CORN LAWS. From the very earliest times, States which have attained to any degree of civilization have found it necessary to take measures to ensure a sufficient supply of cereals for the population. In communities which were wholly or mainly agri cultural, such measures were only of a temporary nature, resorted to in times of failure of crops or of war. Thus in early Egypt (c. 2000 B.C.) steps were taken to store grain in years of plenty, against the prospect of lean years to come (Genesis xxi. 46-5 7) . Similar measures were taken in China at an equally early date. When, however, populations became divided into agricultural and non-agricultural, by the institution of, e.g., sacerdotal or military castes, it became necessary to make permanent provision for the feeding of this non-agricultural element. Thus in imperial Rome, the tribute payable by conquered races frequently took the form of grain to ensure supplies for Rome itself and for the army. The system of tithes similarly arose from the need for supplying the clergy from the produce of the land cultivated by those to whom they ministered.
Up to the i4th century the question was mainly one of pro viding for those members of a self-supporting community, who, for any reason, were not themselves in a position to produce their own sustenance. With however the rise of industrial and com mercial classes, the production of the agricultural section was not sufficient to supply the needs of all, at any rate in years when the yield was in any way below normal, and supplies had to be sought elsewhere. From this arose the need for state intervention in the import and export of corn. At this period communications were in a very primitive stage of development, and intercourse was only possible between comparatively neighbouring communities or states. Thus it frequently happened that years of bad crops were more or less general over the area in which trade normally took place, and the high prices that could be obtained led to corn being sent to accessible parts of a foreign country rather than to less accessible parts of the producing country. This caused steps to be taken to maintain home supplies, by the regulation of im ports and exports. These regulations usually took the form of prohibiting export, or only permitting it when prices were suf ficiently low to indicate sufficiency, if not satiation, on the home market, and by only allowing imports when the home price reached a high level, thus operating against what is now termed "dumping," and ensuring a fair return to home producers, while in times of shortage, the specified price would be reached, and im ports were authorized to alleviate risk of famine.
In modern times, instead of actual prohibition of import or export, it became the practice to impose high, and therefore effectively prohibitive duties, sometimes in conjunction with specified price limits or with a sliding scale dependent on prices in the home market. With the rise of intensive cereal culture in America, Canada, Rumania and elsewhere, protective import duties have been levied in certain countries to prevent the flood ing of the home market with cheap grain to the detriment of the domestic producer.
During four centuries after the Conquest the corn law of Eng land simply was that export of corn was prohibited, save in years of extreme plenty under forms of state licence, and that pro ducers carried their surplus grain into the nearest market town, and sold it there for what it would bring amongst those who wanted it to consume ; and the same rule prevailed in the prin cipal countries of the continent of Europe. The prohibition of export discouraged agricultural improvement, and in so much diminished the security and liberality even of domestic supply; while the intolerance of any home dealing or merchandise in corn prevented the growth of a commercial and financial interest strong enough to improve the means of transport by which the plenty of one part of the same country could have come to the aid of the scarcity in another.
The import of grain from abroad, even in times of dearth and high prices at home, could not be considerable as long as the policy of neighbouring countries was to prohibit export ; nor could the export of native corn, even with the Dutch and other European ports open to such supplies, be effective save in limited maritime districts, as long as the internal corn trade was suppressed, not only by want of roads, but by legal interdict. The regulation of liberty of export and import by rates of price, moreover, had the same practical objection as the various sliding scales, bounties, and other legislative expedients down to 1846, viz. that they failed, probably more in that age than in later times, to create a permanent market, and aimed only at a casual trade. When foreign supplies were needed, they were often not to be found, and when there was an excess of corn in the country a profitable outlet was both difficult and uncertain. It would appear, indeed, that during the Wars of the Roses the statutes of Henry VI. and Edward IV. had become obsolete; for a law regulating export prices in identical terms of the law of 1436 was re-enacted in the reign of Mary I. In the preceding reign of Edward VI., as well as in the suc ceeding long reign of Elizabeth, there were unceasing complaints of the decay of tillage, the dearth of corn, and the privations of the labouring classes ; and these complaints were met by the same kind of measures—by statutes encouraging tillage, forbidding the enlargement of farms, imposing severer restrictions on storing and buying and selling of grain, and by renewed attempts to regu late export and import according to prices. In 1562 the price at which export might take place was raised to 1 os. per quarter for wheat, and 6s. 8d. for barley and malt. This only lasted a few years, and in 1570 the export of wheat and barley was permitted from particular districts on payment of a duty of is. 8d. per quarter, although still liable to prohibition by the Government or local authority, while it was entirely prohibited under the old regulations from other districts. Only at the close of Elizabeth's reign (1603) did a spark of new light appear in a further statute, which removed the futile provisions in favour of tillage and against enlargement of pastoral farms, and rested the whole policy for promoting an equable supply of corn, while encour aging agriculture, on an allowed export of wheat and other grain at a duty of 2S. and Is. 4d. when the price of wheat was not more than 2os., and of barley and malt 12s. per quarter. The import of corn appears to have been much lost sight of from the period of the statute of 1463. The internal state of England, as well as the policy of other countries of Europe, was unfavourable to any regular import of grain, though many parts of the kingdom were often suffering from dearth of corn. It is obvious that this legislation, carried over more than a century and a half, failed of its purpose, and that it neither promoted agriculture nor increased the supply of bread. So great a variance and conflict between the intention of statutes and the actual course of affairs might be deemed inexplicable, but for an explanation which a close eco nomic study of the circumstances of the times affords.
Besides the general reasons of the failure already indicated, there were three special causes in active operation, which, though not seen at the period, have become distinct enough since. (1) A comparatively free export of wool had been permitted in Eng land from time immemorial. It was subject neither to conditions of price nor to duties in the times under consideration, was easier of transport and less liable to damage ; while corn, a prime rural product, was subject, as an article of merchandise, to every dif ficulty, internally and externally, which meddling legislation and popular prejudice could impose. The numerous statutes enjoining tillage and discouraging pastoral farms—or in other words re quiring that agriculturists should turn from what was profitable to what was unprofitable—had consequently no substantial effect, save in the many individual instances in which the effect may have been injurious. (2) The value of the standard money of the king dom had been undergoing great depreciation from two opposite quarters at once. The pound sterling of England was reduced in the weight of pure metal; while, at the same time, the greater abundance of silver, which now began to be experienced in Europe from the discovery of the South American mines, was steadily reducing the intrinsic value of the metal. Hence a general rise of prices remarked by Hume and other historians ; and hence also it followed that a price of corn fixed for export or import at one period became always at another period more or less restric tive of export than had been designed. (3) The wages of labour would have followed the advance in the prices of commodities had wages been left free, but they were kept down by statute to the three or four pence per day at which they stood when the pound sterling contained one-fourth more silver and silver itself was much more valuable.
M'Culloch found from a comparison of prices of corn and wages of labour in the reign of Henry VII. and the latter part of the reign of Elizabeth, that in the former period a labourer could earn a quarter of wheat in 20, a quarter of rye in 12, and a quar ter of barley in 9 days; whereas, in the latter period, to earn a quarter of wheat required 48, a quarter of rye 32, and a quarter of barley 29 days' labour.
The result was chronic privation and discontent among the common people, by which all the conditions of agriculture and trade in corn were further straitened and barbarized ; and the age was marked by an enormous increase of pauperism, and by the introduction of the merciful but wasteful remedy of the Poor Laws.
English Corn Laws 1660-1773.—The corn legislation of Eliz abeth remained without change during the reign of James, the civil wars and the Commonwealth. But on the restoration of Charles II. in 166o, the question was resumed, and an act was passed of a more prohibitory character. Export and import of corn, while nominally permitted, were alike subjected to heavy duties—the need of the exchequer being the paramount considera tion, while the agriculturists were no doubt pleased with the com plete command secured to them in the home market. This act was followed by such high prices of corn, and so little advantage to the revenue, that parliament in 1663 reduced the duties on im port to g% ad valorem, while at the same time raising the price at which export ceased to 48s., and reducing the duty on export from 20s. to 5s. 4d. per quarter. In a few years this was found to be too much free-trade for the agricultural liking, and in 1670 prohibitory duties were re-imposed on import when the home price was under S3s. 4d., and a duty of be tween that price and 8os., with the usual make-weight in favour of home supply, that export should be prohibited when the price was 53s. 4d. and upwards. But complaints of the decline of agri culture continued to be as rife under this act as under the others, till on the accession of William and Mary, the landed interest, taking advantage of the Revolution, as they had taken advantage of the Restoration, to promote their own interests, took the new and surprising step of enacting a bounty on the export of grain. This evil continued to affect the corn laws of the kingdom, varied, on one occasion at least, with the further complication of bounties on import, until the 19th century. The duties on export being abolished, while the heavy duties on import were maintained, this is probably the most one-sided form which the British corn laws ever assumed, but it was attended with none of the advan tages expected. The prices of corn fell, instead of rising. There had occurred at that period of the Revolution a depreciation of the money of the realm, analogous in one respect to that which marked the first era of the corn statutes (1436-1551) and form ing one of the greatest difficulties which the Government of Wil liam had to encounter. The coin of the realm was greatly debased, and as rapidly as the mint sent out money of standard weight and purity, it was melted down and disappeared from the circu lation. The influx of silver from South America to Europe had spent its action on prices before the middle of the century; the precious metals had again hardened in value ; and for 4o years before the Revolution the price of corn had been steadily falling in money price. The liberty of exporting wool had also now been cut down before the English manufacturers were able to take up the home supply, and agriculturists were consequently forced to extend their tillage. When the current coin of the kingdom be came wholly debased by clipping and other knaveries there en sued both irregularity and inflation of nominal prices, and pro ducers and consumers of corn found themselves equally ill at ease. The farmers complained that the home market for their produce was unremunerative and unsatisfactory; the masses of the people complained that their money wages could not purchase the necessaries of life. The state of agriculture could not be prosperous under these conditions. But when the Government of William surmounted this difficulty of the coinage, as they did surmount it, under the guidance of Sir Isaac Newton, with re markable statesmanship, it necessarily followed that prices, so far from rising, declined, because, for one reason, they were now denominated in a solid metallic value. The rise of prices of corn attending the first years of the export bounty was consequently of very brief duration. The average price of wheat in the Win chester market, which in the ten years 16go-99 was 12 1 os., fell in the ten years 1716-25 to f I 5s. 4d. and in the ten years 1746 55 to £I Is. 24d.
The system of corn law established in the reign of William and Mary was probably the most perfect to be conceived for advanc ing the agricultural interest in any country. Every stroke of the legislature seemed complete to this end. Yet it wholly failed of its purpose. The price of wheat again rose in 1750-6o and 176o 7o to f I Igs. 34d. and f 2 I Is. 3ad., but many causes had mean while been at work. Between the reign of William and Mary and that of George III. the question of bounty on export of grain, had, in the general progress of the country, fallen into the back ground, while that of the heavy embargoes on import had come to the front. Therefore it is that Burke's Act of 1773, as a deliber ate attempt to bring the corn laws into some degree of reason and order, is worthy of special mention. This statute permitted the import of foreign wheat at a nominal duty of 6d. when the home price was 48s. per quarter, and it stopped both the liberty to export and the bounty on export together when the home price was 44s. per quarter. The one blemish of this statute was the stopping export and cutting off bounty on export at the same point of price.
Few questions have been more discussed or more differently interpreted than the elaborate system of corn laws dating from the reign of William and Mary. So careful an observer as Mal thus was of opinion that the bounty on export had enlarged the area of subsistence. That it had large operation is sufficiently attested by the fact that, in the years from 174o to 1751, boun ties were paid out of the exchequer to the amount of 11,515,000, and in 1749 alone they amounted to 13 24,000. But the trade thus forced was of no permanence, and the British exports of corn, which reached a maximum of 1,667,778 quarters in 1749-50, had fallen to 600,000 quarters in 176o and continued to decrease.
English Corn Laws, 1791-1846.-Burke's Act lasted long enough to introduce a regular import of foreign grain, varying with the abundance or scarcity of the home harvest, yet estab lishing in the end a systematic preponderance of imports over exports. The period, moreover, was marked by great agricultural improvements, by extensive reclamation of waste lands, and by an increased home produce of wheat, in the 20 years from 17 of nearly 2,000,000 quarters. Nor had the course of prices been unsatisfactory. The average price of British wheat in the 20 years was 12 6s. 3d. and in only three years of the 20 was the price a fraction under £ 2. But the ideas in favour of greater free dom of trade were overwhelmed in the extraordinary excite ment caused by the French Revolution, and all the old corn law policy was destined to have a sudden revival. The landowners and farmers complained that an import of foreign grain at a nominal duty of 6d., when the price of wheat was only 48s., de prived them of the ascending scale of prices when it seemed due; and on this instigation an act was passed in 1791, whereby the price at which importation could proceed at the nominal duty of 6d. was raised to 54s., with a duty of 2S. 6d. from 54s. to 5os., and at 5os. and under 5os. a prohibitory duty of 24s. 3d. The bounty on export was maintained by this act, but exportation was allowed without bounty till the price reached 46s., and the permis sion accorded by the statute of 1773 to import foreign corn at any price, to be re-exported duty free, was modified by a ware house duty of 2S. 6d. in addition to the duties on import payable at the time of sale, when the corn, instead of being re-exported, happened to be sold for hGme consumption. The legislative vigi lance in this statute to prevent foreign bread from reaching the home consumer is remarkable. There were deficient home har vests for some years after 1791, particularly in 1795 and 1797, and parliament was forced to the new expedient of granting high bounties on importation. At this period the country was involved in a great war; all the customary commercial relations were vio lently disturbed; freight, insurance and other charges on import and export were multiplied fivefold ; heavier and heavier taxes were imposed; and the capital resources of the kingdom were poured with a prodigality without precedent into the war chan nels. The consequence was that the price of corn, as of all other commodities, rose greatly; and the Bank of England having stopped paying in specie in 17g7, this raised nominal prices still more under the liberal use of bank paper in loans and discounts, and the difference that began to be established in the actual value of Bank of England notes and their legal par in bullion.
The average price of British wheat rose to .5 1gs. 6d. in 18oi. So unusual a value must have led to a large extension of the area under wheat, and to much corn-growing on land that after great outlay was ill prepared for it. In the following years there were agricultural complaints; and in 1804, though in 1803 the average price of wheat had been as high as f 2 18s. 1 od., an act was passed, so much more severe than any previous statute, that its object would appear to have been to keep the price of corn somewhere approaching the high range of 1801. A prohibitory duty of 24s. 3d. was imposed on the import of foreign wheat when the home price was 63s. or less ; and the price at which the bounty was paid on export was lowered to 4os., while the price at which export might proceed without bounty was raised to 54s. Judging from the prices that ruled during the remaining period of the French wars, this statute would appear to have been effective fer its end, though, under all the varied action of the times on a rise of prices, it would be difficult to assign its proper place in the general effect. The average price of wheat rose to £4 gs. gd. in 1805, and the bank paper price in 1812 was as high even as 16 6s. 6d. The bullion prices from 1809-13 ranged from 86s. to loos. 3d. But it was foreseen that when the wars ended a serious reaction would ensue, and that the rents of land, and the general condition of agriculture, under the warlike, protective and monetary stimula tion they had received, would be imperilled. In the brief peace of 1814 the average bullion price of British wheat fell to 55s. 8d. All the means of select committees of inquiry on agricultural dis tress, and new modifications of the corn laws, were again brought into requisition. The first idea broached in parliament was to raise the duties on foreign imports, as well as the prices at which they were to be leviable, and to abolish the bounty on export, while permitting freedom of export whatever the home price might be. The latter part of the scheme was passed into law in the session of 1814; but the irritation of the manufacturing dis tricts against the new scale of import duties was too great to be resisted. In the subsequent session an act was passed, after much opposition, fixing 8os. (14s. more than during the wars) as the price at which import of wheat was to become free of duty.
This act of 1815 was intended to keep the price of wheat in the British markets at 8os. per quarter; but the era of war and great expenditure of money raised by public loans had ended, the ports of the continent were again open to some measure of trade and to the equalizing effect of trade upon prices, the Bank of Eng land and other banks of issue had to begin the uphill course of a resumption of specie payments, the nation had to begin to feel the whole naked weight of the war debt, and the idea of the protectors of a high price for corn was proved by the event to be an utter hallucination. The corn statutes of the next 20 years, though occupying an enormous amount of time and at tention in the Houses of Parliament, may be briefly treated, for they are simply a record of the impotence of legislation to maintain the price of a commodity at a high point when all the natural economic causes in operation are opposed to it. In 1822 a statute was passed reducing the limit of prices at which impor tation could proceed to 7os. for wheat, 3 5s. for barley, 25s. for oats; but behind the apparent relaxation was a new scale of im port duties, by which foreign grain was subjected to heavy three month duties up to a price of 85s.-17s. when wheat was 7os., 12s. when between 7os. and 8os., and 1os. when 85s., showing the grasping spirit of the would-be monopolizers of the home supply of corn, and their reluctance to believe in a lower range of value for corn as for all other commodities. This act never operated, for the reason that, with the exception in some few instances of barley, prices never were so high as its projectors had contem plated. The corn trade had passed rapidly beyond reach of the statutes by which it was to be so painfully controlled; and as there were occasional seasons of scarcity, particularly in oats, the King in Council was authorized f or several years to override the statutes, and do whatever the public interests might require.
In 1827 Canning introduced a new system of duties, under which there would have been a fixed duty of is. per quarter when the price of wheat was at or above 7os., and an increased duty of 2S. f or every shilling the price fell below 69s., but though Canning's resolutions were adopted by a large majority in the House of Commons, his death and the consequent change of min isters involved the failure of his scheme of corn duties. In the following year Charles Grant introduced another scale of import duties on corn, by which the duty was to be 23s. when the price was 64s., 16s. 8d. when the price was 69s., and only is. when the price was 73s. or above 73s. per quarter; and this became law the same year. This sliding scale was more objectionable, as a basis of f oreign corn trade, than that of Canning, though not f ol lowing so closely shilling by shilling the variation of prices, be cause of the abrupt leaps it made in the amount of duties leviable. For example, a merchant who ordered a shipment of foreign wheat when the home price was 7os., and rising to 73s., instead of having a duty of is. to pay, should on a backward drop of the home price to 69s., have 16s. 8d. of duty to pay. The result was to introduce wide and incalculable elements of speculation into all transactions in foreign corn. Prices during the greater part of this period were under the range at which import was practically pro hibited. The average price of British wheat was 96s. I id. in 1817, but from that point there was in succeeding years a rapid and progressive decline, varied only by the results of the domestic harvests, till in 1835 the average price of wheat was 3gs. 4d., of barley 29s. 11d. and oats 2 2S. The import of foreign grain in these years consisted principally of a speculative trade, under a privilege of warehousing accorded in the statute of 1773, and extended in subsequent acts, by which the grain might be sold for home consumption on payment of the duties, or re-exported free, as suited the interest of the holders.
The act of 1822 admitted corn of the British possessions in North America under a favoured scale of duties, and in 1825 a temporary act was passed, allowing the import of wheat from these provinces at a fixed duty of 5s. per quarter, irrespective of the home price, which, if maintained, would have given some stability to the trade with Canada. The idea of a fixed duty on all f oreign grain, however, appears to have grown in favour from about this period. It was included in the programme of import duty reforms of the Whig Government in 1841, and fell with its propounders in the general election of that year. Sir Robert Peel, on succeeding to office, introduced and carried in 1842 a new slid ing scale of duties somewhat better adjusted to the current values. But public opinion by this time was changing, and the prime min ister, convinced, as he confessed, by the arguments of Cobden and the Anti-Corn-Law League, and stimulated into action by the failure of the potato crop in Ireland, put an effectual end to the history of the corn laws by the famous act of 1846. It was pro vided under this measure that the maximum duty on foreign wheat was to be immediately reduced to los. per quarter when the price was under 48s., to 5s. on barley when the price was un der 26s., to 4s. on oats when the price was under 18s., with lower duties as prices rose above these figures; but the conclusive part of the enactment was that in three years—on Feb. 1, i849—these duties were to cease, and all foreign corn to be admitted at a duty of is. per quarter, and all f oreign meal and flour at a duty of 41d. per cwt.—the same nominal imposts which were conceded to grain and flour of British possessions abroad from the date of the act. In 1869 even these nominal duties were abolished by Robert Lowe in a Customs Duties Act. In 1902 a registration duty of 3d. per cwt. was imposed on imported corn, and 5d. per cwt. on imported flour, in the expectation that such a duty would broaden the basis of taxation. The duty was, however, repealed the following year. A low duty on imported foreign corn was made an essential part of the tariff reform scheme advocated by Mr. Joseph Chamberlain (q.v.) from i9o3 onwards, but this scheme never became a practical proposition.
During the World War imports and exports were under strict Government control, and prices for the home market were fixed. In connection with any scheme of tariff reform which might be introduced at a later date by the Conservative Government, that took office in 1924 a pledge was given not to tax foodstuffs.