up to the more effective industrial organisation of the workingclasses in trade unions. Ireland also afforded an illustration of misapplied though well-intended methods of relief for the population suffering from the potato famine, and of the extravagances in which an administration may be landed by a pedantic interpretation of general principles in their particular application. The only marked step, however, in the direction of free trade, was the final disappearance of the Navigation Acts from the Statute Book. The protectionists, now led in the Upper House by Lord Derby, and in the Representative Chamber by Mr. Disraeli, were perhaps still not without hope that the policy of free trade might yet be discarded by the country.

The Peelites, or former Conservatives who had followed Sir Robert into the free trade camp, were severed from their former party, but had not yet associated them- The Principle selves with the Liberals. During 1852, the affirmed. Conservatives were the largest single party in the House, but were only allowed to carry on the government after the acceptance of a resolution definitely affirming the policy of free trade, which practically precluded the party from again including protective designs in its programme. But, as commonly happens in such cases, the Peelites had been steadily approximating to the Liberals; and at the close of the year the Derby administration was replaced by a coalition of Liberals and Peelites with a Peelite, Lord Aberdeen, as their chief; a coalition which, in fact, passed into a fusion of the two parties.

A Peelite, Mr. Gladstone, became Chancellor of the Exchequer, and in 1853 introduced the first of the Budgets which carried the system of free trade to com- The Gladstone pletion. The principle laid down was, in the Budget, 1853. first place, the abolition of duties which, from the point of revenue, were unproductive. The next point was to free all articles except finished manufactures-everything, that is, which could be regarded as material for manufacture-from duties, except where the revenue would be materially affected.

In view of the reduction of revenue from the abolition or diminution of the taxes on soap, tea, and a number of other articles, the income-tax was retained, though not without reluctance. The breaking out of the Crimean War prevented any further lightening of the burden of taxation, and Mr. Gladstone retired when the Aberdeen ministry fell.

French
Commercial

Treaty.

In 1859, however, he again returned to the Exchequer ; and in the following years the free trade policy was carried to completion. A commercial treaty with France was negotiated by Mr. Cobden, who had done more than any other single man to convert the country to the acceptance of the now predominant doctrines. The Emperor Napoleon III. was himself a convert, but he could not venture to act in advance of general economic opinion in France. It was arranged, however, that French duties on British goods were to be greatly reduced, and were in no case in the future to exceed thirty per cent. ad valorem. On the other hand, in the United Kingdom duties upon practically all manufactured goods were entirely withdrawn.

Budget of 1860.

The Budget of 1860 was framed on the basis of this treaty. The effect of the sweeping changes may be expressed in a comparative statement. In 1845, the number of taxable articles scheduled was still eleven hundred and sixty-three. When Mr. Gladstone took office in 1853, the number had been reduced to four hundred and sixty-six. Forty-seven had then disappeared, and by the Budget proposals of 1860, the remaining four hundred and nineteen were reduced to forty-eight, of which more than two-thirds were quite insignificant. In the whole number there remained no protective or differential duties, so that the whole extra cost of the articles due to taxation went to the revenue.

One item, however, dealt with in a Bill by itself, the abolition of the paper duties, was rejected by the House of Lords; The Paper an action which led, in 1861, to the inclusion of Duties. all the financial proposals for the year in a single Bill. Since the House of Lords laid no claim to the power of amending a money Bill, the entire Budget was passed, and

they did not again intervene on financial questions until their rejection of the Budget in 1909.

The extraordinary prosperity which attended the establishment of free trade was universally regarded as the effect of that policy, and was effectively demonstrated by The Tide of the income-tax returns. In the twenty years Prosperity. from 1842 to 1861, the total income assessed for taxation had risen more than forty per cent., and the rate of advance during the second half of the period trebled that in the first half. In spite of a commercial crisis in 1866, the result of the excessive speculation which commonly follows upon a period of rapid expansion, the progress of national prosperity continued until 1874, when there set in a period of general depression, which was not confined to this country.

CHAPTER XXV

THE FIRST FACTORY ACTS

UNTIL Adam Smith's exposition of the principles of Laissez Faire, the propriety of State intervention, to control or to The Old Order authorise the control of trade and industry, and the New. had been universally assumed. The State had made laws, or had created authorities with power to impose regulations, which touched every department. It had sought, by direct intervention, to check or develop particular branches of commerce and particular branches of industry. Directly or indirectly, it had sought to regulate the quality of goods and to fix wages and prices. Adam Smith had proclaimed that the whole system was economically unsound, and that the maximum of wealth would be attained by leaving the individual free to pursue his own interests in accordance with his own judgment. In the last chapters we have seen how, in the field of commerce, the doctrines of Adam Smith prevailed, and the State limited its restrictions on trading to a minimum of taxation, of which the only object was the necessary provision of revenue. Now, however, we have to observe the contemporaneous development of State intervention in the field of industry in defiance of the principle of unfettered competition, the regulation by the State of the relations between employers and workers -generally in the interest of the workers.

Such regulation was not altogether new. The State had, in the past, sanctioned insistence on apprenticeship and regulation limiting the proportions of apprentices to adult workers, having in view not so much the benefit of the journeyman as security for competent workmanship. But the inter

vention of which we have now to speak had in view primarily the security and health of the workers themselves; and it was generated by the new conditions created The Field of by the industrial revolution and the collection Intervention. of workers in factories. The new machinery gave employment to women and children in a manner which, for the first time, called attention to the labour of women and children as a subject for regulation; and this occurred precisely at the moment when employers were realising the charms of Laissez Faire as applied to the relations between employers and employed.

Children

in Rural

Districts.

When the bulk of the population was in a strict sense rural, it appeared to most observers, including those of philanthropic inclinations, an entirely admirable thing that quite young children should be engaged in industriously adding to the family income. A little schooling and a little play was good for them, but not too much schooling and not too much play. If they got work to do out-of-doors, that was good for them, and if they did it indoors, the sanitary conditions were simply those of their own homes, and would have been the same whether they were idle or busy. Probably there were a good many parents who overworked the children; but it was obviously natural, on the whole, that the sight of children busily employed habitually filled the observers with a benevolent satisfaction. It is pretty certain that most of the children of the labouring class were compelled to be industrious, and that their industry was turned to account by their parents, but more than that we can hardly say.

Of pauper children, however, it can be asserted with some confidence that their lot was not a happy one. They were nobody's bairns,' and the parish was not a Pauper kindly stepmother. The parish wanted to do Children. its Christian duty by them at the smallest possible expense, and to get them off its hands at the earliest possible moment. The parish's conception of its Christian duty was austere; the mortality among its stepchildren was extensive, and those