Christopher Hollis
Two Nations

Chapter X — The Repeal of the Corn Laws

Party government, as Cecil Chesterton truly points out in his History of the United States,(99) is only tolerable when the two parties agree in their political opinions. Whether socialism be a good thing or a bad thing, there can be no doubt that we must make up our minds either to have it or not to have it. We cannot have socialism for five years; then return to private enterprise for five years, then go back again to socialism and so on. Now this condition of substantial agreement between the parties was admirably fulfilled in the England of the 1830s and 1840s. Wellington and Melbourne, Peel and Lord John Russell — all were most obedient servants of the laws of political economy, and it was a matter of indifference to the masters of those laws which of them might chance to be in nominal power.

Yet the system was, of course, challenged, even though it was not challenged from either front bench. It was challenged by the Trades Unions, who, though as yet they had accomplished but little, were at least important in compelling the governing classes to draw a distinction between the poor and animals. It was challenged by enlightened and intelligent employers, like Fielden and Owen, who maintained, and demonstrated, that to pay less than a subsistence wage was not good but bad economics, because it lessened disastrously the efficiency of the worker. It was challenged by the best and most intelligent of the privileged classes themselves — by noble men, such as Sadder and Lord Shaftesbury, whose keen sense of honour made the possession of privilege intolerable to them unless they could use it for the service rather than for the degradation of their unprivileged fellows. By the combined efforts of such men it had been found possible to put upon the Statute Book a number of Factory Acts, which, if they did nothing to raise wages, at least did something to mitigate the horrors of the conditions under which the workers were compelled to earn their inadequate wages.

Yet few, even among those who were shocked at the sufferings of the people, were at all able to diagnose the disease from which they were suffering. The country's productivity was obviously many times greater than it had ever been before. Yet the poor were worse off than they had been in past ages, and even among the rich the captain of industry of the nineteenth century lived with far less extravagance and ostentation than had the aristocrat of the eighteenth century. What had happened to the wealth ?  Who had got it ?  The answer was that nobody had got it. The eighteenth century aristocrat had spent his income. To the moral temper of the nineteenth century captain of industry generous spending was a sin. "Private charity," as Lord Althorp put it,(100) was forbidden by "the laws of political economy."  Therefore there was nothing to do but to save it. As a result, savings piled up and up. It was only possible to find a market for the investment of them, if a quite inordinate proportion of the country's labour was diverted to the production of capital goods and of still further capital goods, sent out to replace the first lot, not because the first lot was obsolete but because the maker of the second needed a market. The answer to the conundrum, What had happened to the world's wealth? in the 1840's as in 1935, was that the world is stiff with scrap-iron.

Now, bearing all this in mind, we can see how the issue of the great controversy of the Corn Laws both was then and still is falsely posed. The controversy was whether England should grow her own corn or import it more cheaply from abroad. Had the age been one of scarcity, the Free Trader's argument that everything ought to be sacrificed for cheaper bread would have been unanswerable. In an age of abundance there is clearly not the same desperate need to buy in the immediately cheapest market, and those statesmen were probably the wiser who pleaded for the security which we should gain through remaining as nearly self-supporting as possible. The remedy was not to let in the cheaper foreign bread but to give the poor the money with which to buy the dearer domestic bread.

However that may be, it was sheerly idle for a disciple of the classical economists to pretend that the poor could gain from cheap bread. For, on the doctrine of the subsistence wage, the whole virtue of cheap bread was that it would make it possible to reduce wages. On this the earlier opponents of the Corn Laws, such as Villiers, were completely frank. In an autobiographic fragment, quoted by Lord Morley in the Life [Vol. i, p. 249], Mr. Gladstone records of his early years in Parliament. "I remember being struck with the essential unsoundness of the argument of Mr. Villiers. It was this. Under the present Corn Law our trade, on which we depend, is doomed, for our manufacturers cannot possibly contend with the manufacturers of the Continent, if they have to pay wages regulated by the protection price of goods while their rivals pay according to the natural, or free trade, price. The answer was obvious. 'Thank you. We quite understand you. Your object is to get down the wages of your work-people.'" "It was," adds Gladstone, "Cobden who really set the argument on its legs," but, to tell the truth, Cobden only differed from Villiers in his greater carefulness not to let the cat out of the bag.

So long as orthodox economists were masters, the working classes could not possibly gain from the Repeal of the Corn Laws. (What gains they made, and why, after the Repeal — post hoc but not propter hoc — will be discussed later.) Nor was that Repeal, as Cobden used to argue, necessary if our manufactures were to find foreign markets. Cobden's argument was based upon the belief that our exports balanced our imports, that the more corn that came in, the more manufactured goods went out to pay for it and that the manufactured goods could not go out unless the corn came in. But there was in truth no such balance. Our exports, visible and invisible, every year considerably exceeded our imports and there was a surplus left over for foreign investment. What in truth regulated the quantity of goods which we sold abroad was the quantity of the loans which our financiers saw fit to make to foreigners to enable them to buy those goods.

Even less true was it that the Irish, in whose interest the Repeal was pretended, could possibly gain from it. On the contrary they were bound to lose. For by the Act of Union there was free trade between England and Ireland. Therefore the Irish corn-grower was up till then able to sell his corn in England with the advantage of protection against his foreign competitor — an advantage of which the Repeal of the Corn Laws would clearly deprive him. As Croker, who had up till then been Peel's confidant, put it in a private letter of protest at the hypocrisy to Graham, the Home Secretary, "Ireland has no more to do with the grand convulsion than Kamschatka."(101) Indeed it was — to put it mildly — hardly honest to pretend that the Corn Laws were repealed out of consideration for the starving Irishman. For such an argument could only begin to have force if the famine in Ireland had been due to a failure of the country's food supply. That was not so. It was only the potato-crop that had failed. According to Mulhall,(102) the most careful statistician, who has investigated the subject, 1,029,000 people out of the total population of something over eight millions died of starvation or undernourishment in Ireland during the famine. It is interesting to notice the exact statistics of the food that was exported from Ireland during 1845. They are 779,000 quarters of wheat and wheat-flour, 93,000 quarters of barley, and 2,353,000 quarters of oats(103) — that is to say, enough to feed for twelve months every person in Ireland who died of starvation, nearly four times over. Lord Althorp's "laws of political economy," which had been so deeply shocked at the very notion of "private charity," could find nothing objectionable in such an export, nor did Sir Robert Peel even refer to it when he argued that the cause of the calamity was that Ireland was "over-populated" — an argument that is repeated in our day, combined with a similar reticence, by such writers as Sir John Marriott in his England after Waterloo. A prince of the blood explained to the Irish that bad potatoes made a nourishing food, if mixed with grass.(104)

These exports of food from Ireland had, of course, no imports to balance them at all. They went out, to some extent, to pay the rents to absentee landlords, but, mainly, to pay the interest on the mortgages in English-bank-manufactured money, which the Irish landlords, like the English landlords, had raised in order to pay the taxation required to meet the interest on the Napoleonic War Debt. On a previous page there has been quoted the general truth, enunciated by Mr. Emil Davies, that "the borrowing nations of the world pay interest on loans just about to the extent that their creditors advance them the wherewithal to do so."(105) Ireland in the nineteenth century was a solitary exception to that general truth, for in that country the capital wealth was in the hands of people, whose cultural and political sympathies were with their creditors rather than with the country in which they lived.

Private charity, in defiance of Lord Althorp, did make a certain contribution towards Irish relief. But such very inadequate Government relief, as was eventually given, was given in the shape of a loan on the security of that small proportion of Irish land that was not already fully mortgaged. Lord George Bentinck suggested the putting of purchasing power into the pockets of the Irish by a scheme of railway-building, but "the state of the money-market," pleaded Lord John Russell's Whig Government, did not permit it.(106) There were more profitable investments elsewhere.

Let us never forget, when we abuse the Irish, that our grandfathers were responsible for these things. I do not say that they understood what they were doing. But what are we to say of a system of education that allowed them not to understand ?  Their purposes were but subconsciously apprehended, and to put them into explicit language is to do them a certain injustice. Yet I do not think it unfair to say that the Irish were an inconvenience to the financial interests owing to their refusal to accept the English progressive interpretation of history. The grandchildren of the eighteenth century were paid out for their refusal to allow education to Catholics; the happy Catholics knew no false history because they knew no history at all. Therefore, as The Times frankly confessed at the time, the policy must be to use the calamity of the famine in order to bring about a future in which "a Catholic Celt would be as rare on the banks of the Liffey as a red man on the eastern seaboard of America."

To whose advantage then was the Repeal of the Corn Laws ?  As has been shown, ever since the Industrial Revolution English financiers had every year been making investments in foreign countries, principally the new countries outside Europe. It was not possible, as has also been argued, that even the interest on these loans, let alone the principle, should ever, properly speaking, be repaid. But, even if the interest was only going to be paid by fresh loans, yet for the system to continue at all it was necessary to arrange that the debtor countries should export to us some substantial quantity of goods. If they gave us nothing, it would become manifest that the system was unworkable, and it would not be possible to raise the new loans with which to pay the interest on the old loans. Now what goods could these new countries export to us ?  It was manifest that they could not export manufactured goods, for they did not as yet manufacture any. As long as our foreign investments were mainly in the United States, there was no insoluble problem, for they could pay in raw cotton. But with other debtors the problem was more difficult.

They could only pay in food. But how could that food find a market in England ?  The rich could not eat it all themselves. For many kinds of manufactured goods the demand is almost unlimited; for food it is by no means so. No one wants more than his belly-full, however rich he is. It could only find a market on one of two conditions. Only, if either the wages of the poor were raised so that they could buy more than the subsistence quantity of food, or if English domestic agriculture was sabotaged, so as to create a gap which the foreign food could fill. According to the canons of the system, the former alternative, that of raising wages, was inadmissible. Therefore it was necessary to adopt the second and to destroy English agriculture. Hence the necessity for repealing the Corn Laws.

The politicians who advocated Free Trade, such as Cobden and Bright, were not, of course, consciously insincere. They believed fervently what they said. Who would be such a fool as to use an insincere tool when he could get a sincere one ?  The sincere one is the cheaper and therefore, on good Ricardian principles, to be preferred; he will work without bribes. But why was it that their arguments received publicity rather than the arguments of other men ?  Why was it that the glaring fallacies in their arguments were allowed to go unexposed ?  It was because there was a power behind them to whose advantage it was that they should be victorious. Even in the seats of that power, no doubt, insincerity was not conscious. The men there were not conscious that they were preferring their own private interests to the interests of the country, but they identified the interests of the country with their own private interests, in much the same way as a patriotic old public schoolboy persuades himself, rightly or wrongly but at the least without any very deep ratiocination, that the collapse of the Public Schools would be a disaster for England. The opinions of the children of the money-power were formed in a certain ambient air which they had breathed since earliest infancy. An increase of foreign trade, however obtained, was to them "progressive" and "natural," and "practical men," "men of experience," were agreed that the preservation of agricultural England was a romantic's dream. The sort of stuff that Cobden and Bright talked sounded right. And beneath such a pressure few Englishmen are strong enough of logic to consider first principles or to demand that assumptions be proved.

The effect of the Repeal of the Corn Laws was as follows. The bad harvest in England in 1846 made necessary the charge of a high price for English-grown corn. Therefore advantage was taken of the new freedom to increase the quantity of imported corn not only from Ireland but also from abroad. So far was it from being true that imports balanced exports that on the contrary the foreign corn could only be paid for in gold. Although these food-producing countries all owed us money, yet we did not dare to accept repayment of our debts. Therefore gold left the Country, and the Bank of England's reserves dwindled from £9½ million in December, 1846, to £3 million in April, 1847. The effect was of course deflationary. The money that had thus vanished from circulation was not replaced as it would have been under another system. And, there being less money about, prices had to come down. Prices of primary products fell most steeply as they always do. Corn fell suddenly from 110s. a quarter to 60s., and corn merchants, who had bought at a higher price in order to resell, were ruined. They were ruined because in a starving country there was too much corn. From the corn-merchants panic spread to the bill-brokers, from the bill-brokers to the banks. The Bank of England announced that it would not accept public stocks as collateral security for advances, and this in its turn caused selling of the public stocks and a collapse of their prices. On 23rd October the Bank Charter Act was suspended and the Bank of England promised immunity if it issued notes beyond the restrictions imposed upon it by that Act. That is to say, once more, as had happened just fifty years before in 1797, in an hour of crisis double-money was abolished in order to save the country from a wholly unnecessary catastrophe which double-money itself had created.

By the abolition confidence was restored, but it was not until thirty-three important English firms had paid in suffering and bankruptcy their penalty to the monstrous folly of double-money, their members condemned to starvation for the strange crime of possessing too much corn. The politicians who had thrown upon the Bank of England a responsibility which they had no right to throw upon any private shoulders promised to the Bank an indemnity for any illegalities which it might have committed in its abuse of that responsibility. The public was left to suffer for the follies of the bankers and the politicians, and, when the bankrupt firms had been finally wound up, the system of folly which had brought them to their bankruptcy was quietly restored. As Mr. Keynes has fairly and bitterly written,(107) "A sound banker, alas, is not one who foresees danger and avoids it but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him."

It has been already argued that party government is only possible between two parties who are substantially agreed in their political opinions, and it is common under the parliamentary system, when any large change of policy is thought necessary, to prevent fair discussion upon it by the leaders of the two parties announcing their simultaneous conversions at the eleventh hour, when it is too late for the organization of any effective opposition. Thus in our own day, in 1931, the electorate was asked to approve of a wild and drastic financial policy under the virtual condition that, if they did not approve of it, they could not have a government at all. In the same way just a hundred years before, when it was found that there was a real and deep feeling against the new Poor Law system, it was agreed between the two front benches that it should not be made a party question. And, when Disraeli, the young Tory, criticized this measure of the Whig ministers, it was "quietly and good-naturedly hinted to him by his chiefs," as he himself said, that, if he wished for any preferment in the future, he had better keep his mouth shut.(108)

There was a good prospect of getting the Repeal of the Corn Laws through in a similar fashion without having in any way to take the opinion of the electorate, or even the real opinion of the House of Commons. In the past both parties had been protectionist without any very serious pretence of understanding the arguments either for protection or against it. "By the by," said Lord Melbourne, the Whig Prime Minister, as his Cabinet was breaking up, "there is one thing we haven't agreed upon, which is, what are we to say ?  Is it to make corn dearer or cheaper, or to make the price steady ?  I don't care; but we had better all be in the same story."(109) A similar spirit reigned in the Conservative cabinet. Readers of Sybil will remember the coaching which "a gentleman of Downing Street" gave to Mr. Hoaxem on the manner in which he was to deal with deputations. After having demonstrated to a deputation of tenant-farmers that the policy of the Government was to keep up the price of corn, he was then to face a deputation of manufacturers. "Show them how much I have done to promote the revival of trade. First of all, in making provisions cheaper; cutting off at one blow half the protection on corn, as, for example, at this moment under the old law the duty on foreign wheat would have been 27s. a quarter; under the new law it is 13s. To be sure, no wheat could come in at either price, but that does not alter the principle."(110)

Within a few days of each other the leaders of the two parties, Sir Robert Peel and Lord John Russell, became converts to Free Trade and, though there was certainly a large opinion in favour of the Corn Laws throughout the country, yet there seemed a very fair prospect of carrying the repeal through the House of Commons with but little opposition and without splitting either of the parties. We have Gladstone's word for it(111) that Peel thought that he could pass the measure without splitting his party. His opponents were but the back-bench squires, grumbling, inarticulate, hating to see the death of rural England, but hating still more to revolt against a Conservative Prime Minister.

His opponents were but the back-bench squires — and one man — one man more wildly unlike an English squire than any man that has ever lived — one man as exuberantly articulate as they were dumbly inarticulate. With this one exception all the political leaders of mid-Victorian England sprang from exactly the origins from which we should have expected such leaders to have sprung. It was not at all surprising that a Grey, a Melbourne, a Russell, and a Palmerston should have led the Whigs, that middle-class Liberalism should have rallied to Gladstone, old Tories to the Duke, and Protectionist squires to a Bentinck. The very probability of these careers but enhances the wild incongruity of the gentlemen of England turning for salvation to an exotic Jewish adventurer. Yet it was almost entirely through the anger and the persistence of Disraeli that the Repeal of the Corn Laws was challenged, that the Conservative party was split, that English politicians were redivided upon entirely new lines instead of being split into a Tweedledum Conservative party, under Peel, and a Tweedledee Liberal party, inspired by Cobden — the consummation to which Peel had looked forward.

It is not the intention of this book even to attempt to find a formula with which to solve the baffling enigma of the character of Benjamin Disraeli. Few, I think, who have studied the story of Peel's refusal of office to him in 1841 can doubt that, among the motives that actuated him in 1846, were both a desire for revenge upon that stiff and arrogant man and a just calculation that, unless Peel could somehow be unseated, there was no future for Disraeli. No one, who has read Sybil, can doubt that also among his motives was a genuine compassion for the miseries of the poor. Whatever the true proportion in which these motives were mixed, at any rate let us understand clearly the predominating importance in history of the stand which Disraeli made against Peel. He failed, it is true, to save protection. Indeed a few years later he even abandoned protection himself. Here was failure, but his success was much more important than his failure. He destroyed the old party political life.

Now let us understand what that old life meant. In the year before the Repeal — in 1844 — that very noble philanthropist, Lord Shaftesbury (Ashley, as he then still was) had introduced an amendment to Graham's Factory Bill, by which the labour of young persons — boys from thirteen to eighteen, and girls of under twenty-one — should be restricted to ten hours a day. Most independent Conservative opinion was for it. Disraeli and his friends of Young England were strongly for it. The Conservative Government, on the other hand, was bitterly opposed and made the rejection of the amendment a matter of confidence. It was able to obtain that rejection, in spite of the opposition of some of its followers, by support of the Manchester Liberals, led by John Bright, who thought it a sufficient answer to the plea that there was misery and starvation in the towns of England, if he could demonstrate that there was also misery and starvation in the country districts.(112) Cobden prophesied that "men like Graham and Peel will see the necessity of taking anchor upon some sound principles, as a refuge from the socialist doctrine of the fools behind them."(113)

What did all this mean in plain English ?  It meant this. The productivity of the country was vastly greater than it had ever been before. At the same time the condition of the people was vastly worse than it had ever been before in recorded time. When James Caird toured England in 1850, he found that agricultural wages, which in Young's time in 1770 had oscillated between 6s. and 10s. 9d. a week, now oscillated between 6s. and 15s.(114) On the other hand, to counterbalance this increase, cottage-rents had more than doubled. To recall Thorold Rogers's conclusions, the poor were some six times worse off than they had been in Henry VIII's time. Now, according to the comfortable vision in Peel's mind, political power was to have rested, turn and turn about, in the hands of two parties, the dominant spirits of both of which flatly denied that, however great the increase in the country's productivity, it was in any way possible for the poor to obtain any share in that increase. It was Disraeli, who, by driving the Peelites over to the Liberals, saved the Conservative party from becoming a second Liberal party. History may yet come to record her verdict that by doing so he saved the world.

proceed !

99. History of the United States, Cecil Chesterton, pp. 227, 228.

100. See chapter 9, p. 109 [p. 37 in this version].

101. Croker Papers, iii, p. 64.

102. Dictionary of Statistics.

103. Growth of Modern England, Slater, p. 353.

104. Peel, Ramsay, p. 317.

105. Investments Abyoad, pp. 20-1.

106. Disraeli, the Alien Patriot, Raymond, p. 166.

107. Essays in Persuasion, p. 176.

108. Speech at Shrewsbury, 27th August, 1844.

109. Russell, Walpole, i, 369.

110. Book vi chapter 1.

111. Gladstone, Morley, i, 209, 210.

112. House of Commons. 15th March, 1844.

113. Cobden, Morley. i, 302.

114. English Agriculture in 1850-1, Sir James Caird.