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I 
 
 HIS EXCELLENCY 
 THE MARQUIS OF LORNE, K.T., G.C.M.G.. 
 
 ^c, Sfc, ^c, 
 GOVilRNOR-GENBRAL OF CANADA, &c. 
 
 Mat it please tottk Excellency, 
 
 With your permission I have now the honour to submit 
 my report upon the present commercial policy of Great Britain 
 and its effects as shewn by the Returns of the Board of Trade. 
 
 The termination of the Commercial Treaty with France 
 restores to England the free control of her Tmde Policy, and 
 affords an opportunity, which may indeed be regarded as a duty, 
 of very seriously considering the effects of Free Imports maintained 
 now for upwards of twenty years, in the face of persistent and 
 increasingly hostile tariffs in Europe. 
 
 it may not, therefore, be out of place to consider the circum- 
 stances under which the system of Free Imports became in the 
 past synonymous with Free Trade, and then to trace by an 
 examination of the progress of British Foreign Trade, its effects 
 upon the well-being of the country, and the prudence of its 
 continued uniform maintenance, irrespective of the action of 
 other nations. 
 
 The occasion has now arisen when the whole subject can be 
 considered solely in the intererfts of Great Britain, and the 
 examination of the facts may be expected to disclose the 
 direction in which the Trade of the United Kingdom can be 
 raost easily and profitably developed. - 
 
 No one will now be disposed to question the wisdom of the 
 course adopted by England in abrogating the duties upon Raw 
 Materials and Food. Her manufacturing industries were plainly 
 overweighted in their competition with foreign rivals by these 
 artificial burdens, and their removal produced immediate and 
 most beneficial results. Political economists, then exulting in the 
 triumph and success of their principles, pressed their views still 
 more strongly on the public mind, declaring that all duties were 
 necessarily an artificial burden upon the nation imposing them, 
 which was thub rendered less able to compete with others, and 
 that no matter what other nations might do, the course of 
 England "hould unhesitatingly be in favour of Free Imports. 
 
 To-day we once more listen to these assertions : we are still 
 again assured that the Balance of Trade is a delusion, and that 
 the prosperity of a nation is to be measured, not by its exports, 
 but by its imports ; that the fact of vast importations of foreign 
 products is not to be viewed with alarm, but rather accepted as 
 evidence that the nation, having required these articles, has 
 obtained them at low prices, and certainly would not have 
 purchased unless it had the ability to pay for them, although 
 such payment has latterly ceased in a large measure to be made 
 by exports of British industry. 
 
 Undoubtedly the reiteration of those arguments has been caused 
 bv the HV^ir Trade HiammiiirtTi . fTif>ii>T>i, :^ .•-:-- i.i _ !.'• i — 
 
1 
 
 
 
 ^ion 
 
J 
 
 judgment will not be as to the wisdom of the adoption of Free Trade 
 (or Free Imports) in those articles which enter largely into the 
 cost of British Manufactures, but whether the political economists 
 who have directed the commercial policy of the nation for thirty 
 years past have not, through their belief in and admiration of 
 general principles, failed to attach due weight to the disturbing 
 effect of other and artificial causes of great importance; and 
 whether it is possible for England to prosper under a system 
 whereby her markets are open to all the world, and those of 
 many other countries practically closed to her, 
 
 I have no thought of questioning the laws of Political 
 Economy as generally laid down by our best writers, but I desire 
 to draw a marked distinction between those laws and Free Trade, 
 which I observe is constantly spoken of as if it were a principle in 
 itself, instead of being a deduction only from sound principles, 
 and if, a deduction, then necessarily subject to all the disturbing 
 influences which may surround its application. 
 
 The laws of Political Economy must be accepted by all man- 
 kind before any deduction from those laws can be capable of 
 universal application. The division of the World into Nations, 
 with all their varied differences in condition, character and laws, — 
 their ambitions, jealousies and rivalries, — must always forbid the 
 hope of any system of economical policy becoming cosmopolitan. 
 Soxind principles exist, but their influence must be modified by 
 the distinct peculiarities which govern each Nation individually ; 
 and c-herefore the application of such principles falls rather 
 within the sphere of the statesman than the philosopher, the 
 object being to adhere as closely as disturbing circumstances will 
 permit to admittedly sound lav s of Political Econouiy, and 
 thereby to secure the largest posdible advantage from them, in 
 the contest with other countries by whom those laws are violated 
 or disregai'ded. 
 
 Apart from rhe artificial distinctions separating Nations, it 
 may indeed be questioned whether Nature herself does not impose 
 certain modifications in the application of the laws which under- 
 lie and regulate human industry. One country, it is argued, 
 naturally produces cereals, another wool or cattle, a third timber 
 while others are plainly pointed out as centres for manufacturing 
 industry. But in most of these cases this condition is only that 
 existing to-day — it was not true of those countries in the past — it 
 will not be true of them in the future. It is idle to suppose that 
 any amount of reasoning will convince the people of such 
 countries as the United States or Canada, that they should remain 
 producers of cotton, wheat or timber only, while they have daily 
 under their eyes treasures of coal and iron, inviting them to 
 become at least their own manufacturers. 
 ^ If it cannot be denied that the present condition of the world 
 ; is such that each Nation will certainly pursue its own selfish 
 > policy, the question that Englishmen have now to decide is whether 
 'their own policy is in their individual interest, and, if it be not, 
 jHien in what direction it is susceptible of modification. In the 
 
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determination of this question the whole Colonial Empire is most 
 deeply interested, and I hope to show it is in their direction 
 that the commercial greatness of the United Kingdom can he 
 most STirely maintained and increased. ' / 
 
 Free Trade as now applied in England is a misnomer : no such / 
 term can justly be applied to a system whi'*h places England in a 
 position of isolation ; the freedom from artificial burdens on trade 
 being given to the Foreigner in her markets without any cor- 
 respondirfT advantage being conferred upon the British prod\icer. 
 The system may be wise and capable of being shown to be in the" 
 interest of England, but it is not Free Trade. 
 
 The argument in support of this one-sided system is that all 
 Customs duties are a burden on the consumer, that they conse- 
 quently diminish his productive power, and render him less able 
 in his other character of a producer to compete with foreign 
 rivals. But, while the general truth of this argument must be 
 admitted, still it is only relative, and though England, freed from 
 such imposts may be well able to produce at a certain percentage 
 of lower cost than other nations, still It is beyond all dispute 
 that the difference does not by any means equal the duties which 
 meet the British manuf actui'er in their markets. He may have 
 the satisfaction of knowing that the United States pay higher 
 for their goods than they might under a sounder system, but he 
 will not the less find himself excluded from their market, and his 
 goods glutting those to which he is confined. 
 
 One fallacy, as it seems to me, in the advocacy of so-called 
 Free Trade, consists in speaking of the interests of the con- 
 sumer as the ruling consideration. Were England only a nation 
 of consumers, no doubt this would be true, but she is at the same 
 time the largest producing country in the world, and it is in the 
 sense of enabling her to produce cheaply that the great triumphs 
 of Free Trade have been achieved. The truth appears to consist 
 in recognizing the facb that though consumption in England may 
 be said to precede production, still in her complex system the 
 two are so intimately blended, that they must work in harmony, 
 or disaster will ensue. It seems bitter irony to tell the working 
 man that youi' system has given him cheap food, if its effect is to 
 expose his labour to foreign competition, which deprives him of 
 the means of purchase. , 
 
 The rapid and vast increase in the importation of foreign . 
 manufactures that might be made in England, has drawn the 
 attention of the public to this subject and has produced the Fair 
 Trade movement. On the other hand, the Free Traders adhere 
 to the general arguments already stated and contend that England's 
 Trade must be considered as a whole, whose supremacy can only 
 be maintained by a rigid adherence to the existing status. 
 
 Before proceeding to examine critically the constituent parts of 
 the Foreign Trade of England, I desire to offer some remarks upon 
 the Balance of Trade, and the assertion which has been strenuosly 
 Dkade since the Imports have so largely exceeded the Exports, 
 
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 Iniys and not by what it sells. If this were true, it is not eaiy 
 to understand why the enormous exports of the United States 
 should be coincident with a condition of great prosperity, when 
 we find equally vast importations by Engliwid attended by great 
 depression. If the present school of economists were right the 
 sfeite of the two nations should be exactly reversed. 
 
 But this d> jjma will not bear examination in the light of the 
 Board of Trade Returns, as it will thereby clearly appear that 
 prosperity attends increasing exporti and more employment for 
 labor and capital, while adversity is as constantly marked by 
 decreasnig exports and diminished employment. The Statistical 
 Abstract, 1880, page 84, gives the following exports and imports 
 for the last ten years in millions of pounds. 
 
 I may here observe, that in dealing with the Monthly Trade 
 Returns, commentators rarely, if ever, notice the experts of foreign 
 and colonial merchandize, — which is most misleading ; as to their 
 extent, they pay for the imports in which they are included, and 
 thus diminish the apparent balance against England. 
 The abstract referred to states : — 
 
 Imports. Exports. 
 
 £ £ 
 
 331 .... 283 
 
 354 .... 314 
 
 371 .... 311 
 
 370 .... 297 
 
 373 .... 281 
 
 375 .... 256 
 
 394 .... 252 
 
 363 .... 245 
 
 368 248 
 
 411 .... 286 
 
 Before establishing a balance it is, however, necessary to correct 
 these figures by allowances for freight, insurance and profit, which 
 are variously estimated on Imports by deducting from 5 to 8^ 
 per cent, and by adding to the Exports 10 to 13^ per cent. 
 Taking roughly, as a mean, 7 per cent, for the Imports and 12 per 
 cent, foi* the Exports, we have the following result as the actual 
 balance for or against England during these years : — 
 
 Balance 
 
 1872 
 
 
 1873 
 
 
 1874 
 
 
 1875 
 
 
 1876 
 
 
 1877 
 
 
 1878 
 
 
 1879 
 
 
 1880 
 
 
 
 £ 
 
 £ 
 
 £ 
 
 1871 
 
 308 
 
 317 
 
 + 9 
 
 1872 
 
 329 
 
 351 
 
 + 22 
 
 1873 
 
 845 
 
 348 
 
 + 3 
 
 1874 
 
 344 
 
 332 
 
 — 12 
 
 1875 
 
 847 
 
 315 
 
 — 32 
 
 1876 
 
 349 
 
 287 
 
 — 62 
 
 1877 
 
 367 
 
 282 
 
 — 85 
 
 1878 
 
 342 
 
 274 
 
 68 
 
 1879 
 
 838 
 
 278 
 
 60 
 
 1880 
 
 882 
 
 820 
 
 — 62 
 
 H 
 
 \i 
 
 it 
 

 } 
 
 l,;j 
 
 y 
 
8 f 
 
 The circumstance that En^jliind is a creditor nation for vaat 
 gums will, undoubtedly, while thi8couditionla8t8,eniibleh»>r without 
 inconvenience to import niorc^ lari^'cly than she exports, and 
 when she ceases to extend furthfr Forei^'n Loans it must 
 necessarily result that the sums du(» to her will be paid in 
 goods or in bullion. The extent to which En^'land thus draws 
 interest annually from abroad is only partially known ; but has 
 been generally estimated at sixty millions per annum. If this 
 annual payment be taken into account in balance, we shall find 
 that in the period — 
 
 1871-5 there was at her credit 1290,000,000 ; 
 while in 1876-80 there was at her debit t;37,0O0,()OO. 
 
 The first period on balance Enj^hind was certainly growing 
 richer, while in the latter she was becoming poort-r, as the 
 bahmces must have be(Mi paid in money or money's worth. These 
 figures seem to be thoroughly borne out by attendant facts, 
 which indicate arrest of progress, not exhaustion, or even serious 
 diminution of resources. If, however, with such seemingly im- 
 important balances, so much depression and appi'ehension exists, 
 may we not look with great dread to a continuance and extension 
 of the evil of over importation and will it not be wise to arrest 
 its progress by taxing those foreign products which are now 
 displacing home laboiu- and capital. 
 
 Another and somewhat remarkable theory has been pro- 
 pounded, and has lately formed the subject of an elaborate report 
 by the eminent statistician of the Board of Trade, Mr. Gitfen, 
 who contends that Trade, as a measiire of profitable employment, 
 must be taken by the quantities rather than, the values. He thus 
 proves that, making the necessary allowances, 1880 was a 
 better year than 1873. I confess myself quite unable to subscribe 
 to this doctrine, as it seems to me if less goods brought more 
 money in 1873 than a miKjh greater quantity brought in 1880, 
 there must ex necessitate have been a larger residuum for Labor 
 and Capital in the former than in the latter jear. Take the 
 important article of Coal as an example — in 1873, 12,617,566 tons 
 produced at its declared value, €13,188,511, while in 1880, 
 18,729,971 tons only produced 48,372,933. It is clearly impossible 
 that the excessive quantity exported in 1880 gave as favorable 
 results to the Capital and Labour that produced it as the smaller 
 quantity in 1873. The only true test is that of price — it is not 
 the quantity exported, but the money it produces which establishes 
 the fund by which imports are paid for. Again, the crucial test 
 of actual experience declares that in the one year employment 
 was plenty and wages good, while in the latter year the conditions 
 were sadly reversed. 
 
 Believing that in the present condition of the Foreign world, 
 and even of the constituent parts of the British Empire itself, no 
 general rules can be laid down for an uniform policy towards 
 others, regardless of their course towards England— it becomes 
 
■;V'/:V:;^-'Vi^K 
 
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meat muoresting to observe the relations ot the foreign J.rade, 
 and to discover how far its operation has tended to promote the 9 
 welfare of the mass of the people. It is not satisfactory that the 
 necessaries and even the hixuries of life should be cheap, if they 
 are obtained through a system which is gradually diminishing 'he 
 employment of the people and restricting their power of purchase. 
 
 The advocates of the present system of trade, and notably 
 Mr, Gladstone in his Leeds speeches, have treated the Foreign 
 trade as a whole and as the natural outcome of Free Trade, created 
 by it, and only to be maintained through it — exulting over its 
 vast volume of exports as proof of the impotence of hostile tariffs, 
 and minimising the imports of foreign goods as a small drawback 
 unworthy of consideration, beside such great and manifold benefits, 
 while any change is stigmatized as a return to Protection. These 
 statements have been severely commented upon (by Mr. Ecroyd 
 and others), and it has been clearly shown that to suimnarize our 
 Foreign Trade in this manner is most misleading. Self defence 
 may in a sense be Protection, but when used to repel attack it 
 ceases to be a term of reproach. 
 
 This discussion upon the Foreign Trade has led me to an 
 analysis of .its composition, and especially in relation to its 
 bearing upon the employment of the people. It is self-evident, 
 apart from the profit or loss that may attend its conduct, whether 
 as merchants or carriers, that it is fairly represented in the 
 oftieial figures of the Board of Trade Returns, as indicating the 
 actual employment of labour and capital it has created, and 
 equally so that the imports of foreign manufactured goods 
 capable of production in England show the extent to which they 
 have diminished the wages fund of the nation. 
 
 Any examination of the resiilts of the Foreign Trade should 
 properly have refer(^ce to the classes of the population affected 
 by it, and not to the whole nation, and to be valuable and 
 reliable it requires to be through a comparison at different 
 periods. It is the manufacturing and trading portion of the 
 community who furnish the labour and capital for the exports, 
 and it is almost exclusively the same classes Avho consume the 
 imports of foreign manufactured goods. It is then the urban, as 
 distinguished from the rural population, who are mainly concerned 
 in this portion of the Foreign Trade. The other branches of trade 
 which cover the free importation of raw materials and food are 
 an unmixed blessing to the m-ban working men, whatever they 
 may be to the farmer. 
 
 The agricultural population have never shewn very great en- 
 thusiasm respecting Free Imports. Tlu-y have, until recently, 
 found in the general pnspority of the towns'-peoi^le, indemnity 
 for their exposure to foreign competition in food, and if their 
 condition is now one of great trial, it may, I believe, be largely 
 traced to the depression in the trading centres, which has cm-tailed 
 
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 tbeir home market. The bad harvests have impoverished them, 
 while bad trade has prevented their receiving any compensation 
 through better prices and enlarged consumption. 
 
 To enable a comparison to be made of the bearing of tho 
 Foreign Trade upon the employment of the people, it should, I 
 think, be confined to the urban districts, which com|>rehend all 
 the mercantile, trading and manufacturing classes — except miners 
 — but in the first instance, it may be less open to objection to 
 refer to the whole population of the United Kingdom. 
 
 The analysis which I desire to submit is based upon the Census 
 for 1871 and 1881. It happens, somewhat singularly, that this 
 period — which is the latest, and therefore the best, that ctm be 
 chosen for present comparison — shews an almost exactly equal 
 Export Trade of British and Irish produce in 1871 and in 1880 
 (223,000,000 each year), while the ten years included within 
 it comprehend the period of greatest prosperity and also that of 
 greatest depression in trade. 
 
 In order to discover the real bearing of the Export Trade in 
 British and Irish produce upon the industry of the people, 
 especially in view of the discussion upon the merits of a continuance 
 of Free Imports, it becomes necessary to divide it into three general 
 classes. 
 
 ;• First. The Nations who have developed manufacturing 
 
 industries, and who already compete with England in her 
 own markets and in other foreign countries. These 
 comprehend France, Grermany, Holland, Belgium, Spain, 
 Italy, and the United States. 
 
 Secondly, The remainder of the foreign world. 
 Lastly. The British Possessions. 
 The Population of the United Kingdom was — 
 In 1871 . . . 31,845,879 
 
 „ 1880 .. .. 35,246,562 
 The Export Trade in 1871 . . . . £223,066,162 
 
 „ „ 1880 .. .. £223,060,446 
 
 Eepresenting as a measure of employment to the people and 
 to capital — 
 
 In 1871, per head . . . . £7 1 
 
 1880 .. .. .. 6 6 7 
 
 :?;• 
 
 »> 
 
 Decrease 
 
 £0 13 6 
 
 muttm 
 
 Such are the undeniable results of the Export Trade of 
 British and Irish produce taken as iiffording employment to the 
 resources of the whole nation, and the decrease is unsatisfactory. 
 But it now becomes necessary to divide this general result 
 into the three classes before specified. 
 
 To the firit-class the exports were as follows : — 
 
 In 1871. In 1880, 
 
 France .. .. £18,205,856 .. .. £15,694,499 
 
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 Belgiuiu . . 
 
 Germany . . • . 
 
 Spain 
 
 Italy 
 
 United States . 
 
 6,217,005 
 27,434,520 
 
 3,148,419 
 
 6,294,787 
 
 34,227,701 
 
 5,796,024 
 
 16,943,700 
 
 3,222,022 
 
 5,482,908 
 
 30,855,871 
 
 £109,627,395 £87,091,706 
 
 Per head £3. Ss. lOd. £2. 98. 5d. 
 
 To the second-class, comprehending all other Foreign Nations, 
 I find the Trade in British and Irish produce to have been — 
 In 1871 .. .. £62,188,554 
 
 ,,1880 .. .. £60,714,561 
 Representing per head in 1871 . . . . £1 19 1 
 
 1880 .. .. £1 14 5 
 
 Decrease 
 
 £0 4 8 
 
 The third and last class comprises all the British Possessions, 
 to whom the export of British and Irish produce was — 
 In 1871 .. .. £51,250,213 
 
 ,,1880 .. .. £75,254,179 
 
 Per head in 1871 £1 12 2 
 
 „ „ 1880 £2 2 8 
 
 Increased employment for labour and capital 
 
 in United Kingdom, per head . . . . £0 10 6 
 
 The summary of the foregoing analysis of the Trade Return, 
 therefore, proves that, as a means of creating wealth by employment 
 of labour aJid capital, Export Trade with competing nations 
 has fallen off in 1880 as compared with 1871, from £8. 8s. lOd. per 
 head to £2. 9s. 5d. With the rest of the Foreign World it has 
 nearly remained stationary, having decreased from £1. 19s. Id. to 
 £1. 14g. 5d., per head. While with British Possessions the 
 exports have risen from £1. 12s. 2d. per head to £2. 2s. 8d. 
 
 It is now necessary to examine Foreign Trade from the jjoint 
 of view of imports of such Foreign Goods, most, if not all, of 
 which are produced in the United Kingdom ; but before doing so 
 I desire to call attention to the following comparative statement 
 of the entire Import Trade for 1871 and 1880 :— 
 
 
 1871. 1880. 
 
 
 Total Imports. 
 
 Less 
 He-exports. 
 
 Uoine 
 Consumption. 
 
 £ 
 97,723,129 
 
 120,901,242 
 
 10,661,935 
 
 41,220,824 
 
 Totallmports. 
 
 Less 
 Ee-Kxpoi-ts. 
 
 Home 
 Consumption. 
 
 Food 
 
 Raw Material . . 
 
 Wines, Spirits, \ 
 Tobacco, 4c . ) 
 
 Manufactured 1 
 Goods .... 1 
 
 £ 
 112,924,237 
 
 158,696,289 
 
 13,083,076 
 
 46,412,060 
 
 £ 
 16,201,108 
 
 37,696,047 
 
 2,421,140 
 
 6,191,242 
 
 £ 
 173,799,700 
 
 164,494,268 
 
 10,667,595 
 
 72,368,012 
 
 £ 
 18,437,605 
 
 35,819,030 
 
 1,613,053 
 
 7,584,332 
 
 £ 
 166,362,096 
 
 118,676,228 
 
 9,164,542 
 
 64,783,680 
 
 JB 
 
 331,016,667 
 
 60,.J08,537 270,507,130 
 
 1 
 
 411,329,665 
 
 63,354,020 
 
 347,975,645 
 
1 
 
 ■-■''Aii;.. 
 
 
 .-':':>tfe' 
 
 J 
 
/ 
 
 i 
 
 In the preparation of this and other statements relating to 
 the Trade Eetums, it is proper to remark that apparent differences 
 may arise out of the sub-division of unenumerated articles 
 which necessarily are more or less the subject of estimate. 
 I think, however, the results arrived at will be found substantially 
 accurate. 
 
 Omitting food, raw motarials, wines, &c., and following the 
 same classification, the Trade Retumj show that manufactured 
 goods were imported from : — 
 
 
 1871. 
 
 1880. 
 
 France 
 
 .. £15,525,998 .. 
 
 . . £26,303,449 
 
 Holland 
 
 . .. 4,267,819 .. 
 
 13,873,539 
 
 Belgium . 
 
 9,129,543 . . 
 
 7,173,132 
 
 Germany . 
 
 2,818,426 . . 
 
 3,906,937 
 
 Spain 
 
 . .. 1,929,097 .. 
 
 2,218,262 
 
 Italy 
 
 683,428 . . 
 
 537,014 
 
 United Stat 
 
 es .. 1,648,763 .. 
 
 4,316,891 
 
 £36,003,074 £58,329,224 
 
 Per head . . . . £1. 2s. T^. £1. 13s. Id. 
 
 From the remainder of the Foreign World we imported : — 
 
 1871. 1880. 
 
 £2,526,392 £2,440,958 
 
 Per head Is. 7d. against Is. 5d. 
 
 From the British Possessions the imports were : — 
 
 1871. 1880. 
 
 £2,691,358 £4,013,498 
 
 Per head Is. 8d. against 28. 3d. 
 
 Viewing the Foreign Trade in manufactured goods, both 
 
 Exports and Imports, with the whole world, in its relation to the 
 
 well-being of the United Kingdom, and especially of the working 
 
 classes, the following instructive results are disclosed. 
 
 The total amount of Export Trade being nearly uniform in 
 
 1871 and 1880, while the Imports of manufactured goods have 
 
 increased from £41,220,824 to £64,783,680. 
 
 France, Holland, Belgium, Germany, Spain, Italy, and the 
 
 United States, gave employment to British Industry, in 1871, to 
 
 the extent of . . . . . . . . £3 8 10 per head. 
 
 Less that which they displaced by goods 
 they sent us . . 
 
 Leaving a net result of . . 
 
 While in 1880 they gave employment to 
 
 the amount of. 
 Less displaced by Imports 
 
 Leaving as their entire contribution to 
 Labour and Capital in the United 
 ,. J^?ygdQm 
 
 1 2 7 
 £2 6 3 
 
 £2 9 5 per head. 
 1 13 1 
 
 £0 Hi ^^ 
 
 i 
 

 ^Ibiu^ajh ^.jtA idk^ 
 
The remaining Foreign Nations in like manner were customers 
 for goods, in 1871, to the extent of . . £1 19 1 per head. "^ 
 Less Imports 
 
 1 7 
 
 » 
 
 £1 17 6 
 
 While in 1880 they gave employment to 
 
 the amount of 
 Less Imports 
 
 £1 14 5 per head. 
 1 6 
 
 » 
 
 £1 13 
 
 The British Possessions, in 1871, took products of British 
 Industry to the exterl, (>f . . . . £1 12 2 per head. 
 
 Less Imports . . . . . . . 18 „ 
 
 While in 1880 they took. 
 Leis Imports 
 
 £1 10 6 „ 
 
 £2 2 8 per head. 
 2 8 
 
 £2 5 
 
 These figures are sufficiently striking, but it may make the 
 relative value of the Export Trade more clear if it be arranged 
 in its proportions of 100. 
 
 Glass First — 
 
 
 In 1871 
 
 In 1880 
 
 Comprising Foreign Competing 
 
 
 Nations furnished 
 
 
 49 
 
 39 
 
 Class Second — 
 
 
 
 
 Other Foreign States . . 
 
 
 28 
 
 27 
 
 British Possessions 
 
 
 23 
 
 84 
 
 100 
 
 100 
 
 Takinjj the Export Trade and deducting the Imports of 
 
 1871 1880 
 
 manufactured goods. 
 
 40 
 
 18 
 
 33 
 
 37 
 
 27 
 
 45 
 
 Class First — Represents 
 
 ,, Second — 
 British Possessions 
 
 100 100 
 
 I have previousl}'^ stated that it is really the urban rather 
 than the agricultural part of the popidation which are interested 
 in the Foreign Trade. If, therefore, the foregoing calc" lations 
 be restricted to the urban population, we shall obtain still more 
 striking results. 
 
 The Census of 1871 gave as the Town population — 
 In the United Kingdom . . 15,870,966 
 
 „ 1881 „ „ ., 18,803,583 
 
 n 
 
 
 HI 
 
'^,: 
 
 :::m: 
 
 
 :i^''L 
 
« // 
 
 Applying these figures to the Foreign Trade as before analysed, 
 
 we find — 
 
 ClaaB First — Employment of Capital 
 and Labour reduced from 
 „ Second — „ 
 
 British Possessions increased 
 
 £4 12 
 £!{ 15 
 
 £!{ 1 
 
 10 
 2 
 
 2 
 
 to£l 10 
 to £8 1 
 
 to £a 15 
 
 8 
 11 
 
 9 
 
 £11 9 
 
 __2 
 
 .18 8 
 
 _4 
 
 I 
 
 ■luxi'^ 
 
 From the foregoing analysis it is evident that the Foreign 
 Trade with the great competing and manufacturing nations has 
 steadily become less valuablt> as a moans of employing labour. 
 If the United States bo omitted from this category, the result 
 appears that Great Britain imported frtmi thesi; European nations 
 manufactures in 1880 to within £2,000,000 — as much as she 
 exported to them of British and Irish produce. 
 
 If, however, within the last decade these countries have so far 
 competed with England in her own home market, may it not safely 
 be assumed that they have still more seriously encroached upon 
 her markets abroad. In what other way can the fact be accounted 
 for, that the Trade with other Foreign nations which do not 
 manufacture remains very nearly the same in volume as it was 
 ten years ago P 
 
 It must also be remembered that the trade with Europe is 
 that which is least valuable aa an employer of Shipping. The 
 vast, rapid and profitable development of the Mercantile Navy 
 of Great Britain is to be traced, not to her commerce with the 
 Continental Nations ; but to the growth of her trade with 
 America, Asia, Africa and Australia. It is true that through her 
 pre-eminence as a carrier, she has made herself the emporium for the 
 supply of Europe with the products of the East, but this is wholly 
 apart from her commercial policy of Free Im])ort8 and must 
 continue if that policy were changed, until other nations are able, 
 as France is now endeavouring, to stimulate their marine to the 
 point of successful competition in neiitral i)orts. 
 
 Believing the Free Import system to li.ave decidedly failed in 
 Europe, there cannot I think remain any doubt that it is steadily 
 sapping the prosperity of the nation and diminishing the employ- 
 ment of the working classes, and I fail to see that any advantage 
 can possibly arise to this country by continuing the displacement 
 of their own labour and capital by that of foreigneis. It certainly 
 does not help England in her trade with the rest of the world, 
 and I believe an Import Duty on Foreign goods and also on 
 such ai-ticles as wines and spirits, is the only means of obtaining 
 fair consideration for the claims of her own people. 
 
 The fact is that the Foreign Trade which is truly valuable to 
 England is almost wholly with extra European nations and with 
 her own pogsessions. It is valuable because it is carried on almost 
 VfhnWhy^ ^"*^sj^ shipping and British capital, anil consiatgJn 
 
 mm 
 
I 
 
 M ■''''" 
 
 i^. ■ i^i^ fe 
 
 ..LAi^SLjd!SldiltbMik.»M.<.'»M _. 
 
 i 
 
' exchttiig*! «»t' British Hittiiufactun'S forraw iniitfrialsaiiil t'ood, both 
 
 1 I esflontial to tho woll-hoin^ of the vast imiHst h of workiiij,' people 
 
 congrnpfated in our towns. ' i 
 
 1 think it is a fjfrcat iniBfortuno that th»' (piostion of Fair 
 Trade has not l)eon stri<"tly coutincd to tlic specific caHos where 
 Trade is not fair, and witli the notabh' exception of tlie [Tnited j 
 
 8tat<>B, this liiuitation wouUl confine the diHciission to Huropo j 
 
 alone, and wo\ild not bring up such general issues as Free Trade J 
 
 or Protection. 
 
 The imposition of duties upon the productions of foreign 
 nations, who resolutely refuse adniiHsion to British goods on 
 reasonable terras is easily understood and can be defended as 
 politic and necessary. But when this demand is made as part of 
 a general change of policy in regard to ti-ade, and especially 
 when it is suggested that in fairness taxes on food should be 
 re-imposed, it opens up so wide a field that the wh(jle argument 
 becomes changed. 
 
 As a matter of fact there is nothing in the great bulk of the 
 Foreign Trade of England, viz., that witht xi a European nations , 
 
 and with her own possessions, which requires any change whatever 
 except in the case of the Unitml Statt.'S, and as she must have 
 their cotton and their food for the present it is idle to class them 
 with the others in considering tlu^ commercial policy of 
 the nation. Upon all the articles England receives from 
 the East, South America, Africa and her own Dependencies, 
 there is nothing to be gained as affecting the employment of 
 labour, by the imposition of new duties. 
 
 It has been contended that if duties !)e imposed upon the 
 productions of France or other protective : itions, as a measure 
 either of retaliation or of self-preservation, that it would operate 
 solely for the benefit of the manufacturing classes, and that as 
 the agricultural interests are also painfully depressed, such 
 duties must be accompanied by a duty on food. But this argu- 
 ]nent tends directly to defeat the whole measure. The working man 
 will never consent to a positive and known evil in the increased cost 
 of his living for the contingent advantage of increased wages 
 by a tax on foreign goods. Neither is a tax on food a measm-e 
 which the farmers will place much confidence in, if imposed as 
 they knowitwould be simply to bring apressure upon other countries 
 to relax their protective tariffs. The farmers would regard it as 
 illusory a-id transient and would much more readily accej^t as an 
 indemnity the assumption by the State of those local rates and taxt s 
 which so sorely and persistently oi)pres3 them. The truth is, that in 
 the present state of England and Scotland, the prosperity of the 
 agricultural class in all its branches has become identified with 
 that of trade, and of the many millions of busy hands in the 
 workshops ; good employment to them brings renewed hope to the 
 farmer, and it needs no bi'ibe of a tax on food to make him assent 
 to a policy that will revive industry in the towns. 
 
 I 
 
I -W TAJ'I 
 
 /■■ " 
 
 Wi f 
 
 
 
7 /3 
 
 strange as it may seem, even as a colonist, I would not ask a| 
 discriminating duty on foreign food ; no doubt in Canada it would 
 instantly stimulate our farmers and hasten the settlement of our 
 country, but we can wait in full confidence that in a few short 
 years, we shall be able to supply England with all the food she 
 wants, and we can have no desire to stand before our suflfering 
 fellow-countrymen here, in the attitude of benefiting by that 
 which they would feel as an injury and a wrong. 
 
 I firmly believe the present system of trade must be speedily 
 revised in the interests of the working classes both in town and 
 coimtry ; but let it be done by taxing articles that compete with 
 home labour, and Ivixuries which benefit none but those who 
 enjoy them. Use the revenue thus obtained in removing the 
 burdens on the farmer. Keep the British markets free and open 
 for all that furnishes food for the workman and employment for 
 his industry, and England will be in a stronger and better position 
 to compete with other countries in neutral markets, and to 
 maintain and extend her trade with her own dependencies. 
 
 The Colonies are prospering and will prosper, having the vast 
 and varied resources of a new country within their grasp. All 
 they ask is the manly straightforward backing of their own 
 fellow-countrymen in their early struggles. They want the over- 
 flow of British population to come to them, and not to go 
 to the United States. Give Canada a million of British 
 settlers in her North-west Territory, and she will speedily 
 solve the food question. Whenever that time arrives, and it is 
 not distant, then it will be possible to deal on terms of perfect 
 equality with all foreign nations, and to secure that perfect 
 British and Colonial Union which should be the desire and aim 
 of all lovers of the British Empire. 
 
 In conclusion I contend that the Trade Returns for the past 
 ten years distinctly indicate that for the employment of labour 
 and capital the commerce with European nations is becoming of 
 very secondary importance ; that the Foreign Trade with Asia, 
 Africa and America continues of great value, especially in the 
 employment of the mercantile marine. But that the only trade 
 which has been steadily progressive through good and bad year:, 
 is that within the British Empire ; and that the recent revival is 
 mainly attributable to the prosperity of the British possessions. 
 
 I do not believe the time has yet arrived for the establishment 
 of a thorough system of British Imperial Trade but it is rapidly 
 approaching, and in the revision which must now be given to the 
 trade relations of the United Kingdom, I trust her statesmen will 
 not be led away by the idle hope of conciliating the foreigner, 
 from the development of the internal trade of the Empire, 
 i vrhip^ already nearly equals that with the entire foreign world, as 
 
 IP 
 
fl j 
 
 p 
 
 .■fev,,, . 
 
 .— „ , , .1,. , . > 
 
as of tumismng empByment to theWorkmg (!Tjl8S6S '01 
 United Kingdom. 
 
 Respectfully submitted, 
 
 London, let March, 1882. 
 
 A. T. GALT, ^y 
 
 High Commissioner. 
 
 P.S. — The Trade Eetunis for 1881, which show a partial 
 recovery in trade, will be found to corroborate the statement 
 hereinbefore made as to the direction in which permanent im- 
 provement will be found. 
 
 Adopting the same classification, the increase in the total 
 exports of British and Irish produce, amounting to £10,878,473, 
 was thus divided : — 
 
 First Class, Competing Nations . . £1,048,329 
 Second „ other Foreign Countries. . 6,464,904 
 
 Third „ British Possessions . . 3,365,240 
 
 £10,878,473 
 
 
 J. 
 
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