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RESTUICTIONS ON TRADE, 
 
 FKO.M A C'OLONl.lL POINT OF VIEW. 
 
 BY DAVID SVME. 
 
 PREFACE BY THE AJERICAN EDITOR. 
 
 Th!5 following essa}', republished I'roin u late n imber of tho Tjondon Fortnirffitly Revieir, 
 !< luueh Iiir_f^'r tluiii fho linufiitii'ii.-i of its title, wine • we would nmeiul, by reiiiiniin^' it Restric- 
 tiofis upon Tniili', t'roni a N'atiunal I'dint of Virw . he auihur luakt-; tlie .sirikiii,L' ami (nithful 
 observation, tliat in Auhtria, Fraiieit, (li'^ rnitoii iStatjs. and the Bririsli Colonies, '' the party of 
 ),rfi<»r<.«M is idcntitied witli a reslrictiv;' <'')in'i'.<'reial poliey," i. t. is Protei'tionist, " while the 
 Ctjufii-rvatives are the most uneoni[jroiriisiiig of Fri'e Traders.'' Eeelesiastieul and political mo- 
 nopoly, iiiiji'TiaiisMi, and Bourboiiism, lVa;erni/A- v.-ith Free Tradi , \iliiie tlie advoeates of free 
 speex"!!, i'.iitl a free [iress, and the opjuMients of slaverj-, are V'roteetionists. 
 
 iu iliseussiiij^ the question Who pui/s (hedttli/f Uie author eoiielndrs, that often the eonsunier 
 does not (>ay it, ami thar, under eeriain cireuinst.iners, if has the eircct of eheupenini^ eoinneidi- 
 lies, ratbir tiian enl),ineiii;,' their eo.st. lie eonclndes further, tluit even wiien the local producer 
 ean incieiuse his ])riees to the full amount of ihe duty, tlie consumer and tho .■State may alike 
 Kain l>y (lie '<idis(itiiliou of a luitive I'nr a foreii.'u itidusiry. Vindieatint; tbonjughly, by'abun- 
 dant artrnment and exiiiiipie. the ])(diey of in.) isiny rertriet'ins iii'Min tnide as a means of stiinii- 
 hitiii'j; jiiodueiinn, titilizmu (uhor, and eiisuri.ij.' plenty, the author seems fUsj)osed to limit it in 
 ()'.'aetiee to a set-off as^ainst tiie taxeh wliieh hi, id producers pay lowani the local revenue. lie 
 argues, that the foreign producer slioe.iil eo i!ri(>nii> to the same extent a.-* the home producer, or 
 otherwise lim huier suffers injustice. He does not ennsider that this may not he enough to put 
 tlieui njion a foi>titig ol' equality, aiul that if the 'oreigoer [)ossi'sse< cheaper eaj)iiai or cheaper 
 labor, theri' must Ih>, as against these advuKa;' - eoiintervailing diiii^^s. Thi> is all that we 
 claim, and our English Author in effect tiuderrat s the I'oiiey of n^strietitms oii traih-, not only 
 from a I'olonial, but also from an .\inerieaii (loint of view, and hi.s argument allows no liiuiia- 
 tion of duties vliJeh prevents them from being j.-oiective. This pttj)er is a terse and conclu- 
 sive answer to the (.'obden Club Speech of D. A. Wells. 
 
 An observant journalist* has reniarkwl Iiat it is a 8ii)p;tilar fact that in 
 Au.stria "those who have vigorously struck dowri every (sceU'siastical and 
 j)oliti(,'al monopoly throughout the Eriipire are the most vehement advoeate)-i 
 of a restrictive cominert^ial })olicy, while, on the other hand, those who are 
 in favor of free trade are the most ardent supporters of ecclesiastical privi- 
 lege," Austria is not singular in this respect. In France the advocates of 
 free speech and a free ])re.'«s are restriction ists, while imperialists, as a rule, 
 are free traders. In the United States the abolitionists, or republicans, are 
 avowed restrictlouists, while thtj democrats are as decidedly in favor of free 
 ti'ad(?. Precisely the same phenomenon may be observed in the British 
 colonies. In t^mada, Australia, and New Zealand, the party of progress 
 has alwavs been identifi«Hl with a restrictive commercial policv. while the 
 conservatives are the most uueom[.rr>mi8ing of free traders. Indeed it may 
 be said that one-half of the entir*' English-sptaking race are, in one shape 
 or another, in fiivor of a restric lonist policy, and of this half the great 
 majority ire a<lvanced liberals. It is the national creed in the Unit^Kl 
 States, Canada, and the leadin^v Australian and New Zealand coloni(>s. 
 That it .should be .so appears to tlie typical Elnglishman a very remarkable 
 instance of perversity, and he can only aocsount for the pheuomeuon by 
 
 ^ ♦ The Economiat. ' 
 
(It) 
 
 2 RE8TRICTI0:.\S ON TUADE. 
 
 attributing it to \\\v igiionuiee aiul Ibl!} wlilch his hasty estimati! of demo- 
 cratic coiHtiiunities leatls iiim to bUj'pose must be thoir predoiuinaiit 
 ( lianicters. 
 
 Tt" th(_^se colonial eonimuiiiric?, have a reason for their creed, as iloubtloss 
 :hcy have, it should bo worlii wlnle to examine it. Let n.s, al all events, 
 do them the justice of looking at tiio qiUhtion from their own point of view. 
 Now, in order that we may be in a |»"6"iiion to do so, we niust reconsider a 
 doctrine which has hitherto been 1h?1 1 to be one of the best established in 
 the whole range of political econoiiy. We refei to the di>ctrine usually 
 held with regard to taxes ou (on.modities. Political Economists of the 
 English school express themselves confidently to tiie ciVect that, under all 
 circumstances, taxes on commodties ultinuUelv Hili on the consumers. 
 They allege that the producer, o the import(;r, as the case may be, pays 
 the tax in the first instance, a.ul [ia.sscs ir. on to the dealer; that the dealer 
 again passes it on to the consumer; and that the latter, as ho cannot again 
 pass it on, inevitably boars the burden of it. \V(^ ho})e to l)c able to show, 
 before we have doite. that; taxes on conunodities are sometimes intercepted 
 before the}' reach the consumer; that when they do reach the consumer, 
 they are n(4 always pai<l by him, that in fiict, he sometimes passes them 
 on ; and that even when thev are paid bv the consumer he mav onlv suffer 
 a temporary loss for a permi.nent gain. At the same time we wish it to be 
 distinctly understood that we do not controvert the generally received 
 doctrine on this subject further than we have now indicated. We ujcrely 
 desire to point out cei'tain conditions which seem to us to limit its universal 
 apj)lication. 
 
 Generally speaking, when (lie priec obtained ibr any commodity is not 
 the highest which consumers ;ire willing to pay tor it, any tax imposed on 
 that commodity will fall on the consumers; but when the conditions are 
 reversed, and the pri<5e obtained is already as high as consumers are willing 
 to pay, the tax will tall on the producers. It may be maintiiiued, however, 
 tliat even when the price obtained for a commodity is not the higlnst the 
 consunier is willing to give, any tax imposed on such commodity may still 
 fall on the jiroducers. This is a result that often follows whi'u it is an 
 object of special im])ortance to producers to secure a foiT'ign nuu'ket for the 
 disposal of their surplus stock, li may Ix; a matter of convenience U) ihem 
 to be able to employ their hands and uiiJ ;hiniry, during certain })eriods of 
 the year M'hen the home demand is dull, in manufacturing expressly for the 
 foreign market; and rather than not have this outlet for their goods, or 
 constant employment tbr their labor an<l capitiil, they may ot'ten be content 
 to forego i«art of th(;ir usual ]>rotit, or ^^ hat might be e«pdvalent to the 
 amoinit of duty their goods might have U> |)ay in entering a foreign port. 
 It! ordinary commercial transactions it Is jound that peoj)!e usually take all 
 they can get for their goods, and often u grout deal more than is cither 
 reusoruble or just. 
 
 Again, when the ta^c is of small amoua,, and when there is consequently 
 a difficulty in apportioning it to consu'ntiiu, it may fall on the producers or 
 intermediate agent. Some tittie ago the rtnliun governnicnt imposed a 
 nndturc tax, which, it was HUpj)ose<l, wo dd have th(> cHcct of increasing 
 the price of bread. No such effect followed, however. The only 'ffect of 
 
RRSTUICriOXS ox TRADE. 
 
 
 'iij;. 
 
 
 the tax was to close a largo luiinber of the smaller mills tliroughoiit Italy, 
 leaving the tax to be paid by the owix.-rs of the more eflii-ieiit mills out of 
 tlie i)roHt'^ of their larger business.'* So with the P^nglish shipping dues, 
 which, as a matter of fact, are not paid by the merchants ur consumers but 
 by the shipowners. In answer to a deputation which waited on the Chan- 
 cellor of the Exchequer recently, Mr. Lowe, ado|>ting the popular view on 
 this question, attempted to explain that the shipowners did not pay the 
 dues out of tlicir own [)ockcts; that tiny oidy advanced the money to tlie 
 merchant; that the merchant again indcmnihed himself by raising the price 
 of his goods to the consumers. But it appeared that in this particular case 
 Mr. Lo\vi''s thectry di<l not square with the fict, as the deputation, which 
 consisted of the leading shipowners in England, positively assured him that 
 no such transfer took place, and that they, and they alone, paid the dues. 
 The deputation further explained tl.u; the shipowners ■id-'ptcl this course 
 because they found it inconvenieut to adjust the charges to their particular 
 business, owing to the smallness of the amount. 
 
 We now cotne to an entirely new cla.ss of phenomena, when the incidence 
 of taxation becomes a matter of secondary im[)ortance. A i;;ix may, under 
 certain conditions, have the very op[)osite effect from which it usually has, 
 for instead of increasing the j)rice of the commodity taxed it may have the 
 effect of diminishing it. An import duty his thi.^ effect when the country 
 iin[)osing the duty has facilities for producirig th(; commodity which itta.ves. 
 Of course the reduction in price in such a case; is a question of time, depend- 
 ing upon the energy M'ith which the manufacture is taken uj), and the 
 facilities for oljtaining the reipiisitt; capita!, labor, and raw material. The 
 manufacture of eotton in the United States furnishes an illustration of the 
 »>ffect of im[)oi't dut-es in this resptn^'t. In 181 G Congress passed a tariff, 
 imi>osing a duty of 2"J per cent, on all cotton fabrics entering any port in 
 the United States, th-^ cotton manufacture In that country being just then 
 in its infancv, and strusxirlinu' ay:ainst excessive imports from al)road. This 
 high duty was contiinied, with slight modltications, till 1834, when it was 
 somewhat reiluced, but before the reduetio'i took place the manufacture of 
 cotton, |)articularly the coarser kinds of tiibrics, had been thoroughly 
 established, and the United States, from !)eing an importer had become a 
 large exporter of this class of goods. From the evidence given i)eforc the 
 Select Committee < f the House oi Commons on imports, in 1840, it was 
 indisj)utably proved tnat Ameriean cotton go(uls had, previous to this lime, 
 been .sold in the East and West Indies, in tin; Brazils, and in other South 
 American States, at a lower price than the same kind of goods made in 
 England could be sold for. 
 
 A high duty was also about th« same time imposed on leatlier, wooden 
 and inm ware, tools and implements of all kinds imported into the United 
 States, and the consequence was that imjiortations of that class of goods 
 have gradually decreased, and cheaper home-made manufactures have taken 
 their i)lace. American-made bw*ts and shoes, carriages, .'uid numerous 
 other articles of manufacture nqW (Vnnpete in tlie world's market with the 
 cheai)est produces oi' Briti-sh workshojw, wl»fle in the case of mining and 
 
 •rinonco MinJHtor's Stiitemeat for 1861). 
 
Ki^rurcTioxs on trade. 
 
 5y 
 
 //- 
 
 
 agri(!ukurul tools ami implements, tho American products have driven the 
 Britisli out of the ii(;l(l all over the world. If American producers can 
 undersell competitors abroad, there can be no doubt tliat American con- 
 sumers can buy eliea[K?r at home, anil the duty therefore must have been 
 a gain rather than a loss to them. That the imjiosition of the duty on 
 imports and the growth of the home manutaeture, i^t:nn\ in the relation of 
 cause and etfeei, there can hardly be a doubt, judging from these and other 
 instances I might refer to.* 
 
 But i)(_'rliaps the clearest case on record of the effect of an import duty in 
 uliiiuaiLiy cheapening the price of a commodity, is the sugar-beet manu- 
 facture in France. When the continental blockade had, in the beginning 
 of the present centuiy, increased th.e price of sugar in that country, the 
 French fTOVcrnmenD instituted a .series of experiments with -a view to the 
 eTtr:;cfi;jg of t!;!s cy/nr;iodity froiu beetroot; but with the ap[)liances of 
 science then at command, no more than two per cent, of sugar could be 
 extracted from beet, while the quality, at the same time, was very inferior. 
 The mainifacture consoquentlv languishe<l for a long period, and only 
 obtained importance in LS/K), when the j)roduee manufactured in that year 
 amounted to 49,000,000 kil., tlu; industry being at this time protected by a 
 differential duty of from i'll to i^)l francs j)er 100 kil., as against the 
 colonial sugar manufactured from ciine. With tlie increase of the home 
 manufacture the imj)ortatioii of colonial sugar preiportionately fell off, ami 
 so did the revenue from this source; to make up for the loss thus accruing,, 
 the government impo.sed an excise duty on sugar -manufactured from beet 
 of from I'H to 22 francs per 100 kil., according (o quality, the home manu- 
 facture being still favored by a diflerential duty of from 26 to 27^ francs 
 per 100 kil. The imposition of this excise duty had iiie effect, however, 
 of closing one-fv.irth of the sugar-beet factories throughout the country, and 
 the total produce; i'oW off in consequence, in the year IStM), to 22i millions 
 of kil., or less than one-half of what it w/.s three years previously. But 
 the industry gradually recovered itself, and in l(S'i2 llie ])roduce reached 
 41 millions. In 1 84;i an Act was passed by which the duly on indigenous 
 sugar was, during the course of the next five years, to be gradtially assimi- 
 
 •5'> 
 
 /'i?c 
 
 * Ali.'Xiiruii'r [l;imilt(Mi, Sci'rt'tary to tho TnniHnnr liuriiu: Washiiiirton's adniiiiistrjitinn, aiul 
 till' trivatot .srfrf4'-,iniui AiiK-rica over ))r(iilucc<l, suyff ; — " Tlioiiirli itwcri' iriic liiiit llic iiiiimiliate 
 ••Kill ('('vtaiii pll'cft, (it' rciculaiioiis I'ontrolliiiir tlio c(>iiip(Milioii nt' (\ii"ci^L,'n willi (Inint'slic I'abrics 
 was an increase (it'))rice, it is iinivorsally true tliat the edjitrary is tlic iiliiiiiale eti'ect with every 
 sueeesHt'ul iiianiit'aetiire. When h iloniestie iiiaiHilstelnre lias uttaineii to pert'cetiun, mid huH 
 ericatfeil ill tice piriseiMifi'n of ii a cinipeteiit iiiiinbt r of j'ersuiis, it invarialily l)('p<inies cl-eaper. 
 . . . Tiie internal ('oiii)iftition which takes ]i|aee kohm does away with everythiiijr like nionojioly, 
 and hy iles/rccs reduces the prici' of the article t<> the niiniuuuii of reasonable protit on the 
 capital enijiloyed."— 'Avc/.vifry Ripnrt, Pei'. 5, 17!U. 
 
 Tiic following tc;;tiino!iy may lie considercii inipp -tial a.s re^'ards tlic effect of the Aniericun 
 tarill on the rdj^'e-tool trade, It is from llytund's / vn Ti-adr ( iirufaj-, j)ul)lit:hed at Hiriniuj^- 
 hain, England, anil is dat''d Marcii 4, l"^"! ; — '' Th-: edge-fool trade is well sustained, and we 
 have less of flic ctlccts of Ainerieaii cnnipetition. That this coiniictilion is severe, however, is 
 a fact that ca'inot be itrnori'd, and it nt)plics to in!i ly oflier branches fhan that of edge-tools. 
 Every Canadian sca'-on affords nninisfaiiabh^ evidei ';<; that some additional article in English 
 liardwnre i.s bcitiir supplanted by fhr pi'oducc of No» .bern Stoteu, and it is not<iriiius how largely 
 Ainericiui wares arc rivalling those of' llic mother coiintry in other of our ( olonial piKSsessions, 
 as Well as upon the Continent. The aseenrlenee of the jirotectionjgt pnrt,y in tht^ States continues 
 to upcrnte most favorable for the init inrie'urirg interests tlcTc, and it was no wonder that, 
 under <\\f]\ benitrnant auspices, the etiicrpriRe in tfiis direction is swelling to colossal propor- 
 tions. The whole subiivt is one detnuadiug tiie scriou.s uttonti'ju of our juauufocUirers.' 
 
 n- rA,,/ 
 
 - V ■ M 
 
 '7'- 
 
 CS 
 
i 
 
 
 RUSTllICTIOXS OX TUADE. 
 
 5 
 
 Uitcd to tliat on sugar imported from the French eolotiies. This was 
 CoUowotl by the downfuU ot" more establishments, ehietly tliose that were 
 ba<lly managed; but again the home pro(hietion inereased till 1850 (that is, 
 two years after the duties had beeome asoimilated), when the quantity 
 manufactured reached 65 million kil., ami li'otu that time till the ])rcaeiit 
 the production lias steadily increas.'d year by year.* That is not all; the 
 most remarkable fact has yet to be stated. In 1864 an Act was passed 
 im()0sing a clitTerential duty against the home-made sugar, and in lavor «,if 
 sugar imported fom the French colonies. By that Act tlu' home produv.'t 
 was made to p.iy an excise <luty of, according to (juality, from 42 to 44 
 trancs per 100 kil., whereas the sugar imported from the French colonies 
 paid, from the 15th of June, 1867, o francs, and subsecjuently 3 francs GO 
 centimes, less per 100 kil.f The be(;t-sugar industry has l)oen able to stand 
 this strain upon it, and is now actually re[)aying the State i»n the one han;], 
 and the consumer on the other, for the assistance rendered to it in the earlier 
 stages of its existence. But that, we may observe by the way, is a very 
 small portion of the benefits that have accrued to the country from the 
 establishment of this industry. France not only produces t^nough sugar for 
 her own consumption, but is also an extensive exporter. Large quantities 
 of Freneh-made sugar are annually exported to Fngland, Belgium, llolliuul, 
 Germany, Sweden, Russia, Italy, the Barbary States, Egypt,. La Plata, au(l 
 numerous other countries.^ The manufacture of l.)eet sugar has, indeed, 
 become one of the most important industries in that country, employing an 
 enormous amount of both labor and ca{)ital; while tiie State now derives, 
 directly and indirectly, a vast revenue from this one industry, sufMcient in 
 time to repay even the large preliminary expemliture (in the sha[)e of 
 differential duties) invested in its establishment. 
 
 An import duty in such cases as we have referred to has the elTect of 
 enabling local manufMctures to develop themselves. It renders local com- 
 petition possible, and permits a new class of producers to enter the field. 
 And this, too, it <loes without showing any iavoritisni towards the local 
 producers. The principle of imposing import duties on foreign commodities 
 is a perfectly fair one. An import duty may be regarded simply as a set- 
 off against the taxes local producers pay towards the local revenue; and if 
 it acts, at the same time, as a stimulus to local production, it need not on 
 that account be considered objectionable. If foreign commodities \\ere 
 a<lmitted dun- free while the home products were subjected to heavy revenue 
 taxes, it is evident the home producers would be driven out of the field. 
 An imjjort duty is imposed on foreign goods on the ])rinciple that those 
 who benefit by the government sImuM contribute towards its support; and 
 as the foreign producer benefits b,.;the sale of his goods, it is but right that 
 his goods should Ixvar a proporti<>:iat<? share of the expenses of government. 
 As the home producer conti-ibutes to the revenue, it is but fail" that the 
 foreign |)roducer should contribute also, and, as near as j)()ssible, in the 
 same proportion. Jf this be not^iftne, the local jn-oducfr will suffer mani- 
 fest iujustiee. Suppos^> two countries similarly situated in every respect, 
 
 I: 
 
 i^f-C.^ 
 
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 lie 
 
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 , u 
 
 * TrehonsVt : " Tlic I'milnofivt^ Forces of Russia," vol. i. p. t7i). 
 
 t The EcoiKiHhUl, Foli. l.)tli, iJ^tlt*. % Ibiil., i'eb. Is* i.jth, 1868. 
 
RIvSTRKTIOXS ON TRADE. 
 
 hut the one having an establisheil government, and the other (say some 
 neutral territory, un(h;r the proteetion of a powerliil neigiihorj with no 
 government at all, and therefore re(nnring no revenue from taxation; and 
 !SUi>[>ose that the <>nly boundary between these two territories was an imagi- 
 nary line, and tliat the goods manufiietured on tiie one side of this line paid 
 no taxes whatever, while tiiose manufactured du the other were subjected 
 to a high rate. In such a ease it is i>lain tliat, if the manufacturers on t!ie 
 one side of tiie line who jiaid no taxes were aHowed to enter their goods on 
 the other side of the line duty free, they would enjoy advantages for which 
 thev hail given no consideration ; and the position of the manufacturers on 
 that, side of the line who paid taxes would be r.'versed, as they would have 
 paid ibr advantages which they had not received, namely, protection to their 
 property and labor. Or take another ej)se. Suppose that in two adjoining 
 States both simihirly situated in ev'ery i^>spect, and botli under established 
 governments, only that the inliabitants in the one Stale were much more 
 lieavilv taxed thati those in the otiier. In such a ease, if the goods maini- 
 factured in the lightly-taxed country w-ere admitted duty free into the 
 I'ountry that was heavily taxed, one of two things would happen; either 
 the taxation of l)oth countries would iiave lo Ix; assimilated, or the lightly- 
 taxed (,'ounirv vv-ouhl manulacture for both. Tlie former alternative is often 
 an impossil)ility; the latter would be simply ruiu to the iieavily-taxed 
 community. 
 
 It is no doubt true that, in ordinary eases, commodities pay taxes in the 
 country whenMhey are minudictured; but, on the other hand, these taxes 
 are ' .en renntted when the commodities are ex[)orted, and .sometimes the 
 export trade is even directly encouraged by a system of bounties. But 
 whether they pay or not is a matter of no moment, so long as the country 
 to wdiieh they are exported is n(uie the better tor it. In the im|)osition of 
 taxes on individuals, the State makes no distinction l)etween citizens ami 
 foreigners; all are r( piired to contribute alike, regardless of the relation any 
 portion of them may bear towards any foreign power. And so it ought to 
 die with reganl to the |)roducts of human labor, whether home or foreign. 
 They should contribute alike to the support of the goveriiracnt of the 
 'country where they are consumed. Mr. j\Iill, when arguing against dis- 
 criminating (kities, maintains that whenever an import duty is placed upon 
 a foreign commodity, tiie home-made commodity should be subjected to a 
 corresponding excise dutv, so that the home and the foreign producers shall 
 be on exactly the same footing. This is precisely what we contend for in 
 the interest of the lion)e proilucer. Mr. Mill, however, forgets that the 
 flatter already pays indirectly his fair share of the taxation of the country, 
 and to charge him, in addition, an excise ,-:ity on the commodities ho manu- 
 factures, would be manifestly unfair. Tiiis would be taxing the home for 
 the benefit of the foreign producer, a policy which may be disinterested 
 enough, but scarcely eommendal)le for air that. 
 
 It is ditficidt enough at any time t**' Iptablish manufactures in a new 
 country, but altogether impossible if (fie local manufacturers are unfairly 
 han<lieapped. The foreign nxTunifaeturer has possession of the market, to 
 begin with. Nex'i he is usually a man of large capital, while the local 
 manufiicturers as a rule are men of small means. Once in possession of the 
 
 i| 
 
RE.STIlICTIOX« ON TRAPE. 
 
 market, with utiliniiteil command of oa[)ital, it is a very (.ajjy matter to 
 maintain it. Mo sooner is Ik; informt-d, tlironirh liis a;j;<iits, that a certain 
 commodity wliich he has been s(ij)[)lyiiijx i^ being siijiorsciU-d by a local pro- 
 duction, than the rorei2;n manutiieturer immediately torwardh to tbat market 
 an extra supply of the commodity in question. The market bein^^ thus 
 supplied with more than is requirtnl, prices recede, and the local manufac- 
 turers not havini^ capital enough to enable, them to liold out for a remune- 
 rative price, sueeumb to the pr ssiire. The latter out of the way, the foreign 
 manufacturer lias the field all to himself again, an<l from the high prices he 
 can now obtain for his goods he may easily recoup himself fur his previous 
 losses. This is a plain statement of what occurs ovvv dav In the colonies 
 when any attempt is made to compete with old-established industries. 
 
 As an illustration "f how the system works, take the following statement. 
 recently made at a (mblie meeting in Sydney, by Mr. Mort, an old atul 
 enterprising colonist of New South Wales. "He had," he ^aiil, "seen a 
 larire number of industries perish in this eountrv, not because thev had not 
 inherent strength, but because they had been strangled, as it were, by the 
 conipetition of other countries. lie could refer to the time when soaj) w.i^. 
 an article of importation into i!ris country FiVery man knew perfe(;tly 
 well that we could make soap a great deal cheaper than we could get it from 
 England, for we had the tallow and everything on the spot to do it with. 
 I hit constant shipments were pcrscveringly sent out, which kept down the 
 market price, and the eonsi'fjuence was that mdess a man had a very strong 
 back indeed he could not bear up against them until he could establish his 
 industry. Take the article of maizena, with which he was intimately 
 conneeted. A great many years ago he obsca'ved that corn grew here almost 
 spontaneously, and was a large industry of our farmers, but yet he saw that 
 corn Hour was sent out hi'rc, and sold at the almost fabulous price of one 
 shilling a pound. He at last met with a gentleman such as he )uid long 
 been looking out for, and, with another friend, he comuienced. the maizena 
 industry. We immediately lowered the price to fivcpencc a potmd ; but we 
 had to contend against shi[)ments wliich kept droi)ping in now and then 
 in the hope, as he supposed, that we should be swamjted, as indeed we 
 should have been, had we not thoroughly believed in the Industry. We 
 now sold our maizena (which many ])eople said was better than the corn 
 flour imported) at threepence a pound less, and yet we wore in danger of 
 having that industry strangled. AVe were rich in kerosene shale, and yet 
 thousands of tons of kerosene oil were annually Imported, a'thongh we had 
 abundance of the material from whi<'h we could make it at a less price. It 
 was the {)erj»elual small shiptuents that came rolling in that swam[)ed us."* 
 
 Take another case. The colony of \'ictorIa exported in 1870, according 
 to the statement of the registrar-rgeneral for that year, tallf)w to the extent 
 of .i!358,<S03, and she imported thesameyear candles and soap (the {)rincipal 
 material of which was tallow) to the extent of Xl."52,129. A glance at these 
 figures would lead a stranger t^ '«p])ose that the Victorian colonists were 
 the reverse of enterprising, or they wouM have retained al least a portion of 
 that tallow to convert it into candles and soag. for their own use. This con- 
 
 * Reported i;i tlie S'jdnfy Morning Herald, Marcli 2-''th. 1870. 
 
8 
 
 REfiTUUTIONS ON TUADE 
 
 
 elusion, liowever, would bo entirely erroneous. Year after year the most 
 systematic and energetic attempts have been made in the eolony to manu- 
 facture both candles and soap for domestic use, but without success, for as 
 soon as the local manufiieturers had supplied a suitab'e article, and reduced 
 the price in order to etFect a sale, large shipments came pouring in from 
 abroad, and swamped the market. The attempt was repeated time after 
 time, and no smmc! had one manufacturer failed, and high prices again 
 l)ecome the rule, than another competitor was ready to enter the fit'ld, and 
 so or\e followed the other in rapid succession, but always with the same 
 result — utter rui>i to all connected with the undertaking. Under the tarit!* 
 of 1871, however, candles and soap pay an import duty of twoj)ence i)er 
 pound, and there is novv a prospect of the manufacture of these ••ommodlties 
 becoming an established industry in the eolony. 
 
 One more illustration. The colony oil Victoria is a great M'ool-producing 
 country. The exports of wool from this (X»iony in 1<S7(), according to the 
 aforementioned authority, amounted to J.3,205,106, and the inijwrts of 
 v/ooilens and woollen piece goods in that year to £817,087. A clotli factory 
 was established in the town of Geelong several years prior to this date, and 
 w'as a fair success, the company which owned it paying a dividend of ten 
 per cent, on the capital itivested. A kind of tweed was ma<le at this factory, 
 which enjoyed a high reputation in the colony, owing to its good wearing 
 qualities; but an enterprising importing firm in Melbourne forwarded a 
 sample of this cloth to Yorkshire with instructions to make a quantity 
 equal in appearance, at a price mentioned. The oonse(piencc was that large 
 shipnK'uts of shoddy imitations of this article were imported into Victoria, 
 auti sold at a price lower than the home-made cloth could be produced for, 
 and the conq)any's cloth — which was really the cheaper aiticle of the two, 
 taking the superiority of the quality into consideration — became a drug in 
 the market. To save the local industry from utttr annihilation, the legi.-la- 
 turt! imposed a duty of ten per cent, on all cloth imported into the colony, 
 and since then tin' manufacture of cloth has assumed largfjr pro[.ortions, 
 an<l new factories have already started, or are about to start, in various 
 ])art8 of the ciilony. 
 
 It r ight naturally bo supposed that a countiy situated at a great distance 
 from Is soun.-o of supply would be protected frou\ a periodical glut of 
 impor -^. But such is not the case. Tt is only a question of a delay of 
 months, instead of wei^ks or days, in the forwarding of the goods to their 
 di'stination. In fact, the very distance from the source of sup|>ly inflicts 
 anothor evil on consumers. The long voyage offers ami)le facilities for 
 foroKfalling the market. Nowhere do goods so fluctuate in price as in those 
 countries wl)ich are situated at a great distance from their source of supply. 
 Australia and ('alif()rni!i for instance, M^ich draw their chief su])ply of 
 nmnufactureil fro(xls, the one from England, via the Cape of Good Hope, and 
 tile other from tii«> Atlantic States, via Cape Horn, are constantly subjected 
 t<» this system of forestalling. There is e^ ajely a commodity imported into 
 Australia but has, at one time or anotln^r, l)een manipulated in this fashion. 
 The T)ractice is th i-e ciirried oft in the most systenaatio manner. There are 
 
 practice is th '"e ciirried onj in the most systt 
 individuals then- who make it their special study to create an artificial 
 soafcity. The Dirxim operandi is very simple. No sooner is there the 
 
REHTPaOTIONS OX TRA hE. 
 
 9 
 
 slightest prospect of even tlic most temporary (.lericienoy in the supj)!)' of 
 any commodity, tlum some one immediiiicly '•unimences to buy up every 
 parcel in the market lie can lay his hands on, and every shipment to arrivf*. 
 Once in possession of the bulk of available stock, and ho is in a position to 
 demand his <nvn price from the consumers. In California the same system 
 prevails. "The mercantile business is very lively and ilnctuating in Cali- 
 fornia," says jVIr. ITittoll. "There is no people in the world, who, in pro- 
 portion to their numbers, ini])ort so largely of foreign goods, or who pay 
 such prices for them. The amount consumed is not very great, the sui)j)lies 
 are irregular, and the time recpiirc'd to obtain shipments round (,':ipe Horn 
 about four months, and thereibre it is not a very difficult matter to (brestall 
 the market; and it is a frequent occurrence that a few wealthy men coujbine 
 togviher to try to buy up all of a certain kind of merchandi/e, and then 
 control the market and raise the price. In other countries it is impossible 
 to get any accurate information about the supply of an article which is stored 
 in large quantities in llfty cities, and owned l>y hundreds of merchants and 
 producers; but in California the main stock of all imported goods is storeil 
 in San Francisco, and is held by a few men. Our business of dealing in 
 merchandizing is thereibre full <Sf specidations, which, tliongh dangerous, 
 are agreeable to the bold and enterprising, and <M)ntril)Utc to render our 
 trade [)eculiar and different from that of other States."* It is apparent, 
 therefore, that in countries remote from the source of supplies, like Australia 
 and California, those wl;o consume imported goods have to pay black-mail 
 to forestallers, in a<1dition to shipping charges, manufacturer's )>rofit, and 
 importer's commission; and this l)lack-mail is often of no trifling amount, 
 l)ut varies, according to circumstance, from ten to one humlred per cent. 
 on the ordinary market price of the goods. In estimating the difference in 
 ])rico between an imported atul a home-made commodity, however; this con- 
 tingency of Ibrostallors' profit is seldom or never taken into accnnnt. 
 
 There are besides other circumstances which must not hv. lost sight of in 
 estimating the comparative price of an imported and home-uiade commodity. 
 It does not by any means follow that be(,'ause tlie ])rice of a home-made 
 commodity is higher than that of an imported one, the consumer is a loser 
 by the extent of the dilicrence, fbr the higher priced couimodity, even when 
 the quality is I he same, n»ay often, in the eu'!, be the cheaj)er of the two. 
 Sui)[»ose, for example, that in a distant British colony thei-e is a steady 
 demand for sleaia-engines, the mauutiicture of which lias not been cstfiblisheil 
 in the colony; the intending purchaser, looking only at first co.st, ascertains 
 that he can import the kind of arti(;Ie he wants for somewhat less than he 
 can purchase it at, uiaile in the colony, and he accordingly orders it from 
 abroad. Ho does not take into (^tisideration, as an element in price, tiie 
 loss of timo in procuring his ateani»-engine from a ilistant part of the world; 
 the risk iu' eni'ountcrs of having forwarded to him a dilfercnt article from 
 what he ordered; the cost of getting all the more intricute working j>arls in 
 duplicate; or the e.vtra expeni^j .'Hvolvcd in making the uecesstiry ri'pairs 
 11 fterwards, owing to tlierc being no ])roper enginei'riug estaldishments in 
 the colony. Ten percent, on cost price w6uld probably be too little to 
 
 -*«- 
 
 • " R«source3 of Ciiliforni*," p. 3313. 
 
r 
 
 10 
 
 RESTRICTIONS t)N TRAPE. 
 
 Pa. 
 
 allow for those coiitiiip;en(;it>:, so that if an ad fiJorrin duty of ten jht cent. 
 
 . were ini[)<)sf(l on all iinportiMl steam-engines, and if that duty liad the effect 
 
 '^'V2 c?Au?l of establish inij; their numniiictnre in the colonv. the consunier wonld virtuallv 
 
 rt/Oii/v H^'^y '*" niore for his home-made artiele, even were the home manufacturer 
 
 !l I to take the lull benetit of the duty, than the same kind of article would 
 
 CjQ tlxA^A have cost him before its imposition, while the colony would be the gainer 
 
 i\ ^^y ^^'^ establishment of a permanent industry. We are aware that this 
 
 t?ii.Z /.L?| letter advantaije is considered to be an illusory one, as capital and labor, it 
 
 Coiup<'<\}^ alleged, would only be diverteil from one industry into another, without 
 
 any real benefit to the country. To tiiis we answer, first, that this objection 
 
 '"'<9?<»(: VJ wouhl hr.ve no force whatever, unless the ?/;/w('^: capital and labor of the 
 
 / i country were already fully and remuneratively employed (a supi)osition 
 
 W^4('inev<'r yet realized in any country); and .secondly, even if it were so, these 
 
 lobjections could have no weight with those who believe in the doctrine of 
 
 demand and supi>ly, for if the creation of a new industry withdraws capital 
 
 and labor from an old one, other capital and other labor will liow into the 
 
 Jatter from other (juarters, and so it wonld go on, till every vacant plac€ 
 
 j was occupied by fresh capital and labor (lowing in from abroad — that is 
 
 \always supposing the inchr^iries to bo retn'inicrative ones. 
 
 We have luiw, we tliinl<, shown that, inider certain circunislanees, the 
 imposition of an im[)ort <huy has the ei^iect of encouraging local competition, 
 the necessary result of such competition being a reduction in price. But 
 we may be asked, Supposing the duiy had the eircct ('s^ merely substituting 
 the local for the f()n'ign proiluct, that no redui-tion in price followed, nay, 
 that the price was actually increased, owing to the local producers taking 
 the full benefit of the Import duty; would not the consumer, in such a case, 
 be worse (j(T than before, and the State none the better from being deprived 
 of the revenue from the imj)ort? Would not the [)roduc(r be the only one 
 t!)at wouM beneiit by the change, and would not the consumer be robbed 
 for the benefit of the producer? Political economists of the English school 
 tell us that this would be the iiractical result. But this would be to assume, 
 first, t'lat the impost is so high as virtually to prohibit foreign competition, 
 whieh would l)e contrary to the principles here laid down, which are basecl 
 o;i a system of equivalent taxation, such as experience has demonstrated to 
 be adapted ti» encourage, not to prohibit, competition; ami, secondly, that 
 if local ))roducers had the field to themselves competition between one 
 another would cease. We cannot admit either assumption. The more 
 equally the Kx'al au<l foreign proilucers were made to contribute towards the 
 reveuu(>, the ketMicr would bo the competition between thi^m, and the s.'iuu! 
 priueipic would hold ei|ually good in (Miconraging competition among local 
 [troducers, if the foreign producers were <}afc of the way. 
 
 Jiut ev-'ii admitting the premises, w(! (Urfnur to the conclusion drav/n from 
 thcni. W'l' maintain that neither tin' coiusumer, on the on«' hand, nor the 
 State on the oth r, need sutler any loss t^v the im[)os(. Regarded sitnply 
 as such, no doubt the consumer woidd -iKtiyi^it of pooket by the transaction 
 (that is, supposing the duty was not ■'intercepted) ; but regarded, as un- 
 doubtedly we ought to regard '.him, as a,„.jnemlx'r ot the comnuinity, the 
 expenditure may uJtimatcly be repaid him with interest, and tin* SUito also 
 r.i.ay gain indirectly much more than it has lost from being de[)"'lv(,'d of the 
 
RESTRICTIONS ON TRADE. 
 
 11 
 
 revenue from the duty. To make the matter plain, let us put a hypotli''tifal 
 case. A country imports foreign manufactured goods to the extent, sav, of 
 one million sterling annually, all of which are admitted duty free. As 
 these goods cannot, at present, be produi-ed at home for less than ten per 
 cent, above what they can be im|)orted for, it is proposed to levy on them 
 a ten per cent, ad valorem duty, primarily for reveinie, and se(;ondarily for 
 the encouragement of local competition. The duty we fix at ten per cent., 
 as that is the estimated aggregated amount of the taxes borne by the local 
 producers. Ten per cent, on one million sterling is exactly £100,000, and 
 that, political economists tell us, is the precise amount that would be filched 
 out of the pockets of consumers for the benefit of j)roducers, if the local 
 took the place of the imported product with the duty added. Let us see, 
 then, how the figures \vork out. .,\Ve must first ascertain how this million 
 sterling is disposed of — how mucii expended in raw material, and how much 
 in wages, interest, and profit. Witli regard to the first, the pro[)ortion 
 expendeil in raw material, the question will be uiuch simplified if we assume 
 that thii can be had in unlimited quantities at home, and that there is no 
 demand for it abroad in its unmanufactured state, such, for instance, as 
 barley and hops (f )r beer-making), sugar-beet, porcelain clay, iron ore, or, 
 in fact, any agricultural or mineral product. Jf we assume, also, that there 
 is an abundance of land from which to obtain these ])roducts, which would 
 otherwise be unproductive if not used in the manner indicated (as in Aus- 
 tralia, for instance), then the raising of the raw material niay fairly bo 
 rec^koned as part of the process of manufacture. Su[)pose, therefore, that of 
 this million sterling fifteen percent., or Xl.")0,0OO, represented interest and 
 profit on capital, and the other eighty-five per cent., or £850,000, repre- 
 sented wages; and suppose that we tnke Mr. Dudley Baxter's estimate of 
 the income of a working man in Great Britain* as our standard, namely, 
 £70, the family consisting of four persons; and the same writer's c timate 
 of the amount of taxes paid out of that income, at ten per cent.; then we 
 have the materials on whi(!!i we may base a calculation. Tire above sum 
 of £850,000 would, therefore, if expendeil in wages, give employment to 
 12,1421^ workmen, each of whom would contribute in the shape of taxes 
 to the State £7, making altogether £85,000 out of the <:100,000. Thus 
 eighty-five per cent, of the duty, \yhich was alleged to be filched out of the 
 pockets of consumers, has already been returned to the coftbrs of the State; 
 and as the remaining fifteen per cent, allowed ibr interest and profit on 
 capital has not been wasted or hoarded, but expended again, chiefly in labor 
 in one shape or another, and as th;vt labor likewise pays taxes at (Jie same 
 rate as the other, we may consider, the whole £100,000 has been returned. 
 But that is not all. The money paid for wages lias not, as we have sjiid, 
 
 * In II paper rwid l)ef«)re the Statistical Society of Tvondoii, in Janiinry, 1« (•, on t1it> Taxation 
 of the I'nit'd Kiii-T'loni, Mr. Ii:i.vtor p^tiJU*tt'(| hat a man witli an incmio of £IO.ui)(> a year, 
 and a lioiiscIioM of fourU'oa jwrsons, pa; »J per i-ont. in taxes; a iiiiin v. iili iiii itn'ome of XAIK* 
 a vt'iir, and a thmily of spvon |>orMonn,'fllik*<< tOV por cent. ; and a wotkiii^ man witli an ini-i>ine 
 n{ £7(1 a year, and a faniily of fmir pornoiiM, pajil 7 per (Kcnt. Thi» lattci- iiinouiit, liowcvor, hi; 
 estiniatesj is only wtiat » iferliinif man of tenipomti' lial)it*< yayn, mid over and aiiov tliis there 
 is a reaidiiA-rftjixatioifrtf £10,0M>.<)(X)a y«iir. d.TivfHl from nlci^oiic drinks, whieh are eoni<nnied 
 ehiorty liy th^ working clittnt'it, whi"h, in liis estimation, brings the woHcing man's Ui\es fully 
 np tu lo']f)«r aiut. y 4 . 
 
12 
 
 RESTRICTIONS ON TRADE. 
 
 been thrown away; it has only changed hands, and it will keep on chiingliig 
 hands. The £63 of yearly income remaining to each laborer after [)aying 
 tjixes, will be again expended in wages and profits. The baker, the butcher, 
 the tailor, the shoemaker, will each receive his .share of this amount; and 
 these again will pass it on to the miller, the grazier, the manufacturer, the 
 tanner, and so on, in one neverceasing round, till it finally passes out of the 
 country. In this way a very small industry may give employment to a 
 whole army nf taxpayers, and the revenue from the import duty, which the 
 btate allowed itself to be d(:})rivcd of, may be returned to it a hundredfold. 
 As for the consumer, he participates in the general benefits enjoyed by the 
 entire community; he also pays loss taxes, as the expenses of a government 
 are not incn-asod in proportion to the increase of population, though they 
 arc diminished in proportion as population is j>rosperous. 
 
 We shall, no doubt, be met with the- stereotyped objection about State 
 interf(Tence in the regulation of trade, but without entering into the question 
 of what are and what are not the functions of the State, we would simply 
 ask this qiiestioti. If it is improper to impose a tax when one of the objects 
 aimed at by its imposition is the development of local industry, would it 
 not be equally improper to abolish a tax ffW the same purpose, should it be 
 discovered that its maintenance lias a contrary tendency? In other words, 
 it' it be wrong to impose a tax, will it not be also wrong to remove one, 
 when its removal may alter the existing state of things? If, say, an excise 
 duty of five per cent., imposed for revenue purposes on a iiome-niade com- 
 modity, had the elfcct of discouraging its manufacture (the five per cent, 
 just turning the scale in fixvor of the foreign comniodity), according to the 
 let-alone doctrine, it would be improper for the government to abolish the 
 duty we/r/j/ because it was injurious to the home trade. Up till 1845 a 
 duty of f'^i^d. per lb. was imposed on all raw cotton imported into England 
 from America; but it was found that this duty had the effect of discourag- 
 ing the cotton uianufaetures of England, j^nd was just sufficient to enable 
 the American n\anufaeturGrs to compete successfully with her in the colonial 
 and foreign market. The legislature of England, however, did not scruple 
 to abolish the tax as soon as it was discovered that it prevented the growth 
 of an important local industry. The immediate effect of the measure was 
 to transftT the scat of the cotton inanufacture from Massachusetts to L;uiea- 
 shire. Did the legislature do Avrong in flholishing the duty on raw cotton? 
 
 Or take another case. By the terms of the union, Scotland was, fi)r the 
 first time, allowed to liold direct intercourse with the American Colonies 
 and the West Indian Islands. The inhabitants of the little village of (Jreen- 
 ock, in the west of Scotland, saw in this 'ft fine opportunity for increasing 
 their trade, and with great foresight and !it!%-denial they voluntarily imposecl 
 on themselves an assessment of In. -hi. 6t»l\nr!; on every sack of malt brewed 
 into ale within the limits of the corporation, and the money so raised was 
 to beex|)ended in making a harbr. for thg port. The work was begun In 
 1707, and finishe<l in three years afterwai^^.j, at an expenditure of over £r>.- 
 000. The undertaking provixl a eom^lctft Success. The assessment and 
 port dues cleared off the whole debt in thirty years, ind left a balance to 
 their credit of £1600; the |)opnlation of the place was largely increased, 
 an important trade was opened up which has been retained to this dav, and 
 
■ 
 
 4.' 
 
 RESTRICTIONS ON TRADE. 
 
 13 
 
 which lias added innnensely, not only to tlie town of Greenock, but to the 
 whole west of Scotland.* The corporation has been coiupllnuMited for its 
 enterprise and self-denial in this matter, and justly so; had the governnient 
 done on a large scale what the corpor; tion did on a small one, would the 
 case have been altered in the slightest degree? 
 
 In all discussions of this nature we must not fail to di^jtinguish between 
 the science and art of political economy. Science has to do with laws; art 
 with the application of those laws. The science of political economy teaches 
 us that labor is the source of all wealth; art how to apply that labor to the 
 best advantage. So far, therefore, from the State exceeding its functions in 
 lookinii- after the material interests of the nation, it mav rather be considered 
 one of the chief objects of its existence. The prosperity of a country depends 
 upon the industry of its inhabitants. With nations, as with individuals, 
 poverty follows idleness, and wealth industry. The true test of good 
 statesmanship is the prosperity of the country; and the art of statesmanship 
 consists in a{){)lying the laws of political economy to the development of the 
 resources of the country so as to provide for the full and profitable enij)loy- 
 ment of the whole population. But no country exclusively engaged in 
 raising raw produce, or, iu other words, no country without manufactures, 
 can fully employ the wliole of its available lal)or. I'here will always be 
 some portion of it wasted, no matter how industrious the people. Raw 
 material is procured almost exclusively by out-door labi>r, and such labor is 
 always intermittent in its nature, as it depends on the vicissitudes of the 
 seasons. In the sugar and coffee plantations of the West Indies no con- 
 tinuous work is done for many months in the year.f In colder climates 
 the severity of the winter puts a stop to all out-d(»or occupations. In tiie 
 Orkney Islands, Norway, Sweden, Russia, and North Cern)any, all out- 
 door labor entirely ceases for seven or eight months out of the twelve.]; It 
 follows, therefore, that if the inhabitants of those countries confined them- 
 selves to agricultural pursuits, they would be unemployed more than half 
 their time. To prevent this enormous waste of pro(hictive power, it berouK's 
 necessary to provide them with in-door employment, in other words, to 
 encourage the growth of manufactures. 
 
 liut, apart from the intermittent nature of out-door labor, there is another 
 difficulty in the way. The whole population of a country can never be fully 
 employed uidess there be a divei*«ity of occupations suitable to the young, 
 the old, the weak and infirm of both sexes. A farmer can always oi)tain a 
 larger return from a mixed system of husbandry, or a combination of live 
 stock anvl j^rain, than from either separately. A greater weight of herlKige 
 (jun be raised from a plot of ground, if sown with several varieties of grasses, 
 than with one oidy.§ And so <t is with the industry of a country — the 
 more varied the o(!eupations tho |,i«8ater the prosperity. If growing grain 
 or i-aising cotton be the only occuMtion of its inhabitants, what becomes of 
 
 '* ^rcCnll:(ch, " (IpoxraTihiTOl md .StntWtciilDictioimrj-," vtjl. i. p. (t.lO. 
 t lU'/elow. " N()t(>s oil JjMnnica," p. 54. , 
 
 T l.aiui^f, ''Denniiirk «*•• th« Diichios," p. 299. Trobohski, " I'loductive Forces of R 
 vol. i. p. 44«. "T 
 
 U8.SUI, 
 
 i Darwin, "Origin of Species," p. 113. 
 
 . ..»., 
 
14 
 
 RRSTRICTIONS CN TRADE. 
 
 those (and they form a large proportion of every population*) who are 
 pliysioally incapable of undergoing the fatigue of out-door labor? If nature 
 ever intended, as moilern theorists would have us believe, that the ])rlnciples 
 of the division of labor should be carried to the extent of one country grow- 
 ing the produce for another to inanufaeture, we should expect to see popula- 
 tion arniiigeil on a somewhat diftetent plan from what it is at present. Un- 
 ibrtunately for the theorisLs, we find all classes of population pretty equally 
 lyprcseiited in every country. It is very noticeable, iiowever, that all over 
 the world those countries which are destitute of manufacture? are notoriously, 
 poor; while those which combine manufacturing with the raising of ran' 
 proiluco are <listiuguished for their wealth and general prosperity. Compare 
 the st'ite of Irelaiul, past ami present, with that of England and Scotland,! 
 or taUe Ireland by herself, and compare the south and west with the northern 
 j)art of tlie island, and tlie contrast is retiiarkable enough. Not less striking 
 is the contrast between the Southern States of America and New England. 
 The inhabitants of liarbadoes have no other occupation than the growing 
 of sugar, and they are in a state of abj(K't poverty. In the sugar and coffee 
 districts of Cuba, where nature has lavished her richest gifts of soil and 
 climate, there exists, in the opinion of a world-wide traveller, " tlie most 
 desperate and deplorable poverty oti the face of the earth. "| 
 
 If the absence of diversity of employment produces such results as these, 
 need m'c wonder at the steps taken by some of our colonies to create manu- 
 factures through the medium of the custom-house? Australia is but a 
 young country yet, with plenty of avaihible land for settlement, with exu- 
 berance of resources, mineral and agricultural, and hitherto not greatly 
 overburdened with population, and that, too, of a class consisting, probably, 
 of a smaller proportion of the physically incapable than any other country 
 in the world. Y(!t for years past the great difficulty has been to provide 
 ein[)loyment for the rising generation. The question of tariffs there has 
 lH>eu eminently a social one. In Victoria three successive general elections 
 have taken j)lace, a majority of the Assembly being returned pledged, on 
 lach successive occasion, to a higher and higher tariff, and all because the 
 question of manufactures came home to every elector. This view of the 
 question may be new to most English readers of the present day ; but the 
 studrntof history will remember a perioH wlien the people and Parliament 
 of England t(»ok a not very dissimilar view of the matter. All countries 
 in a certain stage of ilevelopment feel the want of diversity of occupation. 
 England has long outgrown that stage which is jjccnliar to young countries ; 
 but she felt the want of it at one period as keenly as any of her colonies do 
 now. We sj)eak of England at the timelSrhen she \vas not a manufacturing 
 country, but an import<>r of manufacture'^,* when she was beginning to find 
 out that to grow grain for exportation^ j»nd wool for other countries to 
 inaimfacture, was not the most jiroiitabk' kin'd of industry for her popula- 
 
 * Mr. Tri'I»nn«ki stales that the emplovnicnt of ffl"^ ' »*lltons of person;* in the manufacture of 
 flax and hemp in Russia did not '-iuwe ilie withdrofT^^^i^ a single cultivaUir from the lalwrs of 
 llie Held (" I'roductivK Forces of RusMa," vol. i. jt |S?h- 
 
 t It has been esliniated that out of ?85 oceupntions rdatintj to ttnde, e(immcree. ami manu- 
 facture in the three kingdoms, 74a»w«fc punmed injjlnglsnd, .^01 in Scotland, aiip onlv 201 in 
 Ireland. , 
 
 I Atlantic Munthljf, i^r JAriumry, li<6d. • 
 
EESTUICTlO.ss ON TRATE. 
 
 15 
 
 tion. At the time of Henry Ylil. and Elizubetli the unemployed question 
 repeatedly (oreed itself on the noticje of the legislature, and the legislature 
 of that period, singularly eiiougli, considered that the best way to prevent 
 "the abominable sin of idleness" was to establish manulactiires by the aid 
 of import duties, precisely in the sarae way u.s some of our colonial legisla- 
 tures at the present day are doing. The statutes of the early American 
 colonies present a record of similai;' experiences. The growing of toba<'eo 
 was at one time the only kind of emj)l()yment in many of the early settle- 
 ments. Oil the price of that commodity falling to threepence per pound 
 (the ,>rice in 16-"j9, and even less subsequently) the settlers were thrown 
 into great distress. After enduring great liardships for som(> time, the lo^-al 
 legislature was induced to olfer premiuujs to secure ilivej-silieation of emj)loy- 
 ment; but, on these failing, reeour.e was had to (MjmpulsDry nieasun!s, and 
 acts were passed, compelling the [planting of mulberry-trees, the building 
 of tanneries, the erecting of looms, with provisions attached for the employ- 
 ment of a certain number of ctirri'M's and shoemakers in every county. 
 
 Unless the ditforence in the conditions betwet-n old and new countries be 
 constantly kept in view, the whole object of c-olonial legislation is apt to be 
 misunilerstood. It stands to reason that what may be good for a country 
 with oM-established industries mav be very bad for a (iriuntrv which has 
 none. Old countries sulfer from a ])1ethora jf ]>opulation ; new countries 
 from a scarcity. Old countries would prefer em[)loying their surplus labor 
 in manufacturing commodities for new countries ; new countries, on the other 
 hand, would ratlwr import the labo that should produce the commodities, 
 than the commodities themselves. !?trange as it may ap]>ear, it is neverthe- 
 less true, that it is just because the party of progress in tlie colonics are 
 ojjposed to monopoly in every shape, that they are the advocates; of restric- 
 tion In regard to commerce. Instead of that policy savoring of monopoly, 
 they maintain that it has the very opposite tendency, and their chief object 
 in imposing import duties is to pufcilown monopoly !)y extcuiding the spluM'c, 
 of competition. In this respect tluiy are more for free trade ;han the i'iw 
 traders themselves. But, then, they have no wish to perpetuate a sham, or 
 to practise a make-believe system of free trade. English statesmen and 
 journ-alists .i.:e nover tired of expatiating on the blessings of free trade, 
 while tl\ey know all 'J>.o time that free tnide means monopoly for Engli-sh 
 '.\iunufa(!turci"s. It would i/.' ^o\\y to expect young trees to thrive side by 
 side with oM ones, if the latter cover the ground with their roots, and extract 
 all the nourishment froii/ the soil. Extend the sphere of competition, and 
 restriction, in some shape, is inevitabl(\; narrow it, and competition bci.omes 
 monopoly. But although the object of the colonists i.s to encourage compe- 
 tition, it is as a means otdy, not a* 'U end, and they arc, therefore, as much 
 opposed to handicapping indnst •? the most ardent frc(> traders. They 
 are not favorable to high, or whpl • 'e called jirohibitory, import duties, as 
 they are no less ojijv^sed to any sy m of taxation that would tend to secure 
 the local market tx) the local jwof' r, than they ai-e to the present system, 
 which, they believe, gives a mv.n<r ' to the importer. They would impose 
 restrictions upon trader but they wpnkljrnfiofifithem u;>on nil alike. They 
 have not owe tax for their own peo \U>, an«l ;inoiiier for the foreigner. Tlv;- 
 claim that all goods of the same kind, brought to t!ie ;s:).u](i market, should 
 
 / 
 
 
IG 
 
 EESTiilCTlOXS ON' TRADE. 
 
 pay the same market tines. Thoy may not be free trailers, but they claim, 
 at all events, to be lair traders. 
 
 To slim up the eonclusions arrived at, taxes on commodities do not always 
 fall on consumers, but soinetiiuos on producer^;, and sometimes on the inter- 
 mediate agent. When a duty is impofi<'d on a fonMgn commodity whii;h 
 the imporLinjj country has facalities for producing at home, in ordinary cases 
 the duty falls, in the first instance, on tlr consumer ; but when the duty has 
 the elFect of incresising competition, tlie tendency is to a reduction in price, 
 and, tlierefore, to the ultimate benefit of the consumers. As the duty 
 equalizes the conditions of production between the local and foreign pro- 
 ducers, it enables an entirely new class of competitors to enter the field, 
 namely, the local producers; and as th< circle of competition becomes ex- 
 tended, tlie rivalry among producers 1 comes keener, and prices become 
 lower; for com])etition inevitably leads lo this when it is genuine, and not 
 a monopoly in disguise, as is often the case. If the duty fails to increase 
 competition, it goes direct into the trea«tiry as revenue; if it fails partially 
 as a revenue tax, owing to the local produ(^er contributing part of the supjtly, 
 and paying no duty, the competition l>etwGen the local and foreign producers 
 will cause a reduction in price to the ccMmmer, Sf> that the falling off in the 
 revenue will be in some measure comj^ensated for. It' the revenue from 
 duty fail altogether, owing to the local articile taking the place of the im- 
 ported and duty-paying commodity, a threefold benefit will be secured. 
 The consumer will gain b)' a reduction in the price of commodities; the 
 public will gain by increased employ :<'nt of labor and capital ; and, lastly, 
 the State will gain by increased revenue from the additi^>nal number of 
 revenue-producing })opulation, supported by the new industry. 
 
 fc David Syme. 
 
 
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