineness, but only a piece of metal. Hence 
 we never see foreign coins circulating in England. In the seven- 
 teenth and eighteenth centuries they circulated almost as freely 
 as English gold coins, and ordinary Englishmen knew all about 
 pistoles and gold crowns, moidores and gold ducats. Of course 
 coinage is a manufacture, and the convenience of the product is- 
 such that it will bear the cost of manufacture. We might put a 
 charge on the process, but we do not, and there must be an ad- 
 vantage in the practice. As it is, English sovereigns circulate all 
 over Europe, and people are glad to take them, for as the English 
 people pay all the cost of wear, the foreigner can safely take, 
 circulate, and in their legitimate use, wear them down, with the 
 certainty that he will suffer no loss. I'fc is plainly very arguable 
 whether this policy is a wise one, i.e. /whether we gain or lose more 
 by our liberality. Certainly, when our gold coin gets worn, and 
 it is terribly worn now, more than half the sovereigns, and more 
 than two-thirds the half-sovereigns, being below the legal weight,, 
 people will discuss the seignorage question. But it always ends- 
 in the public purse bearing the loss. To be sure we have a great 
 fund for the purpose. There is an enormous profit made on the 
 circulation of the silver and bronze currency, and in my opinion, as- 
 I have said elsewhere, the profits on this subsidiary currency 
 ought to be a separate account at the Bank of England, held or 
 invested against the contingency of making good the light gold. 
 
 An eminent friend of mine, Mr. Gladstone, once asked me 
 whether I thought currency or love had made most maniacs. I 
 told him that I had often been in a difficulty about his question,, 
 and in my mind it could be coupled with a third cause of lunacy, 
 the interpretation of unfilled prophecies. I trust in what I have 
 said to-day that I have not unsettled any of your intellects. At 
 the conclusion of this lecture, I must however say a word or twa 
 more about two very significant and important facts : first, the two 
 kinds of currency ; and second, the effect of foreign indebtedness 
 on trade and the exchanges. 
 
 Every country has two kinds of currency. One of those kinds is of
 
 SEIGNOBAGES ON COINS. 203 
 
 very large amount, though the amount greatly varies in different 
 countries. It is that which is needed for internal trade, the money 
 which we carry about with us, as we want to use it, that which is 
 employed by traders and manufacturers in their business, and that 
 which is kept by bankers for the purpose of honouring cheques 
 drawn on them, and for the convenience of their customers. No 
 one knows what the amount is, for the issues of the mint are no 
 guide, since the sovereigns may go out of the country ; we know in 
 a rough manner, how much the silver and bronze is, but only in a 
 rough manner, because no one knows how much of the silver has 
 been sent back in a more or less worn condition to the mint. But 
 estimates have been made that there is in the United Kingdom 
 one hundred millions of gold in circulation, thirty millions of 
 silver, and ten millions of bronze. The last two, for the reasons I 
 have given, are rough guesses, but the third is based upon a 
 principle. 
 
 Economists have got an excellent phrase, " The efficiency of the 
 currency." But like many of their forms, even the best of them, 
 it requires explanation. By the efficiency of the currency is not 
 meant the number of economical operations a piece of money 
 satisfies, that is, the number of times in which it passes from 
 hand to hand, for currency may be efficient without being visible ; 
 but the number of transactions which a given quantity of the 
 precious metals will sustain in the aggregate. In England these 
 transactions are very large, larger than, perhaps, in any country. 
 But the quantity of gold needed for them is smaller than in any 
 country of its size. In France it is reckoned that there are three 
 hundred millions sterling of gold in circulation ; in Germany as 
 much. But it does not by any means follow that these countries 
 are richer than England. 
 
 The other kind of currency is that needed to secure the 
 equilibrium of the foreign exchanges. This is known to a single 
 sovereign, for it is to all intents and purposes in the Bank of 
 England, and an account of it is published every Friday. It is 
 part of what Smith calls the money of the great mercantile re- 
 public, and it flows in and out of the country with perfect fluidity, 
 as it is wanted here or elsewhere. If we want to get it, the Bank 
 of England raises the rate of discount. This operation makes it
 
 204 METALLIC CURRENCIES. 
 
 more profitable to send gold here than to send bills, and the gold 
 comes. Sometimes a country is in great straits for this money. 
 Then it sells securities, of course at a comparative loss, and gets 
 gold for them. It is possible that its securities may be at such 
 a discount, that it cannot negotiate them. In such a case it must 
 wait. 
 
 The other point is the effect of foreign indebtedness on trade and 
 the exchanges. England is a prodigious creditor on other countries. 
 The sum which other nations owe English people, by whom I 
 mean the whole United Kingdom, is incredibly large. The interest 
 on these debts is expressed in gold, payable in gold ; of course it is 
 paid in goods. But the fact that this indebtedness exists is an 
 enormous strength in the control of the foreign exchanges. What 
 it is on the trade of the country, 011 its imports, and on the in- 
 ferences to be drawn from the facts, I shall show you hereafter, I 
 hope. But the right to be paid in gold cannot but be an enormous 
 lever. It must greatly increase the force of a rise in the rate of 
 discount. I have good reason to believe, from conversations and 
 correspondence which I have had with some friends of mine in the 
 Bank parlour, that they are not as yet cognizant of the force which 
 that engine possesses, which is virtually in their hands, as the 
 agents of British trade. To people who study the mechanism of 
 economic operations, who avoid metaphysics, and cling to facts, 
 there constantly arise before their view, novelties in action which 
 are profound and far-reaching. I am sometimes, as an economist, 
 glad that the forms of our constitution make changes slow. One 
 chafes at blunders in practice, one chafes at delays in the remedial 
 process of legislation ; but perhaps, on the whole, it is better to be 
 too slow than too fast, even when we are exposing an error, or 
 pointing out the inevitable consequences of a political crime. Of 
 course I refer to economical errors and economical crimes. The 
 history of England supplies us with illustrations in plenty of both.
 
 X. 
 PAPER CURRENCIES. 
 
 Ancient banking The Jews of Asia Minor Practices precede the 
 mention of them The Bank of Venice The Bank of Genoa 
 The Bank of Amsterdam Early English banking The beginning 
 of the Bank of England The relations of the Bank to Govern- 
 ment The powers of a Bank over note issues The Land Bank 
 of 1696 Exchequer Bills The first hundred years of the Bank 
 The crisis of 1797 Sir Robert Peel's Act of 1844 The country 
 banks of issue. 
 
 IT appears, from abundant evidence, that substitutes for money, 
 convertible into money at the discretion of the person who, holding 
 them, was entitled to negotiate them, preceded the invention of 
 coined' money. I have used the widest expression possible when I 
 say substitutes for money. In the great and prolonged controversy 
 which has arisen on this subject, and has not perhaps been con- 
 cluded by any propositions which command universal assent, much 
 debate has arisen as to what substitutes for money are to be accepted 
 as performing equally effective functions in the world of commerce 
 and exchange. The debate or dispute is due in great measure to 
 the views which have been taken as to the State regulation of sub- 
 sidiary currencies, and to the reasons which have been alleged for 
 such an interference with free action in such matters. If the regu- 
 lation of all such substitutes is to be assigned to the State, it will 
 be plain to you, in the course of this inquiry, that the action of the 
 State would seriously incommode commerce, while, if the regula- 
 tion is to be applied to some forms of substitution only, many of the 
 arguments which have been alleged as conclusively proving the 
 necessity of legislative supervision will be invalidated, though some,
 
 206 PAPER CURRENCIES. 
 
 in my opinion quite as forcible, will remain unimpaired in their 
 cogency. 
 
 I stated in my last lecture that modern research has shown that 
 the Babylonian bankers employed instruments of commerce which 
 were, to all intents and purposes, substituted currencies. The private 
 orations of the great Greek pleaders are full of information as to 
 the existence of bankers in the Greek cities, and of the circulation 
 of bills of exchange between such bankers as were in correspondence 
 with each other, and had understandings, as to the negotiation of 
 such instruments. No doubt then, as now, liabilities were ex- 
 pressed in money, either by weight or tale, and in theory the 
 debtor, on completing the transaction in which he was engaged, 
 was under the obligation in theory to provide at Athens or Mgiua, 
 at Corinth, at Carthage, at Tyre, or wherever else he purchased, 
 the coins or bullion in which he expressed his debt. But in practice, 
 and from early times, even times of prehistoric trade, the practice 
 was different. The purchaser had his debtors, to take the simplest 
 form of these transactions, at the city where he had bought, and 
 had previously sold. He transfers his debtor's liability to his creditor. 
 From this it is only a step to transfer a liability in another trading 
 centre, with which that in which he deals has commercial corres- 
 pondence. When the next step is taken, and particular persons 
 make it their business to bring together these debts, to negotiate 
 them, and to balance them, the chain is complete, and the system 
 under which trade is carried on in our day, and was carried out in 
 the remotest ages of trade, is completed. Delay, risk, trouble are 
 avoided, and you are well aware, I trust, that in every economical 
 operation, they who are engaged in it do their best to avoid to the 
 utmost all unnecessary cost and risk. We may be sure, then, that 
 the use of letters of credit, of bills of exchange, of commercial 
 transfers from account to account, are as old afe commercial civili- 
 zation is, and far transcend in antiquity all surviving records. The 
 origin of the intercourse between Tyre, Carthage, and Cadiz or 
 Gades, is lost to history. But it certainly existed in fact, and in 
 the form which I have sketched. It is not remarkable that the 
 record has been lost. Commercial transactions lose their interest 
 as soon as they are balanced ; and, in fact, it is only owing to a 
 peculiarly barbarous tradition, I can hardly call it a principle, of
 
 ANCIENT BANKING. 207 
 
 the English courts of law, which endured to less than two genera- 
 tions ago, that England possesses so extraordinarily large a record 
 of bygone business transactions. I am alluding to the old rules 
 which regulated or defined title by prescription. If economists lay 
 <lown principles to which they claim assent, they must allege that 
 they come under the rule, quod semper, quod ubiqtic, quod omnibus. 
 But the facts which confirm these utterances have to be sought, 
 and are not always easily found. 
 
 Cicero's oration in defence of Flaccus, who was accused of extor- 
 tion in Asia, gives incidentally some hints as to the movements of 
 specie, under the agency, as is obvious, of Jewish bankers or bullion 
 dealers. It appears that Flaccus interfered with their business by 
 prohibiting the exportation of specie from Asia Minor, and that the 
 prosecution laid great weight on the praetor's misconduct. Of 
 course we do not know from the apologist what was the precise 
 action of the praetor, beyond inhibition and confiscation. It is 
 pretty certain that the charge made, that the gold was to be sent 
 to Jerusalem, is an exaggeration, and that Cicero is trying to evade 
 the issue by appealing to Koman contempt for foreign rites. But 
 lie, no doubt, states the fact when he alleges that these movements 
 of specie were carried on by the Jews, nearly sixty years before our 
 era, not only in Italy, but in every province of the empire, and that 
 to interfere with these transactions was to provoke powerful enemies, 
 not, I conceive, so much among the Jews, but among those who 
 recognized the advantage of this bullion trade. In the nature of 
 things these transfers must have been assisted by commercial in- 
 struments. 
 
 The Greeks called a banker, ipaTr^irrjs ; the Romans, argentarius ; 
 and there are numerous references in Greek and Latin authors to 
 the trade and customs of these persons. After the conquest of Egypt 
 they were particularly numerous at Alexandria, then the most im- 
 portant commercial city of the Old World, and, it would seem, the 
 centre of such trade with the remoter East as was carried on in 
 those distant times. But with the violent destruction of the old 
 civilization, and the reduction of nearly all Europe to barbarism, 
 the old system is forgotten, and reappears, as might be expected, 
 in Italy, as one discovers in the exceedingly copious records of 
 Muratori. At some later period I hope to explain to you in some
 
 208 PAPER CUEEENCIES. 
 
 detail what was the position of the Italian city in the early Middle 
 Ages. My information will come principally from the author to 
 whom I have referred. I have little doubt that this commercial 
 system, undoubtedly in a very shrunken form, survived in Southern 
 Italy the incursions of Saracen and Norman, and that it may be 
 possible to trace the commercial law of the remotest ages in the- 
 records of those trading cities. But at present I must confine 
 myself to the development of modern banking, i.e., the trade in 
 substituted currencies. You will understand that a substituted 
 currency is one which is made to perform the functions of money 
 for a longer or shorter period. Its agency may be momentary or 
 prolonged. Its conversion into money may be immediate, or be 
 deferred. 
 
 Individual enterprise, in matters of business, almost invariably 
 precedes partnership business ; partnership business precedes joint- 
 stock enterprise. Joint stock precedes State enterprise. But the 
 beginnings of all enterprise are generally obscure, and almost in- 
 variably unrecorded, for, as I said just now, the interest in a com- 
 mercial transaction expires with its completion. Hence we may be 
 sure that when action like that on which I am commenting attracted 
 the attention of the contemporary annalist, it had long been pre- 
 paring, and possibly long in action. Besides, a successful process 
 is a trade secret, or a source of personal profit. If, as some persons 
 suggest, perhaps with an imperfect acquaintance with human nature, 
 the State is so successfully manipulated, that competition is pro- 
 scribed, you may be pretty certain that competition will reappear 
 under the mask of secrecy. I am well aware that men are misled 
 by names, but we economists, and with reason, distrust all names, 
 and, while we are in possession of our wits, refer ourselves to things. 
 Again, as society is rude, violence is a recurrent risk, and success is 
 doubtful, imitation is slow. You will find, especially in monetary 
 science, and particularly in that branch of it which I am handling 
 this morning, that the wisest and most useful conclusions, fortified 
 by abundant experience, are very slowly adopted by other nations 
 than those who have tried and proved them. Had I time, I could 
 point out to you how many instances can be found, in the economi- 
 cal history of nations, in which one State has progressed rapidly. 
 and others have gazed on them with amazement, imagining that
 
 THE BANK OF VENICE. 209 
 
 there is something preternatural in their doings ; and, again, how 
 many instances there are in which they who know what is best to 
 be done for their fellow-countrymen, appeal in vain to these facts, 
 which cannot be discerned by those who are blinded by the twin 
 forces of ignorance and science. To the votaries of these obstruc- 
 tive forces, secrecy is opposed. You will therefore understand 
 that, when I give you an early date for an economic practice, I 
 give you the date of observation, not that of origin. 
 
 With this caution, then, I may say that the State Bank of Venice, 
 the earliest of these modern institutions, was founded in 1171. This 
 was during the time when Pope Alexander III. was engaged in a 
 perpetual quarrel with Barbarossa, and the two Italian factions of 
 Guelfs and Ghibellines were being consolidated. $fow Venice, which 
 cared nothing for Pope or Emperor, except in so far as it could get 
 advantage from either, had at this time almost a monopoly of trade 
 with the East. Other nations had fought the Crusades, and founded 
 the kingdom of Jerusalem, but Venice traded with Christian and 
 paynirn. The city grew rich and powerful, and you will often find 
 that when people are rich and powerful, their orthodoxy, and even 
 their morals, are not weighed with exceeding scruple. At this time 
 many hard things were said of the Venetians, but everybody, espe- 
 cially those who had need of their services, financial or diplomatic, 
 had dealings with the Venetians. They took all currencies that 
 came to them in course of business, and they secured a profit on 
 all the business they did. I should weary you if I gave you a tithe 
 of the names which belonged to the coins then congregated at 
 Venice. They were more numerous than the nationalities, for the 
 style or effigy of many a forgotten monarch, from Bactria to Mauri- 
 tania, from the caliphs of Spain to the dukes of Moscow, were in 
 the Venetian treasury. 
 
 Venice took, sorted, valued, and discounted them all. An ex- 
 perience of the gain derived from these processes led them to the 
 discovery of giving a ticket to depositors who were waiting for 
 purchases or sales. It is not wise to carry much money about with 
 one, even in these days, it was less wise in those days. Very soon 
 the ticket, really a warrant, implying that the depositor had a right 
 to the coins specified or endorsed on the document given to the 
 depositor, was found to be as good as cash, even better, for it was 
 
 15
 
 210 PAPER CUBBENCIES. 
 
 a better security. Very soon the Venetian note bore an agio or 
 premium, and a bank of deposit was formed. Very soon the bank, 
 to encourage deposits, gave privileges to its customers, or, which is 
 the same thing, put disabilities on those who were not its customers, 
 as, for example, they declined to permit bills of exchange to be 
 negotiated or discounted, except at their bank, or stayed process 
 against the acceptor of the bill, that is, the person liable, until his 
 bill was protested, that is, the non-fulfilment of his obligation was 
 sworn before a notary public, that is, one of their own licensed 
 officials. The Queen of the Adriatic soon learnt how to give 
 stability to its own institutions, and to suggest instability on those 
 which were not its own. But I need not follow the fortunes of the 
 Bank of Venice. 
 
 We get on more solidly chronological ground when we come to 
 the Bank of Genoa, founded in 1407. At this time, the Western 
 world, or rather the potentates of Western Europe, were near on 
 reducing the Pope, who had so long terrified them, to the condition 
 of a nominee, holding office during pleasure, nominally of a general 
 council, really of themselves for laymen sat in the councils of the 
 early fifteenth century. The scheme failed, for reasons on which I 
 need not dwell here. To some extent the Pope recovered his own, 
 though never to such an extent as to make an anti-pope a 
 practicable expedient. But the power of the kings increased. 
 It was just the time in which a bank on the Western Coast 
 of Italy had good prospects of business, and the Genoese char- 
 tered a company for the purpose, gave it immediate privileges, 
 and gradually increased these privileges. At last the Bank 
 of Genoa became an imperium in imperio, which made conquests 
 of its own, and negotiated independently with foreign Powers. 
 It existed as a shadow down to the end of the eighteenth 
 century. 
 
 The Bank of Genoa was not one of deposit. It did not purport 
 to secure to the depositor the exact moneys which it had put into 
 the Bank, earmarked, so to say, for him. It took his money, gave 
 him an acknowledgment in the shape of a note, which was 
 transferred from hand to hand, pledged its credit that it would 
 repay him on demand, and traded or made acquisitions with its own 
 capital and that of its customers. Through the fifteenth and sixteenth
 
 THE SANK OF GENOA. 211 
 
 centuries the Bank of St. George was and remained a very thriving 
 undertaking. The trade "with the East through Alexandria was very 
 prosperous during the fifteenth. The Western Mediterranean, to all 
 appearance, became exceedingly rich and powerful during the six- 
 teenth. The gift of Borgia seemed inexhaustible, and when, under a 
 succession by marriage, Philip II. got possession of Portugal, 
 with its vast Indian possessions and their illimitable resources, 
 Philip and the Inquisition seemed destined to dominate in Europe, 
 and become the masters of the human race. To discount the 
 bills of so rich a potentate as Philip seemed to be good business. 
 Spinola told the Genoese it was, and the Bank and the merchants 
 competed for Philip's paper. I know nothing which would interest 
 me more than to discover the rates at which they discounted it. 
 They were probably high, at least Philip said so, when he 
 repudiated his debts in 1596, ruined the Bank, ruined the 
 merchants, and left Spinola as best he could to finish the siege of 
 Ostend. In war, especially in a war which supports itself, every- 
 body but the warrior may be ruined. This unequal arrangement 
 still subsists. 
 
 Philip, as we all know, was impoverished, and with him the 
 country which he misgoverned, by his attempt to subjugate the 
 Dutch. The resistance of Holland was infinitely more significant 
 than the resistance of Athens more than 2000 years before. The 
 collapse of Philip was far more complete than the collapse of 
 Xerxes, for it took near fifty years of his and his son's reign, and 
 was of infinite value in training the Hollanders. Towards the 
 very end of the struggle the Dutch determined on establishing a 
 bank. They did not, in 1609, take the precedent of Genoa, for its 
 experiences were not encouraging. They also established a bank 
 of deposit on the model of the old Venetian bank, and shortly 
 afterwards, Hamburg, the only Hanse town which retained its old 
 prosperity, followed the Dutch example. It will be remembered 
 that at this time Amsterdam was the Exchange of Europe, as 
 Venice had been during the time of the Crusades. It rose by its 
 own heroism and strength, and on the ruin of Antwerp: I regret to 
 say that England, which owes more to the Hollanders than it does to 
 any other race, never ceased intriguing till it ruined Holland and 
 .the Bank. The process was aided by Dutch unwisdom. The Dutch,
 
 212 PAPER CURRENCIES. 
 
 for reasons into which I cannot now enter (though the burgomasters 
 of Amsterdam and its council took oath annually that the treasure 
 was intact, and were confirmed by the evidence of 1672, when the 
 De Witts were murdered, and there was a run on the Bank, but 
 the treasure was found intact), borrowed the capital in the succeed- 
 ing century for the Dutch East India Company. When the French 
 invaded Holland in 1795, and perhaps expected the reward of 
 patriots in the cellars of the Bank, they were found empty. 
 But Adam Smith, when he wrote his " Wealth of Nations," 
 thought that an account of the Bank of Amsterdam was more 
 interesting than that of the Bank of England, and got Mr, 
 Hope, a Dutchman of Hebrew descent, and ancestor to some 
 distinguished English Churchmen, to give him a "digression" 
 on it. 
 
 Private banking preceded, as usual, joint-stock banking in 
 England. In the seventeenth century the wealth of England was 
 centred in London. The goldsmiths, members of the most 
 opulent and enterprising of the City Companies, who had lent 
 much to Charles, became wealthier under the Protectorate than 
 under the Monarchy. Cromwell's government was strong, and 
 strong governments seem to be safe, while safe governments 
 attract the wealth of the timid. Already during Cromwell's reign 
 the project of a Corporation bank was mooted, and the Bank of 
 Amsterdam was the obvious model. But corporations in a 
 republic are much more secure than corporations under a 
 monarchy. During the Protectorate the London Corporation was 
 respectable, and remained respectable for a century or more after 
 the Protectorate. But, as the surrender of the Charters proved, it 
 was not safe. The opponents of the Bank of England were never 
 tired of saying that a public bank and monarchy were in- 
 compatible. They certainly were if the monarch was a Stuart. 
 With these people nothing was sacred, nothing safe. In 1638 
 Charles I. stole the money in the Mint, 204,000. In 1672, 
 Charles II. stole the money in the Exchequer, 1,328,526. The 
 father paid the money back, for he found that it would be unwise 
 to keep it. The son, who, Bochester said, never did a wise 
 thing, neither paid principal nor interest. In such times, 
 and under such kings, it would have been as unsafe to estab-
 
 THE BANK OF AMSTERDAM. ENGLISH BANKING. 213 
 
 lisb a bank as it would have been to entrust the Exchequer to 
 Falstaff. The only chance for a bank was a revolution. It came 
 in 1688. 
 
 No doubt the project of founding a joint-stock bank in London 
 was in every one's mind as soon as the Government was settled, 
 and James was driven from Ireland. But the projectors of the 
 institution might well have hesitated. The business of banking, 
 and that a very lucrative business, was in the hands of wealthy 
 men, who had a common interest in keeping it. The bankers, 
 then called goldsmiths, took the money of such among their 
 customers as wished to find a safe place of deposit no easy 
 discovery, for after the Restoration London swarmed with 
 footpads and highwaymen and gave acknowledgments of the 
 deposit in the shape of notes. These notes passed freely from 
 hand to hand, were indeed a favourite instrument of business and 
 trade, as they were portable, were easily traced, and, if they fell 
 into wrong hands, could at least be stopped, and very probably 
 recovered. The goldsmiths soon discovered that they could issue 
 notes, the amount of which was far in excess of the money which 
 they ordinarily held, if the issuer was known to be solvent, and 
 could thus carry on a business by their own credit. This peculiarity 
 of the new system was perfectly well known and recognized at the 
 time, as may be gathered from contemporary pamphlets. But 
 besides the profit derivable from these issues of credit, which 
 fulfilled to the goldsmith and the trader all the functions of money, 
 these persons derived a very great profit from the discount of 
 foreign bills. The exchange between England and Holland was 
 subject to very violent fluctuations, fluctuations which seem 
 incredible to modern experience, as they are without parallel in 
 recent times. But two centuries ago, the chances of exceptional 
 profit, especially in foreign articles, was very great. Within a few 
 months such an article might rise to a price treble that at which it 
 ordinarily stood, and though the trader might be certain that it would 
 not fall below a certain rate, the speculation in a rising market, if 
 the trader had money or credit, was generally safe, and might 
 assure a gigantic profit. With such prospects, the trader might 
 endure complacently such a rate of exchange on his bills as would 
 be ruinous to his modern successor. For example, the chief
 
 214 PAPER CURRENCIES. 
 
 supply of saltpetre was from the East Indies. Its price was open 
 to great changes, as the demand of war, or the safe return of the 
 East India ships were announced. It more than doubled in price 
 in a week. Now the trader who knew what ships were afloat 
 might reasonably calculate on his profits for a time, and might, if 
 he were quick, get a monopoly of the market. It was by such 
 bargains that the great fortunes of this period were made. 
 
 The exigencies of the Government were the opportunities of 
 those who were projecting the Bank, and Montague, who had 
 ulterior motives in encouraging the projectors, was quite ready for 
 negotiations in 1694. William had determined if possible to rival 
 the victory of La Hogue by a land campaign, and had planned the 
 siege of Namur. But the expenses of the war were great. The 
 country gentlemen had granted the land tax, then a great sacrifice. 
 Montague raised a million by a lottery, and gave a charter to an in- 
 corporation of bankers, on consideration of a loan, to be raised within 
 a brief time, of 1,200,000 at 7 per cent. The whole was subscribed 
 in a few days. The new incorporation received deposits and issued 
 notes, in imitation of their rivals, the goldsmiths. They expected 
 to pay their dividends from the interest paid by Government, from 
 the profits of their own issues, acting as money, from the employ- 
 ment within safe lines of their customers' deposits, and from the 
 discount of bills. In short, they strove to get hold of the gold- 
 smiths' business, and they had to expect, and did experience, the 
 goldsmiths' enmity. This is not the occasion on which to deal with 
 the early struggles and rapid success of the Bank of England. I 
 have told the story of its first nine years in a volume recently pub- 
 lished, the occasion of which was my discovery of a price list of 
 Bank Stock, printed weeklyin Houghton's Collections. The Bodleian 
 Library has a perfect copy of this remarkable periodical. The 
 British Museum, as I found from a recent inquiry, has only an im- 
 perfect copy. I suspected that the National Library was, in this 
 particular, not so well off as we are, from the slighting manner in 
 which Macaulay treats Houghton's labours. It would have been of 
 great value to the historian if he had seen the Bodleian copy. 
 
 The peculiarity of the government of the Bank of England, from 
 its inception and for many years after its business commenced, was 
 that the management was entirely in the hands of Whigs and Dis-
 
 THE BEGINNING OF THE BANK OF ENGLAND. 215 
 
 senters. Sir John Houblon, the first Governor, two of his brothers 
 being in the direction, was the descendant of a Flemish refugee, 
 who had fled to England from Alva's persecution. From the 
 correspondence of Pepys, preserved in our library in the Kawlin- 
 son Collection, it is clear that Houblon was a general, but especially 
 a timber merchant, for though Pepys chiefly writes to him about 
 ship stores, he gets him to perform certain commissions, chiefly in 
 dress, for Mrs. Pepys, the lady whom he appears to have treated 
 with great consideration, though he writes of her with much dis- 
 paragement. Holland, though it grew no timber, was the principal 
 mart for this produce, and like genuine traders, the most patriotic 
 Hollander thought no scorn of selling materials of war to Philip of 
 Spain and Louis of France. They believed, and quite correctly, 
 that they could sell them the goods, and maintain war on a portion 
 of the profits. We did the same by the first Napoleon during the 
 great Continental war, and with the same results. Napoleon put 
 impediments in the way of procuring stores for his own troops, and 
 thereupon secured a higher rate of profit for the English manu- 
 facturer and merchant. There are several other names, manifestly 
 of French or Flemish origin, in the first list of directors. Now, 
 though the days of active persecution were past, disabilities were 
 put on Nonconformists, and humiliations were inflicted. Inconse- 
 quence, the London Dissenters became a virtual corporation, which 
 acted with a common purpose, had reciprocal sympathies, and gave 
 mutual aid. Macaulay, you may remember, has shown how much 
 better were the prospects in the professions and in trade of those 
 who stood in with Nonconformity. The Nonconformist minister 
 exercised far more influence than the Anglican divine did, the 
 Nonconformist trader was more sure of help and consideration from 
 his wealthier co-religionists than the shopkeeper did who affected 
 Episcopal ministrations. This is always the result of persecution, 
 when it does not go to extremes. It unites its objects into an 
 organization. 
 
 The directors, too, were Whigs, not of the school which made 
 alliances with their opponents iu order to keep office, as the Whigs 
 of 1710 did, or maintained a sulky opposition to their old leaders 
 as the Whigs of 1780 did, but downright faithful adherents to the 
 principles of 1G8B. The critics of the Act of 1694, under which the
 
 216 PAPER CURRENCIES. 
 
 Bank of England was first constituted, provided, fortunately for the 
 institution, that the advances that might be made to Government, 
 beyond, as it appears, such ordinary banking facilities as were 
 accorded to all customers, should have the sanction of Parliament, 
 the violation of such a regulation being visited with a heavy fine. 
 Hence the Bank could always plead inability to make large 
 advances by the terms of the Act under which the Bank existed. 
 "When, in 1797, Pitt nearly ruined the Bank and its credit by exces- 
 sive demands on its specie, under the form of advances on public 
 securities already created by parliamentary grants, he strained the 
 principle of the Bank Acts, if he did not violate the letter. 
 
 The political relations of the Bank of England to the Government, 
 as soon as ever, under its second charter, it had conferred on it a 
 virtual monopoly of joint- stock banking, were of singular impor- 
 tance in the development of the parliamentary system which was 
 formulated in 1688. There was only the form of a representative 
 assembly ; the duly elected members were outnumbered by those 
 returned from the close boroughs. But the Bank of England be- 
 came the financial agent of the Government, and in no slight degree 
 its financial master. It was, indeed, from time to time, compelled 
 to accept disadvantageous terms, on the renewal of its charter at 
 successive periods, for it overvalued its power of issue, and the 
 advantage which its apparent monopoly gave; but the Bank directors 
 knew that the Government of the day could not break with it, or 
 dispense with its services. The fortunes of the Bank were bound 
 up with the fortunes of the Act of Settlement, and there was no 
 fear that a correspondent of the Stuarts would be found in the 
 Bank parlour. It thus wielded a silent, secret, but most effective 
 authority. Addison illustrated, in one of his cleverest " visions," 
 how the Bank of England was identified with English credit. The 
 Bank negotiated all the loans of the eighteenth century, and was 
 the agency by which the good faith of Government was assured. 
 
 From the very first, the Bank possessed aud exercised the power 
 of discretionary issue. Its note was not, and never purported to 
 be, a warrant entitling the holder to recover the exact and literal 
 value received, the very same coins which had been deposited, and 
 were originally made the security for the note. It always professed 
 to trade with the customers' money, only engaging to refund to
 
 THE RELATIONS OF THE BANK TO GOVERNMENT. 217 
 
 these customers at their discretion, the cash which had been 
 entrusted to it. It had, of course, to learn within what limits it 
 could use its customers' balances, and more difficult still, to deter- 
 mine the extent to which it could, when required, make advances 
 from these balances on public securities, actual or prospective. 
 Its notes, too, were of large denominations, and were therefore 
 generally employed, if not almost entirely, in mercantile transac- 
 tions, especially in the transmission of credits, operating as short 
 dated bills of exchange. 
 
 Now I have told you that no country ever retains a larger amount 
 of metallic currency than it finds necessary for the transaction of 
 its proper business. The private individual takes money to spend 
 or to hoard or to invest, in some interest or profit-bearing security. 
 If it is spent or invested, it passes away from the individual to those 
 whose interests, say, as traders, is to make money yield as rapid a 
 profit as possible. If it is hoarded, it is withdrawn altogether from 
 circulation, and as long as it remains in this form, it is virtually 
 extinguished as an economical agent. Now what is true of a 
 metallic currency, is true of a substitutive or subsidiary currency. 
 No man keeps more of it than he wants, and society collectively 
 circulates 110 more than it wants. To keep it needlessly is to incur 
 a, superfluous risk to the ordinary holder, to decline the chance of 
 profit to the manufacturer or trader. The ingenuity of modern 
 society is turned in all directions towards making its metallic cur- 
 rency as efficient as possible, and it strives with equal assiduity to 
 make its paper currency as efficient as possible. It follows, there- 
 fore, that bankers cannot put more paper money into circulation than 
 the public need. If they make an excess of issue, the excess conies 
 back instantly to themselves, as the parties responsible for the 
 engagement which the note implies. Again, if the community 
 requires more paper currency than the banks are able or willing to 
 give, either by legal restraint or by caution, the community will 
 discover some paper substitute, which it will employ in lieu of notes. 
 Thus, fifty years ago, bills drawn by the Manchester house of Jones 
 Loyd and Co., on the London house of Jones Loyd and Co., per- 
 formed all the functions of a note currency in Lancashire, and 
 brought no small profit to the ingenious firm, of which the head 
 was the late Lord Overstone.
 
 218 PAPER CURRENCIES. 
 
 It is sometimes alleged that paper currency has as effective an 
 influence over prices as a metallic currency is admitted to have. 
 But this is an error. Gold and silver influence prices when they 
 are adopted as co-ordinate currencies in proportion to the cost at 
 which they are acquired, the cost of acquisition being also affected 
 by the cost of their production, when that cost conforms to the 
 ordinary conditions under which industry is carried on. But neither 
 cost of acquisition nor cost of production affect, to any sensible 
 degree, the value of a note. Notes are the representatives, the 
 reputed equivalents of metallic money, and their acceptance and 
 circulation at the full value of what they represent, depends 011 
 the conviction that they can be changed into money at the pleasure 
 or convenience of the holder. If they cannot be so converted, 
 and still keep up their full credit, as happened during the first 
 eight or ten years of the Bank restriction of 1797, it is due to 
 the fact that the public knows them to be amply covered, and 
 therefore agrees to use them as currency at their full nominal 
 value. If such an issue is in excess, or is not sufficiently 
 covered, the note is sure to be discounted, as happened during 
 part of the last ten years in which the restriction endured. 
 
 But it is said, by virtue of discretionary power of issuing notes,. 
 a bank can practically coin money, and so by supplying an excess 
 of money give occasion to wild speculation. This is a confusion 
 between money, paper and metallic, and credit. If a bank could 
 coin metallic money, it could as soon create an excess as it could 
 by issuing notes. It would do nothing by such an act. If the 
 money were in excess it could go out of the country, if the notes- 
 were, they would come back to the bank which issued them. No- 
 power can make any people take and circulate more money than 
 they want. Of course I do not mean that bankers should be 
 allowed to circulate what paper they please. Every bank which 
 circulates paper, nay, every bank which takes deposits and trades, 
 should be constrained to prove, by an independent audit, that their 
 assets entirely cover their liabilities, and the surplus of assets over 
 liabilities, on the faith of which their customers deal with them, 
 and other than their customers take their notes, should be as 
 accurately expressed and published. The failure of the Greenways^ 
 Bank exhibits the difference between a real and sham audit. I
 
 THE POWERS OF A BANK OVER NOTE ISSUES. 219 
 
 will tell you before I conclude this lecture why a sham audit was 
 permitted under the Act of 1844. 
 
 Banks can assist a rash speculation by granting indiscreet credit, 
 though there is less likelihood that they will do so than other 
 traders will, for it is a fundamental rule in banking to deal with 
 easily convertible securities only. Thus a bank will discount a 
 three months bill having known names on it, because the security 
 is short; it will not advance money, if it be wise, on the mortgage of 
 real estate, however ample the security is, because the term is 
 indefinite, or in banker's language, a mortgage is a dead security. 
 But banks may be deceived by fraudulent bills, or may be under 
 the impression that the return will be quick, when it turns out to 
 be delayed, or they may give credit to those whom they believe to 
 be solvent, when they are not so. Credit may then raise prices, 
 but it does so only because it is believed to be money, or to have 
 money behind it. Generally, however, if not universally, the 
 rising market precedes the indiscreet grant of credit, for the 
 prospect of exceptional profit must needs go before the attempt to 
 gain it. I do not deal with the cases in which credit is continued, 
 after it is shown to be undeserved or incautious, where I mean the 
 banker thinks that he can by timely help recover what is in danger. 
 The effort is seldom successful, and is technically called throwing 
 good money after bad. Nor do I deal with fraudulent banking on 
 the part of the banker. This is a crime, though it is not punished 
 always as it deserves to be. I am speaking of business carried on 
 by honourable and prudent men. 
 
 Neither note issues nor credits can be based on anything but 
 money, or upon securities convertible into money with the least 
 conceivable delay. Suppose, for example, that a bank has liabilities 
 in the shape of customers' balances, and notes to the extent of a 
 million. It should have one-third of its liabilities ready at hand, 
 in the shape of money, of Bank of England notes, or of deposits 
 similar to those of its customers in the Bank of England or at 
 call. It may have another third in Government stocks, on which 
 it can borrow if it needs, or sell. It may have advanced the 
 residue on commercial bills, which in a strait, are also negotiable 
 though not as speedily or as safely as the securities which I have 
 referred to. It ought, besides, to have its own property and its
 
 220 . PAPER CURRENCIES. 
 
 own reserves. I have given you only a sketch of what a bank 
 might do with wisdom. But there are occasions on which it 
 might as wisely vary the distribution of its assets, and in the 
 interpretation of these occasions, but always with the knowledge 
 that it must secure itself, the practical judgment of the banker 
 resides. At this stage, I must leave the economical view of the 
 subject, in connection with which are many problems, and return 
 to the historical particulars before rne. 
 
 The Charter of the Bank of England was issued on July 24, 1694. 
 It began its business about the middle of the August following. 
 During the first two years of its existence, when its charter was 
 incomplete, it was subjected to three very serious strains. These 
 were the state of the currency, the project of the land bank, and 
 the straits to which it was put by unwisely advancing too much of 
 its cash on Government securities. The first of these difficulties 
 was met slowly, and, as far as the Bank was concerned, grudgingly, 
 by the recoinage; the third by an exposure of the Bank's affairs in 
 Parliament, by the evidence afforded by its solvency, and by the 
 wisdom which for a hundred years guarded against the recurrence 
 of the risk. On December 4, 1696, the issues of the Bank were 
 1,657,996 10s. 6d., and its cash in hand was only 36,664 Is. lOd. 
 It had practically lent this disproportionate sum to Government by 
 anticipating the payment of taxes, an act of incaution which, 
 unless its banking business were to be given up altogether, nothing 
 but prudence could save it from. The second of these causes, the 
 temporary rivalry of the land bank, requires a somewhat longer 
 comment. The land bank is an illustration of the error into which 
 human societies are apt to fall. 
 
 If I have made myself at all clear, you will have seen that a 
 paper currency will be accepted and used as money only on the 
 understanding that it may be changed into money at the pleasure 
 of the person who holds it. It may be the case, and it constantly 
 is the case, that the actual amount of paper money in circulation 
 is greatly in excess of the known gold which is held to meet it, 
 though it never in a well-ordered community with a convertible 
 paper currency nearly equals the amount of gold which is actually 
 circulating in the country. If, however, one includes in the paper 
 currency, the cheques and bills and other instruments of credit,
 
 THE LAND BANK OF 1696. 221 
 
 mature and immature, the paper put into circulation in a com- 
 mercial country is greatly in excess of the gold which is reputed 
 to cover it. But this makes no one uneasy. The extent to which 
 metallic money is made to support other instruments of credit 
 indicates the efficiency of the currency, and the extent to which 
 gold is demanded for notes is a calculable average, more interesting 
 to the bullion dealer and the bill discounter than to the ordinary 
 Englishman, who is satisfied that he can get what he wants in the 
 way of money as he wishes'. In short, additions to the stock of 
 gold in domestic circulation are temporary, dependent on easily 
 ascertained causes, and therefore anticipated. But though the 
 power to get gold may not be exercised, the power must be recog- 
 nized and must be respected. 
 
 Now from seeing how great a mass of business may be done with 
 but little metallic money, people begin to conclude that one can do 
 without it at all, and can substitute in the place of it even interest- 
 bearing security, such as a public fund, or a highly desirable kind 
 of property, such as recently was land, for the rent of land from 
 the beginning of the seventeenth to the last quarter of the nine- 
 teenth had been regularly rising in amount. " Why not then," 
 persons argue, "issue notes on the security of Consols, or on the 
 land of the country ? The security is indisputable, the pledge 
 stable, the basis of the security bears a revenue, while gold, do 
 what we will, yields in itself no revenue, and, as you economists 
 say, eludes all efforts to forcibly detain it. Surely stocks or land 
 are a better security. Do not your own bankers invest their 
 balances in stocks, rather than accumulate barren money ? " 
 
 To this the answer, and the sufficient answer, is, that people will 
 take and circulate notes because they know that they can get gold 
 for them. For a 5 Bank of England note I can get five 
 sovereigns, when I want to get them. If instead of five sovereigns, 
 I am offered by the bank which issues the note 5 worth of stock, 
 or land, what I receive in exchange is of no use to me unless I 
 sell it, and so take upon my shoulders a second transaction, 
 certainly of a troublesome, possibly of a risky, character. After 
 the e*xarnple of Master Durnbleton, I like not the security, and no 
 one unless he were a conscious or unconscious swindler, and Sir 
 John Falstaff, I fear, was intended to represent the former class of
 
 222 PAPEE CUREENCIES. 
 
 adventurers would press it on me. As to the land bank of 1696, 
 the scheme possessed every blunder which crazy heads could 
 have invented, and' it would not have had currency for a 
 day, had not the country gentlemen and Tories, who hated the 
 Whigs and the Dissenters, imagined that they could get money 
 easily, and ruin the psalm-singing, snivelling, Puritan usurers 
 of Grocer's Hall, which was then the habitation of the Bank of 
 England. 
 
 In the darkest hour of the Bank of England, in the spring of 
 1696, when the Tories were pressing forward the land bank, and 
 were prematurely glorying in the certain success of a swindle, 
 Montague contrived to procure a power to issue on behalf of the 
 Government what were virtually bills of exchange, bearing a fixed 
 rate of interest, and secured upon anticipated revenue, and 
 redeemable at a given date. These are called Exchequer bills, and 
 they remain to this day as a Treasury expedient with which to 
 keep a balance in the Treasury by their circulation. It was, and 
 is, in their capacity of bills of exchange, that they are first-class 
 banking securities. In this manner they perform the functions of 
 currency, render that whose functions they perform more efficient, 
 but do not affect prices. 
 
 For a hundred years the Bank of England performed notable 
 functions. I cannot follow them in this lecture, which is only 
 intended to give an outline of the principles on which banking is 
 carried on, and, according to my custom, to illustrate what I have 
 to say by historical parallels. During this century, it became the 
 centre of trade and credit, was to successive Governments a 
 permanent ministry of finance of an invaluable kind, and was an 
 adviser ; sometimes an ineffectual adviser of prudent counsels. 
 Of course it made mistakes, but it gained wisdom for the future, 
 and accumulated that prudence, invaluable in public business, 
 which comes from practical experience. As long as the Bank 
 adheres to its traditions, it is of no consequence to know what are 
 the present politics of its directors. It holds a place which is not 
 above party, for party is the etenial struggle between good and evil, 
 but apart from party, because there is no doubt, to use a logical 
 expression, about either its major or minor premises. But the 
 Bank of England is the glory of the Kevolution Whigs of the better
 
 THE CRISIS OF 1797. 223 
 
 school, and not of them only, but of their best type, the London 
 Dissenters of that period. 
 
 Close upon a hundred years after its first great crisis came the 
 second. I am referring to the events of February 10, 1797. The 
 Bank had made prodigious loans to Government, for the younger 
 Pitt was straining every nerve to keep up, at the expense of 
 England, the policy which he thought proper to adopt in 1793. 
 I have, to be sure, very strong opinions about that policy. His con- 
 temporaries, especially those whom he favoured, called him a 
 heaven-born minister. I am afraid that I must assign his place of 
 origin to a lower region, for it would be a strange heaven in which 
 his policy would be acceptable. Again, Pitt anticipated taxes, 
 which, in that epoch of most atrocious finance, he was imposing, 
 and on the date given, or rather on February 26th, the floating loan 
 to Government was 7, 586,445, and the cash in the Bank's hands 
 '1,272,000. We were engaged in subsidising the German prince- 
 lets. I will not touch here on the policy which was deemed 
 necessary, the suspension of cash payments, the order in Council 
 that the Bank of England be ordered to forbear any cash in 
 payment of its notes. This needs a lecture of its own, to be 
 postponed. At present it is more important that you should learn 
 the principles. We shall have hereafter to criticise the par- 
 ticulars. As the old logicians used to say, we are dealing with the . 
 analytics now, we shall have to handle the topics hereafter. 
 
 No subject was more hotly debated during the suspension of cash 
 payments, in effect enduring for twenty-two years, than the policy 
 of the Government and the Bank. The latter would and could have 
 resumed cash payments easily during the epoch of suspension, 
 but the Government believed that they had an important engine in 
 the paper currency, which they must keep in their hands. Mean- 
 while, gold disappeared, was hoarded, held by the Bank and 
 exported. The only circulation was one-pound notes, worn silver 
 and copper. The advocates of an honest currency were thought 
 to be disaffected, as the Wall Street gamblers in American soft 
 money tried to urge that the advocates of good money were. 
 Foiled in this calumny, they got a well-known Oxford professor 
 to lecture in New York on the lofty patriotism which swindled 
 manufacturers and workmen. America is a very free country.
 
 224 PAPER CURRENCIES. 
 
 Some of its public men, and with impunity, make free with the ten 
 commandments, and seek for the approval of political economy. 
 When they did me the honour of approaching me, I gave them no 
 compliments. The advocates of an honest currency got the 
 Bullion Committee appointed in 1810. The Committee reported, 
 what Mr. Vansittart perhaps, after Dashwood, the most absurd 
 Chancellor of the Exchequer who ever filled the office, I do not 
 touch more recent examples neglected. Lord King insisted on 
 his tenants paying in gold. His son, my late friend Mr. Locke 
 King, told me that he did this because one of his tenants was a 
 Bank director. Then came Vansittart's motion that the bank-note 
 had not fallen in value, but gold had risen, the climax of financial 
 folly; and Lord Stanhope's motion of July, 1811, making it illegal 
 to pay or receive gold at less than its nominal value, the climax 
 of financial injustice. I only touch briefly on that which I hope 
 to treat in detail hereafter. 
 
 I must in the same manner, and on this occasion, only deal 
 superficially with the famous Act of 1844. Sir Eobert Peel was 
 under the impression, gathered, not unnaturally, from the action 
 of the Bank during the suspension, that bankers could issue 
 excessive numbers of their notes, and thereby stimulate rash 
 speculation. Perhaps they can, under an inconvertible currency ; 
 but even here the infallible barometer of the discount to which 
 the note is subjected, leaves even this an arguable question. Now 
 he could deal with the issues of the Bank of England. The 
 London bankers had long since abandoned the issue of notes, and 
 had invented, to the great advantages of commerce, and monetary 
 transactions, the system of cheques. Peel therefore resolved, 
 acting mainly on the advice of Mr. Jones Loyd, afterwards Lord 
 Overstone, Colonel Torrens, and Mr. Norman, to alter the constitu- 
 tion of the Bank of England Lord Overstone having made the 
 main of his fortune by a process which he now urged should be 
 illegal. He divided the Bank of England. The issue department 
 he refounded on the principle of a bank of deposit, taking away 
 from the directors the power of discretionary issues, and making 
 the number or value of existing bank notes an automatic quantity, 
 partly based on public securities, partly on bullion in the Bank 
 cellars. He left the Bank to carry on its banking business at its
 
 PEEL'S ACT OF 1S44. THE COUNTRY BANKS. 225 
 
 own discretion. - He ordered that a weekly balance sheet of the 
 Bank's financial position should ba published, and in this, I think, 
 he acted wisely; for all financial knowledge, if the account be not 
 cooked, is of high practical value. He permitted, in case country 
 banks abandoned their business or failed, that the Bank of 
 England should be entitled to add their issues to its own. 
 
 The expedient, as a means for checking what Peel deprecated, 
 failed. "Within a year or two after his Act, he had to authorise an 
 excess of issue on the authority of the Administration, and get a 
 bill of indemnity for his action. This has happened since, time 
 and again, and the periodical suspension of a law seems to me to 
 be the most serious criticism which can be brought against its 
 efficacy. Of course the ingenuity of finance can always baffle the 
 most peremptory enactments, and in spite of Peel's Act, perhaps 
 in consequence of it, the development of the system of paper 
 substitutes has been rapid and remarkable. But I have not space 
 or time on this occasion to prosecute an inquiry, either into the 
 Act itself or into the remedies which have been suggested for its 
 amendment. I ought, however, here to say, that though I think 
 meanly of Eicardo's theory of rent, conclude that his speculations 
 on value are metaphysical rather than practical, aud see great 
 difficulties in accepting his canons on over-production or what were 
 called general gluts, his authority on all matters of monetary 
 science is of the highest. Here, like the Juno of Virgil, he was at 
 Iionie and master. 
 
 A few words on the country banks. Peel limited their issues to 
 their average amounts at the date of his Acts, and prohibited new 
 country banks from issuing at all. But he took no steps to secure 
 evidence of their solvency, insisted on no independent audit of 
 their assets and liabilities. The fact is, the country bankers were 
 the social and political despots of the small boroughs, and in Peel's 
 day these small boroughs were the supports of his party. To 
 have affronted the country bankers, to have exacted pledges of 
 integrity from them, would have been to imperil the maintenance 
 of Conservative principles among those who aided the party at 
 Westminster. Whether after its disruption by the adoption of 
 free trade principles in 1846, Peel, had he returned to office, would 
 have amended the Act of 1844, in the direction which I have 
 
 18
 
 226 PAPER CURRENCIES. 
 
 indicated, is a problem which his premature death in 1850 has 
 made insoluble. In this direction of monetary reform no successor 
 of Peel has gone, though I have reason to know that changes have 
 been contemplated, and perhaps, too, not in the remote future. 
 Perhaps, also, a recent and flagrant failure will stimulate the reform. 
 It cannot come too soon.
 
 XI. 
 THE ORIGIN AND PROGRESS OF ENGLISH PAUPERISM. 
 
 All economic utility a resultant of cost Tlie poiuer of liuman energy 
 over nature indefinite Present and manifest impossibilities illus- 
 trated The coal famine of 1873 Possibilities of production to the 
 acre The saving of labour and cost The recipients of profits 
 The position of rent The wisdom of the rent-receiver The causes 
 ivhy wages were depressed The magistrates in Quarter Sessions 
 The Acts for the relief of the poor The defence of such Acts 
 Parochial settlement The close and open parish The eighteenth 
 century Arthur Young's comments The Speenhamland Act 
 The origin of the New Poor Law, and its effects. 
 
 I MAY I trust assume that you know and realize that the produc- 
 tion of wealth, i.e., the bestowal of utility on matter, by 
 intelligent labour, is limited only by the laws of nature, by which 
 I mean hindrances of a physical character put upon the process by 
 which those utilities are induced. Some of these hindrances are 
 obvious. To give motion we must incur cost. You cannot put the 
 human machine in motion, or any of those substitutes for human 
 labour which ingenuity has developed, without expenditure, the 
 expenditure of that which has been acquired by previous labour. 
 Even those natural forces which man has pressed into his service, 
 the force of running or falling water, of the winds and the tides, 
 are of no avail, unless man appropriates them by mechanism, 
 which represents the expenditure of previous labour. So again, 
 however much you may diminish its effects, you cannot overcome 
 friction entirely, especially in its most obvious form, the resistance 
 of air to artificial motion. But, on the other hand, though we
 
 228 ORIGIN AND PROGRESS OF ENGLISH PAUPERISM 
 
 know that there are limits to the power of man in the application 
 or adaptation of natural forces, we do not know and cannot tell 
 what those limits are. Every year discoveries are made which set 
 those limits further back, inventions which make that easy and 
 familiar which at an earlier time seemed impracticable and 
 impossible. 
 
 Now before I go further with the subject which I am treating 
 io-day, I may say that nothing is more barren, arid, and meta- 
 physical, than the discussion as to which is prior in existence, 
 capital or labour, and the collection of inferences to which you 
 must expect a very easy reply. All capital, like all wealth, is the 
 product of previous labour, and it may be readily conceded that all 
 capital, however rude its form, or simple its kind, must have been 
 a resultant from a previous satisfaction of natural necessities, and 
 from an intelligent consciousness that the labour of creating it 
 would shorten or expedite future labours. But though this is the 
 obvious and logical account of the origin of capital, and may be, 
 to some extent, illustrated from the practice of savage races, to 
 draw a conclusion from it, that economical labour can be considered 
 independently of economical capital, is to confound a primitive 
 cause with a modern effect. If I have made myself at all plain, 
 I have already shown how capital and labour in what we have to 
 Consider an organized and progressive society are interlaced, how 
 they are remunerated, and to some extent how far the more 
 influential, and politically more powerful, of the two factors 
 has been able to oppress the other. But to discuss the origin of 
 primeval capital is a logomachy ; and to infer, as some have done, 
 that the analysis of its origin is to give a commanding position to 
 the claims of labour, is a sophism, which will hinder instead 
 of helping the true interests and the ultimate improvement of 
 those who are popularly said to work for wages. And similarly, 
 it is easy to exaggerate the functions of capital, and as it is easy so 
 it is a common practice. 
 
 I have said that the limit of restraint imposed on human 
 anergies by what are known as the laws of nature is constantly 
 being pushed back. But political economists have frequently 
 assumed that the limit has been reached, and that it will be driven 
 back by no new discovery or utilization of force. This disposition
 
 PRESENT AND MANIFEST IMPOSSIBILITIES, 229 
 
 to look on human skill as having exhausted its powers, anil there- 
 fore to indulge in economical pessimism is frequently found in the 
 works of the most approved writers. Let me take some utterances 
 of Mr. Mill, and in taking these I do not by any means exhaust 
 his sinister predictions. Mr. Mill has accepted, with all its gloomy 
 riders, the doctrine which has heen called the law of diminishing 
 returns ; he distressed himself with Mr. Jevons' inquiry into the 
 probable exhaustion of the English coal-beds, and the con- 
 sequences to English industry and English life, when we were at 
 once deprived of motive power and warmth, inferring from it 
 especially, that it was necessary at once to set about clearing 
 away the public debt, since hereafter we should be certainly unable 
 to do so ; and in his investigations into population, and the reputed 
 causes of its redundancy, he concluded that the field of foreign 
 supply was very narrow, and would soon be exhausted. Now in 
 these three alarms he confounded a present impossibility, the 
 interpretation of which is subjective, and should be founded 
 on facts, with a manifest impossibility, afforded by the inex- 
 pugnable resistance of natural law, which is objective. 
 
 Now I will grant that it is a manifest impossibility to grow 300 
 bushels of corn to an acre of land, or 7 tons of grain food 
 for man and animals, or, at any rate such a rate of production 
 is inconceivable, the best present average being, say, 1^ tons 
 or 48 bushels. I can more readily admit that we shall not be 
 able to convey goods and passengers over a railroad at the velocity 
 of a cannon-ball, during the first few seconds of its progress, 
 or that, granted that Mr. Jevons was accurate in his estimate of 
 the coal-fields, of the rate of production, of the rate of consump- 
 tion, and that he was also right in postulating that no economy in 
 consumption, and no substitution of any other force, was possible, 
 the future exhaustion of coal supply in Great Britain was a 
 calculable problem. I will admit that, when Mr. Mill wrote, the 
 cost of freight by rail and steam vessel was so high per ton mile, 
 that it must have materially curtailed the possibility of supply from 
 distant regions. But in all these cases a present impossibility, as 
 it seemed, was found out to be no manifest impossibility, that 
 it was a subjective, not an objective hindrance, and that the real 
 limit was not rightly taken.
 
 230 ORIGIN AND PROGRESS OF ENGLISH PAUPERISM. 
 
 It was, -when this acute and excellent person wrote, conceived to 
 be impracticable to reduce haulage charges below a certain cost, 
 and the speed of transit below a certain time rate. That an 
 express train should be able to go easily and safely at the rate of 
 seventy miles an hour or more, that the cost of repairing the 
 permanent way should be reduced to a third in amount, and that 
 material for the rails of the future should be almost indestructible, 
 and that such economies of fuel could be affected that the same 
 force could be elicited, or a superior product attained by a third of 
 the consumption of fuel or less, was not anticipated. No one can 
 blame a writer on such subjects for not foreseeing the results of 
 modern invention and skill ; but, on the other hand, no one 
 can praise him for assuming that the present conditions were 
 permanent. The elastic band of which he speaks is far less rigid 
 than he imagined, as time has proved. 
 
 The real occurrence of something like a coal famine, shortly 
 after Mr. Jevons' predictions were uttered, and were endorsed 
 by Mr. Mill, seemed to give reality to the forecast. In reality 
 there was a sudden demand for fuel power, owing mainly to the 
 demand which arose for restoring the waste of a peculiarly 
 destructive war between France and Germany, and the consequent 
 stimulus which the void occasioned to the British manufacturer, 
 who then occupied the field of supply. The price of coal rose 
 rapidly, and every one who had property, or thought he had 
 property in coal, hastened to take advantage of it. My friend the 
 late Professor Phillips told me that from 500 to 1000 square 
 miles of new coal-fields were discovered. Nearly double the number 
 of coal-pits were set to work, and the production of the article 
 has never recovered from the inflation. I remember that, three or 
 four years ago, I sat on a committee for sixteen days, listening to 
 the arguments for and against sixteen miles of new railway, which 
 'was to pass over one of the Yorkshire coal-fields. Every landowner 
 but one, whose land it was intended to pass over, was favourable to 
 the^project, and we passed the Bill, though with some modifications. 
 The Lords, however, threw it out. Now I asked one of the land- 
 owners who wished to get the Bill, Mr. James Lowther, why they 
 Bet so much store by it, seeing that no part of the district was 
 more than 2| miles from an existing railway ; and he told me,
 
 PRODUCTIVENESS TO THE ACRE. 231 
 
 I do not doubt with perfect accuracy, that such was the com- 
 petition, that the difference of profit and loss on working lay 
 in those 2i miles of haulage. I shall show presently to what course 
 part of the fall in price is due. But the facts are an instructive 
 comment on Mr. Jevons' prediction and Mr. Mill's alarm. 
 
 There is no doubt a limit in the production of corn to the acre, 
 but no one has discovered what the limit is. It may be that the 
 increase, as the Kicardians say, can only be obtained at a greater 
 relative cost, though I very much doubt whether such a fact has 
 ever been registered. But I am sure that no one has yet discovered 
 what is the maximum producible of particular crops, under favour- 
 able conditions. The sewage farm of Croydon is an area of 600 
 acres, a light and not otherwise fertile gravel. But being irrigated 
 by the drainage, the fertilizing powers of which it completely 
 exhausts, and discharges as pure water, it will grow for ten 
 months in the year an average monthly crop of rye grass at 
 the rate of seven tons to the acre. After a time the sewage is shut 
 off from some portions and oats sown on the land. Of these 
 the land commonly yields a good 100 bushels to the acre. It 
 may be retorted that this produce is exceptional. I will give you 
 an instance in ordinary cultivation. A friend of mine, who had a 
 large London establishment, bought a country seat, with fifty 
 acres of land about it. It was like the Croydon farm, a light 
 gravel, which readily took and gave back what fertility could be 
 bestowed on it. My friend kept a very large quantity of stock. 
 In the autumn of one year I witnessed the preparation of one of 
 his fields. He trenched it, every four feet, with trenches two 
 or three feet deep, filled the trenches with good manure, and 
 levelled the ground. In the spring he sowed the land with rye 
 grass and vetches. The growth was so rank, that when I went to 
 see it as it was being fed by sheep, it almost reached to the top of 
 the hat of a man who was six feet high, and the ground grew more, 
 than twenty tons to the acre of green food. He told me that 
 the husbandry paid him well. The same kind of reasoning 
 will apply to Button's culture at Beading, and I could give you 
 instances of ordinary farming of a very excellent kind, with similar 
 results. 
 
 Similar illustrations may be given about the cost of freight.
 
 232 OEIGIN AND PROGRESS OF ENGLISH PAUPERISM. 
 
 I should think that at present, notwithstanding the hindrances 
 which protective regulations have put on international trade, 
 freights by rail or sea do not cost more than a fifth of that at 
 which they stood when Mill wrote. The ship is built more cheaply,, 
 sails more safely and more quickly, consumes less coal, requires 
 fewer hands, and is laded or unladen far more rapidly than it was 
 a few years ago. The low cost of freight is alleged by Mr. David 
 Wells, one of the ablest American writers on economical subjects, 
 to be the principal cause in the fall of market prices for heavy 
 goods, no doubt a matter of severe competition to the British 
 farmer, but of infinite interest to the British consumer, and not a 
 little to the manufacturers, to whom cheap material is a benefit of 
 the first importance. Now a diminished cost of freight is a lessened 
 charge, and though profits may seem to fall, chiefly in relation to 
 the estimate made of fixed capital, and the interest which it is 
 calculated to bear, the prices of manufactured goods do not 
 tend to fall in the same proportion that the price of the material 
 falls. 
 
 Now these results are brought about by two motives, which are 
 the inevitable outcome of free competition. People have a habit 
 of saying that competition lowers prices. If it does so, in the 
 manner that I am about to describe, the lessening of price is 
 never equal to the lessening of cost, and lowered price may after 
 all mean increased profit. Over and over again people have found 
 that fortunes have been rapidly made because prices have been 
 lowered, while profits have been heightened. These two motives 
 are (1) The motive to save labour ; (2) The motive to save cost. 
 Thus when mechanism is employed in place of labour, labour is 
 saved. "When the force needed to bring about a result is lessened, 
 or the time interposed between the process and the profit is 
 shortened, there is a saving of cost. It does not follow that the 
 wages of labour are reduced, because the cost of labour is lessened. 
 On the contrary, it is generally, perhaps invariably, found, that if 
 the efficiency of labour is increased, the wages of labour are 
 bettered ; for, first, profits are increased, and there arises a com- 
 petition for the profit-making agent ; and next, efficiency is a 
 kind of fertility, nay, the best kind, perhaps the only kind of 
 fertility, and therefore has to be paid for. It by no means follows
 
 THE SAVING OF LABOUR AND COST. 233 
 
 that "when competition drives down profits, the wages of skilled 
 labourers are also lessened. Their number cannot be suddenly 
 increased, and when competition is keen, under the conditions of 
 modern manufacture, the demand for their services may be 
 heightened as long as it is a demand. 
 
 So again with the saving of cost. All processes of invention", 
 as opposed to the discovery of new powers in substitution of labour, 
 save cost. In Siemens' furnace, for instance, greater efficiency is 
 obtained and with less expenditure of fuel. In Bessemer's process 
 for the manufacture of steel, the material is made to purify itself, 
 by the combustion of injurious admixtures. The substitution of the 
 hot for the cold blast, and a thousand other examples maybe given 
 of the saving of cost, and hundreds of people, engaged in 
 engineering and similar callings, are constantly busy in striving to 
 get greater results at less cost. Now it is probable that new 
 machinery and even saving of cost may shorten, even extinguish, 
 employment. Economists cannot get themselves, it seems, out of 
 the pernicious habit of treating all forms of capital and labour as 
 equally mobile, because they always have in their mind balances 
 at a bank, which can be readily transferred, and accountants who 
 can do as well in a merchant's office as at a banker's. Hand-loom 
 weavers were ruined by the power-loom. Domestic industries have 
 been extinguished by manufactures. No doubt railroads injured 
 coach builders, as they did canals and turnpike roads. Nor must 
 we conclude that it is a good thing to dispense exceedingly with human 
 labour, any more than it is with human employments. Perhaps a 
 better rent is got for land as deer forest than for land as occupation 
 ground for cottars. But unless the gains of the individual are 
 to override every other consideration, it is a very arguable question 
 whether the state should permit such a kind of occupancy as 
 drives out man. The defence, and it is generally in the long run, 
 a good defence for invention and substituted forces, is that in a very 
 short time labour is merely displaced, occupation is really increased, 
 and the conveniences of life are multiplied and cheapened. But in 
 a deer forest, only the first of three ends is achieved. I hope that 
 I have sufficiently illustrated my statement, that while Production 
 is limited by law and nature, the limit is not easily discoverable, 
 and the power of adapting the processes of industry to these laws,
 
 234 ORIGIN AND PBOGRESS OF ENGLISH PAUPERISM. 
 
 is and will remain unknown, and I thought it best, in discussing 
 the subject of English pauperism, to preface what I had to say 
 by a short account of the relations of labour and capital to pro- 
 duction ; for it is in the earlier stages of invention and improved 
 production in England, delayed in a singular manner in this 
 country, that the worst and the most lamentable exhibitions of 
 English pauperism were made manifest, and at last became 
 intolerable, after having been long scandalous. 
 
 Even though they make them too rigid, economists are agreed 
 that the laws of production are laws of nature, those of the dis- 
 tribution of wealth of human institution, wholly or mainly. By 
 distribution is meant that part of the gross product which is 
 received by each of the contributors to the partnership. By 
 saying that the laws of distribution are of human institution only, 
 economists intend, not that products are of necessity arbitrarily 
 assigned to each of the agents, but that the whole product being in 
 the power of man in society, they could be distributed (not indeed 
 to the total exclusion of one among the contributories, for in that case 
 the others would perish) according to the discretion of those forces 
 which are and must exist in order to constitute a society, in such 
 proportions as those who undertake, usurp, or are intrusted with 
 the administration of society may determine. These parties are 
 four the recipient of interest, the superintendent of labour, the 
 labourers ordinarily so-called, and the recipient of rent. For 
 reasons already stated, the second and third of these are 
 analytically one, though in the distribution of the product, the 
 second may be able to secure great advantages over the third. 
 Again the first and second may merge in the same person. The 
 superintendent of labour may be a capitalist employer, who is 
 indebted to no one for a particle of the capital which he employs in 
 his calling. In general, however, and especially in modern times, 
 a great amount of business is carried on with borrowed capital. 
 
 Now in point of fact, if credit is maintained, interest is secured, 
 and seems to be first paid out of profits or products. But it must 
 be paid after labour, whether it be that of the superintendent or 
 workman, is at least kept alive. In short, interest on advances or 
 loans is due to an anticipation that labour will be productive 
 enough, after it has been kept going, to leave enough to satisfy the
 
 THE ORDER OF PAYMENT. 235 
 
 lender. This is equally true if the capital is actually borrowed, 
 or introduced into the calling by the superintendent of workmen. 
 If such a satisfaction is not accorded, the loan rapidly passes from 
 the active into the passive form of wealth, is hoarded instead of being 
 lent. If the insecurity of compensation is so great that people 
 who have wealth will not lend it, the disposition to hoard will be 
 intensified, and the reason is that the motive for saving is the pro- 
 vision against emergencies, and that this feeling is stronger and 
 more enduring than saving for the sake of profit on loans. It is a 
 mistake with many economists to say thai saving is due to the 
 desire of profit. If people could get no profit or but a small profit 
 or interest, they could still save, perhaps save all the more, for it 
 is found necessary, with prudent people, to save for the sake of 
 security, and we may be sure that people saved and hoarded with the 
 greatest energy, before the}' could find the people whom they could 
 trust as borrowers ; and similarly, a very low rate of interest stimu- 
 lates saving. 
 
 Now it is generally said that the last of the whole four to be 
 paid is the recipient of rent. And this, when in a society the 
 distribution is effected by competition only, is certainly the case. 
 Kent, it is alleged, cannot arise till the others are satisfied or at 
 least paid. Hence it is said, and with general correctness, that 
 rent does not enter into price, and Adam Smith was adversely 
 criticised for saying that it did, for it was alleged that rent was the 
 result of price. This is true, even in those cases which some 
 economists have been inclined to except, as the rent of factories 
 and shops. Now setting aside the payment made for the building, 
 which is no more really a rent than payment made for the use of 
 machinery or tools is, however great the rent of sites or ground 
 rents may be, we shall be quite safe in assuming, that there is an 
 advantage, technically called a fertility, in particular sites, which 
 induces the person who hires the ground to give more for it than 
 he would for a piece which has less advantage or attraction. Rent 
 is paid for fertility, that is for qualities which enable the occupier 
 to pay more out of his produce than is sufficient to pay interest, 
 wages, and profits. 
 
 But though Adam Smith's statement was not economically 
 sound, it was not historically incorrect. Undoubtedly in the
 
 236 ORIGIN AND PROGRESS OF ENGLISH PAUPERISM. 
 
 earlier stages of this and other societies, rent was a tax, levied by 
 downright force, either without the pretence of an equivalent, or 
 as the representative of reciprocal advantage, as defence, and 
 payment for administration, or as mere blackmail, the rent 
 receiver, in consideration, refraining from plunder. And this is, I 
 think, the origin of the old law of distress, under which, when 
 the tenant failed to pay his rent, the landlord, or overlord, was 
 entitled to seize his chattels 011 that part of his holding from which 
 the rent issued. I have often found that rents in old accounts are 
 put under bad debts, because the lord's agent " did not know on 
 what land to distrain." 
 
 Hence you will observe that an economic rent might totally dis- 
 appear, and no one but the former recipient of rent be any the worse, 
 but every one also all the better. Eent is no matter of concern to 
 any one but the landowner, just as any other kind of revenue-bearing 
 property is, which becomes obsolete and unprofitable, as a canal no 
 longer used. If the earth brought forth so abundantly and so 
 readily for those who consumed its products, that the price realized 
 for the sale of agricultural produce was only sufficient to pay th 
 cost of cultivation, of collection, and of exchange, there would be no 
 place for rent. In an ideal state of plenty there would be no 
 economic rent. I say ideal, for in experience even the most fertile 
 countries pay rents. If land were all equally fertile, as long as 
 demand raised the price of farm produce above cost and exchange, 
 there would be rent, though MacCulloch, who was a demented 
 Eicardian, said it would not. But, on the other hand, everything 
 which tends to diminish rent by plenty and cheapness approaches 
 in its degree that ideal condition in which land is so fertile and so 
 abundant that there is no place for rent. Of course they who have 
 hitherto received rent fancy that when it falls or is reduced, the 
 country is going to ruin, but they who buy agricultural produce 
 know better. No doubt, if I were a great recipient of rent, I should 
 find it difficult to reconcile my interests with my convictions ; as it is, 
 I can afford to be an entirely dispassionate economist. 
 
 You will observe that I do not quarrel with rent. I find no fault 
 with it, and I would not interfere with it, unless under certain 
 circumstances, which I shall, I trust, make plain to you. It is not, 
 however, a sacred right, but the result of certain natural facts, as
 
 THE POSITION OF KENT. 237 
 
 natural as labour, \vaste, and friction are. It comes out of the 
 limitation of human happiness as a doctor's fees do out of the 
 limitation of human health. Still less would I counsel either its 
 confiscation as Mr. George does, or its compulsory purchase as Mr. 
 Mill did. The former policy I think would he an injustice, the 
 latter would be a folly, or, to be more strictly economical, an unwise 
 bargain. If we had bought the English landlords out, more than 
 fifteen years ago, when Mr. Mill was insisting on the unearned 
 increment, every one who knows anything about present English 
 rents, would agree with me in thinking it a most incautious pro- 
 ceeding. It is true that the landowners treated Mr. Mill's proposal 
 as one of confiscation. Their opinions are probably altered now. 
 But they cling to the Eicardian theory that high prices cause high 
 rents, and are still expecting the unearned increment. In my 
 opinion it is as much vanished as the feudal system is. But the 
 reduced cost of freight is not the only cause of their declining pros- 
 perity, as I have already shown. And here I may observe that 
 there is one advantage which the condition of a person who is at 
 once owner and cultivator possesses, and yet has escaped the notice 
 of economists, that he is to some extent removed from the risk of 
 one or more of those artificial laws which regulate the distribution 
 of wealth. He is not so much affected by high and low prices as 
 the rent receiver is, for he lives on the labour of his own hands, 
 for the greater part of his expenditure. 
 
 Now as I have already told you, interest always tends to diminish 
 as wealth increases, on the presumption that men are honest in 
 their contracts. The reason is that on the desire of accumulation 
 for the sake of safety comes at a subsequent stage a desire of 
 accumulation for the sake of income, the principal remaining intact. 
 Now if laws such as usury laws meddle with the latter and later 
 tendency, they may tend to drive the latter into the former impulse, 
 and so raise the rate of interest, while their object has been to 
 lower it. One great service among many which Bentham did was to 
 point out what usury laws were doing. At last they were abolished. 
 It was seen to be inexpedient in the interest of borrowers, and 
 ultimately in the interest of lenders to regulate the rate of interest 
 by law, to make the laws of human institution meddle with loans. 
 At the same time, it is clear that if money contracts are rigidly en-
 
 288 ORIGIN AND PBOGRESS OF ENGLISH PAUPERISM. 
 
 forced, a bankruptcy law, to include all debtors, becomes necessary. 
 The usury laws cut down the interest of the loan, the bankruptcy, 
 the principal. But though in my opinion there is no economic diffe- 
 rence between a usury and a bankruptcy law, for both are regulations 
 of free contracts, there is a great practical difference. In the usury 
 law the state regulates the contract, by a theoretically rigid rule. 
 In the bankruptcy law equity regulates the contract, and by a 
 variable rule. Besides in the bankruptcy law, the creditor blames 
 himself ; under usury laws, the creditor blames the law. 
 
 Now it is quite possible for human societies, acting on the rule 
 that the distribution of wealth is of human institution only, to 
 seriously curtail rent. There is already a school, which diligently 
 teaches that rent is a fraud, an extortion, a misappropriation of the 
 wealth which labour has created. It is not improbable, as the real 
 origin of rent becomes better known, that these opinions, however 
 unjust, unfair, destructive, may grow in intensity and work evil ; 
 for landowners in England are not conciliatory, claim very unjust 
 privileges, and having made their gain out of the industry of society, 
 strain every effort to further plunder the society to which they 
 owe so much. They talk of the burdens on land, which are light, 
 and should be heavy, for a spontaneous growth of wealth, to the 
 origin and increase of which the fortunate owner has contributed 
 nothing, is a peculiarly just subject of taxation, and not as it is in 
 the United Kingdom, a peculiarly favoured subject of exemption. 
 But except in the protection of some occupiers from outrageous 
 pillage, the state has not used its powers over rent, or the receiver 
 thereof. 
 
 It has been found disastrous to meddle in the interest of the 
 rent receiver with interest and profits. With interest it has not 
 meddled directly, though the mortgagor is treated with more 
 consideration than any other debtor is, for he has to bear no such 
 loss as an ordinary debtor does, if his pledge is depreciated, and is 
 assisted by what is called the equity of redemption, in case he 
 makes default in his payments, and his pledge is forfeited. But 
 that form of interest and profit which is anticipated from the 
 employment of farmer's capital is, and long has been, at the mercy 
 of the rent receiver, as I have already shown you, and it is because 
 the profits, interest, and capital of the farmer have been absorbed
 
 THE POSITION OF THE RENT-RECEIVER. 239 
 
 by aggressive rents, for some of the consequences of which the 
 farmer is responsible, that the present unfortunate state of agri- 
 culture, the present depression of trade, and in particular the serious 
 stagnation of the home market are due. True to their instincts, the 
 landowners are seeking to retrieve the consequences of their own 
 action, and their own selfishness, by demanding further sacrifices 
 from the general public, the relief of themselves from their just 
 liabilities, and the imposition of food taxes on the general public. 
 I have a strong conviction that if they are not wise in time, their 
 latter end will be worse than their present state. 
 
 It has been possible and easy for the legislature to employ its 
 powers in the distribution of wealth in the direction of lessening 
 the share of the recipient of wages by positive enactments, and for 
 it to lessen both profits and wages in the interest of rent. It has 
 been possible for the legislature to deceive the recipient of profits 
 so entirely by plausible statements, as to make him an accomplice 
 in the oppression of the workman, and in the end to devote his own 
 energies and powers to the oppression of himself. When forty 
 years ago, the mass of Englishmen threw off the old restrictive 
 laws which were intended to promote the artificial exaltation of 
 rent, they had become alive to the iniquity of the system ; now it 
 seems some of the people are apparently being gulled by the 
 sophisms from which their fathers freed themselves. They seem 
 to think too that they can persuade the workmen that artificially 
 high prices, i.e., prices which stint supply, will make better wages, 
 and give more employment. This state of things will lower wages 
 absolutely and relatively, and stint employment. 
 
 Now I have told you how, for 200 years and more, the representa- 
 tives of rent tried to depress wages by force of law, in the interests 
 of rent and failed. So complete was the failure that in 1495, the 
 legislature enacted that scale of wages for which the workmen had 
 contended, and so left them in the possession of the situation. The 
 workman had his trade union and benefit society in the guild to 
 which he belonged, an institution which I shall attempt to describe 
 hereafter. The condition of the country was eminently one of small 
 holdings. In a Surrey village, Tandridge, some of the history of 
 which I shall often refer to, there were, in 1600, forty-nine 
 owners or occupiers, whose average holding is nineteen and a half
 
 240 OEIGIN AND PROGRESS OF ENGLISH PAUPERISM. 
 
 acres, and I have no doubt that such holdings continued for more 
 than a century longer. A peasant who has land is in a much hetter 
 position to make an independent contract for his labour than one 
 who is landless. The landowners and farmers know this. They 
 have contrived to dispossess the peasants of all interest in the soil, 
 and they do their best to keep them landless now. In an earlier 
 lecture I gave you an account of the numerous Acts of legislation 
 by which the landowners in Parliament strove to depress the 
 labourer's condition, but in vain. I am now dealing with the 
 circumstances which secured their success, and followed on it. 
 
 Now the circumstances which led to this total rout and subjection 
 of the workmen were, first, the deluge of base money. The amount 
 of this was equal to the average coinage of gold and silver for any 
 seven years during Elizabeth's reign, and was almost certainly 
 equal to any ten years' coinage of her father's reign. When base 
 money is put into circulation by rulers, the heaviest loss, nearly 
 the whole loss, falls on the poor. This is what makes the crime of 
 the smasher eo peculiarly infamous. Then came the confiscation 
 of the guild lands, and the loss of all the benefit society's funds, an 
 act of embezzlement of which Somerset was guilty, who added the 
 crime of hypocrisy to that of robbery, for his plea was that the 
 endowments were devoted to superstitious ends. Next comes the 
 inevitable rise in prices. Now if labour was as free as the winds, it 
 cannot made head against heightened prices, a fact which I make 
 no doubt Fair Traders know perfectly well, when they seek to delude 
 working-men with the falsehood that high prices bring high wages. 
 Provisions rose 2| times ; that is, 1G-6 shillings after the change 
 went no further than 6s. did before, and wages remained nearly 
 unchanged. Finally, came the statute 5 Elizabeth cap. 4, under 
 which the labourer's and artizan's wages were fixed by Quarter 
 Sessions assessments, severe penalties being denounced against those 
 who took more or gave more than the justices allowed. 
 
 This famous Act t which consummated the degradation of the 
 poor, made pauperism inevitable, and misery universal, was really 
 no new legislation. The Act repealed all the old statutes of 
 labourers, and re-enacted all the provisions of those Acts. It did 
 not provide any new machinery, for the administration of the old 
 laws had been in the hands of the justices for nearly the whole 200
 
 THE CAUSES WHY WAGES WERE DEPRESSED. 241 
 
 years, and sometimes the right of making the assessment. What 
 it did was to seize the opportunity, when the workmen were help- 
 less, to consolidate all the old statutes, to draw up rigid rules of 
 apprenticeship, so as to make agricultural the residuum of all 
 labour, to enact exhaustive penalties, and to leave no loophole 
 through which workmen could escape, so as to better themselves 
 in the struggle with their employers. The English Statute Book 
 contains many atrocious Acts, most of them with hypocritical pre- 
 ambles. This Act of Elizabeth is, in my judgment, the most 
 infamous of them, for it was levelled against every right of the. 
 poor, even of the poor to live, and entirely in the interest of rent. 
 
 The magistrates duly met, and issued their schedules of wages- 
 I have discovered thirteen of them, and perhaps, hereafter, more- 
 will be found. They invariably prescribe wages which I am sure, 
 from the evidence of prices, would not, even if the peasant had 
 continuous employment, find bread for him and his household. It 
 was inevitable that he should be driven on private or public charity, 
 on the alms of the generous, or on taxes levied for his maintenance 
 on all occupiers. It is some satisfaction to find that, despite these 
 penalties, the wages actually paid were a good deal above the 
 justices' assessments. Employers were more generous than the 
 "little tyrants of the fields." Thus out of seven assessments 
 between 1593 and 1684, the average allowances for eight kinds of 
 labourers and artisans, three of the former and five of the latter, 
 were 3s. O^d., 3s. OJd., 4s. Ofd., 5s. 3d., 7s. Ofd., 7s. HJd., 5s. 3d. 
 a week. The average of wages actually paid was 5s. 4d., 5s. 2Jd., 
 5s. 5id., 5s. 9d., 7s. 5d., 8s. lid., and 8s. 3d. It should be noted that 
 the highest assessments were made during the Commonwealth, and 
 that an attempt was made to reduce wages after the Kestoration. 
 The labourers, as far as the will went, were better off under the 
 rule of the saints than they were under that of the sinners. 
 
 Legislation for the relief of the poor, at first by voluntary con- 
 tributions, began with the year 1541. Between this date and 1601 
 inclusive, when the famous and permanent statute of Elizabeth was 
 enacted, there were twelve Acts of Parliament passed with the 
 distinct object of providing relief against destitution. These Acts, 
 which are a very instructive study for the economical history of 
 England, can be found in the contemporary issues, a complete set 
 
 17
 
 242 OEIGIN AND PROGRESS OF ENGLISH PAUPEBISM. 
 
 of which is excessively rare our copy in Bodley being to some 
 extent defective and in the folio reprint copies of which, the 
 volumes extending from the earliest times to the conclusion of 
 Anne's reign, were sent by the express authority of Parliament to 
 the college libraries of Oxford and Cambridge. In ordinary col- 
 lections of these statutes, they are omitted as repealed or obsolete. 
 
 Now it was at first believed that private benevolence would fill up 
 the void in wages which bad government had made. But private 
 benevolence can never grapple with a national calamity, even if it is 
 very active. "When, moreover, the head of the state is rapacious, lying, 
 extravagant, reckless, and dishonest, ordinary human nature, espe- 
 cially when it is severely pinched by the exhibition of these vices on 
 a gigantic scale, is more apt to loyally imitate them than to remedy 
 the mischiefs which they have ocasioned. Still it is possible that 
 Henry and his son's guardians fancied that private charity would 
 fill the void. The " Supplication of the Beggars " calculates that the 
 alms given to the begging friars amounted to 45,333 6s. 8d. 
 annually, and if people would give so much to the professors and 
 teachers of a creed which the king had dispossessed and proscribed, 
 surely they would give as much to misery and poverty. But it has 
 been constantly found that men will give to what they believe to be 
 a religion far more freely than they will to what they know to be 
 want, and perhaps with reason ; for it is very difficult to distinguish 
 between want and fraud, between real distress and simulated 
 poverty. It is certain that the anticipation was disappointed. 
 
 These statutes were of various character. At first they only 
 claimed voluntary gifts, collections in churches, made at first in 
 Midsummer, afterwards more prudently postponed to Christmas. 
 Very soon the appeal for voluntary aid was followed by exhortations 
 to the richer folk to give of their abundance. Soon the caitiff who 
 would not give was to be delated to the bishop, who was to exhort 
 him. In Mary's reign, obstinate covetousness thus reported was, 
 it seems, to be considered a suspicion of heresy, and inquiries were 
 to be made. Very soon compulsion followed. The rich but 
 covetous man, who remained obdurate, was to be sent to gaol, and 
 an assessment levied on his goods. Finally, a general assessment 
 was ordered. 
 
 I have been fortunate enough to recover, and have printed one
 
 THE ACTS FOB THE BELIEF OF THE POOE. 243 
 
 of these assessments. It is a rate levied on the parish of Tandridge, 
 for the relief of the poor and of maimed soldiers, besides other 
 objects, such as the maintenance of prisons and hospitals. The 
 unit of assessment is a penny an acre, and the justices direct that 
 only one rate a year shall be levied on owners and occupiers of 
 under ten acres, twice a year on those above ten and below thirty, 
 all additional assessments, if required, being paid by those who had 
 over thirty acres. The system was therefore one of graduated 
 taxation. But the rate provides that if the occupier has little land, 
 but a good house, he shall not be exempted from a tax which is not 
 to be too heavy on the poorer tenants. 
 
 The fact that laws for the relief of the poor were enacted after 
 the Dissolution of the monasteries has led some writers to connect 
 them with this event. Others have pointed out, perhaps to relieve 
 the Eeformation from these odious features, that poverty, for which 
 the state was anxious, existed before this action of Henry. I dare 
 say that the Dissolution aggravated the evil. It is possible that 
 sheep-farming, rent-raising, and attempts to aggregate farms may 
 have increased the mischief. But I am entirely convinced that the 
 four causes given above are amply sufficient to account for it. 
 
 The Act of 1601 was at first temporary only, being enacted from 
 Parliament to Parliament, and therefore regularly included in the 
 continuance Acts. But there is no reason to believe that the legis- 
 lature from the first ever thought that the system of legal relief 
 could be abandoned. It was impossible, with the experience of 
 prices constantly rising, and with the system of justices' assess- 
 ments in full operation, to contemplate the diminution of destitution 
 as within the range of a probability. In course of time, the doctrine 
 began to take root, that as the poor, when in want, lived from the 
 land, they could not be wronged, if they were deprived of every 
 other interest in the land, as, for example, commonable rights 
 of pasture. The song which, while it bade the rustic "hang 
 sorrow and cast away care," also declares that the parish "was 
 bound to find them," is much more the abandonment of despair 
 than an outcome of contented thankfulness. The Act of Elizabeth, 
 rendered perpetual at the Restoration, was substantially the law 
 for the relief of the poor till 1835. 
 
 I do not know that there can be alleged an economical defence
 
 244 ORIGIN AND PROGRESS OF ENGLISH PAUPERISM. 
 
 for the relief of destitution. It does not seem to me that Mr. 
 Mill's argument, that the individual man is not responsible for his 
 own existence, makes a very strong case for the responsibility of 
 those who are no more concerned in such a person's existence than 
 he is, nor do I think, if we could conceive a state of things in 
 which the maintenance of the destitute became an intolerable bur- 
 den, that the argument would be cogent. Assume a contingency 
 in which the struggle for existence leaves no margin for those who 
 work, and I do not think that men would elect to starve themselves 
 on behalf of those who do not or cannot work. But defective as- 
 the economical defence of the legal relief of distribution is, the 
 moral and political defence of the practice is, I think, over- 
 whelmingly strong. The loss which every solvent ratepayer bears 
 in relieving others is cheaply purchased by the law which prevents 
 the hardness and indifference which would ensue if one were 
 familiar with the sight of unrelieved distress. The cultivation of 
 that habit of mind, under which, in spite of one's being compelled 
 to make a sacrifice in order to effect the result, men are indignant 
 at the poor perishing for lack of bread, is of no little social value. 
 The struggle after comparative abundance, or the competition of 
 those engaged in the struggle, is studied by the economist, who 
 discusses its conditions and its issues. But the moralist is glad 
 when the struggle is suspended, or some of its fruits are aban- 
 doned, in order that those who fail in the effort may live. So too, 
 the politician or statesman, who wishes that the mechanism of that 
 society, whose affairs he administers, may move with the least 
 friction, knows that the despair of those who are famishing, though 
 he may be able to curb its outbreaks, is a discredit always, and may 
 become a danger. Here, however, one's concessions cease. 
 
 The necessity of the English Poor Law can be traced distinctly 
 back to the crimes of rulers and their agents. I do not say that if 
 those four causes which I have recounted had been absent, destitu- 
 tion would never have ensued ; but I am certain that it would have 
 been more manageable, the police which legal relief must in the 
 end administer would have been less harsh, and the relief itself 
 more gently given and more gratefully received. In a vague way, 
 the poor know that they have been robbed by the great in past 
 time, and are stinted now. Nor can any defence be alleged for the
 
 PAEOCHIAL SETTLEMENT. 245 
 
 manner in which the rate is distributed. The gain of a Poor Law, 
 that is, the fact that relief is a harsh form of insuring labour 
 against sickness, old age, and incapacity, and therefore operates 
 in reducing wages, is on the side of employers. The maintenance 
 of the poor is laid on occupiers. No doubt, the fact that the small 
 occupiers do not employ labour, and therefore are not so justly 
 chargeable with its relief, accounts for the system of a graduated 
 rate, which, from the example of Tandridge, evidently prevailed in 
 the early days of the English Poor Laws. And, above all things, it 
 is scandalous in the highest degree, that great mansions and parks 
 should be now rated at nominal sums, and by people who are 
 personally interested in obtaining exemptions from contribution. 
 This gross unfairness is dangerous as well as dishonest, for there 
 is no little risk, when these practices are not only seen, but under- 
 stood, that there will be an effort after differential taxation in that 
 direction which will invert the present process. 
 
 At the Eestoration the law of parochial settlement was enacted. 
 Mischievous and selfish as the Act was, it was, I make no doubt, 
 thought urgent by the heavy incidence of the poor rate in the 
 wealthier counties, and justified as a return, in a sense, to the old 
 practice of parochial responsibility. It produced in the end, a 
 special evil, now fortunately historical, of the close and open parish 
 the former being one in which the whole parochial area belonged 
 to one person, who could expel from its borders those who might 
 be chargeable, and might therefore get his destitute labourers 
 supported at the charge of others ; and the latter, one in which, 
 owing to a plurality of proprietors, such a policy was not possible. 
 This evil, remedied in part by Gilbert's Act, passed more than a 
 century ago, under which a number of urban parishes could, for 
 the purposes of relief, be included in one, was cautiously and at 
 last completely altered under the New Poor Law. I can well 
 remember the whimsical indignation displayed by some of these 
 close proprietors when they were made to take their share in the 
 common burden. I lost the friendship of one or two among them 
 owing to my zeal for this reform, and bore the loss with patience. 
 
 Just before the Eevolution, a return, preserved by Davenant, was 
 made of the poor rate in the several English counties. I will not 
 trouble you with the details. It is sufficient to say that the poor
 
 246 ORIGIN AND PROGRESS OF ENGLISH PAUPERISM. 
 
 rate was much heavier in the midland, eastern, and southern 
 counties, than it was in those north of the Trent, though from the 
 returns of the hearth tax, an official document, it appears that 
 the North was, on the whole, as densely peopled as the South, 
 though far more backward in the conveniences of life. Again the 
 poor rate, relatively speaking, was exceedingly heavy. For the 
 time at which it was taken, it was about half the revenue of the 
 Crown in time of peace, a proportion which no later statistics have 
 ever disclosed, even at the time when it was over eight millions, 
 just before the change in the law. Again, the bonds of the 
 parochial settlement was made more strict after the Kevolution 
 than they were before. The great change which settled the Con- 
 stitution brought no amendment to the peasant's lot. But, in 
 point of fact, the seventeenth century was one of almost unbroken 
 misery to the workman. At the conclusion of it, Gregory King 
 sets down all the labourers as a class which contributes nothing to 
 the annual savings, and the farmer as contributing next to 
 nothing. During this century the population doubled, and in the 
 eighteenth was again doubled. 
 
 Arthur Young notices with dismay and anger that, though the 
 wages of workmen had risen considerably at the date of his tours 
 as contrasted with those of a generation before, poor rates had 
 notably increased likewise, and he ascribes the disagreeable 
 phenomenon to the increase of tea drinking. It was due to a far 
 less recondite cause, one, however, which he would not have liked 
 to admit, for it would have been a shock to a system which he 
 greatly admired. The growth of the poor rate, despite the increase 
 of agricultural wages from about 7s. 6d. a week to 9s., taking the 
 harvest gains in, was due to the enclosures, the consequent exclu- 
 sion of the poof from small agriculture, and to the curtailment of 
 bye-industries. It was these bye-industries which kept rates low, 
 and even wages low in the North. Besides, enclosures went on far 
 more rapidly in the South than they did in the North, as Young 
 indirectly testifies, and as the agricultural returns of his own 
 department prove. The poor became more straitened even when 
 prices had not seriously risen, because they were more and more 
 divorced from the soil. At last the law of Elizabeth annexing four 
 acres of land to every cottage, and prohibiting overcrowding was
 
 ARTHUR YOUNG'S COMMENTS. 247 
 
 repealed. It was a great boon to the peasant, but it was a hind- 
 rance to enclosures. He has not yet recovered it. 
 
 The first half of the eighteenth century, owing to the prevalence 
 and success of the new agriculture was one of great plenty, high 
 profits, low prices, and increasing wages. I have no evidence on 
 the subject of poor rates, but I conclude from Young's contrasts, 
 that they were stationary or declining. The next quarter was not 
 unprosperous ; the last was one of high prices, low wages, and 
 unparalleled suffering. The distresses of the poor attracted 
 attention, and Sir Frederic Eden essayed their history. For his 
 own time it is valuable, for the near part useful, for the remoter 
 past his work is worthless, for he had no information, and he does 
 not appear even to have studied the Statute Book. Eents rose 
 rapidly, and the farmers began to grumble at the justices' assess- 
 ments as too generous to the poor. Acts of Parliament were 
 passed, restraining the use of barley in beer, restraining the 
 excessive bolting of the bran from wheat, the king had bran 
 loaves served on his table, and the princesses wondered that people 
 would starve, while cake could be got. " I would sooner," said one 
 of these innocent creatures, " eat bread and cheese than starve." 
 
 The magistrates of Berkshire, appalled at the magnitude of the 
 calamity, and at their wits' end to devise a remedy, at the close of 
 the century devised a new mode of relief, which, from the place 
 of their meeting, got the name of the Speenhamland Act. They 
 were encouraged in their course by an interpretation which they put 
 on two Acts of Parliament, 9 Geo. I. cap. 7, and 22 Geo. III. 
 cap. 83. They assumed a certain sum, according to the price of 
 wheat, which would, they conceived, support a man, his wife and 
 one child, and that they declared to be the minimum earnings. 
 In the case of a man whose family was more numerous, they 
 despaired of obtaining increased wages from the employer, so they 
 added the necessary sum from the rates. This was known as the 
 allowance system, and was greatly condemned by the more zealous 
 Malthusians as a premium on population, or as they sometimes 
 said, incontinence. No one was struck at the outrageous injustice 
 of making those occupiers who did not employ labour pay the 
 wages, often half the wages, of those who did employ labour. 
 Shortly after its adoption, Mr. Whitbread tried to give legal
 
 248 ORIGIN AND PROGRESS OF ENGLISH PAUPERISM. 
 
 authority, to the practice, but it does not seem that it was ever 
 invested with this dignity. It prevailed till the new Poor Law 
 was passed, and so mechanical was it, that I remember two cases in 
 my own native place of provident and furtive day labourers, who 
 saved up the price of a small farm from their allowances. 
 
 At last the system became intolerable. The rates in the open 
 parishes were eating up the whole rent, and the landowner's device 
 was rapidly becoming the landowner's ruin. A new system was 
 tried by Mr. Nicholls and Mr. Lowe, at Bingham and Southwell, 
 and its success suggested the new Poor Law, which the Whigs, 
 guided by the metaphysical economists, carried. It was necessary, 
 but the process of change was inverted. It should have followed, 
 not preceded, the reform or abolition of the Corn Laws. But the 
 Whigs thought that the landed interest would be ruined if the 
 people had cheap food, and naturally preferred the former to the 
 latter interest. Curiously enough, Mr. Villiers' return of wages, 
 some few years afterwards, when he was at the Poor Law Board, 
 showed that wages in the aggregate had risen rather more than 
 poor rates had decreased. By this time the right persons were 
 paying them. 
 
 The apparently selfish policy of the party which carried the new 
 Poor Law led to the establishment of Chartism. It was of no 
 little service in its early days to the Conservative party in the 
 North, and even in its decadence it is of service to that party now. 
 It coupled political reforms with a socialist or quasi-socialist eco- 
 nomical platform. Some of these economical purposes were good, 
 as, for example, the Factory Acts, and there is little doubt that this 
 beneficent change was greatly aided by the working men who 
 followed Oastler and O'Connor. These people, however, were so 
 unintelligent that they resisted the repeal of the Corn Laws, on the 
 plea that free trade would lower wages. Even now, it is said that 
 not a few of them believe that a period of high prices, created 
 artificially, would heighten them. You at least are not likely to fall 
 into this delusion, for the whole consensus of facts proves the 
 reverse.
 
 XIL 
 HISTORICAL EFFECTS OF HIGH AND LOW PRICES. 
 
 Gregory King's law The foundation of the laius regulating prices 
 Causes which depress and raise prices The scarcity or plenty of 
 gold and silver Lessened cost of production Lessened cost of 
 freight The produce of silver in England Foreign silver and 
 gold procured by trade The effect of plagues on prices The 
 younger son and the civil war The literature of the seventeenth 
 century ShaJcspere and Dryden The inventions of the eighteenth 
 century The authors of the new agriculture, and Arthur Young 
 The services of Sir John Sinclair to Scottish agriculture High 
 prices cannot of themselves recover high rents. 
 
 WHEN I was drawing up the list of lectures which I purposed to 
 give in the present term, I very much hesitated before I concluded 
 to put down that which forms my subject to-day. The range of the 
 subject is very great, the faots are very copious and very intricate, 
 the subject from the historical point of view is as yet so utterly 
 unknown, and the evidence is so remote and so near, that I might 
 well despair of giving you a clear and connected outline of the 
 elements from which to make economical inductions and historical 
 interpretations. But, on the other hand, the topic is of such great 
 and general importance, the issues which it raises are of such pro- 
 found significance, the interests of which it treats are so varied and 
 so vital, and the future which it seeks to penetrate by the evidence 
 of the past is so immediate, so full of menace and withal so 
 obscure, that if I am able to throw any light on the situation, I 
 should be lacking in that courage which one who has special 
 knowledge ought to show, if he thinks he can elucidate a grave
 
 250 HISTORICAL EFFECTS OF HIGH AND LOW PEICES. 
 
 social problem. As on other occasions, I shall attempt, by way of 
 preface to what I have to say, to state concisely and as clearly as I 
 can what are the principles on which high and low prices depend, 
 or, in other words, the laws and causes which induce them, and in 
 what manner these causes which should be dominant are modified 
 or obscured by other causes and conditions, the true force or 
 influence of which must be, if possible, weighed and distributed. 
 And here I may observe : (1) That there is no part of political 
 economy in which the metaphysical or psychological method which 
 you get up in your text-books is more misleading and delusive 
 than it is on this subject, where the only safe course is to collect 
 and estimate facts ; and (2) that variations of high and low prices, 
 which a century or more ago would have excited little attention, 
 and caused little alarm, in our day, when production and trade are 
 so sensitive and so complicated, rouse the gravest apprehensions 
 and exercise the attention of the most laborious and acute investi- 
 gators into economical phenomena and economical agencies. 
 
 Now there is one law of prices which you must know and under- 
 stand before you can make the least progress in interpreting the 
 simplest problem. It is known to some economists, I do not say 
 all, for it is most unaccountably neglected or obscured in most 
 treatises on the subject, as Gregory King's law. Gregory King 
 was Lancaster Herald in the latter part of the seventeenth century. 
 Struck, as I do not doubt, with the extraordinary fluctuations of 
 price, particularly in the price of wheat, which characterized the 
 seventeenth century, and being a man of really statistical mind 
 that is, one able not only to collect figures, but to interpret related 
 figures he stated it in this form, and you will remember that I 
 have often referred to it : 
 
 " We take it, a defect in the harvest may raise the price of corn 
 in the following proportions : 
 
 Defect. Above the common rate. 
 
 1 tenth raises the price 3 tenths 
 
 2 tenths 8 tenths 
 
 3 tenths 16 tenths 
 
 4 tenths 28 tenths 
 
 5 tenths 45 tenths;"
 
 LAWS REGULATING PRICES. 251 
 
 and from this King draws some highly practical conclusions from 
 the free trade practices of the Dutch. It will be observed that 
 King merely takes the price of corn, and that though he gives the 
 proportion in an arithmetical form, he intends to imply no more 
 than a principle, which experience may modify. Let me try to 
 draw out in the form of an economical rule or rules, the important 
 canon of prices which was suggested two centuries ago, as I have 
 seen it verified in the long research which I have given to the 
 subject. 
 
 1. The price of any article in demand, but at present in defect, 
 rises in price by a different ratio from that indicated by the ascer- 
 tained amount of the deficiency ; and e converse, the price of any 
 article in demand, but at present in excess, falls in price by a 
 different ratio from that indicated by the ascertained amount of the 
 over-supply. By the expression " ascertained amount," I do not 
 intend that the quantity shall be exactly measured. It is sufficient 
 for the illustration of the first rule that it should be a sufficiently 
 apprehended fact. 
 
 2. The operation of the above law is always most dominant in 
 articles of prime necessity, in which no notable economy can be 
 made without suffering on the part of the people when supply is 
 short, and no notable increase of consumption can be expected when 
 the quantity is in excess of supply. If the article is relatively 
 perishable, the phenomena increase in intensity on either side. 
 This law or rule is not unlike Mr. Mill's principal law of values, 
 but is more comprehensive. 
 
 3. If in the scarcity or excessive plenty which prevails, as the 
 case may be, there are several kinds of the same article, which 
 ordinarily stand in a certain ratio to each other, and can be used 
 interchangeably, the rise of price is greatest, in the event of 
 a scarcity, in what has been heretofore the cheapest form, and 
 conversely in a time of oversupply the greatest fall is in what has 
 hitherto been the dearest. This rule will require a little explana- 
 tion. Eoughly speaking, under ordinary circumstances wheat, 
 barley, and oats stand in the ratio of 100, 73, and 50. Now in 
 times of scarcity 73 and 50 will rise more than 100 does, and if 
 there be a fall in prices owing to excessive supply 100 will fall more 
 than 73 and 50 do. This rule is of the greatest importance in
 
 252 HISTOEICAL EFFECTS OF HIGH AND LOW PRICES. 
 
 practice, and in a rough manner is seen, though none too clearly, 
 by practical men of business. 
 
 4. If the articles in question are more or less of voluntary or 
 optional demand, and the supply be in excess, prices tend to fall to 
 money values which come very near the margin indicated by the 
 present cost of production ; but if the demand be in excess, profits 
 rise considerably, and production and trade are active. I state this 
 law, which is accurate enough when other prices are nominal, but 
 is apt to be powerfully affected under the pressure of such excep- 
 tional circumstances as I shall have to refer to hereafter. If the 
 use is entirely voluntary the phenomena are intensified; if the 
 option is exercised in the direction of a practicable economy of 
 use, they are less powerfully exhibited. 
 
 5. High prices in articles of necessary use consequent upon 
 scarcity, natural or artificial, diminish the purchasing power of 
 wages, and do not increase the amount of employment. High 
 prices consequent on demand in voluntary articles which can be 
 increased indefinitely increase profits and increase wages. Low 
 prices in articles of voluntary use do not, especially when labour 
 or employment is greatly distributed, lower wages, so long as the 
 producer does not or cannot diminish the output. If the demand 
 for labour is urgent, and the supply is scarce, King's law applies to 
 labour as fully as to any commodity. The working of this law is 
 exceedingly obscure, but very real; but I hope to be able to illus- 
 trate it clearly in the course of this lecture, at least in its most 
 salient points. For the moment, take the law in its briefest form. 
 High prices do not make high wages. 
 
 Now these are the principal, I will not say the only, but the 
 most practical of the laws, rules, or canons, which may be deduced 
 from King's statement, which in the form of a question, is, accord- 
 ing to his figures, as follows : Why is it that a deficiency of food, to 
 the extent of one half an average supply, raises the price of the 
 actual supply nine times over the average price ? I will candidly 
 say that I have never recorded such a rise; the highest I have 
 noted was in the year 1315, five times for wheat. But as I have 
 already stated, Gregory King's proportion, though undoubtedly 
 sound in principle, is hypothetical in form. I am indebted to King 
 for the principle of the general law governing prices ; the canons
 
 CAUSES WHICH DEPRESS OB RAISE PRICES. 253 
 
 which I have given you are inductions from my own researches, 
 inductions which I intend to the best of my power to illustrate. 
 
 But I must now proceed to the next part of my economical 
 inquiry. Three causes, apart from those laws which I have already 
 given tend to depress or raise prices ; one in the course of econo- 
 mical history to raise them, two others to depress them. The 
 depressing causes have never overtaken the exalting cause, except 
 in some significant cases, and every effort, as I shall try to show, 
 is made to prevent so entire a change in relative values as such a 
 result would effect. If it did take place universally, it is difficult 
 to see how society would accommodate itself to the obligations 
 which it has created or has suffered to be created on its behalf. It 
 is a minor, but only a minor matter, that it would effect an entire 
 social revolution, because it would seriously affect all who have 
 depreciable property, i.e., working capital and land, and as inevit- 
 ably better those who have that property in which a fixed rate of 
 interest is paid for advances, the fund and debenture holder, i.e., 
 the man to whom the earnings of the nation, and the earnings of 
 industrial companies, are pledged at a given rate of interest. 
 
 The three causes are (1) the plenty and scarcity of gold and 
 silver ; for the last 300 years, the elevating cause of prices. The 
 two others are (2) diminished cost of production ; (3) diminished 
 cost of freight. These causes are dominant, but I must warn you 
 that there are other agencies behind them, which I shall have to 
 expound, which are also depressing causes of prices. If we are 
 able to grasp the five general laws of prices which I have given 
 above, which you will see are exponents of immediate phenomena, 
 and the -three causes which are operative over permanent, or at 
 least continuous, phenomena, we shall be on the way to interpret 
 the facts, past and present, which I have to lay before you. You 
 will remember, too, that the laws and causes are disparate, but 
 co-ordinate. The laws which I have quoted, in so far as they have 
 had materials to work on and opportunity for activity, have affected 
 prices, or money values, and, in the absence of money, exchange 
 values from the days of the Pharaohs to the days of the Coburgs. 
 But the causes have been especially dominant during the last two 
 centuries. Society may, by an accession of barbarism, entirely lose 
 the fine arts. But if the civilization of antiquity had been equally
 
 254 HISTORICAL EFFECTS OF HIGH AND LOW PEICES. 
 
 interested in the industrial arts, it is doubtful whether civilization 
 would have been lost, as it was lost, for at least twelve centuries. 
 The protection which the industrial arts give society is so great that 
 all the savages collected by Jinghis Khan, Tamerlane, and the 
 Osmanli Turks together would have been annihilated by two or three 
 squadrons of modern infantry and a modern park of artillery. But 
 the civilization of antiquity accepted the fatal custom of slavery ; 
 and the process of invention, of adapting natural laws to the 
 economy of human labour in production, never made progress for 
 lack of motive. 
 
 When I speak of the plenty and scarcity of gold and silver, I am 
 referring to the case of either of these metals being legal tender to 
 any amount, that is, compulsorily acceptable in liquidation of con- 
 tracts, to the exclusion of the other ; or, which is an exceedingly 
 rare case, adjusted in value to each other by so exact a proportion, 
 that the recipient of the sum is indifferent whether he receives the 
 one or the other. Now this equivalence may be discovered and 
 affirmed as a commercial fact, or it may be to some extent the 
 creation of law. In order to make this clear, I will illustrate it 
 from the annals of the English currency. 
 
 In 1257, it is said that Henry IIL issued a gold currency in the 
 proportion of 10 to 1, and that on the remonstrance of the 
 London citizens, he took it back at a discount of 2 per cent., or at 
 9| to 1. In 1262, he bought gold for making into plate at 9 to 1. 
 Thirty years later Edward, his son, bought gold ingots at 12 to 1, 
 the object being to decorate the crosses which he set up in memory 
 of his wife Eleanor of Castile. -During the fourteenth, fifteenth, 
 and sixteenth centuries, when a gold coinage was circulating in 
 England, the ratio varied from about 10J- to llf. In the 
 seventeenth century it was about 15 to 1, and the ratio was 
 liable to considerable fluctuations. In the eighteenth it was 
 overvalued, and as a consequence silver, the undervalued cur- 
 rency, disappeared. The ratio was altered, and a limit put to 
 the legal tender of silver. In 1819 the market rate was 15 
 to 1, at which it was undervalued, and gold disappeared from 
 France. To meet the difficulty, the Latin Union was formed, 
 and the issue was regulated. But the Californian and Australian 
 gold discoveries led to the overvaluation of gold, and silver began
 
 THE SCARCITY OR PLENTY OF GOLD AND SILVER. 255 
 
 to disappear. Eecently silver has been demonetised, except for 
 change in Germany, Italy, the United States, and France, the last 
 two practically, though not theoretically. The present ratio is 
 nearly 22 to 1. 
 
 These alterations of proportion are wholly due to the use of 
 gold as currency. The rise in thirty years from 9|- to 12^ was 
 due, as I pointed out long ago, to the adoption of a gold cur- 
 rency by the Italian cities. But out of Italy a gold currency was 
 unimportant up to the seventeenth century, when the American 
 supplies came. The present fall is due to the cessation of silver 
 coinages. If Austria and Eussia were to retire their forced paper 
 currencies, and adopt a legal tender silver currency, and if China 
 were to issue a silver currency, the price of silver would rise, 
 if not to its old proportion, to something very much nearer it 
 than it is likely to be unless such expedients be adopted. If you 
 leave off using any article hitherto in demand, either by finding a 
 cheaper substitute for it, or by discontinuing it in whole or part, 
 my first law of prices at once applies. Now the Governments of 
 Germany and Italy adopted a dearer substitute for silver, and lost 
 a great deal by the operation; the former a considerable part of the 
 indemnity which it extorted from France after the war of 1870. 
 
 The other two diminishing causes of prices were very slow in 
 coming into operation. There is very little evidence that in any 
 department of human industry improvements in the process of pro- 
 duction diminishing cost are traceable; for centuries, abundant evi- 
 dence shows that no such improvements were made. I will mention 
 two instances in which distinct progress was made and is traceable 
 in diminishing prices. These, the most marked examples which I 
 have seen, are paper and glass. There is not, I believe, any in- 
 formation in existence as to what improvements were made, and 
 where they were made. But when prices begin to rise, the money 
 value of these two articles is either stationary or sinks. It is certain 
 that the demand did not fall off, and when prices were rising all 
 round, the fact that any alteration in the price of these two articles 
 was in the direction of cheapness, is a proof which no direct testi- 
 mony would strengthen, that the phenomenon is due to diminished 
 cost of production. 
 
 Diminished cost is exhibited in several ways. 1. It may be that
 
 256 HISTORICAL EFFECTS OF HIGH AND LOW PRICES. 
 
 less time is required in order to bring the thing into a merchant- 
 able condition, for the saving of time is a saving of interest, risk, 
 and profit. Thus in the breeding and management of animals, the 
 agriculturist whose skill shortens the period to one-third in which 
 stock is brought to market, gains at first the whole profit of his 
 economy, till the skill being diffused among all farmers, his advan- 
 tage is absorbed in rent. 2. It may be that what has hitherto 
 been intractable by any known laws of nature is found to yield on 
 the discovery of a new law to which it is amenable. Such was the 
 case with those iron ores which contained phosphorus, arsenic, 
 and sulphur, and were of no economical value till the discovery of 
 Bessemer's process. In general nothing has been more noteworthy 
 than the economy of what has been conceived up to recent periods 
 to be mere waste. 3. It may be that the economy is in the process. 
 At present, by the improvement of furnaces, a ton, say of pig iron, 
 requires not more than a third of the coal or coke it required 
 twenty years ago in order to make it merchantable. 4. It may be 
 in the manipulation of the product. It is not easy to define raw 
 materials. Under certain circumstances, what seem to be finished 
 goods are raw materials for another product, if they are required 
 in order to achieve a further economic result. Clothing in a wax- 
 work exhibition are raw materials ; to most of us they are finished 
 goods which have a final and no ulterior economic use. But the 
 processes by which products are handled for one stage or the other 
 of a merchantable article, are the subject of incessant improvement 
 and modification. Now in all these four forms of diminished cost, 
 and I am far from haviog exhausted them, no appreciable develop- 
 ment has been or could be traceable till comparatively recent 
 times. 
 
 Improvement and economy in the cost of freight is also a matter 
 of very recent experience. When, after the year 1600, the English 
 East India Company was formed, it took more than two years to 
 double the Cape, to collect a cargo of goods, and to return. At 
 the present time the journey backwards and forwards is achieved 
 in two months. But it is not only accomplished in one-twelfth the 
 time, but with much greater safety, and with less than a twelfth of 
 the relative cost. Means too have been invented by which the 
 market may be foreseen and anticipated, balances due from either
 
 LESSENED COST OF. FREIGHT. 257 
 
 side, constantly in old times transmitted at great risk and cost, are 
 written off against each other and by monetary communications. 
 Navigation, once a knack, is now an art; the astronomer, the 
 meteorologist, the physicist, have been pressed into the service of 
 trade, and the man who at first sight is merely a student of know- 
 ledge for the sake of it, is constantly discovering and arranging 
 facts, which the economist who interprets results, instead of being 
 engaged in barren speculations, discovers to have played their 
 part in reducing the cost of production and exchange. For, as I 
 have said more than once, though the power of man to appropriate 
 the forces of nature is necessarily limited, no one knows, and no- 
 one ever will know, what those limits are. 
 
 Now I must admit that much of what I have just now said is' 
 part of the commonplaces of industrial history, of which you may 
 read much, and that with gush, in the pages of Mr. Smiles and 
 such people. But though I do not purpose to trouble you with the 
 statistics of what I may call the saving of waste and friction, it will 
 be clear that what I have dwelt 011 has its past in that machinery 
 of production and trade, the concrete illustration of which is high 
 and 'low prices, the interpretation of which is the object I have 
 before me. 
 
 When the facts come before them and are examined and ad- 
 mitted, the first impulse, even in those who should be better in- 
 formed, is to assign high and low prices to the excess and defect 
 of the precious metals. In an age when no substitutes for money 
 had been discovered, and no efficiency of the precious metals in the 
 operation of exchange had been dreamed of, the plenty or scarcity 
 of money had a far more direct effect on prices than it has in more 
 recent times. There is no doubt that one rise in prices, for 
 example, was effected between 1541 and 1582, and another between 
 1583 and 1642, and a third of far smaller significance between 1G48 
 and 1702. But it is as certain that the first modification was due 
 to the currency and certain peculiar facts connected with it ; the 
 second was due to the influx of the precious metals, and, speaking 
 generally, to that alone ; while the third was of a much more com- 
 plicated character, and can be referred only doubtfully and slightly, 
 to currency influences at all. 
 
 A country which does not produce the precious metals itself 
 
 18
 
 258 HISTOEICAL EFFECTS OF HIGH AND LOW PRICES. 
 
 procures them by the operations of foreign trade. Now England, 
 till the rise in prices at the beginning of the seventeenth century, 
 when it is unquestionable that the supplies came from the New 
 World, supplied itself with silver, as I told you in a previous lecture ; 
 for silver is rarely found in Europe, except in conjunction with 
 lead, and the English did not, if we can trust the accounts given 
 of its trade, import lead at all, but, on the contrary, was a source 
 of supply to the west of Europe. From this lead it extracted its 
 silver, and I have no doubt whatever that from this country 
 "Western Europe, and in particular France and the Low Countries, 
 procured the main of their supplies. The superficial gold supplies 
 of the British Islands, large probably in pre-historic times, espe- 
 cially in Ireland, where the use of gold ornaments was very general, 
 as the collections of the Eoyal Irish Academy show, were long ex- 
 hausted, although Adam de Moleyns says that Ireland still produced 
 gold of the finest quality. The circulation of gold was, however, 
 trivial, and remained trivial till the seventeenth century, all Euro- 
 pean countries using a silver currency. Some even used a billon 
 or mixed metal local currency, an abomination which circulated up 
 to fifteen years ago in Germany and Switzerland. The gold cur- 
 rencies of Italy in the thirteenth and fourteenth centuries were 
 chiefly, if not entirely, drawn from Byzantine reserves. 
 
 I purposely, at this stage, entirely ignore the effect of paper cur- 
 rencies: such as existed, at the epoch when the cheapness of money 
 affected prices, were local, and were limited to the operations of mer- 
 chants. It "was not till after the Eestoration that the circulation 
 of goldsmiths' notes was general, and then was only general in 
 'London. The denomination of the notes was high, and remained 
 ' high. So little profit, indeed, was derived from them by private 
 bankers, the successors of the London goldsmiths, that at a doubtful 
 period in the middle of the eighteenth century these bankers retired 
 their notes, as, in effect, since 1844, private bankers who retained the 
 right of issue have nearly retired theirs also. To all practical pur- 
 poses, then, the circulation of the public was, and remained, metallic, 
 from the earliest date of recorded economical history down to the 
 great event which I referred to in an earlier lecture, the suspension 
 of cash payments, when a perfectly new departure was made. 
 England, then, from early times down to the beginning of the
 
 THE PRODUCE OF SILVEE IN ENGLAND. 259 
 
 seventeenth century, could and did rely on its own resources for its 
 own supplies of currency, and though, as I have stated, a restraint 
 was put on the exportation of the precious metals, it is obvious 
 that if it were the interests of the merchant to export, there was 
 no machinery in existence which could hinder him. Now up to 
 the incidence of the Great Plague the average price of lead for the 
 previous ninety years was 53s. 3d. the fother, after the plague, for fifty 
 years, it was 128s. 4d. But during the next one hundred and forty 
 years it is 73s. 9d., and the price is declining during the early part of 
 the sixteenth century. Now cheap lead implies a more abundant 
 supply of silver, and, of course, if a foreign market was ready to 
 take off an excess of produce, it would do so without prices being 
 heightened, as they would have been heightened had the silver, as 
 the law intended, found no exit from England. There was, beyond 
 question then, for the evidence of prices is conclusive on the sub- 
 ject, a regular outflow of English silver into Western Europe, till 
 the new source of supply from Mexico and Peru made the cost of 
 English silver too considerable for its profitable extraction, at least 
 for a time. 
 
 Now the value of the precious metals at the place of their origin 
 depends on the cost of production, just as the value of everything 
 else does. It is presumed that people will not undergo the severe 
 and dangerous work of mining unless they get the compensation 
 which is anticipated by all industrial agents. But here we should 
 remember that another principle comes in. Those callings in which 
 exceptional profits are a characteristic, i.e., profits depend greatly 
 on chance, are exceptionally attractive. The more tickets, says 
 Adam Smith, a man takes in a lottery, the more certain is he to 
 lose. But the fact that one man has drawn a great prize in a lottery 
 attracts many who certainly will not ; for, says the same acute 
 author, people always think their own good fortune and their own 
 abilities at least equal to that of their neighbours. A longer ex- 
 perience of mankind than most of you have has convinced me that 
 Smith's observation is sagacious and accurate, and you need not 
 think yourselves cynical if you hold the same opinion. Now this 
 gambling spirit operates powerfully in mining. 
 
 But in countries which do not produce the precious metals, tho 
 value depends on the cost of acquisition, i.e., on the cost of the
 
 260 HISTORICAL EFFECTS OF EIGH AND LOW PRICES. 
 
 commodity against which they are exchanged. Of course in no 
 exchange can you separate the cost of acquisition from the cost of 
 production, but in the exchange of goods against gold and silver 
 the cost of acquisition is more obvious than that of production. 
 Now the difference between the cost at which the article is pro- 
 duced may be low, and its exchange value may be high. The 
 cost at which Philip II. procured the precious metals in his Plate 
 fleet was low, for they were procured by a tax on the mine adven- 
 turers, who were permitted to wear out the native population by 
 compulsory labour. In so far as the Dutch and English appro- 
 priated these treasures by privateering, the cost of acquisition was 
 comparatively low. But they were chiefly exchanged against goods 
 purchased or procured by the Amsterdam merchants in Cadiz and 
 Seville. Except, then, in so far as the English traded with 
 Holland or Spain, no portion of the treasures of the New World 
 would have entered into English currencies. Still, from the 
 beginning of the seventeenth century, the English have imported 
 gold and silver bullion, and have done it by their trade. The 
 home supply of silver became insignificant. Now it is plain that 
 the country which procures the precious metals with the greatest 
 ease can always obtain them in the greatest plenty, and, if nothing 
 intervenes to obviate such a result, will, in so far as prices are 
 affected by the precious metals, exhibit the highest average prices, 
 at least in articles of unrestrained import. 
 
 But there is a cause which checks the likelihood of a high level 
 of prices in a country whose trade gives it a great control over 
 the supplies of gold and silver which are produced and exist. This 
 is the amount of foreign debt which is held by the exchanging or 
 importing country. If a country, say England, has made great 
 loans to other countries, it has generally created the loans by 
 exports, and when lending is brisk, the export trade is active. 
 But it receives the interest on its loans by imports, especially of 
 raw material, and when the indebtedness is heavy, the debtor 
 country is forced to press the produce by which it liquidates its 
 liabilities on the importing or creditor country. The effect of this 
 operation may be to induce the phenomenon of continual over- 
 supply, and with it the excessive cheapening of materials. This 
 result is aggravated if the debtor and exporting country adopts
 
 FOREIGN SILVER AND GOLD GOVERNED BY TRADE. 201 
 
 a protective tariff, for by tins policy it curtails its own power of 
 exchange, and is constrained in order to meet its obligations to 
 force on the market a larger amount of its own goods. I mention 
 this here because it has its effect, as I shall show, on the circula- 
 tion of money. It is of greater significance still when one considers 
 its effect on the progress of young countries. 
 
 No country takes more money than it needs for purposes of 
 circulation, and for the due support of its paper substitutes. It is 
 quite likely that it knows with so much exactness that the want 
 can be supplied at discretion, that the banks can leave the adjiist- 
 ment of currency to circulation to the bullion merchant, who 
 watches the ebb and flow of international money with the intelli- 
 gence and acuteness which come from experience. But the function 
 of the bullion dealer is after all that of a middle man only, and the 
 circumstances must be provided before the middle man can inter- 
 vene. Now I cannot but think that a country which has not only 
 an active trade, but is an extensive creditor of other countries, has, 
 by virtue of the latter position, a far larger power over international 
 money than one which is not in this position, and that it was, in 
 the first place, the magnitude of its trade, and, in the next, the 
 enormous amount of foreign debt which it holds, which made, and 
 will continue to make, London the monetary centre of the world, 
 and able, with the least possible rise in the rate of discount, to 
 attack the store of international money most effectually. 
 
 I have now, I trust, stated with sufficient distinctness the laws 
 which govern prices, and have indicated how universal they are. 
 They are, you will understand, those which affect temporary 
 exaltations and depressions, as scarcity and plenty characterize 
 supply. The causes of high and low prices are permanent in their 
 character, and may have a long, perhaps an enduring, effect on 
 societies. I cannot indeed attempt, nor would you be able to bear, 
 a minute inquiry into, the total aggregate of causes which induce a 
 period of high and low prices, still less could one assign its precise 
 effect to each in this aggregate. No one can perhaps do much 
 more than guess at the force which each of these mauy causes has. 
 It is sufficient if the man of business can foresee them with suffi- 
 cient accuracy for business purposes. I shall, during the rest of 
 this lecture, deal with some high and low prices in their relations
 
 2(52 HISTORICAL EFFECTS OF HIGH AND LOW PBICES. 
 
 to labour and rent, including in labour the true profits of the 
 capitalist employer, as well as the earnings of workmen. I 
 assume that you entirely understand the meaning of economic 
 capital, that it is wealth loaned for productive purposes, and re- 
 ceiving interest., as has been happily explained, as the wages of 
 abstinence. 
 
 Nothing strikes the student of prices more than the fact that, 
 taking an average, that is, excluding the occasional manifestations 
 of the laws governing prices, prices are so uniform, that is, the 
 causes governing prices are so unchanged. This uniformity endures 
 from the first recorded account of continuous sales and purchases 
 till about the 31st of Henry VIII., a date which is not arbitrary, 
 and very convenient, because it precedes the debasement of the 
 currency, and it follows the dissolution of the larger monasteries. 
 The period which I have dealt with is 230 years. Now in the first 
 140 the price of wheat is 5s. lOf d. a quarter ; in the second 140, 
 5s. llfd. I referred also to the price of lead. In the first 149 
 years it is 90s. 9-|-d. the fother ; in the second, 104s. 4-J-d. Similar 
 illustrations could be given from other commodities. The causes 
 which determine prices, and have so enormous an influence in our 
 time were practically unaltered in intensity for centuries of early 
 English life. 
 
 But the laws affecting prices are illustrated to the fall. Except 
 in 1315, 1316, 1321, 1438, and 1527, there are no years of famine 
 during the whole 280 years, that is, a year in which the price of 
 wheat rose to double the average price. It is true that the famine of 
 the first three years was excessively severe, was without parallel in 
 any recorded period of English history. We may, perhaps, dis- 
 regard the stories told by the chronicler monks, who dwell on the 
 strange viands which the famishing people devoured, but there is 
 one proof of the calamity which is conclusive to the student who 
 investigates prices. It is that the price of labour rose permanently 
 10 per cent, after this visitation, evidence that the number of 
 labourers was lessened, and that the survivors took advantage of it. 
 In 1438, when the scarcity was also very great, stringent measures 
 were taken to prevent the exportation of food, and even water- 
 carriage in the interior of the country was prohibited, from a 
 fear lest an opportiinity should bo given of shipping corn abroad.
 
 THE EFFECT OF PLAGUES ON PRICES. 2G3 
 
 The most notable fact in the history of the fourteenth century is 
 the Great Plague of 1349, which reappeared in 1861, arid was 
 epidemic in England afterwards certainly till 1665. It probably 
 at its first visitation destroyed a third of the people. Our fore- 
 fathers, I regret to say, were astonishingly dirty in their habits. 
 The nations of Europe were in no country over cleanly at the 
 time, but even the Spaniards in the train of Philip II. commented 
 on the extreme sluttishness of the English. These English, they 
 said, live like pigs, but they fare as well as the king. Long after 
 the plague began they had not changed their habits. Even in the 
 eighteenth century London was polluted by the dead and the living. 
 A broad, open river of filth passed throitgh London at the bottom 
 of Ludgate Hill, and two minor abominations ran across the Strand 
 under rickety bridges. .Long after the eighteenth century set in a 
 particularly frowsy market was held between the Bank of England 
 and what is now the Mansion House. In wet weather the streets 
 were ankle-deep in pestiferous mud, and in dry weather in pesti- 
 ferous dust. Sometimes the burials in London were double the 
 christenings. "When the plague was burnt out. in 1666, it was suc- 
 ceeded by spotted fever, i.e., typhus, and smallpox. In moderately 
 healthy years the death rate was forty-one to the thousand. The 
 population of London was only kept up by constant immigration. 
 
 Hardly any event in English economical history has been so full 
 of results as the plague of 1349 was. It emancipated the serf, and 
 it demoralized the Church. It gave occasion to the teaching of 
 Wiklif, and assured the Eeformation. Had it not been for the in- 
 surrection of 1381, and the identification of Lollardy with sedition 
 and rebellion, the separation from Eome would have occurred in 
 the fifteenth century. The tie which bound Western Europe to 
 the Papacy was very slender at the Council of Constance, when 
 John XXIII. was deposed and Martin V. elected. But the English 
 rulers dreaded the Lollards, and remained orthodox and uneasy. 
 The pious Gascoigne is civil to the Pope, indignant with his court,, 
 especially contemptuous of the English bishops, and quite ready 
 for the dissolution of the monasteries. He was close upon Lollardy 
 without knowing it. 
 
 The first cause of this change was the laws of prices as I have 
 given them you operating upon labour. Labour is always in demand,
 
 2G4 HISTORICAL EFFECTS OF HIGH AND LOW PRICES. 
 
 and the supply fell short of the demand suddenly. If one-third of 
 the population perished, and this represented one-fifth of the 
 adults in the country, for the disease was far more deadly in the 
 towns, Gregory King's illustration would nearly double the price. 
 Now this is what happened, and illustrates niy first law. The 
 wages of women and children rose far more than those of adult 
 males. This illustrates my third law. 
 
 During the fifteenth century famine occurs as I have said in one 
 year only, and there is little record of pestilence. The chroniclers 
 and farmers tell us of years when there is no fruit, of summers 
 dry and wet, hut no mention of sickness occurs till 1477, '8 and '9. 
 In 1485 came the sweating sickness, a disease due to unclean 
 habits, which seems to have generally affected well-to-do persons 
 in towns, such as London aldermen. But there was a social 
 disease in the fifteenth century which produced grave results. 
 This was the appearance, at a most difficult time in English 
 political and social life, of the younger son. The Church was 
 exceedingly corrupt. The monasteries were dens of greedy and 
 voluptuous monks, the artisans all given to Lollardy, and the 
 nobles with dozens of vendettas everywhere. The peasant farmerp, 
 who were exceedingly prosperous, appear to have taken no side in 
 the struggle. 
 
 As long as the great landowners cultivated their own estates, 
 there was an abundance of personal property, with which to 
 portion the younger son. "When the stock and land lease followed, 
 there were still funds for this purpose. But about the middle of 
 the fifteenth century the farmers either purchased or had their own 
 stock, and took the land without borrowed stock. Not a few bought 
 small estates, and land ran up from ten to twenty years' purchase. 
 In the land hunger of the century nobles and knights even purchased 
 copyholds, and became by the common law serfs. When they 
 could do so, they asserted that part of Wiklif's doctrine for them- 
 selves which affirmed the injustice of civil inequality, and forced 
 the revision of the liabilities of those base tenures. I found, years 
 ago, a most curious illustration of this practice, in the compulsion 
 which Sir Ealph Cotiller and other Gloucestershire gentlemen, 
 tenants of the manor of Cheltenham, put on the abbess of Sion, 
 its lady. The younger son became exceeding poor. As long as
 
 THE YOUNGER SON AND THE CIVIL WAR. 265 
 
 the war with Franca lasted he could find employment, and if he 
 were fortunate and thrifty, fortune. But loot seldom sticks. The 
 war was over in France. It soon began in England. The country 
 was fall of soldiers of fortune, and they went on fighting, as chance 
 occurred, from St. Albans to Bosworth, thirty years of pitched 
 battles and guerilla warfare. Edward and his judges knew what 
 they were about when they devised a plan for breaking entails. 
 Only the relics of the factions, some five thousand on each side, 
 fought at Bosworth. The rest had left their bones on wastes and 
 moors. 
 
 The downfall of England under Henry VIII. was due to 
 economical causes. Perhaps if one examines his Pipe Kolls, one 
 could find out how he squandered his own and his people's money. 
 I know that he had twenty palaces or more, the whims of the 
 hour, in each of which the establishment maintained was more 
 costly than the whole expense of his thrifty father. He dissipated 
 his father's hoards, the taxes he wrung from his people, the for- 
 feitures he got from his nobles, whom he cunningly played off 
 against each other, the old and the new, the lands of the monas- 
 teries, the spoils of the monasteries, the loans he raised which 
 Parliament excused his paying, and then took to issuing base 
 money. The patriot king of Mr. Froude appears to me, who 
 know a good deal of his goings on, to be the very worst monarch 
 who ever reigned. 
 
 I told you in my last lecture of the economical causes which 
 brought about English pauperism, and I need not recapitulate 
 them here. The operation of law shut the English workman 
 as completely out of the laws, and the causes which regulate prices, 
 as he would have been if he had been made a chattel, a plantation 
 slave. To him, you may be sure, the great drama of the 
 seventeenth century, so noble as it seems to me in its beginning, 
 so outrageously base at its conclusion, had no meaning or interest. 
 I dismiss this part of English history for the time with only one 
 comment which you will, I think, find accurate. In the first half 
 of the century you will seldom find the worst men base. In the 
 last half of the century the best men are rarely anything but base. 
 And what is true of the politicians is true of the men of letters. 
 Shakespere seems to me to be like his own Prospero. Dry den
 
 266 HISTORICAL EFFECTS OF HIGH AND LOW PRICES. 
 
 remodelled his play in tlio spirit of Caliban, who, though a beast, 
 is a poetical beast. 
 
 In the seventeenth century, to confine myself to the merely 
 economical aspect of the situation, for I might say a good deal 
 more, occurs an exaltation of prices on the grandest scale. 'It is 
 due to one cause only, the inundation of American bullion through 
 the machinery of trade, the depressing causes, lessened cost of pro- 
 duction and diminished cost of freight, being too trivial to check 
 the rise. And besides this dominant cause, there are manifesta- 
 tions from time to time of the laws which govern prices through 
 prolonged periods. The severe plagues of 1803, 1625, and 1665, 
 appear to have had no compensative power, though in each of 
 the first tw r o years more than a fifth of the London population 
 perished, and in the last at least a fourth. It is always very hard 
 for wages to keep up with prices, however freely labourers are 
 allowed to use their own discretion in combination, and the effort 
 would have been impracticable in the seventeenth century. 
 Wheat rose 209 per cent, over the comparatively high prices of the 
 first half of Elizabeth's reign, meat 184 ; while labour up to 164'2 
 rose only 82 per cent., and for the whole period, owing entirely to 
 the rise during the Commonwealth, 100 per cent. Women's 
 labour, in accordance with my third rule, rose only 15 per cent., 
 , and as a rule prices go up, each decade of years, till after the 
 Eestoration, after which there was some little decline. 
 
 During this period, too, there are severe and prolonged dearths. 
 The first is for three years, 1595-7 inclusive. 1608 and 1630 are 
 years of famine. In the five years, 1646-1650 there was con- 
 tinuous scarcity. In 1661 wheat rose to 100s.. a quarter, a price 
 unheard of, and never paralleled till the close of the eighteenth 
 century, and the seven years, 1692-1698 were compared to those 
 Egyptian experiences in which the lean kine devoured the fat 
 kino, and were as ill-favoured after their meal as they were before. 
 The seventeenth century fastened pauperism on the English 
 labourer, and this is his only inheritance in the strife of that time. 
 
 The seventeenth century was an epoch of high prices, due 
 entirely to the cheapening of metallic money, and unrelieved in 
 any notable degree by the other two causes. The first half of the 
 eighteenth century was an epoch of low prices, due almost entirely
 
 THE INVENTIONS OF THE EIGHTEENTH CENTUKY. 267 
 
 to the operation of the second cause which I gave you, economy in 
 the cost of production; though the other economy, cost of transit, 
 was carried on with great success by the construction of canals, 
 improvements in the art of ship-building, in the invention of the 
 chronometer, and the practical settlement of the longitude question. 
 The eighteenth century multiplied the primitive spinning- wheel 
 and hand-loom, by the inventions of Arkwright and Crompton, 
 and a hundred others, and supplied the requisite motive power to 
 these complicated machines by the capital inventions of Watt. I 
 could go through a whole host of these inventions, but it would be 
 superfluous. They have employed the leisure of Mr. Smiles, and 
 the leisure of 'Mr. Smiles was very respectably employed. There 
 was, however, one particular direction in which progress was made, 
 and to which I must recur. I alluded to it before when I treated 
 the economic history of rent, and I am told that my audience 
 was surprised that I spoke so well of landowners. Would that 
 the public spirit and great usefulness of the landowners in the 
 eighteenth century had been as hereditary as their estates and 
 titles are ! 
 
 During the seventeenth century the landlords strove to get all 
 the rent they could out of their tenants. To the utmost of their 
 power they forced famine wages on the labourer. To the utmost 
 of their power they used the legislature in order to secure famine 
 prices from the consumer. As far as they could they levied famine 
 rents from their tenants. The historical evidence on this subject is 
 cumulative and abundant. In consequence, agriculture, despite 
 the teaching of those who saw how Holland and Flanders were 
 thriving, was stagnant in England. A few freeholders tried 
 experiments and succeeded, but they were too poor to produce any 
 effect, even if the farmers had been able to imitate them. " The 
 bane of husbandry," says writer after writer on the subject, " is 
 uncertainty. Men will not improve if their rent is raised on their 
 own improvements." Gregory King, in the curious and, on the 
 whole as I believe, accurate account, which he gives of the saving 
 power possessed by different classes of society, credits the bishops 
 with the largest power of annual accumulations, the tenant farmers 
 with the least ; for ho sets the former down as capable of saving 
 400 a year out of an average income of .1,800, and the latter
 
 268 HISTORICAL EFFECTS OF HIGH AND LOW PRICES. 
 
 with a power of saving twenty-five shillings a year out of an 
 income of 42 10s. 
 
 The landowners of the eighteenth century took an entirely new 
 departure. They no doubt raised their rents when they could. 
 Jethro Tull, who wrote on agriculture early in the second quarter of 
 the century, puts the average rent at 7s. Arthur Young, who 
 wrote towards the end of the third quarter, at a little below 10s. 
 an acre. They deserved every penny they got, for they themselves 
 made the increase possible. Arthur Young blames them for not 
 raising their rents more generally. But Arthur Young knew that 
 the security of the tenant was essential to the success of agri- 
 culture. His admiration for experimenting and improving land- 
 lords is as great as mine. Only those landowners who know how 
 to manage their own property as well as a good farmer does can 
 understand what rent land will bear, and what capital it needs. 
 They were the adopters of the new agriculture in England. 
 
 Curiously enough the movement began in Norfolk, which has 
 indeed been, in the economical history of England, the original 
 home of most of those early improvements to which the England 
 of the past owes so much. It is not easy to say who was the first 
 pioneer, whether it was Lord Townshend of Eaynham, or Mr. 
 Coke of Holkham. I understand that the farming accounts of 
 Lord Townshend are perfect, and I hope soon to see them. The 
 present Lord Leicester has sent me some of those drawn up for 
 his distinguished ancestor, Lord Lovell. The family of Coke, 
 descended from the great Chief Justice, has done continuous service 
 to British agriculture from the beginning of the eighteenth cen- 
 tury. O si sic omnes ! It is not impossible that the stories as to 
 the jealousy of the Norfolk landowners at Walpole, may mean that 
 they were led to prefer a country life to a political one. It is very 
 likely that the long period of peace and progress which came after 
 the treaty of Utrecht may have dissuaded men from taking part in 
 political struggles. I am myself disposed to believe that the 
 motive for the new agriculture was enlightened self-interest. 
 The relations of the eastern counties with Holland and Flanders 
 had long been intimate, and the new system was near a century 
 old in these countries. 
 
 As I have told you, the new system consisted in getting rid of
 
 THE AUTHORS OF THE NEW AGRICULTURE. 269 
 
 bare fallows and poor pastures, by root crops, and artificial grass 
 crops. The turnips were carefully boed two or tbree times, and by tin's 
 means tbe ground was cleared of weeds. They were fed off by sheep, 
 and by this means the land was adequately dressed for a subsequent 
 crop of corn. The corn crop, if of barley or oats, was followed by 
 a crop of clover, trefoil, lucerne, or rye grass, sown with the grain, 
 and left after harvest to form a fodder crop for the next year. 
 Occasionally a crop of rape and vetches was mixed with rye grass, 
 for which it is impossible to qyermanure fields. In Arthur Young's 
 time, these experimental landlords could be counted by hundreds, 
 and that shrewd and honest observer, who was subsequently put at 
 the head of a board of agriculture, since most unwisely allowed to 
 be starved into non-existence, is enraptured at the general worship 
 of the plough. If the landowner is a genuine agriculturist, Young 
 visits his house, measures his reception rooms, describes the 
 pictures in the mansion and the views in the park. If he is not 
 an improving landlord, I don't think that the possession of the 
 finest Carlo Dolce (for which painter Young entertains, as I think, 
 an unreasoning admiration) would have persuaded him to darken 
 that man's doors. Years after he published his tours, Arthur 
 Young visited France and Italy, and gave the best account which 
 has ever been written of what happened when the peasants were 
 suddenly liberated from their feudal dues and local tyrannies in the 
 autumn of 1789. Amid the crash of the historical French families 
 and the omens of the coming Committee of Public Safety, the 
 Mountain, and the Terror, Young is glad when he can get the 
 landowners to accept his toast of " The Plough." 
 
 It is a commonplace to say that nothing teaches like example. 
 The landowners of the eighteenth century did what the English 
 landowners had not done since the fourteenth, cultivated some of 
 their own property, and showed their tenants how successful, how 
 profitable, such agriculture would be. They soon doubled their 
 corn produce. They soon trebled their general produce. They 
 invented or adopted agricultural machines, and bettered the tra- 
 ditionary tools of the peasant and farmer. They revived, in 
 short, under better auspices, the merits of the fourteenth-century 
 landowner, which had naturally, after an interval of nearly five 
 centuries, been forgotten, and were first recovered and proclaimed
 
 270 HISTORICAL EFFECTS OF HIGH AND LOW PRICES. 
 
 by myself. They were gradually imitated by the farmers, and 
 rents inevitably rose, for though the capacity of the soil has its 
 importance in agriculture, its success depends incomparably more 
 in the diffused skill of the cultivator. Towards the close of the 
 century, Sir John Sinclair, an ardent disciple of Young, carried the 
 new process into Scotland, grafted it on the nineteen-years lease, 
 and the worst system of agriculture that existed in Europe, and did 
 more good to Scotland than all the Campbells that ever have been 
 born, and admired themselves. 
 
 There was to be sure a peculiar stimulus to agriculture in. 
 England, but it was a stimulus which was slow in operating. 
 The Government of 1660 imposed heavy protective duties on 
 foreign grain, permitting imports only when, corn had reached a 
 famine price, a price which it never reached except in 1661. The 
 Government of 1688 added a bounty on exportation. But the 
 effect of this bounty does not seem to have been felt for thirty 
 years. When it became a motive it was only a gambling one, a 
 chance for the farmer or landowner. But I have little doubt, from 
 the eulogy which Young gives the bounty, that it did operate as a 
 stimulant to agricultural operations later on. 
 
 The cheap prices of the eighteenth century were undoubtedly a 
 great boon to the peasant. His wages rather rose than fell. The 
 harvest payment, as may have been expected from the great 
 increase of produce, was much higher than it was in the seven- 
 teenth century, for there was, as you will anticipate, a great 
 demand for his labour at the time. But the price of produce was 
 very low, lower than it had been in the seventeenth century, by a 
 considerable percentage. Now as I mentioned to you at first, high 
 prices of produce are by no means followed by high rates of wages, 
 nor are low prices of produce by low wages, if the cheapness is 
 induced by a diminished cost of production, or what is the same 
 thing, greater production at equal cost. In 1731-2, when wheat 
 was 20s. a quarter, barley lls., and oats 9s. Gd., Lord Lovell reports 
 as the result of the new agriculture that his profits on his outlay 
 are more than 36 per cent. Of course, as soon as this was under- 
 stood and the new system learned, the rent of the landlord rose, 
 for rents depend only in a slight and temporary degree on natural 
 fertility, which may be soon exhausted, and in a large and 
 overwhelming degree on the skill cf the cultivator.
 
 THE SERVICES OF SIB JOHN SINCLAIR. 271 
 
 High prices will not make high rents, if the skill is undeveloped. 
 Nor will they if the skill is lost. If wheat rose in England to 50s. 
 a quarter, and other kinds of grain proportionately, economic rent 
 would not increase in any notable degree, unless the skill and 
 capital of the existing generation of agriculturists were induced to 
 compete for occupancy. The rise in prices might arrest the bank- 
 ruptcy of some who are struggling under their self-imposed 
 burdens, but it would not recall, of necessity, a single sovereign to 
 the soil, or set in motion a single competitive farmer. People 
 are amazed that land of good average fertility is gone out of 
 cultivation, that there is no inquiry for it, and under the old 
 system there seems likely to be no inquiry, even though it be 
 offered at nominal rents, on long leases, and with discretionary 
 tillage. It is not that it could not be cultivated with a profit 
 under such conditions, provided capital and skill were forthcoming, 
 but it is that capital and skill have been extinguished by the rents 
 which kept rising from 1852 to 1873. Landowners who want to 
 let land are crying in the desert. The economical conditions are 
 intelligible enough to those who understand economic laws and 
 economic causes. The conditions of agriculture in England are 
 at least equal to those of the United States, the freight from 
 which, as I learn from the authority of American public reports is 
 at least, in these times of cheap transport, 9s. a quarter, or about 
 one-seventh of a penny per ton per mile. The soil of the United 
 Kingdom is better, the climate better, the possibilities of high farming 
 better ; for all root crops must be housed in autumn in the United 
 States, and carefully kept from the severe frosts of the country. 
 The insect plagues of the United Kingdom are as nothing by the side 
 of those which afflict farmers in the United States. But land in 
 England is going out of cultivation. I hope that I have explained 
 the reason. The remedy is one on the exposition of which I have 
 much inclination, but no time to enter. It is quite certain that it 
 does not reside in the artificial restoration of high prices.
 
 XIII. 
 
 DOMESTIC MANUFACTURES. 
 
 The numerous early conquests of England The advantages of the 
 island's natural position Slowness of England in the arts, in- 
 dustrial and other The skill of the agriculturist The iron and 
 salt works BricJc -making Paper Textile industries The size 
 of the English farms The insulated character of English life 
 The density of the Flemish population The ruin of continental 
 industry The development of English industry in manufacture 
 and agriculture The condition of Europe in 1763 The theory of 
 a sole market The effect of modern ivars. 
 
 ENGLAND is not inhabited by a naturally inventive nation. We read 
 a good deal in certain books which, while purporting to give us an 
 account of our race, have uttered a thousand plausible flatteries, 
 intended to be soothing to our insular feeling?, and to assist our 
 industrial Chauvinism, about the greatness and progressive power 
 of the Anglo-Saxon people. Some of these authors, if they get to 
 learn it, find that the Anglo-Saxon race had not unity enough to 
 protect England against invasions like their own, and had to 
 succumb to Danish rovers, much more rapidly and hopelessly than 
 the British races yielded to them. Then they talk of " the Making 
 of England," and treat us to generalities as to how the Norman 
 invader, who made even shorter work of the English than the Dane 
 did, induced upon ihe English race those habits of law and order 
 which have made us the envy of nations. But the barons of the 
 Conquest exterminated each other in Stephen's reign, and the 
 Plantagenet conquest is as real as the Norman, which it followed. 
 I am almost weary of the philosophy of history. It is become to me
 
 THE NUMEROUS EAELY CONQUESTS OF ENGLAND. 273 
 
 as unreal as alchemy and astrology or metaphysics. You who, for 
 inscrutable reasons, have to get up so-called history, and be 
 examined in it, will, I trust, find it wise to learn what I am con- 
 vinced, as time goes on, you will find it even wiser to forget. Law 
 and order ! We have deposed more kings than any other European 
 race, and, excepting Eussia, have murdered more, or, at any rate, 
 have acquiesced in their deposition and murder. 
 
 The English race, I must confess, who am the descendant of 
 centuries of English life, and that of the wildest, for I come of a 
 Northumbrian stock, with a judicious admixture of other nationali- 
 ties, invented very few things in the mechanical sense. It contributed 
 but little, of its own effort, to that progress which lessens cost by 
 invention, by the adaptation of natural laws to the process which 
 manipulates matter and turns it into utility. The English had 
 greater advantages of position than Flanders had. They were fairly 
 free from foreign attack. Their nobles were glad to turn their 
 swords into reaping-hooks. The peace was kept at home, and 
 every one was interested in keeping it. The temptation to shear 
 sheep, with a perpetual market for the produce, was great. Now 
 the peace cannot be kept, unless every one tries to keep it, they who 
 could afford to break it with impunity most of all. Besides, they 
 are certainly most competent for national defence, who can spare 
 for foreign aggression. For a hundred years our kings, with the 
 sympathies of the people, strove to conquer France. Once they 
 almost dismembered it ; once they almost conquered it. If Henry V. 
 had not died at Vincennes, when he was under forty years of age, 
 what might not have happened ? 
 
 The Flemings were the weavers of Europe. It is a considerable 
 "business to clothe the world, and the Flemings undertook the busi- 
 ness with great success. That we learnt all our knowledge of 
 weaving from the Flemings is certain, but we were the slowest of 
 pupils. Even in the Middle Ages it was seen that a piece of cloth 
 was worth at least eight times as much as the wool is from which 
 it had been spun and woven, and that, if we could catch the art, the 
 wool which bore an export duty of 100 per cent., with ease, 
 i.e., without depreciation, would have borne in the shape of cloth, 
 a far higher duty, and, in the absence of duty, a far. higher profit. 
 We had extraordinary advantages of climate, but we either did not 
 
 19
 
 274 DOMESTIC MANUFACTURES. 
 
 understand them, or made no use of them. As I have told you 
 before, I do not detect any progress in the arts of invention, under 
 which the process of production was cheapened, for centuries, 
 except in two arts, paper and glass-making. I do not know whence 
 these arts were derived, and how they were improved. But I 
 am sure that they were both of foreign origin, and that their 
 development in England was not due to native ability or to native 
 enterprise. 
 
 Painting, I hope it may be said without offence, is the most 
 mechanical of the fine arts. Were it not mechanical, I am sure 
 that over three hundred men and women of genius could not be 
 painting, with much acceptance, at once. It is the only one of the 
 fine arts which procures the fortunate possessor the two great boons 
 of fame and fortune the fame perhaps evanescent, though not as 
 evanescent as that of an author, the fortune perhaps permanent. 
 Genius in mediaeval England was, I grant, very poorly paid. We 
 do not know, except in rare cases, who were the builders of our 
 great cathedrals, and for a very good reason, because they were 
 generally working men, at slightly better wages than their fellows. 
 Even as late as the seventeenth century, Dorothy Wadham paid a 
 pound a week to her architect, who built fifty times better than his 
 descendant in the craft, who gets fifty times more. Men used the 
 skill of those people for building stately tombs, with decorative 
 imagery. The monument of Cardinal Beaufort is a great work of 
 art. I am sure that the effigy is a perfect likeness. I have often 
 looked at it in Winchester Cathedral with much interest, not only 
 as a noble specimen of fifteenth-century art, probably Flemish, but 
 f.s the effigy of nearly the last great clerical statesman of the Middle 
 Ages. 
 
 There are no English painters till the eighteenth century. There 
 are no portraits of Englishmen till the sixteenth. Had they ever 
 existed, they could not all have been totally lost. During the 
 fifteenth century Flanders was teeming with art, and Italy had 
 carried it to perfection. At last came Holbein and his school. 
 Then there was a flying visit of Rubens, who painted the apotheosis 
 of the first Duke of Bucks of the house of Villiers. I am glad that 
 no Englishman was competent to perform the degrading function. 
 Then comes Vandyke for a more lengthened period. After him
 
 SLOWNESS OF ENGLAND IN THE ARTS'. 275 
 
 there is Lely and his pupils, who drew portraits on speculation, in 
 hopes that the sitters (I do not touch on their character) would 
 buy. I have read through the list of portraits of this kind which 
 he had on his hands at the time of his decease. They would furnish 
 a Grosvenor Street gallery. Then conies Kneller. The eighteenth 
 century, which is in England the great epoch of inventive activity, 
 sees the beginnings of purely English art. 
 
 I have referred to this because it illustrates my position by a 
 subject with which all Englishmen are now supposed to be familiar ; 
 occasionally, I fear, more familiar than informed. I know nothing 
 which has pained me more, who have an honest pride of race, than 
 to feel how great a debt in every department of art, science, philo- 
 sophy, invention, we owe to foreign immigrants and foreign teachers. 
 Even now, I fear, a Teutonic certificate of proficiency is worth more 
 to men than' any evidence of ability which they can procure from 
 their fellow-countrymen. Even what we fondly hoped was our own 
 is being demanded by other races. I have heard that Shakspere 
 can be claimed for the Welsh race, Milton and Chaucer for the 
 French ; for the philologers, having settled the origins of lan- 
 guage for the next six months, and given us a professor or reader 
 for each epoch, divert themselves with the race derivation of our 
 names. 
 
 There is no doubt an intimate connection between art and utility, 
 for art is an exponent of utility in its best sense, and the homeliest 
 conveniences may be subordinated to art. Now the economist is on 
 the look-out for the processes by which any invention has served 
 utility, and he knows that art and utility equally study fitness, the 
 best adaptation of means to ends. From my, perhaps vulgar, point 
 of view, a straight drawn furrow in a fifty-acre field is as much a 
 work of art as the curves which Xeuxis and Parrhasius drew, or 
 Hogarth's line of Beauty is. Perhaps, horresco referens, it is nearly, 
 if not quite, as difficult of perfect acquisition as the efforts of the 
 artist are. The other efforts of a skilled husbandman are artistic, 
 though they seem to be mechanical. A closed or open drain is to 
 be made on or round agricultural laud. The fall, we will say, is 
 one foot in a hundred. It needs a very practised eye to so regulate 
 the declivity of the ditch as to secure that the flow should be even, 
 and no part be waterlogged. I could multiply illustrations from the
 
 278 DOMESTIC MANUFACTURES. 
 
 husbandman's craft by which I could, as I think, prove that his art 
 is of a high order ; that, if genius consists in a rapid and an almost 
 intuitive adaptation of means to ends, the English peasant has his 
 genius ; and that we Englishmen could better afford to lose a good 
 many people of far higher social consideration than we can to part 
 -with the peasantry. 
 
 In the department of agriculture, the Englishman of the four- 
 teenth and fifteenth centuries was superior to the husbandman in 
 every part of the world. In the eighteenth and nineteenth cen- 
 turies he recovered his pre-eminence in this particular. In the last 
 two centuries he has made great progress in the arts of life. My 
 object in the present lecture is to trace the progress, and to suggest 
 an explanation of the delay which occurred in accepting and adapt- 
 ing the inventions of foreign nations, and in making progress in 
 invention ourselves. But, in the first place, taking, say, the end of 
 the thirteenth century, let us consider what was the state of the 
 industrial arts in England at that time. 
 
 The one article which the mediaeval husbandman desired more 
 than anything else was cheap iron* In those early days farmers 
 kept accounts, and, therefore, were well acquainted with their posi- 
 tion, their profits, and their losses. In our days they do not keep 
 accounts, and have therefore easily and insensibly glided into ruin. 
 Now in these bailiffs' accounts nothing is more common than the 
 apology for the great charge which the bailiff had to incur in the 
 purchase of iron, owing to the dryness of the season. There was 
 reason for the complaint. A hundredweight of iron in mass before 
 the Great Plague cost as much as six bushels of wheat ; after it, 
 more than twelve bushels. The husbandman was therefore warned 
 that, if his land was strong, he must be very sparing in the use of 
 iron. Abundantly as iron ore is diffused in England, so abundantly 
 that, till recently, we almost supplied the world, the art of working 
 it was almost unknown, and the English farmer, to a great extent, 
 depended for this necessary material of husbandry on Biscay and 
 Sweden. I have indeed found some few traces of iron production 
 in England, but they are few indeed and unimportant. Now, if 
 iron be scanty and dear, husbandry suffers. The ploughing is 
 shallow, the pulverization of the clods imperfect, and the efficient 
 drainage of land is prevented. I see no natural reason why the
 
 IRON AND SALT WORKS. 277 
 
 Swede and the Biscayan should have so entirely surpassed the 
 Englishman in the art of making merchantable iron. I am aware 
 that Swedish and Biscayan ores are remarkably free from those 
 admixtures which spoil the result, admixtures which no ancient 
 skill could get rid of. But the Sussex and North Lancashire ores 
 are not inferior to these, or only slightly inferior, and were cer- 
 tainly, had the requisite skill been present in England, abundant 
 and obvious. 
 
 It may seem strange to you that I should name another product 
 as one which England possessed in great natural abundance, but 
 did not possess the skill to utilize. This is salt. But 500 years 
 ago salt was a most important article in the economy of life. For 
 half the year, owing to the absence of winter fodder, the mass of 
 the English people lived on salted meat. On St. Martin's Day, 
 November llth, the mediaeval farmer considered seriously what was 
 his live stock, and what was his store of hay and straw. It was 
 certain that he had not enough to keep his cattle and sheep through 
 the winter, though he kept as many as he could, and poor enough 
 their condition became before the spring grass was ready. What 
 he saw that he could not possibly keep, he slew, and devoted to the 
 powdering tub. Into this went beef and mutton for winter food ; 
 and salted mutton would be, I should think, detestable. Now for 
 all this salt was required. Our ancestors were unable to use the 
 abundant deposits of Worcestershire and Cheshire, which now form 
 the material from which soda ash is manufactured for the civilized 
 world. They quarried the rock salt, but did not know how to refine 
 it. The Romans did, and evidences of their rock salt mines are 
 still found. It is only towards the end of the seventeenth century 
 that salt was procured from these natural deposits. As far as 
 home supply went, they depended upon the produce of salterns or 
 wyches on the sea coast. But the product, often described as black 
 and grey, was sufficiently uninviting. The greater part, and the 
 best of their supply came from South-western France. 
 
 I have mentioned the domestic use of salt. There was as im- 
 portant a commercial use in the cod and herring fishery. The 
 discipline, perhaps the policy, of the Roman Church, prescribed a 
 fish diet for a considerable part of the year. To those who did not 
 possess ponds or stews, salt cod, salt herring, salt salmon, salt
 
 278 DOMESTIC MANUFACTURES. 
 
 sturgeon, salt eels, were an important article of diet. Now the 
 fisheries of Yarmouth Roads were always considerable. So were 
 the different kinds of cod obtained from the shoals of the German 
 Ocean, the Scotch coast, and the coast of Iceland. Most of this 
 fishing was in the hands of the eastern towns, till in the fifteenth 
 century the Bristol merchants, by the aid of the mariner's compass, 
 sailed through the tempestuous seas of the Scottish Archipelago, 
 and reached the Iceland fisheries. For a successful fishery, cheap 
 and abundant salt was needed. Then they had rivals. The 
 Flemings were bold fishermen. They nicknamed their political 
 parties by the names of the cod, and the hooks which caught the 
 fish. A Fleming or Hollander (the distinction was then only geo- 
 graphical) discovered a new way with which to cure herrings, and 
 great wealth accrued to the Low Countries. So honoured was this 
 local fish-curer, that Charles V., who let his Netherland subjects 
 know, rather too frequently, how highly he valued the wealth which 
 they accumulated, ordered mass to be said at the man's tomb, and 
 himself attended the ceremony. A generation later, and the fisher- 
 men of Holland, the Beggars of the Sea, began the foundation of 
 the Dutch Kepublic by the capture of Brill. The Dutch fishermen 
 manned the ships which went out for discovery, for trade, and for 
 the capture of the Spanish treasure fleets, for the exploits of 
 Linschoten and Heemskirk, and a thousand other heroes. A gene- 
 ration later, and a pretty quarrel, fortunately only on paper, sprung 
 up between our Selden and the Dutch Grotius, in reference to the 
 use of the high seas on the eastern side of England, in which 
 Selden was in the wrong and Grotius in the right. At that time, 
 however, Selden was desirous of being on good terms with James 
 I., and such a desire was an effectual check to an author being in 
 the right. 
 
 But the English, with abundant coal, sea and pit, as they dis- 
 tinguished the Newcastle and inland beds, and with vast treasures 
 of salt which they quarried for a few fancy purposes, did not take 
 any step for two centuries in the direction of producing that upon 
 which so much depended. If they had made the salt, they might 
 have obtained enormous profits by leaving the fishery to the Dutch, 
 .and supplying them with cheap material for curing. 
 
 Another art of great value, long practised in Roman Britain, of
 
 BRICK-MAKING. 270 
 
 which indeed plenty of evidence remains now, but of which much 
 more existed five or six centuries ago, was the art of brick-making 
 r.iid brick-burning. It had been entirely lost. Not a single brick, 
 I believe, was made in England between the fifth and the fifteenth 
 centuries. There are some brick buildings of an earlier age, as the 
 church of St. Pancras at Canterbury, and the church in Dover 
 Castle. But the former was built from the ruins of a Koman basi- 
 lica, given to St. Augustine for the new worship, and is the most 
 ancient site of that new worship in England. The church of Dover 
 was built of brick, brought, I do not doubt, in ballast from the 
 Baltic, from Liibeck or Bremen. Brick, however, as every one can 
 see, was common enough, from the Netherlands to the Baltic pro- 
 vinces of Russia, for centuries before it was reintroduced into 
 England. It seems amazing, that what English people from London 
 or elsewhere must have seen everywhere in the region with whose 
 commerce they were so familiar, should not have been early manu- 
 factured in England, especially as tiles were made abundantly. 
 Building stone, though common enough in some places, and gene- 
 rally available for churches and castles, is not by any means 
 distributed over England. As late as the beginning of the seven- 
 teenth century, the improvement of the Thames navigation between 
 Burcot pier, near Dorchester, to Oxford between which points the 
 river was crossed by impassable or unnavigable shallows was de- 
 clared urgent in Acts of James I., in order that Oxford stone should 
 be conveniently carried to London. Brick earth is much more 
 widely distributed than stone. But it was not employed for what 
 is now so obvious- a use. 
 
 The first purchase of brick which I have noticed is at Cambridge, 
 in 1449. In 1453 I have found it in London. In 14G1 it occurs 
 at Oxford, where it was, and remained for two centuries, very dear. 
 I conceive that the art was copied from the practice of the Flemings. 
 Before the fifteenth century was over, brick became the common 
 material for building in the eastern counties. In the sixteenth, it 
 was generally used in London, and along the Lower Thames. It was 
 the favourite material of Henry VIII. , whose mania for building was 
 excessive, and who made use of it, I have no doubt, because it was 
 so costly. Certainly the brick of the sixteenth century was admirably 
 made. It was almost a work of art in itself. I have seen arches with
 
 280 DOMESTIC MANUFACTURES. 
 
 very flat crowns, built in the early part of the sixteenth century, 
 which, though they are now the substratum of ruins, and covered 
 with rubbish and earth, are as sound as when they were set up. Our 
 ancestors were slow to adopt, still more slow in invention ; but when, 
 they had adopted an invention, they did their work well. In our 
 time matters are painfully reversed. But the modem tradesman,, 
 whose raison d'etre is to use the skill which he possesses, and you do- 
 not, to supply you with genuine articles, generally employs what 
 abilities he has in cheating you. I have given you the economical 
 defence of his existence, and its too frequent perversion. 
 
 The curious thing is besides, that other branches of the great 
 Teutonic race were distinguished in past times for capital inventions. 
 It is a dispute where paper was first made from linen rags. The 
 earliest piece which I have seen, and certainly the rudest in manu- 
 facture, for a fair-sized fragment of the original rag is still in the 
 structure, is under the date 133o. It is a bill for spices, no doubt 
 bought at the London shop of some Bruges merchant. But it is 
 more than two centuries after this that the English are credited 
 with having attempted the manufacture of paper. It is said that 
 Bishop Thirlby, the last abbot, and the first and last bishop of 
 Westminster, induced one Eemigius, a German, to set up a paper mill 
 in or near London, at or about the middle of the sixteenth century. 
 It seems that the project failed, for a poem, published in 1588, which 
 contains a eulogy upon one Spillman, a German, and court jeweller 
 to Elizabeth, who was successful in his undertaking at Dartford r 
 states that he was the first to introduce the industry in England. 
 Unless I am mistaken the Dartford paper mills are still well at work. 
 
 The great invention of printing Ayas the work of the Ehenish 
 Germans, and it appears at Mainz. It was introduced, as we know r 
 into England by Caxton, about thirty years later. He learnt, 
 the art in the Netherlands. His successors in the art, such as 
 Wynkyn de Worde, were foreigners, or taught by foreigners. The 
 principal printer of Henry VHI.'s reign is Berthollet, whose name 
 may be taken to designate his origin. Nor do I think that it made 
 much progress in England. It seems to me rather to deteriorate 
 during the sixteenth century ; the type to become more clumsy and 
 coarse, and the impression less clear. In these industrial arts then, 
 which I have taken as illustrations only, I think I have made out.
 
 PAPER. TEXTILE INDUSTRIES. 281 
 
 that the English were not an inventive people, and that they did 
 not even readily adopt what other people had long invented. I will 
 now attempt to show what they did do, to venture on some explana- 
 tion of their exceedingly slow and imperfect progress, and to give 
 my solution of the movement which began at the end of the seven- 
 teenth, and became characteristic, traditional, and progressive in 
 the eighteenth, and onwards. The causes will be principally seen 
 to be social and political. You cannot, of course, separate, except 
 in thought, and then only with 110 little risk of confusion, economi- 
 cal from social and political facts. Fortunately, though some of 
 the social and political forces are enduring, their origin is so far 
 archaic, that they need not frighten the most sensitive member of 
 the Liberty and Property Defence League. 
 
 Now there always were textile industries in England. There was 
 probably hardly a home without a spinning wheel, hardly a manor 
 without' half a dozen hand-looms. The spindle side, if it be not one 
 of those modern affectations, of which philological pedants produce 
 many, is equivalent to maternal descent, and the universal occupa- 
 tion of unmarried women is enshrined in the generic term of spinster. 
 These domestic industries were general, at least to the middle of the 
 eighteenth century. They were inevitable in early times, partly 
 from the habits of the people, partly for a cause to which I shall 
 presently refer. But I am thinking of local industries in which 
 the persons engaged depended for the whole, or for the main, of 
 their livelihood, for I am convinced that generally they who engaged 
 in handicrafts had some land. The market was too precarious for 
 them to rely entirely 011 such an industry. I have often found 
 that head masons and other artisans, clerks and weavers, are 
 cultivating land for themselves, or occasionally employed in field 
 work. The Statutes of Labourers allege that artisans are compellable 
 to serve in harvest. In the long vacation lawyers and students were 
 remitted to husbandry. When Parliament is dismissed or pro- 
 rogued, the session being over, the Commons are sent back to their 
 fields, ths Lords to their pleasures, as the royal message, with un- 
 conscious irony, often counsels. 
 
 As I have said many times, the principal seat of the textile 
 industries was Norfolk. The county was in closo communication 
 with the Low Countries. The small craft of the time went across
 
 282 DOMESTIC MANUFACTURES. 
 
 to the eastern coast, and hugged the shore, the German Ocean 
 being generally calm, to the port of Norwich, but especially to 
 Lynn and Blakeney. The characteristic of the former town was 
 that it was villa mercatorum. Through the Norfolk rivers came the 
 merchandise which was sold at the great fair of Stourbridge, near 
 Cambridge, the principal mart, while it lasted, of Eastern England, 
 and even of all the southern counties. The purchasers of cloth 
 and linen do not often designate the origin of their purchases. 
 But Aylsham linen is not infrequently named, a strong woollen 
 stuff for leggings from Worsted, and cloth generally from Norfolk. 
 It is more than probable that linen cloth which went by foreign 
 names, such as Holland, was from early times of English 
 manufacture, as it is sometimes expressly said to be. Sometimes 
 linen and cloth are said to be of Irish origin, and it is plain from 
 the accounts of Roger Bigod at the end of the thirteenth century, 
 who having married one of Strongbow's co-heiresses, had large pos- 
 sessions in Ireland, that a flourishing manufacture of cloth was 
 carried on at Carlow. 
 
 Eicher people bought linen from Liege, and generally from 
 Flanders. In course of time, much linen so designated is 
 purchased by corporations. But the custom of traders, when 
 foreign goods are a fashion, to call domestic goods by foreign 
 names, in order to invite the custom of ignorant purchasers, is 
 beyond doubt as old as the Middle Ages. The boots which our 
 modern ladies purchase as French are generally manufactured in 
 North London, sent out to Paris, stamped or labelled with the 
 names of French houses, and reimported into England as French 
 goods. Put into this class of imports, they rouse the alarms of 
 Fair Traders, and are quoted as illustrations of one-sided Free 
 Trade. I have often had to point out this among other such 
 cases. But I sat for some years for a leather-manufacturing con- 
 stituency. So with cloth. The purchases of great people were 
 of the finest Flemish cloth. They obtained velvet and silk goods 
 from Genoa and Venice, though there was a silk manufacture 
 in London in the fifteenth century, carried on by women, who 
 complain of the rivalry and frauds of the Lombard merchants, 
 and are protected by an Act of 1454. 
 
 There were two metals, important products of this island,
 
 THE SIZE OF THE ENGLISH TOWNS. 283 
 
 which were produced for Western Europe. They were lead and 
 tin. The former was mined certainly in Derbyshire, and probably 
 elsewhere, and was, I am sure, abundantly exported. The other, 
 a Cornish product, was subject to a royalty paid to the Earl or 
 Duke of Cornwall. The whole district, in so far as it produced 
 tin, was subject to a local jurisdiction, that of the Stannary Court, 
 and the product was sold at a staple town, Bodmin generally. 
 
 Now I imagine that the manifest check to invention, and the 
 adaptation of manufactures in England, which were prosperous and 
 progressive abroad, was the generally agricultural character of 
 England. It contained one targe city, London, which had between 
 80,000 and 40,000 inhabitants. York, the capital of the north, 
 came next with 11,000 ; Bristol had about 9,500 ; Coventry about 
 7,000; Norwich 6,000; Lincoln about 5,000. No other English 
 town had above 5,000 inhabitants. In the poll tax of 1377, no 
 town in the counties of Bedford, Surrey, Dorset, Westmoreland, 
 Eutland, Cornwall, Berks, Herts, Hunts, Bucks, and Lancashire 
 was deemed worthy of a particular enumeration. The population 
 of forty-two towns is given, and the proportion of county to town 
 population in the last quarter of the fourteenth century is nearly 
 fourteen to one. Such a proportion is indicative of the urban 
 population which the whole country could employ and provide for 
 either in manufacture or trade. In Colchester, seventy-two years 
 before the poll tax, there were about 2, 000 inhabitants, of whom 140 
 were householders, designated as manufacturers and traders. In 
 1377 it had 4,432, but the eastern towns were very prosperous 
 during the fourteenth and fifteenth centuries. 
 
 Parish life was exceedingly insulated. The custom of registering 
 the native born children in the manor roll, of excluding strangers, or 
 making their host answerable for them after a brief visit, and of 
 the local administration of justice, must have tended to keep the 
 villages very much apart. In my native village in Hampshire, 
 even as late as my personal memory, the peasantry expressed an 
 open and hearty contempt for the peasantry of the two neighbour- 
 ing villages. For the inhabitants of one, they had nearly as much 
 dislike as the Southern French had for the Cagots. It was said 
 that none of them had ever intermarried with the despised race. 
 Up to comparatively recent times, no road passed through this
 
 284 DOMESTIC MANUFACTURES. 
 
 village, but merely skirted it. There was a theory, and I believe 
 one with some foundation, that the inhabitants were descended 
 from the ancient Britons, whom the Jute settlers it was in the 
 heart of the Meonwaras had failed to drive out of the morasses. 
 
 Such insularity was unfavourable to invention or progress in the 
 industrial arts. These villagers to be sure went to fairs, got rid 
 of their wool in neighbouring markets, perhaps some of their corn, 
 and their surplus stock of sheep and cattle, quite as frequently to 
 migratory purchasers as in regular markets. Eton and Winchester, 
 and some of the colleges of Oxford and Cambridge, went far afield. 
 in the fifteenth and sixteenth centuries for supplies. The un- 
 certainty of the home market discouraged invention if it did not 
 prevent the formation of special industries. The busiest time of 
 the producer's or dealer's year was at the great fairs, such as that 
 St. Giles, Winchester, and Stourbridge. In the former of these, 
 as my friend Dean Kitchen has shown, by the words of the 
 Charter which he has published, all business in Winchester and 
 Southampton was suspended for three weeks, and the Mayor and 
 Corporation of the city of Winchester was superseded by the 
 bishop's officials during the same period. Of course the traders 
 rented booths on the hill, and probably did more business in. the 
 three weeks than in the rest of the year. 
 
 The true function of capital, as I have stated more than once, 
 is to keep labour in continuous action, and to make prices as 
 uniform as possible. Now the motive to invention is a saving of 
 labour, and the stimulus to the saving of labour, is the prospect 
 of a wider or more active market. The peasant would no 
 doubt have been glad to get some of the things which he did 
 not make himself at a cheaper rate. But the producer could 
 not anticipate his wants, or guess that he could better his market 
 by cheapening his wares. Hence, when the price of manufactured 
 articles was doubled by the calamity of the plague, there was 
 less motive than ever for economizing the cost of production, and 
 lowering the prices, when the contingency of a lessened amount of 
 producers had induced the effect of raising it. Invention is 
 stimulated by a widening market, checked by a narrowing one. 
 
 Now let us compare England with Flanders, when at the height 
 of its commercial and manufacturing prosperity, ?'.<?,, during the
 
 THE DENSITY OF TEE FLEMISH POPULATION. 285 
 
 reign of Charles the Bold (1467-1477). The sea-board was 
 studded with large, fortified, and wealthy cities, who were possessed 
 of great municipal privileges, for which they were always willing 
 to fight, and whose burghers were the manufacturers of Europe. 
 The trade with the East, in so far as its products were accessible 
 to Western Europe, was centred at Bruges, the exchange of Europe, 
 and the negotiation of mercantile bills at Antwerp. The difference 
 between a given weight of wool, and a piece of cloth manufactured 
 from the wool, was eightfold, and of this produce, as far as 
 foreign trade went, Flanders had the monopoly. The country was 
 so densely peopled that it could not be maintained on its own 
 produce. It imported barley largely from Norfolk, and I know 
 that two of the great Norfolk families, Fastolfe and Cromwell, 
 grew rich by this traffic in grain. The Flemings therefore had a 
 market, a market which was constantly expanding, as long as 
 they could get raw material for their looms and customers for their 
 produce. It was impossible to exclude them from this market by 
 protective duties, for harbours were many, ships were of light 
 draught, and a preventive service was out of the question. When 
 two centuries after these events, Colbert tried to stimulate the 
 manufactures of France, he saw that a subvention might be 
 effectual, but prohibitive duties impracticable. 
 
 The progress of invention in Flanders was slight, and to our 
 experience trivial. But at the time it was very real. It chiefly 
 lay in the extension and multiplication of industries, in the perfec- 
 tion of products, not in the economy of the process, though the 
 development of special skill and aptitude, with what it invariably 
 implies, a division of employments, is a real economy and a virtual 
 invention. The Flemings developed the art of the wool-comber, i.e., 
 the process by which the better and finer parts of the fleece are 
 separated, the first and most important step in the manufacture of 
 fine goods, one which English inventors have since carried almost 
 if not quite to perfection. I remember some years ago, telling my 
 late friend, Mr. W. E. Forster, when on a visit to me, that the 
 cloth of the fourteenth century (I might have said on Shakspere's 
 authority) was coarse and full of hairs. He asked me oh what 
 ground I said this, as he, a woollen manufacturer, would be glad 
 to know. So I carried him off to the lodge at New College,
 
 286 DOMESTIC MANUFACTURES. 
 
 where the warden preserves William of Wykeliam's mitre case 
 and valise, and bade him take note of the stuff with which it was 
 lined in proof of my statement. He then saw why in Shak- 
 spere's time winter garments had to be lined. I have come across 
 many historical and economical inductions which are worse 
 founded than mine was. A man in an English winter might as well 
 have dressed himself with a hurdle as with English woollen cloth. 
 
 Although I believe that the manufacture of English cloth for 
 home use and for exportation was only of the commoner or coarse 
 kind, it soon spread from Norfolk. It gets to Wiltshire and Dorset 
 in the fifteenth century, as I know from purchases. In course of 
 time, it is made the subject of legislative enactment, mainly, if we 
 can trust the preamble of Acts, to prevent fraud and the cozening 
 of customers. These Acts of Parliament instruct us as to the 
 extension of the industry to the north. It probably always 
 existed in Yorkshire, for Leeds and Bradford have from ancient 
 times been marts of northern produce. Here, as we know from 
 evidence which is almost modern, these textile industries were 
 especially home products, which were collected by factors from the 
 houses of the weavers. 
 
 Flanders was ruined by. the wars of religion. Thousands of its 
 weavers became emigrants. They came to England and France, 
 especially after 1567. But the stream was incessant during the 
 rule of Alva, Parma, and the Archdukes. The Exchange of 
 Antwerp was transferred to Amsterdam. The trade with the 
 East, by which the cities of the Ehine and Bruges had been en- 
 riched, was destroyed by the capture of Egypt in 1516, and by the 
 Cape Passage route to India. But though Flanders was desolated, 
 England made little industrial progress in the sixteenth century, 
 and only began to wake up in the middle of the seventeenth. The 
 same cause was at work as before. In the sixteenth century the 
 rivalry of Flanders was annihilated, in the seventeenth that of 
 Germany. 
 
 I have never yet heard that any of the numerously laborious 
 and learned Germans have been at the pains to give us an account 
 of the economic condition of Germany, from the Khine to the Elbe, 
 and from the German Ocean to the Alps, when the horrible Thirty 
 Years War broke out. We are told what were the causes of that
 
 THE RUIN OF CONTINENTAL INDUSTRIES. 287 
 
 war the bigotry of Ferdinand, the ambition of the House of 
 Austria, the sudden outburst and the sudden collapse of the 
 Bohemian revolt, and the folly which, instead of uniting Lutheran 
 and Calvinist against a common foe, led them to quarrel and be 
 destroyed in detail. We know also what were the insidious purposes 
 of France, matured by Henry IV., put into practice by Kichelieu, 
 and persisted in till the collapse of France in the war of 1870. 
 But what I have always desired to know is, what Germany was 
 before 1619. We know only too well what it was after 1648, and 
 how, when weariness had brought peace, after every one of those 
 who had taken part in the beginning of the war was in his grave, 
 Germany was wholly ruined, thrown back in the progress of nations 
 for two centuries, and reduced to being little better than a geo- 
 graphical expression. 
 
 England was in the midst of her own troubles, and the laws of 
 Political Economy, or at any rate those of economical progress, are 
 as silent during warfare as those of the constitution are. The first 
 half of the seventeenth century was a miserable time for the 
 English people, however crowded it may have been by great men, 
 and stirring events. If the Commonwealth did not bring peace, if 
 the time was not ripe for the Government which Cromwell would 
 have established, great prosperity followed the cessation of the war. 
 The lot of the labourer was lightened, for wages rose 50 per cent. 
 The policy of English conquest and trade, that of assuring a sole 
 market for the manufacturer and merchant, though vicious, was 
 disguised by a success which was. not due to the policy. England 
 became, during the reign of the Protector, again one of the first 
 European Powers, which it had ceased to be since the miserable 
 reign of Henry VIII. 
 
 About the middle of the seventeenth century, or a little later, 
 Dud Dudley, a base cadet of the house of Dudley, discovered new 
 processes for smelting iron with pit coal. Cast iron, Dudley's product, 
 was known in the days of Elizabeth, but Dudley's inventions gave 
 it a high commercial value. At about the same time, or a little 
 earlier, the forests of the Sussex Wealden were utilized for the 
 manufacture of iron and glass. Of course, to modern notions, 
 the process was very wasteful and very destructive, for within a 
 generation Sussex was cleared of its woods, and the industries
 
 288 DOMESTIC MANUFACTURES. 
 
 decayed for want of fuel. But from this time forth, the depen- 
 dence of England on foreign iron masters ceased. At the end of 
 the century, England, by the welcome she gave to the French 
 Huguenots, went a great way towards appropriating the silk in- 
 dustry of France, though not permanently, and much further 
 towards neutralizing the projects of Colbert. The art of refining 
 rock salt was rediscovered, and England began to export what she 
 had previously procured from abroad. But the capital fact of the 
 seventeenth century, in the last half of it, was the development of 
 the East India trade; with the home production of articles which 
 should be exchanged against Eastern goods, the great development 
 of the cloth trade, and with it the supersession of Spanish cloth 
 imports. England having now improved her manufactures, the 
 growth of the Colonial trade, notably with the Southern American 
 plantations, and with those of the Leeward islands which belonged 
 to England, especially Jamaica and Barbadoes followed. 
 
 England had now learned how suitable her climate was for the 
 manufacture of woollen and linen cloth, to which in time was to 
 be added cotton. Davenant states that Bishop Burnet, in a con- 
 versation which he had with him, informed him that good woollen 
 and linen yarns could be profitably and perfectly spun in a moist 
 and equable climate only, while silk goods could only be brought 
 to perfection in a clear and dry atmosphere. Now this is perfectly 
 true. There is no country in the world where so much finish can 
 be given to woollen and similar goods as can be in England, by 
 what I may call entirely natural processes. The migrations of the 
 woollen trade are illustrations of the truth of Burnet's remark. It 
 went from Norfolk, the driest county of the island, to the west, 
 where the rainfall is often double that of the east, and excellent 
 goods are still produced there. But in time, it migrated to the 
 north, for there the climate is as equable, and the motive power 
 of coal is cheaper and more ready. I regret that I must add, that 
 Davenant quotes the bishop's information in order to urge the 
 forcible destruction of the Irish woollen industry, since Ireland, 
 with an equally convenient climate, might rival English trade. 
 Then affirming the selfish maxim, Lucrinu cessans cst damnum 
 emeryens, he urged with success the extinction of one among the 
 many Irish industries which the English Parliament exterminated.
 
 THE DEVELOPMENT OF ENGLISH INDUSTEY. 289 
 
 The eighteenth century, however, is that in which more than in 
 any other, invention or adaptation made rapid progress. Its 
 beginning is marked by the acceptance of the new agriculture, a 
 subject on which I have frequently commented, and at some 
 length, for it is one of the most interesting and instructive facts in 
 economical history. But it was not as a discovery original. The 
 new agriculture had been practised for a century in Holland and 
 Flanders. Its success is constantly commented on by agricultural 
 writers of the seventeenth century, who are never tired of re- 
 proaching the English with their slothful and backward agri- 
 culture, and I am forced to say, of giving distasteful reasons for the 
 fact. We are told by these writers, that all the choicer vegetables, 
 common enough as we should think them now, came from Holland, 
 and that a gentleman's or farmer's garden, let alone his fields, did 
 not supply him with the commonest. They tell us also, how, in 
 Brabant, to use Arthur Young's phrase, sand had been turned into 
 gold, by liberal and just covenants between landlord and tenant, 
 and by securing to the tenants the bond fide improvements which 
 they had made. Among the many benefits which Holland has 
 conferred on civilization, that of improved agriculture is not the 
 least. Perhaps in time to come, and ere it be too late, we may 
 take another lesson from Holland, and copy her land system. If 
 we do, I can confidently promise the landowner in the United 
 Kingdom a return to at least a large cantle of his old prosperity. 
 But as I have been often obliged to affirm, the two greatest 
 obstacles to human progress are the prejudice of ignorance and the 
 bigotry of science. 
 
 The last half of the eighteenth century was the great epoch of 
 mechanical invention in England, or, as I ought now to say, Great 
 Britain, for Scotland contributed her full share in the discoveries 
 and adaptations of Watt. And here I cannot but think, that the 
 greatest of national gifts, if it be diffused, the power I mean of 
 adapting means to ends, had now become hereditary in our 
 countrymen. Captain Galton has used an unlucky phrase, in my 
 opinion, when he writes about the heredity of genius, and illus- 
 trates his opinion by facts drawn from the heredity of logical 
 powers. With us economists, all the phenomena, which, from our 
 judgment, seem to contribute to industrial skill are pressed into 
 
 20
 
 290 DOMESTIC MANUFACTURES. 
 
 our service. It is plain that the spread of education in our gene- 
 ration develops an aptitude for education in a succeeding gene- 
 ration. The children of a man whose logical faculties have been 
 cultivated disclose a readiness in applying their faculties to 
 similar results which appears to be cumulative. The fact is con- 
 stantly noticeable, and is, I think, most hopeful. I speak, of course, 
 of education under proper conditions. The sprightliest mind may 
 be demoralized and degraded by silly examinations and sillier 
 examiners. The English people, I will not go nearer home, seem 
 to have gone mad over examinations. I remember that my friend, 
 Sir W. Harcourt, told me that an excellent female domestic at the 
 Treasury was constantly in danger of losing her place, and her 
 employers her services, because she could not come up to the Civil 
 Service standard in decimal fractions. Examinations may be 
 necessary, but we need not, like the " gentle Sicambrian" Clovis, 
 adore them. 
 
 Still, I cannot but think that the political condition of Europe 
 counts for something in the situation, though I admit that the 
 Briton of the eighteenth century had thrown off, at least in some 
 quarters, his hereditary stupidity, while he retained his dogged 
 industry. The civilized world had adopted the policy of endeavour- 
 ing to secure by force of arms a sole market, as, under altered 
 circumstances, France and Germany are trying to secure now the 
 one in the swamps of Tonquin, and in the malaria of Madagascar ; 
 the other in the waterless desert of Angra Pequena, and in the 
 beerless desert of North New Guinea. But when every one thought 
 the policy wise, the winner in the game had his advantages. Now 
 let us look at the condition of Europe at and after the Peace 
 of Paris in 1763. As we Englishmen are still paying interest on 
 the bill which we ran up then, and disavow the policy now, it may 
 be well to examine the positive gain. 
 
 France, our nearest neighbour, was stripped of nearly every- 
 thing. A little before she had a menacing position in India, a 
 more menacing one in North America. She had a preponderating 
 influence in the southern half of the Indian peninsula, and held 
 the strings of an intrigue in the north-east portion. In 1763, she 
 was left with Pondicherry. In North America she held Louisiana 
 and Lower Canada, and was constructing a chain of fortresses
 
 THE CONDITION OF EUROPE IN 1763. 291 
 
 from the south to the north. Nothing could have been more 
 cleverly strategic that her plan, as I noticed in several places when 
 I traversed a considerable part of the country which she intended 
 to occupy. Unfortunately for France, she had in Louis -XV. a 
 king who, while living the life of our Charles II., affected the 
 policy of Louis XIV. The Seven Years' War really created the 
 union of the American plantations, and gave them the means for 
 the War of Independence. 
 
 Spain counted for nothing, and all Scandinavia for next to 
 nothing. Germany was again torn to pieces by war ; now by a 
 dynastic struggle, as a century before by a religious war. Holland 
 had been finally ruined by the house of Orange in the person of 
 William V. The Italian States seemed past hope. England alone 
 <;ame out with the universal empire of a sole market. Captain 
 -Cook was discovering and annexing in the Pacific and Australia, 
 and England had at last a chance of winning a greater empire of 
 trade than the Bull of Borgia had given Portugal and Spain to- 
 gether. At that time, it would have cost but little to have annexed 
 the Spanish colonies, and for the elder Pitt to have exclaimed, on 
 behalf of the British Parliament, " Uterque Poenus serviat uni." 
 
 Now look at the opportunity for the manufacturers who had the 
 chance of supplying a sole market. The seaboard of North 
 America, from Nova Scotia to the borders of Florida was theirs. 
 India was theirs, and without their permission no one could land 
 cargo, or take cargo thence. The supply of this market, so largely, 
 so suddenly extended, was in the hands of English manufacturers 
 and merchants, and the economy of production, i.e., of inventions 
 in aid of or in substitution of human labour was the obvious and 
 ready road to wealth. No wonder that the abilities of Arkwright, 
 Crompton, and Watt, were called into active exercise. And 
 though in a short time the reverse of the Treaty of Paris was at 
 hand, and the acknowledgment of American independence was to 
 <5ut off half, and that the most hopeful half, of the sole market, 
 the English were equal to the occasion. They discovered that a 
 sole market was, after all, by no means so absolute a good as they 
 imagined, and they began to build up a new colonial empire, more 
 vast than that which they had lost, under a new and far truer 
 maxim, that trade follows the flag.
 
 292 DOMESTIC MANUFACTURES. 
 
 Besides, the temporary stimulus which the sole-market theory 
 had afforded British invention was made permanent by the natural 
 effort which producers who have embarked their capital in in- 
 dustrial avocations make to arrest the risk, even though it may 
 prove an imaginary risk, of decline. Nations which have made no 
 progress in the industrial arts are slow to move and apathetic. 
 Nations which have made progress are exceedingly unwilling to 
 lose ground. Again, the circumstances in which Europe was 
 placed, effectually staved off competition. It seemed that the 
 stars in their courses were fighting against the industrial rivals of 
 this country. 
 
 A few short years, and the great continental war broke out. 
 Every throne in Europe was shaken, even in countries which were 
 not invaded. The French overran Europe from the harbour of 
 Gibraltar to the city of Moscow. In the eighteen years con- 
 tinental war there was no leisure for the arts of peace, for the 
 growth of industry. But England early gained the mastery at 
 sea, only checked by the folly of the short war with the United 
 States, and became the workshop of Europe. Napoleon, that idol 
 of idiots, fancied that he could destroy the English factories by the 
 Berlin and Milan decrees, and being a clever Italian of the fifteenth- 
 century type, that depicted by Machiavelli, denounced the penalties 
 of piracy against all English vessels which entered continental 
 ports with English merchandise. When he marched to Moscow in 
 1812, his soldiers were clothed with the produce of Yorkshire 
 looms, i.e., he found that the exigencies of war, from one point of 
 view, had to override the exigencies of war from another point of 
 view. 
 
 The peace of Europe, from the Battle of Waterloo to the 
 Crimean War, interrupted only by a few transient struggles, was 
 the peace of languor. During this period the European nations 
 were recovering from the losses which they had suffered for 
 eighteen years of unbroken bloodshed and waste. The epoch was 
 characterized by the capital invention of steam transit on rail- 
 roads, the accomplishment of which was again due to English 
 invention, and was suggested by the obvious advantage of cheapen- 
 ing freight, one of those economies in production on which I have 
 already commented. It was English, because in England only, so
 
 THE EFFECT OF MODERN WARS. 293 
 
 great was the prostration of the Continent, was the accumulation 
 of capital, and its expenditure on productive works of deferred 
 profit, possible. 
 
 The wars which have followed have been brief, for the Crimean 
 was the longest European war, the civil war in America the most 
 prolonged. But though they have been generally brief, they have 
 been exceedingly destructive. It is too early to determine or even 
 to guess at the effect which they have induced on the resources of 
 the states which have waged them. The utmost we can at present 
 follow is the economical efforts which they have induced on industry 
 and trade, especially on that of the United Kingdom. Now England 
 was very little affected by the Crimean War, except in one direc- 
 tion. Up to the time in which hostilities began with Eussia, the corn 
 trade with that country was of great significance to the belligerents, so 
 significant that when war was declared, Odessa was not blockaded 
 till the corn fleet was dispatched; and nothing was left to blockade. 
 But indirectly this war had, followed as it was by a still more 
 significant struggle, a singular effect on values. It caused, and by 
 a chain of circumstances assisted, that remarkable increase of 
 agricultural rent (26^ per cent, between 1854 and 1879) which has 
 been a prime factor in the agricultural ruin of to-day. The 
 Eussian corn trade never recovered the collapse of the Crimean 
 War, and it naturally took time to develop it elsewhere, and in the 
 interval high grain prices prevailed, and stimulated an agricultural 
 system which had been carried to perfection, except in one direc- 
 tion, the accurate keeping of farmers' accounts. I do not find that 
 the Indian Mutiny, which followed the Crimean War, had much 
 effect on English manufactures and trade. Had it happened at 
 the present time, it would have had far different effects, for the 
 wheat exports of India, which have unquestionably brought about 
 that over-supply of which my first rule, given you last week, 
 affords the interpretation, was at that time non-existent. 
 
 But the process was interrupted by the four years' civil war in 
 America. No war was ever so costly and so destructive. The debt 
 contracted by the North was enormous, the waste of life prodigious, 
 the destruction of property incalculable, the arrest of development 
 total. When the war was over, the demand for European, 
 -especially for English products, was urgent, so urgent that it
 
 294 DOMESTIC MANUFACTURES. 
 
 easily overleaped the barrier of what was intended to be a pro- 
 hibitive tariff, carried through the American Congress by Mr. 
 Morrill, as the price, it may be feared, of that gentleman's 
 allegiance, a tariff which rendered the restoration of waste ex- 
 ceedingly costly, and the redemption of the Federal Debt exceedingly 
 easy. The waste replaced, there began the development of the 
 North-west corn lands, and the exportation of their produce to the 
 United Kingdom. 
 
 Then came short but sanguinary European wars. They were all 
 wars for frontier, like the Crimean and American wars. There 
 was the war undertaken by Prussia and Austria together, for the 
 sake of pillaging Denmark, and completing the German frontier on 
 the Baltic and the German Ocean. The quarrel over the spoils 
 between the two brigands came briefly after, and the delimitation 
 of Austria, which suffered a further delimitation in Northern Italy. 
 These wars were short and costly, and what is to our purpose, 
 arrested industrial rivalry. Lastly came the Franco-German War, 
 the latest, perhaps the last, struggle after the success of the policy 
 of Henry IV. and Eichelieu. It is difficult to say whether the pay- 
 ment of the indemnity was a greater loss to France than its receipt 
 was to Germany. Why I may be perhaps hereafter able to 
 explain. 
 
 Since then there has been generally peace ; but such a peace I 
 An armed peace, if prolonged, is more destructive of economical 
 prosperity than open warfare for a time. I do not see that the 
 industrial position of England is threatened. The German and 
 Belgian are to some extent inventive, the former especially in 
 chemistry and its products. But they are much more disposed to- 
 imitation. Friends of mine have been obliged to treat persistently 
 intrusive Teutons, who desire to pirate their processes, to the mill- 
 pond of dye-works, from which the unwilling bather issues an 
 altered man. But the victories of piracy are limited. At present 
 all nations but our own effectually block the impulse to invention 
 by protective duties, for the earliest and most persistent effect of 
 protection is to disable the nation which adopts it from the just 
 interpretation of its own faculties.
 
 XIV. 
 THE GUILD AND APPRENTICE SYSTEM. 
 
 The organization of 'parish or manor Of toions The guilds of 
 London and elseivhere Apprenticesliips, criticized by Adam Smith 
 Motives for the system The wages of artisans The property of 
 the guilds Combinations of workmen hardly taken into the scheme 
 of economists Economical fallacies generally contain some truth 
 Mr. Mill's wage fund Associations of capital or of labour The 
 trade union a partnership The emancipation of trade unions 
 The trade union a remedy against socialism. 
 
 ORGANIZATION was the essence of early English life. In the country 
 every man belonged to a parish or manor, and, to use a modern 
 phrase, had a stake in it. The landless man was an outlaw, a 
 thief, a brigand. Ho lurked on the no-man's land, on the border 
 of the settlement, in the outlying woods. He may not have been 
 a very unpopular person, when he plundered Jew or Lombard, or 
 even an abbot, particularly if he were one of those foreigners whom 
 the Pope planted in an English benefice, or who got the reward of 
 service under the king, or was the object of royal favour. But 
 the landless man was otherwise included in no organized or regu- 
 lated parish or manor, he was outside the universal system of 
 English life, not in the Middle Ages only, but long afterwards. The 
 English peasant for many a long day, even up to recent times, 
 looked askance at a stranger or foreigner, as they sometimes called 
 him, when he was imported into the parish. The law of parochial 
 settlement, selfish as its motive was, and mischievous as its results 
 were, was, in principle, an appeal to ancient and deep-seated 
 traditions.
 
 296 TEE GUILD AND APPRENTICE SYSTEM. 
 
 Forms which are obsolete and unintelligible, and now abrogated, 
 bad a great significance in old times. It appears that the consent 
 of the settlement was necessary for the introduction of a new 
 tenant or purchaser under the lord. It is certain that the lord 
 could not transfer his rights to a stranger unless with the assent 
 of the tenants. This practice, from which was developed the legal 
 ceremony of attornment, survived in some particulars to the 
 eighteenth century, when, having long ceased to have any practical 
 importance, and being found to hinder the free conveyance of land, 
 attornment was wholly abolished by statute. I am disposed to 
 believe that the action of the homage, the view of frank pledge, 
 was, from what I have gleaned in manor rolls, an active force, 
 that it formed in some particulars a consultative council for the 
 lord, and that its advice or assent was convenient, sometimes even 
 necessary. 
 
 The development of a homogeneous England from these 
 curiously separate units was not so easy a matter. It was early 
 attempted. The doctrine of allegiance to a central authority, 
 which, if we can trust constitutional antiquaries, was enforced as 
 early as the days of Cnut, may have gone for something, but I 
 suspect that the promissory oaths of the tenth century were not 
 found to be more binding than those of the eighteenth, when a 
 considerable Parliamentary party, with Shippon at their head, took 
 the oath of allegiance to the Hanoverian king, and assured the 
 exiled family of their unfaltering devotion to the Stuart. If the 
 courts of the hundred and the shire had any real vitality, and but 
 little is known of their working, they would help to take the 
 peasant out of the narrow surroundings of his immediate home, 
 and suggest a wider field of action than that with which he was so 
 familiar. 
 
 It seems that the chief agency by which some sense of nationality 
 was developed was the administration of justice. The assize of 
 the migratory judges executed the criminal law in directions 
 which the local jurisdiction, however large its powers were, could 
 not reach, and the civil side determined rights of property in 
 matters where the local authority had no jurisdiction at all, and, 
 besides, gave publicity and force to its decisions. How important 
 these decisions were conceived to be is proved by the care with
 
 THE ORGANIZATION OF PARISH OR MANOR. 297 
 
 which these judgments were reported and preserved. The student 
 of family history finds the greater part of his information in the 
 record of judicial, or at least of fiscal, proceedings. Again the 
 institution of the new system of direct taxation, after an assess- 
 ment, following on a Parliamentary grant, aided in the develop- 
 ment of common purposes. We are told that in consequence of 
 the statute of 1406, by which all suitors in the County Court and 
 others were declared to be the electors of knights of the shire, 
 " outrageous and excessive numbers of people, and of small sub- 
 stance," had chosen them ; and therefore, in 1430, the forty-shilling 
 freehold was declared to be the franchise, further limited, two 
 jears later, by an amendment that the freehold must be in the 
 -same county. So widespread an interest must have tended to 
 take the peasant out of the narrow surroundings of his ordinary 
 life. But the parochial feeling remained strong long after this 
 time. Again it is probable that the institution of the justice of the 
 peace, and the statutory increase of his power, which, though 
 local, was not necessarily identified with those traditional 
 boundaries, had a further effect. At any rate, it straitened, and 
 finally extinguished, the local jurisdictions. I refer to these facts 
 because, though the old associations were weakened, they were far 
 from being lost. In some particulars they were even strengthened, 
 as I hope to show. 
 
 The organization of the towns, though the urban population was 
 small by the side of the rural, was strict. The object of the town 
 was to get a charter of incorporation, which should give the town 
 local authority, and the administration of justice, if not of the highest, 
 in considerable degree, by the elected officials of the city. Or the urban 
 population sought to confirm and enlarge charters already given. 
 Now all these concessions cost money, and the money was contri- 
 buted by those who were to enjoy the new or extended privilege. 
 But it was not to be expected that they who had purchased their 
 own urban rights would freely admit strangers to the advantages 
 which they had bought. It is true that, in theory, the town 
 <;ould admit strangers, even serfs from distant places, and after a 
 time could protect such persons in the freedom which had been 
 granted them. But neither policy nor self-interest could be con- 
 sulted by making the town an asylum. From evidence which I
 
 298 THE GUILD AND APPRENTICE SYSTEM. 
 
 have collected as to the payment of head money or chivage by non- 
 resident serfs, I conclude that such persons did not conceive them- 
 selves to be enfranchised by mere residence, though it. is not 
 unlikely that if it were strong enough the town would resent the 
 attempt to seize a person of servile origin after it had determined 
 on adopting him, and he had become rich. 
 
 The principle of association and organization was extended to 
 the two universities. It is not known when either of these was 
 planted, or when they received their first charters. The students 
 at Oxford are mentioned in the reign of Henry II. in the chronicle 
 of Brakelond, who narrates the good offices of his hero, Abbot 
 Samson, in settling some difficulties which had occurred among 
 them and the city authorities. In the early part of the thirteenth 
 century Oxford is .organized; in the days, for instance, when 
 Grostete was the leader of its philosophy and other studies. In 
 a list of towns, written in the handwriting of Henry III.'s reign, 
 the schools of Oxford are mentioned as a distinctive feature of that 
 town. I do not intend to draw a negative inference when I men- 
 tion that Cambridge is also noted, but only as being distinguished 
 for its eels. These two ancient institutions, when they come 
 before us, are self-governing corporations, having a ruler, a law, 
 and judges of their own, holding property, real and personal, 
 admitting persons to their franchises, and banishing them, and are 
 entirely independent of the municipalities in which they were 
 situate. In course of time the urban authorities of Oxford town 
 are subordinated to the university, and it was the boast of the- 
 academical corporations that they were entirely exempt from any 
 secular or spiritual authority. The privileges they possessed were 
 confirmed by charters, and long after the history of these corpora- 
 tions began they had the distinction, alone, I believe, among 
 analogous institutions, of being confirmed by Act of Parliament. 
 England was, in short, filled with associations, customary, chartered; 
 and, in these two cases, formally legalized. 
 
 The principle of association \vas, however, extended beyond 
 these country, urban, and academical units. The members of 
 crafts or trades organized themselves, enacted their own bye-laws, 
 regulated their own business or merchandise, and finally were 
 incorporated, in some cases by charter, and in a few were appointed
 
 THE GUILDS OF LONDON AND ELSEWHERE. 299 
 
 the machinery for enforcing legislative Acts ; as, for instance, the 
 weaving trade generally, by a special corporation created under one 
 of numerous police Acts of trade, for the whole county of Norfolk. 
 In London, which early became pre-eminent for its wealth, these 
 trade associations or companies were incorporated by charter, 
 though long after they had been fully in operation as private com- 
 binations. The charters, I believe, date from the fourteenth century, 
 but I have been told that the site of the Goldsmiths' Hall has been 
 in the possession of the craft from before the Conquest. Many of 
 them were accorded considerable duties. The London goldsmiths 
 were very early consulted in what is called the trial of the pyx, 
 that is, the verdict that the officers of the mint had satisfied the 
 indenture under which they were entrusted with the coinage. The 
 Merchant Tailors were called on to pass the cloth which was pur- 
 chased for the king's army. The Grocers were directed by Acts of 
 Parliament to see " to the proper garbling of spices." A search 
 into the Statute Book would no doubt result in the discovery of 
 many such obligations, and an examination into the archives of 
 those City Companies whose records survived the Fire, and have 
 been preserved, would give, perhaps, much confirmation as to the 
 part which the companies played in the police of trade. They 
 assumed, or were permitted to make, bye-laws, and some curious 
 illustrations of their practice have been published. Thus, for 
 instance, in the fifteenth century, the Grocers' Company levied a 
 fine of 10 on two members of the fellowship for the offence of 
 taking a fellow livery-man's house, by offering to pay a higher 
 rent than the occupier was paying, against such an occupier and 
 fellow Grocer's will. Half the fine went to the fraternity, and 
 "half to him that is thus put out of his house." The Act of 15 
 Henry VI. directs that the ordinances of these associations shall 
 be certified and registered by the justices of the peace, or the chief 
 magistrate of cities and towns, under a penalty of 10 for neglect. 
 This enactment indicates how universal these combinations were, 
 not in the town only, but in the country. 
 
 The whole country, and not alone the towns, possessed these 
 organizations. The masons had, under the rule of the heads of 
 their craft, the freemasons, and so had the carpenters. Under 
 84 Edward III. cap. 9, " alliances and covines of masons and
 
 300 THE GUILD AND APPRENTICE SYSTEM. 
 
 carpenters, with their congregations, chapters, ordinances, and 
 oaths, made or to be made, were rendered void and annulled." 
 Some of these words seem like the technicalities adopted by their 
 reputed successors, the modern freemason. Later on these associa- 
 tions were declared to be felonious. The combinations of the artisans 
 were imitated by the peasant labourers, and we are told that, to 
 use modern language, all labourers during the last quarter of the 
 fourteenth century were united into very effective trade unions. 
 But it is quite clear that, to ensure unity of purpose and efficiency 
 in action, some sacrifice was required on the part of applicants for 
 admission into these organizations. Besides, in their struggle with 
 the capitalist and the law, they had need of a common purse, and 
 we are told that subscriptions were actually collected by the upland 
 folk, to pay the fines of such among their number as might be con- 
 victed, and generally in order to mature and carry out the line of 
 defence or campaign which they might undertake in this social 
 warfare. 
 
 This process was apprenticeship, a practice unknown to antiquity, 
 and apparently not accepted in all the countries of modern Europe. 
 This expedient, adopted, I do not doubt, in the first case, from 
 motives of police, is adversely criticised by Adam Smith, who holds 
 that it raises the wages of the persons who go through this period 
 of deferred wages. He also believes that it hinders the free circu- 
 lation of labour, because it disables those who have not passed 
 through this preliminary training from undertaking an employment 
 which is, so to speak, fenced against them. But he does not dwell 
 long on its effect on the wages of labour, for it is open to doubt, 
 whether in the end the calling which is necessarily preceded by 
 apprenticeship is necessarily better remunerated than one which is 
 not. For if it be supposed to have advantages, due to the post- 
 ponement of the wage earning period, either the remuneration 
 when the wages are earned owes its amount to the delay which has 
 been interposed, in which case the matter is in equilibria, and we 
 must search further for the effects, as it stimulates competition for 
 the higher earnings, in which case the wages are depressed by an 
 excess of supply, or the employment is rendered precarious, and the 
 aggregate earnings are equalized by breaks in the occupation. In 
 reality, however, the economical significance of apprenticeship is
 
 APPRENTICESHIPS. 301 
 
 part of a far larger question ; the particular causes which raise or 
 depress wages, or affect the value of that which the workman offers 
 for sale, apart from the general laws which induce high and low 
 prices. Let us first, however, look at the history of apprentice- 
 ship. 
 
 There can be no douht that the origin of the practise is to be 
 traced to the motive which I have already given, a desire to secure 
 to the purchasers of trade privileges the benefits which the existing 
 generation and their predecessors in title have secured. In fact, the 
 practice of apprenticeship long precedes any statutable enactment 
 enforcing it on craftsmen. Early intimations of it are given by 
 Madox, and, indeed, the indirect adoption of the system in the 
 liberal professions at an early date is to my mind proof that these pro- 
 fessions copied the existing and older practice of artisans and trades- 
 men. It is, I think, open to doubt whether all craftsmen were 
 apprenticed in times early and late. The existence of a class of 
 masons who are called free, or master, and a similar order among 
 carpenters, for I have often seen them thus designated, appears to 
 me to indicate that the practice was not universal. The frequent 
 attempt made in the Statute Book to compel apprenticeship implies, 
 I conclude, that the rule was frequently disregarded. Undoubtedly 
 the wages of artisans are higher than those of agricultural labourers 
 at all periods in English history, but this may not necessarily be due 
 to apprenticeship ; it may be the result of broken or uncertain 
 employment, or of bye-industries. 
 
 The period of apprenticeship was almost invariably seven years, 
 perhaps from the precedent of Jacob. The limit of time was occa- 
 sionally fixed by statute law, the regulation in the professions was 
 a bye-law of the corporation which admitted the qualified person 
 at the end of his training. Thus, originally, seven years inter- 
 posed between the student's entry at an inn of court and his call- 
 ing to the bar, seven years were demanded for the training of the 
 attorney, seven years' study for admission to the privileges of the 
 University. I do not find that any material advantage of a calcu- 
 lable kind was presented by the licensing body when the course 
 was over. Up to the end of the seventeenth century the earnings 
 of barristers and solicitors as attorneys were very small, and the 
 remuneration of a clerk, i.e., of a graduate, was no better than
 
 302 THE GUILD AND APPRENTICE SYSTEM. 
 
 that of an artisan. Quite apart from the pressure which charac- 
 terizes professions in later times, all that the licensing bodies did 
 was to give the privilege of pleading to the barrister, of acting as 
 the agent of another to the attorney, and of teaching what he had 
 himself been taught to the graduate. 
 
 One of three motives may have been present to the minds of 
 those who by the custom of their calling were in the habit of im- 
 posing the prior condition of apprenticeship on those who would be 
 their fellows in the future. They might have contemplated the ex- 
 pediency of making those who entered into a more or less privileged 
 order, pay for the privilege to which they succeeded. They might 
 have designed to narrow the field of competition within their own 
 calling, by putting impediments in the way of those who might elect 
 to follow it. They might have had before them the expediency of 
 maintaining a high standard of proficiency in their craft. The 
 economist who is naturally disposed to interpret such a regulation 
 from the point of view which marks the relation of wages to profits 
 and prices, may be tempted to dwell more exclusively on the second 
 of these motives. But I am sure that the first and third were pre- 
 sent to the minds of the artisans of old times. Whether the second 
 of these motives was a successful one, and, in case it did influence 
 the advocates of the apprenticeship system, is capable of being sus- 
 tained, is to be determined by the fact of what the apprenticed 
 person actually earned. 
 
 The trade of early England was not only small, but precarious. 
 The smalmess of the towns, to which allusion has already been 
 made, is a proof of this. The feeling, therefore, which a trader or 
 manufacturer would entertain towards his company and its members 
 must have been akin to that which in later times was felt by the 
 licensees of regulated companies of commerce. It is not just, they 
 would argue, that they who create and insure trade at considerable 
 initial expense should be exposed to the rivalry of those who are 
 striving to enter on the fruit of our labours, without making any 
 contribution towards the outlay which was essential to the existence 
 of the trade at all. Or to take a more modern parallel, it must 
 have been like the feeling which an artisan, who has belonged to a 
 trade union all his life, who has made, in consequence, continual 
 sacrifices for it, and who consequently believes, rightly or wrongly,
 
 THE WAGES OF ARTISANS. 303 
 
 that his expenditure has raised wages, entertains towards another 
 artisan, who will make no sacrifices, will incur no unpopularity 
 with employers, but is not above reaping the benefit of his fellows' 
 disinterested action. 
 
 It is quite true that the wages of first-rate artisans were in the 
 Middle Ages 50 per cent, above those of agricultural or peasant 
 labourers. But the artisan was migratory when he earned so much. 
 The common mason and the common carpenter got, as a rule, no 
 more for their labour than would compensate them for precarious 
 or broken employment. Now a migratory artisan was put to much 
 greater cost for his maintenance than a labourer would be, whose 
 home was stationary. This was discerned, early and late, by the 
 fact that workmen who were pressed for the king's service, no un- 
 common event, were always provided, in addition to their wages, 
 with journey money. Let me illustrate my position. A founder 
 resolves on building a college or monastery, and the former was not 
 infrequently founded in the fifteenth century. Workmen are to be 
 got from all quarters, master builders and master carpenters from 
 remote places. Such men have to leave their homes and families, 
 and to have for a time, in their humble way, a double establish- 
 ment. It is impossible to conceive, quite apart from apprentice- 
 ship, that they would be content to work at wages which did not 
 exceed the earnings of a residential workman, upon whom no extra 
 -charges were put, or if such a remuneration were not paid them, 
 that a constant supply of artisans would be forthcoming. I think 
 that these are sufficient causes for the comparative elevation of 
 artisan's wages, without having recourse to the theory that they 
 were designedly raised by apprenticeship. Further, it seems to me, 
 that the far greater elevation of artisan's wages in London points 
 ,to, analogous facts. There was much more expectation of work in 
 the city, bnt, on the other hand, the cost of living was much higher 
 than in the country, and even in small towns. But at the same time 
 I can assure my hearers that a mason in Oxford 440 years ago was 
 paid relatively better wages than he is paid in London for a fifty-six 
 hours' work at present. The fifteenth-century workman worked for 
 only an eight hours day. 
 
 One may well wish that one could recall the discussions which 
 took place at " the chapters and congregations of masons and car-
 
 304 TEE GUILD AND APPRENTICE SYSTEM. 
 
 penters when under their alliances and covines, they made ordi- 
 nances and took oaths, "when they excited the wrath of Parliament 
 in 1361, the year of the second plague. It was the time at which 
 Decorated architecture, having been brought to perfection, was on. 
 the eve of giving way to the more florid and less attractive Perpen- 
 dicular. The greater part of the handsome churches and conven- 
 tual buildings of that age were the work of the artisans themselves,, 
 who "could draw their own plot." It needed no common or brief 
 training to enable the mason to himself design these structures- 
 from the foundation to the roof, and then resign his work to an _ 
 equally skilful carpenter. These working men were the teachers,, 
 the models of those architects who copy their labours in our days,, 
 and often make a sad bungle of the imitation. In a time when men 
 could not be spared for the otiose function of a designer, who very 
 often knows little or nothing of the materials with which he has to- 
 deal, but the design came from the artisan, we may depend on it, 
 that a seven-years apprenticeship was no long period for the youth 
 to learn his craft in, and become the rival in the new style of 
 these great builders who had raised the structures of a previous 
 century. 
 
 I am speaking, you will observe, of the work of artisans, five 
 centuries ago. A study of the conditions under which they lived 
 and worked, many of their works being still before us, convinces 
 me that, whatever may be said against apprenticeship in time 
 present, it was a necessary condition for the art and labour of the 
 past. It is quite possible that a practice may have outlived its 
 usefulness, and though there was a time when it was requisite, 
 that time has been followed by another, when it has become super- 
 fluous or even mischievous. What I wish you to notice is, that 
 when we project ourselves into a bygone age, we cannot conclude 
 invariably with those, who, however far-sighted and shrewd they 
 are, are unable to realize, from lack of facts, these remote 
 conditions. It is a common and a dangerous error to interpret the 
 past by the present. It is a true and necessary philosophy to 
 interpret the present by the past, and I have some satisfaction in 
 knowing, that whatever be the worth of my own comment judge 
 it as you will I have provided the means by which others after 
 me will be able to realize for themselves the bygone, but by no
 
 THE PROPERTY OF THE GUILDS. 305 
 
 means exhausted conditions of past industrial life. And I may 
 mention as part of these facts, that Acts of Parliament not infre- 
 quently provide for the apprenticeship of labourers in husbandry, 
 meaning by this, I am sure, those higher agricultural operations 
 which require special knack and acuteness, and formed the 
 qualifications of the first-class farm-hand, whom our ancestors 
 were wont to describe as a bailiff in husbandry, who directed all 
 operations, and could do everything which he directed. These 
 apprenticeships, Sir John Sinclair informs us, survived in the 
 West to the present century. 
 
 I must, however, say a little here about the guilds, town and 
 country, at a time when they were in their prime and were actually 
 the institutions which they proposed to be. In the first place, they 
 were well-nigh universal, though they were unchartered and 
 informal. Then* property was derived from grants or charges on 
 land or houses, made for the purpose of securing the continuance 
 of a religious office, much appreciated and exceedingly common in 
 the period of English social history, which precedes the Eeforma- 
 tion, prayers or masses for the dead. From what I have seen there 
 was scarcely an estate on which some such liability was not 
 created. One college in Oxford, Oriel, was much engaged in the 
 business of negotiating the price at which masses could be secured, 
 and the register of the College contains evidence of the strictly 
 commercial character of these negotiations, the College fulfilling 
 its part of the bargain in the large chancel, large for this special 
 object, of St. Mary's Church. Almost all the house property in 
 Oxford possessed by the pre- Reformation Colleges is due to this 
 source, the bargain, especially when the mass was an obit or a 
 perpetual ceremony, being that the land or tenement was conveyed 
 to the contracting party, subject to this obligation. It seems, so 
 thoroughly was the custom engrained in the religious life of the 
 English, that these grants for definite religious offices were not 
 liable to the ordinary law of mortmain. To have refused per- 
 mission that such engagements should be made would have shocked 
 the sentiment of the time too seriously. In the New College 
 rental of Oxford tenements, six such payments are reserved for 
 divers monasteries, and it is quite certain that most of the other 
 property was held under similar obligations. 
 
 21
 
 306 THE GUILD AND APPRENTICE SYSTEM. 
 
 Now this is a type of the guild lands held in town and country 
 by chartered or unchartered associations. The ancient tenements, 
 which are still the property of the London Companies, were 
 originally burdened with masses for the donors. In the country, 
 the parochial clergy, or the migratory clergy, undertook the service 
 of these chantries, which were ranged along the side walls of the 
 aisles of churches, and the establishment of a mass or chantry 
 priest, at a fixed stipend, in a church with which he had no other 
 relation, was a common form of endowment. The residue, if any, 
 of the revenue derivable from these tenements, was made the 
 common property of the guild, and as the continuity of the service 
 was the great object of its establishment, the donor, like the 
 modern trustee of a life income, took care that there should be a 
 surplus from the foundation. The land or house was let, and the 
 guild consented to find the ministration which formed the motive 
 of the grant. Besides these sources of income, the nucleus of 
 very substantial advantages, the association levied small fees from 
 the members, inflicted fines on offending members of the guild, 
 and so secured a common purse. 
 
 I have referred to this at some length, because the guild lands 
 were a very important economical fact in the social condition of 
 early England. The guilds were the benefit societies of the time, 
 from which impoverished members could be and were aided. It 
 was an age, as I have told you, in which the keeping of accounts 
 was common and familiar. Beyond question, the treasurers of the 
 village guild rendered as accurate an annual statement to the 
 members of the fraternity, as a bailiff or collector did to the lord. 
 .If there was a surplus over the annual expenditure, it went to the 
 purposes of an annual or more frequent feast. The banquets of the 
 City of London Companies, now enjoyed by persons who have not 
 the remotest connection with the purposes of these Companies, 
 are a survival of mediaeval guild life. So are the parish feasts, 
 whose origin Blomfield discovered in collecting materials for his 
 county history of Norfolk, whose compulsory impoverishment 
 he comments on with some indignation. It is quite certain 
 that the town and country guilds obviated pauperism in the 
 Middle Ages, assisted in steadying the price of labour, and 
 formed a permanent centre for those associations which fulfilled
 
 COMBINATIONS OF WORKMEN. 307 
 
 the function, that in more recent times trade unions have striven 
 to satisfy. 
 
 It is not a little remarkable that the combinations of workmen 
 for the purpose of bettering their condition, such combinations 
 being known popularly as trade unions, though, for reasons which 
 I shall give, I prefer to call them labour partnerships, have 
 attracted so little attention from professed economists. Their 
 ancient history had long been lost, and has only recently been 
 re-discovered. This may account for much. In Smith's time, 
 they were suppressed, being under the ban of the law, and if they 
 subsisted at all, existed only as secret societies. When Ricardo 
 became a classic, they were still illegal, and the literary descendants 
 of Ricardo, the two Mills, father and son, preserve a complete 
 silence on this organisation. Mr. Fawcett, as was inevitable in a 
 man brought face to face with practical questions, during a long 
 Parliamentary experience, at last dealt with the topic. But as he 
 had a very scanty array of statistical facts, his account is not 
 analytical, and is far from being exhaustive or satisfactory. It is 
 "very hard for a man, who has gone on to middle age in the 
 twilight, to accept evidence which alters his impressions. I do 
 not say this of my friend, Mr. Fawcett, whose mind, to the last 
 days of his life, too early closed, was singularly receptive of new 
 information. 
 
 One, out of the calamities which afflict political economy, is the 
 constantly recurrent phenomenon, that all or nearly ah 1 its fallacies 
 are partially true. There is some truth in the mercantile theory, 
 in the balance of trade theory, in the protectionist theory, in the 
 Ricardian theory of rent, in the bimetallic theory of currency, in 
 the fair trade revival, in the doctrine of reciprocal liberty, even in 
 the Liberty and Property Defence League. It is so in history. There 
 is some value in a mere arrangement of facts in chronological 
 order, without any indication of sequence or connection. There is 
 some value in what is called constitutional history, i.e., the dis- 
 covery in documents, and the partial analysis of the machinery of 
 administration and legislation, at various epochs of English 
 history, though the principle or practice has been in existence, 
 certainly for some time, possibly for a long time, before its activity 
 is announced, as the record in which the fact is preserved was
 
 308 THE GUILD AND APPRENTICE SYSTEM. 
 
 composed, when a multitude of analogous records have perished. 
 There is some value in what is called the philosophy of history, 
 i.e., the analysis of the motives which have influenced considerable 
 persons, and of the power such persons have had in moulding the 
 destiny of nations, though here a pernicious habit of paradox has 
 been indulged, under which, for instance, Henry VIII. is made to 
 appear a patriot king ; Elizabeth, a capricious woman without a 
 policy ; Mary Stuart, a virtuous and ill-used princess ; and so on, 
 through the ages. Of course these whims have no vitality beyond 
 the popularity of the writer, but they are immeasurably wearisome. 
 I hope that I may, in the course of such lectures as these, deal 
 with most of these half-truths in political economy, and unless I 
 am mistaken, I shall incidentally show, out of solid and unmis- 
 takable economical facts, how baseless are many of the conclusions 
 which pass current as constitutional principles, or historical 
 philosophy. 
 
 Now, the particular half-truth which arrested Mill in his analysis 
 of the labour question, quite apart from the total ignorance under 
 which he suffered in reference to the history of labour and wages, 
 was the wage fund theory. This, like the law of diminishing 
 returns, is, as I have told you, the transference of a theoretical 
 hypothesis into the sphere of an actual condition of fact, and 
 thence to an economical law. It is quite true that in theory, and 
 at a given point of time, could we conceive that the industrial 
 machine was in equilibria, the amount of capital destined to 
 reimburse the workman for the labour which he has advanced, or 
 lent to the employer, is an exact quantity. Now, Mill thought that 
 this theoretical quantity was, in the ceaseless activity of human 
 industry, an actual quantity, that it was inelastic and incapable 
 of increase, not only at an incommensurable point, but in a 
 measurable space of time. This is the meaning of his celebrated 
 paradox, for it is no better, that demand for commodities is not a 
 demand for labour, a position on which he insists with unwonted 
 pertinacity, I had almost said, passion. I have already pointed out 
 to you that a demand for commodities is a demand for labour, that 
 even the comparative slackness of demand for commodities, by no 
 means involves a slackness in the demand for labour, and that the 
 manner in which an urgent demand for commodities is met, is by
 
 MR. MILL'S WAGE FUND. 309 
 
 turning wealth from its passive condition as an accumulation into 
 its active condition as capital, loanable by the employer or self- 
 supplied. I could easily anticipate the satisfaction with which 
 many persons engaged in production would respond to the demand 
 for commodities, and the rapidity with which the demand for labour 
 would arise. 
 
 But, as Mill had committed himself to endorsing the fallacy of 
 the wage fund, he was driven to certain logical inferences from it. 
 If the sum destined for the wages of labour was an inexorably fixed 
 quantity, incapable of accretion by any human means, it follows 
 that a demand for commodities only means the diversion of labour 
 from one to another calling ; one of the curious delusions which 
 political economists fall into when, having derived their notions of 
 capital from bankers' balances, they assume an equal mobility for 
 all industrial agencies. Does, however, any man of practical expe- 
 rience imagine that an urgent demand for cotton cloth will draw 
 on the reserve of agricultural labour, or that if, for example, more 
 persons are employed, or the same persons employed more con- 
 tinuously in weaving cotton, this will have any effect whatever on 
 the employment or wages of farm hands ? But, to be even partially 
 true, the wage fund theory would require that each calling should 
 have its own wage fund, on which the wage fund of other callings 
 cannot trench. If, however, each calling has its own separate wage 
 fund, the demand for the commodities produced by that calling will 
 inevitably create a demand for labour, by which commodities can 
 alone be supplied, the addition of capital, provided it be forth- 
 coming, as it always is in saving or settled countries, and the 
 transference of a part of the fund of passive wealth into the agency 
 of active wealth. I venture upon saying that, if I were to ask any 
 practical man of business, in any of our great or, for the matter of 
 that, small centres of industry, as to the process by which an ex- 
 ceptional demand would be met, he would tell me that I had put 
 into words the result of his experiences. 
 
 Now the consequence of Mr. Mill's theory, at present, I believe, 
 dropped by the economists of his school, is, that if any combination 
 of workmen succeed under any circumstances, under which there is 
 an urgent demand for their labour, in getting better wages for their 
 work, or even in case they get these higher wages by the sponta-
 
 310 THE GUILD AND APPRENTICE SYSTEM. 
 
 neous offers of competing employers, they are, by bettering their 
 own lot, worsening the lot of other labourers, whose share in the 
 fixed quantity is pro tanto diminished. The doctrine of the wage 
 fund, enforced by the high authority and the sterling character of 
 Mr. Mill, has been made a perpetual weapon of attack against the 
 labour partnerships of working men. These men have been in- 
 formed, very superfluously, because very erroneously, that the efforts 
 which they are making to better their condition are against the 
 laws of political economy, and are assured, as they are assured 
 under the Eicardian law of rent, that the wages of labour are low 
 and inelastic by a natural, or even providential, arrangement. It 
 is no wonder that they resent such interested nonsense. It is to be 
 regretted that they are apt to repudiate economic science altogether* 
 and even utter : " If political economy is against us, we are against 
 political economy." 
 
 The ordinary teaching of political economy admits that all wealth 
 is produced by labour, but it rarely tries to point out how one of 
 the producers can secure the benefit of his own product. It treats 
 of the manner in which wealth is originated, but it generally post- 
 pones the analysis of the process by which it is distributed. It is 
 attracted mainly by the agencies under which wealth is accumu- 
 lated, as a general does military force, and it is more concerned 
 with its concentration than it is with the process of its partition. 
 Most writers on political economy have been persons in easy cir- 
 cumstances, or have been intimates of those who are in easy cir- 
 cumstances. They have witnessed, with interested or sympathetic 
 satisfaction, the growth of wealth in the class to which they belong, 
 or with which they have been familiar. In their eyes the poverty 
 of industry has been a puzzle, a nuisance, a problem, a social crime. 
 They have every sympathy with the man who wins and saves, no 
 matter how, but they have not been very considerate for the man 
 who works. They lecture the poor on their improvidence, their reck- 
 lessness, on the waste of their habits. But I have never read any 
 of their works in which they have raised the question as to whether 
 these traits in the character of workmen, assuming them to be true, 
 are not historically traceable to some manipulation of the processes 
 by which wealth is distributed, processes which they candidly and 
 truly inform you are of human institution only.
 
 ASSOCIATIONS OF CAPITAL OR OF LABOUR. 311 
 
 Now I am one of those persons who believe that, on the 
 hypothesis of perfect freedom in all innocent action, the agency 
 of the State should be limited to the protection of the weak against 
 the strong, and I have never, in vote or speech, swerved from that 
 principle. As I deprecate the unnecessary interference of the State 
 on behalf of the workman, so I deprecate the action of the State in 
 permitting restricted devises, remainders, or reversions to the re- 
 puted heads of private families. But if the law permits or sanctions 
 anti-social privilege, the community must expect a socialist propa- 
 ganda. If, by its enactments, the State permits people to be pro- 
 tected against the consequence of their own vices in one class of 
 life by the mechanism of settlements, it must not wonder at another 
 class demanding an eight-hours day from the legislature, or at some 
 people talking loosely about the nationalization of land. One eco- 
 nomic fallacy, if it be discerned that it is conceded to in order to 
 subserve a special interest, is sure to beget another, which would, 
 if it could, and may perhaps hereafter, deal unfairly with that pro- 
 tected or bolstered interest. In the fifteenth century workmen had 
 an eight-hours day, probably by their own concerted action, assu- 
 redly to the advantage of employers. I hope hereafter to state what 
 is, in my opinion, the economic defence of a restraint on laissezfaire 
 in some directions. 
 
 When men put their capitals together in any direction, neither 
 society nor political economists have a word to say against them. 
 The defence of such associations is obvious, their utility unquestion- 
 able, their necessity in some cases indisputable. No fortune, how- 
 ever vast, could have constructed the North-Western Eailway, the 
 Suez Canal, or even a fleet of ocean-going steam-vessels. These 
 are undertakings the risks of which would be too great for private 
 capital, the profits too remote,, even if the individual could supply 
 the funds. The bias of the present age is continually towards the 
 joint-stock principle, i.e., the aggregation of small capitals into 
 industrial avocations. There is no little reason to believe that the 
 development of this tendency has had a considerable effect on the 
 depression of prices, because people interpret the profits of capital 
 by the cost of acquiring that from which their profit is derived, not 
 by the accumulated cost of that which they have purchased. Very 
 possibly, the business or undertaking which has been turned into a
 
 312 THE GUILD AND APPRENTICE SYSTEM. 
 
 joint-stock enterprise is weighted at its inception by an excessive 
 price. In course of time it is found to be unworkable at that 
 price, and the undertaking is wound up, and reconstructed with a 
 diminished capital. This process may go on again, till the ultimate 
 possessors have procured it at far less than its intrinsic value. 
 Under such circumstances, as prices are modified by the competition 
 of capitalists, the undertaking of the same kind which has not 
 undergone this process is at a disadvantage in the competition 
 against that which has, and can therefore afford to undersell. It 
 is true, underselling does not tend to go further than is necessary 
 in order to get a sound footing, and to displace rivals ; but, as com- 
 petition increases and becomes sharper, the process by which the 
 footing is gained and rivals are displaced is more prolonged and 
 more costly. But it is plain that the agency whose capital is small 
 in proportion to its expected or possible profits is at an advantage 
 in the struggle. 
 
 But in the experience of life, and under the traditions of society, 
 if in a commercial undertaking, the capital of which is collected by 
 these small contributions, the business is carried on with integrity, 
 or, at least, with success, if demand is interpreted clearly, and 
 supply is regulated shrewdly, so as to secure the largest possible 
 profit to the undertakers, to use Smith's excellent word, not only is 
 the business welcomed as legitimate, but the managers or agents of 
 it are applauded. If it be greatly successful, the promoters are de- 
 scribed, by no purposed adulation, as merchant princes, pioneers of 
 industry, creators of public wealth, benefactors of their country, 
 and guarantors of its permanent progress. They are presumed to 
 be peculiarly fit for offices and titles of honour, to merit places in 
 Parliament, occasionally to be even qualified for the transmission 
 of hereditary fortune, rank, and authority. It may be discovered 
 on analysis that they have made no wealth, but have simply 
 gotten it, or that their profits are extorted from the small earnings 
 and the prolonged labours of the downtrodden and helpless. What 
 matter ? the wealth is won, and they who witness the riches which 
 have been acquired take 110 thought of the process by which they 
 have been aggregated. Perhaps it is impossible and unjust to blame 
 that which society permits, or, it may be, cannot of its own force 
 prevent. For if the State guarantees employment and wages, it
 
 THE TRADE UNION A PARTNERSHIP. 313 
 
 can be only to some applicants, and to these, so far Mill is right, 
 it will give employment and wages at the cost of others, for the 
 State has no means of its own, and must get its funds by taxation 
 or loan. But a loan is only deferred and disguised taxation. If all 
 men who are ready to work are to be provided with occupation by 
 the State, you must not only get it for carpenters and masons, 
 peasants and unskilled labourers, but clients for a lawyer, patients 
 for a doctor, and, vox Iwrrenda, a congregation for a preacher. 
 There was a time, between 1558 and 1688, when the last provision 
 was thought to be the province of the State, but, at the latter date, 
 the State became wiser or more considerate, and passed a Toleration 
 Act. 
 
 Now in a trade union or labour partnership the workmen do pre- 
 cisely that which the promoters of joint-stock enterprise undertake. 
 The latter are individually too poor for the enterprise ; collectively 
 they are rich enough. They are too weak alone ; they are strong enough 
 in union or combination. The sacrifice of the present to the future, 
 however assured the future may be, is too serious for the individual, 
 it is obvious to the corporation. The association may be called into 
 being in order to perform a great service. Perhaps no greater ser- 
 vice was ever performed by a joint-stock company than that of the 
 Bank of England to England and the nation in 1694 and 1695. 
 The richest patriot would have shrunk from the self-devotion which 
 was necessary in that eventful year, when the capture of Namur 
 gave promise that the English might be on land what they had two 
 years before showed themselves on sea at La Hogue. 
 
 The workman has only one thing to sell, the skill of his hands. 
 This commodity, to use economic terms, is exceedingly perishable. 
 If it be unsupported by its necessary supply, it rapidly deteriorates. 
 Labour, unlike other finished articles in demand, cannot be kept 
 out of the market without prodigious loss to the owner. Fortu- 
 nately for the possessor, could he only make a universal joint -stock 
 company comprising the capitals of all workmen within the same 
 craft, his existence and work is so necessary that he could, on the 
 hypothesis given above, dictate his own price to his employer. He 
 will never claim, to be sure, a price which will destroy his employ- 
 ment by destroying his employer's remuneration. The mere fact 
 that he could diminish this, and perhaps prevent the growth of
 
 314 THE GUILD AND APPRENTICE SYSTEM. 
 
 rent, is the key to the prolonged struggle which I have often* 
 referred to, in which the workmen were for two centuries a 
 victorious, and for three a defeated, class. The combination which 
 in capital was considered beneficent, in labour was treated as 
 felony, and even when the felony was extinguished by abrogating 
 the labour statutes, was left to the elastic interpretation of the 
 common law doctrine of conspiracy, if there be a common law 
 doctrine of anything. 
 
 Up to 1825, all labour partnerships were proscribed. Now it 
 would not be in human nature, that action, which had been 
 passionately suppressed for centuries, should not be conceived of 
 immense importance to those who had suddenly recovered the 
 liberty of association. The concession of free action is a great 
 acquisition, even if people are puzzled with the unaccustomed 
 boon, and make an unprofitable and erroneous, perhaps even a 
 criminal, use of it. The blame of so ill a use lies much more afe 
 the door of those who have, for their own ends, refused the liberty 
 of spontaneous action than it does at the door of those who abuse 
 what they have recovered. The natural inclination to exaggerate 
 the importance of what they had won, was heightened in the work- 
 man's mind by the new steps which were taken to indirectly annul 
 the gift, by bringing these associations under the law of conspiracy, 
 by refusing to allow their partnerships the protection accorded to 
 benefit societies, and by permitting the secretaries of such associa- 
 tions to embezzle their funds with impunity. Even now the move- 
 ment, instead of being welcomed, as a virtual exposition of the 
 joint-stock principle as applied to labour, and therefore as just and 
 as innocent as any analogous institution among capitalists for the 
 furtherance of manufacture and trade, is looked on with suspicion 
 and dislike, constantly misrepresented, and as far as possible 
 thwarted. 
 
 Every calling, especially those which are professional, always has- 
 its own code of honour. There are offences against the unwritten 
 code of these callings which are punished by the members of these 
 callings with the connivance, perhaps with the approval of the 
 public. Is that wrong per se in working men which is right in 
 medical and legal practitioners? If a physician or surgeon is guilty 
 of unprofessional conduct, his fellows decline to serve with him, as-
 
 THE EMANCIPATION OF TRADE UNIONS. 315 
 
 far as possible exclude him from their society, or even exclude him 
 from practice. Misconduct at the bar is occasionally punished 
 with a formal deprivation of a barrister's privilege. It is possible 
 that the reference of a solicitor's conduct to the Incorporated Law 
 Society's action has not been a complete success, and that it would 
 be better superseded by a court of honour which should take cogni- 
 zance of misconduct which now passes unchallenged. I see no 
 reason why a similar rule of action should not be adopted by arti- 
 sans, and acknowledged by employers. It might make better and 
 more trustworthy workmen ; for the machinery of such a censorship 
 would certainly increase the self-respect of those who were sub- 
 jected to it. 
 
 The machinery of a strike, the war of the workmen, is seldom 
 successful. It is generally adopted at the least advantageous time, 
 that in which the demand for labour is diminishing, and therefore, 
 when the workman is most in the power of the employer. But 
 this cannot be made a reproach to the workman. It rather implies 
 that he does not make use of his lost opportunity, a strike in the 
 midst of a rising market. The workman appears to let the market 
 do its own work when the demand is in his favour, and when 
 profits are exceptionally high, to look for only a small part of the 
 increased advantage. Of course when he does get exceptional 
 wages in a time of exceptional profits, calumny is busy about him, 
 and grotesque fables are circulated about the way in which he 
 expends his enhanced earnings. If the men were unforgiving they 
 would treasure up the memory of these libels. 
 
 In recent times, intelligent employers have begun to see that 
 what economists, who understand facts, defend as the right of the 
 workmen, has its advantages from the point of view of the master. 
 The practice adopted in many trades, where a unit of value can 
 be easily taken and understood, is to make that unit the basis of 
 a sliding scale. I have been told by persons engaged in the iron 
 trades that the system of a sliding scale works well. I can well 
 believe it, because it assists in settling what is always of interest 
 to the producer, the anticipation of price. As I have often stated, 
 the anticipation of a price is the problem before the capitalist 
 producer, the regulation of market values, the one desideratum, of 
 those who engage in productive industry. Besides, the profits of
 
 316 THE GUILD AND APPRENTICE SYSTEM. 
 
 the capitalist and the remuneration of the labourer are both forms 
 of wages, the question between the two being merely a settlement 
 as to the share due to each. I tried, of course in vain, to introduce 
 the principle into the Irish Land Act of 1881. 
 
 Mr. Mill was in error when he believed that an increase of wages 
 can only be procured at the expense of profits, an error tbe more 
 remarkable, when one remembers that he detected or endorsed the 
 economical principle that high wages did not necessarily mean dear 
 labour, or low wages cheap labour. No doubt if higher wages were 
 paid while the efficiency of the labour is not increased there would 
 be an immediate and apparent loss to the employer. But it may be 
 recouped out of rent, which may diminish, or it may be refunded 
 by the consumer. The latter condition of things prevailed during 
 the first half of the seventeenth century, as I have shown you. 
 But in the last half, when the wages of labour rose 50 per 
 cent., wages did not suffer nor profits either. If the labour becomes 
 more efficient, it is certain that the enhanced advantage will 
 remain with the employer long before it reaches the workman. So 
 it was in the first half of the eighteenth century, when profits were 
 high, prices low, and labour wages were very slightly altered. 
 
 The full concession of freedom in the formation of labour part- 
 nerships is a remedy, and one of the best remedies against those 
 socialist movements which demand the intervention of Parliament 
 on behalf of the labourers' employment. In countries where the 
 Government manages its subjects too much, socialism in a more 
 or less menacing form prevails. There are ominous signs that in 
 countries where protectionist theories are adopted, there is spring- 
 ing up a movement under which the immigration of labour, how- 
 ever sparsely peopled the country may be, is threatened with 
 regulation or even prohibition. This is the talk in the United 
 States, and in the Australian colonies. It seems that the predic- 
 tions and pledges of protectionist statesmen have been falsified by 
 facts. Wages have not increased so rapidly as profits. The rich 
 are getting richer, the poor poorer. Again and again it has been 
 proved that high prices do not make high wages. But in England, 
 though here there is just cause for discontent, the doctrine that 
 the State should find employment and fix wages has made but 
 little way. In England no producer is assisted to a price, and
 
 THE TBADE UNION A REMEDY AGAINST SOCIALISM. 317 
 
 therefore no workman has a plea that lie himself should be. Be- 
 sides, there is a widespread belief that workmen, if the whole 
 order had only public spirit and would consent to combined action, 
 coupled with prudent counsel, have their fortunes very much in 
 their own hands. Only they feel that it is not a little hard that the 
 best of then- order have borne the brunt of the struggle, while others 
 whom they have materially assisted, refuse to enter into the asso- 
 ciation, and take unfair advantage. The utmost, however, that 
 they would see restored is the system of apprenticeship, and the 
 excuse that they make for this demand, is not that it will assist in 
 raising the rate of wages, but that it will secure the efficiency of 
 the workman.
 
 XV. 
 
 THE EISE AND PROGRESS OF THE COLONIAL TRADE. 
 
 Early English commerce The discoveries of Portugal and Spain 
 The English buccaneers The American plantations The sole- 
 market theory Wars of conquest, of religion, of trade The Irish 
 manufactures The colonial system The duties on colonial timber 
 and sugar Enumerated and unenumerated goods The doctrine 
 of the flag Colonies of conquest and of settlement Canada and 
 the Cape The surrender to the colonists The tie which binds the 
 Colonies Loans by Great Britain. 
 
 I POINTED out to you, in an earlier lecture, that the English nation 
 was not for many years, not for many centuries, an inventive 
 people, and that it was slow to adopt the discoveries of other nations. 
 I sought to show you, what in my judgment was the original cause 
 of this singular backwardness, and what were the causes which 
 brought about the surprising and, apparently, enduring energy of 
 the eighteenth century. And though, in the judgment of all those 
 whose judgment is worth anything, the policy which created the 
 opportunity was an erroneous one, and was certain to bear its own 
 Nemesis with it, it is the duty of the historical economist, to take 
 measure of facts which have had their effect on the destinies of 
 nations. I do not imagine that the elder Pitt thought much of the 
 effect which would be induced on the industrial capacity of the 
 English when he entered on the Seven Years' War, and saw realized 
 his dream of a mercantile empire at its conclusion, or anticipated 
 that the very efforts which he had made would assuredly be, 
 whether the English Government were foolish or neutral, the 
 stimulus to colonial independence. In the same way the Govern-
 
 EARLY ENGLISH COMMERCE. 319 
 
 ment of Louis XVI., in their anxiety to retaliate on the English 
 people, for the sacrifices which they had to make at the Peace of 
 Paris, never dreamed that when they were assisting the American 
 plantations to independence, they were making the French revolu- 
 tion an inevitable consequence, and with it the destruction of the 
 ancient monarchy a proximate result. 
 
 As the English were slow to invent, so they were slow in 
 maritime enterprise. Their kings had for near four centuries, 
 considerable transmarine possessions, and these possessions were 
 lost, recovered, lost again, recovered again, and finally passed away 
 from them with great facility. Other peoples and other kings have 
 held distant possessions for much longer periods. The inheritance 
 of the house of Burgundy remained with the elder branch of the 
 house of Austria from the last quarter of the fifteenth century to the 
 first quarter of the eighteenth, and with the younger branch from 
 that date till a century later. In conquests, the English seemed 
 destined to win, but unable to keep. The explanation of this is 
 to be found in the traits of the English political character, on 
 which indeed I have very decided opinions. But they are not 
 economical, and I will not detain you with a dissertation on our 
 national characteristics. 
 
 In commerce, as I have already said, for many centuries, the 
 mercantile marine of the English, though considerable enough to 
 excite the envy, and stir the gall of our neighbours, was by no 
 means venturesome. The account given of it at the beginning of 
 the fifteenth century confines it to the Baltic and the French coast as 
 far as Bayonne, though some ships may have coasted Biscay, and 
 even reached Lisbon. In the middle of the century it seems that 
 the limits of its trade were not extended, for the French critic 
 notes, after charging the English with piracy in the narrow seas, 
 that with all their marine they were not at the pains to put down 
 the Barbary and Algerine pirates. Only two capital discoveries 
 were made by the English in the fifteenth century. At the com- 
 mencement of it, the Bristol merchants, by the aid of the mariner's 
 compass, reached Iceland by the eastern route ; at the end of it 
 another Bristol adventurer discovered Newfoundland. But we hear 
 nothing more of the former exploit, and we know that no results 
 ensued from the discovery of Sebastian Cabot in 1497. In the reign
 
 320 PISE AND PROGRESS OF THE COLONIAL TRADE. 
 
 of Henry VIII., as we learn from a statute regulating the cost of 
 freight, English vessels ventured a little farther, to the crane of 
 Seville. But they did not enter the Mediterranean, or give any 
 presage whatever of that bold maritime enterprise which was to- 
 characterize them in the latter part of the sixteenth century. Till 
 the time of the great captains or buccaneers of Elizabeth's reign,, 
 their only new venture was the unlucky voyage of Willoughby 
 round the coast of Norway and Sweden, when one ship reached 
 Archangel. 
 
 But during this period of strange inaction or hesitancy, great 
 discoveries were made. Long before the Bulls of Borgia were 
 granted to Portugal and Castille, Prince Henry of Portugal had dis- 
 covered the Canary and Cape Yerd islands, and had coasted along- 
 the north-western shore of Africa. The spirit of enterprise was 
 kept up by Portugal through the fifteenth century, at the conclusion 
 of which, in 1497, the Cape was doubled, and the foundation was 
 begun of the Portuguese settlements in Asia, both on the Indian 
 Peninsula and in the Eastern Archipelago. Spain discovered the 
 New World and speedily got possession of Central America, and 
 the Pacific coast of the Andes. While English voyagers had hardly 
 trusted themselves out of sight of land, other nations had crossed 
 the oceans and founded empires or factories. Like the early settle- 
 ments of all European nations, the ultimate object of these 
 conquests or occupations was the creation of a sole market, a right 
 guarded jealously and angrily, as we know from the issue of the 
 Darien expedition. After the Treaty of Utrecht, the subordinate 
 agreement, known as the Assiento treaty, the commencement of 
 the English slave trade, the proximate cause of the South Sea 
 Bubble, and the occasion of a short war with Spain, was the con- 
 cession of a very limited right of trade with the Spanish plantations. 
 The Spaniards governed their colonies in a peculiar manner. No- 
 one was permitted to have a share in their administration, unless- 
 he were a native Spaniard, sent out for the purpose. Men born,, 
 though of the purest Spanish blood, in these settlements, were per- 
 petually disabled from all share in the government of the colony. 
 It is no wonder that the Spanish colonies revolted. The wonder 
 was, when Canning, as he said prematurely, called in the New World, 
 in order to redress the balance of the Old, that the revolt had not
 
 THE DISCOVEEIES OF PORTUGAL AND SPAIN. 321 
 
 occurred long before. No human ingenuity could have suggested 
 a worse government than that of the Spanish colonies. The ad- 
 ministration of Spain itself was had enough, but it was wisdom 
 compared with the other. 
 
 This lack of commercial enterprise in England was, I do not 
 doubt, due to the cause which I have before commented on. Eng- 
 land produced next to nothing for foreign trade, and had therefore 
 nothing to traffic with. Its industries, such as they were, were for 
 itself, with a small overplus of coarse goods for its neighbours. This 
 appears to me to be indicated by the maritime enterprise which 
 characterizes the latter part of the sixteenth century. The great 
 captains of the age, Drake, Frobisher, Hawkins, Ealeigh, were 
 buccaneers or pirates, on the look out, not for opportunities of trade, 
 or for the foundation of colonies, but for plunder, or at best for 
 gold. They plundered the Spanish and Portuguese ships on the 
 high seas, intercepted the Plate fleet, and did mischief in the 
 Spanish ports. One of them visited Labrador, and struck with the 
 masses of bright crystal on the coast, conceived that the stone must 
 contain gold, and shipped it to England. Ealeigh was fired by the 
 example of Cortes, and dreamed of an American city, which like 
 the ancient and forgotten buildings of the giant kings before Noah, 
 were composed of gold, silver, and precious stones, which he called 
 Eldorado. Undoubtedly the enterprise of Elizabeth's later years 
 was supremely useful, but the taint of the original buccaneering 
 clung to it, till the English people, somewhat late in the day, 
 checked it by hanging Kidd and his comrades at Execution dock. 
 But by the time of William III. English trade had become important 
 enough to turn buccaneering from an heroic virtue into a crime 
 which had to be suppressed. 
 
 The English Government has never colonized, except with con- 
 victs. English settlements had the inestimable advantage of being 
 spontaneous, or, at least, of having owed more to the neglect of 
 the mother country than to its interference. Practically the first 
 settlement of Englishmen on the western shore of North America, 
 was due to the emigration of the Puritans who fled from the 
 ritual and discipline of Laud, for the first settlement of Virginia was 
 a total failure, though the name survived. The places where these 
 -colonists landed are now great and wealthy cities, united into a 
 
 22 
 
 I
 
 322 RISE AND PBOGEESS OF THE COLONIAL TEADE. 
 
 gigantic confederation. But when they were first settled, the 
 colonists had to contend with an inhospitable climate, a barren soil, 
 and the enmity of shrewd, active, and bloodthirsty savages. I never 
 saw land so utterly uninviting as that of the Atlantic sea-board from 
 Maine to New Jersey, and yet I have examined the agriculture of 
 the North German plains. The country I speak of is not only in- 
 fertile, but subject to tropical heat in summer, and Arctic cold in 
 winter. It is infested by tormenting and destructive insects, the 
 latter a periodical plague. It had one perennial source of plenty if 
 not of wealth as yet, in its fisheries. 
 
 The American plantations readily acquiesced in the English 
 Commonwealth. They fell in as readily with the Restoration. The 
 capture of New Amsterdam from the Dutch, and its new name,, 
 taken from the Duke of York, gave the English settlements a sea- 
 board from Maine to the Carolinas, for New Jersey followed the 
 fortunes of New York. The settlers had penetrated very little 
 inland, when the Cal verts founded Maryland, and Penn the Quaker 
 the great state which goes by his name. These later plantations 
 were settled at the expense of English adventurers, who had the- 
 hereditary government of the colony, ultimately bought up by the 
 British Government, when the trade of the colony was worth con- 
 trolling. The early history of these settlements has been occupy- 
 ing the attention of Mr. Doyle, of All Souls. The first of these to 
 attract the attention of the English Government from the point of 
 view before English merchants and statesmen who wished to 
 conciliate English merchants, I mean the establishment andt 
 maintenance of a sole market, were the Southern Plantations, and! 
 in particular Virginia, one of whose products rapidly procured a; 
 European reputation and a European market. 
 
 This product was tobacco. Europe gave the sugar cane and 
 the cotton plant to the New World, and received from it maize, 
 tobacco, and the potato. Tobacco smoking, as all the world 
 knows, was common enough in England during the early part of 
 the seventeenth century, to excite the ire and stimulate the 
 literary activity of the unwashed James. It appears to have- 
 been cultivated in the midland counties, and particularly in 
 Gloucestershire. Under the new tariff of the Eestoration, the 
 manuscript of which one of the few volumes which survived the
 
 THE AMERICAN PLANTATIONS. 323 
 
 fire in which the old Palace of Westminster was destroyed is 
 preserved in the House of Commons Library, signed by Sir Harbottle 
 Grimstoii the Speaker, tobacco was subjected to a customs duty, and 
 the English cultivation of it was forbidden. Then recourse was had 
 to Spanish tobacco, but this was very dear, 10s. to 12s. a pound. 
 Soon the cultivation made great way in Virginia, where it was 
 easily raised and cured, and from which it could be sold cheaply. 
 In a few years, Virginia expelled Spanish tobacco from the 
 English market. For a time the two kinds were mixed. Soon, 
 however, only colonial tobacco was imported. A few years later 
 and the produce of the British colonies supplied the world. It 
 became the basis of a new fiscal system, a compact between Eng- 
 land and her American colonies, and was pressed into the service 
 of that commercial scheme which was thought to be the highest 
 wisdom. This was the sole-market theory. 
 
 The doctrine that the commercial prosperity of a country 
 depends on the creation, maintenance, and extension of a sole 
 market for its products and for its supplies, was prevalent from 
 the discovery of the New World and the Cape Passage down to the 
 war of American Independence. This was the principal object of 
 Borgia's Bulls. This was what animated the Dutch, in their 
 successful, in the end too successful, struggle, after a monopoly 
 of the Spice islands. This was the motive which led to the 
 charters of the Piussian Company, the Levant Company, the 
 East India Company, the Turkey Company, the Hudson's Bay 
 Company, in England. The theory was organized in the colonial 
 system, which Adam Smith examined, attacked, and as far as argu- 
 ment could go, demolished in his great work. But the dream of a 
 sole market is still possessing the Germans and the French. The 
 insane passion for this costly and ruinous monopoly has led to 
 the raid on Tonquin, and the scandalous and unjustifiable attack on 
 Madagascar, by the latter, to the protectorate of Zanzibar, the 
 settlement on Angra Pequena, and the occupation of North New 
 Guinea by the former. How long the experiment will be per- 
 sisted in I cannot guess. Nations and governments are seldom 
 willing to confess themselves to have been in the wrong, and, 
 indeed, nations have little opportunity for giving effect to their 
 regrets, as long as their rulers are impenitent, and do not per-
 
 324 BISE AND PBOGBESS OF THE COLONIAL TBADE. 
 
 sonally suffer for their errors. But this I can predict with 
 confidence. For every pound's worth which these peoples buy 
 and sell in their conquests and occupations, they will have to 
 pay another pound out of German and French taxes in order to 
 maintain and secure the sole market, even if they get off as 
 cheaply as that. I know pretty well what our colonies of conquest 
 have cost us, and still cost us. These colonies of conquest 
 were all made with the object of a sole market, and we have in 
 return from the people whom we have created, protected, and 
 maintained at an enormous cost, the grateful acknowledgment of 
 hostile tariffs. 
 
 The early wars of Europe were wars of conquest. Such 
 were our wars with France. Such was the extension of 
 North-eastern Germany by the Teutonic knights at the ex- 
 pense of the Slaves of old Prussia and Lithuania, and of the 
 Hanseatic League. After them came the wars of religion, from 
 the outbreak of the Insurrection in the Low Countries, and the 
 civil wars in France, down to the Peace of Westphalia in the 
 middle of the seventeenth century. From that day to our own, 
 European wars have been waged on behalf of the balance of 
 power, the principal mischief-maker in the contest being France. 
 The English, the French, and the Dutch were the competitors in 
 the wars for a sole market. But Holland was practically ruined 
 at the peace of Aix-la-Chapelle, and France was stripped, as I 
 have told you, of her colonies at the peace of Paris, and England 
 became not only the principal maritime, but the principal 
 manufacturing and mercantile country in the world. As regards 
 English trade, however, though India was an outlet to some 
 extent for English goods, its trade was in the hands of a chartered 
 company, whom the Seven Years' War had left in serious straits. 
 The most important sole market which Great Britain had 
 acquired by her wars was the sea-board of North America. To 
 support the finances of the chartered company, the British 
 Parliament determined on taxing the inhabitants of her sole 
 market, and the result as you know was the war of American 
 Independence, and with it the explosion of the theory which I am 
 about to describe. 
 
 The colonial or sole-market system was based on a strict recip-
 
 WARS OF CONQUEST, OF RELIGION, OF TRADE. 325 
 
 rocity. The English Government admitted colonial produce into 
 the English markets at differential duties, or prohibited the produce 
 of foreign nations and foreign colonies altogether. The Colonies 
 were not only the customers of English manufacturers only, 
 to the absolute exclusion of foreign manufactures, but were 
 prohibited from undertaking those manufactures themselves. 
 The English Government adopted \vith their colonies the policy 
 which they adopted with Irish manufactures, which they also 
 prohibited, but with this difference, that they disabled the Irish 
 from having any trade whatever with England, with the Colonies, 
 and with foreign countries. They wished to extinguish, with one 
 exception, every Irish product, and to constitute themselves the 
 sole manufacturers and shopkeepers for the Irish. They allowed 
 only the linen manufacture of Ulster. The Irish were to be, with 
 this exception, agriculturists only, but they were to be disabled 
 from selling their agricultural produce in England, or elsewhere. 
 They were practically denied the right of trade. I need hardly 
 inform you, that under these conditions, the position of the 
 peasantry, subject through Poynings' Act to the English Privy 
 Council, and constrained to pay rack-rents to landowners who were 
 frequently absentees, was that of a race which is constrained 
 to pay tribute, under the most disadvantageous terms. The 
 commercial relations of England and Ireland, from shortly after 
 the Restoration to the acknowledgment of the independence of 
 the Irish Parliament, were in the last degree oppressive to the 
 latter. It was the doctrine of the sole market in its most 
 exaggerated form. 
 
 To external appearance the relations of the colonial system were 
 reciprocal and beneficial. There are certain minds to which 
 this reciprocity is even now exceedingly attractive, and unless we 
 are wrongly informed, there are not only individuals but a party 
 which would seek to restore this ancient condition of tilings not 
 indeed in its full force, for to that there are grave existing 
 difficulties, not to say vigorous counter theories in the protective 
 laws of most of our colonies, but with as much reciprocity as 
 possible. They would confer, for example, special advantages 
 on the settlers in our colonies for their products, while they are 
 straining every effort to exclude our products, and are even
 
 326 RISE AND PROGRESS OF THE COLONIAL TRADE. 
 
 arguing that the time is come when our workmen should be 
 excluded from settling among them, except on the payment of 
 a heavy customs duty. I take it, if a butcher was constrained 
 by positive law to deal with that grocer only whom he sup- 
 plied with meat, and the grocer to deal with that butcher 
 only whom he supplied with groceries, the ingenuity of man 
 could not devise a more certain process for getting inferior meat 
 and adulterated groceries. But if the butcher were prohibited 
 by law from buying the other dealer's groceries, and the grocer 
 was still constrained to buy the butcher's meat, it is pretty certain 
 that the meat would get worse and worse till it eventually became 
 carrion. 
 
 A brief reflection will show how futile, how mischievous, such 
 an arrangement must have been. A reciprocity of advantage in 
 reality implies a reciprocity of loss. For if the benefit exists in a 
 voluntarily reciprocal trade, it will be appreciated and appropriated, 
 and needs no law to secure it. But the law, it is said, will instruct 
 persons in the benefit which they would not otherwise recognize. 
 This affirms that they who frame the law know better than those who 
 engage in the business what their true interest is in trade. But 
 such a shrewdness on the part of law-makers has never been 
 discovered yet and never will. The men who make laws on trade 
 matters either possess the necessary knowledge of the subject 
 themselves, by having engaged in the trade, or they borrow 
 their knowledge from the people who have more experience than 
 the law-makers possess. Now the man who has the knowledge, or 
 the man who imparts the knowledge, invariably, if he is dis- 
 interested, and does not want to turn the machinery of law to his 
 private advantage, legislates or advises legislation for the purpose 
 of protecting or rather facilitating, and not for creating trade. 
 In other words, he advises that men should find out for themselves 
 where or how to do business, and that the law should be em- 
 ployed only to diminish the risk or cost of the business after it is 
 formed, or to assist in the due satisfaction of contracts after they 
 have been entered into. 
 
 That stage of the colonial trade in which the use of Virginian 
 tobacco superseded that of the Spanish product was a spontaneous 
 and natural advantage to both parties. The colonial system, as it
 
 THE COLONIAL SYSTEM. 327 
 
 was developed later on, did not create and would not have expedited 
 this trade. It is true that in those early days the Navigation 
 Act, originally intended to interfere with the carrying trade of the 
 Dutch, led to the freight of Virginian tobacco being a British 
 monopoly, as far as the ports of Great Britain were concerned. 
 But freight is one thing, trade profit another. The Dutch shippers 
 could not carry, except under penal charges, goods into British 
 ports. But Dutch traders did deal with colonial produce, and very 
 extensively too. Nay, the existence of a sole right of carrying 
 freight, if no restraint is put on shippers, might make it better 
 worth while for the trader to use the services of a foreign carrier 
 than to use those of the carriers of his own people. This is the 
 case at the present time. The British shippers carry goods at a 
 cheaper rate than any other nation does. Some people say at 
 ruinously low rates. Let us assume, for the sake of argument, 
 that this country has procured the carrying trade of the world 
 because it conveys goods at 10 per cent, less than other nations 
 do, or perhaps can, and farther that, one thing with another (the 
 figures are used for illustration only), the cost of freight is 10 per 
 cent, all round of the value of goods delivered at their ports of des- 
 tination. Is it reasonable to conclude that a trader, whose motive 
 to economical action is expectant profit, will sacrifice so great 
 an advantage as is implied in these figures for sentimental reasons ? 
 The effect of the Navigation laws may be profitably studied in the 
 history of the English marine from the Restoration to the Revolu- 
 tion. 
 
 Towards the latter end. of the eighteenth century, American 
 cotton came into the English market. The story of a consignment of 
 some bales to the house of a Liverpool produce broker, Mr. Rathbone, 
 is often quoted by those who scribble books on the romance of trade. 
 The produce was at first neglected. It was afterwards taken up, 
 and out of that original consignment, little more than a century 
 ago, has been developed the prodigious cotton industry of the 
 North of England and Southern Scotland. The trade was in its 
 infancy at the end of the century, though it was making great 
 profits to those who worked up the material. In the debates on 
 the Irish union, Sir Robert Peel, the father of the great minister, 
 demurred to the roseate picture which Pitt and his followers drew,
 
 323 RISE AND PEOGEESS OF THE COLONIAL TRADE. 
 
 of what Ireland would become after the Union ; for the cotton 
 spinner of Bury expressed his alarms at the future rivalry of the 
 Irish. Now no rational person would believe that the use of 
 cotton as a raw material would have been facilitated by the 
 colonial system, then, as far as the American colonists were 
 concerned, abrogated by the fortune of war, more than it was by 
 a rational self-interest, when the utility of the material were 
 discovered. 
 
 The colonial system, under which advantages were secured to 
 the colonial producer by giving him a preferred market in Great 
 Britain, while the colonist was debarred from engaging in manu- 
 factures, was a selfish one on the part of the English merchants 
 and manufacturers. It gave the colonist a sole market, it is true. 
 But it does not follow that a sole market is a high market. On 
 the contrary, it is probable that the offer of a sole market is 
 intended to secure a low market. The Virginian planter sent the 
 whole of his tobacco to England. The English trader re-exported 
 it to other countries, say Holland or Germany. It may be pre- 
 sumed that he made a profit on the original consignment, and on 
 the re-exportation, or he would not have undertaken the business. 
 In such a case the Dutch or German consumer paid more than he 
 need have paid had he dealt first hand with the Virginian planter, 
 and by parity of reasoning, the Virginian planter received less, for 
 the difference between the English imported price, and the Dutch or 
 German re-exportation price, would on every hypothesis of trade, 
 have been shared between the planter and the foreign purchaser. 
 You will observe, too, that the reciprocal business was limited to 
 objects, on the colonial side, which England could not produce ; and, 
 011 the English side, to manufactures which the foreign nations 
 could have produced as well as the manufacturer, who got a sole 
 market for his wares. So inveterate and widespread was the 
 delusion, however, as to the benefits of a sole market, that it does 
 not appear that the colonist resented an arrangement under which 
 he got all the losses and the British manufacturer and merchant 
 all the gains of this regulated monopoly. For he was blinded to 
 the true meaning of the relation by the differential duty put 011 
 goods like his, but produced on colonial soil. 
 
 In course of time these differential duties became to the residual
 
 THE TIMBER AND SUGAR DUTIES. 329 
 
 British colonies after 1782 an apparent advantage, to the English 
 consumer a real lass. About forty years ago, there were two 
 articles of Colonial produce on which the differential duties were 
 serious. These were Canadian timber and' West India sugar. 
 Other countries could supply us with timber of better quality and 
 at cheaper rates than Canada did, for of course, by putting an extra 
 duty on foreign timber, we were giving the Canadian lumberers a 
 price. However, at last the differential duties went with the other 
 tariff reforms, not without warnings that Canada would be disaffected 
 if her lumberers were disabled from rifling our pockets. The sugar 
 duties were defended on different grounds. The English nation 
 had abolished slavery in the sugar colonies of this country, and 
 had compensated the owners of the slaves. But other sugar-pro- 
 ducing countries, as Cuba and Brazil, had not followed our example. 
 When the movement began for the abolition of the differential 
 duty, there arose a cry, " How can the English, who have abolished 
 slavery, purchase sugar produced in those unchristian countries 
 which still maintain this institution ? " Now in my opinion, 
 slavery is detestable. I agree with Wesley, who said that it was 
 the sum of all human villainies, and said that before Granville 
 Sharpe and the elder Wilberforce began their crusade against it. 
 But it is also ruinous to the country which adopts and maintains 
 it, and I am quite certain that its economical disadvantages far out- 
 weigh any economical profit which can be gotten from it. But I 
 am also certain that when a man appeals to my piety and my 
 Christianity in order that he may keep some business advantage, 
 he is a very dangerous man to do business with, a suspicious 
 character. This maxim was well illustrated during the controversy 
 on slave-grown sugar. It was found that some of the loudest 
 humanitarians in Jamaica and Barbadoes had been in the habit of 
 importing slave-grown sugar from Brazil and Cuba, and exporting 
 it to England as genuine free-soil produce. You may be surprised 
 to hear it, but it is a proof how completely phrases take possession 
 of men, when such phrases indicate their material interests, and 
 how little evidence does, for though they were detected they were 
 not silenced. 
 
 Most of the American colonies were constituted under charters, 
 given to the projectors and founders of these plantations. Now it
 
 330 EISE AND PEOGEESS OF THE COLONIAL TEADE. 
 
 was clear that such rights as were possessed by these founders and 
 their representatives, checked the growth of the colony, and 
 materially interfered with the development of the system which 
 seemed so wise and profitable. Hence Parliament, twice in the 
 early part of the eighteenth century, was invited to pass a Bill, 
 under which the rights of the proprietors should be purchased, 
 and the old charters should determine. There was a good deal 
 of opposition shown to this scheme by the representatives of the 
 various families in whose interests the charters were granted. On 
 the first occasion, during the reign of Anne, the Bill was decisively 
 rejected on the second reading. It was again brought in at the 
 beginning of George I's. reign (1715) was then read a second time, 
 and was referred to a select committee, which did not report, and 
 the Bill disappeared. I found among the Parliamentary papers of 
 Mr. Hammond, sometime member for Huntingdon, a number of 
 memorials, similar to those now circulated among members, con- 
 taining reasons against the proposal. They were not known in 
 America, to which country I sent copies of the originals. Ulti- 
 mately these rights were purchased, when they had become 
 considerably enhanced. It is part of the irony of history that the 
 British taxpayer is, or was recently, paying a perpetual pension to 
 the heirs of William Penn, for the surrender of this personage's 
 right in Pennsylvania. 
 
 The colonial system did not preclude the plantations from 
 sending, under the strict conditions of the Navigation Act, certain 
 kinds of produce to other countries than England. These were 
 called non-enumerated commodities, the principal being corn, timber, 
 salted provisions, fish, sugar, and rum. There was a reason for 
 this, which was to be found in the fiscal system of England. We 
 did not want colonial corn, for there were duties on corn, levied in 
 the interest of the landlords, nor colonial timber, salted meat and 
 salted fish, for the home produce of these articles were similarly 
 assisted. Sugar and rum were allowed to be exported, for the 
 owners of the plantations in the Leeward isles were chiefly absentee 
 English proprietors, who had already a monopoly of English 
 supply, and were powerful enough in Parliament to get an extended 
 market elsewhere. But in 1769, just before the troubles broke out 
 with the American plantations, an Act was passed, disabling the
 
 ENUMERATED AND UNENUMEEATED GOODS. 331 
 
 colonists from sending even the non-enumerated commodities to 
 any country north of Cape Finisterre, in Northern Spain. The 
 object of this restraint, was to prevent a trade even in these 
 articles with countries which had any manufacturers, lest the 
 colonists should find out that they could buy goods cheaper than in 
 England. 
 
 The enumerated goods, and there was a long list of them, could 
 be exported to Great Britain only. They consisted, as Adam 
 Smith says, of what could not be produced in this country, and 
 what could be produced in great quantity in the Colonies. But 
 the colonial manufactures were either forbidden altogether, or 
 their exportation and importation within the Colonies were bur- 
 dened with such excessive duties, as practically to confine the 
 manufacture, if it existed, to a scanty home supply. Steel mills 
 and all manufactories for working iron were prohibited in 
 America, trade between the different settlements was forbidden, 
 if the trade was in a local manufacture, in fact, not a horse- 
 shoe or a nail could be forged in the whole of the transatlantic 
 colonies. When, therefore, the War of Independence broke out, 
 the American colonists were agriculturists only. Had it been 
 possible to blockade all the ports, the insurgents would soon have 
 been unarmed, for they could of themselves have provided no 
 munitions of war. Hence the revolt of the plantations was an 
 interruption to British trade, and a signal to other nations that 
 they might now enter on a commerce from which they had hitherto 
 been rigidly excluded. This, I am persuaded, had as much to do 
 with the assistance given to the United States by many European 
 Governments, as any desire to avenge the reverses of 1763. 
 
 The acknowledgment of American independence was supposed to 
 herald the downfall of the commercial greatness of England. When 
 Gibbon declined to meet Franklin, on the ground that he would 
 hold no intercourse with a rebel, the American replied that if 
 the historian had the leisure, he would be willing to supply him 
 with materials for a new narrative, of the decline and fall of the 
 British Empire. He was merely expressing a common opinion. 
 But though England had to abandon the colonial system, and never 
 afterwards ventured to levy taxes by her Parliament on the smallest 
 and weakest of her dependencies, she began to build up a new
 
 332 EISE AND PEOGEESS OF THE COLONIAL TEADE. 
 
 colonial empire. She occupied successively all those parts of the 
 world iu which European races can thrive and increase, and, whether 
 in the course of time she will retain them or not, as nominally 
 dependent on the centre of Great Britain, it is certain that at 
 no remote date the English-speaking races will he more numerous 
 than any other people. The relations which have subsisted between 
 England and her still associated colonies is the topic with which I 
 shall conclude this lecture. As before, I shall deal with the 
 economical relations only, but in fact the political relations have 
 now become entirely economical, for no reasonable person doubts 
 that if the English colonies were decidedly convinced that the 
 interests of the colony made independence seena desirable, no- 
 military attempt would be made to retain the political depen- 
 dence of the settlement. They are to be united to us by the tie of 
 self-interest only, and self-interest is an economical tie. 
 
 I mentioned in an earlier lecture that the doctrine of the sole 
 market was succeeded by the doctrine of the flag. The old phrase 
 was conquest first and law afterwards make trade, a position sadly 
 interfered with by interlopers, buccaneers, and smugglers. The 
 newer phrase was occupation by the sword, or by prior settlement, 
 with the careful management of the colony, with the first process 
 well in view, but with the hope that custom, tradition, and the 
 careful nursing of all which wanted nursing, would carry the pre- 
 eminence of the flag. England now held her colonies. As long as 
 the colonies wanted nursing, as they wanted or thought they wanted 
 it forty years ago, this policy fostered the growth of the British race 
 in distant parts, its extension, and as was hoped, its consolidation. 
 I am speaking of what I noticed (for I was early schooled in these 
 matters, a good while ago), and of what I criticized, not without 
 much obloquy. To a sensible man, convinced that he has no pre- 
 judices, but only facts before him, which he is bound to interpret,, 
 obloquy, especially from a daily or weekly paper, is cackle. I only 
 regret that men whom I have worked with more years ago than I now 
 care to count, seem to be deterred from the logical conclusions of 
 their principles, and even from the facts which illustrate those 
 principles, by utterly unfounded alarms. But the saddest thing 
 in the whole of my experience, is the spectacle of that worst form of 
 senility, the dread of seeing that come which one has laboured for,
 
 THE DOCTEINE OF TEE FLAG. 333 
 
 and the consequent exhibition in maturer life the epoch of the 
 manifestation differs of that in which the best qualities of one's 
 youth are changed into the worst qualities of one's age. 
 
 The doctrine of the flag, when put into the dry language of 
 economists, is that habit, old ties, family, social, political, will 
 correct the narrow and selfish interests which the hot race for 
 wealth in new settlements engenders. These habits and ties are 
 greatly aided by local weakness, and I am sorry to say, the local 
 weakness is too often made a plea for other aid. This is illustrated 
 by the historical relations which have existed between this country 
 and the British colonies of conquest, as opposed to the British 
 colonies of spontaneous settlement. Of the former kind are the 
 colonies of Canada and the Cape of Good Hope ; of the latter, 
 Australia and New Zealand. It will be obvious that a colony of 
 conquest is likely to contain disaffected inhabitants, or ill-affected 
 neighbours, and to be, consequently, a perpetual drain on the 
 material resources of the country which holds it. The possession of 
 such a colony was, as I have often said, due, in the first place, to the 
 desire of procuring a sole market ; in the next, to the belief that 
 identity of race or habit would maintain close commercial relations ; 
 and perhaps in our time, the connection is fostered because a kind 
 of national pride is supposed to be assisted by the maintenance of 
 a large number of dependencies. Phrases such as " the sun never 
 sets on the British Empire," "Greater Britain," "the English- 
 speaking race bids fair to be the most widely extended of any, and 
 the English language the universal speech of commerce and civilisa- 
 tion," are illustrations of the sentiment to which appeals are made. 
 I am far from deprecating these appeals, but they should not be so 
 uttered as to give the impression that this country is prepared to 
 make every sacrifice for the sake of maintaining a mere similitude 
 of empire. 
 
 The colonies of conquest have been terribly expensive to this 
 country. In order to destroy the design which the French had 
 devised of connecting their settlement of Louisiana with their 
 settlement in Lower Canada, the English during the Seven Years' 
 War, conquered the latter and annexed it. In dealing with the 
 French Canadians, then and subsequently, the British Government 
 allowed them to retain their local laws, and their ecclesiastical
 
 334 EISE AND PROGRESS OF THE COLONIAL TRADE. 
 
 system, and to become pro tanto, an imperium in imperio. The 
 Eomau Catholic Church in Canada is, under these arrangements, 
 probably the wealthiest church establishment in the world, and 
 possesses powers, guaranteed by law, over the population, which 
 have been rescinded elsewhere, as inconsistent with the due 
 supremacy of civil government. I do not mention this to criticize 
 or impugn the arrangement, but merely to show how commercial 
 considerations in a bygone age, and in deference to what is now an 
 exploded opinion, modified military and civil relations. In the War 
 of American Independence, French Canada remained faithful to its 
 new masters, and though the good sense of the American people has 
 led them ultimately into fairly friendly relations with Canada, an 
 enormous expense, spread over more than a century, hasbeenincurred 
 in preserving this dependency from political risks. Even now there 
 is a long-standing and menacing quarrel about certain fishery 
 monopolies claimed by the Dominion, and, on the other hand, 
 a strong party has been formed, with the object of putting an 
 end to the war of tariffs, and the costs of a custom-house police 
 along a mere geometrical frontier, by establishing a zollverein be- 
 tween Canada and the States. The English Parliament has spent 
 hundreds of millions in maintaining the political independence of 
 Canada, and in guaranteeing its frontier. The issue is that having 
 adopted a strongly Protectionist tariff, which is really war in 
 disguise on the country which defends it, Canada is seeking to 
 contract a close trade alliance with an equally Protectionist 
 neighbour, on the ground that the war of tariffs between itself and 
 its neighbour has become intolerable. 
 
 Another colony, that of the Cape, was wrested from the Dutch, 
 during the great continental war. The intrigues of the British 
 Parliament, partly stimulated by trade jealousy, partly by the 
 family alliances of the Hanoverian sovereigns with the utterly 
 degenerate and disreputable family of Orange, had ruined the Dutch, 
 had divided the people into the bitterest factions, and had induced 
 for a time the Dutch people to look on the French occupation in the 
 early days of the French Revolution as an unmixed boon. But 
 in ridding themselves of the wretched William V., they became a 
 prey first to the rapacious patriots of the French Eepublic, and 
 next to the family of Bonaparte, for Napoleon speedily carried out the
 
 COLONIES OF CONQUEST AND OF SETTLEMENT. 835 
 
 policy of Henry IV. and Eichelieu. The Dutch possessions, there- 
 fore, at the Cape and in the Indian Ocean, became a prey to the 
 British navy. It is very likely, I cannot dispute it, nor do I attempt 
 to judge it, that the policy was not only timely, and of great strategic 
 importance, but had, at least temporarily, an economical and com- 
 mercial defence. The policy of Napoleon was to exclude England 
 from the commerce of Europe, the retaliatory policy of England was 
 to exclude France and all who were under the influence of France 
 from the rest of the world, and the English were far more successful 
 than the French. They even made a short war on the United 
 States in furtherance of this policy, one of the last of the prolonged 
 wars of commerce. At the peace of 1815, England restored the 
 Dutch possessions in the East, but retained the Cape, and asserted 
 British supremacy in South Africa. 
 
 Since 1815, we have hardly been at peace with the native races. 
 The English settlers were long outnumbered by the Dutch, are, 
 I believe, now. It became a maxim of policy to support, by military 
 expenditure and by aggressive and defensive wars, the due influence 
 of the colonists of English descent. I could show you that all the 
 profits of the Cape trade, enjoyed of course by those who trade at 
 the Cape, are not and never can be equal to the interest on the 
 capital which has been spent by the British Parliament on the 
 progress and defence of the Cape Colony. Even now, after having 
 had a war with the Dutch settlers, who have erected an independent 
 Dutch republic, we are threatened with another Dutch republic, 
 which is to occupy the lands at present in the possession of a 
 native tribe, whom we have taken under our protection. I am not 
 concerned here with the imperial interests which are contained in 
 this policy, but it is indisputable that our economical interests are 
 not furthered by our political action. 
 
 About twenty-five years ago, Mr. Goldwin Smith and myself 
 called public attention to the cost of the British Colonies. Half the 
 English army was being kept in them, at the cost of the British 
 exchequer, and to the profit of colonial tradesmen. Every particle 
 of British spirit was absent from the colonial character. Traders were 
 making money fast, planning Protectionist tariffs in order to enable 
 them to make money faster, and calling on the British exchequer 
 to relieve them from all risks at the expense of the British taxpayer.
 
 336 EISE AND PROGBESS OF THE COLONIAL TBADE. 
 
 We thought the relation one-sided, and said so very plainly. We were 
 soundly rated for our presumption by the British imperialists, and 
 by the colonial squatters, many of whom were beginning to return 
 to England with fortunes rapidly acquired under the system. But 
 our views were taken up, and the situation rapidly improved. The 
 colonists recognized that if they were part of an empire, they had 
 duties of self-defence, and a further duty in the direction of general 
 defence, and at the present time I do not know that there is a 
 British regiment in colonial^ quarters. Whether we are making 
 a better use of these regiments at present, I do not care to inquire. 
 I am sure that the moral tone of the Colonies has improved, and 
 that our controversy was justified. At that time, however, Mr. 
 Goldwin Smith and I were credited with a design of breaking up 
 the unity of the British Empire, and had to pay the usual penalties 
 for premature wisdom. 
 
 The British Colonies were for a long time governed from Downing 
 Street, and by the permanent officials of the Colonial Office. They 
 had a nominal system of Parliamentary and responsible govern- 
 ment, but were subjected to a thousand checks. Discontent 
 naturally followed, and discontent gradually ripened to rebellion. 
 As you will find happening over and over again in English 
 history, the rebellion was chastised in the open field, the leaders 
 tried, convicted, and sentenced to the penalties of high treason. 
 The next act in the drama was to pardon them, and surrender to 
 their demands, to surrender, in fact, more than they asked. An 
 attempt had been made to secure a provision for the English 
 establishment, in order to keep it on a level with the rich and 
 guaranteed establishment of the French Catholics. But an attack 
 was made on the clergy reserves, and the Colonial Office yielded. 
 The rebels of the Canadian rebellion rose to high political office in 
 their country, and were finally decorated with the distinction of 
 knighthood. I played a little part in the slaughter of the fatted 
 calf for those political prodigals, for I got the University of Oxford 
 to make them Doctors of Law. We have not as yet united the 
 other customary substantive to our honorary degrees. 
 
 When the British Parliament or, to be more correct, the Colonial 
 Office (for it is very hard to keep a House for a colonial question), 
 entirely surrendered to the colonial demand for free institutions,
 
 THE SURRENDER TO THE COLONISTS. 337 
 
 responsible governments, and entire relief from the Colonial Office 
 veto, a surrender was made of two principles, for the maintenance 
 of which at least some struggle should have been made. In the 
 United Kingdom, the Crown, i.e., the executive, is still the reversioner 
 to all land, and until land is declared to have a private owner, is 
 the absolute owner of all unassigned land. This was surrendered 
 to the colony, and the colonists in Parliament are entitled to make 
 what regulations they please for its sale, grant, or distribution. I 
 do not say that they have used the power unwisely. In some 
 particulars, I am strongly of opinion, from what I have seen, and 
 from what I have heard and read, the American Congress would 
 have done well had they followed colonial practice, especially that 
 which Mr. Gibbon Wakefield instituted, under which a high mini- 
 mum price was fixed for public lands. The scheme was abandoned, 
 but left a habit behind it. On the other hand, the Federal 
 Government at Washington has never surrendered its rights over 
 the public land to the States, however much it may have consulted 
 their interests or wishes. 
 
 The second part of this total change of front is the discretion 
 of levying what tariff the Colony pleases. In the history of English 
 politics, as I have had to show you more times than once from 
 1381 onwards, uncompromising resistance has been constantly 
 followed by unconditional surrender. In 1772, the inhabitants of 
 the American plantations would willingly have contributed to the 
 imperial exchequer. They knew perfectly well that they had been 
 the principal gainers at the Peace of Paris, and that debts had been 
 piled up by Great Britain to an extent beyond previous experience, 
 and as was believed, beyond the capacity of the British taxpayer. 
 They were perfectly willing to have taken their share in the charge, 
 but they claimed that it should come from their own action, not 
 from the autocratic will of the British Parliament, or, to be more 
 correct, for the unreformed Parliament was a legislative farce, 
 from the British administration, acting as such administrations 
 have constantly acted, with high-handed, unconstitutional, and 
 disastrous pride. When it became necessary to throw this policy 
 aside, they threw aside with it a perfectly sound principle, that in 
 the common defence of mother country or colony, the colony should 
 by its own action, pay its own contribution. Under existing circum- 
 
 28
 
 838 EI8E AND PROGRESS OF TEE COLONIAL TRADE. 
 
 stances, the Colonies having very properly refused to allow us to tax 
 them, we have permitted the Colonies to tax us. Over and over 
 again, for instance at the Cape, the local government has 
 undertaken a war, in which it rarely had justice, and never the 
 means for carrying on the war in its own hands, and having 
 compromised us, have called on us to pay for what they have done. 
 It is impossible to conceive any system more demoralizing to the' 
 colony and more unfair to ourselves, than to incur responsibilities, 
 and put on the shoulders of others the obligation of meeting them. 
 
 After the Colonial Office had perpetually meddled with the 
 Colonial Governments, and irritated them beyond description, they 
 entirely gave in, and made no stand on a single point. I remember 
 that, as a chief justice of the Cape told me, in the old days of the 
 Colonial Office, a retired general demanded of the Cape represen- 
 tatives that they should provide from the taxes salaries for a 
 number of archdeacons. The chief justice said that he was 
 himself a Presbyterian, and being unacquainted with the special 
 functions of an archdeacon, asked the governor for information as 
 to their place and duties. All that he got from the old soldier was, 
 "Archdeacons, sir, there were archdeacons in the time of Abraham." 
 The chief justice was obliged to be satisfied with this assertion as 
 to the continuity of history, which, from its modern aspect, my 
 friend Mr. Freeman assures us, begins with the call of Abraham. 
 But when the Colonial Office at last had to give, like Lear, they 
 gave all, and England has been used by her prosperous offspring,, 
 almost as ill as the mythical king was by his daughters. I cannot 
 see that the English Government, when it conceded the entire 
 political freedom of the Colonies, and their right to raise a revenue 
 and spend it at their discretion, should not have contracted with 
 them that the revenue should be raised for the purposes of govern- 
 ment, and not for that of local protection, since a protective tariff 
 is to all intents and purposes an act of war. 
 
 " The rulers of Great Britain," says Adam Smith, in the conclud- 
 ing sentences of his great work, "have for more than a century 
 past, amused the people with the imagination that they possessed 
 a great empire on the west side of the Atlantic." Smith is speaking 
 of the American plantations, then in the first struggles of the War 
 of Independence. " This empire, however, has hitherto existed in.
 
 THE TIE WHICH BINDS THE COLONIES. 339 
 
 imagination only. It has hitherto been, not an empire, but the 
 project of an empire; not a gold mine, but a project of a gold 
 mine ; a project which has cost, which continues to cost, and 
 which, if pursued in the same way as it has been hitherto, is likely 
 to cost immense expense, without being likely to bring any profit ; 
 for the effects of the monopoly of the colony trade, it has been 
 shown, are, to the great body of the people, mere loss instead of 
 profit/' There is, as Adam Smith saw, a cheap investment to be 
 made in popular delusions. I know no safer speculation. If the 
 opinion of such men prevails, quite irrespective of their personal 
 efforts, they have taken a part in the nation's salvation, and deserve 
 reward. If their advocacy is seen to be untenable, and is expended 1 
 on a discredited cause, they trust that their personal obscurity will 
 secure them forgetfulness, or that they may rely on a vested in- 
 terest. I have lived for forty years among such people, and for 
 as long with others who understand them. The hardest work of 
 my life has been to save them from contempt. 
 
 There is however one tie between England and her Colonies, of 
 which even Adam Smith, despite his far-sighted sagacity, did not 
 dream. I am no judge of loyalty, of attachment to a central crown 
 and empire, in the place which I hold before you. I only pretend, 
 as an economist, to judge matters of business. We are tied to the 
 Colonies by a bond, strong as adamant, as long as we are wise and 
 they are prudent, but weak as a rope of sand, if we are unwise, 
 and they become desperate, or perhaps become self-contained. 
 They owe us a great deal of money. I do not mean money which 
 the nation has spent in its collective capacity. That is gone with 
 last year's snow, but with money which is registered and stocks 
 which are negotiated on the Exchange. The Stock Exchange is the 
 weakest in one sense, the most powerful force conceivable in 
 another. It can be wronged by a repudiation of obligations 
 created by it, and due to it, and it is unable to avenge its injuries 
 directly. It cannot immediately punish its defaulting debtors, or 
 enlist its own Government on its own side. This policy is now 
 abandoned. It was tried, I believe, for the last time in Mexico, 
 twenty years ago, and in Egypt ten. But it is not the business of 
 the State to collect debts due to the subjects of the State. So far, 
 then, the Stock Exchange is weak.
 
 340 RISE AND PROGRESS OF THE COLONIAL TRADE. 
 
 But from another aspect it is strong. It is unforgiving to 
 defaulting communities. Now most, perhaps all, communities 
 want at some time or the other to borrow. They will seek in vain 
 if they have made default in past time. A taint clings to them 
 even if they make good past breaches of faith, even if they appear 
 likely to commit such a breach, or put themselves into a position 
 of being able to commit the offence. Thus a sharp lesson was 
 taught the defaulting States of the American Union when they 
 repudiated their obligations to their foreign creditors, and I do not 
 suppose that a defaulting State would get what is technically called 
 a quotation on the Stock Exchange, until it had satisfied its ancient 
 creditors, principal and interest. The same experience has come 
 to diverse transatlantic Governments, and to Turkey. A short time 
 ago, and it was well-nigh coming to Egypt. There is always some 
 danger of repudiation if the stock is held exclusively by foreigners, 
 as is the case with Eussia, or if the loans are dangerously near the 
 possible margin of the borrowing country's powers, or if the loans 
 even for public works of a remunerative character are suspected to 
 be premature. 
 
 Now the interest on this money is paid in goods. It is no doubt 
 a strain to pay, and only large natural profits render the payment 
 possible, even when the profits are derived from distinctly remune- 
 rative undertakings, as railways and dues. But if we were to 
 decline to receive goods from them, or burden the exportation of 
 such goods with heavy import duties, or even light ones, we may 
 make that impossible which is already difficult, and the fair traders 
 might find, if they can persuade a majority of their fellow country- 
 men, that they have broken the bond between the Colonies and the 
 mother country, and have ruined their investing and too trusting 
 fellow countrymen in the process. By natural profits, I mean the 
 exceptional bounty which new settlers are able to appropriate.
 
 XVI. 
 LAISSEZ FAIEE: ITS OKIGIN AND HISTORY. 
 
 Man a wolf to Ids neighbour The weakness of the social unit The 
 principle of contracts and their enforcement Tlie ideal of govern- 
 ment Its disappointing attitude Half truths in politics and poli- 
 tical economy The economists of France The publication of " Th-e 
 Wealth of Nations " Gradual reforms Laissez faire no panacea 
 The case of the ivorking classes, ofraihvays The Factory Acts 
 Lord Shaftesbury and the children in agricultural service Edu- 
 cation, primary, and the present system Land and the tenant 
 Restraints on bankers Adulteration Technical education 
 Sanitary restraints. 
 
 " Homo liomini lupus," said Plautus, perhaps Demophilus, from whom 
 lie borrowed the Asinaria. This is the comment in which the 
 historical relations of man to man have been, in the practice of 
 life, and by the observation of publicists, condensed. You will 
 notice that the aphorism is universal. It is not directed against 
 the selfish spirit of competition, or the arid cynicism of the meta- 
 physical economist, or the tyranny of capital, or the aggressions of 
 labour ; but against the dangers of civil society, the risks which 
 communities and individuals incur from fraud or force, or a combi- 
 nation of both. It applies to monarchs who, like Philip II. or 
 Louis XIV., or Napoleon, aimed at Universal Empire, and to Vikings, 
 pirates, buccaneers, and heroes generally. It is equally true of 
 criminals who pursue gain, and of statesmen who pursue glory, 
 generally, it must be confessed, with an eye to the purely criminal 
 motive. Even the instinct of domestic duty, the education in the
 
 342 LAISSEZ FAIBE : ITS OEIGIN AND HIS TOBY. 
 
 sacredness of family ties, is no efficient guarantee against predatory 
 impulses. "The price of liberty," said Mr. Mill, "is eternal 
 vigilance." But it is true of everything else which is worth keep- 
 ing, and therefore worth stealing, or otherwise appropriating. The 
 economist, who takes no notice of the selfishness with which aggres- 
 sive rulers and statesmen cover their action, is constrained to 
 identify, too often, the hero with the burglar, the minister of religion 
 with the buccaneer. In point of fact, the two who have in past 
 times accepted the alternate occupation, have also, with a clear 
 knowledge of the fact, been mentioned with eulogy in their own 
 generation, and have had the benefit of some contemporary 
 Smiles. 
 
 The weakness of the social unit, however strong he is when 
 matched with any one of his fellows, however shrewd he may be at 
 a bargain, however successful he may be in the conduct of business, 
 is so marked, and so readily confessed by himself, that every one 
 admits the necessity of a government which shall protect the weak 
 against the strong, which shall punish the violence of foreign and 
 domestic foes to the best of its ability, which shall arbitrate equit- 
 ably between contending interests, whether the contest is one of 
 general principles or of particular details, which shall chastise the 
 highest offender as well as the lowest, and shall be entirely impartial. 
 Above all things, this government has to abstain from allowing its 
 powers to be utilized for particular interests, and against the general 
 good. Even when it has, to the best of its judgment, formulated a 
 law, it should remember the maxim, summumjus summa Myurta,and 
 modify in practice the generality which it sanctions. It is perfectly 
 true that unless contracts are enforced, society becomes a chaos of 
 universal distrust. It is plain that men are very slow to learn the 
 obligation of paying what is due, especially when the article or ser- 
 vice which is conceded, on the understanding that the price must 
 be refunded, and profit or interest paid, has served its immediate 
 turn. This insensibility to the obligation of a just debt, occasionally 
 exhibited in our own experience, is, I do not doubt, the explanation 
 of the excessive severity with which contracts are enforced under 
 the codes of an early civilization, the Draconian legislation and the 
 laws of the Twelve Tables. To be sure, in time, it is found neces- 
 sary to relax the rigour, and to modify the contract, occasionally to
 
 THE WEAKNESS OF THE SOCIAL UNIT. 343 
 
 rescind it. But no rational person ever doubts that the law should, 
 as a rule, enforce contracts. So convinced was the great analytical 
 philosopher, Aristotle, that the centre of civil government is the 
 satisfaction of contracts, that he makes even crimes to be involuntary 
 contracts, in which the State should compensate the injured party 
 at the expense of the criminal. 
 
 The State, then, is bound to enforce contracts. But it is also 
 entitled, indeed is equally bound, to declare what contracts it will 
 enforce. In all civilized societies, for instance, it refuses to recog- 
 nize contracts under which one of the parties agrees to sell himself, 
 or members of his family who are in his power, as a slave or slaves.' 
 "We treat the traffic in human beings as piracy, and punish it as 
 such, or profess to do so. Again, a contract based on a criminal 
 proceeding is not only void, but punishable. An arrangement 
 by which a burglar engaged to sell his plunder to a tradesman 
 would not only be avoided ab initio, but, if detected, would bring 
 thief and receiver under equal penalties. Where a contract is based 
 on an immoral consideration, it is also void. Contracts which are 
 shown to come under what is called the restraint of trade are void- 
 able. Contracts which create perpetuities are said to be contrary 
 to legal policy, though the practice of courts has not been consis- 
 tent. In many cases, certain contracts are declared illegal. Thus 
 a landlord cannot include income tax in rent, cannot compel his 
 tenant to preserve ground game, cannot determine a tenancy arbi- 
 trarily. 
 
 In the same manner the State modifies contracts, or interprets 
 them equitably. Nothing can be more complete than the transfer 
 of a mortgagor's estate, when he fails to fulfil the conditions of re- 
 paying money lent, and interest due, to the mortgagee. But the 
 law, from the time of Chancellor Ellesmere, in James I.'s reign, has 
 stepped in, and secures the mortgagor his equity of redemption. 
 Kecently, the usury laws have been entirely abolished. But the 
 law relieves a borrower, who is in expectancy of a life interest in 
 land, from an oppressive or usurious debt. Unfortunately these acts 
 of equity or generosity are limited to certain favoured classes. The 
 interest of the Irish tenant, though declared his own in law, is not 
 secured to him after eviction on the non-payment of rent, though 
 its market value may be greatly in excess of the rent due. A dis-
 
 344 LAISSEZ FAIEE : ITS ORIGIN AND HISTORY. 
 
 tinguished statesman has latterly shown himself to be very ill- 
 informed on this subject. But distinguished statesmen are very apt 
 to be ill-informed in particulars. They should be criticized with 
 much consideration, for foolish folk insist on their being omniscient, 
 and with the natural consequences. 
 
 In brief, the State must protect the weak against the strong, not 
 only by national defences on sea and land, by police against domes- 
 tic violence, by the mechanism of criminal justice against some 
 offenders, and by the agency of civil justice against torts; but by 
 what is almost as important, by just legislation, and by just interpre- 
 tation of that legislation. The American Constitution even protects 
 its citizens against legislation which is asserted to be just, for the 
 Supreme Court can, on appeal, reverse and annul an act of the 
 Federal Legislature which it declares to be unconstitutional. In an 
 ideal State, the legislature, the administration, and the courts would 
 unite in enforcing what the highest human intelligence could 
 declare to be absolute equity. The duty of the State is admirably 
 expressed in the oath of the Manx judges that the deemster, 
 as they call him, will decide as evenly between parties as 
 the backbone lies in a herring. These honest islanders 
 gathered their similitude from the fisheries which form their 
 staple industry, and were assured that the reminder would be 
 perennial. 
 
 Unfortunately, the absolute fulfilment of these great public duties 
 is an ideal. No one has ever seen a set of human institutions which 
 have been entirely just, in which no undue advantage was given to 
 any class, trade, or calling, in which public burdens are evenly dis- 
 tributed, in which complete fairness has been the rule. It has over 
 and over again been admitted that a change which has been de- 
 manded is intrinsically just, but that interests have grown up about 
 irregular and indefensible practices, which it would be highly in- 
 jurious to annul or even to frighten. Persons have even held, and 
 economists among them I do not challenge their conclusion that 
 in course of time an initial wrong becomes a subsequent right, which 
 must not be questioned. I shall, in a subsequent lecture, illustrate 
 what I mean, when I deal with the siibject of Crown lands, and the 
 ancient practice of resumption. It has been even alleged that con- 
 tinuous wrongs on others become in time the rights of the wrong-
 
 THE IDEAL OF GOVERNMENT. 345 
 
 doer. The late Lord Palmerston had a favourite adage, that tenant 
 right was landlord wrong, though the maturer conscience of the 
 British Parliament, shortly after Palmerston's death, determined, 
 in 1870, at least to modify this position. So in 1820. Lord Liver- 
 pool declared that he entirely and cordially concurred with evei'y 
 principle and every sentiment in the Merchants' Petition. But he 
 could hold out no prospect of great or immediate alteration, because, 
 as he alleged among the reasons, " So many vested interests had 
 grown up in the country, which he imagined would be imperilled " 
 by accepting and acting on the principles of the petition. The 
 objection is a very old one, for it was adduced by Demetrius in the 
 theatre of Ephesus. The majority of the House of Commons 
 shouted their sympathy with the worthy silversmith of the nine- 
 teenth century. 
 
 The fact is, the practice of parliaments and governments has 
 differed widely from what each would admit to be the raison d'etre 
 of their existence. All the forces of government have been diverted 
 from time to time towards the sustentation of particular interests, 
 and not a few of them are still diverted, so hard is it to reconcile the 
 conflicting claims of conscience and self-interest, of the public good 
 and private advantage. I always treat the arguments of those who, 
 being interested, sometimes greatly interested parties, defend what 
 my convictions and my experience prove to me to be indefensible, 
 with patience and consideration, for I know nothing more diffi- 
 cult than to get a person, all of whose interests lie in one direction, 
 to accept the disagreeable necessity of examining facts, and finally 
 of going in a just direction. I should, had I lived in old days, have, 
 in this frame of mind, excused the bias of those ruined landlords 
 who devised the labour statutes; of those adventurous spirits who 
 claimed trade monopolies ; of the restored royalists who created our 
 present land system ; of the merchants in the last century, who, 
 essaying that enormous novelty to the English people, mechanical 
 invention, demanded that their venture should be guaranteed by 
 protection ; of those patriotic persons, who, having founded the 
 Bank of England, and restored the finances of the country at a 
 most critical time, claimed, and obtained, the benefit of that cur- 
 rency law, in accordance with which the second charter of the Bank 
 of England was granted. There were plausible arguments for each
 
 346 LAISSEZ FAIEE ; ITS ORIGIN AND HISTORY. 
 
 of these departures from true and just principles. There were 
 people, when these concessions were made, who recognized that 
 the good which the favoured objects of this legislation secured 
 was infinitesimal, even to them, was in some cases even ruinous, 
 and that the evil which they inflicted on the rest of the people was 
 great and permanent. Had I known what I know, I should have 
 resisted the proposal in each and every case as a disinterested person, 
 and should, no doubt, have incurred much obloquy. But I do not 
 think it can justly be inferred that a man is deliberately dishonest be- 
 cause he cannot see the public interest as clearly as he can see his 
 own. If his own interest in the end is to be superseded, one may 
 leave him the privilege of protest, and the utterance of discontent, 
 with a hope that matters will not turn out as serious as the subjects 
 of the change anticipate. 
 
 The fact is, there is a plausible argument which may be alleged 
 for many of the most serious errors which governments have 
 incurred, and many of the most serious injuries which they have 
 unwittingly inflicted. Half or partial truths are the bane, the 
 ignesfatui of political life, and by implication of political economy. 
 It has been for many years my practice to point out that most of 
 the economic errors or fallacies into which people fall have a 
 certain basis of truth in them. Whatever they may effect in the 
 end, they are not in the beginning mere impudent brigandage. 
 The most selfish of rulers, the last Henry and the second Charles, 
 did not seriously design the dishonour and ruin of the unhappy 
 country which they governed. The sordid managers of the Re- 
 formation, the sordid patriots of the Revolution, did not want to 
 do mischief, though they could not help doing it. Somerset plun- 
 dered the poor, but perhaps he thought that a purer faith was 
 a full compensation for their losses. Leeds and Seymour, Maccles- 
 field and Walpole, and a host of others robbed the taxpayer and 
 enriched themselves, but perhaps concluded that their gains were 
 a cheap price for the inestimable boon of the Revolution and the 
 Hanoverian succession. In most men, especially in those who 
 must be trusted, good and evil are strangely mixed, and they are 
 themselves very often entirely unconscious of the mixture. Clive, 
 you will remember, amassed an enormous fortune in India at an 
 early age, and within a few years. He afterwards declared, perhaps
 
 HALF TRUTHS. THE ECONOMISTS OF FRANCE. 347 
 
 with perfect sincerity, certainly with a proud consciousness, that 
 he was amazed at his own moderation. 
 
 Now towards the end of the first half of the eighteenth century 
 a body of Frenchmen, who called themselves Economists, or 
 Physiocrats, struck with the infinite misery to which France had 
 heen reduced, partly from the expedients of Colbert, partly by the 
 extravagant wars of Louis XIV., the more extravagant misconduct 
 and profligacy of the Regency, and of Louis XV., determined on 
 examining into the causes of wealth and poverty, of waste and 
 beggary, especially in France, where the contrast was violent. 
 The eighteenth century, as you are doubtless aware, was one in 
 which people were beginning to inquire into the foundations of 
 authority, and of the power which authority claimed as its due. 
 The bitterness of religious feuds had worn itself out. It is true 
 that after a scandalous youth and middle age Louis XIV. became 
 decot in his later years, and signalized his piety by persecuting the 
 Huguenots, expelling them from France, and rooting out the 
 Camisards. But all pretence to propriety, and all, or nearly all, 
 the homage of bigotry, passed away with the regency of the Duke 
 of Orleans and the administration of Dubois. In England tolera- 
 tion was followed by apathy, apathy by inquiry, inquiry by scep- 
 ticism. The Puritans of the first Revolution became the Unitarians 
 of the early eighteenth century, the fierce Churchmen of the 
 Restoration the Latitudinarian divines of the first Georgian era. 
 The ancient orthodoxy was conceived to be disaffected, and perhaps 
 Bolingbroke, who was above all an intriguer, wished to show that 
 a man could be a Tory, even a Jacobite, and withal a freethinker. 
 In France the very foundations of society were discussed. There, 
 topics long reputed too sacred for handling were freely and scep- 
 tically criticized. During the long and peaceful administration 
 of Fleury, the Court became more scandalous, France more adven- 
 turous, the merchants and manufacturers richer, and the peasantry 
 more beggarly. The economists, with many errors in principle 
 and detail, were thorough. They did not quarrel with the Govern- 
 ment ; but they severely criticized what I may call the control of 
 French industry, and especially agriculture by the administra- 
 tion. They concluded that private and personal interests, as long 
 as they were innocent, were judged of better by the individual than
 
 348 LAISSEZ FAIBE : ITS ORIGIN AND HISTORY. 
 
 they can be by the State, that if men were left free to work, free 
 to bargain, free to trade, the result would be that in the choice of 
 industry the fittest, to use a modern phrase, would be selected, and. 
 that the country would prosper much more under competition than 
 it had done under regulation. In a word, they affirmed that laissez 
 fa ire should be the rule of an economic society. Smith, who was- 
 travelling in France as tutor to the young Duke of Buccleuch, the 
 descendant of Monmouth and of the considerable heiress to whom 
 Monmouth was married, said, " I was attracted by three philo- 
 sophers, and influential people they were Turgot, Quesuai, and 
 the elder Mirabeau;" and after his return to England composed, to- 
 a great extent on their principles, " The Wealth of Nations." 
 
 It was a great advantage to the Economists that their doctrines- 
 were accepted as sound in the abstract, however difficult it might 
 be to allow them in practice. It is quite probable that the greatest 
 profligate living would admit privately that the Ten Command- 
 ments are excellent in the abstract, the Sermon on the Mount an 
 admirable exhibition of theoretical virtue, but that vested in- 
 terests compel the hearer of them to limit his acceptance within, 
 the bounds of respectful admiration. The tenets of the French 
 Economists were listened to with speculative acquiescence, but 
 Pompadour and Du Barry prevented their acceptance in state- 
 craft. They were out of the range of practical politics. By and 
 by came the cataclysm, in which everything was submerged in a 
 common ruin, the residue of the Economists, of the Encyclo- 
 paedists, of the dilettante statesmen, of the financiers and the 
 harlots, king and church. 
 
 The English version, or rather comment of Adam Smith on this- 
 new departure, was the beginning of a new era. The publication 
 of the great work was delayed, as I have recently discovered, by 
 some negotiations which were undertaken by Pulteney with the- 
 East India directors to get Smith an office in the Bengal CounciL 
 They failed, and to their failure we owe the publication of " The- 
 Wealth of Nations," which would never have seen the light had he 
 obtained the appointment. Mickle, who translated the "Lusiad" of 
 Camoens, and dedicated it to the company, thought it would suit 
 his patrons if he reviled Adam Smith, who reflects rather plainly 
 on the East India Company's trade policy. But the opinions of
 
 THE WEALTH OF NATIONS. GRADUAL REFORMS. 349 
 
 the author gained him the respect of the younger Pitt who, after 
 ousting Fox on an India Bill, brought in nearly the same measure 
 himself, and gave a striking and early example of that policy with 
 which expectant statesmen ' rail at measures when they are in 
 opposition, and adopt them when they are in office. For a time 
 it seemed that Pitt would not only accept the theory, but put in 
 practice the tenets which Adam Smith inculcated. But the French 
 Eevolution came, and Pitt, after a struggle, threw in his lot with 
 the emigres and the Bourbons and the affrighted herd of kings 
 and kinglets. He died of chagrin, having at his death-bed the 
 affectionate sympathy of his king and the spiritual consolations 
 and offices of his bishop, one Tomline. 
 
 This is not the occasion on which to go through the history of 
 the long delay which attended the acceptance of the principle 
 laissez faire. It reappeared, as I have told you, in the Merchants' 
 Petition, was accepted in the abstract by Liverpool, and cautiously 
 adopted in the concrete by Huskisson and Canning. The trade 
 in bullion and the foreign exchanges were relieved from vexatious 
 restrictions, while the national honour was maintained unimpaired 
 in the integrity of the currency. Next the laws regulating labour 
 were swept away. Next an inroad was made on the taxation of 
 raw materials, and on some peculiarly vexatious excises. As time 
 went on, trade was freed from monopolies. Then the most 
 grotesque tariff conceivable was greatly altered. Then the most 
 important of all raw material, food, was liberated from selfish 
 attempts to regulate its price in the interest of landowners. The 
 shreds of colonial preference went shortly afterwards. All but one 
 of the materials of human labour, land, have been made free. 
 This is still stifled by protective regulations. But the system is 
 breaking down from its own inherent perversity, folly, and mis- 
 chief. Laissez faire became triumphant, and this in little more 
 than a quarter of a century. I can well remember the last struggle 
 against it. The advocates of the old system were first very con- 
 temptuous, next very angry, then very ill-tempered, and lastly, 
 very ill-mannered. But the bravest act, and that which disarmed 
 opposition more than anything else, was the resolution taken to 
 break the weapon with which the victory was won. The League 
 which enforced the repeal of the Corn Laws was dissolved as soon
 
 350 LAISSEZ FAIEE : ITS OEIGIN AND HISTORY. 
 
 as the Legislature had swept those acts from the Statute 
 Book. 
 
 But complete as this victory was, it was soon found that laissez 
 faire was not a panacea for all social mischiefs. Much of the evil 
 which afflicts society is due to causes whose effects survive and are 
 profoundly noxious long after the cause has ceased to be operative, 
 and even has been forgotten. The maxim, Cessante causa cessat 
 fffectm, is only partly true in the physical world, where the energy of 
 a transient cause may have permanent effects. The desolation of parts 
 of Calabria have been prolonged since the earthquake of 1782 to our 
 own day. In the political, the economical, the moral world, effects 
 long survive causes. The prolonged survival of effects is the centre 
 of Mr. Darwin's theory. The publicist affirms that precedents are 
 valid long after their occasion has passed away. The historian, 
 philosopher, constitutional or romantic, white, grey, and black, 
 is fond of tracing present phenomena to ancient beginnings, even 
 if he refrains from connecting British institutions with the call of 
 Abraham. The laws regulating wages, the justices' assessment, 
 and parochial settlement, the old Poor Law, the new Poor Law, the 
 Corn Laws, have left marks on labour for which the doctrine and 
 practice of laissez faire is no detergent, even though it were adver- 
 tised as copiously as the soaps of our day are. You cannot, like 
 the adventurer in the Greek comedy, take the nation and by some 
 magic bath restore it from decrepitude, disease, vice, dirt, drunken- 
 ness, and ignorance, to manliness, health, virtue, self-respect, 
 sobriety, knowledge, forethought, and wisdom by a mere wash. 
 Some of us who have essayed remedial measures have found that 
 we have not in the schoolmen's phrase, materia prima to deal with. 
 Our progenitors in the art of legislation have left us their failures 
 to remedy, as well as our own work to do. We have to clear away 
 the effects of old wrong-doing. Half of our legislation, more than 
 half, is remedial, not of what is the genuine present, but of the 
 historical, the inveterate past. It is only when you learn the past 
 that you cease to be impatient at the present. If you would do 
 well in your interpretation you must not be deterred by the long 
 chain of causes, for every discovery aids your remedy. 
 
 Laissez faire, then, is no more than natural justice postulating the 
 absolute and entire freedom of all contracting parties, in which all
 
 LAISSEZ FAIEE NO PANACEA. 351 
 
 the agents are fairly equal in their competency to interpret their 
 own interests, and give effect to their interpretation, being of 
 course constantly corrected by other interests, which they equit- 
 ably balance against their own. I need hardly say, that, at the 
 best of times, it is as ideal as the legislative and administrative 
 body which we heard of just now. It is almost as superfluous to 
 point out that, if it existed, it would so curtail the functions of the 
 legislature, that we might leave all debates to the two front benches, 
 who might discuss those questions which Milton referred to Limbo, 
 and Swift to the grimy philosophers of Laputa. The chance of 
 mending society by laissez fairs, is as rare as the capture of the 
 golden bough. Is it entirely without a meaning, when Virgil tells 
 us that the lucky acquisition only gives us an introduction to Proser- 
 pine ? And yet there is a select body of speculative philosophers, with 
 Lord Wemyss at their head, who seem to be as far away from the 
 facts as their president was, when he tilted at the Eglinton tourna- 
 ment, and dreamed of a revival of chivalry, which I fear, and I 
 have read the private accounts of the chevaliers was the most 
 pretentious of shams. 
 
 As laissez faire cannot do all, it will be well to point out where it 
 totally fails, and always must fail before we come to more debat- 
 able ground. And here I may say that so enthusiastic have been 
 some advocates of the doctrine, that they would have applied it 
 without discrimination to every economical fact. Thus Malthus 
 would have extinguished all relief to destitution, Newmarch all 
 diplomacy on trade, while Mr. Herbert Spencer carries the doctrine 
 of individualism so far that I remember him lamenting the exces- 
 sive police protection which the law accords, as he thought, to the 
 average Englishman. - 1 need hardly say that these are idola 
 specus, the speculations of an armchair and easy circumstances. 
 
 In the first place, then, as you will anticipate, the application of 
 the doctrine laissez J'aire, laissez aller,is impracticable in cases where 
 the present situation is directly traceable to the action of that govern- 
 ment or administration which has been permitted or encouraged to 
 commit the mischief. No- question is, indeed, more difficult in the 
 whole range of the ethics of social life than the modern doctrine of 
 vested interests. It is obvious that if we were to extend the 
 principles which some persons have laid down, that we must per-
 
 352 LAISSEZ FAIRS : ITS OEIGIN AND HISTORY. 
 
 sist, even in the near prospect of national ruin, in continuing what 
 we have once allowed. If Charles II., for example, had given the 
 son of Louisa Querouaille, French prostitute and spy, the whole 
 revenue of the Crown, we should be obliged to go on paying the 
 proceeds to the Duke of Kichmond. If it be true that the bounty 
 and the Corn Laws, as many contended, were as much the inherit- 
 ance of the English landowner as his acres were, no reforms could 
 have been permitted. If, on the other hand, maintenance out of 
 the rates were, as was alleged, the absolute right of the British 
 labourer, in consideration of his having been ousted, without com- 
 pensation, from his commonable rights in the land, occupiers 
 would have been bound to keep paupers until they became 
 paupers themselves. No reform in our social system could be 
 possible if full play were given to the doctrine of vested interests. 
 Fortunately, as yet, the claim is seriously affirmed, some few 
 cases excepted, in the case of life interests only, and in some of 
 these only, such being, as a rule, intrinsically the least defensible. 
 But I shall have to return to this subject in another lecture. 
 
 The most marked of these cases in which laissez faire breaks down 
 is in the case of the working classes. I have pointed out to you, 
 from the indisputable facts of economical history, that the beggary 
 of the working classes was the direct and deliberate work of the legis- 
 lature, and that it is excessively difficult to retrieve the fortunes of 
 these people by the principle of free competition, and by their own 
 collective efforts. But the utmost freedom should be given to those 
 efforts, the fullest sympathy should be accorded to them, the 
 kindliest criticism should be given to their errors and failures, and, 
 beyond all, they should be allowed to witness no class privileges, 
 bestowed and fenced for their more fortunate fellow countrymen, 
 in the struggle of life. The strength of socialism is the injustice of 
 government, it is weakened by every act of equity, and becomes an 
 extinct or at least dormant force, when all rights are respected. 
 I have a great aversion to legislation on behalf of adult labour, 
 except, of course, when, as in the Employers Liability Act, the 
 abominable doctrine of common employment, a mere fiction of 
 judges, had to be extinguished. But I entertain this aversion, not 
 because I hold that the legislature may not be bound to compen- 
 sate in the present for wrongs in the past, but because I am
 
 .: THE CASE OF THE WORKING CLASSES. 353 
 
 convinced that concerted action is a far more remedial measure 
 than legislative restitution. In the fifteenth century, and in the 
 teeth of restraining statutes, the workmen secured an eight-hours 
 day. I am sure that an eight-hours day is worth more to the 
 employer than a ten-hours day, is cheaper at the same money. 
 But I would far rather that the workmen got it by their own 
 combinations, and by their own exertion, than by a gift of the 
 legislature. 
 
 There are some services the price of which must be controlled. 
 A railway, for instance, has over a given district a monopoly of 
 conveyance for passengers and goods conferred upon it by the 
 legislature. It is true that Parliament never surrenders, and I 
 trust never will surrender, the right of permitting competition. 
 But in practice it declares against competition, when it permits im- 
 perilled companies to appear by counsel against new projects. It 
 does this for two reasons. In the first place, it is quite alive to the 
 famous dictum of the younger Stephenson, that where combination 
 is possible, competition fails ; and it next knows, in the light of this 
 fact, that if it permits unnecessary rivalry, its still more important 
 right, that of regulating rates and fares, is in peril. It is to be 
 presumed that the railway, having been permitted to come into 
 existence for the profit of its shareholders, has a right to make 
 profit. But if it is to share a limited profit with a rival, it must, 
 in all likelihood, both in the stage of competition and in that 
 of combination, make less profit. But less profit can be supple- 
 mented only by less cost, or by slower and scantier accommo- 
 dation, or by higher rates. The first will be shared by all the 
 competitors, the latter are achieved by the inconvenience and cost 
 of the customer. 
 
 When, in 1886, the Railway Bates Bill came before the House of 
 Commons, and, in my opinion, the projected changes, passionately, 
 but not over wisely, demanded by landowners and manufacturers, 
 seemed to me to be likely to injure the railway projectors first, 
 and would infallibly in the end react on the public, I spoke in 
 the House as follows : " The carriage of goods and passengers 
 should first pay the unprofitable costs or working expenses, and, 
 secondly, should yield a profit on the traffic. If the freight of the 
 former did not cover cost, the shareholders must suffer, or the 
 
 24
 
 354 LAISSEZ FAIRE : ITS ORIGIN AND HISTORY. 
 
 conveyance of the latter must be rendered clearer. But much of 
 the travelling on railways is voluntary, and an excessive fare 
 would check business. Now if profits were seriously curtailed, 
 one cannot expect that railway proprietors can carry goods at 
 a loss, or at no remuneration. You are then," I argued, "in a 
 vicious circle. You have a right to regulate rates and fares, but 
 you must do so with a view of leaving a margin of profit. Your 
 clients wish to save some of the costs of freight. But if you have 
 established a set of conditions under which you cannot seriously 
 reduce cost without extinguishing profit, you will assuredly 
 find in the end, that you were better off under the old system 
 than you will be under the new." The Government expected that 
 I should move the rejection of the Bill. As it was sure not to pass, 
 I thought this action superfluous. But I am quite convinced that 
 legislation is necessary. Perhaps some compensation should be 
 made to railways in view of the great value which they have given all 
 land, and to some, enormous value, and this at the expense of those 
 who have been benefited by 110 outlay of their own, and sometimes 
 after preposterous compensation for disturbance. It is not unfair to 
 fix the price at which a monopoly of service shall be accorded, but 
 this restraint should precede the grant of the monopoly, and be very 
 cautiously exercised afterwards. If you fix the price, or better still, 
 require the agent to fix the price, and abide by it at his peril, and 
 leave the person to undertake the service or leave it alone, you do no 
 wrong. A cabman is not wronged when his mileage price is fixed, 
 nor is any other person who is granted a monopoly, actual or regu- 
 lated, for he can take the calling or leave it alone. It is quite a 
 different thing when you have instigated the producer to invest his 
 capital in the undertaking. 
 
 There are, or have been, some occupations, the result of evil laws 
 or customs, the outcome of bygone wrongs, which have been pro- 
 hibited ; and, in particular, the premature employment of children 
 and of women in some severe and degrading callings. These were the 
 outcome of the past restraints on labour. It is very rarely that I find 
 in the earlier accounts which I have inspected entries of children's or 
 women's labour in the fields. When the detestable assessments of 
 the justices were legal they became common. "When machinery 
 began to supersede human labour, and adult strength was no longer
 
 THE FACTORY ACTS AND LORD SHAFTESBUBY. 355 
 
 so necessary, they became commoner. At last the practice became 
 intolerable, and it was attacked by the earlier factory legislation. 
 Since that time, to the dissatisfaction of the laissez faire people, the 
 legislation has been extended, and there is strong reason to believe 
 that greater restraint will be put on certain very continuous employ- 
 ments. When I served on Sir John Lubbock's committee, I was 
 surprised to find that the greatest amount of overwork was exacted 
 in the wholesale City warehouses, which close to appearance with or 
 shortly after daylight, but sometimes continue with closed doors to 
 very late hours. 
 
 The argument for the Factory Acts was that the children were in 
 the power of their parents, and eked out miserable earnings by their 
 premature toil, that it entirely prevented education, and that it 
 weakened the vital powers of the child. It was further alleged, and 
 truly, that this labour was not advantageous in the end, that long 
 hours, apart from other considerations, were a loss, and that 
 employers did not know their own interest when they exacted them. 
 The workmen passionately demanded the Factory Act, possibly 
 because they foresaw that their own wages would be bettered if the 
 labour of children were prohibited ; and in my opinion justly and 
 rationally demanded them. The employers resisted, and angrily 
 too. They were offended, perhaps reasonably, at being told that 
 they did not understand their true interests and their own business. 
 They looked on the onslaught as a direct attack on their own 
 calling, and with justice, for the employment of children in agricul- 
 tural labour was not similarly restrained. Now the agricultural 
 gangs of the eastern counties were worse than any labour in the 
 factories. They were defended by Mr. Clare Read, among others, 
 on the old plea that cheap labour was required in order to enable 
 farmers to pay rents. They were exposed, denounced, and finally 
 extinguished by a Norfolk clergyman, at his own personal risk, but 
 to his great honour. 
 
 I once asked my friend, the late Lord Shaftesbury, why he did 
 not extend the sphere of his Acts to the agricultural children, as 
 well as to the young people in the factories, for that he must have 
 known that the work of a child in the fields, ill-fed, poorly clothed, 
 and exposed to the worst weather in the worst time of the year was 
 to the full as physically injurious as premature labour in the heated
 
 356 LAISSEZ FAIEE : ITS ORIGIN AND HISTOEY. 
 
 atinospliere of a factory. He told me that he well Imew the evil, 
 but was powerless to meet it ; that if in the struggle he had 
 engaged, he had at once enlisted the hostility of the manufacturers, 
 the farmers, and the landowners, he should be incapable of doing 
 anything at all, and that if he procured the liberation of one class 
 of children, time would ensure the emancipation of the rest. Lord 
 Shaftesbury was a courageous and persevering man, as you know, 
 and his answer showed how well he knew what are the difficulties of 
 practical politics. People blame compromises, when they do not 
 know how rarely it is possible to get anything else. Nor do men 
 ordinarily see that all guaranteed interests are of suspicious justice, 
 and that just or not, they inevitably invite attack. 
 
 Again, it may be plausibly argued, that the bestowal of education 
 on a child by a parent is as natural a duty, in the light of civiliza- 
 tion, as that of food, clothing, and shelter. But the question is 
 not solved so simply. Most parents do bestow one kind of ediica- 
 tion on their children, that by which such children hereafter get 
 their living. The children of the peasant generally follow their 
 father's calling, and if he be an expert farm-hand, readily and 
 rapidly learn the many and varied accomplishments which every 
 person experienced in agriculture knows to be included in such an 
 expression. The children of mechanics also generally, indeed 
 obviously, grow up to the same pursuit, unless ability and oppor- 
 tunity combine to raise either out of an hereditary calling. In 
 point of fact, occupations are more hereditary than people imagine, 
 and I suspect, Mr. Galton, in dealing with hereditary genius, has 
 confounded hereditary occupation with it, for I should think that 
 the son of a judge, or the son of a bishop, has more chance of 
 becoming eminent in the law or the church (and Mr. Galton seems 
 to think that success is genius) than the son of another man who 
 had neither influence or patronage in either profession. So again 
 with special learning, the acquisition of which has a market value, 
 because the communication of it to others, by speech or writing, has 
 a price. I need hardly tell you that there is scarcely a single 
 endowment in public schools or in either of the universities, given 
 by benefactors in England up to the end of the last century, 
 which was not intended for the poor, the beneficiaries of which 
 were to be carefully selected all over the country, and transferred
 
 EDUCATION, PEIMAEY. 357 
 
 for higher education to Oxford or Cambridge. The grantees of 
 the monastic lands were put under the condition of endowing 
 schools with part of that which they received, in order that the 
 education conferred by the monasteries, much more general than 
 modern ignorance imagines, might not be lost, and the pious 
 founder is generally only paying a debt, which he seldom pays 
 fairly. Now all these endowments are appropriated by the rich. 
 The reason is plain, the higher education came to have a mer- 
 chantable value. 
 
 The case is wholly different with primary education, or the 
 ordinary education of the poor. In the main this is elementary. 
 Now if every working man, without exception, were taught up to 
 the standard required, say, for passing the Oxford or Cambridge 
 " little-go," it would not make any difference to the wages which 
 such a person would earn. Add what you please to the capacity of 
 all industrial agents, in the way of physical and intellectual power, 
 and you will add nothing to the wage-earning power, as long as no 
 individual is differentiated by the instruction. It is possible that 
 the educated workman will do his work better, more briefly, more 
 efficiently. This will be obviously to the advantage of the em- 
 ployer. It is only when he employs his acquired intelligence in 
 his own calling, and makes it by combination the means of exacting 
 better terms from his employers, that his acquisitions are a source 
 of profit to him. Now this I suspect the workman knows as well 
 as I do. I am bound to have a theoretical knowledge of the fact, 
 he is led to have a practical knowledge of it. The gain of his 
 child's education is not personal, it is national. The individual is 
 not better off by virtue of a universal and compulsory education, 
 except very indirectly ; the nation is all the better off, because a 
 well-taught race is cceteris jyarzftws, stronger in the competition of 
 nations, where laisiezfaire is supreme^ than an ill-taught one is. I 
 say, cceteris paribus, for the best educated race may be crippled by 
 unwise financial legislation. Bismarck's protectionist policy is 
 rapidly neutralizing all the efforts of North German education. 
 
 Now the peasant or artisan is first bidden to dispense with the 
 the earnings of his child, pitiful and paltry to us, but notable to 
 the men who can often only live by stint, to whom spare diet is 
 a habit. Next, for the sake of the state, the nation, he is bidden,
 
 358 LAISSEZ FAIRE : ITS ORIGIN AND HISTORY. 
 
 out of the clipped earnings of the family, to have his child taught, 
 Then out of our ridiculous s} r stem, of which I believe Mr. Lowe, 
 examination mad, was the author, the poor child is crammed in 
 order that he may earn grants for the school by his answers to 
 the inspector. I can conceive no more rational contempt and dis- 
 gust than that which peasant and artisan must feel for this precious 
 scheme. I know no system which is better adapted to defeat its 
 own ends, none in which a shallow pedantry is more ridiculous and 
 more transparent. The education of the poor ought to be free, it 
 ought to be inspected, as it is in the United States, by a committee 
 of competent persons, who attend to the master's tests and, if 
 needful, apply their own. I have no doubt that if the change were 
 made, the teaching would be more solid, the learning more attrac- 
 tive, and the selection for a higher grade more satisfactory than it 
 is under our preposterous system of extortion, cram, examination, 
 and grant. 
 
 There is another case or two which I must briefly refer to, in 
 order to illustrate what I have said as to the limits of laissez faire. 
 The doctrine is become an exceedingly useful one to the strong, 
 an argument for the oppression of the weak. Under the English 
 land system certain families all I grant if they could do so, a state 
 of things manifestly impossible are permitted to settle land. 
 They are protected against their own errors, vices, misfortunes, 
 by the machinery of an estate for life, with remainder in tail. 
 Land is limited in quantity, while population, i.e., of the customers 
 for land grows. The landowner is further assisted. All local taxes 
 are paid by his tenants, and his own charges are put at an absurdly 
 low amount. If his land is not let, it ceases to pay local taxes. 
 Land was formerly, till recently, liable to certain charges, which 
 are now to a great extent put on the general revenue, i.e., on the 
 income-tax payers; for Chancellors of the Exchequer are threatened 
 with revolt if they venture on taxing the succession of real estate 
 as personal estate is taxed. Everything is done which the law can 
 do indirectly to save the great estates, and not infrequently they 
 are farther secured from dispersion by private Acts of Parlia- 
 ment. In other words, the law of England does its very best to 
 make the landowners a ring, as it is technically called in trade, 
 to curtail the trade in land, and to give the man who is to sell
 
 LAND AND THE TENANT. 359 
 
 the use of land an overwhelming advantage in all contracts for 
 its use. 
 
 It is inevitable under these circumstances, that the tenant will 
 either be outrageously fleeced, or that the law must regulate con- 
 tracts for the use of land. We have done so, imperfectly enough, in 
 Ireland. We have done so still more imperfectly, only tentatively, 
 and with a serious failure of common justice in England, for we 
 permit a landowner to raise a rent arbitrarily against a sitting 
 tenant, and so allow him to confiscate his tenant's capital. At first 
 sight, a contract for the use of land seems to be an excellent, an 
 unimpeachable field for the principle of laissez faire. It is only so 
 in appearance, as every civilized government has discovered, and 
 ours must, it may be hoped, before it is too late. For we may be 
 perfectly sure that as time goes on, for every advantage which the 
 existing law gives the landowners, an equivalent will be exacted by 
 the tenant from the law of the future. People complain querulously 
 that the tendency of recent legislation is socialistic, and most of all 
 they complain whose position and the advantages of whose position 
 are distinctly anti- social. The tenant, in brief, when he makes a 
 contract for the use of land, except in so far as he is constrained 
 to carry on his occupation in a market which is rigged, is momen- 
 tarily a free agent. But immediately on his completing the con- 
 tract he ceases to be a free agent, and is at the mercy of the land- 
 owner, to whom the law gives an exceptional power in many ways. 
 The abuse of this power is sure, sooner or later, to bring retaliation. 
 The existence of the power is in itself a terror. We may be sure 
 that when those who elect legislators learn what they can do, they 
 will retaliate. Laissez faire when it can be most excused, or most 
 defended, postulates equality of conditions in order that it may 
 affirm equality of contracting power. 
 
 The English law has condemned truck, i.e., the right of an 
 employer to pay his workmen in goods, or in orders on particular 
 shops. At first sight the practice seems justifiable. Money is only 
 a pledge of purchases to come, of goods to be acquired, consumed, 
 or turned to further use and profit. The employer may be able by 
 the command of his capital, and by the fact of his custom, to 
 secure the greatest advantages to the workmen in quality, in cheap- 
 ness, in variety. He may inculcate upon them the excellent prac-
 
 300 LAISSEZ FAIRS : ITS ORIGIN AND HISTORY. 
 
 tice of not running into debt, by insisting that bis tallies shall 
 square with their consumption. But, on the other hand, the 
 employer may, and the temptation is exceedingly strong to do so, 
 make a further profit out of the retail transaction. He may argue 
 that, as he gives the shopkeeper a large custom and a safe trade, 
 he has a right to some of the advantages which the shopkeeper 
 calls his good-will, and may find that his investment in the tally 
 shop is as good as that which be makes in his business. And as 
 the dealer is made to pay for his business, be may reimburse 
 himself by selling inferior goods, by giving short weight and 
 measure, and by making use of his professional skill for the pur- 
 pose of cheating his customers with impunity, since he has a sole 
 and secure market. You will see at once that the evils of the 
 system counterbalance the advantages. I heard the other day of 
 most ingenious scheme of truck, which perhaps does not come 
 under the Truck Acts. A large employer of labour pays his work- 
 men every fortnight in tickets. These tickets are, to all intents 
 and purposes, equivalent to checks drawn on his bankers, the pay- 
 ment of which is deferred. They are known to be equivalent to 
 a deposit at the bank, and to be therefore well covered. The 
 employer makes no conditions as to the place in which they are 
 negotiated, except finally at the bank. The tradesman takes them 
 for goods and gives change, or exchanges them for money, probably 
 at par, as he can make up the loss, if any, out of the custom which 
 he gets. At the end of the third week the employer sends a clerk 
 round and exchanges them for cash. In this way, for I am told his 
 sole reason is that which I am about to state, be gets into his hands 
 the capital of his workmen's labour for three weeks in advance. 
 
 For a long time the legislature permitted private individuals, or 
 partners, the number being limited, in consideration of the privileges 
 accorded to the Bank of England to trade in money, to take 
 deposits, and to issue notes payable on demand or deferred, without 
 giving any security by an independent audit as to their solvency. 
 It gives, for reasons now historical, very many of these powers now. 
 I referred to these reasons when in one of my lectures I treated of 
 paper currencies. Now such a trust ought to be reposed in no 
 person whatever, for it has been justly said : " Free trade in bank- 
 ing is free trade in swindling." Look at the latest exposition of
 
 RESTRAINTS ON BANKERS. 361 
 
 the system. Messrs. Greenway, a quarter of a century ago, as one 
 of the partners said under examination, had with a note issue, 
 limited to '30,000, a capital of a little over 600. They had as 
 much moral right to carry on a bank under such circumstances as 
 a street sweeper has. But they put a face on it. They lived hand- 
 somely on the property of their customers, took an important political 
 position with the property of their customers, traded and speculated 
 with the property of their customers, and failed for a quarter of 
 a million or more a few weeks ago. They published balance-sheets, 
 they simulated solvency as well as virtue and patriotism, maintained 
 the sacred rights of property, and abode by the cause of law and 
 order. But their debts were returned as assets in their balance- 
 sheets, the notes which they put into circulation on faith in their 
 virtue were in innocent hands, and the indignant and defrauded 
 gentlemanlike party in the district had the poor consolation of 
 hearing their bankers' confessions, and burning the confessors forth- 
 with in effigy. It is not an invasion of laissez faire, you will 
 probably conclude, to insist on an independent audit of the assets 
 of private banks. Had it been taken twenty-five years ago, the trio 
 might have remained poor, but have also remained honest. 
 
 There are some other invasions of the principle of laisses jaire 
 which are admittedly, some which are probably, some which are 
 doubtfully, defensible ; some which are entirely and absolutely in- 
 defensible. I have a little to say on the former, I must reserve the 
 latter to a later lecture. You will always remember that every in- 
 vasion of economical liberty is on its trial, that those who maintain 
 the right of free action are merely on their defence, and that just 
 cause has to be shown by those who allege that private right should 
 be suspended or curtailed. And here I may observe that private 
 right postulates that the individual is not by his conduct undeserv- 
 ing of ordinary rights. I will illustrate what I mean by an action 
 of my own. When the Criminal Law Amendment Act was in com- 
 mittee I got inserted among other, I venture to think necessary, 
 amendments, a clause by which a criminal parent should be dis- 
 abled from exercising parental rights, though he still remained 
 liable to parental responsibilities. I had, in my experience of the 
 action of certain criminals, reason for an amendment, which the 
 House of Commons accepted.
 
 862 LAISSEZ FAIEE : ITS ORIGIN AND HISTORY. 
 
 Now you will probably agree with me that laws punishing the 
 adulteration of goods are just. I have already explained to you 
 what are the economical relations of trader and purchaser, and if I 
 am right, you will admit that the customer has a right to expect 
 truth from the dealer. If I buy bread I mean to get bread, not 
 stones, perhaps not potatoes mashed. If I buy meat I want meat, 
 not carrion. And, to quote a recent and much-debated topic, if I 
 buy butter I do not mean to buy butterine. So with a thousand 
 articles. There are, I know, people in high position who have 
 defended these tricks of trade, on the somewhat feeble ground that 
 purchasers prefer adulterated articles. I very much doubt the truth 
 of this statement. That people will be smart in shoddy who cannot 
 afford to be smart in cloth, I know to be a fact. That a dandy 
 whose means are small will adorn his breast with Abyssinian gold 
 when he cannot buy sterling is a fact, and may be a lesson, by 
 disappointing a pickpocket. But I doubt whether any one is willing 
 to pay the price of a genuine article for what he knows to be a 
 sham. And this is what adulteration means to make him do. 
 Besides, ha: nuga in seria ducunt. Army contractors have been 
 known to ruin a campaign by frauds. I have heard it said that 
 the collapse of the French armies in 1870 was due as much to the 
 frauds of the contractors as it was to the superior discipline of 
 Germany. We, too, had our experiences in the Crimea and Egypt. 
 It is only recently that we have heard of flexible bayonets and 
 brittle swords. It may be wise to turn a bayonet into a reaping- 
 hook, but it is not satisfactory to find it turning itself into one. 
 Depend on it the principle of laissez faire will not justify adultera- 
 tion, and should not be cited to condone trade frauds. 
 
 Should the State be at the expense of the higher education, and 
 particularly of that which is called technical ? There is a con- 
 siderable amount of fallacies uttered about the latter term. I hold 
 that a well-regulated apprenticeship, such as in practice I under- 
 stand engineers in England have to go through, is a good, almost 
 a perfect, technical education. Such is the system prevailing, for 
 I have witnessed the process, in the American technological colleges, 
 where the teacher, sometimes only a skilled workman, watches the 
 pupils' efforts, and gradually imparts to him the requisite knack. 
 Such, as I have told you, was the mediaeval apprenticeship in the
 
 ADULTERATION. TECHNICAL EDUCATION. 863 
 
 art of architecture and agriculture. Now if everybody is to be 
 taught this in his degree, the State may, for reasons given above, 
 be called on to pay it. If a few are to have the benefit, the State 
 may perhaps start the institution, as they did at Boston, perhaps 
 pay part of the management, but the pupils ought to supply the 
 means for its continuity. So with grants to universities. I never 
 could see what claims the Scotch universities had on a Parlia- 
 mentary grant. From the Tay to the border, Scotland is as rich 
 as any part of the United Kingdom. The English universities, 
 from the oldest to the most recent, have been founded by private 
 munificence, and are largely supported by the taxation of their 
 members. I am pretty sure the Scottish will not be as long as 
 Parliament gives them money. Myself, by a moiety a Scotchman, 
 I am assured that we are the better for their appearance here, where 
 they no longer say, tenui mcilitamur arena. But it might be argued 
 that Scottish wealth should of its abundance give to Scottish 
 learning in Scottish universities. 
 
 More disputable still is the obligation, in the reputed interest of 
 the laws of health and of public safety, to compel vaccination and 
 to insist on the notification of infectious disease. I know that I 
 am treading here on dangerous ground, on the fire, as Horace says, 
 which lies below deceitful cinders. Medical and sanitary science 
 say Yes ; but there is a strenuous, perhaps an uneducated, oppo- 
 sition, which says No. I have been in my past experiences, when 
 I was losing my health in the public service, to regain it by 
 losing my seat in my own, put to great straits in debating and 
 acting on this question. Much opposition is irrational, but, strange 
 to say, I have found that you do not always abate it by calling it 
 irrational, or even by proving to your own satisfaction that it is 
 perfectly fatuous. On the other hand, much science is bigoted and 
 intolerant, and I have found that eminent men of science have much 
 of the temper of an inqiiisitor when you are slow to accept their 
 conclusions. Besides, they are occasionally contradictory, and are 
 not free, even in the pure ether of their minds, from the passion 
 of advocacy. I have been in my time amused, and finally shocked, 
 at the conflict of scientific witnesses, even in matters which 
 appeared to be demonstrable. And when the doctors disagree, 
 and even quarrel, laissez fairc is pretty certain to re-assert itself.
 
 364 LAISSEZ FAIEE : ITS OEIGIN AND HISTORY. 
 
 There are subjects on which it is constantly alleged that the 
 principle of laissez faire should be suspended or rejected, which 
 are, in my opinion, no way to be dealt with on such lines. But I 
 shall be dealing with the history of the Protectionist movement in 
 my next lecture.
 
 XVII. 
 
 THE HISTOKY OF THE PROTECTIONIST MOVEMENT IN 
 
 ENGLAND. 
 
 The revival of the Protectionist cry The aim of Protection a higher 
 price The means, heavy import duties The object of the pro- 
 ducer an increasingly wide market Protection gives him a narrower 
 one The effect of Protection on prices and labour Protection and 
 rent The early protective laws The Pensionary Parliament 
 The policy of retaliation The futility of retaliation Protection 
 in Europe and militarism Protection in the United States, and 
 in tlie British colonies Mr. Mill's defence of Protection ex- 
 amined. 
 
 IT is difficult to approach the subject on which I purpose to lecture 
 this morning without a definition, and yet the definition of Pro- 
 tection, owing to the vague language of those who advocate this 
 unquestionable interference with laissez faire (in what appears to be, 
 under all or any circumstances, the most violent invasion of human 
 liberty conceivable, short of slavery), renders it very difficult to 
 realize, and thereafter to grapple with, what its advocates intend. 
 Again, the very shifting ground taken by those who advocate a 
 reversal of the policy which this country adopted above forty years 
 ago, the singular abstention from the body of those who are claim- 
 ing a change of any persons who are acquainted with the principles 
 of business, the entire absence of any one from their ranks, who 
 can be, by the wildest stretch of imagination, supposed competent 
 to form a judgment on the subject, is extremely puzzling. The 
 leader of this new movement is a gentleman who, before he sat 
 in Parliament, was a superior officer in the criminal detective de-
 
 366 THE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 partment. Mr. Howard Vincent is probably a very capable judge 
 of details, and I daresay was an accomplished person in bis own 
 line. I am told that he has exercised, from his own past experience, 
 a power by which he knows every person in his constituency a 
 rather questionable honour for them. All I know about him is, 
 that before he came in Parliament, he got the Home Office to pro- 
 pound a Bill which would have made every pawnbroker a f)rim<i 
 facie criminal ; a Bill which I effectually extinguished ; and when 
 he got into Parliament, he took on himself to move a grant for a 
 very deserving object. You are perha'ps aware that it is contrary 
 to Parliamentary rule for any one but a Minister to ask Parliament 
 for a grant. 
 
 As, however, Mr. Howard Vincent has been among us, and 1 has 
 got his associates to vote for a return to Protection, and has re- 
 solved to revive a controversy which we all thought dead and buried, 
 he therefore should be met. I purpose in the next two lectures 
 on this and next Monday's to deal with the history of Protection 
 up to 1846, when it received, as it deserved, its coup de grace here, 
 on its continuance, perhaps its extension in foreign countries and 
 some of our colonies ; and, in the next place, to show you how you 
 must interpret the tables of exports and imports, in other words, 
 the foreign trade of England, so as to give reality to the figures 
 which appear in the small annual Blue-book known as the Statis- 
 tical Abstract. The widespread, but at the same time extraordinary, 
 delusion which possesses many nations on the subject of Protec- 
 tion, is almost as much an ethical as it is an economical portent. 
 In the United States it is a widespread opinion, especially in New 
 England and Pennsylvania, and I am informed that a New England 
 or Pennsylvanian free-trader is almost a caput lupinum, a man whom 
 Mr. Howard Vincent, in his old capacity, would have had to take 
 care of, or, in technical language, to want. But in the earlier and 
 more pious days of New England there was a similar horror of 
 Quakers and witches, and the sceptic as to the supernatural wicked- 
 ness of these two imaginary malefactors ran the risk of a probable 
 tarring and feathering, and a possible hanging. 
 
 Now in our search after a definition we must always remember 
 that Protection is a password. When the expression is complete 
 it means Protection to native industry. Industry means work, and
 
 THE EEVIVAL OF THE PROTECTIONIST CRY. 367 
 
 native industry must be that of tlie British workman and the capi- 
 talist, in so far as he is a workman. But in early times, and for 
 the matter of that in later, as far as England was concerned, it 
 always meant, not a workman, who was not in the least thought 
 of, but a merchant and a landowner one of whom was conceived 
 to be the indirect means of manning the British navy, and must 
 therefore be indulged with a sole market, and a monopoly of freight ; 
 the other, the recipient of rent, who is not', in that capacity at least, 
 industrious, but is merely living, without reproach, in my opinion, 
 as long as his receipts of rent are fair, on the industry of others, or 
 as he has been profanely described by an eminent and versatile 
 statesman, of the class " which toil not, neither do they 
 spin." 
 
 Now it is easy to discover what Protection does to real industry, 
 i.e., to the labour of the workman with educated hands, and to 
 the labour of the capitalist superintendent with educated head, 
 respectively, either by an economical analysis, or by a historical 
 retrospect. We shall be able to show what, from the condi- 
 tions of industry and the interchange of industrial products, must 
 be the effect produced on the two forms of industry by restraint 
 in that particular direction which Protection implies, and we shall 
 be able to show, from the indisputable evidence of facts, what it 
 always has been. There are parts of the economic theory in which 
 the relation of the parts is so obvious, so intimate, and so inevitable, 
 that they may be proved apart from facts, just as there are rela- 
 tions of numbers and plane figures which can be proved to exist 
 without the concrete objects which illustrate those numbers, and 
 the actual surfaces whose relations are capable of a practical test. 
 But for all that, the abstract is always the better for the concrete, 
 the principle for the fact which demonstrates the principle, the 
 major premiss for the minor, the universal for the particular, the 
 inductions of reason, for the inductions of experience. What I 
 propose to show is, that, taking society at large, a policy of Pro- 
 tection could not benefit industry, and has not ever benefited 
 industry, meaning by industry those on whom society depends for 
 its existence and the continuity of its existence. I do not say 
 that some individuals may not be temporarily benefited by Protec- 
 tion, A thief is temporarily benefited by stealing a watch, but
 
 3G8 THE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 we do not on that account give a legal status to the pickpocket, 
 except in the dock. A swindler is temporarily benefited by success- 
 fully forging a check. But we do not on that account condone 
 forgery. Unless Mr. Howard Vincent has entirely abandoned all 
 sympathy with his ancient calling, he must admit that we must 
 consider the general good of society, and not individual ad- 
 vantage. 
 
 And now to deal with the analysis of these relations. No one 
 will deny that what Protection aims at is to secure, by the opera- 
 tion of law, a higher price for certain articles which are produced, 
 or presumably could be produced, in the country which is invited 
 to adopt such a fiscal change as would heighten the price. The 
 object of Protection is to make articles dearer, more inaccessible, 
 or at any rate, to demand from the purchaser a greater sacrifice 
 than he would have to make, if no protective taxes were imposed. 
 If any one gains, it is clear that the purchaser of the article must 
 suffer. In the next place, to make the protection of any use at 
 all for the objects which it is intended to serve, it must be imposed 
 on articles of general consumption, that is, 011 those which the 
 poor must consume, and cannot evade by going to the place of 
 their origin and getting them there. For example, the American 
 people put a tax on the price of foreign wool and foreign cloth, 
 for the sake of compensating the farmers, who could not export 
 a pound of American wool, as no rational spinner would buy it, 
 and for protecting the industry of the native spinners and weavers. 
 The late message of the President of the United States to Congress, 
 says that no objection can be made to taxing luxuries. To this I 
 might answer, What is a luxury ? and I think it would puzzle a 
 dozen Presidents to give an answer. But the fact is, the system 
 does not tax high-class goods or rich consumers. I have crossed 
 the Atlantic four times, and coming and going, I have always met 
 people of American descent, highly patriotic citizens, who declare 
 that their country is superior to the rest of creation, and that their 
 institutions are as free and enlightened r as themselves are, who 
 reckon that they will pay the price of their passage-ticket by the 
 difference at which they will buy stores at Poole's in Savile Eow, 
 as compared with the price they will give in Broadway. I do not 
 mention this to advertise Mr. Poole, who is, I am told, an excellent,
 
 THE AIMS OF PROTECTION A HIGHER PRICE. 369 
 
 but rather expensive tailor, but to show that they who admire 
 Protection, and' defend it, are always eager to escape from it when 
 it comes home to their own pockets ; that what they take to their 
 bosoms and their hearts in the case of the labourer, the tradesman, 
 and the farmer in the States, they reject and evade, when it touches 
 a far less vital part of their own surroundings. Protection to be 
 of avail must be got out of the belly and back of the great mass 
 of consumers. There is no use in trying to protect the industry 
 of those who produce articles of voluntary use. You must impose 
 it for the advantage of those who produce articles of necessary use. 
 The reason lies in the two words. Consumers will stint or forego 
 articles of voluntary use, but they cannot those of necessary use. 
 I know and foresee that there is a similar difficulty about " articles 
 of voluntary use," that there is about " luxuries." It is hard to 
 define either. It is less hard to define "voluntary use " than it 
 is luxury. But you will see how, even though undefined, these 
 words make for what I am engaged on, the effect of production 
 on industry. 
 
 Again, there is no use in putting on small protective duties. 
 Every country has a natural protective duty in the coat of freight. 
 In some cases it is so heavy as to be prohibitive. For example, 
 no one would dream of importing bricks or draining tiles from 
 America or India. Even in an article like wheat, the cost of 
 freight from Chicago to London, freights being ruinously low, is 
 9s. a quarter. Now wheat land is ill cultivated in England which 
 does not produce thirty-two bushels or four quarters to an acre. But 
 36s. is a very large natural protection to the British farmer for an 
 acre's produce. I could multiply instances and tire you with them. 
 Whether I should convince a fair-trader is another matter, if the 
 instances were infinite and all cogent. If we keep in mind, then, 
 that protective taxes, in order to be effectual, must be of articles 
 necessarily used, and that they must be pretty large in order to 
 have the desired and reputed effect of aiding native industry, wo 
 shall not find it difficult to conclude that the tax must be put 
 on what men, women, and children must all use, especially the 
 poor, and that the tax must be, in commercial language, stiff. 
 A small tax, too small to assist native industry, would be of no 
 use, except to the Chancellor of the Exchequer, and to those who 
 
 25
 
 370 THE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 profit by taxes, and I presume that Mr. Howard Vincent does not 
 want to merely increase taxes. In my opinion the distribution 
 of the taxes already levied, might well be put under the view of 
 a financial director of criminal investigation, with considerable 
 advantage to public morality and to the taxpayer's pocket. 
 
 Again the advocate of a policy which is the reverse of that which 
 has been adopted in this country for the last forty years assures 
 us, in solemn and prophetic language, that his expedient will 
 heighten profits and wages. He dilates on the land which has 
 gone out of cultivation, on the numbers of the unemployed, on the 
 stint of profits, on the decline of wages. But an inquiry has 
 latterly shown ^that the land which has gone out of some sort 
 of tillage or the other, is less than -00006 of the area of England 
 and Wales, a very low fraction. Mr. Groschen, who is not a friend 
 of Mr. Howard Vincent (he would belie his own income-tax returns 
 if he did not admit it), shows that profits, especially in incomes 
 between 1000 and 150 a year are increasing. The savings- 
 bank returns are also increasing, the average of each depositor 
 being rather lessened. And I should like to know a little about 
 the statistics of the unemployed. They are not yet forthcoming, 
 except in so far as I obtained a Parliamentary return of the Oxford 
 and Cambridge professors. I do not much care for vague state- 
 ments, especially when there is a suspicion about the motives 
 of the vagueness. For many years, in the infancy of my researches 
 into English agriculture, I used to examine the reports of each 
 year's harvest in the Mark Lane Gazette. I dare say that I noted 
 them for near twenty years. The report invariably stated that 
 the harvest was below an average. Now as such a statement, 
 annually repeated, constitutes an arithmetical impossibility, I 
 ceased to study the Mark Lane Gazette. Do not imagine that I 
 learned nothing from the statement. The Mark Lane Express was 
 a farmer's paper, and I saw that the farmers were playing at hide- 
 and-seek with the landlords, and that the newspaper was assisting 
 them in the game. You will frequently find, as you live, and get 
 shrewd in interpreting the second or secret meaning of what people 
 say, that even fictions may be instructive. 
 
 Everybody produces in the expectation of a market. Sometimes 
 he produces more than the market will take off his hands, by mis-
 
 PRODUCERS DESIRE A WIDE MARKET. 371 
 
 calculation or even by necessity. He may find that he cannot sell all 
 he makes, and yet, for reasons familiar to men of business, must go 
 on making, storing goods, employing labour. He does so in hopes 
 that the market will sooner or later lift his stock, and in the inter- 
 val he tries to induce economies on production, to lessen cost, and 
 if he can, to lower the charge of freight. He seeks above all things 
 to sell, sometimes by improving the produce, sometimes by elimina- 
 ting middle men, sometimes by lessening some of his profit. There 
 is nothing which he dreads more than the risk of selling less, for 
 he has, we must suppose, extensive buildings to keep in repair, ex- 
 pensive machinery to keep going, skilled hands to keep together. 
 The estimate that he makes of his business is based on the width of 
 the market, and his hopes that it may get wider. My late friend, 
 Mr. Babbage, long ago pointed out to me that the division of employ- 
 ments, which all economists are agreed is the most potent agency 
 in the diminution of cost in production, is principally aided by the 
 width of the market. As he is longing for a wider market, and 
 chafing most naturally at the artificial restraints which foreign 
 countries, encouraged by metaphysical economists, have put on his 
 market, Mr. Howard Vincent comes to him, and offers him a still 
 narrower market, as a priceless boon ; for, to every man out of 
 Bedlam, a higher price means a narrower market. There must 
 be something seductive in a proposal which at first sight offers 
 him a certain loss, in place of a possible gain. 
 
 But the fair-trader is not an absolute fool. He recognizes the 
 difficulty which I have referred to above, the tendency of goods in 
 these days of competition, of cutting prices, of imperilled, perhaps 
 of lessened, profits, to accumulate. He sees how serious a hindrance 
 hostile tariffs are to the British producer, and he dwells on the 
 inconvenience and wrong. He probably does not know that the 
 folly of British governments has made these hostile tariffs possible, 
 folly committed years after the free-trade policy was affirmed. Now 
 he says, "Levy a customs duty on foreign imports, and you will raise 
 prices, increase your profits, and give employment." It is just pos- 
 sible that the possessor of these accumulated goods might, if such a 
 policy were adopted, sell what he cannot sell now, though this is 
 far from certain. But what becomes of the continuity of industry 
 then and afterwards ?
 
 372 THE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 I have told you that it is 110 use protecting by taxes what people 
 may decline to use. The serviceable or, to be more accurate, effec- 
 tual protection is of what they must use food, clothing, cheap 
 luxuries. And the new school is candid. They want to tax food, 
 alleging the decline of British agriculture, which mainly means the 
 diminution of rents, though, as I shall show you presently, raising 
 corn to 60s a quarter would not necessarily raise rents. They 
 want to make a raid on the cupboard and the wardrobe of the 
 poor. But to sell agricultural and manufacturing produce at arti- 
 ficially high rates is not to give employment. It is not to secure 
 profit, for price does not guarantee one or the other. In the seven- 
 teenth century wheat was at an average 41s. a quarter, rent 4s. 6d. 
 an acre, wages of agricultural labour at first 4s., and after the 
 Commonwealth was established 6s. a week ; artisans 6s. and 8s. 
 After protective duties were levied on corn with a view of improv- 
 ing rents, with the pretence of stimulating agriculture, the police 
 of labour, the justices in Quarter Sessions, strove to bring back the 
 two kinds of labour to the old prices. They never told the work- 
 men, who had no votes then, that Protection would increase wages, 
 nor the tenant farmer, who was also politically voiceless, that high 
 prices would keep up farmers' profits. They were too contemptuous 
 of these interests to be sophistical. 
 
 Let us now suppose that the new fiscal policy is accepted, that 
 taxes are put on imported food in order to assist agricultural 
 industry ; taxes on cotton, woollen, and linen goods, in order to 
 assist textile industry ; and similar imposts for similar ends im- 
 posed on other products reputed to be manufactures, on products 
 of industry, and not raw materials, though, of course, without 
 giving a definition of this puzzling expression, and which is really 
 an intermediate product wool and flax, are as much a product of 
 industry as cloth and linen are, and cloth and linen are raw mate- 
 rials to the tailor and shirt-maker. At once the stint begins. The 
 labouring man gets a single loaf where he got a loaf and a half ; a 
 single boot where he got a pair of boots ; a coat once in two years 
 when he used to get it every year. He has of course, for the bread 
 must be got, even less power to buy a pair of boots, especially at 
 the enhanced price, and the coat than ever. Now the leather dealer 
 during the artificial inflation, has perhaps sold his stock of leather,.
 
 EFFECT OF PROTECTION ON PRICES AND LABOUR. 373 
 
 the shoemaker his stock of boots, the cloth weaver his stock of cloth. 
 All want to be busy, but the market is gone, or so shrunken, that 
 there remains only half the old occupation for the employer and the 
 labourer. The army of the unemployed is doubled at a stroke, and 
 it is fortunate if the teacher of this new gospel, in which a possible 
 temporary gain is followed by a certain permanent loss, is not in- 
 vited again to assume his ancient functions as a director of criminal 
 investigation. For it is certain that if prices were trebled, and 
 three men were taking the wages of one man, the employer will 
 give no more wages than he need, be he farmer, manufacturer, shoe- 
 maker, tailor, builder, or indeed any one of the multitudinous 
 traders or employers who figure in the census. A workman does 
 not get wages because a trader informs him that he will get them, 
 but because his labour is needed, since there are people ready to 
 buy or use what his labour produces. Employment is not of spon- 
 taneous growth, but is the result of definite and intelligible impulses. 
 Take away or curtail the impulses, and you do not stimulate employ- 
 ment. You might as well say, if you closed up your window 
 shutters in broad daylight, you would have light in your dwellings, 
 by some spontaneous action, independent of yourself. You would 
 have to put up with a candle or a lamp, to pay for it, and therefore 
 have less to buy other things with. But worse would come. You 
 would in human industry have destroyed its continuity, have 
 brought into irretrievable confusion the complicated, but, on the 
 whole, beneficent agencies of modern society, and have effectually 
 beggared the labourer and the capitalist employer. 
 
 There is one occasion, and one only, on which high prices will 
 induce higher wages. This is when there is an urgent demand for 
 something of which the supply is short. This generally happens 
 after there has been some great destruction of the products of wealth 
 or some prolonged suspension of ordinary industrial action. Such is 
 ordinarily the result of a great war, in which much property is anni- 
 hilated, workmen have been employed in mutual slaughter or in pro- 
 viding the means of mutual slaughter, but thecondition is all impor- 
 tant the recuperative power of the nation or state is not seriously 
 impaired. Such a state of things ensued, for example, after the 
 civil war in America, and after the Franco-German struggle. It did 
 not ensue after the Thirty Years' War, after the war of the Spanish
 
 374 THE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 succession, after the great Continental War, for the principal com- 
 batants were absolutely exhausted after the struggle. But when 
 such high prices prevail, protection is entirely superfluous. Native 
 industry has its own way, and does not need to be guided or fos- 
 tered. To offer protection at such a time as this, would be like 
 offering a strong and healthy man a pair of crutches. The offer or 
 suggestion of protection comes when trade is dull, stocks are accu- 
 mulated, profits are imperilled, and quacks talk. The acceptance 
 of it would make trade more dull, [stocks more unsaleable, and 
 profits go out of the category of peril into the actuality of extinction. 
 It would be a small consolation for quacks to be silenced. 
 
 I have told you that exalted prices of agricultural products, due 
 to artificial causes, would not raise rents. They would enable 
 sitting farmers to get rid of their stocks, and even enable them to 
 pay existing rents. But they would not recover rents. For rent 
 is the resultant of two forces, of which one has been dwelt on 
 disastrously as the sole cause of rent ; the other, to which the 
 greater part of rent is due, has been studiously ignored. The 
 former is, the natural powers of the soil, judiciously used and 
 renovated. This source of rent was known to Pharaoh and 
 Nebuchadnezzar. It is commented on very properly by Herodotus, 
 when he describes Egypt and Mesopotamia. The latter is agri- 
 cultural skill, which is the capacity of the tenant. This may be 
 shortened, even destroyed. You can no more extemporise capitalist 
 farmers by artificial prices than you can, as the polite but dilatory 
 Frenchman thought an astronomer could, encore an eclipse. A 
 destroyed interest is more difficult to revive than it is to create one. 
 The agricultural landowners of the eighteenth century created 
 British agriculture. The horseracing landowners of the nine- 
 teenth century have destroyed it. And of all the mean things 
 which mischief-makers can do, none is more mean than to claim 
 that the rest of mankind should meekly set to work to pay them 
 for the mischief which they have done. It is possible that the 
 injury which has been done to British agriculture is not so serious 
 after all, as people who are smarting with the consequences of 
 their own folly would have us believe. But of the fall of British 
 rents there is no doubt. Of the recovery of them there is the 
 gravest doubt, for the source of them is seriously impaired. But if
 
 PROTECTION AND BENT. 375 
 
 the capitalist employer lias, in great degree, disappeared from 
 agriculture, what is the prospect of agricultural wages rising under 
 artificially enhanced rents ? Will the farmer give Hodge, from 
 spontaneous good nature, a shilling a week more for his work, when 
 he can get Hodges in plenty, because the price of corn is doubled? 
 Why, at the end of the eighteenth century, when farmers were 
 getting 150s. a quarter for wheat, agricultural wages were at 7s. a 
 week (you may read of them in Sir Frederic Eden's ''History of 
 the Poor") and farmers were grumbling because they had to pay 
 so much. 
 
 The old free-traders of forty or fifty years ago used to say that 
 all Protection meant robbing somebody else. The expression was 
 plain spoken, homespun, perhaps coarse, but it was very accurate. 
 The object of protection is to enhance prices. Prices are what a 
 man has to pay, for it is no use to enhance a price which no one 
 will give. But to make me or any one else pay more for what I 
 must have than I need pay, and to put this compulsion on me in 
 the interest of the third party, which is most falsely called native 
 industry, is as violent an invasion of my personal liberty as I can 
 easily conceive. I do not object that prices are heightened against 
 me, in order to provide funds for the administration of public 
 affairs, for internal and external defence, for the "proper dignity of 
 the collectivity, which we call the United Kingdom or the empire, 
 though every one has the right, a right too rarely exercised, of 
 criticizing taxation and expenditure. But I object very strongly 
 to being called on to pay for one man's profits and another man's 
 rent, especially when I have grave doubts whether profits or rent 
 will be improved by these means, and I am quite sure they ought 
 not to be, if they could. It is bad enough to be plundered for the 
 best of causes, but to be plundered for the worst is more than 
 irritating. I might wince if my own savings, or my own harmless 
 enjoyments were curtailed in order to increase the wages of em- 
 ployed or unemployed workmen, though I might bear the calamity 
 with equanimity, but to . have them curtailed when I am quite 
 certain that the process will only make the condition of labourers 
 worse is a good deal more than a grievance. 
 
 But it is time, especially as part of this subject is postponed 
 till the following lecture, that I should say something about the
 
 376 THE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 history of that fiscal policy which was exploded some forty years 
 ago. And here I may observe, that the assault which Adam Smith 
 made on the Protectionist policy of his time was chiefly directed 
 against the mercantile theories of his time, and not very notably 
 against the landowners. "The mean and malignant sophisms" 
 which he denounces were put out by the trading interest, who were 
 then the advocates of the sole-market theory, " the sneaking arts 
 of an underling tradesman," has only to be quoted to show its aim. 
 He was under the impression that the landowner was, on the 
 whole, high-minded and patriotic, a little too fond perhaps of 
 artificially cheapening labour, and possessed of an income, the 
 origin of which would not be well defended, after an economical 
 analysis, but one, who, on the whole, used his position honestly 
 and fairly. He was very much in the right. The great land- 
 owners were still engaged in the highly serviceable work of teach- 
 ing agriculture. Their rents were by no means extortionate. 
 Arthur Young, who has no words too strong for the absentee and 
 grasping Irish landowner, blames the excessive leniency of the 
 English ; for though he held that a tenant farmer ought to have 
 adequate security, he also held, and with considerable reason, that 
 a fair rent was a stimulus to progressive agriculture. 
 
 A search into the early statutes would lead the student to the 
 discovery of many laws which were intended to assist new de- 
 partures in English industry. Our early kings and early parlia- 
 ments were really anxious to assist in the development of new 
 energies, and in the improvement of old ones. They encouraged 
 Flemings to settle in England, though curiously enough the craft 
 of the weaver (textor) was long a synonym for the depraved 
 appetite of a heretic, of one who hungered after novelties of faith, 
 or as the weavers themselves said, after the earlier gospel. The 
 Plantagenet kings, early and late, faced this risk, if haply they 
 might improve English textile industry. But owing, as I believe, 
 to the unparalleled backwardness of the English intelligence, the 
 expectation was baffled. Of course the prohibition of foreign 
 goods was more intended to discourage than to prevent their 
 importation. The administration must have been aware that it 
 could not stop smuggling. Hints occur over and over again in 
 accounts, that the officers of customs were by no means uncorrupt,
 
 THE EARLY PROTECTIVE LAWS. 377 
 
 and that a judicious present was not without its effect. Infinitely 
 more effectual than the preventive service of the ports were the 
 sumptuary laws. People who broke these laws went about with 
 the evidence of their offence on them. But the clothing which a 
 noble alone was allowed to wear was not an English product, and 
 therefore did not call for protection. 
 
 Protective laws in England have been of two kinds those which 
 controlled the importation of foreign food in the interest of the 
 landowners, and those which taxed or prohibited the introduction 
 of foreign manufactures, in the interest of dealers or merchants, 
 and to some extent of manufacturers. The early policy of the 
 English Parliament was to favour imports of food and to check 
 exports. The Government had a reasonable anxiety that foreign 
 countries should be encouraged to make up the occasional defi- 
 ciencies of English harvests, and wished to preclude loss in bad 
 years by checking exportation. Thus in 1438, the only serious 
 scarcity of the fifteenth century, the administration actually forbad 
 the inland water carriage of corn, on the ground that occasion would 
 be taken if it were once on shipboard to export it. In dear times, 
 corn ships, putting under stress of weather into English harbours, 
 were bound to dispose of the whole or part of their cargo in English 
 markets. The laws against forestalling and regrating, i.e., buying 
 corn on the way to market, and selling corn in the market at 
 which it was bought for a higher price, were really due to a desire 
 on the part of the Government, to secure, as far as possible, plenty 
 for the consumer. 
 
 The first really important legislative Act, the object of which was 
 to raise rents at the expense of the consumer, and in the interest 
 of the rent-receiver was that of the Pensionary Parliament of 
 Charles IL I have referred to it before, and pointed out that it 
 was a failure, for shortly after the passing of the Act occur a series, 
 on the whole, of very cheap years, and as we learn from the 
 literature of the age, there followed loud laments about agricultural 
 distress, this being, historically, the landlords' name for cheap food. 
 After the Revolution the legislature granted a bounty on the 
 exportation of corn, an expedient which was intended to heighten 
 prices. As the new agriculture was developed, it had an opposite 
 effect. It stimulated production, for it was a premium on which
 
 378 THE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 the producer could speculate, and for which he would sow a larger 
 breadth. Exactly the same complaint is now being made in those 
 countries which give a bounty on beet-root sugar. The producers 
 are urged into producing more than the market needs, by the 
 chance of getting this premium on production. I doubt whether 
 the English refiners, who are constantly clamouring about the 
 bounty, have suffered so much as the continental farmers have, 
 who are supposed to be benefited by it. The favours of Govern- 
 ment are like the box of Pandora, with this important difference, 
 that they rarely leave hope at the bottom. During the greater part 
 of the eighteenth century the Corn Laws were inoperative, the 
 bounty, as far as the consumer was concerned, was innoxious. I 
 shall revert to the later history of these Corn Laws hereafter. 
 
 The growing importance of the American colonies, to the fiscal 
 theory of which I referred in a lecture of last term, and the 
 development of the sole-market project, led to the whole system of 
 manufacturing protection. But it is plain, from Adam Smith's 
 language, that the most odious part of this system was not the 
 manufactures which it forced on the colonists, but the restraint of 
 trade which the traders insisted on and extended, under successive 
 amendments of the Colonial Trade Acts. One thing proves this 
 incontestably. The American colonists smarted exceedingly under 
 the losses, I may say the atrocities, of the War of Independence. 
 But they were better customers of England after the war was over 
 than they were before. To be sure, the English were becoming 
 the weavers of the world. Their trade grew and their fortunes 
 with the growth. Now such people do not want protection. They 
 do not care for it. They would prefer free trade, because they get 
 a profit on both exports and imports. They were jealous of one 
 place only. They feared the rivalry of one country only. This 
 was Ireland, and they destroyed her manufactures piecemeal. Is 
 it not written in the English and even in the Irish Statute Book up 
 to 1782 ? With this exception, the English manufacturers are, on 
 the whole, free-traders during these early years. At last they 
 became all but unanimous, enthusiastic on the subject. 
 
 The case was very different with the landowners. Land, thanks 
 to the experimental cultivation of the eighteenth century, was 
 exceedingly well tilled at the end of that century. The evidence
 
 THE POLICY OF RETALIATION. 379 
 
 on this subject is conclusive and abundant, as one can see by 
 studying the country reports sent to Arthur Young, as Secretary of 
 the Agricultural Board. But the landowner, as a rule, ceased to be 
 a cultivator. Bents rose rapidly, partly owing to the generally 
 diffused skill of the farmers, partly to the extremely high prices of 
 corn, partly to the forced paper currency. Population increased in 
 numbers and in misery. The determination to keep up rents, by 
 keeping up a high price of corn, became a passion as keen as that 
 which is said is the appetite of a tiger who has tasted human flesh. 
 I lived in my youth through the time of this fury. On one side 
 of my household I consorted with the free-traders. On the other, 
 I consorted with protectionists, and heard the maledictions of both 
 parties. It was a battle of giants. They who were in the fray 
 were of very different stature and thews from the fair-traders. It 
 is superfluous to pursue the subject further on this occasion. In 
 my next lecture I shall hope to deal with what has happened to 
 English manufacture and trade since 1846. But there are matters 
 connected with the practice of other nations, referred to with 
 admiration by some writers and speakers, with the analysis of 
 which I may fittingly occupy the rest of the time which I may 
 claim of you. 
 
 The pleas on which a reversal, more or less complete, of our 
 present policy has been advocated, as far as England is concerned, 
 are chiefly based on the expediency of retaliation. Foreign 
 countries have excluded the goods of our production from their 
 markets. Our own colonies have done so with even greater strin- 
 gency. There is just so much reason in this, because these 
 colonists are generally producers of nothing as far as we are 
 concerned, except undeniably raw material, such, say as wool and 
 wheat, and other countries are producers of manufactures which 
 they want to sell ; and therefore, to adopt a policy entirely exclu- 
 sive, would destroy their own export trade, or at least force it into 
 roundabout and less profitable channels. Now these people argue, 
 and they are supported by a most erroneous and mischievous 
 utterance of Mr. J. S. Mill, that retaliatory tariffs are real 
 remedies against prohibitive or protectionist tariffs. " Let us 
 then," they say, "give these people a taste of their own doctrin. . 
 Let us handicap them in our own country and in those countries
 
 380 THE PEOTECTIONIST MOVEMENT IN ENGLAND. 
 
 in which. the administration is still the master, for instance, in 
 India and the Crown colonies." 
 
 But there is a difficulty at the very beginning. The worst 
 offenders against us are our own kinsfolk, whom we have defended 
 in their infancy at our cost, and who retort on us by repudiating 
 all the products of our industry but our money. It is certain that 
 any attempt to retaliate upon them would be resented, and that the 
 result of the attempt would be, that the Imperial Institute and all 
 that it symbolizes would be shattered. If Great Britain wants to 
 keep such a hold as it has on Greater Britain, it must submit to 
 Greater Britain's financial petulance. Hence the project of retali- 
 ation excludes the British colonies from the scheme, or revives the 
 old differential theory of the Colonial Empire, without securing any 
 compensatory restrictions. We are to buy of our colonies only, or, 
 on advantageous terms to them ; are to consent to other nations 
 buying of them as freely as we do, and those other nations permit; 
 and are to bear, on the hypothesis of retaliation, greater injuries 
 from them, with patience, serenity, and persistent consideration for 
 the greatness of the empire, whatever affronts they put on our 
 trade. Talk about one-sided free trade. That may be a calamity. 
 I do not dispute, but I do not exaggerate the inconvenience. But 
 one-sided retaliation is a most pitiful absurdity. 
 
 But Mr. Mill is wholly in the wrong. Eetaliatory duties never 
 did and never will avail. They are essentially personal. They 
 are easily met by trans-shipment. Let us, for instance, meet the 
 figures are a mere hypothesis a bounty of 10 per cent, on French 
 refined sugar by a "countervailing duty." The French refiner 
 will forthwith ship his sugar to Bergen or Christiania. No sugar 
 is, I believe, produced from beet-root in Sweden or Norway. It is 
 thence trans-shipped to Hull. Now no country has ever in its fiscal 
 system been able to grapple with the origin of goods. It would 
 not be the duty, inclination, or interest of the port authorities of the 
 Swedish kingdom to assist us in tracing the origin of goods, and 
 they would assuredly resent custom-house detectives prowling 
 about the waters over which they have jurisdiction. Besides, 
 retaliation has the inconvenience of admitting that the offender is 
 in the right. Again, nations have never been known to revise their 
 tariff laws by reason of force majeure, and I doubt whether the
 
 THE FUTILITY OF RETALIATION. 381 
 
 strongest nation could coerce the weakest in this way. Again, the 
 smuggler is sure to reappear in the interest of the consumer, and 
 with his sympathy and covert assistance. But most powerful of 
 all is the argument that a community which adopts a protective 
 system deliberately or unconsciously puts itself under a commercial 
 disadvantage. Every country wants to sell something, even if it 
 determines on buying nothing. The more completely it carries out 
 the latter resolve, the worse price does it make for what it wants to 
 sell, the more of its goods must it offer in order to make any 
 market at all, since, for example, it loads itself with a double 
 freight in order to effect a single transaction. If it took nothing 
 but money, as Eussia is striving to do, it would in addition, sooner 
 or later, depreciate by over-supply the only article which it will 
 accept in exchange. The country, on the other hand, which takes 
 its produce, gets what it buys on the easiest terms, or as Mr. 
 Mill says, by a happy inspiration, in marked contrast to much 
 which he has written on the subject of international trade, though 
 here he does not specify the cause, it gets articles more cheaply 
 than they are procurable in the country of their origin. But to 
 retaliate would be to lose this advantage. We do not, it is true, 
 sell as much as we could under the present system. But we buy 
 much cheaper. Eetaliate, and you sell no more, and buy on far 
 worse terms. And as much of what is sold is raw material, in the 
 strictest sense of the word, which Great Britain keeps or re-exports, 
 to heighten the price of what you buy would be to straiten supply, 
 to check manufacture, and to diminish the demand for labour, and 
 with it wages. Even agriculture, which is always demanding Pro- 
 tection, and has lately affirmed it with naked selfishness, is blind 
 to its own interests. For a wise agriculture is that which busies 
 itself with its own best products. Let us conceive this to be stock- 
 raising. But a plentiful supply of cheap food for stock more than 
 compensates for the low price of the food itself, in so far as it is 
 produced at home. 
 
 I shall, however, I hope, in my next lecture dispose of most of 
 those allegations which are made for the purpose of suggesting 
 retaliatory measures, as I deal with details. In this lecture I am 
 concerned with principles. I cannot see what right any producer 
 has, or any landowner for the matter of that, to pretend to strike
 
 382 TEE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 at another and wound me. One of the commonest and, I may 
 add, one of the most impudent of fallacies is that a private interest 
 is a public duty. If in the competition of foreign agricultural pro- 
 duce, all the agricultural rent of England were to disappear, what 
 is that to the mass of Englishmen ? We might have to deplore the 
 loss of a class of men whose existence has been characterized by 
 lofty probity, by patriotic aims, and by unselfish devotion to the 
 common good, by the unvarying exhibition of public and private 
 virtue, by an elevating example of refined culture, of ennobling 
 pursuits, of passionate devotion to a lofty ideal, of a long record of 
 just and painstaking service, of an order so self-restrained and 
 faultless that no scandal has attached, early or late, to any of its 
 members during its historical career. But, beyond doubt, abun- 
 dance for those who work is better than full rents to those who 
 merely afford us a shining example. And if, as I have said, wheat 
 land is protected by the cost of freight, to the extent at least of 
 3Cs. an acre, there is something wrong in English agriculture 
 which no duty on corn, Mr. Chaplin's proposal, will remedy. 
 
 Europe is, I admit, increasingly protectionist. It is also in- 
 creasingly military. I am not clear that the waste of its 
 resources in one direction should make us admire it, still less 
 follow its example, when it wastes its resources in another direc- 
 tion. It is an open secret that the finances of nearly every 
 European Power are strained to the uttermost, and that the 
 margin between solvent and bankrupt exchequers is perilously 
 narrow. When governments are in straits for money, they may 
 make loans, claim a part of their subjects' property under a 
 direct tax on their means, or levy new customs duties. There is 
 a limit to the first process, though where the limit is is hard 
 to say, for the fact of its being reached lies in the vast region 
 of the unexpected, and the limit is ruin or repudiation. The 
 second is always unsafe, and generally unprofitable. It is especi- 
 ally unsafe now, for it greatly resembles the most offensive, and 
 to the well to do, unpopular demands of communism. Besides 
 the wealth which would be most conveniently attacked can seldom be 
 attached. When it is imperilled, it can satisfy the Scythian's 
 conditions of passing imperceptibly through earth, air, and 
 water, and so escape the Scythian's arrows. The most resolute
 
 PROTECTION IN EUROPE. 383 
 
 and Bismarckian of financiers would think once, twice, or thrice 
 before he came to quarters with owners of Stock Exchange secu- 
 rities and bankers' balances in his own country. There must be 
 some warning of the intended effort, and then cantabit racitns. 
 
 There is always in reserve a new tax on consumption. This was 
 nearly the whole of English finance during the terrible struggle of 
 the Continental War. The person who pays is helpless. He is 
 offered the alternative of abstinence, often the power of consuming 
 at a cheaper rate, an inferior home product. The payment is 
 almost insensible. The custom-house officer, it is true, cuts a 
 large slice from the loaf, weakens the coffee, lessens the supply in 
 the sugar basin, makes a. great hole in the habiliments, and so 
 forth ; but he is invisible, and this is some consolation. And then 
 the manufacturer is to be consoled by the most agreeable combination 
 which can be offered him, patriotism plus profit. Taxes on food 
 are to be levied in aid of the farmer, and compensatory duties are 
 accorded to everybody, in consideration of these taxes on food. 
 The people are assured that they are independent of foreign nations, 
 and under all there is increasing misery, decreasing wages, increas- 
 ing discontent, increasing repression, socialism of the most menacing 
 kind, and an utter distrust in the providential functions of govern- 
 ment. The result is not encouraging. Everybody is to be benefited, 
 and everybody is dissatisfied, impoverished, and discontented. From 
 the Ural mountains to Gibraltar, Europe is seething with social 
 volcanoes. 
 
 The history of Protection in the States of the American Union is 
 entirely different. The people, though high-spirited, proud of their 
 country and their institutions, and resolutely determined to permit 
 no meddling with the northern half of the New World, are not dis- 
 posed to keep on foot a large army or formidable navy. They have 
 no mind to interfere in European politics, or ape, as they say, the 
 inevitable folly and extravagance of monarchical institutions, but 
 they are quite resolved that no one of these powers shall interfere 
 with them. They have, therefore, no urgent necessity for excep- 
 tional taxation, no excuse for an impolitic and vexatious fiscal 
 system. But they are none the less the victims of sophistry, 
 supported, it cannot be denied, by corruption and even by terrorism. 
 The American people pretend to be the freest nation in the world,
 
 384 THE PBOTECTIONIST MOVEMENT IN ENGLAND. 
 
 and they permit themselves to be fleeced and plundered by a few 
 interests, which dictated their own terms at a supreme crisis of the 
 national history, and found spokesmen and agents when the country 
 was aghast at the political perfidy which was visible everywhere. 
 The protectionist tariff of Mr. Morrill was in great part, as I have 
 heard alleged by eminent American statesmen, the price paid for 
 the allegiance of the manufacturing East. I have been told this so- 
 unanimously and so uniformly that I cannot doubt it. I do not 
 conceive that these persons put, as the phrase goes, into black and 
 white the terms of the treaty, but many men half consciously act 
 on what they would be ashamed to openly avow. 
 
 There were, of course, other reasons given. The American 
 financiers copied the precedent of the War of Independence, and 
 raised their loans by a floating debt, which was funded as a paper 
 currency. This is, of course, a most extravagant way of creating 
 a debt, because it creates an over-issue of inconvertible paper,, 
 depreciates the stock in which the debt is ultimately founded, and 
 necessitates in the end the concession of a prodigious premium 
 to the virtual lenders of the fund, the public which circulates the 
 notes. The greenback finally was quoted at over 250, gold being at 
 100. No more wasteful way of creating a debt could, I think, have 
 been devised than that adopted by United States Treasury. The 
 evil too of a forced paper currency long survived the occasion of 
 its issue, and numerous and shameful advantages were taken of the 
 situation by Wall Street gamblers, to the infinite misery of the 
 American working classes. The fact is now confirmed by the record 
 of prices. 
 
 Now how was the people to be reconciled to a tariff, which, in the 
 nature of things, and in accordance with the inevitable conditions 
 of indirect taxation, must press with far greater severity on the 
 poor than on the rich ? The people was instructed that, under this 
 policy, the country would be self-contained, and independent of 
 foreign supply (though America has borrowed more in Europe 
 than any other country), that this policy was certain to lead to the 
 development of all kinds of industry, and would exhibit the varied 
 and versatile character of American genius^ while without it, the 
 people would be limited to a few common pursuits, that prosperous 
 America, the paradise of labour, would, under a free market, be
 
 PROTECTION IN THE UNITED STATES. 385 
 
 handicapped by cheap foreign labour, by the famished slaves of 
 European despotism. It was necessary therefore that the better-off 
 -workmen should be protected by protecting the employers' profits, 
 as though employers paid wages in proportion to their profits, and 
 not in proportion to the bargains which they could force upon 
 workmen. I remember telling my friend, Mr. Cyrus Field, when 
 the new tariff was passed, that before many years were over, 
 America would be visited with an anarchic and socialist trades 
 union, and the experiences at Pittsburgh and Chicago, the knights 
 of labour, and the followers of Mr. George, are a justification of 
 my prediction. The system, which has been enforced, over and 
 over again, by American economists and statesmen, has been 
 maintained by terrorism, for honest men have had to choose 
 between reticence on free trade and the threat of social and com- 
 mercial excommunication ; while corruption, not only that known 
 as lobbying, under which the manipulation of members of congress 
 has been made a fine art, but lavish and equally corrupting expen- 
 diture on harbours and ports, canals and the like, has been freely 
 practised, the excessive receipts of the treasury being freely em- 
 ployed in order to demoralize localities. At last, though even now 
 the President has not felt strong or bold enough to utter the 
 word, the whole question of Protection and Free Trade is made 
 an issue to the American Republic. 
 
 The action of the British Colonial Governments, who have gene- 
 rally adopted a Protectionist trade policy, is based on different 
 grounds. The advocates of the system have sometimes stated, 
 what does form an apology, though not a good one, for high custom 
 duties, that in a thinly peopled country it is difficult, if not impos- 
 sible, to collect direct taxes, especially from the mass of the people, 
 or to levy countervailing excises, and that therefore the only 
 remaining source of revenue is considerable customs. But if it be 
 hard to levy an excise, because the power of collecting it is scanty, 
 and the law might be evaded, it is hard to see how smuggling is 
 to be checked. Then the fallacy, so often exposed in these lectures 
 that high prices make high wages, has been industriously dissemi- 
 nated and insisted on. This can only happen when prices arc 
 naturally raised in a free market, when the situation tends to in- 
 crease the demand for labour. It does not happen, when the rise 
 
 26
 
 386 THE PEOTECTIONIST MOVEMENT IN ENGLAND. 
 
 is artificially induced, because the demand for labour is not in- 
 creased, but if anything diminished. But their chief reliance is on 
 a famous passage in Mr. Mill's " Political Economy." 
 
 I am referring to a statement which will be found in book v. 
 chap, x., of this classical work. Mr. Mill, after stating it to be 
 " the only case in which, on mere principles of political economy, 
 protecting duties may be defensible, is when they are imposed tem- 
 porarily (especially in a young and rising nation), in hopes of 
 naturalizing a foreign industry, in itself perfectly suitable to the 
 circumstances of the country. The superiority of one country over 
 another in a branch of production often arises only from having 
 begun it sooner. There may be no inherent advantage on one 
 part, or disadvantage on the other, but only a present superiority 
 of acquired skill and experience. But it cannot be expected, that 
 individuals should, at their own risk, or rather to their certain loss, 
 introduce a new manufacture, and bear the burden of carrying it 
 on, until the producers have been educated up to the level of those 
 with whom the processes are traditional. A protecting duty con- 
 tinued for a reasonable time will be sometimes the least incon- 
 venient mode in which the nation can tax itself for the support of 
 such an experiment. But the protection should be confined to 
 cases in which there is good ground of assurance that the industry 
 which it fosters will after a time be able to dispense with it ; nor 
 should the domestic producers ever be allowed to expect that it will 
 be continued to them beyond the time necessary for a fair trial of 
 what they are capable of producing." Perhaps there is no passage 
 in any work which exhibits so much ignorance of human nature, 
 and so much ignorance of facts. 
 
 I don't quite know what Mr. Mill means by "mere" political 
 economy, a term which I emphasize. What is called political 
 economy is true or false. If it is " mere," it is of no validity or 
 force. But to pass this by. In every young and rising nation there 
 are a number of capacities, which are as yet undeveloped, perhaps 
 unknown. The best way to make them known and develop them 
 is to let them come to the front spontaneously. The best way to 
 leave them unknown, and to develop them unhealthily, is to allow 
 Government, at the instance of individual, and probably mistaken 
 self-interest, to give them assistance out of people's pockets. Be-
 
 MR. MILL'S DEFENCE OF PEOTECTION EXAMINED. 387 
 
 sides, in what does the suitableness consist ? Is it in the circum- 
 stances of the country, or in the superiority, as the passage seems 
 to imply, of acquired skill and experience, which is the capacity of 
 the applicant for this qualified protection ? If the former, the cir- 
 cumstances will soon assert themselves ; if the latter, is the appli- 
 cant to be the judge of his own skill and experience, and inform 
 the Government, or how is the Government to put him to the test? 
 Sum it as one will, the situation is one in which the conditions 
 cannot be satisfied. On the other hand, every country has in 
 nearly every industry the enormous protective duty of the cost of 
 freight. Nor is the passage in which the writer cannot expect that 
 " people should at their risk or rather to their certain loss " initiate 
 a calling, to the purpose. Mr. Mill has evidently in his mind the 
 East India Company. That as a trading association was a failure, 
 as Mr. Mill lived to see. But there was this apology for the pro- 
 tection accorded to the East India Company, that the basis of 
 operations was ten thousand or more miles off. In that of the pro- 
 tected young country the disadvantage of distance counts against 
 its rivals. And why should the nation tax itself for the support of 
 the experiment ? Why undergo a certain loss in order to force a 
 confessedly unprofitable industry ? 
 
 Who is to give the assurance that the industry which is fostered 
 will be able after a time to dispense with the protection ? Not the 
 applicant certainly. He never did and never will assure the country. 
 On the contrary, he will tell those who have been rash enough to 
 give him his head, " that the action of the Government has given 
 him," as Lord Liverpool said, " ' a vested interest,' that the shock to 
 the industry would be fatal, that workmen would be discharged and 
 ruined, capital would be lost, and the latter end would be worse 
 than the beginning. You might have refused us a trial, if you 
 pleased. It is base, cruel, dishonest, to induce us to start this in- 
 dustry and then desert us. We may have erred in believing that a 
 short time would set us on our feet, but is our error to be expiated 
 by our ruin ? We are the creation of the State in its wisdom, do 
 not let us be the victims of its caprice. Mr. Mill saw the necessity 
 for creating us, he could not have foreseen or contemplated the ex- 
 pediency of destroying us." Had I lived in a country where the 
 State, in deference to Mr. Mill, had protected me, I think I should
 
 388 THE PROTECTIONIST MOVEMENT IN ENGLAND. 
 
 reason in this way, when I was threatened with the withdrawal 
 of the protection. 
 
 What too is a fair trial ? Is it in the judgment of the domestic 
 producers, or of the Government, or of a court of law ? It may be 
 pleaded with justice that the circumstances precluded a fair trial. 
 The origin of the industry was an unnatural stimulus, and you have 
 no right to expect a healthy life. By constituting the State as the 
 judge of the occasion on which an industry may be protected, you 
 deprive the person who prosecutes the industry of learning what are 
 the only natural conditions on which he may practice his industry 
 with success. You blind him, and ultimately insist on his exer- 
 cising the function of sight. The fact is the whole passage is 
 metaphysics, mere political economy, very bad metaphysics, and no 
 political economy at all.
 
 XVIII. 
 THE INTERPEETATION OF EXPORT AND IMPORT TABLES. 
 
 The present subject dull and difficult, but important Alarms about 
 exports and imports Causes of the decline of nations Effects 
 of debts on exports and imports Effects of the cost of freight 
 Customs and bonded warehouses Walpole'a scheme Re-exports 
 and their effects The United States, and the figures of its trade 
 with the United Kingdom The trade of France The business 
 of warehousemen Fallacies derived from comparative figures 
 Alarmist fallacies The case of leather, and the lecturer's analysis 
 of the trade. 
 
 You may naturally anticipate that, in dealing with the topic which 
 forms the subject of my lecture this morning, I am inviting you to 
 consider the most unattractive and dreary of social facts. Here, 
 you may say, are the relations of political communities condensed 
 into a set of figures, which may interest merchants, financiers, 
 statesmen, politicians, because they are obliged to get Tip their 
 subject, or at least pretend to have got it up. But it must be 
 possible to learn the economical relations in which divers peoples 
 stand to each other, the principles and practice of exchange, the 
 mutual interdependence of different countries, without demanding 
 that one should analyze the national ledger, and to see how 
 exports and imports are balanced against each other. The 
 information is for the expert, not for the student of economical 
 forces. There is, I cannot deny it, some ground for these objec- 
 tions. But there are far stronger reasons why I ask you, if not 
 to undertake the criticism of a particular set of figures, such as, 
 for instance, the Blue-book which is before me, the Statistical
 
 390 INTEEPEETATION OF EXPORT AND IMPORT TABLES. 
 
 Abstract for 1885 ; at least to understand, in order to refute or be 
 proof against the popular fallacies which are frequently uttered 
 about such statements, what, in this concrete form of the volume 
 of foreign trade which this country undertakes, are the facts and 
 principles which must be before you in order to understand any 
 such publication. For, after all, in these figures, and in the 
 interpretation of them, lies the very essence of practical 
 economics. Here is the picture in little of British activity, in so 
 far as it is concentrated in the United Kingdom, and has within a 
 couple of generations become the most extensive creditor of foreign 
 communities that has ever been known, and thereby has become 
 the centre of trade transactions with the world. 
 
 I once asked a Parliamentary friend of mine, Lord Eothschild, 
 whether certain speculative stocks were not held extensively on two 
 of the most active of the foreign bourses, Paris and Berlin, and I 
 instanced Egyptians and Suez Canal shares. He told me that in 
 his opinion, by far the largest part of these stocks were held in the 
 United Kingdom. I asked him how he came to the conclusion, 
 and he replied, that if an extensive order was given to purchase 
 in either of these securities in Berlin or Frankfort or Paris, say 
 100,000, no broker in these cities would undertake the com- 
 mission at a price, for some hours, that is, till he had telegraphed 
 to London, and received a reply. I was a good deal struck with his 
 statement, and admitted that there was great force in it. But it 
 does not seem to me to be a quite conclusive inference. The fact 
 seems to me to point quite as much to what I have already referred 
 to, that as Great Britain is a centre to which merchantable goods 
 are transmitted, and in which they are purchased, so, even if a 
 stock were not procurable in plenty on the London Exchange, it 
 would be highly expedient to get a price from thence, because a 
 price in a central mart is the best price which can be got any- 
 where, and because, for reasons which I will give you later on, the 
 London Exchange has a power of attracting both goods and 
 securities to an extent and rapidity which is possessed by no other 
 analogous institution. 
 
 The exports and imports of England, then, after 1706, of Great 
 Britain, and since 1800, of the United Kingdom, have been an 
 object of great curiosity, and not a little concern to economists and
 
 ALARMS ABOUT EXPORTS AND IMPORTS. 391 
 
 statesmen, the latter having learned from the former, very slowly 
 and with great hesitation, what is the interpretation which should 
 be given to them. Now from the very first it was seen that the 
 exports must pay for the imports, though in early times, under the 
 theory of the balance of bargain, and by the machinery of the 
 king's exchanger, persistent attempts were made to secure that this 
 country should derive a money profit on the aggregate of the 
 country's commercial transactions. I described to you in an earlier 
 lecture on metallic currencies how futile the attempt was, and 
 how it was inevitably baffled in the interests of trade. But though 
 every merchant saw that as far as he was concerned, the vital 
 object was to get a balance of profit, and quite a subordinate and 
 temporary matter to secure a balance of cash, the dread that we 
 should be drained of all our money by an adverse balance of 
 trade, as it was conceived to be, affected merchants collectively, 
 and led, after the old mechanism was abandoned, governments to 
 adopt, and merchants to sanction, various expedients for securing 
 that to the mass of trade which individual traders saw would 
 be mischievous or injurious in each individual trade. It is, as it 
 was, and I fear as it will be, very hard to induce people to see 
 that what their experience has proved to be prudent in their own 
 case, is prudent for the whole country ; and it appears that this 
 is as inveterate an error as the far more mischievous fallacy, 
 that on which I have 'already commented, and shall often need 
 to comment, that a private advantage should be assisted by 
 government help at the expense of the great body of the 
 nation. 
 
 As long as the trade of England was confined to the Baltic 
 and the French coast, and subsequently extended to Seville, no 
 serious attempt was made to examine the real principles which 
 underlie the balance of trade doctrine. I have little doubt that 
 the reason lies in the individual evasion of that which was still 
 conceived to be collectively sound. But with the development of 
 the trade with the East the difficulty at once arose. It was plain, 
 and could not be denied, that the export of silver was essential to 
 any trade at all with the East Indies. India has been engaged 
 for centuries in importing silver, this not being a produce of the 
 peninsula. Besides there was nothing produced in England which
 
 392 INTEEPEETATION OF EXPOET AND IMPOET TABLES. 
 
 could be exchanged against the coveted produce of the East. It was 
 necessary that permission should he given to export silver, and the 
 concession was justified on the ground that the exchange of Eastern 
 produce would bring back into the country far more silver than the 
 ships took away. But this argument would be equally valid in 
 favour of permitting the free circulation of money between all 
 countries which trade together, for trade is undertaken with a 
 view to profit ; and money is the instrument by which trade is 
 measured, and just as in a progressive community no more money 
 is kept than is necessary for the wants of commerce, internal and 
 external, so no country which is not declining ever finds itself at 
 a loss to procure all the money which it needs for its mercantile 
 transactions. But though the government of the seventeenth and 
 eighteenth centuries were ready to allow the minor premiss in 
 their syllogism when India was in their minds, they shrunk from 
 accepting the major premiss, and from allowing the consequences 
 of permitting mercantile money to be fluid, a principle of trade 
 which Oresnie saw to be fundamental as early as the fourteenth 
 century, and Eoger North in the seventeenth. And so people 
 went on speculating on imports and exports, and wondering when 
 the collapse would come, which was evidently impending as long 
 as the country imported more in return than it exported. The 
 shrewdest men were alarmed at the risks of an adverse balance of 
 trade, and no doubt many of the protective laws on the English 
 Statute Book were enacted originally, not so much for the purpose 
 of sustaining particular interests at the public cost, or the public 
 loss, but in order to obviate what they honestly thought to be an 
 impending danger. It may be doubted whether the alarm at a 
 depletion of money is even now an extinct delusion. Of late years 
 I would fain hope ignorantly, the old doctrine of the balance of 
 trade has, it appears, taken possession of some people's minds, or 
 what is called their minds. 
 
 A nation, like an individual, can spend more than it earns. It 
 often does so, through the action of its government, in this case, 
 collectively. It cannot do so, by the whole number of its people, 
 distributively, else it would exhaust itself. If some people in a 
 community are wasteful, others who are not wasteful get the pro- 
 duct of their waste. I do not mean to say that a nation may not
 
 CAUSES OF THE DECLINE OF NATIONS. 393 
 
 decline from opulence to poverty, even to nothingness. Many 
 parts of the earth were once occupied hy rich and industrious 
 peoples which are now wholly waste. Such a decline may come 
 from the effect of a destructive conquest, of long and ruinous wars. 
 But in almost all cases, the ruin of a race is the fault of its govern- 
 ment. The exigencies of society, perhaps its weakness, compel 
 nations to have governments. Men should be eternally on the 
 watch against them as Mr. Mill argues. Nations will not ruin 
 themselves, said Adam Smith, hut governments may ruin them. 
 If a nation through this agency spends more than it can earn, it 
 inevitably begins to decline, and if the process goes on too far the 
 nation is exhausted and perishes. This happened, it appears, with 
 whole districts of the Eoman Empire. The military government 
 of Eome spent the resources of its subjects, and wide parts of the 
 world became desolate. I will not say that spectacles of this kind 
 will never be seen again, of nations perishing by the vices of those 
 who administer its affairs. But such a consummation is not dis- 
 played in the exports and imports of a people, for the very signifi- 
 cant reason that the process I have referred to leaves the mise- 
 rable community nothing wherewith to traffic, every energy 
 remaining being devoted towards the mere sustentation of life in a 
 declining population. In modern times, the malevolence of a 
 government rarely goes further than to arrest the natural progress of 
 a people. 
 
 There are occasions in which a government spends, not more 
 than perhaps its people could pay, but more than it is politic to 
 exact. In such a case it borrows. It may borrow, as has been 
 done in England, from its own people, that is, from those whom in 
 theory it might tax, but does not think it would be wise or just to 
 put to such sacrifices. Or it may borrow from other people, where 
 there are large stocks of accumulated capital in existence, the 
 owners of which can be induced to part with their property on con- 
 dition of the borrowing government paying interest on the loan. 
 Governments may borrow for the purpose of carrying on a war, or 
 of defending themselves against aggression. The government 
 generally asserts that it is the latter motive which influences it, 
 when every one sees that it is the former. Whether their subjects 
 or citizens see it or not, governments generally, almost invariably,
 
 394 INTERPRETATION OF EXPORT AND IMPORT TABLES. 
 
 avow it so persistently or savagely, that their subjects are brought 
 to agree with them. Or they may as is constantly done in new and 
 thriving communities, where there is plenty of use for all the capital 
 which the country has, with a good profit borrow in order to 
 develop the public works which are a great assistance to the 
 employment of such capital as they do possess. In such countries, 
 to borrow from their own people would be to cripple themselves, 
 and to procure what they want on far less advantageous terms than 
 they may, if their credit is good and the security stable, in other 
 countries. This is the way in which most of our colonies have 
 borrowed of us for their public works, railways, docks, harbours, 
 and the like. Now it will be plain that in all these cases, the future 
 earnings of the people are pledged to pay interest on the past out- 
 lay of the government. I say earnings, for we know by this time, 
 that all wealth is the product of capital and labour, though in the 
 distribution of that which is earned, others besides the capitalist 
 and labourer are sure to share. Such is the origin of public debts. 
 You will see that they are represented by very different present facts. 
 In most cases and in old countries, there is nothing to show for the 
 debt, in the shape of property. In some, especially in new coun- 
 tries, there may be very solid and valuable assets, the value of 
 which may be increasing. But in every case the country which 
 holds the debt is supposed to obtain interest on it. The amount of 
 foreign debt held in England is enormous. In Stock Exchange 
 securities there are said to be two thousand millions, known or 
 ticketed as English property. But this by no means exhausts the 
 debts owed to people who live or accumulate in the United Kingdom. 
 English capital has gone over the whole world. English houses of 
 business are settled in most countries, and the profits due from them 
 are part of the indebtedness, which has to be annually paid. You 
 will see, then, that every year a vast amount of cash or property 
 has to be imported into England to pay the annual charge of 
 foreign debt held here. 
 
 Now let us see how this affects imports and exports. There is, 
 we may be sure, quite apart from the operations which I have 
 described, a certain amount of trade going on between England and 
 another country, say, for instance, cloth of English make to 
 Australia, wool of Australian growth to England. If this were the
 
 EFFECTS OF DEBTS ON EXPORTS AND IMPORTS. 395 
 
 only business going on, these two articles would infallibly, what- 
 ever the figures may allege, of which presently, balance each 
 other, i.e., the English cloth and the Australian wool are an equation, 
 for otherwise trade is inconceivable. But the effect of these borrow- 
 ings and payments of interest creates an apparent confusion. The 
 loan is not paid in money, but in goods ; for it is to the interest 
 of both parties that it should take the latter form, since both the 
 producer and exporter and the consumer and importer get a profit 
 from the transaction. Now if many such loans are made in a short 
 space of time, the volume of exports is greatly increased, the pro- 
 duction of the exporting country is greatly stimulated, and trade is 
 exceedingly active. Such, for example, were the exports of England 
 to America after the Civil War, and to France after the Franco- 
 German war, when, as was said by Mr. Gladstone, trade progressed 
 by leaps and bounds. Goods went out and debts came back, for 
 whenever the expenditure of a country exceeds its production, it 
 takes goods and export securities. Now the goods appear in the 
 exports, the securities do not appear in the imports. Hence the 
 appearances are all on the side of the country whose trade has been 
 so stimulated. When you look below the surface, you will find, as 
 I have shown you, that the country has been giving away its 
 property, for pieces of paper on which the indebtedness of the other 
 country is expressed. These securities are of course transferred 
 from those who received them in payment of their goods to those 
 who accept them as investments. 
 
 But in course of time, especially in the case of a country which 
 goes on lending, as this country has done for a long series of years, 
 the interest payable 011 these loans exceeds all the new loans which 
 are made in any one year. Thus if the rate of interest on the loans 
 I spoke of is 4 per cent., the annual interest is 80 millions, and 
 to this we may add 20 millions more for profit on investments 
 which do not pass through the Stock Exchange. Now 100 
 millions sterling would be a vast sum to lend every year. Sup- 
 pose the loans cease, because the colonists and foreigners do not 
 want to borrow any more, or our people do not feel inclined to 
 lend. The valuing of what I may call natural exports and imports 
 remains unchanged, but the latter is swollen by the compulsory 
 imports which are sent to this country in payment of interest, for,
 
 396 INTEEPEETATION OF EXPOBT AND IMPORT TABLES. 
 
 as before, the payment is not made in money, but in goods. To 
 find fault with its appearance in what people call the national 
 balance sheet of industry and trade, is to find fault with the debtors 
 of the country for paying the interest on their debt which they 
 agreed to pay, and to adopt any means which would put a hin- 
 drance or a stopper on these exports is to provoke the debtor into 
 repudiating his debt, because the creditor country has thought 
 proper to make it difficult for him to pay it. Wherever any country 
 is a large foreign creditor, and the dividends on the debt which it 
 holds are paid punctually by its creditors, its imports will greatly 
 exceed its exports, for these exceptional imports represent the divi- 
 dends which it has to receive. The quantity of imports is heigh- 
 tened if the dividends are due from non-productive debts, for here 
 the imports are of the profits only made on the goods sent, whereas 
 when the dividends come from productive debts, the profit paid on 
 the investment in the borrowing country is included in. the payment, 
 and may or does represent the whole value of the goods. You will 
 see, therefore, that a vast excess of imports over exports does not 
 mean that the country is spending more than it receives, but 
 just the contrary, receiving more than it spends, and receiving 
 it, as I shall take occasion to show, in the most advantageous 
 manner. 
 
 There are, to be sure, occasions, I have already stated what they 
 are, in which a country is spending more than it earns or produces. 
 But the evidence of this is always being made clear to those quick- 
 witted people whose business it is to explain the movements of 
 Stock Exchange property. Such a country exports securities, or r 
 as some people say, throws them on the market, where they do not 
 generally experience very favourable treatment, for the operation 
 is invariably followed by a fall in their market value. Now, it is 
 perfectly certain that English holders are not doing this. There 
 is plenty of loanable money in England, rather too much, as people 
 desiring to invest will pathetically tell you, when they can only 
 get a low rate on sound investments. For though the rate of 
 discount and the rate of interest are not influenced by the same 
 causes, they are parts of the same aggregate, and what persistently 
 affects the one is sure, in the long run, to affect the other. Be- 
 sides, if there were a strong desire to part with some of these in-
 
 EFFECTS OF THE COST OF FREIGHT. 397 
 
 vestments, and to thereupon export them, they would be exported 
 in exchange for other investments which are more sound or other- 
 wise more attractive. 
 
 But there is a further fact below these returns of exports and im- 
 ports which cannot be exhibited, but must be recognized. When an 
 article is imported into London its value is declared, and I will as- 
 sume, for the sake of argument, accurately declared, at the port of 
 entry. When an article is exported from London its value is de- 
 clared at the port of exit. Now, in the first case, the import, its cost 
 of carriage or freight, is included. But in the other, the export, 
 the cost of freight is not included, for it is not yet defrayed. 
 Hence the value of the imports is always increased by freight, that 
 of exports lessened, as far as freight is concerned. The freight 
 must be included in the import, for it is part of the cost. But in 
 the export, it is expected that the market of destination will pay 
 the cost, and in the end it does so, else the trade would not be 
 worth having. This addition to values is called by Mr. Giffen, 
 very felicitously, the invisible export and import. In an earlier 
 lecture, I took a hypothetical figure, 10 per cent, all round, as 
 representing the cost of freight. I find that it has recently been 
 calculated, by different persons, of high eminence in such esti- 
 mates, at from 11 to 15 per cent. Now, in interpreting the 
 relation of exports and imports, this addition to value which 
 does not appear, except on analysis, is of great significance, and 
 must be reckoned. If it represented foreign shipping, or freight 
 earned by foreigners, it would still appear in the article which has 
 been shipped, but the profit contained in the price would be ap- 
 propriated by foreign capitalists. As it is, the shipping owned by 
 British capitalists is 70 per cent, of that engaged in the carry- 
 ing trade, despite foreign Navigation Acts, and is therefore a British 
 asset in the volume of exports and imports, not the less real because 
 it is invisible. 
 
 But there is a further item in the account which needs explana- 
 tion. I have already stated, that owing to its free-trade policy, 
 this country, excepting some half-dozen items, is a free port. 
 Owing to its prodigious mercantile operations, it is the market 
 which gives the price, and the market that gives the price attracts 
 the dealer. But if the dealer is attracted the commodity dealt in
 
 398 INTERPRETATION OF EXPOET AND IMPORT TABLES. 
 
 is attracted. Furthermore, even in those articles which are liable 
 to duty, the system of bonding warehouses is so perfect and so 
 easy, that the United Kingdom, even for duty paying and excise- 
 able articles, is virtually a free port. I ought perhaps, however, 
 as you cannot be supposed to be conversant with the mechanism 
 of trade, to say a little about the warehousing system. 
 
 In old times, all goods imported and exported equally paid cus- 
 toms. The system probably arose from the theory, that the king 
 by virtue of his position as commander-in-chief of the national 
 forces was under the duty of defending the narrow seas, and, 
 indeed, English commerce wherever it went. In time, the cus- 
 toms became part of the private revenue of the Crown, and the 
 duty of maritime defence was imposed on the Cinque Ports, then 
 on the whole mercantile marine of the kingdom, and by ship-money 
 on the inland counties. The reason for this extended impost was 
 plausible, and had the tax possessed a lawful origin, conclusive ; 
 for if a country is to have any trade at all, there must be a police 
 of the seas. So clearly is this recognized, that there is no part of 
 the law of nations more indisputable than the dictum that piracy 
 is an offence, not only against the person who is plundered, but 
 against civilization in general, every state by the law of nations 
 being entitled to attack, capture, and punish pirates on the high 
 seas. But the English were very slow to accept a principle which 
 accorded ill with their practice. As I have often stated, our early 
 maritime heroes were all pirates, and even after the government 
 determined on putting down the practice, and actually hanged a 
 number of adventurers who became a scandal to it, mainly because 
 they had originally been sent out by government, and had been 
 old-fashioned enough to strain their commission ; even after this, I 
 say, a preliminary apprenticeship in this lucrative and invigorating 
 business was no bar to the subsequent employment of a buccaneer, 
 who had abandoned his special calling, in Church and State. 
 
 It was very difficult to get rid of customs on exports. Nations, 
 like individuals, overrate their own importance, and the import- 
 ance of their own doings, and are apt to conclude that when a 
 foreign trader wishes to do business, he represents a foreign neces- 
 sity, instead of a prospect of making a profit. Besides, there had 
 been a time, long remembered, in which the demand was a ne-
 
 CUSTOMS AND BONDED WAREHOUSES. 399 
 
 cessity, and England could carry on a war with a wool tax, which 
 the consuming country paid. Nothing is harder to persuade cer- 
 tain governments than that they do themselves mischief by levying 
 export duties. Again, it was the object of government to naturalize 
 manufactures in England. They saw clearly enough that a dozen 
 pounds of cloth was worth several times over a dozen pounds of 
 wool, and a prohibitive duty on the export of wool seemed the best 
 way of stimulating the home manufacture of cloth. An export 
 duty, therefore, seemed to be a form of patriotism, and it is almost 
 impossible to reckon up the list of crimes and follies which have 
 been committed under the plea of patriotism. And, lastly, it was, 
 and had been, from the]earliest times, a branch of the revenue. Now, 
 it is true that the management of the revenue has been under- 
 taken by the Parliament. But the fiction of the king's taxes seemed 
 to imply a kind of property in these imposts, and more reasonably, 
 it was seen that if one branch of revenue be remitted, another, and 
 a new tax, must be put in its place. 
 
 Walpole, George the Second's great finance minister for nearly a 
 quarter of a century, saw that if he could establish a system, under 
 which foreign duty-paying goods could be put under lock and key, 
 and, for the matter of that, exciseable home products as well, the 
 duty and excise being paid only when the articles were taken out 
 for consumption, he would save the pockets of the consumers of 
 goods in Great Britain, and do a great deal towards making this 
 country a free port for all produce, for he contemplated allowing 
 these foreign goods to go out free of customs. But Walpole, like 
 other statesmen of very comprehensive views, had a good many 
 enemies, who were discontented with his ascendancy, and when he 
 propounded his new Excise and Customs Bill, these enemies found 
 their opportunity. They wanted a pretext for humbling him, and 
 if he had brought forward the Ten Commandments, they would have 
 tried to raise an outcry against them. The great London mer- 
 chants were under the impression that if the warehousing system 
 were permitted, persons of small capitals would become their rivals 
 in business, as they would be relieved of the necessity of paying 
 duties at the moment of importation, and could, therefore, carry 
 on business with less cash. Walpole, who loved office more than 
 he did financial good sense, when the retention of the one and the
 
 400 INTERPRETATION OF EXPORT AND IMPORT TABLES. 
 
 exhibition of the other, were incompatible, yielded to the clamour. 
 In the same way the younger Pitt sacrificed financial justice to 
 office, when he yielded to the country gentlemen on the legacy 
 duties. Perhaps statesmen may be pardoned for considering them- 
 selves to be a necessity. It is not in human nature to resist the 
 flattery which assures them that they are. 
 
 I have no doubt that had Walpole's project succeeded, his 
 policy would have been identified with the rapid progress of 
 English commerce. Like every financial expedient of the time, 
 the idea of bonding goods was derived from the practice of the 
 Dutch, in the days of their commercial prosperity. But by 
 this time the Prussian and the British monarchy were doing 
 their very best to ruin Dutch trade, Dutch credit, and Dutch 
 finance. At last they succeeded, to the disgrace of both countries. 
 But even if the scheme had been adopted, people were still so 
 stupid that they believed that the only prosperous trade was one in 
 which the visible sum of exports exceeded in value the visible sum 
 of imports, i.e., that people are prospering when they give more in 
 value than they receive. There are such people in existence even 
 now. Mr. Giffen, in his excellent essays on finance, states that 
 he read an alarmist calculation in which the writer, having counted 
 up the difference between exports and imports for twenty years, 
 came to the conclusion that the English nation had run into debt 
 with foreigners to the extent of 1,000 millions, and that ruin was 
 imminent. The writer was not aware, of course, that during this 
 time England had been constantly lending, and not borrowing, and 
 that, were this terrible process of debt going on, there would have 
 been daily evidence of it on the Stock Exchange. You are now 
 aware that if a community has credit enough to get into debt, and 
 cannot pay in goods, it pays by the export of securities, i.e., by 
 pledges to liquidate indebtedness at a future date. We in England 
 have, however, been constantly importing securities. 
 
 Now a considerable quantity of what we import we export again. 
 This country has become, for reasons which I hope that I have 
 made plain, a great entrepot for foreign products, particularly for 
 raw materials, by which I mean such products as are not available 
 for consumption. For instance, we export an enormous amount 
 of cotton to other countries, apart from what we consume our-
 
 BE-EXPORTS AND THEIR EFFECTS. 401 
 
 selves. A trader -will deal in anything from which he can get a 
 profit, and naturally seeks the market in which he knows that 
 prices are most exactly defined, and from which, therefore, he can 
 best anticipate his profit. This was the case at Amsterdam two 
 centuries ago ; it is the case with London now, and not only 
 London, but with many other great centres of trade in the United 
 Kingdom. Besides, not a little of the imports are absorbed in 
 that invisible reservoir of the mercantile marine ships want 
 stores, provisions, and a number of other conveniences. It is 
 reckoned that the annual cost of a vessel is about 13 12s. per ton 
 of freight capacity, and Mr. Giffeii reckons that the mercantile 
 marine of this country earns some 80 millions annually by 
 freights. This sum is added to the value of the imports, but is 
 not discerned in the exports. It appears in them when they are 
 landed at their destination. 
 
 It will now be convenient to illustrate what I have said by a few 
 figures, extracted from a single year of trade. I will take the year 
 1885, the return for which happens to be before me. The imports 
 for this year are valued at 376,967,955. The exports of produce, 
 British and Irish, are valued in this year at 213,044,500. There- 
 exports of foreign and colonial produce for the same year are 
 valued at 58,359,194. So there appears to be 318,608,761, 
 bought with 213,044,500, and there remains 105,564,261 to be 
 accounted for. But you will see that, in the first place, one must 
 take from the imports all the cost of freight. At 13 per cent, 
 this leaves 56,558,418, with which to explain the interest on debts 
 held in the United Kingdom, and due annually from foreign 
 countries. 
 
 I do not pretend to say that I have given you an exact analysis 
 of the figures which were presented to Parliament and the public 
 as illustrating the foreign trade of Great Britain in 1885, the 
 returns of which is over 590 millions, for the values are only 
 declared. They rest entirely on the authority of the importers, 
 and as our customs duties are not ad valorem, there is no motive 
 for the importer to understate this value, but, on - the contrary, 
 there are motives for exaggerating it. For example, some years 
 ago there was a very active trade between this country and 
 Hamburgh, in shipments of sherry from that port. I do not 
 
 27
 
 402 INTERPRETATION OF EXPORT AND IMPORT TABLES. 
 
 know whether the trade still exists, but the attention of the Custom 
 House was called to this strange trans-shipment of Spanish wine 
 from a port in the German Ocean. Further inquiry led to the dis- 
 covery that, whatever the origin of the liquid might he, it was not 
 Spain, and, in brief, the article was manufactured at Hamburgh, 
 from materials in which the grape was not included. Now if the 
 imitative and enterprising Teuton who hoped to find a market for 
 this abomination among the too-confiding Britons entered his 
 product, as he was obliged, to do, he would certainly give a value 
 to the article which the facts would not justify, and experience 
 would not confirm. I give one instance ; I might cite many. But, 
 on the other hand, there is every motive for not exaggerating the 
 value of the exports, for under the protective tariffs of foreign 
 countries ad valorem taxes are general, I had almost said universal ; 
 and in accordance with this system, and in order to prevent under- 
 valuations, Custom House officers, for example, in the United 
 ^States, are empowered in the case of goods imported, on which an 
 -ad valorem duty is imposed, to elect, if they should see fit, to 
 purchase the article at the owner's valuation. 
 
 Again the imports are those of a year from January 1st to 
 December 31st. But it by no means foUows that they represent 
 consumable commodities within that year. There are stocks of 
 goods which do not deteriorate with keeping, some which improve 
 by time, some which ultimately represent, when they are ex- 
 changed, a different value from that which was declared at the 
 port of entry. This may arise from an over-estimate of that which 
 the dealer has to sell. This over-estimate may be in the thing 
 itself, or in the turn of the market. In short, the estimate of 
 imports is far more liable to exaggeration in value than that of 
 exports is. This is particularly the case with raw materials, of 
 which, as is inevitable, a very large proportion of the imports is 
 composed. Besides, you will see that the debtor country is much 
 more obliged to sell than the creditor country is obliged to buy. I 
 should be very much surprised, supposing one compared the 
 declared value of imports with the prices current of the articles so 
 valued, if it were not found that these registers of business done 
 would show less figures than are given as their value. Such an 
 examination would be very laborious, and to me, at least, who
 
 THE UNITED STATES FIGURES. 403 
 
 know the facts, would be superfluous. It is sufficient for us to 
 know that these elements of dubiety do exist, and why they 
 exist. 
 
 The country which has the largest exports is the United States. 
 To the United Kingdom, in 1885, it exported in value nearly 87 
 millions, and imported in value 31 millions. In some years the 
 discrepancy is far more considerable. Now for not a little of this 
 produce the United Kingdom is only a temporary port, the 
 commodities purchased being trans-shipped and distributed by 
 traders in this country, and by foreign visitors to our markets. 
 The commodities which we receive from the States are chiefly raw 
 materials, strictly so called, and among them cotton, corn, and 
 preserved provisions, for food is the raw material of labour. 
 Comparatively few manufactured articles, and those mainly of 
 cheap and ordinary construction, reach us from them. Now how 
 is this discrepancy explained ? But before proceeding to this, I 
 should observe that it is the custom in America, as would be 
 natural under ad valorem duties, to value the articles at the port of 
 departure, and not at their arrival. Hence the American imports 
 do not, like ours, imply, but disclaim the cost of carriage, and 
 therefore, as a question of balance, the 81 millions should be in- 
 creased by this item. The United States do not tax freight. But 
 to give the solution of these figures, on the lines which I have 
 already indicated, and by the facts of the case. In the first place, 
 the citizens of the United States annually expend a large sum of 
 money in travelling abroad. There is a considerable American 
 colony constantly resident in Europe, and drawing on the States 
 for their expenditure. There is, every year, a perfect host of 
 migratory Americans in Europe, and especially in the United 
 Kingdom, looking up the old country. It is reckoned that the ex- 
 penditure of such persons is not less than from 10 millions to 15 
 millions in excess of what Europeans expend in travelling about 
 America. Then, as is the case with new and growing countries, 
 there is a prodigious amount of interest due from the States to 
 British investors, and one may also add a vast amount of money 
 annually sent by the American Irish to their kinsfolk in Ireland 
 itself. In every country which progresses rapidly, which adopts 
 expensive means for expediting intercourse between distant parts
 
 404 INTERPRETATION OF EXPORT AND IMPORT TABLES. 
 
 of the same political union, and does so wisely, if it can afford it, 
 enormous debts are necessarily and indeed advantageously incurred. 
 It is said that America has reduced her indebtedness abroad. 
 Undoubtedly she has as regards her public debt, which under the 
 banking system of the country is made the basis of the paper 
 issues, and is therefore held by bankers only in the States, but the 
 loans created in the United Kingdom and held here are enormous. 
 If we take these two particulars into consideration, we can easily 
 see how a difference of 50 millions is accounted for, by the 
 expenditure of foreign travel and the payment of interest on 
 loans. 
 
 Such evidence as is forthcoming on the position of France leads 
 to the conclusion that the people not only save, but in some degree 
 invest in foreign securities, not indeed to the extent which they 
 seem to indicate by their protestations, but sufficiently for my 
 inference. But the curious fact about the French balance-sheet is 
 the singular oscillation which there is in the exports and imports 
 of the country. From 1862 to 1865 inclusive, the exports were 
 greatly in excess of the imports ; from 1866 to 1871 the reverse 
 phenomenon was exhibited ; in 1872 and 1873 the exports were 
 again in excess ; and since that year the ordinary course of trade 
 has been exhibited, under which the imports exceed the exports. 
 But the difference is slight. In the first place, the shipping of 
 France is very small, for it is only in tonnage a fifteenth of the 
 British amount. But no country which depends for its carrying 
 trade on other nations can show a large margin of imports over 
 exports, unless indeed it is an extensive creditor of other nations* 
 But I must not weary you with details ; my object is to show you 
 what are the principles which you must have before you in inter- 
 preting export and import tables, and what are the grounds on 
 which you will hesitate before you accept superficial interpretations. 
 I will, for the rest of this lecture, point out what are the errors 
 into which people are apt to fall, who for no worse motive than 
 alarm, err in interpreting the facts, and a few practical inferences 
 from the facts. 
 
 In an earlier part of this lecture I mentioned that the system of 
 bonded warehouses had a considerable significance in making the 
 United Kingdom a free port or market. A bonded warehouse belongs
 
 THE TRADE OF FRANCE. 405 
 
 to an individual, to partners, or to a company. The owner or owners 
 store goods which are liable to duties at a rent, and are under 
 government inspection. The keys of the warehouses are distributed 
 among the owners and the government officials, so as to make a 
 simultaneous visit of the owners and the revenue officer necessary 
 when goods liable to duty go out. I know that the system works 
 well, that there is neither smuggling nor pilfering from these ware- 
 houses, in which the government license is a notable addition to 
 the value of the premises. Now a few years ago, at the end of a 
 session, the government introduced what is technically called an 
 omnibus Bill, one which makes amendments in existing statutes, 
 mainly in procedure, and at the instance of the departments. Now 
 I have, I hope not uncharitably, a profound distrust of the per- 
 manent officials in London, in Edinburgh, and even in Dublin, and 
 I always examined omnibus Bills. I soon found out that there 
 were certain alterations introduced into the bonding system which 
 would infallibly destroy the property of these warehousemen, so 
 as at least to discourage them from housing dutiable goods. I 
 warned them of their danger. They were no political friends of 
 mine, I must confess. But I became the Good Samaritan, and 
 took care of them. I do not say that they did me a wrong, 
 but I am sure that I did them a service, for I compelled the 
 Treasury to throw overboard its subordinates in name, its masters 
 in fact. 
 
 I have indeed adverted to some of these errors, the misconcep- 
 tion as to the place which freight bears in declared values ; the 
 necessity there is, if the figures are accurate, for recognizing that, 
 if profit is to follow trade, the exports must ordinarily be below the 
 imports ; and the importance of allowing in the imports what is due 
 to the liquidation of interest on debt. But there are other fallacies 
 into which the indiscreet manipulation of figures may lead one. 
 We may think, for instance, that because a country is always 
 exporting much more than its imports, that it may be engaged in 
 a losing trade, or that because the volume of exports and imports is 
 a higher percentage in one country than another, that the progress 
 of the former country is more rapid than that of the latter. Or, 
 again, we may be confronted with the fact that, in appearance at 
 least, we are losing part of o\ir supremacy in manufactures, and
 
 400 INTERPRETATION OF EXPORT AND IMPORT TABLES. 
 
 therefore run the risk of a decline in our industrial eminence ; we 
 may be pressed by the citation of details ; we may even find some 
 paltry and easily-interpreted fact made the ground on which to 
 urge national action or a fundamental fiscal change. 
 
 Let us eliminate from the declared value of exports and imports 
 that which is to be ascribed in the latter to the liquidation of 
 interest on debt, that which must be assigned to the cost of freight, 
 that which has to be deducted in consequence of a different custom, 
 due to traditional as well as fiscal reasons, in the valuations 
 assigned to goods in different countries, and let us also discount 
 the motives which might lead people in England, for instance, to 
 heighten the value of that which they import, on paper at least, 
 whatever may ensue on the market when they sell. To these we 
 may add, as disturbing causes, the inclination which people have 
 to make a sacrifice in order to gain a footing. Traders know that 
 a large business on a small profit is better than a small business on 
 a large profit. I have been told that the great business which Mr. 
 Whitely has established makes only 5 per cent, on a turnover of a 
 million. Now part of the machinery by which people make busi- 
 ness, in the hope of establishing a wide connection, and of associat- 
 ing the habit of customers or the fashion of the public with their 
 undertakings, is to incur a certain present loss, with a view to 
 future gain, for example, to advertise extensively, to pay large 
 rents for the opportunity of display, and the like. I have heard, on 
 the best authority, that Bradford light woollens were being sup- 
 planted by French articles, because the Bradford manufacturers 
 clung tenaciously to obsolete fashions and materials. Now, in such 
 a case, a Protectionist country has a peculiar advantage, for the 
 producers of such a country can press the sale of their goods at an 
 apparent loss, and reimburse themselves by heightening prices, 
 and lowering wages, at the expense of the consumer and the work- 
 men in the country where they carry on their manufacturing 
 operations. 
 
 After all these deductions are made from the aggregate of imports, 
 every country which has by course of time become fully settled, 
 and in which a variety of operations are naturally and necessarily 
 not artificially carried on, will exhibit an excess of imports. 
 The difference is due, a fair return being made of prices, to the
 
 FALLACIES DEEIVED FROM COMPARATIVE FIGURES. 407 
 
 profit which the traders make in their business. Let me illustrate 
 what I mean in common life. A trader, say a grocer, carries on 
 his business with his own capital, on his own premises, and with- 
 out the assistance of a loan, directly or indirectly, from any one. 
 He exports his capital. It passes away from him in the purchase 
 of goods. He imports the goods. But in the nature of things, 
 the goods which he buys as a trader figure in his mind, if they 
 do not in his books, at a higher rate than that which they cost 
 him, else he would be carrying on his business at no profit, but a 
 loss. He intends in the very nature of things that his imports 
 shall be worth more than his exports, and the higher he can make 
 their value, the more is the profit which he contemplates and, I will 
 assume, achieves. Now this illustrates the position of the exports 
 and imports in the balance-sheet of a nation which really trades. 
 The imports are bought with the exports, the transaction, as far 
 as the nation goes, being complete. If the former did not exceed 
 the latter in reputed, and in real as well as reputed, value, the 
 balance-sheet would show no profits, and the shareholders in the 
 concern would have reason to be greatly alarmed. The profit is of 
 course increased if the exporting country is obliged, whatever 
 price may be realized, to sell to the importing country, as is the 
 case with all debtor countries. 
 
 People sometimes point to the rapid growth of other countries as 
 a proof that our own trade is declining. For example, the imports 
 of the United States have increased during the last forty years by 
 700 per cent., and the exports between 500 and 600. But in the 
 United Kingdom the exports have increased during the same period 
 335 per cent., the imports (for the last twenty- six, since before this 
 date there was no computed or declared values given) 186 per cent. 
 Here, then, they may say, you have a Protectionist country pro- 
 gressing at a more rapid rate than a free country does. Of course 
 concurrent facts are not necessarily causes, and causes are rarely 
 single and simple. But you will notice that the United States is a 
 country of almost indefinite expansibility, and of rapid growth. 
 One of its imports, that of adult and trained immigrants, is never 
 reckoned in its statistics, but would be in an economical analysis, 
 under-estimated at 100 millions pounds a year, this coming from the 
 old world. "With this mass of potential wealth annually put into
 
 408 INTERPRETATION OF EXPORT AND IMPORT TABLES. 
 
 activity in that country, the growth of trade is inevitable. But it 
 is recent, and is nothing as yet like ours. Forty years ago it was 
 small, less than ours at the beginning of the century. Even now 
 it imports 150 millions as compared with 400 of the United 
 Kingdom, and exports 170 millions, chiefly raw material, as compared 
 with 223 millions. In fact, the United Kingdom has appropriated one- 
 third of the whole world's trade. Now it will be plain to you that if a 
 man starts in business with 1,000, and at the end of ten years has 
 a capital of 10,000, his percentage of increase is greater than that 
 of another who ten years ago had 100,000 and now has 200,000. 
 But no person would doubt which of the two was the more opulent, 
 and which was doing the largest business. 
 
 The last subject in connection with these statistics of exports and 
 imports which time allows me to deal with, has an historical 
 interest with me, for I was constantly obliged to expound the facts 
 during my Parliamentary connection with a very large constituency, 
 which was also a vast manufacturing one. People are very apt to 
 forget that London is not only the largest trading city in the world, 
 but that it possesses the most numerous and varied manufactures. 
 Now among the industries which I represented, the greatest was 
 leather, and some of my constituents constantly took counsel with 
 me as to the alarming imports of leather. But before I deal with 
 this matter, I must remind you that raw material, in the language 
 of economists, is any product of human labour or skill, which is 
 destined to be further manipulated by human labour and skill, the 
 further operation being a fresh, and, in some cases, a very large 
 addition to its value. Thus leather to a tanner is finished goods, to 
 a saddler and shoemaker raw material. Now, if a tanner cannot 
 supply leather enough in quantity and quality to keep saddlers and 
 shoemakers at work, it is to my mind hard to keep such men out of 
 work till the tanners can come up to their demands in these two 
 articles, and quite as hard to keep people without boots and shoes 
 while the master tanners are getting an unnatural profit out of the 
 public want. 
 
 Now, we are often told that some article in which we hoped we 
 should have pretty well a sole market is being imported into 
 England. When you hear these statements, you may fairly ask, 
 not with a view to disparaging your informant's veracity, but for the
 
 ALARMIST FALLACIES. 409 
 
 sake of accurate information, Is it true ? And it is very often found 
 not to be. A short time ago it was said that a large area of British 
 land, formerly occupied for agriculture was now unoccupied. On 
 inquiry it was found that the proportion of unoccupied land to 
 occupied stood in the proportion of -00006 to unity. But when 
 people are anxious to establish a position, especially when they 
 think that, if they succeed, they will be rescued from an alarming 
 or an adverse situation, it is amazing how vigorous their imagina- 
 tion is, and how eagerly they enlist irrelevant facts, and even 
 entirely baseless fictions, into their cause. Again, we are told that 
 large quantities of manufactured iron from Belgium is being 
 imported into England. But when I searched in the expanded 
 volume of exports and imports, the fact was not mentioned. If the 
 import did take place, it was too trivial even for a large volume of 
 details. I heard the other day of a man who was alleging that 100 
 worth of Belgian glass was imported into England, where it can be 
 produced 5 per cent, cheaper than in this country. But is it true ? 
 I am sure that the carriage would be close upon 5 per cent, of its 
 value, for glass is a hazardous article, and if the figures are as 
 stated, the English and Belgian producer can cry quits. But 
 granted that it is true. There is, I admit, a good deal of foreign 
 glass brought into England, much for trans-shipment, on which the 
 English trader makes a profit. I do not see that the profit should 
 cease till such time as English glassmakers and workmen can or 
 will fill up the void which prohibition would cause. Besides, it was 
 a raw material, wanted for something, and among other matters 
 certainly for glazier's work. Is the glazier to be kept idle because 
 the glass-blower will not supply him with what he primn facie wants? 
 We have become no doubt a very clever people, having been, as 
 I have told you and proved to you, for generations, for centuries, as 
 far as invention and adaptation went, about the stupidest and 
 slowest race in Christendom. But we cannot as yet do everything 
 better than our neighbours. In some cases the climate is against 
 us ; in some cases, you will I am sure pardon me, our want of 
 capacity. The English climate disables us for weaving and dyeing 
 silk as they can in Southern Europe, and therefore we wisely 
 import silk goods, giving employment by this means to tailors, and 
 dressmakers, and the like. We have not the taste of the French in
 
 410 -INTERPRETATION OF EXPORT AND IMPOST TABLES. 
 
 knick-knacks. We cannot rival the Italians in ornamental and 
 coloured glass. The result is visible even within our own limits. 
 For generations the Barnsley damask weavers have been trying to 
 rival the Scotch and Irish in table linen, and Barnsley is a good 
 deal behind Dunfermline and Belfast. But there is no knowledge 
 more valuable to man, I state, than the knowledge of what you can 
 do best. 
 
 I may further illustrate what I have said by that leather manu- 
 facture in which I have an historical interest. There was a great 
 deal of leather imported into England in 1885, over 5f millions in 
 value ; and a little over 4 millions worth of leather and leather 
 goods exported. Now, not a little of this leather, 1 J millions, is re- 
 exported, so that in reality the balance apparently against us is 
 500,000, no serious matter in such extensive transactions. Now 
 when I came to inquire into the matter, I found that a very large 
 portion of this leather was partially tanned hides. The material 
 was in such a condition that it was not available for manufacturing 
 use, but the partial tanning made the article more manageable and 
 more merchantable than raw or salted hides could be. Hence this 
 competition against English labour turned out to be in reality a 
 partial preparation for the higher and more perfect skill of the 
 English workman, and, as a distinguished but very ignorant 
 politician has said, a blessing in disguise. Further research into 
 this leather business disclosed to me that there was only a small 
 part of the whole import, which for some reason or the other was 
 not, and, as yet, could not be manufactured in England. It was a 
 produce of Pomerania, and I am glad that a branch of the Teutonic 
 race has invented something besides metaphysics and testimonials. 
 Now, I cannot see why, if people want shoes, or boots, or gloves 
 made of Pomeranian leather, English makers of these useful articles 
 should be disabled from manufacturing them, and English cus- 
 tomers from buying them, especially when English tanners cannot 
 supply the article. Again, I found that it was a common custom 
 for French dealers to buy and export boots and shoes of Clerkenwell 
 and Southwark manufacture, and having stamped them in France 
 with the name and trademark of well-known French firms, to re- 
 export them to England as genuine Paris goods for our highly 
 intelligent West End men and women.
 
 THE CASE OF LEATHER. 411 
 
 I liave, I hope, pointed out to you some of the uses which can be 
 made of exports and imports, some of the errors into which a 
 superficial study of them may lead disinterested inquirers, and some 
 of the fallacies which are, consciously or unconsciously, derived 
 from them by interested parties. The latter-named class we must 
 constantly expect. Painters and poets, says the Eoman Horace, claim 
 much for the efforts of their imaginations. So, I assure you, do 
 Protectionists.
 
 XIX. 
 
 THE ESTATE OF THE CROWN, AND THE DOCTRINE OF 
 
 RESUMPTION. 
 
 The earliest liabilities of the Crown estate The king an extensive 
 agriculturist The causes of the risings against John, Henry III., 
 Edward II. Provision for younger sons by wealthy marriages 
 The alien priories The impoverishment of the Crown during 
 Henry VI. 's minority The partisan feuds of the fifteenth 
 century The practice of parliamentary attainders The poverty 
 of Edward VI., of Mary and Elizabeth The growth of the revenue 
 under James The grants of Charles II. Davenant on Resumptions, 
 and his line of argument The action of William III. His want 
 of judgment The act of Anne The present estate The ancient 
 interest in the subject obsolete. 
 
 IN the early ages of English history, the estate of the Crown was an 
 object of great interest to the politics of the time. A cursory in- 
 spection of Domesday will show how large it was in the Conqueror's 
 time, and how considerable it was in that of the Confessor. It con- 
 tained many manors and estates, many towns and rentals of towns, 
 besides large and almost indefinite rights of a casual or extraordinary 
 kind. The king's land revenue was very great, many times in excess 
 of that possessed by his richest fellow adventurers and subjects. 
 But the estate of the Conqueror was not acquired without a stubborn 
 resistance. The waste of England after the Conquest, and by rea- 
 son of it, has not, I believe, yet been estimated from that remarkable 
 survey which the compilers of Domesday set in order as a monument 
 to succeeding times. The author of " TheDialogue on the Exchequer," 
 says, that the Conquest was a wholesale and righteous confiscation,
 
 EARLIEST LIABILITIES OF THE CROWN ESTATE. 413 
 
 but he writes in the interest of those who had succeeded to the 
 inheritance of the older English stock, and did not procure this 
 inheritance without an effort. 
 
 The estate of the Crown was, however, liable to serious charges. 
 It maintained the king's household, the officials of his household, 
 and the officials of the exchequer. It bore the charges of justice, 
 of such police as the king exercised, no trifling matter among and 
 over nobles, who held that their title to the lands which they had 
 won was as good as that of the tanner's grandson was to the throne, 
 and were reported to have expressed themselves to that effect. It 
 was charged as far as we can make out with the cost of such an 
 army, or guards, as the king collected; the liability to service, except 
 in the case of invasion, being disputed and disputable. It needed 
 a good deal of vigour to keep the new nobility in check, and it was 
 thought politic to use considerable severity when their uprisings were 
 anticipated or suppressed. I believe I am right in saying, that at 
 the accession of Henry II., most of the nobles of the Conquest had 
 been extirpated. A good many people say now, that their families 
 came here with the Conqueror. I believe that similarity of name, 
 how acquired one cannot tell, is commonly alleged to be evidence of 
 lineage. But I imagine that the descent of the English people, high 
 and low, is as confused as that of the Jews, whose pedigrees 
 Nehemiah vainly tried to investigate. But throughout this dark 
 period the estate of the Crown is a substantial fact, for the record 
 of it, from the date of the second conquest, that of Henry II., is 
 contained in that remarkable series of documents known as the Pipe 
 Bolls. 
 
 The English sovereign was not only expected to maintain his 
 state, his establishment, and his authority, from the estate of the 
 Crown, but to make provision for his descendants from the same 
 source. Hence in the earliest times you will find that the king, 
 without creating or intending to create independent principalities 
 for his children, gave them parts of his dominions. Henry II. as- 
 sociated his eldest son with him in the kingdom, and got into such 
 trouble by it that he did not, on the young Henry's death, repeat 
 the experiment with Richard. But Richard got Guienne ; Geoffrey, 
 Brittany, then a dependency on Normandy ; while John, who had 
 his first nickname from his landlessness, was made Lord of Ireland.
 
 414 THE ESTATE OF THE CROWN. 
 
 In this reign, too, the fashion began of wedding the cadets of the 
 royal house to wealthy heiresses, for Henry wished to make a pro- 
 Vision for John by betrothing him to the heiress of Gloucester. We 
 shall see in course of time how general this custom became, and how 
 much the royal house intermarried with the English nobles. It is 
 said that the custom of the Crown, in addressing all lords' who are 
 of and above the degree of earl as cousin, originated at a time when 
 the statement was very much one of fact. 
 
 Land then, and charges upon land, were the principal source of 
 revenue in the king's estate. Where the king possessed manors, he 
 cultivated them by the agency of his own bailiffs, just as the other 
 proprietors did, and like them was anxious to see that the peace 
 was kept, not only in consideration of his own authority as head of 
 the State, but as a producer of corn, stock, and wool. This re- 
 markable habit of early English life in which all classes, from the 
 king to the peasant, were interested in the successful pursuit of agri- 
 culture, a habit resumed on a large scale, and with most excellent 
 results, in the eighteenth century was, I am persuaded, the chief rea- 
 son why social order was so well maintained in England, and outrages 
 on property so rarely recorded. At two periods, then, of English eco- 
 nomical history, very remote from each other, the propertied classes in 
 land did a great service to agriculture. In the thirteenth and four- 
 teenth centuries, they were the cause why, alone among European 
 nations, the English were great breeders of stock, especially sheep, and 
 therefore became the sole source of wool, the selection of which, as the 
 schedule of 1454 in the Kolls of Parliament informs us, had already 
 become precise and varied. In the eighteenth century, though here 
 they mainly imitated the Dutch, they again took up with progressive 
 and experimental agriculture, and carried the art of husbandry in 
 England to perfection. They did not do the like in Scotland or 
 Ireland. Besides, during this long interval, though nothing new 
 was developed, nothing old was forgotten. During the long period 
 which intervenes between the earliest authentic records of the older 
 English agriculture, i.e., from the middle of the thirteenth century 
 down to the beginning of the seventeenth, land and its products 
 were well-nigh the only source of wealth, and by far the largest 
 part of the population was engaged in cultivating the soil regularly, 
 while the residue were occasionally occupied in the same employ-
 
 THE KING AN EXTENSIVE AGRICULTURIST. 415 
 
 ment. So universal an occupation was not only due to the fact 
 that land was, according to our experience, scantily productive, but 
 also to its very general distribution. Every one, as I have often in- 
 formed you, 'owned or occupied land, even in the towns. Most of the 
 manorial rentals show that this was the case in the country. Hints 
 and allusions make it clear that, in a less degree, the same fact 
 characterized the towns, and it appears that the singular county of 
 the town, in which a large adjacent area was reckoned in the town 
 as, for example, the whole county of Middlesex with London, a 
 district of near 3000 acres in the City of York, and similarly large 
 suburbs to Coventry, Southampton, and the like are, so to speak, 
 survivals of an ancient association of rural with urban life, the 
 peasantry of these country towns being reckoned with the burgesses. 
 
 Now it is manifest that, between the periods alluded to, there is 
 no trace of economic or competitive rent. That in the sixteenth 
 century, the rights of the landlord were strained, there is evidence 
 in the works of contemporary writers. Hence the rent which was 
 exacted was a customary payment, a fixed due, and I hold it to have 
 been an historical truth, which later researches of my own have 
 entirely confirmed, that rent was, as Adam Smith sagaciously re- 
 cognized, a tax. In later times, it became a product of competition, 
 circumstances having altered. But Smith was more in the right 
 than his critics were, who imported into past usages the facts of 
 present action, the common error of ill-informed persons, who have 
 no faculty of discerning what must have preceded present habit. 
 It was also a peculiarity in these tenures that the tax was un- 
 alterable in itself. It might be indirectly enhanced, and this 
 indirect exaltation by a fine 011 succession might be a grievance, or 
 when the tenancy was a lease, renewable by corporation or in- 
 dividual a progressive fine, but the old rent of collegiate or 
 corporate property is a survival, or was till recently, of universal 
 custom. 
 
 Now I have referred to this in order to show that the main 
 source of the Crown's ordinary revenue was fixed dues and rents 
 arising from land, and that this revenue was inelastic, what was 
 paid in the third generation of the Plantagenets being identical in 
 amount with that which was paid in the second generation of the 
 Tudors. I have, in an earlier lecture, pointed out the negative
 
 416 THE ESTATE OF THE CEOWN. 
 
 significance of this custom in refuting the common idea as to the 
 effect of reputed changes in the currency, and I have shown that 
 the real change forced on Elizabeth by her father's action, which 
 she was too poor to practically revoke, led to the competitive rent 
 of the seventeenth century. If no encroachment occurred on the 
 Crown estate, its income might be computed with fair accuracy. 
 It is true that after the rise in wages in the middle of the four- 
 teenth century the Crown, like every other great proprietor, was 
 very seriously hit, and had constantly to appeal, apart from the 
 necessities of the first great war with France, for extraordinary 
 grants to Parliament, a practice which became even more marked 
 during the short, obscure, and, to the interpreter of fiscal and 
 economical action, difficult reign of Henry IV. 
 
 As soon, then, as the system of extraordinary grants in Parliament 
 became the means for assisting the extraordinary necessities of the 
 Crown, the importance of the Crown estate in the eyes of the tax- 
 payer, and the necessity of preserving it intact, becomes manifest. 
 During the reigns of John and Henry III., when the greater part 
 of the Crown estate on the Continent was lost, discontent was 
 general and energetic. Nothing, I believe, but the opportune death 
 of the father saved the son from deposition, and he subsequently 
 only escaped deposition by the judicious and patent good faith of 
 Edward I. With insufficient means, John had attempted to main- 
 tain an enlisted army, officered by foreigners, on English soil, and 
 had strained the rights of the Crown in doing so. Henry had 
 similarly not only impoverished himself by nepotism, but had 
 engaged in a wild political speculation, with still more insufficient 
 means, and had aroused the profoundest discontent with his policy 
 throughout the kingdom. He had conferred a large and important 
 estate of the Crown on his brothers, he had given much to his 
 half-brothers and his wife's relations, and had finally bestowed 
 another large royal estate on his second son. The earldom of 
 Cornwall was soon re-united to the estate of the Crown, aiid was 
 thenceforward destined to a special purpose. More than a century 
 later, the estate of Edmond reverted to the Crown, and was, with a 
 similar policy, preserved intact. From the time of Edward I. the 
 custom becomes general to match the younger sons of the king to 
 the heiresses of great fiefs, so as, I believe, to prevent for the
 
 DISCONTENTS WITH JOHN, HENBY, EDWARD II. 417 
 
 future any notable alienation of the Crown estates by way of 
 appanage, for it was impossible to prevent dangerous intrigues on 
 the part of cadets of the royal house, as was the case with Lancas- 
 ter in Edward II. 's reign, with John of Gaunt in the time of Edward 
 III., with Gloucester in that of Richard II., and with Humphrey 
 of Gloucester in that of Henry VI. 
 
 The first serious outbreak consequent upon discontents, which 
 led to entire distrust in the king and his court, and were caused, I 
 believe, by the indiscreet impoverishment of the Crown on behalf 
 of favourites, was the action of the opposition faction in the case of 
 Gaveston first, and the Despensers afterwards. The petulance of 
 Gaveston, and the arrogance of the younger Despenser, would have 
 hardly led to such serious issues had not the public felt that they 
 were running the risk of making up the void which was caused by 
 the lavish way in which these people were enriched at the expense 
 of the Crown. The counter revolution of the palace which, shortly 
 after Edward's deposition, overthrew Mortimer, was similarly 
 instigated by the extensive appropriations of Isabella's favourite, 
 and the re-appearance of an offence which was punished so 
 effectually in a previous reign. 
 
 Edward III. provided generally for his sons by marriages with 
 heiresses, and it is not improbable that the constant dying out 
 of royal stocks may have been due to the prevalence of this custom. 
 Thus, his eldest son, Edward, married the heiress of Kent; his 
 second, Lionel, the heiress of the De Burghs, the owners of Ulster ; 
 his third, the heiress of the house of Lancaster. I cannot but 
 detect in this an anxiety to provide for a numerous family from 
 other sources than the Crown estate. It was better, said the critic 
 of the times of Henry VI., that the king should have married from 
 among his own people, than to have brought a furious foreign 
 woman into the royal house who added nothing to its wealth, but 
 impoverished it. Again the discontent felt at the promotion and 
 enrichment of De Vere by Richard II. and the extravagance of his 
 household, as in the days of his great-grandfather, led in the end to 
 the revolution of 1899, as former practices of the same kind did to 
 that of 1827. 
 
 But it was in the fifteenth century that the great impoverishment 
 of the Crown estate began. Henry IV., who had married an heiress 
 
 28
 
 418 TEE ESTATE OF THE CROWN. 
 
 of the house of Boliun, merged the honour of Lancaster, with its 
 very widespread possessions, in the estate of the Crown, though it 
 was kept, and has thenceforward been kept, distinct from the rest 
 of the Crown estate. But Henry was incessantly in difficulties. 
 He had troublesome wars, disturbances in Wales which he failed 
 to overcome, civil war with the Percies and their adherents, with 
 whom he was more successful. But these troubles do not seem to 
 me to account for the singular straits to which this monarch 
 was reduced, straits which had no parallel in any other reign. 
 The age was, no doubt, lavish and extravagant to excess among 
 the upper classes, as contemporary testimony avers. I can 
 account for the fact only in this way. Henry had to provide for 
 a numerous family, and the hereditary revenue of the Crown was 
 inadequate for this and for his other expenses. The language of 
 his Parliaments seems to indicate that the charges of his house- 
 hold were more than ordinarily great. 
 
 His son added to the estate of the Crown the lands of the alien- 
 priories. Some of these he sold, others remained for a consider- 
 able time in the hands of the Exchequer. I have never been able 
 to discover the extent of this addition to the Crown lands, and we 
 only know the destination of two parcels of this considerable 
 dissolution. Some were bought by Chichele for his two Oxford' 
 colleges, and the foundation at Higham Ferrers. Much more 
 was long afterwards devoted to the foundation and enlargement of 
 the great house of Sion, and to the creation of Eton and of King's 
 College, Cambridge. But these would have absorbed only a por- 
 tion of the funds. * Of course Henry's French war necessitated 
 considerable extraordinary grants. 
 
 It was during the reign of Henry VI. that the Crown estate was- 
 reduced to the lowest point. No doubt the costs of the French 
 war were great, and the acquisitions which were made in France 
 were not profitable. But 'other causes were at work during the 
 young king's childhood, though his reign was always a minority. 
 Now the report presented to Parliament, when the king was 
 between eleven and twelve years old, on October 18, 1433, is to the 
 effect that the revenue had fallen to little more than 9,000 a year, 
 exclusive of the Duchy of Lancaster. The principal items of expendi- 
 ture were the household at Windsor, 13,678 ; annuities to the mem-
 
 THE ESTATE UNDER THE HOUSE OF LANCASTER. 410 
 
 bers of the royal family, 11,152 ; the government of the Marches 
 and Ireland, 10,899, Calais, ill, 913. The total charges are 56,878, 
 or 47,877 in excess of the income. There were outstanding debts 
 to the amount of 164,815, besides liabilities for which securities 
 were held. Of course much of the Crown estate was permanently 
 or temporarily alienated, and it is plain that, besides the cadets of 
 the royal house, many of the nobility had quartered themselves on 
 the revenue. The treasurer, Lord Cromwell, who died some years 
 after, perhaps the richest subject in England, had no doubt assisted 
 at the spoliation. He became a violent Yorkist before his death. 
 
 There can be no doubt that this wholesale plunder of the Crown 
 estate, and the resentments of those who were excluded from the 
 spoil, developed and kept alive the atrocious feuds of the fifteenth 
 century. The civil war, which lasted for over thirty years, from 
 the skirmish of St. Albans to the battle of Bosworth, was essentially 
 one of partisans. The people took little part in it, except in so far 
 as the Lollards of the eastern counties preferred the Yorkist to the 
 Lancastrian faction ; for the latter was the persecuting party, while 
 the former appears to have been tolerant. But nearly all the 
 nobles, except perhaps some on the Scottish border where, however, 
 the Percies were violently Lancastrian took part in the struggle. 
 
 They undoubtedly obtained their partisans from those soldiers 
 of fortune whom the cessation of the long war with France had 
 sent back to England. And they seem to have worn each other 
 out, for at Bosworth the forces on either side appear to have been 
 insignificant. Now the proof that this civil war did not affect the 
 mass of the English people is to be found in the singularly pro- 
 gressive condition of England during the fifteenth century, and the 
 total absence of complaint during the murderous strife that was 
 going on about any loss or disturbance from these military events. 
 You will observe, too, that the war of succession was eminently one 
 of pitched battles, not of sieges ; and it is curious that during the 
 heat of the struggle the strong castellated mansion of an earlier 
 date gives way to the embattled house, which, though possessed of 
 some slight defences, was by no means such a stronghold as the 
 feudal castle was. 
 
 The war of the family succession gives occasion to those 
 numerous acts of attainder, confiscation, and resumption, which
 
 420 THE ESTATE OF THE CROWN. 
 
 were perhaps intended to obviate the perpetual inheritances which 
 had been created under entails and uses. The practice of employ- 
 ing Parliament as the means by which malcontents in high rank 
 might be effectually crushed, began with the Coventry Parliament 
 of 1459, when Margaret resolved on the wholesale attainder of the 
 entire Yorkist party. This, it is true, did not take effect ; for the 
 acts of this Parliament were revoked in the following year. But 
 the precedent was not forgotten. It was repeated in 1461, after 
 Edward's accession ; and in 1471, after he had finally subdued the 
 Lancastrians at Barnet and Tewkesbury. It was revived after 
 Bos worth, after Henry had determined to assert that he was 
 de jure and de facto king, the day before the battle. The Crown 
 frequently extended its estate from this time forth by forfeitures. 
 
 If there be any truth whatever in the common statement as to 
 the real estate possessed by the monasteries, the addition made to 
 the Crown estate by the Dissolution was enormous. It was said that 
 Henry entered into the possession of one-third the area of England. 
 It is certain that he promised, if this grant were made him, that he 
 would ask his people for no further taxes. It is equally certain 
 that he broke his word. It is quite as certain that the whole of 
 what he appropriated disappeared in a marvellously short time, and 
 that before he died he was reduced to the greatest straits, and 
 resorted to the most disgraceful frauds in order to extricate himself. 
 It has been said that the monks foresaw the storm, granted long 
 leases, and invented the fine on beneficial holdings ; and there is 
 historical colour for this allegation. But the accumulated treasures 
 in plate and jewels, possessed by the more famous and frequented 
 monasteries, must have been enormous ; and the trials of abbots 
 and others for embezzling the monastic treasure, the diligent 
 search made by the king's agents for it, and the extreme rarity of 
 any discovery in later times of a hidden hoard, prove, I think, that 
 the whole, or nearly the whole, must have been surrendered. I am 
 of course aware that Henry made prodigious grants. The houses 
 of the Keformation owe most of their wealth to their share in the 
 plunder. But this share was but a fraction. Besides, the nobles 
 whom he proscribed and ruined, could have almost afforded suf- 
 ficient provision for those whom he created and left. 
 
 After this epoch the hereditary estate of the Crown was greatly
 
 THE TUDOR PERIOD. 421 
 
 wasted. The infancy of Edward VI. was like the infancy of 
 Henry VI., except that the later child-king was remarkably pre- 
 cocious. But the guardians wasted and appropriated much that 
 Henry had not lived long enough to spend, and the young king's 
 sisters Mary and Elizabeth were both exceedingly poor. Eliza- 
 beth was forced to supply the wants of the few courtiers whom she 
 enriched from other sources than those of the Crown lands ; and it 
 is well known that some rich bishoprics were turned into very poor 
 ones, in order to satisfy the claims of her favourites. Elizabeth 
 insisted on the government of the Church by bishops, but she had 
 no objection to compensating their spiritual dignity by shortening 
 their temporal resources. It is a more disputable question whether 
 she intended, or hoped to compel, an ornate ritual. It is perfectly 
 certain that it was not enforced, whatever opinions have been 
 recently expressed as to the fact. Had it been, I should certainly 
 have been able to trace it in the college accounts. 
 
 The indirect revenue of the Crown was stationary during the 
 reign of Elizabeth ; it began to grow rapidly under James. That 
 very absurd person chafed at Parliament most unwisely ; for it was 
 the means by which discontent evaporated in complaint. In the 
 times of the Plantagenets, the favour shown to Carr and Villiers 
 would have been resented as effectually as that exhibited against 
 Gaveston and the Despensers. But Parliament became a mouth- 
 piece through which popular indignation found a vent. James, 
 however, discovered sources of revenue which his predecessors never 
 dreamed of. Not content with straining the feudal rights of the 
 Crown, he openly sold hereditary honours, instituting a new order 
 entrance to which was purchasable for a round sum. But, in 
 fact, the interest which was anciently felt in the Crown estate was 
 lessened by the graver question which was not set at rest till 
 civil war decided it the right of the Crown to revise and increase 
 the ancient customs which it had collected at the ports. The 
 strife, which begun with Cecil's " Book of Kates," was only ended 
 at the Whitehall tragedy. James appears, from the transactions 
 between him and the City of London, to have died greatly in debt. 
 It appears that the Irish estates of the City Companies were gradu- 
 ally acquired, and that some, at least, of them were taken in lieu of 
 advances in the reign of Charles.
 
 422 THE ESTATE OF THE CROWN. 
 
 During the time in which he had quarrelled with Parliament, 
 Charles attempted to enlarge the estate of the Crown by inquiring 
 into the boundaries of the royal forests. The exemption of the 
 Crown's title from any prescription is probably a very early maxim 
 of law. It certainly found favour with Charles, who, we are told, 
 wished to govern in entire accordance with law. But this laudable 
 aspiration was, in the eyes of his contemporaries, marred by his 
 coercing the judges, and subjecting juries to the old law or custom 
 of attaint. I am not sure that a naked despotism is not better, as 
 I am sure it is much more honest, than an affectation of legality 
 from which all true legality is carefully weeded out. To supersede 
 law is a manlier course than to use the forms of law as a cloak for 
 absolutism. At any rate, Charles created against himself a party 
 of aggrieved peers. I know nothing in the irony of history more 
 striking than the fact that the son of the first Lord Salisbury of 
 the house of Cecil took part, as he virtually did by sitting among 
 the Lords on the memorable 30th of January, in the execution of 
 the son of that king, whom the first Lord Salisbury instigated to 
 quarrel with his Parliament, by doing what that Parliament con- 
 ceived to be illegal and constantly resented. 
 
 During the Protectorate the incidents of the Crown estate were 
 neglected, or silently abrogated, though the direct taxation levied on 
 all landowners was searching and heavy. The estate of the Crown 
 became the estate of the nation, and formed part of the general 
 revenue. Cromwell had a modest establishment for his household 
 at "Whitehall, though the cost of protecting his Government by a 
 standing army was great. At the Restoration, on the ridiculous 
 and technical plea, that as Cromwell had not been formally declared 
 king, the Act of Henry VII. did not protect his adherents, or 
 legalize his government, all the Acts of eighteen years were de- 
 clared void by the lawyers. But it was impossible to ignore the 
 custom which had held good for nearly a generation, and the feudal 
 dues of the Crown were extinguished at the cost of the poorest class 
 of people, they who were customers or consumers of articles included 
 under the hereditary excise. The estate of the Crown, now become 
 a comparatively unimportant part of the royal revenue, was left to 
 the discretion of the reigning sovereign, and conceived to stand on 
 the footing of a private estate. It is not remarkable that Charles
 
 THE GRANTS OF CHAELES II. 423 
 
 gave so much away, the wonder is that he left any part of it for 
 himself or his successor. The check on alienation was, I believe, 
 the consciousness that if he left himself entirely without resources 
 lie would need to apply to Parliament, and it is plain that Charles II. 
 was as bent, in the latter years of his life, on dispensing with Par- 
 liaments as his father had been before him. Fortunately I believe, 
 for him, the project was fresh when his sudden death occurred. 
 
 Now during the actual reign of Charles, which lasted for near 
 a quarter of a century, the estate of the Crown was largely burdened 
 by grants to his numerous irregular offspring. He was not indif- 
 ferent indeed to indirect means of enriching them. The eldest he 
 married to the heiress of the Scotts, Earls of Buccleuch ; another 
 was matched with the heiress of the De Veres, an ancient and 
 impoverished peerage ; the youngest was married to Charles's own 
 kinswoman, the heiress of the Scottish house of Eichmond. But 
 all were provided liberally for out of the Crown estate, some from 
 what were conceived to be the hereditary resources of the Crown, 
 some from doubtful taxes anciently imposed, but imposed, it would 
 appear, with .insufficient legality. But these grants in later times 
 were the occasion of a singular controversy, and ultimately of a 
 significant Parliamentary settlement, in which very ancient tra- 
 ditions as to the permanent alienability of the Crown estate were 
 affirmed, and under strict conditions the descent of the estate was 
 protected. There is not, I believe, a grant of James II. from the 
 Crown estate, for Berwick went into exile with his father. 
 
 Now it was I believe an early doctrine, certainly as early as the 
 fifteenth century, that a grant of the Crown, even when the sove- 
 reign was only the nominal founder or donor, was valid only 
 during the life of the donor, or reputed founder, and could in 
 theory be revoked on the demise of the Crown. Thus Colleges in 
 Oxford and Cambridge, even though they were founded by the 
 license of the Crown, sought a confirmation of their charters, as 
 though such charters were invalid without such a confirmation from 
 successive sovereigns. Magdalene College, for instance, in this 
 University, obtained a fresh charter, and at no little cost, from 
 Henry VIII. , though there is no evidence that the Crown gave an 
 acre of land to the foundation. With more reason the foundation of 
 King's College, Cambridge, had to pay smart money to Edward IV.,
 
 424 THE ESTATE OF THE CEOWN. 
 
 and to redeem the legacy of Henry VII. devised for the completion 
 of the chapel from his magnanimous FOIL But the most significant 
 illustration of this principle is to be found in the various acts of 
 resumption. Here it was considered necessary to insert the colleges 
 of Oxford and Cambridge, and the two ancient schools of Win- 
 chester and Eton, among the exceptions to a general act. A 
 relic of this doctrine appears in the history of the judges' patents. 
 By the Act of Settlement the judges are irremovable, except by an 
 address from both Houses of Parliament. The protection is perhaps 
 excessive, but long experience had taught the statesmen of the 
 Kevolution that these people could not be kept decently honest un- 
 less they had a freehold given them in their offices. In our day, 
 perhaps, the privilege is too absolute, and well-proved partisanship, 
 stupidity, or ignorance, recognized to the satisfaction of either 
 house and affirmed, might be conveniently substituted for the double 
 address. But notwithstanding the Act of Settlement, it was law, 
 up to the accession of George III., that the demise of the Crown 
 vacated the patents of the judges. 
 
 The evidence on the subject referred to was collected at the very 
 end of the seventeenth century with great fulness and superficial 
 moderation by Davenant, in his discourse on grants and resump- 
 tions. Davenant was a very capable pamphleteer and partisan writer 
 in a time when a pamphlet could influence a policy, certainly sustain 
 it. He knew well enough what were the conditions under which 
 party writing alone could be successful, for during the Kevolutionary 
 time, and for a long time afterwards, the pamphlet was the most 
 serviceable weapon of literary warfare. In our day, the opinions of a 
 politician expressed in writing are more ephemeral than his speeches. 
 No one cares, perhaps no one rightly cares, what was said yesterday 
 in a leading article. No one cares, and probably with equal justice, 
 at what a public man has alleged in a signed article or pamphlet 
 for any long time. Even the trick of searching into Hansard 
 or the files of a newspaper for public utterances in order to 
 found charges of inconsistency on them is stale. But nearly 
 two centuries ago political pamphlets were written with extreme 
 care, were constantly quoted, and not infrequently reprinted. 
 They often deserve to be, for they are the best index of contem- 
 porary opinion, since the writer had to catch public opinion at the
 
 DAVENANT ON RESUMPTIONS. 425 
 
 time when he wrote, and, if be would be successful, reflect it witb 
 fidelity. Tben be bad to give good reasons, historical, for matters 
 in wbicb be appealed to ancient precedent, political or economical, 
 wben he bad to deal witb diplomatic combinations, when be advo- 
 cated or insinuated a line of policy or the reversal of one. Swift's 
 " Thoughts on the Conduct of the Allies" did not bring about that 
 Parliamentary change in England which led to the treaty of Utrecht, 
 for the Tory party were bent on ousting the Whigs ; but it was the 
 best justification of their tactics that could be given. Davenant did 
 not create the feeling which led to the action of Parliament in 
 1700, when he obliquely and inferentially challenged the grants of 
 William to his Dutch favourites ; but he brought considerable learn- 
 ing into the controversy on the question, and gave the air of a 
 respectable zeal for the public service and public economy in a 
 controversy which was in the main partisan, though the indiscre- 
 tion of the administration had given a powerful lever to its 
 enemies. 
 
 Davenant was the son of the playwriter whom some believed 
 bad inherited a little of Shakspere's genius and even of his blood. 
 He filled certain places in the office of the revenue, and was for 
 a time in Parliament. He was essentially a party writer on the Tory 
 side, and the best writer which they had in the seventeenth century. 
 To our habits of thought, his true picture of a modern Whig is a 
 gross and clumsy lampoon, but it was highly effective at the time ; 
 for it charged the politicians of that party with no better aim than 
 that of pretending to public spirit as a cloak for personal gains ; 
 contrasted them to their disadvantage with the Whigs of a genera- 
 tion or two before, for instance, the Exclusionists, and even the 
 framers of the Kyehouse plot, and suggested their proscription. 
 It was most extensively circulated by the Tory leaders, and firmly 
 believed to be a genuine account of such men as Somers, Halifax, 
 Burnet, and the like. So highly did Louis XIV. value this timely 
 lampoon, that he sent Davenant a handsome present. Davenant 
 repaid the bribe by entering into confidential communications with 
 Poussin, the French envoy, and was in his company when the 
 famous supper of the Blue Posts was being enjoyed. But this 
 event was subsequent to the essay. 
 
 The essay on Resumptions is exceedingly adroit. It dwells on
 
 426 THE ESTATE OF THE CEOWN. 
 
 the importance which had been traditionally assigned to the Crown 
 estate, and the discontents, insurrections, and resolutions which had 
 heen caused by the malversation of ministers of the Crown, their 
 embezzlement of it in their own interests, and their corrupt com- 
 plicity with those whom the king had unwisely favoured. He dwells 
 with particular emphasis on the occasions when the reigning 
 monarch had quartered foreign favourites on the Crown estate, and 
 how uniformly the community had resented the enriching of these 
 adventurers. He alludes to the fact that in all impeachments of 
 unpopular and corrupt persons, the charge that they had enriched 
 themselves by the disherison of the Crown, and to the waste of the 
 royal revenue, had been strongly insisted on, that it was alleged in 
 the case of Villiers, of Strafford, whom lie ingeniously asserts to have 
 been the victim of a section of the Court party who would screen 
 themselves by sacrificing him, and touches on Danby's case, a public 
 man still living, and one of his own party, though now under a 
 cloud, with an exceedingly shrewd air of candour. To the partisans 
 of that time and the students of this age who can read between the 
 lines, the oaths of the servants of the Crown, quoted at length, were 
 intended to charge Somers and others with corruption and perjury, 
 while the cases cited are made to resemble as nearly as possible 
 those of Bentinck, Ginkell, Eouvigny, and Keppel. Everything is 
 cleverly insinuated, nothing is actually alleged. Even in dealing 
 with the Irish forfeitures it is hinted that these ought, as the Irish 
 Protestants and the English public have found the funds for the 
 Irish campaign, to be disposed of for the benefit of the taxpayer, 
 and not to be distributed at the pleasure of the Crown, even among 
 the most deserving persons. Nothing could be more adroit and in 
 terms less offensive than Davenant's volume, for it amounted to these 
 dimensions, and nothing more serviceable to the malcontents. It 
 does not seem to me that Macaulay has given sufficient weight to 
 this remarkable essay. But he was dealing with this subject and 
 this epoch just at the time when fatal illness attacked him. I will 
 assume that you are familiar with the description which this 
 luminous and conscientious historian gives of the Parliamentary 
 struggle over the Irish forfeitures and the English grants in the 
 wenty-fifth chapter of his history. 
 In dealing with the subject of the Crown estates and William's
 
 THE ACTION OF WILLIAM III. 427 
 
 grants, Macaulay utters some faint censure on his hero. Now I do 
 not think that in estimating William III. this eminent historian 
 has sufficiently recognized the position which William had occupied 
 as Prince of Orange, and that which the Revolution put him in as 
 king of England. In Holland William was the leader of a faction 
 against which was arrayed not a little of the administrative ahility 
 of the Dutch nation, and nearly all its wealth. It was the mis- 
 fortune of the house of Orange that two of its most eminent repre- 
 sentatives had been strengthened or elevated to power by the judicial 
 murder or assassination of their best friends and benefactors. 
 Maurice, who in his own youth owed every thing to the care and energy 
 of Barneveldt, brought about or permitted the atrocious execution of 
 that great man ; and William III., who owed everything in his own 
 youth to the fostering care of the De Witts, was thrust to the head 
 of affairs after the assassination of the brothers, who had been 
 deceived by the matchless perfidy of William's uncle. Now the 
 De Witts were especially the type of the great Amsterdam merchants, 
 jurists, and publicists, and though the eminent services of William 
 to his country for the sixteen years between 1672 and 1688 effaced, 
 to some extent, the memory of the events which caused his rise, 
 and his association with the Dutch democracy, William was never 
 at home at Amsterdam. But in England the case was wholly dif- 
 ferent. He had risen to power, and to the place of an English 
 king, by the class which had been opposed to him in Holland, the 
 mercantile interests of the great trading cities. He had been found 
 exceedingly useful by that part of the aristocracy which had broken 
 with James. But the country clergy and the country gentlemen were 
 never reconciled to him, never really rallied to him. He entertained 
 towards the two parties of the Revolution about as much respect 
 as he had entertained towards the burgesses of Amsterdam, and 
 they, in so far as they had escaped from the corruptions of the 
 Restoration, a rare occurrence in any of the public men, could not 
 be expected to feel personal loyalty to a foreigner, a Dutchman, 
 a king, who, as they conceived, apart from his attachment to 
 certain persons of his own nation, was certain to postpone English 
 to Dutch interests. 
 
 Now Macaulay says that " in giving away the old domains of the 
 Crown he did only what he had a right to do, and what all his
 
 428 THE ESTATE OF THE CROWN. 
 
 predecessors had done." But this was the whole question. It was 
 alleged by Davenant, and alleged with historical truth, that it was 
 not in the power of the Crown to grant more than a life interest in 
 any part of the Crown estate, and the precedents for this construc- 
 tion of the law were numerous and cogent. The Kolls of Parlia- 
 ment, the journals of the two Houses, the Statute Book itself, 
 looked on at that time, when precedents were of the greatest sig- 
 nificance, were conclusive on the subject. Of course the occasion 
 of the stormiest scenes, as Macaulay has shown, was not the favour 
 shown to Somers and Burnet in the former of which it might be 
 contended with some reason that the Chancellor had been privy to 
 a transaction which involved his own benefit ; and the attack on 
 this failed, even the malcontent Whig House declining to join in 
 the attack. The services of Ginkell, Kouvigny, and Schomberg r 
 the grants to the last of these being still a charge on the exchequer, 
 were military, intelligible, and important ; the grants to Bentiiick 
 and Keppel, to the former outrageously large, were made to needy 
 Dutch nobles who had attached themselves to William, and were 
 at best for diplomatic services, but mainly for personal reasons. 
 Whatever were the merits of Bentinck, however justly he deserved 
 William's confidence, English people saw at that time in him only 
 an arrogant foreigner who, by the favour of the king, was suddenly 
 raised to be the equal in wealth of the first English families, and this, 
 out of an estate the deficiencies of which would have to be supplied 
 by a land tax on the country gentry and by excises on the expenditure 
 of the poor, or on the development of trade. I may be wrong, but I 
 believe that, even in our own day, the ennobling and enrichment 
 of a personal favourite of the reigning sovereign out of any public 
 fund whatever, say the duchies of Lancaster and Cornwall, would 
 be met by an equally strong opposition, and that Parliament would 
 not need the precedent of 1700 in order to give effect to its dis- 
 content. I cannot but think that but little of the sagacity which 
 William possessed was needed in order to have enabled him to- 
 foresee the dissatisfaction which would be aroused by his grants to 
 Bentinck. 
 
 Besides it might have been argued with great propriety that the 
 relations of the Crown and the revenue had been totally altered by 
 the Revolution. This great change had been effected, not only to
 
 WILLIAM'S WANT OF JUDGMENT. 429 
 
 reverse the doctrines which had prevailed or had been taught, as to 
 the administrative and judicial usurpations of the Crown, but at 
 once and for ever to put a stop to equally noxious fiscal theories. 
 The money, the revenues, the resources of the country, however 
 ancient they were, however much they had hitherto been at the 
 disposition of the sovereign, were henceforward to be under the 
 control of Parliament. If, it was argued, the hereditary revenues 
 of the Crown were wasted prodigally and on unworthy objects, the 
 nation has to make the loss good. Now the English people has 
 never failed to assist the necessities of the Crown, and it has never 
 failed either to control a foreigner's greed when he has quartered- 
 himself, in appearance on the sovereign's favour, in reality on the 
 public purse. And no one throughout his reign more misconceived 
 the new departure than William did. He thought himself entitled 
 to all the grants which a packed Parliament had made to James. 
 He thought himself at liberty to appropriate the revenue to private 
 purposes more largely than Charles, to the discontent even of those 
 who hated the memory of Cromwell. Even in the age of un- 
 reasoning loyalty they had endorsed the impeachments of Claren- 
 don and Danby, and included peculation in the charges made 
 against both. 
 
 Again it was not to the credit of the king and his administration 
 that no steps had been taken after those years of peace to deal with 
 the deficits and the floating debts of the war. The people, the 
 Parliament itself did not know what were the charges against which 
 they had to make a permanent provision, and ignorance naturally 
 exaggerated liabilities. If the Irish forfeitures could lighten this 
 load of debt, it was not unreasonable for people, smarting under 
 novel taxes, irritated at a great direct tax on land, to claim for itself 
 the repayment of those funds, the advance of which had made the 
 Irish conquest alone possible. It should have been the business of 
 the administration to exhibit in a distinct and clear schedule what 
 the liabilities of the nation were, and to take order for their liquida- 
 tion or funding. Even now, it is exceedingly difficult to make out 
 from returns presented to Parliament, what was the cost of the war 
 of the English succession which ended with the peace of Eyswick, 
 even from Postlethwayte's details. 
 
 At the beginning of Anne's reign (it should be noticed that no
 
 430 THE ESTATE OF THE CROWN. 
 
 such steps were taken in William's as a proof that the English 
 Parliament was generous, perhaps just), a restraint was put by 
 Parliament on alienations of the estate of the Crown, by what must 
 be now recognized as the administration. By 1 Anne cap. 6, the 
 Crown was disabled from granting leases of Crown lands for more 
 than thirty-one years, and no renewal of the lease was allowed till 
 the earlier had determined. Again, it could not make grants from 
 the hereditary revenues of the Crown for a longer period than the 
 life of the sovereign. This is illustrated by the case of Churchill, 
 whom Anne made Duke of Marlborough at the instant of her 
 accession, and on whom she at once settled for her life 5,000 a 
 year out of the profits of the Post Office. When Parliament met in 
 October, and Marlborough had been appointed commander-in-chief 
 of the Dutch as well as of the English forces, and had captured 
 some places in Flanders, though he had not as yet shown eminent 
 proofs of his great military abilities, the queen, no doubt at the 
 instigation of the duchess, sent a message to the Commons re- 
 questing them to settle 5,000 a year on the duke for his services 
 in Flanders. The Commons admitted that he had retrieved the 
 honour of the English nation, declining to accept the words 
 " maintained or advanced." But they refused to make the grant and 
 annex it permanently to his peerage, on the ground that " the 
 revenue of the Crown had been so much reduced by exorbitant 
 grants in the late reign, 1 ' and carried these words, reflecting on 
 William's action, by an overwhelming majority. 
 
 By this time, indeed, the estate of the Crown had sunk to the 
 shadow of its ancient dimensions. Lessened as it had been in the 
 early part of the fifteenth century to some 57,000 a year, and 
 therefore the subject of anxious alarm to the Commons, who 
 demanded that a resumption of grants should forthwith take place, 
 it was still on a fair interpretation of rents paid in the fifteenth 
 century, equal to two and a quarter millions of present revenue, for 
 forty is a moderate multiplier of mediasval rents into modern money. 
 I have no estimate of the annual value of the Crown lands at the 
 beginning of the eighteenth century, but 1 have 110 doubt from the 
 general rise of rents, between the restricting statute of 1 Anne, 
 that it was not more than 40,000 a year by that time, and rents 
 having risen about ten times since that date, the present value of
 
 THE ACT OF ANNE. THE PRESENT ESTATE. 431 
 
 the Crown estate confirms this calculation. Of course it had 
 become wholly insufficient for the maintenance of those objects 
 to which it had been originally dedicated, and even for the royal 
 household, which thenceforward depended on a civil list, voted and 
 appropriated at the commencement of each reign. 
 
 Practically, the estate of the Crown has become part of the 
 national estate. It does not belong to the present royal family by 
 descent, for on mere grounds of hereditary right, there are many 
 persons more near the Stuart stock than that which was declared 
 after the death of the Duke of Gloucester, by Act of Parliament, to 
 be next in succession. The doctrine that the Crown lands belong 
 to the Crown is as obsolete as the doctrine would be that the 
 hereditary excise of the Restoration does. These lands have been 
 surrendered, or rather have never been given, and the estate is 
 managed by and for the State, under the control of Parliament. 
 Even in their present form they cannot be charged or alienated, 
 although it must be allowed, the restraint was put on when there 
 was little left to save, just as in Elizabeth's reign, the disabling 
 statute, putting a check to the alienation of lands belonging to 
 ecclesiastical and academical corporations was not enacted till 
 many sees had been greatly impoverished by the exactions of 
 Elizabeth's courtiers, and with the queen's connivance. 
 
 The Act restraining the Crown from alienating the royal estate 
 in England did not extend to Ireland, and enormous grants of these 
 forfeited estates, about which so much stir was made in William's 
 reign, were conferred on the queen's favourites, notably on the 
 Seymour Conways. But, in fact, the Irish exchequer, even up to the 
 days of the Union, was loaded with placemen, rewarded for services 
 which, even in "Walpole's time, the English Parliament would have 
 compensated very differently. Perhaps among the many Irish 
 grievances which existed before and after 1782, none was more 
 offensive to national feeling than the use which was made of the 
 Irish pension list, and the lavish expenditure of Irish money on 
 those who were fortunate enough to get a share in the distribution. 
 Nearly as many families were founded and enriched from this source 
 as from the Church lands in the days of Henry, and even the Irish 
 Parliament which is associated with Grattan's name, contained 
 persons in it, created under this system, who would not have been
 
 432 THE ESTATE OF THE CROWN. 
 
 endured in the very worst times of English Parliamentary corrup- 
 tion; men who merited the indignant contempt with which Wolfe 
 Tone characterized the Irish House of Commons. 
 
 Two of the ancient Crown estates are still annexed to the 
 reigning monarch and the heir apparent, the duchies of Lancaster 
 and Cornwall. They are curious survivals of the old feudal 
 tenures, and illustrate how strangely the possessions of the ancient 
 estates were scattered all over the country, for the two duchies hold 
 lands in most of the English counties. For example, there is a 
 considerable estate of the Duchy of Cornwall in Berkshire, not half 
 a dozen miles from Oxford. Up to recently those estates were 
 generally occupied under the system of beneficial leases, but these 
 leases have not been renewed, and in consequence no little discon- 
 tent has been expressed by those who had purchased on the 
 understanding that the traditional custom would be continued. 
 But in fact, as these estates are appropriated to these royal persons, 
 they are naturally, in their improved condition, to be taken into 
 account in the settlement of the civil list, and so fulfil to some 
 extent the purposes for which in old times the estate of the Crown 
 was so suspiciously watched. 
 
 I have dealt with this subject then, partly because it plays in 
 past history so important a part in that economic side of English 
 public life which deals with taxation and revenue. Its indirect 
 significance in the many disturbances and changes which have 
 occurred in the English monarchy is of the greatest. As I said 
 at first, revolutions in English history, the deposition of princes, 
 the change in the succession, the control of Parliament over the 
 executive, may have been brought about by a plurality of causes, 
 but the fiscal or economic cause dominates the whole. In one way 
 the shrunken importance of the Crown estate, now not as much as 
 the two-hundredth part of the annual revenue, has made the succes- 
 sion infinitely stronger. It is now exactly two centuries since 
 Parliament undertook to change the succession to the Crown, and 
 to dissociate itself from the dogma of Divine or even of hereditary 
 right. You will not find any two centuries of English history in 
 which the position of the dynasty which Parliament established 
 has been so unassailed as that of the House of Hanover. The 
 constantly recurrent cause of disaffection has been taken away. 

 
 THE ANCIENT INTEREST OBSOLETE. 433 
 
 The personality of the sovereign, though by no means lost, is 
 merged in that of Parliament. 
 
 The appropriation of the Crown lands by Parliament, and the 
 limitations imposed by the statute of Anne, had much to do with 
 the gradual extinction of Parliamentary corruption. People may, 
 if they please, criticize the conduct of the House of Commons, its 
 management of business, its appetite for undertakings which it 
 cannot adequately deal with, its delays, its disturbances, its fac- 
 tions. But no critic can charge it with being corrupt, with its 
 members being influenced by personal advantage in their political 
 action, with any motive more ignoble than ambition. In this it 
 can be contrasted to its honour with every other Parliament, with 
 every other British institution, even with the University of Oxford. 
 In this political purity lies its enduring hold on the English people. 
 This reputation had its beginnings in the efforts of those who 
 quarrelled, however unskilfully and unduly, with William, and 
 anticipated by its own action, in the Act of Anne, the possible 
 continuance of William's errors under the rule of his feeble 
 successor. But the historical interest in the doctrine of resump- 
 tions is materially modified, if not extinguished, by the passing of 
 the NuUum Tempus Act in 1768 (9 George III. cap. 16). By this 
 Act, the Crown was disabled from resuming any grant after a lapse 
 of sixty years. The occasion of the Act was an attempt, on the part 
 of Sir John Lowther, to appropriate to himself through the interest 
 of his father-in-law, Lord Bute, one of the grants which William 
 III. had made to Bentinck. 
 
 29
 
 XX. 
 
 PUBLIC DEBTS. 
 
 Early loans The example of the Dutch Their finance The origin 
 of their loans The power which a government possesses of raising 
 loans The United States France India and the Colonies 
 Elements of safety and distrust Loans in government paper 
 Inconvertible paper Taxation of dividends The ordinary object 
 of loans Permanent and terminable loans The loans of the 
 Revolution The system of borrowing The funding system, and 
 the arguments for and against it The return to cash payments, 
 and the reasoning of those who wished to degrade the currency 
 Peel's action. 
 
 THE Dutch taught European governments that part of finance 
 which under the name of public debts pledges the future earnings 
 of a people to the payment of interest on loans, and to the repay- 
 ment of them in course of time. Governments have often bor- 
 rowed money on the security of taxes. Thus our Edward III. 
 raised large loans from Florentine bankers, giving them what they 
 no doubt thought adequate security, and broke faith with them. 
 It is not so long ago that the descendant and representative of one 
 of these houses was entertained in London, when he alluded to the 
 fact, though without any expression of hope that the liability 
 written off five centuries ago as a bad debt would be recognized by 
 the present generation. I mention the fact to illustrate how en- 
 during is the memory of repudiation. In the same way Philip II. 
 repudiated his debts in 1596, and nearly ruined Genoa, which had 
 plentifully discounted his paper. From that time the Government 
 of Spain has never been able to retrieve its credit. Public credit is
 
 THE EXAMPLE OF THE DUTCH. 435 
 
 vigorous enough when the integrity of a government has heen 
 traditionally unblemished. But it takes a long time to restore a 
 tarnished reputation in matters of finance, when the confidence 
 has been that of a foreign creditor whose most effectual criticism 
 of the past is a deaf ear to present applications. I shall try in the 
 course of this lecture to point out, not only the acts which destroy 
 all trust, they are fairly obvious, but also the circumstances which 
 excite a hardly less dangerous suspicion. 
 
 The war of Dutch independence is, to my mind, the most 
 striking fact in modern European history, perhaps in the history of 
 civilization. It begins with the capture of Brill by the Beggars of 
 the Sea on April 1, 1572, and ends with the practical acknowledg- 
 ment of Dutch Independence in 1609. It is true that before this 
 time William of Orange was resisting and negotiating, and no one 
 doubts how important was his name as a rallying cry, and his counsel 
 in success or in adversity. But the War of Independence was essen- 
 tially one of the traders and the people. The Dutch nobility were con- 
 stantly traitors to the cause which they had embraced, and to the 
 men who trusted, honoured, and rewarded them. It was unhappily 
 the case that two of the English commanders, Yorke and Stanley, 
 were even more treacherous. It is only too true that the house of 
 Orange has exhibited the most conspicuous illustration of how little 
 hereditary political virtue, political intelligence, and true patriotism 
 are. This house in its later times has clung only to the worst 
 traits which disfigured some of the earlier members in the lineage. 
 But during the whole struggle the Dutch merchant and the Dutch 
 peasant were as true as steel, never discouraged, though constantly 
 deceived. 
 
 The debt which modern civilization owes to the Dutch cannot be 
 too overrated. They taught Europe the art of agriculture ; for it is 
 .to their example that the new agriculture, which we adopted tardily 
 in the eighteenth century, was due. They instructed Europe in 
 the mystery of commercial credit, and the Bank of Amsterdam 
 supplied what were virtually the earliest practical lessons in mer- 
 cantile finance. They taught the world the whole of the scientific 
 navigation which it knew for centuries. They were the pioneers of 
 international law, of physics, of mechanical science, of a rational 
 medicine, of scholarship, of jurisprudence. The geographical dis-
 
 436 PUBLIC DEBTS. 
 
 coveries of Holland were the basis of the first real maps. But above 
 all things, they instructed during their long struggle after inde- 
 pendence modern financiers in the art of taxation, for the exigencies 
 of their position forced them to try every expedient for the discovery 
 of ways and means by which the little republic could make head 
 against the colossal armies and, as was believed, the inexhaustible 
 wealth of Spain. 
 
 The Dutch did not borrow till they had exhausted every other 
 financial expedient. During the continuance of the Dutch excise, 
 and after it .was made permanent, in order to secure interest on the 
 loans which the Republic found it necessary to raise, every Hollander, 
 from the cradle to the grave, for every act of his daily life, and 
 even for the voluntary and involuntary incidents of it, was taxed. 
 He lived under the regime of a perpetual, sleepless, searching octroi. 
 No nation ever bore so much in the way of taxation without flinching. 
 They had none of those foolish notions which possess the minds of 
 many modem financiers, that a government can put on customs 
 duties and make foreigners pay them. They were perfectly aware 
 that trade to be successful must be free, that however much the 
 Hollander might be pinched in his daily expenditure, thrift might 
 overcome this evil ; but that to deter the trader from bringing pro- 
 duce to Dutch ports was to cripple the very life of a commercial 
 people, and make existence impossible. And so Dutch finance was 
 a charge on consumption, levied at the purchase of the article, or 
 011 the event at which the impost was due, an income tax which 
 dealt with all expenditure at the time in which expense was in- 
 curred. But trade was free, and Amsterdam with other cities were 
 marts from which all European merchants took their price, at 
 which all traders congregated. Nothing but a political education 
 of the most stringent kind, a deference to authority which never 
 was shown to power, would have induced this extraordinary people 
 to submit to so searching a fiscal inquisition, and yet to remain so 
 free from protectionist illusions. Their finance formed a precedent, 
 but never became an example for other communities, perhaps 
 because no other community has been animated by so intelligent a 
 patriotism at that which marked the War of Dutch Independence. 
 Cromwell imagined that he could graft the system on English 
 finance. But notwithstanding the brilliancy of that great general's
 
 DUTCH FINANCE AND LOANS. 437 
 
 career, his action, and that of those who were with him, was too 
 narrow. The English people took no side in either the first or the 
 second English Eevolution. They had been carefully excluded 
 from ah 1 stake in the struggle. To them a change of dynasty was 
 only an exchange of masters. Even now it may be well doubted 
 whether many Englishmen rightly interpret the meaning of political 
 struggles. 
 
 When the endurance of the Dutch taxpayers of excise was 
 apparently exhausted, the Dutch Government took to borrowing of 
 their more wealthy citizens, for there was no reason to believe 
 that they could go out of Holland for money. If they had had 
 recourse to a forced loan, as a special-income-tax from the wealthy, 
 and the expedient had been successful, the money could have been 
 raised and spent. But the Dutch knew that capital may be weak, 
 but that it is very mobile, very agile, and that it is better to attract 
 capital than to discourage it. When a government borrows money 
 from its own subjects or citizens, it is plain that it could extort the 
 money, for the success of the operation proves that what it is in 
 quest of is present. But entirely apart from the equity of such an 
 expedient, it is wise to examine its policy. Now every council- 
 general of the Dutch states who had any sense, knew that it would 
 be impolitic to do so, and the Dutch councils-general were very well 
 acquainted with the conditions of business. It is very probable that 
 many among them knew that to borrow on the future industry of 
 the community is to incur a double burden, to dimmish the present 
 material of industry, by devoting capital to an object which would 
 not increase the industrial powers of the community, and by forcing 
 those industrial powers to pay interest on a loan which it would 
 take the future industrial powers of the community to pay off. But 
 they borrowed from their own people, and the rate at which tbey 
 borrowed proved how considerable were the resources to which 
 they appealed, and how judicious was the conclusion at which they 
 arrived. 
 
 Assuming an intelligible necessity, a government has almost 
 indefinite powers of borrowing from its own people, under the con- 
 ditions that the habit of saving is in excess of the habit of expendi- 
 ture among them, and that the community has a reasonable freedom 
 of industry accorded it. Lord Rothschild once told me that the
 
 438 PUBLIC DEBTS. 
 
 reason why the Jews were the financiers or loan-mongers of Europe 
 resided in the fact that the whole race saved, every one of them 
 striving to accumulate half his income. M. Sylvain van der Weyer, 
 the Belgian minister from the date of the Belgian separation to his 
 death, told me that this was the secret of Belgian wealth, and the 
 cause of Belgian agriculture, which should almost be called horti- 
 culture. Every Belgian, he said, from the Duke of Arenberg to the 
 peasant, tries to save half his income. Now, such a people must 
 either hoard and hide its savings, a custom nearly obsolete ; or buy 
 land with them, a practice said to hold in Belgium and rural France ; 
 or employ them under the joint-stock principle, in industrial under- 
 takings, as is witnessed in many countries ; or lend them to govern- 
 ment. They may, in the last form, be lent to government for 
 reproductive purposes, as in railways or similarly remunerative 
 undertakings ; or for objects remotely remunerative, as in defences, 
 harbours, and the like; or in war, when whatever may be the 
 pretext, or justification, they are for all that concerns future 
 industry wasted, and remain a burden. 
 
 The power, then, which a government has of borrowing from its 
 own people, however seriously the operation may cripple industry, 
 is indefinite, under the above conditions. But a government may 
 find it difficult or impossible to borrow from its own subjects or 
 citizens. They may be too poor to lend voluntarily, as is the case 
 with Kussia ; or they may be distrustful of the government, as in 
 British India ; or they can better afford to borrow abroad, because 
 they can find a more lucrative employment for their savings at 
 home, as in the British colonies. In these cases, the loan is held 
 out of the country. Now, though it is not easy to say where the 
 limit of possible indebtedness in such cases is to be found, it is 
 certainly far narrower than it is when the government borrows of 
 its own subjects. The Kussian government, since it came before 
 the European Stock Exchange, has fulfilled its engagements. It has 
 paid its interest scrupulously and punctually, and we may be sure 
 with prudential motives. But it is probable that every rouble of 
 that debt is held abroad, and it is certain that all of it is believed to 
 be. Its power of further borrowing is, therefore, doubted, and, if 
 we are well informed, it has striven in vain to negotiate a further 
 loan in the Stock Exchanges of Berlin, Paris, and Amsterdam.
 
 THE POWER OF RAISING LOANS. 439 
 
 Lenders of money to government are neither patriots nor politicians. 
 The strongest assurance that the loan was wanted for a Slavonic 
 purpose would not get cash from the most ardent Panslavist. Still 
 less would a Dutchman or German, or Frenchman or Englishman 
 lend his money to the Russian government for political reasons. It 
 is lent to get an income, and if the prospect of the income is 
 dubious, either because the government is incapable of bearing a 
 further strain, or because the resources of the country are sup- 
 posed to be near upon exhaustion, the applicant will visit the 
 Stock Exchanges in vain. Even Pitt's " patriotic loan " was a 
 failure. 
 
 Perhaps an indication of this possible exhaustion, not it may 
 be exactly formulated, but not the less real or dominant, is to be 
 found in the demand which follows on a war. The civil war in the 
 United States was prodigiously costly, perhaps more costly than any 
 recorded war. But the Eepublic had no difficulty in borrowing 
 after the war was over, even when it was being waged, much of the 
 stock being temporarily held in England, and only relinquished 
 when the States determined on making their public debt the basis 
 of their paper currency. Then the price of what was still irredeem- 
 able was forced up so high that holders found it more profitable to 
 sell, and now, probably, every dollar of the debt is held by the States 
 bankers. After the Franco-German War, great as the waste of it 
 was, neither of the combatants were exhausted, and France found it 
 easy to borrow the indemnity which it paid, and the charges of the 
 war which it incurred. After the war between Russia and Turkey, 
 both combatants were exhausted. The credit of Turkey was entirely 
 gone, that of Russia strained so considerably that loans became 
 impracticable. The test of this state of things is to be found in the 
 exports and imports, for war is waste, and when the militant countries 
 cannot relieve the waste from their own resources, they purchase 
 what they want by the export of securities. Now the market for 
 these securities was narrowed, if not extinguished. When the 
 younger Bismarck told me, no doubt repeating what I knew to 
 have been his father's criticism on the situation, that ten years ago, 
 the Tzar invited revolution if he did not go to war, and bankruptcy 
 if he did, he expressed in political language what I am trying to 
 give you in economical.
 
 440 PUBLIC DEBTS. 
 
 In the government of British India, to those who look below the 
 surface, the fact that its debt, unproductive and productive (and by 
 the former I mean the costs incurred for wars, by the latter, those 
 expended on rail ways) is almost entirely held abroad, is not reassuring. 
 The mass of the Hindoos is poor, but there is great wealth among 
 some of the native merchants and professional people. A Calcutta 
 counsel is supposed, as I am informed, to rival his English fellow 
 subjects in lucrative employment. The native merchants are many 
 of them reputed to be rich. But India stock is generally, govern- 
 ment and railway alike, held in England. Some of the native 
 patriots complain loudly that the resources of India are diminished 
 by the dividends transmitted to England in consideration of the 
 capital invested in Indian railways. They have said as much to 
 me, and I have told them that there is an easy remedy for the 
 grievance of which they complain they may buy the stock them- 
 selves. But for some reason or other, the advice does not seem 
 palatable. The English nation, I presume, are reputed to be the 
 government of India ; of course I mean by Parliament. This is a 
 fiction, I admit, for it is very hard to get a house together for the 
 Indian budget. But it is a common weakness with nations, one 
 from which our own is not exempt, to expect great things from 
 government, and to grudge the sacrifices which are necessary in 
 order to get the great things. Perhaps we have been in this country 
 historically disappointed in our expectations, and have had to make 
 the sacrifices. 
 
 In the British colonies, most of the loans have been for reproduc- 
 tive purposes. British capital has constructed most of the colonial 
 railways, for the colonists, even when their finance is wise, and that 
 is seldom, can do better with their own money than to lend it for 
 public works. But even here a mistake may be made by the colony. 
 If I were a British colonist, nothing would cause me to distrust a poli- 
 tical advocate more, than reference to the illimitable resources of the 
 colony, and to the importance of its taking an imperialist place in a 
 great empire. Both may be true, but the translation of either into 
 active business may be disastrously premature. For in new countries, 
 whatever may be the future capacity, predicted by the geologist or 
 the speculative physicist, the limit is unluckily economical, and is 
 the capital, the population, the market of the settlers, and, of course,
 
 INDIA AND THE COLONIES. PAPER LOANS. 441 
 
 its industrial skill, which, in deference to Mr. Mill's opinion, it almost 
 invariably takes care to cripple or stultify by Protection. But all its 
 debt is held out of the country, and if the impression gets abroad 
 that it has sp^nt more than it can earn wherewith to pay the 
 interest, and that it is likely to do so, the colony's borrowing powers 
 will soon be arrested. There is no little reason to believe that the 
 policy which has been inculcated by ignorant or self-interested 
 people on these young settlements is already leading to serious 
 economical complications ; and if these precipitate events, neither 
 colonial borrowers nor English creditors will have reason to be 
 satisfied with the counsellors of a rashly progressive policy, with 
 their tools and with their dupes. 
 
 The safest of public debts, then, are those which are held almost 
 exclusively by the inhabitants of the country which issues them. 
 But I have not quite exhausted the elements of distrust. There 
 is one which governments are capable of inflicting, and subjects 
 are powerless to avoid. This is the issue of an inconvertible 
 government paper, such an expedient being adopted in order to 
 create an internal debt. Practically such an issue is a forced loan, 
 to which the poorer classes contribute more heavily than the 
 richer, particularly more than the mercantile classes, who know 
 in the course of their trade how to discount the paper, and even 
 to make a small profit. Now, if a government is moderate in the 
 issue of such a paper, the necessity which every community has 
 for a measure of value (coin invariably disappearing when an 
 inconvertible paper is put upon the country) will keep up the 
 internal or nominal value to a point considerably in excess of its 
 exchange value, the true measure of depreciation. At the present 
 time two European governments have a forced paper circulation, 
 Austria and Russia. The exchange value of the Austria^ paper 
 florin is from 15 to 20 per cent, below the silver florin, that of the 
 Russian rouble not half the silver value. But we are told that 
 internal prices have not materially risen in either country. The 
 reason is not that the redemption and retirement of the paper is 
 anticipated, and that therefore an Austrian or Russian cherishes 
 a hope which the foreigner cannot be expected to entertain, or that 
 specie exchanges as other commodities do, for no less or no more 
 than the amount which the paper nominally represents, but
 
 442 PUBLIC DEBTS. 
 
 because in their internal trade the inhabitants of these two 
 countries have no choice in their circulating medium. But the 
 fact remains that such a currency is a debt, which should be 
 redeemed as much as a public debt is, forms part of the govern- 
 ment's liabilities as much as that public debt is, and is to be 
 calculated, as far as possible, when there is a wish to form an 
 estimate of a government's solvency. 
 
 The extent to which a forced paper currency can be cir- 
 culated without producing its effects on internal prices 
 depends on the discretion of government. If it merely 
 displaces the metallic currency but little effect is produced, 
 for a slight difference will make the metal disappear. But if, 
 through ignorance or [ necessity, the issues greatly exceed the 
 public wants, the depreciation may be rapid, and internal prices 
 may be so rapidly exalted that the paper is utterly discredited. 
 Such was the case with the paper money of the French Kevolution, 
 when notes to an enormous extent were issued under the name 
 of assignat or mandat, were ordered to be taken at their nominal 
 value under the threat of capital punishment to the reluctant 
 trader, were withal discredited, and were finally repudiated by the 
 government itself. Such again were the paper moneys of the 
 American War of Independence, wheii^the colonies found it impossible 
 to keep their pledge of redemption. In a limited sense such was 
 the experience of the greenbacks in the Civil War, the forced cir- 
 culation of which, owing to Wall Street intrigues, was carried on 
 long after any justification of the policy had ceased. Such was 
 the experience of the suspension of cash payments by the Bank 
 of England in 1797. Now the bank note from this date till 1819, 
 when the resumption took place, was in one sense a government 
 paper, for the non-convertibility of it was an act of government. 
 In another sense, it was the issue of a private corporation, for all 
 the profits of the transaction theoretically remained in the hands 
 of the Bank. For some years the note was not depreciated in ex- 
 change value. It is true all metallic currency had disappeared, 
 except worn silver. But the notes had only filled up the void 
 which the disappearance of gold had created. But at or about 
 the year 1807, the Bank directors transgressed the caution which they 
 had previously exercised, and issued notes in excess of the public
 
 INCONVEETIBLE PAPER. TAXATION OF DIVIDENDS. 443 
 
 Avant. The consequence was that the exchange value fell, prices 
 correspondingly rose, and the consequences of a forced paper 
 circulation in a trading community made themselves exceedingly 
 apparent. I shall show in the course of this lecture, what were its 
 effects on the rapidly increasing debt of the United Kingdom. 
 
 Again, the credit of a country is affected hy distrust when it 
 taxes the dividends which it has covenanted to pay. This breach 
 of faith, as it must be called, was committed by the Italian 
 government. To levy a tax, however light, on the dividends 
 payable on a public debt is, disguise it as one will, a partial re- 
 pudiation, differing in degree only, and not in principle, from a 
 total repudiation. We in England levy an income tax on dividends 
 of government stocks. The awkwardness of this action was 
 justified by Sir Eobert Peel, and since that by Mr. Gladstone, 
 on the ground that remissions of duty left a larger margin to 
 consumers, i.e., to the recipients of dividends, and that therefore 
 they might be expected to make compensation. But a remission 
 of duty, unless the remission is very large, is not necessarily 
 followed by a lowering of price. It does not necessarily ensue 
 that, if an excise is taken off bricks and tiles, the charge for house- 
 rent will be lessened. No doubt, the abolition of taxes on food 
 would more than compensate for the imposition of an income tax. 
 But Peel's first tariff reforms rather benefited the trader and manu- 
 facturer than they did the -consumer, and I shall have occasion in 
 a further lecture to point out what-have been the fortunes and what 
 is the present distribution of the income tax. But the principle 
 on which the income tax on dividends was justified or defended 
 is still maintained. It is and remains a tax on consumers, for it 
 is not enacted on the recipients of dividends on income when 
 the recipients live out of the United Kingdom. The Italian 
 government levies it on all indiscriminately. Now this is, I 
 repeat, a partial confiscation or repudiation, and inevitably a cause 
 of distrust. On the other hand, Italy has retired her forced 
 paper currency. 
 
 The circumstances, then, under which a government can most 
 easily borrow funds, and pledge the future industry of a country 
 to the repayment of interest and principal are 1. That it borrows 
 principally from its own subjects. 2. That it makes its loans
 
 444 PUBLIC DEBTS. 
 
 when the country gives every guarantee, either by its saving 
 power, or by its progressive ability, that the burden imposed may 
 be met. 3. That it preserves, in its relations to its creditors, 
 unimpeachable good faith. 4. That there exists in the country 
 a class of persons who are not only able to invest in such securities, 
 but for various reasons are eager to do so. 5. That the borrowing 
 government gives every facility for the cheap and rapid transfer 
 of such securities from hand to hand, so that they may be the 
 best possible security for temporary loans, and the most con- 
 venient form for temporary investments. Hence, it is not only 
 just to the creditor, but expedient for the government to make its 
 own securities exempt from all transfer taxes or duties. 6. That 
 if possible its loans are effected for reproductive objects. 
 
 These, then, are loans negotiated under ideal conditions. I say 
 ideal, for I do not believe that all the foregoing six conditions 
 have ever been fulfilled in any of these borrowings. Of course, 
 the most excusable loan conceivable is that which fulfils the last 
 condition. But out of the great mass of public debt which 
 civilized societies, and some societies which it is perhaps a more 
 or less extravagant compliment to call civilized, very few loans 
 have satisfied the last condition. Even when they have pre- 
 tended to satisfy it, there is often a doubtful or second purpose 
 in the professed object. For example, loans have often been made 
 for the construction of railways, for instance, in Eussia and the 
 British colonies. But for the former, it is notorious that 
 military communications were the principal objects of the loan, 
 when the pretence was a mercantile one. For the latter, it has 
 been too frequently the case, that local interests have induced 
 or constrained colonial governments to make expenditure which 
 will be so remotely profitable, that the interest on the advance 
 will swallow up the principal before there is any prospect that 
 the public works will be remunerative. Occasionally the true 
 purposes of the colony have been sacrificed to what are called 
 imperial interests, a fine sounding phrase, which may mean any- 
 thing, and generally means nothing, but which has the support 
 of adventurers in the colony, and unintelligent, because ignorant, 
 politicians at home. Nations, like individuals, may be induced 
 to launch out beyond their means, to recklessly discount the
 
 THE ORDINARY OBJECT OF LOANS. 445 
 
 future, to believe, as Adam Smith says, that their fortunes or their 
 abilities can stand a greater strain than experience warrants. In 
 such cases, there is apt to be a sudden arrest, perhaps an undue 
 alarm, frequently the adoption of what is believed to be a recuperative 
 process, -which may be more disastrous than the original speculation. 
 Unless I am greatly mistaken, the economical condition of many 
 of the British colonies is far from satisfactory, and to bring this 
 about, English statesmen have unconsciously lent themselves, and 
 colonial adventurers have only been too willing to further 
 folly. 
 
 There can be little doubt that nations, when a serious emergency 
 overtakes them, are justified in using every and nearly any means, 
 in order to avoid collapse, or even the enforced cessation of 
 progress. But it is open to very great doubt, whether, on many 
 occasions in the history of communities, the facility with which 
 loans have been made is not a more effectual bar to progress than 
 that which has seemed to an existing generation to be formidable, and 
 whether it has not encouraged ventures in which success is almost 
 as disastrous as failure. Again, it is a question of the greatest 
 importance as to whether a present difficulty justifies the burden- 
 ing of future industry, the restraint of a coming generation. 
 There is a commonplace with some reasoners on this subject, that 
 the generation to come succeeds to a splendid inheritance, which 
 the wisdom of a past age has protected, but, of necessity, has 
 burdened. But what may the future generation say about the 
 legitimacy of the charge ? They may retort that the charge was, 
 after all, a gambling debt, which the riper intelligence of a later 
 age has analysed and detected. Chatham imagined that in creating 
 a sole market for the British merchant and manufacturer, he 
 justified the permanent charges of the Seven Years' War. The 
 experience of the war of American independence, by which that 
 theory of a sole market was tested, in which another debt of even 
 greater amount was incurred, proved that the theory was as base- 
 less as the South Sea Bubble. Is the future to be indefinitely 
 pledged to the errors of the past ? And then when we remember 
 that all finance in inevitably based on the contributions of those who 
 work for wages, and cannot escape the tax-gatherers, what may 
 they say in the future who have no share in the inheritance?
 
 446 PUBLIC DEBTS. 
 
 Surely the wisest course is to pay off debt as soon as can be, and 
 incur as little as possible in the future. 
 
 In a well-known passage, Macaulay has commented on the 
 alarms which bygone generations of Englishmen have expressed at 
 the growing magnitude of the public debt, and he has pointed out 
 with great cogency how the growth of wealth has been incompar- 
 ably more rapid than the growth of debt. But I conceive that 
 even in the ages when the debt was contracted, it must have been 
 clear that wealth grew faster than debt did, else how could the debt 
 have been raised ? Beyond question during the great continental war, 
 the debt grew with frightful, with unexampled rapidity, and wealth 
 grew with it. But wealth was very unequally distributed, was the 
 share of very few persons. Mr. Porter has shown, in his " Progress 
 of the People," that the costs of that great struggle, as far as 
 England was concerned, was borne by those who lived on wages, or 
 were engaged in genuine industrial callings. In those times, the 
 criticism of those who had to pay was unheeded. English finance 
 was or became, like the Dutch finance of the wars of independence, 
 a tax on every function of life, on all its enjoyments, on all its 
 necessities. But such people had to endure in silence, or at best to 
 murmur inarticulately for all practical purposes. I do not doubt 
 that had they found a voice, and had their voice been effectual, the 
 policy of Pitt and his successors would have been challenged. For, 
 I repeat, it is a maxim in finance, that the sufferings of the nation, 
 when taxation is heavy, are the sufferings of the poor, that beyond 
 naked confiscation, or as a statesman has said, by the ransom of 
 their property only, can taxation really touch the rich. Now it is 
 an expedient which is full of danger to visibly increase the area of 
 taxation, if that taxation is to be effective. I challenged the 
 Chancellor of the Exchequer in 1886 to tell the House of Commons 
 what new tax he could impose without risk to himself and to his 
 Government, and I could get no answer from him. The days 
 of Vansittart are gone by. 
 
 Loans based upon imperial or local pledges, are of two kinds, 
 permanent or consolidated, and temporary or terminable. In the 
 first case, the payment of the interest is guaranteed, and the 
 redemption of the principal is left to the discretion or convenience 
 of the debtor. In the second, the payment and the redemption are
 
 PERMANENT AND TERMINABLE LOANS. 447 
 
 Tmited in the same act. Now it would be beneficial, if all loans 
 were of the later class, and of late years, financiers have, with some 
 success, planned the extinction of debt by terminable annuities. 
 But there are always two difficulties in the way of this desirable 
 policy. In the first place, only a few persons, or a few classes of 
 investors, look with favour on a security which is annually decreas- 
 ing in value. Now for actuarial reasons, to be an effective 
 relief, the terminable annuity must rapidly decrease in value. Then, 
 as I have stated, it is all important in government loans, that the 
 security should be readily saleable or convertible. But there fire 
 more permanent and entirely safe investments, which bear a higher 
 interest than terminable annuities do, but are not immediately con- 
 vertible. Now the agents who are most likely to negotiate termin- 
 able securities are those who do not desire, as traders and bankers 
 do, securities which can be sold at one hour's notice, or can be 
 pledged to nearly their full market value. Hence the market for 
 terminable securities is limited, and in order to float them, a 
 financier must make an actuarial loss, or offer them at less than 
 they are intrinsically worth. In the second place, the negotiation 
 of such securities, owing to the income tax, is difficult, for it will be 
 plain to you that if 3 per cent, is paid on a terminable annuity, it 
 is a heavier tax than 8 per cent, paid on a perpetual annuity. 
 In the former it is 8 per cent, on principal and interest, in the 
 latter 3 per cent, on interest only. For reasons which I hope 
 to make plain when I deal with modern taxation, it is by no means 
 easy to make the English income tax accommodate itself to this 
 manifestly unequal charge. 
 
 It now remains that I should give you, after having spoken at some 
 length on the economical principles which are involved in the 
 system of creating public debts, some historical facts and illustra- 
 tions which will illustrate what I have said. 
 
 The English public debt is almost entirely the creation and out- 
 come of the Revolution of 1688. It is even made a reproach of 
 that great event. It is, if the anticipation of future revenue can be 
 justified, and if the occasion on which the anticipation was made 
 can be defended, greatly to its reputation. Loans were probably 
 negotiated by despots in the days of Ninus and Sesostris. There 
 are notices of such transactions in the time of the Athenian and
 
 448 PUBLIC DEBTS. 
 
 Eonian republics, and these were apparently liquidated. Loans 
 were raised by Philip II. and Louis XIV., and were followed by 
 repudiation. There is this danger in a loan to a despotic govern- 
 ment, that its first concern is its own security, and to that it will 
 sacrifice the most sacred pledges by this the law of its nature. The 
 City of London, as I have lately shown, lent to James I. and 
 Charles I., but took care to have security. It was in this way that 
 the Companies aggregated their estates in county Derry. But a loan 
 to a despotic Government is always a precarious loan. I cannot 
 tell when these people will repudiate, but that they will preserve 
 themselves in preference to their creditors is ultimately certain, and 
 will do so all the quicker if their neighbours begin to suspect their 
 paper. 
 
 I will readily admit, for the economical interpretation of 
 history has, in matters of finance, to take account of political 
 facts, that the Parliament of the Revolution was the travesty of a 
 Parliament. But behind it, and to be conciliated, was the moneyed 
 interest. In these Parliaments for many a year, the four members 
 for the City of London were of more importance than fifty times 
 their number from Grampound, Old Sarum, the two Looes, and 
 Gatton. It was in the power of these persons to keep the Govern- 
 ment on its feet, or to let it stagger. The London merchant of the 
 Revolution and of the two wars which followed the Revolution, 
 those of the English and Spanish succession, exacted no heavy 
 price for an assistance which was invaluable. The nation had got 
 rid, not entirely of personal government, but of the worst features 
 in it, and any Parliamentary Constitution, however anomalous it was, 
 however much it might cherish forms which had lost their vitality, 
 was better than the dispensing power, and a corrupt bench of judges. 
 The public danger in the days of the Stuarts came so nearly home 
 to the people who had power, that the existence of the National 
 Debt was looked on as the best guarantee of the Act of Settlement, 
 in which the least significant part was, if we are to judge by what 
 was written at the time, the devolution of the Crown on the house 
 of Hanover. I have no doubt that the risks which were sure to be 
 seen in the event of the old line being restored are the key to the 
 indecision of Harley, and must be read between the lines in the savage 
 disappointment of Atterbury and Bolingbroke, when the latter
 
 THE LOANS OF THE EEVOLUTION. 449 
 
 described bis colleague and rival. You will find it quoted by 
 Hallam as of the old Pretender. It is really of Harley. 
 
 Most of the early loans were terminable, and special taxes, as is 
 now the custom in countries with little credit, were assigned to the 
 interest. I have told you before that the existence of the floating 
 debt was a scandal to "William's government or advisers, and I think 
 that Bentinck and Zulestein, if they were anything but diplomatists, 
 might have instructed Montague and Godolphin in the expedients of 
 Dutch finance. In reality, the earliest part of the permanent debt 
 was that of the bankers, the money which nearly thirty years before 
 Charles the Second stole, when he conspired with Louis XIV., in 
 1672, against the Dutch, a debt which was funded towards the con- 
 clusion of William's reign, but on condition that it should be re- 
 deemable on paying a moiety of the principal. I am disposed to 
 believe that the difficulty in the way of the financiers of the Revolu- 
 tion was the impossibility of levying solid customs duties, in the 
 teeth of the Owlers and their sympathisers, and the unpopularity of 
 excises. The English people is said to be a highly intelligent race, 
 but it has a persistent habit of confusing names with things. This 
 illogical trick is poor testimony to its shrewdness, but statesmen, I 
 presume, must do the best with the material which they have to 
 deal with, and be excused for being slow in insisting even on neces- 
 sary truths. 
 
 The creation of the public debt of Great Britain in the form or, at 
 any rate, on the lines with which we are familiar, was the work of 
 those who manipulated finance in Anne's reign. The war of the 
 Spanish succession was the opportunity of the historic Whigs ; the 
 peace of Utrecht, which sacrificed, and not without reason, all the 
 efforts and all the expense of the war, was the work of the historic 
 Tories. What was achieved was the humiliation of Louis XIV., the 
 impoverishment of France, and the admission of England to the 
 lucrative but disgraceful business of importing African slaves into 
 the Spanish possessions hi the New World, under the terms of the 
 Assiento treaty. The nation which imported slaves into the Spanish 
 possessions, under the Assiento treaty, imported them into the 
 American plantations and such of the Leeward Islands as belonged 
 to Great Britain, under the sole-market theory. The first-fruit of 
 the Assiento treaty was the South Sea Bubble, the last was the civil 
 
 80
 
 450 PUBLIC DEBTS. 
 
 war between the Northern and Southern States of the American 
 Union, for the American people justly charge the historical English- 
 man with being the cause of the trouble which nearly rent the Union 
 in twain a quarter of a century ago. You will find, as you study 
 history, that economical causes have had much to do with the 
 events about which the philosopher of history dilates and prates 
 chaotically. 
 
 The new departure which Walpole undertook in dealing with the 
 public debt was and is one of the most significant economical events 
 of the eighteenth century, full as that century is of great and lasting 
 facts. The early debts of the country were in various forms, and 
 secured by different special taxes. They were sometimes permanent, 
 sometimes terminable. They were at all rates of interest. Now, 
 peace was generally maintained in Europe during the period which 
 intervened between the treaty of Utrecht and the War of the Austrian 
 succession. In this period English commerce, especially with the 
 American plantations, made great progress, and the country was 
 generally prosperous, for the new agriculture was being extended, 
 prices of food were low, the profits of the new system were high, and 
 wealth was being rapidly accumulated, not by the traders only, but 
 by the agricultural classes. The rate of interest fell below all pre- 
 vious experience, and opportunities of permanent investment were 
 few. Hence the price of stocks rose far above par, and the time was 
 ripe for a financial experiment. Walpole was paying off the public 
 debt rapidly, and he resolved to deal with the residue. He deter- 
 mined on consolidating the various debts, and consolidating the 
 funds from which provision was made for them. He contrived, by 
 the offer of payment at par, -to reduce the interest on the debt, and 
 to unite most of the public liabilities into a common stock, since 
 known as consols. He was aided in his policy by the alarm which 
 had been expressed at the magnitude of the National Debt. 
 
 From Walpole's innovation is dated that remarkable departure in 
 the finance of public debt, which has been imitated by all nations 
 subsequently. It is plain that a borrower must, according to the 
 state of the market, the plenty or scarcity of money, and the solidity 
 of the security offered, vary the rate of interest which he proposes to 
 the lender, giving less or more as the circumstances are more or less 
 favourable. And this is the ordinary way in which interest on more
 
 THE SYSTEM OF BOEEOWING. 451 
 
 or less permanent advances, and discount on temporary advances, 
 i.e., the negotiation of commercial bills are determined, the key to 
 the latter being supplied by the official rate of discount settled by 
 the Bank of England, and announced to the public. The circum- 
 stance which principally determines the Bank of England in fixing 
 this rate is the abundance or scarcity of the metallic reserve which 
 it possesses itself, though this is by no means the only cause of 
 action, as great competition for discounts, due to a real or imaginary 
 alarm as to the immediate future, may, apart from bullion move- 
 ments, necessitate or appear to necessitate a rise. Hence, the rate 
 of discount, i.e., of inverted interest, is subject to much greater and 
 more numerous fluctuations than the rate of ordinary interest. 
 Public stocks, as they are a peculiarly convenient form of pledge, 
 partake of the nature of short-dated bills and ordinary investments. 
 They are less liable to fluctuation than the former, more than the 
 latter. 
 
 A borrowing government always makes it a condition with its 
 creditor that the latter may not, as most creditors can, demand re- 
 payment of the advances which he makes, at pleasure or after notice. 
 The motive of this precaution is plain. A government cannot, 
 especially in a serious crisis of public affairs, be exposed to the risk, 
 in addition to its other difficulties, of a run on its exchequer, for it 
 does not borrow, as a trader or a banker does, of all comers at all 
 times. But, on the other hand, it reserves to itself the right of 
 paying off its creditor at its pleasure. If it has a surplus in the 
 treasury it can, and under recent statutes must, purchase its own 
 stock in the open market, where its securities are always saleable, 
 and extinguish as a debt that which is purchased. This rule is abso- 
 lute, so absolute that if, in the appropriation of supply, Parliamentary 
 grants are found to be in excess of departmental demands, the sur- 
 plus cannot be devoted to any other service, but must be applied to 
 the extinction of debt. Now a supplementary estimate is, under 
 ordinary circumstances, bad finance, and, unless an adequate expla- 
 nation is given, is primu facie censurable. Hence the departments, 
 though under the criticism of the estimates (which is indirectly much 
 more effective than the outside public imagines) they strive to reduce 
 this quota to the lowest amount which the services are content to 
 .accept, generally seek to have some margin over, and thus, in a
 
 452 PUBLIC DEBTS. 
 
 normal condition of finance, stock is regularly purchased and extin- 
 guished every year. 
 
 Sometimes, however, when the price of stocks is very high, or, in 
 other words, when a large amount of savings is seeking investment, 
 the government can venture on a larger operation. After carefully 
 sounding the market, it can exercise its right of offering the creditor 
 the election of having his money, a hundred paid for a hundred, 
 really or nominally lent, refunded in full, with the alternative of 
 accepting a lower rate of interest. It will be plain that it can under- 
 take this operation with success only when its creditor is placed in 
 such a position as to make him see that to accept payment in full 
 would be less profitable than to accept the lower rate of interest. Of 
 course it may give him, as an expedient, a higher nominal principal, 
 e.g., 105 stock at the lower rate of interest in place of 100 at the 
 higher, and in other ways, with which I need not trouble you. It is 
 also important to observe that when the public debt is held in small 
 parcels by great numbers of persons, as in France, the operation of 
 converting a debt bearing high interest to one bearing low interest 
 is more difficult, not, perhaps, because it produces discontent among 
 the holders of the debt so much as because the trouble of the 
 transfer may be excessive, and the cost outweigh the gain. 
 
 Now Walpole turned the greater part of the existing debt into a 
 4 per cent, stock. The times were favourable. But his successors 
 in creating future debt adopted, on the whole, the other alternative 
 of borrowers. They fixed the rate of interest, and varied the 
 amount of the principal, offering 100 consols at the price which 
 the public would give for them, or financial agents would under- 
 write, that is, guarantee for them. The price paid for new issues of 
 consols has greatly varied. During part of the continental war, it 
 was more than once a good deal below 50, and the Government 
 had to give 100 stock for less than 50 cash, that is, to virtually 
 pay over 6 per cent, for its loan. 
 
 This proceeding, which got the name of the funding system, has 
 been severely criticized. From one point of view the criticism is 
 obvious. By taking a low rate of interest, and covenanting to 
 redeem at par, the Government deliberately debars itself from 
 cutting down the interest in the future, under the operation which 
 I have described. And then the critics go on to say, " The
 
 THE FUNDING SYSTEM. 453 
 
 greater part of the public debt by no means represents the cash 
 that has been paid for it. Lucky fundholders, who invested at the 
 price of 50 or less, are receiving 6 per cent, in perpetuity, and at a 
 time when 8 per cent, has practically become normal. The finan- 
 ciers who have adopted the funding system are putting the English 
 people, whose savings are pledged to the payment of interest, in a 
 worse position than the financiers of the Kevolution put them, who 
 did indeed pay 6 per cent., but in such a manner as left the 
 door open for the future reduction of interest. This door then- 
 successors have effectually closed, for there cannot be a very clear 
 prospect of much reduction below 3 per cent. The nation, in brief, 
 is constrained to pay money which it never received, and to be 
 charged with a high though hidden interest in the interval." 
 
 The criticism is plausible, but there is an answer to it. " The 
 very circumstance," it may be said, " which you are alleging must 
 have been present to the minds of those who negotiated the loan, 
 and to those who purchased it, or invested in it. The public 
 creditor knew well enough that there was little risk that his stock 
 would be converted, and he realized this favourable feature of the 
 loan in his mind, when he made his offer. He gave more than 
 he would have given, if he had not been assured against the risks 
 of a reduction. It is true that he paid 50 or less for every 100 
 stock. Suppose you had borrowed in a stock paying a high rate 
 of interest, but liable to conversion, you would have probably had 
 to pay, not 6 per cent, in perpetuity, but 8 per cent, or 10 per cent, 
 for a long time to a lender who assisted you in your necessities, but 
 would have assuredly had his services forgotten as soon as you, 
 being in funds again, could force him to acquiesce in far less 
 favourable terms. You have reserved to yourselves the right of 
 redemption at par, and you must take all the consequences of this 
 right, when you deal with people whom you invite to consider their 
 own interests, while you are considering yours." Most of the best 
 financiers with whom I have reasoned on this matter state the case 
 of the government as I have given it, and conclude that not only 
 did the administration borrow in the easiest, but in the cheapest 
 way. 
 
 This subject has not only been discussed by political economists 
 as a speculative question, and within that part of the subject in
 
 454 PUBLIC DEBTS. 
 
 which they are most likely to be right, the domain of money, 
 finance, and the exchanges, where practical experience is always at 
 hand to correct the crudities of metaphysics, but it has been 
 debated under very plausible circumstances in the House of Com- 
 mens. In the prolonged and somewhat heated discussions on the 
 suspension of cash payments, after the absurdities of Mr. Van- 
 sittart and Lord Stanhope were combated, for a time with little 
 success, by Lord King and Mr. Homer, a question at that time 
 conveniently kept in the background by the government necessarily 
 came to the front, and was pressed by the very men who had 
 defended Mr. Vansittart's motion and Lord Stanhope's law. For 
 when the war was over, and the restoration of the currency was 
 demanded, these people argued as follows, forgetful of their dogma, 
 that " the value of the bank-note had not fallen, but that of gold had 
 risen " : " We are left, now that this just and necessary war (one of 
 the stock phrases of politics) is over, with an enormous, a crushing 
 load of debt. Prices of agricultural produce are falling, and the 
 agricultural interest is threatened with ruin. There is great dis- 
 content abroad, just discontent, which in the interest of law and 
 order (another stock phrase) we are obliged to repress by severe 
 measures, by a regrettable extension of the criminal law, happily and 
 adequately supplied by the vigour, bravery, and forethought of Lords 
 Sidmouth and Castlereagh. But we have to endure, in addition to 
 our misfortunes, the sight of the stock-jobbers and fundholders, who 
 have fattened 011 our misery, and are now receiving more than half 
 our taxes. And for what ? We have put down the Corsican 
 usurper, and restored peace to Europe, legitimacy to its thrones. 
 These people not only get under our funding system at par, stock, 
 with a number of incidental advantages, in exchange for some 50 
 or less, but they paid this inadequate quota in notes which were 
 constantly at a discount of 30 per cent. It is intolerable, it is 
 unjust, that we should redeem the stock under the terms of so 
 monstrous and one-sided a bargain. It is enough that we should 
 keep faith with them when they made their advantage out of our 
 straits. But to pay them in full-weighted sovereigns would be 
 suicidal. For years past the one -pound note has been worth only 
 14s. 6d. We must issue sovereigns for the future at the rate at 
 which notes have been discounted, and the financial harpies will
 
 THE EETUEN TO CASH PAYMENTS. PEEL'S ACTION. 455 
 
 even then get better terms than they deserve." I am not quoting 
 to you the language or the sentiments of Cobbett and orator Hunt, 
 and other misguided but honest men who denounced the war and 
 the paper money, and the funding system with equal and with 
 impartial rigour, but of nobles and statesmen in both houses. 
 
 Fortunately for the nation better counsels prevailed. The service 
 which Peel did British credit was almost, perhaps quite as great 
 as tbat which he did when he freed British trade. Peel seems 
 to me to have been the greatest of Parliamentary tacticians. 
 His writings, published by Cardwell, are almost childish. His 
 speeches are carefully prepared. But his principal power was in 
 debate. He was very ready, and had that rare gift of puzzling 
 an opponent by timely questions and timely rejoinders. Above 
 all things, Peel was transcendently honest. He was slow in 
 changing his opinion, but sure when he had changed it. A Con- 
 servative by instinct, he was the most dangerous of allies to un- 
 thinking Conservatism. In particular he knew that all his defences 
 might prove untenable, and that it was useless to maintain a 
 political fortress when a battle was fought and won in its vicinity. 
 It was this prescience about the real worthlessness of a reputed 
 safeguard which made him so much stronger than the Whigs, 
 whose position after 1832 seemed unassailable. 
 
 I have not time to tell you of Price's absurd sinking fund, which 
 took Pitt in, and increased the burdens which the nation was 
 already bearing, and of the more practical policy which has in 
 these later days, and in the hands of Peel's most capable pupil, 
 done so much to reduce the debt and is within reasonable dis- 
 tance of doing so much more. It chiefly consists in the 
 judicious creation of terminable annuities, in making the charge of 
 the debt a fixed or nearly fixed annual amount, and in gradually 
 lessening the principal, while it maintains the interest. For- 
 tunately in finance there is no party, at least just now, and the 
 most suspicious, angry, and determined opponents of a living 
 statesman's political opinions, bear testimony to his incompa- 
 rable skill in dealing with national finance, and especially with 
 the orderly liquidation of the public debt.
 
 XXI. 
 
 THE THEOEY OF MODERN TAXATION. 
 
 The financial situation in 1688 and its difficulties, contrasted with 
 those of 1640 The two Revolutions compared Customs and 
 excise The analysis of taxation The land tax The prevalence 
 of smuggling Walpole, his fortunes and his policy The wars of 
 the eighteenth century, of the Austrian succession, and of American 
 Independence The growth of debt and taxation The taxation of 
 inheritances Mr. Mill's theory The avoidance of legacy duties 
 by the rich The income tax and its liistory An income tax 
 intrinsically unfair Later British finance. 
 
 THE second English Revolution, as I am accustomed to call the 
 events of 1688, in contradistinction to the first, by which I mean 
 the events of 1640, was from the beginning characterized by a new 
 system of taxation. The new departure was, if you will, inchoate, 
 clumsy, blundering, experimental. It deserves these and perhaps 
 stronger epithets. But never were a set of men put into a more 
 difficult position than the financiers of William's reign were. 
 They were entirely new to the most difficult business in all finance, 
 to the perpetual puzzle of all inventors of taxes, which is 1. What 
 will people bear without resenting the action of government ? 2. 
 What kind of tax is least likely to cripple industry and derange trade ? 
 3. If taxes, which satisfy people or at least do not dissatisfy them, 
 are imposed, what machinery can be relied on for collecting them ? 
 Now at the Revolution projectors of new taxes were swarming. 
 The pamphlets of the age are full of projects, submitted to the 
 finance minister and the public, from which a plentiful revenue is
 
 THE FINANCIAL SITUATION IN 1688. 457 
 
 promised, without loss or inconvenience to the persons who are to 
 contribute the tax. It has been my business, for several reasons, to 
 examine with some minuteness the vast mass of pamphlets in the 
 Bodleian Library, and if one could argue from the multitude of 
 suggestions, financial shrewdness was at the time a peculiar gift of 
 the English public. When one examines the proposals, one is able to 
 see whence Swift derived the truest and most caustic part of the 
 comments which he makes about the occupations of the political 
 philosophers of Laputa. 
 
 The situation was peculiar. One part of the finance of Crom- 
 well, heavy direct taxation of land, was intolerable, though it ha(d 
 to come in the end. Another part of it, an octroi duty, paid under 
 the name of excise, by every purchaser, when he bought articles of 
 necessity and convenience, was odious in the last degree, both to 
 dealer and consumer to the former, because it made him a respon- 
 sible tax-collector for the government; to the latter, because it made 
 the presence of the government visible in its least attractive and 
 conciliatory function, in every part of the business of life. It was 
 no doubt a relief to know that arbitrary government by king and 
 courtiers was at an end. It was still pleasanter to find that 
 ecclesiastical tyranny was checked. But as a rule, the victims of 
 arbitrary government are few. To the mass of men, the high- 
 handed violation of law and order, under the pretence of maintain- 
 ing law and order is rarely visible ; for, in those ages at least, the 
 government chastised those only who professed to be the leaders in 
 the popular cause, and did not organize a system of terrorism against 
 the whole people. I imagine that the Star Chamber and the High 
 Commission Court were more an object of alarm and anger to the 
 mass of those men who met in November, 1640, than they were to 
 the peasants and shopkeepers whom the Hampdens and Pyms, the 
 Hydes and Seldens, the Cromwells and St. Johns represented. But 
 in all which makes taxation vexatious Cromwell's excise was more 
 hateful than Charles' ship money. Besides, when people get angry, 
 and call the fiscal system of a country " oppression, thraldom, 
 and misery," it matters little to them that the charges of which 
 they complain are imposed by constitutional authority. It is no 
 doubt a great thing for a government to shape its policy under the 
 apparent control of a Parliament, and with its sanction. But men
 
 458 THE THEOBY OF MODERN TAXATION. 
 
 who believe that they are oppressed by a Parliament will question its 
 authority, and even say that it has been recreant to its indisputable 
 duty and to its admitted pledges. 
 
 Again, it was perhaps no great boon to have exchanged the control 
 of Laud's bishops and other officials, the etcetera of the famous oath, 
 for a prying vexatious directory, engagement, assembly, Presby- 
 tery, or whatever other engine of theological control was evolved 
 from the Babel of sects. Men wished in some vague manner to be 
 free, though they were far from seeing that toleration or equality in 
 theological matters was the only true freedom. But they found that 
 they had exchanged the free and easy parson, who did not come 
 very willingly into Laud's schemes, for a sour and vexatious fanatic. 
 I do not indeed believe that the Puritan movement, except locally, 
 embraced the country folk. I cannot otherwise account for the 
 influence which the rural clergy, poor and low born as most of them 
 were, exercised after the Restoration, or for the general popularity of 
 the Clarendon code. It must, Ithink,be plain that the Commonwealth 
 contrived to destroy its own principal agent, the organization of the 
 Puritans. It might have done this, and the morality of the move- 
 ment have survived. The mass of the English people took no 
 part in the hideous orgies of the Kestoration. But the politics of 
 the first Revolution and the politics of the second were equally 
 aristocratic. You will often find in history that a leader of the 
 people, whom his enemies or rivals have been used to call a dema- 
 gogue, becomes in course of time the advocate of aristocratic 
 reaction, perhaps has always supported it. 
 
 The first Revolution was not menaced by foreign intervention, 
 Europe was, when the contest began, entirely exhausted by the 
 Thirty Years' War. The French king, who was hereafter to imper- 
 sonate the spectre of universal empire, was a child, and the policy of 
 Richelieu and Mazarin was not inclined, either by interest or 
 gratitude to make the cause of Charles its own. Few things, I 
 should conceive, would have been more ridiculous or more offensive 
 to Richelieu (for Louis XIII. was a nobody in French affairs), than 
 the absurd and useless assistance which Charles and Buckingham 
 gave to Rochelle. If he and his successor entertained, as is the 
 custom of statesmen, no feelings of revenge, on the other hand 
 they could not but keep alive the heartiest contempt for the silly 

 
 THE TWO REVOLUTIONS CONTRASTED. 459 
 
 dupe of the silly Villiers. The Dutch democracy, led by the family 
 feeling of the Prince of Orange, showed some sympathy for the 
 royal cause. They harboured the murderers of Dorislaus, certain 
 obscure Scotch loyalists and bravos. They paid a long penalty for 
 their superfluous hospitality. They harboured Charles, who repaid 
 them of course with ingratitude and perfidy. After 1672, one 
 would have thought that every Dutch Calvinist, whom pre- 
 destination had not entirely divested of all forethought, must 
 have treasured up the Divine maxim, " Put not your trust in 
 princes." 
 
 The authors of the second Eevolution had a very different state 
 of things to contend against. The boy of the first Eevolution was 
 the terror of the second. The Peace of Nimeguen had left Louis 
 XIV. in a position which was only second to that of Napoleon after 
 the treaty of Tilsit, and about equal to that of his nephew after 
 the Italian campaign and the cession of Nice. Now Louis XIV. 
 had every reason to assist the Stuarts in their policy and their 
 pleasures, and thought no money wasted which would secure them 
 in both. The expulsion of James must have been a severe disap- 
 pointment to him, and the protection accorded to the royal exile a 
 somewhat hopeless expense after the Irish campaign. In that 
 country of long memories, Ireland, Cromwell is always named with 
 dread, James with contempt, though I do not think that the 
 Irish read Macaulay. Now in 1689 Louis was seen to be ruler 
 over a kingdom which, being entirely under one man's authority, 
 was known to be the most populous state in Europe, and believed 
 to be by far the richest. The financial policy of Colbert had 
 dazzled the nations; and the French, i.e. the France which lived on 
 the peasantry, were pleased at the effect. It was then that prestige, 
 which of course you know means a juggler's imposture, began to 
 describe French ascendency, and to exercise a permanent influence 
 over French action. In order to understand the finance of the 
 Eevolution, you must understand the political situation of Europe. 
 England had one ally bound to her to be sure by the strongest 
 of ties, the sense of mutual danger ; and, though England was 
 in this war and in the next the protector of Holland, she 
 made that unfortunate country pay dearly in the end for her 
 services.
 
 460 THE THEOEY OF MODEEN TAXATION. 
 
 
 
 You will see, then, if I have made my inferences plain, that even 
 if England had possessed the most intelligent and venturous finan- 
 ciers in Europe, it would have been difficult to raise a new revenue. 
 The old excise was utterly odious, and could not be revived. There 
 was a new excise, a tax levied on the dealer, which experience 
 showed to be tolerable only because it chiefly fell on the working 
 classes. But it was doubtful as to how far it could be extended. 
 There was a quasi-personal tax, dating from the Eestoration, which 
 was supremely odious, the hearth money. That had to go, though 
 not without misgivings at the Exchequer. It was not possible, so 
 it seemed, to renew a land tax on the lines, or beyond the lines of 
 the old temporary taxes, or the projected commutation of feudal 
 dues. I say beyond the lines, for the hereditary excise did not 
 certainly yield a tenth part of what was soon found to be wanted. 
 Then there were customs. But, as I have often told you, even 
 when the English were expected to be patriotic and were warned 
 that the supremacy of Louis would condemn them to a diet on frogs, 
 and the substitution of wooden ehoes for leathern, they applauded 
 the sentiment and traded with the smuggler of French goods. I am 
 not surprised. In my experience of human life I have constantly 
 witnessed the struggle in men, otherwise pious and honest, between 
 their conscience and their interest, and have recognized with un- 
 feigned regret that the latter has generally had the better of it. 
 
 The metaphysicians of political economy often debate as to the 
 grounds on which taxation is imposed. Now there is no doubt that 
 in early days it was argued by lawyers and divines that the prince, 
 like an Irish chieftain of the old days, should spend his subjects' 
 money at his discretion, and defend them from wrong in considera- 
 tion of their contributions. To be sure he interpreted, like the 
 aforesaid chieftain, his own duties as well as those of his subjects, 
 and generally to his own relief, and their disadvantage. It was 
 ultimately found, though only after many struggles and not a few 
 revolutions, that it was not safe to trust the ruler and his advisers 
 with the interpretation of the situation. Then it has been alleged, 
 by a dangerous metaphor, that the state is to be likened to a vast 
 property, in which each of the citizens or subjects has his share, and 
 that as the partners, or tenants in common of an industry or an 
 estate, have received their share of the produce, they should be in
 
 THE ANALYSIS OF TAXATION. 461 
 
 duty bound to contribute to the expenses of management. But 
 unluckily the analyst of taxation finds that, as soon as the limits of 
 destitution are passed, those who get relatively least pay most 
 relatively to the costs of management, for taxation is not effective, 
 except it levies imposts 011 those articles or those practices which 
 the mass of the people cannot or will not do without. Then, more 
 plausibly, the function of the state, which has nothing of its own, 
 and must, it is admitted, curtail every one's enjoyments in order to 
 exist, performs a high and necessary service, in which the protection 
 and continuity of the working-man's industry is of no slight signifi- 
 cance. Taxation, then, is the payment rendered for service done. 
 The difficulty in this theory is, that one is constantly invited to 
 criticize the reality, even the pretence, of the service, and the people 
 in possession are very apt to resent the criticism. Adam Smith, 
 with his usual insight into human nature, and the relation of means 
 to ends, suggests that taxation should be merely relative to enjoy- 
 ments, i.e., should not touch that which people must spend in order 
 to live and work. I do not know whether I have stated all the 
 views which are alleged. If there are more and you ask me about 
 them I will try to explain them ; for though the metaphysics of 
 political economy are well-nigh as boundless as space, they are 
 generally quite as shallow as a plane superficies is. 
 
 The financiers of the Eevolution, then, had to find out what taxes 
 the people would bear. Poll taxes were levied, graduated accord- 
 ing to the rank or condition of life, and disappointed those who im- 
 posed them by the scantiness of the produce. They lasted for eight 
 years. A house tax increasing with the number of windows was 
 imposed in lieu of the hearth money, licenses to trade were granted, 
 and stamp duties, again in imitation of the Dutch, were imposed on 
 legal documents. Duties were levied on goods coming from the 
 East Indies and China, and from some European articles. There 
 was the impost of 1690, of 1692, the new duty of 1695, the French 
 duty of 1696, and the new subsidy of customs in the same year. 
 The excise on beer was increased, an excise 011 spirits imposed, and 
 another very heavy one imposed on salt. Not to weary you with 
 details, I may state that the finance was always experimental, and 
 constantly had to be abandoned, because it proved disastrous to 
 industry.
 
 4G2 THE THEORY OF MODERN TAXATION. 
 
 The resolution to which Parliament came soon after the Revolu- 
 tion, that it alone was capable of granting a charter which could 
 confer a trade monopoly, a resolution which the quarrels of the 
 two Houses over the privileges of the East India Company had 
 accentuated, led to a new and most timely financial operation. 
 Two great companies under this new doctrine were created in the 
 reign of William III., the Bank of England and the New East 
 India Company. The payment made to the Crown, or rather the 
 Eevenue, for these privileges seems small to our modern experience, 
 but the sum of 3,200,000 which these two companies paid for their 
 privilege was an exceedingly important item in the finance of the 
 period not less than a sixth of the war expenditure from William's 
 accession to the peace of Eyswick. Still more important, in the 
 case of the Bank of England was the fact, that in creating this 
 corporation, Parliament created a great financial agent whose 
 existence was bound up, or supposed to be bound up, with the Act of 
 Settlement, and, more to the purpose, was found to be the safe and 
 trustworthy instrument by which, in succeeding wars, loans could 
 be negotiated, public credit could be established on a secure basis, 
 and a reduction, as I told you in my last lecture, in the rate of 
 interest payable on public securities could be effected, during the 
 long and pacific administration of Walpole. 
 
 The land tax, that most distasteful of Cromwell's expedients to 
 the landowners, was reimposed in 1692. After a struggle with the 
 Commons in which the Upper House strove to secure some advan- 
 tages to their own order, the Lords yielded. The system began 
 with a monthly assessment, strictly in the nature of a property tax. 
 In 1692 it was assessed at 4s. in the , and the assessors took no 
 oath. In 1693 they took an oath, and the produce of the tax was 
 less, a practical illustration of how little value promissory oaths are. 
 After various expedients had been tried for making the tax more 
 fruitful, Parliament, in 1697, fixed the amount which should be 
 raised, and distributed over counties and towns according to an 
 unalterable valuation. In theory, no doubt, the land tax of 1697 
 was assumed to be collected from personal property as well as 
 from houses and land. In practice it came to be a tax on real 
 estate, unchangeable not only in the amount collected, but in the 
 amount assessed, and thus after so long an interval from the first
 
 THE LAND TAX. 463 
 
 assessment it became exceedingly unequal. The remission of the . 
 tax on personal property became inevitable, for personal property 
 is essentially shifting. The representative of real estate is always 
 present or at least discoverable. The representative of personal 
 estate in 1697, or of his representative or alienee a century later, 
 is not discoverable, and to transfer a fixed tax to one who has no 
 relations whatever with the person who was originally rated, was 
 out of the question. 
 
 Two centuries ago, land or the rent of land, which had risen 
 without effort on the part of the owner some twelve times in the 
 course of the seventeenth century, was deemed to be a peculiarly fit 
 subject for taxation. In the first place, it had escaped, by a Parlia- 
 mentary Act from its hereditary liabilities ; in the next place, these 
 rents, as far as legislation could effect this result, had been 
 peculiarly favoured by Parliament; in the third, it was supposed to 
 be specially bound to the new settlement ; in the fourth, a tax on it 
 formed, in the necessities of the state, the only escape from a 
 particularly vexatious excise, or a capricious, nugatory, or oppres- 
 sive customs duty. The land tax was beyond doubt a very dis- 
 agreeable impost. With an improving agriculture and with 
 increasing rents, it was resented in the eighteenth century by the 
 country party. But the Seven Years' War and the War of American 
 Independence rendered its permanent imposition at the highest 
 rate, but on the old assessment, inevitable ; and in 1798, Pitt, in 
 order to carry out a financial operation, during a time of singular 
 financial difficulty, made the land tax a perpetual, but redeemable 
 charge. 
 
 The war of the Spanish succession cost the British nation (for 
 in 1707 the Scottish Parliamentary Union was carried out) more 
 than 50 millions, of which 3-7ths was raised by loans. But by 
 this time the British financier found that the country was gradually 
 being accustomed to excises and customs, and that the system 
 could be extended. It also became the practice to grant these 
 customs and excises for far longer times than was originally thought 
 prudent, and for the obvious reason that, in this manner, greater 
 security would be given to the loans which were raised, and the 
 loans themselves could be procured on easier terms. This war 
 too saw the beginning of those more modern treaties of commerce,
 
 464 THE THEOEY OF MODEBN TAXATION. 
 
 in which the fiscal policy of the country was made to do service on 
 behalf of the sole-market theory. The Methueii treaty with Portugal 
 was the type of that economical diplomacy which was criticized 
 adversely by Adam Smith. As yet, however, the taxation was of 
 cheap luxuries, cheap because neither excise nor customs make a 
 substantial revenue, unless they attack the consumption of the 
 poor. The duties on foreign corn existed practically on paper 
 only, for the new agriculture and the almost unbroken abundance 
 of the seasons, never paralleled except in the fifteenth century, 
 rendered the Corn Laws of the Restoration only a contingent terror. 
 The war of the Spanish succession led to several enduring taxes. 
 Thus taxes were put on hops, in this case imposed on the cultivator, 
 on soap, on paper, on printed goods, and on newspapers, besides 
 one on advertisements. The tax on newspapers was collected by 
 stamps. Now the taxes which I have enumerated were continued 
 up to living memory. It was conceived, perhaps with some reason, 
 that the newspaper tax was in effect a licensing Act. But, on the 
 whole, the cause of the Tory party of that time was better served 
 by men of letters than that of the Whigs. Swift, St. John, and 
 Prior are .more vigorous political writers than those on the opposite 
 side. Defoe, it appears, was ready to take a brief from either of the 
 contending factions. He had accepted as his guide in literary 
 life the adage of Vespasian, Non olet. 
 
 The smuggler always avenges foolish and unfair customs duties. 
 Experience has proved that nations will endure heavy taxation, 
 if it be equitable, and not imposed to subserve personal interests 
 or political whims. The English people reluctantly substituted 
 port for claret, Geneva or colonial rum for French brandy, for in 
 the southern part of the island at least, they submitted to taxes 
 which were intended to weaken the hereditary enmity of France 
 and secure a balance of trade. But the case was different in certain 
 other articles. The taste for tobacco and tea was rapidly growing, 
 and it is said that owing to the excessive duties levied on these 
 articles, the taxes on them were unproductive ; the ordinary trader, 
 finding it impossible to compete against the smuggler, in the end 
 entering into regular business relations with him. In the arithmetic 
 of the customs, said Swift, two and two do not always make four. 
 It has been constantly alleged that a reduction of duties is the
 
 THE PREVALENCE OF SMUGGLING. 4G5 
 
 remedy for the smuggler. But in our time, when smuggling has 
 ceased to be a calling, and has become merely an occasional private 
 fraud, heavy enough duties are levied on certain goods of foreign 
 origin. But they are not discriminating or protective, and there- 
 fore do not deaden the moral sense of the consumer. It is, I 
 believe, to the adoption of free trade, and the levy of revenue 
 duties, excises and customs for revenue only, that we must assign 
 the extinction of the professional smuggler. The case is still 
 different in protection-ridden countries. The present tendency 
 in Canada towards a Zoll-verein with the United States is the 
 impossibility of maintaining a preventive staff along a geometrical 
 frontier. I do not predict confidently that the result of such a 
 tariff will be the annexation of Canada to the United States as 
 Mr. Chamberlain with much show of reason foresees. But I am 
 well advised that the present state of things is intolerable, that it 
 lias been developed from causes which might have been prevented, 
 that these causes have been fostered by incompetent advisers of 
 the Crown at the Colonial Office, and that it is by no means clear 
 that in the existing state of affairs remedial measures are possible. 
 " Walpole," says his biographer and eulogist, Archdeacon Coxe, 
 " found the British tariff the worst in the world, and left it the 
 best." Mr. Coxe, like most biographers, errs on the side of 
 excessive praise. It may be doubted whether a biography does 
 its object any lasting service with posterity. No one can be 
 expected to feel the same interest in a subject which the author 
 does, and when the subject is a fellow-creature, we take up the 
 narrative with a natural suspicion that the portrait will be over- 
 charged with brilliant colour. But Walpole was a man of great 
 Parliamentary tact. One of his earliest exploits was in 1702. 
 The Tories had determined on recovering those parts of the Crown 
 estate which had been granted to William's friends, and they 
 were strong enough to carry their Bill. Walpole affected to agree 
 with them, but proposed to carry the resumption back to the 
 Eestoration. Now even to the most inveterate party spirit, the 
 services of Somers and Montague, and even of Bentinck and 
 Keppel, though they might be over-rewarded, were considerable. 
 But it was not easy to discover the services which had been done 
 -by the dukes of the creation of Charles of Grafton, St. Albans, 
 
 81
 
 466 THE THEORY OF MODERN TAXATION. 
 
 Richmond, and the rest. The situation was too ludicrous, and the 
 Bill was dropped. Fortunately for his reputation, Walpole was 
 out of office at the time of the South Sea Bubble, though it is said 
 that he materially improved his fortunes by judicious purchases 
 and sales of that notorious stock. He was certainly of consider- 
 able use in rescuing public credit from the consequences of that 
 gigantic swindle, in which indeed, too many of the government 
 were compromised. 
 
 Walpole made a great fortune in the public service. So had 
 Osborne, whom we know as the Duke of Leeds, and Churchill, 
 whom we know as the Duke of Marlboro ugh, to say nothing of a. 
 dozen others. This has latterly, I see, been made a reproach 
 against him, and it appears that one of his descendants is sensitive 
 on this score. Walpole would have laughed heartily at his future 
 critics had he foreseen the charge. " Of course," he would have 
 said; "but when a man undertakes public business, he intends 
 to better his fortunes. Why, do you think, do the honest gentlemen 
 who are about me come into this House, and pay solid cash for 
 getting here ? It is sufficient if a public man does honest service 
 to the nation, and takes a moderate commission on the function 
 which he performs." I do not doubt that Shippon spoke the 
 popular sentiment when he said, " Eobin and I are two honest 
 men ; but he is for King George, and I am for King James." Now 
 Shippon had taken the oaths of allegiance and I know not what 
 to King George. But he did not think his integrity compromised 
 when he intrigued with the exiled family, though he sat in 
 Parliament under the condition of recognizing to the full the 
 house of Hanover. Promissory oaths are never worth much, but 
 in the first half of the eighteenth century, they were worse than 
 worthless. 
 
 Walpole determined on reforming the tariff in such a way as to 
 liberate industry from customs duties on materials, and by per- 
 mitting drawbacks on duty-paying goods exported. He repealed 
 certain taxes which grievously discouraged maritime enterprise. 
 He permitted, with a few exceptions, the free exportation of articles 
 produced or manufactured hi Great Britain, thus striking off most 
 of the export duties. He contemplated a revision of the land tax, 
 about which the country gentlemen constantly complained. But.
 
 WALPOLE'S POLICY, 467 
 
 these honest people dreaded a reassessment still more, particularly 
 those in the west and the north, where, according to ancient 
 tradition, the tax was particularly light. So he had to drop his 
 scheme, as far as the land tax was concerned, and soon afterwards 
 another reform which he contemplated. 
 
 This was the establishment of bonded warehouses for duty- 
 paying goods. In 1711, importers of tea and coffee were permitted 
 to warehouse their imports. In 1723, Walpole made the process 
 compulsory in these articles, and found that he checked smuggling 
 by it. In 1733 he proposed to extend the system to wine and 
 tobacco, and to levy the duties under the name of excises at the 
 time when they were taken out of bond for consumption. The 
 great dealers saw rivalry to themselves in this scheme. Walpole's 
 enemies, and he had been so long in office that disappointment had 
 made him many enemies, raised up the cry that the Cromwellian 
 excise was to be restored, and the people .were informed that this 
 was the beginning of a system under which everything would be 
 taxed inquisitorially. So there were numerous petitions, and mobs 
 in the Court of Bequests. In the end Walpole withdrew his Bill 
 and the country was pacified. Perhaps some of the opponents of 
 the projected measure were not so anxious to extinguish the 
 smuggler as Walpole was. This prudent retreat kept him nine 
 years longer in office. 
 
 In 1739 a war with Spain was undertaken, ostensibly in order to 
 avenge the wrongs which had been perpetrated on British merchants 
 and sailors, in defiance of the Assiento treaty, really because it was 
 believed that the Spanish colonies were conveniently situated for 
 plunder. You have no doubt heard the story of Jenkins' ears. 
 Simultaneous with this was the war of the Austrian succession, and 
 the early aggrandisement of Prussia. This war involved a quarrel 
 with France, and a quarrel with France another and a last expedition 
 in favour of the Stuarts. The war ended with the peace of Aix-la- 
 Chapelle in 1748. The costs of this war were met by increasing 
 the customs and excise, by revising the house tax, and by levying a 
 tax on private carriages. In consideration of the burden laid on 
 articles of domestic manufacture, heavy customs were imposed on 
 identical foreign goods, and the country became Protectionist 
 without knowing it. It is true that even at that time there were
 
 468 THE THEORY OF MODERN TAXATION. 
 
 people, like Henry Fox, who saw that it would be well for England 
 if the country could be made a free port ; but to effect this it would 
 be necessary to raise the necessary funds by a property tax on a 
 just system of assessment, or to levy a searching excise on internal 
 consumption. The landowners would not endure the former, and 
 the mass of the people rebelled against the latter. Additional 
 customs was therefore the only remedy. Fox calculated that in his 
 day a bonaficU land tax would have yielded, at 4s. in the , at least 
 four, possibly five, millions. 
 
 Peace only lasted for eight years, when the Seven Years' War was 
 undertaken in 1756. The economical consequences of this war, the 
 effect of which was to secure to Great Britain a sole market as 
 vast and to all appearances immeasurably more valuable than the 
 territories bestowed by Borgia on Spain and Portugal by his cele- 
 brated Bulls, have been treated of in a previous lecture. But it cost 
 eighty-two and a half millions, and of this sum sixty were in the 
 form of an addition to the public debt. The new taxes are on the 
 possession of plate, on cards and dice, and a license duty on 
 publicans. Further duties, intended as far as possible to fall on 
 consumption, were imposed, and an additional 5 per cent, ad- 
 valorem was put on articles paying customs duties. The most 
 important additions, however, were those made on malt, beer, and 
 spirits. They were borne, but the imposition of a tax on cider 
 and perry very nearly caused a rebellion. It was believed that 
 Parliament had exhausted the possible subjects of taxation, and 
 even the patience of the nation. So completely bewildered were 
 the ministry which came into office at the peace of Paris, and so 
 desperate seemed the condition of British finance, that Grenville 
 determined on taxing the Colonies by the authority of Parliament. 
 There seemed to be this reason in it, that the Seven Years' War had 
 left the British settlers the undisputed masters of the best regions 
 of North America. They had, to be sure, contributed liberally to the 
 expenses of the war, and had incurred considerable debts for the 
 same object. But by freeing them from all risk on the part of 
 France, the only power of which they now had any dread was Great 
 Britain* 
 
 The colonists affected to believe and with reason that the lan- 
 guage of Grenville's Act implied an indefinite power in the hands
 
 THE WAR OF AMERICAN INDEPENDENCE. 469 
 
 of Parliament of taxing the plantations for Imperial purposes. At 
 the same time, they did not offer an unqualified opposition to 
 Grenville's scheme. They agreed to certain customs duties on 
 imports and exports. They had, as a matter of fact, acquiesced in 
 the colonial system, which, by regulating their trade, regulated 
 their port dues. It was to the Stamp Act that they made a 
 stubborn, and in the end successful, resistance. The British Parlia- 
 ment offered no opposition to Grenville's Stamp Act in either house, 
 and yet perhaps no more momentous and enduring fact has ever 
 occurred in history than the Stamp Act. It is the least part of it 
 that it led to the revolt of the Colonies. It did much more it 
 stereotyped the fiscal independence of every British settlement, it 
 settled the principle that taxation cannot be imposed without 
 representation, and by a forced construction put on the facts, it 
 permitted the colonist to levy Protectionist duties against the home 
 government, and yet to embroil that very government, apart from 
 any act of its own, in any local and political war in which the 
 colony might think it proper or profitable to engage. The political 
 consequences of this precedent no one can confidently predict : the 
 economical consequences are disastrous enough to the colonists who 
 have voluntarily experienced them. The Stamp Act, which did not 
 pay for the cost of collection, was repealed in 1766, though in 
 repealing it Parliament was induced to assert that what it had done 
 was within its right. The Colonies now went a step further, and 
 denied the right of Parliament to impose any tax whatever on the 
 Colonies, whether internal or at the ports. The duty on tea, 
 calculated to yield 80,000 a year, was retained in the Cabinet by a 
 single vote, that of Lord North. 
 
 I shall not weary you by dealing with the events of the War of 
 Independence, except in so far as they bear on the extension of the 
 British fiscal system. The greater part of the costs incurred by 
 this war was met by loans. The greater part of the taxes imposed 
 was on consumption. Now there is no doubt that wealth increased 
 greatly during this war. But there is no doubt also that the con- 
 dition of the working classes was rapidly becoming deteriorated. 
 The old days of plentiful harvests and low prices were over, or 
 perhaps the growth of population, doubled in the eighteenth 
 century, assisted in producing by the aid of the Corn Laws the
 
 470 THE THEORY OF MODERN TAXATION. 
 
 terrible scarcity prices which were at hand. In 1782, the National 
 Debt had grown from 126 millions to 230. In order to be effectually 
 discontented, a people must be prosperous : when misery revolts, it 
 strikes blindly and is generally restrained. 
 
 In 1783 the younger Pitt came into office, and in 1784 obtained 
 a pliant Parliament ; how obtained will not probably be known for 
 sometime to come, there being a tradition that the secret materials 
 of history are kept back in this country for more than a century, a 
 pretty clear indication how discreditable those secret materials are. 
 Pitt's taxes were the very worst conceivable, nearly all on con- 
 sumption, on trade, and on manufactures. It is paraded of this 
 personage that he was a disciple of Adam Smith. There have 
 been many disciples, from Gehazi and Judas onwards, who have 
 misused the instruction which they have received. Pitt's finance 
 was a disastrous reversal of Adam Smith's maxims, even during 
 nine years of peace. It was to become worse and worse during the 
 twenty-two years of the war into which he plunged the country. 
 
 The great Continental War, in which the early endeavours of the 
 continental governments were made to repress the movement known 
 as the French Revolution, led to atrocious excesses in France itself, 
 the mere outcome of blind and desperate fear, to a military enthu- 
 siasm which overran nearly the whole of Europe, and added 622 
 millions to a debt which at the commencement of the war was 237^ 
 millions. Left to itself the Eevolution would have burnt out. It 
 might have been followed by a republic on the model of the United 
 States, though this is unlikely, because Federalism was a dangerous 
 tenet in the early days of the Kevolution ; or it might have even- 
 tuated in a limited monarchy. The action of Europe gave occasion 
 to a military despotism of singular destructiveness. In one sense, 
 the Continental War was like the Thirty Years' War. It left the 
 combatants in a state of absolute exhaustion, an exhaustion so 
 complete that it took a generation before they could begin to recover 
 from the waste of war. A war may be very bloody and very 
 destructive. If the combatants are not exhausted it will be followed 
 by a great stimulus to the trade of neutrals. No better test can be 
 found of the financial position of a country at the close of a war, 
 be it long or short, than the fact that the wearied and penniless 
 combatants cannot, after the struggle is over, go into the markets
 
 THE TAXATION OF INHERITANCE. 471 
 
 of the world with money or credit. The latest illustration of this 
 position is the condition of Kussia and Turkey after their latest 
 struggle. Poverty may not prevent war, but it is a terrible restraint 
 on recovery from war. 
 
 One of Pitt's taxes (1795) was that on successions. He intended 
 to impose it on all kinds of property, real or personal, descending to 
 collaterals. It was a Dutch tax, and the Dutch had borrowed it, 
 according to their own interpretation, from the 5 per cent, duty, 
 vicesima hereditatum of the fiscal system established in the Koinan 
 Empire. It is said that he intended originally to include these 
 charges on inheritance in a single Bill. If so he changed his mind, 
 for he brought in two Bills one referring to the succession of 
 personality, very often a merely arbitrary and technical class of 
 property ; the other to the succession of realty, a class similarly quite 
 as incapable of a rational distinction. He passed the first, he 
 failed to pass the second ; for the country party threatened to desert 
 the heaven-born minister at the ciisis. He probably knew before- 
 hand that they would, and hoped to obtain the acquiescence of the 
 possessors of personal property by showing that while they were 
 content to make sacrifices to save the tempest -driven ship, the land- 
 owners would have let the ship sink, rather than make any personal 
 sacrifice. At this time, I should mention that rents were rapidly 
 rising. But the landed interest had an excellent reason in resisting 
 the proposal. 
 
 A tax on inheritance has always been defended by metaphysical 
 economists. " The recipient of an inheritance," they allege, 
 " cannot be said to possess any rights to that which he acquires. 
 It is property gained by the industry or good fortune of another. 
 By the death of its possessor, who has now ceased to have any 
 rights among the living, it is derelict, abandoned, and virtually the 
 property of society. By a leniency, perhaps a culpable leniency, 
 human societies have generally permitted the lineal descendants of 
 the deceased person to enter on a possession which is not de jure 
 theirs. The state is entirely justified in taking a heavy toll on that 
 which it permits to pass. Strictly the child of a deceased ancestor 
 has not a higher right in his inheritance than that which public 
 opinion would assign as the necessary maintenance of the same 
 person's illegitimate offspring." I am not consciously parodying
 
 472 THE THEORY OF MODERN TAXATION. 
 
 Mr. Mill's argument while I am condensing it. My late friend, 
 however, admits the validity or sacredness of testamentary disposi- 
 tions. Strictly speaking, then, a person who does not or cannot 
 make a will (for accidents happen to the most thoughtful and 
 anxious) should be constrained to leave, beyond the provision 
 mentioned above, of a few shillings a week, his children penniless ; 
 while another, who is able or prudent enough to make a testamen- 
 tary disposition, shall be entitled to an authoritative voice at his 
 own death. This reasoning seems to me very like punishing one 
 person for another's negligence or ill-fortune. Mr. Eicardo, on the 
 other hand, objected to legacy duties altogether, on the ground that 
 the tax hindered the accumulation of capital, as though any tax 
 did not hinder the accumulation of capital, and the argument could 
 not be alleged for doing away with taxation altogether. 
 
 It is, I presume, germane to the economist to discuss, and if pos- 
 sible to discover, the reasons why people save. Now the earliest and 
 most enduring motive for saving is a sense of the insecurity of 
 fortune or health, of the risks of social life, and the risks of con- 
 tinuous activity. A second and wholly subordinate motive is the 
 expectation of profit. In some morbid or exceptional minds, the 
 love of power which wealth confers may act as a stimulus, but this 
 remotely or rarely. Now every one, even the most arid economist, 
 allows that the habit of saving is directly and indirectly a benefit to 
 society, and that it should not be discouraged. I conclude also that 
 it will be conceded that it is not illaudable on the part of a parent 
 to strive that a child should not sink to a lower position than that 
 in which he was bom and educated, that such a child should not, 
 on the premature death of a well-to-do parent, decline to the few 
 shillings a week condition. Public opinion would censure a father 
 who, having a considerable life interest only, made no adequate 
 provision for his offspring. A parent may therefore be well excused 
 in devising his property to his child ; the state would be severely 
 condemned if it confiscated this natural provision, in case the 
 parent had failed to make a will, and in my opinion is to be blamed 
 for giving such effect to a parent's will as shields the child from the 
 consequences of its own misconduct. 
 
 A man must be a very sturdy patriot if he will save as energeti- 
 cally for the state as he will for his children, and in a minor degree
 
 ME. MILL'S THEOEY. 473 
 
 for his kindred. If the state discouraged saving by taking an over 
 heavy toll on inheritances, I conclude that the worst forms of un- 
 productive consumption would be increasingly exhibited. At present 
 they are reprobated. That action of the state would commend 
 them. It is found impossible to forbid these forms of waste, ex- 
 cept when they are entirely noxious, but I should think that the 
 possessor of wealth would prefer his own waste to the waste of the 
 state, and the disposition of what he has saved for his own wants, 
 real or artificial, to the involuntary disposition of his property by 
 the central authority. I do not dwell on the moral question, of 
 how important it is for the state to encourage family duty, and an 
 adequate provision for one's own, though I could conceive no more 
 mortal wound being given to parental feeling, than the instruction 
 afforded to parents, by the utterance of the law, that the moral 
 obligations of parents to children is, by political ethics, limited to 
 the few shillings a week awarded by a bench of magistrates for the 
 maintenance of an illegitimate child. But Avhen political economy 
 becomes metaphysical, it may lead one on to anything. 
 
 There is an objection to the taxation of the inheritance of 
 personal property of a very serious kind. It is that it is one law for 
 the rich and another for the poor ; the inveterate and inexcusable 
 vice of levying a tax which wealthy men may evade and poorer men 
 must submit to. It is easy for a man with a large amount of 
 personal property to make a donatio inter vivos. It is a very 
 common thing for him to do so. I have known good men, who 
 would not consciously defraud any one, who hare told me that they 
 have provided largely for their children during their lifetime out of 
 their abundance ; and when I have rejoined, " Then you avoid the 
 probate and legacy duties ? " they answer with the full conviction 
 that the reply is complete, " But the law allows me to do so." But 
 I hold that what the law does not allow you or me to do, but 
 allows a richer man than you or me to do, is a privilcyiuni and 
 ipso facto to be condemned. Most of us, unlike King Lear, cannot 
 give everything, for as we get older, the first and fundamental 
 motive for saving becomes more apparent to us. Now I do not doubt 
 that the landowners in Pitt's time foresaw this advantage of the 
 rich owners of personal property. Their lands were visible ; under 
 settlements and entails, inalienable. They would certainly be
 
 474 THE THEORY OF MODERN TAXATION. 
 
 caught, and the net was spread in vain in sight of the bird. They 
 were told what would happen. One of the peers, who had accumu- 
 lated a large personal estate in the exercise of a profession which 
 produces peers regularly, declared that he would never pay the 
 legacy duty. When age came on, he gave all his personal estate to 
 his eldest son, reserving to himself a life interest in the whole. 
 The son became a lunatic, and died. The bereaved father had to 
 pay probate, legacy, and intestate duty on his own property, and 
 died shortly afterwards of the double grief. Then the estate paid 
 legacy duty again. 
 
 If Pitt's finance was bad, that of his successors was worse. His 
 efforts, well meant I do not doubt, were full of misery for the poor. 
 They wore him out, and he died mox daturus progeniem vitiosiorem. 
 After a short interval, he was succeeded by Perceval, Perceval by 
 Vansittart, perhaps with the exception of Dashwood, sixty years 
 before, the most incompetent Chancellor of the Exchequer who 
 ever did mischief. Robinson, and Huskisson were incomparably 
 superior to him, and gradually sounder principles of finance at last 
 prevailed. Parliamentary reforms canae, and for nine years the 
 Whigs were in office. They were not successful in finance. Their 
 fiscal policy led to their downfall in 1841, and a new departure 
 began with Sir Eobert Peel. 
 
 Now in 1830, Sir Henry Parnell, afterwards Lord Congleton, an 
 Anglo-Irishman of distinguished Parliamentary descent, for he was 
 son to the last Speaker of the Irish House of Commons, put out a 
 very significant treatise on Financial Reform, this treatise, in fact, 
 being a series of experiences which he had arrived at as Chairman 
 of the Finance Committee of the House of Commons. He wished 
 to repeal all taxes on raw materials, taking the words in their 
 popular meaning," all taxes in which excise regulations interfered 
 with the course of manufacture, and to reduce the taxation of spirits 
 and tobacco so as to obviate smuggling. In order to fill up the 
 deficit created by these necessary reforms in the fiscal system of the 
 country, he suggested that an income and property tax should be 
 imposed. 
 
 The income tax was imposed by Pitt at the period of his greatest 
 trouble in 1799, at 10 per cent. This full rate was payable only 
 on incomes of 200 and upwards, was not taken at all from those
 
 THE INCOME TAX AND ITS HISTORY. 475 
 
 under 60, and was differential between 200 and 60. After the 
 peace of Amiens it was repealed, but reimposed when war broke 
 out again, when it was divided into five schedules. It was payable 
 on all income derived from property in Great Britain, whether the 
 owner resided in the kingdom or not, and on all property yielding 
 an income in Great Britain or elsewhere. The tax yielded about 
 six millions, and as I know from those who had to endure it, in 
 addition to taxes upon every necessary or convenience of life, it 
 was a very severe infliction. After 1815, the country insisted on its 
 repeal, though Castlereagh implored Parliament not to turn its 
 back upon itself, a gymnastic feat which one would think im- 
 possible. 
 
 When Peel came into office in September, 1841, there had been a 
 succession of deficits. But there were about 1200 articles in the 
 customs tariff, some of which yielded next to nothing, so thorougbly 
 had past financiers racked the earth and its products for taxes. Peel 
 took up Parnell's idea, determined 011 reforming the tariff, and 
 claimed as compensation for loss of revenue an income tax on the 
 lines of the old tax of 7d. in the for four years. He made some 
 important changes in the assessment. He allowed a total exemp- 
 tion 011 incomes up to 150, and showed considerable favour to 
 farmers in England and Scotland, reckoning the profits of the 
 former at one half, of the latter at one third the rent, a prodigious 
 satire on the rack-rents of the time, aided as they were by the Corn 
 Laws. It is not easy to see in this exemption whether Peel 
 intended to gratify his followers, to prepare the way for a repeal of 
 the Com Laws, or to accentuate the severity of the rents then 
 ordinarily payable, for it is plain that a rent could not be equitable 
 which in England was worth twice the maintenance and profits of 
 the tenant, and in Scotland three times. 
 
 The income tax of 1842, which has continued both in war and 
 peace, long after the wisdom of Peel's financial policy has been 
 demonstrated, was imposed in order to cover the risks of a financial 
 experiment. As the facts turned out, there was no reality in 
 the risk. Industry, liberated from more than a thousand tram- 
 mels, grew rapidly and successfully under the new system, 
 large masses of the public debt were paid off, financial operations 
 for the liquidation of the residue were rendered possible, and one
 
 476 THE THEOEY OF MODERN TAXATION. 
 
 must acknowledge also that expenditure greatly increased. As time 
 went on, .and the number of articles visited with customs and 
 excise were reduced to not more than 1 per cent, of those so 
 attacked when Peel first took the tariff in hand, the plea, of very 
 doubtful validity, was put forward, that the income tax was the 
 equivalent for a much larger remission of taxation. Of course the 
 statement is absolutely inaccurate, for the remissions in question 
 affected all incomes, and especially those which were earned in the 
 form of weekly wages ; while the equivalent in the income tax was 
 paid only by a limited class. Nor is the reasoning more valid, 
 which alleges that those who have an income above that level are 
 better able to afford the tax than those who are below it. In the 
 first place, all wage incomes paid weekly or at short intervals, 
 though in some skilled crafts they are considerably above the limit, 
 are practically exempt, if not legally ; and in the next, the exigen- 
 cies of certain callings demand outgoings from which the wage- 
 earning classes are exempt. A man who earns his living by reason 
 of his clerkly or intellectual or professional gifts cannot get it if he 
 is clad like an artisan, or is housed like one, though he may be seri- 
 ously stinted in his household. The necessary outgoings of certain 
 classes are a very considerable first charge on professional or quasi- 
 professional incomes, and no imposer of taxes ought to be able to 
 force such people to the manifestation of heroic poverty. 
 
 It is impossible to dispute the intrinsic inequality and unfairness 
 of Peel's income tax. It taxes precarious incomes at equal rates 
 with permanent ones. It is no answer to say, with Mr. Mill, that 
 the precarious income pays for a shorter time than the permanent 
 one does. For, first, the income tax always professes to be a 
 terminable expedient, and, I presume, the pledges of Parliament 
 ought to go for something ; and, next, the veriest tyro in analytical 
 economics can see that in a precarious income capital and profits 
 are taxed, in a permanent one profits only. Indeed, so serious is this 
 consideration, that one of the most inconvenient obstacles to the 
 extinction of debt through terminable annuities by those who could 
 best float them, as, for example, life insurance offices and banks, is 
 the obvious actuarial fact, that a numerically equal tax on permanent 
 and terminable incomes, is a differential tax to the disadvantage of 
 the latter. Again, it taxes unequal outlay at equal rates. The
 
 AN INCOME TAX INTBINSICALLY UNFAIR. 477 
 
 winner of a professional income in a town, often in a particularly 
 expensive district of a town, must needs make a greater outlay on 
 an obvious necessary of life, his house-rent and its incidents, no part 
 of which he is permitted to deduct from his earnings, than one 
 who, having an independent income, can elect his own place of 
 residence, and his own scale of expenditure. Again, though this is 
 a more disputable point, the family charges of one man may be 
 greatly in excess of those, incurred by another. There are to be 
 sure economists who are so alarmed at the Malthusian theory, that 
 they seem to hold that the continuity of the human race demands 
 an apology, that it is a misfortune, almost a crime. But taking 
 the facts as they are, it cannot be doubted that a person who has 
 to bear these charges is, from the taxpayer's point of view, worse 
 off than the man who is free from them, and therefore in an equal 
 charge suffers more severely than his less burdened neighbour. Now 
 it is no answer to say that taxation is inevitably unequal. This 
 may be admitted, without one's conceding that a financier should 
 select a tax which is sure to be more unequal than any other, and to 
 be at no pains whatever to deal with its schedules. Least of all is 
 it an answer to say, that the persons to whom I refer, being per- 
 mitted to make their own return, are enabled to rectify the inequali- 
 ties of their lot. In the first place, they do not always do so; in the 
 next place, that law is to be condemned which cannot be just, unless 
 the object of it is, put in plain English, to commit a fraud in order 
 to escape an injustice. 
 
 Besides, it is possible to transfer an income tax. A trader is 
 pretty certain, in dealing with his customers, to treat all his out- 
 goings, house-rent, local taxation, his own necessary maintenance, 
 the inevitable charges of his calling, as part of the cost of distributing 
 the goods in which he deals. He has every motive and every power, 
 all traders equally contributing the tax, to include income tax, and 
 even the highest contingency of it, in the initial cost of his goods. 
 He is practically paying a licensing duty, and he is impelled to 
 exact that from his customers. This result, which is obvious to 
 the analyst of trade profits, was curiously illustrated by the argu- 
 ments employed by a deputation of London traders, who some 
 fifteen years ago waited on Mr. Lowe, then Chancellor of the 
 Exchequer, to complain of the Co-operative Stores. They alleged
 
 478 TEE THEORY OF MODERN TAXATION. 
 
 that they could not compete in cheapness against these stores, 
 because the latter paid 110 income tax. This reasoning had no 
 meaning if it had not been their practice to make their customers 
 pay the income tax which was imposed on them as traders, and Mr. 
 Lowe admitted to me that it had no other. 
 
 The latest finance, then, of the British Parliament has reduced 
 taxable objects to a very few articles. It intends as far as 
 possible and with considerable numerical success to distribute 
 taxation in tolerably equal moieties between those who earn less than 
 100 a year, and those who earn more than 100, and very in- 
 genious and perfectly fair-minded analysts of taxation inform us 
 that this result is obtained. The former are visited with the greater 
 part of the indirect taxation, with by far the most of the excised 
 and customs still levied, and with a small amount of the stamp and 
 succession duties. The latter pay the income tax, the greater part 
 of the succession and stamp duties, the assessed taxes, and much of 
 such customs as are paid for those luxuries of foreign origin which 
 can be purchased only by fairly well to do persons. Of course, 
 even under these circumstances, the contribution of the poorer 
 classes will and must represent a greater sacrifice on their part. I 
 cannot see how this can be avoided, unless indirect ' taxation is 
 wholly remitted, and direct taxation substituted for it. But such 
 a new arrangement would be wholly impossible and intolerable, 
 unless a property tax were adopted in the place of an income tax, 
 and the liability to this tax be put on all property alike. 
 
 It is not easy to impose a new tax, and in the present condition 
 of public expenditure, it is not easy to remit one. I do not discuss 
 whether the rejection of Mr. Childers' budget in 1885 was due to 
 financial dislike merely. But it was a strong deterrent, and will 
 probably remain a strong one for some time, for the rejection of a 
 budget is a disagreeable surprise to any financier. Nor can it be 
 doubted that the financial income of the United Kingdom has shown 
 signs of inelasticity in some of its most important particulars. But 
 the general wisdom of our financial system is admitted by all whose 
 opim'on is worth anything, and any serious attempt to alter it would 
 be met with opposition from many quarters where opposition might 
 be unexpected, but would be very decided.
 
 XXII. 
 
 THE OBJECT AND CHARACTER OF LOCAL TAXATION IN 
 
 ENGLAND. 
 
 Central and local government Causes which lead to federal systems 
 or discourage them America, France, England Ancient local 
 liabilities illustrated by the Tandridge rate The growth of local 
 taxation modern The poor rate The relief of destitution justi- 
 fied The maintenance of roads Mr. Goscherfs Committee The 
 cost of police, of prisons, hospitals The charge of national 
 education, of sanitary improvements Local debts Modern ex- 
 pedicnts Local taxation subsidised The motion of March 23, 
 1886. 
 
 ALL communities which have arrived at anything like political and 
 social organization have experience of two forces, one of which 
 draws them towards the central government, the other inclines 
 them towards local administration. Constitutional antiquaries, who 
 have searched into such evidence of the conduct of early societies 
 as have survived, assure us that the latter preceded the former 
 system, and we know that there has been an historical struggle on 
 the part of the former to supersede or to control the latter. The 
 motive of the former has been the reality or the pretence of the public 
 safety, which could not, it was alleged, be secured, unless the 
 authority and completeness of local administration were circum- 
 scribed. But the local administration, having all the forces of 
 tradition, and not a few of the conveniences of experience on its 
 side, while admitting that the central government must be recog- 
 nized and supported, insists that local autonomy provides a 
 machinery of self-government which is certain to be respected,
 
 480 CHARACTER OF LOCAL TAXATION IN ENGLAND. 
 
 which is more intelligent and acute than departmental administra- 
 tion could be, and can be worked with greater efficiency and 
 economy. There are reasons in favour of centralization, there are 
 reasons for decentralization, and there is a sphere for the action of 
 both. The question as to which kind of common action shall be 
 referred to either function has been, and will remain, matter of 
 debate. But in a decision on the question is involved the settle- 
 ment of the most effective and least harassing form of social 
 government. I shall not be touching on political controversy 
 when I state, as most of you are well aware, that the subject 
 is occupying the serious attention of most English statesmen 
 now, and that the controversies which have been made promi- 
 nent in recent times, are likely, as time passes on, and experience 
 becomes more and more a guide to action, to become less personal 
 and less bitter. 
 
 Events, which in the history of nations are so remote that they 
 seem to be merely antiquarian, have had a great influence in 
 inclining communities towards centralization, or towards federalism 
 under a central authority or parliament. Thus in France, the 
 initiative, even in matters of purely local business, has been taken 
 away from the local authority, and has been referred to the central 
 government. In the United States, the doctrine that the state is 
 still sovereign, and that the powers of the President, his Cabinet, 
 the Senate, and the House of Representatives of Washington, 
 though inalienable, are circumscribed, is constitutional, and has 
 been recently re-affirmed. The doctrine, it is true, suffered some 
 severe shocks shortly after American independence \vas secured, and 
 when the great Civil War waged a quarter of a century ago. On the 
 other hand, though there was evidently a design on the part of 
 those public men who guided the action of France in and after 
 1789, to found a republic on the model of the American Union, 
 these persons repudiated the most characteristic part of the 
 American system, the free but permanent union of a number of 
 independent states. Soon afterwards, federalism was denounced as 
 treason, and the suspicion of any sympathy with such a social 
 theory was in the highest degree dangerous. Now these differences 
 in the constitution of two communities were due to historical 
 causes.
 
 FEDEEAL AND CENTEAL GOVEENMENT. 481 
 
 The American plantations were voluntary settlements, in the 
 administration of which the English crown readily accorded a con- 
 siderable amount of independence. Sometimes, as in the New 
 England colonies, the adventurers consisted of a body of men 
 flying from a distasteful religious organization, not to proclaim 
 toleration, but to construct as rigid and despotic a government as 
 that which they sought to avoid. Some were conquests, as New 
 York and New Jersey, easily acquired from the original settlers, 
 and easily relinquished by the countries which founded them. 
 Most of them, however, were proprietary colonies, as Maryland, 
 Pennsylvania, Virginia, and the Carolinas, in which the representa- 
 tives of the founders were the hereditary administrators of the 
 plantation. In course of time, and after at least two abortive 
 efforts, the proprietary rights were extinguished, generally by 
 purchase, as the plantations came more and more under the 
 mercantile regulations of Parliament, and, within certain limits, all 
 became autonomous. These settlements, then, had no other 
 experience than that of advantage in the development of their 
 autoinony, and when they combined together for a common 
 purpose would naturally relinquish as little as possible of that 
 independence, which to the popular mind marked the growth of 
 their local liberties. It became necessary in the early history of 
 the American Union to control these State Eights, in order to 
 strengthen the Washington government, but the doctrine that the 
 association was voluntary remained, and formed the principal 
 justification of the Southern secession. At the present time, 
 under well-defined and intelligible limits, the American State 
 administers its own affairs, has its own Governor, Senate, House 
 of Kepresentatives, imposes and collects taxes by its own authority, 
 and possesses large powers of administration within its own area. 
 In some particulars and these of awkward significance, the Supreme 
 Court of the United States has declared that no central authority 
 can control a state, particularly in incurring state debts and 
 repudiating or forcibly converting them. 
 
 France, however, was slowly built up, partly by conquest, partly 
 by the persistent assertion that the king was paramount over the 
 numerous princes among whom France was partitioned. In the 
 middle of the twelfth century, the authority of the French king 
 
 82
 
 482 CHAEACTEB OF LOCAL TAXATION IN ENGLAND. 
 
 over the great fiefs of Normandy, Guienne, and Toulouse "was in the 
 last degree shadowy. Our own Henry II. was the real ruler over 
 the sea-board of France, from the mouth of the Seine to the 
 Pyrenees, and the customs of this feudal kingdom recognized the 
 right of the vassal to make war on his lord paramount, at least till 
 as late as the reign of Saint Louis. The grandfather of this king 
 challenged, with much astuteness, and on every opportunity, the 
 exercise of this right. He stripped John of Normandy and 
 Brittany, and probably if John's mother had not been alive, when 
 his reputed offence had been committed, he would have appropriated 
 Guienne. At the end of the century he made use of the real or 
 imputed heresies of Provence to establish his authority firmly 
 in the south. But it must not be supposed that this policy was 
 always readily submitted to. The only enemy which the French 
 king seriously feared was the party of the great nobles, and those 
 people were quite alive to the fact that they were being subdued in 
 detail. Twice, by their open assistance, the English overran and 
 nearly partitioned France. The struggles of the sixteenth century, 
 between the French king, the Leaguers, and the Huguenots, were 
 aristocratic revolts, following on the last attempt, by Charles the 
 Bold, to dismember Eastern France. The effort after independence 
 on the part of the nobles was continued till the war of the Fronde. 
 Anything else, then, except deference and submission to the central 
 authority, seemed by the experience of ages to be an attempt to 
 lessen the dignity, and to break up the unity of the nation. It is 
 not wonderful, then, that the very shadow of local independence was 
 looked on with dismay and anger in France, and that even the 
 republicans of 1789, with the cry of liberty, fraternity, and 
 equality, gave an exceedingly qualified meaning to this historical 
 phrase. 
 
 The social history of England has proceeded on lines midway to 
 the state rights of the American republic, and the excessive 
 centralization of the French monarchy. In early times the right of 
 self-government appears to have been almost complete in every 
 village and town. As a measure of police and public safety, the 
 government of the Conquest undertook an investigation into cases 
 of homicide, and it would seem in this manner it quenched the 
 embers of that guerilla warfare which plainly, and to the infinite
 
 FRANCE. ENGLAND. 483' 
 
 injury of the country, followed on the first victory of William the 
 Norman. There were also severe forest laws, but these were, I 
 believe, exceptionally directed against brigandage, though capable 
 of being made exceedingly oppressive. Otherwise, however, justice 
 appears to have been administered by the self-appointed or spon- 
 taneous police of the Lord's Court, and was, as I conclude, from read- 
 ing many hundreds of early manor records, respected and efl'ective. 
 Similar justice appears to have been administered in the towns, 
 when they were not chartered, the principal object of the charter 
 being to bring about that the administration of the affairs of the 
 corporation should be conducted by elected magistrates. When the 
 troubles with labour began after the Great Plague, the first remedy 
 applied was the Lord's Court. But in this the presentment was by 
 a jury of the inhabitants, and it is not surprising that this should 
 have not been found effective, considering that the jury was from 
 the class whom the law was trying to coerce. The labour statutes 
 were thenceforward administered by the justices of the peace, whose 
 object it was to coerce the peasants. But I have pointed these 
 facts out before. I refer to them now, only to show how universal 
 was the ancient English system of local self-government. 
 
 Now we are told that from the earliest date the resident English- 
 man was liable to three local obligations the defence of the realm 
 in case of invasion (a liability well illustrated by the Assize of Arms), 
 the repair of bridges, and the maintenance of roads. But it is 
 singular that neither in the accounts which I have examined, and 
 they are many thousands in number, nor in the record of the 
 manor business, have I found any notice of a charge imposed for 
 these purposes. Eoads there were in plenty. Bridges certainly 
 existed. Now it is quite clear that the roads were good, for many 
 years ago, when I collected evidence as to the cost of carnage over 
 known distances and I may add, over roads now existing as well 'as 
 then I was extremely surprised at the rapidity and cheapness with 
 which goods were conveyed, all things considered. That the 
 villagers repaired ' their own roads is, I think, obvious; it was 
 unquestionably their interest to do so. That the owners of 
 scattered properties did so was equally in their interest. It is 
 wonderful to see how property even in the same parish or manor 
 was scattered. It is equally wonderful to see how monastic
 
 484 CHARACTER OF LOCAL TAXATION IN ENGLAND. 
 
 property was scattered, and how rare it was that an estate was not 
 loaded with some burden, which the piety or policy of the earlier 
 owner had imposed on his heir, or his heir's alienee. Now every- 
 thing which diffuses property laden with these obligations suggests 
 the wisdom of keeping communications open. I am quite sure that 
 roads in England were in far better repair in the time of Edward 
 the Third than they were in the time of George III. I do not say 
 that the ancient roads were level, macadamized, and well metalled ; 
 but they are infinitely better than the turnpike roads of which 
 Matt. Bramble, in Smollett's novel of " Humphrey Clinker," com- 
 plains so bitterly. My evidence, then, as to local taxation for roads 
 up to the sixteenth century is entirely negative. 
 
 The first local charge which I am able to trace is that levied and 
 distributed for the relief of the poor and other public purposes. 
 Now in the years 1541-1801 inclusive, twelve Acts of Parliament 
 were passed for the relief of the poor, the last being the famous 
 statute 43 Eliz. cap. 2, the basis of our poor law system for 
 more than two and a quarter centuries. We can read about these 
 Acts in any of the two Collections of Statutes at large, though as 
 regards one of these Collections, beginning with those printed by 
 order of Henry VIII., it may be doubted whether there are more 
 than two perfect copies in existence, perhaps not even two. Of 
 their administration there is even less trace. But I have been 
 fortunate enough to find an original illustration of an assessment 
 for the relief of the poor in a Surre}^ parish, in 1600, i.e., under the 
 Act 39 Eliz. cap. 3. The document is the original manuscript of 
 the committee of parishioners, to use a modern phrase, who in this 
 year were called upon to survey the parish, and to fix the contribu- 
 tions of the occupiers to several objects the relief of maimed 
 soldiers, the hospital and prisons of Surrey, the carriage of the 
 Queen's household, especially of coals, for the composition for pro- 
 vision, for oats, c., for the Queen's stable, for setting the poor to 
 work, and for the relief of the poor. 
 
 Tandridge is a Surrey village on the Kentish border. The parish 
 lies rather high, and is of only average fertility. Before the 
 Reformation it possessed a hospital, to which charity a good deal of 
 the parish was annexed. This foundation fell at the Dissolution 
 into the hands of Mr. Froude's patriot king, as indeed nearly every-
 
 ANCIENT LOCAL LIABILITIES. 485 
 
 thing else fell, and was, it seems, parcelled out among numerous 
 proprietors, probably to a great extent purchasers of the hospital 
 lands, and, two generations before, its tenants on beneficial leases. I 
 may mention that in the spring of 1600 wheat was 25s. 4d. a quarter, 
 and malt 13s. 4d., and beef 2d. a pound. The maimed soldiers were 
 allowed 2d. a week, and the charge on this account to the parish is 
 to be 8s. 8d. yearly, so that the parish was expected to find this 
 pension for fifty-two weeks in the year. Of course this was not 
 the whole of the soldier's pension. Double the sum is paid for the 
 prisons and hospital. The residue of the rate is devoted to the other 
 objects, and you will notice how numerous and how varied were the 
 regular charges imposed on land in the last year of the sixteenth 
 century, under the form of what we should call in modern phrase 
 local taxation. You will also notice that the account gives no 
 item for mending roads, but as the parish was charged with a pay- 
 ment in lieu of purveyance, and for carriages to the royal house- 
 hold, no doubt in this case Greenwich or Eltham, as the case may 
 be, the Avisdom of keeping their roads in repair, as far as the custom 
 of the time demanded, must have been very apparent to the occu- 
 piers of Tandridge. It appears from the account that it cost 7s. GdV 
 to convey a load of coals to the Court. The duty of the parish 
 was probably completed by the carriage of a single load. The fixed 
 annual charges of the parish were therefore 38s. 6d., and the rate 
 at a penny an acre, amounted to 9 12s. 7d. The people of Tand- 
 ridge therefore reckoned on having to spend at least 7 19s. Id. on 
 the relief of the poor, and the overseer is instructed to collect a 
 second, or more rates as soon as he had only 20s. in hand. At a. 
 shilling a week for each destitute person, then, they reckoned that 
 they had permanently three persons on their hands. Taking the 
 land at Tandridge in 1600 as worth a shilling an acre rent, and this 
 is a full rent, the local rates in this Surrey parish at the end of the 
 sixteenth century were at least Is. 8d. in the pound. 
 
 By 22 Henry VIII. cap, 5, the justices in Quarter Sessions were 
 made responsible for the repair of county bridges. Now the 
 Parliament of 1529 sat for six years. It began by attacking 
 Wolsey, by taking cognizance of the abuses in the Church, and of 
 Henry's divorce. It passed a vast amount of legislation, established 
 the succession, curbed the clergy, and suppressed the smaller rnonas-
 
 486 CHARACTER OF LOCAL TAXATION IN ENGLAND. 
 
 fceries. At this time it became, it seems, necessary to find some 
 new machinery for keeping bridges in repair, a duty which I have 
 no doubt had hitherto been practically fulfilled by the monastic 
 bodies until the dissolution was in the air. Under this Act the 
 magistrates in Quarter Sessions were empowered to levy a tax on all 
 the inhabitants, landowners or not, towards the repairs of public 
 bridges. In course of time the precept of the justices was made a 
 valid order on the overseers or receivers of poor rates. It appears 
 that this Act of Henry VIII. still constitutes the law on county 
 bridges. 
 
 In course of time, two of the local liabilities, the composition for 
 purveyance and the obligation to carry the fuel necessary for the 
 royal residence became obsolete, as did also the provision for the 
 pensions of soldiers, while the liability to maintain the poor, to 
 repair the roads, and to pay a contribution to prisons and hospitals, 
 remained obligations. During the seventeenth century the cost of 
 maintaining the poor became a growing charge, the amount of 
 which was very great in proportion to other liabilities, and far 
 heavier in relation to the ordinary revenue of the Crown than it was 
 in the worst and latest ages of the old Poor Law. In the latter part 
 of Charles II.'s reign it was retumed at ^665,362, according to 
 Davenant, or more than a third of the whole revenue in the time of 
 peace. It would seem, as this author mentions no deductions from 
 the poor rate for other local purposes, that the whole of this 
 amount was expended for the relief of the poor only, and for 
 such other ancient incidents as were imposed on the occupancy of 
 land. 
 
 The development of local taxation is very modern. It is partly 
 the outcome of larger powers given to local authorities, partly to 
 the spread of knowledge as to the laws of health, partly to the 
 convenience which there is in finding an area for taxation, the 
 habit of being taxed with patience being formed, partly to the oppor- 
 tunity which the existing system gives of imposing a charge 011 one 
 person the effects of which shall be found beneficial by another 
 person. It is also a remarkable feature in modern local taxation 
 that the person who pays nothing, but makes other people pay for 
 him, constantly becomes the mouthpiece of those who do pay, -and 
 by raising the cry of peculiar burdens 011 land, when these burdens
 
 THE POOE BATE. 487 
 
 are imposed on the occupier, is enabled to appear as the enlightened 
 and patriotic advocate of fiscal reform, when he knows that he is in 
 reality engaged in an attempt to further burden those whose claims 
 he so generously advocates. 
 
 Whatever may be said of imperial taxation, that which is levied 
 for local purposes is either the satisfaction of a duty or a beneficial 
 outlay. The invariable defence of the old Poor Law was that it was 
 a compensation for rights in the soil, commonable and other, of 
 which the peasantry were deprived under the numerous enclosure 
 Acts of the eighteenth and early part of the nineteenth centuries. 
 "We admit," such people alleged, " that the poor have from time 
 immemorial had common of pasture in the open fields, and the 
 unenclosed pasture. We allow that when the enclosure Acts were 
 passed, such rights were confiscated without compensation, for they 
 alone shared in the enclosed districts who had estates of inheritance 
 within the boundaries of the parish. But an adequate equivalent 
 has been given. The maintenance of those who have been dispos- 
 sessed is a first charge on our estates, the new and the old. We 
 must lose all our rents before the poor can want." And to do them 
 justice, many persons reasoned in this manner when the new Poor 
 Law was ventilated, and finally carried, even though the incidence 
 of the old law was found intolerably heavy, and in one or two 
 unlucky parishes, of which much was made, the poor rate had 
 actually extinguished the rent. 
 
 A poor rate is inevitably a rate in aid of wages. Even when it is 
 refused to the able-bodied, who could have made provision against 
 the ordinary risks of destitution, it is very difficult for any forethought 
 within a working man's opportunities to make provision against 
 prolonged sickness, or, if he have wife and child dependent on him, 
 against the risks of accidental death. Nor does it seem to me pos- 
 sible for an ordinary working man, subsisting entirely on wages, and 
 having no income-yielding property on which to rely, to provide 
 against old age. Now, unless wages can cover, in addition to a 
 decent maintenance, the risks of sickness and the certainty of in- 
 capacity, they must be supplemented by private or public charity, 
 i.e., either by alms or rates. Hence it seems obvious that they who 
 employ labour with a view to profit, and under my hypothesis get 
 this labour at less than the natural rate, should alone supplement
 
 488 CHARACTER OF LOCAL TAXATION IN ENGLAND. 
 
 the deficiency of what they pay. In a rough way this was the case 
 when Elizabeth's statute was enacted. Almost all persons were at 
 once occupiers and owners, even in the towns. The parson, besides 
 being an owner of tithes in kind, the collection and preparation of 
 which for market required labour, was also, nine cases out of ten, 
 the cultivator of his own glebe, nay, in not a few benefices, had 
 the whole of his endowment in land. Undoubtedly owing to an 
 ancient belief that the tithe was originally charged with the main- 
 tenance of the poor, the parson was made liable to more than his 
 proper share of the charge. With better, though not with sufficient, 
 reason, it was alleged that the source of his tithe was the pro- 
 duct of human labour, and should be charged with the sustenance 
 of those whose toil had produced it. This argument became more 
 substantial when the tithe became more and more a toll on the 
 husbandman's skill, even to a greater extent than the landowner's 
 rent, for the rent was exigible only when the skill was diffused, 
 the tithe while the skill remained the peculiar property of the 
 cultivator. 
 
 But the levy of the poor rate on those who do not employ 
 labour with a view to profit, as agriculturists and manufacturers do, 
 or derive no advantage from the density of population, in con- 
 sequence of the competition for building sites, as landowners 
 do in towns, is in no case defensible, except on the plea of 
 usage. It is true that most persons who pay notable sums for 
 poor rates are the employers of domestic servants, taken almost 
 entirely from the class which is likely to require parochial relief. 
 But the wages of such persons are constantly equal in private 
 families, their board included, to the whole earnings of the agricul- 
 tural labourer for himself and family, and, I believe, form indirectly 
 not a little of the means by which such families are maintained; for 
 domestic servants, especially women, are peculiarly open to the 
 claims of their near relations. Treated then on economical grounds, 
 there is no justification for the present distribution of the poor rate. 
 They who are not, on these grounds, naturally bound to pay, in 
 consequence of having entered into definite profit and loss arrange- 
 ment with those who labour, and are thereupon economically liable 
 for all the charges which are essential to their due and continuous 
 labour, do pay, while those who enter into such relations, and
 
 THE RELIEF OF DESTITUTION. 489 
 
 from my analysis should pay, are pro tanto relieved of their 
 liabilities. 
 
 I have taken the most disputable case first, for I ani far from 
 admitting that the relief of the poor from destitution is a liability 
 which is merely to be measured by economical considerations and by 
 economical duties. They ought to be stated. But I am prepared 
 to admit that there are duties which are higher and more stringent 
 than those which an economist allows. I may allege that 110 man 
 has a right to have his want supplemented out of my abundance ; 
 but I may also, with perfect consistency, allege that it is my duty 
 to supplement it. For our duties are not to be measured by other 
 people's rights. They are much wider and much more personal, as 
 the better instincts of every man teach him. It is, I think, unfor- 
 tunate that Mr. Mill has based the obligation of maintaining desti- 
 tution on the ground that the unfortunate object of public charity 
 is not responsible for his own existence. The person who is 
 constrained by law to support him may retort with perfect justice 
 nnd absolute cogency, that he is not responsible either. It is, in 
 my opinion, infinitely better and more logical to base the obligation 
 on the general claims of humanity, on the mischievous effect induced 
 on the individual man when he sees unrelieved destitution, and on 
 the sentiment, if you will, which urges people to believe that 
 necessary as legal relief may be, it is better if possible, except to 
 the utterly undeserving, that private benevolence, or if the cause be 
 preventible, legal action, should obviate as far as possible the 
 necessity of applying for that legal relief. For destitution may be 
 caused by law, and therefore may be, I will not say remedied by 
 law, for effects in the social system endure after causes have ceased, 
 but repressed or obviated at its future origin. But I fear that I am 
 quitting the range of economical reasoning, and intruding into the 
 wider and more suggestive field of morals. My excuse must be 
 twofold first, that one may occasionally soften the stern inferences 
 of the economist ; next, that I may point out to you that not every 
 social fact is capable of a complete exposition on economical 
 principles. 
 
 The poor rate used to bear the expense of roads and prisons, and, 
 in so far as the duty was not satisfied by compulsory service, of 
 police. The roads, to be sure, since 1778, were on the whole
 
 490 CHARACTER OF LOCAL TAXATION IN ENGLAND. 
 
 maintained by tolls levied on passing vehicles, considerable excep- 
 tions being made in the case of agricultural carriages. It must be 
 allowed that some thirty years before new methods of locomotion 
 were invented or applied, the trustees of these roads, animated no 
 doubt by motives of enlightened self-interest, mended them decently. 
 For some time, however, after the Act of 1773 (you may find it in 
 the literature of the time) the permission to levy tolls was not 
 made the ground for repairing the roads, but for saving the rate. 
 The stage coach of the eighteenth century paid heavy tolls, of 
 course taken out of the passengers' fares, and was not infrequently 
 stranded in a slough. There is a story, perhaps a legend, that at 
 the end of the last century the Oxford coach going to London, 
 and not over-laden with University professors, was absorbed in some 
 Serbonian bog on the old eastward road over Shotover. You have 
 heard of the scholar of Queen's, who choked the Shotover boar that 
 charged him with his Aristotle, and brought his head, no doubt, to 
 the Christmas festivities of that college of the plural Queens. A'ow 
 defensoribiis istis, non tali auxilio must have been, if the story is true, 
 the despairing cry of those engulfed passengers. The story may 
 not have been true, but it must have been possible. 
 
 Now, it seems to me inevitable that a landowner should pay for 
 the creation and maintenance of roads to his estate. I dare say 
 they are ancient. I witnessed what I have no doubt is the history 
 of many an English road in my experiences in the Kocky 
 Mountains, experiences which I do not doubt were recognized nine- 
 teen or twenty centuries ago in our own country. The first track 
 is that of wild animals migrating for early pastures, and I may say 
 that I know no country in the world in which a few miles of north 
 and south latitude make so remarkable a difference of late and 
 early growth as is seen in the British Islands. The second track is 
 that of the savage, who utilizes the instinct, if we can use this word 
 in these Darwinian days, or limited logical faculties of the brute. 
 The third is the more or less civilized man, who, in the United 
 States, adopts the track of the bison, and the trail of the Ked Indian 
 for high-road or railway. We may be pretty sure that most of the 
 English roads have as ignoble an origin as that of the American, 
 that the bos primiyenius taught the ancient Briton, that the ancient 
 Briton could not conceal his secret from the Roman, and that Saxon,
 
 THE MAINTENANCE OF ROADS. 491 
 
 Dane, and Norman were the inheritors of this traditional knowledge. 
 Depend upon it, the new roads, other than those of towns made 
 from place to place in England, during the last two centuries, are 
 not more than 1 per cent, of the existing roads, roads which date 
 from the days of savage occupancy. And if one deducts disused 
 roads from the total, I have my own opinion that 1 per cent, is 
 a very liberal estimate. Of course the various settlers, immigrants, 
 freebooters, brigands, the aggregate of whom is implied by Juvenal 
 in his word of three letters, settled in the neighbourhood of these 
 primeval roads. Show me a Roman villa, and I am sure that a 
 Roman road will be found near it. We are, some of us at least, the 
 heirs of a multitudinous experience. 
 
 Now, in 1773, the English landowners in Parliament, as is 
 natural, seeing that they were dominant, thrust the cost of main- 
 taining those roads, the existence of which was essential to their 
 rent, and the due repair of which was nearly as essential, on those 
 to whom the repair of the roads was even more important than its 
 existence, by the machinery of turnpike tolls. For a long time they 
 got the tolls, exempting themselves and their tenants from them, 
 and did not repair the roads. But as stage coaches increased, it 
 was seen that the fruitful contingency of tolls depended 011 
 adequate repair ; and in some cases, even on a few miles of new 
 road, cutting through hills and bridging over low-lying land. 
 Some specimens of this later engineering may be seen on the west 
 and south roads leading out of this city, and a little on the east. 
 The two north roads, I venture on asserting, are as old as the days of 
 the ancient Britons. The money for restoring, and in certain cases 
 for improving, these communications came from private subscribers ; 
 and fifty years ago, a turnpike trust, though its duration was very 
 properly limited, because it was really the restraint of a public 
 right, was supposed to be an excellent investment. In course of 
 time the receipts from the tolls fell off, for a more rapid and cheaper 
 means of transit was discovered and gradually extended. The trusts 
 were renewed after the term was expired, but in vain ; for it was' 
 finally discovered that the tolls payable did not cover the cost of 
 collection. There was nothing to be done but to refuse to renew 
 the trusts, to secularize the toll-houses, and to leave the landowners, 
 as was the case before 1773, to mend the roads which had now
 
 492 CHARACTER OF LOCAL TAXATION IN ENGLAND. 
 
 become in the main their interest only. In less than a century 
 the ancient obligation on themselves, which they had striven to 
 shift, and with success on the mail coaches and trade waggons, re* 
 verted to their own shoulders, and again became a charge on land 
 or on occupancy. They had learned how important an aid to the 
 rent of land is cheap and convenient transit. Hitherto they had 
 got it at other folks' cost. Now they had to provide it at their own. 
 The situation, as the landowners encouraged branch railways, 
 became worse and worse, for though the roads were not used by the- 
 carts and coaches, and therefore presumably lasted the longer, the 
 contributions to the charges gradually disappeared. It became 
 necessary, either to pay for the maintenance themselves, or through 
 the tenants, or to let the roads get out of repair, or to find some 
 other source by which to secure a good road, and save their own 
 charges. They hoped for a time that a renewal of the trusts would 
 prove efficacious, and when they were disappointed in this, they re- 
 viewed their opportunities. 
 
 Now about twenty years ago, a Committee of the House of Com- 
 mons, of which Mr. Goscheii was chairman, was nominated for the 
 purpose of investigating the amount, the incidence, and the equitable 
 distribution of local taxation. The committee was, as usual, taken 
 from the two traditional parties in equal moieties, except that it had 
 a bare majority on the side of the existing government, a rule 
 which is observed in the House of Commons and, perhaps, explains 
 the singular worthlessness of nearly all reports made by select com- 
 mittees. The committee took evidence as usual, and divided on a- 
 report, drawn up as usual by the chairman. Half the committee 
 voted in favour of the chairman's report, half against it, and the- 
 report was carried, as usual, by the chairman's casting vote. I may 
 observe that in recent times the House of Commons on matters of 
 high public interest steadily stultifies itself in this absurd fashion. 
 In consequence, as I have been constantly constrained to state in 
 the House, the evidence taken by the committee is almost invari- 
 ably of far higher value than the report issued, which purports to be 
 an adjudication on the evidence. It is needless to say that a report 
 carried by the casting vote of a chairman is of no practical force. 
 Mr. Goscheii had nothing left for him but to issue a volume of his 
 own on the subject, in which the whole matter was stated with
 
 THE COST OF POLICE. 493 
 
 great clearness, and the principles which should determine the dis- 
 tribution of such taxation were, from Mr. Goschen's point of view, 
 advocated with great cogency. He advised, in brief, that such tax- 
 ation should be divided between oAvner and occupier in equal 
 moieties, as is done in Scotland and generally in Ireland, though in 
 the latter country what is called county cess is imposed on occu- 
 piers only. I shall point out later on what was the effect of Mr. 
 Goschen's publication. 
 
 Up to comparatively recent times, the maintenance of the peace 
 in town and country was imposed upon the inhabitants in turns, the 
 office of constable being one which an inhabitant could not decline. 
 Even in the city of London, there were constables appointed in 
 every ward. But in course of time, it was seen that it was im- 
 possible to rely on these gratuitous services. A detective force had 
 to be established in London. Then a regular police was instituted 
 by Sir E. Peel, and put under the Home Office, when its duties 
 were outside the city. Very soon the system of the London police 
 was extended to other large towns, and finally the constable of the 
 village or hundred was superseded by a county police, and paid ser- 
 vice substituted for a quasi-voluntary one. The ancient constable, 
 an institution alleged to be coeval with the common law and in 
 activity within my own memory, is now as obsolete as the court leet, 
 by which he was originally appointed, and whose officer he was. 
 
 Now the maintenance of the peace and the arrest of offenders, 
 a duty still imposed in theory on all persons, apart from the form 
 of the special constable's oath, is every one's interest, and if it be 
 delegated its cost should be defrayed by the contributions of all who 
 have the benefit of such services. On no pretext whatever should 
 this charge be defrayed by the owners of land, or by occupiers 
 whose liabilities are measured by the use of agricultural land, It 
 is entirely unfair that a farmer of 500 acres should pay this tax on 
 his holding. It is true that his property is in the open, and is 
 exposed to marauders. But it is quite possible that another 
 inhabitant of the same parish may have as much property in his 
 house as the farmer has on his land, and not be liable to a tenth of 
 his payments. He may have, as I shall show hereafter, much 
 more than the farmer has, and not be rated at near the sum. 
 Plainly the police rate should be defrayed by the occupier, and the
 
 494 CIIAEACTEE OF LOCAL TAXATION IN ENGLAND. 
 
 most equitable way in which it should be defrayed is by a house 
 tax, estimated on the building value of the house. If a man 
 chooses to live in a house which would cost and did cost half a 
 million to build, he should pay on that half million for protection 
 and not 011 a nominal sum. The maintenance of the poor then, in 
 equity, should be a charge on the employers of labour ; the main- 
 tenance of roads, by the same equity, should be defrayed at the cost 
 of those who own landed property. The maintenance of the peace 
 should be a charge on occupation, and should be calculated on the 
 cost which the occupier is put to in building the house in which he 
 thinks proper to live. 
 
 But I am far from having exhausted the charges which are 
 included under the general head of local taxation, charges which 
 are rapidly becoming a tax, the aggregate amount of which is con- 
 siderably in excess of the whole cost of government, exclusive of 
 interest on the debt, sixty years ago, charges which if continued at 
 the same rate bid fair to rival, at no remote period, the imperial 
 expenditure. Much of the outlay is, I allow, immediately or 
 indirectly beneficial, but unfortunately they who incur the cost are 
 very frequently, I may say generally, not the persons who obtain 
 the benefit. On the contrary, the benefit which they pay for 
 supplying is, inevitably and in the nature of things, the basis of a 
 further charge on themselves. In brief, they improve another 
 man's estate, and are called upon to pay a subsequent sum on the 
 improvements which they have effected at their own cost. Such a 
 result must ensue by basing all local taxation on occupancy. 
 
 One ancient tax, contributed by all occupiers and occupying 
 owners, as I have shown you in n%y analysis of the Tandridge rate, 
 is the charge for maintaining prisons and hospitals. Now the 
 detention and punishment of criminals is part of the machinery of 
 police. So, though in a less obvious manner, is the case of lunatics. 
 The lunatic is kept in custody because he has either committed a 
 criminal offence or is judged likely to commit one. Now the charge 
 of his maintenance and custody should be defrayed, as the police 
 rate should be defrayed, by the contributions of all occupiers, and 
 this because the liberty of such persons is a danger to secure 
 occupancy. Besides, it is a matter of local interest that the causes 
 of excessive local crime or excessive local lunacy should be studied,
 
 NATIONAL EDUCATION. 495 
 
 and if possible remedied, under the stimulus of having to pay 
 exceptionally and sensibly for the local evil. 
 
 Recently, the state has wisely determined to insist on the com- 
 pulsory education of all classes. It is seen that an uneducated 
 people is handicapped in the industrial competition with educated 
 nations, and however much people may declaim against competition 
 within the limits of any one particular community, it is plain that 
 no law can prevent its operation, and that in all its force in the 
 industrial relations of any two communities or more, and that 
 consequently industrial ignorance, however caused (and a highly 
 educated nation can be rendered industrially ignorant by protective 
 laws) is a bar to economical progress and industrial competition. 
 Now for reasons already stated, this charge should be a national 
 one, for the primary education of the young does not, by the very 
 terms of the hypothesis, benefit the individual nearly as much as 
 it does the state. It might be paid entirely by the state. It 
 assuredly should not be paid by the magnitude of the occupancy. 
 It would be much better paid, as it is in the United States, by a 
 house or property (not income) tax, and the control of it should be 
 in the hands of local committees, instead of being based 011 foolish,, 
 frantic, and mischievous examinations. 
 
 But by far the most formidable, and on the whole least defensible, 
 forms of local taxation remain. The researches of modem science 
 have shown that the health of a community must be considered in 
 the supply of pure water, and in the adequate elimination by sewage 
 works of unwholesome and dangerous matter. A district should 
 not be declared habitable, or allowed to be occupied with houses, in 
 which pure water is not forthcoming, and dirt is not effectually 
 removed. Under the same rule overcrowding should not be per- 
 mitted, the building of unwholesome houses should be forbidden, 
 and in general, the public health should be consulted. But the 
 restraint on overcrowding and what is called jerry building, a term 
 I believe imported from the other side of the Atlantic, is, like the 
 inspection of food, a matter of police, and should be defrayed as 
 other police liabilities should be. 
 
 But the supply of water and the removal of sewage are, or 
 ought to be, permanent charges on the owner of habitable land. By 
 the laws of sanitary science, and, what is more important, for the
 
 490 CHARACTER OF LOCAL TAXATION IN ENGLAND. 
 
 purposes of economical inquiry, building land is or should be of no 
 more value than ordinary agricultural land, if these conditions are 
 not complied with. It was from ignorance only that they were not 
 made obligatory by early English law. In the city of London the 
 supply of water reputed to be pure was imposed on the [civic 
 authorities, and assistance was accorded to them for the purpose, 
 The city estate, which lies west of St. James' Street, was granted 
 to the Corporation in early times, in order that it should contain 
 reservoirs for the City supply of water, the streams formerly utilized 
 for the purpose at Paddington being now diverted into the Serpen- 
 tine. In equity then, and 011 economical grounds, the supply of 
 pure water and the removal of sewage matter should be a charge 
 on building land. 
 
 The greater part of the local debt, which now figures as so 
 serious an item in local budgets is due to these permanent improve- 
 ments. In most cases the debt is terminable, that is, the occupiers 
 are constrained to pay off principal and interest, and as I have 
 stated, are engaged in benefiting an estate, the owners of which 
 can and will make them pay interest on the improvement which 
 they have effected at their own cost. The same reasoning applies 
 to workhouses, to prisons, to county halls, and a host of other 
 permanent structures created out of the occupier's money for the 
 landowner's benefit. It is not easy to conceive a system which 
 more completely offends against every canon of economical equity. 
 If outlay is beneficial, immediately or indirectly, it ought to be 
 defrayed by those who secure the benefit. 
 
 But this is not all. The property which is liable to a rate is 
 assessed by the local authorities either in person or by deputies. 
 But there is an appeal from the judgment of the assessor to 
 Quarter Sessions. The rating Act of William IV. bids the Court 
 of Appeal take into account the fair letting value of premises, a 
 direction which is entirely equitable in nearly all cases. But it 
 is not equitable in the vary class of cases, in which the justices 
 in Quarter Sessions are generally interested, viz., their own houses. 
 They have therefore interpreted the clause greatly in their own 
 favour, and county mansions, however costly their construction, 
 are rated at nominal sums, on the plea that their letting value is 
 .an unknown quantity. The Quarter Sessions shrinks from the
 
 MODEBN EXPEDIENTS. 497 
 
 logical conclusion of its own premises, which should be that they 
 must not be rated at all, and attempts a compromise. There is 
 nothing, I believe, which has excited more universal condemnation 
 than this evasion of an obvious duty. There is no practice more 
 dangerous, for the most powerful stimulant to socialism is the 
 conviction that the forces of government are perverted to the 
 interests of a particular class. "When my friend Lord Wemyss 
 declaims against socialism at St. Stephen's in the Lords, it is only 
 wise to trace the circumstances to which this movement which he 
 stigmatises owes its origin. In England socialist opinions are 
 expressions of discontent at existing and indefensible practices, 
 not an organization directed against the very foundations of 
 economical progress. 
 
 Two manifestations have lately been made, indirectly attacking 
 the existing system of local taxation in England. One of these is the 
 enfranchisement of leaseholds by a compulsory process, the other 
 is the special taxation of ground rents. The first is intended, it 
 seems, to obviate the consequences which ensue from the artificial 
 preservation of family interests under the forms of a settlement 
 of land, the second is an assault on the principle which levies all 
 local taxation on the occupier. Now nothing excuses the former, 
 except it be that it purports to supply a remedy for an existing 
 practice which is believed to be mischievous, unless it also urges 
 that in a densely peopled country, everything which distributes real 
 estate is to be commended, everything which accumulates it is to be 
 discouraged. It is, however, open to some doubt whether the 
 strict enforcement of sanitary conditions is not a better remedy 
 against the owners of house property and building land, than com- 
 pulsory sale as a remedy against accumulation. In the United 
 States such accumulation is not only discouraged by public opinion, 
 but by the more drastic effect of levying local taxation to the full 
 on all lands and tenements, whether void or occupied, and by 
 putting this taxation entirely on the owner. But the condition of 
 workmen's houses in the States, to judge from the latest report in the 
 State of Pennsylvania, is worse than in any civilized country, and the 
 rents are enormous. Of course, there is much which is exceptional 
 in the fiscal system 'of America to account for this, but it also 
 implies that facilities for acquiring ownership, undoubtedly 
 
 88
 
 498 CHARACTEB OF LOCAL TAXATION IN ENGLAND. 
 
 present in the States, do not inevitably lead to beneficial 
 results. 
 
 The special taxation of ground rents, except as a remedy to the 
 unfairness of levying local taxation on occupiers only, and as part 
 of the theory of progressive taxation, a very agreeable topic in the 
 economical analysis of finance, is an attempt to levy a special tax 
 011 a special kind of fertility. Fertility, among political economists, 
 represents those exceptional advantages which particular pieces of 
 income-bearing land possess, by reason of their yielding a larger 
 return to the possessor than other pieces do. In ground rents 
 this is proximity to the market. The ground rent of a plot in 
 the city of London is exceptionally high, because the occupation 
 of it gives exceptional advantages for carrying on a profitable 
 business. It may be just and prudent, as Mr. Mill alleged, to>levy 
 special taxes on accidental fertility, i.e., such fertility as is in no 
 sense the creation of the owner, and is due to the recognition by 
 others of the exceptional advantages which the site yields. But 
 to be just, the same liability should be extended to every kind of 
 exceptional and spontaneous advantage, and in the analysis of 
 economical fertility, it is by no means easy to determine what is 
 spontaneous and what is consciously acquired, even in the pos- 
 session of land. Purchasers may, by reason of their own acuteness, 
 anticipate the pressure of demand, and subsequently stimulate it. 
 Are they to be exceptionally taxed because they have been ex- 
 ceptionally acute or farseeing ? 
 
 After the publication of Mr. Goschen's work, in which the 
 author advocated the equal partition of local taxation between 
 owner and occupier, the landowners in Parliament became alarmed. 
 It is constantly alleged that the payment of local taxes by occupiers 
 is merely an indirect payment by owners, and that if the owner 
 paid them in the beginning, the tenant would pay them in the end. 
 But this contention proves too much. If it be true, no harm 
 would acrue to the owner if he did pay them in the beginning, 
 a reversal of practice to which owners show a very rational re- 
 pugnance. Besides, if Parliament transfers any tax from owner 
 or occupier to the consolidated fund, it is inevitable that pro tanto, 
 a present is made to the owner out of the public taxes, and no 
 boon whatever is bestowed on the occupier by such a lightening of
 
 LOCAL TAXATION SUBSIDISED. 499 
 
 local taxation, for the hypothesis is that the landowner can and 
 will exact all the remission in an increased rent. But such 
 reasoning implies that the landowner has a power of enhancing 
 the rent at his pleasure, a position which, if it were affirmed and 
 believed, would be an unanswerable argument for regulating all 
 rents, however voluntary in appearance, by the state. In fact, he 
 has no such power, as recent experience is proving, in the decline, 
 not of agricultural rents only, but in the slower reduction of house 
 rents. The value of building sites, and of houses erected on them, 
 is determined by the ordinary laws of value. It is subjective, i.e., 
 it lies in the discretion of the occupying applicant, not objective, 
 i.e., in the will of the consenting owner, unless, of course, the 
 state assists him to some extent in fixing a monopoly price. 
 
 The parliaments of 1868 and 1874 began the transference of 
 considerable masses of local taxation from the occupier to the 
 consolidated fund. All the charges of prisons were transferred in 
 this way, all the charges of lunacy, and a notable amount of the 
 charges on roads. These were ancient liabilities on land, and on 
 the profit of its use. Since the date at which this practical 
 answer to Mr. Goschen's suggestion was made, no new tax of 
 a substantial kind has been imposed ; some have been reduced, 
 and very urgent demands in the interest of manufacturers have 
 been put forward, especially for the reduction or abolition of the 
 taxes on gold and silver plate, and on the use of carriages, taxes 
 alleged to be exceedingly injurious to two British manufactures. I 
 have already referred to the budget of 1885 and its failure. As a 
 consequence, these remissions have been made entirely at the cost 
 of those who pay income tax; and when 1 investigated the subject, 
 and based a motion in the House of Commons on it near two years 
 ago, I found that half the income tax had become a subvention to 
 local taxation, and, according to the ordinary interpretation, to 
 landowners, in relief of traditional charges. 
 
 Some of the burden of local taxation, indeed of any taxation, 
 must rest on the person who first pays it. This is, I believe, the 
 case even in those excise and customs duties which, on the theory 
 of finance, are transferred from dealers to customers. I do not 
 otherwise understand the unanimously expressed grievance of the 
 tobacco dealers at Sir Stafford Northcote's increased tobacco tax in
 
 500 CHARACTER OF LOCAL TAXATION IN ENGLAND. 
 
 1878, since remitted, or the equally unanimous anticipation of what 
 the effect of the increased beer tax in the budget of 1885 would be 
 on the profits of brewers. The power of transferring a tax is one of 
 degree. It is greatest when the person who primarily pays it bases 
 his calling on further relations with a body of consumers, and this 
 quite apart from the check to business which increased taxation has 
 a tendency to produce. It is least when the person who pays it 
 first has no further relation with customer and consumer, and 
 therefore has his power of transmission hindered ab initio. And so 
 I conclude that, if a moiety of local taxation were paid by the 
 owner, and the other moiety by the occupier, on the principle laid 
 down by Mr. Goschen, the former would almost certainly be dis- 
 abled from transferring his tax, and the latter would not be much 
 affected in all new transactions. 
 
 With these views, and on these grounds, I made my motion in the 
 House of Commons on March 23, 1886, when I proposed that for the 
 future local taxation should, as in Scotland and Ireland, be divided 
 into moieties, of which the owner should contribute one part, the 
 occupier another, power being given to the occupier to deduct the 
 owner's moiety from his rent. This motion I carried by a majority 
 of forty, after a prolonged debate. In less than three months, the 
 decision of the House of Commons was followed by a political 
 cataclysm. But I have no doubt as to what the solution of the 
 question will hereafter be, and that the precedent of 1886 will be 
 followed in the settlement of a system which is still exciting 
 increasingly grave discontents.
 
 XXIII. 
 
 THE POLICY OF GOVEENMENT IN UNDERTAKING SERVICE 
 AND SUPPLY. 
 
 The tendency of government to extend its functions, and its motives 
 The economist and the politician The Post Office and its manage- 
 ment The purchase of the telegraphs Jealousy at tJie functions 
 of government The construction of railways in England The 
 United States and the European continent Arguments for and 
 against their acquisition by the state Mr. Mill's scheme for 
 making the state a universal landlord The practice of Parliament 
 in making purchases or sanctioning them Government as a pro- 
 ducer Dockyards The defence of the system The frauds of 
 contractors Precautions against them. 
 
 THEKE is always a disposition on the part of governments to allege 
 that the Administration can carry out the business of private life 
 and private action better than individuals can. I have illustrated 
 to some extent this habit of mind on the part of more or less 
 permanent officials in my lecture on the limits of laissez faire. 
 I have given some account of the facts which bring about or justify 
 this tendency in the last lecture on the origin and development of 
 local taxation. Now the general inclination of governments to 
 undertake such functions is partly due to fear, partly to conceit. 
 There are, and will be, occasions on which administrations, justly 
 dreading criticism, wish, as far as possible, to keep certain processes 
 of action entirely in their own hands. In Europe at present nearly 
 all railways from the Bhine to the border of Asia owe their 
 initiative and their control to government. They are primarily 
 the mechanism for military concentration. Again, it is natural
 
 502 THE POLICY OF GOVERNMENT. 
 
 for an administration which represents the will or intelligence of 
 the central authority to affirm that the limits of its action should 
 be extended, that it may prudently be entrusted with details, and 
 be allowed to supersede, or at least to control, spontaneous efforts. 
 It must be allowed that the results of this meddlesomeness are not 
 reassuring. I have only taken one instance of the love of interfering 
 in a part of Europe. The consequence has been that the inevitable 
 errors or disappointments of government are open to destructive and 
 malignant criticism ; that powerful statesmen have had to oscillate 
 between deference to domestic discontent and deference to foreign 
 authority, sometimes to make friends with the red international, 
 sometimes with the black, sometimes with the yellow; and that 
 in those parts of Europe, where the initiative has been taken 
 incessantly, the authorities have as incessantly been met with 
 anarchy. 
 
 It is much better, even if they disobey it in spirit, for govern- 
 ments, in the letter at least, to acknowledge that they are acting 
 under a popular mandate. The effect is that by doing so they 
 obviate any criticism beyond that of having misconceived their 
 mission, and experience tells us that an error in generalities is more 
 readily pardoned than one in details. I remember some time ago 
 that an old general with whom I had a slight acquaintance told me 
 that he had been once appointed governor of a Crown colony, in which 
 the function which he held was coupled with that of being Lord 
 Chancellor, or principal judge in equity. He waited on the minister 
 to whom he owed his place, and expressed his doubts as to whether 
 a person, all whose experiences were military, could be trusted with 
 purely legal functions, and was assured, by being told that as long as 
 he gave no reasons for his legal decisions, he had no cause for alarm. 
 Now this is not a satire on law, but an eulogy of it, because it alleges 
 that equity is natural justice. But it is also of great practical 
 value, for as long as you let your neighbours supply reasons for 
 your action, you are in a far safer position than you would be if 
 you gave the reasons yourself. And by parity of reason, if you have 
 to state the grounds on which you take up a particular line of 
 action, the lines of action should be as few as possible. I am per- 
 suaded that much of the domestic trouble with which foreign 
 governments have to grapple is due to the fact that they have
 
 THE ECONOMIST AND THE POLITICIAN. 503 
 
 taken so many initiatives, and have given so many disputable 
 reasons for their action. 
 
 Now, though an economist should abstain from the criticism of 
 political action, he always has to discuss social motives and 
 practices, to search into the causes which bring about the former, 
 and to predict the consequences -which follow from the latter. The 
 economist and the politician are equally busied with human society, 
 but the function of the economist is limited by observation and 
 analysis, that of the politician is to proceed to action. Public men 
 have often had to do many things which economists naturally 
 criticize. Economists have been known to draw conclusions which 
 public men are constrained to disregard, or perhaps to repudiate. 
 Perhaps the principal use of economical inferences is that which is 
 derived from what I am in the habit of calling negative inductions, 
 under which it is shown that premises, in the first instance 
 seductive or attractive, have disastrous effects. Not much less 
 valuable are the positive inductions, by which it may be shown 
 that private rights, admittedly sacred up to a certain point, may, if 
 carried to excess, inflict serious evils on society. The earliest 
 economists, notably Adam Smith and his predecessors in France* 
 chiefly elaborated negative inductions. The best efforts of their 
 successors have been directed to those positive inductions which 
 discover the strain that will be put on society by the undue accep- 
 tance of private rights. You will remember that, on very high 
 authority, modern writers of a more rigid school, who have insisted 
 on the acceptance of their conclusions in practical life, have been 
 recommended to betake themselves to Saturn. 
 
 Now I have made this short preface to my lecture to-day in' order 
 to point out to you that a prudent administration will be very 
 cautkms in either directing private enterprise or in rivalling it. 
 The less it takes in hand, out of its legitimate sphere, of adjudicat- 
 ing, through the machinery of Parliament, on the best means for 
 reconciling contending claims, the less does it invite adverse 
 criticism. The function of such an equitable interpretation is 
 difficult enough, and the decision will constantly be challenged. 
 But it has to be made, even though long, and perhaps useful, delay 
 is occasioned by the collection of evidence, lint to undertake many 
 more offices than that of a judge in equity on the principles of
 
 504 THE POLICY OF GOVERNMENT. 
 
 legislation, where the parliament, with the administration, is com- 
 petent to take evidence and arrive at a decision, is the acceptance 
 of a function which needs a constant apology. Now, there are 
 occasions on which the apology is complete, and the public admits 
 that government has rightly appropriated to itself the supply of 
 certain services. It is much more disputable whether government 
 is ever wise in undertaking the economical function of production. 
 Almost all the evidence as to the latter action is hostile to the 
 practice. An examination of instances is the best means of arriving 
 at reasons for determining on general rules. 
 
 The supply of a service is best illustrated by the Post Office. 
 The origin of this institution was quite as much a measure of 
 police, as it was to serve a commercial convenience. It was 
 instituted under Cromwell's government, and the Act of the 
 Commonwealth which created it states that it was to be "for the 
 benefit of commerce, for the conveyance of government despatches, 
 and for the discovery of wicked and dangerous designs against the 
 commonwealth." The Act of 1657 was ratified at the Restoration, 
 and the Post Office soon became a notable source of royal revenue, 
 being early charged with pensions. The convenience of the service 
 was great, and it was soon made compulsory, the rates charged for 
 conveying letters being very high, though comparatively slight 
 when contrasted with the old cost of sending them by private 
 hand. In course of time the Post Office profits were transferred to 
 the general revenue. In 1840 the rate was reduced on the plea 
 'that the distribution, and not the weight of the letter, was the 
 principal charge on the service. It was supposed that the revenue 
 under the new system would soon equal the amount received under 
 the old, but this did not happen till after the lapse of a consider- 
 able time. Hence the experiment was deemed premature by Peel, 
 who foresaw that no little experimental boldness would be needed, 
 in order to get rid of annual deficits, and make the revenue 
 elastic. 
 
 The economical defence of the Post Office system is that a service 
 is performed by the government with a punctuality, dispatch, speed, 
 and certainty which could not be achieved by individuals under any 
 competitive system, and that in this function, at least, a state 
 monopoly of service is thoroughly justified. It is further alleged,
 
 THE POST OFFICE. 505 
 
 that through this agency a cheap service is carried out indeed, but 
 that by the fact of the monopoly a considerable revenue is also 
 acquired. Now it is highly probable that a considerable part of 
 this contention is correct. The government was anxious to secure, 
 tinder the old system, a notable revenue. But however thoroughly 
 Parliament would have granted them a monopoly of collection and 
 distribution, it is certain that the results to the government would 
 have been disappointing if those ends to which I have alluded had 
 not been satisfied, and that the Post Office would have had in- 
 terloping rivals, as indeed to some extent they did have under the 
 old rates. But much of the success which has attended the Post 
 Office in this country is due to the constant public criticism to which 
 its details have been subjected and its efficiency examined. This 
 criticism, too, came from exactly those classes whose influence any 
 government would have been anxious to conciliate, and unwilling to 
 offend. The Post Office, in short, is as much the work of the 
 people as it is of government, for it owes its usefulness and there- 
 fore its efficacy, to the constant supervision it submits to. 
 
 The peculiar position which a government occupies towards the 
 people whose affairs it administers has made it decline to become a 
 bailee, that is, to be responsible for the safe delivery of that which 
 it conveys. The fact is important, as it shows how cautious a 
 government should be in competing for a service which might be 
 satisfied by private hands, unless it has an exceedingly strong case 
 to show. Now it is part of the Common Law that a common 
 carrier is liable for the goods which are entrusted to his custody, 
 though this liability has been from time to time limited, unless 
 special terms are made with him for transmitting articles of 
 extraordinary value. But soon after the Post Office was instituted, 
 as early as the reign of William III., the judges decided that the 
 Post Office was not liable for the safe delivery of letters, and the 
 case has been determined again to the same effect. The reason, I 
 apprehend, is to be found in a well-grounded suspicion that the Post 
 Office would be treated more harshly by juries than common carriers 
 would be, and that in consequence the liability must be entirely 
 repudiated, because the contingency would assuredly be abused. 
 Even now when the business of the Post Office has been so greatly 
 extended in several new directions, now that it has become banker,
 
 506 THE POLICY OF GOVERNMENT. 
 
 carrier, is made an annuity office, and lias undertaken the trans- 
 mission of telegraphic messages it still, except to a limited amount 
 and under certain circumstances only, declines to acknowledge 
 similar liabilities to those who supply analogous services. 
 
 The difficulty of a government in undertaking a public service is 
 further illustrated by the purchase of the telegraph companies. 
 The government was anxious to obtain the monopoly of all 
 messages which were transmitted by electricity, aiid negotiated the 
 purchase of the various companies which had hitherto supplied the 
 want. The purchase money was enormous, and out of all propor- 
 tion to the value of what was bought. The government might 
 with perfect justice have entered into the field of competition itself, 
 and have forced its rivals to submit to more reasonable terms. So 
 high was the price, that Mr. Lowe, then Chancellor of the 
 Exchequer, told me that he was strongly disposed to throw the 
 whole scheme over, for that the bargain gave nearly the price of 
 consols for a capital and plant, which would require to be replaced 
 every twelve or fifteen years. No corporation would have given any 
 such price for that which the nation was called 011 to purchase. 
 But the government was held to the bargain and the purchase was 
 effected. There is no entity against which the doctrine of vested 
 rights and extravagant compensation for compulsory purchase is 
 pressed with so much energy and so much success as it is against 
 the Treasury ; and I may say (till recently, when I had the satis- 
 faction of arresting one of these attempts) with such ample, such 
 profuse concessions made by Parliamentary authority, when the 
 details are settled by a committee. " The revenue," says Lamb, 
 with much truth as well as humour, "is an abstract which I don't 
 care much about." The effect of this bargain is, that with better 
 facilities than any other country, telegraphic messages are dearer in 
 England than elsewhere, and the receipts from the service hardly 
 pay interest on the purchase money. 
 
 If the government then attempts to acquire the machinery of 
 an existing service hitherto supplied by private enterprise, it has to 
 pay an excessive price for the acquisition. If it attempts rivalry it 
 is met by the most jealous obstruction, and very effective obstruc- 
 tion too. Experience of Parliamentary procedure, not here only, 
 but in other countries as well, alone can inform people as to the
 
 THE PURCHASE OF THE TELEGRAPHS. 507 
 
 difficulties of remedial legislation, when such legislation alarms 
 existing interests. I am here particularly referring to postal notes, 
 and to deposits in Post Office savings banks. Now there is con- 
 siderable debate about the expediency of issuing a small note 
 circulation. The advantages are that it saves the wear of a gold 
 currency, and is a convenient means of transmitting small sums by 
 post. The objections alleged are that the system would make the 
 reserves of bullion so much the less, and that therefore bullion 
 operations through the foreign exchanges would be subject to more 
 frequent fluctuations ; that the tendency of such a circulation, the 
 paper acting as money, would tend to artificially heighten prices, 
 or at any rate to induce disturbances in value which would be 
 injurious. Another reason which I do not remember to have heard 
 alleged in debate, is that a power of such issues conceded to private 
 banks, or to banks having a power of local issue, would bring 
 persons within the risk of loss, who had no interest in the issuing 
 bank, and DO means of checking its action, that, for example, in 
 such a case the Warwickshire working men might have been 
 constrained or misled into taking some of the Greenways' notes. 
 These difficulties do not apply to the issue of postal notes. But 
 the bankers in the House of Commons finally constrained the 
 government to levy a heavy commission on the issue, to limit the 
 amount of the note, and to limit the time of its legal circulation. 
 In the same way they put a limit on the amount of deposit which 
 an individual might make yearly with a post office, and the total 
 amount which he could hold in the form of security. It is difficult 
 to avoid the conclusion that they fancied that there was some 
 danger to bankers' deposits in the change. There are then con- 
 siderable difficulties when the government of the United Kingdom 
 undertake a competing service. It is certain either to be checked 
 and controlled if it takes the initiative, to be mulcted if it attempts 
 to purchase. 
 
 Less jealousy is shown to corporations which undertake service 
 or even supply. Parliament would not, I am sure, make very 
 satisfactory bargains upstairs for corporations seeking to purchase 
 compulsorily, as I very well know from my experience on com- 
 mittees. But generally well-managed corporations negotiate the 
 terms first, and come to Parliament for confirmation only. Besides,
 
 508 THE POLICY OF GOVERNMENT. 
 
 if they have any local powers, they have that of competing supply, 
 and such a power greatly expedites negotiation. Hence it is the 
 practice with corporations to undertake supply. They have 
 generally purchased or created gas and water works. Under the 
 impression that the process was complete enough for economical 
 use, they obtained some two or three years ago the power of 
 supplying the electric light. But a little reflection will show why 
 these services are performed more satisfactorily by corporations than 
 they would be by government. The administration is more close to 
 the people. Economies in administration and supply are more 
 sensibly and more immediately felt, and the machinery of local 
 government is far more under the control of the ratepayers than 
 the expenditure of a government is under the control of Parliament. 
 The policy which makes the existence of a Parliament depend on 
 the acceptance of the budget and the estimates confers, in my 
 opinion, powers on an administration which are not in the public 
 interest. I do not believe that municipal affairs could be conducted 
 with any continuity or certainty, if the rejection of financial 
 schemes by a town council was the signal of its dissolution and 
 re-election. 
 
 Furthermore, I do not think that the local taxation of towns 
 would be borne with patience, if the economies of the local 
 authorities were subjected too entirely to vested interests. If I 
 made myself at all clear to you in rny last lecture, I showed you 
 how onerous and, on economical grounds, how indefensible many of 
 them are. But they have at least the semblance of self-imposed bur- 
 dens. To heighten them by adventitious charges would be to throw 
 an unwelcome light on their incidence and their equity. I am ready 
 enough to acknowledge the economy of the quarter sessions, on 
 which the advocates of the system dwell. If they added extra- 
 vagance to the obvious inconvenience of their administration, the 
 institution would long since have been revised. When they were 
 entrusted a century ago with the function of fixing the labourer's 
 wages, they found it an exceedingly unpopular thing to issue a 
 considerate scale. 
 
 I have dwelt on the case of the Post Office and its details at some 
 length, and have touched lightly 011 the powers which corporations 
 have acquired and use for the purposes of rendering supply and
 
 THE CONSTEUCTION OF RAILWAYS. 509 
 
 service to the burgesses of municipalities, in order that I may deal 
 from one point of view only with another public service. I shall 
 reserve to a separate occasion the very important question as to the 
 control which the state should exercise over the means of travel and 
 the carriage of commodities. I purpose on the present occasion to 
 merely deal with that of the acquisition of railways by the state. 
 
 In England railways have been entirely constructed by private 
 enterprise and private capital. The projectors of these undertakings 
 have planned them, got government sanction for them through the 
 two Houses of Parliament, procured the requisite land for them, 
 constructed them, enlarged and extended them, and worked them 
 entirely at the expense of the shareholders. The nation, through 
 the administration and Parliament, has given or granted them 
 nothing whatever, but has put on them outrageous and indefensible 
 expenses, expenses which should have been published as preliminary 
 charges, in order that the English people might see how these pub- 
 lic undertakings have been fleeced. So heavy were they, that we 
 owe to them that railway travelling and freight are necessarily 
 higher here than in any other civilized country. In no other has 
 the whole cost been borne by private enterprise. Even in the 
 Um'ted States the government granted the great railways large 
 blocks of land on either side of the line, the subsequent sale of 
 which has been of great advantage, while in the United Kingdom 
 by a standing order of the Lords, the railways were jealously ex- 
 cluded from getting a single square yard beyond what was needed 
 for their way, sidings, and stations, so that they have often had to 
 pay heavily for the very fertility or adventitious value which they 
 have created. 
 
 In France the land was given by the state, the construction of 
 the line, property in which was conceded for a long term of years, 
 being the work of private enterprise. In Belgium, Germany, Italy, 
 Spain, &c., they were almost entirely constructed by the state, and 
 are under state control. In Eussia they are entirely the work of 
 government, the purpose of the way being wholly military. In 
 British India and the Colonies they are the product of British 
 capital, the interest on the loan, sometimes on the working of tho 
 railway, being guaranteed by the Government of India or the 
 Colonies . They are nearly all the work of the last fifty years, and
 
 510 THE POLICY OF GOVERNMENT. 
 
 certainly in no period of the world's history has so much capital 
 been advanced and expended on any public works as has been laid 
 out on these roads. 
 
 Now, there are many persons who conclude that it would be well, 
 if by some gigantic operation, these undertakings became in Eng- 
 land the property of the state. " The operation," they say, " is 
 very large, but it is an operation on paper only. Railway transit," 
 they say, " has so completely superseded all other modes of convey- 
 ing persons and goods, that it is not only a necessity, but the 
 public is as much in debt to the shareholders of railways, as if the 
 capital, estimated at its dividend-bearing value, were inscribed with 
 the rest of the public debt in the books of the Bank of England. 
 Competition of any serious kind with the great lines is out of the 
 question, and however much it be affirmed in theory would consti- 
 tute, if it were seriously thought of, much more, if it were put in 
 practice, a gross breach of faith. Nor is there a genuine competition 
 between the great lines, from which Parliament expected so much. 
 The companies have found out that competition at low prices is 
 ruinous, and have accepted the younger Stephenson's maxim that 
 where combination is possible, competition ceases. The directors 
 try to encourage traffic, cautiously, but with growing intelligence. 
 They put their fares as low as they can, for they know that high 
 fares check travelling. Their only competition against each other, 
 when they run from and to the same places, is that of who shall 
 convey passengers and goods with the greatest rapidity and 
 punctuality. In England the railways are all made, and the use 
 which can be made of railways has been exactly tested. We know 
 all that we want to know about them, and though improvements in 
 detail may be effected, these are minor matters compared with 
 what has been done. Their value, estimated from their earnings 
 and dividends, can be exactly calculated." 
 
 "The saving of cost," they go on to say, "consequent on the 
 acquisition of railways by the government would be enormous. 
 Without in the least degree curtailing the comfort or convenience 
 of passengers and traders, a great economy might be made in work- 
 ing expenses, by weeding out superfluous and competing trains. 
 "Why in the world should a train from London to Manchester start 
 and arrive at exactly the same time, by the North-Westem and the
 
 STATE OWNERSHIP OF RAILROADS. 511 
 
 Midland, and arrive at exactly the same time, each at its destina- 
 tion ? Again, how great would be the saving in getting rid of these 
 innumerable boards of directors, their fees, their right of free user 
 over all the lines with which their own is brought in contact. One 
 half or more of these officials could be disposed of, the efficiency in- 
 creased, and the money saved. Then again, Parliament would be 
 rid of the squabbling over the various Kail way Bills, the partisan- 
 ship in the House of Commons, the unseemly and costly struggles 
 upstairs, the waste of the Committees' time and temper. The time is 
 ripe for the conversion, the value of the property can be easily ap- 
 praised, and the public which, as you say, has really kept the Post 
 Office efficient, would have as extensive and as healthy an influence 
 on the railways." 
 
 No doubt a very strong case may be made out for the transaction. 
 But, on the other hand, " It is a very serious thing to hand over to 
 the administration the whole mechanism of transit. Nor for many 
 reasons is the case of the Post Office and that of the railways parallel. 
 In the conveyance of letters, distribution is everything, nearness and 
 distance are almost unimportant factors. In railways the latter are 
 all important. Then the non-liability of the Post Office as a carrier 
 is a minor inconvenience, but life and property would be seriously 
 imperilled, if the government declined, 011 its own account, those 
 liabilities which it has wisely imposed on railways, in respect of 
 passengers. The railway authorities, by the threat and by the 
 reality of substantial damages, have been obliged in self-defence to 
 undertake those precautions against risk, which have made railway 
 travelling almost the safest business one can undertake: They 
 would never have done so much but for the law. Is it reasonable to 
 believe that a government official will be influenced by these alarms ? 
 Dividends are nothing to him, and the government, if he be ever so 
 negligent, will be pretty sure to shield him. We shall rue the day, 
 if in order to diminish danger and lower cost, we are hereafter called 
 to travel at the German rate, thwarted and badgered at every turn 
 with a number of insolent government nominees, who will consider 
 their places to be freeholds, and use us as such officials do now, 
 when we have experience of them. You say that competition is re- 
 duced to that of dispatch, punctuality, and, I may add, uniform 
 civility. Are we to .expect these when, on undertaking a journey,
 
 512 THE POLICY OF GOVERNMENT. 
 
 we are reduced to Hobson's choice, and must accept what an officer 
 chooses to offer us ? We shall lose more than we gain by handing 
 over our railways to a central government office." 
 
 " Besides, experience and prudence teach us to curtail rather 
 than to extend the functions of government. Many of us think that 
 centralization has been carried a great deal too far, that Parliament 
 undertakes what it cannot possibly carry out, that in consequence 
 the administration, and especially the permanent officials, are the 
 Legislature, and the two Houses are becoming more and more, the 
 one a debating society, the other a pageant. The proposal which you 
 commend will enormously increase the official class, will put one of 
 the most important instruments' of modern society into the hands 
 of the government, and put us under a bureaucracy with a witness. 
 You know, since Monk's Bill admitted them to the franchise, how 
 importunate, how insatiable the Civil Service is, how they com- 
 pete by hundreds for the least vacant place, how they grumble and 
 sulk about their pay and promotion when they get in. Are all our 
 railway officials of the future to have freehold offices, as they will 
 assuredly claim to have ? Every one knows what trouble there is 
 in dockyards, what pressure is put on government to retain useless 
 hands and to continue useless works. Every town in which railway 
 men live for the future, supposing your scheme be adopted, will be 
 a focus of conspiracy against the public purse. It may be doubted, 
 whether the economy which you expect from abolishing boards of 
 directors will come to much, when the whole of these new officials, 
 from the highest to the lowest, will be shouting for short hours and 
 long pay. It is very possible, perhaps, that in foreign countries offi- 
 cials are content with moderate salaries. Perhaps they compensate 
 themselves by ill manners. Our experience is different. We shall 
 certainly have to pay the high salaries, and are pretty certain to get 
 the bad manners into the bargain." 
 
 " You say that the value of these properties can be exactly calcu- 
 lated on the basis of their past earnings, which are on record. But 
 what reason is there to believe that Parliament will accept the cal- 
 culation as the basis of purchase ? If it does it will go against all 
 its traditions. It has long acted on, and can hardly refuse to con- 
 tinue its 10 per cent, compensation for disturbance, above the 
 valuer's price. It was prepared, till the theory was overset by some
 
 THE CASE AGAINST IT. 513 
 
 of us, to take into consideration the clause in the old railway Acts, con- 
 tained, we believe, in all, that a company should limit its dividends to 
 10 per cent., as a pledge that such a maximum should be taken into 
 account in dealing with minimum earnings. And then where are 
 you to get your valuer ? Is it to be a gentleman like Mr. E. Smith, 
 who valued plant for us as though it were as indestructible as matter, 
 and wanted us to give this actuarial value, with other items for pro- 
 perty that was not worth 15 years' purchase at best? You have had 
 experience of a Parliamentary purchase in the telegraph companies, 
 is it likely that you will get better terms with the railway people ? 
 The telegraph stockholders held out for their price, and the 
 government gave in. Is the railway interest less strong ? The 
 directorate in the House of Commons is not a weak body, the pro- 
 prietary is an overwhelmingly strong one. Outside the House it is 
 not to be trifled with. According to the latest returns which have 
 been furnished, the proprietors of stock, shares, and debentures have 
 an average of 14 a year from their holdings. Of course much of 
 the stock is held in large masses. If the conversion is to take place 
 every one of these holders will be on the alert to prey on the govern- 
 ment, and to insist that the concession should be favourable to him. 
 The prosperous railways will point to their solid success, the un- 
 prosperous ones to their public services and to their deferred hopes. 
 As it is they can blame their fortunes or their directors, but 
 assuredly they will look to government, i.e., the taxpayer, to make 
 them amends for what they have lost, if the conversion is to come." 
 The arguments which I have given you in this sketch for and 
 against the purchase of railways in the United Kingdom by the 
 government are by no means imaginary. I have used them, I 
 leave you to conclude which way, over and over again, during the 
 time, not passed yet, in which the dissatisfaction of traders with 
 railway freights has been made the subject of one or two abortive 
 Bills, and is like to be the subject of many more. But I venture 
 on predicting that if government seriously inclined to the pur- 
 chase, and hinted that the traditionary practice of Parliament 
 would be followed in the valuation, the hubbub would cease as sud- 
 denly as the storms raised by ^Eolus was when Neptune put his 
 head above the waters. But whether the purchase would be as 
 satisfactory to the nation as it would be to the stock and shareholders, 
 
 84
 
 514 THE POLICY OF GOVEENMENT. 
 
 and whether the management would be as economical, and the 
 service as satisfactory to the public, is a question on which, at 
 present I believe, opinion decidedly inclines in one way. 
 
 Some years ago, my late friend, Mr. J. S. Mill, seriously proposed 
 that the State should constitute itself the universal landlord of the 
 British Islands. Of course, for Mr. Mill was by no means disposed 
 to repudiate the rights at present enjoyed by the living owners of 
 property, though he had very strong views about the ownership of 
 intestate estates, he conceived that the acquisition should be made 
 on the basis of an equitable purchase, in which the full value of his 
 interest would be given to the dispossessed owner. In the valuation 
 of such interests, there would be strong claims for compensation on 
 the ground of the disturbance of traditional associations, in the 
 demand for which the men who have done nothing but disgrace 
 their ancestral origin would be as loud advocates of a sentimental 
 price as those have, whose personal merit is as great as that of any 
 ancestor with whom their holding is associated. Now when under 
 the law, say for a street improvement, a tenement in which, to the 
 scandal of municipal or other authority, human beings have to live, 
 but pigs should not be housed, had to b'e appropriated for public 
 works, the owner of the abomination obtained over and above the 
 valuation price, never lower than the true price, 10 per cent, for 
 disturbance, and till recently a valuation based on the rent which 
 he or his sub-lessee contrived to extract from misery. I have no 
 doubt that Parliament, if we assume that the scheme came within 
 a reasonable prospect of completion, would lean to its traditions, 
 and that the nation, if Mr. Mill's plan had been adopted, would 
 have had to pay fully 20 per cent, above the existing value of 
 the property. I say nothing here about the wisdom or justice of 
 the various Irish Land Acts ; but any one who studies the claims 
 put forward at the landowners' conference can form an estimate 
 from the demands made on the part of men, who have not a shred 
 of Parliamentary influence left, what would be expected by those 
 who still have and are like to have a great deal of Parliamentary 
 influence. 
 
 I have no doubt as to what were the motives which induced Mr. 
 Mill to contemplate this gigantic operation. He knew that the rent 
 of all kinds of land available for human occupation, agricultural
 
 ME. MILL AND THE LAND. 515 
 
 and other, had risen from the remotest time for which there was 
 any evidence in this country, and that it was rising still. He knew 
 that the rise of rent was due to the increase of demand for land, and 
 lie concluded, with Eicardo, that this resulted from the pressure 
 of population, and the law of diminishing returns, when some of us 
 had begun to see that, given free trade in food, of which Mr. Mill 
 was a staunch advocate, the cause in the rise of rent, whatever it 
 might be of, was due to the expectation of increasing profit, that 
 hitherto trade and agricultural profits had been progressive or 
 seemed to be progressive, and that in consequence there was a 
 steady competition for occupancy. Believing, then, that rent was 
 increasing by reason of the increase of demand, and believing that 
 as population increased, the demand would be still more keen, he 
 treated as unimportant or less important, the continuity of trade 
 t&id agricultural profit, and the consequent necessity that capital 
 and skill must be attracted to these callings, and must be provided 
 with obvious and adequate guarantees. He never contemplated 
 the case of agricultural capital being destroyed by the mixed opera- 
 tion of the tenant's ignorance and the landlord's cupidity, and with 
 it the skill which makes a profit and therefore makes a rent. Now 
 Mr. Mill was ready, being an entirely just man, to recognize the 
 present value of a monopoly rent. He was under the impression 
 that it would go on increasing in the future, and he gave the name, 
 now historical in more senses than one, of the unearned increment 
 to this future growth. In order to secure this future increment, 
 he recommended its present purchase. He propounded his scheme 
 in London more that twenty years ago, and asked me to come and 
 support him. I told him that I thought him in the wrong, and he 
 pressed me the more to come and attack him. I did so to the best 
 of my power, though I did not then possess a tenth part of the 
 information which I have since collected as to the history and 
 development of rent. 
 
 One can of course be wise after the event, and every one can see 
 that if, more than twenty years ago, Mr. Mill's scheme had passed 
 into the region of practical politics, the purchase would have been 
 disastrous, nay ruinous, to the people of the United Kingdom, and 
 that probably popular discontent would have led to the bargain 
 (being repudiated. I do not pretend to assert that I foresaw the
 
 516 THE POLICY OF GOVERNMENT. 
 
 fall of rents, consequent on bad harvests in England, decreasing- 
 agricultural capital, discouraged skill, and cheap freights. I did 
 not, till I learned twelve years ago, how much agricultural capital had 
 already shrunk, foresee the inevitable issue, and then foresaw it only 
 in part. But more than twenty years ago, I had learned that the 
 Kicardian theory of rent was a metaphysical conclusion, that its 
 progress and even its continuity, under free trade, was due to 
 an intelligible but precarious set of conditions, in which the fertility 
 of land, the pressure of population, and the law of diminishing 
 returns played but an unimportant part, and that, very possibly, 
 the unearned increment of the future was entirely hypothetical and 
 probably visionary, certainly too doubtful to admit of being made 
 the basis of a gigantic operation. 
 
 But let us suppose that the unearned increment had gone on 
 increasing, that the purchase had been made on reasonable terms, 
 and that, on the whole, the dispossessed landowner would have been 
 glad, at the present time, to recover his property on the terms 
 of a compulsory purchase made twenty years ago. What would 
 have been the situation ? The cultivation of the soil would have 
 exchanged a landlord, who is, after all,' a human being, with 
 sympathy and consideration, at least at times, with some desire 
 to live at peace and goodwill among his neighbours, for a govern- 
 ment office, the servants of which, by a very natural impulse, 
 would manipulate the whole estate by a set of hard inelastic rules. 
 They would, by the very nature of their duties, be unaffected by 
 all sympathetic influences. Their first object would be to earn 
 the interest on the purchase money, and to insist on its punctual 
 payment, come what would. The business of the office would 
 be enormous, and prodigiously costly. The farmers of the state 
 lands would get no mercy, and as for the unearned increment, 
 if it had gone on even in the way that farmer's rents rose between 
 1853 and 1873, it would have been entirely swallowed up,, in the 
 costs of the office. Even under the present system, the tenant 
 of Crown lands is by no means the most contented of farmers, 
 the rent of Crown lands, by no means cheaply collected. Under 
 the proposed scheme, the tenants would soon be in rebellion, and 
 the English plan of campaign would be far more minatory, than 
 the nroject which bears that name in Ireland. Even the worst
 
 PURCHASES BY PAELIAMENT. 517 
 
 landlord has some knowledge of his property and its capabilities, 
 the state landlord has no knowledge but what he pays for. 
 
 This is by no means, however, the whole case. Governments are 
 essentially weak, that is, they are peculiarly open to indirect 
 influences, and those governments which make the greatest show 
 of firmness, weakest of all, because to be firm with one set of 
 people makes it necessary to conciliate another set. For in an 
 administration, the law of self-preservation is exceedingly keen, 
 and the means which would be adopted for self-preservation, which 
 might be disdained by an individual, represent only a divided 
 responsibility in a government, to say nothing of the fact that, 
 under the exceeding leniency of our political system, even the crimes 
 of a government now go entirely unpunished. As a consequence, 
 the new land office would swarm with jobs. I feel convinced that 
 the virtue of no Parliament would resist the temptations which 
 would aggregate in a land office, which would be professedly the 
 only landowner in the kingdom, which would be managed indeed 
 by clerks and surveyors, but would be manipulated by the adminis- 
 tration. Even the Woods and Forests office has been charged 
 with the gravest scandals, with the offence of corrupt favouritism, 
 and this not in historical times only, but in very recent cases. Before 
 the Colonial Office surrendered the Crown lands hi the Colonies 
 to the Colonial governments, there was evidence of the grossest 
 jobs perpetrated on behalf of the soundest patriots in the two 
 Houses, and indeed outside them, for persons in very high places 
 were said to have been implicated in transactions which we should 
 call fraudulent. The unearned increment may be a reality. I am 
 disposed to think it no better than a hypothesis. But be it ever 
 so real, we may buy gold too dear, and universal corruption with 
 universal discontent is too heavy a price for the unearned 
 increment. 
 
 I reasoned in this way twenty years ago, in opposition to my 
 friend's suggestion, and longer experience has not changed me. 
 Of course the scheme to which I referred, though I believe mis- 
 taken, was scrupulously honest. There is another scheme for the 
 nationalization of land, on which I hope to comment in a future 
 lecture. I only say in passing that this later scheme is not inten- 
 tionally dishonest. It is exceedingly startling, but it purports to
 
 518 TEE POLICY OF GOVERNMENT. 
 
 be the resumption of a neglected right, the restoration of a system 
 of which negligence and cupidity have permitted the violation. As 
 I have more than once said, the crudest economical fallacies have 
 generally some truth, always much plausibility in their composi- 
 tion, and it is not wise or just to denounce those who astonish 
 us with their theories, as being brigands and anarchists. Long 
 experience and labour given exceptionally to the study of economical 
 society, have convinced me that there are reasonable causes for all 
 discontents, however unreasonable and nugatory are the remedies 
 which discontent avers to be proper, righteous, and necessary. 
 
 It still remains that I should dwell on the other aspect of govern- 
 ment propounded in this lecture, viz., government as a producer. 
 In the cases which I have already given government is supposed 
 to be doing a service, or is invited to do a further service, and I 
 have by no means criticized all the invitations. In what remains, 
 I shall consider government as a producer only, that is, as com- 
 peting against ordinary manufacturers, for the supply of govern- 
 ment stores, or even of the public wants. But I shall not on this 
 occasion deal with what is a favourite topic with some continental 
 socialists, the elevation of the government into the function of a 
 gigantic and all-embracing manufacturer, who is to appropriate 
 all capital, or to annihilate its private use, and distribute and 
 regulate all industries in the interests of labour. I have to deal on 
 the present occasion with a humbler function, one which has been 
 in part traditional from the earliest times, and is in part a sub- 
 sequent development for which an economical justification is 
 alleged. The larger question I hope to deal with hereafter. 
 
 As soon as ever grants were made in Parliament for the con- 
 struction of navies, the Crown began to establish navy docks and 
 works. These are known to have been in existence on the Thames 
 and Mersey for a long time, but Henry VIII. was the real founder 
 or restorer ..of the town and dock of Portsmouth, which indeed 
 appears to have been an arsenal and port during the time of the 
 Koman occupation, and probably those 011 the Thames and Medway. 
 But for a long time the work at these ports, Greenwich, Deptford, and 
 Portsmouth, was casual and interrupted. There was no practical 
 difference, except in the artillery, between a private vessel and a 
 man-of-war, and, in point of fact, the strongest and most important
 
 GOVERNMENT AS A PRODUCER. 519 
 
 part of the mercantile marine were the armed ships of the East 
 India Company. The sovereign could therefore constantly call on 
 the merchant shipping for vessels of war, and it would seem that 
 the custom, only recently remitted, of pressing seamen in the 
 merchant service for the purpose of manning the navy, was a relic 
 of that general embargo which early tradition put on the vessels 
 and men in the several English ports. But as soon as ever war, 
 the preparations for war, and the national defence at sea became 
 an object of public consideration, the various dockyards were kept 
 in a state of constant activity. The jealousy with which for gene- 
 rations public men viewed, or affected to view, the army was not 
 felt towards the navy, and Englishmen began gradually to be 
 convinced, and with good reason, that to a maritime power, the 
 best weapon of defence was a well-appointed marine. 
 
 For a long time a royal dockyard was pretty well the only place 
 in which a first-rate man-of-war could be built and equipped. The 
 Dockyard was therefore as necessary an element in the naval 
 defences as the Horse Guards and the depots were to the army, 
 and there grew up in these institutions a permanent staff of over- 
 seers and workmen who claimed, with some reason or analogy, to 
 be an abiding part of the naval establishment. In course of 
 time, however, the shipbuilding firms on the Tyne and the Clyde, 
 especially the latter, began to have yards of a magnitude which 
 rivalled in completeness and efficiency the public works at the 
 older docks already referred to, and the newer establishments at 
 Chatham, Plymouth, and Devonport. Nor did the development of 
 the later system of armour-plated vessels carrying a few guns of 
 great power and projectile force tend to confine the manufacture of 
 war vessels to government dockyards. The shipbuilders of the 
 north took contracts with foreign governments, and constructed all 
 kinds of munitions of war for them. But the government con- 
 tinued to extend its manufacturing operations, to undertake, as it 
 did not at first, the supply of small arms from its own factories, 
 and, in brief, to take into its own hands the production of all the 
 necessaries for the public defence. 
 
 This system, it is said, was commenced after the Crimean War, 
 before which time the principal supply of munitions of war was 
 obtained from private firms, under competitive contracts. Now the
 
 520 THE POLICY OF GOVERNMENT. 
 
 objections to the change were, that the cost of all government 
 works was incomparably greater than the charges which would be 
 incurred by dealing with private firms, as was proved by the large 
 dealings of foreign states with our manufacturers ; that it loaded 
 the manufacture with departmental charges ; that the accounts of 
 expenditure returned from these factories were delusive, because they 
 set down nothing to interest on buildings and plant ; that it quar- 
 tered on the exchequer a whole heap of experimental inventors, of 
 whose failures we heard nothing, though the public had to pay 
 the cost ; that it lead inevitably to a system of favouritism, because, 
 it being necessary that some practical man should be put at the 
 head of the establishment, the selection of any one person was the 
 exclusion of every one else ; that in consequence foreign govern- 
 ments are likely to be better supplied with naval and military stores 
 than ourselves, because they were free to choose their market ; and 
 that the system discouraged rather than stimulated invention and 
 improvement. In short, it was argued that we were getting in- 
 ferior results at extravagant prices. 
 
 There has generally, too, been a financial loss and a political 
 inconvenience in multiplying dockyards, and in them workmen 
 depending on the naval department. Such localities were, it was 
 long alleged, seats at the disposal of the government, at least as 
 long as the complement of men was kept up. If, however, the 
 government showed any signs of a rational economy, they im- 
 perilled the allegiance of the constituency and lost support. It is 
 a danger, people alleged, to political integrity, to have a large 
 number of working-men electors and most of the men even under 
 the old franchise were electors, whose livelihood and the continuity 
 of whose work depends on the lavish, and it may be unnecessary 
 and unwise, expenditure of public money. It is, in short, politic, for 
 motives of public morality and fiscal economy, to confine govern- 
 ment manufactures within the narrowest limits possible, to confine 
 government to the duties of government. If one is to make a 
 beginning with large and small arms, the same reasoning will apply 
 to clothing establishments, to boot-and-shoe making, and to every 
 conceivable kind of work, which is better left in private hands, and 
 selected by contract. 
 
 It was alleged, on the contrary, that government acts wisely in
 
 THE DEFENCE OF THE SYSTEM. 521 
 
 producing and testing its own stores, when such serious conse- 
 quences depend on the skill and integrity of an examiner of 
 contracts, and the goodness of the article requires the highest 
 practical skill on the part of the official who passes it. There are 
 articles such as those quoted, which can be easily tested by a 
 moderate experience. "What we manufacture requires a special 
 and highly educated experience. Besides we have this advantage 
 in producing arms and munitions ourselves. They are made on 
 such exact patterns, that a flaw which escapes careful scrutiny, and 
 can only be found out in use, is easily replaced from the stores 
 where all the parts are precisely alike. In matters of the greatest 
 importance, too, we cannot trust contractors. We cannot always 
 escape heedlessness ; we cannot always detect fraud. In that very 
 Crimean war, owing to a serious oversight in the commissariat 
 department, the army was brought into the greatest peril. We can 
 exercise much more vigilance over processes which we ourselves 
 superintend, than over products which are merely supplied by con- 
 tractors, and inspected by our own experts, for a false finish, hiding 
 serious flaws, may be given to goods. To avoid loss on their con- 
 tracts, private firms would put upon us those failures which our 
 more careful scrutiny rejects. Our process may be a little more ex- 
 pensive, but it makes up to the public in safety what it increases 
 in cost. 
 
 It will be seen that in all this reasoning the question in 
 debate is generally one of facts. It is not disputed, that in the 
 supply of government stores, if one can rely on the integrity, 
 the dispatch, the finish, the efficiency of what is supplied by public 
 competition, there are very considerable advantages in procuring 
 what a government wants by the ordinary course of trade. It is 
 also probable that by making themselves the source of their own 
 supply, the government cuts itself off from those economies and 
 improvements which it is invariably the aim of competitive pro- 
 ducers to accept and adopt. Practically the administration has 
 a bottomless purse, or, at worst, in the matter of the public 
 defences, an inexhaustible store of patience to appeal to, and 
 people on whom economy is not enforced, rarely seek out economi- 
 cal processes for themselves. Now, in manufactures, economy is all 
 but invariably coupled with improvement. The producer who
 
 522 THE POLICY OF GOVEBNMENT. 
 
 competes against other producers is, by the very law of his being, 
 not content with doing a thing cheaper. That is at best his own 
 look-out, and no one has reason to thank him for saving his own 
 expense. What he has to prove to his customers is that he turns 
 out a better article. So that, after all, efficiency is best promoted 
 by purchasing under competitive contracts, and if the public safety 
 is implied in efficiency, this competition, under proper restraints 
 and conditions is, and always will be, the best guarantee of the 
 public safety. 
 
 It has always seemed to me that that part of the defence of 
 government manufactories, which insists on the difficulty of testing 
 work done, is the weakest part of their case. It implies corruption 
 or incompetence, or both. I will admit that it is difficult to provide 
 against these risks, and I must allow that our system of giving 
 government officials of all grades freeholds in their offices is a 
 practice of very questionable wisdom. I am certain that no private 
 trader could afford the experiment. In the government offices, 
 forty or fifty years ago, there were all the evils present of a close 
 corporation of self-elected officials. When I was a youth my father 
 asked a friend of his, then naval lord in the Admiralty Board, to put 
 me in the Navy office. He told my father that he could willingly 
 do so, but that my life would be a burden to me if he did, for that 
 the Admiralty clerks were a family party, who would endure no- 
 outsider among them, in an estate which was divided among a few 
 families. So I never went, and a member of one of the families 
 was put in. A quarter of a century afterwards, I had the 
 melancholy satisfaction of getting my rival a sentence of penal 
 servitude. My friend, Mr. Baxter, then Secretary to the Navy, was 
 entirely convinced that frauds were common in the Navy contracts. 
 He came to Oxford, and did me the honour to consult me as to 
 how he might get evidence. I told him that I knew of a person 
 here who was very experienced in the leather trade, and that I 
 would get his services. My friend was so anxious about it that, 
 though he was a devout Scotchman, he gave, to his own amazement, 
 audience to the leather expert on the Sabbath. The result was, he 
 discovered the fraud, saved the nation a quarter of a million, while 
 the clerk expiated his political offence in a political livery. 
 
 I am convinced that it is well to circumscribe the functions of
 
 FRAUDS AND PRECAUTIONS. 523 
 
 government. I am saying this not as a politician, but as an 
 economist. I believe that by competition and scrutiny, the former 
 as free as possible, the latter as rigid as possible, the country would 
 be better served, and the necessary expenses of the state would be 
 lessened. The weakness of the executive is so great, its exposure 
 to perfectly sincere but very dangerous advisers is so constant, that 
 it is best by far to confine itself to the function of a choice between 
 rivals. Of course, under these circumstances, the whole difficulty 
 lies in the inspection of contracts. In old times this used to be 
 done in all which the government bought, by a jury from those 
 city companies whose business was in early days associated with the 
 mystery of which they are now ignorant members. In particular, 
 the Merchant Taylors inspected the cloth purchased by contract 
 for the forces. I do not select the Taylors invidiously, but they 
 could hardly fulfil the function now, for I suspect that there is not 
 a ready-made clothier among them, and this, I suppose, is what is 
 meant by a Merchant Taylor. 
 
 But I cannot doubt that it would be possible to procure as I 
 procured, for mere justice between contractors and the public, a 
 competent body of persons who would undertake the test of all that 
 is bought for the public service. Assuredly such persons with such 
 aims would not only save the public purse, but would give a healthy 
 stimulus to trade. Experience teaches us that protected interests 
 have a sickly and costly existence. The statement is true of a 
 government producer, as well as of a producer protected in an 
 artificial price by government, for practically there is no difference 
 between them. It is not reasonable to expect faithful service from 
 an inspector of contracts, who is able and, as I know is, willing to 
 blackmail the contractor. Such a practice is so common, that it 
 forms, I am told by many manufacturers, who know about govern- 
 ment contractors, a sensible element in the contract price. It may 
 be that the act is a serious criminal offence. It is surely one which 
 should be obviated, if it is difficult to detect it. Our forefathers 
 were not always unwise in their processes. The government 
 established, and the traders acquiesced in, a jury of experts. They 
 did this, not only for purchases made on behalf of the Crown, but 
 for trade carried on in the interests of the public. I think we 
 might in a modified form, revert to their practice. It is the duty
 
 524 THE POLICY OF GOVERNMENT. 
 
 of a government to prevent fraud, not only when itself is the 
 victim, but when the people whose affairs it administers axe 
 defrauded. The discovery of the process of detection ought not to 
 be difficult. I am convinced that its action would not be unpopular. 
 
 THE END.
 
 INDEX. 
 
 A 
 
 Abbots, their way of living, 65 
 Abraham, call of, the origin of modern 
 
 history, according to some, 338 
 Accounts, farming, .&c., cause of the 
 
 survival of, 3 ; not kept by farmers, 
 
 178 
 
 Acquisition, cost of, 260 
 Acts of Parliament, 23 Ed. III., 25 
 
 Ed. III., 31 Ed. III., 34 Ed. III., 
 
 36 Ed. III., 42 Ed. III., 26-28; 
 
 1 Eic. II., 28; 9 Eic. II., 12 Eic. 
 II., 31; 4 Hen. IV., 7 Hen. IV., 
 
 2 Hen. V., 4 Hen. V., 2 Hen. VI., 
 32; 3 Hen. VI., 6 Hen. VI., 11 
 Hen. VI., 15 Hen. VI., 18 Hen. VI., 
 23 Hen. VI., 33; 11 Hen. VII., 7 
 Hen. VIII., 28 Hen. VIII., 34; 5 
 Eliz., 38; 31 Eliz., 42; 32 Hen, 
 VIII., 103 ; 5 Eliz., its effects, 240; 
 collections of, 241; 9 Geo. I., 22 
 Geo. III., 247; 15 Hen. IV., 34 
 Ed. III., 299 ; 1 Anne, 430; 9 Geo. 
 III., 433 ; 22 Hen. VIII., 485 
 
 Addington, his income tax, 131 
 Addison, on English credit, 216 
 Adisham, rate of production at, 53 
 Administrations, meddlesomeness and 
 , conceit of, 501 
 Admiralty office, old, a narrative of, 
 
 522 
 
 Adulteration, why punishable, 362 
 Advertisements, Elizabeth's, not put 
 
 into practice, 199 ; loss of incurred, 
 
 to gain a footing, 406 
 Ad valorem taxes, their effect on export 
 
 values, 402 
 Agio rapidly developed on Bank notes, 
 
 210 
 Agricultural Board, country reports of, 
 
 379 
 
 Agricultural distress, a synonym for 
 
 cheap food, 377 
 Agricultural gangs, the worst kind of 
 
 child labour, 355 
 
 Agricultural skill, a work of art, 275 
 Agricultural system, the new, its 
 
 characteristics, 268 ; British, its 
 
 present decline, 160 
 Agriculture, practical, in eighteenth 
 
 century, 176 
 Agriculture, success of, its meaning, 
 
 46 ; importance of, 47 ; a universal 
 
 occupation, 143 ; always yields more 
 
 than the cultivator's subsistence, 
 
 165 ; character of, in early times, 
 
 170 ; progress of, in eighteenth 
 
 century, 177 
 
 Agriculturist, British, his capacity, 48 
 Aid of 1503, its distribution, 147 
 Aix la Chapelle, peace of, 467 
 Alarmist calculation, an, quoted by Mr. 
 
 Giffen, 400 
 Alexandria, a great centre of banking 
 
 207 
 
 Alien priories, suppression of the, 418 
 Allotments Act of Elizabeth, 42 
 Allowance system, origin of, 247 
 All Souls College, a fellow of, and his 
 
 conscience, 192 
 Alton, Hants, robbers of, 142 
 America, its occasional practices, 224 
 American citizens, practices of, in visits 
 
 to England, 368 
 American civil war, prolonged and 
 
 destructive, 293 
 American colonies, effect of the Seven 
 
 Years' War on, 468 
 American plantations, planters of, 
 
 their character, 329 ; federation in, 
 
 why dominant, 481 
 American roads, origin of, 490 
 Americans, their boasted freedom and
 
 526 
 
 INDEX. 
 
 its reality, 383 ; travelling in Eng- 
 land, numbers of, and effect thereof, 
 
 403 
 Amsterdam, Bank of, 211 ; a centre 
 
 of trade once, 401 ; causes of its 
 
 ruin, 109 
 
 Anglican church, Selden on the, 81 
 Anglican clergy, representatives of, 
 
 72 
 
 Antwerp, negotiation of bills at, 102 
 Apprenticeship, limit put on rights 
 
 of, 32 ; origin of, 300 ; well regu- 
 lated, its value, 362 
 Apprenticeships in husbandry, endu- 
 rance of, 305 
 Arable rents, rise of, 180 
 Archdeacons, antiquity of, declared by 
 
 a military Colonial governor, 338 
 Archers' tax of 1453, its distribution, 
 
 147 
 Arches, brick in Henry VIII.'s time, 
 
 280 
 Architects, medieval, why unknown, 
 
 20 
 Architecture, masters of, in Middle 
 
 Ages, 304 
 Argyll, Duke of, his illustration of 
 
 husbandry, 48 ; his opinion about a 
 
 nineteen years' lease, 181 
 Aristocracy, English, pride of, in 
 
 eighteenth century, 176 
 Aristotle, on crimes as contracts, 
 
 343 
 
 Arkwright, inventions of, 267 
 Army assessment, 1649, 152 
 Army, English, its early origin, 119 
 Art, its connection with utility, 275 
 Artificial rents, means of procuring, 
 
 181 
 Artizans, mediaval, the architects, 
 
 20 ; wages of, how to be interpreted, 
 
 303 
 Assets of Banks, how to be held, 
 
 219 
 Assiento Treaty, the, its objects, 
 
 320 ; origin of slavery in the 
 
 American colonies, 449 
 Audit, independent, should be exacted 
 
 from banks, 218 
 Avignon, secession to, and effects of, 
 
 74 ; gold currency at, 189. 
 
 B. 
 
 Babbage, Mr., on width of market, 
 
 371 
 Babylonian bankers, practice of, 206 
 
 Bailee, government in service, not a, 
 505 
 
 Bailiff's account, exactness of the, 
 54 
 
 Balance of bargain, doctrine of, 96 
 
 Bank Act of 1844, motives for, 224 ; 
 its effects, 225 
 
 Bank of England, the, founded by 
 the Independents, 86 ; a fortunate 
 disability of, its relations to govern- 
 ment, 216 ; condition of on Dec. 4, 
 1696, 220 ; its history for a century, 
 222 ; its services in 1694-5, 313 
 
 Banker, name of, in Greek and Latin, 
 207 
 
 Bankers, restraint of, 360 ; in House 
 of Commons, their action, 507 
 
 Banking, has existed apart from coins, 
 184 ; practice of, probably never 
 lost, 208 ; private, in England, 212 ; 
 in United States based on public 
 securities, 404 
 
 Bankruptcy laws, their economic 
 meaning, 238 
 
 Barley, imports of, to Netherlands, 
 285 
 
 Battle Abbey, its home farms, 66 
 
 Baxter, Mr., on the leather contracts, 
 522 
 
 Bayonets, flexible, 362 
 
 Beaufort, Cardinal, effigy of, 274 
 
 Becket, the [reported inventor of scu- 
 tage, 119 
 
 Beet-root sugar, bounty paid pro- 
 ducers of, their condition, 378 
 
 "Beggars, Supplication of," estimates 
 alms to friars, 242 
 
 Belgian glass and iron, reputed im- 
 ports of, 409 
 
 Belgians, their saving habits, 438 
 
 Belvoir estate, rents of, 1692, 168 
 
 Benedictine order, services of the, 71 
 
 Benevolence, private, cannot deal with 
 destitution, 242 
 
 Benevolences, history of, 132 
 
 Bentham, his service on usury laws, 
 237 
 
 Bentinck, enrichment of, unpopular, 
 428 
 
 Berkshire, magistrates of, at end of 
 the eighteenth century, 247 
 
 Bessemer, his process for steel, 233 
 
 Bigod, Roger, his Irish estate, 282 
 
 Bimetallism, some difficulties in, 191 
 
 Biscay, source of iron, 276 
 
 Bishops, murder of two in 1450, 80 ; 
 pillaged by Elizabeth's courtiers,
 
 INDEX. 
 
 527 
 
 180 
 421 
 
 impoverished by Elizabeth, 
 
 Bismarck, and his protectionist policy, 
 
 357 
 Blackburn, Archbishop, his earlier 
 
 career, 108 
 
 Blomfield, on village guilds, 306 
 Blue Posts, supper at the, 425 
 Board of Trade returns, analysis of, 401 
 Bodmin, generally the staple town of 
 
 tin, 283 
 Bolingbroke (St. John), his criticism 
 
 of Harley, 448 
 Bonded warehouses, effects of, 405 ; 
 
 Walpole's scheme of, 467 
 Boots, French, made in London, 282 
 Boots and shoes, made in England, 
 
 exported to France, &c., 410 
 Borgia, Bull of, 103 
 Borgia's Bulls, object of, and outcome 
 
 of, 323 
 Borrowing, when undertaken by 
 
 government, 393 ; from foreigners, 
 
 how limited, 438 
 Boswprth, combatants at, few, 419 ; 
 
 policy of king, after, 420 
 Bounty, the, of 1689, 270 ; its origin, 
 
 and the effects of, 377 
 Brabant, agriculture of, 289 
 Bradford, manufacturers of, 406 
 Brakelond, chronicle of, on Abbot 
 
 Samson and Oxford, 298 
 Bricks, art of making lost in England, 
 
 279 
 
 Bridges, repairs of, law of, 486 
 Brill, capture of, 278 
 Bristol, its rise, 150 
 Bristol merchants, expedition of, to 
 
 Iceland, 103 
 
 Britain, Great, a centre of prices, 390 
 British islands, temperature of, 490 
 Brougham, Lord, his protest in 1850, 
 
 126 
 
 Bruges, mission of Wiklif to, 77 
 Buccaneers, the English, 398 
 Budget, the acceptance or rejection of, 
 
 its effect on Parliament, 508 
 Bullion dealer, trade of the, 261 
 Bunyan, sketched unconsciously 
 
 Henry VIII.'s character, 35 
 Burcot pier, navigation of Thames 
 
 from, 279 
 Burdens on land, absurdity of alled- 
 
 ging, 238 
 
 Burnet, Bishop, on the English cli- 
 mate, 288 
 Bye-industries, effects of, on rent, 175 
 
 C. 
 
 Cabot, Sebastian, his voyage, 106 
 
 Cadets of the Eoyal house, their dis- 
 affection, 417 
 
 Caird, Sir James, on losses by eviction, 
 173 
 
 Calais, staple town of wool, 129 
 
 Cambridge, distinguished for its eels, 
 298 
 
 Canada, proposals of a zollverein with 
 the States, 465 
 
 Canadians, French, concessions to, 
 333 
 
 Canning, his saying about the New 
 World, 320 
 
 Canterbury, St. Pancras Church at, 
 279 
 
 Cape Colony, acquisition of, 334 
 
 Cape trade, far less than expense in- 
 curred for it, 335 
 
 Capital, function of, 17 ; aggregation 
 of, praised in every one but work- 
 men, 311 ; British, in foreign invest- 
 ments, 394 
 
 Capital and labour, endless warfare of, 
 23 ; priority of, a barren question, 
 228 
 
 Capitalist farmers cannot be extem- 
 porised by artificial prices, 374 
 
 Captains, first English, buccaneers, 
 321 
 
 Cardwell, his publication of Peel's 
 writings, 455 
 
 Carlow, cloth manufactory at, 282 
 
 Cash payments, suspension of, 442 
 
 Castlereagh, Lord, his invitation to 
 Parliament, 475 
 
 Cattle, breeds of, 61 
 
 Cavaliers, their character, 44 
 
 Cecil, his "Book of Bates," 421 
 
 Centralization, motives for, 480, sqq. 
 
 Chamberlain, Mr., on Canadian finan- 
 cial proposals, 465 
 
 Chaplin, Mr., his remedy for English 
 agriculture, 382 
 
 Charles I., his desire to debase the 
 currency, 198 ; hie theory of govern- 
 ment, 422 
 
 Charles II., his risks in 1684, 86; his 
 alienation of Crown estates, mar- 
 riages of his illegitimate sons, 423 ; 
 dukes created by, 465 
 
 Charles V. says mass at a fi shearer's 
 tomb, 278 
 
 Charles the Bold, purposes of, 482 
 
 Charles the Great, empire of, brief, 71
 
 528 
 
 INDEX. 
 
 Charter, Great, its restraining clauses, 
 
 120 
 Charters of City Companies, origin of, 
 
 299 
 
 Chartism, origin of, and bias of, 248 
 Chatham (Pitt), his belief in his own 
 
 policy, 445 
 Cheltenham, manor of, in fifteenth 
 
 century, 264 
 Chevallier, Mr., on ratios of gold and 
 
 silver, 189 
 Chichele, his purchase of the alien 
 
 priories, 418 
 
 Childers, Mr., his budget in 1885, 478 
 Children's labour, restraints on, 354 
 China, currency in, 185 ; effects of 
 
 adopting a silver currency by, 190 
 Chivalry, a pretentious sham, 351 
 Christianity, appeals to, by traders, 
 
 suspicious, 329 
 
 Christie, Mr., on Shaftesbury, 6 
 Church, changes in the, 458 
 Church, Canadian, its powers, 334 
 Church, English parties in the, 72 
 Churches, use of, in Middle Ages, 144 
 Cicero, his oration for Flaccus, ito 
 
 interest, 207 
 
 Cinque Ports, privileges of, 136 
 Cities and towns, English, population 
 
 of, in 1377, 283 
 City Companies, possible utilization 
 
 of, 523 ; London, duties of, 299 
 City (London), estate in the west, its 
 
 origin, 148 
 Civil war, American, result of Assiento 
 
 Treaty, 450 
 Clarendon, on condition of England, 
 
 139 
 
 Class privileges, danger of, 352 
 Clergy, poverty of in the seventeenth 
 
 and eighteenth centuries, 87 
 Clergy, English, victory of Edward I. 
 
 over the, 122 
 
 Clergy, regular, the services of the, 62 
 Clipped money, difficulty of the, and 
 
 explanations given of, 200 
 Cloth, Early English, coarseness of,286 
 Cloth manufacture, migrations of, 286 
 Cloves, bloodshed for possession of, 109 
 Coach, stage, story of submersion of 
 
 one, 490 
 
 Coal, demand for after the Franco- 
 German war, 230 
 Colleges, estates of, 180; meagre life of 
 
 in Elizabeth's reign, 199 
 Colonial Office, government of colonies 
 by, 336 ; jobs in, 517 
 
 Colonial protection, put out of the- 
 retaliatory theory, 380 ; defence of, 
 385 
 
 Cobden, Mr., his commercial treaty 
 with France, and his motives, 113 ;. 
 his translation of Chevallier, 189 
 
 Cochrane, Lord, story of, 201 
 
 Coinage, invention of place of not 
 known, 184 
 
 Coins, all sorts of, in Venetian' 
 treasury, 209 
 
 Coke, family of, their public services, 
 268 
 
 Colbert, policy of, effects of, 460 
 
 Colonial system, the, described and 
 criticized, 325 
 
 Colonial trade, growth of in the seven- 
 teenth century, 288 ; effects of on 
 trade values, 328 
 
 Colonies, of conquest, their cost, and 
 their practices, 324 ; British, after 
 war of American independence, 332 ; 
 of conquest, and of settlement, diffe- 
 rent character of, 333 ; present rela- 
 tions of, 339 
 
 Colonies, British, loans in, 440 ; diffi- 
 culties of, 441 
 
 Colonists, American, mainly agricul- 
 turists at the outbreak of the War 
 of Independence, 331 
 
 Columbus, his voyage, 106 
 
 Combinations of workmen, condemned 
 by the wage-fund theory, 309 
 
 Commercial disadvantage, inevitable 
 under Protection, and why, 381 
 
 Commercial law, relics of from an 
 early age, 208 
 
 Committees, Special, of House of 
 Commons, their constitution, and 
 futility of, 492 
 
 Common employment, an abominable 
 doctrine, 352 
 
 Commonwealth, more generous to 
 labour than monarchy, 44 ; growth 
 of England under and after the, 
 287 ; wages in time of, 372 
 
 Common, rights of, their value, 42 
 
 Company, feelings of trader towards 
 his, 302 
 
 Competition, effect of on prices and 
 profits, 232 
 
 Competition rents, long unknown, 171 
 
 Competitive and famine rents, no dis- 
 tinction between, 173 
 
 Compromises, necessity of, 113 ; 
 blamed, but inevitable, 356 
 
 Canons of taxation, Smith's four, 116
 
 INDEX. 
 
 529 
 
 Concerted action, more remedial than 
 
 legislative restitution, 353 
 Congleton, Lord, his proposals, 474 
 
 Conqueror, people who say their 
 families came over with the, 413 
 
 Conquest, barons of, some extirpated, 
 272 ; nobles of the, some extir- 
 pated, 413 
 
 Conservative, Peel was, but a dangerous 
 ally, 455 
 
 Conspiracy, constructive, an engine of 
 tyranny, 45 
 
 Constituencies, in dockyards, tenden- 
 cies of, 520 
 
 Constitution, unfair use of the, 165 
 
 Constitution, American, powers of 
 Supreme Court in, 344 
 
 Consumption, taxes on, 383 
 
 Continental war, effects of, 292 
 
 Contraband trade, the, in Hampshire, 
 123 
 
 Contracts, enforcement of, why neces- 
 sary, 342 ; risks of, 523 
 
 Contracts for use of land, must be 
 regulated by law, and why, 359 
 
 Controversy, a practical rule in, 158 
 
 Convocation, grants of, confirmation 
 of, 134 
 
 Copyholds, purchases of by gentlemen, 
 264 
 
 Cook, Captain, his discoveries and 
 annexations, 291 
 
 Co-operative stores, a complaint 
 against, 477 
 
 Corn Law, first real, that of the Pen- 
 sionary Parliament, 377 
 
 Corn rents, Act of, in 1576, 199 
 
 Cornwall, Earldom of, 416 
 
 Corporations not safe banker sunder de- 
 spotisms,212 ; their undertakings, 507 
 
 Corruption, in the United States, 385 
 
 Cost, saving of, effects of, 233 
 
 Cotiller, Sir Ralph, and abbess of 
 Sion, 264 
 
 Cotton, use of, origin of, 327 
 
 Counties, English, wealth or poverty 
 of, 145 
 
 Counties of towns, creation of, 415 
 
 Country banks, treatment of by Peel, 
 and reasons for, 225 
 
 Court favourites, dislike to, in England 
 through its history, 125 
 
 Court Bolls, importance of, 3 
 
 Coventry Parliament, 1459, its action, 
 420 
 
 Coxe. Archdeacon, his life of Walpole, 
 465 
 
 Credit, power of Banks over, 219 
 
 Crimean war, indirect effects of, 293 ; 
 dangers in, origin of, 521 
 
 Criminal investigation, a director of, 
 his function, 370 
 
 Criminal Law Amendment Act, clause 
 in, 361 
 
 Criticism, social, in the last quarter 
 of the fourteenth century, 22 ; par- 
 liamentary, its effect, 451 
 
 Crompton, invention of, 267 
 
 Cromwell, Lord, in the fifteenth cen- 
 tury, his rise, 64 ; his statement in 
 1438, 419 
 
 Cromwell, his New Model, 119 ; national 
 bank, suggested in time of, 212 ; his 
 exaltation of England, 287 ; his 
 establishment, 422 ; his imitation 
 of Dutch finance, 436 ; finance of, 
 457 
 
 Crown, estate of, its original mag- 
 nitude, 412; in 1703, 430; its 
 present position, 431 
 
 Crown lands, rents of, 516 
 
 Croydon, sewage farm at, 231 
 
 Cultivation, system of, in open fields, 
 60 
 
 Cumberland, permanently the poorest 
 English county, 149 
 
 Currencies, continental, accounts of ,203 
 
 Currency, debasement of, by Henry and 
 his son's guardians, 36 ; importance 
 of true understanding of, 183 ; de- 
 basement of, history of, 197 ; two 
 kinds of, efficiency of, 203 ; regula- 
 tion of forms of, by the State, 205 ; 
 gold and silver, relations of, 254 ; 
 restoration of, reasonings at time 
 of, 454 
 
 Customs, difficulty of collecting, 123 
 
 Customs duties, grant for its purpose, 
 398 
 
 D. 
 
 Danske trade, extent of, 101 
 Dartford, paper made at, 280 
 Davenant, on Resumptions, 118; his 
 return of the poor rate, 245; his 
 narrative of Burnet's conversation, 
 288 ; his pamphlet on Resumptions, 
 his liteVary abilities, 424 
 Debt, liquidation of, present, 455 
 Debt, floating, not funded after Peace 
 
 of Ryswick, 429 
 
 Debt, permanent, oldest part of the, 
 449 
 
 85
 
 530 
 
 INDEX. 
 
 Debts, colonial, effects of, 339 ; early, 
 
 their character, 450 
 Decentralization, motives for, 480, sqq. 
 Deer forest, rent of, a poor defence, 233 
 Delusions, popular, cheap investments 
 
 in, 339 
 Demagogues, frequent tendencies of, 
 
 458 
 Demetrius of Ephesus, his advocacy 
 
 of vested interests, 345 
 Departments, spending, claims of, 451 
 Derbyshire, production of lead in, 283 
 Derry, county, estates of Companies 
 
 in, 448 
 
 Despotic government, loans to, pre- 
 carious, 448 
 Destitution, economical defence of, 
 
 relief of, 244 
 De Witts, murder of the, 212 ; their 
 
 position in Holland, 427 
 Differential duties, effects of, 329 
 Di Gama, Vasco doubles the Cape, 106 
 Diminishing cost, effect of, on prices, , 
 
 255 
 Diplomatic instruments, wealth of in 
 
 England, 4 
 
 Direct taxation, its unfairness inevit- 
 able, 124 ; its effect on the nation, 
 . 297 
 
 Discount, rate of, and interest, 451 
 Dissenters founded Bank of England, 
 
 214 
 Dissolution of monasteries, connected 
 
 by some with pauperism, 243 
 Distress, law of, 172 
 Distribution, laws of, human, 234 
 Distribution of products, order of, 163 
 Distribution of wealth, laws of, 50 ; 
 difficult to interpret at present, 141 
 Docks, origin of English, 518 
 Dockyards, development of, 519 
 Domesday, its importance, 3 ; its 
 evidence as to the distribution of 
 wealth, 141 
 
 Domestic servants, wages of, 488 
 Dominion, civil, Wiklif's treatise, criti- 
 cism of, 75 
 Dominion of Canada, fiscal policy of, 
 
 334 
 
 Donationes inter vivos, constantly prac- 
 tised by rich people, 473 
 Downs, cultivation of, in Hampshire, 
 
 179 
 Doyle, Mr., on early history of the 
 
 American plantations, 322 
 Drake the character of his expeditions, 
 10 
 
 Dryden, like Caliban in the re-modelled 
 
 "Tempest," 266 
 
 Dublin, valuation of, in 1657, 153 
 Duchies, the, of Lancaster and Corn- 
 wall, 432 
 
 Dudley, Dud, his invention or improve- 
 ment, 287 
 
 Dutch, the, their objects in trade, 109 ; 
 origin of their resources, 260 ; and 
 the family of Orange, 334 ; their 
 services to civilization, 435 ; their 
 sympathy with the Stuarts, and 
 their reward, 459 
 Dutch trade, character of, 327 
 Dutch war, assessment for 1672, 154 
 Dumont, his collection of treaties, 92 
 
 E 
 
 East Anglia does not love the clergy, 
 
 80 
 
 East Coast, Navigation of the, 282 
 East India Company, remodelling of, 
 by Parliament, 86 ; before Mr. Mill's 
 mind when he advocated a temporary 
 protection, 387 
 
 East India Company, Dutch, its origin, 
 108 
 
 East India Company, New, origin of, 
 462 
 
 East, trade with, first impugned the 
 balance of cash doctrine, 391 
 
 Eastern produce, early routes of, 10 
 
 Eastern trade, routes of, in fourteenth 
 century, 104 
 
 Ecclesiastical history, a limited teach- 
 ing of, in Oxford, 70 
 
 Economical facts, neglect of, its effects, 
 1 
 
 Economists, rashly predict impossi- 
 bilities, 50 ; French, rise of, 347 ; 
 politicians, their relations, 503 
 
 Eden, Mr., his treaty of 1786, 112 
 
 Eden, Sir Frederic, his work, and its 
 value, 247 ; on the wages of the 
 poor, and the discontent of the 
 farmers thereat, 375 
 
 Edinburgh, assessment of, in 1657, 
 153 
 
 Education develops hereditary powers, 
 290; elementary, cost of, put on 
 parents, 356 ; and wages, 357 ; 
 taxes, &c., who should pay, 495 
 
 Edward I., projects and policy of, 122 ; 
 his theory of representation and tax- 
 ation, 126 
 
 Edward II., causes of his deposition, 417
 
 INDEX. 
 
 531 
 
 Edward III., his claim to French 
 throne, 74 ; marriages of his sons, 
 417 ; borrowed of Florentine bankers 
 and repudiated, 434 
 
 Edward IV., his character misrepre- 
 sented, 132 ; his project of invading 
 France in 1472, 135 
 
 Edward VI., his guardians, and their 
 baseness, 36 ; reign of, waste of, by 
 his guardians, 421 
 
 Effects endure after causes, 52 ; do 
 not cease with causes, 350 
 
 Egypt, decline of, after the conquest 
 of Selim, 11 
 
 Eighteenth century, progress in the, 
 289 ; temper of, illustrated in, 347 
 
 Eight hours' day, rule of, in England, 
 303 
 
 Elizabeth, poverty of, and reforms of, 
 37 ; re-coinage by, facts of, 195 ; 
 proclamation of, 196 ; her restora- 
 tion of the currency, 416 
 
 Ellesmere, Lord (James I.), on mort- 
 gages, 343 
 
 Employers, paid higher wages than 
 magistrates' assessments allowed, 
 241 ; benefit by a Poor Law, 245 ; 
 some begin to see that Trade Unions 
 are useful, 315 
 
 Employment, provision of, by the 
 state, 313 ; stint of, effect of, 373 
 
 Enumerated and non - enumerated 
 goods, meaning of, 331 
 
 Enclosure Acts, compensation for, 487 
 
 Enclosures, effects of, on the poor, 
 246 
 
 England, distribution of wealth in, 
 138, sqq. ; influx of silver into, 196 ; 
 its wrongdoings with Holland, 211 ; 
 Bank of, origin of, 213 ; population 
 of, in North and South, 246 ; down- 
 fall of, under Henry VIII., 265; 
 development of, difficult, 296 ; has 
 often lost what it gained, 319 ; cannot 
 produce everything, 409 ; local in- 
 stitutions in, 482 
 
 England, Northern, its poverty, 145 
 English people, by no means patient, 
 193 ; confuses names with things, 449 
 English roads, origin of, 490 
 English, their hindrances to inter- 
 national comity, 94 ; relations of, to 
 Flemings, 101 ; naturally not an in- 
 ventive people, 272 
 English trade, early character of, 100 
 Enjoyment, possibility of, fundamen- 
 tal, in taxation, 117 
 
 Enterprise, individual, partnership, 
 Joint Stock, 208 
 
 Equation, always effected by trade, but 
 in different ways, 395 
 
 Equity, rules of, in enforcing contracts, 
 344 
 
 Ernest of Saxe-Coburg, debasement of 
 currency by, 197 
 
 Europe, at once protectionist and mili- 
 tary, 382 ; wars in, from 1714 to 1793, 
 110 
 
 European history, Dutch war the most 
 striking fact in, 435 
 
 Errors and injuries of Government, 
 how far to be incurred, 346 
 
 Evans, Mr., on the early British cur- 
 rency, 185 
 
 Examinations, absurdity of, 290 ; pre- 
 sent system of, its absurdity in pri- 
 mary schools, 358 
 
 Exchange, free, its benefits, 93 
 
 Exchanger, King's, his function, 96 ; 
 origin and history of the office, 187 
 
 Exchanges, early process of, 206 ; fluc- 
 tuations of the, 213 ; foreign, 
 process of, 198 
 
 Exchequer Bills, origin of, 222 
 
 Exchequer, dialogue on the, 412 
 
 Excise, first imposition of, 137 ; the 
 Dutch, its universality, 436 
 
 Exhaustion, political, signs of, 439 
 
 Export duty, conditions of an, 10 
 
 Exports and imports, general theory 
 of, 96, sqq. ; study of, a puzzle, 390 
 
 Exports.customs on, rarely possible,398 
 
 F 
 
 Factory Acts, arguments for, 355 
 Fair trader, his case, 371 
 Fair traders, sophistries of, 240 
 Famine of 1438, petition during, 55 
 Famines, occasions of, in England, 
 16 ; the great, of the fourteenth cen- 
 tury, and those of the sixteenth, 56 ; 
 dates of, 262 ; in the seventeenth 
 century, 266 
 
 Far West, stories about, 106 
 Farmer, unjust to put a police rate on 
 
 holding of, 493 
 Farmers, bilingual, 54 ; imitate the 
 
 new system, 177 
 
 Farmers' rents, income tax from, 475 
 Farm hand, accomplishments of the, 
 
 20 
 
 Fastolfe, his trade, 66 ; his purchases, 
 115
 
 532 
 
 INDEX. 
 
 Fawcett, Mr., on Trade Unions or 
 labour partnerships, 307 
 
 Federation, varied fortunes of, as a 
 principle, 480 
 
 Fertility, economic senses of, 166 ; 
 meaning of, with economists, 498 
 
 Feudal liabilities, assessment for 1660, 
 154 
 
 Fictions, occasionally instructive, 370 ; 
 pressed into arguments, 409 
 
 Field, Mr. Cyrus, the author's predic- 
 tion to, 385 
 
 Fifteenth century, characteristics of, 
 264 ; English mercantile marine in, 
 319 
 
 Financial motives, have often caused 
 revolts, 194 
 
 Fiscal system, effect of a bad, in 
 British industry, 372 
 
 Fish, diet on, in Middle Ages, 277 
 
 Fitzherbert, on the extortion of land- 
 lords, 67 ; on landlords, 171 
 
 Fitzherbert (Long-beard), his insurrec- 
 tion, 129 f 
 
 Fitzjarnes, his purchases, 151 
 
 Flaccus, his conduct, 207 
 
 Flanders, political relations of, to Eng- 
 land, cause of, 8 ; early immigrants 
 from, to Norfolk, 90 ; trade of, 102 ; 
 influence of, on Norfolk, 144 ; de- 
 scription of, 1467-77, 285 ; ruin of, 
 and causes of, 286 
 
 Flax, compulsory cultivation of, 144 
 
 Fleetwood, Bp., his " Chronicon Pre- 
 ciosum," 192 
 
 Flemings, trade of the, 101 ; the 
 weavers of Europe, 273 
 
 Florentine bankers, loans of, to Ed- 
 ward III., 434 
 
 Food, interpretation of wages in, 43 ; 
 policy of government about, in 
 early English times, 377 
 
 Forces, two, in government, 479 
 
 Foreign debt, effects of, 260 
 
 Forestalling and regrating, offence of, 
 why created, 377 
 
 Forest laws, motives for, 483 
 
 Forms, antiquity of, suggestive, 296 
 
 Forster, W. E., and early English 
 cloth, 285 
 
 Fox, Henry, his wish to make Eng- 
 land a free port, 468 
 
 France, position of, in 1763, 110 ; war 
 with, and grants during, 127 ; the 
 degradation of, 197 ; attempts to 
 conquer, 273 ; has coveted the 
 Rhine, 287; its modern colonies, 
 
 290 ; exports and imports of, 404 ; 
 king of, in 1640 and 1688, 458; 
 federalism, why unpopular in, 489 
 
 Franklin, his retort to Gibbon, 331 
 
 Franks, his gift to Oriel College, 67 
 
 Freeman, Professor, his " Norman 
 Conquest," 3 
 
 Free port, the United Kingdom, virtu- 
 ally a, 398 
 
 Free Trade can be less easily aban- 
 doned than Protection, 47 ; growth 
 of principle of, 349 ; a question 
 before the American Republic, 385 
 
 Free trader, risks of, in the United 
 States, 366 
 
 Freight, charges of, reduction of, 230 ; 
 diminished cost of, 256 ; cost of,, 
 from America, 271 ; effects of regu- 
 lating by law, 327 ; cost of, a 
 natural protection, 369 ; invisible 
 export and import, 397 ; not taxed 
 by United States, 403 
 
 Fremantle, Mr. , on the risks of private 
 coining, 190 
 
 French, modern colonies of, 323 
 
 Friar Bacon and Friar Bungay, play 
 of, 62 
 
 Front benches, the two, their ideal 
 debates, 351 
 
 Froude, Mr., thinks Henry a patriot 
 king, 36 ; on the patriot king's 
 offences, 197 
 
 Funding system, process of, and 
 criticism of, 452 
 
 G. 
 
 Galton, Captain, on heredity of genius, 
 
 289 ; on hereditary genius, 356 
 Game, capture of, by labourers, 42 
 Garnlingay, survey of, in 1603, 59 ; 
 
 small parcels of land in, 172 
 Gardiner, Mr., on Wentworth and 
 
 Laud, 6 
 Gascoigne, his opinion about the 
 
 monks, 73 ; on the Papal court, the 
 
 bishops and monasteries, 263 
 Gascony, conquest and revolt of, 102 
 Genoa, Bank of, its history, 210 ; 
 
 loans of, repudiated by Phillip III., 
 
 434 
 George, Mr., the origin of his theory 
 
 in Malthus and Ricardo, 7 ; on 
 
 Ricardo's theory, 162 
 German scholars do not seem to have 
 
 studied early economical history of 
 
 Germany, 286
 
 INDEX. 
 
 538 
 
 Germany, troubles of, at the beginning 
 of seventeenth century, causes of, 
 12 ; her gold currency, 189 ; her 
 modern colonies, 290 ; wars in, 
 since 1860, 294 ; its modern attempt 
 at colonization, 323 
 Gibbon, his message to Franklin, 331 
 Giffen, Mr., value of his essays, 8 ; 
 his phrase about freights, 397 ; his 
 essays on finance, 400 ; on the 
 earnings of freight, 401 
 Gilbert's Act, purpose of, 245 
 Gladstone, Mr., on the picture of the 
 English clergy, drawn by Macaulay, 
 87 ; his defence of the income tax, 
 131 ; on currency and love, 202 
 Glass, imports of, defence of, 409 
 Glass-making, improvements in, 274 
 Gloucestershire, cultivation of tobacco 
 
 in, 322 
 
 Gold, price of and coinage of, 188 ; 
 price of, in 1462, 195; production 
 of, in Ireland, 258 
 Golden bough, the discovery of the, 
 
 351 
 Goldsmiths, the, original English 
 
 bankers, 212 
 Government, English, never colonized, 
 
 but with convicts, 321 
 Government, necessary development 
 of a central, 164 ; theory and prac- 
 tice of, 345 ; favours of, 378 ; its 
 powers of borrowing, 437; borrow- 
 ing, its conditions in loans, 451 
 Government paper, issue of, effects of, 
 
 141 
 
 Governments, desire of, for money, 
 95 ; often in the wrong, and always 
 impatient, 323 ; the principal agents 
 in ruining nations, 393 ; always 
 weak, and liable to influences, 517 
 Goschen, Mr., on income tax returns, 
 370 ; his committee on local taxa- 
 tion, 492 ; effect of his publication 
 on local taxation, 498 
 Governor, Colonial, story of, when 
 
 made a judge in equity, 502 
 Grant, special, of 1375, its distribution, 
 
 147 
 
 Grants, extraordinary distrust at, 125 ; 
 to Crown, origin of, 118 ; from 
 Crown, duration of, 423 
 Greenbacks, circulation in America, 
 
 442 
 
 Greenways Bank, failure of, 218 
 Greenways, Messrs., bank of, 361 
 Gresham, Sir Thomas, his formula, 
 
 37; the king's Antwerp agent, 
 198 
 
 Grimston, Sir Harbottle, his signature 
 to the book of customs, 323 
 
 Grocer, business of a, illustrates ex- 
 ports and imports, 407 
 
 Grocers' Company, fines inflicted by, 
 299 
 
 Grotius, his dispute with Selden, 278 
 
 Ground rents, taxation of, 497 
 
 Guienne, revolt of, and financial 
 measures on, 134 
 
 Guilds, rural, spoliation of, 15 ; town 
 and country, traits of, 305 ; endow- 
 ments of, 306 
 
 H. 
 
 Half truths, danger of, illustrated, 
 
 346 
 Hallara, Mr., on medieval villages, 4 ; 
 
 his authorities, 13 
 Hamburgh, imports of " sherry" from, 
 
 401 
 Hammond, Mr., M.P. for Huntingdon, 
 
 his papers, temp. Anne and George 
 
 I., 330 
 
 Hanover, house of, stability of, 432 
 Hanseatic League, origin, purposes, 
 
 and fortunes of, 100 
 Har court, Sir W., on a female 
 
 domestic at the Treasury, 290 
 Harley, his indecision in Anne's reign, 
 
 448 
 Hartlib, on production in England, 
 
 53 
 
 Hearth tax, inferences from, 158 
 Heaven-born minister, an inaccurate 
 
 name for Pitt, 223 
 Heiresses, weddings of king's sons 
 
 with, 414 
 
 Hemp, compulsory cultivation of, 144 
 Henley, Walter de, on agricultural pro- 
 duce, 53 
 Henry II., church parties in the time 
 
 of, 72 ; his provision for his sons, 
 
 413 ; dominions of, 482 
 Henry III., his difficulties with the 
 
 Alton robbers, 142 ; nearly deposed, 
 
 and why, 416 
 Henry IV., breaks his own law at 
 
 Windsor, 32 ; his marriage and his 
 poverty, 418 
 
 Henry VI., his character, 83 ; marriage 
 of, its unpopularity, 417 ; im- 
 poverishment of Crown in reign of, 
 418
 
 634 
 
 INDEX. 
 
 Henry VII., his claim of aids, 135 
 Henry VIII., his character and actions, 
 35 ; debasement of currency by, 
 197 ; his mania for brick buildings, 
 279 ; his acquisitions and his 
 extravagance, 420 
 
 Henry of Portugal, his discoveries, 106 
 "Heralds at arms," "Debate of," 103 
 High and low prices, causes of, often 
 
 intricate, 261 
 Higher or technical education at the 
 
 expense of the state, 362 
 Highways, condition of, 62 
 History, neglect of economical facts 
 in, 2 ; its progress and shortcomings, 
 4 ; constitutional and political, 183 ; 
 philosophy of, hollow and weari- 
 some, 272 ; secret materials of, 
 concealed and discreditable, 470 
 History, philosopher of, his chaotic 
 
 talk, 450 
 
 Hoarding, how passion for arises, 235 
 Holdings, small at Tandridge, 239 
 Holkham estate, rents of, 1629-1706, 
 
 168 
 
 Holland, struggle of, after indepen- 
 dence, its importance, 211 ; its ser- 
 vices and its enemies, 400 ; a Free 
 Trade country, 436 
 Holy well, Oxford, jurisdiction in manor 
 
 of, 143 
 
 Honour, codes of, in callings, 314 
 Hope, Mr., on the Bank of Amster- 
 dam, 212 
 
 Hops, a peculiarly risky crop, 180 
 Houblon, Sir John, first governor of 
 
 Bank of England, his origin, 215 
 Houghton, his collections and prices 
 
 of Bank stock, 214 
 
 House of Commons, growth of power 
 of, early, 122 ; taxes originate in, 
 origin of the custom, 132 ; its reflec- 
 tion on William in Anne's reign, 
 430 ; British, its present freedom 
 from corruption, 433 
 House of Lords, its original character, 
 
 133 
 
 Houses, acreage to, in 1690, 158 
 Houses of Parliament, history of, in 
 
 seventeenth century, 87 
 House taxes, grossly unequal, 494 
 Huguenots, the, immigration of, into 
 
 England, 288 
 Human institution, laws of, in what 
 
 sense used, 234 
 
 Humanity, claims of, the true defence 
 of a poor rate, 489 
 
 Hume, Joseph, procured the repeal of 
 
 the labour statutes, 45 
 " Humphrey Clinker," its evidence as 
 
 to English roads, 484 
 
 I. 
 
 Idola specus, illustrations of, 351 
 Imperialists, British, calumnies of, 336 
 Imperial Institute, its peril, 380 
 Importers, value of imports on 
 
 authority of, 401 
 
 Import values, exaggeration of, 402 
 Impossibilities, present and manifest, 
 
 229 
 Improvements, some do not increase 
 
 rent, 179 
 Income Tax, the, unfair, 118 ; Pitt's, 
 
 474 ; Peel's, 475 ; unfairness of, 
 
 and incidence of, 476 ; payers of, 
 
 pay what should be local taxes,. 
 
 499 
 Income Tax returns, not conclusive as 
 
 to the distribution of wealth, 140 
 Indebtedness of foreign countries to 
 
 the United Kingdom, effects of, 98 ; 
 
 foreign to England, effects of, 204 
 Independence, "War of, its effects on 
 
 the Colonial system, 469 
 Independency, chief home in London, 
 
 85 
 Independents, the founders of the 
 
 Bank of England, 86 
 "Indestructible powers," an absurd 
 
 phrase, 161 
 
 India Bill, Fox and Pitt on a, 349 
 India, British, loans for, 440 
 India, struggle in, between France and 
 
 England, 110 ; value of rupee in, 
 
 190 
 Inductions, negative, generally the 
 
 work of economists, 503 
 ! Industries, early English character of, 
 
 321 
 ! Industry, real, what Protection does 
 
 to, 367 
 i Industry, English, in Middle Ages, 
 
 chiefly agricultural, 21 ; early 
 
 attempt to stimulate, 376 
 Inheritance, national, succession to, 
 
 445 ; taxes on, defence of, examined, 
 
 471, sqq. 
 Institutions, human, never entirely 
 
 just, 344 
 
 Insurrection, the, of 1381, 22 
 Intelligence, human, progressive, but 
 
 its limits unknown, 49
 
 535 
 
 Intercursus Magnus, policy of, 111 
 Interest, its relation to profits, 19 ; 
 natural diminution of, 237 ; dan- 
 gerous to meddle with, 238 ; amount 
 payable on loans, 395 
 International currency, amount of, in 
 
 England, 203 
 
 International, the kinds of, 502 
 Invention, motives of, 284 
 Inventions of nineteenth century, 
 
 generally English, 292 
 " Invisible export and import," a 
 
 phrase of Mr. Giffen, 397 
 Ireland, assessment of, in 1657, 153 ; 
 landlord and tenant in, 163; pro- 
 duction of gold in, 258 ; manufac- 
 tures of proscribed, 325 ; manufac- 
 tures of destroyed, 378 ; exemption 
 of, from Act of 1 Anne cap. 6, 431 
 Irish Academy, treasures of the, 258 
 Irish Americans, export of money to 
 
 Ireland by, 403 
 Irish estates of London Companies, 
 
 their origin, 421 
 
 Irish Land Acts, the various, 514 
 Irish landowners, Arthur Young on, 
 
 376 
 Irish, opinion of, on Cromwell and 
 
 James II., 460 
 Irish pension list, scandalous character 
 
 of the, 431 
 
 Irish priest, the, his influence, 81 
 Irish rebellion, assessment for, 152 
 Irish tenant, interest of, made pre- 
 carious, 343 
 Irish union, the first Sir Eobert Peel 
 
 on the, 327 
 Irish woollens, suppression of, advised 
 
 by Davenant, and why, 288 
 Iron, high price of, effects of, 61 ; want 
 of, and dearness of in early agri- 
 culture, 276 
 
 Italy did not quarrel with the Papacy, 
 and why, 79 ; revival of banking in, 
 '207 ; its taxes on public dividends, 
 443 
 
 Ivan the Terrible, reign of, and rela- 
 tions of, with England, 104 
 
 J. 
 
 Jacob, example of, perhaps suggested 
 seven years' apprenticeship, 301 
 
 James I. , no one in the right, who was 
 on good terms with, 278 ; his wrath 
 at tobacco smoking, 322 ; his absur- 
 dities, his expedients for money, 421 
 
 Jenkins' ears, story of, 467 
 
 Jevons, Mr., on coal measures, 229 
 
 Jews, the, interfered with by Flaccus, 
 207 ; pedigrees of, in the days of 
 Nehemiah, 413 ; thrift of the, 438 
 
 John the Good, of France, his acts, 
 197 
 
 John, nearly deposed, 416 
 
 Joint stock principle, its effect on 
 prices, 312 
 
 Jones Loyd and Co., bills of, 217 
 
 Judges, effect of their getting freeholds, 
 41 ; immovability of, 424 
 
 Justice, administration of, its value in 
 developing nationality, 296 
 
 Justice of peace, his function and 
 action, 297 
 
 Justice-room, less effective than Manor 
 Court, 143 
 
 Justices' assessments, number of ex- 
 istent, 40 
 
 K. 
 
 Ket, insurrection of, 151 
 Kidd, Captain, execution of, 108 ; 321 
 King, Gregory, his estimate of wages, 
 44 ; on production in England, 53 ; 
 his law of prices, 55; on saving 
 powers of a bishop and a fanner, 
 175 ; his law of prices, 250 ; on 
 power of saving, 267 
 King, Lord, his action hi 1811, 224 
 King's College, Cambridge, its pay- 
 ments to Edward IV. and Henry 
 VIII., 423 
 Kings, deposition and murder of by 
 
 English, 273 
 
 Kings, English, what they were 
 expected to do with their revenues, 
 413 
 King's estate, nature and extent of, 
 
 119 
 King's peace, why kept in England, 
 
 9 
 
 King's taxes, fiction of the, 399 
 Kingston estate, rents of, 1690, 168 
 Kitchin, Dean, on St. Giles' fair, Win- 
 chester, 284 
 
 L. 
 
 Labour, rise of price of, 266 ; impor- 
 tation of into the United States, and 
 its value, 407 
 
 Labourers, prosperity of in the
 
 536 
 
 IffDEX. 
 
 fifteenth century, 34 ; position of in 
 first half of eighteenth century, 
 270 
 
 Labour partnerships, little noticed by 
 political economists, 307 ; proscribed 
 till 1825, 314 
 
 Labour statute of Elizabeth, provisions 
 of, 38, sqq. 
 
 Labour statutes, number of, 40 
 
 Laissez faire, a principle -with the 
 French economists, 348 ; when to be 
 acknowledged, 350 
 
 Lancashire, at first the poorest English 
 county, 149 
 
 Land Bank, the, in 1696, 222 
 
 Land, distribution of, in the medieval 
 village, 14 ; historical changes in 
 ownership and occupation of, 52 ; 
 owners of, make laws, 163 ; in 
 Colonies, surrender of to Colony, 
 337 ; Mr. Mill's theory on its incre- 
 ment, 515 
 
 Land hunger of fifteenth century, its 
 effects, 264 
 
 Landless man, how understood in 
 early England, 295 
 
 Landlords, English, repaired buildings 
 and insured stock, 169 
 
 Landowner, duty of, 174 ; great privi- 
 leges and exemptions of the, 358 ; 
 Adam Smith's view of the, 376 ; his 
 right to rent, 51 ; early, the in- 
 structors of the farmers, 54 ; of 
 eighteenth century, their action, 58 ; 
 the cause of agricultural trouble, 
 166 ; transference of liabilities of 
 the others, 164 ; their services to 
 agriculture in the eighteenth cen- 
 tury, 177 ; their folly and injustice, 
 238 ; the, of the eighteenth century, 
 their services, 269 ; agricultural, and 
 horse racing, their different actions, 
 374 ; action of, after Mr. Goschen's 
 book was published, 498 
 
 Landowners, English, their policy in 
 1773, 491 
 
 Land system, English, and the families 
 358 
 
 Land tax, assessment of, 155 ; re-im- 
 position of, 462 ; re-assessment of, 
 contemplated by Walpole, 466 
 
 Langdon, Thomas, his survey of Gam- 
 lingay, 59 
 
 Latimer on landlords, 171 
 
 Latin Union, silver issues of, 189 
 
 Law and order, interest of, a stock 
 phrase, 454 
 
 Law, corruption of, while keeping to 
 
 the letter, 41 
 
 Law makers, incompetence of, 326 
 Laws, collection of all English, 23 ; 
 
 economic, which human and which 
 
 natural, 234 
 Lead, relations of, to silver, 186 ; prices 
 
 of, as an index of silver prices, 259 
 League, Anti-Corn Law, dissolution of 
 
 the, 349 
 
 Learning, special, has a price, 356 
 Lease for years, its occurrence early, 
 
 66 
 
 Leaseholds, enfranchisement of, 497 
 Leases of Colleges, character of, 180 
 Leather industry, great in London, 
 
 408 
 
 Leeward Islands, proprietors of, 330 
 Legislature, power of, over wages and 
 
 profits, 239 
 
 Lenders of money not patriots, 439 
 Letters, safe delivery of, Post office 
 
 not responsible for, by law, 505 
 Liabilities, always fixed, 120 
 " Libel of English Policy," its object 
 
 and facts, 101 ; its information, 150 
 Linen manufacture, special seats of, 
 
 410 
 Liverpool, Lord, on ratio of gold and 
 
 silver, 188 ; on merchants' petition, 
 
 345 
 Loanable money, plenty in England, 
 
 396 
 Loans, why made by colonists, 394 ; 
 
 of the Dutch, origin of, 437 ; facility 
 
 of making a serious matter, 445 ; 
 
 two processes of creation, 450 
 Local charge, first in time, poor relief, 
 
 484 
 Local debt, origin of, and payment of 
 
 by occupiers, 426 
 Local interest, causes of colonial loans, 
 
 444 
 
 Local taxation, development of mod- 
 ern, 486 ; two recent attacks on, 
 
 497 ; motion of author on, in 1886, 
 
 500 
 Locke King, on Lord King's action, 
 
 224 
 
 Locke, on the recoinage, 200 
 Lollard, the, his social and political 
 
 tendencies, 80 
 London, by far the largest town, 148 : 
 
 notes at first circulated in, princi- 
 pally, 258 ; filthiness of, and un- 
 
 healthiness of, 263 ; a centre of 
 
 trade, 401 ; a vast manufacturing
 
 INDEX. 
 
 537 
 
 city, 408 ; financial influence of, 
 448 
 
 London, City of, its estate, west of St. 
 James, origin of, 496 
 
 Lords, the, Standing Order of, 509 
 
 Louis XIV., on the last pistole, 95 ; 
 his opinion of Davenant's abilities, 
 425 
 
 Louis XVI. , policy of, its effects, 319 
 
 Lovell, Lord, the price of his wool, 
 62 ; his farming book, and his pro- 
 fits, 177 
 
 Lowe, Mr., and new Poor Law, 248 ; 
 the author of school examinations, 
 358 ; on the transference of income 
 tax by traders, 477 
 
 Lowther, Mr. Jas., on competition in 
 collieries, 230 
 
 Lubbock, Sir J., his Shop Hours Com- 
 mittee, 355 
 
 Luxuries, difficulty of denning, 368 
 
 Lynn, King's, early importance of, 282 
 
 M. 
 
 Macaulay, criticism of his history, 5 ; 
 on the English clergy, 87 ; probably 
 saw no perfect copy of Houghton, 
 214; on Nonconformists, 215; had 
 not duly weighed Davenant's essay, 
 426; on William III., 427; on the 
 public debt, 446 
 
 MacCulloch, Mr., on Dutch rates of 
 interest, 110 ; on the discovery of 
 the Ricardian theory of rent, 161 ; 
 his absurdity about rent, 236 
 
 Madox, his antiquities, 13 ; early in- 
 dications of apprenticeship in, 301 
 
 Magdalene College, Oxford, charter to 
 from Henry VIII., 423 
 
 Magistrates, assessments of wages by, 
 1593-1684, 241 
 
 " Making of England," hollowness of 
 the phrase, 272 
 
 Malthusian theory, some economists 
 on the, 477 
 
 Manor courts, jurisdiction of, effectual, 
 142 
 
 Mansions, rating of unfair, 140 
 
 Manufactures, prohibited in the Colo- 
 nies, 331 ; economy and improve- 
 ment simultaneous in, 521 
 
 Manufactures by Government, origin 
 of, 519 
 
 Manufacturing regions, generally he- 
 retical, 79 
 
 Manx judges, oath of, 344 
 
 Margaret of Anjou, her army, and its 
 effects, 25 ; her northern army in 
 1461, 145 
 
 Mariner's compass, use of, 278 
 
 Maritime enterprise, England slow in, 
 319 
 
 Mark, the, the unit of Teutonic curr- 
 encies, 184 
 
 Market, non-protection of and width 
 of, stimulants to production, 371 
 
 Markets and fairs, very distant fre- 
 quented, 284 
 
 Hark Lane Gazette, average crops in, 
 370 
 
 Marlborough, request that a pension 
 should be settled on, refused, 430 
 
 Marling, custom of, 170 
 
 Mary, her wish to restore the currency ; 
 the day of her death kept as a holi- 
 day, 198 
 
 Mason, wages of, in Oxford 440 years 
 ago, 303 
 
 Masses, endowments of, apparently 
 free of law of mortmain, 305 
 
 May, highest prices generally in, 
 56 
 
 Maynard, Serjeant, his reply to William 
 III., 41 
 
 Meonwaras, settlement of the, 284 
 
 Merchants and governments view 
 money differently, 95 ; London, 
 their objections to the bonding 
 system, 399 
 
 Merchants' petition, Lord Liverpool on, 
 345 
 
 Merton College, Oxford, its cultivation 
 in 1333-6, 52 ; its survey of Gam- 
 lingay, 59 
 
 Metaphysicians discuss apologies for 
 taxation, 460 
 
 Methuen treaty, the, in 1703, its 
 policy, 112 
 
 Mickle, his translation of Camoens, 
 he reviles Adam Smith in its notes, 
 348 
 
 Migrations, during civil war, probable, 
 159 
 
 Mill, Mr., on wage fund, 17; on the 
 purchase of the landowner's interest, 
 51 ; his sinister predictions, 229 ; 
 on buying out landlords, 237 ; his 
 defence of poor law relief, 244 ; on 
 wages fund, 308; on wages and 
 profits, 316 ; on " the price of 
 liberty," 342 ; on retaliatory tariffs, 
 379; a happy expression of, 381; 
 his defence of Protection in " young
 
 538 
 
 INDEX. 
 
 and rising nations," examined, 386, 
 sqq . ; deference of colonists to opin- 
 ions of, 441 ; on taxes on inheri- 
 tance, 472 ; on precarious incomes, 
 476 ; his defence of the relief of 
 destitution, 489 ; on taxation of 
 accidental fertility, 498 ; on making 
 the state, the universal landlord, 
 514 
 
 Mining countries not necessarily 
 wealthy, 259 
 
 Mischief-makers, meanness of, 374 
 
 Moleyns, Adam de, on Irish gold, 258 
 
 Monasteries, dissolution of, their 
 wealth, 35 ; the, contrived the stock 
 and land lease, 65 ; treasures of, 
 enormous, 420 
 
 Monastic lands, grantees of, their obli- 
 gations, 357 ; property, very scat- 
 tered, 484 
 
 Money, impossibility of keeping in, 
 96 ; circulation of, 188 ; power of a 
 bank to coin, a misconception, 218 : 
 the basis of notes and credit, 219 ; 
 depletion of, not yet an extinct 
 delusion, 392 
 
 Money, old, did not disappear, 193 
 
 Monk's Act, and civil servants, 512 
 
 Monopoly, price of, to be fixed, 354 
 
 Montacute, Earl of Salisbury, his sym- 
 pathy with the rebels of 1381, 29 
 
 Montague, his attitude at the Eecoin- 
 age, 200 ; his project of the Bank of 
 England, 214 
 
 Montfort, Simon de, his Parliament, 
 and his motive, 121 
 
 Merrill, Mr., his tariff and his motives, 
 294 ; the price of his tariff, 384 
 
 Mortimer, overthrow of, 417 
 
 Moscow, march to, and the uniform of 
 French soldiers, 292 
 
 Muratori, his collection of diplomas, 
 4 ; his Antiquitates, 92 ; on gold 
 currencies, 189 ; on Italian banking, 
 207 
 
 Musical instrument, land bearing rent, 
 compared to by the Duke of Argyll, 
 48 
 
 N. 
 
 Napoleon, his commercial policy, 215 ; 
 
 an idol of idiots, his character, 292 
 Nation, benefit to, collectively, by 
 
 primary education, 357 
 National Debt, a guarantee of the 
 
 settlement, 448 
 
 National laws, discovery and adapta- 
 tion of, effects of, 49 
 
 National ledger, interpretation of, 389 
 
 National pride, phrases appealing to, 
 333 
 
 Navigation Act, effects of, 327 
 
 Navigation, once a knack, now an art, 
 257 
 
 New College, Oxford, its house pro- 
 perty in 1453, 169 ; possesses speci- 
 mens of early cloth, 285 
 
 New England, soil of, uninviting, 322 
 
 Newspaper tax, imposition of, 464 
 
 Newton, Sir I., on the recoinage, 200 
 
 Nicholls, Mr., and new Poor Law, 248 
 
 Nimeguen, peace of, effects of, 460 
 
 Nobles, sons of, in the Church, 64 ; 
 great, intrigues of, in France, 482 
 
 Nonconformists, their cohesion and 
 influence, 215 
 
 Norfolk, early opulence of, 89 : indus- 
 tries of, 144 ; its early position, 149 
 
 Norfolk, North, talk in, about Lord 
 Lo veil's farming, 177 
 
 Norman, Mr., on Bank of England, 
 224 
 
 Northern England, rudeness and pov- 
 erty of, 145 
 
 North, Lord, his attitude on the 
 American tea duty, 469 
 
 North, Eoger, on the circulation of 
 specie, 392 
 
 Nory, his precedents for ship money, 
 136 
 
 Notes, natural limitation of, issues of, 
 217; inculation of, 218; early de- 
 nominations of, high, 258; bank, 
 restraint of issue of, 360 ; incon- 
 vertible, why circulated, 441 
 
 Nullum Tempus Act, origin of, 433 
 
 0. 
 
 Oaths taken on Land Tax, 462 
 Obligations, local in England, 483 
 Obloquy, newspaper, to sensible men, 
 
 cackle, 332 
 Obstacles, greatest to human progress, 
 
 ignorance and science, 289 
 Occupancy, local taxation on, unfair, 
 
 494 
 Occupiers, payment of taxes by, said 
 
 to be payment by owners, 498 
 Official clergy, class of, 72 
 Old Testament, reading of, its effects, 
 
 78 
 Omnibus Bills, their purpose, 405
 
 INDEX. 
 
 539 
 
 Open fields, system of, 59 ; custom of, 
 a hindrance to agriculture, 178 
 
 Opposition, irrational, not always met, 
 by calling it so, 363 
 
 Orange, house of, its degradation, 435 
 
 Oresme, Bishop of Lisieux on money. 
 95 ; on the circulation of specie, 
 392 
 
 Organization, its universality in early 
 English life, 295 
 
 Oriel College, its purchase of a rever- 
 sion, 67 ; its trade in masses, &c., 
 305 
 
 Outlaws, haunts of, 142 
 
 Overstone, Lord, his opinions on the 
 Bank, 224 
 
 Oxford city and university, assess- 
 ments of 1693, 156 
 
 Oxford Colleges, house property of 
 pre-Beformation, how procured, 305 
 
 Oxford professor, a, on American 
 paper currency, 37 
 
 Oxfordshire, its early relative wealth, 
 149 
 
 Oxford, the origin of all religious 
 monuments in England, illustrated, 
 73 ; the farm rent of, 128; St. Mary's 
 church at, its use, 144 ; roads of, 
 ancient and modern, 491. 
 
 Oxford town, its municipality sub- 
 jected to the University, 298 
 
 P. 
 
 Painters, English school of, late, 274 
 
 Palmerston Lord, his adage rejected, 
 345 
 
 Papal clergy, types of, 72 
 
 Paper currency, forced, in England, 
 201 ; why accepted, 220 
 
 Paper issues of Austria and Buasia, 
 effects of, 189 
 
 Paper, manufacture of, in England, 
 280 
 
 Paper money, issue of, in American 
 War, 384 
 
 Parliament, rolls of, imperfect, 127 ; 
 tries punishments before remedies, 
 200; theory and practice of, 345; 
 relations of to railways, 353 ; a 
 mouthpiece for popular indignation, 
 421 ; the old, a travesty, 448 ; alone 
 able to create a monopoly, 462 ; 
 claims right of taxing the Colonies, 
 468 ; the, of 1529, its duration and 
 its acts, 485 ; limitations on the 
 functions of, 503 
 
 Parliament, Irish, its corruption, 431 
 
 Parliamentary franchise, the, of 1406 
 and of 1430, 297 
 
 Parish, English, its position as a social 
 unit, description of, 13 
 
 Parishes, close and open, effects of 
 245 
 
 Parish life, exceedingly insulated, 283 
 
 Paris, Matthew, his opinions, 72 ; on 
 the condition of England, 139 ; on 
 reign of Henry III., 170 
 
 Paris, peace of, 1763, state of Europe 
 at, 290 
 
 Parnell, Sir H. (Lord Congleton), his 
 financial proposals, 474 
 
 Parochial settlement, law of, and 
 origin of, 245 ; law of an appeal to 
 old traditions, 295 
 
 Passport system of 12 Eic. II., 31 
 
 Past and present, continually muddled 
 by writers, 304 
 
 Pasture rents, rise of, 180 
 
 Paterson, his earlier career, 108 
 
 Patriots, Indian, their criticism on 
 loans, and answer to, 440 
 
 Peace, armed, what it means, 294 ; 
 maintenance of and charges of, on 
 whom it should be imposed, 493 
 
 Peace of 1815, one of languor, 292 
 
 Peasant, with land, his advantages, 
 240 
 
 Peasant, English, his life, 15 ; his 
 superiority to those of France and 
 Germany, 16 ; his early struggles 
 for freedom, his present attitude, 82 
 
 Peasant or artizan, sacrifices of, in the 
 education of his children, great, 357 
 
 Peasantry, outbreaks of, 81 ; organiza- 
 tions of, 300 
 
 Pecok, Bishop, his teaching, 83 
 
 Peel, his defence of his income tax, 
 131 ; his famous question, What is 
 a pound ? 201 ; and Bank Act of 
 1844, 224 : premature death of, 226 ; 
 his tariff reforms, 443 : services of, 
 and abilities of, 455 ; financial posi- 
 tion on his coming to office in 1841, 
 475 ; on post office reform, o04 
 
 Peel, Sir Eobert (the first), on Irish 
 trade, and the Irish Uniou, 327 
 
 Peer, a, his tactics with his personal 
 property, 474 
 
 Peers, claims of, to writ of summons, 
 133 
 
 Penal code, the, in Ireland, 81 
 
 Penn, William, pension to heirs of 
 330
 
 540 
 
 INDEX. 
 
 Pennsylvania, workmen's houses in, 
 497 
 
 Penny, supposed degradation of, 185 
 
 Pepper, price of, 106 
 
 Pepys, his correspondence with Houb- 
 lon, 215 
 
 Permanent and terminable loans, 
 difference of, 446 
 
 Personal government, extinction of, in 
 England, 448 
 
 Personal property, taxes on inheritance 
 of, 471, sqq. 
 
 Pessimism, economical, a risk, 229 
 
 Philip II., his resources in money, 
 95 ; and Bank of Genoa, 211 ; origin 
 of his resources, 260 ; his loans in 
 Genoa, 434 
 
 Philip le Bel, his quarrel with Boni- 
 face VIII., 74 
 
 Phillips, Prof., on the extent of coal 
 measures, 230 
 
 Philologers, their occupations, 275 
 
 Philosophy of history, its progress and 
 its risks, 5 ; illustration of para- 
 doxes in, 308 
 
 Phrases, their power over men, 329 
 
 Piracy, why an offence which all may 
 punish, 398 
 
 Pitt, Elder, his objects, 318 
 
 Pitt, his income tax, 131 ; his action 
 in 1797, 201 ; his real breach of law 
 in 1797, 216; his policy, and his 
 relations to the. Bank, 223 ; death 
 of, its attendant circumstances, 349 ; 
 his respect for Adam Smith, 349 ; 
 his "patriotic loan" a failure, 439 ; 
 in 1798, makes the Land Tax per- 
 petual, 463 ; his accession to office, 
 470 ; successors of, their finance, 
 474 
 
 Plague, Great, causes of, and effects of, 
 263 
 
 Plague, the, of 1349, its effects, 21 
 
 Plantations, American, their origin, 
 322 
 
 Plate, silver, price of, 195 
 
 Plautus on relations of man to man, 
 341 
 
 Police, modern, origin of, 493 
 
 Political economists, their practical 
 errors, 7 ; generally in the right on 
 financial questions, 454 
 
 Political economy, neglect of econo- 
 mical facts by, 2 ; illustrations of 
 its speculative side, 50 ; nearly all 
 the fallacies of, partially true, 307 
 
 Political nicknames in Flanders, 278 
 
 Political pamphlets, importance of two 
 centuries ago and onwards, 424 
 
 Poll taxes, beginning of, 129 
 
 Pomeranian leather, a special import, 
 410 
 
 Poole, Mr., visited by American 
 citizens, and why, 368 
 
 Poor, doctrine that they should live 
 on the land affirmed, 243 ; harshness 
 of political economists to, 310 ; de- 
 sire of fair traders to make a raid 
 on, 372 ; maintenance of the, a 
 growing charge, 486 ; relief on, not 
 settled on economical grounds, 489 
 
 Poor Law, derivable from the bad acts 
 of government, 244 ; ancient defence 
 of, 487 
 
 Poor laws, between 1541 and 1601, 241 
 I Poor priests, foundation of order of, 77 
 
 Poor rate, return of, at 1685, 43 ; in- 
 cidence of, in 1685, 159 ; relative 
 amount of, in 1685, 246 ; payment 
 of, by those who do not employ 
 labour, 488 ; the distribution of, to 
 various objects, 489 
 
 Pope, the, expensiveness of his Court, 
 187 
 
 Population, amount of, in England, at 
 different times, 53 ; abundance of, 
 no necessary test of prosperity, 140 
 in England, calculations on, 157 
 
 Porter, on the Progress of the Nation, 
 446 
 
 Portsmouth, created or restored by 
 Henry VIII., 518 
 
 Portugal, discoveries of, 320 
 
 Postal notes, restraints on, 507 
 
 Post office, the, best illustration of 
 governmental work, 504 
 
 Pound, the, unit of currencies derived 
 from Eoman system, 184 
 
 Povertv, expedients to relieve by law, 
 242 
 
 Precious metals, how procured in non- 
 producing countries, 257 
 
 Presbyterians of seventeenth century, 
 now Unitarians, 85 
 
 Prestige, its influence in France, 460 
 
 Price, the giver of a price attracts the 
 dealer, 397 
 
 Price, his sinking fund, 455 
 
 Prices, rise of, cause of, 17 ; regula- 
 tion of, general, 25 ; wages do not 
 rise with, 37 ; evidence of, as to 
 degeneracy of coins, 194 ; laws of, 
 251, sqq. ; causes affecting, 253 ; 
 rise in, historical epochs of, 257 ;
 
 INDEX. 
 
 541 
 
 general uniformity of, from 1260 to 
 1540, 262 ; high, occasions on which 
 they induce high wages, 373 
 
 Primogeniture, effect of, at first un- 
 important, 63 
 
 Printing, an invention of foreigners, 
 280 
 
 Prisons and hospitals, taxes for, 494 
 
 Private coining, little risk of, 190 
 
 Private interest, doctrine that it is a 
 public duty, an impudent fallacy, 
 382 
 
 Privileges, purchase of, 128 
 
 Proclamations, Elizabeth's, volume of, 
 40 
 
 Producer, Government, like a protec- 
 tion for manufactures, 523 
 
 Production, cost of, 260 ; motive of, 
 the expectation of a market, 370 
 
 Professional classes, wages of, small, 
 301 
 
 Professional incomes, taxes on, 477 
 
 Professors, Oxford and Cambridge, 
 statistics of, 370 
 
 Profit, the vital object to get a balance 
 of, 391 
 
 Profits increase more rapidly than 
 wages, 306 
 
 Profits, natural, in what sense used, 340 
 
 Promissory oaths, futility of, 296 
 
 Propertied classes, their services to 
 agriculture, 414 
 
 Property, respect for in England, gene- 
 ral but peculiar, 24 ; not a basis of 
 notes, and why 1 , 221 
 
 Property taxes, graduated, instances of, 
 124 ; grants were nearly always, 
 127 ; of fifteenth century, cha- 
 racter of, 130 
 
 Proprietory rights, attempts to deal 
 with in Parliament, 330 
 
 Protection, to corn, given in 1660, 270 ; 
 definition of, vague and shifting ; 
 advocates of, 365 ; not quoted fully, 
 366; object of, 368; must be on 
 articles of necessary use, and con- 
 siderable, 309 ; " robbing somebody 
 else," 375 ; in United States, its his- 
 tory, 383 
 
 Protectionist countries, cries in, 316 
 
 Protectionist manufacturers, an in- 
 direct advantage to, 406 
 
 Protectionists employ their imagina- 
 tions like painters and poets, 411 
 
 Protective tariff, effects of, 261 
 
 Protectorate, taxation of landowners 
 during the, 422 
 
 Provisions, rise of after 1541, 240 
 
 Proxies, origin of, 133 
 
 Public characters, contradictory criti- 
 cism of, 6 
 
 Public Debt, English, its origin, 447 
 
 Public Debts, best conditions for crea- 
 ting, 443 
 
 Public schools, endowments of, appro- 
 priated by the rich, 355 
 
 Public service, gains in, 466 
 
 Public stocks, income tax on, a practi- 
 cal repudiation, 443 
 
 Purchase of land by state, effects of, 
 had Mr. Mill's proposal been carried, 
 515 
 
 Purchase of railways by the state, 
 arguments for and against, 510, 
 sqq. 
 
 Puritan movement, social character of, 
 84 
 
 Puritans, their character, 44 ; colonies 
 of, 321 ; their extent and influence, 
 458 
 
 Q- 
 
 Quakers, rise of the, 85 
 Quarter sessions, the conduct of, in 
 rating mansions, 496 
 
 R. 
 
 Rack rents, origin of, 67 
 
 Railway Rates Bill of 1886, author's 
 comments on, in Parliament, 353 
 
 Railways, control of, necessary, 353 ; 
 British charges put on, 354 ; loans 
 for, 444 ; construction of, in Eng- 
 land and elsewhere, 509 
 
 Raleigh, his Eldorado, 321 
 
 Rates," "Book of, issues of, and effects, 
 135 
 
 Rating Act, the, of William IV., 496 
 
 Raw material, not easy to define, and 
 why, 256 
 
 Real estate remained liable to land tax, 
 and why, 403 
 
 Reasons, wise not to give, 502 
 
 Rebellions, colonial, how met and con- 
 doned, 336 
 
 Recoinage by Elizabeth, facts of, 
 195 
 
 Reciprocity, attractions of to some 
 minds, 325 
 
 Re-exportation great from the United 
 Kingdom, 400 
 
 Reform impossible, if the doctrine of
 
 INDEX. 
 
 vested interests is extended or 
 strained, 352 
 
 Reformation, English, its true pro- 
 moters, 84 
 
 Eeligion, extirpation of a, possible, 
 89 ; people give more liberally to, 
 than to want, 242 
 
 Eeligion, wars of, interpretation of 
 characters in, 12 
 
 Religious movements, conditions of, 80 
 
 Religious opinions honestly entertained 
 and enforced, 69 
 
 Remigius, a German paper-maker in 
 England, 280 
 
 Rent, compared to the hire of a musical 
 instrument, 48 ; history of defini- 
 tions of, 160 ; of no interest but to 
 the landowner, 165; regulation of 
 in Europe, 175 ; the last received 
 in distribution, 233 ; its real posi- 
 tion, 236 ; attacks on, 238 ; in seven- 
 teenth century, and comments on it, 
 267 ; agricultural, rise of in Eng- 
 land, 293 ; why considered a fit sub- 
 ject of taxation, 463 
 
 Rents, early, fixed and unalterable, 
 15 ; arable, ancient amount of, 
 167 ; pasture, ancient amount of, 
 167 ; do not depend on prices, 271 ; 
 forcible elevation of, process of, 173 ; 
 not so much affected by cattle and 
 sheep-raising, 179 ; rise of, in seven- 
 teenth century, 199 ; not necessarily 
 raised by protection, 374 
 
 Republic, Roman, nationalized land, 
 and with what effect, 51 
 
 Republic, Athenian and Roman, loans 
 negotiated by, 448 
 
 Repudiation, risks of, 340 
 
 Restoration does not always follow 
 reform, 350 
 
 Restoration, the ruling of lawyers at, 422 
 
 Resumption Bill, Walpole on, in 1702, 
 465 
 
 Retaliation, policy of, examined, 379 
 
 Revenue of Crown, fixed and inelastic, 
 415 
 
 Revolution, the effects of, in relation to 
 the Crown and its estate, 428 ; 
 financial situation of, 456 
 
 Revolution, English, of 1642, sects of, 
 85 
 
 Revolution, French, interruption of 
 commercial treaties by, 113 ; Arthur 
 Young on the, 269 ; paper of, 442 ; 
 character of, and interference with, 
 470 
 
 Revolutions, causes of, in English 
 history, 432 
 
 Rhenish cities, origin of wealth of, 10 
 
 Rhine, policy of France as regards the, 
 287 
 
 Ricardo, his definition of rent, 161 ; 
 his merits on currency questions, 
 185 
 
 Richard I., captivity of, its cost, 120 
 
 Richard II., state of society at begin- 
 ning of reign of, 78 ; and De Vere, 
 417 
 
 Rich, different law for, and poor, 
 471 
 
 Richelieu, his policy, 458 
 
 Richmond, Duke of, descent of, and 
 grants to, 352 
 
 Risk, its relation to profits, 19 
 
 Ritual, character of, during Elizabeth's 
 reign, 421 
 
 Roads, early condition of, 483 ; main- 
 tenance of, a just tax on land- 
 owners, 490 
 
 Rock salt quarried but not refined, 
 277 
 
 Roman Empire, survivals of, 70 ; the, 
 ruined its subjects, 393 
 
 Rothschild, Lord, on foreign stocks, 
 390 
 
 Royalists, their conduct to the peasants 
 in 1642-5, 25 
 
 Rubens, his apotheosis of Villiers, Duke 
 of Buckingham, 274 
 
 Russia, attempts of England to reach, 
 103 ; its use of gold, 190 
 
 Russian corn trade, shock to, by Cri- 
 mean war, 293 
 
 Rymer, his diplomatic collection, 92 
 
 S. 
 
 Salisbury, Earl of (Cecil), early history 
 of the family, 136, 422 
 
 Salt, price of, illustrates the price of 
 wheat, and why, 57 ; importance of, 
 277 
 
 Salted meats, general use of, 277 
 
 Samson, Abbot, his good offices at 
 Oxford, 298 
 
 Sanuto, work of, in 1321, 104 
 
 Saturn, limbo of some political econo- 
 mists, 503 
 
 Savages, irruption of, on Roman Em- 
 pire, why successful, 254 
 
 Savings banks, post office, restraints 
 on, 507 
 
 Savings, various destinations of, 438
 
 INDEX. 
 
 543 
 
 Scarborough, fee-farm rent of, 128 
 Scientific witnesses, disputes of, 363 
 
 Scotch universities, Parliamentary ' 
 
 grants to, indefensible, 363 
 Scotland, customs duties in, 123; 
 degradation of pound in, 197 ; assess- 
 ment of, in 1657, 153 ; wealth of 
 from Tay to Tweed, 363 
 
 Scott, Sir W.,his descriptions of Scot- 
 tish life, 123 
 
 Securities, export of, meaning of, 99 ; i 
 export of, causes for, 396 
 
 Seignorage, practice of exacting, 202 
 
 Selden, his dissertation on tithes, 162 ; 
 on the King's Exchanger, 187 ; his 
 dispute with Grotius, 278 
 
 Selim I., his conquest of Egypt and 
 its effects, 11 ; his conquest of Egypt, 
 107 
 
 Serfs, emancipation of, the effect of, 
 the insurrection of 1381, 30 
 
 Servility, worst traits of, 332 
 
 Session, Parliamentary, ceremony of 
 closing, 281 
 
 Settlement, Act of, immunity of 
 judges under, 424 
 
 Seventeenth century, importance of 
 economical facts in, 2 ; prices and 
 population of, 57 ; calculation of 
 population in, 158 ; rents of, 174 ; 
 men of, 265 
 
 Seven years taken generally as a period 
 of qualification, 301 
 
 Seven Years' War, effect of, on Ameri- 
 can plantations, 291 ; fiscal effects 
 of, 468 
 
 Shaftesbury, Lord (the late), on the 
 Factory Acts, and their limited 
 scope, 355 
 
 Shakspeare like Prospero in the "Tem- 
 pest," 265 ; on winter garments, 286 
 
 Sheep, breeds of, 62 ; losses of, insured 
 by landlord sin the fifteenth century, 
 169 ; keeping of, in England, 273 
 
 Sheep feed, produce of, on acre, 231 
 
 Ship money, its imposition, 136 ; as- 
 sessment of, 151 
 
 Shippon, his attitude, 296 ; his esti- 
 mate of himself and of Walpole, 
 466 
 
 Shotover boar, story of the, 490 
 Sicily, attempt to secure crown of, 
 
 121 
 
 Siemens, his furnace, 233 
 Silk manufacture, London, in the fif- 
 teenth century, 282 
 Silver coin, fineness of, 184 
 
 Silver greatly produced in England, 
 186 ; need of, for Eastern trade, 
 391 
 
 Sinclair, Sir John, his services in Scot- 
 land, 60, 270 ; on apprenticeships in 
 husbandry, 305 
 Sion Abbey, its home farm, 66 
 Sion, abbess of, pressure put on, 264 ; 
 
 foundation of abbey of, 418 
 Sixteenth century, scanty information 
 
 about, 151 
 
 Social and political causes not separ- 
 able, 281 
 
 Smiles, Mr., his books, 257 
 Smith, Adam, on rent, 51 ; on the 
 mercantile system, 96 ; borrows from 
 Turgot his canons of taxation, 115 ; 
 why he called rent a tax, 164, 165 ; 
 on prices and wages, 181 ; his phrase 
 about international money, 190 ; on 
 - the Bank of Amsterdam, 212 ; his 
 theories of rent, 235 ; on lotteries, 
 259 ; on apprenticeship, 300 ; his 
 description of colonial manufactures, 
 331 ; on the Colonial Empire, 338 ; 
 endeavours to get him a place on 
 the Bengal Council, 348 ; on the 
 Protectionists of his day, 376; on 
 the Colonial Trade Acts, 378 ; on 
 nations and governments, 393 ; on 
 rents, economic, competitive, fixed, 
 415 ; on the conceit of nations and 
 individuals, 445 ; on taxation, 461 ; 
 Pitt said to be a disciple of, but how, 
 470 
 Smith, Goldwin, and the Colonies 
 
 twenty- five years ago, 335 
 Smollett, his novel, " Humphrey Clin- 
 ker," 484 
 
 Smuggler, difficulty of dealing with, at 
 Bevolution, 461 ; difficulty of coping 
 with the, 464 
 
 Smuggling, cessation of, 465 
 Socialism, best answer to, is social 
 equity, 316 ; strength of, in what, 
 352 ; stimulants of, 497 
 Social state of England, how affected 
 
 by law, 24 
 Society, may lose some arts, bat is safe 
 
 if it retains others, 253 
 Sole market, acquisition of the, and 
 
 its effects, 290 
 
 Sole-market theory, the, described, 323 
 South Sea Bubble, fruit of the Assiento 
 
 treaty, 449 
 
 Sovereigns, English, their continental 
 circulation, 202
 
 544 
 
 INDEX. 
 
 Sovereign, the, dependence of, on 
 
 Parliament, and legislation of 1850, 
 
 126 ; Crown estate does not belong 
 
 to, 431 
 Spanish Colonies, Government of the, 
 
 320 
 Spain, trade of England with, 103 ; 
 
 its conquests in the New World, 
 
 107 ; discoveries of, 320 ; war with, 
 
 in 1739, 467 
 
 Speaker, his address to the Crown, 134 
 Speenhamland Act, its object, 247 
 Spillman, a German paper-maker at 
 
 Dartford, 280 
 
 Spinning, a universal occupation, 143 
 Spinola, and bank of Genoa, 211 
 Squatters, Colonial, impudence of, 336 
 Stafford on landlords, 171 
 Stamp Act, the, 468 
 Stanhope, Lord, his absurd motion, 224 
 Stanhope, Lord, his politicalportraits,-6 
 State, limits of agency of, 311 ; should 
 
 define what contracts it enforces, and 
 
 how far, 343 ; result of land being 
 
 owned by, 516 
 State rights in the American Union, 
 
 theory of, 481 
 
 Statesmen, duty of, in economical in- 
 ductions, 8 ; ignorance of and its 
 
 causes, 344 
 Statesmen, European, their alliances, 
 
 502 
 States of the Union, defaulting, lesson 
 
 given to, 340 
 
 State, the, finding capital, illusory, 18 
 Statute of Labourers, enacted, and its 
 
 provisions, 26 
 Stephenson, the younger, his dictum, 
 
 353 
 Stock and land lease, the, its character, 
 
 64 
 Stock Exchange, its weakness and its 
 
 strength, 339 
 Stock Exchange securities cannot be 
 
 conveniently taxed, 383 
 Stock, railway, distribution of, 513 
 Stocks, conversion, process of, 452 
 Stourbridge, fair of, 282 
 Strike, a, rarely successful, and why, 
 
 315 
 Stuart, kings, thefts of bankers' 
 
 money by, 212 
 Stuarts, their policy as to judges' 
 
 patents, 41 
 
 Subsidy, amount of, fixed, but is les- 
 sened, 126 
 Substitutes for money, early use of, 205 
 
 Success in wealth-getting honoured, 
 
 312 
 Successions, Pitt's tax on, examined, 
 
 471 
 Succession, war of, combatants in the, 
 
 64 
 Sugar, slave grown, objections to, and 
 
 facts as to, 329 
 
 Sumptuary laws, effectiveness of, 377 
 Superintendence, wages of, their profit, 
 
 19 
 Supplementary estimates, bad finance, 
 
 451 
 Supreme Court, American, decisions 
 
 of, 481 
 
 Surrender, by Colonial Office, to Colo- 
 nies, in what directions, 337 
 Suspension of cash payments, debate 
 
 on, 223 
 Sussex, forges and glass furnaces of, 
 
 287 
 
 Button's culture, character of, 231 
 Sweden, source of iron, 276 
 Swift, on the customs, 123, 464 ; his 
 
 political philosophers of Laputa, 
 
 457 
 Sworn-off gold, origin of the phrase, 
 
 187 
 
 T. 
 
 Tandridge, graduated local taxation 
 in, 124 ; relief of poor at, 243 ; de- 
 scription of, and local taxes at, 484 
 
 Tallage, the, of towns, 120 
 
 Tallages, liability to, 128 
 
 Tanning, partial, a practice in foreign 
 leather trade, 410 
 
 Tariff, protectionist, a war in disguise, 
 334 ; American, local defence of, 384 ; 
 reform of, in Walpole's time, 466 
 
 Tariffs, Colonial, meaning of, 337 
 
 Taxation, canons of, ambiguous, 116 ; 
 arbitrary, restraint of, 120 ; motion 
 on, by author, 131 ; various grounds 
 for, alleged, 460 ; present distribu- 
 tion of, 478 
 
 Taxation, English, early, peculiar, 115 
 
 Taxes, distribution of, a proper subject 
 for a director of criminal investiga- 
 tion, 370; imposed atEevolution,461 
 
 Taxes, sanitary, who should pay, 495 
 
 Tax, new, difficulty of levying, 446 
 
 Tax, remains, to some extent, on those 
 who first pay it, 499 
 
 Tea, use of, said to have caused an in- 
 crease of rates, 246
 
 INDEX. 
 
 545 
 
 Telegraph companies, scandalous pur- 
 chase of the, 506 
 
 Tenancy at will, origin of, late, 67 
 
 Tenant, his position to landlord, 359 
 
 Terminable annuities, effect of income 
 tax on, 476 
 
 Terminable securities, how affected by 
 income tax, 447 
 
 Terrorism in the United States, 385 
 
 Teuton, imitative and occasionally 
 intrusive, 294 
 
 Teutonic certificates, their value, 275 
 
 Teutonic irruption, character of, 70 
 
 Teutonic race manufactures some 
 thing besides metaphysics and 
 testimonials, 410 
 
 Textile industries, diffused in England, 
 281 
 
 Thimble money, origin of name of, 
 136 
 
 Thirlby, Bishop, his paper mill, 280 
 
 Thirty Years' War, causes and provo- 
 cations of, 287 
 
 Tillage, decimal fraction of land gone 
 out of, 370 
 
 Tin, produce of, in England, 283 
 
 Tithe, payment of rates by, its defence, 
 488 
 
 Tobacco, Virginian, importance of, 
 322 ; Spanish, cost of, 323 
 
 Tobacco tax, the, of Sir S. Northcote, 
 499 
 
 Tolls taken, but roads not mended, 
 490 ; receipts from decline, 491 
 
 Tone, Wolfe, his language about the 
 Irish House of Commons, 432 
 
 Tories had better writers than Whigs, 
 464 
 
 Tories, historic, authors of the peace 
 of Utrecht, 449 
 
 Torrens, Colonel, on the Bank of 
 England, 224 
 
 Tower pound, weight of, 184 
 
 Towns, taxation of, peculiar, 127 ; 
 organization of, 297 ; local taxation 
 of, 508 
 
 Trade, British, assistance given to 
 Americans due to a desire to break 
 up, 331 
 
 Trade follows the flag, maxim ac- 
 cepted, 291 
 
 Trade, its aids to international mor- 
 ality, 93 ; international character of , 
 99 ; early English, small and pre- 
 carious, 302; reciprocal, effects of, 
 326 
 
 Trade profits, principle of, 109 
 
 80 
 
 Traders do not desire to keep money, 
 
 94 ; prudent rule of, 406 
 Trades, organization of, 298 
 Trans-shipment, an easy evasion of 
 
 retaliating duties, 380 
 Treaty of 1861, character of, 113 
 Troy pound, weight of, 184 
 Truck, defence of, and condemnation 
 
 of, 359 
 Tail, Jethro, on rent in eighteenth 
 
 century, 176 ; on rents, 268 
 Turgot, his canons of taxation, 115 
 Turk, the, his mischievous presence, 
 
 107 
 Tzar, his policy ten years ago, how 
 
 determined, 439 
 
 U. 
 
 Ulster, linen weaving by peasants of, 
 
 84 ; bye-industries in, 175 
 Unearned increment, hope for, per- 
 petual, 237 
 
 Unemployed, the, statistics of, 370 
 United Kingdom, its proportion of the 
 
 world's trade, 408 
 
 United States, circulation of green- 
 backs in, 37 ; risks to agriculture in, 
 271 ; protection in, malignant, 366 5 
 advocates of protection in, avoiding 
 their own case, 369 ; protection in t 
 its history, 383 ; exports of, and ex- 
 planation of, 402 ; growth of trade of. 
 recent, 407 ; building land in the, 
 497 
 
 Unit, social, weakness of the, 342 
 Universities, the incorporation of, 298 
 Universities and Colleges Act 1576, its 
 
 tendency, 171 
 
 Universities, English, founded by pri- 
 vate munificence, 363 
 Usury, laws regulating, 94 
 Usury law, abrogation of, 343 
 Utility, connection of art with, 275 
 Utrecht, treaty of, its effects on Eng- 
 lish trade, 320 
 
 V. 
 
 Vaccination, compulsory, opposition 
 
 to, 363 
 
 Valuations, for taxation, Edward's, 122 
 Van der Weyer, M., on Belgian thrift, 
 
 438
 
 546 
 
 INDEX. 
 
 Vansittart, Mr., on the Bullion Com- 
 mittee, and his motion, 224 ; his 
 action, 454 ; his incapacity, 474 
 
 Vegetables, garden, came from Hol- 
 land, 289 
 
 Venice, Bank of, and the practice of 
 the Eepublic, 209 
 
 Vicarious responsibility, characteristic 
 of English life, 121 
 
 Village guilds, endowments of, 306 
 
 Villiers, Mr. C., his return of wages, 
 248 
 
 Vincent, Mr. Howard, his advocacy of 
 protection, his earlier calling, hjs 
 action in Parliament, 366 
 
 Virginia trade, character of, 326 
 
 Volcanoes, social all over Europe, 
 383 
 
 W. 
 
 Wadham, Dorothy, her architect, 274 
 
 Wage-fund theory of Mr. Mill criti- 
 cized, 308 
 
 Wages, receipt of, its analogy to 
 profits, 19 ; do not rise with prices, 
 37 ; actually paid higher than that 
 allowed, 44; cannot keep, up to 
 prices, 266 ; poor rate, a rate in aid 
 of, and why, 487 
 
 Wakefield, Gibbon, his colonial 
 scheme, 337 
 
 Wall Street gamblers, and soft money, 
 223 ; their intrigues, and the conse- 
 quences, 384 
 
 Walpole, his treatment of public debt, 
 450 ; his parliamentary powers, 465, 
 sqq. ; his project, and his enemies, 
 399 ; his consolidated debt, 452 
 
 Warehousemen, London, their agency, 
 404. 
 
 War, invariable language of govern- 
 ment about, 393 ; just and neces- 
 sary, a short phrase, 454 
 
 War of Spanish succession, cost of, 
 463 
 
 War of Succession, 1453-1485, charac- 
 teristics of, 265 ; in the fifteenth 
 century, its causes and character, 
 419 
 
 Wars, European, since 1815, very 
 destructive, 293 ; European, succes- 
 sive characteristics of, 324 ; effects 
 of various, 470 
 
 Warwickshire, open or common fields 
 in, 178 
 
 Water companies, valuation of the, in 
 1880, 513 
 
 Watt, importance of his invention, 
 267 
 
 Waynflete, founder of Magdalene Col- 
 lege, Oxford, his practices, 66 
 
 Wealth, kinds of, 17 ; production of, 
 causes of, 227 ; teaching of political 
 economy on, partial, 310 
 
 "Wealth of Nations," delay in the 
 publication of, 348 
 
 Weaver, a, synonymous with a heretic, 
 91 ; generally a heretic in the 
 Middle Ages, 376 
 
 Weight, payments by, the practice, 
 arguments for, 191 sqq. 
 
 Wells, David, on cost of freight, 232 
 
 Wesley, movement of, 88; on slavery, 
 329 
 
 Westminster monks, their home farm, 
 extorted by the Russells, 66 
 
 Weymss, Lord, as a speculative poli- 
 tician, 351 ; on socialism at St. 
 Stephens, 497 
 
 Wheat and labour, prices of, inference 
 from, 6 
 
 Wheat, ratio of, to barley and oats, 
 251 ; highest relative price of, 252 ; 
 rise of price of, 266 ; heavy protec- 
 tion on, in the cost of freight, 369 
 
 Whig, modern, picture of a, a lampoon, 
 425 
 
 Whigs, monied, their support of the 
 Act of Settlement, 88 ; first directors 
 of Bank of England generally, 214; 
 and what sort of, 215 ; historic, 
 created the wars of Spanish succes- 
 sion, 449 
 
 Whitbread, Mr., his attempt to make 
 allowances legal, 247 
 
 Whiteley, Mr., character of his busi- 
 ness, 406 
 
 White, William, his history and fate, 
 79 
 
 William the Norman, policy of, 71 
 
 William the Primate, proclamation 
 addressed to, in 1349, 26 
 
 William III., his position in Holland 
 and in England, 427; the floating 
 debt a scandal to his government, 
 449 
 
 Wiklif , career of, 73 
 
 Wilkes, defended as a Nonconformist, 
 87 
 
 Willoughby, voyage of, 320 
 
 Woods and Forests, office of, charges 
 against, 517
 
 INDEX. 
 
 547 
 
 Wool, American production of, 368 
 "Woolcomber, art of, 285 
 Wool, English, its importance, 9 
 Wool taxes, the, amount of, 129 
 Wool tax of 1341, its distribution, 140 
 Working classes, laissez faire breaks 
 down in, 352 ; their position deteri- 
 orated after 1782, 469 
 Workman, what he has to sell, 313 
 Workmen, subjection of, causes of, 
 240 ; dislike those who refuse to aid 
 their organization, 317 
 Wykeham, William of, his mitre case 
 and valise, 286 
 
 Y. 
 
 York, house of, asks for few grants, 
 132 
 
 York, statute of, its importance, 122 
 
 Young, Arthur, on rent in eighteenth 
 century, 176 ; on increase of poor 
 rates, 246; on eighteenth century 
 agriculture, 268 ; on the early days 
 of the French Revolution, 269 ; on 
 Irish landowners and rents, 376 ; 
 reports sent to, 379 
 
 Younger son, the, when he becomes a 
 nuisance, 64
 
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 The Story of the Nations. 
 
 Crown 8vo., Illustrated, and furnished with Maps and 
 
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 L'interessante serie 1'Histore des Nations formera . . . un cours d'histoirc 
 universelle d'une tres grande valeur. Journal des Debats. 
 The remarkable series. New York Critic, 
 That useful series. The Times. 
 An admirable series. Spectator, 
 That excellent series. Guardian. 
 
 The series is likely to be found indispensable in every school library. 
 This valuable series. Nonconformist. [Pall Mall Gazette 
 
 Admirable series of historical monographs. Echo. 
 An excellent series. Times of Morocco. 
 This admirable series. Evangelical Review. 
 The excellent series. Literary World. 
 The Story of the Nations series is excellent. Literary Churchman. 
 
 % ARTHUR OILMAN, M.A., Author of "A History 
 of the American People," &c. Third edition. 
 "The author succeeds admirably in reproducing the 'Grandeur that was 
 Rome.' " Sydney Morning Herald. 
 
 PW ^ n Ancient, Mediaeval, and Modern Times. 
 CV) &. By prof - j K< HoSMER< Second edition. 
 
 " The book possesses much of the interest, the suggestiveness, and the charm o) 
 romance." Saturday Review. 
 
 ^ v Rev. S. BARING-GOULD, Author of "Curious 
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 "A decided success." Ath^naum. 
 
 T 
 J 
 
 ALFRED J. CHURCH, Author of" Stories 
 from the Classics," &c. Second edition. 
 " Told with admirable lucidity." Obso-ver. 
 " A masterly outline with vigorous touches in detail here and there." Guardian. 
 
 Alexander's Empire, J th * 
 
 Greece." Second edition. 
 "An admirable epitome." Melbourne Argus, 
 "A wonderful success." Spectator. 
 
 The Moors in Spain. ! y K STANL / Y (< C AN , K POOLE ' 
 
 r Author of " Studies in a 
 
 Mosque." Second edition. 
 
 " Is much the best on the subject that we have in English." Athtnaam. 
 ' ' Well worth reading. " Times of Morocco. 
 
 " The best, the fullest, the most accurate, and most readable history of the Moor.- 
 in Spain for general readers." St. James s Gazette.
 
 By Prof. GEO. RAWLINSON, Author of 
 </ T he Five Great Monarchies of the 
 World." Second edition. 
 
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 ARMINIUS VAMB&RY, Author of 
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 The fiorarpnc From the Earliest Times to the Fall of 
 
 J 11C OclidLCIlb T> 1 1 T> A /-^ TV/TA 
 
 Bagdad. By ARTHUR GILMAN, M.A., 
 Author of " Rome, &c." 
 
 " Le h'vre de M. Oilman est destine" a etre lu avidement par un grand nombre 
 de gens pour lesquels I'&ude des nombreux ouvrages deji parus serait impossible." 
 
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 Ireland ^ tha ** on ' EMILY LAWLESS, Author of " Hurrish." 
 
 J.J. V^IclllV^l t c _, 
 
 oecond Edition. 
 
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 Chaldea. By Z. A. RAGOZIN, Author of " Assyria," &c. 
 
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 The Goths. By HENRY BRADLEY. 
 
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 great branches of the Gothic nation. " THOMAS HODGKIN in The Academy. 
 
 A <s<;vria * From tne Ri fie of the Empire to the Fall of Nineveh. 
 J By Z^NAI'DE A. RAGOZIN, Author of" Chaldea," &c. 
 
 "Madame Ragozin has performed her task in it as admirably as she has done in 
 her earlier volume on Chaldea. She has spared no pains in collecting the latest 
 and best information on the subject." Extract from Letter from PROF. SAYCE. 
 
 Turkey. By STANLEY LANE POOLE. (Now ready.) 
 HollcinQ. By Professor THOROLD ROGERS. [In September. 
 France. By GUSTAV &IASSON. [October.
 
 Annp OilrhriQf- Her Life and Writings. Edited 
 He VjlLCn St . by HERBRT RARLAKENDEN 
 GILCHRIST. Prefatory Notice by WILLIAM MICHAEL 
 ROSSETTI. Second edition. Twelve Illustrations. Demy 
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 12 
 
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 Cfreologg anD 
 
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 i ne rusen ^nnst . Rev j BALDWIN BROWN, M.A., 
 
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 _ Cbcologp ana Pbilosopftg. _ 15 
 A Short Introduction to the History of 
 
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 G 
 
 he R Land f the Quetzal. By WILLIAM 
 F. BRIGHAM. Twenty-six full -page 
 and Seventy -nine smaller Illustrations. Five Maps. 
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 Modern Hinduism An Account of thc Religion and 
 
 ATAVy V4-W A J. -L -L 1 1 1 vl LI 1 O 1 1 1 -r f f . TT' J XT 
 
 Lire or thc Hindus in Northern 
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 is Cratiel. 
 
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 Asia. By DEMETRIUS C. BOULGER. With Portrait and 
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 TVi<- "Rslksn Peninsula B ^ EMILE DE LAVELEYE - 
 
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 Dead At the Baths The Giostra The Mushroom Merchant in the 
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 T efterc frnm Tfolv % EMILE DE LAVELEYE. Trans- 
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 Origin of the State The Aim, their Sphere of Action, and the Ideal of the 
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 and Right The Sources and Forms of Law. 
 
 Labour, Land, and Law: 
 
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 20 a^fecellaneous. 
 
 Jrtt-inrrc from Tail Notes and Papers on Prison Matters. 
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 Oxon., late (and last) Chaplain of H.M. Prison, Clerkenwell. 
 
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 Literary Landmarks of London. H^T ToT. 
 
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 Literary Landmarks of London. % LAURENCE 
 
 7 H UT T O N . 
 
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 Ahrvnt fVi<=> TTh^al-rR Essays and Studies. ByWiLLiAM 
 
 * JL \j\J LA L IJ.X v* JL 1-L^CV LI \** % * /-> , , 
 
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 " Manners Makyth Man." *? the A u uth r of 
 
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 The Brownies : Their Book, 
 Original 
 Pictures and Poems by PALMER Cox, as published in 
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 Some of the Contents, In the Toy Shop The Singing School Their 
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 " A graceful little picture. . . . Charming all through." Academy.
 
 T6oo&0 for Cbttoren. 23 
 
 Bird's NeSt anc * ot ^ er Sermons for Children of all 
 ' Ages. By the Rev. SAMUEL Cox, D.D., 
 Author of " Expositions," &c. Second edition. Imp. l6mo., 
 cloth, 6s. 
 
 " These beautiful discourses were addressed to children of all ages, and must 
 have found an echo in the hearts of many youthful listeners." St. James's Gazette. 
 " Dr. Samuel Cox has opened up a comparatively new vein." 
 
 Nineteenth Century. 
 
 Birdsnesting and Bird-Stuffing. ^J^ ^ 
 
 the Nests and Eggs of Birds which Breed in Britain. By 
 EDWARD NEWMAN. Revised and Re-written, with Direc- 
 tions for their Collection and Preservation ; and with a 
 Chapter on Bird-Stuffing, by MILL.ER CHRISTY. Crown 
 8vo., is. 
 
 Spring Blossoms and Summer Fruit ; 
 
 or, Sunday Talks for the Children. By the Rev. JOHN 
 BYLES, of Ealing. Crown 8vo., cloth, zs. 6d. 
 " They are of simple and instructive character." Dundee Advertiser. 
 
 Arminim Vamhrv His Lifc and 
 
 /ITimillUS* VdlllUery, Written by Himself. With 
 Introductory Chapter dedicated to the Boys of England. 
 Portrait and Seventeen Illustrations. Crown 8vo., 55. 
 
 "We welcome it as one of the best books of travel that our boys could have 
 possibly placed in their hands." Schoolmaster. 
 
 Own Stories By AscOTT R - HopE Author of 
 
 WWII OLUllCb. stories of Young Adventurers," 
 " Stories out of School Time," &c. Eight Illustrations. 
 Crown 8vo., cloth, 53. 
 
 " This is a really admirable selection of genuine narrative and history, treated 
 with discretion and skill by the author. Mr. Hope has not gathered his stores 
 from the highway, but has explored far afield in less-beaten tracts, as may be seen in 
 his ' Adventures of a Ship-boy' and 'A Smith among Savages.' " Saturday A'eview. 
 
 The Adventures of Robinson Crusoe. 
 
 Newly Edited after the Original Editions. Nineteen Illus- 
 trations. Large crown 8vo., cloth extra, 58.
 
 The chief papers of interest in THE 
 CENTURY for 1888 are those dealing with 
 Travel and Adventure. Mr. KEN NAN 
 describes his Adventures, Exile Life, and 
 the People- he met with in a journey of 
 fifteen thousand miles through Russia 
 and Siberia. Mr. ROOSEVELT treats of 
 the Wild Industries and scarcely Wilder 
 Sports of the great lonely plains of the 
 Far West ; while Mr. DE KAY con- 
 tributes a series of studies on the 
 Ethnology, Landscape, Literature, and 
 Arts of Ireland. 
 
 Price is. \d. Monthly. Post free, i<)s. a Year. 
 
 :NIGHOIAS 
 
 CONDUCTED BY 
 
 Y-AAPES- DODGE; 
 
 For 1888, contains a large number 
 of Tales by many well-known Authors, 
 among whom are Miss ALCOTT, Mrs. 
 FRANCES HODGSON BURNETT, FRANK 
 R. STOCKTON, JOEL CHANDLER HARRIS, 
 AMELIA B. BARR, H. H. BOYESEN, Miss 
 F. C. BAYLOR, and PALMER Cox. 
 
 Price \s. Monthly. Post free, i^s. a Year. 
 
 Xon&on : 
 
 T. FISHER UNWIN, 26, PATERNOSTER SQUARE.