Monday, 15 October 2007

Aspects of Chartism: A short history of the Corn Law

Government regulation of exports and imports of corn was well-established long before the nineteenth-century[1]. The Corn Laws of the seventeenth and eighteenth centuries had a dual purpose: they sought to prevent “grain from being at any time, either so dear that the poor cannot subsist, or so cheap that the farmer cannot live by growing of it.”[2]

The Napoleonic Wars brought a fundamental change in the history of the Corn Laws. During the war years, agriculturists had enjoyed high grain prices, but with the peace prices fell dramatically[3]. In response, Parliament enacted the Corn Law of 1815, which allowed free entry when the price of corn was above 80s per quarter, and prohibited entry when the price fell below 80s. Some argue that this new legislation, unlike that of the earlier Corn Laws, was “defiantly protective”. “It sought to fasten on a country at peace the protection furnished by a generation of war.” Others maintain, however, that fear of scarcity drove government policy. Rapid population growth and a dependence upon foreign corn are said to have justified a policy of self-sufficiency based on concerns for national security[4]. A third rationale for the move to protection is that the Government hurriedly passed the legislation in order to gain the support of landowners as it scrambled to pay its war debt.

The 1815 law suffered from two basic flaws: it generated no government revenue from protection and it was too rigid. Public petitions of distress which resulted from the 1815 law were directed to a Select Committee of the House of Commons, whose report was drafted by William Huskisson. In the report, Huskisson called for a return to the “practically free” trade that existed before 1815[5]. The Act of 1822 allowed wheat to be imported when the domestic price reached 80s per quarter, but when the price fell to 70s, imports were again prohibited. Between 1822 and 1828, the price never reached 80s, and thus the Act never came into effect. In 1822, the economist David Ricardo proposed that protection should be withdrawn gradually, beginning with a fixed duty of 20s and lowered by annual reductions of 1s, until it reached 10s, at which it would then remain[6].

By 1827, discussion was not of free trade in corn, but rather of the choice between a fixed duty, as Ricardo suggested or a sliding scale, as Huskisson, President of the Board of Trade, proposed. The fixed duty avoided the problem of averaging prices which any sliding scale would face. The Foreign Secretary George Canning and others stressed that a fixed duty would not allow flexibility in times of scarcity, posing the likelihood that the Government would be forced to suspend the duty during such times. Other politicians favoured the sliding scale because it, unlike the fixed duty that was favoured by the “cold-blooded political economists”, was based on “experience” not “theory”. Huskisson’s justification for the sliding scale was that it remedied the worst feature of 1815: rigidity. The agriculturists rejected Huskisson’s 1827 bill, however, on the grounds that his pivot point of 60s (from which the duty of 20s would gradually descend) would afford them inadequate protection. In drafting the 1827 bill, Huskisson and the Duke of Wellington (to become Prime Minister in 1828) became embroiled in a fundamental disagreement: the former sought to move towards freer trade in corn, while the latter sought to consolidate protection for agriculture[7]. In 1828, Huskisson and Wellington agreed upon a sliding scale tariff for corn, so that as the price rose the duty would fall. Fay described the 1828 sliding scale as “Huskisson’s sliding scale spoiled.”[8]

While Huskisson suggested a pivot point of 60s or 62s, the 1828 Act legislated 66s. According to the 1828 Act, when the price of British wheat was 52s per quarter or below, the duty would be 34 s. 8 d.; as the price rose, the duty would fall to 1s when the price hit 73s. The 1828 scale also differed from Huskisson’s in that it introduced large jumps in the scale (a 13s. 8d. duty at 69s, and 1s. at 73s.). Speculators took advantage of the rapid descent of the scale when prices were high, withholding sales until the price rose one or two shillings to avoid the payment of duties. In spite of this defect, the 1828 act continued to operate until Peel introduced a modified sliding scale in 1842. Peel’s sliding scale differed from both the 1827 bill and the 1828 Act in that it abolished the pivot point. Peel also lessened the incentive for speculation by smoothing out the scale at the lower end and reducing the maximum duty to 20s when the price hit 51s or below.

Paralleling the history of Corn Law legislation were major demographic and economic changes that cut against the fabric of protection for food. From 1811 to 1841 the population of Great Britain increased from 12.6 million to 18 million and British farmers were becoming less able to provide sufficient supplies for the home market. This said, while Britain had not been self-sufficient in corn since the early 1760s, British agriculturists “still managed to feed every year on the average all except about 700,000 and as late as 1831-40, all except about 1,050,000 of the population.”[9]

A second factor proved more fatal to the Corn Laws: the growth of British manufacturing industry and export trade, especially in textiles. More particularly, as the industrial prosperity and export boom of the early 1830s began to crack, industrialists became increasingly vocal about “unfair” protection enjoyed by the agriculturists. Beginning in 1836, an economic downturn together with a series of poor harvests sparked the industrialists into action. High food prices and unemployment gave impetus both to the middle and working classes, the former organised as the Anti-Corn Law League and the latter as the Chartist movement.

[1] Donald Grove Barnes A History of The English Corn Laws from 1660-1846, London:George Routledge & Sons, Ltd., 1930.

[2] C. Smith Tracts on the Corn Trade and Corn Laws, volume II, page 72, as quoted in C.R. Fay The Corn Laws and Social England, Cambridge University Press, 1932, page 34.

[3] In 1814, the average price of wheat was 74 s. 4 d. per quarter, but following the war and with a good harvest in 1815, the price dropped to 52 s. 10 d. William Spence noted in 1815 that “thousands of farmers, who but twelve months ago were living in prosperity, are utterly unable to raise money for their taxes merely, and tens of thousands to discharge them are force to sell their produce at less than one half its prime-cost . . .”

[4] Boyd Hilton Corn, Cash, Commerce: The Economic Policies of the Tory Governments 1815-1830, Oxford University Press, 1977, pages 20-26.

[5] C.R. Fay The Corn Laws and Social England, Cambridge University Press, 1932, page 80.

[6] J.R. McCulloch, J.S. Mill and Joseph Hume also supported a fixed duty, although Mill and Hume suggested a lower starting duty.

[7] Boyd Hilton Corn, Cash, Commerce: The Economic Policies of the Tory Governments, 1815-1830, Oxford University Press, 1977, pages 284-286 describes the misunderstanding cum disagreement that emerged in an ambiguous rider that Huskisson proposed to Wellington’s warehousing amendment to the 1827 bill. The keyword in this passage is “thenceforward” that Wellington read as meaning ‘permanent’, whereas Huskisson had meant it as a temporary measure.

[8] C.R. Fay The Corn Laws and Social England, Cambridge University Press, 1932, page 84.

[9] W.H. Chaloner ‘Introduction to the Second Edition,’ in Archibald Prentice History of the Corn Law League, 1853, Frank Cass, 1968, page x.

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