The ten earlier years of his rule marked a new point of departure in English statesmanship. Pitt was the first English Minister who really grasped the part which industry was to play in promoting the welfare of the world. He was not only a peace Minister and a financier, as Walpole had been, but a statesman who saw that the best security for peace lay in the freedom and widening of commercial intercourse between nations; that public economy not only lessened the general burdens but left additional capital in the hands of industry; and that finance might be turned from a mere means of raising revenue into a powerful engine of political and social improvement.

That little was done by Pitt himself to carry these principles into effect was partly owing to the mass of ignorance and prejudice with which he had to contend, and still more to the sudden break of his plans through the French Revolution. His power rested above all on the trading classes, and these were still persuaded that wealth meant gold and silver, and that commerce was best furthered by jealous monopolies. It was only by patience and dexterity that the mob of merchants and country squires who backed him in the House of Commons could be brought to acquiesce in the changes he proposed. How small his power was when it struggled with the prejudices around him was seen in the failure of the first great measure he brought forward. The question of parliamentary reform which had been mooted during the American war had been steadily coming to the front. Chatham had advocated an increase of county members, who were then the most independent part of the Lower House. The Duke of Richmond talked of universal suffrage, equal electoral districts, and annual Parliaments. Wilkes anticipated the Reform Bill of a later time by proposing to disfranchise the rotten boroughs, and to give members in their stead to the counties and to the more populous and wealthy towns.

William Pitt had made the question his own by bringing forward a motion for reform on his first entry into the House, and one of his first measures as Minister was to bring in a bill in 1785 which, while providing for the gradual extinction of all decayed boroughs, disfranchised thirty-six at once, and transferred their members to counties. He brought the King to abstain from opposition, and strove to buy off the borough-mongers, as the holders of rotten boroughs were called, by offering to compensate them for the seats they lost at their market value. But the bulk of his own party joined the bulk of the Whigs in a steady resistance to the bill. The more glaring abuses, indeed, within Parliament itself, the abuses which stirred Chatham and Wilkes to action, had in great part disappeared. The bribery of members had ceased. Burke's Bill of Economical Reform had just dealt a fatal blow at the influence which the King exercised by suppressing a host of useless offices, household appointments, judicial and diplomatic charges, which were maintained for the purposes of corruption.

Above all, the recent triumph of public opinion to which Pitt owed his power had done much to diminish the sense of any real danger from the opposition which Parliament had shown till now to the voice of the nation. "Terribly disappointed and beat" as Wilberforce tells us Pitt was by the rejection of his measure, the temper of the House and of the people was too plain to be mistaken, and though his opinion remained unaltered, he never brought it forward again.

The failure of his constitutional reform was more than compensated by the triumphs of his finance. When he entered office public credit was at its lowest ebb. The debt had been doubled by the American war, yet large sums still remained unfunded, while the revenue was reduced by a vast system of smuggling which turned every coast-town into a nest of robbers. The deficiency was met for the moment by new taxes, but the time which was thus gained served to change the whole face of public affairs. The first of Pitt's financial measures - his plan for gradually paying off the debt by a sinking fund - was undoubtedly an error; but it had a happy effect in restoring public confidence. He met the smuggler by a reduction of Custom-duties which made his trade unprofitable. He revived Walpole's plan of an Excise. Meanwhile the public expenses were reduced, and commission after commission was appointed to introduce economy into every department of the public service. The rapid developement of the national industry which we have already noted no doubt aided the success of these measures. Credit was restored. The smuggling trade was greatly reduced. In two years there was a surplus of a million, and though duty after duty was removed the revenue rose steadily with every remission of taxation.

Meanwhile Pitt was showing the political value of the new finance in a wider field. Ireland, then as now, was England's difficulty. The tyrannous misgovernment under which she had groaned ever since the battle of the Boyne was producing its natural fruit; the miserable land was torn with political faction, religious feuds and peasant conspiracies; and so threatening had the attitude of the Protestant party which ruled it become during the American war that they had forced the English Parliament to relinquish its control over their Parliament in Dublin. Pitt saw that much at least of the misery and disloyalty of Ireland sprang from its poverty. The population had grown rapidly while culture remained stationary and commerce perished. And of this poverty much was the direct result of unjust law. Ireland was a grazing country, but to protect the interest of English graziers the import of its cattle into England was forbidden. To protect the interests of English clothiers and weavers, its manufactures were loaded with duties.

To redress this wrong was the first financial effort of Pitt, and the bill which he introduced in 1785 did away with every obstacle to freedom of trade between England and Ireland. It was a measure which, as he held, would "draw what remained of the shattered empire together," and repair in part the loss of America by creating a loyal and prosperous Ireland; and struggling almost alone in face of a fierce opposition from the Whigs and the Manchester merchants, he dragged it through the English Parliament, only to see amendments forced into it which ensured its rejection by the Irish Parliament. But the defeat only spurred him to a greater effort elsewhere. France had been looked upon as England's natural enemy; but in 1787 he concluded a Treaty of Commerce with France which enabled the subjects of both countries to reside and travel in either without license or passport, did away with all prohibition of trade on either side, and reduced every import duty.