Britain also exported capital. The accumulated private wealth of the country, drawn from both industrial and agricultural profits, was channelled into foreign and imperial investments. What turned out to be a massive diffusion of British capital was already well underway in the 1830s, when income from overseas dividends averaged about £5 million yearly. This figure rose to £50 million by the 1870s, and continued to soar as more and more British capital flowed abroad. By and large, middle-class and aristocratic investors prudently chose to put their money in stocks which offered a fixed annual return, rather than speculative ventures. Raising capital for foreign governments and commercial enterprises, along with banking, marine insurance and stockbroking were the work of the City of London. These specialisms, experience and the sheer volume of money available in Britain for overseas investment assured London preeminence among the world’s financial centres.
London lay at the hub of an unseen empire of money. The Industrial Revolution had made possible a financial revolution, well advanced by 1870, in which Britain became the world’s major exporter of capital. Money-lending complemented manufacturing. By injecting large sums of money into undeveloped and developing economies, British investors were stimulating new demands. British-funded enterprises such as cattle ranches in Uruguay, railroads in America and Indian cotton plantations drew new countries into her global network of trade. At the same time, although this was not immediately apparent, British investment was also creating industries which would, in time, compete with her own.
The export of goods and money led to the creation of what had been called an ‘unofficial’ or ‘informal’ empire. In the scramble for new markets it was inevitable that British merchants faced local opposition or found themselves in countries where governments were either too feeble or lazy to take measures to protect them or their goods. This was the case in Buenos Aires in the spring of 1815, when the city was caught between the two sides in the Argentinian revolt against Spain. Fearing local anarchy once street-fighting began, British merchants appealed to the naval commander in Rio de Janeiro to safeguard them and their property. They reminded him that they were ‘in pursuit of those objects of Mercantile Enterprise to which Great Britain owes so much of her power and Greatness’.5
Nineteenth-century consuls, admirals and foreign secretaries were naturally well aware of this, and of the prevalent feeling among those who created the nation’s wealth that they were entitled to their government’s support. The world was full of areas of chronic instability, like the River Plate republics, and countries where the authorities were hostile to British business, or whose officials were obstructive or corrupt. In such places, British lives and property were perpetually endangered unless there was the assurance of some kind of protection or, if the worst occurred, retribution. Bond-holders expected their dividends and, if they were withheld for reasons which appeared frivolous or dishonest, they looked to the government for redress. Free trade required the uninterrupted passage of goods and services through nations and local legal systems that offered justice to the businessman who had suffered losses.
These conditions did not exist in the states on the shores of the Mediterranean, the Ottoman empire, the coastal states of Africa, the Latin American republics, and China. It was necessary for the British government to teach the rulers of such nations where their duty lay, and when they refused to heed the lesson, to make them see sense through the application of naval force. For instance, in 1821, during the war between Spain and its former colonies, Spanish privateers had seized a British merchantman, the Lord Collingwood, in the Caribbean. No compensation was offered by the government in Madrid so, in 1823, a squadron was ordered to Puerto Rico to confront the governor and recover the captured vessel. If he proved intractable, then men-o’-war flying the Spanish flag were to be attacked and Spanish ships arrested.6
As usual, forceful measures were a last resort. There were, successive British governments realised, recidivists who needed frequent chastisement, as the Foreign Secretary Lord Palmerston explained to the Commons in September 1850:
These half-civilized Governments such as those of China, Portugal, Spanish America, all require a dressing down every eight or ten years to keep them in order. Their minds are too shallow to receive an impression that will last longer than some such period and warning is of little use. They care little for words and they must not only see the stick but actually feel it on their shoulders before they yield to that argument which brings conviction.7
This was a typically candid explanation of the principles of unofficial empire.
Palmerston was also speaking in defence of his decision to send seven battleships and five steamers to Salamis Bay in January after the Greek government had refused to consider compensation for losses suffered by various British subjects, including Don Pacifico, a Gibraltarian moneylender. Palmerston ordered the local admiral to take ‘measures’ designed to impress the Greek government with Britain’s determination to have its subjects’ claims honoured. The Greek navy was seized without a struggle; Greek merchantmen were arrested at the Piraeus, Spezia and Patras; and an embargo was imposed on Greek shipping.8 This was what Palmerston meant by feeling the stick.
More commonly, persuasion backed by the threat of force worked. In a bizarre but revealing incident in 1845, the consul-general in Beirut, Colonel Hugh Rose, was able to secure the sacking of the Turkish governor, whom he described as an ‘infamous man’ and ‘fountainhead of corruption’. It appears that three men had committed an outrage of ‘a revolting and unnatural nature’ at the consulate and Rose had demanded that one be punished by bastinado (flogging on the sole of the feet), to be carried out in front of the consulate, while the other two swept the street there. The homosexual governor connived at the trio’s escape, and a furious Rose passed the case to the embassy in Constantinople. In the meantime HMS Warspite was summoned to Beirut as a token of how seriously the British government took what Rose thought was a calculated insult to its dignity.9 It was not really needed, since by this time the Ottoman government desperately needed to accommodate Britain, its potential ally against Russia.
Another form of coercion was to remind local rulers that they would be held personally responsible for any harm that befell British subjects or crimes committed within their jurisdiction. When two dhows were taken by pirates in the Persian Gulf in 1855, a naval officer ordered the local sheik to find the culprits. If he failed, he would be made to pay blood money and compensation or face the bombardment of his village.10 As Palmerston appreciated, pressure had to be constantly exerted. Noting a resurgence of piracy in the waters around Malaya in 1852, the commander of a man-o’-war regretted ‘the inherent propensity a Malay has to return to his lawless traffic when unrestrained by personal fear of immediate punishment.11
The campaigns against piracy in Far Eastern waters and against slavers in the Atlantic and Indian oceans were uphill struggles, undertaken in the complementary causes of the advancement of civilisation and the protection of commerce. Once slaving and piracy had been eliminated, those who had profited from them would turn to what was called ‘legitimate’ trade. Even so, there were some parliamentary protests against what seemed brutal methods. In 1849 Richard Cobden, a free-trade radical and manufacturer, expressed disgust at the awarding sailors ‘head money’ of £20 each for dead or captured pirates. He was rebuked by a Tory, Colonel Charles Sibthorp, who asked whether his humanitarian concern for Borneo pirates extended to his own factory workers.12
Anti-piracy operations were part of a wider effort to break into Far Eastern markets during the 1840s and 1850s. Siam (Thailand) and Japan signed favourable commercial treaties and informal control was tightened over Malaya, Borneo and Sarawak, but China remained adamant in her refusal to accept any more trade with Britain than was necessary. The result was three wars, in 1839, 1856 and 1859, all fought to force the Chinese government to concede markets and naval bases. There was disquiet at home about this ruthless aggression, especially from
those Liberal free-traders who believed that, correctly applied, their doctrines would bring about universal peace. They objected strongly to the vigorous measures adopted by the authorities in Hong Kong after a British-registered junk had been seized by Cantonese officials in 1856. Palmerston, then Prime Minister, backed the men-on-the-spot and asked MPs whether they wished to ‘abandon a large community of British subjects at the extreme end of the globe to a set of barbarians – a set of kidnapping, murdering, poisoning barbarians’.13 The Commons vote went against him, and so he took the unusual step of calling a general election over an issue of foreign policy. The largely middle-class electorate responded with John-Bullish patriotism, and enthusiastically endorsed Palmerston’s iron fist policy towards China. His principal opponents, Cobden and the pacifist John Bright, lost their seats. Informal empire, even if it meant waging wars against countries which obstinately refused the blessings of free trade, was almost universally supported by the business community.
Palmerston’s minatory policies were known as gunboat diplomacy. Small, shallow-draft, heavily-armed gunboats were an innovation of the 1850s and were soon distributed across the world as the workhorses of informal empire. Each new class of gunboat was equipped with the most up-to-date technology; by 1890 they had searchlights, quick-firing breechloaders, and machine-guns, which gave them a firepower far beyond that of their potential adversaries. Some were given names that combined belligerence with jaunty arrogance: Bouncer, Cracker, Frolic, Grappler, Insolence, Staunch and Surly.
Arrogance and resolution were needed by consuls (often ex-naval and army officers) and the men who commanded the ships which provided the cutting edge of unofficial empire. Consider Commander Sir Lambton Loraine, a thirty-five-year-old baronet who commanded the modern ironclad Niobe based at Kingston, Jamaica in 1873. In May of that year he was summoned to Puerto Plata on the coast of the Dominican Republic, where the local governor had broken into the British consulate and arrested three asylum-seekers. For this violation of British prestige, Loraine made the governor personally unshackle his prisoners before they were sent on board the Niobe. Then Dominican troops were ordered to hoist the Union Jack over the consulate and honour it with a twenty-one gun salute.
Disturbances in Honduras and Guatemala in June 1874 brought the Niobe to Puerto Cortéz. Her primary purpose was to safeguard the property and staff of a railway construction company which, with British finance, was laying track for a line between the Caribbean and the Pacific. The engineers and their workers had been threatened by a local commander, Colonel Streber, who added to his infractions of British rights by later kidnapping refugees from British-owned islands off Belize. So far, Loraine had confined his actions to cruising off the troubled coast, and once bringing on board a Honduran general, who was treated to a display of British sailors’ cutlass and rifle drill. (Had he been a day earlier he would have witnessed the flogging of a boy sailor.) Shows of force were not enough; and Loraine, having demanded the return of British property from Streber, bombarded his fortress at Omoa with war-rockets and seven-inch shells. Within a few hours the colonel capitulated and handed over his loot.
Loraine and the Niobe were in action again in November 1874 at Santiago de Cuba. Less than a week before, a Spanish warship had captured an American steamer, the Virginius, which was carrying Cuban rebels and arms. The Virginius was carried back to Santiago, where the governor began shooting not only the rebels but the crew. Thirty-seven British subjects had been murdered by the time Niobe entered Santiago harbour, and the governor was preparing to kill more. Loraine, accompanied by the British consul, went ashore and told the Spaniard that if another execution occurred he would immediately sink a Spanish warship. There were six in the harbour, but so great was the fear of the Royal Navy that the governor immediately stepped down. In Britain, France and the United States Loraine was hailed as a hero, and the Spanish government was forced to grovel and pay compensation to the families of the men killed.14
The activity of the Niobe during 1873–4 was exceptional, but it illustrates well the mechanics and purpose of unofficial empire. The Dominican government was too weak to control one of its officials, anarchy in Honduras endangered British investment, and the lives of British subjects were being taken by the brutal agent of a decayed empire. Each situation demanded prompt action, which was undertaken by a naval officer with formidable self-assurance and, importantly, the knowledge that his conduct would be endorsed by his government. More usually ships like the Niobe cruised the seas, putting into port from time to time to remind Latin Americans, Chinese, Arabs and Africans of the power of Britain. Whenever a crisis occurred a warship would be summoned by the local consul or ambassador, acting on Foreign Office instructions where practical, and its commander would keep watch. Direct engagement, save in an emergency as at Santiago de Cuba, was discouraged since the British government preferred to persuade the local authorities to do their duty. It was the Sultan of Pahang’s police who rounded up the murderers of some British tin-mining engineers in 1892, prompted by the appearance of two gunboats off his coast.15
By 1870 the apparatus of informal empire was in place in every quarter of the world. Asian and African princes were bound by treaties in which they pledged themselves not to molest missionaries and merchants, and to suppress slave-trading and piracy; Latin America was safe for business and investment; and it was possible to speak of Britain’s ‘practical protectorate’ over the Turkish empire.16 Even though the primary purpose of informal empire was to make the world a safe place for the British to trade in, it was also the imposition of a higher morality. Slavery and piracy were wrong, and, when they moved abroad, the British expected to find the same standards of official honesty and detachment as obtained at home.
Informal empire depended on British maritime supremacy. In 1815 the Royal Navy possessed 214 battleships and nearly 800 smaller vessels. There were considerable post-war cuts, but in 1817 the Foreign Secretary, Viscount Castlereagh, insisted that Britain’s security required her to maintain ‘a navy equal to the navies of any two powers that can be brought against us’.17 This principle was more or less upheld for the rest of the century, despite regular calls for cheeseparing from lobbies who held that it was the government’s first duty to keep down expenditure and taxation. Invasion scares, which occurred frequently throughout Victoria’s reign, silenced demands for a reduced naval budget and usually triggered a crash programme of ship-building.
Behind fears of invasion lay suspicions of Britain’s old rival, France. Between 1815 and 1870 Anglo-French relations swung between extremes of friendship and hostility. Outright war seemed possible in 1840, in 1844–5, when an aged Wellington anxiously toured the south coast looking for possible French landing sites, and in 1859. Old misgivings about French militarism and what was believed to be a national addiction to la Gloire died hard. On the other hand, Britain was largely tolerant of French efforts to rebuild their territorial empire by conquest in North Africa. Likewise, no action was taken when France sought to acquire Diégo Suarez as a naval base in the Indian Ocean, and made treaties with the rulers of West African states, which, unlike the agreements of British informal empire, insisted that France had sovereign rights.
This indifference vanished in 1840 when France gave its backing to Muhammad Ali, the khedive of Egypt, who was endeavouring to carve a personal empire out of Ottoman provinces in the Middle East. Memories of Napoleon’s Egyptian adventure were still fresh, and so the Mediterranean fleet was ordered to intervene. France backed down rather than risk a one-sided naval war in the Mediterranean, and British warships were free to bombard Muhammad Ali’s coastal fortresses in Syria and the Lebanon. The shells which fell on Acre were a forceful reminder that Britain would employ her seapower whenever she believed a vital interest was at stake.
There were, however, limitations to seapower. Could it, many wondered, protect Britain from her other rival, Russia? Throughout this period, Anglo-Russian relations were severely strained; what was i
n effect a cold war lasted from the late 1820s until the beginning of the next century. This cold war became a hot one in 1854, and very nearly did again in 1877 and 1885. Russophobia infected the minds of nearly every nineteenth-century British statesman, diplomat and strategist, and was strongly felt among all classes and shades of political opinion. It was commonly agreed that Czarist Russia was the antithesis of Britain. The personal, political and legal freedoms which characterised Britain and, according to many, gave it its strength and greatness, were totally absent in Russia. Its Czar was a tyrant and its masses a servile horde ready to respond unthinkingly to their master’s whim. ‘As the power of Russia has grown, the individuality of its subjects has disappeared,’ claimed one Russophobe in 1835. It was a state ‘irretrievably bent on acquisition’, enlarging itself to provide living space for its growing population.18 And yet for all its obvious political, social and economic backwardness, Russia had the means, an 800,000-strong army, with which to hurt Britain.
Behind this apprehension, which at times approached hysteria, was the fear that Russia would launch an overland invasion of India. The possibility of such an attack had been discussed in political, military and naval circles since the beginning of the century, when Napoleon had shown the way. Speculation and anxiety reached a new pitch after the Russo-Persian War of 1826–28 and the Russo-Turkish War of 1828–29. In the first, a Russian army, based on the Caucasus, had beaten a Persian one, and in the second, the Russians had come within striking distance of Constantinople. What emerged was that Russia had demonstrated the weakness of two Asian powers and revealed that it had the will and wherewithal to challenge Britain in a sensitive area.
India was more directly threatened by Russia’s thrust eastwards towards the Caspian. Her empire-building plans were plain and, according to the logic of the Russophobes, it was inevitable that once the khanates of central Asia had been overcome, Russia would turn its attention to India. An Indian civil servant, writing in 1838, predicted that the people of India would be ‘overwhelmed by the sea of Russian despotism’. He added, significantly, that the forthcoming contest would be between benevolent and oppressive imperialisms. If Russia won, the Indians would be made ‘the serfs of a government which, though calling itself civilised, is in truth barbarian’.19
The Rise and Fall of the British Empire Page 22
