On June 3, 1804, Richard Cobden was born. Nicknamed the “Apostle of Free Trade,” he spearheaded the campaign against the protectionist Corn Laws, leading to their repeal in 1846, which then spread to the liberalization of trade throughout much of Europe. His role was so great that it has been said the free market owes its existence to him.
Cobden saw that free trade was the key to material prosperity, as evidenced by England’s economic growth and rise to world leadership in virtually all aspects of trade—finance, insurance, shipping, etc.—after the Corn Law repeal. But more than prosperity, Cobden emphasized the injustice of protectionism, by which one group used government power to harm all other groups, which, in contrast, showed the moral superiority of free trade.
Further, Cobden saw free trade as the basis of peace, rather than government controlled trade, which often led to war, and to the moral and economic harm of people. And, indeed, the period of liberalized trade coincided with one of the most peaceful periods in history.
Author Jim Powell describes the reasons for free trade leading to peace in that era:
Peace prevailed, in large part, because nonintervention became the hallmark of foreign policy. Nations seldom tried to bully one another, and economic policy was a major reason why. There was unprecedented freedom of movement for people, goods, and capital. By reducing intervention in economic affairs, governments reduced the risk that economic disputes would escalate into political disputes. There wasn’t much economic incentive for military conquest, because people on one side of a border could tap resources about as easily as people on the other side of a border. Trade expanded, strengthening the stake that nations had in the continued prosperity of one another as customers and suppliers. While free trade was never a guarantee of peace, it reduced the danger of war more than any public policy ever had.
In an era of occasional trade liberalization, seasoned with a great deal of protectionism for politically powerful groups, we can benefit from Richard Cobden’s insights today as much as was true a century and a half ago.
Consider some of what he said:
The progress of freedom depends more upon the maintenance of peace, the spread of trade, and the diffusion of education, than upon the labors of cabinets and foreign offices.
Look not to the politicians; look to yourselves.
You who shall liberate the land will do more for your country than we have done in the liberation of its trade.
England, by calmly directing her undivided energies to the purifying of her own internal institutions, to the emancipation of her commerce…would, by thus serving as it were for the beacon for other nations, aid more effectually the cause of political progression all over the continent, than she could possibly do by plunging herself into the strife of European wars…
The foreign customers who visit our markets are not brought hither through fears of the power of influence of British diplomats…It is solely from the promptings of self-interest…
The people of the two nations [France and England] must be brought into mutual dependence by the supply of each others’ wants. There is no other way of counteracting the antagonism of language and race. It is God’s own method of producing an entente cordiale, and no other plan is worth a farthing.
…protection…takes from one man’s pocket, and allows him to compensate himself by taking an equivalent from another man’s pocket, and if that goes on in a circle through the whole community, it is only a clumsy process of robbing all to enrich none, and simply has this effect, that it ties up the hands of industry in all directions.
Holding one of the principles of eternal justice to be the inalienable right of every man freely to exchange the result of his labor for the productions of other people, and maintaining the practice of protecting one part of the community at the expense of all other classes to be unsound and unjustifiable, your petitioners earnestly implore…carry out to the fullest extent…the true and peaceful principles of Free Trade, by removing all existing obstacles to the unrestricted employment of industry and capital.
It is labor improvements and discoveries that confer the greatest strength upon a people. By these alone and not by the sword of the conqueror, can nations in modern and all future times hope to rise to power and grandeur.
Warriors and despots are generally bad economists and they instinctively carry their ideas of force and violence into the civil politics of their governments. Free trade is a principle which recognizes the paramount importance of individual action.
Peace will come to earth when the people have more to do with each other and governments less.
The great rule of conduct for us in regard to foreign nations is—in extending our commercial relations—to have with them as little political connection as possible.
I yield to no one in sympathy for those who are struggling for freedom in any part of the world; but I will never sanction an interference which shall go to establish this or that nationality by force of arms, because that invades a principle which I wish to carry out in the other direction—the prevention of all foreign interference with nationalities for the sake of putting them down…
It appears to me, that a moral and even a religious spirit may be infused into that topic [free trade], and if agitated in the same manner that the question of slavery has been, it will be irresistible.
…throughout the long agitation for Free Trade, the most earnest men co-operated with us were those who constantly advocated Free Trade, not merely on account of the material which it would bring to the community, but for the far loftier motive of securing permanent peace between nations.
I have been accused of looking too much to material interests…I believe that the physical gain will be the smallest gain to humanity from the success of this principle. I look farther; I see in the Free-Trade principle that which shall act on the moral world as the principle of gravitation in the universe, drawing men together, thrusting aside the antagonism of race, and creed, and language, and uniting us in the bonds of eternal peace…I believe that the effect will be to change the face of the world, so as to introduce a system of government entirely distinct from that which now prevails. I believe that the desire and the motive for large and mighty empires; for gigantic armies and great navies…will die away; I believe that such things will cease to be necessary, or to be used when man becomes one family, and freely exchanges the fruits of one’s labor with his brother man. I believe that…the speculative philosopher of a thousand years hence will date the greatest revolution that ever happened in the world’s history from the triumph of the principle which we have met here to advocate.
I would not step across the street just now to increase our trade for the mere sake of commercial gain…But to improve moral and political relations of France and England, by bringing them into greater intercourse and greater dependence, I would walk barefoot from Calais to Paris.
…our principle, which if carried out, the Free-Traders believe would bring peace and harmony among the nations.
…whilst we are in a state of profound peace, it is for you, the taxpayers, to decide whether you will run the risk of war, and keep your money in your pockets, or allow an additional number of men in red coats to live in idleness under the pretense of protecting you.
Richard Cobden knew that at the center of free trade was freedom; freedom that required sharply limiting government, and which produced justice by preventing government sponsored theft by one group from others.
He knew that free trade broke down the powers of privilege and barriers against people’s progress, and replaced them with a system of mutually beneficial relations among all those who participated. In a world still far from that ideal, we should remember that wisdom from the “Apostle of Free Trade.”
This article was previously published at Mises.org.
“We are on the eve of great changes” Richard Cobden told Parliament in February 1846. He was correct. Britain stood poised to embark on a period of growth unparalleled in its history, which would, in a few short years, bring it wealth and power not seen since ancient Rome. A major reason for this was Britain’s path breaking adoption of free trade, and the man behind that as much as any other was Richard Cobden.
By the late 1830s it was apparent that the Whig government led by Earl Grey and then Viscount Melbourne had exhausted itself in the passage of the Reform Act of 1832. This had given the vote to propertied males, enfranchising many of those made rich by the Industrial Revolution. The Radical faction within the Whig Party sought a new cause with which to restore the momentum which had carried the 1832 Act and settled on repeal of the Corn Laws.
The Corn Laws was a catch all name for the thicket of tariffs which had been erected to keep foreign wheat out of Britain. Justified on the deathless grounds of ‘food security’, these laws also had the handy effect of benefiting the landowning classes, many of whom sat in the Commons and Lords as Tories.
The Corn Laws, as with any tariff, had the effect of making the product in question and associated goods more expensive. The burden of this was borne disproportionately by the members of the emerging working class in burgeoning industrial centres such as Manchester and Leeds who spent a large percentage of their incomes on food. By extension, they raised labour costs. And blocking foreign producers from selling in Britain prevented them from earning the money to buy the output of the new industries.
Out of this shared interest between workers and bosses (and other factions such as dissenting churchmen) came the Anti-Corn Law League, established in Manchester in 1838. One of its founders and leading lights was Richard Cobden.
Cobden was born the son of a poor Sussex farmer in 1804 and started his own textile printing business in 1828. It quickly became a success and in 1832 Cobden moved to Manchester, the centre of the booming British textile industry.
Immersed in the city’s Radical politics Cobden quickly became active. He was instrumental in the shift from broad based reform agitation to a single issue focus which had led to the creation of the League, noting that “the English people cannot be made to take up more than one question at a time with enthusiasm”. Throughout the campaign Cobden would hold to the principle of single minded focus on full and immediate repeal of the Corn Laws.
He became a prolific writer, and in his work he revealed the broader purpose behind the activities of the League. In Cobden’s mind free trade and peace were linked, he wrote in 1842 that “Free Trade by perfecting the intercourse and securing the dependence of countries one upon another must inevitably snatch the power from the governments to plunge their people into wars”.
With the Corn Laws Cobden and the League faced a problem of concentrated interest. While the benefits of repeal were spread across society, the costs were concentrated. Each person in Britain might benefit by a few pounds a year from repeal (though that was no small sum to impoverished workers) but those relatively few people who would be adversely affected by repeal stood to lose far more. The landowners were incentivised to act more strenuously in fighting against repeal than individual consumers were in fighting for it.
Partly because of this the League was frustrated during its first two years. Copying the tactics of the campaign for the 1832 Reform Act and the contemporary Chartists, the League attempted a strategy of mass agitation with open meetings and lectures. These suffered from frequent attacks by Chartists who resented any reforming competition, after one meeting Cobden wrote: “The Chartist leaders attacked us on the platform at the head of their deluded followers. We were nearly the victims of physical force; I lost my hat, and all but had my head split open with the leg of a stool”. The failure of this strategy left the League short of money. Attempts to petition Parliament were heavily defeated and the League members were frequently tempted away into movements for wider reform.
In 1841 Cobden convinced the League to change strategy. He wrote to a fellow member “You will perhaps smile at my venturing thus summarily to set aside all your present formidable demonstrations as useless; but I found my conviction on the present construction of the House of Commons, which forbids us hoping for success. That House must be changed before we can get justice”
From now on the League would seek to make Parliament its battleground, starting with a by election in Walsall in February 1841. The Tories allied with their Chartist arch enemies in an effort to defeat the League which still came a close second. Cobden’s strategy had been a success, the Morning Chronicle noting that “one consequence of the contest at Walsall is that the Corn Laws are, and must henceforth be, throughout England, a hustings question”. With a general election approaching the Whig leaders adopted a stronger free trade stance.
The election of summer 1841 saw the Whigs defeated by Robert Peel’s Conservatives, heirs to the Tories, and seemingly dashed hopes of Corn Law repeal for the foreseeable future. But the situation was brighter than it might have appeared. The election saw a number of League members returned to Parliament including Cobden, now widely recognised as the League’s leader, who was elected MP for Stockport. Also, by the end of the year, ‘operative’ associations attached to the League, mostly consisting of working class supporters, had organised to protect League meetings from the violence of the Chartists. But perhaps more importantly, in Peel, Britain now had as Prime Minister one of the most remarkable statesmen in her history.
With Britain in economic depression Peel deliberated before finally announcing his budget in February 1842. Despite his Tory lineage, Peel recognised that the Conservatives must learn to accommodate themselves to changing circumstances if the wilder, revolutionary wing of the Chartists was to be held at bay. Given the revolutions across Europe in 1848, this was no minor threat. Peel’s Tamworth Manifesto of 1834, as close to a foundational act as the modern Conservative Party has, had been an act of reconciliation with the passage of the 1832 Reform Act.
Peel’s fiscal proposals were in this tradition, proposing a drastic tariff reduction with revenues to be made up by a new income tax. The moves were warmly welcomed by liberals and, while it represented a significant vindication of the League’s arguments, it also brought danger. As Cobden predicted “The greatest evil that could befall us would be a bona fide concession – The middle classes are a compromising set”.
After some debate about strategy (during which Cobden squashed a move to declare a general strike by factory owners) the League stepped up its propaganda. Millions of leaflets, posters, handbills, and newspapers were distributed with the aim of reaching every voter in Britain, though that was only about 600,000 people at the time.
But despite all this activity the League found it needed an event, a shift in circumstances beyond its control, to provide proof of its arguments and swing opinion behind them. That came in 1845 when the potato crop failed. Particularly in Ireland, where much of the population depended on potatoes, this caused great suffering, culminating in a famine which killed an estimated one million people.
Cheap food was needed and quickly. Faced with this unfolding catastrophe, supporters of the Corn Laws were helpless. A further vital, final, factor was Peel’s reaction. Acting on humanitarian grounds and the perennial desire of Conservative Party leaders to pick fights with their backbenchers (in this case the land owning Tories) in order to prove they are ‘different’, Peel moved for full repeal in 1845. In May 1846 repeal was passed and the Anti-Corn Law League wound itself up.
The benefits for Britain were immense and immediate. The effects of famine receded and a wider program of free trade enacted. Between 1815 and 1842 Britain’s exports edged up from £47,250,000 to £50,000,000. By 1870 they had rocketed to £200,000,000.
How had Richard Cobden and the League managed to defeat the special interests in favour of keeping the Corn Laws?
First, and most importantly, they were right. Free trade became the orthodoxy to such an extent that we can forget that while the League was working its ideas were one strand of a lively discourse. There was a long tradition of bad economics arguing for protection and Friedrich List was giving these old doctrines a new outing even as the League was campaigning.
Second, their strategy of exclusive focus on Corn Law repeal was a success. Cobden refused to be, and refused to let the League become, distracted by any other reform or campaign. This ensured that while the Chartists got nothing from a long list of demands the League actually got more than its comparatively modest aims with Britain quickly embracing free trade generally.
Third, they were tactically flexible. There were three fronts to their activities. First, were the mass meetings. These were of limited success largely owing to the competition, both ideological and physical, of the rival Chartists. The second front was education. Here the League had more success, sending literally tons of propaganda out every week. They pitched to all sections of society, sending lurid drawings of emaciated families to lowbrow readers and helping found The Economist for the highbrow. Third, and most effective, was the Parliamentary front. It was arguably the fact that the League engaged here while the Chartists didn’t that guaranteed the success of the League relative to the Chartists.
The fourth factor was, as Harold Macmillan put it, events, or, more broadly, circumstance. Without Peel’s transformation of the Tory Party into the Conservative Party and its concomitant embrace of free trade, the League would have had to wait until at least 1848 and the possible election of the Whigs who, under Lord John Russell, had finally adopted full repeal as a policy. And without the famine in Ireland it is doubtful whether either party could have carried repeal in as full a form as eventually happened.
To a large extent however, this event is not so exogenous. It could be, and was, painted as the predicted outcome of the bad policies of the Corn Laws.
As a result, when circumstances combined in 1845-1846 in the advents of Peel and the potato blight, thanks to Cobden and the League the arguments for free trade were widely enough known to be accepted as a viable possibility. The lesson is to have rigorous, well tested arguments. Pick a definite, achievable aim then work hard to spread and publicise your views until they become the ‘white noise’ of the debate. Then position yourself to take advantage of changing circumstances and move quickly when circumstances change.
When Richard Cobden died in 1865 the French foreign minister wrote that he was “in our eyes the representative of those sentiments and those cosmopolitan principles before which national frontiers and rivalries disappear; whilst essentially of his country, he was still more of his time; he knew what mutual relations could accomplish in our day for the prosperity of peoples. Cobden, if I may be permitted to say so, was an international man”.
At the end of three successful years The Cobden Centre can continue to draw on its namesakes rich example as it looks forward to furthering his goals of peace and prosperity.
We are pleased to announce a special discount for Cobden Centre readers on The Letters of Richard Cobden from Oxford University Press:
In four volumes, The Letters of Richard Cobden, edited by Anthony Howe, provide a unique insight into the career of one of Britain’s leading nineteenth-century politicians. Oxford University Press is pleased to offer a special 20% discount on the series.
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The Prime Minster has justified his leading role in orchestrating a UN resolution to protect the citizens of Libya, particularly those in the east of the country, from the tyrannical oppression of their dictator, Col Gaddafi. There seems to be an underlying moral urge on the part of our Prime Minster and his Deputy to stop the blatant outrage that is taking place just south of the Mediterranean. I sympathise.
Historically, we must also remember that Gaddafi part funded the war of aggression by the Irish Republican Army in Northern Ireland and in the mainland of Great Britain itself, and in some of our overseas territories, killing 3,000 civilians in the period known as the “Troubles”. Responsibility for the Lockerbie bombing also sits squarely at his feet. He is clearly a vile and demented individual who is capable of inflicting pain and destruction on not only his people, but those of many other nations. I will open a bottle of champagne upon the announcement of his death, and that of any of his henchmen associated with so much pain and destruction.
There are many murderous tyrants around the world, and plenty of morally indefensible states, but we are not on a crusade to bomb them all and liberate their people. The communist government in China unleashed untold brutality against their own people, notably in the Tiananmen Square uprisings in 1989. Despite moves toward capitalism, the Chinese people continue to be oppressed. Are we seeking to bomb them? Surely not. They have a population over a billion, and a standing army of over 2 million. Best leave them alone! More recently, in Sri Lanka, 20,000 Tamils were killed in May 2009. And what about the on-going treatment of the people of Zimbabwe? Here we have another tyrant-led country that has prosecuted a war of famine and pestilence against his own people. I am sure you get the picture.
I submit that our leadership shows a selective application of morals. Cameron is very much in the neo-Conservative tradition here. I feel it would be better for him to be honest and practical, and simply say “with the support of the international community, we have an opportunity to depose a tyrant with a history of aggression towards the UK, with hopefully low costs to ourselves, amidst the chaos of a domestic rebellion”.
You either apply your moral standard universally, or it lacks validity. Why are we not bombing Bahrain? I wouldn’t advocate it, but Cameron should, if he is to be consistent.
Meanwhile, our Deputy Prime Minister, Nick Clegg, leader of the Liberal Democratic Party, says he has voiced his support for possible military intervention in Libya, saying that any action would be carried out in order to “uphold international law.”
So Clegg appeals to a higher moral sanction called International Law. This is where the nations of the world, some with very dubious track records, decide what we all should do. I wonder if the UN had passed resolutions saying Northern Ireland should be ceded with immediate effect to the Republic of Ireland against the wishes of the vast majority of the population of both parts of the island, he would unquestionably seek to obey this command from on high. That is hypothetical, but there have in fact been many resolutions against Israel. Should we be as vigorous in enforcing these as we are being with the latest resolution against Libya? I do not think Clegg would go that far.
Clegg is not a true Liberal. The great 19th century Liberals such as Cobden and Bright would have recommended arbitration and free trade for breaking down barriers and opening up countries. That should be the long term policy of all nations interested in freedom. The interdependence that results from global trade provides strong motivation for peace. There is no need for international law or global government.
For the short term, the moral yardstick a liberal must apply is to treat international relations as they treat interpersonal relations: to live and let live, and only use force in response to aggression. Now, Libya certainly has aggressed against us over the years, and a liberal could have supported the bombings of Libya undertaken by the USA with the support of the UK under the Thatcher government in April of 1986. What aggression have they dealt out to us today?
The deputy prime minister, whose Liberal Democrat Party opposed the war in Iraq, said: “this is not Iraq. We are not going to war”. Such cowardice, to hide behind semantics! If bombing the hell out of Libyan air defences, and shooting at tanks and other armoured units is not warfare, I do not know what is. In truth, I do not think Clegg has the stomach for this, and he’s trying to post-rationalise it with appeals to a higher moral authority, and to black out from his mind the uncomfortable reality that he is party to an act of aggression against another state. Bless his Liberal heart and soul; it is all too much for him. More than ever, he must be wondering whether he really wants to be in this Coalition?
Faced with overwhelming western air power, Gaddafi may well resort to guerilla warfare, and send his men into cities for protracted battles, street by street, house by house. The misery that this would inflict upon those cities has not been experienced in Western Europe since WWII.
I see no justification for this war.
However as it has started, I hope this act of aggression by the UK and its allies is swift and decisive. Having committed to intervention, I hope our fighting men have freedom of action to finish this conflict quickly as possible. Failing this, I hope we are brave enough to extract ourselves very quickly, if it turns out that the rebellion does not have the strength to overthrow the regime.
My thoughts are now with all the people involved in this conflict, and I pray for peace.
Walter Bagehot’s 1865 obituary of Richard Cobden, from the Online Library of Liberty
(H/T Sean Corrigan).
Twenty-three years ago—and it is very strange that it should be so many years—when Mr. Cobden first began to hold Free-trade meetings in the agricultural districts, people there were much confused. They could not believe the Mr. Cobden they saw to be the “Mr. Cobden that was in the papers”. They expected a burly demagogue from the North, ignorant of rural matters, absorbed in manufacturing ideas, appealing to class-prejudices—hostile and exciting hostility. They saw “a sensitive and almost slender man, of shrinking nerve, full of rural ideas, who proclaimed himself the son of a farmer, who understood and could state the facts of agricultural life far better than most agriculturists, who was most anxious to convince every one of what he thought the truth, and who was almost more anxious not to offend any one”. The tradition is dying out, but Mr. Cobden acquired, even in those days of Free-trade agitation, a sort of agricultural popularity. He excited a personal interest, he left what may be called a sense
of himself among his professed enemies. They were surprised at finding that he was not what they thought; they were charmed to find that he was not what they expected; they were fascinated to find what he was. The same feeling has been evident at his sudden death—a death at least which was to the mass of occupied men sudden. Over political Belgravia—the last part of English society Mr. Cobden ever cultivated—there was a sadness. Every one felt that England had lost an individuality which it could never have again, which was of the highest value, which was in its own kind altogether unequalled.
What used to strike the agricultural mind, as different from what they fancied, and most opposite to a Northern agitator, was a sort of playfulness. They could hardly believe that the lurking smile, the perfectly magical humour which they were so much struck by, could be that of a “Manchester man”. Mr. Cobden used to say, “I have as much right as any man to call myself the representative of the tenant farmer, for I am a farmer’s son,—I am the son of a Sussex farmer”. But agriculturists keenly felt that this was not the explanation of the man they saw. Perhaps they could not have thoroughly explained, but they perfectly knew that they were hearing a man of singular and most peculiar genius, fitted as if by “natural selection” for the work he had to do, and not wasting a word on any other work or anything else, least of all upon himself.
Mr. Cobden was very anomalous in two respects. He was a sensitive agitator. Generally, an agitator is a rough man of the O’Connell type, who says anything himself, and lets others say anything. You “peg into me and I will peg into you, and let us see which will win,” is his motto. But Mr. Cobden’s habit and feeling were utterly different. He never spoke ill of any one. He arraigned principles, but not persons. We fearlessly say that after a career of agitation of thirty years, not one single individual has—we do not say a valid charge, but a producible charge—a charge which he would wish to bring forward against Mr. Cobden. You cannot find the man who says, “Mr. Cobden said this of me, and it was not true”. This may seem trivial praise, and on paper it looks easy. But to those who know the great temptations of actual life it means very much. How would any other great agitator, O’Connell or Hunt or Cobbett look, if tried by such a test? Very rarely, if even ever in history, has a man achieved so much by his words—been victor in what was thought at the time to be a class-struggle—and yet spoken so little evil as Mr. Cobden. There is hardly a word to be found, perhaps, even now, which the recording angel would wish to blot out. We may on other grounds object to an agitator who lacerates no one, but no watchful man of the world will deny that such an agitator has vanquished one of life’s most imperious and difficult temptations.
Perhaps some of our readers may remember as vividly as we do a curious instance of Mr. Cobden’s sensitiveness. He said at Drury Lane Theatre, in tones of feeling, almost of passion, curiously contrasting with the ordinary coolness of his nature, “I could not serve with Sir Robert Peel”. After more than twenty years, the curiously thrilling tones of that phrase still live in our ears. Mr. Cobden alluded to the charge which Sir Robert Peel had made, or half made, that the Anti-Corn-Law League and Mr. Cobden had, by their action and agitation, conduced to the actual assassination of Mr. Drummond, his secretary, and the intended assassination of himself—Sir Robert Peel. No excuse or palliation could be made for such an assertion except the most important one, that Peel’s nerves were as susceptible and sensitive as Mr. Cobden’s. But the profound feeling with which Mr. Cobden spoke of it is certain. He felt it as a man feels an unjust calumny, an unfounded stain on his honour.
Mr. Disraeli said on Monday night (and he has made many extraordinary assertions, but this is about the queerest), “Mr. Cobden had a profound reverence for tradition”. If there is any single quality which Mr. Cobden had not, it was traditional reverence. But probably Mr. Disraeli meant what was most true, that Mr. Cobden had a delicate dislike of offending other men’s opinions. He dealt with them tenderly. He did not like to have his own creed coarsely attacked, and he did—he could not help doing—as he would be done by; he never attacked any man’s creed coarsely or roughly, or in any way except by what he in his best conscience thought the fairest and justest argument. This sensitive nature is one marked peculiarity in Mr. Cobden’s career as an agitator, and another is, that he was an agitator for men of business.
Generally speaking, occupied men charged with the responsibilities and laden with the labour of grave affairs are jealous of agitation. They know how much may be said against any one who is responsible for anything. They know how unanswerable such charges nearly always are, and how false they easily may be. A capitalist can hardly help thinking, “Suppose a man was to make a speech against my mode of conducting my own business, how much would he have to say!” Now it is an exact description of Mr. Cobden, that by the personal magic of a single-minded practicability he made men of business abandon this objection. He made them rather like the new form of agitation. He made them say, “How business-like, how wise, just what it would have been right to do”.
Mr. Cobden of course was not the discoverer of the Free-trade principle. He did not first find out that the Corn-laws were bad laws. But he was the most effectual of those who discovered how the Corn-laws were to be repealed, how Free-trade was to change from a doctrine of The Wealth of Nations into a principle of tariffs and a fact of real life. If a thing was right, to Mr. Cobden’s mind it ought to be done; and as Adam Smith’s doctrines were admitted on theory, he could not believe that they ought to lie idle, that they ought to be “bedridden in the dormitory of the understanding”.
Lord Houghton once said, “In my time political economy books used to begin, ‘Suppose a man on an island’ ”. Mr. Cobden’s speeches never began so. He was altogether a man of business speaking to men of business. Some of us may remember the almost arch smile with which he said “the House of Commons does not seem quite to understand the difference between a cotton mill and a print work”. It was almost amusing to him to think that the first assembly of the first mercantile nation could be, as they were and are, very dim in their notions of the most material divisions of their largest industry. It was this evident and first-hand familiarity with real facts and actual life which enabled Mr. Cobden to inspire a curiously diffused confidence in all matter-of-fact men. He diffused a kind of “economic faith”. People in those days had only to say, “Mr. Cobden said so,” and other people went and “believed it”.
Mr. Cobden had nothing classical in the received sense about his oratory; but it is quite certain that Aristotle, the greatest teacher of the classical art of rhetoric, would very keenly have appreciated his oratory. This sort of economic faith is exactly what he would most have valued, what he most prescribed. He said: “A speaker should convince his audience that he was a likely person to know”. This was exactly what Mr. Cobden did. And the matter-of-fact philosopher would have much liked Mr. Cobden’s habit of “coming to the point”. It would have been thoroughly agreeable to his positive mind to see so much of clear, obvious argument. He would not, indeed, have been able to conceive a “League Meeting”. There has never, perhaps, been another time in the history of the world when excited masses of men and women hung on the words of one talking political economy. The excitement of these meetings was keener than any political excitement of the last twenty years, keener infinitely than any which there is now. It may be said, and truly, that the interest of the subject was Mr. Cobden’s felicity, not his mind, but it may be said with equal truth that the excitement was much greater when he was speaking than when any one else was speaking. By a kind of keenness of nerve, he said the exact word most fitted to touch, not the bare abstract understanding, but the quick individual perceptions of his hearers.
We do not wish to make this article a mere panegyric Mr. Cobden was far too manly to like such folly. His mind was very peculiar, and like all peculiar minds had its sharp limits. He had what we may call a supplementary understanding, that is, a bold, original intellect, acting on a special experience, and striking out views and principles not known to or neglected by ordinary men. He did not possess the traditional education of his country, and did not understand it. The solid heritage of transmitted knowledge has more value, we believe, than he would have accorded to it. There was too a defect in business faculty not identical, but perhaps not altogether without analogy. The late Mr. James Wilson used to say, “Cobden’s administrative power I do not think much of, but he is most valuable in counsel, always original, always shrewd, and not at all extreme”. He was not altogether equal to meaner men in some beaten tracks and pathways of life, though he was far their superior in all matters requiring an original stress of speculation, an innate energy of thought.
It may be said, and truly said, that he has been cut off before his time. A youth and manhood so spent as his, well deserved a green old age. But so it was not to be. He has left us, quite independently of his positive works, of the repeal of the Corn-laws, of the French treaty, a rare gift—the gift of a unique character. There has been nothing before Richard Cobden like him in English history, and perhaps there will not be anything like him. And his character is of the simple, emphatic, picturesque sort which most easily, when opportunities are given as they were to him, goes down to posterity. May posterity learn from him! Only last week we hoped to have learned something ourselves:—
- “But what is before us we know not,
- And we know not what shall succeed”.
The day after Cobden’s death.
Matthew Arnold, “The Future”.
Bankers’ Magazine Vol I April-October 1844 – H/T Sean Corrigan
The author of an interesting work published a short time since, entitled “Sir Robert Peel and his Era,” in which a lively sketch is given of the chief peculiarities, external and intellectual, of the leading members of the Houses of Parliament; refers to the assertion sometimes made, that Mr. Cobden is a man of only one idea,
in the following terms,—” It is a mistake; Cobden is really a man of great talent, energy, and tact, though, of course, it has been by means of his one idea at the critical time, that he has become in the compass of a year and a half, a noted public character.” Most persons know little of Mr. Cobden, except in connection with the Anti-Corn Law League, and may, therefore, feel some surprise at recognizing him in the character of a financier. But long before the Corn Law League commenced its operations, his very clever pamphlets, “England, Ireland, and America,” and “Russia, by a Manchester Manufacturer,” had shewn him fully capable of appreciating and discussing with ability, any of the intricate questions connected with our monetary system. We purpose in this paper to lay before the reader, his views on the currency, because we think it by no means improbable, that they may have considerable influence, when the subject comes under consideration in Parliament; and, further, because they are the opinions of a practical man of business who speaks to facts.
We must beg to be understood as expressing no opinion ourselves, either for or against the views he advocates, by thus drawing attention to them. He gave his evidence before a select committee of the House of Commons in 1840, and it is not a little singular that he only once, and then incidentally, spoke of the Corn Laws, as interfering injuriously with our monetary system.
In order to present, in a concise form, the subjects connected with the theory and practice of Banking, which were referred to in the course of his evidence, we shall arrange them under separate headings, commencing with his own statement of the character of the evidence he proposed to give.
His Opinions—those of a Practical Man.
I am here as a practical man, a merchant and manufacturer, and with a view to the scientific definitions of the terms to be used by bankers, I do not pretend to come here as an authority. It would very much prevent that confusion into which I fell at the close of my last examination, if I should clearly understand the practical bearing of every question, and it is only on practical subjects that I can afford any information. I make this explanation, because I find that in the attempt which I thought due to this Committee, to answer every question put to me on the last occasion, I have given some answers at the close of my examination which have been, by permission of the Committee, struck out, which are so unintelligible to me on reading them, that I think they must be incomprehensible to every living being. I do not understand the questions any more than I understand the answers at this moment, and I wish my examination to be of that practical nature, on which alone I can afford the Committee any information.
Evils produced by Fluctuations in the Currency.
My opinion is, that great evils have arisen to the trade and manufactures of the country from fluctuations in the currency; I believe great evils have been occasioned to the trade and manufactures of the country in 1836 and 1837, and the subsequent period, by fluctuations in the currency; greater evils, pecuniary, social, and moral, than by the direct failures of all the banks of issue since they were first established in this country.
I could adduce a fact derived from my own experience that would illustrate the heavy losses to which manufactures were exposed in their operations, by those fluctuations in the value of money. I am a calico printer; I purchase the cloth, which is my raw material, in the market, and have usually in warehouses three or four months supply of material. I must necessarily proceed in my operations, whatever change there may be, whether a rise or a fall in the market. I employ 600 hands, and those hands must be employed. I have fixed machinery and capital, which must also be kept going, and therefore whatever the prospects of a rise or fall of prices may be, I am constantly obliged to be purchasing the material, and contracting for the material on which I operate. In 1837, I lost by my stock in hand 20,000/., as compared with the stock-taking in 1835, 1836, and 1838; the average of those three years when compared with 1837, shews that I lost 20,000/. by my business in 1837, and what I wish to add is, that the whole of this loss arose from the depreciation in the value of my stock. My business was as prosperous; we stood as high as printers as we did previously; our business since that has been as good, and there was no other cause for the losses I then sustained, but the depreciation of the value of the articles in warehouse in my hands. What I wish particularly to shew is, the defenceless condition in which we manufacturers are placed, and how completely we are at the mercy of these unnatural fluctuations. Although I was aware that the losses were coming, it was impossible I could do otherwise than proceed onward, with the certainty of suffering a loss on the stock; to stop the work of 600 hands, and to fail to supply our customers would have been altogether ruinous; that is a fact drawn from my own experience. I wish to point to another example of a most striking kind, shewing the effect of those fluctuations on merchants. I hold in my hand a list of thirty-six articles which were imported in 1837, by the house of Butterworth and Brookes, of Manchester, a house very well known; Mr. Brookes is now boroughreeve of Manchester. Here is a list of thirty-six articles imported in the year 1837, in the regular way of business, and opposite to each article there is the rate of loss upon it as it arrived, and as it was sold. The average loss is 37 1/2 per cent, on those thirty-six articles, and they were imported from Canton, Trieste, Bombay, Bahia, Alexandria, Lima, and, in fact, all the intermediate places almost. This, I presume, is a fair guide to shew the losses which other merchants incurred on similar articles.
Conduct of the Bank of England.
The great instrument in the hands of the Bank, for effecting its changes in the value of commodities, is by creating a panic; it is a process the most disastrous to the trading community; it is the most profitable to the Bank proprietors; that process was resorted to at the end of 1836, in striking a blow at the American houses, in advancing the rate of interest, and by all those means which are resorted to in the London papers, through its organ’s of the press, for exciting apprehensions in the minds of merchants and traders, that a curtailment of its securities and credit generally was to take place. The Bank ought to have contracted its issues long before, at the commencement of the drain in 1836; there was a previous drain, which was but slightly interrupted, which began as early as 1834; in fact, the Bank appears to have departed from its principle, immediately it had obtained the renewal of its charter, of keeping one-third of its liabilities in gold. If the Bank had kept its securities at an even amount, and retained one-third of its liabilities in bullion, or about that (I do not complain of a million), I feel assured there would have been no panic; there could have been no panic if that had been the policy from the time of its obtaining its charter.
I consider the cause and effect in the contractions and expansions of the currency, and their influences on prices, are not to be measured in periods of six months, or even twelve months; the expansions of the Bank of England in 1835, and indeed its previous course of expansion (for I am of opinion that mischief was generating long before that), had given rise to an immense amount of speculation; and amongst other things, it had set in motion seventy or eighty joint-stock banks; forty-seven joint stock banks were established in 1836; those were in the course of formation at the very time when the Bank of England was, as it appears here, in the course of contraction, but it necessarily must have taken a considerable time to have checked the spirit which had been generated by the previous course of expansion on the part of the Bank of England.
Effects of an over Issue of Paper Money.
The conduct of the Bank, in inflating the currency, produces a rise of prices. The prices of all commodities gradually rise; that begets what is thought prosperity; it is in fact unhealthy excitement; this causes an extension of our commerce and manufactures; it causes an advance of prices abroad, in consequence of the advance in this market, which is the regulator of the prices abroad, and that begets a general system of over-trading. This overtrading inevitably leads in the end to discredit, and panic to a greater or less degree; it was through promoting this train of consequences by originally departing from its rule of keeping steadily to the amount of its securities, and keeping one-third of its liabilities in bullion, that the Bank, in my opinion, caused the over-trading; and the panic of 1836-7, which, I repeat, could not have happened had the Bank been true to its own principle of remaining passive, with the amount of one-third of its liabilities in bullion.
Bank of England can control Issues of Joint Stock Banks.
I believe it to be impossible for private and joint-stock Banks to expand the circulation, provided the Bank of England remained true to the principle it had laid down. We have had no instance of its having been so; even the Scotch Banks cannot inflate the currency, unless the Bank of England have previously set the example; that was the case from 1823 to 1825; the Scotch Banks increased their circulation from, I believe, 3,400,000/. to upwards of four millions and a half, up to the panic of 1825; I think that was about the increase of the circulation in Scotland; but the moment the screw (to use the common term) was placed upon the currency in London, that moment the Scotch Banks were compelled to restrict their issues, and the same operation went on with all the private banks of the kingdom. I have a pretty clear recollection of having seen that statement in Sir Henry Parnell’s work upon Banks. It is impossible to doubt that the Bank, having the entire circulation of the metropolis, having the privilege of a legal tender, its notes being alone receivable by the Government in payment of the revenue, and possessing altogether the prestige which the Bank of England possesses in the public estimation, and backed by the Government, it is impossible that an institution so circumstanced should be otherwise than in a position of absolute power over all other banks in the kingdom. I should not say that the country Banks contract their circulation instantaneously, on finding that the Bank of England is doing so; but the country Banks do what is of as much importance in the way of effecting a correction of the evils of expansion; they curtail their credits, they allow fewer facilities, they call up old debts, and take warning by the example of the Bank of England, to put a general restriction upon the operations of trade; I think it must be known to every one that the slightest movement on the part of the Bank of England, is watched with intense interest by every banker as well as merchant in the kingdom.
What Causes should regulate the Currency.
I hold all idea of regulating the currency to be an absurdity; the very terms of regulating the currency, and managing the currency, I look upon to be an absurdity; the currency should regulate itself; it must be regulated by the trade and commerce of the world; I would neither allow the Bank of England nor any private banks, to have what is called the management of the currency.—Have you not stated that the Bank of England ought to regulate its circulation according to the amount of its bullion? I have stated that that is the principle laid down by the Bank of England, and that that principle has not been conformed to; I have no faith in any man or any body of men ever conforming to any such principles, and, therefore, I remarked I should never contemplate any remedial measure, which left it to the discretion of individuals to regulate the amount of the currency by any principle or standard whatever; but the Bank having laid down that principle, and having obtained its charter in consequence of Mr. Horsley Palmer’s evidence, as to the views and intentions of the Bank Directors, they have departed from that principle, and I make the complaint and charge against them of having violated a principle laid down by themselves.
Upon what principle, in your opinion, ought the circulation of this country to be regulated? If we are to have paper money at all—but in the abstract I should be sorry to commit myself to the principle that there should be any paper money at all—but if we are to have paper money, it must be restricted to that amount which the precious metals would be if they circulated alone. I would not put it into the power of individuals to depart from the principle, as the Bank Directors have done, which they have once laid down; and, therefore, my idea is, that if there be a circulation of paper, the maximum amount of that paper should be settled, and that there should be such an amount as to leave still such an amount of the precious metals circulating, as would allow the operations of the exchanges to work tranquilly upon the precious metals, without ever occasioning any shock to trade or commerce.— The object you would propose is, that the paper currency should vary exactly as the metallic currency would do? I have stated that the maximum of the paper should be settled; and it should be of such amount as would require gold and silver, in addition to such an extent as would meet all the demands for exportation in case of adverse exchanges, which I maintain would never amount, in the course of trade, to any thing at all of magnitude, unless, through the operation of bad laws, such as the present corn law. I wish to be understood that the whole of the currency in circulation should vary precisely as if it were all gold and silver, and that the exchanges should operate upon the bullion,—upon the specie.
Do you mean, by the maximum of the paper, a certain fixed amount to be issued on security, the remainder to be issued against gold, and vary with it? Precisely; I think there would be no harm done, if you issued a certain amount on securities beyond the amount required on bullion.—You do not mean by a maximum that a limit should be fixed, beyond which paper should not go, whatever gold might come in? By a maximum I mean, a maximum amount to be issued on securities, and any thing beyond that, issued on gold, would be represented by the gold.—Do you conceive that that object can be obtained by any regulations of the Banks as now constituted in this country? No, decidedly not.—How would you propose to attain that object? I think the details might be worked out with great ease, so far as the alteration of such a bank goes, inasmuch as it would require only a few men of probity to see that the principles laid down were not violated, and that the bullion of of the Bank was secure.—Would that not, so far as the Bank of England is concerned, be attained, by a strict adherence on their part to the rule of making their paper vary according to their bullion? I should be sorry to trust the Bank of England again, having violated their principle; for I never trust the same parties twice on an affair of such magnitude.—Suppose they were to adhere strictly to their principle, would not the object be obtained? The Committee must excuse my taking a hypothetical case, to give a favourable opinion. I object, moreover, to a national Bank being managed by merchants, those engaged in extensive mercantile transactions. It would be impossible, looking to the Directors of the Bank of England, to impute a want of probity; for we have had abundant proofs that the Bank of England has been conducted by men of strict personal honour; but it is quite clear that such a thing may arise as for such a bank to be under the direction of individuals as merchants, whose personal interests may be in direct hostility to their public duty. I would take, for instance, such a case as merchants having a large amount of produce coming home, previous to a glut, and previous to a panic, when it might become exceedingly important to those gentlemen that they should delay an action of the Bank, which produced a fall in prices, until they had realized on certain shipments. Such a thing is quite possible; but at the same time I should wish to be understood as not imputing any thing of the kind to such a body of men.
Advantages of One Bank of Issue.
Is it your opinion that nothing short of putting down all existing establishments, and establishing a Bank administered by Commissioners, will regulate the currency of the country? I repeat what I stated before, that the affairs of private banks cannot be so far wrong as to effect prices abroad, provided a bank having the power the Bank of England has had hitherto, remains steady to its principle, and, therefore, of course I must also think that a national bank having such a monopoly as the Bank of England has, if conducted on that principle, would prevent any mass of serious evils arising either from our country banks in England, or banks in Ireland and Scotland. All the evils we feel as merchants and manufacturers, arising from the fluctuations in the prices of commodities, originate, I believe, in London, with the Bank of England.—Would it answer the purpose, so far as the Bank of England is concerned, if a separation were made into two parts, the one to manage the currency, on the principle you have laid down, the other to manage the banking department in the same manner as the private Banks, not of issue, are managed? Mr. Loyd’s plan, to which reference is made, would have many advantages over the present system; but it is not a plan I should approve.—What are your objections to it? Mr. Loyd uses the term managing the currency, and regulating the currency, which I consider to be just as possible as the management of the tides, or the regulation of stars, or the winds. I have seen no plan which places the thing wholly beyond the power of a body of men to increase or diminish the quantity of money, which power is as intolerable, as that a body of men should have the power of regulating the length of the yard periodically; and it is as reasonable in the case of merchants who may manage a bank like the Bank of England, as if they should be privileged to sell by the short yard, and buy by the long one. I object entirely to such a bank being in the hands of a body of merchants; I object to any body of men having the power to increase or decrease the quantity’ of money.—Is not that power possessed to a small extent, and for perhaps short periods, by any bank of issue in the country? Not to an extent to influence the prices of commodities throughout the kingdom . I am not prepared to say whether slight perturbations might not arise in particular localities, owing to the indiscretions of individual banks; but no general derangement to the commerce of the country could arise from any such cause, in my opinion, provided an institution, possessing the important privileges of the Bank of England, were administered upon the principle I have pointed out.—Are not those derangements, to whatever extent they go, in direct contradiction to the principle on which, in your opinion, the currency ought to vary? I should consider them so trivial that they could not have any effect beyond the mere moment.—Not even if a great many banks pursued the same course at the same time? No; from the circumstance that I have already referred to, that if prices are raised generally in any particular quarter, commodities, stocks, railway shares, and other securities would flow to that quarter for sale; if they would fetch a higher price there than they would in London, they would be sold there, and a bill demanded on London, or gold demanded to be transmitted to London, and so the thing would be almost instantly corrected.—Do you find the contraction of the Bank of England, even when made, produces so speedy an effect on the circulation of private banks? No, not when made under the circumstances, to which I nave alluded in 1837; but under ordinary circumstances, it would have the power to correct, such as Mr. Samuel Jones Loyd has alluded to; but time must be taken, as a necessary ingredient, in all its operations; a time for expansion must be considered as having been necessary, and time for contraction must be given.
If from any causes a disposition to speculate arose, might not considerable facilities for it be given by the issues of country banks, and considerable derangement in consequence be produced? No; I consider that no great over-trading can take place unless the prices of foreign articles are influenced; that would not be the case under the circumstances to which reference is made; at present, the Bank of England, in its variations, not only effects this market, but it effects all the markets in the world. I happened to be travelling in Turkey and Greece in the spring of 1837, and I saw in the little island of Syra, the Greek merchants there, with their telescopes in their hands, looking out as anxiously for the arrival of a vessel from Trieste, giving an account of the proceedings of the Bank of England, as a merchant on the Exchange at Manchester, would watch for the arrival of the mail, to know what the next step to be taken by the Bank Directors would be; and we know, that in the message of the President of the United States in 1837, and in the Addresses of some of the Governors of the States, New York in particular, the Bank of England was not only mentioned by name, but a considerable space given to the discussion of its policy. The operations of the Bank of England, therefore, can never be compared with the operations of a small country bank, such as have been supposed to effect the changes in the value of commodities; the country bank forms a little instrument for raising up a few more houses in a town, or giving an impulse to a small line of railroad, but it could never influence the prices on staple manufactures, provided the great Central Bank was governed by a principle precisely the same as if we had a metallic currency.
In the case of a central bank administered on the principle you have mentioned, on what footing do you think country banks ought to be placed? I am as much opposed on principle to country banks of issue, as to the Bank of England; I know, in talking of remedial measures such as we wish in Manchester, such as men of business wish, in order to be saved from losses such as we have experienced, we must be practical, and rather look to what is expedient than what is wholly desirable; and, therefore, I confine myself chiefly to the removal of the great grievance, the power of influencing the prices in the hands of the Bank of England; but I should be as glad to see the power withdrawn from every other bank in England, and I believe that is a rapidly increasing opinion on the part of the trading community among whom I am accustomed to mix in Manchester.
Do you conceive it to be an increasing opinion that all power of issue should be confined to one bank, under the management of Commissioners? I believe it is.
Do you contemplate that a bank so constituted should perform any other functions than those of the issue of money? None whatever; to remain wholly passive, and not to dream of regulating the currency.
You do not contemplate its making advances to Government or other parties? Oh no, not at all; there is an end to its usefulness if that illicit intercourse is kept up; there is money raised without the advances of bank notes in America, by means of post notes; and if the Government were in great distress they might borrow, perhaps, upon post notes from merchants, without going to the Bank of England for advances.
I have been extensively engaged in business for twenty years, and I never saw an Exchequer Bill in my life; it is a singular fact, that I once mentioned the same thing at our Chamber of Commerce, in the presence of a dozen individuals, all very largely engaged in business, and not one of them had ever seen an Exchequer Bill; there is an immense amount of this paper afloat, but they do not enter into commercial transactions; and the reason they do not enter into commercial transactions is, that they pay interest, and, therefore, it is profitable to the holders to keep them, instead of passing them away.
Bankers’ Magazine Vol I April-October 1844
John Bright and Richard Cobden are forever associated because they were both industrial capitalists, Corn Law Reform free traders, Anti War campaigners, and founders of the “Manchester School” of working class classical Liberalism. We have published some articles in the past about Cobden, after whom I named this Educational Charity, the most recent by Tom Woods, a brilliant work of scholarship. This piece has prompted me to dig out from the vaults this most moving and brilliant speech given in the House of Commons on the 23rd of February 1855 on the war against Russia in the Crimea.
On the 22nd of February 1855 four senior Cabinet Ministers including Gladstone had resigned citing that they were being censured by the new Palmerston led Administration, as members of the prior Administration, they had decided to go to war; Palmerston was now arguing for peace. Cobden and Bright had always stood opposed to war, indeed Bright was a principled Quaker.
Sadly this speech could have been made in recent years. Free trade, more interaction with other people and not war is the best approach. War only ever delivers up an enlarged State and a diminution of freedom with widespread destruction of life, limb and property.
Notes: The seat of Tiverton was Palmerston’s. Lord John Russell was MP for the City of London negotiating the peace treaty at Vienna. Steve Baker MP advises us that his colleague the great Bill Cash is writing a biography of Bright. A quick web search and I see the great free trader himself is flying the family flag as Bright was his great grandfather’s cousin (see here).
The official copy of the “Angel of Death” speech is to be found in Hansard. Needless to say, it was given unscripted.
I am one of those forming the majority of the House, I suspect, who are disposed to look upon our present position as one of more than ordinary gravity. I am one, also, of those, not probably constituting so great a majority of the House, who regret extremely the circumstances which have obliged the right hon. Gentlemen who are now upon this bench to secede from the Government of the noble Lord the Member for Tiverton. I do not take upon me for a moment to condemn them; because I think, if there be anything in which a man must judge for himself, it is whether he should take office if it be offered to him, whether he should secede from office, whether he should secede under a particular leader, or engage in the service of the Crown, or retain office in a particular emergency. In such cases I think that the decision must be left to his own conscience and his own judgment; and I should be the last person to condemn any one for the decision 1756 to which he might come. I think, however, that the speech of the right hon. Gentleman is one which the House cannot have listened to without being convinced that he and his retiring colleagues have been moved to the course which they have taken by a deliberate judgment upon this question, which, whether it be right or wrong, is fully explained, and is honest to the House and to the country. Now, Sir, I said that I regretted their secession, because I am one of those who do not wish to see the Government of the noble Lord the Member for Tiverton overthrown. The House knows well, and nobody knows better than the noble Lord, that I have never been one of his ardent and enthusiastic supporters. I have disapproved much of his policy both at home and abroad; but I hope that I do not bear to him, as I can honestly say that I do not bear to any man in this House—for from all I have received unnumbered courtesies—any feeling that takes even the tinge of a personal animosity; and, even if I did, at a moment so grave as this, no feeling of a personal character whatever should prevent me from doing that which I think now, of all times, we are called upon to do—that which we honestly and conscientiously believe to be for the permanent interests of the country. We are in this position, that for a month past, at least, there has been a chaos in the regions of the Administration. Nothing can be more embarrassing—I had almost said nothing can be more humiliating—than the position which we offer to the country; and I am afraid that the knowledge of our position is not confined to the limits of these islands. It will be admitted that we want a Government; that if the country is to be saved from the breakers which now surround it, there must be a Government; and it devolves upon the House of Commons to rise to the gravity of the occasion, and to support any man who is conscious of his responsibility, and who is honestly offering and endeavouring to deliver the country from the embarrassment in which we now find it. We are at war, and I shall not say one single sentence with regard to the policy of the war or its origin, and I know not that I shall say a single sentence with regard to the conduct of it; but the fact is that we are at war with the greatest military Power, probably, of the world, and that we are carrying on our operations at a distance of 3,000 miles from home, and in the neighbourhood of the strongest fortifications of that great military empire. I will not stop to criticise—though it really 1757 invites me—the fact that some who have told us that we were in danger from the aggressions of that empire, at the same time told us that that empire was powerless for aggression, and also that it was impregnable to attack. By some means, however, the public have been alarmed as if that aggressive power were unbounded, and they have been induced to undertake an expedition, as if the invasion of an impregnable country were a matter of holiday-making rather than of war. But we are now in a peculiar position with regard to that war; fur, if I am not mistaken—and I think I gathered as much from the language of the right hon. Gentleman—at this very moment terms have been agreed upon—agreed upon by the Cabinet of Lord Aberdeen; consented to by the noble Lord the Member for Tiverton when he was in that Cabinet; and ratified and confirmed by him upon the formation of his own Government—and that those terms are now specifically known and understood; and that they have been offered to the Government with which this country is at war, and in conjunction with France and Austria—one, certainly, and the other supposed to be, an ally of this country. Now, those terms consist of four propositions, which I shall neither describe nor discuss, because they are known to the House; but three of them are not matters of dispute; and, with regard to the other, I think that the noble Lord the Member for the City of London stated, upon a recent occasion, that it was involved in these terms—that the preponderant power of Russia in the Black Sea should cease, and that Russia had accepted it with that interpretation. Therefore, whatever difference arises is merely as to the mode in which that “preponderant power” shall be understood or made to cease. Now, there are some Gentlemen not far from me—there are men who write in the public press—there are thousands of persons in the United Kingdom at this moment—and I learn with astonishment and dismay that there are persons even in that grave assembly which we are not allowed to specify by a name in this House—who have entertained dreams—impracticable theories—expectations of vast European and Asiatic changes, of revived nationalities, and of a new map of Europe, if not of the world, as a result or an object of this war. And it is from those Gentlemen that we hear continually, addressed to the noble Lord the Member fur Tiverton, terms which I cannot well understand. They call upon 1758 him to act, to carry on the war with vigour, and to prosecute enterprises which neither his Government, nor any other Government has ever seriously entertained; but I would appeal to those Gentlemen whether it does not become us—rewarding the true interests and the true honour of the country—if our Government have offered terms of peace to Russia, not to draw back from those terms, not to cause any unnecessary delay, not to adopt any subterfuge to prevent those terms being accepted, not to attempt shuffles of any kind, not to endeavour to insist upon harder terms, and thus make the approach of peace even still more distant than it is at present? Whatever may be said about the honour of the country in any other relation in regard to this affair, this, at least, I expect every man who hears me to admit—that if terms of peace have been offered they have been offered in good faith, and shall be in honour and good faith adhered to; so that if, unfortunately for Europe and humanity, there should be any failure at Vienna, no man should point to the English Government and to the authorities and rulers of this Christian country, and say that we have prolonged the war and the infinite calamities of which it is the cause. Well, now, I said that I was anxious that the Government of the noble Lord should not be overthrown. Will the House allow me to say why I am so? The noble Lord at the head of the Government has long been a great authority with many persons in this country upon foreign policy. His late colleague, and present envoy to Vienna, has long been a great authority with a large portion of the people of this country upon almost all political questions. With the exception of that unhappy selection of an ambassador at Constantinople, I hold that there are no men in this country more truly responsible for our present position in this war than the noble Lord who now fills the highest office in the State and the noble Lord who is now, I trust, rapidly approaching the scene of his labours in Vienna. ["Hear, hear!" and cries of "No, no!"] I do not say this now to throw blame upon those noble Lords, because their policy, which I hold to be wrong, they, without doubt, as firmly believe to be right; but I am only stating facts. It has been their policy that they have entered into war for certain objects, and I am sure that neither the noble Lord at the head of the Government nor his late colleague the noble Lord the Member for London will shrink from the responsibility 1759 which attaches to them. Well, Sir, now we have those noble Lords in a position which is, in my humble opinion, favourable to the termination of the troubles which exist. I think that the noble Lord at the head of the Government himself would have more influence in stilling whatever may exist of clamour in this country than any other Member of this House. I think, also, that the noble Lord the Member for London would not have undertaken the mission to Vienna if he had not entertained some strong belief that, by so doing, he might bring the war to an end. Nobody gains reputation by a failure in negotiation, and as that noble Lord is well acquainted with the whole question from beginning to end, I entertain a hope—I will not say a sanguine hope—that the result of that mission to Vienna will be to bring about a peace, to extricate this country from some of those difficulties inseparable from a state of war. There is one subject upon which I should like to put a question to the noble Lord at the head of the Government. I shall not say one word here about the state of the army in the Crimea, or one word about its numbers or its condition. Every Member of this House, every inhabitant of this country, has been sufficiently harrowed with details regarding it. To my solemn belief, thousands—nay, scores of thousands of persons—have retired to rest, night after night, whose slumbers have been disturbed, or whose dreams have been based upon the sufferings and agonies of our soldiers in the Crimea. I should like to ask the noble Lord at the head of the Government—although I am not sure if he will feel that he can or ought to answer the question—whether the noble Lord the Member for London has power, after discussions have commenced, and as soon as there shall be established good grounds for believing that the negotiations for peace will prove successful, to enter into any armistice? ["No! no!" and "Hear, hear!"] I know not, Sir, who it is that says “No, no,” but I should like to see any man get up and say that the destruction of 200,000 human lives lost on all sides during the course of this unhappy conflict is not a sufficient sacrifice. You are not pretending to conquer territory—you are not pretending to hold fortified or unfortified towns; you have offered terms of peace which, as I understand them, I do not say are not moderate; and breathes there a man in this House or in this country whose appetite for blood is so insatiable that, even 1760 when terms of peace have been offered and accepted, he pines for that assault in which of Russian, Turk, French, and English, as sure as one man dies, 20,000 corpses will strew the streets of Sebastopol? I say I should like to ask the noble Lord—and I am sure that he will feel, and that this House will feel, that I am speaking in no unfriendly manner towards the Government of which he is at the head—I should like to know, and I venture to hope that it is so, if the noble Lord the Member for London has power, at the earliest stage of these proceedings at Vienna, at which it can properly be done—and I should think that it might properly be done at a very early stage—to adopt a course by which all further waste of human life may be put an end to, and further animosity between three great nations be, as far as possible, prevented? I appeal to the noble Lord at the head of the Government and to this House; I am not now complaining of the war—I am not now complaining of the terms of peace, nor, indeed, of anything that has been done—but I wish to suggest to this House what, I believe, thousands, and tens of thousands, of the most educated and of the most Christian portion of the people of this country are feeling upon this subject, although, indeed, in the midst of a certain clamour in the country, they do not give public expression to their feelings. Your country is not in an advantageous state at this moment; from one end of the kingdom to the other there is a general collapse of industry. Those Members of this House not intimately acquainted with the trade and commerce of the country do not fully comprehend our position as to the diminution of employment and the lessening of wages. An increase in the cost of living is finding its way to the homes and hearts of a vast number of the labouring population. At the same time there is growing up—and, notwithstanding what some hon. Members of this House may think of me, no man regrets it more than I do—a bitter and angry feeling against that class which has for a long period conducted the public affairs of this country. I like political changes when such changes are made as the result, not of passion, but of deliberation and reason. Changes so made are safe, but changes made under the influence of violent exaggeration, or of the violent passions of public meetings, are not changes usually approved by this House or advantageous to the country. I cannot but notice, in speaking to Gentlemen who 1761 sit on either side of this House, or in speaking to any one I meet between this House and any of those localities we frequent when this House is up—I cannot, I say, but notice that an uneasy feeling exists as to the news that may arrive by the very next mail from the East. I do not Suppose that your troops are to be beaten in actual conflict with the foe, or that they will be driven into the sea; but I am certain that many homes in England in which there now exists a fond hope that the distant one may return—many such homes may be rendered desolate when the next mail shall arrive. The angel of death has been abroad throughout the land; you may almost hear the beating of his wings. There is no one, as when the first-born were slain of old, to sprinkle with blood the lintel and the two sideposts of our doors, that he may spare and pass on; he takes his victims from the castle of the noble, the mansion of the wealthy, and the cottage of the poor and the lowly, and it is on behalf of all these classes that I make this solemn appeal. I tell the noble Lord, that if he be ready honestly and frankly to endeavour, by the negotiations to be opened at Vienna, to put an end to this war, no word of mine, no vote of mine, will be given to shake his power for one single moment, or to change his position in this House. I am sure that the noble Lord is not inaccessible to appeals made to him from honest motives and with no unfriendly feeling. The noble Lord has been for more than forty years a Member of this House. Before I was born, he sat upon the Treasury bench, and he has devoted his life in the service of his country. He is no longer young, and his life has extended almost to the term allotted to man. I would ask, I would entreat the noble Lord to take a course which, when be looks back upon his whole political career—whatever he may therein find to be pleased with, whatever to regret—cannot but be a source of gratification to him. By adopting that course he would have the satisfaction of reflecting that, having obtained the object of his laudable ambition—having become the foremost subject of the Crown, the director of, it may be, the destinies of his country and the presiding genius in her councils—he had achieved a still higher and nobler ambition; that he had returned the sword to the scabbard—that at his word torrents of blood had ceased to flow—that he had restored tranquillity to Eu- 1762 rope, and saved this country from the indescribable calamities of war.”
Peter Joyce and Geoffrey Sell describe an Eton and Oxford educated Party Leader thus:
A long-term opponent of statism, the view that social advance could only be brought about through the action of the state. His opposition to state action was partly based on the belief that this enhanced the power of bureaucracies, transforming those who received state services into the passive recipients of handouts, devaluing their humanity by depriving them of the ability to take decisions which affected their everyday lives. His firm belief in the importance of participation and the need for individuals to possess freedom of choice resulted in him viewing communities as the key social unit in which individuals could intellectually develop their full potential by sharing in the pursuit of common goals…
He found in small self-sufficient communities paradigms against which he measured the lunacies of central government and the welfare state…
He deserves credit for placing on the political agenda issues such as how Britain should handle her relative decline in the world and how government should be brought closer to the people…
I was struck by the similarity of the Big Society not Big Government message from David Cameron and these quotes from the excellent Joyce/Sell Biography of the late Liberal leader Lord Jo Grimond found here.
I believe it highlights the flawed tribal nature of our politics. I feel truly sorry that the Liberals have abandoned such a rich political heritage for the politics of envy entrenched in their 2010 Manifesto. They now espouse a misguided socialist agenda of taxing the rich and disincentivising enterprise with policies like Mansion tax and more than doubling capital gains tax. Surely we have all learned the lesson from Labour’s mistakes of the 60’s and 70’s that to “tax the rich until the pips squeak” does not work. This is even more relevant now that we recognise the potency of global competition which even Gordon Brown acknowledges now that his claims to have ended “boom and bust” have been trashed by “global events”. Wealth creators can simply up sticks and locate in tax and regulatory friendly jurisdictions. We need to encourage enterprise as well as foster philanthropy and promote sound stewardship.
Nick Clegg says this in his foreword to the Liberal Democrats Manifesto “We’ve had 65 years of Labour and the Conservatives: the same parties taking turns and making the same mistakes, letting you down. It is time for something different. It is time for something better.”
If he truly wanted to do “something different” he would have stuck to core Liberal ideas and not filched old Labour policies. With luminaries such as Richard Cobden and Jo Grimond in their past they have a rich vein of truly innovative and now timely ideas on which to draw. Sadly, enticed by the prospect of power they have ditched ideas of gravitas and integrity for a more populist polemic.
If I were to summarise the 2010 manifesto’s for my 83 year old father and ask him to identify the Party he would probably identify the Conservative manifesto as old Liberal, the Liberal manifesto old Labour and the Labour manifesto as – well at best it is a poor attempt to cobble together enough populist ideas to cling on to power
Through it all is an electorate so disenchanted with politics and politicians that if they bother to vote at all they will either vote tribally or be influenced by the televised debates where image not policy is King. Political selection now has more in common with TV shows like X Factor, Britain’s Got Talent and in Lord Mandelson’s case Strictly Come Dancing.
On the plus side this is just the right time for efficacious change. Our Nation has been shaken for sure, we have seen the imperfections of the banking system and Politics has been thrown into disarray by the expenses scandal. Yet a wind of change is blowing life into the embers and fresh ideas are being debated. The Cobden Centre is dedicated to promote “Honest Money and Social Progress” – let the discourse continue!
Food is on the whole cheap to us as an advanced or even a post industrial nation. Richard Cobden, with a small group of fellow manufacturers, took on the whole might of the Aristocracy in putting forward the case to abolish the Corn Laws and have unilateral free trade.
For those interested in free trade, I have dug out possibly one of Cobden’s finest orations delivered in the House of Commons, on March 13, 1845, and described by John Morley as:
“probably the most powerful speech he ever made.” Men on the Tory benches whispered to one another, “Peel must answer this.” But Peel crushed in his hand the notes he had made and remarked, “Those may answer him who can.”
For economic history buffs, you will love it. For its relevance today, we must remember we have one of the most economically insane policies that covers agricultural production in the United Kingdom and through the whole of Europe: the Common Agricultural Policy. The Tax Payers Alliance has shown us here the utter madness of the policy. Here is part of their executive summary.
“With the onset of a recession, family budgets are tight. Despite agricultural commodity prices falling from their recent exceptional high, there are still global concerns at a food crisis. Saving £400 a year, over one per cent of average household, post-tax income, would be a welcome boost for many families struggling in a these tough economic times. The Common Agricultural Policy (CAP) imposes a significant burden on families both by costing significant amounts of taxpayers’ money and by pushing up food prices: The CAP costs the UK £10.3 billion a year, £398 per household. That is equivalent to adding around £7.65 per week to family food bills.”
Abolish CAP; it serves no purpose for the public of this nation. Let farmers use cheap food and make cheaper products for the people of our nation.
Let farmers invest long term in things that people want to consume.
The following speech, made one full century and a half ago, could be made today by one of our politicians. Sadly, we seldom see such oratory in the House of Commons nowadays.
“SIR, the object of this motion is to appoint a select committee to inquire into the present condition of the agricultural interests; and, at the same time, to ascertain how the laws regulating the importation of agricultural produce have affected the agriculturists of this country. As regards the distress among farmers, I presume we cannot go to a higher authority than those honourable gentlemen who profess to be the farmers’ friends and protectors. I find it stated by those honourable gentlemen who recently paid their respects to the prime minister, that the agriculturists are in a state of great embarrassment and distress. I find that one gentleman from Norfolk [Mr. Hudson] stated that the farmers in the county are paying their rents, but paying them out of capital, and not profits. I find Mr. Turner of Upton, in Devonshire, stating that one-half of the smaller farmers in that county are insolvent, and that the others are rapidly falling into the same condition; that the farmers with larger holdings are quitting their farms with a view of saving the rest of their property; and that, unless some remedial measures be adopted by this House, they will be utterly ruined.
The accounts which I have given you of those districts are such as I have had from many other sources. I put it to honourable gentlemen opposite, whether the condition of the farmers in Suffolk, Wiltshire, and Hampshire, is better than that which I have described in Norfolk and Devonshire? I put it to county members, whether—taking the whole of the south of England, from the confines of Nottinghamshire to the Land’s End—whether, as a rule, the farmers are not now in a state of the greatest embarrassment? There may be exceptions; but I put it to them whether, as a rule, that is not their condition in all parts?
The distress of the farmers being admitted, the next question which arises is, What is its cause? I feel a greater necessity to bring forward this motion for a committee of inquiry, because I find great discrepancies of opinion among honourable gentlemen opposite as to what is the cause of the distress among the farmers. In the first place there is a discrepancy as to the generality or locality of the existing distress. I find the right honourable baronet at the head of the government [Sir Robert Peel] saying that the distress is local; and he moreover says it does not arise from the legislation of this House. The honourable member for Dorsetshire declares, on the other hand, that the distress is general, and that it does not arise from legislation.
Now, there are these very different opinions on the other side of the House; but there are members upon this side representing very important interests, who think that farmers are suffering because they have this legislative protection. There is all this difference of opinion. Now, is not that a fit and proper subject for your inquiry? I am prepared to go into a select committee, and to bring forward evidence to show that the farmers are laboring under great evils—evils that I would connect with the legislation of this House, tho they are evils which appear to be altogether dissociated from it. The first great evil under which the farmer labours is the want of capital. No one can deny that. I do not mean at all to disparage the farmers. The farmers of this country are just the same race as the rest of us; and, if they were placed in a similar position, theirs would be as good a trade—I mean that they would be as successful men of business—as others; but it is notorious, as a rule, that the farmers of this country are deficient in capital; and I ask: How can any business be carried on successfully where there is a deficiency of capital?
I take it that honourable gentlemen opposite, acquainted with farming, would admit that 10l. an acre, on an arable farm, would be a sufficient amount of capital for carrying on the business of farming successfully. I will take it, then, that 10l. an acre would be a fair capital for an arable farm. I have made many inquiries upon this subject in all parts of the kingdom, and I give it you as my decided conviction, that at this present moment farmers do not average 5l. an acre capital on their farms. I speak of England, and I take England south of the Trent, tho, of course, there are exceptions in every country; there are men of large capital in all parts—men farming their own land; but, taking it as a rule, I hesitate not to give my opinion—and I am prepared to back that opinion by witnesses before your committee—that, as a rule, farmers have not, upon an average, more than 5l. an acre capital for their arable land. I have given you a tract of country to which I may add all Wales; probably 20,000,000 of acres of cultivable land. I have no doubt whatever that there are 100,000,000l. of capital wanting upon that land. What is the meaning of farming capital? There are strange notions about the word “capital.” It means more manure, a great amount of labor, a greater number of cattle, and larger crops. Picture a country in which you can say there is a deficiency of one-half of all those blessings which ought to, and might, exist there, and then judge what the condition of laborers wanting employment and food is.
But you will say, capital would be invested if it could be done with profit. I admit it; that is the question I want you to inquire into. How is it that in a country where there is a plethora of capital, where every other business and pursuit is overflowing with money, where you have men going to France for railways and to Pennsylvania for bonds, embarking in schemes for connecting the Atlantic with the Pacific by canals, railways in the valley of the Mississippi, and sending their money to the bottom of the Mexican mines; while you have a country rich and overflowing, ready to take investments in every corner of the globe, how is it, I say, that this capital does not find its employment in the most attractive of all forms—upon the soil of this country? The cause is notorious—it is admitted by your highest authorities; the reason is, there is not security for capital in land. Capital shrinks instinctively from insecurity of tenure; and you have not in England that security which would warrant men of capital investing their money in the soil.
Now, is it not a matter worthy of consideration, how far this insecurity of tenure is bound up with that protective system of which you are so enamored? Suppose it can be shown that there is a vicious circle; that you have made politics of Corn Laws, and that you want voters to maintain them; that you very erroneously think that the Corn Laws are your great mine of wealth, and, therefore, you must have a dependent tenantry, that you may have their votes at elections to maintain this law in Parliament. Well, if you will have dependent voters, you can not have men of spirit and capital. Then your policy reacts upon you. If you have not men of skill and capital, you can not have improvements and employment for your labourers. Then comes around that vicious termination of the circle—you have pauperism, poor-rates, county-rates, and all the other evils of which you are now speaking and complaining.
Now, sir, not only does the want of security prevent capital flowing into the farming business, but it actually deters from the improvement of the land those who are already in the occupation of it. There are many men, tenants of your land, who could improve their farms if they had a sufficient security, and they have either capital themselves or their friends could supply it; but with the absence of leases, and the want of security, you are actually deterring them from laying out their money on your land. They keep everything the same from year to year. You know that it is impossible to farm your estates properly unless a tenant has an investment for more than one year. A man ought to be able to begin a farm with at least eight years before him, before he expects to see a return for the whole of the outlay of his money. You are, therefore, keeping your tenants-at-will at a yearly kind of cultivation, and you are preventing them carrying on their businesses in a proper way. Not only do you prevent the laying out of capital upon your land, and disable the farmers from cultivating it, but your policy tends to make them servile and dependent; so that they are actually disinclined to improvement, afraid to let you see that they can improve, because they are apprehensive that you will pounce upon them for an increase of rent.
Now, I do not know why we should not in this country have leases for land upon similar terms to the leases of manufactories, or any “plant” or premises. I do not think that farming will ever be carried on as it ought to be until you have leases drawn up in the same way as a man takes a manufactory, and pays perhaps a thousand pounds a year for it. I know people who pay four thousand pounds a year for manufactories to carry on their business, and at fair rents. There is an honourable gentleman near me who pays more than four thousand pounds a year for the rent of his manufactory. What covenants do you think he has in his lease? What would he think if it stated how many revolutions there should be in a minute of the spindles, or if they prescribed the construction of the straps or the gearing of the machinery? Why, he takes his manufactory with a schedule of its present state—bricks, mortar, and machinery—and when the lease is over, he must leave it in the same state, or else pay a compensation for the dilapidation. [The chancellor of the exchequer: “Hear, hear!”]
The right honourable gentleman, the chancellor of the exchequer, cheers that statement. I want to ask his opinion respecting a similar lease for a farm. I am rather disposed to think that the Anti-Corn-Law Leaguers will very likely form a joint-stock association, having none but free-traders in the body, that we may purchase an estate and have a model farm; taking care that it shall be in one of the rural counties, one of the most purely agricultural parts of the country, where we think there is the greatest need of improvement—perhaps in Buckinghamshire,—and there shall be a model farm, homestead, and cottages; and I may tell the noble lord, the member for Newark, that we shall have a model garden, and he will not make any boast about it. But the great object will be to have a model lease. We will have as the farmer a man of intelligence and capital.
I am not so unreasonable as to tell you that you ought to let your land to men who have not a competent capital, or are not sufficiently intelligent; but I say, select such a man as that, let him know his business and have a sufficient capital, and you can not give him too wide a scope. We will find such a man, and will let him our farm; there shall be a lease precisely such as that upon which my honourable friend takes his factory. There shall be no clause inserted in it to dictate to him how he shall cultivate his farm; he shall do what he likes with the old pasture. If he can make more by plowing it up he shall do so; if he can grow white crops every year—which I know there are people doing at this moment in more places than one in this country—or if he can make any other improvement or discovery, he shall be free to do so. We will let him the land, with a schedule of the state of tillage and the condition of the homestead, and all we will bind him to will be this: “You shall leave the land as good as when you entered upon it. If it be in an inferior state it shall be valued again, and you shall compensate us; but if it be in an improved state it shall be valued, and we, the landlords, will compensate you.” We will give possession of everything upon the land, whether it be wild or tame animals; he shall have the absolute control.
Take as stringent precautions as you please to compel the punctual payment of the rent; take the right of reentry as summarily as you like if the rent be not duly paid, but let the payment of rent duly be the sole test as to the well-doing of the tenant; and so long as he can pay the rent, and do it promptly, that is the only criterion you need have that the farmer is doing well; and if he is a man of capital, you have the strongest possible security that he will not waste your property while he has possession of it.
Now, sir, I do not stop to connect the cause and effect in this matter, and inquire whether your Corn Laws or your protective system have caused the want of leases and capital. I do not stop to make good my proof, and for this reason, that you have adopted a system of legislation in this House by which you profess to make the farming trade prosperous. I show you, after thirty years’ trial, what is the depressed condition of the agriculturists; I prove to you what is the impoverished state of farmers, and also of labourers, and you will not contest any one of those propositions. I say it is enough, having had thirty years’ trial of your specific with no better results than these, for me to ask you to go into committee to see if something better cannot be devised. I am going to contend that free trade in grain would be more advantageous to farmers—and with them I include labourers—than restriction; to oblige the honourable member for Norfolk, I will take with them also the landlords; and I contend that free trade in corn and grain of every kind would be more beneficial to them than to any other class of the community. I should have contended the same before the passing of the late tariff, but now I am prepared to do so with tenfold more force.
What has the right honourable baronet [Sir R. Peel] done? He has passed a law to admit fat cattle at a nominal duty. Some foreign fat cattle were selling in Smithfield the other day at about 15l. or 16l. per head, paying only about seven and one half per cent. duty; but he has not admitted the raw material out of which these fat cattle are made. Mr. Huskisson did not act in this manner when he commenced his plan of free trade. He began by admitting the raw material of manufactures before he admitted the manufactured article; but in your case you have commenced at precisely the opposite end, and have allowed free trade in cattle instead of that upon which they are fattened. I say give free trade in that grain which goes to make the cattle. I contend that by this protective system the farmers throughout the country are more injured than any other class in the community.
I will go further and say, that farmers with thin soil—I mean the stock farmers, whom you will find in Hertfordshire and Surrey, farmers with large capitals, arable farmers—I say those men are deeply interested in having a free importation of food for their cattle, because they have thin, poor land. This land of its own self does not contain the means of its increased fertility; and the only way is the bringing in of an additional quantity of food from elsewhere, that they can bring up their farms to a proper state of cultivation. I have been favoured with an estimate made by a very experienced, clever farmer in Wiltshire—probably honourable gentlemen will bear me out, when I say a man of great intelligence and skill, and entitled to every consideration in this House. I refer to Mr. Nathaniel Atherton, Kingston, Wilts. That gentleman estimates that upon 400 acres of land he could increase his profits to the amount of 280l., paying the same rent as at present, provided there was a free importation of foreign grain of all kinds. He would buy 500 quarters of oats at 15s., or the same amount in beans or peas at 14s. or 15s. a sack, to be fed on the land or in the yard; by which he would grow additional 160 quarters of wheat, and 230 quarters of barley, and gain an increased profit of 300l. upon his sheep and cattle. His plan embraces the employment of an additional capital of 1,000l.; and he would pay 150l. a year more for labour.
Now, I undertake to say, in the name of Mr. Atherton, of Wiltshire, and Mr. Lattimore, of Hertfordshire, that they are as decided advocates for free trade in grain of every kind as I am. I am not now quoting merely solitary cases. I told honourable gentlemen once before that I have probably as large an acquaintance among farmers as any one in the House. I think I could give you from every county the names of some of the first-rate farmers who are as ardent free-traders as I am. I requested the secretary of this much dreaded Anti-Corn-Law League to make me out a list of the farmers who are subscribers to that association, and I find there are upward of one hundred in England and Scotland who subscribe to the league fund, comprising, I hesitate not to say, the most intelligent men to be found in the kingdom. I went into the Lothians, at the invitation of twenty-two farmers there, several of whom were paying upward of 1,000l. a year rent. I spent two or three days among them, and I never found a body of more intelligent, liberal-minded men in my life. Those are men who do not want restrictions upon the importation of grain. They desire nothing but fair play. They spy: “Let us have our Indian corn, Egyptian beans, and Polish oats as freely as we have our linseed cake, and we can bear competition with any corn-growers in the world.” But by excluding the provender for cattle, and at the same time admitting the cattle almost duty free, I think you are giving an example of one of the greatest absurdities and perversions of nature and common sense that ever was seen.
Upon the last occasion when I spoke upon this subject, I was answered by the right honourable gentleman, the president of the Board of Trade. He talked about throwing poor lands out of cultivation, and converting arable lands into pasture. I hope that we men of the Anti-Corn-Law League may not be reproached again with seeking to cause any such disasters. My belief is—and the conviction is founded upon a most extensive inquiry among the most intelligent farmers, without stint of trouble and pains—that the course you are pursuing tends every hour to throw land out of cultivation, and make poor lands unproductive. Do not let us be told again that we desire to draw the labourers from the land, in order that we may reduce the wages of the work-people employed in factories. I tell you that, if you bestow capital on the soil, and cultivate it with the same skill as manufacturers bestow upon their business, you have not population enough in the rural districts for the purpose. I yesterday received a letter from Lord Ducie, in which he gives precisely the same opinion. He says: “If we had the land properly cultivated, there are not sufficient labourers to till it.” You are chasing your labourers from village to village, passing laws to compel people to support paupers, devising every means to smuggle them abroad—to the antipodes, if you can get them there; why, you would have to run after them, and bring them back again., if you had your land properly cultivated. I tell you honestly my conviction, that it is by these means, and these only, that you can avert very great and serious troubles and disasters in your agricultural districts.
On the last occasion when I addressed the House on this subject, I recollect stating some facts to show that you had no reasonable ground to fear foreign competition; those facts I do not intend to reiterate, because they have never been contradicted. But there are still attempts made to frighten people by telling them: “If you open the ports to foreign corn, you will have corn let in here for nothing.” One of the favourite fallacies which are now put forth is this: “Look at the price of corn in England, and see what it is abroad; you have prices low here, and yet you have corn coming in from abroad and paying the maximum duty. Now, if you had not 20s. duty to pay, what a quantity of corn you would have brought in, and how low the price would be!”
This statement arises from a fallacy—I hope not dishonestly put forth—in not understanding the difference between the real and the nominal price of corn. The price of corn at Dantzic now, when there is no regular sale, is nominal; the price of corn when it is coming in regularly is the real price. Now, go back to 1838. In January of that year the price of wheat at Dantzic was nominal; there was no demand for England; there were no purchasers except for speculation, with the chance, probably, of having to throw the wheat into the sea. But in the months of July and August of that year, when apprehensions arose of a failure of our harvest, then the price of corn in Dantzic rose instantly, sympathizing with the markets of England; and at the end of the year, in December, the price of wheat at Dantzic had doubled the amount at which it had been in January; and during the three following years, when you had a regular importation of corn,—during all that time, by the averages laid upon the table of this House, wheat at Dantzic averaged 40s. Wheat at Dantzic was at that price during the three years 1839, 1840, and 1841. Now, I mention this just to show the fact to honourable gentlemen, and to entreat them that they will not go and alarm their tenantry by this outcry of the danger of foreign competition. You ought to be pursuing a directly opposite course—you ought to be trying to stimulate them in every possible way, by showing that they can compete with foreigners; that what others can do in Poland, they can do in England.
But we are told that English agriculturists can not compete with foreigners, and especially with that serf labour that is to be found somewhere up the Baltic. Well, but flax comes from the Baltic and there is no protective duty. Honourable gentlemen say we have no objection to raw materials where there is no labour connected with them; but we can not contend against foreigners in wheat, because there is such an amount of labour in it. Why, there is twice as much labour in flax as there is in wheat; but the member for Shoreham favours the growth of flax in order to restore the country, which is sinking into this abject and hopeless state for want of agricultural protection. But the honourable baronet will forgive me—I am sure he will, he looks as if he would—if I allude a little to the subject of leases. The honourable gentleman on that occasion, I believe, complained that it was a great pity that farmers did not grow more flax. I do not know whether it was true or not that the same honourable baronet’s leases to his own tenants forbade them to grow that article.
Now, I have alluded to the condition of the labourers at the present time; but I am bound to say that while the farmers at the present moment are in a worse condition than they have been for the last ten years, I believe the agricultural labourers have passed over the winter with less suffering and distress, altho it has been a five-months’ winter, and a severer one, too, than they endured in the previous year. [Hear!] I am glad to find that corroborated by honourable gentlemen opposite, because it bears out, in a remarkable degree, the opinion that we, who are in connection with the free trade question, entertain. We maintain that a low price of food is beneficial to the labouring classes. We assert, and we can prove it, at least in the manufacturing districts, that whenever provisions are dear, wages are low; and whenever food is cheap, wages invariably rise. We have had a strike in almost every business in Lancashire since the price of wheat has been down to something like 50s.; and I am glad to be corroborated when I state that the agricultural labourers have been in a better condition during the last winter than they were in the previous one. But does not that show that, even in your case, tho your labourers have in a general way only just as much as will find them a subsistence, they are benefited by a great abundance of the first necessaries of life? Altho their wages may rise and fall with the price of food, altho they may go up with the advance in the price of corn, and fall when it is lowered; still, I maintain that it does not rise in the same proportion as the price of food rises, nor fall to the extent to which food falls. Therefore in all cases the agricultural labourers are in a better state when food is low than when it is high.
Now, I hold that this duty begins nearer home, and that the landed proprietors are the parties who are responsible if the labourers have not employment. You have absolute power; there is no doubt about that. You can, if you please, legislate for the labourers, or yourselves. Whatever you may have done besides, your legislation has been adverse to the laborer, and you have no right to call upon the farmers to remedy the evils which you have caused. Will not this evil—if evil you call it—press on you more and more every year? What can you do to remedy the mischief? I only appear here now because you have proposed nothing. We all know your system of allotments, and we are all aware of its failure. What other remedy have you? For, mark you, that is worse than a plaything, if you were allowed to carry out your own views. [Hear!] Aye, it is well enough for some of you that there are wiser heads than your own to lead you, or you would be conducting yourselves into precisely the same condition in which they are in Ireland, but with this difference—this increased difficulty—that there they do manage to maintain the rights of property by the aid of the English Exchequer and 20,000 bayonets; but divide your own country into small allotments, and where would be the rights of property? What do you propose to do now? That is the question. Nothing has been brought forward this year, which I have heard, having for its object to benefit the great mass of the English population; nothing I have heard suggested which has at all tended to alleviate their condition.
You admit that the farmer’s capital is sinking from under him, and that he is in a worse state than ever. Have you distinctly provided some plan to give confidence to the farmer, to cause an influx of capital to be expended upon his land, and so bring increased employment to the labourer? How is this to be met? I can not believe you are going to make this a political game. You must set up some specific object to benefit the agricultural interest. It is well said that the last election was an agricultural triumph. There are two hundred county members sitting behind the prime minister who prove that it was so.
What, then, is your plan for this distressing state of things? That is what I want to ask you. Do not, as you have done before, quarrel with me because I have imperfectly stated my case; I have done my best, and I again ask you what you have to propose? I tell you that this “Protection,” as it has been called, is a failure. It was so when you had the prohibition up to 80s. You know the state of your farming tenantry in 1821. It was a failure when you had a protection price of 60s., for you know what was the condition of your farm tenantry in 1835. It is a failure now with your last amendment, for you have admitted and proclaimed it to us; and what is the condition of your agricultural population at this time?
I ask, what is your plan? I hope it is not a pretense—a mere political game that has been played throughout the last election, and that you have not all come up here as mere politicians. There are politicians in the House—men who look with an ambition—probably a justifiable one—to the honours of office. There may be men who—with thirty years of continuous service, having been pressed into a groove from which they can neither escape nor retreat—may be holding office, high office, maintained there probably at the expense of their present convictions which do not harmonize very well with their early opinions. I make allowances for them; but the great body of the honourable gentlemen opposite came up to this House, not as politicians, but as the farmers’ friends, and protectors of the agricultural interests. Well, what do you propose to do? You have heard the prime minister declare that, if he could restore all the protection which you have had, that protection would not benefit agriculturists. Is that your belief? If so, why not proclaim it? And if it is not your conviction, you will have falsified your mission in this House by following the right honourable baronet out into the lobby, and opposing inquiry into the condition of the very men who sent you here.
With mere politicians I have no right to expect to succeed in this motion. But I have no hesitation in telling you that, if you give me a committee of this House, I will explode the delusion of agricultural protection! I will bring forward such a mass of evidence, and give you such a preponderance of talent and of authority, that when the blue book is published and sent forth to the world, as we can now send it, by our vehicles of information, your system of protection shall not live in public opinion for two years afterward. Politicians do not want that. This cry of protection has been a very convenient handle for politicians. The cry of protection carried the counties at the last election, and politicians gained honours, emoluments, and place by it. But is that old tattered flag of protection, tarnished and torn as it is already, to be kept hoisted still in the counties for the benefit of politicians; or will you come forward honestly and fairly to inquire into this question? I can not believe that the gentry of England will be made mere drumheads to be sounded upon by a prime minister to give forth unmeaning and empty sounds, and to have no articulate voice of their own. No! You are the gentry of England who represent the counties. You are the aristocracy of England. Your fathers led our fathers; you may lead us if you will go the right way. But, altho you have retained your influence with this country longer than any other aristocracy, it has not been by opposing popular opinion, or by setting yourselves against the spirit of the age.
In other days, when the battle and the hunting-fields were the tests of manly vigor, your fathers were first and foremost there. The aristocracy of England were not like the noblesse of France, the mere minions of a court; nor were they like the hidalgos of Madrid, who dwindled into pigmies. You have been Englishmen. You have not shown a want of courage and firmness when any call has been made upon you. This is a new era. It is the age of improvement; it is the age of social advancement, not the age for war or for feudal sports. You live in a mercantile age, when the whole wealth of the world is poured into your lap. You can not have the advantages of commercial rents and feudal privileges; but you may be what you always have been, if you will identify yourselves with the spirit of the age. The English people look to the gentry and aristocracy of their country as their leaders. I, who am not one of you, have no hesitation in telling you that there is a deep-rooted, an hereditary prejudice, if I may so call it, in your favour in this country. But you never got it, and you will not keep it, by obstructing the spirit of the age. If you are indifferent to enlightened means of finding employment to your own peasantry; if you are found obstructing that advance which is calculated to knit nations more together in the bonds of peace by means of commercial intercourse; if you are found fighting against the discoveries which have almost given breath and life to material nature, and setting up yourselves as obstructives of that which destiny has decreed shall go on,—why, then, you will be the gentry of England no longer, and others will be found to take your place.
And I have no hesitation in saying that you stand just now in a very critical position. There is a wide-spread suspicion that you have been tampering with the best feelings and with the honest confidence of your constituents in this cause. Everywhere you are doubted and suspected. Read your own organs, and you will see that this is the case. Well, then, this is the time to show that you are not the mere party politicians which you are said to be. I have said that we shall be opposed in this measure by politicians; they do not want inquiry. But I ask you to go into this committee with me. I will give you a majority of county members. You shall have a majority of the Central Society in that committee. I ask you only to go into a fair inquiry as to the causes of the distress of your own population. I only ask that this matter may be fairly examined. Whether you establish my principle or yours, good will come out of the inquiry; and I do, therefore, beg and entreat the honourable independent country gentlemen of this House that they will not refuse, on this occasion, to go into a fair, a full, and an impartial inquiry.”
I founded the Cobden Centre inspired by the writing of F A Hayek, particularly his reference in “Denationalization of Money: the Argument Refined” (IEA, 1976) from which the following quote is taken.
Free Money Movement
What we now need is a Free Money Movement comparable to the Free Trade Movement of the 19th century, demonstrating not merely the harm caused by acute inflation, which could justifiably be argued to be avoidable even with present institutions, but the deeper effects of producing periods of stagnation that are indeed inherent in the present monetary arrangements.
Now of course that Free Trade Movement was the movement set up by the businessman and radical social reforming liberal, Richard Cobden. Hayek knew that the original founders of that movement attacked the import tariffs or “Corn Laws” that harmed ordinary people. The Corn Laws forced the price of basic food stuffs so high that the working man was almost paying what we would pay today on our mortgages.
The legal privilege that this gave landowners to price gouge the masses at the expense of the privileged few was an outrage and the courageous corn law reformers did away with this invidious protection by repealing the Importation Act of 1815 with the Importation Act of 1846.
In Bright, J. and Thorold Rogers, J.E. (eds.) (1908) Speeches on Questions of Public Policy by Richard Cobden, M.P., Vol. 1, London: T. Fisher Unwin, republished as Cobden, R. (1995), London: Routledge/Thoemmes, they cite a quote from a working man who sums up the iniquities of the Corn Laws that Richard Cobden used:
When provisions are high, the people have so much to pay for them that they have little or nothing left to buy clothes with; and when they have little to buy clothes with, there are few clothes sold; and when there are few clothes sold, there are too many to sell, they are very cheap; and when they are very cheap, there cannot be much paid for making them: and that, consequently, the manufacturing working man’s wages are reduced, the mills are shut up, business is ruined, and general distress is spread through the country. But when, as now, the working man has the said 25s. left in his pocket, he buys more clothing with it (ay, and other articles of comfort too), and that increases the demand for them, and the greater the demand…makes them rise in price, and the rising price enables the working man to get higher wages and the masters better profits. This, therefore, is the way I prove that high provisions make lower wages, and cheap provisions make higher wages.
Sir Robert Peel, who was Prime Minster at the time, was very educated in the works of Hume, Ricardo and Smith: he understood the law of comparative advantage. With a massive starving Irish population (the “potato famine”) and pressure from the likes of Cobden at home, Peel powered through the repeal of the laws. In Morley, J. (1905) The Life of Richard Cobden, 12th ed., London: T. Fisher Unwin, 985 p., republished by London: Routledge/Thoemmes (1995), Peel said in his resignation speech after the repeal had been done for the UK:
In reference to our proposing these measures, I have no wish to rob any person of the credit which is justly due to him for them. But I may say that neither the gentlemen sitting on the benches opposite, nor myself, nor the gentlemen sitting round me—I say that neither of us are the parties who are strictly entitled to the merit. There has been a combination of parties, and that combination of parties together with the influence of the Government, has led to the ultimate success of the measures. But, Sir, there is a name which ought to be associated with the success of these measures: it is not the name of the noble Lord, the member for London, neither is it my name. Sir, the name which ought to be, and which will be associated with the success of these measures is the name of a man who, acting, I believe, from pure and disinterested motives, has advocated their cause with untiring energy, and by appeals to reason, expressed by an eloquence, the more to be admired because it was unaffected and unadorned—the name which ought to be and will be associated with the success of these measures is the name of Richard Cobden. Without scruple, Sir, I attribute the success of these measures to him.
The pound Sterling has lost some 99% of its value since the suspension of commodity-backed money post World War I, as successive governments have chosen not to confront their electorates in an honest fashion and say how much all the activities they say they are doing for you to get your vote will cost you. Instead, tax receipts pick up the majority of the costs of government, but there is always a bit of debt they choose to monetize. This means printing it out of nothing or creating it electronically our of nothing, a term which today is now called QE or quantitive easing.
So, instead of a Free Money Movement, I have started what I call the “Honest Money Movement”.
Why do I use the word honest?
Well I simply use it to show that, like the iniquitous Corn Laws that our forefathers sought to destroy as they gave privilege and wealth to one minority party at the expense of the masses, governments can take everyone’s wealth to benefit them and the few who organize this wealth transfer for them, i.e. the Central Bank and its client banks in the private sector who organize bond sales and purchases. They get the new money wealth effect first, just like the aristocratic land owners of old got the excess price of corn at the expense of the masses of working people.
If honest money is demanded, a government can no longer monetize debt it has to live or fall by its tax receipts only. This means when a politician comes to you at election time with a menu saying “we are going to give you X and Y” they will now have to say, “we propose to take £A and £B from you and give £A and £B to Mr X and Mrs Y” and you can then decide the merits of this knowing what you are getting yourself involved with.
Sir Robert Peel plays another role in our story. He was the first Prime Minster to do something about the bad effects of private sector bankers issuing notes purporting to convert into gold on demand. The trouble being, just as the landed aristocrats kept corn high at the expense of the wealth of the people, so the goldsmiths issued promises to pay on demand on bits of paper that functioned as money, over the actual amount of gold in their safe keeping. This criminality was stopped by the Bank Charter Act of 1844: the original text can be seen here and the amended text, that is still in force today, can be seen here.
Unfortunately for us, there was no restriction on the creation of demand deposits. A demand deposit is where a bank creates an IOU or a bank deposit out of thin air which functions as money.
You as the deposit holder can make payments to anyone who will accept your transfer of this IOU to them. Whenever you write a cheque it is drawn on a bank deposit, whenever you make an electronic payment, you make it from a bank deposit. In Peel’s day, there were over 20 bits of paper, called promissory notes, issued by the goldsmiths of the day, to every unit of gold. When people tried to redeem in gold, there was a “panic” and bust followed the boom.
The rapid creation of bank demand deposits since then has had the same effect. I seek to encourage an amendment to the Bank Charter Act to include deposits and finish off the job that Peel so courageously started. This would stop credit-fuelled boom and bust. All booms and busts, even the South Sea Bubble and the Tulip Mania, can be traced back to credit-fuelled binges that have been created by governments. Remove this power from the governments and their proxies, the bankers, and we can have honest money, peaceful enjoyment of the fruits of our labours and the enrichment of only those who earn it.
A starting point to advance this honest money movement is our banking reform proposal is available here. I hope you will help push for reform and end dishonest money and dishonest government.
- Toby’s interview with Brian Micklethwait explores Toby’s philosophy in more detail: it can be found here.
- The staggering errors behind the policy of QE.
- In The Causes of the Economic Crisis, Mises forecasts and explains the breakdown of the German mark and the market crash of 1929: buy here or read online here (PDF).