His policy from the first was one of active reform, and he faced every one of the problems, financial, constitutional, religious, from which Walpole had shrunk. Above all he had none of Walpole's scorn of his fellow-men. The noblest feature in his mind was its wide humanity. His love for England was as deep and personal as his father's love, but of the sympathy with English passion and English prejudice which had been at once his father's weakness and strength he had not a trace. When Fox taunted him with forgetting Chatham's jealousy of France and his faith that she was the natural foe of England, Pitt answered nobly that "to suppose any nation can be unalterably the enemy of another is weak and childish." The temper of the time and the larger sympathy of man with man, which especially marks the eighteenth century as a turning-point in the history of the human race, was everywhere bringing to the front a new order of statesmen, such as Turgot and Joseph the Second, whose characteristics were a love of mankind, and a belief that as the happiness of the individual can only be secured by the general happiness of the community to which he belongs, so the welfare of individual nations can only be secured by the general welfare of the world. Of these Pitt was one.

But he rose high above the rest in the consummate knowledge, and the practical force which he brought to the realization of his aims.

Pitt's strength lay in finance; and he came forward at a time when the growth of English wealth made a knowledge of finance essential to a great minister. The progress of the nation was wonderful. Population more than doubled during the eighteenth century, and the advance of wealth was even greater than that of population. The war had added a hundred millions to the national debt, but the burden was hardly felt. The loss of America only increased the commerce with that country; and industry had begun that great career which was to make Britain the workshop of the world. Though England already stood in the first rank of commercial states at the accession of George the Third, her industrial life at home was mainly agricultural. The wool-trade had gradually established itself in Norfolk, the West Riding of Yorkshire, and the counties of the south-west; while the manufacture of cotton was still almost limited to Manchester and Bolton, and remained so unimportant that in the middle of the eighteenth century the export of cotton goods hardly reached the value of fifty thousand a year. There was the same slow and steady progress in the linen trade of Belfast and Dundee, and the silks of Spitalfields. The processes of manufacture were too rude to allow any large increase of production.

It was only where a stream gave force to turn a mill-wheel that the wool-worker could establish his factory; and cotton was as yet spun by hand in the cottages, the "spinsters" of the family sitting with their distaffs round the weaver's handloom. But had the processes of manufacture been more efficient, they would have been rendered useless by the want of a cheap and easy means of transport. The older main roads, which had lasted fairly through the middle ages, had broken down in later times before the growth of traffic and the increase of wagons and carriages. The new lines of trade lay often along mere country lanes which had never been more than horse-tracks. Much of the woollen trade therefore had to be carried on by means of long trains of pack-horses; and in the case of yet heavier goods, such as coal, distribution was almost impracticable, save along the greater rivers or in districts accessible from the sea. A new aera began when the engineering genius of Brindley joined Manchester with its port of Liverpool in 1767 by a canal which crossed the Irwell on a lofty aqueduct; the success of the experiment soon led to the universal introduction of water-carriage, and Great Britain was traversed in every direction by three thousand miles of navigable canals.

At the same time a new importance was given to the coal which lay beneath the soil of England. The stores of iron which had lain side by side with it in the northern counties had lain there unworked through the scarcity of wood, which was looked upon as the only fuel by which it could be smelted. In the middle of the eighteenth century a process for smelting iron with coal turned out to be effective; and the whole aspect of the iron-trade was at once revolutionized. Iron was to become the working material of the modern world; and it is its production of iron which more than all else has placed England at the head of industrial Europe. The value of coal as a means of producing mechanical force was revealed in the discovery by which Watt in 1765 transformed the Steam-Engine from a mere toy into the most wonderful instrument which human industry has ever had at its command. The invention came at a moment when the existing supply of manual labour could no longer cope with the demands of the manufacturers.

Three successive inventions in twelve years, that of the spinning-jenny in 1764 by the weaver Hargreaves, of the spinning-machine in 1768 by the barber Arkwright. of the "mule" by the weaver Crompton in 1776, were followed by the discovery of the power-loom. But these would have been comparatively useless had it not been for the revelation of a new and inexhaustible labour-force in the steam-engine. It was the combination of such a force with such means of applying it that enabled Britain during the terrible years of her struggle with France and Napoleon to all but monopolize the woollen and cotton trades, and raised her into the greatest manufacturing count, v that the world had seen.

To deal wiiely with such a growth required a knowledge of the laws of wealth which would have been impossible at an earlier time. But it had become possible in the days of Pitt. If books are to be measured by the effect which they have produced on the fortunes of mankind, the "Wealth of Nations" must rank among the greatest of books. Its author was Adam Smith, an Oxford scholar and a professor at Glasgow. Labour, he contended, was the one source of wealth, and it was by freedom of labour, by suffering the worker to pursue his own interest in his own way, that the public wealth would best be promoted. Any attempt to force labour into artificial channels, to shape by laws the course of commerce, to promote special branches of industry in particular countries, or to fix the character of the intercourse between one country and another, is not only a wrong to the worker or the merchant, but actually hurtful to the wealth of a state. The book was published in 1776, at the opening of the American war, and studied by Pitt during his career as an undergraduate at Cambridge. From that time he owned Adam Smith for his master. He had hardly become Minister before he took the principles of the "Wealth of Nations" as the groundwork of his policy.