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"Proper Trust of Liberty": economical reform, the English constitution and the protections of accounting during the American War of Independence, The
Accounting History, Feb 2008 by Funnell, Warwick
Abstract
Prior to the nineteenth century the more lucrative public offices under the direct control of the Crown as part of the civil list were given as sinecures to favoured individuals. The use of these sinecures, pensions and other valuable appointments provided the Crown with the means by which it could buy influence and, thereby, undermine the constitutional authority and independence of parliament. In the main, civilian officers of the Crown were not accountable to parliament. Financial accountability for spending on the civil list was sporadic, without sufficient enforcement mechanisms and, therefore, a threat to the liberty of all "Englishmen". The financial and political strains that the American War of Independence placed upon England, combined with the abuse of patronage privileges by the Crown, provoked a movement for economical reform, most often associated with Edmund Burke, which sought the reform of both the civil list and executive accounts as protections for liberty. Crucial to convincing the government of the urgency of reform were reports from the Commissioners for Examining the Public Accounts.
Keywords: American War of Independence; commissioners for examining the public accounts; economical reform movement; Edmund Burke
1. Introduction
Ultimately all political power is dependent upon control over public finances for, at its most basic level, control over finances ensures the ability to marshal and use military force, either against external foes or to stifle internal discontent, to maintain political dominance. This nexus between political hegemony and public finances lay at the heart of the constitutional battles between parliament and the executive in the evolution of the English Constitution (Clode, 1869).1 John Morley (1879/1909, p.92), a prominent Liberal politician, noted that "(u)nder other governments a question of expense is only a question of economy, and it is nothing more; with us, in every question of expense, there is always a mixture of constitutional considerations". From the late seventeenth century until the late nineteenth century the constitutional intent of making the executive financially accountable to parliament for the expenditure of monies appropriated by parliament, while progressively less prominent, still continued to provide the core rationale for reforms to government accounting and executive accountability that relied upon the simple charge-discharge form of accounts long favoured by the Exchequer.
Throughout the eighteenth and early nineteenth centuries significant reforms of English government accounting and auditing were most often responses to the political crises of war and revolution during which the executive had been presented with opportunities to jeopardize the liberty of all citizens (Funnell, 1996,2004). From the ferment of war and revolution came the impetus for constitutionally transformative accounting and audit reforms, for during times of great political peril the constitutional protections afforded by the executive giving an account to parliament became most obvious In the late eighteenth century the political and economic crisis engendered by the American War of Independence (1776-83) was especially significant in prompting government accounting and audit reforms that laid the foundations for British public sector audit reforms of the middle decades of the nineteenth century. Consequently, the last decades of the eighteenth century constitute the crucible of modern Westminster constitutional audit.
Cobban (1960, p.ll) refers to the eighteenth century as "the seed-time of modern Europe": a time when understandings of the role and nature of modern government first appear in England, if not the Continent. Indeed, it was a period of great constitutional significance for it was in this century that the constitutional principles that were forged in the English Revolutionary Settlement of 1689 were developed in practice and enshrined in the conventions of Westminster accountability. In particular, O'Gorman (1973, p.60) refers to the years 1779 to 1785, which encompass most of the American War of Independence, as "a period of great interest, partly because of the swift flow of events and partly because of the political and constitutional implications which these revealed" (see also Marshall, 1963, p.481). Most importantly, during these years, as a result of the more certain threat of exposure afforded by reforms to executive accountability in response to the War of Independence, there was a marked diminution in the Crown's ability to engage surreptitiously in constitutionally inappropriate attempts to buy influence in parhament through the use of executive patronage to procure appointments to the civil list. The civil list included all civil departments of state and the offices within the royal household. With reforms to the civil list and executive accountability in the late eighteenth century, "executive government" was progressively replaced with "parliamentary government" when the financial supremacy of parliament was added to the legislative and constitutional supremacy it had gained in 1689 (Gunn, 1974, p.306). These reforms, while possibly the most consequential at the time, were but the more prominent reforms during a period of reformist zeal in which William Pitt's efforts were prominent, if not always successful. Particularly notable were Pitt's efforts in 1783 and later in 1785 to reform the electoral system in order to remove the worst abuses of rotten boroughs and to reform the East India Company with his Bill of 1784 (Rose, 1914, pp.131,160-3; Ehrman, 1969, p.64). For some time the East India Company, the activities of which left untouched few aspects of English life, had been poorly managed ensuring that its recent natural condition was to teeter on the brink of bankruptcy. Most worrying for reformists such as Pitt and Burke were the opportunities that the breadth of the company's activities and its semi-governmental nature provided for political patronage (Ehrman, 1969, pp.118-19).
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