PITT'S FIRST MINISTRY Finance.—Finance was the first consideration. There was a heavy debt and the fiscal machinery was antiquated. Pitt floated a loan of 16,000,000, offering the tenders to public competition, and funded L6,600,000 of the floating debt. The loss to the revenue which had long resulted from the systematic evasion of the high protective tariffs he countered by a radical reduction of duties—that on tea being reduced from 119% to 12%. To meet the loss he increased the window tax, and many new taxes were instituted to touch the whole people. But he withdrew the tax on raw cotton, and pronounced it as his principle that "manufactures in general ought to be free from taxes." Pitt, who had been one of the earliest students of Adam Smith, next attempted the establishment of free trade between England and Ireland. The Irish accepted his propositions (Feb. 7, 1785) but in England the measure was met by the organized opposition of vested interest, prejudice, and faction. Pitt was obliged to alter his original scheme, and in that form the Irish, disappointed and inflamed by Fox's subtle tongue, rejected it.
In 1786 Pitt introduced his sinking fund, a measure adapted from a scheme of Dr. Richard Price (q.v.). Economically it was undoubtedly mistaken, but it was believed to be a sovereign remedy, and it at least inspired public confidence.
On April 18, 1785, Pitt brought forward a bill proposing to suppress 36 pocket boroughs and to transfer their members to increase the representation of certain towns and counties. LI,000, 000 was to be spent upon the purchase of the interests of the various owners. The bill, for which he eloquently pleaded, was rejected by 248 to India.—Pitt's India Bill, which had been rejected during the first struggle in the spring of 1784, was passed in the summer easily enough. Pitt's bill, unlike Fox's, left the ordinary patronage with the directors of the company while passing to the Crown the political control. Moreover, he had the tact and the wisdom to consult the company and to present as a final draft a measure to which he knew they were prepared to agree. The bill was not without serious defects—especially in its subordination of the governor-general not only to his council, but in all important con cerns to the home Government. Warren Hastings resigned at
once, and upon his return, his conduct of the Government was called in question. Pitt who had voted against the Rohilla charge (which was not carried) voted in favour of the Benares and the Begum charges. His action decided the issue. The motions were carried, and the impeachment pursued. Pitt has been heavily criticised for his conduct. But the truth that Hastings had been a great administrator could not disguise the fact that here was a patent scandal, which demanded inquiry. Indeed Hastings, through his agent in the House, had himself originated the discussions; and Pitt deliberately chose to support the Opposition in a matter where he honestly believed them to be right, instead of following the usual custom of opposing whatever measure the Opposition proposed.
The Regency Question.—In Nov. 1788 the king's illness pro voked a crisis which might have ended Pitt's political career. There was a traditional enmity between the Hanoverian monarchs and their sons, and the whole influence of the prince of Wales (doubly hostile because Pitt would not pay his debts), was directed to the cause of the Whigs. The king being insane it was essential to appoint a regent, and Pitt was inevitably agreed that there could be no other candidate for the office than the prince of Wales. The point at issue lay in the claim of Fox and his party that the prince had a prerogative right to the position. Pitt claimed that he could only become regent by act of parliament, and drew up that act so as to restrain the regent from making peers or granting pensions, while the king's person and household and the patronage of the Crown were to be placed under the direction of the queen. The bill passed the Commons (Feb. 5, 1789) and while it was under discussion in the Lords the king recovered. The situ ation had been dangerous, for though the resolutions had been carried, there had been much uneasiness among Pitt's followers.