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History of the Commercial and Financial Relations between England and Ireland from the Period of the Restoration (Author: Alice Effie Murray)
Chapter 14
Irish Finances from 1782 to the Union
Improvement in Irish Finances from 1782 to 1793 — Financial Policy of the Irish Parliament — The Responsibility, Pension, and Place Bills of 1793 — The French War and increased Military Expenditure — Continued Prosperity of Ireland — Outbreak of the Rebellion and further military Expenditure — Universal Distress — Irish Expenditure from 1793 to 1797 — Irish Expenditure from 1797 to 1801 — Increase of Irish National Debt — Commercial and financial Distress after 1797 due to the Rebellion combined with the
increasing Cost of the French War.
During the first eleven years of legislative independence the expenditure of Ireland kept fairly level, averaging about one and a quarter millions per annum. In the three years 1787, 1790, and 1793 there was a small surplus of revenue over expenditure, and in the other years the deficit was insignificant.686 In 1783 the deficit had been much larger, but it was successfully reduced through the efforts of the Opposition party in the Irish House of Commons, and for the next ten years the condition of the finances was flourishing. The equilibrium maintained between revenue and expenditure during these years says a good deal for the financial policy of Parliament, when we remember that just at this time new sums were being spent in encouraging trade and manufactures, and in developing the natural resources of Ireland. But directly after the grant of legislative independence Grattan and other Members of the Opposition succeeded in inducing Parliament to grant additional duties, estimated to produce £14,000687 a year, in
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order to do away with a deficit which for some time past had been steadily increasing. These new duties, combined with a policy of strict economy on the part of Parliament, practically restored equilibrium, and from 1785 to 1794, when the cost of the French War began to be felt, the annual deficit was never higher than £89,434 (British), and was generally very much less, while in 1790 there was an actual excess of revenue over expenditure amounting to £85,397 (British).
No economy was effected by the Irish Parliament at the expense of England; on the contrary, generosity and loyalty were shown. In May, 1782, Grattan proposed a vote of £100,000, to be obtained by loan, for the purpose of raising 20,000 sailors for the Royal Navy.688 Curiously enough, although the proposal was accepted by the great majority of the House of Commons, it was found later, on an inquiry by a committee appointed for the purpose, that not more than one-half of the sum voted was actually spent and that only 7,000 men had been raised.689 A further offer, however, of aid to England soon followed. An Act690 was passed allowing the temporary withdrawal to England of 5,000 out of the 12,000 men on the Irish military establishment ordered by the Irish Act of 1769 to be always retained in Ireland. But only partial advantage was taken of this offer also, and it was in consequence not renewed.
In November, 1783, a party in the Irish House of Commons, headed by Flood, made a vigorous attempt to reduce the number of troops maintained by Ireland. But Grattan opposed any reduction of the military establishment. He pointed out that the rising trade of Ireland was being protected by the British Navy, and that the Irish payment of about £70,000 a year to maintain Irish troops to serve abroad was not a dear purchase ‘for partaking that which has cost England so many millions.’
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Grattan managed to carry his point and Flood's motion was accordingly negatived.691
It has been seen in the account given of the Commercial Propositions how anxious Pitt was to secure from Ireland some fixed contribution to the general expenses of the Empire, such contribution to be applied either to the support of the Imperial navy or to the reduction of the British debt.692 The Irish Parliament had shown itself quite willing to make some settled contribution, conditional on an equilibrium between revenue and expenditure in years of peace, but unconditional in time of war. But the jealousy of the British manufacturing interest had forced Pitt to modify the propositions, greatly to the disadvantage of Ireland, and in consequence they had been thrown out by the Irish Parliament chiefly on constitutional grounds. With the abandonment of the scheme all idea of securing from Ireland a fixed money contribution to Imperial expenses fell to the ground and was never again renewed in its original form. And so until the commencement of the war with France Ireland merely continued to maintain her military establishment of 15,000 men, 3,000 of whom were liable to serve abroad according to the Act of 1769, as her permanent fixed contribution to Imperial needs.
From 1785 to 1793 the Opposition party in the Irish House of Commons, headed by Grattan, devoted their attention to securing some sort of administrative reform. For some time Grattan had supported the administration, in the hopes of effecting the desired reforms through the influence of Government. But when it became clear that Government was opposed to all reform, and that pensions were being granted and offices created for the express purpose of obtaining parliamentary influence, he again threw in his lot with the Opposition. In 1790 the number
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of placemen and pensioners in Parliament was declared to be equal to one-half of the whole efficient body.693 The pensions on the Irish establishment, exclusive of military, were in 1789 £105,739694, and it was said that fresh pensions to the amount of £16,000 had been granted since March, 1784, besides additional salaries to sinecure offices in the hands of Members of Parliament, while during the same period the whole civil list had increased by £31,000.695 There had also been a rise in the amount of the military pensions, and the cost of collecting the revenue had increased since Lady Day, 1784, by £105,000.696 The large additional salaries to sinecure or utterly insignificant offices were granted in order that the names of the recipients should not appear in the pension lists, so that a sort of inferior and corrupt pension list existed. What Grattan and his party wanted was to check this extravagance and corruption on the part of Government by means of legislation. They wished for a Pension Bill limiting the amount which could be granted in pensions: for a Bill to disfranchise the revenue and Custom House officers, as had been done long ago in England, and they also desired to pass a Bill giving additional guarantees for a proper expenditure of different branches of the revenue. The Opposition also did their best to procure an enquiry into the cost of collecting the revenue, for this cost had risen between 1758 and 1783 from £81,000 to £157,000, or from 13 per cent to 16 per cent of the whole revenue.697 But Government resisted all these proposals with great energy, and it was not till 1793 that the Irish Parliament
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managed to pass its three great measures for limiting the powers of the executive. A Responsibility Bill was passed, bringing the signatories of money warrants under the control of Parliament. The hereditary revenue was now voted annually; the King could no longer dispose of the money alone, and a fixed civil list was granted to him which was never to be more than £145,000, exclusive of the pension list.698 At the same time a Pension Bill made the whole amount of pensions reducible to £80,000699 and excluded from Parliament all future pensioners at will or for years; no single pension of more than £12,000 a year was to be granted except to members of the Royal family, or on an address from both Houses of Parliament.700 It was thought that all this would effect a saving of about £30,000 a year. Finally in this same year a Place Bill excluded from Parliament revenue officers, placemen, and pensioners; all members who accepted offices under Government were to vacate their seats, although they might be re-elected, and every Member of Parliament before he took his seat was to swear that he did not hold any pension or office which might incapacitate him from sitting.701 The cost of collecting the revenue was also diminished and the surplus was to be applied to national objects. At the same time great relief was given to the poorest classes in Ireland by exempting from the hearth tax all houses possessed of only one hearth.702
The Pension and Responsibility Bills put Irish finances for the first time theoretically under the control of the Irish Parliament and also increased the real financial power of the Commons. But the Place Bill, from which so much was hoped, achieved nothing, for it was perverted by Government to corrupt uses. In a country where the
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Parliament was really popularly elected it would have been safe enough to insert a clause in a Place Bill providing that Members of Parliament obliged to vacate their seats through accepting offices under Government might be re-elected by their constituencies, but in Ireland it was quite another thing; a great number of Irish boroughs were at the complete disposal of the Ministers, and the new Bill merely gave Government facilities for vacating seats and changing the whole composition of the House without a dissolution.703 The Bill was really to the advantage of Government, and the Lord Lieutenant had clearly seen this in 1789, when the proposal had first been brought forward. Writing to Sydney, he says that the principle of vacating by pension or otherwise seats of Members of Parliament would be a manifest advantage to the Crown, and that if the Opposition had realised all that their proposal might mean they would never have brought it forward. ‘The King's Government,’ he writes, ‘will be essentially strengthened by it.’704 Even that part of the proposed Bill which limited the amount of the pension list was not looked upon with disfavour by Buckingham himself, because it recognised clearly for the first time the exclusive right of the Crown to grant pensions without parliamentary control, even though an Act of the legislature might limit the amount which could thus be granted. Accordingly the whole Bill was allowed to pass the Commons, but eventually the Government resolved to throw it out in the Lords on the ground that ‘the violent and dangerous combination existing against Government could only be ultimately destroyed by a considerable increase in the charge in the civil pension list.’705 The Regency question had just been agitating Parliament, and Buckingham thought that there
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was at that time ‘very little hope of uniting to a systematic support those whose seats depend upon popular elections.’706 The actual enactment of the Bill in 1793 may at first have purified the Irish Parliament in some slight degree, but there is no doubt that later on the Bill was perverted to corrupt uses, and it was through their power of changing borough Members without appealing to the constituencies by a dissolution which enabled the Irish Government to carry the Union.
In the financial year 1792–93 the condition of Irish finances seems to have been good. When the Chancellor of the Exchequer made his annual statement to Parliament in February, 1792, he stated that the unfunded debt was decreasing, and that the country was experiencing that improvement in the finances which he had expected, and in the hope of which he had deferred any application to Parliament for an extraordinary supply to discharge arrears. He said that the revenue for the half-year ending in September, 1792, exceeded the yield for the corresponding term in the preceding year by £53,000, and that he thought he was justified in foretelling an additional increase in the revenue for the next year.707 The increase of revenue foretold by Sir John Parnell took place, but in 1793 the war with France began, and the even course of Irish finances changed. At the opening of the parliamentary session after the commencement of the war the Lord Lieutenant, in delivering the Royal message, said that the King ‘relied with confidence on the firm and effectual support of the Irish House of Commons and on the zealous exertions of a brave and loyal people in prosecuting a just and necessary war.’708 A speedy and practical answer was given to this message, for a Bill was at once passed raising the Irish military establishment from 15,000 to 20,000 men and directing the enrolment
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for four years of a militia force of 16,000 men. Two years later another appeal on the part of Government met also with an adequate response. The new Viceroy, Lord Fitzwilliam, stated in his speech at the opening of the session that the King believed so firmly in the loyalty of Parliament that he thought it unnecessary to press them in any particular manner for a sufficient provision under the ‘present awful situation of affairs.’709 The address of the Commons in answer to the Lord Lieutenant's speech is extremely interesting, for it bears substantial testimony to the growing prosperity of the country even in this time of war.710 The whole force of regulars and militia combined was raised to 40,000 men, and a vote of credit of £20,000 moved by Grattan for the Royal Navy was carried without any stipulation,711 and their ability to make such adequate provision for the war was put down by the Commons to the flourishing condition of the commerce and revenue of the kingdom. During the financial debates of this session all parties agreed that the prosperity of Ireland during the last ten years had been unparalleled, and that in spite of the war this prosperity was continuing. Mr. Cuffe, one of the Government's supporters, asked, ‘What is the state of Ireland at this moment?’ ‘A state,’ he answers, ‘of unexampled prosperity. The landlord gets his rent to the hour. The tenant finds money for the purchase of his land the moment he brings it into the market; and the manufacturer finds employment and payment to his satisfaction. Ireland has the Constitution of England without its debt.’712
But this prosperous state of things could not last. The strain of the war began to tell. England herself was suffering from it, but in Ireland the financial burden soon became even heavier in proportion to the resources of the country; for added to the expenses of the war with France
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there was now the necessity of large military preparations at home to maintain the Government and repress the growing disorders. Credit began to fail and industry was soon paralysed by the anarchy that reigned in many parts of the country. After 1796 Parliament found it no longer possible to exempt the very poor from taxation, and besides the hearth tax, the salt and leather taxes now fell very heavily upon them.713 When a great and growing necessity imposed heavy taxes on the poor it was little wonder that the injustice of exempting the great absentee proprietors from taxation should be bitterly resented. An absentee tax was therefore proposed, but the measure was vigorously opposed in England and the Irish Government managed to defeat the proposal by 104 votes to 40.714 It was soon found impossible to obtain sufficient supplies from taxation, and Government had to raise nearly four millions by loan. They issued 5 per cent £100 debentures at 63, and managed with some difficulty to obtain a loan of one and a half millions from England.715 Credit had nearly collapsed, and the Lord Lieutenant wrote to Pitt that the Bank of Ireland was unable to meet the engagements into which it had entered with Government and even called for a partial repayment of the loan it had made.716 Merchants were withdrawing their deposits from the Bank, and all over the country distress soon became universal. Some manufactures indeed showed a marvellous vitality, and agriculture prospered through the high prices which prevailed. But these high food prices brought suffering to the poor, and in 1797 there were 37,000 persons in Dublin alone in a state of destitution.717
From 1797 Ireland had to reckon with the Rebellion as
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well as with the French War. Further military demands on her were made, and the entire cost of the great numbers of English troops sent to Ireland was borne by that country. The Irish Yeomanry was established, and the maintenance of this force formed another heavy charge. The supplies granted by the Irish Parliament were unprecedented in their amount, and were given with a unanimity and zeal which attested the loyalty of the Commons.
In consequence of the French War, and later on of the Rebellion also, the expenditure of Ireland increased enormously after 1793. It has been seen that from 1782 to 1793 the Irish revenue and expenditure fairly balanced each other, and that expenditure did not materially increase. But from 1793 to the Union expenditure increased at a very rapid rate. This increase was chiefly under the head of military services, and the total expenditure for the year ended Lady Day, 1800, was as much as five times greater than that for the year ended Lady Day 1793.718
From 1782–83 to 1792–93 the sum expended annually on military services amounted on an average to £585,000 (British). From 1793 to 1797 the increased military expenditure due to the French War raised this amount greatly, and in the year ended Lady Day, 1797, the large sum of £2,032,000 (British) was spent on military services alone. In 1797 the cost of the Yeomanry force, established to suppress the disorders in Ireland, first appears in the public accounts, so from this year till the Union a further increase in Irish military expenditure took place, an increase caused, not by the French War alone, but also by the Rebellion. In the year ended Lady Day, 1800, £4,596,762 (British) was spent on military services. If the military expenditure during these seven years, 1793–94 to 1799–1800 had been at the normal rate of £585,000 per annum mentioned above, it would only have amounted
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for the whole period to £4,095,000 (British). Actually it amounted to £18,050,941 (British), thus exceeding the normal amount by about fourteen millions. A further expenditure was made on military services in the three-quarters of a year from Lady Day, 1800, to January 5th, 1801, of over £2,500,000 (British), so that roughly speaking during the seven and three-quarter years since the commencement of the war with France over sixteen millions (British) was spent by Ireland on military services in connection with the war and the Rebellion.
Under these circumstances the Irish national debt rose from an insignificant amount to a very large sum. On Lady Day, 1783, the aggregate amount of the Irish funded and unfunded debt had only amounted in British currency to £1,917,784, and this amount had only increased by £334,983 (British) by Lady Day, 1793. But from that date it naturally began to grow enormously, and on January 5th, 1801, the aggregate Irish debt stood at £ 28,551,157 (British), or over £26,500,000 more than it had been eighteen years before.719 Nearly the whole of this increase took place in the last eight years of the period, and was directly due to the expenses of the French War and the Irish Rebellion.
It was, therefore, little wonder that the condition of Irish finances just before the Union was held to be appalling, and the financial difficulties under which Ireland laboured were seized upon by Lord Castlereagh in order to press for a legislative Union with Great Britain. He even underestimated the revenue of the country in order to prove his case that bankruptcy was inevitable if a Union did not take place. It is as well to emphasise the fact that the commercial and financial distress which existed in Ireland during the last four years of the eighteenth century was due to the
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specific causes which have been mentioned. There was little decline in the prosperity of the country until the end of 1796, and this though an expensive war was being carried on. Castlereagh himself acknowledged that during the first three years of the war with France, Ireland had been regularly improving in commerce and revenue, even though eight millions had been taken from her circulating capital at different periods.720 Naturally, however, it was impossible for this improvement to continue when the Irish disturbances broke out. Credit was bound to collapse and industry to be dislocated, and we can only be surprised that the statistics of exports and imports do not show even a greater fall than is actually the case and that so considerable a revenue was raised from the country.
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