Chapter XXVIII: The Last Year of “the Great Peace.”

Abortive Attacks on the Ministry--Mr. Disraeli’s First Budget--Fall
of the Tory Cabinet--The Queen and Lord Aberdeen--Organising the
Coalition--A Ministry of “All the Talents”--The Queen and South
Kensington--A Miser’s Legacy to the Queen--Sport at
Balmoral--Proclamation of the Second Empire--The “Battle of the
Numeral”--The Queen Initiates a Policy--Personal Government in the
Victorian Age--A Servile Minister--Lord Malmesbury’s
Spies--Napoleon III. and “Mrs. Howard”--Creole Card-Parties at
Kensington--Napoleon III. Proposes to Marry the Queen’s Niece--Lord
John Russell’s Education Scheme--Mr. Gladstone’s First Budget--The
India Bill--Transportation of Convicts to Australia Stopped--The
Gold Fever in Australia--The Rush to the Diggings--The First Gold
Ships in the Thames--Gold Discoveries and Free Trade--Chagrin of
the Protectionists--The Rise in Prices--Practical Success of Peel’s
Fiscal Policy--Strikes and Dear Bread--End of the Great Peace.

No sooner had the Duke of Wellington been buried than rival parties resumed the war of faction. The Free Traders, who had been resuscitating the old anti-Corn Law organisation in the North of England, resolved to force from the Ministry an unambiguous declaration against Protection. Mr. Charles Villiers accordingly moved a series of resolutions on the 23rd of November, affirming, that the Free Trade policy of the country had been wise, just, and beneficial[64]--“three odious epithets,” said Mr. Disraeli, which could not be accepted by the Tory Party. He ridiculed this attempt to revive the cries of “exhausted factions and obsolete politics.” He was himself fain, however, to propose a resolution, which admitted that Free Trade had cheapened the necessaries of life, which bound the Government to adhere to that policy, but which did not contain any formal recantation of Protectionist principles.[65] Mr. Bright hit the weak spot in these tactics when he asked, was it safest to let the national verdict on Free Trade be drawn up by Mr. Villiers, who advocated it, or by Mr. Disraeli, who did not advocate it, and the majority of whose followers were pledged to exact from the people some kind of compensation to the landed interest for the repeal of the bread tax? Had it suited Lord Palmerston to let the Ministry be beaten, nothing could have prevented their defeat. But, as we have seen, he had resolved never to serve under Lord John Russell; and there was too much reason to fear that at the moment Lord John was the only possible Premier in the event of Lord Derby resigning office.

“A moderate resolution,” writes Sir George Cornewall Lewis to Sir Edmund Head, “had been prepared by Graham, and assented to by Lord John and Gladstone. Charles Villiers was willing to move it, but Cobden insisted on something stronger, in the secret hope that the House would reject it, and thus damage itself in public opinion, thereby promoting the cause of Parliamentary Reform. Palmerston got possession of the resolution prepared by Graham, and moved it as an intermediate proposition.”[66] The resolution affirmed the principle of Free Trade, but not in terms obtrusively offensive to the Tories. It was eagerly accepted by Mr. Disraeli, who saw in it the means of deliverance from his enemies, and it was carried by a majority of 468 to 53--the minority representing all the Tories who were prepared to cling to Protection, even after it had been formally abandoned by Mr. Disraeli in his audacious address to his constituents.[67]

Mr. Disraeli’s tactics in thus evading defeat have sometimes been cited as a proof of his skill. In reality, they were the outcome of inexperience and exaggerated self-confidence. He did not correctly understand why Sir James Graham and Mr. Gladstone desired to move a moderate resolution. They were, of course, anxious not to turn out the Ministry before Mr. Disraeli’s Budget saw the light. They were morally certain that it would contain some fantastic proposals, which must not only wreck the popularity of the Government, but destroy public confidence for ever in Mr. Disraeli’s financial skill. Events proved that they were right in their calculation.

On the 3rd of December, in a speech of dazzling brilliancy, Mr. Disraeli introduced his famous and fatal Budget. It reduced the Malt Tax by one-half. The House Duty was raised from 9d. to 1s. 6d. in the £, and extended from houses of £20 to houses of £10 rental. Light dues paid by ships other than for the support of lighthouses pure and simple were taken off. Tea duties were to be reduced gradually by small annual amounts from 2s. 2¼d. to 1s. a

pound. The Income Tax was to be extended to funded property and salaries in Ireland. A distinction was drawn in taxing permanent and precarious incomes, the exemption for industrial incomes being limited to £100 a year, and for incomes from property to £50; and the rates of assessment per £ were 7d. on incomes from rent of land and from funds, but only 5¼d. on incomes from farming, trade, and salaries. Farmers’ incomes were to be taken as a third instead of a half of their rents. The remissions were so balanced by the additions to taxation that no surplus on the estimated revenue could be shown. A surplus of £400,000 was, however, manufactured by appropriating as revenue the repayments on local loans made to the Exchequer Loan Commission--repayments hitherto used for clearing off debt. The scheme could not stand criticism. After four nights’ debate, it was utterly demolished, Mr. Gladstone’s speech attacking it being one of the few which are said to have ever really turned doubtful votes in the House of Commons. The addition to the House Tax, pressing, as it did, on those who would come within the extended range of the Income Tax, infuriated the urban voters. The remission of half the Malt Tax failed to satisfy a landed interest, hungering for compensation for the abolition of the Corn Laws, because a reduced Malt Tax, it was agreed, benefited nobody but the publicans and the brewers. An extension of the Income Tax to funded property, Mr. Gladstone contended, was a breach of Mr. Pitt’s pledge to the public creditor, in 1798, that no distinct and special tax should ever be laid on the stockholder as such. Mr. Gladstone, like all the eminent financial authorities, protested against recognising the illusory principle of a graduated Income Tax, which lurked in the distinction made between permanent and precarious incomes. He further protested against the danger of estimating too narrowly for the services of the year, and urged with incontestable force that it was a vicious principle to reckon as surplus revenue £400,000 of repayments on the score of local loans--that is to say, to regard the repayment of borrowed money as true income. The Government were beaten on their Budget, by a vote of 305 to 286, on the morning of the 17th of December.[68] In the evening Lord Derby handed his resignation to the Queen at Osborne.

Her Majesty, fully aware of the reasons that rendered Lord John Russell an impossible Premier, now saw her way to organising the strong Government of capable and experienced statesmen which, ever since 1846, she had held could only be formed by a coalition of the Whigs and the Peelites. She accordingly summoned Lord Aberdeen and Lord Lansdowne to assist her out of the Ministerial crisis. Gout prevented Lord Lansdowne from attending at Osborne. His ill-health, together with his loyalty to Lord John Russell, and the disinclination of the Peelites to serve under him, rendered it impossible for him to accept the Premiership. It was equally impossible for the Queen to ask Lord Palmerston to become Prime Minister, after the recent events which had led to his dismissal from the Foreign Office. Hence Lord Aberdeen, though the head of the smallest faction, was the candidate for the Premiership who least divided the Opposition. He was therefore charged with the task of forming a Cabinet.[69] On the 28th of December the famous Coalition Ministry was organised--Lord Cranworth was Lord Chancellor; Lord Aberdeen, Prime Minister; Mr. Gladstone, Chancellor of the Exchequer; Lord Palmerston, Home Secretary; Lord John Russell,[70] Foreign Secretary; the Duke of Newcastle, Colonial Secretary; Mr. Sidney Herbert, War Secretary; Sir J. Graham, First Lord of the Admiralty; Lord Granville, President of the Council; Sir C. Wood, President of the Board of Control; the Duke of Argyle, Lord Privy Seal; Sir W. Molesworth, Chief Commissioner of Works; the Marquis of Lansdowne, a Minister without office. “The success of our excellent Aberdeen’s arduous task,” writes the Queen to the King of the Belgians, “and the formation of so brilliant and strong a Cabinet would, I was sure, please you. It is the realisation of the country’s and our own most ardent wishes, and it deserves success, and will, I think, command support.”[71] The Queen here simply reflected public opinion. Never had a Cabinet of abler men, individually speaking, ruled England since the Ministry of “All the Talents” fell from power. But the Sovereign and her people both forgot that in our strange and anomalous constitution no Cabinet is, as a rule, so weak as a Cabinet of strong men. This Ministry, which started on its career on the flood-tide of Court and popular favour, was destined, by its vacillation in foreign policy, to lead the country into the terrible calamity of a European war. It was doomed to fall amidst the execrations even of those who, like Mr. Cobden, declared that to his dying day he could never sufficiently regret giving one of the votes that brought it into power.

After the formation of the Government, the usual explanations of the position of affairs were given in both Houses of Parliament, Lord Derby attempting to show that the destruction of his Ministry had been plotted by an unprincipled combination of hostile factions. On the contrary, as Sir George Cornewall Lewis says in one of his letters, “there was no real anxiety on the part of the Opposition to turn out the Government; the sections of it were divided, and there was none of that ‘coalition’ which Lord Derby spoke of. The Budget, however, was more than human flesh and blood could bear. The promises of a substitute for Protection which Disraeli had made at the Elections rendered it necessary that the Government should propose something which appeared for the benefit of the agriculturists. They sounded some of their supporters among the county members as to a transfer from the local rates to the Consolidated Fund; but I believe the answer they got was, that a measure which destroyed the power of the magistrates and the local authorities would not be acceptable to their party. They had nothing then to propose but a reduction of the Malt Tax, which created a large deficit, and rendered an increase of taxation necessary. This latter object was effected by doubling and enlarging the House Tax. Disraeli was evidently very confident of the success of his Budget, and impatient to produce it. But when it had been out a week it was clear the country would not agree to it. The farmers did not care about the reduction of the Malt Tax; but the towns did care very decidedly for the increase of the House Tax, and showed a strong objection to it.... Having made their Budget a means of redeeming their promise to give their party an equivalent for Protection, they could not modify it, and therefore defeat on it was vital.”[72] On the 31st of December all the appointments under the new Government were filled up, and Parliament was adjourned till the 10th of February, 1853.

In the early part of the year the Queen was much distressed by reason of her husband’s anxieties in connection with the affairs of the Great Exhibition. His idea was to apply the surplus in the hands of the Exhibition Commissioners

(_After the Equestrian Portrait by Count D’Orsay_)]

to the purchase of a site at South Kensington, for the Science and Art Institution which he hoped to see created. Ninety acres of land were bought for £342,500, of which sum Government advanced £177,500, with the intention of transferring the National Gallery to the site. The agent of the Commissioners, however, had in purchasing the land stupidly agreed to take it on a building lease, under conditions which would have destroyed their plans, and involved them in the dilemma of repudiating their agent, or incurring liabilities to erect dwelling-houses, which they dared not undertake. The vendor, Baron Villars, generously permitted them to make other arrangements for buying the fee-simple of the land; but the anxieties of the Prince during the period when the issue was in suspense preyed terribly on his mind and health, and the Queen has herself recorded how she exhausted all means in her power to cheer and sustain him in his distress.

Her Majesty’s birthday was spent in the sunshine of domestic happiness at Osborne. In the festivities of the season the Queen, early in June, assures her uncle, King Leopold, that she and her family joined only to a limited extent. They gave two State balls and two State concerts. They go, she says, three or four times a week to the play or opera, are hardly ever later than midnight in going to bed and, but for the fagging business of public affairs, the Season “would be nothing to us.” During the summer, life at Osborne was diversified by several short yachting excursions round the South Coast. In August the Queen planned and carried out a brief visit to her uncle, King Leopold of Belgium, reaching Antwerp on the 10th in the Royal yacht in a tempest of wind and rain. At the King’s country seat at Laeken the Royal party spent four bright and happy days, saddened only by the too visible gap in the family circle, left by the death of Queen Louise. The disagreeable and tempestuous voyage homeward was only broken by a charming visit to Terneusen, where the simple hospitality and quaint old-world ways of the villagers greatly delighted her Majesty, who seems to have passed a pleasant day among them.

On the 30th of August her Majesty was amazed to receive information at Balmoral to the effect that an eccentric old barrister called Nield had bequeathed a legacy of £250,000 to her. John Camden Nield was a miser, who had pinched and starved himself for thirty years to add to his patrimony. The Queen very properly resolved to refuse the legacy if Mr. Nield had any relations living who had a claim to the money;[73] but as it appeared he had none, she accepted the gift. The holiday at Balmoral was as bright and happy as could be wished. “Nothing,” writes Lord Malmesbury, who was in attendance on the Queen at this time, “can exceed the good nature with which I am treated, both by her Majesty and the Prince. Balmoral is an old country house in bad repair, and totally unfit for Royal personages.... The Royal party consists of the Duchess of Kent, the ladies in waiting, Colonel Phipps, and Sir Arthur Gordon. The rooms are so small that I am obliged to write my despatches on my bed, and to keep the window constantly open to admit the necessary quantity of air; and my private secretary, George Harris, lodged somewhere three miles off. We played at billiards every evening, the Queen and the Duchess being constantly obliged to get up from their chairs to be out of the way of the cues. Nothing could be more cheerful and evidently perfectly happy than the Queen and Prince, or more kind to every one round them. I never met any man so remarkable for the variety of information on all subjects as the latter, with a great fund of humour _quand il se déboutonne_.” The Prince himself records in his Diary,[74] however, that “Balmoral is in full splendour, and the people there are very glad that it is now entirely our own.” On the 4th of September Lord Malmesbury writes:--“The Prince had a wood driven not far from the house. After we had been posted in line, two fine stags passed me, which I missed. Colonel Phipps fired next, and lastly, the Prince, without any effect. The Queen had come out to see the sport, lying down in the heather by the Prince, and witnessed all these fiascos, to our humiliation.”[75] This happy holiday was sadly broken by the death of the Duke of Wellington, which brought the Court unexpectedly back to Windsor in October, their route being through Edinburgh, Preston, Chester, and North Wales, where they inspected, on the 14th of October, the Britannia tubular bridge over the Menai Straits. The Queen drove through the bridge in a State carriage drawn by men, while Prince Albert, accompanied by Mr. R. Stephenson, walked across on the roof of the tube. On reaching the south end, the party descended to the water’s edge, from which they obtained a complete view of the magnificent proportions of the gigantic structure.

During 1852 one striking event in Foreign Affairs that occupied the attention of the Queen was the transformation of the French Republic into the Second Empire. In Paris, on the 1st of January, Charles Louis Napoleon was installed at Notre Dame as President of France, and he promulgated a new Constitution, preserving little of the form and none of the spirit of Liberty. The whole Executive was to be vested in the President, who was to be advised by a Council of State, a Senate of nobles nominated for life, and a powerless legislative body elected by universal suffrage for six years, whose transactions at the demand of five members could be kept secret. The next step taken by the Prince-President was to issue Decrees on the 23rd of January, compelling the Orleans Princes to sell their real and personal property in France within a year, and confiscating the property settled on the family by Louis Philippe previous to his accession in 1830. This raised a storm of indignation among all Frenchmen who were not accomplices of the Prince-President in the _coup d’état_, and it caused Montalembert to resign his seat on the Consultative Commission of the 2nd of December. De Morny and Fould also resigned, M. de Persigny replacing the former.[76] To the Queen, whose partiality for the Orleans family was well known, these Decrees were painfully offensive. The Prince-President’s strongest partisan in England, Lord Malmesbury, wrote a letter remonstrating with him, and the reply serves to illustrate the character of the men who consented to serve in the Senate. “He (the Prince-President),” says Lord Malmesbury in a letter to Lord Cowley, British Ambassador at Paris, “declared the confiscation necessary, as even some of his own Senators had been tampered with by Orleanist agents and money.”[77] On September 13th this patriotic Senate prayed for “the

re-establishment of the hereditary sovereign power in the Bonaparte family;” and on the 4th of November the Prince-President announced that he had in view the restoration of the Empire, and ordered the French people to be consulted on the matter. The French people, when consulted, were for the restoration--7,839,552 voting “Yes,” and 254,501 “No.” The vote was cast on the 21st of November, three days after Wellington was laid in the grave. As Cobden said, one might almost picture the third Napoleon rising from the yet open tomb of the vanquisher of the first.[78] On the 2nd of December Charles Louis Napoleon was declared Emperor of the French under the title of Napoleon III. The Constitution of January was confirmed with some slight modifications. A Royal title was given to Jérôme Bonaparte, Napoleon’s uncle. St. Arnaud, Magnan, and Castillane were created Marshals of France; and then there arose the first of the Imperial difficulties--that of obtaining recognition from the European Courts.

The Queen took a thoroughly sensible view of the situation. The atrocities of December and the confiscation of the Orleans property had not prepossessed her Majesty in favour of the French Emperor. But in her opinion there was no essential difference between such a Republic as had been established by the _coup d’état_ strengthened by the Constitution of January, and a military Empire without glory or genius. If the vast majority of Frenchmen were desirous of transforming their Prince-President into an Emperor, that was their affair, and Foreign Courts had no concern in the matter. The Queen was, therefore, strongly in favour of recognising the title of the Emperor of the French, and of according to him the customary courtesy of addressing him in ceremonial communications as _mon frère_.[79] The Northern Courts, however, could not bring themselves to treat as an equal, an adventurer who, to use his own expression in announcing his marriage in the Chamber on the 22nd of January, 1853, “had frankly taken up before Europe the _position de parvenu_.” Ultimately they all yielded to facts, and with the exception of Russia, agreed to address Charles Louis Bonaparte as their “brother.” The haughty autocrat of Muscovy, who had smiled on him approvingly when he strangled Liberty in France, frowned on the attempt to raise on its ruins a fabric of Empire, claiming parity with the ancient dominion of the Romanoffs. The Czar, therefore, persisted in addressing the French Emperor, not as “my brother,” but “my cousin.” This trivial slight is mentioned here, because it had subsequently a potent influence on the fortunes of England.

“England,” writes Sir Theodore Martin, “conceded the phrase _mon frère_ without a grudge.”[80] That is a somewhat misleading statement. It was certainly decided in England that the Emperor should be recognised some little time before the Empire was proclaimed, because everybody knew that its proclamation was inevitable. Having determined that the Prince-President was to be recognised in some fashion as Emperor, a question as to style was raised by the pedants of diplomacy, which showed where the “grudge” lay. It gave rise to that most grotesque of diplomatic struggles--the once famous but now forgotten Battle of the Numeral. Charles Louis Bonaparte, through his envoys, let it be known at the Court of the Queen that he meant to call himself Napoleon III. “Why Napoleon the Third?” asked alarmed Diplomacy. “Clearly he means to filch from us a recognition of the ephemeral title of the Duc de Reichstadt, the son and heir of Napoleon I., who was proclaimed when the First Empire crashed into ruins.” It was a crafty device to avenge Waterloo with the blast of a herald’s trumpet, and to wipe out fifty years of French history, just as the Parliament of the Restoration tried to efface the Commonwealth by dating the statutes of 1660, as of the twelfth year of the Merry Monarch’s reign. The usurper might be recognised by England as Napoleon II., perhaps, but never, argued Lord Malmesbury, as Napoleon III., for that would have countenanced more than our recognition of the Second Empire was actually meant to convey. It would have implied a recognition of the Emperor’s _hereditary_, as distinguished from his _elective_, title to the Throne. Most wearisome were the disputes and most tiresome the conferences between Lord Malmesbury, then Foreign Secretary, and the French Ambassador on this subject. At last it was agreed that we should accept the disagreeable numeral, after the French Government admitted in writing that it was not to imply our recognition of the Emperor’s hereditary right to the Imperial Crown of France. From first to last, however, Lord Malmesbury and the other diplomatists were mistaken. Very little reflection might have taught them that if the numeral were meant to efface Waterloo, and the Monarchies of the Bourbons and the Barricades, the usurper would have styled himself Napoleon V., and not Napoleon III., for his elder uncle Joseph and his father Louis both survived the young and ill-fated Duc de Reichstadt. A hereditary title, moreover, would not need to have been consecrated by a _plebiscite_, and the reign of its wearer would not have been dated from 1852, but from the date of Louis Bonaparte’s death. It is, therefore, natural to ask how Charles Louis Bonaparte came to style himself the Third and not the Second Emperor. The explanation illustrates the facility with which the tragicomedy of fussy English diplomacy is transformed into farce at the touch of fact. Lord Malmesbury, who is rendered supremely ridiculous by the story, tells it himself as follows in his Diary:--

“December 29 (1852). We went to Heron Court. Whole country under water. Lord Cowley[81] relates a curious anecdote as to the origin of the numeral III. in the Emperor’s title. The Prefect of Bourges, where he slept the first night of his progress, had given instructions that the people were to shout ‘Vive Napoléon!’ But he wrote ‘Vive Napoléon!!!’ The people took the three notes of interjection for a numeral. The President, on hearing it, sent the Duc de Mortemart to the Prefect to know what the cry meant. When the whole thing was explained, the President, tapping the Duke on the shoulder, said, ‘_Je ne savais pas que j’avais un Préfet Machiavéliste._’”[82]

After the proclamation of the French Emperor, his matrimonial schemes touched the family connections of the Queen somewhat closely. The Emperor’s marriage, in truth, was the favourite topic for gossip and scandal in every high social circle in Europe. As a matter of fact, Charles Louis Napoleon was averse from marriage. Two women were already devoted to him; perhaps more zealously than any bride of exalted rank could ever be. One was Madame Favart de l’Anglade, a creole, who lived some time at Kensington Gate, and whose whist and dinner parties have, perhaps, not yet been quite forgotten in the old Court suburb. (Lord Malmesbury, it may be said in passing, was told by Kisseleff, the Russian Ambassador at Paris, that had the _coup d’état_ failed, Charles Louis Bonaparte and De Morny were to have fled for concealment to this lady’s house.) The other woman who exercised so much influence on the Prince-President’s life was a Mrs. Howard. She was his mistress, and he created her Comtesse de Beauregard after he broke off his intimacy with her.[83] This event was virtually an intimation of his intention to marry. He was anxious to have an heir--for obviously none of the Bonapartes were fit to succeed him. To perpetuate a dynasty a Royal bride would be useful, and to enable him to obtain a Royal bride, Charles Louis Bonaparte persuaded France to proclaim him Emperor.

His first project was to seek in marriage the Princess Caroline Stephanie de Vasa, a grand-daughter of the Grand Duchess of Baden, and daughter of Prince Gustave de Vasa, son of the last King of Sweden of the old legitimate dynasty. The proposal was not accepted, and the lady afterwards married a German Prince. In December, however, Walewski was sent to the English Court to ask the hand of the Princess Adelaide of Hohenlohe for his Imperial master, greatly to the disquietude of the Queen, who was her aunt. On the 28th of December, when the Tory Ministers went to Windsor to deliver up their seals of office, the Queen began at once to discuss this delicate affair with them. Lord Malmesbury says:--“The Prince (Albert) read a letter from Prince Hohenlohe on the subject, which amounted to this, that he was not sure of the settlement being satisfactory, and that there were objections of religion and morals. The Queen and Prince talked of the marriage reasonably, and weighed the _pros_ and _cons_. Afraid the Princess should be dazzled if she heard of the offer. I said I knew an offer would be made to the father. Walewski would go himself. The Queen alluded to the fate of all the wives of the rulers of France since 1789, but did not object positively to the marriage.”[84] This project, however, fell to the ground, and the Emperor, tired of being rejected by Princesses, acted on the wise apophthegm of Ovid--_Si qua vis apte nubere, nube pari_. On the 22nd of January, 1853, he announced his intention of marrying Eugenia de Montijo, Countess of Théba, daughter of the Donna Maria Manuela Kirkpatrick, Dowager Countess de Montijo, by the Count de Montijo, an officer of rank in the Spanish army. The father of the Donna Maria Manuela Kirkpatrick was British Consul at Malaga, and supposed to be descended from the assassin of the Red Comyn, whose family motto, “I mak sickar” (“I make sure”), perpetuates grim

memories of his loyalty to the Bruce. His Majesty told the deputations from the Senate, the Legislative Body and the Council of State, that whilst it was his aim to place France once more within the pale of the old Monarchies, that result would be better attained by policy than by “Royal alliances, which create feelings of false security, and frequently substitute family interests for those of the nation.” Now, any dispute which engages Europe in diplomatic controversy that finally leads to war, is apt to produce fresh groupings of the Powers. An Imperial parvenu seeking for a respectable ally finds in these new groupings excellent opportunities for insinuating himself into “the pale of the old monarchies.” Hence the Emperor’s marriage was a sinister omen for England, because it was his fixed idea that England was the most profitable ally France could have. The Queen, however, on hearing that the Emperor’s marriage was a love match, imagined that his abandonment of an attempt to contract a Royal alliance gave additional force to his assurance at Bordeaux, on the 9th of October, 1852, that the “Empire was Peace,” and that under its guidance France was about to enter on a busy epoch of Industrialism. English Society approved of the marriage,[85] and the Press was loud in its praises of the Imperial pair.[86] Nobody, indeed, had the faintest suspicion at the time that war was in store for us--a war which gave the French Emperor that very alliance with England for which he was then scheming. But before describing the events that led up to the most disastrous calamity that darkens the Queen’s reign, it may be well to sketch briefly the chief points in the Home Policy of her Majesty’s Ministers during 1853.

It has been said that there were only two great projects in which the Queen interested herself during this year, filled, as it was, with distracting anxieties as to foreign affairs--the Budget and the India Government Bill. There was, however, a third: Lord John Russell’s scheme--unhappily abortive--for establishing a national system of public instruction.

Parliament met on the 10th of February, and Mr. Disraeli called Sir James Graham and Sir Charles Wood to account for speaking rudely of the French Emperor in their hustings addresses. Nothing came of his pungent attack, and public interest in politics was languid till April arrived, when Mr. Gladstone introduced his celebrated Budget--the first of a series that enabled him to divide with Sir Robert Peel the glory of being the greatest Finance Minister of the Victorian age.

Mr. Gladstone found that Mr. Disraeli, by under-estimating his revenue and over-estimating his expenditure, had left him with a surplus, not of £461,000, but of £2,307,000.[87] Unexpected military expenditure, due to dread of a French invasion, had reduced this surplus to £807,000. The primary feature in Mr. Gladstone’s Budget was the extension of the tax on personal property devised by will to real property, and also to personal property that passed by settlement. This, Mr. Gladstone reckoned, would ultimately bring in £2,000,000, and put him in a position to deal with the Income Tax, which came to an end in 1853. He proposed to continue the Income Tax at sevenpence in the pound for two years, then to reduce it to sixpence, and in three years after that to reduce it to fivepence. He extended the tax to Ireland, but, by way of compensation, remitted the debts which Ireland had recently incurred to the Imperial Treasury. He increased the duties on Scotch spirits from 3s. 5d. to 4s. 8d., and on Irish spirits from 2s. 8d. to 3s. 4d. a gallon, and thus, he reckoned, he had a surplus of £2,151,000 to spend. How did he spend it? He abolished the duty on soap, thereby terminating the last of the taxes on the four “necessaries”--salt, leather, and candles were the other three--which Adam Smith condemned a century before.[88] He reduced the taxes on 256 minor articles of food, besides tea, advertisements, carriages, dogs, male servants, apples, cheese, cocoa, butter, and raisins. He reduced the rate of postage to the Colonies--a reduction which, it is surprising to find, had not been even suggested by Mr. Disraeli or any of his predecessors in the highest of Imperial interests. An ingenious feature in his Budget was his manipulation of the Funds. Old Three per Cent. Consols, which could be paid off at a year’s notice, sold for a little over par, that is to say, £100 of stock sold for a little more than £100. New Three per Cents, however, which were not redeemable for twenty years, sold for £103--_i.e._, £100 of stock was worth in the market £103, the difference of £3 representing the value of the State guarantee to pay interest on the stock for twenty years. Hence, he said, if he gave a like guarantee for some of the unguaranteed stock, he might lay hands on the increment of value thereby added to it for the benefit of the State. He accordingly permitted fundholders to exchange £100 of Consols, or “Reduced Three per Cents.” for Exchequer bonds,[89] or for £82 10s. in New Three and a Half per Cent. Stock, guaranteed for forty years to pay £2 17s. 9d. of interest, or for £110 irredeemable Two and a Half per Cent. Stock. Mr. Spencer Walpole has said

that “in breadth, in comprehension, in boldness, in knowledge, and in originality,” Mr. Gladstone’s first Budget will compare with Peel’s greatest efforts in 1842 and 1845.[90] But even Mr. Walpole admits that, whereas Peel’s Budgets can be tested by results, Mr. Gladstone’s can be judged of only from its intention. The Crimean war--which he did not foresee, and which, as will be shown presently, was then brewing--upset all his calculations. It was not favourable to conversion of debt; moreover, the new succession duty did not bring in one-fourth of the estimated sum.[91] Only one important change was effected in the scheme. The duty on advertisements, which Mr. Gladstone proposed should be reduced to 6d., was abolished by the odd and novel method of moving and carrying an amendment substituting the cipher (0) for the figure 6(d.), in the resolution of the Chancellor of the Exchequer. Mr. Hume challenged the competence of the House of Commons in Committee to adopt a resolution with a “nought” in it instead of a definite figure, but the Speaker ruled against him.

The India Bill was introduced by Sir C. Wood on the 3rd of June, 1853. The complaints against the system under which India was ruled were that it led to wars, deficits, maladministration of justice, neglect of public works and of education. The Dual Government of the Imperial Board of Control and the Court of Directors of the East India Company was maintained, but the Court of Directors was reduced from thirty members to eighteen, twelve of whom were to be chosen by the Company, and six nominated by the Crown, who were to be Indian officials of ten years’ service. The new system, which was to prevail till Parliament chose to change it, put an end to the old plan of leasing the Indian Empire for a term of years to a Company of merchant adventurers. As to patronage, competition was substituted for nomination as the mode of entering the public service. Direct appointments to the Indian Army were, however, left in the hands of the Directors of the Company. The scheme was warmly discussed, the friends of the Company insisting on immediate legislation; its enemies, thinking that in time they might be able to educate the country up to the point of abolishing the authority of the Directors, and transferring the government of India absolutely to the Crown,[92] pressed for delay. Mr. Disraeli and the bulk of the Tories were for postponing legislation, but in the end the Government carried the Bill.

Lord John Russell, on the 4th of April, explained his scheme for establishing a system of national education. The main point in it was that it empowered Municipal Authorities to raise a rate in aid of voluntary schools, the rate to be applied to pay twopence in the week for each scholar, provided fourpence or fivepence were contributed from other sources. The scheme was, however, abandoned. Lord John had in his speech foreshadowed the introduction of a Bill imposing drastic reforms on the Universities, and this roused the Tory Party to obstruct his proposals. It is but fair to draw attention to this Bill, because Lord John Russell is entitled to the credit of having been the first statesman to present a comprehensive scheme for organising primary education, based on the principle that it is the duty of the community to provide for the instruction of the people by levying an education rate. This, said Mr. W. J. Fox, was “a most important step in the progress of public instruction.”

A Bill empowering the Local Governments in Canada to deal with Clergy Reserves was introduced by Mr. F. Peel on the 15th of February. It is notable because the debates on it illustrate the difference between the ideas of the two parties in the State as to Colonial Government--the Tories in those days being on the whole opposed to granting the Colonies privileges of self-government, whilst the Liberals favoured such grants. In 1791 it was enacted that whenever the Crown disposed of waste lands in Canada, one-seventh of their value should be reserved for the support of the Protestant clergy. The funds, it seems, had not been fairly distributed, the Established Churches of England and Scotland having received the largest share of them. In 1840 the Imperial Legislature had confirmed this appropriation by restraining the Canadian Legislatures from meddling with these funds. The Bill of the Government simply gave the Canadian Legislature the right of dealing with them as it thought fit, on the ground that the disposal of lands which derived their value from Canadian capital and Canadian enterprise was a matter of Colonial rather than of Imperial concern. The Bill was passed.

On the 11th of July a Bill for altering the punishment of transportation was introduced into the House of Lords by the Lord Chancellor. Only one Colony--Western Australia--was willing to receive convicts, and not more than 800 to 1,000 a year could be sent there. The Government proposed, therefore, to limit transportation to such cases of crime as would carry a sentence of fourteen years’ imprisonment, and substitute shorter periods of imprisonment for offences, which up till now had been punished by varying periods of transportation.

This proposal, which was carried, was forced on the State by the great changes which had been effected in the Australian Colonies after the discovery of gold in New South Wales. Here it may be well to notice the manner in which these gold discoveries were made, and their effect on the prosperity of the Empire.

It was on the 10th of September, 1852, that the West India mail steamer brought news to England which revived the old yearning for the discovery of the fabled El Dorado--dormant in the English breast since the days of Raleigh. Gold, it was reported, had been found near Bathurst, in New South Wales, where a frantic rush to the diggings had taken place. The merchant left his warehouse, the shopman his counter, even the lawyers deserted their clients--all eager to join in the headlong race to the mines. But all the gold they were likely to win could not possibly balance the loss caused to the Colony at the time by the mad stampede of the shepherds, who abandoned their countless flocks for the mines. The gold fever was further exacerbated by the subsequent discovery of another rich deposit in Victoria. America had found her El Dorado in California; Englishmen accordingly heard with pride that they, too, had come into a richer heritage in the hitherto despised convict settlements of Australasia. On the 23rd of November, 1852, three vessels from Australia sailed into the Thames with a cargo of seven tons of solid gold. The _Eagle_ brought 160,000 ounces, worth £600,000, and she had made the passage from Melbourne to the Downs in seventy-six days; the _Sapphire_ and _Pelham_, from Sydney, brought 14,668 ounces and 27,762 ounces respectively; the _Maitland_, from Sydney, followed with 14,326 ounces; the _Australia_, the first steamer that arrived from these Colonies, next came in with a still larger quantity; and in December the _Dido_ appeared with a cargo of gold-dust valued at £400,000.

Politically the Protectionists tried to turn these discoveries to some account. They had predicted that Free Trade would ruin the country. On the contrary, £6,000,000 of taxation had been remitted since 1846, and yet there was no shrinkage of revenue. Exports had risen from £58,000,000 to £78,000,000, the shipping trade was brisker than ever, and on the 1st of January, 1853, there were not quite 800,000 paupers in the country.[93] Even the landed interest could not pretend to have been ruined, seeing that the Income Tax assessment under Schedule B, which is levied on rents of agricultural land, had risen from £46,328,811 in 1845 to £46,681,488 in 1852. This tide of prosperity under Free Trade seemed certain to flow rather than to ebb, so that the Tories were taunted with the utter failure of their dismal Protectionist prophecies. It need hardly be said that the Queen, who, as a strong Free Trader, had watched with deep anxiety the result of the great revolution in fiscal policy which she had helped Peel to initiate, was intensely gratified, not to say relieved in mind, when the figures illustrating the commercial condition of her realm were brought under her notice. The Protectionists, however, had an answer to these facts. It was, they averred, the unexpected discovery of gold in Australia that had saved the country from the ruin which they predicted must come from Free Trade. It may be pointed out that the figures we have given for the purpose of showing how the trade of the country stood after 1846, cover the period _before_, and not the period _after_, gold was imported from Australia--a circumstance which the Queen and Prince Albert were quick to note and appreciate. The Tory Protectionists, in fact, completely misunderstood the effect which would be produced by any sudden increase in the supply of gold. That effect was two-fold: (1) on the mother country, and (2) on the Australian Colonies.

There is very little mystery about the effect of an increase in the production of gold. The more we put into the market the less valuable will it become. If we double the quantity of gold in circulation, it follows that an article which could be bought for a sovereign will not be sold for less than two sovereigns. The price of the article is thus said to rise, whereas the value, or, properly speaking, the purchasing power of the gold, for which it is exchanged, is said to fall. An increase in the stock of gold ought, therefore, to lead to a rise in prices, and to a fall or depreciation in the value of the metal. In 1853 some foolish persons therefore predicted that gold would soon be as cheap as silver; and yet, though the supply was trebled, gold was not trebly depreciated in value. “Undoubtedly some effect,” says Mr. Walpole, “was consequently made on prices; but the effect was probably only slowly and gradually felt. Gold was absorbed in vast and unprecedented quantities in the arts, and the supply which was actually available for barter was not immediately augmented to the same degree.”[94] It is difficult to understand how so able a writer has been led into an error which must vitiate every deduction drawn from the effect of the Australian gold discoveries on the prosperity of the English people, in the Victorian period. Nobody has ever been able to estimate even approximately the amount of gold that is absorbed in the arts. All that we know is that the amount is so small, that it could not affect such an enormous increase in the supply as that which came from Australia.[95] Besides, as gold did not fall much in value, it was not likely that it would be much absorbed in the arts. But, then, what became of all the gold that was so suddenly poured into England from Australia? Some of it was absorbed in coinage,[96] but not enough to account for the absorption of the vast quantity that remained. The key to the puzzle is, in truth, to be found in the statistics of commerce which we have already cited.

(_After the Engraving in the “Illustrated London News.”_)]

The value of gold was kept up in spite of the sudden increase in the supply, because, under Free Trade, the commerce of the country began to expand by leaps and bounds. The Australian supplies, in fact, were absorbed in trade, for it is obvious that the sudden expansion of business which followed from Free Trade must have caused a corresponding demand for money, not only to conduct the operations of barter, but to pay the wages of the additional workers who produced the articles sold for money. When this fact is grasped, it is easy to understand what the Australian gold discoveries did for England. Had no new supplies of gold been found in 1853, Free Trade would have brought serious disasters in its wake, but not precisely in the form predicted by the Tories. The sudden expansion of trade would have caused a sudden demand for gold; the value of gold must have risen. Supposing gold had thus doubled in value, then the prices of commodities would have been halved, that is to say, one hundred oxen would have sold only for as many sovereigns as fifty sold for before the value of gold was thus increased. Everybody who had to make a fixed money payment, such as rent or interest, would have had their payment doubled, for they would have had to produce twice as much to meet their obligations as originally sufficed for that purpose. The burden of the National Debt, for example, would have been doubled, for, to pay every pound’s worth of interest to the fundholder, the public would have had to realise what represented two pounds’ worth of wealth when the interest was first fixed. In fact, the only people who would have gained, would have been the few who had to receive fixed payments, at the expense of the many who had to make them. The discovery of gold at a time when a liberated and expanding trade was causing an increased demand for the metal was thus a providential coincidence. By preventing the demand from outrunning the supply, it prevented a sudden increase in the value of the metal, which must have reduced prices and upset all the monetary arrangements of the country.

What was the effect of the discovery of gold on the Australian Colonies? Very much the same as the discovery of rich deposits of any other saleable ore, excepting in this respect, that gold is the one metal that commands an immediate sale, at a high and very slightly varying price. Land, Labour, and Capital are the three great requisites of production. Of these Australia, prior to 1853, had only the first in abundance. The gold mines attracted a rush of emigrants to Australia. But gold mining is a lottery in which the prizes fall to the few. The average earnings of the digger were soon found to be lower than the wages paid in other employments. Hence crowds of men who had been attracted to the mines soon left them, and were ready to follow other pursuits, so that the gold rush gave Australia the second element in production--labour. But the gold which was won, and the demands of the mining population, soon stimulated industry and increased wealth in the Colonies--in other words, the gold rush brought to Australia the third requisite of production--capital.

The Australian gold discoveries, therefore, transformed an insignificant penal settlement into a rich and queenly Commonwealth, and saved England from the gold famine, with its disastrous fall in prices, which a sudden expansion of trade must inevitably have produced after Protective duties were abolished. There were, however, two shadows on the picture. The gold rush to Australia depleted the labour market at home. The demands of the Australian Colonies for British goods, after gold had been discovered, were enormous. A sudden diminution in the supply of labour, combined with a corresponding increase in the demand for the goods which Labour produces, naturally led to a demand in England for increased wages. Strikes broke out all over the country. Labour was scarce and business brisk, and though the conflict was, except in rare cases, unaccompanied by violence, it may be said that generally speaking victory lay rather with the workers than with their masters. Wages were forced up, which was perhaps fortunate, because, as the year wore on, it soon became apparent that a bad harvest in England, France, and Germany would seriously increase the price of food.[97] The enormous impetus given to industry, and the rise in wages which followed, enabled skilled labour to bear this increase in the price of bread. The unskilled labourers, however, who from lack of organisation cannot “strike” with much effect, suffered acutely, especially towards the end of the year. But by that time a calamity was within measurable distance, which diverted the minds of the English people from dear bread and bad harvests. That calamity was the Crimean war, which rendered 1853 the last year of “The Great Peace” which followed the battle of Waterloo.

(_After an Etching by the Queen._)]