Licensing System, Great Britain

In Great Britain, in fact, the licensing system had acquired an immense range, culminating in 1810 with the granting of over 18,000 licences in a twelvemonth; and, according to almost unanimous information, it was carried through to such an extent that the greater part, not only of British foreign trade, but also of the maritime trade of the whole world, was carried on with British licences. But this did not prevent the Heligoland merchants, for instance, from feeling their operations restricted by not getting so many licences as they wished. The licence system placed practically the whole power over foreign trade in the hands of the British government, more particularly in the hands of the president of the Board of Trade. This very fact was enough to provoke incessant attacks on the whole system on the part of the opposition; and it also aroused great dislike on the part of the business world, which had already begun to regard as almost an axiom the incapacity of the state to judge commercial questions. It is true that on two different occasions, in 1805 and 1807, certain general exceptions had been granted from the current regulations, especially for importing foodstuffs and raw materials into Great Britain. But evidently the merchants considered—probably on the ground of dearly bought experience—that the commanding officers of the warships and privateers did not refrain from seizing other vessels than those which had licences in due form, and therefore continued to take out such licences even when, from a strictly legal point of view, that was superfluous.

In the opinion of the opposition, this state of affairs could not cease until the laws had been repealed from which the licences granted freedom in individual cases. Thus the opposition regarded the licensing system as a further inconvenience of the Orders in Council and as subject to the same condemnation as they. In the House of Commons the chief speakers of the opposition in economic questions, especially Alexander Baring, the junior partner in the famous firm of Baring Brothers &Co., Henry Brougham, the barrister, and Francis Horner, the originator and chairman of the famous Bullion Committee of 1810, were therefore indefatigable in their attacks on the licensing system. The first two named, together with the lawyer J. Phillimore, author of a pamphlet entitled Reflections on the Nature and Extent of the License Trade (1811), carried on the campaign outside Parliament too—Baring especially, by his pamphlet entitled An Inquiry into the Causes and Consequences of the Orders in Council (1808). The attacks of the opposition, however, were met by the government with the assertion that licences would be quite as necessary, even if the Orders in Council and the blockade were entirely revoked, to serve as a form of dispensation from the prohibition of trading with the enemy. In 1812, for instance, Lord Castlereagh, then foreign secretary, declared that not a fifth of the licences were due to the Orders in Council; and as it was generally considered to be equally self-evident that this trade with the enemy should be forbidden by law and encouraged in reality, the government so far had the better of the argument.

But the opposition to the licences was nourished by the looseness with which the whole thing was managed by the incompetent administrators who were at that time guiding the destinies of Great Britain. In one case, for instance, two licences granting an otherwise refused right to import spirits were given out, according to the statement of the minister concerned, Rose, owing to a purely clerical error on the part of the official in the Board of Trade who made out the papers. One of these licences by itself was said to have brought in to the fortunate owner no less than £4,000; and Baring, 'perhaps the first merchant in the Kingdom, or perhaps in the world', declared that he would gladly pay £15,000 for such a licence. On another occasion it was alleged without contradiction in Parliament that 2,000 guineas had been paid for two licences to trade with the Isle-de-France (Mauritius) and Guadeloupe, and that bribes were openly given for the purpose, though not to the Board of Trade itself. That British licences were openly bought and sold, not only in Great Britain, but also all over the Continent, was a fact known to all the world; they were a mere trade commodity not only in Gothenburg and Norway but even in French maritime towns, such as Bordeaux and Amsterdam. The opposition, which naturally insisted upon the rights of Parliament as against the government, also objected—in the same way as was the case in Sweden during the recent war—that the licensing system gave the government revenue outside the control of Parliament and was therefore unconstitutional.

On the other side, the licences formed a manifest advantage, not merely for the British government but also for British external policy in general, by permitting a regulation of foreign trade according to circumstances, without the proclamation of more or less disputable principles of international law; and so far they accorded pretty well with the general attitude of horror displayed in British public life toward all doctrines and declarations of principle. It was really the licensing system that rendered possible the formal concession with regard to the original Orders in Council which was effected by the new Order in Council of April 26, 1809, in that the old regulations could in reality be maintained without being put on paper, simply by being made the condition for the granting of licences. This found quite open expression, for instance, in the letter which the Marquis of Wellesley, as foreign secretary, wrote to the new British Minister at Washington, Foster, in 1811, and in which, among other things, he says: 'You will perceive that the object of our system was not to crush the trade with the Continent, but to counteract an attempt to crush the British trade. Thus we have endeavoured to permit the Continent to receive as large a portion of commerce as might be practicable through Great Britain'—of which there is not a word in the only Order in Council of 1809 then in force—'and that all our subsequent regulations, and every modification of the system by new orders or modes of granting or withholding licences, have been calculated for the purpose of encouraging the trade of neutrals through Great Britain.'

The licences were thus, in the first place, a flexible means of carrying through the policy that had been marked out once for all. It is true that this did not prevent them, as we have seen, from coming to serve quite other purposes through the inefficiency and laxity of the officials; but these abuses did not imply that the British government had altogether lost its control over the licensing system. Thus, for instance, the ease with which the Norwegians obtained licences in 1809-11, despite the fact that the Dano-Norwegian monarchy was at war with Great Britain, was due to the British need of Norwegian timber. Later on, when pressure was regarded as desirable for political reasons—it was just at the time when Norway was suffering immensely from shortage of foodstuffs—the granting of licences in effect ceased entirely, although under the form of a claim for security to amounts which it was not possible to achieve (£3,000-4,000 per licence).

Even in its consistent form, however, the licence system led to embittered resistance in many quarters of Great Britain, especially in the seaports. In 1812 Hull, Sunderland, South Shields, Scarborough, Aberdeen, &c., overwhelmed Parliament with petitions against the licensing system, largely for reasons opposite to those usually alleged by the opposition. Here the attitude adopted was that the neutrals, with the object of maintaining connexion with the self-blockaded ports of the mainland, were admitted to too large a share in trade and shipping, and further that British subjects, contrary to the Navigation Act, were allowed to ship cargoes in neutral vessels. In this way these, petitions alleged, it was unintentionally made possible for Napoleon himself and his allies, under a neutral flag and with British licences, to take part in trade with impunity. Thus one example was cited when thirty-seven vessels were allowed, in 1810, to go without hindrance from Archangel to Holland; but this was due evidently to the usual carelessness in the application of the system. With regard to admitting foreign vessels and sailors, on the other hand, the government could point to the insufficiency of the British shipping for all purposes and to the advantage of penetrating to the markets of the Continent under a neutral flag when it could not be done under a British flag. This last was an idea which was strongly confirmed by Napoleon's view of the matter. On the whole, the British licences, despite their luxuriance of growth, remained, at least in principle, what they had been from the beginning, namely, a means of combining the formal British blockade of the Continent with the real mercantilist aims of the policy, as has been described in part I of this book. This found expression, among other things, in regulations which really placed a premium on exports, namely, in the form that the granting of a licence to import was made dependent on making exports to the same value, either in general or for certain goods; e.g., the granting of licence for the importation of wine in return for an engagement to export colonial goods. And although licences were often sold for high sums on the Continent (700 Rigsdaler in Norway, it is said, and 500 florins in Amsterdam) and in Great Britain itself were supplied by the state at such a considerable price as £13 or £14 apiece for individual licences, with the addition of a guinea for each licence when a large number were in question—on some occasions, however, higher charges did occur—yet the opposition, so far as I know, despite its repudiation of the whole system on constitutional grounds, never insinuated that the state was influenced by fiscal points of view, but only alleged abuses in favour of individuals. Even if one accepts the highest number of licences for a twelvemonth, about 18,000 for the year 1810, and the highest conceivable average amount per licence (i.e., £14, which is assuredly too high an estimate), the highest annual amount would only be about £250,000 or 6,250,000 francs.