Lord Hervey, writing memoirs of the earlier years of George II's reign, apologises for their lack of incident. There was no lack of incident in affairs on the continent, but Walpole, in spite of occasional strong pressure, managed to prevent Great Britain from being embroiled. It was in fact his very particular business to avoid incidents.
The country was to enjoy the happy lot of having no history. Nothing was to be disturbed which could be left undisturbed. The French alliance, inaugurated under the Stanhope regime, was the best possible guarantee of peace.
Under Stanhope also the domestic question of religion had been relieved of its acuteness by the repeal of the Occasional Conformity and Schism Acts.
In the abstract it was quite unreasonable no doubt that dissent should carry with it any legal disabilities; but the grievance was more theoretical than practical, since the great majority of Nonconformists had no conscientious objection to passing the very futile tests which the law imposed; and even if they did break' the law, they could practically count upon the passing of an annual Act of Indemnity which relieved them from any penalty.
Walpole, therefore, discountenanced any attempts at re-opening a question which might arouse a slumbering fanaticism into a dangerous activity. For a moment the equilibrium was in danger of being disturbed when old King George I died in 1727, for it was known that the new king's favourite among, the statesman of the day was Carteret, who, at first a colleague of Walpole and Townshend, had been driven from office as a too clever rival. The ice cracked but it did not break; Walpole, having won the support of Queen Caroline, was soon more firmly established than ever.
Commercial Policy
The main features of Walpole's policy were negative; he would not provide a handle for any one who sought to create discontent and disturbance; he would not be seduced into a policy of intervention in Europe.
The one direction in which he adopted a positive policy of reform was in that of commerce; because he looked to commercial prosperity as the surest guarantee of political quietude. And here he could venture to be a reformer, though an exceedingly cautious one, because his already high financial reputation was convincingly confirmed by his management of the South Sea disaster.
The Mercantile System
The country was wedded to the mercantile system, the doctrine of controlling trade so that British goods should be exchanged for foreign money rather than British money for foreign goods. Broadly speaking, imports were discouraged except from countries which took more than their value in exports, and they were discouraged also as competing with British products.
On the other hand, British exports were taxed -in order to keep down their prices in the home market for the benefit of the consumer, although in other cases the consumer was forgotten and the export was encouraged by bounties for the benefit of the producer. Walpole saw that the greatest economic gain would come from the maximum development of the volume of trade; he wished to make London the great World Emporium.
Walpole and Taxation
But he was true to his principles, disturbing no interests which were satisfied with the existing order, but might be dangerously excited by change. He reduced or removed taxes on exports, taxes on imports which did not compete with home products, and taxes on raw materials which the home manufacturer wanted to buy at the lowest possible price.
Experience had shown the risk and disadvantages which arose from the dependence of the country on the Baltic trade for naval materials, since hostility on the part of the Baltic Powers tended to paralyse that trade; so the production of naval materials at home and in the "Plantations" or colonies was fostered by bounties.
No commercial interests suffered, nor did the revenue itself suffer from the reduction of tariffs, because while the rate was lowered the corresponding reduction in price brought an increased demand and an increase in the quantity of the goods on which the duties were levied. Yet the moment of greatest danger to Walpole's administration came with the "financial proposal known as the Excise Bill. If it had not been called an excise bill no danger would have arisen at all.
Excise is internal taxation; as distinct from customs duties, the taxation at the ports of goods on their embarkation or disembarkation. It had been introduced by the Commonwealth government, but applied only to the production and sale of spirituous liquors, and was exceedingly unpopular, though it was too useful a source of revenue to be dropped. Now, in accordance with the principle of eneavouring to attract commerce and shipping to English ports, Walpole tried a very successful experiment with tea, coffee, and chocolate.
Such goods were brought to English ports, in part, not for sale in England but for re-export. They paid a duty on being disembarked, and when they were re-embarked a corresponding rebate was allowed.
In the case of tea, coffee, and chocolate under Walpole's experiment the goods were disembarked and stored at the ports without paying a duty, and of course were re-embarked without any rebate; the duty, in short, became chargeable only when they were withdrawn from the port for home consumption. It was found that this change was productive of a substantial increase in the revenue.
Walpole's Excise Bill
In 1733 Walpole proposed to extend the system to other goods, notably tobacco. But he called the measure an Excise Bill. The purpose of the bill was generally to develop commerce and specifically to obtain an increase of revenue whereby he would be enabled to diminish the land tax, and so to conciliate the interests which bore the main burdens of the nation under the system of finance introduced by the Whigs. But the name of excise spelt ruin to the measure.
The Opposition conjured up an appalling picture of a universal system of excise, under which a vast army of government officials would penetrate into private establishments and subject the citizen's private affairs to investigation. Even the landowners took fright, preferring the burden of the land tax to the dreaded invasion which was to deprive every Englishman of his most cherished liberties.
It was of no use to point out that the new army of officials would number not much more than a hundred, and that their duties would be practically confined to the ports. The country lost its head almost as completely as in the days of the Popish Plot. Walpole had absolutely no doubt of the value of his proposal; he could have carried it in parliament, but it was evident that it could not be put in execution without much rioting and bloodshed.
On such an issue a modern ministry in like circumstances would resign office. Walpole withdrew the measure, but did not resign. Common ministerial responsibility is taken for granted in modern times; but this was still so far from being the case in Walpole's day that some of Walpole's own colleagues took part in the agitation against the bill.
Walpole held his own grip of power, and turned those colleagues, Pulteney and Chesterfield, out of office. They joined the ranks of the Opposition which gathered round the inefficient person of Frederick, Prince of Wales, who was on the worst possible terms with his father, as his father had been with George I.
Foreign Policy
The whole episode affords the clearest possible demonstration of the difference between modern conceptions of ministerial responsibility and those which prevailed in the first half of the eighteenth century. Not domestic but foreign affairs finally led to the destruction of Walpole's influence.
We have seen that the outstanding feature of the Whig foreign policy after the death of Louis XIV was alliance with France, because the peculiar circumstances made the French court under the Regent Orleans antagonistic to the new Bourbon dynasty in Spain, instead of drawing the two Bourbon powers together. The death of Orleans in 1723 and the domination of the Duke of Bourbon which followed it did not in effect change the situation.
For Bourbon wanted to get the young king married and to provide another heir to the throne, in order to exclude the new Duke of Orleans from the succession. But the Spanish princess to whom, with another object in view, the Regent Orleans had betrothed the youthful Louis, was only six years old - Orleans had hoped that the sickly king would die before an heir could be born to him.
Precisely in order to prevent this, Bourbon broke the Spanish engagement, and married him to Mary, a daughter of Stanislaus, ex-king of Poland, so that the hostility lot Spain to France was intensified by the slight. But then there came a change. Louis in 1726 declared himself of age, dismissed Bourbon, and entrusted the government to the already aged Cardinal Fleury.
Fleury, like Walpole, was an advocate of European peace; he believed in achieving his ends by diplomacy in preference to war, and so Fleury and Walpole remained in close alliance. But, on the other hand, Fleury had no reason whatever for antagonism to Spain. Since the king's marriage and the growing improvement in his health, the possibility that Philip of Spain would ever have a chance of asserting a claim to the Crown of France became remote.
The Family Compact
The unostentatious reconciliation with Spain bore fruit in 1733 in the secret "Family Compact" between the Bourbon powers; and the policy to which that compact pointed was the estrangement of Great Britain from Austria and the European ascendency of the Bourbons, to be attained by the humiliation first of an isolated Austria and then of an isolated Britain.
The scheme so far as France was concerned required the maintenance of friendly relations with Great Britain until Austria had been dealt with; but the friendliness to Great Britain was merely assumed for ulterior purposes. The public knew nothing of these things, but the Family Compact was known to Walpole, and the great defect of Walpole's management of foreign affairs lay in his neglect to take measures either to counteract or to paralyse the Bourbon conspiracy.
It was a matter of supreme good fortune for Great Britain that Fleury also neglected to provide the means for carrying out the scheme. Neither Spain nor France developed a navy fit to cope with the naval ascendency of the island Power, whose supremacy had been so thoroughly established in the last great war and confirmed in the subsequent years.
This article is excerpted from the book, 'A History of the British Nation', by AD Innes, published in 1912 by TC & EC Jack, London. I picked up this delightful tome at a second-hand bookstore in Calgary, Canada, some years ago. Since it is now more than 70 years since Mr Innes's death in 1938, we are able to share the complete text of this book with Britain Express readers. Some of the author's views may be controversial by modern standards, particularly his attitudes towards other cultures and races, but it is worth reading as a period piece of British attitudes at the time of writing.
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