Factory and Workshop Act which, in its 163 clauses and seven schedules, consolidated and amended the whole of the Factory-Acts since 1878. Another useful Act, the Youthful Offenders Act, provided that in some instances young offenders on remand should be committed to the charge of some responsible person, instead of being sent either to prison or to the workhouse ; and also that when offences committed by children could be directly traced to the habitual and wilful negligence of parents or guardians, the latter should be liable to prosecution. On 30 Jan. 1902, also, he introduced a licensing bill, the first part of which strengthened the law against the individual drunkard, while the second authorised a summary refusal of licences of offending publicans on the annual applications for renewal. The bill also put all retail licences absolutely under the control of the justices and provided for the registration of all clubs {Parliamentary Debates, vol. 101, 4th series).
In August 1902 Lord Salisbury resigned the post of prime minister, and Mr. Balfour, his successor, reconstructed the cabinet. Ritchie accepted with reluctance the office of chancellor of the exchequer. In the first place, as he explained to Mr. Balfour, he unwillingly left a post which was very congenial ; and secondly, he was apprehensive of the favour bestowed by the colonial secretary, Mr. Chamberlain, on colonial preference, with which he felt himself out of agreement, but in regard to which, as finance minister, he would have special responsibilities. His hope that the question would not soon arise in an acute form was disappointed. Mr. Chamberlain and a section of the cabinet argued for a reconsideration of the tariff system, with a measure of preference for the colonies, and the argument soon took a practical turn. Ritchie's predecessor, Sir Michael Hicks-Beach (afterwards Viscount St. Aldwyn), had in the budget of April 1902 imposed on corn an import duty of one shilling a quarter, which was estimated to bring in two and a half millions annually. Although it was regarded as little more than a registration duty, Mr. Chamberlain now desired to retain it as a first step towards granting preference to the colonies, and before leaving for South Africa in December he pressed the cabinet to continue it in this guise. Ritchie declined to commit himself to the imposition or remission of a particular tax so long before the end of the financial year. He declared in any case the shilling duty on corn to be a mere incident in the budget, and that he had no objection to retaining it provided that it was not to be treated as a differentiation or preferential duty or as an earnest of a new fiscal policy which could only be adopted after mature consideration as part of a specifically declared policy. The cabinet decided in favour of Mr. Chamberlain's arguments ; Ritchie registered his dissent, and was assured that the matter would come on later for further consideration. During Mr. Chamberlain's absence in South Africa Ritchie several times informed the prime minister of his inability to act on the decision of the cabinet. That information was communicated to Mr. Chamberlain on his return. Mr. Chamberlain replied that if he could not secure the com duty for preferential purposes, he did not care to have it at all. The cabinet thereupon accepted Ritchie's recommendation to remit the duty.
On 23 April 1903 Ritchie introduced his first and only budget. The war in South Africa was at an end. The financial situation, however, did not allow the chancellor to remit all the war taxes, but, on the basis of the existing taxation, he budgeted for a surplus of 10,816,000l., and therewith he took fourpence off the income-tax. At the same time he dropped the shilling a quarter duty on corn.
The abolition of the com tax was resented by the supporters of Mr. Chamberlain and by a large section of the unionist party. On 15 May 1903 Mr. Chaplin headed a deputation to Mr. Balfour asking that it should be retained. The prime minister made a moderate reply, with which Ritchie stated that he was in complete agreement ; but on the same day Mr. Chamberlain at Birmingham, in an impassioned speech in favour of a policy of preference, 'initiated the acute stage of the fiscal controversy' (Balfour, Fiscal Reform Speeches, p. 16). During the debate on the finance bill on 9 and 10 June 1903 the differences within the cabinet were more clearly defined. Ritchie declared himself to be a freetrader. He declined to be (see Parliamentary Debates, 4th series, vol. 123) 'a party to a policy which, in my opinion would be detrimental to both the country and the colonies.' Ritchie's budget received the royal assent without alteration on 30 June.
The breach in the cabinet thenceforth developed rapidly. Mr. Chamberlain came to the conclusion that he could best forward his views as to imperial preference from without. He sent his resignation to Mr. Balfour from Birmingham on 9 September,
