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Les diagrammes suivants illustrent la mdthode. 1 2 3 32X 1 2 3 4 5 6 PROTECTION AND FREE TRADE. Aol ERRATA. On page 17, for $24,724— read $24,724,000. " loi, fur progency— read progeny. 4 ■;■ I'KOTECTION AND FREE TRADE I WITH SPECIAL R?:KRREMCE TO CANADA AND NEWLY SETTLED COUNTRIES HISTORY OF TARIFFS AND WHAT THEY TEACH. 15Y J. BEAUFORT HURLBERT, M.A., LL.D. M. R. H. S. L., AUTHOR OF "BRITAIN AND HKR COLONIES," "CLIMATES OF CANADA,' "PHYSICAL ATLAS OF THE DOMINION," "FIELD AND FACTORY," ETC. OTTAWA : PRINTED BY A. S. WOODBURN, ELGIN STREET, 1882. m 1 j4 r^/iCr V c y PREFACE. The questions of Free Trade and Protection are now attract- ing more attention among the manufacturing and commercial nations of Europe and America than at any previous time. They lie at the basis of a nation's prosperity. Free Trade Ir- cosmo- politan ; Protection, national and patriotic. Until recently, Free Trade was regarded by most Englishmen as the worship of Brama is by the Hindoos, a matter for devout contemplation only, — too sacred for discussion. But the fair trade movement has recently decided five important elections ; and Mr. Iliteliie's motion in March, 1882, in the Britivsh House of Connnons, which Free Traders turned into one of Fair Trade against Free Trade, was lost by only 51 votes, there being 140 against it and 89 for it. A change of 26 votes would have carried it. When free trade was adopted in 1816, English imports and exports were nearly equal ; in 1880 her imports were within a few pounds of £410,000,000, and her exports but £222,000,000— little over half. Her exports of woollens to Germany in 1872 were £8,659,000; in 1880, only £1,010,000. In 1872 England sent to the United States woollen goods to the value of £5,627,000 ; in 1880 only £2,210,000. Adopt free trade, said Cobden, in 1846, and there will not be a tariff in Europe which will not be changed in less than live ll VI. Preface. } Fl jears. The tiiiio will coiiio, said Disraeli, in 1852, when tlio workinaf classes will come to you on buiideil kiiec and pray you to uiul»» your present legislation. Whether sound or unsound iirinciplos shall sha])e our policy in Canada, is of |)aranionnt importance. We have to do with economic questions under circnmstances very different from those of Enujland ; she salTers from a deii- ciency of food ; we have more than enoni!;!). foi- which there is no market. She has vast surplus capital and unemploye'' labour ; we want both. Manufactures would give ns home markets ; capital and labour would develop onr resources ; si ill England insists upon oui' looking at the world from her standpoint. The policy we advocate is for a young country, with boundless resources yet undeveloped, limited capital and sparse population ; and it is the policy under which all great manufacturing and commercial nations have attained the highest prosperity. M! Ottawa. May. 1882. tti n CONTENTS. CHAPTER I. HISTORY OK PROTFXTION. Protection in England t " France 8 " United States 14 " Spain and Portugal 32 " Hanse Towns 3^ " 1 'landers, Belgium and Holland 38 " Clermany 39 " Russia " 47 CHAPTER 11. Theory and Practice 5 ^ CHAPTER III. Free Trade Assumptions and Sophisms 67 CHAPTER IV. England under Free Trade .. .... »• .. II4 CHAPTER V. Protection in Canada .. .. .. •* ^53 ! ? i waQ— MMM CHAPTER I. ■ ! PROTECTION AND FREE TRADE. -I HISTORY OF I'ROrECriON. , Protection in England — France — United States — Italy — Spain and Portugal — Hanse Towns — Flanders, IJelgium and Holland — Ger- many — Russia. f I . I - In the following pages we have given the facts, so far as our narrow limits would allow, connected with the development and maintenance of home industries in the great manufacturing and commercial states of Europe and in the United States. We have shown that in Great IJritain, France, (Terniany, liussia and in the Ignited States, manufactures were developed and maintained by protection in every form which the ingenuity of Statesmen could devise. For two centuries protection to native industries was the leading policy of the States foremost in the industi'iai arts, — protection the most rigid to every industry on land, as wel' as to their shipping, and enforced with great rigour over every sea and every land where their Hag ruled, — under such protection, established for the sole purpose of fostering native industries, the great manufactures of those States were developed and maintained. Free-traders tell us that they were established and developed, not by protection, but in spite of it. Yet they give us no facts to At' 4 m^i^amm Protection in England. liH pro'-e tliis assertion. England is no example, for her mannfac- tures bad been developed beyond these of other nations under protection long before the adoption of free-trade, so called. In economic questions, at least, we prefer to be guided by facts — by experience — by the well established results of the practical work- ing of a system. We leave to this purely hypotheticid school, the will-o'-the-wisp light which is the only guide their vague theories give them. PROTECTION IN ENGLAND. The woollen and iron trades are the two industries which lie at tJie basis of the manufacturing and commercial greatness of England. In 1618 tlie woollen industr}^ of England had made such progress that Hume says of that period 'a great jealousy then existed with regard to foreign merchants ; they l>ad to encounter a multitude of ditRculties. Under Edward IV. (11:61- 1483) this jealousy increased to such an extent that the importation of foreign cloths and many other articles were prohibited.' More than three centuries ago the manufacture of wool had attained a high degree of prosperity under the fostering care of Elixabeth, (1550-16O3.) The exportation of wool was prohibitred, and the coasting trade restricted to English vessels. Previously England had exported most of her wool in the raw state. Put as early as the reign of James I. (1 ({03-1025) the woollen goods alone exported as the result of protection, Avere valued at £2,000,000. Pefore the time of James I. the chief part of the cloths were sent to Belgium to be dyed and finished, but under protection in this and the subsequent reign (16(»3-16o3) the dying and finish- ing of woollens had attained snich excellence that the export of undressed cloths was almost entirely discontinued and from that period the export was only of the finislied goods. In the time of Protection in England. 3 James I. woollen goods constituted nine-tenths of the entu'e value of English exports. This industry gave to England the means of supplanting the Hanse or North German towns in the markets of Jiussia, Sweden, fs'orway and Denmark, and of attracting to herself the best i)art of the trade of the Mediterranean and the two Indies. This developed the m^.nng and coal interests ; the coasting trade and the fisheries followed ; — these combined were the base of the maritime power which made the act of navigation (of 1051) pos- sible, and thus founded the naval supremacy of Britain. Around this industry as around a common trunk gathered successively the other branches of manufactures which have given to England her industrial, commercial and maritime greatness. As early as the reign of p]lizabeth(1551>-l prohibiting the iin])ortation of India calicoes, chintzes and muslins. In 17^0 it was enacted that no person should wear a printed calico dress without the payment of £5 ; the seller to be fined £20. It was-not till 1 774- that Parliament sane- ■n m ii '"• M' Protection in England. tloned the manufacture and use of cotton. The laws prohilriting the exportation of machinery for the manufacture of flax were in force as late as 1842. In the time of llichard the II., in 1381, a navigation act liad been passed, l)ut soon ceased to be operative. The Parliament of 1461 passed a similar act whicli was not aticnted to by Henry VI. James I. in 1(522 also proposed one which was rejected by the Parliament. The first efficient navigation act was passed in 1651 and tlie second in 1 7<'>3, They enacted that no imports should be admitted into Kngland unless in English vessels of which the officers and two-thirds of the crews were English. The last of these laws * especially was enforced with the utmost rigour over every sea and every coast, as well against her own colonies as against foreign nations. Previously to the time of Elizabeth, ships had been bought of the II anseatic (North German) league. Elizabeth, by restrictions and encouragements, introduced the art of shipbuilding. The herring and whale fisheries were encouraged by premiums. l>y prohibitions or high duties Elizabeth built ap the manufacture of fine woollens, hats, glass, paper, watches, linen, silk and metals. Once in possession of an industry England surrounded it for centuries vv'ith her solicitude as a young plant requiring constant support and attention. From tlie time of James I. (1603-1625) to the period when Eugland l)egan her free-trade legislation in 1841, the pro- duction of cloth had increased under protection six-fold, having then reached a value of £26,000,000. Cotton, mostly developed during the previous half century, had, in 1841, a value of £45, 000,000. In the 14th century, England feeling herself so desti- tute of iron that she prohibited its export, manufactured, in 1841, Protection in England. 5 more iron and steel than all other countries — the value being £18,000,000. This result was secured under protection established expressly to develop this industry. In 1G79, two centuries ago, Parliament imposed a duty of ten shillings a ton on foreign iron. Eleven years after, the duty was increased to £1 Is. Gd. per ton in English vessels, and £2 10s. in foreign — thus giving a double protection to her interests on land and on sea. The duties on iron were increased fifteen times over the long period of 140 years, and in 1819 amounted to £0 18s. 6d. in English, and ,£7 18s. 6d. in foreign ships — iron less than three-fourths of an inch paying £20 per ton. The result of this experiment with the duties increased fourteen-fold, and in every instance specific, was the reduction in the price of English iron to £10 per ton, while in France, iron was £25 10s. ; in Belgium and Germany, £10 l-ls.; and in Sweden and Russia, £13 iSs. — the wages of men in all these continental nations being at the same time much lower, in some states one-third lower than in England. This long protection gave security to capital invested in iron works, and it gave time for new generations of men to grow up with those facile habits — that second nature — which only long practice can impart, and which had given the British iron-workers such pre-eminence over their fellow artizans of other countries. The whole product of the manufacturing industries of the three kingdoms was estimated in IS-il— after more than two centuries of protection— at £187,000,000. The development of manufactures had augmented the value of the agriculture of the country to £285,000,000 — such increase in agricultural products re-acting powerfully upon all tiie industrial interests of the country. England has undoubtedly been indebted for this increase iu . » .H.-8.*«,^ai(M5JB« \^^V^^'^■r^^*-^^'^^^f^^i^lf>k^■i.ii^^ . Protection in England. lit. !!^ lier productive power to her policy of protection, to her naviga- tion act;:, her treaties of commerce, and, in common with other countries, to her progress in science and art. The influence of tlie free-trade acts of 184:2-4o-and 46, in extending I^ritish eoimnerce has been mnch over-estimated. For the three years following 1840, the trade of England was less than during the three years preceding; and up to 1861, to the beginning of the American wai', the trade of the Tnited States had expanded more rapidly than that of (ireat Britain. The same would be true of France, making allowance ft)r the injuries to her industries by the revolution of 1848. When we find the wonderful development in manufactures and trade which began thirty years ago, in every great commercial and manufacturing nation of Europe and in the United States, we must look for some more general cause of this than can be found in the free-trade acts of one of those countries. The great development of steam, the increased facilities for transit on land and sea, and the increased amount of gold thrown into circulation — from lifty millions of dollars annually, before 1848, to twice and even to three times that amount after 1848 — are agencies of wide- spread influenzae and of sufficient potency to account for this increased activity in all the great manufacturing and commei-cial connnunities, and not merely in Free-trade England. David Syme, when he emigrated to Australia, carried with him the free trade theories of an Englishman. His experience in this new country soon convinced him that a science based on assumptions, ofl^ered no solution of grave questions which business men in a country without accunuilated cajntal and machinery have to solve. In the course of his admirable little volume entitled " Industrial Science " he says : Protection in Englmtd. Tlie manner in wliicli English capital is nsed to maintain England's manufactnring supremaoy is well understood abroad. In any quarter of the glohe where a competitor shows himself who is likely to interfere with her mono])oly, immediately the capital of her manufacturers is massed in that particular quarter, and goods are exported in lai'ge quantities and sold at snch prices that outside competition is eifoctually cinished out. English manufac- turers have been known to exjjort goods to a distant market and sell them under cost price for years, with a view to getting the market into their own hands again. The modus operandi is incidentally explained with much nalvcfe in a report published some years ago by the House of Commons, referred to further on. Britain's diiilomacy has been a more effective agent of conquest than her navy and army. Space will pennit me to refer to but a few cases. Her first treaty with Turkey bears date 1570. The Turks were then famed for their industry, skill and social order. They worked in iron, steel, copper, cotton, wool, silk and tobacco, all of which their '-"untry produced, with corn and oil in profu- sion. No country of Europe is richer in native resources than the Turkish Empire, as it then existed. The ti-eaty of 1579 stipulated that the duty on British goods imported into Turkey should be fixed at three per cent ; and that provision, by 8ul)jecting the in- dustries of Turkey to unrestricted British competition, wrought the overthrow of the power that had just threatened the conquest of Europe. " Nature," says Henry C. Carey, '' has done every- thing for the people of that country, and of all those of Europe the Turkish Rayah approaches in condition nearest to the slave." Under the influence of Free-trade England, Turkey still has tt low revenue tariff of 71 per cent, on all imports except on coals and linseed oil, and Turkey, notwithstanding iier great 1 m 8 Protection in France. natni'iil resources, i-oiiiains one of the poorest countries of Europe^ Nor can tliis inferiority in industrial development be wholly attri- butable to difference of races, for the same statement, somewhat m(»diiied, would be true of Italy and Portugal till recently. TMIOTECTTON IN FllAXCE. J'roteetion has existed in France for more than two centuries. In ]<>(n, during the reiuii of Louis XIV., Colbert removed custom-houses from the bordei's of the ])rovinces and estal)lished them on the frontiei's years, France has adhered to protection, under all her forms of Government, ^vhetller Bourbons, Orleanists, Constitutionalists, Red Ilepublicans or Bonapartists — both of the first and second empire. The Cobden treaty of 1861, between England and France, was in no sense a free-trade treaty. It was not free-trade, for duties were imposed by both countries. It was not reciprocity even, for England was to admit many French articles free, while France put upon English manufactures a duty of 30 per cent, ad valorem . Besides, reciprocity is not free-trade. To get coal was, no doubt. Napoleon's object. France cannot get it from her own soil. She has ships, but no coal. Sir Robert Peel, in 1S42, put an export duty of -ts. per ton on coal. The French treaty raised it in England from 15s. to 20s., and from 20s. to 25g. per ton. British coal-beds are not inexhaustible ; scientific men give but 250 to 300 years, at the present rate of consumption, before they will be exhausted ; but the consumption must increase, as also tlie expense of obtaining it, and with the exhaustion of this fuel must follow the wane of England's Protection in France. superiority in her peculiar industries, and in her shipping. But Cobden was determined to liave a treaty, however one-sided, and Napoleon accommodated him. Of the many great branches of industry, silk, woollens, sugar, &c., which have grown up in France under protection, we select here for illustration, the sugar, as being near our own times, and perhaps the best example of an industry built up designedly by protection. In the case of beet-root sugar, protection has natural- ized, in the temperate zone, a tropical product which has not only supplied France with all the sugar she consumes, but gives her large surplusses for export. It has also given a wonderful impetus to agriculture and stock-raising, and now, instead of needing protection, pays a large revenue to the Government. Under the continental system, established by Napoleon, excluding sugars of British colonies from the countries under his control, and through the rigorous blockade by Great Britain, the price of sugar rose to nine francs the killogramme (3s. 9d., stg., per lb.) Chaptel, the Minister of the Interior, established two Imperial factories to manufacture sugar from the beet. These examples were followed in many parts of France, and sugar was made from the beet at a price considerably below that to which it had recently risen. In 1812 Napoleon issued a decree establishing chemical schools and Imperial manufactories for the extraction of sugar from beets ; granting licenses to owners of factories, and to others who had made sacrifices in promoting that branch of industry, and ordering the cultivation of 100,000 acres, which would produce, it was estimated, 37,000 tons of sugar sufficient, at that time, for the wants of France. Sugar produced in France was exempted from every tax for four years. H ll ¥ lO Protectioti in France. After various lo_ij;is]ative modifications, tlie duty on foruig-n sugar wiifi raised, l-'roui 1822 to 1825, more than 100 small factories worked regniarly, producing annually about 5,000 tons of sugar. In 188S, a duty of 10 francs 50 centimes on 100 kilogrammes (Os. 9d. sterling, per cwt.) was imposed on beet- root sugar. In 1840 it was increased to 27 francs 50 centinws (lis. sterling per cwt.) This still left a differential duty of 8s. 2d. sterling in favour of beet-root sugar. In 1843 it was proposed to raise the duty on beet-root sugar by 5 fraiujs a year per 100 kilogrammes, till the duty -should be equalized with that on colonial sugar. In 184S the nomiiuil equalization of the duties was effected. From 1822 the production of sugar from beets rapidly increased. In 1828 its produce was only 4,000,000 kilogrammes (8,808,000 lbs., or 4,-104 tons). In 1838 it was 86,23>,f)97 lbs., or 43,000 tons. In 1858, 303,000,000 lbs., about 150,000 tons. In 1874, it was 450,877 tons; anjcl in 1875, 462,259 tons. A policy was adopted in Russia, Germany, flimgary, Belgium and Holland, similar to that in France — namely, protection to the beet-root sugar — and with similar results. The production of sugar from the beet, is only one of the greiit benefits conferred on France by the creation of this industry. Its effect on agriculture and the raising of stock is most beneficial, — the production of wheat rising in some districts from 20 to 32 bushels per acre, and the number of cattle fed from 400 to more than 10,000 head in nine years. One remarkable result of the establishment of manufactures in France as in every country, has been the constantly falling price of manufactures, and the increasing price of agricultural products — prices of tlie raw^ material and manufactured fabrics steadily 4 Protection tn France. 1 1 approximating. The prices of raw sugar No. 12, in Paris, exclu- sive of impost by government, were gradually falling from tlie establishment of the beet-root refineries under lieavy and increas- ing protection, , Price per lb. In 181«) the price was 12 0-10 cents. 1820 10 3-10 '' 1H54 .5 S-lo '^ \m\ 5 8-10 " 1 800 5 M. lilanquee, although opposed to protection, says (Ilistoire de rEconomie Politique, vol. 2, p. 0) of Colbert's system : " Taken altogether it composes tlie finest politico-economic edifice ever created by any government. Alone among the ruins of the past it has remained standing, and towers now at its greatest height notwithstanding the shock of revolutions. He opened the way for the national labour in a manner at once wise and regular, and to his measures is due tlie fact that France ceased to be exclusively agricultural, and became enriched by the new value given to her land and to the labours of her people." M. Say, another French free-trade writer says " If France has now the most beautiful manufactures of silk and woollens, she is probably indebted i<,v them to the wise policy of Colbert." Instead of the 4,000 tons of beet root sugar manufactured in 1829, France now produces from 400,000 to 500,000 tons per anmim. She, however, imports about 200,000 tons of sugar annually. The consum]ition has increased from 35,000 to 266,384 tons per annum, (1870.) All this sugar is refined at a profit to commerce and industry, and France exports about 'I! % itillii r il!l!! II t 1 1 12 Protcctim in France. 450,000 tons every year. Tlic free-traders wished, at any price, to retain their trade of 35,000 tons of foreign sn«j^ar, and were qiiito willing to sacrifice the interests of home industry and of agriculture. Protection prevailed, and French commerce now handles about 860,000 tons of sugar annually, Loth in France and in foreign countries. To this great commercial movement, created l>y the new in- dustry, must he added the carriage and consumption of about 2,000,000 tons of coal, which are anmially used in the manufac- ture of sugar in France, and the numerous other industries which support thousands of families, who in their turn create new sources of wealth. It is established beyond a doubt that France would have been unable to free herself so easily from the terrible consequences of the last war, without the assistance of the immense agricultural wealth of the whole country, due principally to the beet root sugaries in the north, and vine-growing in the south. Before 1830, no beet-root sugar factories existed in Europe, except in Frar' ■. The writings of M. Dombasle, and others of the same school, stimulated the production of sugar in Belgium, and then in Germany, with the following results in 1 875-0 : Germany (tons) 346,645 France " 462,259 Russia " 245,000 Hungary " 153,922 Belgium " 79,796 Holland " 30,000 V 1,317,622 Protection in Prance. i5 showing an increase of beet sugar production, in forty-seven years, of three hundred and thirty fold. Total cane sugar manufactured in 1874, was 1,840,986 tons ; do. of beet sugar, 1,110,100 tons. Total, 2,051,152 tons. M. Telesphoro Bran, who wrote a pamphlet on the Founda- tion in Canada of the manufacture of beet sugar, thus epitomises the advantages offered by this industry. He says, "' An enlightened practical study on the subject, of half a century, shows, in the most conclusive way — 1st. That the cultivation of beets, far from impoverishing the soil, vastly increases its fertility, by the production of an abundant supply of manure. 2n(l. That by the very many ploughings, harrowings, hoeings, vfcc, indispensable to this crop, the land is prepared in the very best manner for the crop which follows. 3rd. That this hoed crop enables the farmer to follow the best and most rational system of rotation for his farm. 4th. That not only does the sale of the beet to the sugar factory cover the whole cost of the production, and of the clean- ing and manuring of the soil for future crops, but that generally it brings to the farmer a larger cash return per acre than any other crop he could raise. 5th. That it enables the farmer to obtain in summer the assistance of a great number of hands, who find a profitable occu- j)ation at the manufactory for the whole of t^e winter ; thus creating a better market for farm produce, and generally a source of wealth to the country which can hardly be over- estimated." Numerous practical tests have shown, in the most conclusive manner, that for feeding purposes the beet refuse, or pulp, is i 14 Protection in United States. !iil worth about one-third as niucli as the best liay. That is, tliree tons of refuse equal one ton of excellent hay. The sugar boot crop of France produces on p;ood land, with high culture, an average of about 30 tons per acre. In (iorniany the average under similar circnmstances is about 20 tons, but the beets are much richer tlian in France, and more sugar is produced per acre than in France. In Germany an acre of good beet roots gives an average of from 2,800 to 3,000 pounds of sugar. Con- sidering the average of l)eet roots produced to be 20 tons to the acre, the refuse in pulp would be equal to about two tons of the best cured hay per acre. The farmer after having sold his beet roots with profit, and after having sowed hoed crops, which will cause an extraordinary improvement in the subsequent crops, will have as an additional source of profit, the nutritious value of '.wo tons of hay per acre — that is to say, much more than is produced by our good meadows. This should be sufficient to prove in the most convincing manner, the importance of the introduction of this industry, even from a purely agricultural point of view. From an industrial and commercial standpoint, a most necessarj' com- modity would bo produced which we have now to purchase in foreign parts at the cost of about six millions of dollars, besides import charges, customs duties, &c. Besides, to produce this sugar in this country we w^ould use 230,000 tons of coal, which would give a great impulse to the development of coal mines in the Maritime Provinces. PROTECTION IN THE UNITED STATES. Acts of navigation, as well as the protection of industry by import duties, are so material to nations having a presentiment of Protection in Uniied States, »5 future c'umiiierciiil and iiulustiial f^roatnoss, that thu United States, immediately on attaining their independence, adopted maritime restrictions and protection to native industries. The fii-st tariff of the United States was that of 1789, passed (hiring tlie presidency of Wasliingtoii, who was a strong advocate for protection to ^ p.c. 23 85 t( 'A 13 30 to 40 " n to 26 " 5 10 Austria. Ad val. 35 P-c. Free. 6 to 9 " I to 2 " I + On cottons, linens, silk, jute, hides, paper, coals, sugar, and some other arti- cles, the duties are imposed in the United States on the estimated value at the port of import. We refer chiefly to the woollen and iron trade developed by protection in the United States. The number of sheep in the United States in 1850 was Protection in United States. 17 p.c. 21,0(10,000 ; in 1800, 2-l-,000,000. Tlie increase in the number of sheep in ten years was only a little over 3,000,000, and in wool, 10,500,000 pounds. But under the high tariff duties on wool and woollen fabrics in 1801, and the still higher duties of 1807, the increase on native grown wool and the inanui'acturc of wool was enormous. And notwithstanding the greatly increased consump- tion of woollens, there was a constant and growing decrease in the importations; the decrease from 1800 to 1808 was J^5,527,000. But from 1873 to 1878 the decrease in the importations, in five years, was $25,738,000. That is, from $5(>,J-r)0,000 in 1873, to $24,724 in 1878 — more than 50 per cent, decrease. There is a great and steadily growing consumption of wool and woollen fabrics in the Kepublic, and yet we find this greatly diminished importation — showing that the Ignited States are sup- plying their home market with the })roduct of their own mills. Their woollen gools, too, are constant!}^ falling in price, while the quality is improving. The influence on the woollen trade of the United States from the tariffs of 1801 and 1807 may he briefly stated. let. An increase in the annual i)i'oduction of wool imd exten- sion of woollen manufactures. 2nd. A great increase paid for labour in the woollen industry. 3rd. A decided improvement in the quality and tinish of the woollen fabrics. 4th. The average prices of substantial, serviceable woollen fabrics were lower in 1809 than they were ten years before. That the woollen fabrics are not an exception to the general increase in home manufactures in the United States under high protection, is shown by the great decrease in (he imports of the A 2 i .1 ■M M 1 , ' !t' ! [I'l ii' ^1 !ii II ^(liiii 18 Protection in United States. chief articles of consumption from 1873 to 1878. In iron and steel the decrease was from $59,000,000 worth in 1873 to $9,000,000 in 1878 ; in cottons from $29,000,000 to $19,000,000 ; in woollens from $50,000,000 +0 $24,000,000 ; wool, xiot manufac- tured, froni if(2(»,(^00,000 to $8,000,000; and the exports, from November, 1877, to November, 1878, exceeded the imports by $300,000,000. In Great Britain the excels of imports over ex- ports, in 1877, was $690,120,000. Whatever theorists may say of the balance of trade, the vast increase of imports compared with exports in free-trade England, and the great increase of exports over imports in the United States, a country having the highest protective duties, are results which caimot satisfactorily be ex- plained on any free-trade hypothesis. Altliough many efforts were made to establish iron works in the old American colonies, beginning as early as 1619, the com- mencement of this industry cannot be dated earlier than 1718, when the first iron works were established in Philadelphia. In 1810 the cast iron made in the States was estimated at 53,900 tons. In 1820 50,000 tons. 1830 100,000 '^ 1840, pig and bar 483,000 " 1850, pig 563,000 " 1860 987,000 " " rolled 513,000 " " blooms ^ 51,526 " " steel.... 11,838 " 1870, pig i»-on 2,052,821 " " rolled 1,468,000 " • 1876, pig 2,093,000 " - relied 1,921,000 " Protection in United States. 19 From the report for 1880, of the American Iron and Steel Association we gather that the output of pig iron in the United States that year was 4:,39-i,414 net tons, an increase of 40 per cent, over the previous year. That of Great Britain was 7,721,833 gross tons, an increase of about 30 per cent. Comparing 1880 with 1870, however, the British production has grown 17 per cent, in ten years, while that of America has doubled. The United States make more Bessemer Steel than any other country. During 1880, 1,074,262 gross tons of ingots were made — an in- crease of 30 per cent, over the production of 1879. The steel rails made weighed 852,196 gross tons, an increase of not quite 40 per cent, over the output of 1879. In England, in the same year, 1,044,382 tons of ingots and 739,910 tons of rails were turned out. In the opinion of Mr. Swank, the Secretary of the Association, the steel works of the United States will, at the close of the present year, be equal to an annual production of 1,750,000 net tons of ingots and 1,500,000 net tons of rails. The first Bessemer steel works were established in the United States in 1857. In 1870 there were only 19,000 tons produced, and in 1877 the amount had risen to 757,000 tons, and the price; had fallen from $158.50 per ton, in 1868, to $42 per ton in 1878 — the fall having been continuous from 18(58 to 1878. While there has been this enormous increase in the production of iron and steel in the United States, there has been a correspond- ing falling oil in the imports ; the imports having been, of iron and steel, in 1855, 61,724 tons, and 9,19o tons in 1877. The imports of bar, rod, hoop, steel and plate iron were 144,911 tons hi 1855, and only 2<'>,3O0 in 1877. The jmces, too, of all kinds of iron have been constantly falling. The wholesale prices of the best refined rolled bar in Philadelphia, in 1844, were per ton i ■pi ■\¥. 20 Protection in United States. (2240 Ihs.) $85.(52 ; in 1850, $59.54 ; in 1877, $52.08 ; in 1878, $•45.55. Iron rails, in 1847, were $07 per ton ; in 1850, $47 ; in 1878, $35. There must, during this period, have been an enor- mous consumption of iron and steel, for, in 1867, there were only 30,000 miles of railways in the States, but in 1877, there were 70,000 miles. These two great industries, the woollen and iron, in the United States as in England, were developed and maintained by high protective duties ; and they were but examples of the many domestic industries which grew up under the fostering care of the govermnents of these States. Prior to the establishment of American independence the English Parliament had, by successive statutes, restricted the right of the colonists to employ their time and skill in the conversion of native raw materials into wares and fabrics. Referring to some of these laws, Carey, the American writer on protection, said : The lirst attempt at manufacturing any species of cloth in the North American provinces produced a resolution on the part of the House of Commons (1710) that " the erecting of manufactories in the colonies had a tendency to lessen their dependence on Great Britain." Soon afterward complaints were made to Parliament that the colonists were establishing manufactories for themselves, and the House of Commons ordered the Board of Trade to report on the subject, which was done at great length. In 1732 the ex- portation of hats from province to province was prohibited, and the number of apprentices to be taken by hatters was limited. In 1750 the erection of any mill or other engine for slitting or rolling iron was prohibited ; btit pig iron was allowed to be imported into England duty free, that it might there be manufactured and sent back again. At a later period Lord Chatham declared that he Protection in United States. 21 would not permit the colonists to make even a hobnail for them- selves; and his views were then and subsequently carried into effect by the absolute prohibition in 1765 of the export of artisans, in 1781 of woollen machinery, in 1782 of cotton machinery and artificers in cotton, in 1785 of iron and steel-makinji; machinery and workmen in those departments of trade, and in 1799 by the prohibition of the export of colliers, lest other countries should acquire the art of mining coal. British consuls were recpiired to note and report the attempted establishment in any of the States of any ])ranch of manufactures which might compete with the productive or commercial interests of England ; and her capitalists immediately glutted the colonial ports of entry with the article proposed to be manufactured at prices below the cost at which they could possibly be produced in this country. The temporary loss thus incurred would, the manu- facturers knew, be compensated by the prices that might be demanded when their monopoly of the market should be re-esta- blished. The policy when first applied to the American colonies was not experimental — it was traditional. It had been resorted to in the markets of all unprotected or insufficiently protected countries, and was now to be executed on a grand scale in the young Republic. Lord Brougham, referring to the losses on England's exports, said : "■ it was well worth while to incur a loss upon the first expor- tation, in order, by the glut, to stifle in the cradle those rising manufactures in the Unitcsd States which the war had forced into existence, contrary to the natural course of things.'- This process was thoroughly effective. Our workshops, says an American writer, were closed ; their proprietors were bankrupt ; our skilled labourers were without employment, and there was open to them / m ■ m U* mi ■'r ■• t I'! 22 Protection in United States. no ivfufje but the almshouse or work to which they were unused, as agrif'uhural hibourers in the newly settled districts of tlie country. The public rt;venues had beeii unduly swollen by these excessive importations; but, pendini; the glut and the inability of our unemployed and impoverished people to consume imported manufactures, the fTovcM'nment found itself without current revenue. To counteract the effects of this conspiracy the protective tariffs of 1810, known as the Calhoun Tariff", and of 1824 and 1828 were enacted. Under their beneficent intluence our feeble industries revived and the Treasury of the Government was amply replenished ; but when these tariffs were deprived of their pro- tective power by Mr. Clay's Compromise Bill which went into effect in 1833, the glutting of our markets was again resorted to, and 1840 found our labourers without employment because a conspiracy of British manufacturers had ruined the jjroprietors of the shops and facto i-ies in which they had been selling their time and skill. Under the effect of the protective tariffs referred to, the last instalment of the national debt was paid in 1834. But in 1840, thanks to a tariff for revenue only, conceded by Mr. Clay and the Whig party to the disciples of the science based on assumptions, the financial condition of the Government was deplorable. Not only was it without I'evenue but without credit. In his report of December 7th, 1840, the Secretary of the Treasury estimated that at the close of the year 1841 there would remain in the Treasury an available balance of but $824,273 ; and that even this small balance might disappear and a deficit of several millions be found, ' under the operations of the Compromise Tariff Act of 1833,' which was rapidly lowering the amount of the Protection in United States. 23 customs duties levied. The President, in liis message to Congress at its extra session in June, 1841, estimated the probah)le deficit in the Treasury at the close of the year at $11,406,132, and the Secretary of the Treasury informed Congress that during the previous four years, the expenditures had exceeded the revenue by $31,310,014, and in his special message to Congress of Decem- ber 6th, 1842, President Tyler said : After a failure in the American market, a citizen of high character and talent was sent to Europe, with no better success ; and thus the mortifying spectacle has been presented of the in- ability of this Government to obtain a loan so small as not in the whole to amount to more than one- fourth of its ordinary annual income, at a time when the governments of Europe, although involved in debt, and with their subjects heavily burdened with taxation, readily obtained loans of any amount at a greatly reduced rate of interest. Under this pressure. Congress passed the highly protective law of 1842. " The prosperity tlms produced was, however, short-lived, for in 1846 Congress substituted for the protective tariff of 1842 the tariff for revenue only, prepared by the Secretary of the Treasury. The country had never prospered under such a tariff. Was it to do so now ? Let experience answer this question. The law went into effect in 1847 ; and, though we mined $1,100,000,000 of gold from the newly discovered gold fields of California during the following decade, 1857 found the nation bankrupt, its working people and machinery without employment, its banks broken or in a state of suspension, and the Government again without credit or adecpiate current revenue. This condition of things continued until, by the protective tariff of 1861 and its war supplements, we made m H^MUUiifeHivadUMfiHM 24 Protection in United States. the duties uii imports so high that combined British capitahsts could not, after paying sucii duties into our Treasury, undersell our manufacturers. The experiment would involve more capital than even they felt it safe to venture against such odds. Thus protected our industries again revived, and, Muth varying degrees of prosperity, have continued to expand." The founders of the American Ropuljlic; inaugurated protec- tion to their industries in the earliest years of their history. These men had grown up under the colonial system, and were amongst their ablest statesmen, if not even the very ablest. We give below the opinions of some of them. Alexander Hamilton's Keport on Manufactures, 17D1 : "' This idea of an extensive domestic market for the surplus produce of the soil is of the iirst consequence. It is, of all things, that which most eifectually conduces to a flourishing state of agri- culture." — "" To secure such a market, there is no other expedient than to promote manufacturing establishments. Manufacturers, who constitute the most numerous class after the cultivators of the land, are, for that reason, the pi-incipal consumers of the surplus of their labour." ^ President Washington's last Annual Address, 1796 : " Congress have repeatedly, and not without success, directed their attention to the encouragement of manufactures. The object is of too much consequence not to insure a continuance of their efforts in every way which shall appear eligible." President Madison's Special Message, 1809 : " The revision of our commercial laws, proper to adapt them to the arrangement which has taken place with Great Britain, will doubtless engage tlie early attention of Congress. It will be Protection in United States. 25 worthy at the same time of their just and provident care to make such further alterations in the laws as will more especially protect and foster the several branches of niaimfaetures which have been recently instituted or extended by the laudalde exertion of our citizens." Thomas Jefferson's Letter to Benjamin Austin, Boston, 1810: " We have experienced what we did not then believe, that there exist both proflia, upon a large scale, of the Venetian policy. Maritime restrictions and import duties favoured the ship-owners and manufacturei-s of the country — the importing of raw^ materials, and the exporting of manufactured products. SPAIN AND POETUGAL. The Spaniards and Portuguese were indehted for their rapid and great fortunes to their maritime discoveries. But it proved only the riches of spendthrifts, wliile the wealth of the commercial and manufacturing nations was basod on the more enduring foun- dation of home industries. But the Spaniards possessed, at an early period, large flocks of sheep. The breeding of cattle and sheep was, too, the chief foundation of the commercial greatness of England. Henry the First, as far back as 1172, prohibited the importation of Spanish wools, and after the 10th and 11th centuries the woollen manu- facturers of Italy drew from Spain the chief part of their raw material. Two centuries previously the inhabitants along the shores of (xaecony had disfingnished themselves by the manufac- ture of iron, by their skill in navigation and in the whale fisheries. In the tenth century, from 912 to 950, the Moors cultivated, in the fertile plains of Yalentia, vast plantations of cotton, sugar rice, and were producers of silk. Cordova, Seville and Grenada had also, in the time of the Moors, considerable manufactures of TillMfUli Protectimi in Spain and Poringal. 33 W: cotton and silk. Valentia, Segovia, Toledo and many other cities of Castile were distinguished by their manufactures of wool. Seville alone numbered 10, 000 looms, and the woollen manufac- turers of Segovia employed 13,000 workmen in 1552. Other branches of industry, especially the manufacture of arms and paper, were developed in the same proportion. Down to the time of Colbert (1669) who established the protective policy of France, the French received their fine cloths from Spain. At the time of Philip II, her marine surpassed that of any other nation. By religious persecution and by despotism, two millions of the richest and most industi'ious of her inlial)itants were thrust out of Spain; these were chiefly the Jews and Moors, who carried their capital and skill to foreign countries. The discovery of America, and the route to India by the Cape of Good Hope in- creased the wealth of Spain and Portugal. But instead of receiving the products of the two Indies in exchange for their own manufactures as Holland and England did at a later period, they bought goods manufactured in foreign countries with gold and silver extorted from their colonies ; they stimulated the industry and commerce of riolland and England which soon became powerful enough to destroy their fieet and to wrest from them the sources of their opulence. Portugal, under a skilful and energetic minister, made great progress in manufactures. Like Spain she had long possessed large ilocks of sheej). Strabo (born the middle of 1st 'century before Christ) relates that a fine breed of sheep had been intro- duced from Asia, and that a single sheep was sold for a talent (£322 3 sterling). In 1681 Count Ereceina established manu- factures of cloth, using their own -wool, and thus supplying Portu- gal and her own colonies;' this little Kingdom at one time had A3 I i: .]•• 34 Protection in Spain and Portugal. forty princes paying her tribute. Manufacturers of wool were brought from Enghind, and through the encouragement given them by bounties and protection, the manufactures took root so quickly that at the end of three years, in 1684, they were able to prohibit the importation of foreign cloth. Portugal, from that time accomplished the first step in the establishment of home in- indu-stries, the su])plying her own domestic wants. But these industries, according to an English writer (Br. Merchant, vol. 3, p. 69) ilourished for only nineteen years. In 1703, after the death of Ereceina, the English minister Methuen persuaded the Portuguese government that it would be advan- tageous if Portugal could have her wines admitted into England, paying one-third less duties than the wines of other countries, upon the condition of receiving English cloths at the rate of duty established previously to 16S4-, or 23 per cent. ' Immediately after the treaty went into operation Portugal was supplied with English goods, and the first effect of this was the sudden and complete ruin of the Portuguese manufacturers ; an effect similar to that of tlie treaty of Eden, afterwards con- cluded between France and England, and to that of the suppres- sion of the continental system in Germany. The yearly exports of England to Portugal exceeded the imports thence by one mil- lion sterling ; the exports increasing from £300,000 to £1,500,- 000 a year, the balance in favour of England depressed the rate of exchange fifteen per cent., to the detriment of Portugal. "We have, says the British Merchant, a greater balance of trade with Portugal than with any other country. That treaty has since been regarded by the merchants, by the economists and by the statesmen of England, as a masterpiece of commeiTial politjy. It is called a treaty eminently equitable and •WiHw- Protection in Spain and Portugal. 35 advantageous and the hope was expressed ' that it may last for- ever.' Still England, as Adam Smith shows, while admitting the wines of Portugal at one-third less than that charged upon other wines, paid the same duty on her cloths at the Portuguese ports as other nations. But no doubt English goods admitted even on these terms destroyed the manufacture of goods of a similar character in Por- tugal ; and her commerce and agriculture also declined from that time. Pombal vainly attempted to revive them but English com- petition rendered all such efforts powerless. A similar experiment was tried in Spain in the reign of Philip V, and his two immediate successors. Inadequate as was the protection granted by the Spanish kings to manufactures, all branches of industry in every part of tl.e kingdom received a visible and remarkable impuloC from ti)e introduction into Spain of the commercial policy v.iii(^li. inaugurated by Colbert and con- tinued in its spirit ever since, has done so much for France. Lord Brougham, a free trader, says, {Researches upon the Colo- nial policy of the European Powers) that the restrictions upon the import of foreign products contrilmted powerfully to the ilevelopment of Spanish manufactures ; until then Spain derived nineteen-twentieths of her supply of manufactured goods from England. m 36 Protection in Hansc Toivns, MANSE TOWNS. In 124] Hainbm'i!; aiul Lubcck formed a league to protect themselves from the brigaiuls who disturbed their trade by land and sea. . This league united, during tliat century, all the cities of any importance on the coasts of the Northern seas, upon the Oder, the Elbe, the Wescr and the Rhine, to the number of eighty-five. That confederation was called the Ilanse, w-hich, in low German, means a union. The ITanse Towns established a commercial policy admirably adapted, under protection, to develop their manufactures and shipping. Knowing tiiat the maritime power of a country rises or falls with its trade, navigation and fisheries, they allowed thuir goods to be transported oidy in their own vessels. They establish- ed many yreat maritime fisheries. The naviy-ation acts of England (IfiSl and 1703) were modelled upon that of the Ilanse Towns, and this last ui>()n that of Venice. The Northern princes to whom a trade with the Ilanse Towns promised great advantages in the opportunity it afforded, not only of selling the surplus productions of the soil, receiving in exchange manufactured articles vei'y superior to their own, but of tilling their treasuries from import and export duties, looked upon it as a fortunate circumstance when this German league established their commercial houses amongst them ; and to en- courage this they granted them many privileges and important lavours. The kings of England were foi'emost in granting such favours. Enjj^iand was then to the Ilanse Towns what Poland was at a later date to Holland, what Germany was to England, and what most Englisli Colonies now are to England, the younger communities supplying the older with the raw material in exchange Protcctimi in Hanse Toxvns. 37 for mannf.'ictnred articlos. England tlien gave to the Ilanseatic league, her wool, tin. skins, hntter and other productions of lier mines and agriculture, and received in return manufactured goods. Without ))rotection, England would have long remained towards the older and more advanced eountrief; of the continent, what the colonies and the semi-civili/ed parts of the world are tOM'ards Britain to-day — 8up})liers of the raw material — hewers of wood and drawers of water. The experience of all countries and all times teaches that so long as a nation is in a state of barbarism, free-tj'ade, which carries oft" the product of the hunting-ground, its pastures, its forests and its fields, and brings in return better clothing, more perfect tools, M'ith iimumei'able articles from the more advanced communities, confers immense advantages. A people in that condition, may well adhere to free-trade so long as it advances them in civilization. But experience teaches also that in proportion as such a nation makes progress in industry and civilization, it u)ust experience a change in its internal economy which will show that free-trade is no longer its true policy or to its advantage. It was so with the trade between England and the Hanseatic cities. A century had not elapsed since the founda- tidu of the * steel yard agency, when it occurred to Edward the Jh'd that possibly a wiser and more useful policy might be pursued than to export raw wools and import cloths, lie began by oftcr- ing inducements of every kind to the manufacturers of wool in Flanders to attract them to England ; and having succeeded with a goodly num1)er, he prohibited the importation of foreign cloths. "Steel yard. This was a corpor.ition coinjjosed cliefly of llie inliabitants of the Hanse Towns trading in Knglar.d in the time of Henry 3rd (1216-1271). They liad many privileges and were exemjiteil from heavy duties jiaid by other foreigners. So ignorant were the ICnglish of commerce that this company, called the merchants of the 'Steel Yard,' engrossed almost the whole foreign trade of the kingdom down to the reign of Edward (1271-1307). ■-^fi 38 Protection in Flanders, Belgium and Holland. Tliis loatifiie established iiU WMA ■H vv PTfl*s»^"!!lp.iji I '^•nntlW'KaillMwHB 44 Protection in Germany. tiiiental markets with innnufiicturcd goods, for tlic pniiiose of smother i Hi;- in tlie enulle, their infant manufactures, and the eiforts and lanji^uaiii! of the Enylisli Avero i)recisely wliat such a policy dictated. An intluential menil)er of tlie Urlrish Parliament Henry Erou(»;hani, afterwai-ds Lord IJrougham, had declared, that 'England could afford to incur sdme loss on the export of her goods, for the [)urpose of destroying foreign manufactures in their cradk'.' That suggestion of a man afterwards so celehrated as a cosmopolite and philanthro])ist, was, ten years later, repro- duced, almost in the same words, hy another niemher of ParHa- ment not U'ss famed for his liberal mietos, .Joseph llnme, who also desired 'that the nianufactm'es of the continent should be strangled in their cradle.' It was afterwards rejiorted by '^ Parliamentary committee that there were inst.'inces on record of wealthy manufacturers spending as much as £'000,000 and £400,- 000 to break up foreign industries; that before capital could again be invested and those manufactures re-established, the English could step in and enjoy the trade which had been destroy- ed by their sacrifices. The petition of the Prussian maimfactui'ers was heard at last. The tarriif of ISIS met at the time of its enactment all the wants of Prussian industry, without uii(hdy iiu-reasing pro' tection, and witluuit restricting the relati'.»ns of Prussia with foreign countries. The tarritl" was wisely made much more moderate in its duties than the tariffs of England and France, for the object was not to pass by degrees from the prohibition to the protective system, b'v.t fiom free-trade to pi*( .ectiou. The duties, too, were chiefly specific, according to weight, and not ad valorem. Smuggling and under valuation were thu^ prevented or reduced to a minimum, and articles of general consumption which every country can most easily manufactnre, had the highest duties Protection in Germany. 45 imposed on tliom. The home production of such ^oods was the more important on account of the great (piantities used and their high total vahie. The protective duties were lowered in pro- portion to the lineness and higher price of the goods which might come into competition with liome industry. Tn Canada, artich^s of hixury have the highest duties imposed on them, that the burdens may fall most heavily on the rich; hut goods, similar to those manufactured in the country, besides being lightly taxed, have their prices reduced by competition among the native manu- factr.i'crs. And experience proves that, under such a system of customs duties, the combined competition between the home made article and the imported, usually keeps prices as low as under a system of free-trade or under a mere revenue tariff, thus forcing the foreigntir to sell liis goods low enough to allow the imported to compete with the home manufactured. Tn other words, the foreigner pays the duties. The measures which had appeased the Prussian manufacturers dissatisfied those of the rest of (Jermany. Austria h; d recently taxed th'j importation of (lei-man products into her Italian posses- sions. Restricted on all sides to the markets of the small states, and sepai'ated fi'om each other by lines of custom houses, the manufacturers of these states were in a condition of great distress. It was this extremity which led to the estal)lishment of the (irerman customs union, or ZoUverein — a cordon of custom-houses thrown around the Geraian States, taxing the goods from other countries, but allowing free-trade among themselves. •In 181'.), at the Sprmg l^'air at Frankfort on the Main, an association of five or six thousand German manufacturers and merchants was formed for the purpose of abolisliing i.itemal customs, and of pi'otecting vierman industries from foreign com- petition. ■■:.r '^1 / 46 Protection in Germany, The association assumed a regular organization, and its objects were laid before the German Diet and submitted to all the princes and Governments of Germany. The city of Nurem- burg was the centre of the association. A weekly paper, named the Organ of the Trade and Manufactures of Germany, was established to advocate the objects of the association. Every year a meeting was held at the Fair of Frankfort to receive the report of the committee and transact general business. The association addressed to the German Diet a petition urging the necessity and utility of the measures proposed. It sent immediately a deputation to all the German courts, also to the ministerial congress held at Vienna in 1820, The result reached at this congress was, that several of the smaller states agreed to hold a special congress upon this subject at Darmstadt. The debates which took place in this last assembly, led lirst to an association between Wurtemburg and Bavaria ; then to the union of certain Gennan states with Prussia ; then to that of the central states of Germany; and lastly, and chiefly, to the blending of these three customs' confederations ; so that with the exception of Austria, of the two Mecklenburgs, of Hanover, and the Hanse- atic cities, the wh^le of Germany was united in a joint tariif association, tlie Zollverein, which has suppressed internal custom- houses, and established, against foreign countries, a common rate of duties, the product of which is apportic led among the particular states according to thefr population. The tariff of that association is substantially the Prussian tariff of 1800 ; that is to say, a moderate protection, Tinder the influence of this association, the manufacturing industry, commerce, and agriculture of the German states which it embraces, have achieved an immense progress. ■»):■' Protection in Russia. 47 RUSSIA. B.ussia owes her first progress in civilization and industry to her relations with Greece, then to the commerce of the Hanse Towns through Novogorod, and after the destniction of tuat city, to her connneree with England and Plolland through tho White Sea. But Peter the Great (1699-1T25) laid the foundation of Russia's gi'eatness, as PVederick did that of Prussia. The history of Ruijsia during the past 170 years funiishes a proof of the jlower;:ul influence which the policy of one man can exercise over the industrial interests of a nation. It was not to the let alone policy of free-traders, but to the active interference of imperial influence, which established and m?intained authority and effected unity £imong a multitude of barbarian tribes, that Russia owes the rise and progress of her manufactures, the rapid advance of her agriculture, the development of her internal trade through canals and roads, a vast external commerce, and all her industrial and commercial importance. The present commercial system of Russia was inaugurated by Count :S^es8elrode in 1821. Under Catherine II (1729-1796) the advantages accorded to foreign manufactures had not been with- out some benefit to various trades and industries, but the nation was too far behind in general culture to attain to more than the first rudiments in the manufacture of linen, iron, glass, &c., and in those branches of industry for which the countrj^ was best fitted by her agricultural and mineral productions. Greater progress in manufactures was not be expected in the then condition of the country. If foreign nations had received, in payment for their goods, tie raw materials and food products which Russia was able to fumiftti, if there had been no wars, no exterior complioations, 44- / Protection in Russia. Russia ini«;!;lit for a long time^ liave been dependent npon countries ^' more advanced for her manufactured goods. But protracted ware, the continental blockade, and the restrictive measures of foreign nations, compelled her to look beyond the mere export of raw materials and the Import of manufactured ])roducts. In Rus.sia as in Germany the puldic mind had been influenced through the universities in favour of free-trade. The Govem- ment, the Czar himself, favoured that p(_)licy. The writings of Stork, a free-trader, enjoyed in Russia a similar authority to that of Say in Germany and Adam Smith in England. The commeg*- cial condition of the continent for a time favoured the policy of free imjiorts, for bad crops in Western Europe had stimulated a heavy export of agricultural products, giving Russia abundant means for paying for considerable importations of foreign goods. But when this extraordinary demand for the agricultural pro- ducts of Russia had ceased, and when England had increased the duties on grain and timber, the ruin of the manufactures of the empire and the excess of the importation of manufactured goods, was doubly felt. It was then that the most clear-sighted and pro- found statesman of Russia did for his country what the celebrated (Colbert had 150 years before done for France. Dr. List, a distinguished continental writer on economic science, gives this account of free-trade and protection in Russia : " Soon after the war of 1815, there arose a teacheT* of the free-trade theory, a certain Storeh, who taught in Russia, what Say did in France, and Dr. Smith in England ; Government gave the free-trade system a fair trial, until the Chancellor of the Empire, Count Nesselrode, declared in an official circular of 1821 'That Russia iinds herself compelled by circumstances to adopt an independent system in commerce, as the raw productions of Protection in Russia. 49 the country find but an indifferent market abroad; the native manufactures are becoming ruined already, money is going abroad, and the most solid mercantile houses are about to break.' In a few weeks afterwards the new protective tariff was issued, and the beneficial consequences soon manifested themselves. Capital, talent, and mechanical industry, soon found their way into Kussia from all parts of the civilized world, and more especially from England and (Germany. Nothing more was heard there of com- mercial crises, caused by over-trading ; the nation has grown pros- perous, and the manufactures are flourishing."* , Not finding abroad any markets for her products, Russia undertook to bring the markets near to the products. She estab- lished manufactures upon her own domain. The demand for fine wool occasioned by her woollen manufactures had the effect of rapidly increasing the number and improving the breeds of sheep. Commerce increased instead of diminished under this policy, especially with Persia, China and other neighboui'ing countries. In examining the reports of Russian commerce and manufactures from that time to the present, we find what gigantic strides she has made in wealth and general prosperity. England, of course, complained of this change in the commercial policy of that empire, for an important market for her goods was shut or restricted, and Russia became a powerful competitor for the com- merce of Asia : the nearness of the markets and her diplomatic influence giving her great facilities. If Russia had not improved her foreign trade, her pro<;ective policy might still have been an eminent success; for lilie the •This independent system, protection, was established in 1821. In 1820, the nianuf '-tures of woollens, silks, cottons and linens, were 26,000,000 rubles in value ; in 1824, under three years' protection, they had risen to 58,000,000, and imports diminished to even a greater extent. A4 -j' so Protection in Russia. t United States, and like all countries in the infancy of their manu- factures, to supply at first the home demand, is a great achieve- ment, and more truly so when a rapidly increasing population brings with it a proportionately increased demand. Long hefore the reign of Catherine II, who continued the work of Peter the (Ireat, in Europeanizing everything in Russia, protective duties had been resorted to in that Empire ; at the epoch of the Congress of Vienna (1514) there existed a complete system of protection, partly by prohibitions, having for its object the restraint of luxury and the retaining the money in the country. In treaties of peace, subsequently concluded, diijlomatists in- serted articles on tlie subject of free-ti-ade little suited to the con- dition of Russia. Thence came the liberal tariff of 1819, under the operation of which Russia was inundated with foreign mer- chandise, and many branches of manufactures were ruined or on the verge of ruin. It was felt that this system, however it increas- ed the revenue by customs, could not be endured ; industry was loud in its complaints, and in 1821 a new tariff was decreed, with heavier duties and some prohibitions. "• The Count Canerin found this tariff in force in 1823, when he was named Minister of Finance. He continued it with correc- tions and improvements; he abolished some prohibitions, he reduced some duties, he increased others with a view to revenue or protection, and modified the custom house regulations." ' That this sygtem does not restrain commerce in an undue degree, is proved by the annual receipts which have increased (up to 1845) three-fold since 1823, of which a considerable portion is furnished by articles of foreign manufacture. CHAPTER II. TUEOEY AND PEACTIOE. , , , r To barbarous and semi-barbarous tribes, coininunities but little acquainted witb the arts and sciences, no doubt the free admission of manufactured goods from nations more advanced would be their wisest policy. Such intercourse would open a market for their raw material and supply them with necessaries whicli they coukl not get in any other way. The expenditure, too, in such communities for government, internal improvements, etc., is very limited. Customs, in young and poor countries, are the easiest and almost the only means of raising a revenue, and until the imports are sufficient to justify resort to this means of replen- ishing the exchequer, it would be useless to impose a tarift". The best examples we have in modern times of the circum- stances which first forced young countries to resort to protection, are to be found in the United States, and in the present depen- dencies of Great Britain — offshoots of the mother country, all of whom have imposed custom duties at first for a revenue, and sub- sequently to encourage home industry. AH the Australian colonies had adopted protection in 1870, which was a very early period in their history to resort to such a policy. New South Wales was the last of those colonies to fall into this measure, that i)rovince being differently situated from the others. Sydney, the chief port, possessed a large trade with the interior, for which there was a sharp competition. Business men saw that a tariff and protec- tion would l)ring diminished trade, and they opposed them. "What protection has done in the great manufacturing nations of Europe and in the United States, it could do in Canada. They 'M S2 Theory and Practice. were mainly agrieiiltural as Canada is to-day wlien they initiated protection as a means for establishing, developing and maintaining domestic industries. These countries, in Europe and America, to which we have referred as building up manufactures by protection, number two hundred and fifty millions of people. Wliile numbers do not necessarily prove the truth of a principle, still the policy of all these great manufacturing countries, pursued in souk; of them for centuries, and in others almost since their foundation, may safely be adopted by a young country. The one example of free- trade is that of a country wliich adopted it, after centuries of pro- tection, and when she believed she had no rivals that could com- pete with her. Xor did England lower and abolish duties on im- ports in the interest of free trade. Two bad harvests had raised the price of breadstulfs to such a height that the government was forced to repeal the duties on them. The famines of 1845 and 1846 gave birth to that new policy. During one generation, under free-trade, England has lost position in the markets of the great nations, and even in her own colonies. Her vast marine alone gives her chief control in the distant and semi-civilized parts of the earth. Year by year she imports relatively more manufactured stuffs. Her artisans are thus thrown out of employment and must perish or migrate. Her policy does not economize labour, but annihilates it. ' Protection has caused a great flow of capital and skilled labour from older and richer manufacturing countries to the United States, and has, even during the short period of three years, done the same fcxr .Canada. England, proper, as an agricultural country, never supported more than four millions of people. Her manufactures added another four millions. These added another equal population engaged in commerce ; and by the reaction of I Theory and Practice. 53 these on each other, Enghmd proper, to-day, swarms with more than twenty millions of people. These add immensely to the development of manufactures. Duties put upon foreign goods render it more difficult for older and richer States to destroy the infant manufactures of younger and poorer countries. Under a mainly revenue tariff Canadian industries suifered immensely by the goods forced upon lier markets from the United States, for the express purpose, under a combination of manufacturei-s, of shutting up her factories ; after which they could step in and command the markets at their own price. . „ This was a policy well understood and practised in England. In a report of the commission appointed by the House of Com- mons in 1854, " To inquire into the state of the population in the mining districts," it is stated that : " The labouring classes are very little aware of the extent to " which they are often indebted for being employed at all to the " immense losses which their employers voluntarily incur in order " to destroy foreign competition and to gain and keep possession " of foreign markets. Authentic instances are well known of " employers having carried on their works at a loss of £300,000 " or £400,000 [$1,500,000 or $2,000,000.] These few wealthy " capitalists are able thus to overwhelm all foreign competition. " The large capitals are the great instritments of warfare against " the competing capitals of foreign countries and are most essen- " tial instruments by which our manufacturing supiemacy can be " maintained." {Report of House of Commons, 1854.) By protective duties this danger to young industries can be averted, and they can have time to grow to maturity, shielded from the destroying avalanche of foreign goods thrown upon their :11 54 Theory and Practice. §m inelgium, bnt it represents a very encouraging industrial activity for a nation of only 5,537,000 • inhabitants. But to what countries wa'nt the exports from Bel- gium? That country is surrounded by protective nations, it hhould be remembered. To free-trade England then, of coui*8e, a Theory and Practice. 59 next-door neighbor, must have gone the bulk of all this large exportation. But what were the facts? J I ore are some figures which we commend to those who believe that a protective tariff destroys foreign trade : KXPORTATTONS KROM BKIXJIUAt IN 1879. t To France frs., 372,100,000 To Germany " 280,400,000 To England " 2a0,100,000 Here it will bo seen that England is only the third best cus- tomer of Belgium, though in proportion to population Belgium is undoid)tedly one of the best customers of p]ngiand. It was in protected (tennany and France that the Belgians made tlieir largest sales. So much for theories. A\'^ith regard to the growth of national wealth in protective and free-trade countries we find some statistics extracted from a work by Mnlliall, entitled " Balance Sheet of the World," and published in London. The figures indicate the '\\ crease in capital, or national wealth, in one decade, in t/ie princi])al countries in Europe. Only those that refer to England, France, Germany and Russia, three protected countries and one free-trader, are here reproduced. ' INCRKASK IN MII.I-IONS OK POINDS STERLING FROM 1870 TO 1880. (j.iin in ten ye.Trs. England £150,000,000 France 295,000,000 (iermany 725,000,000 Russia 250,000,000 A portion of the increase to Germany nnist be regarded as loss to l^' ranee ; for the decade is that following upon the Franco- (ierman war, when the payment of a heavy indemnity enriched -- ««n 60 Theory and Practice. the Germans at the cost of French savings. But even inert Russia, it will be seen, increased her capital more rapidly than trading England.' SOURCES OF REVENUE. England raises more than one-fourth of her immense revenue by customs duties ; two-thirds by customs and excise, and only one-bighth by direct taxation — namely, the property tax and assessed taxes ; yet England pretends to have adopted the prin- ciples of free-trade, while she obtains by customs £20,000,000 of her £80,000,000 revenue. If we take the opinions of theoretical free-traders as our guide, then all customs and excise duties are inconsistent with the principles of free-trade. Revenue must come from direct taxation alone. On this ground one of their leading advocates, John Bright, once proposed an income tax of half a crown in the pound — one-eighth of every man's income — as a substitute for customs. Hence also the Financial Association of Liverpool, driven by the logic of their own theories, called Mr. Gladstone, the then Chan- cellor of the Exchequer and a free-trader, to account for taking a penny off the income tax and retaining the duties, although he admitted that the corn duties were impolitic. The Free-trade Association asserted that the corn duties were a protective duty amounting to £4,000,000 sterling, while they were supposed to have got entirely rid of protection. Mr. Gladstone in reply said : " Direct taxation, I admit, if we were to proceed upon abstract principles, is a sound principle. But, gentlemen, have some compassion upon those whose first necessity it is to provide for the maintenance of the public credit, to provide for the defences of the country, to provide in every department for the full efficiency of the public service. I wish I could teach every Theory and Practice. 6i political pi ilosoplier and every financial reformer to extend some indulgence to thoee who would ascend along with them, if they could, into the seventh heaven of speculation, but who have weights and clogs tied to their feet, which bind them down to earth. Let no Government be induced under tlie notion of abstract, extensive, sudden, sweeping reforms, to endanger the vital principles of public credit or to risk throwing the finances of the country into confusion." {Gladstone's speech at Liverpool, 13M October, 1&64.) Here the issue is put fairly and broadly by free-traders them- selves, and their theories admitted to be impracticable, even in England, for the benefit of which they were formed. A finan- cial association composed of leading free-traders, asks the Chancel- lor of the Exchequer, an out-and-out free-trader in theory, to retain the penny just remitted on the income tax and takt off the duties on corn, Mr. Gladstone, as a free-trader, has to admit the " soundness " of the " abstract principle " here pressed upon him, but exclaims in terror of the consequences of putting in practice the " sound principles : " " Gentlemen, have compassion on me while a Minister of the Crown, and after that I will go with you strong on the abstract principle, although utterly impracticable in the affairs of terrestrial kingdoms. I warn any government against adopting free-trade." If all free-traders were as harmless as Gladstone, and would leave their theories in their books or in the seventh heavens, we would not obJ3ct to them. Free-trade confined to the closet and protection in jijrac^tce, would suit us. In strict accordance with the position here taken by this free-trade Chancellor of the Exche- quer has been his own practice, and that of every Finance Minister of England, since the adoption of the so-called free-trade policy 62 Theory and Practice. i. '1 in 1846; that revenue must be derived chieliy from customs duties. Mr. Laing, M.P., recent Finance Minister of India, and sent there as a thorough free-trader, gives the preference, after his India experience, very decidedly to customs over all other systems or means of raising a revenue. It is, lie says, a most simple, productive, and in the main, equitable mode of raising the neces- sary revenue, and 1 believe little more remains to be done in the way of adjustment of taxation. The greater substlhUion of direct for indirect taxation may he a favourite theme with theorists^ hut it will not stand the test of practice. Direct taxation is open to the fatal objection, that, if uncertain, it leads to fraud and vexation, and if limited to certain incomes and objects it involves glaring inequality, by omitting others as real though not so easily ascertainable. An income tax, in the condition in which he found India, Mr. Laing proceeds to say, is the M'orst possible tax. Accordingly Mr. Laing, who was sent to India as a free- trader, and who sums up his politics in the two compound words, free-trade and non-intervention, established customs duties as almost the sole source of revenue ; and England, which adopted " free-trade " only theoretically, however, " as the policy of the Empire," following the dictation of Mr Laing, surrounded India with a cordon of custom liouses as soon as that va^t Peninsula be- came a part of the Empire. The London Times, too, the unreasoning advocate of free- trade amongst all people, in all parts of the world, under all cir- cumstances, and which calls " free-trade " the noblest truth that has dawned on political science, {September 4, 1864), while condenming in no very mild terms the C>olonie8 for not abolishing their custom liouses, (which England will not do,) and for not Theory and Practice. ^l relying on direct taxation, which England can not do, puts in this strong plea for indirect over direct taxation, (August 13, 1864): "Before they acquire a lengthened prescription, may we ven- ture to ask whether the annoyance they impose, and the sort of bodily fear under which they put every man of property or in trust, are not to be an element in the question betwejen direct and indirect taxation *. That indirect taxes are collected easily and paid most readily completes the case in favour of indirect taxes over direct. You need never use an article unless you choose." And again " the false returns (in the income tax) are made by the lesser merchants, professional men and tradesmen, a class in fact having at present most interest at elections, and whose opinions determine the policy of the nation. There is no argument against the continuance of the income tax so potent as the deterioration of*the political morality it begets in the lower classes. Politicians would be justilied by this consideration in abolishing it were there any hope of achieving such a result." If England and India with the hoarded wealth of ages cannot dispense with customs, how could a country like Canada with her sparse agricultural population and little accumulated capital? The machineiy for the collection of an income tax would cost more than the net proceeds. It is thus established by the practice of Britain at home and in India, under the administration of free-traders themselves and admitted by those disciples of this purely theoretical school who have had experience in the finances of those countries, that rev- enue must be collected mainly by indirect taxes, and chiefly on imports. This, too, has been our own practice, and the practice of every nation of Europe and America whose trade renders such a source sufficiently remunerative. - 64 Theory and Practice. Collection of revenue by customs is the most equitable and general, every one paying in proportion to his purchases; the rich heavily on his costly luxuries, but the poor lightly, and little by little through the year as he receives his daily wages. All taxes are oppressive ; nd annoying; but those by customs are least op- pressive, and least annoying — the amount being drawii impercep- tibly in the form of pur(;hase money. The income and property taxes are the oldest and rudest forms of taxation. They are blood-letting by the hatchet and tomahawk. Under the name of customs dues taxes are di-awn, as under the influence of chloro- form. Ceteris paribus, men's feelings ought to be considered. The property and income tax is the old rude form of seizing one-tenth ot a man's crops in the field — the '"stand and deliver" inodus operandi. It has been left for commerce, if not for Christianity, to devise a more equitable and refined system. This tax, says Thiers, the distinguished 1^'rench statesman and writer, is paid insensibly by slow degrees, so that the tax- payer, who generally has little foresight, pays his share of the public charges, while paying his daily expenses. He can retrench his expenditure if he thinks he cannot meet it. This tax is a most equitable one, for the rich pays the greater share. Having then to rely mainly on customs for revenue, th© question of chief importance for us is, shall we so adjust those duties as to encourage the establishment of manufactures in the country and foster them in their infancy, or shall we legislate Bolely for the collection of revenue without any reference to those industrial pursuits so prol'iic of wealth? Nor could Canada, if so disposed, give up customs duties. She has built gigantic works at a cost of $116,000,000 to facilitate her own trade and that of foreign states passing through her Theory and Practice, 65 country. ()» her canals, which give us an inland navigation of 2,400 miles from the Atlantic to the head of Lake Superioi-, she has expended $40,328,000. These canals, when completed, will admit vessels of 1,200 tons. On her 8,000 miles of railway, with 2,500 miles more nearly completed, the Dominion Government aid is $80,000,000 and with the subsidies promised will amount to $118,864,000. Various other public works, provincial debts assumed, &c., will increase this sum to $200,000,000. Whence is a young country, thinly settled and with little accumulated wealth, to get the means of paying this debt except by duties on imports ? Those works, too, are of immense advan- tage to the English manufacturer. Through them his wares are carried thousands of miles to the very heart of the continent, to parts which otherwise they never could I'each ; thencAJ also are brought the vast surplus products of those fei'tile regions, cheapen- ing the food, and consequently feeding l^etter the millions of the sons and daughters of toil in the Old World. As a mere com- mercial speculation those canals and railways, with our customs duties doubled and even trebled, would be of priceless value to the English manufacturer; for if he had not those facilities, his goods, even supposing they could reach those distant mai'kets, would jiay a thousand-fold in transit dues moi'e than they now do in customs. Mr. Grladstone with others has found fault with the taritf laws of Canada. Why did he not here, as in his own case, apply his " simple test," whether his proposal '* Avould have had success ;" for as an ex])erieuced minister he had, of course, a substitute for the policy which he so strongly condemned. In his speech on the Btidget of 18()r) this same fi'ee-trade financier labours to prove that the malt tax of seven millions and ^5 m mi y^i l!t 66 Theory and Practice. a half falls on the consumer ; aiid the Times says that Mr. Glad- stone has conclusively proved that the malt tax falls on the con- sumer and not on tlie producer. "Why then are not Canadian duties, so much complained of, a tax on the Canadian consumer and not on the English producer? Cottons and woollens are as necessary for the Canadian as beer for the Englishman. The farmer who may have £10 to spend for his family would buy no more by first putting aside £1 for the income tax and then paying the £9 for his goods than by giving the £10 for his fabrics. CHAPTER III. FREE TRADE ASSUMPTIONS AND SOPHISMS. If by a science be meant a collection of trntlis ascertained by experiment or experience, and on which all well informed men are agreed, then political economy, as now understood, is not a science ; and free-trade, one of its tenets, is not a science ; it is simply a policy, wise or unwise according to circumstances : it may be wise to adopt it in a country at one time and unwise at another ; and circumstances may justify the reversal of the policy which for a time may have been sound. Lord Bacon, in his poetic and appropriate language, calls such errors as that of erecting a policy into a truth, an idol, and charges mankind and theorists in particular, with gross idolatry at its shrine. If we take experience as our guide then protection is the true policy for at least young countries. If we run over the history of the establishment and develop- ment of manufactures in the great countries of Europe and America, we shall not find one in which they grew up under free-trade ; in every case they were fostered by rigid protection long continued. One-third of a century ago England was fascinated with the specious theory of free-trade. Agricultural interests, the colonies, the shipping, every interest in the Kingdom, was dust in the balance ; the manufacturing towns, which were the most clamour us for the change, are now the first sulferers. The experience oi one generation has cooled the enthusiasm, and men are beginning to look for the old paths. There is a tendency among writers on economic (questions to 68 Free Trade Assnuiptiois and Sophisms. h . look for a fjrcater dejjrcc of order and conformity with general risks than really exists. England, if not like the city of old, wholly given to idolatr'' has erected free-trade into an id<>licy a pauper dej)LMi(lent upon f(»rei«»ii charity. Nf. Thiers, Prime Mini- ster and President of 1"' ranee, characterised this let aUmf system — that system which wo\dd leave hd)(>iir and capital to their own course, as a "system of indifference, inaction, impotence aiid folly. The natural course of commercial affairs unhifluenced by legislation is impossible. You must liave revenue ; the chief sources of revenue are customs and excise. Customs duties are most easily collected, least felt, and ])art at least of the burden is thrown on the foreigner. Fiscal regulations may be so arranged as to destroy home industries ; they may, too, be so adjusted as to create #hera. The least harm and the most good cannot spring from the least possible care ; to shoot without taking aim is not the surest way of hitting the mark. Foreign commodities, free-ti'aders say, are always paid for by home commodities ; therefore the [)urchase of foreign commodi- ties encourages home industry as much as the home commodities. Both propositions are untrue, as England, whose free-trade writers propounded them, has foimd to her cost. If an Ottawa trader buys a thousand pounds worth of shoes in Montreal, this sum goes to the shoemakers, the tanners, the last-makers »fec., in Canada, and by them is distributed to the farmer, the gardener, the butcher, the baker, the grocer, the hatter and to the dealer in all kinds of fabrics. The spending of 70 Free Trade Assumptions and Sophisms. i^i? this suiii in tho country surely does Canada more good than if it were sent to a foreign country. Nor is it an answer to this to say we pay more at home tlian abroad for our shoes; tho fact is we now pay much less than we did before the duties were put on slioes. I hit 8U[)posing it to bo true that we pay in this transaction -tSO less in cash to the foreigner than to the Canadian, would that (^om|»ensate this country for the loss of tliis and other manufactures, and the immense sums which are now ]iaid to our own peopK'^ Ilomc trade is more adv^autageous than foreign. On this hear the apostle of free trade, Adam Smith; — " The capital which is employed in juirchasing in one part of the country in order to sell in another the produce of the industry of that country, generally replaces by such operation two distinct capitals that had both been employed in the agriculture or manu- facture of that country, and thereby enables them to continue that employment. When both are the produce of domestic industry, it necessarily replaces by every such operation, two dis- tinct capitals, which had both been employed in supporting pro- ductive lal)our, and thereby enables them Lo coutimie that support. Tlie capital which sends Scotch manufactures to London, and brings back English manufactures and corn to Edinburgh, neces- sarily replaces by every such operation, two British capitals, which had both been employed in the agriculture or manufactures of (4reat Britain." " The capital employed in purchasing foreign goods for home consumption, when this purchase is made with the produce of domestic industry, replaces, too, by every such operation, two distinct ca])itals, but one of them only is employed in supporting domestic industry. The capital which sends British goods to Portugal, and brings ])ack Portuguese goods to Great Britain, Free Trade Assumptions and Sophisms. n replaces by every such operation only one British capital. The other is a Portuguese one. Though the returns, therefore, of the foreign trade of consumption should ])e as quick as tiiose of the home trade, the capital employed in it will give but one-half the encouragement to the industry or productive labour of the country." '•A capital, therefore, employed in tiie home trade, will sometimes make twelve o])erations, or be sent out and returned twelve times, before a capital employed in the foreign trade of consumption has made one. If the cap.tals are equal, thereforej THE ONE WILL GIVE FOUH-AND-TWENTY TIMES IHOrC eUCOUragemcnt and support to the industky of the cx)untry than tuk other." " You might have had the entire gross value of two industries to spend and thereby also to create and sustain markets ; but you are content to have the value and the market of one industry only." M. Say, one of the first if not the chief of the French free trade writers, maintains a similar doctrine. '"Ze commerce interitur est le plus avantageux. Les envois et le retour de ce commerce sont necessairement les produits du pays. II prowque une double production.^^ These are the admissions of the founders of the existing school of political economists, on a point of such vital importance that it affects the entire theory of free-trade ; so far have the disciples of Adam Smith departed from the teachings of their master. The entire price or gross value of every home-made article constitutes net gain, net revenue, net income to the producing nation. Change the policy and purchase foreign with home articles 1^ Free Trade Assutnpiicvis and Sophisms. and _you create only one value instead of two, and oily one marl^iet foi" home indnsti-y instead of tAvo. M. Say, in uis Traite iVeconomie iwlit'ujxe^ analyses the price of a watch, to show how the whole of it is distrihnted as net income amon^ those who have conti'ihiited to its production. He traces also tlie distribution of the cost of manufacturinir cloth and says 'we cannot concen'e of any portion of the vahie (^f \\\^, cloth which has not served to pay a revenue or ucome. The entiiv value has been so enijiloyed. Admitting: that the home-made article would cost more than the foreign, the difference in the price will not compensate the country for the ^oss otherwise sustained by purchasing the foreign commodity. ' For example, suppose we can produce an article for $100 and can import it for $99, we gain one dollar, but lose ^100, which we might have had to spend by creating- the value at home. Even admitting that we exchange our own manufactures foi" the foreign, we lose by the collapse of liome industry the ${tl>, which we would have had in addition ])y producing both conmiodities at home. jS'or can it l)e said, 'what the producer loses the conr-umer gains ;' for the producer loses i^Kxi, the con- sumer gains one dollar, and the country loses the markets which that superceded industry supported. Free-traders tell us that foreign commodities are always paid for by home commodities. Suppose on this assumption that half a n.illion dollars worth of stoves made in Toronto was exchajiged annually for sugar to the value of half a million refined in Montreal, the workmen, the tradesmen, the landloi'ds of Toronto and Montreal, enjoy an aimuai income of one million of dollars. Hut suppose now that the Canadian refineries were given up and the Toronto manufacturers should exchange their Btovos with New York for lialf a million w( "th € sugai". •9. ^; Free Trade Assumptions and Sophisms, 73 suppose free trade to be restored in sugars and the richer manufacturers in the States sliould combine to destroy the Canadian refineries — no unusual occurrence — and shoukl succeed. Sui'cly New York gainw wliat Canada loses; Canan the other, there would be few excii.mges; Canada would have to i)av the hard cash to foreij'n looms and foreign factories, — CJanada would become chiefly an agricultural country. AVithout home markets, created by home industries, she must seek markets in foreign lands, and the cost of fi-eight on her heavy products amounts to a large per"entage of the profits. The land year after year would be exhausted l)y tl>e growth of wheat ■ *• 1 wf m 74 Fref Trade Assninptiotis and Sophisms. and such products as would pay the heavy transit to distan markets. '"'•If all countries practised free-trade, all countries would he gamers.'''' This assertion is taken as true, because it has been so boldly and constantly repeated- It is possible that free-trade might have concentrated certain manufactures in favoured localities. After England had well established by protection her cotton, AvooUen and iron industries, it is possible she might, under free-trade, have retained them against all competition. She could, as she frequently did, destroy the infant industries of other countries by flooding their markets with goods sold at a sacrifice for that very purpose. ' It was the duty of English manufacturers,' Lord Brougham said, ' to crush foreign manufactures' ; 'to strangle them in the cradle,' as Joseph Hume, another typical liberal statesman, said. Protective duties are not only eminently conducive but absolutely necessary to the diffusion of various industries and wealth over the surface of the globe. The firm establishment and development of manufactures in all the leading nations of the globe, as we have seen, were uiider protection. What support, therefore, have free-traders for the assertion that 'all countries would be gainers by free-trade.' It is not supported bv any evidence, but is against all evidence. The cotton and woollen industries are not indigenous to England, as oranges are to hot climates. Ploughs, and reapers and stoves, a.*d engines, and cars, can be made in Canada as well as in England. Climate is not rgainst these. They merely want, for their establishment, the favouring circumstances which protection gave England. The land teems with food for man and beaet, but our markets are 4,000 miles away, and the Free Trade Assumptions and Sophisms. 75 transit of agricultural products is costly. Under protection manufacturing towns spring into existence, giving a local market to the farmer, not merely for what he before sent to foreign countries, hut for the numerous products of the soil, whicli either from being perishable or of too little value to hear the freight to distant markets, had no value. Home manufactures are furnished without the cost of transit ; competition at homo keeps down the price. Two capitals are employed instead of one, and with quicker iitid more frequent returns. Wealth is created at both ends of the exchange. Native industry supplies the necessaries and comforts of life for which we before depended on foreigners. A numerous population can now be employed, fed, clothed and lodged. Industry and plenty reign. Protection wisely regulated, instead of being, as free-traders assert, a blight on industry, is a system of irrigation, diffusing industry where industry would otherwise never have existed. AVithout protection m France, to her cotton, and woollen, and hardwai'e, where would liave been the industries on the banks of the Seine, of Rouen and EUxjeuf i What would have become of the thriving population of Tourcoing, Roubaix, Midhausen and St. Etienne ^ Manchester, Birmingham, (rlasgow and Sheffield, would have prostrated all, and turned the banks of the Seine and half the thriving towns of France into a desert. England would have lost rather than gained, for the enormous purchasing power, now given France by lier industries, would have been destroyed, or never existed. What France would irave been without protection Ireland now is. Before the unio:; between England and Ireland there existed protection against English manufactures, and there were Irish linen manufacturers, Irish wool-combers, Irish carpet manu- I 76 Free Trade Assumptious at id Sophisms, facturers, Irisli blanket inamifacturers, Trisli calico-printers. These industries are now all extinct except the linen of ijelfast, and that was founded and inirtured by protection, and by government grants for a long series of years. Protection was, by the act of union, gradually witharawn. Ireland under protection swarmed with more than eight millions of people; under free-trade she luis three millions less. Ireland has certainly lost by the change of policy. Has lOngland gained *. I'nder protection she was one of England's best customers; under free-trade she is a pauper, dependent on P]ngHsl5 charity. So far from ivrotection producing monoply, it is protection alone which can prevent the first established manufactures from enjoying an unjust and undeserved monopoly. Protection gave England security against the old established manufactures of l.lje continent. After Russia's industries were ruined under free-trade, it was protection which secured their establishment. The wisdom of a Burleigh and Cromwell in Kngland. of Colbert and Napoleon in France, of Peter the Great and Nesselrode in Iliissia, and of a Washington and Jefferson in the (Tnited States, has diffused tlie industrial pursuits over Europe and America. Their p(>pulations do not now merely fringe the coast, but penetrate the inierior. Protection has extendeil the area of human industry, and given employment to the most numerous class in society — the labourer. Pa» trap (jouveifier. Dont over goveiii. A convenient motto for an imbecile government, or lor a party which has adopted, like the free-traders, an impracticable theor}'. lietween the two extremes — over government and no government — frop (jonverner and laiHser falre ; "it is a iine prob- lem in legislation," says I>urke, "wliat the state ought to take upon itself to direct by ])ublic wisdom, and what it ought to leave with Free Trade Assumptions and Sophisms. 77 as little interference as possible to iQclividual exertion." Thirty to forty years ago, when Cobden was discussing tlie repeal of the Corn-laws, the let alone theory was considered by that school as the height of wisdom ; the government was to be like the Hindoo gods, far removed from all sublunar}- alTairs — in a state of eternal sleep. The majority of every nation arc young and inexperienced, and unac(]uainted with what the teaching of ages has taught to be wise in government. It is necessary, therefore, that governments shoijM be ever watchful of the wants and interests of the governed. In no well organized community do governments act on the let alone theory. It would be easy to enumerate hundreds of instances in which governments must and do interfere by legis- lation. They must provide defenct; against external aggression ; preserve internal peace ; maintain ports and lighthouses; coin money; provide a uniform system of weights unci measures; assume the distribution of the mail ; protect public health by (juarantine laws, by the prohibition of nr.isances of a thousand kinds; institute and ])rotect property and regulate its transmission; lay the corner-stone of family ties by enforcing the marriage con- tract ; and interfere in a hundred ways to protect the helpless and inexperienced. '' J leave men to themselves to be taught by experieuee, is to leave them to be first ruined by the more experienced and unprin- cipled, and taught afterwards. How much more would this be true of women and children ? The In w steps in to defend the weak against the strong; and in nations the government steps in to protect the new and weak industries against the older and stronger ones of foreign countries. The great mass of a nation — the labourers — depend on their 7« Free Trade Assumptions and Sophisms. daily wages. The protection of their industries from destruction by an avalanche of goods from foreign factories thrown upon the country for that very purpose, is surely the duty of government. On these wages depend, and on the rate of wages hangs the weal or woe of the bulk of the people and of the nation itself. We might as well send a ship to sea without a crew, or with an inex- perienced crew, as to leave a country without a wise and ever watchful care over all its interests. ' Do not under govern ' would be a wiser motto. Free-trade doctrines, instead of biiulinijf the nations of the earth together, have driven them farther apart, and protection, on a scale never before known, has been adopted by the leading commercial nations. Free-trade vv(»uld, too, have disintegrated the British Empire, it theadviceof tb.e Kussells, (ireys, (Tladstunea and the Manchester school had been taken, and free-trade made the policy of the Empire. But fortunately wiser councils pre- vailed, and the dependencies of the Empire adopted their own fiscal policy. ' What is the good of colonies,' ask free-tradere, ' Give me ships, colonies and commerce," said the greatest admin- istrative genius of modern times. While British exports are falling off to an alarming extent to all the great manufacturing countries in Europe and the United States, they are as rapidly increasing to the Colonies. 'Perish India I' exclaim free-traders; but India is now one of England's best customers. Steam and electricity have done much to annihilate distance and bind together the distant provinces of the Empire. Steam, as an effectual means of communication by land and sea, has not existed half a century, and its effects have been marvellous in transforming villages into Manchestors and Birminghamis. On the Empire with its dependencies in every part of the globe, its effects will be proportionate. ^jg^ ^m Free Trade Assuwptions and Sophisms. 70 lie To deviso a fiscal policy satisfactory to every part of this vast union of nations, may be diftieul but not impossible; and it is a consummation earnestly wished for by every loyal subject. Pro- tection, instead of destroyinj]^ external trade as asserted by free- traders, might, under such a fiscal policy, increase it within the Empire, composed as it is of dependencies in every clime. The tea and coilee, the sugar and spices of tropical and sub-tropical countries, the cereals, the beef and mutton of the higher temper, ate zones, can all be supplied within the Empire. Protection, free-traders tell us, adds to the cost of living. This assertion is made without qualification, and by dint of per- petual repetition is, in England especially, almost universally believed. They don't inform us that wages are higher in propor- tion to the cost of living; that by local markets the farmer gets better prices, and is thus given the power to bu}' of the merchant and manufacturer. The United States, under the highest pro- tection which ever existed in any nation, is prosperous beyond precedent, and in all the past luis been prosperous under protection, but depressed under free-trade and purely revenue tariffs; and all the highly taxed countries of Europe — Holland, France, Ger- many, — are prosperous under protective tariffs. Canada was depressed under comparative free-trade, and under a purely revenue tariff, but is prosperous under protection. Some taxes are a mere transfer of value from the tax-payer to the exchequer, to be distributed again to the nation; the nation a large is neither poorer nor richer for the transfer. Customs duties are in many instances paid by the foreign producer. If a mowing- machine is sold in Canada for $100, and a similar one is imported, the importer must pay the customs duties. If a Canadian farmer takes 100 bushels of barley to the American market and sells tbem K 8o Free Trade Assumptions and Sophisms. for one dollar a bushel, out of this he mur^t pay $16 duties; but the American fanner who sells 100 bushels of barley in the same market, having no duties to pay, has $100 as the proceeds of his load, while the Canadian has but $84. " Increase of exports and imports is the index of national ■prosperity.^'' The imports into England, the country which gave birth to ihis dogma, are now much more rapidly increasiug than her exports. Production, in some form or shape, is the only source of wealth. The superceding of heme production by foreign, in- creases im])orts. If a nation buy abroad a million worth of goods which it produced before at home, the impoj'ts are increased, but that increase is the index of the loss to that amount of a home production. That trade — the mere movement of goods — is thr chief in- terest or industry of a nation., isassinned by nearly every English writer on this subject. " 8ee," say they, " our vast imports and exports, how prosperous we are." The celebrated petition of thcniercliants of London to Parlia- ment, adopted as the clearest embodiment of free-trade doctrine, states : 1. " That foreign commerce is eminently conducive to the wealth and prosperity of the country. 2. " That freedom from restraint is calculated to give the utmost extention to foreign trade." To be carriers, traders pure and simple, is the one idea here advanced. Mr. Bright, in a letter to the Chicago Trihme in 1867, in answer to a request for his views on free-trade, for publication ir. America, says : Free Trade Assumptions and Sophisms. %\ and I'lia- I'ine, the the here " I do not recollect any paper bcarin*;^ on the question of wages. The fallacy was made great use of in our movement for the repeal of the corn laws. The real argument against it is this : Free-trade always means great trade, and great trade means a great detnand for labour, and this always means and necessitates a high rate of wages. At this moment wages are liigher than at any period, at least, within our recollection. It is so through all our manufacturing districts. It is so with our farm labourers. The worhneti's safety and success depend ^qmn the extent of trade. All the countries of Europe are tending to freedom of trade." " Give your decisions, but never your reasons," was the advice of an English statesman to a judge, and no man stands more in need of this caution than the great English declaimcr. " All the countries of Europe are tending" to greater restric- tion in their tariffs rather than to the relaxing of theni ; and even the little favour got of France in the Cobden Treaty is sure to be lost, if we can judge from the general objections by the French workmen and French ])oli'"icians to its renewal. The " workman's safety depends upon the extent of trade," Mr. Bright says, and yet we iin^l that coincident with the greatest expansion of the trade is the greatest depression in the labour market. Never, we are told, within the memory of living men haxe so many been out of employment in Eng!;ind. The cai.se is manifest. Home industries have failed, or are declining. Even if Englantl had the whole carrying trade of the world, the mere passage of goods upon the ocean, or touching at British ports, could not supply labour to the artizans and working men in her great industries. A Birmingham jeweller, in a recent letter, says of the jewellery sent from ohe southern ports of pjUgland, that most of it is German and French, merely transhipped there in Ih'itish vessels. This a6 Km 82 J^ree Trade Assumptions and Sophisms. (♦wells the trade of Kn^land, but does not give employment to artizans in that industry, now so greatly depressed through the vast importationi* of continental jewellery. Colonel Beresford, in an address, at Southwark, jiointed to St. Thomas's Hospital, as a proof of what was done abroad : " The whole of the carpenter work of that great building was being made in Sweden and sent to P^ngland ready to be fixed into its proper place." Here is increased trade, but at the expense of the carpenters. The imjiorta- tion of iron, woollens, cottons, silks, and wares of all kinds from the Contiiient increases ti-ade, bu*" throws the English workmen out of eiuj>loyment. Hence the great distress in most English industries, ^^r. Uright refers to the increase of Avages in England as the result of free-trade. IJad he looked abroad, on the Conti- nent of Europe (»r to America, he would have found as great, and and in most cases, greater increase of wages in countries under high i)rotection. The ti'uth is. the great impulse given to industry, and the demand for labour throughout the world, which followed the discoveries of gold in California and Australia, were the chief causes of the higher wi»ges, as they were also of the expansion of trade n(>t merely in England, as contended by free-traders, but in all the great manufacturing countries of the r)ld and Xew World. Every statement, therefore, of Mr. Bright, quoted above, is proved by existing circumstances to be the reverse of the truth, or else is credited t'^ free-trade, when it is due to othei- causes. Free-ti'Uili' means (jreat trad<', and gi'eat trade great demand f(yr /(^?/o"/'.— This dogma is founded upon a one-sided and partial experience. The trade of Great Britain rose from £145,000,000, imports and exports, in 1848, to £697,000,000 in 1880—32 years. Yet never, we are told, from every part of England, have there been so many out of employment — one million and a-half. We Free Trade AssufNptioh^ and Sop/iisms. 83 )0,000, years. there We know that a larj^e propDi'tion of tho trade of England is simply a carryinj^ trade ; and the demand for labour is at the ports and in the channels of trade: it is the labour oF middlemen and carriers, and not of pj'odncjers. Suppose ten million lbs. of wool and ten million bushels of wheat to be carried to Kn<^"land. Here is ''great trade and great demand for labour," much greater than there would be if the wool were manufactured here and the wheat retained to feed the manufacturers. If the Held and factory were side by side, there would be less exported products, less "demand for labour in trade," an; ,1% ■ '■, ^* .1 »' -^ o / Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. "80 (716) 872-43, . &? mmau 84 Free Trade Assumptions and Sophisms. 'fiw m more fallacious. Expansion of trade had followed the adoption of their free-trade policy, therefore it had been caused by it ! Cunt hoc, vel post hoc, ergo propter hoc — one occurrence follows another, and therefore is caused by it ! The trade of France and of the United States increased more rapidly from 1848 to 1860 imder protection than that of England under free-trade ; therefore protection caused that expansion. It increased most rapidly in the United States under the highest protection ; therefore, the higher the protection the more rapid the expansion of trade, according to free-trade logic. The corn laws were repealed in 1846, but we have taken the years from 1848 to 1860 for comparison, because during the iirst three years (from 1846-8) there was little change in the trade ol Britain ; the exports actually diminishing and the imports increasing only seventeen millions during those three years as they had in the three years preceding, and, therefore, to begin the comparison with 1846, would give a result the more unfavourable to England. After 1 860 the American civil war so disturbed the trade of the States as to preclude the possibility of a f^Jr comparison. So in Erance, we take the period from 1849 to 1861, because, in 1848, the year of the French revolution, the imports being small, the increase to I860 would show a result too faA^ourable for France. We have thrown out every element which might appear unfair to free-trade England. The imports of Great Britain in 1848 were £93,000,000 ; in 1860, £210,000,000; exports in the former year, £52,000,000. in the latter, £135,000,000. For the United States the fignres would stand in the same years, nnports, £30,000,000 and £75,000- 000; exports £28,000,000 and £83,000,000. France, imports, (1849) £45,000,000, in 1861, £123,000,000; exports, £56,000,000 and £128,000,000. ti^ Free Trade Assumptions and Sop/iisnis. H :\-i to It may be objected here that the increase of trade is greater in Britain, though less in percentage, m the p. c. is upon a larger principal so to call it. We may merely reply that the increase of the trade of Britain has been even greater in percentage on a great than it was on a small commerce. This principle is found true in the accumulation of i^rivate fortunes; a millionaire's percentage is greater than when he was a poor man. Nothing succeeds like success. The increase on both imports and exports would thus stand : For Britain 4.85. For France 4.96. For United Sta..^s 4.98. Here the increase in the trade does not differ much in these three great nations, yet is greater in the protected countries. Greater trade instead of being a proof of prosperity, may be the reverse. If English crops were to fail, and she were to import £50,000,000 worth of breadstuffs, this would add fifty millions to her trade ; but would be proof of fifty millions deficiency in her ordinary productions. It would not be an index of her prosperity, but of her want. Again, the Continent can undersell England in many of her great industries. Hence we are informed that England is becoming an exporting country for the raw material. In woollens, silks, lace, and iron, from the fine cntlery to the ponderous railway engines ; in jewellery, in paper, in glass, in carpenters' work for her ordinary buildings, &c., the foreigner undersells the Englishman in his own market. Now, wliile the aw material is being sent abroad to be manufactured, with the coal to blow the furnaces and the breadstuffs to feed the opera- tives, there would be a vast increase of trade, and a proof, not of a country's prosperity, but of the aimihilation of hundreds of lii 86 Free Tradr Assuviptions and Sophisms. millions in prodnctive in(hu.tiy, the luin of some of her chief sonrces of wealth, and witli these the I'uin or expatriation of millions of liei- ])eople. The two ijreat elements in the expan^iion of trade are the discoveries of <;old in 1S!S (the verv vear that the trade of Enii'laiid l»e«;an to expand most,) and tlu' vasr, almost illimitahle (levelopement of steam jwwer. Kuji'land's protection to her industries and shi[)|)ini>' prior to 184<'> was almost a complete exclusion of all rival-; and hci" supei'iority since, till a recent * (hitc, lia- hi'cn as etfectual an exclusion of competition as her ohl protection. Kni>-lish trade expands. Slie has the run of the bnsiness. A nation as a tradei' in this advanced ])osition has the advantage f)f her rivals. The Manchester cosmo])olitan philosophy is the philosopliy of the tyrant traders of the earth. It is the necessary creed of a nation holding the almost universal dominion in trade. She had become not so much a eompetitoi" as a monopolist. Cii-cnmstances are modifyfng that philosophy as to England's home industries. It may be a wise policy for her commerce while she possesses the carrying trade of the world ; indeed, with her vast mercantile marine and her surplus capital, freedom in trade, at all events, is a necessity to her. Traffic, comnu>rce, is the passion of the age. ( )ur farming youth leave the ancesti'al fields for the more exciting pursuits ot trade. The boy drops his hoe and hies to the nearest town. From retail to wholesale; from iidand trade to ocean commerce ; to buy and sell on 'change; to do business on the great waters; to make and lose fortunes in a day; are more exhilara- tiui; than the humdrum of the field or the factorv. So with nations. England has run mad with trade. This to her seems the great source of wealth. P^very other interest must bend Free Trade Assumptions and Sophisms, 87 to it. The more expanded tlie commerce the more exciting; foreign more than domestic ; ocean more than inland. So thought Tyre, Carthage, Alexandria, Yenice, and Genoa, and when adverse winds or wars swept their connnerce away they had no home industries to fall hack upon; they were like the house built upon the shifting sands ; or if these anticpiated exam- ples have lost their force, Portugal and Spain, in their brilliant yet short-lived empires, teach the same lesson. Tliey trusted too ex- clusively to commerce ; their fortunes were on the seas, and tliey sank as they rose. England, that grew rich by agriculture and manufactures, now concentrates her energies upon commerce, and neglects too much hei- homo industries. All her calculations are built upon the sea, upon the assumptions that lured those renowned maritime states to rain — that thev would still bo mis- tress of the seas ; or upon the delusive hope of the peace-at-any- price party, that nations will know war no more. Her energies are wasted in being mere cf>rriers instead of producei-s. Trade has become the mistress when it should be l)ut the handmaid of the nation. It is the god of Britain. It has an undue, an unhealthy prominence, and is, we believe, one of the active causes of the wide-spread distress there now, and a danger of national calamity in the future. We say a cause of the present distress, foi' by hei* great facilities for transit she can, and does, bring to her own shores the cheaper goods from countries Avhere the artificers live at a lower standard; in other words, sink nearer to barban'sm, and swamps her own manufactures by an avalanche of foreign pro- duets, thus annihilating her own industn'es. She is fostering a monster commerce at the expense of those home interests which, although less alluring and less exciting, give more employment to the masses, and are surer foundations of ]iermanent prosperity. "•■•I 88 Free Trade Assiiviptiofis and Sophisms. Tliis is Olio of those vicious principles at tlie foniidation of a national policy wliich, sooner or late', is sure to work a national calaniity. Tlic symiitoms arc already felt ; they liave shaken the . fiihric, but iii'o unheeded. Protection is a, monopolij to henejit t/iefnn at the expense of the many. If others refitsc to hmj of you., do you. mend matter^ hy refusing 1(> hin/ of theui f We place tliese two sophisms together, as the same facts will serve as an answei- t,()0(» copies upon the assurance that tliey woidd be taken. The American publisher, on being inf(trmed of this, immediately flooded the market with his books for $4.00 per dozen. The Canadian house would have been ruined had it not boon able to hold on to the copies. Finally, the American, finding that he could get better prices in the States, stopped his sales here, and the Canadian house has since had comnuvnd of the market at the reduced price. Had this home industry been destroyed, the foreigner would have had control of the market, and put his books again at $7.50 per dozen, or higher. Instead of an advantage, a(;cording to free-trade dogmatists, to this country, from the introduction of these books, either free or at a low tariff, there would have been the reverse — niin to a most important business, and the capital, artizans and labourers engaged in it, driven from the country. Again, a mamifacturer in one of the many branches of the iron trade in Canada, informed us that, meeting with commercial travellers from south of the lines taking orders on terms which 90 Free Trade Assumptions and Sophisms. appeared to be ruinous, he inquired of them liow they could put their wares so low ; they told him that they could not fifford it, hut hoped, by drivinfjj out competition, to have the market again all to themselves, l^y a sufficient duty, which need not be immo- derate, such schemes would be frustrated and this illegitimate trade checked. We have fully shown in other parts of this work that protec- tion, where it has been steadily adhered to. has cheapened pro- ducts, introduced capital, multiplied production, opened up home markets, aiul by the many other benefits to the entire community, following in the train of maimfactures and commerce, so far from being a monopoly, in the sophistical language of free-traders, to benefit the few at the expense of the many, is a most simple and powerful means of developing the resources and multiplying the productive ageiicies of the country ; of cheapening, by increasing supplies, while it adds to the ability of the purchaser to buy. Tt is Minerva presiding over and patronizing the arts. It is by protection, by care, that every fruit of the field has been made what it is, and every art, fine and industrial, has attained excel- lence. In the discussion on the tariff, April 1870, Mr. Lawrence, of Ohio, quoted the prices at which woollen goods were sold in 1859-60 under comparative free-trade and in 1809-70 under pro- tection. They show that woollens were cheaper in 1870 under high protective duties than they were ten years before under low revenue duties. " Before the war, says Mr. L., our tariff on wool was so low that wool-growing was almost abandoned. The importers, having a monopoly of the market, controlled prices. But the great demand for army goods during the war stimulated the production of wool ; and in 1867 our flocks had enormously increased. To ii Free Trade Assitmptions and Sophisms. 9* prevent the destruction of this great branch of industry, tlie wool tariff of 1867 was enacted. The result is, we are furnishing to the people of this country cheap woollen goods. If the tariff were removed two effects would follow : Ist, we woidd annihilate the wool-growing interest of our country, producing more than !js60,000,000 worth of wool yearly ; *2nd, we should give the foreign producer the control of the market. We should export sr)0,(<0(),<»0() I \ gold to buy wool which we ought to produce." Here are cheap goods with home industries encouraged. Our linance ministers were formerly afraid to even say that they would favour any of tlie industrial j)ursuits of the country. Free-traders ask why should not agriculture require })rotec. tion as well as manufactures^ The country is adapted to it. Then let all engage in farming and keep out of manufacturing. Freights on the products of the farm are a prohibitory tariff. The Illinois and lo'va farmer gives six bushels of corn to get one to the New York market. New York and New England do not re([uire protection against the corn of the west, superior as that country is for the production of this cereal. And it is just be- cause the west has lio manufactures that she sacrifices six bushels in freight to get one to market. Here is great trade and little profit. I think it is Horace Greeley who tells this story of western markets: " T visited, he says, a few years ago, Iowa City, lying about fifty miles from the Mississippi, with which it was connected by rail. The streets were thronged with farmers, each with a waggon load of corn,which they were trying to sell for fifteen cents per bushel (shelled), the pay the vilest shinplasters ever fabricated." Corn was then worth six times this in New York, and more in old England. But the cost of transit by rail would have eaten up the gross proceeds. 5 1 i 1 1 h. I: Wl 92 Free Trade Assumptions and Sophisms, i - ■ But tho iimuufjicturei-s of England and France can send to Montreal twenty shillings' worth of their fine fahrics for sixpence. The average cost is ten or twelve per cent, on the price, and less if in sailing vessels, in which we send our heavy products. We cannot ship to Europe in return any of our coarse grains or root crops. If it takes the price of six bushels of corn to get one from Illinois to New York, how many heads of cabbages, or bushels of mangel-wurzel, or beets or carrots, &c., would the farmer have to give to p.iv the freight of one to Manchester? — and it is water all the way, the cheapest transit. Hence the shallow logic of English free-traders, that because they admit our products free, (which they don't) therefore we should admit theirs free. The reason the Canadian farmer requires little protection is the same that a limestone quarry and clay for bricks do not need it — the cost of transit ; liecause, also, farming does not demand much ca])ital to begin with, but manufactures require both heavy capital and skilled labour. Our land will be occupied, for it re- quires only a strong arm, and it is just because we wish to give the farmer the best return for his labour that we advocate tiie establishing of manufactures. We wish to see Canadian farmers situated like the English, with the factory in their midst, with 15,000,000 mouths to feed, to hear the ring of the anvil, and the busy hum of the mill, and see the smoke of the glowing furnace. The English farmer has now an immense advantage over the Canadian, Ist, In his market being by his side; ours 4,000 miles away. The only reason that we export so much to the States is that it will not bear the transit to Europe. 2nd, The English farmer can supply his various wants at the lowest price from the work shops around him; we must pay, in addition, all the costs and charges thither. The English free-trader would keep us in this position, reaping only the profits of the rudest labour. II Free Trade Assumptions ami Sophisms, 93 Mi Even if the forolj^u goods should bo |)aid for by home pro- ducts tliere is still the loss to the country of all the benelits which would tlow to it from the production of those goods. Canada makes a million worth of boots and shoes. If, through free-trade, foreign made shoes should supercede the home made, Canada would import a million worth more than now. The Canadian shoemaker would be ruiiwed. The expenditure in Canada to the amount of a million would be gone. The annual product of the lul)()ur of the country is diminished to the extent of a million, and all the benelits of the distril)ution of that sum would be lost to the country. If England has to im])ort i;5( »,()()(),()()() sterling worth of ])rcad8tutfs in consequence of the failure of her crops, her im- ports would be increased by fifty millions, but this would repre- sent tifty millions deficiency in home products. The most pros- perous of all nations for half a century has been the United States, yet Ler imports and exports vary little over that period ; but she has supplied her increasing home consumptioii. It is this nnregis- tered home consumption, doubling and quadnipling over and over again, which has contributed largely to this unexampled prosperity. " All commodities should be rendered as cheap as possible." One kind of cheapness is when but little money is paid for a thing; — this is cheapness measured by its money value. This kind of cheapness may be l)rought about by the abundance of other commodities when compared with the precious metals, or by the scarcity of the precious metals. When Dr. Johnson was told that several eggs could be bought in the Hebrides for a penny. ' It is not ' he said ' that eggs are plenty, but pennies are scarce." After the discovery of gold in A.ustralia and California, things became dear from the increased quantity of gold put into circula- 94 Free Trade Assnmpiions and Sophisms. tion. There followed a great expansion of trade in conHeijuence of the increuHed quantity of precious metals and their depreciation. If labourers had to pay more for everything they bought, they gained much more than they lost by the additional demand for labour and higher wages. Cheapness may also mean a low value measured in other connnodities. Some goods may be cheap measured by others; but all cannot be cheap. The cheapei* you make some, the dearer you make othere by that very j)roces8. Cheapness of all commodi- ties in this second sense, is impossible ; it is a contradiction in terms. A third sort of cheapness — that produced by low wages — is a suicidal cheapness — the cheai)ne!-- of shiitw produced by poor needle-women at four pence a doi en. The cheaper things are from this cause the dearer they are to the labourer. The more the incomes of the working classes fall off, and the more surely you ruin the largest and best of all customers — the labouring classes, because, being so much the most numerous, their expendi- ture is the greater. If, instead of manufacturing commodities for which the coimtry is adapted, we buy them of foreigners, we take away the power of the working classes to buy. When such goods, made by labourers worse fed, worse lodged, worse clothed than our own, are introduced into our market, they bring with them this ruinous cheapness. They throw our own people out of employment and take from them the power to buy. If cottons were a penny a yard and ilour a dollar a barrel, what use would they be to the labourer who could not get work ; but if cottons were a shilling a yard and flour ten dollars a barrel, and the labourer should get two dollars a day, five days labour would pay for a barrel of flour MVP Free Trade Assumptions and Sophisms, 91 or fifty yardn of cotton. To ftuy a country should be made a cheap country to hve in is ineiinin2;le8H. To give the farmer jjood prices, and the labourer good wages, 18 to give him tin- power to buy; it is to give, not only the manufacturer, but all classes, a market for their goods, A. fourth sort of cheapness is the low vahie measured by the labonr necessary to produce a thing. This would be a gain to all classes. Steam, instead of human hands, produces this cheapness. On virgin fertile soils wheat can be produced clieaper than on impoverished lands. l'\)r the benefit of the masses, it is not enough to make things cheap even in the best sense of the word. What is wanted is to make them accessible, attainable by the multitude ; for to make things cheaj) is not necessarily to make them accessible as we have seen above. What the masses want is the means of purchase. The only means of purchase which they have are their wages. Plenty, even if dearer, ticcessible to all, is better than cheaj)ne88 for the benefit of a few. The study of every government, in order to produce plenty widely diffused, should be to give full employment to the people in the various productive industries of the state. The production of articles at home which can be made or grown cheaper abroad, even though it should not produce cheap- ness, promotes the employment of the people, gives them the means to purchase, produces ])lenty ; but the oi)posite policy, even under the most favourable circumstances, though it should create cheapness, destroys the means to purchase and brings with it wide- spread distress. Adam Smith, the father of modern economic science, declares ' that foreign production, compared with domestic, ■ t J 96 Free Trade Assumptions and Sophisms. gives hut one half the encouragement to the native industry of the country. '' Free iinpoivatiou is the source ol plenty ; protecti(>n of scarcity." One sort of plenty is where there is more than individual consumers ivAw buy and pay for. Where one-sided free-trade floods the nuirket with ^oods when the starving population have not the means of purchase. Protection would have given work, and work, the means of paying for the necessaries of life ; but one- sided free-trade has destroyed home iudustries, left the masucs without work and without the means to buy. Ireland, and thou- sands in England, are in this condition to-day. Tliey have not the power to purchase food and clothing. This is a modern illus- tration of the old fable of Tantalus, bound, perishing from hunger and thirst with food and water before him, but beyond his reach. Protection would seem to be the remedy for the woes of Ireland. For iinder protection she had mnnerous manufactures which have perished under free-trade : under protection Ireland swarmed with a population of more than eight millions of people and was one of England's best customers : under free-trade she lias barely five mil- lions and is a pauper dependent on English alms. Change this policy to one where the nuisscs have the means of purchase and it becomes a ditferent kind of plenty — one that is made come-at-able by the power to purchase given by employment. It is the duty of governments to provide this kind of plenty, by protection to home industry. It gives emi)loyment and employ- ment brings with it the means to buy. The operatives in England at the present day understand this subject better than the movers and debaters on rhe corji law league did in 1846, and probably better than the Brights^ Greys, and Free Trade Assumptions and Sophisms. 97 tills and Gladstones of tho present day do, for the latter have floated down the stream of time covered with the barnacles and weeds of the iniiddy waters of tliose times, while tl.o artizans and labofirers have learned wisdom by experience. With the incidents of the Reform bill of IS32 fresh in their minds, men were accnstonu'd to say that the franchise then granted conld never be revoked ; tiiey therefore argned that the nation conld njver retnrn to protection. Ihit to go back from j)olitical privileges once granted, is a very dilferent thing from changing a policy on economic questions. Russia, and Holland, and (Jermany and the TTnited States, have returned to a protective policy after having adopted free-trade, and the ITnited States frequently reversed her policy. Again the effects ju'oduced by parliamentary reform are apparent only after long periods of time, and even then it is dithcult to decide what changes are really due to such reforms; 1 nt the changes produced by such a revolution in commercial policy as the adoption of free-trade for protection are soon apparently felt by millions of the nation. And why should free-trade become the pernument })olicy of one nation ; it is not a truth, but a mere policy, wise or unwisa according to circumstances. Under protection to home industries labour is in better demand and men find more constant employment. Wages being higher in England than on the continent and higher in the new than in the old world, it is in the interest of the labourer that his wages should not be brought down by unfair competition with the worse paid labour. The English labourer is better paid, and better lodged, l)etter clothed and better fed, than the French, Germans, Russians, or Italians. In the United States A? r-ii * ■ ill- 98 Free Trade Assimipiions and Sophisms. s 1 jjt;:,., , 1 ii' " ■ i i il and Canada, in all these respects, the labourer is better off than oven the English ; and protection against the poorer paid labour is the duty of government, till, at least, onr infant industries get a footing. To make things cheap is not necessarily to make them accessible to the poor. The reverse is under certain circumstances true — that the cheaper things are the more inaccessible to the poor they become. Even if it were true that under protection prices are higher, yet wages increase fastei', and more than the price of articles, and the labourer is better off. l»ut in the absence of homo industries, the demand for labour l)t'coming circumscribed, wages are reduced ; reduction of wages tend to a decrease of production and a further decrease in the demand for labour; the cheaper things are in such a state the more inaccessible they become to the ])oor. ^'JDonH toic the 7iation foi' the benefit of a produciiKj class. Take care of the consumer and let the producer talce care of himself.'^ Communities und'^r protection adopt a policy the opposite of this. They protect the })roducer; and as a nation can have no mot-f value than it produces; this is a wise policy. The object of protection is to develo]) the producing forces of a nation. These producing forces are the men, the land, the mines, the machinery, the water power, the steam, Arc. The gain from protecting the producing forces will bo immense — it will bring plenty and a cheapness which will benefit the labourer, for it brings the power to purchase. So reasoned Cromwell, and Chatham, and Walpole, and Burke in England, Peter the Great in Kussia, Colbert and Napoleon in I^' ranee, Washington and Jefferson in America, and nr. agi Free Trade Assumptions and Sophisms. 99 class. to this day France, Belgium, Russia, Germany, the United States, and now Canada, are reaping the advantages of such a policy. Every increase of domestic production is an addition of so much wealth and so much of the means of purchase ; any diminu- tion of domestic production is a subtraction of so much wealth and of so much of the means of purchase. AVhen we produce within our own dominions what we for- merly imported from abroad, our labour, our land, our capital produce what they otherwise M'ould not have produced. In addi- tion to producing the articles, which we sold to buy the foreign products, we now have the whole value of tlie new domestic pro- duct. We have developed a new producing power which other- wise would have been stifled and smothered by foreign imports. By a sacriiice it may be of one per cent, the nation has gained ninety-nine. That the more a nation produces the richer it becomes, is a self-evident proi >sition. JEx nihilo nihil fit. Any increase of domestic production is an addition of so much wealth ; any dimi- nution of domestic production is a subtraction of so much wealth. Protection secures such increase of production. Free traders marshal the nation into two hostile camps, pro- ducers and consumers. Not only is every producer a consumer but there is not a consumer who is not eitlier a producer or else lives out of the income of a producer. The landlord, the professional man, the freeholder, the public servant, the mortgagee, all arc paid from the profits of producers. The producer, espe- cially the weak producer, in young countries, should be protected against the stronger manufacturers of old countries. If we produce at home what we before imported from abroad, 'M :wm' 100 F:^ce Trade Assumptions and Sophisms. Ill I j the eousumers, if tliey were to lose at all, might lose one per cent. l)nt the ])ro(1neei's gain 1(><>, and the nation t>9. Most of the .taxes are thrown on the foreign producer; and to assume that rhe tritling tax paid hy the consumers would continue forever is a gratuitous assnmi)tl()ii. l>y developing our own in- dustrial forces and concentrnting them <>n wluit the counti'j is adapted to manufacture, iiiid our soil and din ate and ])eo[)le are tit for or may l)ecome tit for, home competition will hring down prices. The London Times once called free-trade the " nohlest truth that liad ever dawned on political science : " and in the /Saturday lieview (London) " unsound writers (protectionists) on economic questions " are called " crazy, or muddled, like those who pro- pound objections to the established principles of mathematics, astronomy, optics or gravitation." "If political economy be a science," the Review continues, "it is as impossible for a compe- tent economist to believe in protitable protection as for a mathe- matician to believe in any short-hand metliod of squaring the circle, tfec." If free trade, as propounded by the great movers and leaders of this school, were, indeed, a truth or established principle, then it should be universally adopted and everywhere acted upon, as men act upon the law of " gravitation," and, by so acting, give the best proof of their belief in it. The apple falls to the ground under the inlluence of that law which draws all bodies to the centre of gravitation. Money at interest begets money. But this Manchester idea — bred of the loom and the spindle of an excep- tional and artitieial state of society — is not a truth ; it is a mere policy, wise or unwise, according to circumstances, but still a pol- per cent. i-; and to continue r own in- ountry is eople are iny; down ilest truth Saturday economic who pro- theniatics, Diny be a a com pe- ll mathe- iiariiig the lud leaders siple, then il upon, as eting, give the ground lies to the But this an excep- is a mere still a pol- Free Tradi Assumptions and Sophisms. 101 icy smelling of the shop alone, to be adopted or not as interest may dictate ; a policy of local and precarious application. Free trade is the progency of two unpropitious summers. In 1845 the harvest in England was bad; in lS-l-6 still worse. Bread-stuffs being dear, ])eople spent more for food and less for manufactures. The remedy seemed obvious ; the repeal of the corn laws would give cheaper food ; the opening of foreign markets greater demand for Elnglish wares; and both an increase of trade. And what was true of Manchester, so it appeared to them, was true of all the world. England thought then that she could beat the world in manufactures, and tlierefore she could safely throw ojien her ports to unrestricted competition. With all the advantages with which she b> gan the race, one-third of a century hsis sobered her ; she is to-day undersold by foreigners in her own markets and in her own specialties ; and that which ap- peared a truth in 1846, is in 1882 becoming di. policy to be modi- fied or rejected. But England has never, herself, adopted free trade. She imposes £20,000,000 sterling annually, at British ports, upon foreign products, before she will admit them to British markets. And as soon as India became a part of the empire, to be ruled from Westminster, it was surrounded by custom houses, and even British goods had to pay duty at its ports. This policy was adopted, too, by a free trader (Mr. Laing) who was sent there as its finance minister, because he was an advanced disciple of this school. But the necessities of the India Exche(pier obliged him to lay aside this "great truth,'" and to collect, as he informs us, his revenue from customs dues. But the free trader will tell us that this setting aside his princii)les in India and in England from the necessities of the Exchequer, is not a negation or repudiation -,',1 •''immmBsmim 102 jP'ree Trade Assumpliotis and Sophisms. of his favourite truth ; it is merely modifying or keeping it in abeyance because of a pressing necessity. VVliy, tlien, call it free trade ? It is by this confession admitted to be not a truth, but a policy to be ignored or modified as interest or convenience may dictate. And if free trade has never been acted upon — and it cannot be shown that it is j^jssible for any nation but the barbar- ous or the poor to adopt it — on what ground can it lie called a truth, much less the noblest truth that has dawned on political science ? England, perhaps, doet^ not now legislate to favour her manufactures, yet her laws and customs dues do this in one way or auQther to a hundred industries, and her trade is only less burdened than that of Russia and the United States. When Mr. Gladstone, an out and-out free trader, in theory^ was called upon, while finance minister, by the free traders of Liverpool, to throw olf the shilling duty on corn instead of reducing the income tax, — for, they said, to retain the duty on corn was inconsistent with free trade, which they were supposed to have adopted— his answer was a very remai-kable one for a scholar of Cobden and Bright, though it would have been per- fectly natural had he been a ])rotectioni8t, or, like ourselves, a believer in free trade and protection, not as innnutable truths, but as policies, wise or unwise, according to ciniumstances. Gentle- raen, said Mr. Gladstone, free trade in theory, no doubt, is right, but have mercy on us while in office. Here, as in India, the finance ministers, free tradei*s in both cases, ignore the very existence of those beautiful truths of their theory, because they must have a certain sum of money, and can get it no other way. When foreign products go upon British markets burdened by British legislation with one hundred millions of dollars annually, it would be an insult to tell us that her trade mm. Pree Trade Assumptions and Sophisms. 103 is free ; if it be free there, so it is the world over. Bnt tlie one liundred millions of dollars collected at her ports on the products of foreign lands are not merely customs dues ; they are a ])rotec- tion to her fields, forests and factories. If British statesmen would merit the generous name they covet, let them first do the deed which would entitle them to it. At present t\niy place this burden of one hundred millions of dollars on foreign industry where it suits their own interests. They don't remove it ; and if trade be free there, so is it the world over. If protection to the looms and mills of Holland against the surroimding states of Europe made her the great hive of i::du8try, made her prosperous and wealthy ; if a similar policy produced similar effects successively in Old and New England, so, wc believe, will it work the same change in Canada. The free trader must admit this much — that these countries have, under high pro- tection, outstripped their neighbours in the race of jjrosperity. The Australian colonies have given us the best comment, by practical men, upon free trade and protection as pt)licie8 and not truths. In New Zealand and Tasmania, each under a single gov- ermnent having command of the entire coast, the revenues are made up chiefly by customs. There could here be no rival trade, and no loss of trade as there would be in England, by any burden on the imports. In South'Australia, also, the chief port being isolated, and not capable of being used as an entrepot of trade with other parts of Australia, ad valorem duties are imposed. The case of New South Wales is entirely different. Sydney, the chief port, possesses a 'large trade with the interior, for which there is a sharp competition. Sydney has also a coasting trade, to which the same remark applies. Business men saw that a tariff and protection would bring diminished trade, and they voted ¥ ' t MM 104 Free Trade Assumptions and Sophisms. against them. In Victoria, again, protection is as popular as free trade is in tlie sister colony. In these countries free trade and protection are treated as policies and not truths. But even New South Wales has altenately adopted free trade and protection. England is in the same condition as New South Wales. Her ports are emporia^ store-houses of goods in transitu, for all the world. Customs, and, indeed, any restrictions, would cause diminished trade ; and is not trade the sole intei-est of a nation, according to this theoretical school ? Hence, these ports are, or ought to be, free ports. The United States and the German Zollverein have free trade within, but protection against the outer world. They so adjust their tariff that, with a revenue, they protect their home industries. Here is a double policy, protection and free trade, and not the adoption of either as a truth. The United States, we believe, are neutralizing the good effects of their protection to home industries by taxing the raw material and putting an excise duty on the manufactured article in a thousand forms. But this is their folly, and is a corollary of free trade sophisms, for they tell us trade should be free and revenue raised from a property and income tax. We say revenue should come chiefly from customs. A military camp which allows freedom of motion within, throws around it a cordon of posts and puts restrictions upon ingre&s from without. The motive is obvious. There are other and greater interests at stake than freedom of motion into and out of the camp. So in a nation— trade, although the one idea of a free trader, is not the only thing of importance. Tlijjre are other and greater interests which protection fosters. We have shown liFlH «■« ^m Free Trade Assumptions and Sophisms. los how the finance ministers of England and India, themselves free traders, failed In their atteni])ts to act upon their theories when brouf^ht face to face with the jjreat living wants of a nation. Their sopliism, beautiful to these transcedental philosophers, would not stand the test of experience. These finance ministers, with their heads cleared of the fogs of Birmingham and Manchester, found that there were otiier and higher interests in a state than those of the shop, to which their dogmas must bend — interests affecting the very foundations of the state, and wliich those impracticable theories would speedily undermine. But the free trader will listen to none of these things. To be spinners and weavers for mankind is, in his opinion, the great mission of a nation. Trade is the one idea that fills the mind, the sixponce near the eye which shuts out the light of the sun. He sees noth- ing beyond his own narrow horizon. The integrity of the empire and the very existence of the government may stand in uncom- promising opposition to his theories ; he yields nothing —so much the worse for those mighty interests — tant ;pi% jpoivr lesfaits — if they oppose his theories. Thai protectee/ maniifaGtures are sickly is a corollary of the Manchester School, and not a deduction from facts, but is so fre- quently and so constantly reiterated that we may here condense the references to the facts which we have adduced as a complete refutation of it. The condition of manufactures in England under free trade and on the continent and in the United States, under production, not only confutes this dogma, but establishes the reverse, that manufactures under free trade are sickly, and under protection healthy. Important industries in England are, as we have shown, some sickly and some dead, while those on the Continent under io6 Free Trade Assumptions and Sophisms. ki.i high protection are healthy and vigorous to such uu extent as to 8Uj)phint those to the north of the ClianneL Those manufactures introduced into England two centuries ago, and fostered through their entire history by the most rigorous and persistent protection, got a iirm footing upon the soil, and flourished under that policy, but have withered under free trade. As we have pointed out, the great iron works of England, machine making, shipbuilding on the Thames, the woollens of Bradford, the silk and lace of Spitallields and Coventry, the glove, and paper, many of these the greatest glory of English industry, are now either living a sickly life under the blighting air of free trade or have silently withdrawn to find a home under protection. The manufactures of Ireland had already run a similar course — healthy under pro- tection but perishing under free trade. In Belgium, in France, in Germany, in Russia, those same interests, so far from being sickly, have attained an excellence and a cheapness which enable them to bear the transit to England and break down some of the great industries of that country. This is one of those high-sounding platitudes so pompousb- enunciated by this theoretical school. They have no pi'oof to support their dogma; nor would it be consistent with their entire proceedings if they relied on facts. Bold assertion won the battle in 1846. By a parity of reasoning we could prove that Canada would produce the finest palms and figs. It is true they never grew here ; but that is just the reason that it is a fair iield for a free trader's logic. Reasoning would end if we had the facts ; the skill of these theorists is shown where the facts are against them. The depressed state of the woollen trade at Bradford in England and its flourishing condition at Roubais in France under high protection, has attracted the attention of that great interes in England, and large meetings in the woollen centres have dis Free Trade Assumptions and Sophisms. \oi cussed this anomaly in free trade. Apart from all theories, every body can understand the imnieMso advantage the French possess in having the English market as well as their own ; whde the Knglish liave access to France oidy under a heavy tariff. The Americans, too, have their own and English markets — two to our one. Each country should confine itself to what it can produce hest, is another free trade sophism so stated as to give us but half the truth. How are we to know what we can produce best without experiment ? Manufactures are of no climate. They do not exist naturally in any country. Protection has been their foster-mother in all countries. It was only by experiment that we found out that we could gi-ow wheat or any of the cereals, grains or grasses, or root crops, or Hax or hem]) ; that the sheep, the ox and the horse would thrive here ; that we had oil and salt springs, ])eat beds and valuable minerals. It may be true that neither Canada nor England ought to attempt to compete with Italy in growing oranges, or with the Indies in spices ; nor the Indies with Canada in producing ice. Here nature would be against them. This let-alone doctrine, would have left England and Scotland without any of their great industries, and even without their most valuable agricultural products. It is only about one hundred years since a wheat field was an object of great curiosity north of the Tweed. All plants in England, says Forbes, are German. Certainly most cultivated ones are. Their diffusion over the British Islands is due to great care and superior cultivation. Up to 1770, says Whitley in his prize essay, (11. Ag. So ,) very little wheat was grown at Edinburgh ; now it grows north to Murray Frith, (lat. 58°). These plants were fostered there, and not let alone ; just as Indian corn in IFP"^' I- • (■f. \ ^p 1 08 Free Trade Assumptions and Sophisms. i< li America has by care adapted itself to tiio shortened Huminers of high latitudes. Eiigiaiul, by care and not hy lamer faive, has been made what she is. It has not been by letting alone but by taking care, by protecting where necessary, that every industry, every product of the field and factory, and every domestic animal, have become what they are and been introduced and established in every civilized country. The infant nuiy become a giant if protected in its helplessness, but protection it must have. And what a pity that England was ignorant of this new- born philosophy in the days of the Plantagcnets or even down to the last of the Stuarts, for she might have continued to " confine herself to what she could then do best," and have been still tillers of the soil, importing her manufactured wares from the continent and sending her raw materials thither. Holland and the low countries, Gaul and Germany, if they had had a Cobden and a Bright to teach them, might have brought all their fabrics from Italy and the Mediterranean, as these countries had theirs from Greece, and Greece from Phoenicia and Egypt, long before Hellenic heroes constructed the wooden horse nnder the walls of Troy. God made man upright, and had he not since found out many inventions Europe might, at this day, be in the primitive state in which she doubtless was when Tubal-Cain, or some other ancient "cunning worker," was making his first wicked inventions, and America might still have been a vast hunting ground. But our practical forefathers planted the seeds of manufactures and fostered them by protection, and the tree has spread far and wide her fruitful branches. How unfortunate for England that a century and a-lialf ago some unreasoning Cobden of unadorned eloquence, or some declamatory Bright innocent of history, had not arisen to teach her 9m i^ Fne Trade Assumptions and Sophisms, 109 tliis doctriuo. How siul tho channel Miicuulay says that the mass of tho wealth in the shups and warehouses of Jiondoii exceeds hy live hundred fohl that wluch the whole ishuid contained in the days of the I'hmtagenets. At the l)0'. V t no Free Trade Assumptions a\d Sophisuis. But j2:<)ld is not our staple, nor can we get it for a great majority of the products of our fields, If a pedlar were to pass througli the uf ricnll.ural parts of Canada with fabrics or wares of the loom or factory for sale, he would be met in nine cases out of ten with tlie statement ; we cannot buy, we have no money. l>ut were he to reply, I will take your cabbages at 10 cents a head, or potatoes at 2s. 6d., or beets and carrotr at 2s., or turnips at Is. 3d., per bushel, or lettuce or green peas or beans, tfee.; or if, were he to add, not expecting a demand for these articles, you have none tliis year, I will take them next year, the i)edlar will find a ready market ; for to exchange such ])roducts for manufactures would be the cheapest for the farmer, although too deai* for him if the purchase were to be in gold. JVow, let factories, with their thousand mouths to feed, take the place of the pedlar near the farm, and create a market for the gardener and the agriculturist ; these latter will tlien have the power to buy in what to them would be the cheapest market, although it might in gold be the dearest. The time has been in the early settlements of Canada when wheat Wiis a York shilling a bushel at the head of Lake Ontario. Manufactures give not only home but steady markets. Every farmer feels the the necessity (»f these, and knows their vast im- portance. Foreign markets are uncertain ; home markets are more steady. " Buy in the cheapest market." If every body had a fortune in ready money, this might be a correct way of stating the case. But under the circumstances in which 999 out of 1,000 are placed, these words express a meaningless platitude. The moneyed man who goes abroad to buy is in the same position as the absentee landlord. ITe walks around his sti-uggling Free Trade Assumptions and Sophisms. Ill un- are comitrymen, to a foreign market, leaving them to bear the burdens of tlielr connti-y. Here the free-trader states but half the (|uestion and states it falsely ; for men who state it thus are thinking of the gold value of wliat t'.iej buy. Wliat then is our cheapest market, or rather how can we get a market where we can buy the greatest quantity o^ the needed articles for the least amount of our products^ Inlanil, T find a farmer with 10,000 heads of cabbages, 1,000 bushels of turnips, 1,000 of beets, and carrots, celery, lettuce, and other products, too cumber- some or too perishable to be sent to a foreign market. What will he do with them ^ If he had a Manchester or Binning, ham near him he could got high prices for all these. As it is he gets nothing. To him the cheapest market would bo the one which would give him the greatest cpiantity of the required goods in exchange for his products. Manufactures would create that demand at his own door. This woidd give him the power to purchase the necessaries and even luxuries which he cannot produce. The free-trader's cheap market does not exist for our farmers. We must first give him good value for his products, and we thus give him the power to buy. We have vast forests of the most valuable wood, which in Euijland or (»n the continent would be of immense value. With us, especially in the new districts, it is a nuisance, and millions of cords are burnt to get rid of it. (live the possessors of this timber a market by establishing manufactures, and you give them the power to buy. That market, where they could exchange tlieir wood to supply their wants, would be the cheapest for them. Suppose manufactures were establislied in every town- ship in (^anada, or furnaces opened for smelting the metals with which our country abounds, the wood now an encumberar.ee would have a good market value, of at least $20 to $40 an acre. mm 112 Free Trade Assumptions and Sophisms. L ... m m Many a man in Canada has copper, or lead, or iron, or car- bonate, sulphate or j)husp]iate of lime, or a i)cat bed, quarries of marble or slate, or other valuable stone. He cannot send these abroad. Population and niauf;\ctures would g\\Q value to them. He could tiien exchange them for manufactured goods. Here would be his cheapest and only market. We can point out how the free-trader can buy in the cheapest market consistently with his principles, W ool and flax, wood, stone, and food, are cheap in Canada. Let him come here under protection, with his capital and labour, establish manufactures and he can then buy his raw material in the cheapest market. He will have the advantage of protection for his fabricated wares. He has even a double advantage — buying in a cheap and selling in a dear market. lie will, too, benefit us, as lie will give us a market for much not now saleable. If 50,000 needle women, and tailors, and shoemakers, and hatters, and furriers, and bhicksmiths, and bakers, were th'-own out of employment by our buying the products of these artizans in foreign markets, because the gold value would be less, we would find this, apparently cheap, the dearest market in che end ; for we would be in the condition England is to-day, her markets supplied by foreign fabrics, because the price in gold is cheaper ; her workmen out of employment — more, we are told, without work than ever known before ; and instead of those hundreds of thou- sands creating wealth they are consuming wliat was hoarded up in more prosperous years. " But,-' says the free-trade, — who is ever ready with his platitudes — " let those millions of displaced artizans turn to some- thing else." * What will they do 'f Their habits qualify them • McCoUocb's Pol. econ. ch. 5. '<1HI ^ Free Trade Assinnptions and Sophisms, 113 a his sorae- tliem only for their own specialty ; besides, every industry is mure or less depressed, and the operatives in them also seeking work. Let the theorist show us one instance where a large population turned out of one great industr}' has been readily absorbed into another. , The destruction of Irish manufactures, by England's free-trade policy of 1846, drove from the land, or starved, three millions of her people. The same policy ruineci Jamaica, and decimated whole districts in India. If foreign workmen continue to 'gain on their English brethren during the next ten, as they have in the last ten years, many of England's great Midnsti-ies will have written over their graves the historic words which told the fate of Ilium. The last exhibition in Paris showed that, even in iron and wool, England eould hardly compete with her neigh- bours. The years which have intervened have shown the steady and rapid growth of these and other manufactures in protected countries and their even more rapid decline in England. In one industry alone, in Lancashire, there are fifty millions sterling invested, and by it a population of two millions supported. These factories we are now told, are working on half time or closed. If they should fail, and these two millions of people and fifty million pounds of capital, with the one hundred millions that are yearly changing hands, should pass to the continent, it would all be for the good of England — so those free-traders teach. Britain could then supply herself with cottons cheaper than she can manufacture them. This might be followed by the workers in iron, copper and wool ; and those ponderous works — such as those of Dawlais in South Wales — heretofore alive with fourteen thousand workmen, with their glowing furnaces and streams of molten metal, might, in a few years, remain but as monuments of their great industries, and be remembered only as the moulder- ing ruins of a Palmyra or a Babvlon. If Macaulay's New Zealander a8 ij' *'■ 1 a. 1 1 f 114 England under Free Trade. m should ever appear to sketch the ruins of old England, he will corne as the spectre of this specious and fallacious but art-destroy- ing philosophy. CHAPTER IV. ENOL.VND U^'DEU FKEK TliADE. Pi'inciples are now challenged which a few years ago were regarded as settled for all time and beyond all dispute. Manufacturers declare that they are continually growing poorer while the experts inform them that they are misled by ap- pearances. Mr. Gladstone no longer exults over a prosperity which ad- vances by leaps and bounds ; but warns the nation that its pro- gress appears to have heen arrested. Events are taking place which are menacing to labour and capital, but which alarm labour more than capital ; for it is the working men who are crying out bitterly against hostile tariffs. It will be difficult for even the tribune of the people to sup- press the agitation by sneers or by denunciations of caste preju- dices by calling the agitators lunatics. At Bradford, the centre of the woollen trade, in May last, there was no difficulty in getting ten thousand signatures 'n a few days to a recjuisition desiring the mayor to call a meeting for considering the state of trade and the new French duties. Numerous influential country newspapers openly proclaim their opposition to the present commercial policy, and even the "Times" (20th May, '81) sorrowfully acknowledges that it is becoming necessaiy to fight the whole battle of free trade over again. '"m tiiiglaud under Free Trade. i»5 and the A still muru remarkable admission was made by ^Ir. Glad- stone (Times 18th May, '81) in receiving a de]nitation represent- ing the Trade Conncils of various great centres of population and industry. The deputation protested against bounties and prohibi- tive duties and suggested to the government to adopt eounto'vail- ing duties. Mr. Gladst<^ne's reply must have produced a feeling of consternation in the minds of some of his colleagues. ' We do not regard,' he said, ' with any satisfaction the system under which an artificial advantage is given in our markets to the products of foreign labour, the principle to be observed being that of e(piality. Some people say it is a good thing because the consiimei* gets the benefit of it ; but I do not think that any l)enellt founded on inequality and injustice can bring good even to the consumer.' The word equality manifestly means reciprocity. Mr. Gladstone, no doubt, could easily show that e({uaHty does not strictly mean ecpiality, when used to a deputation ; it lias then some pole- mical signiflcation. "What has brought about the change in public opinion which leads Mr. Gladstone to talk of equality, the public journals to con- fess that the free-trade battle must be fought over again, and leads some manufacturers and former admirers of Gobden and Bright to remove their busts from the mantle-piece to the cupboard. English export trade during the last twelve yeai*s has fallen off with Germany 33 per cent., with Holland 36 ])er cent., with the United States 28 per cent. Fortunately the colonies, those useless and burdensome members, have increased their [)urcliases, or English trade would have been still more depressed. Starving labourers ask for work and the ])rofe8sor8 of the ' dismal science ' present them with rows of figures and bundles ii6 England tinder Free Trade. of ' infallible principles' borrowed from Adam Smith and Mill, to prove to them that the want of work is a delusion and that they are living in luxury. , . In 1870 the value of cotton manufactures exported from England to the United States was £2,674,000 sterling; in 1876 they had fallen to £1,275,000, and the revival of trade in 1880 ran these exports up to only £1,748,000. In 1872 England ex- ported to Germany cotton-yarns to the value of nearly six millions sterling ; in 1880 the amount was below a million and a half. The decline of the cotton trade of England with Egypt during the last ten years is sixty-eight per cent. With Holland the cotton trade fell in ten years from four and three quarter millions to under two and a half. But in the same period the value of these goods ex- ported to India rose from thirteen to twenty millions. India and the colonies, which would long ago have been cast off by the Manchester School, have saved English trade from etill greater depression. In 1872 England sent to the United States woollen goods to the value of £5,627,000; in 1880 the amount had fallen to £2,210,000. The exported woollens to Germany may be summed up in one line. 1869. 1872. 1875. 1880. £5,960,000. £8,659,000. £3,024,000. £1,010,000. These few figures throw a flood of light into the dark abysses of the ' dismal science.' English woollen mann Jacturers have established factories on the continent, and others propose to do the same in the United States. In Birmingham it is stated that there are ten thousand houses without tenants, the rental per house ranging from £7 to £200. People who once kept house are now, through com- II England under Free Trade. 117 mercial depression, going into appartments ; for it is not unusual for two and even three families to occupy a small three shilling a week tenement sharing the rent among them. {Manchester iV(g^«, June 11, 1881. , Out of the OCT blast furnaees in England, 550 only are at work. {Iron^ June 4, 1881.) In South Wales the j)roportion is about the same. The United States have enfoi-ced protection on a scale such as the world never saw before. They have levied duties of from 40 to 200 per cent, and under the withering influence of this tariff their manufactures have developed to an unprecedented extent. During the last ten years the capital invested in iron industries has increased from $121,772,000 in 1870 to $230,671,- 000 in 1880 — nearly 90 per cent. In the same period the number of cotton looms has been enlarged by 46 per cent, and the number of spindles by 53 per cent. According to all established theories and according to the immutable doctrine of 'great thinkers,' the United States should have been going rapidly down hill during all these years. Mr. Bright, who makes many prophecies and lives to see most of them reversed, in his speech at the Cobden celebration in 1877, saw this vision. 'If we look into France we see that protection is becoming weaker. If we look at the United States or consult any intelligent American we shall find that there it is shaken and tottering to its fall.' Five years have passed and protection, in all the great countries of Europe and America, has a firmer hold of the public mind now than then ; and during the 35 years since the repeal of the coni-laws, public opinion, in all the great commercial and manufacturing countries has gradually settled down more and more in favour of •i:!^m\ (■■' W '^ Ii8 liiiglaud under Free Trade. m I protection. Kepnblics are the most rigid protectioiUHtR, and tilt' European and American world are coming more and more nndor the inilnence of the labouring classes, who mostly favour protection t(^ native industries. The American and French Repuhlics ai'e more l)ent upon that policy than ever; Canada has adopted it. After the first experience under the C'ohden treaty in 1800 of, not free-trade, I mt partial reciprocity, the rest of the continent of Europe is reverting to the princi])le of high duties. The refusal of the French to be enticed any fai-ther along the path in which free-ti'aders are trying to lead them, will indefinitely prolong the reign of protection on the continent. The new philosophy of English free-traders, forced upon them by the inexorable logic of facts, is that it is a most excellent thing for a country to buy more than it sells. They think it a good thing for England that her imports should have exceeded her exports in 18Y0 by £1T0,595.0(>0, and in 1880 by £187,000,000. In ten years her imports would exceed her exports by £1,870,000,000 sterling. This may be a proof of the great wealth of England but it cannot be the cause of that wealth. The surplus must eventually be paid in hard cash. It may be in part by the interest on foreign loans ; but the surplus is not paid by the profits of production, and production is the only source of wealth. Thirty years ago her exports and imports increased together ; the differ ence was not great. If the present state of trade is sound the former was not. The United States, to which Mr. Bright so often points his countrymen, exported in 1881 £54,000,000 more than they imported. If F2ngland is getting richer by the great excess of mmm, n England under Free Trade. 1 1 9 her imports, the United States must be getting poorer by the opposite policy. In 1880 England bought of the United States various commodities to the value of £90,000,000, and sold to them goods valued at ,£22,950,000. The United States did not take of England goods to the amount of lier exports to England according to free-trade teachings 'that foreign commodities are always paid for by British commodities.' And yet we are told that she must be doing so, as all trade is barter, and might be carried on without money or anything to represent money.— {Times June 25M 1881, Facts are stronger than theories, but so much the woi-se for the facts according to free-traders. Mr. Cobden said tliat to suppose we should buy com of other nations while they declined to take our manufactures, was as much as to say they would give us their corn for nothing. The "7Y'yw.e«," too, as late as June 20th 1881, advances the same doctrine. ' If France will buy from us she will be able to export to us, but on no other terms.' Mr. Cobden and the ^^ Times'^ overlooked also this alternative that they would ask to be paid for their corn in cash. England must have the grain ; if it were a luxury she might do without it, and say she would not trade with those who refuse to traA with her ; but bread England cannot do without, and must pay down in hard money for it. England has £2,000,000,000 invested in American and other foreign bonds and with this she pays for a large part of the difference between her imports and exports which amounted in 1880 to £187,179,530, Imports £409,990,056 ; Exports £222,810.526, Excess of Imports £187,179,530. 'tj I? ii lit ' I I20 England under Free Trade. And yet tliese tlieoristH go on repeating 'that a nation which will not Imy from lis cannot soil to ns; if foreign nations will not buy onr niannfactnres, they cannot sell ns their corn or cotton.' The tapping on a child's drum pro- duces sounds which mean as much as this hollow jargon. ' Adopt free trade ' said Cobdcn, ' and there will not he a tariff in Europe that will not be changed in less than five years to to follow your example.' Seven times five years have passed since these words were uttered, and every tai'iff in the old world and the new has become more thoi-oughly protectionist. Sir Robert Peel maintained in ISIO that hostile tariffs would best be met by free imports. 'Depend upon it' he said 'your example will prevail — Reason and common sense will induce relaxation of high duties — I see symtoms of it already.' And what symtoms of the kind would Sir Robert Peel have discovered had he lived till to-day ? In 184P) imports into England amounted to £74,000,000 ; last year they were £410,000,000. With the increase of imports the free-traders looked for at least a corresponding increase in exports, for they predicted that England would supply the world with manufactures, but in 1880 the imports were-||£409,990,256. but exports wore little over one half — 222,810,526. Exceas of Imports— £187,179,530 This excess, according to the writers we have quoted, represents the sum by which P]ngland has grown more wealthy in 1880 than she was in 1870. Is it possible that any one can believe this. To pay year after year for such a large surplus of imports may be a proof of accumulated wealth, but cannot be the cause — the creator of wealth. "^ England under Free Trade. 121 Free-traders teach tliat the interests of the " consumer" alone should 1)0 considered ; the producer must, if necessary, be trodden under in the strife. When onlya handful of Spittalfield weavers were concerned, tliis was considered the essence of wisdom, but now when the " prodi.Cci " has to be coimted by millions even Mr. Gladstone is open to conviction and admits that the " con- sumer" even must not be allowed to profit by inequality and injustice. In opposition to free-trade teachings one would think that the producei's should chiefly be considered, solely because they are the producers — the creators of wealth. The tillers of t}:3 soil, the breeders of cattle and sheep, the fishermen, etc., produce tlie food of the human family ; the miner, the manufacturer, the shipper, are producers in their several ways. Mr. Ecroid would impose a duty of ten per cent, on all articles of foreign production, except raw materials of manufacture, and admit importations from the colonies duty free. His object would be, not to protect English industries, but to raise a revenue ; by this 10 per cent., over £17,000,000 would be raised ; this would lighten taxation and break down hostile tariffs. Taking the popu- lation at seven millions of families of five persons each, the extra cost of living to each family by the duties would be sixpence a week. Mr. Ecroid further proposes to remit the duties on tea, coffee and other articles received from nations which do not weigh down British commerce with heavy duties, and he calculates that after all deductions there would be £7,500,000 sterling to relieve our depressed and harassed agriculturists, and £1,600,000 to in- crease the interests and profits of wholesale and retail distributors, should competition permit them to charge it to us. A duty on American wheat would not, he contends, cause any advance in the 122 England under Free Trade. price of brnad, for ample 8Up])lie8 could bo pi'ocnred from Canada, and in return for taking her England under Free Trade, 129 societies. One rich trade society liad paid no less than £200,000 in 'work pay' during the hist five years, and reduced its capital to less than £100,000. ^ Every year the gulf between rich and poor beconieh deeper and broader — every year this wealth is accumulating into fewer hands. The Hon. David Wells of United States, at the Cobden Club, said, 'the rich became richer and the poor poorer under protection." It is calculated that in England there are 14-,.500,000 people with less than lOs. 6d. a week to live on. Contrast this with the wages paid labourers in countries under protection. How long, asks the Cobdeu Club, will the farmers of America allow protection to add to the cost of what they consume? So long, it may be answered, as work gives them better wages — gives them power to buy. The question is not so much one of the price of goods as of the power to buy. The farmers of America have this power from tho continuous good prices given by manufacturers for their products. ' Who,' asks Mr. Bright, triumphantly, ■ dare now propose a return to protection V Who, it may be asked in return, amongst all the wise and thoughtful men in enlightened Europe and America, dare now propose the adoption of free-trade ? Not one. There is univei'sal suffrage in France and the United States, yet those nations adopt protection. Every where the voice of universal suffrage has decreed that free-trade is destructive to native industries. When foreignei-s sec manufactures dying out under free-trado in England, and springing into vigorous life under protection in France, Germany, Belgium, America and Canada; when they see the ruin of industry, the depression of all manufacturing interests ISL' i :• "(Hi jim il m \m "I'lii 'lis II ; :'! 1' P : !;■ i 130 England under Free Trade. operatives emigratinfij, capitalists preferring investments in foreign countries to those of their own ; they do not Jook much further for arguments against free-trade. The number of votes in France is 27 per cent, of tlie popu- lation, in America probably more; in England it is 9 per cent., yet throughout the whole of America and France every class, rich and poor, statesmen and pressmen, producers and consumers, are in overwhelming majorities in favour of upholding protection. On the principles of Mr. Bright and his radical school, universal suffrage, which is more likely to be right, — the 27 per cent, or 9 per cent., the nine millions in France, the thirteen millions in United States,or the three millions in England ? ' It is in times of distress,' says the great apostle of isolated free-trade, 'that the unwisdom and injustice of laws come to be examined.' No time therefore can be more appropriate than the present to examine the ' unwisdom' of the novel free-trade theories inaugurated 36 years ago in England, and this is now being done. National prosperity depends on general employment. A man who earns 25 shillings a week or £65 a year possesses, in the skill or knowledge, or experience, or strength, which en- ables him to earn that money, a capital which yields that amount weekly. A man may have 30 years work in him or he may have 15. If 15, the income of the operative earnirg 25 shillings a week capitalized at 15 years, represents £975 (say£l,000). Now, there are in England, six and a half millions of operatives engag- ed in manufactures and similar pursuits, earning in fair times, 25 shillings a week. This represents an annual income of £422,000, 000 (say £400,000,000) capitalized at 15 years purchase this sum represents a capital of £0,337,000,000. This is the capital of labour. 1 England under Free Trade. 131 A loss of one day's work in the week would be a loss of £1,056,000,000 sterling a year ; to double or treble this loss would be to take annually from the wages of operatives more than two thousand or three thousand millions sterling. Sir Edward Sullivan says 'England has a population of 34,000,000 of the best working race in the world, accustomed for generations to agricultural and manufacturing industries. She has ample capital, better banking facilities and credit, cheaper coal and iron, and better engineers and machines and machinery than any nation in the world ; greater facilities for importing raw materials for our industries ; our climate is better adapted for labour of all kinds all the year round than any other climate in the world; our soil, take it all through, is better suited for agricul- tural industries than any other soil in Europe or America ; we have the finest breed of horses, beasts, pigs and sheep in the world; and yet the agricultural interest is on the verge of ruin, and the manufacturing interest is in a condition that alarms all engaged in it.' Why then should English labour be so depi-essed ? Has she not free trade, the panacea for all the ills of a state. And yet France sends four times the value of manufacturing goods to England that England sends to France. Bradford is nearly ruined, and both manufacturers and oper- atives are emigrating to America. 'Bradford' say the political economists ' must be patient and watchful and must look for new markets.' It is a terribly sad reflection on the vaunted economic wis- dom of free trade writers that now in 1 882 there is actually a better field for investments of capital in manufacturing industries in 132 England under Free Trade. France, Germany, Be]«i;iTnn and America than in England, was not 80 at the beginning of the free trade era. It Isolated free trade would not have been tolerated in England a single hour if it liad not been made the cause of the poor against the rich. Isolated free trade has removed the restriction from foreign trade but not from J]nglish trade ; it has not conferred a single blessing on England that any other country has not enjoyed under absolute protection, but it has done this for it, it has ruined her great agricultural interests. It has thrown one-fourth (soon alas ! most probably to become one-half) of her wheat area out of cultivation. It has extinguished her dairy farming, her fruit and vegetable, and all minor agricultural industries. It has enabled foreigners to Hood her markets with cheap and often nasty manu- factured goods : it has transferred the production of between fifty and sixty millions worth of manufactured goods from English manufacturers and English operatives to foreigners. It has in- creased the volume of trade against England till it has reached the alarming figure of £136,000,000 . Free traders may cut and carve and disguise the economic question as they like, l)ut there is no escape from the two horns of the dilemma — protection or emigration. Which will the operative classes of Great Britain select ? Will they protect their labour and industries, a» their fellow-workers all over the world, have done, and remain at home, or will they quit the land of what is falsely called free trade for the land of what is actually and really fair trade ? Under protection the commerce of the world has increased 36 per cent, in ten years. Under protection the commerce of the United States has increased 68 per cent, in the same period, and ^i England nndcr Free Trade. jj yet England has nearly all the shipping. Tender protection tlic commerce of Holland, l^elginra, of France and Germany, has in- creased 57, 51, and 30 per cent. Under free ti-ade the commerce of England has increased 21 per cent, in ten years. Under protection America is accanndating annually £105,- 000,000 sterling. Under free trade England is accumulating an- nually £65,000,000 sterling. Many experts maintain that since 1875-6, she is losing money instead of accumulating. Protective America now exports more tlian she imports. Protective France imports £'1:0,(»00,,50(>,()()0 on 25.0(>0,0(>() quarters. This would not be all loss. It would have prevented the loss of £000,1 »Oo,()()() of agricultural capital in the last ten years, and the annual loss of .£23,000,000 agricultural income. Now this great free trade theory is blown to the winds, and Mr. Bright himself told the operatives at Bradford that agriculture not manufacture is the true source of national wealth. Tiiirty-five years ago soi-disant free traders set themselves to the work — "God's work," they called it— of destroying the land- owner. Well, they have nearly succeeded, but in doing so they have destroyed the tenants, shopkeepers, tradesmen, carriers, and the hundred and one small industries in every arigcultural town and village throughout the country. Ist. Is it probable or even possible that England can return to protection ? 2nd. If she did so, would the working classes be benefitted by it? In answer to the first question it appears probable that the operative classes, as a body, will go for "protection to land and labour." Hut there is another and very powerful class who denounce }\ f I : . 138 England under Free Trade. the idea of a return to protection as gainst mnnutactiires; the promoters of companies of foreign mines, and loans and enterprises of all sorts; the brokers, London bankers, and the great finance houses whose promts depend on the trade of the world— on the industrial prosperity of France and America as much if not more than on the industrial prosperity of I'ngland. Tinder protection England would every year buy £40,000,000 to £50,000,000 less of foreign goods, and consume £40,000,000 to f'iOjOOOjOOO more of her own goods ; and save £20,000,000 to £25,000,<>00 of wages that now go into the pockets of Foreign operatives. " I believe, if confidence could be retained to our manufactiiring and agricultural industries, if land and labour were ])rotected from unwise and unjust legislation, we would soon j)roduce £50,000,000 to £60,000,000 worth more food, and £50,000,000 to £60,000,000 worth more manufactured goods every year, and our manufacturing and agricultural classes would earn £50,000,000 or £60,000,000 worth more wages and income." — {London Cant. li&v.) COMMEKCIAL TREATIES AND TARIFFS. A Statement of the commercial treaties affecting the tariffs of the several countries named : France. — The duties given for the years 1860-61 are those fixed by the Anglo- PVench commercial treaty of the 23rd January, 1860, the supplementary conventions of the 12th October and 16th November, 1860, and the Franco-Belgian treaty of the 29th May, 1861, the provisions of which were extended to the United Kingdom in virtue of the most favoured nation clause. The treaty tariffs of 1860-61 were within the next decennial period further modified by an additional convention between Italy, Switzerland, Sweden and Norway, Spain and Austria. With the •\^"t^l England under Free Trade. 139 exception of au alteration of the sugar duties, there were no changes of importance between 1870 and 1875 ; but in the sub- sequent period the expiry of the Franco- Austrian treaty at the end of 1878, l)rought about an increase in the conventional tariff duties on some of the coarser descriptions of single woollen yams. The existing treaties between Great Britain and France have been prolonged till February, 1882. The changes made in the new French tariff, as compared with the present, that of 1860, are of two kinds : 1st, an increase of about 24 jper cent., in the duties now levned specifically on many important articles of British produce and manufacture ; and 2nd, the conversion into specific duties of the ad valorem rates hitherto charged, also with an incresise in many articles of 21 jt?^?' cent. Negotiations between the English and French governments are now being conducted in reference to this new tariff". Germany. — The treaty under which the commercial relations of Great Britain with Germany are determined is that concluded with Prussia and the Zollverein on the SOtli May, 1865. The treaty accorded most favoured nation treatment, to the produce and manufactures of the United Kingdom, but no special tariff of duties was defined. The treaty remains in force, subject to one year's notice ox termination by either of the contractmg parties. RusssiA. — The treaty of the 12th January 1859 i: still in force under the same conditions of termination as that with Germany. It provides for the most favoured nation^treatment of British goods, but does not embody a tariff of duties. Belgium. — The treaty of the 23rd July 1862 remains in force, subject to one years notice of termination. By article 13, British goods became entitled, with certain temporary exceptions, to the special tariff accorded to Fi-ance by the Belgian treaty with ■'i 140 England under Free Trade. that country of May 1861. A special tariff for certain descrip- tions of cotton yarn was also embodied in a protocol of the 30th August 1862. Further modifications of the conventional tariffs ensued in virtue of treaties between Belgium and other powers until 1865, when the conventional tariffs were generalised and made applicable to all countries alike. ]IoLLAND. — The treaty of the 27th October 1837 grants most favoured nation treatment to British goods. It is still in force, subject to one years notice of termination. The Dutch customs tariff is applicable to all countries alike. AusTRo IIuNOAKiAN Empirk. — The duties stated for 1860-61 were applicable to all countries, some exception being made in favour' of the frontier commerce with the Zollverein. The treaty then in force between Great Britain and Austria was that of the 3rd July lo38. On the 16th December 1865 a new treaty was concluded with Austria under the provisions of which a special convention tariff was drawn up. This tariff was further modified by the Austrian treaties with France and the Zollverein and by the Anglo-Austrian convention of the 30th December 1869. The treaty of 1865 and convention of I860 expired at the end of the year 1876, when cotton and woollen goods lost the advantage of the reduced tariff of duties annexed to the convention of 1869. A new treaty was concluded with Austria on the 5th December 1876 which is still in force. By a declaration of the 26th November 1877 it was prolonged in- definitely, subject to one year's notice of termination. The treaty xvhile conferring most favoured nation treatment on British goods (with certain reservations for frontier traffic), does not specify a tariff of duties. On the 1st January 1879 a new general tariff came into force, which, as modified by the conventional tariff \r*^| Bngland under Free Trade. \Ar\ attached to the Austro-Italian treaty of December 1878, is now applicable to British gooda Italy. — By the treaty of 27th February 1 851 with Sardinia the most favoured nation treatment was accorded to British goods. This treaty was superseded by the treaty of the 6th August 1863 with Italy, which has been prolonged until the 31st December of the current year. The most favoured nation stipulations were renewed, but no special tariff was negotiated. In 1879 the conventional tariff established by these treaties expired. A new general tariff had come into force in July of the previous year, and this, as modified by the conventional tariff attached to the Italian treaty with Austria of 27th December 1878, is now appli- cable to British goods.. !^i l-H 142 England under Free Trade. Return of the Estimated Average ad valorem Rate of Import Duty levied in the Principal European Countries, and the United States, on the following Articles of British produce or manufacture. — (a) AR"ICLES. Prices at which the Rates of Duty are calculated. Cotton Yarns, (undyed) Linen Yarns, (undyed), Silk, (Thrown). Wolien and Worsted Yarns, (undyed) .... Iron, Pig " Bar. Tanned Leather (un- ) wrought) > Ox and Cow Hides. . ) Paper (for writing) . . . . Sugar (Refined) Beer or Ale At <^d. per lb, " u. " IJ. Id. " '* \s. " •' \s. dd. " " 2S. dd. " " 40J. " 3^- " 6o.r. per ton " 7£' " IS. 6d. " " 6d. per lb. " 35f' ps'' cwt " i^s.iod. " PER CENT. AD VALOREM 3 Pi 23 35 23 14 13 50 26 53 90 80 c s a 7 5 to 11 4 to 9 iX I to 7 K to4 Free. Free. 5 44 14 u c See Note See Note Free. See Note 27 35 88 to 95 16 3 < 10 7 to ij 6 to 9 ^Y^ I to 7 >^to4 Free. I to 2 I? CI 'S 5 76 20 t75 t62 t53to8s • 30 to 40 •351040 •351040 •35 ^5 42 67 to icm •151020 •35 1175 75 * Calculated on value at port of import. t These rates are for yarns not on spools. J Excise duty in addition. . II Partially calculated on value at port of import. Note. — These percentages are on the average export prices of British produce. On some articles it has been found difficult to obtain an average value ; on others impossible. (a) Ret. H. Commons, Eng., 1877. England under Free Trade. 143 Free-trade writers — English and Foreign. — Fawcett, *Baden- Powell, Mill, Cairns, Bastiat, ifec. In the opinions quoted below from the leading free-trade writers of the day, it will be seen that none of them touch upon the chief questions which have induced new countries to adopt protection to native industries. They seem incapable of even understanding tliem. In. his work on free-trade and protection, Mr. Henry Fawcett M. P. of the British Parliament says. — * The chief object I have in view is to endeavour to explain the causes which in recent years have not only retarded the general adoption of free-trade, but have in many countries given a fresh vitality to the doctrine of protection.' There is not merely ' a fresh vitality given to protection in many countries' but in all the great commercial countries of Europe and America. The faith in the ' general adoption of free trade ' exists only in the minds of the extreme disciples of that school in England. There has never been any foundation for such faitli — certainly none now. Nothing could exceed the coniidence, says Fawcett ' with which it was predicted that when England had once enjoyed the advantages of unrestricted commerce, other countries would be led to follow her example.' Mr. Fawcett says that 'the adoption of protectionist principles in the colonies has been encouraged by the opinion expressed by Mr. Mill, that the imposition of a protective duty, with the \Tlew of promoting a new industry in a recently settled country, may be justified as a temporary expedient. The assumption by English free-trade writers that their opinions have great influence in the colonies is no doubt very m.: • Baden-Powell (it is one name. ) % 144 England under Free Trade. r flattering to them, but it is a delusion. The tapjjing on a boy's drum would produce about as much effect. Mr. Mill's writings have very rarely been quoted in the discussions on protection in Canada, and never as an argument for its adoption, for very little weight is given by protectionists to Mill's opinion ; when referred to, it was rather to show the disagreements of free-traders among themselves. Mr. Mill's opinions smell of the candles and the kitchen — • they are too exclusively the opinions of one who has spent his , life in the closet, to have much influence in practical life. The narrow view taken of economic questions by Mr. Fawcett, and he is a type of all his school, is shown by his summing up the advantages and disadvantages of the bounty system in the (juestionof thecostof the sugar to the English consumer — ' England gains,' he says 'as certainly as France loses, by the bounty on French sugai ; and as long as France is willing to tax herself for our benefit, why should we refuse to accept the advantage which is offered to us.' The loss of an industry which might give employment to tens of thousands of English- men and support to their families ; the loss of capital, and of its distribution over large areas ; the loss of profits to the com- mercial classes in the importation of the raw material and the distribution of the manufactured article ; these and other advantages are all ignored for, it may be a saving of one per cent, but at a loss of 99 per cent. These and other puerile arguments of free traders show their utter inability to understand the condition of countries outside of England, and the reasons which have induced all the great com- mercial countries to adopt protection. Mr. Fawcett says ' nothing perhaps is so likely to conduce to a ^ England under Free Trade. 145 just appreciation of the injury wliich is inflicted by protection, as to show that the economic advantages whicli are produced by free trade are the same whether the exchange of conmiodities is between different countries, or between different parts of the same country. The very argument which Mr. P'awcett uses to prove this effectually disproves it. He says 'the people of each locality gain two distinct advantages by freely exchanging their commodities for those which are produced in other parts of the country.' If one of these localities is in England and one in France, two of these advantages are lost to England and gained in 1^'rance. England loses one-half the advantages of lier present manufactur- ing industry and France gains it. In protective countries the custom duties, imposed for the encouragement of home industry, are only on those goods which come into competition with those of home production. Mr. Fawcett's phrase so often used for argu- ment ' it can be easily shown ' does not answer the objection. The very fact that countries under protection have advanced in wealth and population to an unprecedented extent has more weight than all Mr. Fawcett's arguments against protection. It is fact against theory. Mr. Fawcett also forgets that an old and rich country like England, with all her industries in the highest state of efficiency, can and does use her power to crush the infant in- dustries of weaker countries. Protection duties are the only means which the weaker community can use against the stronger. Mr. Fawcett says ' It has just been shown that an inevitable result of a protectionist policy is to make the articles which are exported dearer.' All free traders assume that the custom duties must be added to the price at which the article can be produced without such duties. Experience is against this assumption. If A 10 % 146 England under Free Trade. a pair of slioor. cost ten shillings and the onstom duties are two shillings, the foreigner will pay these duties, or which is the same thing, i)ut his shoes at eight shillings. If the custom duties are s^lO a pair (ni shoes, it would be absurd to say that shoes in the protected country would be $(12. Home competition keeps down the price. Mr. Fawcett's examples under this liead (p. 94) are absurd. From the tables given below Mr. Fawcett draws an argument in fiivour of free trade and against protection from the immensely greatei- \ahu' of the exports from England than from the United States, as also that the great bulk of the exports fi'om the States are agricultural products, forgetting the recent origin of manufac- tures in America and that she has had to supply an enormously increasing home consumption. This of itself is a great achieve- ment in a young country. . V ' Value of Agricultural products exported from United States 187(),— £93,000,000 out of her entire exports, £112,500,000. Principal manufactured articles exported in 1876—^ . • From England £129,070,000. . ■ \ ^ , From United States £4,020,000. Fawcett assumes, as all free traders assume, that the great prosperity of luigland, since the adoption of free trade, is due en- tirely to that policy, ignoring the fact that the United States and 1'" ranee under the highest protection which any nations have ever enforced, have, during this same period, had as great a material ])rosperity iis England ; that manufacturing industries have been developed more rapidly in these countries "^han in England. Gladstone, Bright, Baden Powell, and all English free traders assume the same. l^^awcett says ' It should be remembered that the adoption of 1 England under Free Trade. 14/ of free trade in England was powerfully promoted by circumstances of so peculiarly exceptional a character that they do not now exist in any country where a protective tariff either has been or is pro- posed to be introduced. In England it was agricultural produce that was most carefully protected, whereas in continental coun- tries, in America and the colonies, it is manufacturing industry that is most zealously shielded against competition.' • Agricultural products are heavy and costly of transit, and therefore do not need protection to the same extent as manufac- turci' £1,000 worth of manufactures ma}'^ be carried across the ocean at the same charge as £100 worth of agricultural products. There is on this ground even a greater necessity for protecting the weak manufactures of new countries. The entire tone of English writers on free trade leave- the impression on the minds of the readers that they urge that policy on foreign nations chiefly because they believe England would gain by it. Fawcett quotes D. A. Wells' statement that ' it would pay the United States to buy the Bessemer Steel Works, close them and pension off the employees.' But Bessemer steel has fallen from $158.50 per ton to $42.00; and there are now manu- factured in the States 1,074,262 tons— the quantity having risen from 79,000 tons in 1870 to 1.074,263 in 1880. And why should not Bessemer steel be made in the States and Canada as well as in England^ The 'growing oranges ' style of argument so often used by free traders can have no force here. ' Scarcely any one ' says Fawcett ' could now be found in England who would express doubt as to the great advantages which free trade confers!' This was written in 1878, yet now in 1882, the opposition to free trade is wide spread, and five import- m 148 England under Free Trade. ant elections have been carried on the cjuestion of ' fair trade ' in oppositioji to free trade. ' It can no doubt be shown' lys Mr. Fawcett, 'that those who maintain iiigh tariffs inflict a far greater injury on themselves than they do upon us' (the English). 'It can be shown;' this is a constantly repeated form of ex- pression of Mr. Fawcott. One wonders why he does not show it ; and it is extraordinary that, if this is so manifest, the three hundred millions <)f the most highly enlightened people in Kiu'ojie and America, who have adopted protection, continue to retain it and increase their protective duties. Turkey, the only European nation which has not adopted protection — having under English guidance a uniform scale of 7} per cent, on imports — cannot be pointed to as a pattern for others to follow, 'Duties,' continues Mr. Fawcett 'are levied on some articles such as malt and spirits ; an excise duty exactly equivalent to this import duty being imposed on English made malt or spirits.' (p. 28). Mr. Fawcett takes credit to English free traders for imposing an excise duty equal to the import duty, so that the Englishman may have no advantage over the foreigner in the British market. For downright honest stupidity commend us to the Englisli. Fair play is a jewel, and ' fair trade ' is now the cry in England. All except free-trade-run-mad must fail to see any fair play to the English trader or tax-payer in such an adjustment as here referred to. Mr. Fawcett also complains (p. 61) that ' it rarely happens in the United States that an excise duty is imposed on a homo pro- duct to counterpoise the duty on the same product when import- ed.' Tt would have been a rare combination of stupidity and shrewdness if this had been done in the United States. England under Free Trade. 149 Geo. Baden Powell, M.A., treats of, — 1. Nature and effects of protection. 2. Tlie diagnosis of commercial dejircfisions ; including a sufficient account of effective and non-effective remedies, and the possibilities of free-trade. 8, Deals with England of to-dav as an example of these things. Mr. Baden Powell admits that we cannot as yet look for the definite abandonment of economical theories that are conclusively proved to be wrong and hurtful [when and where ^J by expe- rience and reason. We find protection dominating the Fnitod States and Germany, two of the most advanced communities of the present day. (Preface.) Mill writes, " Letting alone should be the general practice ; every departure from it, unless by some gi-cat good [protection may be that great good] is a certain evil." Senior Prendergast, the eminent Spanish economist, puts it thus : '' If you lose confi- dence in the natural powers of the individual, and call upon the state to substitute its power, it is all over with the individual." Professor Cairns comes more directly to tlie point : '" When once the industrial classes have been taught to look to the legislature to secure them against the com]>etition of nvals, they are apt to trust more and more to this support and less and less so their own skill, ingenuity and economy." Bastiat says " the best and most righteous economic world will necessarily result from letting things alone." Merivalc tells us, " Every deduction from the liberty of man as a free agent is, in an economic sense, a diminution of his powers." ' It is, however, when we turn to the civilized colonies of the English race that we find the most urgent need of the inauguration of free intercourse.' \m ii ''■!i mi w. ISO England under Free Trade, At tlie present moment there is probably no single product of the earth which is not the native product of some portion of the Ih'itish Empire. Within its borders exist every known variety of soil, climate and environment. This assertion has never before been possible of any other single nation. That this vast area of supply may be made the most of, may become self-supporting and autonomously prosperous, it imist come under the beneficial influ- ence of free trade. Its connnodities nuist be freely interchange- able and freely producible without lets or hindrances of local or personal seltishness av ambition.' (ji. 354-.) This is solely in the interest of the mother country. ' Both of food and raw material, the British Empire offers an inexhaustible and cosmopolitan supply.' The colonies are to furnish food and raw material, the parent state the manufactured goods. ' But there must be freedom of access ; and this is nothing move i\via\ free trade within the E'nipir6.\, ' It may be asked why have any of the provinces of the British Empire the right, how have they the license to adopt other than free trade principles? ' . ,' , •. ■,, , , ' By the imposition of duties for purposes other than those of levenue, a province of the Empire at once invades the domain of Imperial interests ; at once challenges the control of the Imperial authorities.' Mr. Bright, in a letter on Protectionism in the United States, has a strange confusion of ideas about protection and slavery. ' A people who put down slavery at an immense sacrifice are not able to suppress monopoly, which is but a milder form of the same evil (the object of the war was not the abolition of slavery but the preservation of the union. Monopolies, too, grow up more England under Free Trade. ISI under free trade than under protection.) 'Under slavery' Mr. Bright continues, ' the man was seized and hi« labour was stolen from him; under protection, the man is apparently free, but he is denied the right to exclMngo the produce of his labour, except with his countrymen, v/ho offer him much less for it than the foreigner would give. If a man's labour is nut free, if its ex- chai ge is not free, the man is not free.' Surely the American living under protection is not restrained from selling the produce of his labour in England or anywhere else. In fact he has the advantage over the English labourer under free trade ; he has the command of two markets — his own and the English — while the English labourer cannot get into the Ameiican market without paying heavy duties. 'The Imperial Parliament, before this latter-day develop- ment of self-governing provinces of great power and influence, never had its authority questioned or even appealed to in regard to the general commercial policy of the empire. Now the case is altered ; and it is evident the Imperial authorities nmst resume this forgotten duty. But they must resume it. hearing in mind the fact that in the interval vested or prescriptive rights have ccme into being ; various of these prosperous provinces have now an equitable right to a voice in the matter. In order to institute free trade in perpetuity for the British Empire, its self governing communities must be brought to mutual and, in a measure, spon- taneous agreement. The development of self-government has brought into existence the necessity on grounds, both of ecpiity and of expedience, for an appeal based on the principles of volun- tary union. The Imperial Parliament can indeed, and should^ 7'emain the constitutimial guardian of some such new charter of union, once such a charter be instituted by mutual agreement. I in '' '11 ■r-:n ik^ 152 England under Free Trade. And under the strict terras of this charter will fall any future delegations of self-government, or of fiscal or other powers to separate communities of Englishmen that may, in the future, develop the acquisition of self-government. ?^ :: ' Such are the rational means to this desirable end. That they are eminently feasible at the present conjunction of aifaii's is not to be doubted. They will derive great countenance and assistance from the silent but powerful mfluence of English opinion on the whole empire [not on trade questions]. English statesmen are the pick of a large and well-qualified field ; ani it is no wonder their utterances are treasured up and valued mos* highly by the statesmen of the colonies. ' ' Some would seek to hasten this by a course of differential tariffs and, other measures which should seek to encourage the provinces of the empire to consolidated action; but which sliould take no notice of the existing fiscal policies of any particular colony ; which should draw no line but that between all provinces of the enquire aiul free trade foreign states on the one hand, and, on the other, as beyond the sphere of such commercial charity, all foreign protectionist states. But there seems to be little need for such directly precipitate measures. There are but two or three colonies, out of the total number of fifty, that avowedly put in practice protective principles, or that impose duties on imports for the purpose of protecting their industries. All others are ready in principle to join in such a union ; and there is nothing imprac- ticable in the prospect of the various provinces of the British Empire banding themselves together, in their various degrees of constitutional spontaniety; and jealously maintaining a secured freedom of intercourse among themselves, as close a commercial union as that rigorously maintained by the citizens of the United States.' Protection in Canada. 153 'Yet whether hy direct political action, or by these many means of indirect iufluences, certainly one of the gravest and most profitable tasks of English statesmanship, both of that which exercises itself in the crowded arena of the mother country, and that which rises to a vigorous life in her many provinces, is to aim at the consolidation of the empire in regard to the exchange of its products ; the inauguration of a true free trade era ; the commercial unification of the empire.' ' ■ :'><^': CHAPTER V. i* PROTECTION IN CANADA. The chief home of manufactures and commerce on tliis con- tinent will, we believe, in time, be in Canada. The physical features of the country — the innumerable streams and waterfalls, the rich mineral resources, the vast areas of the finest food pro- ducing zones, and the invigorating climate, point to Canada in the neio, as to the northern half of Europe in the old world, as the centre of the chief industries, of commerce, of wealth and power. That the southern parts of North America were settled be- fore the north, is what any one acquainted with history would have predicted. Europe was fii-st settled in the south. But here in time, as in Europe, population, manufactures, commerce, wealth, high civilization and power will be found in the north. The greater amount of life in the northern character is seen in their valour 'n war, in their energies in peace, in manufactures, in conn.ierce, and in all the walks of life. The people of Europe, living in latitudes and cliroatos corresponding with Canada, are 154 Protection in Canada. more vigorous than those south of them, and are capable of the long-sustained labour necessary in the lieavy industries. An emi- nent Frenchman, at the Exhibition in London in 1862, said to the writer, after passing through the English and French depart- ments: ' We cannot compete with you in the heavy manufactures ; our men could not do the work your men do.' Climates are permanently the same, and thoir effects upon the animal and vegetable kingdoms in the old world will be re- produced in the new. Climate, here as there, will have the same effect upon the physique of man. Those regions in the old world lying in latitudes and position similar to the greater part of the United States are inferior for the abode of man to those which correspond with Canada. Harvey Philpot, M.D., Assistant Surgeon for 21 years to Her Majesty's forces in the Crimea and Turkey, says : ' Canada is an exceptionally healthy country. I do not hesi- tate to make the statement after seven years in the country en- gaged in an extensive practice. As a race the Canadians are line, tall, handsome, powerful men, well built, active, tough as pine knots, and bearded like pards ! ' Marshall, in his work on Canada, says : • I am persuaded that, despite its severity, the climate of Canada is one of the healthiest in the world. It is expressly fitted to develop a hardy race. The fact of the generally healthy con- dition of the people, the splendid development of the men, the preservation of the English type of beauty of the women, may be taken in proof of the excellence of the climate. The Canadian is well proportioned and vigorous, often tall, with broad shoulders, sinewy frame, and capable of great endurance. He is quick of resource, entbrprising, sober-minded, persistent, and trustworthy. 7 Protection in Canada. IS5 The sons of the Bi-itish Isles and of Norway have certainly not degenerated here. The old race bids fair to attain a new vigour.' HOW TO ESTABLISH AND DEVELOPE NATIVE INDUSTRIES. The most urgent want of a nation is profitable employment for the great mass of the people — work for the million. Canada has broad fields and abundant occupation for the robust, for the mere agricultural labourer: but little f < r the less hardy, and for those who may prefer mechanical, manufacturing, or mercantile pur- suits. Hence these classes of our population leave us, and artizans from the Old World shun our shores, as they can find no employ- ment for their skilled labour. In a new country, too, like Canada, essentially agricultural, one of the chief wants is markets ; and good markets mean good profits and good wages ; they stimulate production and lead to wealth. Where all are producers of an article there are no mar- kets. If all, or most, as with us, are farmers, the products of the field find no pui-chasers — or but few ; profit? ^re poor. " It is precisely because British farmers have their customers — the British manufacturers — almost at their doors, and that other corn producing countries have not any manufacturers, that British agriculture is rich and thriving." — Ho\n to farm profi- tably, by Alderman Mechi, 1864. " The increase and riches of commercial and manufacturing towns contribute to the improvement and cultivation of the countries to which they belong in three ways — 1. By affording a great and ready market for the rude produce of the country." — Adam Smithes Wealth of Nations, B. 3, S.' 4. To have good markets, we must have consumers who are not producers of what is offered for sale. We must have home mar- m > If IS6 Protection in Canada. kets for a hundred products of the garden and the field too bulky or perishable to bear the transit to foreign countries. Canada has poor markets, little capital and a sparse popula- tion ; Englarid good markets, abundance of capital and a dense population. In Canada — the new Dominion — there are but ten souls to tlie square mile ; in England and Wales nearly four hundred; in Belgium four hundred and thirty; in Massachusetts one hundred ; and in New York ninety. Population we must have, not mei'ely in bulk, but of all those classes necessary for a complete and independent nation, and for a full development of the resources of the country ; and capital for utilizing our vast resources. How are we to get these \ Wait for centuries, say a modern transcendental school. You are yet young. Time is all that is wanted. But England has grown more in population and wealth in the last one hundred years than dui'ing the previous twenty centuries ; or taking the one thousand years of her history from the establishment of the Saxon Heptarchy, she has advanced more in all the materials of national prosperity in the last one hundred years than she had in the previous nine centuries. Why then should we fold our arms and wait a thousand years? Africa, Asia, and America, (until her settlement by Europeans) had re- mained what we know them to have been from time immemor- ial, under this laissezfaire doctrine. Wliat gave Old and New England, Holland and Belgium, the power to outstrip all other people in the race of prosperity ; what is leading France, Russia, the German Zollverein, and tiie United States to the great development of their wealth, and what is now impoverishing Ireland, India and Jamaica? If England has added more to ho wealth in fifty years than in the previous Protection in Canada. 157 twenty times fifty, why may not we prosper in the same ratio? A century and a-half ago England had a popnhvtion little more than Canada has to-day. Now she has twenty millions, three- fourths of whom are occupied in manufactures, commerce, and other pursuits unconnected with the soil,givinggood home markets, helping to bear the burdens and aid in the defence of the state. We are a young luition, it is said : but the people are the nation, and we are individually as old as other people, and may avail our- selves of all those agencies that have given such sudden riches to other countries. These are chiefly manufactures and commerce. With them we get that illimitable power — steam — which in Eng- land alone is capable of doing more work than the ten thousand millions of fingers of the human family. With this vast creative power we can give employment to our own people who now so largely leave us, and we can draw to our shores others with capi- tal and skill. What then are the means by which we can obtain capital, population, and skilled labour, manufactures and com- merce ; by which we can keep amo:!gst us our young men and women ; call to our shores a greater tide of immigration ; secure that power more prolific than all others in the creation of wealth ; prepare in peace, by the establishment of inanufactures, for the day of trial in M'ar. — What is the policy by which a young coun- try in want of all these can secure them ? This is the question of (piestions with us. An old country, overbui'deiftd with all the agencies for the creation of wealth, in active operation, can form but a faint conception of the condition, and can, therefore, be but a poor counsellor, of a young country in want of all these. •' ' We cannot, therefore, take the advice of England in these matters, although we might safely be guided by her example running through many centuries, and before she yielded to the 158 Protcctim in Canada, teacliir.gs of those whom Mr. Gladstone, — himself a free trader, — called the philosophers of the seventh heavens. English ma- nufactures and commerce were fostered through their whole his- tory by the most rigorous and persistent protection. Under Charles the Second, two centuries ago, the iron, brass, silk, glass, paper and hat manufactures, were introduced from the continent ; wool-dyeing from the low countries ; and glass and crystal from Venice ; all fostered by heavy protection, the customs chiefly, with the small excise duties, amounting to nine-tenths of the whole revenue of the kingdom. Many of these industries, after flourishing for two centuries through protection, have perished under free trade since 1846. This is true of the silk, woollen and lace of Ireland ; and of the glove, paper and some minor manufactures of England. Other industries, such as silk, woollen, cutlery, machinery, steam engines even, and ship-building on the Thames, have been most seriously impaired by foreign competi- tion. In both the Indies, free trade has wrought a similar ruin. But Russia, since lier sad experience of free trade till 1821, has persistently adhered to protection, and manufactures have sprung up and are flourishing over that vast empire. Her imports in- deed have diminished, but her home products have increased im- mensely, her home markets improved, her ])eople employed, wages better, and the industries of the empire rising to impor- tance. English capitalists have always invested their money in the United States under high protection rather than in Canada ; and emigration has sought the same destination often through direct British agency. Such is the recompense the free-trade manufac- turing and commercial circles of the parent state mete out to us in return for low tariffs. Protiction in Canada. 159 Frederick List thus speaks of the effects of a low tariff in the United States, and tlie consequent influx of forei<^n manufactures, the contraction of native industries and the non-etnjiloyment of her people : " Tliere are many wlio impute the commercial crises of the United States to their paper and banking systems,* but there can be no doubt that the evil originated in the compromise (Free- trade) Bill (of 1832) in consequence of which x\merica's imports soon exceeded her exports, and the United States became debtors to England for several hundred millions of dollars, whioli they were unable to cancel by theii' exjioi'ts. The proof that these crises must chiefly be ascribed to the excess of imports lies in the fact that they invariably occurred in times of great influx of foreign manufactures in consequence of a reduced tariff ; aiul that on the contrary they never took place either in time of war, when few imports could take place, or when, by the high import duties, the exports had been brought into just proportion with the imports. In 1789 the first American tariff was framed, imposing a trifling duty on the most important articles ; its effect on the prosperity of the country became so manifest that Jefferson, in his message in 1801, congratulated the nation onth;. flourishing state of manu- factures and agriculture. Congress raised, in 1804, the duties to 15 per cent., and in 1815 the manufactures of the United States em- ployed 100,000 hands, and the annual amount of the products was $60,000,000, while the value of land and the prices of all sorts of goods and wares rose in an extraordinary degree." The tariff was lowered in 1818; raised in 1842; lowered in 1832; raised in 'The irredecmal)le paper money was caused by free trade. Under this policy the country was drained of specie to pay her foreign debts incurred by heavy importa- tions, and pajier money was issued to take its place ; having no specie basis, it was of course depreciated. "1 i i M i6o Protection in Canada. 'il|i 1842; lowered in 1849 ; raised in '61 and again in '67. A crisis or great depression followed the lowering, and prosperity the raising of the tariff in all these instances. , . Free trade in 1846 took away from Ireland their protection for the farm and the dairy ; the famine of 1847 followed, and the popu- lation of tl^at unhappy land, by famine and emigration, has been diminished by three millions. Tiieir manufactures ruined, their land impoverished, like all lands that export their chief products in raw material, the people, starving at home and without employ- ment, fled in hundre/. Then what is the result in one third of a century of tliis new policy upon the manufactures whiclitlie wisdom of our fathers had raised to an excellence and reduced to a cheapness that drove all competitors out of the market ? Let the late English papers and peiiodicals answer the question. Two facts stated tell the wl lole tale : The custom house officers along the Thames, says a writer (a free trader, too, be it understood,) in Blackwood, will tell you as they told me, that England has become, in the main, a country which exports raw materials, and that the bulk of manufactured goods consumed by the people of England is of foreign production. 1^ i^f.'-tm 'III 1: 164 Protection in Canada. Tho second statument is a iiucessiiry coiiHequence of this, that never, within the memory of living men, were there so many of the workin^^ classes out of employment. " Sir," was the remark of tho custom house officer, '' we are going down hill as fast as we can. The foreigner not (mly beats us in the cheapness of his articles, but he imitates our ti-ade marks, and sells in England Uiany a bale of his own cotton cloth." The tale is a very sinii)le and natural one. The foreigner can manufacture cheaper than the Englishman, l^'rec trade Kngland exports the raw material, imports the nuuiufactured stuifs, ruins her industries, throws her arti/.ans out of employment, and fhen supports them by alms or drives them abroad. Recent muubers of the London Times give accounts of the most heart-rending destitution in Manchester, in that great centre (if free *:rade ; as many are now receiving alms as in the worst period of the Lancashire distress during the American war. While referring to the greater development of many manu- factures in countries unuIations would give, we might restore our impoverished soil and do much to save our now \ irgin lands from a like fate. The average yield of wheat has fallen with us from 40 to to 15 bushels per acre, in Britain it has risen. The total amount of waste in the mineral constituents of our grain exported instead of behig con- sumed in the country cannot be less than one hundred million bushels annually. "^I'liis one beneficial result* would be worth countless millions to Canada ; and yet it is only a collateral advan- taire tlowiny; from the introduction of these home industries. 7. The establishment of a few br even of one manufacture would give rise to others, for the efficient working of one industry demands and creates new ones. T' >se act mutually and favourably up»»n each other. The beginning is half the battle. K. Tiiey work up much raw material which in this country is thrown away. We can here but indu-at' the kind of waste we refer to. In ('anadagas is from los. to ;{0s. pjr thousand cubic feet ; in Kngland 4s. From the great demand for dyes in her manufactures, gas companies there extract colouring matter from the refuse of the coal, which here is thrown away. We don't of course forget the higher price of coal in Canada; but the chief cause of the difference in the price of gas is that just statjd. In a r ii;i ir Protection in Canada. 169 purely agricultural community materials are allowed to perish, which, in manufacturing countries, are turned into fabrics and wares worth, or sold for, millions. What v^ast wealth or elements of wealth perish every year in the devastation, in the barbarous hewing and hacking, of our noble forests, l^ook at the mighty water power throughout the length and breadth of the Dominion, spent for ever for want of the mill and the wheel to turn it to use. The riches of our mines and forests, of flood and field, are wasted (»r lie dormant through ignorance of our true interests. 9. Manufactures add another population to the agricultural : and these again give rise to commerce and shipping with their kindred industries, and t.'ius superadd another population. These several classes re-act favourably upon and support each other. These again create and support other classes, professional men, bankers, literary men, miners, brokers, clerks, ifec, &c. As England, with her inimerous industries, has five men to supp'Tt and defend the state where, as an agricultural country, she would have but one, so might Canada have five where she tiow has but one. For England, purely agricultural, could not maintain more than four millions ; but by the favourable re-action of the other classes five millions may live by agriculture. Now England, agricultural, manufacturing, mining and commercial, v/ould easily support twenty millions of people- We refer to England only. 10, In estima*:ing the productive power of a country we are not to take into the account the population merely. That of England is but twenty millions ; yet her machinery is capable of doing more work than the one thousand millions of the human family. Its ex^.ansion, its creative power, is practically illimit- id)le. Thi« vast power is the growth of the lujt half century, and tho great wealth of England has been created chiefly within tliat fit- ' •^'^HBj^M 170 Protection in Canada. period. By being mere producers of the raw material, we remain the liewers of wood and the draM'ers of water to the workshops of wiser communities. With this vast motive power, fifty years lience might see us equal in population and v/ealth to the England of to-day. Our vast material re80urceL\ our forests and peat beds' the coal of Nova Scotia, New Brunswick and Prince Edward Island, the fertility of our soil, the salubrity of our climate, the vigour and activity of our people, give us all the natural advan- tages we could wish. It is for us to improve them. 11. We have only to point to the great prosperity of the United States to show the enormous gains accruing to a young country from the labour and machinery introduced undei- high protection. This example in a country having so many points of resemblaiiice to our own should have the greater weight with us. If it be said that this prosperity has been at the expense of the West and South, we reply : Ist. That of the positive increase of wealth in the nation there can be no question ; 2nd. That from the introduction of free-trade in England, in 1840, to the Ameri- can Ilevolution in 1860, the growth in material prosperity and the expansion of trade, were greater in the Republic under pro- tection, high and stringent as it was, than in England under free- trade ; 3rd. That the West and South have grown wonderfuli" in wealth during that period, and at no time have suffered under protection, as Ireland and various parts of England under free, trade have, and do, even at this day. ,,. 12. Manufactures would give us employment of four capitals where now we have but two. We produce, for example, some ten million pounds of wool annually. One capital is expended in the [)urchase of the pasture, in stock, &c., and every year after in labour ; another capital changes hands on the sale ot m ool, which r Protection in Canada. 171 ■Ji 18 at 2:3. per lb. would be £1,000,000, Without manufactures the expenditure of capital ends here— with them we have a third in machinery, in labour, etc., say £1,000,000 ; and fourthly the receipts from the sale of these fabrics. We would have similar results in the growth rfid manufacture of flrtx and timber, in iron, coppei", lead, gold, silver, marble, slate, salt, coul, oil, leather, sugar, glass, etc. From any one of these raw materials in which our country abounds, there would spring several industries, in all of wliich sinn'lar capital and labour would be expended. Here would bo at least fifty industries, with £1,000,000 invested in each, thus throwing upon the community £50,000,000 annually, changing hands within, and not going out of the country. When these materials are sent abroad we are deprived, in thetirst, place, of the population engaged in those tifty kinds of industries ; secondly, we lose the l)enefit of two out of four capitals in each, which would be spent in a foreign country ; thirdly, we must pay 100,000 middlemen, in brokers, boatmen, labourers, etc., in the transit of our raw products, for this expense comes out of us ; fourihly, our land is thus impoverished, and in return we get only the lowest Itenefit — that froui the first rude labour ; fifthly, we get none of the other collateral benefits, arising from working up the raw material on our own soil. We lose the series >f markets growing out of these arts. The mamifacturer pays to his artisans, machin- ists, etc., say £i,000,000 ; these again disburse it to the baker, butcher, gardener, J'armer, draper, hosier, hatter, etc. After running these : yunds it gets back to the manufacturer, t^ud through him again to the producer of raw material. Look now at Ireland since the introduction of free trade in 1846, at Lancashire since 18(32-3, and at mostEnglisli industries of the present day, in which the English free trader finds liis ground cut from under him by the],Gaul »^d German protectionists. 172 Protection in Canada. V\ Markets abroad are taken from him through the too sharp compe- tition of foreigners ; tliere are no home ones to fall back upon — these h id already failed. The manufacturer puts his men on short time ; then closes his sho]). His artizans have not the millions for the tailor, the butcher, the gardener, etc. j^the series of markets are broken up ; the shopkeeper is ruined ; less demand comes back for the manufactiu'er. lie, too, must close. A brief struggle with want and iitful charity ensues ; then thousands, if not millions, must Hee from their homes and native land. 13. These factories would be cheap industrial schools for the education of our youth. They would keep the idlers from our streets and make them good mend>ers of society. For -Bvery child should be taught some trade or calling. The state should require this, and save our youth from becoming vagabonds. This would do much to crowd idleness, then crime, out of our streets. Every hour's work makes man a better being and better member of society. We instinctively admire the genuine hard worker. All the ener- gies of mind and body are bent, if not always on a noble, never on a bad end. Government is bound on national grounds to see that every member of the body politic is educated to take care of himself. E-.ery man's property would be worth more by it. The nation would be better and stronger. 14. But another consideration, not well defined nor even ex- pressed, is often present to the minds of the historian ;uul the statesman. War may come to us, as it conies to all countries. Scarcely a generation passes witliout leaving traces of its dovast- atiiig effects. War may come to us in our infancy and in our helplessness, as it did to the thirteen old colonies and to the Southern confederation. We might suddenly find ourselves in- volved in a b'fe and death struggle with a powerful enemy. Shut .'i**U; Protection in Canada. 173 out from the sea, without factories to create the materials of war, and without clotliing for our soldiers and people in a Canadian winter, labouring at the same time to organize an army and to equip them, to support our people and defend our soil. Suppose it were true, as theoretical free traders teach, that our attempts 10 establish manufactures would take money from our productive in- dustries, how small an evil would this be in comparison with what we would suffer in such a war without the manufactures necessary for the emei'gcncy. The spinning-jenny carried England through the wars with Napoleon. The factories of the North concpiered the South. The weavers and blacksmiths of England 'svould now be invincible in any war. They furnish the sinews. The iirst customs tariffs of Canada were for revenue. The Act of 1849 imposed a duty of 12^ per cent, upon most goods; and 'i\ upon har iron and heavy iron. In 1856 the duty on gen- eral merchandise was raised to 15 per cent, and on the manufacture of leather and India rubber to 20 per cent. The first act passed in the interest of protection was that of 1858, imposing a duty of 20 per cent, on general merchandise and of 25 per cent, on the manufactures of leather, boots and shoes, harness, saddlery, and some kinds of wearing apparel. The act of 1859 raised the duties on many goods and classified them imder customs dues of 100, 40, 35, 30, 25, 15 and 10 per cent. The customs acts of 1866-7 lowered the duties imposed in 1858-9. In 1874 the duties were chiefiy for revenue, being in- creased on most articles. The customs act of Mar(;h 1879 was the first enacted in the interest of protection, pure and simple, to native industries. It has now been in operation three yeare, and its results have more than met the expectations of its supporters. The Finance Minister, ^H Protection in Cattada, in his last IJudget Speech has given some interesting statements as to the working of the act of 1 870. In looking over the history of protection in Europe and in the United States, we have found no instance where tlie first act in the interest of protection lias work- ed more satisfactorily than the Canadian act referred to. Extracts from the Budt/et Speech of Sir Leonard Tilley, "l-^th Fehruary, 1882. Sir, it is customary, I find, with our friends opposite, when addressing either their own constituents or other constituencies in dilferont parts of the Dominion of Canada, to refer to the present state of things as alone tlie result of large exports during the last two or three years. I have made up a statement to show that the present state of the country cannot be the result of largely increas- ed exports of the products of Canada. Considering the average population from 1874-78 and the average population during the past three years, we shall find that the then state of the country as compared with the present, or the present condition of the country as compared with its condition then, is not due entirely to that cause or to causes quite outside the National Policy. I call attention to that because it is of im- portance to show that, during the five years that our friends opposite were in power, the value of the exports, being products of Canada, was but $1,700,000 a year less, with a smaller popula- tion, than it was during the three years tlie present Administra- tion have been in power. I am prepared to show, from the data I have before me, that, if the hon. gentleman opposite had collected from Customs, Excise and Stamp Duty money enough to pay their expenditure, and if the present Administration had collected simply money enough to pay theirs, upon the average population of the five years they I' -'''''V Protection in Canada. •75 were iu power and the tliree years we have been in office, the Hgures show that 28 cents per head less wonkl have been collected from the i)eople of Canada dnrin<^ the last three years than during tlic live years that my friends opposite were in power. There were collected from Customs, Excise and Stamps, in 1 874-75, $20,6t)4r,87H.96 ; in lH75-7t), *1 8,614,41 5.02; in 1876-77, $17,H97,- JJ24.82; in 1877-78, >t^l7,841,l)38„19 ; in 1878-79, $18,476,613.35; making a total of $93,295,770.34. The deficits during the live years were $5,491,259.51. If the deficits had been collected and added to the sums above, it would have amounted to $98,787,039.- 85. The average for the five years was $19,757,408.97. The average population for this period being 4,050,674, the per capita tfx during that period was $4.88 per head. Tliese are the figures and these are the results. There were collected from Customs, Excise and Stami)s, in 1879-80, $18,479,576.44 ; for 1880.81, $23, 942,e38.95, making a total of $42,421,715.39. Deducting the surplus for the two years $2,589,515.36, leaves $3,9832,200.03. The av^erage for the two years of taxation was i^l9,916,100.01, being, on a population of 4,282,360, $4.65 per head during the last two years, as against $4.88 during the other period. jS'ow, Sir, it may be said, but you collected more. We admit it ; we collected $2,900,000 in the two years more than was required for the expenditure. That was the surplus for tlie two years, and, liaving been used in the reduction of the debt, diminished our taxation for all time to come. . . , , THE DUTY ON COAL. .. .,-,.. Then, Sir, we were told that this tariff would be oppressive to a certain section of the Dominion of Canada by the imposition of a duty on coal, while it would do no good whatever to Nova ocotjia or other portions of the Dominion where there are large Wii 176 Protection iti Canada, coal depoHits. When 1 was asked by an hon. member oi)po8ite in 1879 what increase of the consnmption or what demand the Ctov- ernment expected to create for Nova Scotia coal by the operation of the tariff, I stated tliat probably within a shoit time the con- snmption of Nova Scotia coal in the Dominion of Canada would increa-se to the extent of 400,000 tons. • I did not Hnp])oae, Mr. Speaker, saniruino as I was with refer- ence to the effect of this tariff, that in three years, by the increas- ed demand for steam power, it would make a demand which would require over 400,000 to meet it ; but we find that these industries have been growing up all over the country to such an extent that it has required more than 400,000 tons more from the Nova Scotia miners, and has also caused a largely increased amount to be im- ported from the United States as well. . , In 1877, 757,000 tons of coal were raised in the mines of Nova Scotia; in 1878, 770,603 tons; in 1879, 788,271 tons, hi 1880, 1,032,710 tons; and in 1881, 1,116,248 tons; and to be added to that, there were in British Columbia 214,243 tons, against 145,542 tons in 1878, or a total of 916,145 tons in 1878, agfdnst a production in 1881 of 1,333,391 tons, being an increase of 417,246 tons per annum. . ,. ,-, 1 ..i,,;i.., 1 -^ . . * ■ THE SUGAR TRADE. ■ ''i''! '•^'^'' i' i ' " ' There was another very grave objection brought to this })oli- cy, and that was, thai, vhen we imposed an additional duty upon sugar refined in any country that granted a bounty — that is, when we provided that on the importation of sugar from any countiy that granted a bounty the ad valorem 0( 1,000 of reveime ; and the leader of the Opposition stated hero and at a public dinner in Toronto, that under the opei'ation of this policy we lost durini>; the years IS70-8O §()0(i,(»(»o of revenue, and that the people of Canada paid $6(M),0(>(i in increased.price for the sugar which they consumed, so that the sugar monopoly, as he termed it, cost the people of the Dominion of Canada !?1, 200,000 a year. I stated in my place in the House last Session in answer- to that lion, gentleman, when he said a loss of $0( »(»,()(»(» revenue had taken place, that the returns laid on the table perhaps justified the lion, gentleman in making the statement, because they showed that, in the year IS80, there had been $(300,000 less of revenue collected from sugar than in 1879 ; but I pointed out that the re- venue collected in 1879 was $30 if the $300,000 had been credited to that year ; and, further, that from the returns laid on the table of the reven\'e collected for the first six months of that fiiical year it was clear that the revenue to be received during that year would be equal to, if not above, that collected in any previous year. What has been the result { The figures that A 12 1 A., Q o,^.\^. IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I ':f!ia Ilia iKin o 12.0 liilM .8 1 1.25 1.4 1.6 M 6" — ► VI <^ /^ A. e. e). '^ o 7 Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, NY 14580 (716) 872'4S03 m c?^ mm ! *■■■ ■ h' ■ 1- ' ■ 178 Protection in Canada. I am now quoting can be found in the trade and navigation returns, and they show this : tliat during the last year we paid into the Treasury for duties on sugar $154,910 more than the average for the five years previous and under the tariff of the hon. gentlemen opposite, justifying the statement I made, and showing that as far as the present tariif is concerned there is no loss, or comparatively no loss, of revenue, because if we add $8()(t,0(»0 to the value of the sugar iniported — and that $800,000 is represented by freight from the West Indies, the labour in the refineries, coal consumed, interest on capital and other expenditures — and you add 43 per cent., the rate of duty collected in the year 1876-77 on the sugar imported, with the sums 'lamed added, then it would only give S40,000 more than we collected last year. There is the fact that $154,000 more were received during the last year than the average of the five years previous ; so much with regard to the anticipated loss of reveuue. A few words with respect to the cost of sugar to the consumer. When I made the financial state- ment last vear, I had obtained from reliable sources a return showing the comparative prices in New York and Montreal, when we had but two refineries in operation. I stated that as far as the prices of granulated sugar were concerned it appeared that those paid by the consumers in the Dominion were 25 cts. per 100 lbs. more they would have been if the sugars had been imported under the Tariif of 1877-78 ; but I might have added, as I pro- pose to add now, that that calculation did not take into account the profits of importers, the middlemen between the New York refiners and the men who bought and sold the sugar here. Still, I admit that as regards granulated sugar, omitting the profits of the middlemen, there was the difference of 25 cents per 100 ius., the yellow refined sugars being much less than it could have been Protection in Canada. 179 imported for under the Tariff of 1877. I have now a carefully pi'epared return sho^ving the values during two periods in each month in New York and Montreal, deducting the drawback and adding 30 cents per cwt. as the expense of importation ; this cal- culation does not include 50 cents per cwt. profit on transactions between the New York refiner and the Canadian consumers; giving the consumers the benefit of that also, there were still 7 cents less charged to the people of Canada on that line of sugar than if it had been imported from New York under the old Tariff; adding the profits of the middlemen, the <;aving was 57 cents per 100 lbs. ; and with respect to other refined sugars, the difference was much greater. As far as the revenue is concerned, there has been no loss, and $800,000 were probably expended in Canada in refini-^g sugar, in freights, and in cost of coal. What have we in return ? I explained this very fully last year, and showed what the effect of establishing refineries had been. There are now employed 1,000 hands in the cane sugar refineries, or 1,100, in- cluding those connected with the beet root sugar industry. Those men, most of whom have families, require food, clothing, tene- ments, and everything that the merchants, manufacturers and farmers supply; those men are employed in this country at re- munerative wages, whereas they would have removed to another country if it had not been for the policy that rebuilt those indus- tries and placed them in motion. Then we have 400,000 tons of coal raised from the mines of Nova Scotia, giving employment to, perhaps, 1,000 men additional— 60,000 tons of the 400,000 tons increase in the production of the Nova Scotia mines being used in the refining of sugar. Thus employment was given to the miners, a market was afforded to the coal ownera, business was provided for vessels and railways, 60,000 tons of vessels being ill til; : 'W'M i8o Protection in Catiada. employed in conveying raw sngar from the West Indies to differ- ent ports of tl)( Dominion, something like 90 per cent, of the whole coming direct to Canada, instead of 6 per cent, as in 1878. Employment was also given to coopers, and, in one section of the country 1 visited, the timber on the land had increased in value because of the demand ^or the particular kind of wood used for sugar casks. Everywhere, in the extension of trade, increased machinery was required and in operation, and additional employ- ment was given to the people. It was alleged that this Tariff would fail either as a revenue producing Tariff or as a protective Tariff. What evidence have we that hon. gentlemen opposite were mistaken on that i3oint ? There are various Avays of ascer- taining the increase of industries as the effect of the Tariff. The one which I shall now present is to show how the quantity of raw material consumed by manufacturers has increased since the adoption of tliis Tariff. j^^,. , RAW corroN, uidks and wool. I will take up first the increased hnports of the following raw materials used in manufactures, namely : raw cotton, hides and wool. These three articles, esjiecially cotton, because there is none produced in the country, give a very fair idea of the increased value of the manufactures. The raw cottons imported in 1877-78 amounted to 7,243,413 pounds ; in 1880-81, ir),018,7£l, pounds, or an increase of more than double in the three years. Hides imported in 1877-78 amounted in value to $1,207,300 ; in 1880-81, $2,184,884, or nearly double. Wool imported in 1877-78 was 0.230,084 pounds; in 1880-81, 8,040,287 pounds. Wool exported in 1877-78 amounted to 2,445,893 pounds ; in 1880-81, 1,404,123 pounds, giving an increase of imports of 1,810,000 pounds and a decrease of exports, which sliows tliat there was a ! *■. ' "u Protection hi Canada. [8i consumption in 18S0-S1 of Ciimidian wool over tluit of 1ST8 of 1,04-1,770 pounds, thus making an increase on the con- sumption of wool between the two periods of 2,851,973 ponnds. The increased value of cotton, leather and woollen manufactures for the year ISSl, as compared with 1878, therefore exceed $5,500,000 on tlKse three articles alone. NEW FACTORIES ESTABLISHED. Now, let US see what facts we have been able to gather with reference to the new factories established, and the number of persons employed. I will deal with the general statement fii'st, and then with one or two diiferent localities, showing the improve- ment that has been produced there by the operation of this tariff. I have statements with reference to wages, but 1 will take the mimber of persons employed first. Upon a very partial investi- gation, because it only extended over a portion of the Dominion, we ascertained that there have been ninety-five new factories established down to October last, since March, 1879, employing 7,025 hands. The cotton factories that are now in course of con- btruction. and will probably be completed within twelve montlis, will employ 8,000 hands in addition to those I have already mentioned. 440 odd factories visited and that were in operation in 1878, less the the ninety-five that 1 have named as being established since 1878, show an increase of employees varying from 5 to 30 per cent, and with an average of 17 per cent, in these 350 odd factories. That lY per. cent, on the number of em- ploj'ees, as far as we can gather from the (Census of 1871, and making allowance for reduction in the number employed between 1871 and 1878, would give 17,850, nudund, the i"aw cotton being 10 cents per pound. The same articles are manufactured by Parks, luid they are sold in 1882 for 22 iV cents, the raw cotton being 12 cents per pound. Tiiere M'as an increase of price in this case of li's cents per pound on the manufactured article, against an increase of 2 cents per pound on the raw material. Carpet warps sold in the United States in 1878 at 2 2 ro cents per pound, while the same article is sold by Parks in 1882, at 24x5 cents per pound, the increase being lA cents per pound, against an increase in the price of the raw material of 2 cents, showing that the price was not really in excess of what it cost in 1878. Beam warps, number 10, were 28 A cents per pound in the United States, while in Xew Brunswiclc in 1882 they were 31 A, an increase of 2tV cents, against an increase of 2 cents per pound on the raw cotton. Beam warps, in January, 1882, in the United States were 30-i% cents per pound net, while the price in New Brunswick was 81r/ff cents per pound net, or less than 2 per cent, above the United States prices. These figures show that so far as this particular class of cotton goods is concerned they are sold to the consumer at a less price than in 1878, and many of the articles are sold at the American prices, or a fraction under or a fraction over them. I may add tliat it was not to be expected that the prices would be as low for the first year or two as they will be when competition is established. Take, for example, the year l)efore last, when we had but two sugar refineries — those in Montreal— and look at the result which has followed upon the establishment of three others in the Maritime Provinces, A year ago I had to admit, on the : Protection in Canada, i^ face of the paper snbinitted to me, that 25 cents per linndred more was paid for sugar tliaii under the tariff of 1S78. This did not include the charges by the middlemen. Now wo can state eniphatically that the price is less to the consumer tlian if it had been imported under the tariff of 1S7S. And T tirndy believe tliat the competition in cost on cotton manufactures in twelve months, when we shall have 400,000 spindles instead of 180,000 which we have now, will produce such a result that there will be little difference in the prices here of any description of such goods and the prices in the United States. What our manufacturers say is, " we can manufacture here as cheaply as in the United States, but we want the market. We are preparing for the sharjiest com- petition, and Ave do not fear our friends on the other side of the line if we have the home market, and the competition among ourselves will keep the prices down to the consumer." This is an important subject ; the leader of the Opposition referred to it, and, in order to make the people in the Maritime Provinces see the effect of this tariff as he sees it, said that if a farmer visited one of the dry goods stores and bought a dress for his wife he would have to send out of the nine or twelve yards he would buy, three or four yards up to Ottawa. One farmer who was present said " that is not true, because I take what I buy liome to my wife. I send none to Ottawa." Many gentlemen and some ladies who were present at his meetings said that the main point made by him against the tariff was with reference to woollen goods. lie said that the poor man would be compelled to pay 4( I per cent duty and upwards, and the rich man but 25 or 27 per cent. I have taken some pains to write^to parties who could furnish me with reliable information with reference to the price of woollen goods ; and a gentleman sent to me, at the "111 !fflf I *! 1 86 Protection in Canada. request of a fiiuud, a letter, of wliieli he authorized me to make any use I thought proper, I stated to the gentleman, to wliom I wrote among others, tliat I wished reliable data — data that could not be shaken by any statements of fact that could be produced in the House — because we wanted nothing but the facts, and if the manufacturers were getting large prolits it was just as well that we should know it, and deal Avith the facts as we found them. This letter I received from Cantlie, Ewan A: Co.. of Montreal, who 1 believe have been for years engaged in selling AvooUen goods. Tt has reference to the price and nature of certain descrip- tions of woollen goods made in Canada, compared with, the prices of the same goods previous to the change in the tariff. Ft is as follows: " Ist. Etoffes, tweeds and fabrics made from Canada wools, and used chiefly by farmers, labourers, shantymen, and mechanics in country districts, are as low in price now as at any time during ten years previous to 1878. This refers to regular sales, ino doubt during the very severe dejjression special lines may have been sold at a concession to force sales, but the average price of such goods for 1880, 1881 and 1882 is lower than the average of ten years previous to 1878. " 2nd. Medium and fine avooI fabrics made exclusively from imported wools, and used by farmers, mechanics in cities and towns, and by the large mass of the population, were in 1880 and 1881, and are now selling for 1882, at lower jjrices than at any previous time since these goods were made in Canada. " The goods now made in Canada from fine and medium wools have improved very much in character as to fabric, colour and finish, and ought on this account to bring more money instead of less. Protection iti Canada. iS; " 3rd. Flaniiols arc now as low in price as at any tinio during tlio pant fonrteen years, except for a sliort time during 1S77 and 1878, when, under the proHSure of hard times, a break in price took place by the largest manufacturer of such goods attemj)ting to run out the smaller makers. This failed, and the price has since been steady. No advance has taken place, although wool supplies and wages all have advanced very considerably. " 4th. Jilankets are as low in price now as they were any time during ten years previous to 1878. During 1880 they were lower in j)rice than at any former time in Canada. Our Canadian woo's Averc^ then very low in price, al)ont 21 cents per lb. ; since tlien wool suitable for blankets has averaged not less than 29 cents to 8t) cents, and blankets have adv^anced in consequence. For last year and this present year prices are as low as any year since 1869. Being compelled by foreign competition to give up making blankets for 1875, 1876, 1877, 1878, we have no record of prices for these four years." , j Mr. Speaker, that speaks strongly with reference to the price and value of the goods made in the Dominion of Canada largely from wool grown in (Canada, and consumed by the masses of the people of Canada, and while the masses of the people have been buying their woollen goods at prices as low as they were before the change of the tariff, it will be found by reference to the trade returns that we received $411,000 more from the finer descriptions of woollen goods worn by the wealthier people than we did the year previous, and an average of from 7^ to 9 per cent, duty more than we did in 1878 from the consumers^ of the finer goods, showing clearly that instead of the rich man getting his clothing cheaper and the poor man paying more as a rule, the poor man gets his clothing as cheap or cheaper than he did before, while the rich man has paid from 7 to 10 per cent additionalduty. |,i. f liili 1 1 Iff 188 Protection in Canada. Mr. Millrt — Then Ciiriiula never was a saerifiw! market? Sir Leonard Lilley — Yes, it was ; that was the trouble. I asked one of the manufacturers, How is that, although wages are higher, prices are lower? lie said to nie, '• The fact is, we used to have to spend a largo sum in employing runners to go through- out tlie country to make sales ; hut now we have doubled our production, have orders ahead, our expenses of management have not increased, we fran sell at smaller profits than we could before, and yet in consequence of the increased production we have larger profits at the end of the year." Thus we see that while we are building up these industries the people are getting cheaper goods and the manufacturers are making more money than they were before. Now, Sir, as I have dealt with the cotton and woollen gooils worn by the masses of the people, I thought I would like to know how the case was with reference to the hats and caps made out of coarse woollen goods, felts and other materials ; and I addressed a letter to a gentleman in Montreal largely engaged in the manufacture of these articles— a gentle- man who is, I believe, known to many lion, members of this House — Mr. E. K. Greene. He, among others, sent me a reply, and which he said I might make whatever use of 1 pleased ; and as he speaks very strongly and decidedly with i-espect to the effect of this policy on prices, I give him as an authority on the subject. I know he is a somewhat prominent man in the City of Montreal. Mr. Mackenzie — A prominent Protectionist? Sir Leonard Tilley — Yes ; and he was, I believe, a supporter of hon. gentlemen opposite at one time. Mr. Mackenzie— He is yet. Sir Leonard Tilley — Then, Sir, I present the testimony of a Protection in Canada. 189 gentleman who synipathisos Avith lion, gentleineii on tlio o})posito side of the House, and who, uiuler these circumstances, would not, except for the National Policy maintain this Government in power. I said, " I believe you are engage'! in the manufacture of hats and caps, and that class of material," the relative cost of which to the consumer 1 had not up to that time received any information about. I was under the impression that some caps, made from the coarse woollen goods, coat a little more, and I was anxious to got information on the subject, so I wrote to him. J His reply was : — j. Hamilton, February 3rd, 1882. / ''I have gone over and carefully compared the prices of the various lines of caps and felt liats manufactured by us in 1878 and 18SI, and I find as the result of my investigation that the average selling price of our goods during the past year has been lower than in 1878, for the same class of goods. This is the case not only in those lines of goods on which the advance of duty has been slight, but also applies to those coarse, heavy woollens on which the duty has been considerably increased. These results have been attained by an increased protection of this class of goods in consequence of the present tariff, and by a natural law of manufactures, whereby a larger_jquantity of a given article can be produced and sold to the consumer at a less price than a smaller quantity of the same article. In other words, owing to the enlarged market afforded by protection and thejkeenness of home competition, we are able to supply the country generally with coarse woollen caps and felt hats at lower prices under the present tariff than in 1878, before it went into operation. " As an importer, manufacturer, general merchant, of twenty- five years' experience, extending at present from Cape Breton to l!li: ii ^^k '■ 'ijf MiiH tgo Protection in Canada. British Colurnbia, I can safely say that the country as a whole, in its solid material prosperity and sound financial condition, has never been (during the period mentioned) as truly prosperous as at present. I believe this statement will be confirmed by every leading banker and merchant throughout the Dominion. Yon are at liberty to use this letter in a!:y way you think best." ' We have taken the felt hats and woollen caps, the woollen clothing and the cotton underclodiing, and, for the mass of the people, it does not appear to have cost them a great deal more for these articles — it cost them somewliat less ; but, at any -ate, we say they have cost them no more than under the tariff of 1878. Let us see what other articles have been affected by the tariff. Ploughs are selling at 15 per cent, less than in 1878. All agri- enltural implements are selling from 5 to 20 per cent, less than they were sold for in 1878, and the business has increased nearly fourfold. Sewing machines are reduced in price ten dollars each, and the business has trebled or more. Boots and shoes and leather manufactures, first-class custom work, have increased in price about 15 per cent., equivalent to the increase of wages of the men employed in that particular work ; but factory goods are sold at from 10 to 25 per cent, less than in 1878, although the pi-ice of labour has increased. Lamp glasses sell at less than in the United States in 1878. In hardware goods there has been an increase in ])rice for a portion, jut not greater than the increased cost of labour and of raw material, but a large portion are sold lower tliaii in 1 878. The bestclass of furniture is selling at a somewhat higher price than before — that is, the ^'ery best description of furniture — but the furniture that is used by the masses of the people, manufactured at the large establishments of the Dominion of Canada, is sold as low, and lower iu most cases, than it was in 1878. The prices of iron / Protection in Canada. 191 castings in 1SS2 was per cent, higher than in 1878. In 1870 the prices were at the lowest, pig iron being cheaper tlian at any period since. The increase in the price of iron castings is about 15 per cent., or equivalent to the increased cost of the pig iron and the labour, principally of the labour. Cut nails are 5 per cent, lower, and iinishuig nails are per cent. lower than in 1878 ; pressed sjjikes are 12 per cent, lower than in 1878, and railway spikes $2 per ton lower than in 1878. Horse shoes are 8 per cent, higher than they were in 1878, because when the machine made horse shoes were Jirst introduced, in order to induce ^^hose who required them to abandon the manufacture of shoes, the prices were put down, and consequently they were lowered in 1878, and are now selling at 8 per cent, higher than in that year j but for nails thero has not been an increase in price, though we have increased the duty upon them. Let me say that as far as these particular mamifactures are concerned it does not appear that the consumer has been called upon to pay anything more as a rule, but in some cases less than before, and consequently the TarJ3, to the masses of the people, with reference to these manu- factures, has has not been oppressive. IMlMtOVELi CONDmON OF THE FARMER There are a great many statements made about the taxation of the working man, and especially upon the farmer. Now let us look at that view of the case for a moment. There is a good deal of synipt thy manifested for the f armei'. Let us see now, mider the change in the taiiff that iias been in operation since 1879, with the reductions proposed to-day, how thes farmer, mechanic and labourer stand. His tea will cost him 5 to 6 cents a pound less than it c'M in 1878. The duty is removed off his coifee. The Bugai*, couBidcring the middleman and his profits, is at least 50 192 Protection in Canada. cents per hundred lower than before. His molasses is 10 per cent, less than he jmid in 1878, AVith reference to rice he will be able to obtain it under the new arrangement a little less than before. Soap has increased about 12t^ per cent, in price ; the increase, however, is due to the raw material from which it is manufactured, and this raw material pays no duty. With refer- ence to spices, the duty remains unchanged. With reference to woollen goods used by the masses, they are as cheap or cheaper than before. With reference to cottons, they are as cheap or cheaper than before. Hats and caps are also as cheap as they were before. Custom made boots and shoes are 15 per cent, more, the others less. Agricultural implements are from 5 to 20 ;^er cent less than in 1878. Sewing machines are $10 less than before. Lamp shades and glassware are less than before; organs are less than before ; nuts and bolts, which I did not refer to previously, are less than before : furniture of common qualities is as low, if not less, than before ; nails and spikes less ; horse shoes a httle higher ; stoves and castings a little higher ; hardware, taking it all round, a little higher; tools and tiles less than in 1878. The reducti' " in cost will average from 5 to 10 per cent., as near as can be gathered, on the articles named. Now, sir, that being the case, let us consider the position of the farmer especially. I quite admit, if it could be shown that this tariff had no advantages for the farmer, that it was oppressive, that he paid more taxes than formerly and received nothing in return, then he might be induced to accept the invitation of hon. gentlemen opposite to oppose this policy whenever it is put upon its trial. But the leading articles which he is consuming are no higher than before, and in many cases they are less. We shall now inquire what other benefit he has in addition to the lower priceSe In my judgment the farmer is Protect ion in Canada. 193 as greatly interested in this tariff as any otlier class of men in the Dominion. In the first place he has the home market. An lion, member opposite referred to the home market last session, stating that it was of very little importance. Visit any section of the Dominion you please, put youi'sclf in communication with the farmers, especially in the neighborhood of towns where manufac- tiu'ing industries have been established and are increr.sing, and ask them if they arc deriving no adv^antage. Why, sir, under the operations of this tariff the vegetables, the fruit, the poidtry, the lamb f nd veal and other meats, the butter, the cheese, for almost everything they offer for sale, they obtain higher prices on account of the home market tiian is ol)tained in localities where thev have to sell to the middleman and ship to another market. In conver- sations with the farmers, I found that in 1878 they frecpiently came to market with their fruit and vegetables, would stand there all day, and, not being able to get a price which wouM be an object to them, woidd drive home and wait for another opportunity, frequently being compelled to return and take what was offered. " I Tow is it now i '■ I said. They replied : " There is no difficulty now. We sell everything we bring in for cash, and at good prices." Why ? J)ecause business is in an active and flourishing state. Manufack>rie8 have increased, the number of the employed has increased, and their wages also have increased. They have plenty of money with which to buy country produce — I speak particularly of perishable goods wliicli cannot be sent to a distant market. Some 25,000 more people are employed than in 1878 in these manufactories, and if they represent four for each family you have 100,000 people to be fed, the heads of whose families were without employment or were only partially employed, or not in the country, in 1 878. What the effect of this is to the A 13 mmm m m 194 Prolection in Canada. fiinuL'r cMii l»e clearly understood. l>ut it is said the duty on oats is no protection to the fanner; the dntv on corn is very Uttle henetit to tlie farmer. AVliat is the fact '. Do tliey not ohtain better prices fur tlieii- corn than they did before the duty of 1\ cents per l)ushel was imposed '. They cer- tainly do. There is no (piestion about it. Do they not obtain a better ^iricc for their rye '. I admit tliat is regulated to a very large extent by the price in (rermany and elsewhore, the markets to Avln'ch it is generally shipped from the Dominion. Jiut the tlistillei-s of Canada now buy their rye from the farmers of Canada, ■which they use as a substitute for corn. That gives an increased market, and to a certain extent affects the price. Wifh reference to the price of oats, we have evidence beyond controversy, in my judgment, that it has been increased to the consumer 3 cents per bushel. But it is said "the European market regulates the price here. It does not matter an iota what you put u])on it.'- Does it not \ The leader of the Opposition said in Nova Scotia — and I do him the justice to say he made the same statement in Toronto previous to the West Toronto election — that the duty on coal increased the price of coal to the consumer in Ontario, and that the duty on breadstulfs increased the price of breadstnffs to the consumer in tlie Maritime Provinces. The operation of this state of things, he said would create a bad feeling between the people of ( )ntario and the people of the ^Faritime Provinces, because the latter had to pay addi- tional for the breadstulfs of Ontario consumed in the Maritime Pro- vinces,and the former additional on the coal consumed by the former. On the subject of coal I know there has been a great deal said ; but my incpiirics have led me to the coiudusion that, Mdiile we received a very considerable sum from coal imported from the TTnited States and consumed in Ontario, one-half of that sum is paid by the coal producers in the Vnited States. i Protection in Canada. 195 TITK PRTCK OF WIIKAT. Sir, tlic pnces have been quoted in Cliicago and coiapared with the prices of wheat in Toronto, and the conclusion has been drawn by some that the tariff has no effect on the price of wheat in Toronto. But, Sir, an exceptional state of thini»;s has existed in the United States for two years. This year especially the holders of wheat have felt that the short ci-op in the I'nited States and the short crop in Europe would necessarily brin<>; up the price above what it was when the harvest was completed in America. They have been holding for a time wheat at six cents per bushel higher than the price brought for that description of article in the Liverpool market, adding the ordinary freight and ordinary expenses in conveying it to the market. AVhat have they been able to do from the fact of holding grain '. They have driven the railroad companies and the shipowners to the point that, in order to enable them to get the price they were asking for it in Chicago, they have reduced the freight by railways, and the charges of transportation and the freights on shipping by which it has been sent forward, and thus made just a fair return considering the price which was paid for it in Chicago. And what was the differ- ence a week ago I I will give an illustration simpl}^ to show that this tariff, while it does not, of course, increasf> the price of grain 15 cents a bushel, does, as I estimated last session, increase tlie price on an average of 10 cents a bai'rel on Hour consumed in the Dominion of Canada ; and, if the leader of the Opposition was present, I would thank him for the compliment which he paid me at one of his meetings when he undei'took to show to the people of the Maritime Provinces that they paid more for their flour, and in order to clintih the matter he quoted my statement in Parli- jnent to prove that the price was increased to the consumer JO B "*'0VJ 196 Proit'ction in Canada. %i.^:-.-i ■ ■..■:i cents a l)iin*cl on flour. Ten days ago M'heat was sold in the Toronto uiai'ket tlirec cents liiglier per l)ns]icl than it was in the Chicago market, and it could not have brought these 3 cents per bnsliel in excess had it not been for the tariff ; and I will tell y,)U why. The cost of transmission of wheat from Chicago to Liverpool ria New York was precisely to a cent what it costs to convey wheat from Toronto via the Grand Trunk liailway and t'lo Allan steamers to Liver])ool ; therefore, if it depended simply o I the hjiglish, that wheat would have had to go down three cjnts in i)rice per bushel in order to compete with the wheat sent fi'om diicago, but it brought three cents more, because, as Ave know — after the harvest is in, and a large portion of it has been 8'ii])ped to England — the quantity of Canadian grain in the country being diminished. Canadian milkrs have to pay an increased price for the wheat which they require, and this increase goes into the pockets of our farmers, who reap the benefit ; and, therefore, the miller has either to go to the United States market and pay the duty oi- lic> has to pay the price which the farmer demands for his grain here. And, conse([uently, our farmers ten days ago received three cents more per bushel for their wheat than they would have obtained had our market been open and exposed to the danger of being bi'oken down by shipments from the other side, which without the duty, would have been throM'n in here, and thus brought into competition with the produce of our own agricultu- rists; The returns on the table of the House show that in the years 1S7!)-S0 and 1880-Sl there were 10,000,000 bushels more of Canadian grain consumed in Canada than was the case during the two years previous. We had, therefore, a market for the products of Canada to tlie extent of 5,000,000 bushels of grain per annum which we did not before j)<>ssess, and it is thus we derive the * Protection in Canada. 197 danger buiiolit. Our exports of the procliicts of Canada have been somo- wliat increased, and a home market for 5,000,000 more busliels of grain has been provided for our farmers, who have obtained better prices than they would have received had their market been open to free competition with the farmers of tlie Western States ; and in this manner the taritf has conferred a decided benefit uiioii our agriculturists. 1 have the evidence here wliich will show the ex- act extent of the reduction in imiiorts of breadstulfs. In 1877 we consumed in Canada 5,210,890 more busliels of United States wheat than we did in 1881, and in 1878 we consumed 2, 1(.!l,8«;7 bushels more than we did in 1881. In 1877 we consumed 5J)0,- 737 more bushels of American oats than we did in the year 1881 ; and in 1878 we consumed 1,999,150 more bushels of Cnlted States oats than we did in the year 1881 ; showing that in 1881 we had a home market for 7,B02,000 bushels more of home grown grain than the average for the years 1877 and 1878. ca>;.U)a's cKEDrr in kx(;lam). Having dealt with these points, I desire to deal with another objection, and that is that the ill feeling that would be created in England from the adoption of this policy would alfect our credit there. I answered that last session, and in this way: that in 1878 the securities of New South Wales, which were the highest colo- nial securities in the English market, sold from 4 to 5 ])er cent, above Canadian; that, while Canadian -1 per cent, securities had increased from about 89 or 90 to 104, the other colonial securities had not increased in like proportion; that the Canadian securities were 1 per cent, above those of New South Wales, and, therefore, their increjised value was not solely attributable to the abundance of money and the lower rate of interest. 1 am in a position to state to-day that our securities arc 2 percent, above those of New 198 Protection in Canada, Soiitli AVales, showing an increase over last year, and standing, as they stood then at the very top of every colonial security that is offered in the English market, and next to Consols. OPEKATIONS OF TUK TARIFF. Let us look again for a few moments before I close, at the operations of this tariff. How has it affected the different interests of this country % Take, lor instance, the owners of bank stocks ; it has not in jnred them. The stock owned in Ontario and Quebec to-day at the (juoted prices of sales made within a week is §-i(),0(»0,OnO above what the quoted sales in 1879 would produce, lias it hurt the manufactures \ It has not, because, while they say they are selling goods for less than they did before, business has largely increased. They are working full time, making prompt sales, and their increased productions at even a lower price have given them better profits than before. Have the men employed by the manufacturers suffered 1! They have not, because we find that in the cases where they have not had an increase of wages they have had constant employment instead of short time as before. In many cases they have not only constant employment, but they work overtime, and their position is better than it was before. How is it with the labourer to-day \ He has plenty of employment in every part of the Dominion. His position is infinitely improved, at all events, as compared with what it was before the adoption of the present tariff. How is it, Sir, with reference to the niercnant ? The wholesale merchant tells us that his business has been doubled last year compared with that of 1879, and 50 per cent, larger than that of 1880; that he has had prompt payments, that there have been fewer baid<),u00 necessary to make up deficits of past years. It would I admit he difficult for us to show any great direct benelit given to them, but I throw Dut this idea : Tt is now well understood that after three years' operation of this Tariff houses that were unoccupied before have no longer " to let" on them ; this is one benefit to lumbermen ; that there is an increased demand in all parts of the Dominion for lumber for home consumption, as com- pared with 1878, for now buildings, and every thousand or million feet sold for use in our home markets decreases by just so much the amount that would otherwise be exported, and it is well known by those who live in the Maritime Provinces how much the prices in American and English markets depend upon the stocks placed upon those markets. The lumber we manufactured in 187s and could not consume here was thrown in addition to # the ordinary shipments upon the the English and American mar- kets, reducing its value there. Providing an increased demand at home is the measure of relief afforded to ine lumber trade. How is it with the mining industry iJ lias there been nothing done for that^ Has nothing been done for the coal industry by increasing its output 400,000 tons last year? and it would have increased still more but for the accident at the Albion mine. There are two smelting furnaces where there was one before, and there is a proposition now, and capital paid in, for smelting works in Montreal, There are before the Government now propositions that may result in the establishment of other iron industies ; but, take the facts as they aie, they show that the policy is doing something for this industry. I have shown that the farmer i.us Protection in Canada. 20 1 a homo market ami hi'^licr prices owing to American produce being largely shut out, while the articles he consumes are not higher than they were before. Look at the railway interest. It was thought the operation of the TarilV would tend to diminish the amount of their tratMc. If we could make a careful account of the manufactured goods carried over the railways, we would find the the revemie from these sources has lai-gcly increased. Comparing wluit they carried from the seaports in liS77-7S and what tliey carry from the seaports to-day, and add the manufac- tures from the various factories that are sending their products all over the ])ominion, it will be found that the railway proprietors have a large interest in this new policy. Every interest in the country has been, in my judgment, largely and materially benefitted. This policy, supplemented with our legislation securing the rapid construction of the Canadian Pacific Railway, have combined to place us in the enviable position we now occupy — the best position of any people on the face of the earth. ioi Foreign Tarifis. Wo give below the most recent reference to the state of British trade made hy Mr. liitchic in the Hritish Parliament, on introducing:; the following motion on 20th March, 1882.''*' FOKEKliN TATllKFS. Mr. Ritchie, in rising to move for the appointment of a select committee to inquire into the effect on British trade of foreii::M tariffs, said his motion was directed simply to an investigation of the causes of the depression in trade which had succeeded to the brilliant and progressive period which preceded 1872. For the last live or six years the coimtry had not been progressing, but had, on the contrary, been going hack, and all classes of the com- munity had in consecpience midergone severe 'trials and privations. Since 1880 the exports had undoulitedly increased in volume, l)nt they had not increased in price, while, on the other hand, the imports had undoubtedly increased in price. In speaking ahout the condition of the country he could not hegin better than by recalling to the notice of the House the very grave and weighty words uttered by the Prime Minister when last year he introduced his financial statement. The right lion, gentleman considered it necessary at that time to draw attention to the fact that the improvement which had gone on for so many years in the condi- tion of the country had not only come to a standstill, but that unmistakable signs existed that we were going back instead of forward. He would consider what progress bad been made witli • regard to that portion of the income tax which was ol)tained from the manufacturing and trading community. The income assessed to the tax amounted in 1875 to £267,000,000, in 1876 to • The report of this important discussion was received after this work was in type. We append Mr. Ritchie's statements as the most recent corroberation of the views expressed under Chapter IV. — England under Free Trade. I Poreign Tariffs. 203 4:271,000,000, in 187i> to £257,000,000, and iti 1880 to i;24SVH)0,- 000. As, however, the population had increased 5 percent, fiincc 187(5, the decrcaHc of 8 per cent, between that year and 1880 did not fully describe the actual decrease. The income in 1880, corrected accordinjiij to tlu^ increase of population, should be ,£285,000,000, These figures showed a decrease of 13 per cent, in four years. There were other indications of the condition of the country that were equally important. The Customs and Excise revenue amounted in 1870 to £47,000,000, and in 1881 to only £-1-4,000,000. Thus the House would see that in 1881 the con- sumption of articles under the head of (Justoms and Excise decreased £3,000,000, and the figures corrected according to the increase of population made a decrease in 1881 as compared with 187<) of no less than eleven per cent. But, after all, however important mig-ht be the comparison he expected to be made, the point was not that the country was richer now than in 1840, but that it was poorer than it was ten years ago. It was to be borne in mind, in considering the subject of imports and exports, that we were every year becoming more and more dependent on other countries for our supplies of food and raw material. Our wants were constantly increasing, and, in order to satisfy them, we could only give our manufactures. Our exports, then, ought to increase in a direct ratio with our imports, if we were to pay for the latter out of our national income. Now, in 1872 the value of the animal and cereal fooil imported into the country was £75,000,000 ; in 1879, $102,000,000, or an increase of 33 per cent., while our means of paying for that supply had diminished as much as 20 per cent. In 1872 we grew 54,000, 000 cwt. of wheat, and imported 47,000,000cwt. ; in 1879 we gi-ew 28,000,000cwt., and imported 70,000,000. And wr;h re- 204 Foreign Tarij^s. spect to nici'L. in 1S72 wo <>;rew 20,00(>,(>0()('\vt. and imported 4,0(M»,(>00; aud in 1879 we g-rew 24,0(M>,()()Ocwt. and imported 8,()0(t,U00. h\ his opinion, there was no better test of the pros- perity ui a country than was ait'orded by its foreign trade. He would, tli jfore, compare the exports of the years 1872 and 1880, though tiie tigures for 187 1 and 1879 gave a precisely siinilar result. In 1872 the value of our exi)orts was £'2r)(;,000,O(Mi ; in 1880 it was -£223,000,000 ; or in the former year iiS Is. per head of the pop ulation, and in the latter only ,£(1 %. od., since which time there liad been a steady further decline. Comparing the year 1872 with 1879, the decrease was still greater, and amounted to 30 per cent. Tf lie separated our foreign from our colonial exports, the diminution in their value was very remarkable. The value of our exports to foreign countries in 1&72 amouiited to .£195,000,000 or £6 2s. lid. per head; in 1880 to £147,000,000, or £4 5s. 9d. per head, a decline of no loss than 30 per cent., or almost one-third, in ou)' foreign trade. But if we look to the British possessions, the story was entirely different. In 1872 our exports to our colonies amounted to i£60,000,000, and instead of decreasing 30 per cent, like our foreign trade, th#y increased in 1880 to £75,000,000, or 25 per cent. That increase would have been still greater if it had not been for a decrease of about 20 per cent, in our exports to Canada and 25 per cent, in our exports to Victoria, which was an evidence of the effect of their tariifs. But to India, which not many years ago some members of Her Majesty's Government did not lay great store upon Jis a market for our trade, our exports had increased from £18,000,000 in 1872 to £30,000,000 in 1880, or no less than 70 per cent. Our exports of cotton had decreased from 1872 to 1880 as follows: — To Germanv, from £6,000,000 to £3,000,000 ; to Holland, from £5,500,000 to » r Foreign Tariffs. J05 £2,500,000; to France, from £3,000,000 to £1,750,000. To Egypt the value of the cotton exports in 1872 was £2,000,000, and in 1880 it was £4,000,000. Taking tliese countries together, the decrease in the \ ahie of cotton goods exported was 40 per cent., while the increase to India alone — namely, from £20,000,000 to £42,000,000 — amounted to G5 j)er cent. With respect to woollen goods the decrease of our exports between 1872 and ISSO was as follows :— Germany, from £12,000,000 to £3,000,000 ; Holland, from £3,400,000 to £1,<)00,000 ; the Ignited States, from £7,0.0,000 to £2,500,000 — a decrease in the case of these three Cimntries ui from £2'2,O00,O(»0 to £7,O00,O(.'O, or one-third. While our exports had diminished to that enormous o\tent, our imptu'ts had increased by £50,000,000, the increase being mainly in food, though there had been some hi manufactured articles. The vote on IVIr. Kitchie's motion was 140 against and 80 for it, a majority of only 51 ; showing that the change ot 20 votes from the majority to the minority would have carried what the free traders turned in the discussion into free trade against fair trade. ^ INDEX. AGENCIES in developmcnl of trade, 6. Austria, 39. Australian Colonics, 103. BACON, 67. Hastiat, 146. Hesstmcr steel in the States under high l^rotection, 19. I!clj;ium, 38, 58. liounties, prohibitions, etc., 3. Hradford, 114. lirougham, policy recommended, 21, 44. Bright, 67. lUiy in the cheapest market, 109. J5o\vering, Dr., effect of free-trade in India, 161. CAIRNS, 149. Canada, protection in, 153. Credit in England under Taritf of 1879, 197. Cheapness, kinds of, 93. Climates, influence on the races of men, 158. Cloth, manufacture of under protection, 4- t'oliden, French Treaty, 8, no, 126. Colbert, 8. Cottons, first manufactory, j ; value in 1841, 4 ; exports of, lib ; effects of tariff on, 79, 180. Commerce, increase of, 132. Consumers and ]iroducers, 98, 121. Canllie & Co. on Woollen Trade under Tariff of 1879, 186. Coal, duty on in C'anada, 175. TklSKAELI, 128. EACH Country should confme itself to what it can produce best, 107. Ecroid, policy of, 121. Edict of Nantes, 39. England, manufactures, policy of, 17 ; under free-trade, 114; imports and exports, 119, 122 ; excess of imports, 120; exports, part foreign, 124. Erecina, Count, 32. l-'xpansion of Trade, 123. Export Trade of England, 115, 136. FAWCETT, 143. I'ine fur wearing calico, 3. Flanders, 28. Florence, Commerce of, 30. l'"oun in Spain, 32. NAVIGATION Acts. 1651 and 1763, 3. Native industries, how to establish, Napoleon, encoura;^e heet-root factories, 9. 42- Xesselrode, Count, 47. PARLIAMKNT, Imperial, 151. I'as lr(»ps gouveneur, 76. Peel. 136. I'hiljiots, on Canadian climate, 154. Petition of London uierchants, 80. Policy of England in reference to nianu- iactures, 20, 53. Prussia, 39. Powell-Baden, 144, 153. Prendertjast. 149. Protection in a new country, 165, 173 ; does it add to the cost of living, 88. Protected manufactures, are they sickly ? 105. a UESNEV, 55. REPl'HLICS -rrotecli(mists, 1 iS. Kevenue, sources of, 60. Kussia, 47. SHIPI?UILDIN(;, introduced into England, 4 ; in Canaila under Tariff of 1879, 199. Say, 71. Smith, x\dam, 59, 70. .S|)ain and Portugal, 32. Sullivan^ Sir Edward, 131. Sugar, lieet-rool, in France, 9 ; effect on of tariff of 1879, 176. rpARIFFS, 142; First Canadian, 173. T Times The, on free trade, 1 14; direct and indirect taxation, 62. Thiers on taxation, 64, 69. Treaties, Commercial, 138. Traile, increase of, in England, France and United States, 84. Traders, a commonwealth among them- selves, 55. Theory and practice, 51. Tariffs of 1816-24-28 in United States, 22. Turkey under low tariffs, 7. Tilley, Sir Leonard, on effect of Cana- dian tariff of 1879, 174. U V NITED STATES, protection in 14; first tariff, 15; influence of 16 ; sheep uiffler protection, 17 woollens, 17; iron, 18; exports. 118 ENICE, 31. Votes in France, England and United States, 130. WAGES, 97, 124. Wayland, 43. Wealth, in England, France and the United States, 133. Wells, David A., 124. ^\'heat, decreased production of, 135 ; price of. 137 ; in Canada under Tariff of 1879, 195. Woollens, sent from luigland to Helgimn to he dyed, 2 ; in United States, 90, 116; effect on of tariff of 1879, 180. ZOLLVEREIN, Cierman, 43 ; United States. 104. f- f- ;, 9 ; effect on Canadian, 173. e trade, 114 ; ation, 62. gland, H"rance among them- Jnited States, flfect of Cana- 4- protection in, influence oi, irotection, 17 ; ; exports. 1 18 ; England and ranee and the iction of, 135; Canada under land to Helgium lited States, 90, iff of 1879, 180. lan, 43 ; United