problems of empire engrossed him, and a new enthusiasm for imperial projects arose in the Unionist party under his inspiration. No English statesman probably has ever been, at different times in his career, so able an advocate of absolutely contradictory policies, and his opponents were not slow to taunt him with quotations from his earlier speeches. As the war drew to its end, new plans for imperial consolidation were maturing in his brain. Subsidiary points of utility, such as the formation of the London and Liverpool schools of tropical medicine from 1899 onwards, were taken up by him with characteristic vigour. But the next step was to prove a critical one indeed for the loyalty of the party which had so far been unanimous in his favour.
The settlement after the war was full of difficulties, financial and others, in South Africa. When Mr Arthur Balfour succeeded Lord Salisbury as prime minister in July 1902, Mr Chamberlain agreed to serve loyally under him, and the friendship between the two leaders was indeed one of the most marked features of the political situation. In November 1902 it was arranged that Mr Chamberlain should go out to South Africa, and it was hoped, not without reason, that his personality would effect more good than any ordinary official negotiations. At the time the best results appeared to be secured. He went from place to place in South Africa (December 26-February 25); arranged with the leading Transvaal financiers that in return for support from the British government in raising a Transvaal loan they would guarantee a large proportion of a Transvaal debt of £30,000,000, which should repay the British treasury so much of the cost of the war; and when he returned in March 1903, satisfaction was general in the country over the success of his mission. But meantime two things had happened. He had looked at the empire from the colonial point of view, in a way only possible in a colonial atmosphere; and at home some of his colleagues had gone a long way, behind the scenes, to destroy one of the very factors on which the question of a practical scheme for imperial commercial federation seemed to hinge. In the budget of 1902 a duty of a shilling a quarter on imported corn had been reintroduced. This small tax was regarded as only a registration duty. Even by free-trade ministers like Gladstone it had been left up to 1869 untouched, and its removal by Robert Lowe (Lord Sherbrooke) had since then been widely regarded as a piece of economic pedantry. Its reimposition, officially supported for the sake of necessary revenue in war-time, and cordially welcomed by the Unionist party, had justified itself, as they contended, in spite of the criticisms of the Opposition (who raised the cry of the “dear loaf”), by proving during the year to have had no general or direct effect on the price of bread. And the more advanced Imperialists, as well as the more old-fashioned protectionists (like Mr Chaplin) who formed an integral body of the Conservative party, had looked forward to this tax being converted into a differential one between foreign and colonial corn, so as to introduce a scheme of colonial preference and commercial consolidation between the colonies and the mother country. In South Africa—as in any other British colony, since all of them were accustomed to tariffs of a protectionist nature, and the idea of a preference (already started by Canada) was fairly popular—Mr Chamberlain had found this view well established. The agitation in England against the tax had now blown over. The Unionist rank and file were committed to its support,—many even advocating its increase to two shillings at least. But Mr Ritchie, the chancellor of the exchequer, having a surplus in prospect and taxation to take off, carried the cabinet in favour of again remitting this tax on corn. Mr Chamberlain himself had proposed only to take it off as regards colonial, and not foreign corn,—thus inaugurating a preferential system. But a majority of the cabinet supported Mr Ritchie. The remission of this tax, after all the conviction with which its restoration had been supported a year before, was very difficult for the party itself to stomach, and on any ground it was a distasteful act, loyally as the party followed their leaders. But to those who had looked to it as providing a lever for a gradual change in the established fiscal system, the volte-face was a bitter blow, and at once there began, though not at first openly, a split between the more rigid free-traders—advocates of cheap food and free imports—and those who desired to use the opportunities of a tariff, of however moderate a kind, for attaining national and imperial and not merely revenue advantages. This idea, which had for some time been floating in Mr Chamberlain’s mind (see especially his speech at Birmingham of May 16, 1902), now took full possession of it. For the moment he remained in the cabinet, but the seed of dissension was sown. The first public intimation of his views was given in a speech to his constituents at Birmingham (May 15, 1903), when he outlined a plan for raising more money by a rearranged tariff, partly to obtain a preferential system for the empire and partly to produce funds for social reform at home. On May 28th in the House of Commons he spoke on the same subject, and declared “if you are to give a preference to the colonies, you must put a tax on food.” Considered in the light of after events, this putting the necessity of food-taxes in the forefront was decidedly injudicious; but imperialist conviction and enthusiasm were more conspicuous than electioneering tact in the launching of Mr Chamberlain’s new scheme.
The movement grew quickly, its supporters including a number of the cleverest younger politicians and journalists in the Unionist party. The idea of tariff reform—to broaden the basis of taxation, to introduce a preference, and to stimulate home industries and increase employment—took firm root; and the political economists of the party—Prof. W. Cunningham, Prof. W. Ashley and Prof. W. A. S. Hewins, in particular—brought effective criticism to bear on the one-sided “free trade” in vogue. The first demand was for inquiry. The country was still bearing an income-tax of elevenpence in the pound; it appeared that the old sources of revenue were inadequate; and meanwhile the statistics of trade, it was argued, showed that the English free-import system hampered English trade while providing the foreigner with a free market. Mr Chamberlain and his supporters argued that since 1870 certain other countries (Germany and the United States), with protective tariffs, had increased their trade in much larger proportion, while English trade had only been maintained by the increased business done with British colonies. A scientific inquiry into the facts was needed. By the Opposition, who now found themselves the defenders of conservatism in the established fiscal policy of the country, this whole argument was scouted; but for a time the demand merely for inquiry, and the production of figures, gave no sufficient occasion for dissension among Unionists, even when, like Sir M. Hicks Beach, they were convinced free-importers on purely economic grounds; and Mr Balfour (q.v.), as premier, managed to hold his colleagues and party together by taking the line that particular opinions on economic subjects should not be made a test of party loyalty. The Board of Trade was set to work to produce fiscal Blue-books, and hum-drum politicians who had never shown any genius for figures suddenly blossomed out into arithmeticians of the deepest dye. The Tariff Reform League was founded in order to further Mr Chamberlain’s policy, holding its inaugural meeting on July 21st; and it began to take an active part in issuing leaflets and in work at by-elections. Discussion proceeded hotly on the merits of a preferential tariff, and on August 15th a manifesto appeared against it signed by fourteen professors or lecturers on political economy, including Mr Leonard Courtney, Professor Edgeworth, Professor Marshall, Professor Bastable, Professor Smart, Professor J. S. Nicholson, Professor Conner, Mr Bowley, Mr E. Cannan and Mr L. R. Phelps,—men of admitted competence, yet, after all, of no higher authority than the economists supporting Mr Chamberlain, such as Dr Cunningham and Professor Ashley.
Meanwhile, the death of Lord Salisbury (August 22) removed a weighty figure from the councils of the Unionist party. The cabinet met several times at the beginning of September, and the question of their attitude towards the fiscal problem became acute. The public had its first intimation of impending events in the appearance on September 16th of Mr Balfour’s Economic
