The notable points of these years as regards Pitt's conduct of the war and of foreign policy are these: his two endeavours to combine Europe against the common enemy; his constant anxiety for peace; the four direct overtures which he made with that object; the almost uniform success of the enemy on land, and the uniform triumph of our arms at sea; finally, the dictatorship with which the country wisely entrusted him, which enabled him to overrule the dissensions of the Cabinet and carry on war, if not triumphantly, at any rate with more success than would otherwise have been possible under the conditions royal, aristocratic, and traditional, which so hampered our efforts.

Pitt's war policy was twofold: it was a naval and colonial policy, it was also one of subsidy. His enterprises by land were neither numerous nor successful. There he spent himself in scattered and isolated efforts, costly both in money and life. It was calculated that these expeditions had, at the Peace of Amiens, cost us no less than 1350 officers and 60,000 men. But our fleet swept the seas; and swept all hostile colonies into our net. Something falls now to be said of his subsidies.

At first sight subsidies have a crude appearance, nor have they agreeable associations. They are apt to recall the time when degenerate emperors were buying off hungry barbarians, or the doles that Charles and James II received from Louis XIV. But they must be judged on their separate merits. A nation that conducts its main operations by sea, and endeavours also to stimulate hostilities by land, has hardly any choice in the matter. She has, on this presumption, no spare army to send; and she must contribute something more substantial than goodwill or despatches.

Pitt, it must be remembered, was in the position of being at war with an enemy of more than twenty-seven million with many vassal states, though the population of Britain was little more than ten million, while that of Ireland at her side could only be reckoned to the enemy. His policy of subsidies was, therefore, a necessity; for, while the population of France was eminently warlike, that of England was relatively rich. The essential point, however, in advancing money under these conditions, is to receive in return the services for which the payment is made. This is a precaution not free from difficulty; and so Pitt found it.

His subsidies were of two kinds: guaranteed loans or direct gifts, though they were only different in form, as the result to the taxpayer was the same in either case. Of the first description there were two. One was a loan of £ 4,600,000, made in 1795, under an Act passed to give effect to a Convention between Great Britain and the Emperor of Germany, dated on the 4th of May 1795. By this instrument it had been stipulated that, in consideration of the maintenance by Austria of 200,000 troops in the war against France, Great Britain should guarantee the interest on this loan. As, after the first two years, Austria was unable to provide the requisite sum, the burden henceforth fell on the British Exchequer. This guarantee Fox describes as "the most imprudent measure, all things considered, that ever was carried through."

Again, a similar Convention was concluded on the 16th of May 1797, and a loan of £ 1,620,000 made on the same conditions. But the charge fell entirely on the British Exchequer, as Austria was unable to pay anything. Besides these loans, it may be of interest to add a list of the subsidies which were gifts during Pitt's governments, as furnished to Parliament in 1815.

But the subsidies, though considerable, formed of course only a small fraction of the cost of the war. On this point something must now be said.

Subsidies Totals

The total addition made to the capital liabilities of the State between the 1st of February 1793 and the 17th of March 1801 amounted in stock to £ 325,221,460. Stock, however, did not constitute the whole liability. For, in addition to stock, subscribers often received, as part of their security, a certain amount of terminable annuities. These terminable annuities, (which .expired in 1860), were known as the "Long Annuities"; and their capital value, if computed at a rate of 5 per cent interest, may be taken to amount to £ 9,323,976 at the end of the eighth year of war (1800-1).

Thus Pitt increased the capital liabilities of the State for war purposes in the course of those years by a total sum of £ 334,525,436. But it must be remembered, that, during all this period, Pitt's Sinking Fund was at work. While he was borrowing with one hand, with the other he was still setting aside large sums for the redemption of debt by the purchase of stock. The stock, therefore, acquired during this period by the National Debt Commissioners, amounting to £ 42,515,832, must be deducted from the total liabilities, if it is desired to ascertain the burden that the war during these years laid upon posterity.

The result of the deduction gives a net total of £ 292,009,604 as the war burden permanently imposed by Pitt in his first and main administration.

Of these £ 334.5 millions Pitt only received about 200 millions in cash. He borrowed in a stock of a low denomination; and, as in January 1797, for example, the 3 per cents fell to 47, it may readily be imagined at what a sacrifice of capital value the loans were raised. For this he has been much blamed. It has been said that he should have borrowed in stock of a denomination more nearly corresponding to the actual credit of the State; by which method the capital would not have been swollen to such an inordinate extent, and the generation responsible for the war would have borne a fairer share of the burden.

The answer to this criticism, though convincing enough, would require more details and space than can be afforded in this volume. This much may, however, be said, that Pitt had no choice. He was borrowing on a scale unknown in the history of the world; and he had to borrow, not in accordance with his own views, but with those of the lenders. He made repeated attempts to borrow at 5 and 4 per cent, but met with no response. For his very first loan, raised within a few weeks of the declaration of war, he received tenders from only one set of persons, who insisted on 3 per cents.

When, again, he funded the Navy and Exchequer Bills in 1796, he offered options in 3, 4, and 5 per cent stock. According to the market price, the option in 5 per cents was the most favourable to the lender; but 85 per cent was taken in 3 per cent stock, and only 11 per cent in 5 per cent stock.

There is overwhelming evidence to show that he repeatedly did all in his power to stimulate public competition, and to raise Lis loans in stock of a higher denomination. Such stock, however, not only commanded less popularity, but had relatively a less marketable value, owing to its liability to be redeemed on the conclusion of peace and the return of better credit.

Consequently, it is open to question whether Pitt would have done better for posterity, even if he had succeeded in borrowing by methods different to those to which he had to resort. Indeed, high financial authority Mr. Newmarch, in an interesting monograph on this subject, demonstrates by actuarial calculations that borrowing in 3 per cent stock as compared with 5 per cent stock was in reality an economy. However that may be, the plain truth is, that, having to appeal to a limited and abnormal market, Pitt was in no sense master of the situation; and that, had he not offered the temptation of stock which was certain to rise sooner or later in capital value, he could not have secured the requisite means for carrying on the war.

Another cognate objection is that he ought to have raised more by taxation within the year and depended less on loans. There was no more strenuous upholder of this doctrine than Pitt himself, He explored and attempted every source of taxation. He added repeatedly to existing taxes.

He even appealed to voluntary contribution; by which he obtained more than two millions sterling in 1798, and a further sum in 1799. He introduced such fertile expedients as the legacy duty, which he borrowed from Holland in 1796. (There are no fewer than three claimants for the honour of having called Pitt's attention to these duties : Miles, Harris, and Lamb.)

In 1796 he took the desperate measure of trebling the assessed taxes (when the familiar phrase of the "pleasure horse " made perhaps its first appearance); and when this impost fell short of expectations, finding that " the resources of taxation were failing under him," he boldly carried through an income tax of minute and complicated graduation in an oration "which," said a competent French writer, Mallet du Pan, who heard it, "is not a speech spoken by the minister; it is a complete course of public economy; a work, and one of the finest works, upon practical and theoretical finance that ever distinguished the pen of a philosopher and statesman."

Mr. Gladstone demonstrated in a speech fully worthy of this description that, had Pitt imposed the income tax in 1793 instead of 1798, there need have been no debt at all. But he would be the first to admit that what was possible in 1798 would not have been possible in 1793; that what was practicable in the fifth year of war would not have been practicable in the first; and that it was not until all other possible sources of taxation had run dry that he could have persuaded the country to accept a severe and graduated income tax. It was only when the trebling of the assessed taxes had failed, that he determined to attain, by a direct impost, his avowed object, of taking a tenth of the income of the country.

The net of the tax was extremely wide, and the mesh extremely small. It operated on incomes of no more than £ 60 a year, which were assessed at the rate of twopence in the pound. The tax proceeded by a minute and complicated scale; each £ 5 of additional income being taxed at a different rate until £ 200 was reached. From incomes of £ 200 a year and upwards Pitt boldly took his tenth. The imposition and acceptance of a tithe so novel and exasperating shows sufficiently that all that taxation could do was done, as well as the anxiety of Pitt and his generation to bear the fullest possible proportion of the burden of the war.

Another criticism of a directly opposite import has been raised against him. He has been accused of unduly adding to that burden by keeping up the charge for the Sinking Fund. The main reason for his doing this is that which would have prevented his proposing the income tax in 1793. He was convinced that the war would be so short, that it would not be worth while to derail his scheme of redemption on that account.

It is clear from his speech of the 11th of March 1793, as well as from other indications, that he thought it highly improbable that hostilities could continue beyond that year. This expectation was based entirely on the financial condition of France. It would, therefore, have been extravagant, in his judgment, to interrupt a beneficial sequence of fifteen years, for a few months of incidental warfare.

Financially, his calculation was correct; but, politically, he was trying to compute a tornado. Nor did these sanguine hopes abate, as the war proceeded. Each year, each month was to be the last. And even had it been otherwise, it may well be that he would have been reluctant to dispel that mirage, which induced the population to bear taxation readily, under the belief that a magic machinery was producing gold as fast as it was spent. The Sinking Fund enabled the nation to endure with cheerfulness the burden of what he believed would be a short war.

It is, therefore, probable that, in spite of the largeness of the figures, Pitt's finance was well and wisely managed; that, looking indeed to the monetary and political conditions of his time, he achieved as much both in annual payment and in economy of borrowing as could well have been accomplished. That he managed this, too, without crushing commerce by taxation is evident from the fact that our imports and exports went on mounting during the war, in spite of deficient harvests, with reassuring elasticity.

In the year ending January 5, 1793, the total value of all imports into Great Britain had been £ 19,659,358; and on an average of six years ending at that date £ 18,685,390. In the year ending January 5, 1799, it was £ 25,654,000, and on an average of the six years then ending £ 22,356,296, showing an increase as between the two years of £ 5,994,642, and as between the two averages of £ 3,670,906.

The total value of the exports of British manufactures in the year ending January 5, 1793, had been £ 18,336,851; on the six years' average £ 14,771,049. The comparative figures in 1799 were £ 19,771,510, and £ 17,154,323, showing an increase of £ 1,434,659 and £ 2,383,274 respectively. Of foreign merchandise exported in the year ending January 5, 1793, the value was £ 6,568,000, and in the six years the average had been £ 5,468,014 ; the corresponding figures in 1799 were £ 14,028,000 and £ 10,791,000, showing an increase of £ 7,460,000 and £ 5,322,986 respectively. It might be said of him, as the grateful citizens of London recorded of his father, that under his administration commerce had been united with and made to flourish by war.

But it is not possible to discuss Pitt's war administration, which has been so bitterly attacked, merely by laying down general principles. It must be considered as a concrete record of achievement and failure. As regards the minor and military part, it may at once be admitted to be unsuccessful, and want of success may be held at once to damn it. But the circumstances must be borne in mind.

Pitt's catamarans and martello towers must not be compared with torpedoes and Brialmont turrets. It must be remembered that he was dealing with dupes or invalids or self-seekers on the one hand; and with a cosmopolitan convulsion, embodied in a secular genius, on the other. The French Revolution, to borrow Canning's fine figure, was a deluge which submerged the ancient monarchies of Europe; it was long before their spires and turrets emerged once more above the subsiding wave. Most European Courts beheld it in the spirit of wreckers. While Pitt was planning how to check the torrent, they were speculating on the value of its flotsam and jetsam. His and their professed objects were the same; their real aims were totally different and incompatible.

Pitt was, as it were, heading a crusade with a force of camp followers. They took his money, and laughed in their sleeve. He could not believe that they were insensible to their real interest or their real danger. It is probable that some Pompeians saw in the great eruption an admirable opportunity for shop-lifting; so it was, but it cost the depredators their lives. Pitt saw the real peril, though he succeeded neither in averting it, nor in alarming the princes of Europe; they deceived him and themselves, and were overwhelmed.

Rotten Europe

Europe was rotten. The decay had been demonstrated in France, but the fact was universal. The old systems were moth- eaten. The Holy Roman Empire, never very puissant, crumbled like a corpse under the new light. Prussia, so arduously constructed by the unwearied vigilance of genius, had withered under the single reign of an extravagant voluptuary. Spain was a name, and Italy a geographical expression. Great Britain was neither sound nor particularly great. The nations were indeed a dominant force, but the governments which acted in their name were either unrepresentative or futile.

Pitt recognised this after Ulm, when he said that nothing more could be hoped of the sovereignsthere must be a war of peoples. A few weeks afterwards, the overthrow of the Emperors at Austerlitz confirmed his opinion; Spain, then Russia, then Germany, were to fulfil his prophecy.

But it was the governments that Pitt headed. And, if he could not calculate on the selfish ineptitude, which distinguished, not the peoples, but the courts of the continent, still less could he calculate on Napoleon.

To that imperial intellect he had to oppose the statecraft of the Thuguts and the Cobenzels, the Lucchesinis and the Haugwitzs, men pitiful at all times, contemptible at such a crisis: and the military capacity of the aged Melas, the hampered Archduke Charles, the incomprehensible Duke of Brunswick. He himself had no generals.

"I know not," said Lord North, when a list of officers was submitted to him for the commands in America, "I know not what effect these names may have on the enemy, but I know they make me tremble."

So with Pitt. He discovered the genius of Wellington, but did not live to profit by it. He was obliged to employ the Duke of York, or, as Lord Grenville said, "some old woman in a red riband."

Nothing perhaps could have availed against Napoleon, for two Napoleons do not coexist. But Europe never had a fair chance.

It is also just to remark that, while Pitt's efforts on land were generally futile, he was uniformly successful at sea. If France held one element, England held the other. If the responsibility of the one be debited to him, the responsibility of the other must be placed to his credit. Even if it be said that these victories were entirely due to the incalculable genius of Nelson, which would not be true, it must be said that the defeats were due to the incalculable genius of Napoleon; so that the one may be set against the other.

There was, however, another reason for the wide difference between the results achieved by the army and the navy in the last decade of the, last century. The army was essentially an aristocratic, and the navy a. comparatively democratic service.

In the navy a man of obscure origin could rise, and the area of choice was not limited by the circumstances of birth; but in the army, purchase and favour and lineage gave promotion. Our admirals were not born in the purple. Collingwood was the son of a Newcastle merchant, Jervis of a country lawyer, Nelson of a country parson. But when our armies had to be sent into the field, it was necessary that, if possible, a prince of the blood should command them. A military command seemed to require nothing more than exalted rank, or the seniority which often spelt senility. It is difficult to apportion the blood guiltiness of this proceeding or tradition. Pitt at any rate informed George III that, so far as the Duke of York was concerned, it could not continue.

The King acquiesced with real anguish as a father, and perhaps as a sovereign; but solaced himself by telling Pitt that it was not his son, but Pitt's brother, then at the head of the Admiralty, who was responsible for our disasters. What chance had armies, thus guided by indolence or hazard, against legions of veterans, to whom war was a business and a passion, many of whom had risen, and all of whom looked to rise, by merit? The English generals were brave, and the Duke of York had gallant qualities. But they were engaged in a struggle where this was not enough. The disparity extended from the leaders to the ranks.

"The French system of conscription brings together a fair specimen of all classes; our army is composed of the scum of the earth -- the mere scum of the earth," said the Duke of Wellington, with more accuracy than gratitude.

So it was, and so it was treated. Largely recruited from the refuse of humanity, it was scourged and bullied and abused as if outside humanity. And these were the soldiers we opposed to the regiments in which Ney and Hoche and Massena served as privates.

These explanations and reserves are not intended to prove that Pitt was a great War Minister. In that respect it may be said that he has been much underrated without asserting that he was a born organiser of victory. He had dauntless spirit, he had unfailing energy, he evoked dormant resource, he inspired confidence; but his true gifts were for peace. The signal qualities which he had shown in administration did not help him on this new stage.

Unsupported and overweighted as he was, he could not in any case have succeeded -- nor in all probability could the greatest of War Ministers, not even Chatham or Bismarck. It must be repeated again and again that, locked in a death grapple with the French Revolution, he was struggling with something superhuman, immeasurable, incalculable. We do not read that the wisest and the mightiest in Egypt were able to avail, when the light turned to darkness and the rivers to blood.

Chapter X: Domestic Policy