Captain  Cook claims Australia, 11th June 1770

1815-1914

The British Empire


Mercantilist system was a system of protection that was the prevailing economic theory at a time when it was believed that the amount of wealth in the world was finite and a nation could only increase its wealth by increasing its share of global wealth. Laws were introduced to restrict trade and to make Britain as self sufficient as possible. Colonies were founded to maintain control of the supply of staple commodities and Navigation Acts were passed to ensure that as much trade as possible was carried in British ships. Within years of the Repeal of the Corn Laws, the last Navigation Acts were repealed in 1849 and the Sugar Acts of 1852 removed the protection that Britain's sugar colonies in the Caribbean received. In Gladstone's 1860 budget the remaining traces of fiscal protection were removed.


The ending of Mercantilist was a defeat for the 'landed' interest and a victory for 'steam' and cotton' industrialists whose industries had been at the heart of the Industrial Revolution which had seen the introduction of huge four or five storey factories in the 1830s. These new industrialists had argued that with cheap food there would be a fit and healthy workforce, and with stable wages and food prices there would be a stable social order at a time when there was revolution elsewhere in Europe. Others argued that free trade that came with the ending of the Mercantilist system would bring other freedoms - namely free and universal political institutions, freedom from hunger, want and unemployment. A new era of global supremacy for Britain and freedom for the world would be the ultimate result of the Repeal of the Corn Laws.


Just five years after the repeal of the Corn laws came the Great Exhibition in Hyde Park. This huge glass palace was an advertisement and a display of Britain's global industrial supremacy. This economic supremacy, which would last for the remainder of the Victorian period, was taken for granted by the British. It had come as a result of a series of wars in the late c18th and early c19th which had eliminated Britain's rivals in trade and warfare in Europe. During the Seven Years War of 1756-1763 and the Napoleonic Wars the global military power of France was eliminated through victories in India and Europe. The victories at Waterloo and Trafalgar made Britain the dominant military power in the world and especially of the world's seas and trade routes. By this time Britain was undergoing an industrial revolution, the first European country to do so and with her internal stability of and deep religious commitment towards developing commerce, Christianity and commerce,   Britain would maintain her economic dominance until the last quarter of the century.


With economic dominance and having been freed from the shackles of Mercantilism, British businessmen could seek out trade wherever they could find opportunities to do so. Following industrialisation British businessmen could offer cheap and well made industrial goods on a scale never before imagined. As the only industrial power British businessmen were in a good position to operate in every part of the world and they sought out trade opportunities wherever they could find them. Britain's industries relied on importing raw materials like cotton and wool, and staple commodities like tea and coffee were in huge demand and the introduction of free trade enabled businessmen to seek out new markets and sources of such commodities.


By 1851 Britain was the workshop of the world producing two thirds of the world's coal and a half of all cotton cloth and iron produced in the world. The freeing up of trade enabled this dominance to continue and exports around the world to increase. The value of British exports in 1825 had been £38 million, by 1845 it was £60 million and by 1869 it was £190 million. This increase in trade though came from increasing contact with counties outside the Empire, particularly from North America and Latin America. Although the Empire was increasing in size during the Victorian period, it provided few economic opportunities and indeed with the ending of economic preference for the colonies and the abolition  of slavery and the slave trade, the Caribbean suffered greatly during this new free trade era.


Although the American colonies were lost following the War for Independence, the USA was Britain's chief market and it could be argued that the main purpose repeal of the Corn laws was to enable British industrialists to develop the American market. The USA was until after the Civil War of 1861-65 dependant on Britain for textiles and most manufactured goods whilst Britain imported 90% of her tobacco from the USA. It was a relationship that suited Britain and one that Britain hoped would last. British investment in the USA was also large, particularly in the development of ranches.


Latin America was also an important area for British businessmen. By 1824 there were nearly a hundred British commercial houses in South American cities and there were over 3,000 British people just in Buenos Aires. The demand for textile goods in particular was important for the Lancashire textile factories and as trade with South America increased consuls were appointed to all the commercial bases to facilitate trade and deal with any grievances that the British had. Until the 1860's Brazil was the main trading partner for Britain (providing 50% of Brazil's imports) but after 1860 Argentina became more important so that by 1914 Britain had four times as much investment in Latin America as the USA . In the period 1865 -1914, 51% of Britain's overseas investment went to the Americas, and it was clearly the most important area for British trade and particularly for sugar and coffee.


The Abolition of Slavery and also the abolition of sugar duties on competition from outside the Caribbean hit the West Indies colonies badly. Many plantations, already suffering from competition from South America, closed down. labour became increasingly difficult to come by. Freed slaves often did not want to return to the sugar plantations and instead indentured labour had to be brought in. 36,000 liberated Africans from St Helena and Sierra Leone were brought to the West Indies as were 100,000 Asians. Alternative sources for sugar were sought in Natal, Mauritius, Fiji and Queensland with varying degrees of success.


India, Britain's most important colony, had developed in terms of territorial acquisitions during the early 19th century but most acquisitions were for strategic advantage or to increase the status of the commander concerned. In the 1840s Sind and the Punjab were acquired, but neither provided new trading opportunities until later in the century. Sind was annexed by General Napier against the wishes of the metropolitan government whilst Punjab was annexed to control India's north western border. Likewise the annexations that took place in Burma throughout the century were to protect India's hinterland in the east. In many ways India was a liability for Britain. Over two million British people died in India during the 19th century, mainly from disease, and whilst the contribution of the Indian  army was substantial, the cost of maintaining large numbers of British soldiers in India was huge. In the early 19th century India was not an important destination for British exports or investment. Most of the tea drunk by the British came from China and it was only after the opening of the Suez Canal that India became more important for the British economy. With better transport links to India, investment in the country began to increase with investment in bridges, railways, irrigation and new methods of transport. the relationship with India though was one that benefited the metropolitan power and did little for most Indians. India's textile industry was virtually de-industrialised to benefit the textile factories in Lancashire. New crops were introduced to India but most financial benefits went to the British investors. Assam was developed for tea and replaced China as Britain's source for tea. By 1900 Britain was importing 137 million pounds weight of tea annually compared to just 24 million pounds from China. Indian jute and cotton also became important sources for Britain. India also became an important source of labour for Britain after the abolition of slavery providing over 25,000 Indians as indenture labour by 1838 and providing 18,000 labourers to the sugar industry in Mauritius. The peak of this overseas settlement of migrant Indian labour came in 1858/9 when 53,000 Indians went overseas, 45,000 of whom went to Mauritius. Despite the investment in India's infrastructure in the last quarter of the century, the British failed to make India a real economic asset and its people continued to suffer from periodic famines.


Of Britain's remaining colonies, their interests were ignored when Peel decided to repeal the Corn Laws and move towards free trade. Cheap food and the Atlantic trade were far more important. Apart from India,  the colonies that had been part of the 18th century British Empire no longer existed as colonies or were of minimal economic importance. There was a risk that the self governing colonies might seek greater economic independence from Britain but the security interests and the importance of currency, banking, insurance and shipping links ensured that links with the colonies remained. Canada developed closer ties with the USA as the century went on and imposed a number of tariffs against British goods but trade with Canada still remained relatively high. Australia managed to develop her woollen industry so that Australia became the main supplier of wool to Britain exporting £39 million worth of wool to Britain by 1851 and £400 million (60% of her exports of wool) in 1886. With the development of refrigerated ships the importance of New Zealand and Australia grew as they could now export meat but it was always economic interest that dominated trade relations.


As British trade dominated the global economy, developing generating huge wealth for British industry, much of the profits from British trade were invested in capital projects around the world. Britain became in the second half of the 19th century not just the workshop of the world but the world's banker. London was the financial centre of the world with huge amounts of money being invested in railways, mining, ranching and all kinds of industrial and commercial development. Over half of the money invested  went to areas outside the empire as investors sought new sources of raw materials and markets for Britain's industrial goods and the returns from these investments ensured that Britain's balance of payments remained in surplus throughout the century.

Throughout this global expansion of industry and business, the British government played a supportive role. Palmerston claimed that a good deal of Foreign Office time was spent in dealing with the complaints of merchants abroad and he was quite willing  to intervene abroad using force to enforce free trade. The three wars fought to enforce the opium trade on China between 1839 and 1860 were typical of the attitude taken by British governments throughout the century. The Boer War at the end of the century (1899-1902) was fought partly to improve the position of the gold companies in the Transvaal at a time when the industry was being taxed heavily and having to pay excessive amounts for items such as dynamite.


Politicians increasingly believed that commerce could bring the advantages of civilisation and Christianity and was important in Britain's 'Mission to Civilise'. Palmerston himself said of the role of the British in the world, 'Our duty -our vocation- is not to enslave, but to set free; and I may say without any vainglorious boast, or without great offence to anyone, that we stand at the head of moral, social and political civilisation. Our task is to lead the way and direct the march of other nations.' This humanitarian motive became part of the motive for empire in the Victorian period and developed out of the evangelical revival of the late 18th century which brought the abolition of the slave trade and the abolition of slavery itself in the British Empire. The economic and military dominance of Britain after 1815 led to a feeling of self confidence amongst her people  and following the abolition of  slavery a self righteous attitude that encouraged the development of missionary activity abroad. Livingstone, as did most missionary groups of the mid 19th century,  believed that it was important to Christianise through the development of commerce and civilisation.


Ultimately those making decisions about where to pursue profit in the 19th century did so on the basis of value and reliability of delivery and quality of product. Patriotism and imperial sentiment were not important factors, not even in the 1890s when Kipling and Chamberlain were exhorting to believe the empire could be the answer to Britain's declining share of the world's economy. Chamberlain did try to develop new economies in the Caribbean but with little success. When the figures for Britain's trade and capital investment are examines it is clear that the areas outside the empire mattered more than the empire itself. In the period  1865-1914 60% of new capital investment went outside the empire and 40% within the empire. As far as British exports are concerned, in  the period 1846-1850 27%  went to the empire and 72% to the rest of the world. Between 1871 and 1875, 26% went to the empire and 73% to the rest of the world whilst in  the period 1881-1885, 35% went to the empire and 65% to the rest of the world. Between 1896 and 1913 around 34% of exports went to the empire whilst 65% went to the rest of the world. In the same period the British Empire was growing in size, and the economy was expanding but the empire's share of this trade was declining. At no time during the Victorian did the imperial share of trade exceed 35% and for half of this time it was less than 30%. Moreover throughout this time there was  a negative balance of trade and the balance of payments was only in the black as a result of invisible earnings from shipping, insurance, banking and the profits from overseas capital investment. In  the mercantilist period, trade and shipping was controlled to protect the sources of Britain's staple commodities and to ensure a market for Britain's manufacturing goods. Once Mercantilism had been abandoned in the middle of the century, the percentage of staple commodities that the empire exported to Britain remained quite low as a proportion compared to the exports provided by those areas outside of the empire.


During the Victorian period the British Empire grew from about two million square miles to nearly twelve million square miles. In the last quarter of the century much of this growth was in Africa where the British Empire stretched north from Cape Town to German East Africa and the Belgian Congo, and included much of west Africa and lands north from Kenya to the Mediterranean. Despite this  increase in territory the percentage of trade with tropical Africa actually declined. Vast territories had been annexed in Africa but they had minimal economic importance.  Many of the African territories were annexed for reasons of prestige and geopolitics at a time when European powers we looking  towards Africa to establish empires of their own. The  New Imperialists may have hoped to build a larger empire as a means of sustaining Britain's place in the world but the territories that were annexed in Africa were never going to help do this. Much of the drive behind the drive to acquire territories in Africa was because of the need to protect the route to India and the Far East and as Denis Judd has said in his excellent book 'Empire' a new empire was brought into being to protect the old'.


In 1846 Peel sacrificed the interests of his party to push through the Repeal of the Corn Laws which opened up the domestic market to cheap corn from the American prairies, the Russian plains and from wherever British merchants could import cheap grain. A stated aim for the repeal was to alleviate the hunger and poverty afflicting Britain at the time by providing cheap corn.


A more important consequence of the repeal though was to usher in a period of free trade that was to last until the 1930s by destroying the last vestiges of the old Mercantilist system that had been introduced in the days of Oliver Cromwell in the mid-17th century.

How important was trade in the 19th century British Empire?

Palmerston was prepared to go to war to defend British trading interests

The Opium Wars 1839-1860 were fought to force China to accept the importance of opium

Africa was divided up between the European powers in the 1890s

In the early 20th century, imperial commodities were advertised as the patriotic option.

After the opening of the Suez Canal, tea plantations in India supplied tea to Britain, a trade which replace the China trade in tea.

‘Work’ by Ford Madox Brown

The textile factories of Lancashire clothed the world.

The decline of the West Indian cotton plantations followed the abolition of slavery in the British Empire.

The Repeal of the Corn Laws signalled the end of Mercantilism and the beginning of a period of free trade.

Britain was the first country in the world to move towards factory production and was able to produce manufactured goods more cheaply and in greater quantities than any other country.

A meeting of the anti-corn law league