EARLY YEARS OF PITT'S ADMINISTRATION.The general election of 1784 which established Pitt in office was the expression of a strong national feeling. Humiliated by the loss of its colonies, irritated by the mismanagement of its affairs, and burdened with the expense of an unsuccessful war, which added £114,500,000 to the public debt, the nation listened with approval to Fox's denunciations and got rid of North. It was with unbounded disgust that it saw Fox enter into an alliance with the statesman whom he had denounced as the prime cause of its misfortunes. During the late conflict in parliament public feeling grew strong against him. The king's dismissal of a ministry which commanded a large majority in the house of commons, and his refusal to dismiss its successor at the request of the house needed no pardon; they were endorsed by the declaration of the national will, and he gained a hold on the affection of his people such as he had never had before. His success must not make us forget the courage and the political insight which he displayed during this critical period. All that made the crown worth wearing was at stake, for if Fox's party had obtained a majority at the general election, George for the rest of his life would have become a mere puppet in their hands. He won the game, but he did not win all that he hoped for. Pitt, whom he chose as his champion, was not a minister after his own heart, content to carry out a royal policy. George freed himself from the danger of whig domination, but he did so at the cost of resigning his hopes of establishing a system of personal government, and accepted an independent prime minister. He never liked Pitt, but he knew that Pitt stood between him and Fox, and so for seventeen years was content that he should retain office. Pitt's power was established by, and rested on, the will of the nation. In 1784 England looked forward with hope to the rule of a young minister, a son of the great Chatham, of stainless private character and unimpeachable integrity, who was free from all responsibility for its misfortunes, and was the victorious opponent of Fox, whom it regarded with aversion. Nor did its hope fail of fulfilment.

What the government did for England during the nine years of peace which succeeded the election of 1784 may be said to have been done by Pitt. His colleagues were not men of great capacity, and he received obedience rather than counsel from them. So it was that the position of prime minister, a title which North refused to accept, became finally established. This unavowed change in the constitution settled the sphere of political action open to the crown. Government by the crown through departmental ministers acting independently of each other was no longer possible. The principle of the homogeneous character of the cabinet and of the prime minister's position in it were, as we shall see, decisively settled in 1791 by the dismissal of the chancellor, who, relying on the king's favour, wore out Pitt's patience by rebellion against his authority. Pitt's strength of character and the king's dependence on him caused the gradual extinction of the "king's friends" as a party distinct from the supporters of the government. The leader of the party Jenkinson, the secretary at war in North's ministry, had great commercial knowledge; Pitt made him president of the new board of trade which was constituted in 1785, and as Lord Hawkesbury and as Earl of Liverpool he gave the prime minister his support. Pitt did not attempt to reduce the crown to a cypher, and George exercised a strong and legitimate influence in politics, as adviser of the cabinet, though Pitt occasionally acted against his wishes.

Another change of lasting importance effected by Pitt was in the character of the house of lords. In 1760 the whole number of peers, including minors and Roman catholics, who were incapable of sitting in the house, was only 174; the house was then the stronghold of the whig oligarchy. During North's administration about thirty peers were created or promoted. Under Pitt the invasion advanced far more rapidly. Economical reform deprived the minister of the power of rewarding his supporters with places and pensions, and Pitt used peerages and minor honours in their stead. George, who did not approve of a large increase in the peerage,[186] was forced to yield to his minister's exigencies. In five years Pitt was responsible for forty-eight creations and promotions, and by 1801 the number reached 140.[187] The house of lords ceased to be a small assembly of territorial magnates, mostly of the whig party; it became less aristocratic, for peerages were bestowed on men simply because they were supporters of the government and were wealthy; it became mainly tory in politics, and its size made it less open to corrupt influence. As a body, however, it was inferior in ability and in devotion to its legislative duties to the small assembly of earlier days.Under Pitt's leadership, England during the years of peace which succeeded the American war regained her place in the politics of Europe. His attention, however, was chiefly devoted to domestic affairs. He was eminently skilful in finance; he restored the public credit and freed trade from artificial impediments. The corruption of parliament, of which both whigs and tories had been guilty, was brought to an end; many abuses and sinecures were abolished and public life became purer. Though at first Pitt sustained some defeats in parliament, due both to mistakes of his own and to the absence of party consolidation among his usual supporters, his power rapidly increased until it became absolute in both houses. He showed supreme ability in the management of parliament. With much of his father's haughtiness of manner he combined a tactfulness and self-control which his father never exhibited. He had nothing of Fox's winning power, yet he became extremely popular in the house of commons, for he showed himself worthy to lead men and able to lead them successfully. His temper was sweet, his courage, patience, and hopefulness unfailing, and his industry unwearied. That he loved power is surely no reproach to a statesman who used it as he did with single-hearted devotion to his country. For wealth and honours he cared nothing. He was always poor, and soon became deeply in debt, chiefly because he was too much occupied with public affairs to control his household expenditure. While he disdainfully distributed titles and ribbons among a clamouring crowd, he refused all such things for himself. Some measures of reform which he advocated in early days he dropped when he found that the country did not care for them, and in later days altogether abandoned a liberal policy, for he was called on to give England that which is infinitely more important than liberal measures, the preservation of its constitutional and social life from the danger of revolution.

When parliament met on May 19, 1784, the ministry carried the address in the commons by 282 to 114. Pitt, however, soon found that he could not reckon on this majority on every question. In the Westminster election Fox had been opposed by Admiral Lord Hood, created an Irish baron after the battle of the Saints, and Sir Cecil Wray. The poll was kept open for forty days and there was much rioting and irregularity of every kind, for which both sides appear to have been responsible. Fox's friends, and above all the beautiful Duchess of Devonshire and other whig ladies, canvassed eagerly for him, and the duchess is said to have bought a butcher's vote with a kiss. George watched the contest with anxiety, for Fox's attack on the constitutional rights of the crown had deepened his animosity towards him. So strong were his feelings that, on hearing that Fox was gaining votes, he wrote to Pitt that "the advance could only be by bad votes, yet similar means must be adopted against him rather than let him get returned". He had heard with delight that 300 Quackers (sic) would vote for Hood and Wray.[188] At the close of the poll Hood stood first and Fox second. Great was the triumph of the Foxites, and the Prince of Wales, Fox's pupil in debauchery, was pleased to exhibit his opposition to his father by taking a prominent part in it; he wore Fox's colours, was present at banquets in his honour, where he gave the toast of "True Blue and Mrs. Crewe," one of Fox's lady canvassers, and got disgustingly drunk. Nevertheless the victory was disputed, for the high-bailiff granted a scrutiny, and instead of returning Hood and Fox as elected, merely reported the number of the votes. In this he was clearly wrong, for he made no proper return to the writ. If a scrutiny was to be held, it should have been completed before the day fixed for the return. It was his duty to make a return on that day; a decision as to the lawfulness of the election pertained to the house of commons. His action deprived Westminster of representation, and would have shut Fox out of the house had he not already been returned for Kirkwall.

Fox petitioned the house to order the high-bailiff to make a proper return. Pitt opposed the petition, and the house ordered that the scrutiny should proceed, though in two divisions on the question his majority fell to 97 and 78. Eight months later, in February, 1785, the scrutiny was still proceeding and was likely to last two years longer. Against the king's judgment,[189] Pitt persisted in maintaining it; his majority sank to 39, then to 9, and on March 4 he was in a minority of 38. The high-bailiff was ordered to make an immediate return, and Hood and Fox were returned as elected. In this matter Pitt did not display his usual tactfulness. Excusably enough in so young a man, he allowed himself to be swayed by personal feeling, and his feeling was ungenerous. With the exception of a small knot of friends like Dundas, he kept himself aloof from his supporters and was ignorant of the annoyance with which they regarded this attempt to deal harshly with a defeated foe.[190] A bill passed that session ordered that polls were not to last more than fifteen days, and that any scrutiny should be closed six days before the return to the writ was due. Fox sued the high-bailiff for neglecting to return him and obtained £2,000 damages.

In spite of this mistake Pitt's position was strengthened by his success in dealing with finance. National credit was low; the public debt of Great Britain had grown from £126,043,057 in 1775 to £240,925,908,[191] and the 3 per cent. consols were at about 57. Heavy expenses entailed by the late war were still to be met, the civil list was in arrear, and the revenue was grievously diminished by smuggling. In order to make smuggling less profitable, Pitt largely reduced the duties on tea and foreign spirits, and made up the loss on the tea duties by a "commutation tax," an increased duty on houses according to the number of their windows. He also made smuggling more difficult by a "hovering act," which subjected to seizure vessels hovering off the coast with any considerable quantity of tea or spirits. A deficit of £6,000,000 he supplied by a loan, and in raising this loan he abandoned the old evil practice of allotment among selected subscribers and opened it to public competition. A second point on which he made a new departure was his declaration that all sound finance should be directed towards extinguishing debt and that consequently "a fund at a high rate of interest was better for the country than those at low rates". The unfunded debts were large, those ascertained amounted to £14,000,000, and as outstanding government bills were at a discount of 15 to 20 per cent., these debts depressed the funds. Pitt at once funded nearly half as an instalment. Lastly the required charges exceeded revenue by over £900,000, an enormous sum for that time, and he proposed to make up the deficiency by taxation.

The number of the new taxes is a third point specially to be noted in his budget. One proposed tax, on coals, he withdrew in deference to general opinion, and substituted others in its place. The rest met with little opposition. As they finally stood they were laid on candles, bricks and tiles, hats, pleasure horses and horses entered for races, British linens and cottons, ribbons and gauzes, ale-licences, shooting licences, paper, hackney coaches, gold and silver plate, exported lead, postage, and imported raw and thrown silk. His speech on the budget, during which he moved 133 resolutions, at once placed his talents as a finance minister beyond dispute; it was admirably lucid and was conciliatory in tone. He also carried some regulations checking the abuse of the privilege of franking letters. In those days a letter which bore on the outside the signature of a member of parliament was carried post-free, and franks were given away with the utmost profusion. It was calculated that the new regulations, without abolishing the privilege, would increase the revenue by £20,000. The next year, 1785, Pitt completed the funding of unfunded debt, choosing according to his principle the 5 per cents. which, though entailing an immediate loss, afforded an easy means of paying off debt. He was able to declare that the revenues were in a flourishing state, and to speak of the institution of a fund for the repayment of the national debt as in the near future. He was, however, still obliged to raise £400,000 by new taxes. Among these were an increased tax on male servants, graduated according to the number kept, and two which excited much hostile criticism, the one a tax on female servants, also graduated, two shillings and sixpence on one, five shillings a head on two, and ten shillings a head on three or more, and the other a tax on shops. Both these taxes were unpopular; the shop tax was repealed in 1789 and the tax on female servants in 1792.In 1784 the East India company was applying to parliament for help, and as its affairs were under investigation it was unable to declare a dividend. Pitt carried bills authorising a dividend of 8 per cent., and granting the company relief from obligations to the exchequer which the late war made specially onerous. He then brought in his new bill for the government of India. This measure, which was not materially different from his bill of six months before, entirely subordinated the political power exercised by the directors to a board of control consisting of unpaid commissioners, a secretary of state, the chancellor of the exchequer, and other privy councillors, appointed by the crown. The patronage of India was to be retained by the directors, but the governor-general and the presidents and members of councils were to be appointed and to be removable by the crown. In all matters of peace and war the governor-general and his council were to be supreme over the minor presidencies. Regulations were made to prevent extortion by the officers of the company, and a special court was instituted for the trial of those charged with delinquencies. The bill was violently opposed by Fox, Burke, Sheridan, and Hastings's enemy, Francis, chiefly on the grounds that government and patronage ought not to be divided, that the nominal sovereignty of the directors and the extensive power of the board of control would lead to confusion, and that the governor-general ought not to have absolute authority in matters at a distance. After several divisions, Pitt carried the second reading in the commons by a majority of 211; he accepted some amendments in committee, and the bill finally passed both houses without a division. Thus was established that system of double government which lasted until 1858.

The session closed with a motion by Dundas for the restoration of the Scottish estates forfeited for the rebellion of 1745. The bill was unanimously approved by the commons. Thurlow, who for some reason, possibly merely from jealousy of Pitt, adopted a generally malcontent attitude, spoke against it in the lords, but it passed there also without a division. Before the end of the year Pitt's success was declared by the accession to his ministry of old Lord Camden as president of the council in the place of Lord Gower, who took the office of privy seal, vacated by the appointment of the Duke of Rutland as viceroy of Ireland in the previous February. Shelburne, who was deeply offended by his continued exclusion from office, was created Marquis of Lansdowne with the promise that, if the king made any dukes outside his own family, he should be one of the number. He was not appeased by this promotion, and remained hostile to Pitt, who would have been weakened by his alliance and lost nothing by his hostility. Temple, who also aspired to a dukedom, was created Marquis of Buckingham, and was encouraged to hope that his ambition might in the future be fully satisfied. The session closed on August 20. Parliament did not meet again until January 25, 1785, and from that time the custom of beginning the regular session before Christmas has been discontinued.

As Pitt had already twice brought forward motions for parliamentary reform, in 1782 and 1783, the friends of the cause looked to him to promote it as head of the ministry. The question was not at that time exciting much public interest. The king was personally opposed to reform, and it was not until March, 1785, that Pitt obtained his assent to the introduction of a bill. He promised the king that if it was rejected he would not resign, unless "those supposed to be connected with government" voted against it. George took the hint, and while he expressed dislike of the bill to Pitt, assured him that he would not use any influence against it. Pitt did his best to insure the success of his bill, and even persuaded his friend Wilberforce to return from abroad to support it. He brought forward his motion on April 18. After defending himself from the charge of innovation by pointing out that in past ages changes had frequently been made in the representation, he laid down that the representation of boroughs should depend not on locality but on the number of voters. He proposed to disfranchise thirty-six decayed boroughs, and to add their seventy-two members to the representation of counties and of London and Westminster. The boroughs were to be disfranchised at their own request, which was to be obtained by the purchase of their franchise from a fund provided by the state. In the future any other borough which was, or became, so decayed as to fall below a standard fixed by parliament, was to be allowed to surrender its franchise for an adequate payment, and its right would be transferred to populous towns. He further proposed to extend the franchise to copyholders, and in towns to householders.

According to his plan £1,000,000 sterling was to be set aside for compensation; 100 members would eventually be chosen by free and open constituencies instead of by individuals or close corporations, and some 99,000 persons would receive the franchise. North spoke ably against the motion, dwelling on the coldness with which the country regarded the question; only eight petitions for reform were presented, and none came from Birmingham or Manchester. Fox opposed it on the ground that the franchise was a trust, not a property, and that to offer to buy it was contrary to the spirit of the constitution; and Burke objected to the alteration which it would make in the representation of interests by increasing the influence of the country gentlemen. Pitt allowed that the scheme of purchase was a "tender part"; it was, he said, "a necessary evil if any reform was to take place". Leave to bring in the bill was refused by 248 to 174. Pitt had not yet secured an organised majority. Connexion and influence had not wholly given way to a system of parties founded on general agreement on political questions. There is no reason to suppose that the king broke his promise to Pitt, but his dislike of reform must have been well known, and probably had much weight. Pitt made no more attempts at parliamentary reform, and for the next seven years the question was of little importance in English politics.

The chief conflict of the session was fought over Pitt's scheme for establishing free-trade with Ireland. An agitation for parliamentary reform in Ireland brought into prominence a spirit of discontent. The Irish parliament did not represent even the protestant population; the house of lords was composed of a large number of bishops, generally subservient to the crown, and of lay lords, many of them lately ennobled for political service; the house of commons of 300 members, scarcely a third of them elected by the people. Flood urged reform on a strictly protestant basis, and the cause of reform was supported by a convention of volunteers assembled at Dublin under Lord Charlemont. The Bishop of Derry, Lord Bristol, a vain and half-crazy prelate, advocated the admission of catholics to the franchise, and tried to excite the volunteers, who were then no longer exclusively protestant, and were recruited from the rabble, to extort reform from parliament by force. He attended parliament with an escort of volunteers and in regal state, and appeared in a purple coat and volunteer cap fiercely cocked. His seditious behaviour, the claim made for the catholics, and the violence of the democratic party caused a division among the volunteers and among the advocates of reform generally. Charlemont and Flood himself checked the violent party in the convention, which was dissolved peacefully. Flood's motions for reform were rejected, and the volunteer movement lost political importance. Pitt regarded parliamentary reform in Ireland as certain if it were adopted in England, and was prepared to welcome it, but was at that time determined to maintain the exclusion of the catholics from the franchise. The Irish administration was opposed to a change of system, and the Duke of Rutland, the viceroy, a young man of great ability, held that the state of the country would render it dangerous. The defeat of Flood's last attempt at reform, in 1785, left the Irish parliament as before without "the smallest resemblance to representation".[192]

In face of the threatened interference in politics of an armed force, of discontent and disloyalty, and foreseeing difficulties in the future between the independent Irish parliament and the imperial government, Rutland prophesied in 1784 that "without an union Ireland would not be connected with Great Britain in twenty years longer".[193] Pitt hoped to pacify discontent by benefiting Irish trade, and to unite the two countries by a community of interest. His plan, to which he attached more importance than to Irish reform, though commercial in character, was based on a lofty political conception; it was designed to promote "the prosperity of the empire at large".[194] North's concessions to Ireland in 1779 and the subsequent establishment of Irish legislative independence left both countries at liberty to regulate each its own trade. Ireland admitted English goods free or at low duties; and England shut out most Irish manufactures, though admitting linen, the manufacture of which was encouraged by a bounty, and, for her own convenience, woollen yarn free of duty. Ireland, too, though enabled to trade directly with the English colonies, could neither send their products to England nor buy them from England. Pitt designed to establish perpetual free trade between England and Ireland, and as Ireland would be the gainer by the change, he proposed that in return she should contribute a fixed sum to the naval defence of the empire. Rutland, who saw that sending money to England would be violently opposed, suggested that the contribution should be spent on a portion of the navy to be kept on the Irish coasts. In words which it is well to remember, Pitt pointed out that "there can be but one navy for the empire at large, and it must be administered by the executive in this country".[195] The resolutions he sent over to be presented to the Irish parliament provided that the contribution should come from the surplus which the grant of free trade would create in the hereditary revenue of the crown, for, as that revenue was chiefly made up of customs and excise, the payment would be in exact proportion to the benefits conferred by the change.

As, however, Ireland had a heavy debt, which was largely due to the extravagance of government, Grattan insisted that the contribution should depend on the yearly equalisation of the revenue with the expenses. The Irish government yielded to his demand, and with that change the resolutions were carried. Pitt brought them before the English house of commons on February 22 in a speech of remarkable power. Fox, who had long been hoping "to make his harvest from Ireland,"[196] opposed them as injurious to British manufacture. The manufacturers at once took the alarm; a petition with 80,000 signatures was sent up from Lancashire against the resolutions, and a "chamber of manufacturers," with Wedgwood as president, vigorously protested against them. English manufactures, it was asserted, would be undersold and ruined by goods produced by cheap labour in Ireland. After evidence had been heard on the matter for twelve weeks, Pitt saw that he must modify his scheme. On May 12 he brought forward a new set of resolutions less generous to Ireland, and providing that in commercial legislation the Irish parliament should perpetually be bound by the parliament of Great Britain. Fox, North, and Sheridan vehemently opposed them, and Fox denounced the whole plan as an attempt to lure Ireland to surrender her liberty. "I will not," said he, "barter English commerce for Irish slavery; that is not the price I would pay, nor is this the thing I would purchase." Nevertheless after long and warm debates, Pitt triumphantly carried his resolutions. The speeches of Fox and Sheridan found a loud echo in the Irish parliament; Grattan, in an impassioned speech, condemned the new resolutions, and they passed the commons only by 127 to 108. So strong an expression of adverse feeling forced Pitt to abandon his scheme. Thus was his wise and hopeful attempt to encourage Irish trade and strengthen the bond between the two countries wrecked by the factiousness of the opposition, the selfishness of the manufacturers in England, and the susceptibility of the Irish liberal party. Fox's opposition to free trade with Ireland brought him a temporary return of popularity in the manufacturing districts.Pitt's command of the house of commons was still uncertain. In February, 1786, he was defeated on a bill for fortifying the dockyards at Plymouth and Portsmouth. His defeat was largely due to the unpopularity of the Duke of Richmond, the author of the plan, who had not gained in general esteem by deserting his former party, and to the old prejudice against increasing the military power of the crown. Yet it illustrates Pitt's position at the time. It was a "loose parliament"; the majority voted every man as he had a mind; Pitt had yet to bind his party together, and his cold and repellent manners still hindered him from making friends.[197] His power was strengthened in this session by the general approval elicited by his bill for the reduction of the national debt by means of a sinking fund. In forming his plan he received much help from Price, a nonconformist minister, distinguished as a writer on financial questions. When introducing his bill he was able to show that the public revenue would exceed the expenditure by about £900,000, which he proposed to raise to £1,000,000 by some new taxes not of a burdensome nature, ample resources existing to meet a temporary excess in naval and military expenditure caused by the late war. That the revenue would continue to improve seemed assured by the increase in the customs due to Pitt's measures against smuggling. Government might reckon on at least £1,000,000 surplus, and that sum he proposed to make the foundation of his new sinking fund. Unlike the sinking fund established by Sir Robert Walpole in 1716, which had from time to time been diverted to other purposes, his fund was to be kept inviolate in war as well as in peace, and applied solely to the discharge of debt. To secure this, he proposed that in every quarter of each succeeding year £250,000 should be paid to six commissioners of high position, and should be used by them in the purchase of stock. The interest of such stock, together with the savings effected by the expiration of annuities, was to be invested periodically in the same way. The fund thus created would then accumulate at compound interest and become a sinking fund for the extinction of the national debt.

The bill passed both houses without a division. The highest expectations were founded upon it, for people generally, in common with Pitt himself and Price, regarded the new fund as an infallible means of discharging the national debt solely by the uninterrupted operation of compound interest. That the application of surplus revenue to the payment of debt is sound finance, and that to treat surpluses designed for that purpose as a separate fund is a convenient arrangement need no demonstration. There is not, however, anything magical or automatic in the operation of compound interest, nor can the separation of a sinking fund from general revenue have any real efficacy. Reduction of national debt, whatever arrangements may be made for it, can only be effected by taxation. During the years of peace, when the revenue was in excess of expenditure, Pitt's sinking fund acted as a convenient mode of reducing the debt. In 1792 a second fund of 1 per cent. on all loans was established, and by 1793 the commissioners had reduced the debt by about £10,000,000. Then came the war with France; the revenue fell short of the expenditure, and Pitt met the deficiency by large loans raised at great expense. Yet in order to preserve the benefit which, it was believed, was derived from the uninterrupted operation of compound interest, the payments to the sinking fund were regularly continued, so that the state was actually borrowing money at a high rate of interest in order to reduce a debt at a low rate of interest. No member of the opposition saw the fallacy involved in Pitt's scheme. He is said, probably with truth, to have himself discovered it later, but he maintained the fund, which was useful as a means of keeping the duty of reduction of debt before the nation and of helping it to face with hopefulness the rapid accumulation of debt during the war with France.

In 1787 Pitt laid before parliament a treaty of navigation and commerce with France. The treaty of Versailles in 1783 provided that commissioners should be appointed to make commercial arrangements between the two countries. The French cabinet invited Shelburne to proceed in the matter, and he was about to do so when he was driven from office. Fox was opposed to a treaty. Pitt appointed a commissioner in April, 1784, but nothing further was done. It was a critical matter, for a commercial treaty with France was certain to give some offence at home, and Pitt may for that reason alone have been willing to delay action until his position was more secure. In 1785 the French council of state, irritated by the large influx of British manufactures which were smuggled into France, issued arrÊts restraining trade with Great Britain. Pitt was too wise to retaliate. His opportunity had come, and he entrusted the negotiations to Eden, who deserted the opposition and accepted a seat on the new board of trade. Eden had a thorough knowledge of commercial affairs, and carried out his mission as envoy to the French court with great success.[198] The treaty, signed on September 26, 1786, reduced the duties on many of the principal articles of commerce of both countries, and put others not specified on the most-favoured-nation footing. A large and easily accessible market was opened to British commerce, and, as the exports of France were for the most part not produced in England and the French were in want of British products, both countries would, Pitt argued, be gainers by an increase in the freedom of their trade one with the other, and political ill-feeling would be diminished by more intimate and mutually profitable relations. The navigation clauses showed as liberal a spirit as the commercial; an enemy's goods carried in the ships of either country were to be held free by the other, except contraband of war, which was limited to warlike implements and was not to include naval stores.The treaty favoured the interests of the consumer, and was contrary to the economic principles of the whigs, who maintained that commerce should be regulated so as to promote home industry. Fox strongly objected to it in parliament, mainly on the ground that France was "the natural foe of Great Britain," and that any close connexion with her was dangerous. Sheridan and Charles Grey, afterwards the second Earl Grey, in his maiden speech joined him in condemning the treaty, but it was approved of by large majorities. Though it caused some temporary displeasure among the manufacturers, it was followed by a large increase of trade with France. Among Pitt's achievements as minister in time of peace none deserves to be ranked higher than this treaty, whether regarded in its details, or as a monument of his enlightened commercial policy, or as illustrating his statesmanlike view of the relations which it was desirable to establish between the two countries. His credit was further strengthened in the same session by his bill for the consolidation of the customs and excise. The customs duties, fixed from time to time, some on one system and some on another, were so complex that no one could be sure what he might be required to pay, and merchants often depended on the custom-house officers to tell them the amount due on goods. The excise, though in a less confused state, was also in urgent need of regulation. Pitt abolished the whole mass of existing duties with their percentages and drawbacks, and put a single duty on each article as nearly as possible of the same amount as before. These duties and all other taxes he brought into a consolidated fund on which all public debts were secured. Simple as this change appears, it involved about 3,000 resolutions. While it only slightly increased the revenue, it was a great benefit to merchants, it simplified the work in public offices, prevented officials from abusing their power, and enabled Pitt to get rid of a large number of custom-house sinecures, and so at once to effect an economy and dry up a source of corruption. The bill received a warm welcome from Burke, and was passed without a division.

Pitt's position in the commons was not yet one of command. In 1788 his party, those who recognised him as their leader, was said to number only 52, while Fox's party, the regular opposition, was estimated at 138; the "crown party" which might be reckoned on to uphold the government for the time being "under any minister not peculiarly unpopular," consisted of 185, and the rest were "independent" members, whose votes were uncertain. Pitt then had to walk warily. His practical temperament was in his favour. That the country should be well governed, and that it should be governed by himself, which was the same thing to him, as it is probably to all great ministers, was the object of his life. Compared with that, special questions were of small importance. There was nothing doctrinaire in his turn of mind; the abstract righteousness of a cause did not appeal to him, and could not divert him from the pursuit of his main object. In 1787 a bill for the relief of dissenters by the repeal of the test and corporation acts of the reign of Charles II. was brought in by Beaufoy, a supporter of the government. In reality the dissenters suffered very little from these acts, for they were relieved by annual acts of indemnity. Yet their grievance was not wholly sentimental, and, even had it been so, it would still have been a grievance. The opposition was divided; North opposed the bill, Fox warmly advocated it. Pitt consulted the bishops. All save two were against it. He valued the support of the Church, and declared himself against the bill, which was rejected by a majority of 78. In 1789 the majority against it sank to 22. Yet Pitt was thoroughly high-principled. As we shall see later in the case of Hastings, he would not be false to his convictions, and if he judged that a cause was worth maintaining, even at the cost of weakening his own position, he did not shrink from his duty. This is proved by his conduct with reference to the slave trade.The cruelties attendant on the trade were forcibly represented by a society for procuring its abolition, founded in 1787, mainly by quakers, of which Granville Sharp and Clarkson were prominent members. Wilberforce's sympathy was already aroused by reports of the sufferings of the negroes in the slave-ships. Pitt advised him to undertake the question in parliament, and as a preliminary agreed to the appointment of a committee to inquire into the methods of the trade. The merchants of London, Lancashire, and Bristol were indignant at the threatened interference, and efforts were made to conceal the truth. Nevertheless the abominable cruelties to which the slaves were subjected during the middle passage were clearly proved. Chained to their places, fettered and fastened together, they were packed so closely on the lower decks and in stifling holds that they could scarcely turn, they were kept short of food and water, and were exercised to keep them alive by being forced under pain of the lash to jump in their fetters. While Wilberforce was ill in 1788, Pitt gave notice of a motion on the trade, and supported a bill moved by Sir William Dolben which mitigated the sufferings of the negroes during the passage. In 1789 Wilberforce in a long and eloquent speech moved resolutions for the abolition of the trade, and Pitt, Fox, who was always quick to feel for human suffering, and Burke joined in supporting him. Pitt's conduct on this question displeased many of his followers. The interests concerned in the trade were powerful, and for a time the question was virtually shelved.

The peace of Versailles left England isolated. The new government was to show that she was able and ready to reassert her right to exercise an influence in Europe. The political situation presented three alliances, of France and Austria, Austria and Russia, France and Spain, and opposed to them two isolated powers, England and Prussia. None of these alliances directly threatened England, yet there were elements of danger in the two first. After the death of Maria Theresa, in 1780, her son Joseph II. changed the general direction of Austria's policy. He was restless and full of great schemes which he looked to Russia rather than France to support. The growth of Russian power under Catherine had changed the political state of Europe. The treaty of Kutchuk Kainardji, in 1774, at the close of a successful war against the Turks, saw Russia strongly established on the Black Sea; the partition of Poland augmented her preponderance in the north: and in 1780 England found that her maritime interests were threatened by a power seated both on the Baltic and close to the Mediterranean. Catherine welcomed the overtures of Joseph, for she contemplated further conquests from the Turks, and the good-will of Austria was important to her. Of these two allied powers Austria was the more dangerous to England and Prussia. Russia had already gained much, Austria was hoping for gain; Catherine was looking mainly to extension in eastern, Joseph's ambitions tended to disturb the balance of power in western and central Europe. France was impoverished; she desired peace and was anxious to restrain the emperor's ambition, and Spain could do nothing without her. A quadruple alliance, then, between the two imperial courts and France and Spain was impossible. The late war had raised the Bourbon influence in Europe. England was unable to detach Austria from France, and to form an alliance, as Carmarthen wished, with the two imperial courts; and she was, as we shall see, led by a conflict in Holland to enter into an agreement with Prussia which had important results.Her foreign policy between 1784 and 1788 was chiefly concerned with the affairs of the United Provinces. Anxious to remove the restrictions imposed by treaties on the Austrian Netherlands, Joseph set aside the Barrier treaty of 1715, designed to check French aggression; and the Dutch withdrew their garrisons from the border fortresses. He pressed other claims upon them, relying on their weakness, for they paid dearly for provoking a war with England; and he demanded that the Scheldt, which was closed by the treaty of 1648, should be open to navigation. His claim concerned England, for though Austria could never become a great naval power even if Antwerp had access to the sea, the ports of the Netherlands and, indeed, of the United Provinces might fall under the control of some strong maritime state, such as France or Russia. Joseph's demand was backed by a recommendation from the Russian empress. He sent ships to sail up and down the river, and they were forcibly stopped by the Dutch. War seemed imminent. France, however, was then gaining great influence in Holland, and though she compelled the Dutch to assent to some of the emperor's demands, she upheld their refusal with regard to the Scheldt, and negotiated a treaty concluded at Fontainebleau in November, 1785, between the emperor and the republic, by which Joseph renounced his demand for the opening of the river.

He was already occupied in renewing a scheme, which had been defeated in 1778, for exchanging his Netherland provinces for Bavaria. This project was highly prejudicial to Prussian interests in Germany; and Frederick of Prussia baulked it by forming a FÜrstenbund, or alliance of princes, to maintain the integrity of the Germanic constitution. In February, 1785, he invited King George as Elector of Hanover to join in this projected alliance. George willingly assented, for the alliance was beneficial to Hanover; and in a letter to his Hanoverian minister he expressed the hope that his assent would lead to an understanding between England and Prussia. This was merely an expression of his private feelings; the FÜrstenbund was not a matter of English politics and did not, in fact, bring about an Anglo-Prussian alliance.[199] Such an alliance was highly desirable for England as a means of defeating the intrigues of France in the United Provinces. The more republican or "patriot" party in Holland, which had led the states to break their ancient friendly relations with England, was completely under French influence, and, relying on the support of France, designed to compel the stadholder, William V. of Orange, a feeble and irresolute prince, to resign his office. Their victory would have made the republic virtually a French province, and would have brought France a great accession of naval power. Sir James Harris, the British ambassador at the Hague, laboured to counteract their designs by encouraging the party in the republic opposed to the policy of Holland. The stadholder's wife, a princess of high spirit, was a niece of Frederick the Great, and Harris was anxious for an alliance between England and Prussia as a means of overthrowing the French party. Ewart, the ambassador at Berlin, shared his views, but the ambassadors were held back by Carmarthen. The cabinet, Harris declared, was wholly occupied by domestic matters.[200]

In May, 1785, it was evident that Austria was in accord with France, and the cabinet inquired what Frederick's intentions were, hoping that his desire that England would join in preventing the Bavarian exchange would induce him to oppose the ambitious designs of France, and to form a union of defence.[201] Frederick spoke freely to Ewart with reference to the Bavarian exchange, but would promise nothing as regards Holland.[202] The cabinet then made proposals to Catherine on the basis of her detaching Austria from France, and the formation of a triple alliance between England and the two imperial courts for the maintenance of peace.[203] Catherine replied that she would only agree on condition that England would not assent to the FÜrstenbund, which was a menace to her Austrian ally. Her demand was peremptory and threatening. George stood firm. The FÜrstenbund, he wrote to Pitt, concerned his "electoral capacity," it was a matter of Hanoverian, not of English, politics; he had already ratified it, and would not retreat.[204] A communication from the Prussian ambassador led the cabinet in September to send Lord Cornwallis to Frederick to ascertain his intentions. Frederick declared that the agreement between himself and England to check France would mean a general war in which England would have to meet the fleets of France, Spain, Holland, and perhaps Russia; and he would have on his hands the armies of France, Austria, and Russia; and that "though such a contest had been maintained, it was not a game to play often".[205] He was old and ill, and would not interfere. The action of France in negotiating the treaty of Fontainebleau strengthened the French party in Holland; the stadholder was forced to quit the Hague, but was supported by some of the other provinces. Frederick the Great died on August 17, 1786. The fortunes of the Orange party were at low ebb. France supplied the patriots with money; free corps were acting on their side; the stadholder was suspended from his office, and French agents advocated its abolition. It seemed as though Holland would become mistress of the Dutch republic and France the ruler of Holland.

The new Prussian king, Frederick William II., the brother of the Princess of Orange, deserted the purely German policy of Frederick for a more extended European policy. He did not, however, at once interfere in the affairs of Holland, for there was a strong French party at his court. Harris needed money to support the stadholder's cause, and Carmarthen proposed a subvention of £1,200 a year. George was anxious not to be drawn into another war, and said that as his family was growing expensive the money could not be spared from the civil list.[206] In May, 1787, the cabinet decided to put £20,000 at Harris's disposal. Matters came to a crisis in June. As the princess was on her way to the Hague she was arrested and turned back by a free corps. Frederick William demanded that satisfaction should be made for this insult, and as the states of Holland, relying on French support, refused his demand, he entered into a secret convention with England to restore the stadholder, the two powers agreeing, Prussia to send an army into Holland and England to prepare forty ships of the line to support it. A Prussian army under the Duke of Brunswick crossed the frontier and met with little resistance. Amsterdam surrendered on October 10, and the stadholder was restored. Meanwhile Montmorin, the French foreign minister, declared that his court would support the Dutch. Pitt, who was then personally directing foreign affairs, decided, with the full approval of the king, that if the French court would not agree to the restoration war was inevitable.[207] A treaty was made with the Landgrave of Hesse Cassel for the hire of troops, and the naval and military forces were augmented. On the 27th France definitely renounced her design of intervention, and on Pitt's demand the French navy was reduced to a peace-footing. The designs of France, which were fraught with danger to English interests, were defeated, and the party in Holland favourable to alliance with England was secured in power. Though the FÜrstenbund, a purely German system directed against Austrian ambition, failed to bring about an Anglo-Prussian alliance, the change in Prussian policy and, as an immediate cause, the insult to the Prussian king's sister, brought England and Prussia into active co-operation against the attempt of France to become mistress of the United Provinces, and in 1788 led to the formation of a triple alliance for mutual defence and the maintenance of peace between England, Prussia, and the republic which changed the political situation. England was no longer isolated; she was restored to her position of influence in the affairs of Europe. Harris was created Baron Malmesbury as a reward for his services at the Hague.