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Les diagrammes suivants illustrent la mdthode. 1 2 3 1 2 3 4 5 6 4 ,%;■-' 1\ / ,/ U. iiV. 0. LIBRARY A TREATISE ON FREE TRADE '*.>^ ' ADDRESSED TO THE FARMERS OF CANADA Jfrom ^faiing Articles in .^HE CANADIAN GRANGER (i WILLIAM LINTON DROM. Born 6.t Burstwick, Yorkshire, Snel^nd March 10, i84id. e •• , Eon of Jol-m and illary Holmes Brov.n. Died, London, Canada, August 10, 1898 Editor r.nd Publisher The Cr.nadian GraiU^r 1875 to 1379. ^ On the Staff of Formers /^dvocnte (which absorbed the Granger) 1879 to 1881. M^tL^^q^? I-ondon Free Press as /gri cultural barter, 1381 to 18J8. mmmmmmm -H ^ // i U. 1/V. 0. LIBRARY A TREATISE ON FREE TRADE v,.;'^ • APDRESSED TO THE FARMERS OF CANADA Sxovci %^ixi% §ltticle0 in •fflE CANADIAN GRANGER 1 NiEWSPAPEE. LONDON, ONT.: BE PRESS BOOK AND JOB PKINTING COMPANY, RICHMOND-ST. . 1877. ;^^'.*| \ I \A CIRCULAR,. I The following treatise on a Free Trade policy, is addressed to the farmers of Canada. The farmers being seven-tenths of the whole population, and owning a corresponding amount of wealth, it behooves them — as a class — to study well this important question, as the burdens of the country are on their shoulders. Their interests should be before all others. In this short treatise we have aimed to represent the subject in a clear, terfae style, from the stand point of merit alone. The subject is of such scope, kM. comprises so many con- siderations regarding the welfare of not only the farmers, but the community at large, that it requires careful thought and revision, to put such an important subject in so small a compass. f ^3.9. b ? I w ^vl^^ CHAPTER I. POLITICAL ECONOMY AND TRADE. The science of political economy is of the greatest importance. It is to a community what domestic economy is to a family. It means prudence, thrift and industry. Everyone goes instinct- ively to the cheapest market for what he wants to purchase — that is, where he can get the most for his money ; and if he has sold his own labor or its products, which is the same thing, for its full value in the market, the effect of the two operations will be that he has sold in the dearest and bought in the cheapest market ; and this is the constant and universal practice. And if it were not for the intervention of money, this effect would be too plain to be misunderstood or denied. All parties exact a full equivalent for what they have to sell, and tliis is the natural and necessary principle upon which all ordinary exchanges are made — value for value, and labor for labor. This is the normal condition of commerce when not interfered with by un- natural derangements, called protective duties. These, sooner or later, so to speak, always throw out of gear the natural rela- tions of capital and labour, and cause great losses to those com- munities that are foolish or ignorant enough to adopt them ; they cause great fluctuations in the demands for labor, and con- sequently tend to the reduction of wages, demoralization and pauperism. Taking all things into consideration, it seems almost unaccountable that otherwise sane and sensible men, apparently honest, should be found to advocate so absurd a system as the protective policy in trade. Of course it was not wonderful that this policy should be so strenuously advocated and practised three or four hundred years ago, before the time of Adam Smith, when they even regulated the length of the tails of women's dresses, and of what material they should be made, according to the rank of the wearers, and also issued proclamations that all traders and gentlemen having no important business should leave London and take their families with them, within a certain number of days, for fear of an increase in the price of provisions ; and yet gold wan then thought to be the only wealth. These were the days in which protection was devoutly believed in ; but that such a fallacy should be persisted in in these enlight- ened days of steam and telegraphy, can be attributed only to the prejudices of a narrow selfishness. It is often said that Great Britain is indebted to the protective policy for her enor- mous wealth and power. That, however, is a great mistake. She has attained that position in spite of protection, and there cannot be the least doubt that she would have attained it much sooner if she had adopted free trade at an earlier date. Parties who put forth tliis opinion seem to forget that at that time all coun- tries were acting on the same principles of trade. Most Euro- pean countries had walled themselves round both by import and export duties, as well as absolute prohibitions. The present position must therefore be attributed to the true causes — indus- try, ingenuity, and the enterprise of her people, and to her unique natural advantages, which forced her finally to break through the system which only confined and crippled her. If the system of commerce which existed up to 1842 had continued up to the present time her population could hardly have been over fifteen millions. She could not now have imported to the amount of more than a hundred millions of bushels of grain yearly, besides other food, raw material, &c. But her astute statesmen found out that if she did not buy she could not sell; therefore, after a reduction of duties generally, they took off all duties on food and raw material, and partially on unfinished goods. Export duties, bounties, and prohibitions had ceased long before. The law of exchange is imperative and unbending ; if a country will not import she cannot export. Each country must export that or those commodities which it can produce cheaper — that is, with less labour than other countries can, or it must have a greater demand for some particular commodity produced in the country to which it trades. So that each can give in return a greater value in goods, or rather, that which will bring a greater price in the home market on account of its comparative scarcity. A profit must be had on each side, or the trade will cease. The profits of one country cannot be permanently interfered with by the fiscal regulations of another. If the price of imports be increased by a tax, the price to the consumer must rise sufficiently to pay the tax, with the usual profit to the importer, or the commodity will cease to be imported ; and if importation should be prevented through the duty, and the price of the home- made article should be raised, the tax so far would be paid by the oensumer. When a certain amount of imports are cut off, or pre- vented by protective duties or prohibition, and the imports i continue in quantity as before, just so much profits will be lost or destroyed, and to that extent will reduce the ability of the community to pay taxes. The protectionists, to be consistent, • ouifht therefore to advocate the imposition of export duties for the pur])Ose of curtailing the amount of tlie exports to balance the value of the goods kept out by the import duty ; or to in- crease the price of the exports, which would amount to the same thing. It is high time that the advocates of protection should study political economy from actual and natural causes, and not from the writings and speeches of mere politicians who, to use a common aphorism, have generally other axes to grind than those for the common good. Tlie only reasonable apology that was ever offered for the adoption of the protective system was that of Mr. Henry C. Carey. The effect of protection, according to him, was to locate the factory and the farm together, and so to save the labor and cost of the foreign exchanges. Of course this is an absurdity, as the difference of climates, soils and produc- tions which necessarily affect the industry, the genius, and tastes of the different nations, have hitherto always outweighed the cost of removal, as well as the expense of protective duties. All trade or commerce derives its profit simply from the saving of labor. It allows each individual or country to produce those commodities for which each is the most fitted, and has the greatest facilities of producing. This division of labor increases produc- tion, and commerce spreads the point equally over all countries. Protection, as far as possible, tends to force each country, and if carried to the fullest extent, each individual, to produce every- thing they require for themselves. If wine were required in some countries they must grow grapes in hot-houses, instead of obtaining five or ten times the quantity for the same amount of labour expended in some other production, and exchanging the commodity with France or Spain, or some other country of which wine is a natural production. The same may be said of tea, coffee, sugar, spices, &c., &c. No doubt some countries are rich, and others poor ; but that will not affect the value of the ex- changes, as they must all be made with a profit on each side, £wid each country must be contented with its own rate, as it cannot by any means tax that of its neighbour or fellow-trader. Profits cannot be forced or increased except in a legitimate manner, through increased skill or facility of production : they may^ however, be decreased by taxes, prohibitions, and delays. If the theory of ptotection were correct, it ought to be universally practised. Society should again adopt the regulation of agricul- tural production, the number of sheep and cattle to be kept on a given number of acres should be again limited, and the prices of bread and meat, .'•.'nl the wages of labour, should bo lixed and regulated by law. The old monopolies, guilds, and licenses should be again revived, and the number of apprentices to be taught again rogi»lated by their special authority. The balance of trade should be secured by heavy penalties on the exportntion of gold. And taking the Chine.se as an example, though we need not build a wall round the Dominion, we can at least surround ourselves by prohibitions and protective duties, and like them have no legal contribution for the making or mending of roads. Also, as far as possilde discourage foreign trade, only using our canals and railroads in future for domestic purposes. Trade cannot support itself any more tlian a man can lift himself from the ground by the hair of hi? liead. Agriculture is the support and foundation of proiit, and trade is only its handmaid. The attempt of a nation to get profit by an excess of traffic is a .spec- tacle too ridiculous for 'the present light of political science. Statesmen may pander to the ignorance and cupidity of selfish interests, but the laws of nature will be obeyed or exact tiie penalty, from which there is no escape. Nothing but permanent and profitable industry can benefit a nation. Monopolies may favour the accumulation of large fortunes in the hands of indi- viduals, l>ut if not earned by production they are a cheat and a fraud on the community, and are no test of the prosperity of the inhabitants. CHAPTER II. PROTECTION TO THE FARMEIt. It has always appeared to us that if one class of the com- munity was less in need of what is called " protection " than any other, that class was the farming class. The farmer is the great producer of the first necessaries of life ; he is, therefore, in the mo.st secure position of any class of the community. If he prudently varies his crops and products, they can never all fail together, except, perhaps, in the case of a plague of grass- hoppers, or some other general calamity, and then he must suffer with the rest of the community. But under such cir- cumstances, if he happened to be protected by an import duty on agricultural products, he would very s6on wish it removed. In the nature of things the farmer cannot be competed with at home by others at a distance. No one carries coals to New- castle, nor will water run up hill. But if a farmer, or a number of farmers, should attempt to cultivate very poor land, so that they fiould not produce as cheaply as their neighbors, that t 1 r ,t would be no reason that the food produced in the whole country sliould 1)6 raised in price for their especial henelit, as that would place all other producers at a disadvantage, and would react upon themselves by the increase of the prices of other com- modities. All the farmer re([uir('s is to be let alone. He is protected by his i)osition, and all interference with his interests will bo productive of evil, as it is in all other cases. The farmer, like all other individuals in the world, is benefitted by plenty ; but the efforts of the protectionists, if successful, would produce scarcity all round, which, in turn, would induce a slackness in the demand for labor, because it destroys capital by rendering labor less productive. Free Trade is best for all countries, whether manufacturing or agricultural. Let us take a slight review of the trade in the Dominion. In referring to the imports and exports for the last two years, 1874-5, we find we have imported about ten millions of bushels of Indian corn, and exported half that quantity. Of barley, in the same time, we have exported nearly ten millions of bushels, and imported none. Of wheat, we have imported thirteen millions of bushels, and exported eleven. Of Hour, imported nine hundred thousand barrels, and exported eight hundred thousand barrels. Thus, of the superior grains, leaving out other farm products, we export nearly twice as much as we import. And what does this teach us ? Simply that it would be impossible to benefit the Canadian farmer by a tax on grain, because prices could not be generally raised under such ciroumstances, as one-third of our farm products would still have to seek a foreign market, and that would regulate prices. If the tax had any influence at all, it would prevent reciprocal trade. It would injure the growers of barley and the importers of Indian corn, and would cut off the profit at present arising from that trade. We would have to produce all the Indian corn we required at a disadvantage, and cease to grow barley for export. We should have to grow more wheat, Avhich, no doubt, would have a ten- dency to decrease prices and profits, as we should have so much more to force into the European markets. It is sheer folly to suppose that the interests of a community, or even of a class, can be promoted at the expense of another class, or of another community. In the event of a scarcity, or a tax, which is much the same thing, all will eventually suffer alike. In extensive countries, in spite of the regulations of trade, it is often found that while in one place they are importing a certain commodity, they are at some other port, perhaps at the opposite extremity of the country, exporting the same kind of commodity. And why is this ? Simply because there is a demand for ^e com- wmmm modity in one place, and a facility in obtaining it, and in the other the circumstances are reversed, and the cost of carriage to equalize the deficiency would be more than the duty on import- tation. Thus the duty fails to ' e protective, and it is generally much more injurious to the community than beneficial to the Government. But when taxes on necessaries of life, of which we are speaking, arc most injurious, is when they create a monopoly in a few hands, and when the greater part of the extra price is corsumed in carrying the commodity to market. We allude now to the effect of a tax on coal in the Dominion for the benefit of the lower provinces. ■ It has been stated by very competent authority that coal from Nova Scotia cannot be laid down in Toronto under four dollars a ton (that is for carriage alone), while from the United States it can be obtained for one-third or one -half of that sum. Yet we have had coal actually taxed ; and, if we are to be pro- tected all round, no doubt the' coal owners will again put in their claim, notwithstanding a tax on coal would raise the expenses of every household, every railway, and every manu- factory driven by steam in the Dominion. To tax the neces- saries of life must always be injurious to a country. Our neighbors of the States appear to have had enough of protection for the present. They have thoroughly tried the system, in the full belief of its beneficial operation, and we need hardly say how utterly it has failed and broken down. They have imposed duties of thirty, forty and sixty per cent, on every commodity that was at all likely to compete with their labor ; and it is a notorious fact that these high duties have not pre- vented the importation of any one commodity, be it a necessary or a luxury, that has been thus heavily taxed. In proof of this, we may refer to a paper read at the " Social Science Conference," held at Philadelphia in June, 1876, by Mr. Lorin Blogett, Commissioner of Customs in that city. Speaking of the ineffectiveness of high duties to protect the manufacturer, or to prevent importations, he said : — " Perhaps the silk importations into the United States is the best single illustration. For twelve years past, under the Act of June 30, 1864, manufac- turers of silk have paid the heavy duty of sixty per cent, ad valorem ; yet the manufacture of silks has flourished greatly in France, and the values imported — starting at $8,936,182, rose steadily to .^36,448,623 in 1871-2, which was the highest to which they attained; and even under the present great general depression, they remain at 824,516,415 for the fiscal year 1874-5, witli almost exactly the same proportion for the preserlpyear." liere, then, we have a distinct and clear view of the operation of a protective tariff; the importation of a luxury, which started in the year 1864 under a duty of sixty per cent., at, say in round numbers, nine millions of dollars, reaching in the course of seven years to four times the amount, or thirty-seven millions of dollars. Of course the Government got the taxes, and spent them extravagantly, which no doubt assisted to bring on the depression that has lasted ever since 1873. And yet this luxurious commodity still continues to be imported to three times the amount at which it started in 1864, under the present duty. The same progress was made in the importation of iron, under what was assumed to be a protective duty, which finally brought on the glut — impoverishing the country by the destruction of unused capital and the loss of the labor of tens of thousands of workmen. If it be necessary furthur to show the evils of our neighbors' experience of the protective system, and the prospective condition in which it is likely to land them, according to their own opinions, we may quote a sentence or two from the New York Times of Sept., 1876, to the following effect. The writer says :— " The principal danger which now threatens our export trade, and especially our exports of manufactured articles, is the severity of the taxa- tion which is imposed on our imports. In the long run the imports must pay for the exports. When the foreigner is reduced to the alternative of paying gold in large quantities for our commodities, or of doing without them, he must do without them. We may buy back our bonds, and pay our debts, but we shall never have the fjill benefit of our natural advantages until consumers arc permiMcd to huy in whatever markets they jplcaso, without submitting to taxation for ihe benefit of selected industries." This is plain Free Trade doctrine, which has been evolved by the twelve years' experience of the United States, under the strictest system of protection, and yet it does not intimate the most important evil of the system. In a speech of Governor Tilden lately delivered at Saratoga, he brought prominently forward the dependance of society on the operation of demand and supply. He said :- " In tlie great metropolis in which his home was situated, and its immediate suburbs, there was something like 500,000 families, and pro- bably none of those families would know what food they would have on their tables to-morrow; yet they would all go to marke:^ without the least concern, with the expectation of finding whta they required to consume." Now, foUowino; out the train oj thought apparently indicated by these words, it is manifestyl important that these masses of people, nine-tenths of whom all the world over, belong to the working classes, should^^ at all 8 times employed, so that they might always have the necessary cash to purchase the supplies they might require. Any system, therefore, of trade or commerce that prevents the continuance of the demand for labor, not only injures and demoralizes the people wherever it takes place, hut in the present state of the world it injures, more or less, every other community. It is notorioufi that this general depression of trade has brought on a general lowness of prices, not only of manufactures, but of food and raw material, which can only be accounted for, as the crops have not been excessive, by the slackness in the demand for labor at present in all countries. Upon the permanent em- ployment of the people must depend the prosperity of a country. It should, therefore, be the first care of statesmen to promote it, as whatever injures so large a number of the people as com- prise the working class of any country must inevitably injure the w^hole community; and this has always been the case with aU protective systems, and alwaj^s will be. Yet this is the system of commerce that at the next general election the farmers of the Dominion are invited to vote for, under the pre- tense that their interests are sacrificed by the imposition of a duty on grain by the United States. We have previously pointed out the absurdity of this pretence. T.he market of England is always open to us free,besides those of several other countries of Europe, which pay the greatest prices for all kinds of raw produce, and to which the United States have also to export some of their surplus grain. It is a mere hollow pre- tense to assume that the farmers, are injured by this duty on grain, as in spite of it, as we have before stated, we constantly export all kinds of agricultural produce to the States, which we should not do unless the price was sufficient to cover the duty as well as the necessary profit. It is an unaccountable delusion to supiDOse that any country or people can be benefitted by imposing burdens upon themselves, by increasing the prices of goods by taxation, of which they are themselves to be the con- sumers. The Government may gain, but the consumer must • pay all taxes, all expenses, and all profits. CHAPTER III. FREE TPvADE OR PROTECTION. One of the Foreign Commissiciiers at the Centennial Exposition, in speaking of the effect of the United States tariff upon tjie interests of the farmers, said : — " You make them buy 9 'yi , high, and sell cheap — robbing them twice at once;" that is tO' say, in one operation. This is, indeed, a truth that would naturally strike the mind of any thoughtful foreigner. The operation of an extremely high tariff (take that of the United States) will necessarily produce high prices on the one hand, where the taxes are to be paid, and relatively depreciate the ' prices of the goods given in exchange. If this were not the case it would fail in the object intended, and be a mere nullity. But the protectionists claim that it will eventually conduce to low prices, or cheaper home-made goods. They seem to forget that such an admission must clearly countermine their prin- cipal position, which was chiefly to prevent the wages of the ^ working man engaged in producing these favored commodities from the necessity of falling to so low a rate as the wages earned by the pauper laborers of Europe. But for the sake of argu- ment, admitting the truth of their assumption that protective duties do protect, what, according to experience, does their con- tention amount to ? — merely to the operation of an ignusjatuus, _„^^-' ' or Will-o'-the-wisp : when you think you are the- nearest to it, you are suddenly the farthest off. In other words, when you have just attained the highest prices, and consequently the greatest prosperity, through the treachery of the system, and the absolute necessity of foreign competition,the market is overstock- ed,the master manufacturers fail,andthe workmen are thrown out of employment. Thus, what has been gained by either, is undoubtedly lost by the fall of prices, and the loss of wages to the workmen. But the question arises : By what process doe^U this come about ? Is it the natural and inevit- able conse^Pbnce of the system, or is it merely the result of fortuitous circumstances ? We answer that it is the inevitable consequence of the protective system. The first effect of an increase of duties is to prevent for a short time the usual importations ; the correctness of which assumption may be easily proved by tracing the effect of the different alterations of the United States tariff for any period within the last half century. On the increase of duties, as a matter of course, foreign goods will not be sold at a loss ; they therefore remain at home, or in bond, until one of two things shall occur. Either prices will rise sufficiently to pay the duty and to gi /e a profit to the importer, or that foreign exchange on the protected country has risen to a premium sufficient with the rise in prices to cover the expense of the duty. When that has been achieved, the foreign and home manufacturer will be again on an equal footing, and foreign goods will be again imported as before, and even may be increased in quantity, as in the United States ^u lO within the last fifteen years ; but that, of course, would depend upon a variety of circumstances that space will not allow us to explain. In any conceivable case no profit can be obtained by a community through the practice of this modern Mercantile System, and certainly, in the end, none by individuals. If one class should happen to gain, some other class must lose. Profit to the community can only he gained by free and untrammelled industry, and not by restriction. But assuming the rdle of the protectionist for the moment, and admitting that the prices of the protected goods remain permanently high, and the foreign goods that would compete with them could be kept out, it becomes important to enquir' who would pay the duty ? The ready answer would be, the consumer. This, however, would only be true to a certain extent. The manufacturer who profited by the extra price caused by the duty, could not be said to be taxed in the consumption of his own products ; the tax must, therefore, fall wholly on the eicporter, who would really get a less price for the produce he exported, on account of the dis- count on his bills if sold at home, or the risk and expense of the payment in gold, with the loss of the interest in the meantime. In the latter contingency no profit would be derived by the community from the transaction. The individual merchant might possibly gain, but it would be at the expense of the rest of the community. The community would lose the whole of the value of the commodity exported, which would otherwise have been consumed at home at a cheaper rate. This effect arises from the circumstance' that the exchangeable value grease of its ;^fitable to of money, or gold, will depreciate with every relative quantity. No trade can, therefore, be |n©n table to a community but what eventually brings a return of consumable commodities, and those commodities must be such as are not produced at home, or at least not in suffiicient quantities for the demand. A round-about trade may, to some extent, be profit- able, which protection duties have a tendency to create ; but, as Adam Smith remarks, " a round-about trade of consumption will generally give less encouragement and support to the produc- tive labor of a country than equal capital employed in a more direct trade;" simply because in a round-about trade there would be two or three times the expense in the cost of carriage, interest of capital, &c., wliich must be paid out of the final profit. We see, then, that an indirect, or round-about trade — one in which a profitable return cargo cannot be obtained — is of very little consequence, and can hardly be profitable to any community. Instead of encouraging such kind of doubtful enterptise, the Government should open our own ports under I \ II the lowest revenue duties, which is the only effective protection that any Government can give to its own peculiar capital and industry, and that which will produce the* most profit. Profits cannot be created by mere buying and selling, as witness the vast plethora of money at present in every mercantile city in the world ; they must exist, or arise naturally out of the over- plus, beyond the labor and capital expended ; and a free ex- change is the only method of securing the full advantage of your own facilities of production. All protective duties are therefore evil, because tliey do not nor cannot produce profit j they only prevent a free exchange of commodities between different countries, and therefore tend to reduce them, and as far as they are effective for any purpose whatever, it is only to transfer the legitimate profits of one class of tlie community into the pockets of another, with the least compensation. Under these circumstances, it seems hardly necessary to say that, in our opinion, the interests of the farmers of the Dominion would be sacrificed by the enactment of a protective tariff. CHAPTER IV. PROTECTIOX TO MANUFACTURERS. There is always a natural protection in favour of manufac- tures in any country where labor and capital exist for their production, especially where food and raw material are forced to be exportea for a market. In such case a premium exists for home-made goods, through the cost of carriage, insurance, interest of capital, &c., to and from the foreign country where the goods are marketed. On the other hand, if there be not sufficient capital and skill at hand, for the profitable production of manufactures, without the aid of a Government subsidy, Parliament is by no means justified in taxing the whole of the community for the benefit of a few who choose to follow an illegitimate calling, in- stead of developing the resources already at hand. Would it not be as modest, and equally honest, for these manufacturers to ask the Government to give them a bounty, or bonus, of ten, fifteen, or twenty per cent, on their productions, and tax the farmers so much on tlieir grain, Sec, to pay it. Yet this tax would be equally just, and perhaps the least expense of the two, as it would only be paid on tlie smaller quantity — the home-made products ; not upon the goods imported. But it might be difficult to decide whether this would serve their pur- 1/ 12 pose equally as well as the protective duty. But mig|it not the agriculturists, with equal justice, they being the larger portion of the community, ask for a bounty upon the exportation of their products ? It is true, bounties are rather out of fashion, but they were once common. It seems impossible, however, to justify such a taix as a pro- tective duty in any shape, or under any circumstances, as all taxes ought to be levied as equally as possible, and should all go, save the necessary expense of collection, into the public treasury ; whereas the taxes in question are levied on one part of the community for the incidental benefit of the other. Neither can it bd said with any certainty tliat these taxes would only be a temporary burthen, and would be permanently beneficial after they had been removed. For if the facilities for the production of said manufactures do not at present exist, there is' no certainty that they will exist when the protection is removed, unless in the meantime the wages and the habits of the operatives have been assimilated, or brought down to the levil of their European fellows, with all the concomitant evils of the manufacturing system. No country is so safe from real calamity as one that habitually exports food, and no wise statesman would lend a liand to force on, prematurely, a manufacturing population. But the protective system has other evils. It is one of the greatest engines of commercial demoralization, and of course very oppressive to the honest trader. For evidence of this'w) need only look to the experience of the merchants of New York where within three years more than two million of fines have been paid for infraction of the revenue laws, and of course thgre are per- haps hundreds of other cases not found out. And we know that many of our merchants, if it were their interest to do so, could tell a tale of the smuggling of goods into the States that might startle the uninitiated. For these and many other reasons we are opposed to an increase of duties. There are inevitable fluctuations in trade that cannot be avoided, which are caused by the inconstancy of seasons, and no doubt are necessary to produce a healthy, industrial and commercial activity ; but we need nut add to them those that would be produced by the protective system. We see what this system has done and is doing for the countries of the Old World, whose populations are emigrating by hundreds of thousands every year. Labour has become so cheap relative to the cost of living in those countries, that it can no longer be sustained. If the laborer did not emigrate he must starve. Upon this subject of protection to home manufacturers, great disputations have heretofore existed among cur neighbors of the 13 United States, because the system, as they said, had never been fairly tried — trade policy always being changed with every change of Administration. They have now, however, had the full benefit of many years of steady protection, and yet they are not able, as they l)oasted they should be, to stand alone, even with wliat is called the incidental protection of a revenue tariff. There can be no doubt, whatever may be said to the contrary, that an extensive manufacturing system is an extensive evil, because it produces vice and misery, as well as wealth. If it were natural that population should congregate together in large cities by millions, and produce mere luxuries instead of neces- saries, it would be foolish to complain ; but such large centres of population are an unnatural growth, and show an unhealthy state of the body politic, which at least ought not to be encou- raged. One thing we may say, however, that what is called a pro- tective tariff will be found to, act differently under different circumstances. At the time of the enactment of the tariff of the United States they were exporters of gold, to the amount of fifty or sixty millions a year, consequently the usual price paid for their imports was higher than that of their exports. There- fore the reflux of coin required from other countries to bring up the price of the imports, so that the importer could pay the duty without loss, was very small. The difference, however, in the two years, 1861 and 1862, from the usual exports, was 110 millions of dollars. Should our import duties be increased as the manufacturers wish, we should have to import gold, unless the paper currency was simtftaneously, or previously, increased sufficiently to bring the prices of foreign goods up, so that the duty could be paid with the usual profit. Then the same quantity, allowing for the slight decrease caused by the increased price, would be imported as before. The manufacturers know very well that this could not benefit the farmer, while he is an exporter of grain and other produce. Why not, if they are honest, give him a like bounty on the export of all kinds of agricultural produce, and place him at once, upon an equal footing with themselves ? But this is not their purpose. It is on the principle of throwing a tub to the whale that the manufacturers advocate import duties on agricultural produce. They advocate a duty on the import, as well as a bounty on the production of iron. In this they are consistent as protectionists, but still, in the light of present experience, their whole programme is absurd. It puts one in mind of the old "Anti-Corn Law Catechism," the frontispiece of « /■■<- w 14 which represents a cage of monkeys at feecling time. A trough is represented in front of the cage, and the food, all of one kind, being poured into it, but no monkey seems to be content with the food set before him. Each is reaching over to that of his neighbor, while his neighbor is equally intent on stealing that of some other monkey. But this, though approaching to it, is not quite a correct representation of the protective system, as each monkey would have an equal chance of stealing as much as his neighbor, which can hardly be the case in trade under the protective system, as there must be a general decrease of profits. Therefore, no country can gain as much by a forced system of production as they could by using their own facilities and exchanging with other nations. It is no doubt very pleasant to have one's interest protected, especially when the protection is to be shared and enjoyed by the whole community. But the difficulty in respect to trade is, that such a thing is impossible. Each party to an exchange must obtain an equal value, but the profit on each side will depend on the wages and taxes, or in other words, the expenses to be incurred before the commodity reaches the consumer. If by a tax you take away the profit on one side, the trade will cease ; but if the trade shoidd con- tinue in spite of the tax, the consumer will have to pay the tax as well as all other costs and profits. The idea that one country can tax another by imposing a tax on imports is too absin-d to be entertained by reasonable people. N.0 country can do more than tax itself. It may destroy profit by destroying trade, but like Samson in the house of the Philistines, they must share in the destruction. Yet, according to the recommendations of manufacturers, we are%o encircle ourselves round by a duty on all kinds of commodities, whether of manufacturing or of agricultural produce. Suppose this could be done without any material disturbance in trade, which we know to be impossible, and it should have the effect of raising prices all round — what good? Where would be the prof ^ ? It could not increase production ; though it might, and no doubt would, for a time pinch the laboring classes, and therefore retard consumption ; but eventually wages must be raised, and that would curtail profits to that extent, and the cost of the con- sumption of the capitalist, and of all other classes would be increased at the same rate. So in the end we should only succeed in reducing our own profits. But there are other evils produced by the -protective system besides those above men- tioned. Most of the great manufacturing nations of the world have been in the habit of acting upon this same protective system, and what* a lamentable condition they appear to be in \ 15 at present, with their continual commercial failures, and tens of thousands of their people out of employment, and dependent solely upon charity for support. But we are told that disorga- nization of trade and industry is caused by over-trading or over- production. It is, however, conceded by the protectionists themselves that all this over-trading and over-production is confined to one class of commodities — manufactured goods. This circumstance ought to teach us, if experience were of any use, that protection, or any other method of artificially increasing prices, does not pay in the end, nor increase profits. An increase of prices through protection cannot, and does not, increase production ; but it will continue to attract more capital to the protected employment, until profits are brought down to the common level. Protection must always unbalance trade and production. First, by tending to induce an unnecessary increase of certain kinds of commodities ; and secondly, as these commodities are increased in price, and are not the first necessaries of life, their consumption is to that extent prevented, and with other causes of a like tendency, such as an undue increase of money, will finally bring on what is called a com- mercial crisis. But notwithstanding the manufacturers have come forward as instructors of the Government and the public, it seems possible that they may prove very unsafe guides for the agricultural and commercial part of the community. CONCLUSION. -*r- It is indeed a serious matter to alter the whole course of trade and industry by the gratuitous imposition of new duties, and ought never to be done under any circumstances, as it must always have the. effect just pointed out, of forcing capital and labor into less profitable channels, and probably of causing great distress and inconvenience to some portions of the people. The great delusion of the day appears to be the enforcing of the production of manufactures, whether the eou,ntry possesses the requisite facilities for such production or not ; forgetting what is patent to all observers, that large accumulations of wealth are always attended with an over-balancing amount of poverty. The protectionists of all countries are fond of quoting Mr. Mill's too candid admission, that protection under some circumstances might be defensible, as they formerly did the assumption of Adam Smith that the home trade was more profitable than the foreign trade ; overlooking in the one case, that all the circumstances /- ^i ^ ^ ^TW J \ . i6 must perfectly coincide to make the proposition applicable, and in the other, that if the principles were true previously enunci- ated by Dr. Smith, the assumption must lie false. It seems im- possible that Mr. Mill or any other person can be justified, all things considered, in assuming tlie probability, or even the pos- f^ibility of there being at one time two places in the world, just exactly and equally adapted to the profitable production of any particular kind of manufacture ; that is, where capital, climate, the taste and skill of the inhabitants, and the cost of laboui, were equally cheap and applicable to such production. If, how- ever, this should be the case, it would soon be perceived, and in these days of quick locomotion and general intelligence, the manufacture would spring up accordingly as soon as it became profitable to make it instead of purchasing it with other com- modities. Under such circumstances there need be no fear of public loss by the laxity or tardiness of private enterprise. No country can be so secure of an even and continuous prosperity as the one that produces more of the Jirst necessaries of life than the inhabitants require to consume. Canada, therefore, ought not to give any undue encouragement to the production of ma- nufactures, as she has no peculiar facilities for such purpose. Ontario is already scarce of fuel, and will shortly be dependent on the United States for most of that important constituent of profitable manufactures ; and even at present, it costs double the • price it can bo procured for in the manufacturing districts of EngUnd, and wages are said to be lower there also. There- fore a profitable competition would seem to be impossible. The'greot manufacturing strife of the world has commenced, and we have seen already some of its evil effects ; but those countries must finally succeed in the race, who, while acting upon the principles of free trade, have the greatest material facil- ities and the cheapest labor. Canada had better stand from under and cultivate hSr land, and make use 'of what other facilities of productionshe may naturally possess ; and let manu- facturers take care of themselves. The people will be much happier, and more generally prosperous. This will certainly be preferable to tlie programme of the monkeys, in neglecting the food that was before tliem, and trying to reach that which did not belong to them. \ ^ Jo:.' V I ^ •'-} •> ■^'^- vT-^v ,\ !?