Modern history

096BOOK III 097




THE MARQUIS OF ROCKINGHAM HAD WAITED LONG FOR HIS OPPORTUNITY to form a Government, and when at last it came in March 1782 he had but four months to live. The surrender of Cornwallis at Yorktown in Virginia had a decisive effect on British opinion. Dark was the scene which spread around the ambitious Island and its stubborn King. Britain was without a single ally; she stood alone amid a world war in which all had gone amiss. A French squadron was threatening her communications in the Indian Ocean and French money was nourishing the hopes of the Mahrattas on the Indian subcontinent; the combined Fleets of France and Spain were active in the Channel and had blockaded Gibraltar; Minorca had fallen; Washington’s army lay poised before New York, and the American Congress had incontinently pledged itself not to make a separate peace. Admiral Rodney indeed regained command of West Indian waters in a great victory off the Saintes, and in September Howe was to relieve Gibraltar from a three-year siege. Elsewhere over the globe England’s power and repute were very low. Such was the plight to which the obstinacy of George III had reduced the Empire.

Rockingham died in July, and Lord Shelburne was entrusted with the new administration. He had no intention of following the design which Rockingham and Burke had long cherished of composing a Cabinet, united on the main issues of the day, which would dictate its policy to the King in accordance with its collective decisions. This plan was cast aside. Shelburne sought to form a Government by enlisting politicians of the most diverse views and connection. But the entire structure of British politics was ruptured in its personal loyalties by the years of defeat to which King George III had led them. Now, by enlisting the help of the many, the new Prime Minister incurred the suspicion of all. Of great ability, a brilliant orator, and with the most liberal ideas, he was nevertheless, like Carteret before him, distrusted on all sides. The King found him personally agreeable and gave him full support. But politics were now implacably bitter between three main groups, and none of them was strong enough alone to sustain a Government. Shelburne himself had the support of those who had followed Chatham, including his son, the young William Pitt, who was appointed Chancellor of the Exchequer. But North still commanded a considerable faction, and, smarting at his sovereign’s cold treatment after twelve years of faithful service, coveted a renewal of office. The third group was headed by Charles James Fox, vehement critic of North’s regime, brilliant, generous-hearted, and inconsistent. Burke, for his part, lacked family connections; he had no great gift for practical politics, and since the death of his patron, Rockingham, was without influence.

Hostility to Shelburne grew and spread. Nevertheless, by negotiations in which he displayed great skill, the Prime Minister succeeded in bringing the world war to an end on the basis of American independence. The French Government were now close to bankruptcy. They had only aided the American Patriots in the hope of dismembering the British Empire, and, apart from a few romantic enthusiasts like Lafayette, had no wish to help to create a republic in the New World. His own Ministers had long warned Louis XVI that this might shake his absolute monarchy. Spain was directly hostile to American independence. She had entered the war mainly because France had promised to help her to recapture Gibraltar in return for the use of her Fleet against England. But the revolt of the Thirteen Colonies had bred trouble among her own overseas possessions, Gibraltar had not fallen, and she now demanded extensive compensation in North America. Although Congress had promised to let France take the lead in peace negotiations, the American Commissioners in Europe realised their danger, and without French knowledge and in direct violation of the Congressional undertaking they signed secret peace preliminaries with England. Shelburne, like Chatham, dreamt of preserving the Empire by making generous concessions, and he realised that freedom was the only practical policy. In any case Fox had already committed Britain to this step by making a public announcement in the House of Commons.

The most important issue was the future of the Western lands lying between the Allegheny Mountains and the Mississippi. Speculators from Virginia and the Middle Colonies had long been active in these regions, and their influence in Congress was backed by powerful men such as Franklin, Patrick Henry, the Lee family, and Washington himself. The Radical New Englanders, led by Samuel and John Adams, had no direct interest in these Western territories, but agreed to press for their complete cession provided the British were made to recognise the rights of the Northern colonies to fish off Newfoundland.

Shelburne was by no means hostile to the American desire for the West. The difficulty was the Canadian frontier. Franklin and others went so far as to demand the whole province of Canada, but Shelburne knew that to yield to this would bring down his Government. After months of negotiation a frontier was agreed upon which ran from the borders of Maine to the St Lawrence, up the river, and through the Great Lakes to their head. Everything south of this line, east of the Mississippi and north of the borders of Florida, became American territory. This was by far the most important result of the treaty. Shelburne had shown great statesmanship, and frontier wars between Britain and America were, with one exception, prevented by his concessions. The only sufferers were the Canadian fur companies, whose activities had till now extended from the province of Quebec to the Ohio; but this was a small price. The granting of fishery rights to New England satisfied the Northern states.

In return the British Government attempted to settle two disputes, namely, over the unpaid debts of the American merchants to England accumulated before the war and the security of about a hundred thousand American Loyalists. Shelburne fought hard, but the Americans showed little generosity. They knew only too well that the game was already theirs and that the British Government dared not break off negotiations on these comparatively minor points. It was merely provided that “creditors on either side shall meet with no lawful impediment in the recovery of their debts” and that Congress should “earnestly recommend the several states to restore Loyalist property.” South Carolina alone showed an understanding spirit about Loyalist property, and between forty and fifty thousand “United Empire Loyalists” had to make new homes in Canada.

France now made her terms with England. An armistice was declared in January 1783, and the final peace treaty was signed at Versailles later in the year. The French kept their possessions in India and the West Indies. They were guaranteed the right to fish off Newfoundland, and they reoccupied the slave-trade settlements of Senegal on the African coast. The important cotton island of Tobago was ceded to them, but apart from this they gained little that was material. Their main object however was achieved. The Thirteen Colonies had been wrested from the United Kingdom, and England’s position in the world seemed to have been gravely weakened.

Spain was forced to join in the general settlement. Her American ambitions had melted away, her one gain in this theatre being the two English colonies in East Florida; but this was at the expense of the English retention of Gibraltar, the main Spanish objective. She had conquered Minorca, the English naval station in the Mediterranean during the war, and she kept this at the peace. Holland too was compelled by the defection of her allies to come to terms.

Thus ended what some then called the World War. A new state had come into being across the Atlantic, a great future force in the councils of the nations. The first British Empire had fallen. England had been heavily battered, but remained undaunted.

Her emergence from her ordeal was the work of Shelburne. In less than a year he had brought peace to the world and had negotiated the terms on which it stood. That he received small thanks for his services is a remarkable fact. He resigned after eight months, in February 1783. Later he was created Marquis of Lansdowne, and descendants of his under that name have since played a notable part in British politics. Shelburne’s Government was followed by a machine-made coalition between North and Fox. It was said that this combination was too much even for the agile consciences of the age. Fox had made his name by savage personal assaults on North’s administration. Only five years before he had publicly declared that any alliance with North was too monstrous to be admitted for a moment. Yet this was what was now presented to an astonished public. Shelburne had lived upon his task. The Fox-North Government had nothing on which to rest their feet. Within nine months this Ministry also collapsed. The immediate cause of its fall was a Bill which Fox drafted with the laudable intention of reforming the Government of India. His design was to subject the East India Company, now the rulers of vast territories in Asia, to some degree of control by a political board in London. His critics were quick to point out that extensive patronage would be vested in the hands of this political board and opportunities for corruption immeasurably increased. Only close supporters of the Government could hope to benefit. All party groups, except Fox’s personal followers, were therefore hostile to the proposal.

The King now seized his chance of regaining popularity by destroying a monstrous administration. Party and personal issues alike being exhausted by the weight of the disaster, George III saw his opportunity if he could find the man. Only one figure stood in the House of Commons not committed to the past. If he lacked the traditional elements on which Parliamentary strength had been built in former times, he was at least free from a wholly discredited process. In William Pitt, the son of the great Chatham, the King found the man. He had already held the Chancellorship of the Exchequer during the Shelburne administration. His reputation was honourable and clear. By what was certainly the most outstanding domestic action of his long reign, in December 1783, the King asked Pitt to form a Government. The old Parliamentary machine had failed, and as it broke down a new combination took its place whose efforts were vindicated by the events of the next twenty years.


The revolt of the American colonies had shattered the complacency of eighteenth-century England. Men began to study the root causes of the disaster and the word “reform” was in the air. The defects of the political system had plainly contributed to the secession, and the arguments used by the American colonists against the Mother Country lingered in the minds of all Englishmen who questioned the perfection of the Constitution. Demand for some reform of the representation in Parliament began to stir; but the agitation was now mild and respectable. The main aim of the reformers was to increase the number of boroughs which elected Members of Parliament, and thus reduce the possibilities of Government corruption. There was even talk of universal suffrage and other novel theories of democratic representation. But the chief advocates of reform were substantial landowners or country clergymen like Christopher Wyvill, from Yorkshire, or mature, well-established politicians like Edmund Burke. They would all have agreed that Parliament did not and need not precisely represent the English people. To them Parliament represented, not individuals, but “interests”—the landed interest, the mercantile interest, even the labouring interest, but with a strong leaning to the land as the solid and indispensable basis of the national life. These well-to-do theorists were distressed at the rapid spread of political corruption. This was due partly to the Whig system of controlling the Government through the patronage of the Crown, and partly to the purchase of seats in Parliament by the new commercial and industrial classes. The “Nabobs” of the East India interest, as we have seen, appeared at Westminster, and the incursion of the money power into politics both widened the field of corruption and threatened the political monopoly of the landowning classes. Thus the movement in governing circles was neither radical nor comprehensive. It found expression in Burke’s Economic Reform Act of 1782, disfranchising certain classes of Government officials who had hitherto played some part in managing elections. This was a tepid version of the scheme Burke had meant to introduce. No general reform of the franchise was attempted, and when people talked about the rights of Englishmen they meant the sturdy class of yeomen vaunted as the backbone of the country, whose weight in the counties it was desired to increase. Many of the early reform schemes were academic attempts to preserve the political power and balance of the rural interest. The individualism of eighteenth-century England assumed no doctrinaire form. The enunciation of first principles has always been obnoxious to the English mind. John Wilkes had made a bold and successful stand for the liberty of the subject before the law, but the whole controversy had turned on the narrow if practical issue of the legality of general warrants. Tom Paine’s inflammatory pamphlets had a considerable circulation among certain classes, but in Parliament little was heard about the abstract rights of man. In England the revolutionary current ran underground and was caught up in provincial eddies.

Nevertheless the dream of founding a balanced political system on a landed society was becoming more and more unreal. In the last forty years of the eighteenth century exports and imports more than doubled in value and the population increased by over two millions. England was silently undergoing a revolution in industry and agriculture, which was to have more far-reaching effects than the political tumults of the times. Steam-engines provided a new source of power in factories and foundries, which rapidly multiplied. A network of canals was constructed which carried coal cheaply to new centres of industry. New methods of smelting brought a tenfold increase in the output of iron. New roads, with a hard and durable surface, reached out over the country and bound it more closely together. An ever-expanding and assertive industrial community was coming into being. The rapid growth of an urban working class, the gradual extinction of small freeholders by enclosures and improved farming methods, the sudden development of manufactures, the appearance of a prosperous middle class for whom a place must be found in the political structure of the realm, made the demands of reformers seem inadequate. A great upheaval was taking place in society, and the monopoly which the landowners had gained in 1688 could not remain.

There was also a profound change in the emotional and intellectual life of the people. The American Revolution had thrown the English back upon themselves, and a mental stock-taking exposed complacencies and anomalies which could ill stand the public gaze. The religious revival of John Wesley had broken the stony surface of the Age of Reason. The enthusiasm generated by the Methodist movement and its mission to the poor and humble accelerated the general dissolution of the eighteenth-century world. The Dissenters, who had long supported the Whig Party, increased in wealth and importance and renewed their attack on the religious monopoly of the Established Church. Barred from Parliament and from the franchise, fertile in mind, they formed an intelligent, thrustful, and unsatisfied body of men. Such, in brief, were the turmoils and problems which confronted William Pitt when he became Prime Minister of Britain at the age of twenty-four.


The elections which carried Pitt into power were the most carefully planned of the century. There has been a legend that a great wave of popular reaction against the personal government of George III brought him into office. In fact it was George himself who turned to Pitt, and the whole electoral machinery built up by the King’s agents, headed by the backstairs figure of John Robinson, the Secretary of the Treasury, was put at the disposal of the young politician. In December 1783 Robinson and Pitt met to discuss their plan at a house in Leicester Square belonging to one of Pitt’s close associates, Henry Dundas. Robinson drew up a detailed report on the constituencies, and convinced Pitt that a majority in the Commons could be obtained. Three days later Fox and North were dismissed by the King, and the ensuing elections created a majority which William Pitt preserved into the next century. The plan had been justified, and the nation at large accepted the result as the true verdict of the country.

This majority rested on a number of elements—Pitt’s personal following; the “Party of the Crown,” put at his disposal by George III; the independent country gentlemen; the East India interest, alienated by Fox’s attempt to curb their political power; and the Scottish Members, marshalled by Dundas. Here was a rank and file which represented a broad basis of popular favour. Pitt had no intention of being a second Lord North. The Tories supported him because he appeared to be rescuing the King from an unscrupulous Government. The Whigs remembered that he had refused office under North, and that he had advocated a reform of the Parliamentary system. The “old gang,” with whom he had no connections, had failed, disgraced the nation, and wrecked its finances. With all the renown of his father’s name behind him, this grave, precocious young man, eloquent, incorruptible, and hard-working, stood upon the uplands of power.

Even at this age he had few close acquaintances. But two men were to play a decisive part in his life, Henry Dundas and William Wilberforce. Dundas, a good-humoured, easy-going materialist, embodied the spirit of eighteenth-century politics, with its buying up of seats, its full-blooded enjoyment of office, its secret influences, and its polished scepticism. He was an indispensable ally, for he commanded both the electoral power of Scotland and the political allegiance of the East India Company, and it was he who kept the new majority together. For Pitt, although personally incorruptible, leant heavily upon the eighteenth-century machinery of government for support.

William Wilberforce, on the other hand, was the friend of Pitt’s Cambridge days, and the only person who enjoyed his confidence. Deeply religious and sustained by a high idealism, Wilberforce became the keeper of the young Minister’s conscience. He belonged to the new generation which questioned the cheerful complacency of the eighteenth century. The group who gathered round him were known not unkindly as “the Saints.” They formed a compact body in the House of Commons, and their prime political aim was the abolition of the slave trade. They drew towards them the religious fervour of the new Evangelical, or “Low Church,” movement. Between these contrary characters stood Chatham’s son.

The greatest orators of the age, Fox and Burke, were Pitt’s opponents. They dwelt eloquently on the broad themes of reform. Yet it was Pitt, aided by Dundas, who in a quiet, businesslike way reconstructed the practical policies of the nation. The variety of his following however limited the scope of his work. A multitude of interests stifled his early hopes. He failed to legislate against the slave trade. Wilberforce and his “Saints” were consistently thwarted by the Bristol and Liverpool merchants, who were political supporters of the Ministry and whom Pitt refused to alienate. Such was the meagreness of Pitt’s efforts that many doubted his sincerity as a reformer: abolition of the slave trade had to wait until Fox again came into office. But Wilberforce never permitted a syllable of doubt to be spoken unchallenged against his friend, and trusted to the end in Pitt’s Parliamentary judgment.

Pitt was to need great patience in the coming years. His supporters were stubborn, jealous, and at times rebellious. They frustrated his attempts to reform the Irish Government, now imperative since the loss of the American colonies. It was only after a hard fight that Pitt and Dundas persuaded the House of Commons to pass an India Bill establishing a Board of Control not unlike that which Fox had proposed, though less effective. The system endured until after the Indian Mutiny sixty years later. Since Dundas immediately acquired the management of this Board, the patronage thus placed in his hands greatly enhanced his own political position. In April 1785 the King and the borough Members extinguished another of Pitt’s hopes, a measure of Parliamentary Reform.

Thus from the outset Pitt was overcome by the dead hand of eighteenth-century politics. He failed to abolish the slave trade. He failed to make a settlement in Ireland. He failed to make Parliament more representative of the nation, and the one achievement in these early months was his India Act, which increased rather than limited the opportunities for political corruption. He saw quite clearly the need and justification for reform, but preferred always to compromise with the forces of resistance.


It was in the most practical and most urgent problem, the ordering and reconstruction of the finances of the nation, that Pitt achieved his best work, and created that Treasury tradition of wise, incorruptible management which still prevails. His Ministry coincided with a revolution in economic and commercial thought. In 1776 Adam Smith had published The Wealth of Nations, which quickly became famous throughout educated circles. Pitt was deeply influenced by his book. The first British Empire was discredited and had almost vanished from the map. Another was gradually growing in Canada, in India, and in the Antipodes, where Cook had just charted the scarce-known Southern Continent. But the conception of a close economic Imperial unit, with the colonies eternally subject in matters of trade to the Mother Country and fettered by comprehensive restrictions upon their commercial intercourse with other nations, had proved disastrous. The times were ripe for an exposition of the principles of Free Trade. In steady, caustic prose Adam Smith destroyed the case for Mercantilism. Pitt was convinced. He was the first English statesman to believe in Free Trade, and for a while his Tory followers accepted it. The antiquated and involved system of customs barriers was now for the first time systematically revised. There were sixty-eight different kinds of customs duties, and some articles were subject to many separate and cumulative imposts. A pound of nutmegs paid, or ought to have paid, nine different duties. In 1784 and 1785 Pitt was able to bring a degree of order into this chaos, and the first visible effect of his wide-ranging revision of tariffs was a considerable drop in smuggling.

Further reform consolidated the revenue. It is to Pitt that we owe the modern machinery of the “Budget.” By gathering around him able officials he reorganized the collection and disbursement of the revenue. The Audit Office was established, and numerous sinecures at the Treasury were abolished. The state of the national finances was lamentable. At the end of 1783 over forty million pounds which had been voted by Parliament for war purposes had not been accounted for. Government credit was low, the Ministry was distrusted. The National Debt stood at two hundred and fifty million pounds, more than two and a half times as great as in the days of Walpole. Pitt resolved to acquire a surplus in the revenue and apply it to the reduction of this swollen burden.

In 1786 he brought in a Bill for this purpose. Each year a million pounds would be set aside to buy stock, and the interest would be used to reduce the National Debt. Here was the famous oft-criticised Sinking Fund. The scheme depended on having an annual Budget surplus of revenue over expenditure, and Pitt was often forced in later years, when there was no such surplus, to feed the Sinking Fund with money borrowed at a high rate of interest. His reasons for so costly a procedure were psychological. The soundness of the national finances was judged by the amount in the Sinking Fund, which gave an impression of stability to the moneyed classes of the City. Trade revived, prosperity increased, and what then seemed the handsome sum of ten millions was paid off in ten years.

In this same year, 1786, the Customs and Excise were amalgamated, and a reconstituted Board of Trade established in its modern form. But perhaps the most striking achievement of Pitt’s management was the negotiation of the Eden treaty with France—the first Free Trade treaty according to the new economic principles. William Eden, one of Pitt’s able young officials, was sent to Paris to get French tariffs against English cotton goods lowered in return for a reduction of English duties on French wines and silks. These did not of course compete with any English product, but the export of Lancashire cotton goods damaged the textile manufacturers in North-Eastern France and increased the discontent among the French industrial classes affected by this enlightened measure.

The hope of further reconstruction and improvement was shattered by war and revolution upon the European scene. For Pitt it was a personal tragedy. His genius lay essentially in business management; his greatest memorials are his financial statements. He was most at home in the world of figures. His mind had set and developed at an unduly early age, without, as Coleridge said, “the ungainliness or the promise of a growing intellect.” He found human contacts difficult, and his accession to power cut him off from other men. From 1784 until 1800 he moved exclusively between the narrow world of political London and his house at Putney. He knew nothing of the lives of his countrymen outside the limited area of the Metropolis. Even amid the fellowship of the House of Commons and the political clubs he stood aloof.

Fully aware of the economic changes in eighteenth-century England, Pitt was less sensitive to signs of political disturbance abroad. He believed firmly in non-intervention, and the break-up of the Old Régime in France left him unimpressed. He watched with quiet malice the quarrel on this issue of his leading Parliamentary opponents, Fox and Burke. His interests lay elsewhere. If the French chose to revolt against their rulers it was their own affair. It might be flattering that they should want a constitutional monarchy like the British, but it was no concern of his. The First Minister was deaf to the zealous campaign of the Whig Opposition in favour of the French revolutionaries, and ignored the warnings of Burke and others who believed that the principles of monarchy, and indeed of civilised society, were endangered by the roar of events across the Channel.

It is remarkable to witness the peaceful triteness of English politics, operating almost as if in a vacuum, during the years 1789 to 1793, when the terrible and world-shaking upheavals in Paris and in the provinces of France convulsed men’s minds. The Budget speech; the dismissal of Lord Chancellor Thurlow for intriguing against Pitt, an event which pointed towards the convention of mutual loyalty and singleness of view between all the members of the Cabinet; motions against the slave trade—such was the news from London. Pitt was determined to stand clear of the impending European conflict. He was convinced that if the French revolutionaries were left alone to put their house in order as they chose England could avoid being dragged into war. He steadily avoided any manifestation which could be interpreted as provocative or as demonstrative of sympathy. He watched unmoved the passion of the Opposition for an armed crusade against unenlightened despotism. They were possessed with the fear that the Austrian and Prussian monarchs would intervene to quell the revolution. Led by Fox, they saw in war a hope of breaking Pitt’s monopoly of political power. But Burke was closer to the general feeling of the country when he remarked that “the effect of liberty to individuals is that they may do as they please: we ought to see what it will please them to do before we risk congratulations.” The sympathies of the Court were not unmoved by the plight of the French monarchy, and if intervention became inevitable the Court was naturally in favour of supporting Louis XVI. Pitt maintained an even course of neutrality, and with characteristic obstinacy held to it for over three tumultuous years.

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