N CO CM O REMARKS bj RECENT COMMERCIAL LEGISLATION; SUGGESTED BY THE EXPOSITORY STATEMENT OF THE REVENUE FROM CUSTOMS, AND OTHER PAPERS LATELY SUBMITTED TO PARLIAMENT. BY THE RIGHT HON. W. E. GLADSTONE, M.P. FOR NEWARK. LONDON: JOHN MURRAY, ALBEMARLE STREET. 1845. LONDON : Printed by WILLIAM CLOWES and SONS, Stamford Street. CONTENTS. PAGE Introductory Remarks ... ..... 5 The late Reductions of Customs' Duty considered : I. With regard to the Proportion of our entire Trade which they have affected ....... 6 II. With regard to the entire Amount of Revenue surrendered . 8 III. With regard to their particular results on Revenue and on Trade .......... 13 Class A ......... 16 Class B ......... 17 Class E ......... 18 General result upon Revenue of the Act 5 & 6 Viet., c. 47, as to Raw Materials . . . . .19 Class C ......... 22 Class D ......... 23 General result upon Revenue of the Act 5 & 6 Viet., c. 47, as to Manufactured Products . . .24 General result as to all the Classes . . . .27 Rules to which the frame of the Act approximated . . 28 General result of the Act upon our Import Trade . 29 Particular results : Case of Timber ....... 31 Case of Coffee ....... 38 Principal Raw Materials affected by the Act other than Timber ..... .39 IV. With regard to their results upon Domestic Producers . 43 V. The policy of these measures considered, with especial refe- rence to the recent proceedings of Foreign Powers in matters of Trade ........ 53 Conclusion . . .65 B 2 REMARKS, THE ' Expository Statement of the Customs' Revenue * of the United Kingdom,, which was presented to Parliament at the opening of the session by her Majesty's command, has attracted considerable notice from the public : and a desire has been ex- pressed in the House of Commons by one of its most distinguished members * for something in the nature of a commentary upon that statement, which should bring clearly and definitely into view the leading results it may be found to establish. It is, indeed, obvious that a series of tables so complex and extended afford rather the crude materials of information to the general observer, than information itself. On account of my official cognisance of those changes of the law in 1842, which led to the preparation of the document in question, I am led to make an attempt of the nature I have described. And upon the whole I have preferred making it through the medium of the press, rather than occupying so much of the time of the House of Commons, engrossed as it is by the mass of other business, as would be requisite for the purpose of an oral exposition essentially involving many figures and details. With this introduction, I propose to traverse in succession the following departments of the subject : * Speech of Lord John Russell on motion for going into Committee of Ways and Means, Feb. 17, 1845. *3 Remarks upon I. The proportion of our entire foreign trade which has been affected, in various degrees, by the reductions of the last three years. II. The amount of revenue directly surrendered by them. III. The actual results of the recent changes upon the revenue of the state and on our trade in various branches, so far as they are exhibited by the documents now before Par- liament. IV. Their results upon domestic producers. V. The policy of these measures, with especial reference to the recent proceedings of Foreign Powers in matters of Trade. My examination is suggested by the ' Expository Statement * and other kindred papers which have recently been laid before Parliament ; but it will oblige me to enter into even the financial policy of the legislature and of the administration up to the pre- sent moment, so far as it is immediately connected with trade. Again, it will turn, in the main at least, and directly, upon the course of our import trade. It is true, indeed, that Parliament has now sealed the doom of the very last of our duties upon ex- ports : but this operation had long been within one step of entire accomplishment ; and the amount of immediate relief remaining to be given by the final act during the present year was too small to produce a general effect of appreciable magnitude. I should rather plead that the value of the recent measures with regard to imports might be taken as the ultimate test of their value with reference to the exports with which those imports must be pur- chased ; because, though we cannot in every particular case assume an immediate trade outwards when we create a trade in- wards, yet it is manifest that upon the whole such is the law which must govern our commercial transactions. I. As to the proportion of the trading operations of the country which the measures have embraced. In the Account of trade and navigation,* annually presented to Parliament at its meeting, I find the principal imports of the * Paper No. 18, Sess. 1845. Recent Commercial Legislation. country specified to the number of one hundred and thirty-three. Of these the duties have been reduced or removed upon one hundred and six ; upon twenty-nine they remain unaltered. Again, if we take the official valuations of all imports into the United Kingdom for the year 1843 (the latest for which the accounts have been published), we find that they amounted to the sum of 70,093,0007. The total values of all those articles (as nearly as I can com- pute them without minute detail) upon which no change has been made amounted to about 8,500,0007. of the entire sum ; and the values, which have shared in various degrees the relief afforded by the alterations, amount to about 61,600,0007. It is well known that the criterion of official value is extremely fallacious in detail. It is, however, unfortunately, the only form in which, at the present moment, our imports are reduced to a common measure, and rendered capable of being treated as a whole. In several of the cases the standard fixed has now be- come, through change of circumstances,, egregiously false. Thus cotton wool is valued at 7d. and 7%d. per lb., or nearly twice its average price ; fir timber at 1 5s. per load, or less than a third part of its average price ; and tea, again, at 2s. per lb., which is not much short of twice its average price. Still it does not ap- pear to me that, when the scale of computation is so large, these errors, which very much neutralise one another, materially inter- fere with my object: and therefore the proposition holds good that of our whole import trade seven-eighths have been affected by the reductions of import duty which Parliament has adopted in the years 1842-5. It is true that they have been affected in very various degrees. On raw silk, for instance, and hemp, both of them important articles, only the insensible duties of Id. per lb. and Id. per cwt. respectively were imposed by the previous law. But, speak- ing generally, the reductions and remissions have been far from inconsiderable. For instance, on the three great articles of sugar, timber, and corn, the diminution made, though it cannot be estimated with strict accuracy, may be said to amount nearly to one- half of the duties previously subsisting. 8 Remarks upon II. At the same time it is undeniable that whatever may be the extent of these measures in reference to trade, in reference to the whole amount of revenue which we raise from imported com- modities, they have been secondary. Four articles, of the first class with respect to the amount of duty levied from them, have been left wholly untouched. They are the articles of 1. Tea, yielding in 1844 . . . . 4,524,000 2. Tobacco 3,977,000 3. Wine 1,991,000* 4. Spirits 2,211,000 12,703,000 or more than half of the entire revenue derived from the customs. With respect to this topic, it is enough to say that no consider- able party in this country appears to contemplate any funda- mental change in the system by which we supply a very large part of the wants of the Treasury through the medium of indirect taxation : and, so long as this is the case, any reductions of duty, which may be conceded from time to time, must always bear but a small proportion to the amount still continuing to be levied. But the four articles, which I have quoted as the most con- spicuous and productive among those unaffected by the recent alterations, are none of them articles of the first rank in our trade. The aggregate values of the whole four, independent of duty, do not equal the value, taken singly, either of the cotton or of the sugar, or in most years of the grain, which we import. There are only six other articles of any considerable importance to trade which remain, like the four above specified, subject to the same duties as those payable upon them before the Act of the 5 and 6 Viet. c. 47. They are these : 1. Tallow, which in 1844 yielded . 174,000 2. Butter 136,000 3. Cheese . . . . . 117,000 4. Raisins 159,000 5. Pepper 81,000 6. Silk manufactures of Europe . . 277,000 994,000 Recent Commercial Legislation. If, then, we divide our imports according to the revenue they yield, the major part have remained untouched ; but, estimated according to value, that is, according to their commercial im- portance, they are a small fraction of the whole with regard to which this can be asserted. Let us now, accordingly, examine the extent of these changes in regard to revenue. The reductions of 1842 were originally estimated as involving a loss of about 1,200,000/., but during the progress of the measure of that year they were extended in a variety of parti- culars, and they ultimately reached not less than (without any allowance, except upon timber, for partial recovery through in- creased consumption) 1,550,000/. The principal items were estimated at the time as fol- lows : 1. Raw Materials: Timber . . . . . 600,000 Tanning and dyeing stuffs . 110,000 Hides and skins . . . 60,000 Turpentine .... 80,000 Clover seed .... 70,000 Furniture woods . . . 50,000 Other raw materials . . . 165,000 1,135,000 2. Articles of consumption : Coffee 240,000 Other articles of consumption and manufactures . . . 86,000 317,000 3. Exported manufactures . Total Subtract the coal-duty 100,000 1,552,000 114,000 There remains 1,438,000 10 Remarks upon The mere view of these figures, indeed, gives no adequate re- presentation of the changes made in 1812. Many of them which removed prohibitions, and lowered duties formerly prohibitory to a moderate standard, were important on account of the principle which they recognised even when their direct effects were small. Many of them which involved the greatest difficulty, and aroused the most serious alarm, have proved to be almost nugatory in their operation on the domestic interests that regarded them with so much apprehension. It may be said that there was no justi- fication for creating such alarm, if, after all, no important conse- quences were to follow from the change. I will not interrupt this portion of the inquiry by any detailed examination of the objection. But, in the first place, it should be remembered, that the reduction of prohibitory duty may give the very stimulus to domestic trade which may cause the foreign article to be ex- cluded by being undersold. Secondly, it affords a security for good and economical manufacture which otherwise would not exist. Thirdly, each case of the kind renders the course of British legislation with respect to commerce more and more definite and intelligible to the rest of the world. In 1843 there were no remissions of duty. In 1844 the duties of customs remitted were as follow : 1. Sheep and lamb's-wool .... 100,000 2. Currants (7s. 2d. per cwt. on 254,000 cwts.) 91,000 3. Coffee (2d. per Ib. on 9,854,000 Ibs.) . . 82,000 273,000 Of the duties of customs comprehended in the remissions of the present year, the first and greatest, namely, that on sugar, was estimated by Sir Robert Peel in his financial statement on the 14th of February, as involving a loss of 1,300,0007. With the present prospects of supply from British sources, and of the working of the proposed classification of sugars, I should prefer charging the reduction upon sugar, combined with that on molasses, at 1,500,0007. A large sum without doubt: but in order to estimate rightly the equivalent received by the consumer, Recent Commercial Legislation. we must take into view the reduction of price effected by the measure of last year, of which the bill now in Parliament is avowedly the complement : this cannot be estimated at less than 4s. per cwt. To this we have now to add a reduction amounting to 11s. 3d. per cwt. The diminution, therefore, in the long or wholesale price amounts to 1 5s. 3d. per cwt. ; and to this is to be added relief from the subsequent charges for interest of money and profit on that portion of the price. If these are taken at Is. Id. per cwt., which I think a moderate computation, the total saving to the consumer from this financial operation will be about Ife?. per lb., or 16s. 4d. per cwt. Applying this to the quantity of 205,000 tons, which formed the consumption of the year 1844, we find the saving to the public will amount to no less than 3,348,0007., which is purchased at a cost to the revenue of only 1,500,0007., or less than one moiety of the benefit. We ought not, 1 admit, to set down among the sacrifices of the Ex- chequer anything more than it actually loses by the direct deduc- tion of 11s. 3d. per cwt. from the tax. Thus computed, how- ever, the amount still reaches to 2,306,0007., while the loss to the revenue will probably be so far retrieved by an increase of con- sumption as to keep it down to 1,500,0007., or about two-thirds of that sum. This calculation does not indeed pretend to minute accuracy ; on the one hand it does not include any deduction on account of sugars to be charged at 16s. 4d. instead of 14s.; nor, on the other, any addition on account of the diminution of duty on molasses : but it seems to point out fairly the aggregate result. The amount of taxation upon foreign trade remitted by the measures of the present year, as distinct from the balance of loss likely to be entailed upon the Treasury, may be stated as follows : 1. Sugar 2,306,000 2. Cotton 680,000 3. Duties on other materials of industry and partially manufactured articles ...... 320,000 4. Duty on coals, and minor export duties . . . 125,000 3,431,000 12 Remarks upon We have therefore the whole amount of direct receipt surren- dered by Parliament during the last three years as follows : In 1842 . . . . 1,438,000 In 1844 . . . . 273,000 In 1845 .... 3,431,000 Total . . 5,142,000 It appears, then, to be very worthy of note, that without taking into account the indirect benefit which has accrued from the exten- sion of trade, or from the diminution of protective duties, the country has already received the reward of its submission to the income- tax in the removal, upon Customs duties alone, of an amount of taxation about as large as the sum which is yielded by that highly productive impost. The last year's return of the income-tax was 5,191,0007. This, however, does not present the whole case. In the Budget of 1842, on the one hand, a deficiency was calcu- lated for the year 1842-3, amounting to 2,570,000., and so much of the income-tax as would absorb this deficiency was accord- ingly forestalled. On the other hand, duties other than those of customs, but in general connected with trade in other forms, have been repealed (of are now proposed for repeal), as follows : In 1842, on stage-coaches . 70,000 In 1844, on glass . . . 45,000 on vinegar . . 25,000 on marine insurances 130,000 In 1845, on glass . . 642,000 on auctions . . 250,000 1,162,000 Add customs'-duties repealed 5,142,000 Total . .6,304,000 If then we assume, as we reasonably may, that the service of the present year is adequately provided for, and the revenue will balance the expenditure, it appears that the free surplus of the Recent Commercial Legislation. income-tax, over and above what was required to supply actual deficiency, or 2,621,000?., has been most economically laid out, as the saving in other taxes realised by means of it has been 6,304,000^., or more than double its amount. The question may be raised how far this is owing to the course of legisla- tion, and how far to the buoyancy of the national industry : this, being well content with either cause, I am not curious to discuss ; in some proportion it must evidently be divided between them. III. Having thus measured, in its most general form, the bearing of the recent legislation on the revenue of the country, I now proceed to examine in some degree of detail the effects produced by the changes adopted in 1842 upon the revenue, and also upon our general trade with foreign parts. I pro- pose first to consider these effects as they affect the various great Classes of commodities, distinguished by successive letters of the alphabet, into which the ' Expository Statement ' is divided : and subsequently to take into view singly the cases of such particular articles as may appear on any ground to demand a separate notice. I must then, in the first place, beg the particular attention of the reader to the abstract which has been prefixed to the ' Expo- sitory Statement,' and which I here introduce for the greater facility of inspection; premising, that the eight schedules into which each class of articles is divided, have reference to the amount of revenue produced, upon a mean of two years, by the respective articles under the operation of the Act 5 and 6 Viet., c. 47, according to the following scale : Schedule I. Contains all articles yielding less than 100 each annually. II. From 100 to 500 each. III. From 500 to 1000 each. IV. From 1000 to 10,000 each. V. From 10,000 to 50,000 each. VI. From 50,000 to 100,000 each. VII. Upwards of 100,000 each. VIII. Articles free or prohibited. porte cap. nnual Duties. -S fc S o oc c o ro i ,, 8 5 = co 5 8 Annual of Duties. 1 III s 2 >o i r- eo Oi Tf< Oi ^* Mean Annual oduce of Duties. 5 e* 00 00 * Ol CO TT CO O QO ^ i< J^- T)< i i r I Oi ^ T*< l> O5 i I O5 .-I OC -H QO ?> 10^ r^ S oT 12 C. Articles wholly nufactu Articles partially nufactured. les in a raw to be used Manufactur Mean Produce 3.8*3 SO O CO d co r- o co o o Mean Annual Produce of Duti .-i|a Mean Ann duce of D mi Oi O CO CM ^ l> ' CO 00 CO ** !> CO O t^ OO >O r-i r as o co T o to i I I >-H t CO O CO O O OC i r-( C; r i p- J g o ^ ~ H CO 11 - ill ^8 ^ ll Remarks upon Recent Commercial Legislation. I have already described the reductions of customs' duty made in 1842 as removing direct charges upon trade to the extent of 1,552,000/. ; and I have divided those reductions, after with- drawing the sum of 100,000/. for the repeal of duties upon ex- ports, into two branches according as they fell (1) Upon the raw materials of industry ; (2) Upon articles of consumption imported into this country ; The amount of reductions under the first head was 1,135,000 The amount under the second .... 317,000 Making together . . 1,452,000 Upon adverting to the five classes A, B, C, D, E, in the ' Ex- pository Statement/ we shall perceive that classes A, B, and E contain the articles which may generally, though not with minute accuracy, be denominated the raw materials of industry, and which received remissions to the amount of 1,126,0002., while classes C and D contain the two great divisions of articles prepared for consumption, viz., manufactured goods and articles of food, upon which, taken together, the remissions amounted to 326,0007. I shall therefore consider the three first together, and the two last together, as the most just and comprehensive mode of esti- mating the effect of the reductions. But I have to make another and a material change in the ar- rangement of this Abstract. It purports to compare the mean receipts of two years antecedent to the law of 1842 (1838 and 1840) with those of the two years immediately subsequent to it. But instead of taking the mean products of these two latter years, 1 propose to take each year separately, There are several reasons for doing this. In the first place, for nearly four months of the earlier half of the year 1842 the new tariff had been an- nounced, and its details were undergoing consideration. Deli- veries of the articles affected by it were accordingly in a great degree suspended until the bill had become law in the com- mencement of July: and immediately afterwards unusually large quantities of goods were released, so that the first year shows in many cases rather more than is its due. No such objection applies to the second yc?ar, and it therefore affords a more just criterion of the working of the law. 1-6 Remarks upon But, besides this, the intention of Sir Robert Peel was declared to be, to reimburse the Exchequer for the remissions which he proposed first, by their general effect upon trade and consump- tion and, secondly, by augmenting the demand for the particular articles which were affected. Now, all recovery of this kind is of necessity gradual : and it is even more important, therefore, to ascertain what relation the second year of the new law bears to the first, than to know the relation which the two jointly bear to the period which preceded the alteration. And particularly we must observe that the presumptions in favour of the change are strengthened, if the second year shall be found to bear a favour- able comparison with the first, on account of the factitious aid which, as has been explained, the first of necessity derived from the immediately preceding stagnation, pending the discussions on the measure. On every ground then it is desirable to distinguish the two years which are averaged in the Abstract now before Par- liament. I take first Class A, which contains, in general, articles the most strictly corresponding with the definition of raw materials. Class A. Articles in a raw state to be used in Manufactures. Number of Articles. Mean Annual Produce of Duties in Two Years preceding the establishment of the Produce of the Duties from July 5, 1842, to Produce of the Duties from Julv 5, 1843, to New Tariff. July 5, 1843. July 5, 1844. Schedule I., containing ar- . . . ticles that yield, un- der the new law, less 144 9,817 2,488 2,443 than 100/. each of customs' duty . II. (100/. to 500/.) 45 36,665 10,477 12,081 III. (5007. to 1000/0 16 24,542 11,227 11,199 IV. (1,000/. to 10,000/.) 28 322,881 83,845 72,902 V. (10,000/. to 50,000/0 6 145,187 86,537 134,131 VI. (50,000/. to 100,000/0 2 148,165 141,353 173,966 VII. (upwards of 1 00,000/0 3 1,507,627 1,032,403 1,054,530 VIII. (Free or prohibited) under the new law)/ 8 196 252 2,195,080 1,368,330 1,461,252 Recent Commercial Legislation. Now of the 252 articles comprised in this class, I find that there have been duties reduced or removed by the law of 1842 (and in a few cases, which it is not worth while to distinguish, by subsequent acts) upon 215, viz. in Schedule I. on 128 Schedule V. on 4 II. 38 VI. 1 ,,JII. 13 VII. 1 IV. 25 , VIII. 5 Total . 215 The entire receipt from these 252 articles was as follows :- Mean of two years before the new law 2,195,080 First year of the new law . Showing a loss of 1,368,330 826,750 But again: Mean of two years before the new law 2,195,080 Second year of the new law . . 1,461,252 Showing a loss of 733,828 Gain of the second year on the first . 82,922 This, I think, should be deemed not unsatisfactory as an ad- vance, in proportion to the time, towards the recovery of the revenue. Let us now proceed to Class B. Class B. Articles partially Manufactured. Number of Articles. Mean Annual Produce of Duties iu Two Years preceding the establishment of the New Tariff. Produce of Duties from July 5, 1842, July 5? 1843. Produce 'of Duties from July 5, 1843, to July 5, 1844. Schedule I. 54 . 887 . 673 . 637 II. 19 6,536 4,254 5,832 III. 5 6,712 4,000 3,143 IV. 11 40,835 21,516 44,113 V. 5 179,357 93,231 98,039 VI. . . . . .. VII. 1 816,902 397,470 630,069 VIII. 95 1,051,229 521,144 781,833 18 Remarks upon Of the 95 articles comprised in this Class, there have been reduced 89 ; viz. in Schedule I. . . 50 Schedule V. . . 5 II. . . 17 VI. . . III. . . 5 VII. . . 1 IV. . . 11 VIII. . . Total -. . 89 The entire receipt from this class was as follows : Mean of two years before the 5 and 6 Viet. c. 47 . l ,051 ,229 First year after the Act . . . . . Showing a loss of But again Mean of two years before the Act Second year after the Act 521,144 530,085 1,051,229 781,833 269 3 396 Showing a loss of .. And a gain of the second year on the first year, Amounting to ....... 260,689 which is an advance much beyond the measure of all ordinary expectation. The articles in the analogous class E are of less moment: but the exhibition of them is necessary to complete this part of the subject. Class E. Articles not properly belonging to any of the foregoing heads. Number of Articles. Mean Annual Produce of Duties in Two Years preceding the establishment of the New Tariff, Produce of the Duties from July 5, 1842, to July 5, 1843. Produce of the Duties from July 5, 1843, to July 5, 1844. . . . Schedule I. 91 3,950 1,927 1,476 II. 27 14,415 6,462 6,601 III. 6 JO, 972 4,310 3,690 IV. 15 49,432 33,593 36,833 V. 2 145,229 52,204 57,284 VI. VII. .. VIII. 8 149 223,998 98,496 105,884 Recent Commercial Legislation. Of the 145 articles comprised in this Class, there have been reduced 121 ; viz. in Schedule I. . . 79 Schedule V. . . 2 II. . . 22 VI. . . III. . . 5 VII. . . IV. . . 13 VIII. . . Total . .121 The entire receipt has been as follows : Mean of two years before the Act . . . 223,998 First year after the Act . . . . . 98,496 Showing a loss of . . . 125,502 Again Mean of two years before the Act . . . 223,998 Second year under the Act 105,884 Showing a loss of . . . 118,114 And a gain of the second year on the first Amounting to 7,388 Let us now bring together these results. Mean receipt on Class A before the Act . . 2, 195,080 on Class B . . 1,051,229 on Class E . . 223,998 3,470,207 Receipt of the first year after the Act On Class A 1,368,330 On Class B 521,144 On Class E 98,496 1,987,970 Receipt of the second year after the Act On Class A 1,461,252 On Class B . . . . . . 781,833 On Class E 105,884 2,348,969 Loss on the three Classes for the first year , . l ,482, 237 for the second . . 1,121,238 Gain on the second as compared with the first . 360,999 c 2 20 Remarks upon There are, however, some corrections which it is necessary to make in these figures. 1. The mean receipt of the two years before the Act of 5 and 6 Viet, should be charged with the drawback which was allowed on timber used in the mines under the provisions of the former law, amounting to about 60,0007. per annum. 2. The year from July 1843 to July 1844, should be credited with not less than 20,0007. on account of the abstraction of the duty on wool, which, under a new Act of the Legislature, actually took effect before it had expired, and had been announced, and must therefore have operated on deliveries from a considerably earlier period. By these changes we reduce The loss on the first year to . l ,422,237 The loss on the second year to .... 1 ,061 ,238 And the recovery of revenue On the second year as compared with the first rises to 380,999 It appears to me that this general comparison of the second year with the first, under the new law, as to materials, is emi- nently satisfactory, and must encourage those who take a sanguine view of the energies of our productive industry. The picture is less flattering when we compare the first year under the new law with the mean product of the two years of the old law. The reductions of 1842 on raw materials amounted, as has been already stated, to ... . 1,135,000 But the ensuing defalcation of revenue on that description of commodities amounted to . 1,422,237 Showing an excess of loss above the estimate of . 307,237 It will, however, be recollected that the twelve months from July 184*2 to July 1843, were a period of extraordinary depres- sion and distress to the trade of the country. The last six of them, or perhaps rather the last three, exhibited marks of par- Recent Commercial Legislation. tial revival, which were aided both by the changes of the law and the reduced cost of subsistence. Still for the greater part of the time business had been contracted, and enterprise languid, in a degree quite sufficient to account for the excess of loss which has just been noted. In the second year this excess was re- trieved, and the process of recovery had commenced, for whereas the reductions amounted to .... i0 * 1,1 35,000 The loss in the second year was . . . 1,061,000 Or, as 20,0007. may be set down to the account of the further measure regarding wool in 1844, the real loss in the second year was . . 1,041,000 Up to this point, I have adverted only to that portion of the operation of 1842, which regarded materials intended for employ- ment in our domestic industry. Even this involved, indeed, many points of conflict with protected interests : such as those relating to copper ore and other ores and metals, to hides and leather, to seeds, and to timber. Still its main bearing was in most par- ticulars on the revenue of the country. The other division of the remissions, which included only 317,0007. of revenue, involved in almost every case a diminution of protective duty. Before the Act of 1842, the general character of our Tariff with regard to manufactures, and in a great degree with regard to food, was prohibitory. But it may be said with truth, that from the moment when the provisions of that Act had taken effect, moderate duties of twenty per cent, and less were the rule of the Tariff of the United Kingdom, and high or prohi- bitory rates the exception. This was indeed the most prominent and essential characteristic of the measure, so far as it affected the classes now under consider- ation. Out of 196 articles contained in Class C, 181 underwent reduction : yet I do not find that the remission of duties actually levied upon goods in it under the former law, could be estimated at more than 35,0007., or at the most 40,0007. Remarks upon Class C. Articles wholly Manufactured. Number of Articles. Mean Annual Produce of Duties in Two Years preceding the establishment of the New Tariff. Produce of the Duties from July 5, 1842, to July 5, 1843. Produce of the Duties from July 5, 1843, July 5 1844. Schedule I. 113 . 3,393 . 2,171 . 1,842 II. 31 10,208 7,248 7,992 III. 17 23,260 13,329 12,731 IV. 27 85,767 86,284 99,063 V. 5 117,049 105,148 123,020 VI. . . . . . . VII. 1 239,893 223,457 268,766 VIII. 2 - 196 479,570 437,637 513,414 The articles in Class C on which duty was reduced were, in Schedule I. . . 108 Schedule V. . . 4 II. . . 29 VI. . . III. . . 16 VII. . . 1 IV. . . 23 VIII. Here we find the Mean produce before the Act First year under the Act Total 181 479,570 437,637 Loss . 41,933 But for the second year the account stands as follows : Mean produce before the Act .... 479, 570 Second year under the Act . . . . . 513,414 Increase . 33,844 Gain upon the second year as compared with the first 75,777 But this result again requires correction. More than half of the revenue under Class C arises from silk goods, which, with their various divisions, stand under a single heading in the Tariff. They were not, however, altered by the law of 1842, except with regard to the silks of the East Indies. Let us therefore deduct from all these years the revenue on silks other than those of India ; and the figures will stand as follows : Recent Commercial Legislation. Mean produce of two years before the Act First year under the Act Loss 252,351 217,091 34,260 252,351 248,855 And again Mean produce of two years before the Act Second year under the Act . Loss . 3,496 Gain upon the second year as compared with the first 37 , 756 Thus then it appears that, within the second year from the passing of the Act, the remissions of duty on manufactured goods were as nearly as possible replaced by the increased importations of them : a result worthy of remark in itself, but yet, as I think, less remarkable than another inference which arises from the in- spection of this part of the Statement, and which I shall notice in another portion of these remarks. We now come to Class D, containing articles of food, upon which the great mass of our customs' revenue has for a long time been levied. Seven-eighths of the whole receipt stand, as will be seen, to the account of this Class, Class D. Articles of Food. dumber of Articles. Mean Annual Produce of Duties in Two Years preceding the establishment of the New Tariff. Produce of the Duties from July 5, 1842, to July 5, 1843. Produce of the Duties from July 5, 1843. to July 5, 1844. Schedule I. 46 . 990 . 1,241 . 1,074 II. 15 4,148 3,351 4,625 III. 6 3,546 4,311 4,577 IV. 28 71,803 80,451 76,388 V. 7 120,169 131,427 142,120 VI. Totals of ) Schedules V I. VI. J 3 240,841 221,395 254,494 441,497 442,176 483,278 Sched. VII. 12 18,246,120 19,161,312 20,066,920 VIII. 4 121 18,687,617 19,603,488 20,550,198 24 , Remarks upon Of the 121 articles comprised in this Class, prohibitions were removed, or duties lowered, on 66, as follows : Schedule I. . . 30 Schedule V. . . 5 II. .. 9 VI. .. III. . . 5 VII. . . 2 IV. . . 15 VIII. . . Total . 66 On this class we find the Mean produce before the Act .... 18,687,617 First year under the Act 19,603,488 Increase . 915,871 And again Mean produce before the Act .... 18,687,617 Second year under the Act .... 20,550,198 Increase . 1,862,531 Gain on the second year as compared with the first 946,710 These figures, however, may much more justly be taken as an index of the general prosperity of the country, than of the working of the Customs' Act of 1842. I have already named four great articles * upon which no reduction has taken place up to the present time, yielding twelve millions of money, besides others not inconsiderable : nor was there any change in the law relating to sugar, which yields five millions more, until the year 1844: nor has there been yet time for the change then made to produce any appreciable effects upon the revenue, as the supplies of the foreign article are only beginning to arrive. About seventeen millions, therefore, of the whole amount of duties have been practically unaffected by alterations in the law. It may indeed be true, that those alterations have tended powerfully, by their general effects upon trade, and therefore on consumption, to in- crease the receipts of the treasury from these great articles, and may thus claim the credit of a part of the excess which has been shown. But we may carry the investigation of the effects of the Act to a greater degree of precision by ejecting from the account * Supra, p. 8. Recent Commercial Legislation. all the great articles in Schedule VII., upon which either no change has been made, or no change of which the effects are per- ceptible within the period embraced by the ' Expository State- ment.' Now coffee is the only article comprised in Schedule VII. of Class D, on which the duty was materially altered by the Act 5 and 6 Viet. c. 47. The duties on foreign corn had, however, already been regulated by a previous Act of the same year, and may therefore be taken into account. The total amount of the duties on these two articles was as follows: Their mean produce in two years before the Act . 1,475,027 First year under the Act 2,053,748 Second year under the Act 1,710,132 It is difficult to carry the examination of these items farther ; because as to corn no safe inference can be drawn from a single year, though the experience of the last three years, which have elapsed since the present Act commenced, may be thought to demonstrate that it at least effected a very beneficial change as regarded the revenue : while, as to coffee, the result is obscured by a farther change in the duty which took effect before the second year had expired ; and I propose therefore to examine that case more minutely by itself. But if further we remove Schedule VI., in which no alteration of any moment was made in 1842, from the comparison, so as to confine our view yet more closely to results brought about by the immediate operation of the change in the law, it stands as follows : Mean produce of two years before the Act . . 200,656 First year under the Act 220,781 Increase . 20,125 And again Mean produce of two years before the Act . . 200,656 Second year under the Act 228,784 Increase . 28,128 Gain upon the second year as compared with the first 8,003 *26 Remarks upon Again,, if we combine Classes C and D, both of which may be said to contain articles of consumption as contradistinguished from raw materials, we have the following results : Mean produce of Class C and of Class D, with ex- ceptions as above specified, before the Act . 453,007 Joint produce of first year under the Act . . 437,872 Loss . 15,135 And further Mean produce as before 453,007 Joint produce of second year under the Act . . 477,639 Gain . 24,632 Gain on the second year as compared with the first 39,767 Now the revenue remitted on these several descriptions of articles amounted to about 90,0007. a-year in round numbers ; of which the whole was replaced in the first year, except 15,1357., and was replaced in the second year with an addition of 24,6327. The fiscal scale of this part of the operation was, it is true, contracted, but it was of great importance, and of great difficulty, in other points of view ; and the result thus shown affords, as respects the treasury at least, an ample vindication of the wisdom of Parliament in the adoption of this part of the measure. To conclude this portion of the subject, let us combine the two divisions in which we have thus far been considering it : but in order that the view given of the reductions effected by the new Tariff of 1842 upon imports, may be a complete one, I must include (though with some undue advantage to the first year and prejudice to the second) the receipts from coffee. The reductions, with the exception of 100,0007. on exports, were On materials 1,135,000 On articles of consumption (Classes C, D, corrected as above) ....... 317,000 Total of reductions . . 1,452,000 The effect upon the revenue is shown in the following figures : Recent Commercial Legislation. I. Receipts of the first year. 1. Mean of two years before the 5 and 6 Viet. c. 47. Class A ... Deduct for timber drawback Class B Class E Class C . Class D, including coffee 2. First year under the Act Class A .... Class B .... Class E . Class C . . . Class D, including coffee 2,195,080 60,000 2,135,080 1,051,229 223,998 3,410,207 252,351 1,003,972 Total 4,666,550 1,368,330 521,144 98,496 1,987,970 217,091 1,002,503 Total 3,207,564 Actual loss for the first year on all the Classes together 1,458,986 Estimated amount of reductions as above . 1,452,000 Thus the total loss on the five Classes ex- ceeded the estimate by the sum of about . 6,986 1 1 . Receipts of the second year. 1. Mean revenue of two years before the 5 and 6 Viet. c. 47, as above . . . 4,666,550 2. Second year under the Act, Class A . . 1,461,252 Add on account of loss from the repeal of the Wool Duties in 1844 . . 20,000 Total 1,481,252 28 Remarks upon Brought forward . . 1,481,252 4,666,550 Class B . . . 781,833 Class E . . . . 105,884 2,368,969 Class C . . . . 248,855 Class D, without \ coffee . . 228,784 V 915,462 Coffee 686,678 J 3,533,286 Actual loss on the second year . . . 1,133,264 Gain on the second year as compared with the first, on all the Schedules affected by the re- ductions of 1842, and on coffee . . . 325,722 From this view of the tables, first in the several classes into which they are divided, and secondly as a whole, I now pass to consider the general outline of the Act of 1842, and to estimate rudely its effect upon the import trade of the country. The Act of that year was not merely an Act involving a consi- derable remission of duties : it was the first attempt to apply general rules to the construction of the tariff of the United Kingdom, and was also the most comprehensive modification of the restrictive system which had ever been accomplished. Mr. Pitt, in 1787j found our customs' law a mass of intricacy and confusion. He stated to Parliament the object of his great reform. * The mode in which he proposed to remedy this great abuse was by abolishing all the duties which now subsisted in this confused and complex manner, and to substitute in their stead one single duty on each article, amounting, as nearly as possible, to the aggregate of all the various subsidies already paid.' * Also * in some few articles,' for example timber, he meant to introduce ' regulations of much greater extent ;' but such was the general scope of his arrangement. During the war, and during the first years of peace, many augmentations of duty took place : some for purposes of revenue, * Parliamentary History, xxvi., 629. Recent Commercial Legislation. but with the effect of enhancing the stringency of protection ; some for protective purposes alone. The tariff underwent a general revision in 1819 by the Act 59 Geo. III. c. 52; and again, under the government of Lord Grey (which had failed in 1831 to carry a plan for the reduction of the timber duties), a large number of minor duties were re- duced in the years 1 832 and 1 833 ; but it was in the interval between these two periods that the most important relaxations of the prohibitory and protective system were introduced into the law, first by Mr. Wallace, and afterwards and principally by Mr. Huskisson. Still it continued to contain some prohibitions, and a very great number of prohibitory rates of duty; and no approxi- mation to unity of principle was discernible in its structure as a whole. In 1842 it was attempted to make a general approach to the following rules : 1 . The removal of prohibitions. 2. The reduction of duties on manufactured articles, and of protective duties generally, to an average of 20 per cent. ad valorem. 3. On partially manufactured articles to rates not exceeding 10 per cent. 4. On raw materials to rates not exceeding 5 per cent. The duties were then reduced on about 660 articles. Many changes were made which were of great importance to the con- sumer or to some branch of trade, but which cost little to the revenue, or were even, in some cases, positively profitable. I allude particularly to the changes affecting cattle, salt meat, seeds, oils, manures, leather, and ores, as belonging to these two classes. It is very difficult to form any general estimate of the effect of the measure of 1842 upon the import trade of the country, which shall even approach to precision. Still I think a rude view of this important subject may be presented by means of the tables of official valuations, which reduce the quantities of articles im- SO Remarks upon ported to a common measure. We have these valuations printed for the years 1841, 1842, 1843.* I reject 1842, which was almost equally divided between the old law and the new ; and I take 1841 as the latest full year of the old law, and 1843 as the first full year of the new one. The official values of imports into the United Kingdom were For the year 1841 .... 64,377,952 1843 .... 70,093,353 Increase . . 5,715,401 But there are two articles of importance which it may be better to exclude from this comparison -cotton and corn inasmuch as the quantities of them which we receive in one year as compared with another depend much more upon the respective crops ot those products in America and England than upon any increased facilities in the means of exchange. The official values imported in 1841 were Of cotton 15,948,384 Of corn 5,238,389 21,186,773 And in 1843 Of cotton 22,282,365 Of corn 2,048,768 24,331,133 Deducting these amounts from the respective totals, we have the official values of imports For the year 1841 .... 43,191,139 1843 .... 45,762,220 Increase . . 2,571,081 Finance Accounts, Paper No. 147, of 1844, pp. 131-36. Recent Commercial Legislation. This is a rude, but I do not think by any means an excessive, statement of the increase of general trade which had been realized in 1843, and of which a considerable part may be considered due to the alterations of the law. It is likely that the returns for 1844 may bear a stronger testimony to its influence. I will now proceed to examine the two most conspicuous among all the reductions of duty on particular articles which were enacted in 1842, namely, the cases of timber and coffee; and first, that of timber. This is a most important subject : and the error of the govern- ment and of parliament, which adopted, without division, the most essential parts of the proposal, was, if an error at all, a very great one. It is a subject to try the faith of political economists. Some of them there are, who have shrunk from the sacrifice of a great amount of revenue, which they think might have been spared : and have consistently denounced the plan of 1842 as a waste of public money, while they have been friendly to its principle so far as it involved diminution of the differential duty between colonial and foreign wood. Upon the other hand, there is much to urge, besides the claim of the colony of Canada, as a colony then recently recovered from two rebellions, and the claim of the subsisting interests in the trade to be as gently handled as a regard to public objects would^allow. First, it is very doubtful whether the revenue, such as it stood in the years immediately preceding 1842, could have been entirely preserved. I do not advert now to the distress of the particular period ; but to the permanent operation of the old scale of duties. The premium on colonial timber was so enormous, that it was gradually tending to reduce the proportion of Baltic wood brought into the market. And likewise the article of iron was displacing wood in various important branches of its consumption, Secondly, it must never be forgotten that the scale of duties upon timber was doubly differential. The duty of 55s. per load was, so far as regarded 45s. of its amount, a differential duty against foreign and in favour of colonial wood. But the whole duty both of 55s. on foreign and of 10s. on colonial wood, was a .32 Remarks upon differential impost in favour of British -grown wood and against the growths both of our colonies and of foreign countries. In the year 1841, the then existing administration proposed to reduce the foreign duty by an almost insensible amount, namely, from 55s. to 50s. ; and to raise the colonial duty from 10s. to 20s. This plan would have reduced the protection of the colonist against the foreigner from 45s. per load to 30s. per load ; but also it would have increased that of the home-grower of wood against the colonist by 10s. per load, and would have reduced it against the foreigner by only 5s. per load. It would have borne hardly upon the intermediate party, the colonist, who was thus smitten on both sides : it would have added, I believe, nothing whatever at the moment, and subsequently very little, to the revenue : 5s. per load would have been the maximum of possible relief to the consumer. Further, with this plan it would scarcely have been possible either to have abolished the drawback allowed to the Cornish miners, which appears to have cost the country 60,0007. per annum, or to have introduced the measurement of sawn wood according to cubic contents, which really means taking wood according to the dimensions to which Providence ordains that it shall grow, instead of regulating those dimensions by the schedules of a Customs' Act. The plan actually adopted, on the other hand, which imposed a duty of Is. per load on colonial and 25s. per load on foreign timber, involved a loss of 600,OOOZ. per annum : and although it was in one view much more favourable to the colonist, since it placed him nearly upon an equality with the British grower of timber in our ports, yet as against the foreigner it left him only a protection of 24s. instead of 30s. The British grower, again, who, in the case of an article so essential and of such heavy cost of transport will find in general briskness of trade by much his most effective safeguard, lost 30s. per load of his defence against foreign wood and nearly the whole of his preference over his colonial fellow- subjects. But the gain to the consumer, which, if there be truth in political economy, could not exceed 5s. per load under the plan of 1841, by the plan of 1842 might reach, and on the whole, I apprehend, has already nearly reached, 30s. per load. Recent Commercial Legislation. There was one argument for a large revenue from timber, the argument of possession. It was no mere speculation : we had it in hard money, a million and a half annually. But I know no other apology for such a mode of taxation under ordinary circum- stances. It may be by one degree less impolitic than the impo- sition of a heavy duty without drawback upon the raw material of some manufacture which we export largely: but I know no argument that can be offered in its defence, which would not vindicate a fortiori such taxes as a heavy duty of excise upon coals, upon iron, or upon manures. If there be but one of the mazy paths of fiscal legislation which we may tread fearlessly and firmly, surely it is that in which we reduce the burdens upon such raw materials of industry as are of great bulk in proportion to their value, and as stand in the first order of necessity. Passing, however, from the general discussion, I have now to inquire into the operation of the measure. As regards the deal- ings in the article, with the exception of some local inconveniences, which, as might be expected, accompanied the great alteration that was made in the mode of charging the duty, I gather from the reports of eminent houses in the trade, and from the figures indicating the consumption, that it has been eminently satisfactory. As regards revenue, I shall endeavour to show that we have reason to be well contented with its effects. Sir Robert Peel, in his financial statement for the year 1842, estimated his first year's loss at 600,0007. : and the second year's at 590,0007. I subjoin a statement of the gross and net quarterly revenue from timber during three years before the new system took effect, and also during two years after it. 34 Remarks upon (I.) An Account of the RECEIPTS from TIMBER in each Quarter of Three Years antecedent to 10th October, 1842: also, REPAYMENTS for Drawbacks, ar.d NET RECEIPT remaining in each of those Quarters. (II.) A similar Account for each Quarter from 10th October, 1842, to 10th Octo- ber, 1844. I. < II. ( QUARTERS ended Duties on Wood and Timber in the United Kingdom. Gross Receipt. Drawbacks and Repayments. Net Produce. ^ 5th January, 1 840 5th April, 5th July, 10th October, ,, 5th January, 1841 5th April, , , 5th July, , , 10th October, , , 5th January, 1842 5th April, , , 5th July, , , LlOth October , , / 5th January, 1843 5th April, , , 5th July, , , 10th October, , , 5th January, 1844 5th April, , , 5th July, , , \l Oth October ,, . 382,542 263,681 416,269 733,344 . 33,258 12,046 29,806 6,204 . 349,284 251,635 386,463 727,140 1,795,836 81,314 1,714,522 401,295 259,782 349,796 652,015 32,226 10,812 31,603 5,972 369,069 248,970 318,193 646,043 1,662,888 80,613 1,582,275 327,865 213,621 211,453 380,237 35,753 6,479 35,370 2,692 292,112 207,142 176,083 377,545 1,133,176 80,294 1,052,882 228,012 121,088 160,942 162,539 29,433 18,086 22,006 4,243 198,579 103,002 138,936 158,296 672,581 73,768 598,813 285,182 147,750 210,748 345,954 16,654. 3,230 5,490 2,233 268,528 144,520 205,258 343,721 989,634 27,607 962,027 Recent Commercial Legislation. Now it will be necessary to make several qualifications of this statement before we can draw a just comparison between the periods to which it refers. 1 . The drawback of about 60,0007. a-year, on timber used in the mines of Cornwall, was a regular attendant of the old law, and forms a legitimate deduction from the gross receipt. But the sums charged on this account in the years 1843 and 1844 were liabilities incurred in the preceding years which stood over, and ought not to be charged to the debit of the new system. I shall, therefore, make a corresponding deduction from the sum of 73,7687., charged for drawbacks and repayments in 1842-3, and I shall withdraw (by conjecture) for the same reason half of the 27,6077., which appears for 1843-4. It will be seen that in the table the total amount of repayments before the change in the law exceeds 80,0007. annually, but rather more than a fourth of this amount was disbursed on wood other than that used in the mines. 2. The diminution of half a million in the last year of the first term is owing, without doubt, in some degree to that stagnation of the trade which prevailed to a great extent from the middle of March, 1842, when the new duties were announced, to the 10th of October, when they took effect. But there is, it will be ob- served, a decrease on the receipt of the first quarter amounting to 77,0007. as compared with the corresponding quarter of the fore- going year : it having fallen from 369,0007. to 292,0007., and this before any change in the law could well have been antici- pated. Hence it is clear, that a great diminution in this branch of the revenue must have taken place if the law had continued as it was: and indeed the fact is otherwise notorious, that the timber-market was thoroughly glutted, and the demand extremely feeble at the time. Still, as it is not easy to assign to each of these concurrent causes their due share in producing the effect, I propose to leave out the year 1841-2 altogether, and to adopt another mode of ascertaining what allowance ought to be made for the stagnation of all building enterprise, in estimating the consequences of the alteration of the law. 3. With this view I have procured a statement of the produce D 2 36 Remarks upon of the brick-duty in the years 1840-4, and I propose to take the decline of it in the years 1843 and 1844 as compared with 1840 and 1841, as a criterion of the decline which would have occurred in the timber-duty if the law had remained without change. I think there is every reason to suppose it would even have been greater. The periods do not precisely correspond, as the years of the timber account begin on the 10th of October, and the years of the brick account on the 5th of January : but this is to the dis- advantage of my argument, as the period taken for bricks being by nearly three months later represents a more advanced stage of that commercial recovery which was in progress during the years 1843 and 1844: The receipt from bricks in 1840 was ... .524,000 in 1841 . . . . 449,000 Mean of the two .... 486,000 The receipt from bricks in 1843 was . . . 363,000 in 1844 . . . . 447,000 Mean of the two .... 405,000 The net receipt from timber in 1840, or rather from October 10, 1839, to October 10, 1840, was . . 1,714,000 In the year October 10, 1840, to October 10, 1841 . 1,582,000 Mean of the two .... 1,648000 We have, therefore, the following proportion : 486,000 : 405,000 : : 1,648,000 : x, x being the probable annual receipt from the timber-duty between October 10, 1842, and October 10, 1844, under the old law. On working this sum, we find x = 1,373,000. Which I therefore assume as the standard of comparison to try the new law : Probable annual receipt from timber under the old scale of duties from October 10, 1842, to October 10, 1844 1,373,000 Actual receipt, first year, gross . 672,581 Deduct for repayments . . . 13,768 Net receipt 658,813 Loss 714,187 Recent Commercial Legislation. Again : Probable receipt from the old duties, as before . . 1,373,000 Actual receipt, second year, gross . . 989,634 Deduct for repayments .... 13,803 Net receipt ........ 975,831 Loss 397,169 Gain upon the second year as compared with the first 317,018 Thus the loss upon the first year was greater by 1 14,0007. than Sir Robert Peel's estimate : but such was the progress of recovery that in the second year it was less than his estimate (of 590,0007.) by no less than 193,0007. : and the mean loss of the two years, ascribable, with any presumption of justice, to the change in the law, was 555,5007., less by about 40,0007. per annum than the allowance he had made. Some persons may be surprised at the very great difference between the first year and the second : but it may, I think, readily be accounted for by the fact that a second reduction of 5s. per load on timber and 6s. per load on deals took effect at the com- mencement of the second year, and that a considerable quantity of goods, held back for the benefit of this reduction, go to the account of the second year, whereas in the natural course of things they would have belonged to the first. When, however, it is remembered, how peculiar was the course of the timber-trade and the mode of preparing deals for the British market under the former law, that we have only two years of the new system before us, and that timber does not come here until the year after it is cut, I think it is evident that another twelvemonth at least must elapse before we can fully appreciate the benefits of the alteration which has been made. As, however, it was confidently predicted by many persons that the consumer would not obtain the benefit of the great reduction of the duties on foreign timber, I have referred to trustworthy sources of information, and have obtained the following results: Price of Dantzic or Memel timber in the London market per load, duty paid : 58 Remarks upon January, 1842 5 12 6 January, 1845, 41. 7*. 6d. to 41. 10s. . Mean 489 Reduction to the consumer in 1845 . . .139 Again : Dantzic fir, common and middling, sold in Liverpool,* In January, 1841, for 26jd. to 27d. . . , . Mean 26|d per foot. 1842 24 \d. to 25 \d Mean 25d. 1845 19%d. to 2ld. .... Mean 2Qd. Showing a reduction in 1845, As compared with 1841, of 6d. per foot, or 21s. Id. per load. 1842, of4fd. Ws.lOd. Which latter, however., was a period of very great depression in the wood trade, and not such as to exhibit with any fairness the ordinary state of the market. I take next the article of coffee, the second in importance of those on which material reductions were made in the year 1842. The duty was lowered on British coffee from 6d. to 4d. per lb., and on foreign from a rate nominally of 15^., and really of $d. (with an addition of extra charges making it perhaps equal to a burden of 10?.), to 8d. per lb. The first loss was calculated at 226,OOOZ. ; but it was hoped that so much of this would be made up by increased consumption as to leave an actual defalcation of only 170,0007. Now, on turning to the ' Expository Statement,'-)- we find that the produce of the duties on coffee was as follows : Mean of two years before the Act 5 and 6 Viet. c. 47 . 803,316 First year under the Act 781,722 Loss .... 21,594 Much coffee, however, was held back during the four months of discussions on the new table of duties, and swelled beyond its just proportions the receipt for the first year. Again, the receipt of the second year under the Act was inter- rupted by the further change of the duty on foreign coffee from * See Circular of Messrs. James Houghton and Co., brokers, for Feb. 1845. f P. 158. Recent Commercial Legislation. Qd. to 4d. per Ib. in 1844. We may however estimate, with tolerable accuracy, the effect of this latter reduction by reference to the receipts for the year 1844, as compared with the year 1843, which are given in the tables on trade and navigation, presented to Parliament on February 12, 1845.* The revenue from coffee for 1843 was . . 697,983 The revenue for 1844 was ... 682,218 Less in 1844 by ... 15,765 But the Chancellor of the Exchequer, in his financial statement for 1844, had estimated his loss at 50,0007. ; and the immediate remission of 2d. per Ib. on 9,854,000 Ibs , the quantity of foreign coffee consumed in 1 843, amounted to 82 5 200Z. In this case much must be allowed for the advancing prosperity of the nation, and something for the gradually growing use of coffee as compared with other commodities ; but enough will surely remain to warrant the assertion that the reductions upon coffee have been, up to the present time, eminently successful in their effects with regard to the revenue and also, if progressive extension of demand may be taken as a criterion, to the consumer. I shall next extract from the ' Expository Statement' the most important, after timber, of those raw materials and accessories of industry on which remissions of duty were then granted. These I consider, speaking generally, to be the following articles : 1. Hides. 7. Rosewood. 2. Turpentine. 8. Lard. 3. Palm-oil. 9. Copper-ore. 4. Olive-oil. 10. Train and sperm oil. 5. Bark. 11. Iron. 6. Mahogany. But of these I shall not include copper-ore, because, although the trade has increased since the Act of 1842, the allegation of those interested in it is, that the burden of duty then imposed as the condition of being allowed to smelt in this country much more than counterbalanced any advantage attending an admission to the home-market. | Nor lard, nor train and sperm oil, because * Paper No. 18, Sess. 1845. f Before the law of 1842 the duty on copper-ore was prohibitory, but parties were allowed to smelt in bond for export. By (hat law the prohibitory duty was very greatly reduced, but the privilege of smelting in bond was withdrawn. 40 Remarks upon those cases are complicated by the direct competition of the foreign and British article, and should rather be considered in connexion with another branch of the subject. Nor iron, because the de- mand for foreign iron has, I apprehend, suffered more by im- proved modes of preparation for British iron than it could gain by a diminution of the customs' duty. After withdrawing these, there remain seven articles which will afford considerable in- formation with regard to the working of the altered law. The deliveries for consumption, however, of the first year were so much enlarged in most of these cases by the great inducement to hold back for the reduction of duty, which operated during the discussions of 1842, that I shall notice only the second year's returns, as a fairer standard of comparison. Articles. Estimated First Loss by the Reduction of Duty. Mean Entries for Consumption in 1838 and 1840. Entries for Consumption, July 1843-44. Mean Revenue of 1833 and 1840. Revenue, July 13, 184344. 1. Hides . . . 45,000 349,903 cwts. 551, 550 cwts. . 48,976 . 8,029 2. Turpentine . 80,500 365,621 509,410 82,056 2,237 3. Palm-oil . 11,000 293,936 393,491 18,817 10,394 4. Olive-oil . 24,000 7,960 tuns 9,591 tuns 42,897 20,940 5. Bark . . 13,000 625,612 cwts. 894, 783 cwts. 20,874 11,983 6. Mahogany . 42,000 22,957 tons 22, 885 tons 52,494 11,345 7. Rosewood . 8,500 1,671 2,864 10,190 2,926 In the next table I bring out the results upon trade in a more definite shape : Articles. Actual Loss of Revenue on each Article- Quantities added to the Trade. Assumed Value of the Unit. Value added to 'lie Trade. . 453,706 1. Hides . . . . 36,971 20 1,647 cwts. 45*. over all 2. Turpentine 79,819 133,789 8*. ,, 53,510 3. Palm-oil . . 8,423 99,455 25*. , , 123,774 4. Olive-oil . . 21,957 1,631 tuns 601 , , 97,860 5. Bark . . . 8,891 269,171 cwts. 7*. ,, 94,210 6. Mahogany 41,148 72 tons 10Z. ,, 720 7. Rosewood Total . . 7,264 1,198 10A , , 11,980 204,473 834,720 Recent Commercial Legislation. Thus we find, with a sacrifice of 204,0007. in duties on raw materials, an extension of trade in them to the extent of 834,0007. I should describe this as a satisfactory and sufficient rather than as a very remarkable result. It would be easy to present others which are, in a financial view, much more striking : in cases where duties nearly pro- hibitory, or other impolitic arrangements, were amended. For instance, the mean produce of the duties on foreign sperm- oil, train-oil, and whale-fins, in L838 and 1840, was 10,4637., the duties then being 267. 12s. per tun on the two former, and 47. 15s. per cwt. on the latter. Indeed it was only the prevalence of enormous prices at home that caused the entry of the sperm-oil which yielded almost the whole of this small revenue. But on the 5th of July, 1843, the duties were reduced, under the provisions of the Act of 1842, as follows: On sperm-oil, from 267. 12s. to 157. ; on train-oil, from 267. 15s. to 67. ; and on whale-fins, from 47. 15s. per cwt. to 20 per cent, ad valorem a rate probably equal to about 20s. per cwt., or little more. The revenue yielded in the year from that day to July 5, 1844, was On sperm-oil . . . 44,272 On train-oil .... 6,663 On whale-fins . . . 6,530 Total . . . 57,465 So that a gain of nearly 50,0007. for one year followed upon this reduction. I may add that, owing to increased demand, $iere was a simultaneous improvement in the prices of sperm oil as com- pared with their previous range. Again, copper-ore, which yielded no revenue under the former law, produced about 47,0007. in the first year after the Act of 1 842, and nearly 70,0007. in the second, with no contraction, but, on the contrary, with an expansion of the smelting operations of the country. Again, lard, at a duty of 8s. per cwt., yielded in 1840 the sum of 307. In the first year of the new law, at 2s. per cwt., it was entered to such an extent as to produce 4946/., and in the second year 79807. In the year 1840, thrown silk yielded a revenue of only 7257., 42 Remarks upon the chief part of the importation paying a duty of 3s. 6d. per Ib. A drawback was allowed which absorbed nearly the whole receipt and., indeed, in 1838, there was an excess of repayment over revenue to the extent of 5398Z. In the first year of the new law the debentures due under the old one again absorbed the whole revenue ; but in the second year the balance of net receipts amounted to 16,4207. I will give two other instances, in which duties were reduced for the purpose of driving the smuggler, if possible, out of the market. Under the former law watches were charged at 25 per cent, ad valorem : the value entered in 1840 was 5084Z., and the duty paid was 13871. In 1842 the duty was reduced to 10 per cent. : the value entered rose to 52,622/., and the duty paid to 539 II. The duty on thread lace was reduced in 1842 from 30 per cent to 12^ per cent, on the value, with the active concurrence (a rare example) of the parties engaged in carrying on the trade at home. The entry under the head Thread Lace in the ' Statement' shows an increase only of about one-fourth in the quantities entered under the new law ; but another heading had been introduced for all lace made by the hand, including thread lace, under which a large and apparently increasing quantity has been entered:* so that in this instance, also, we may hope that the province of the smuggler has at least been greatly narrowed. I have still one portion of the ' Statement ' to subject to further * I believe that the annexed figures will represent pretty accurately the effect of the alteration in the duty upon thread lace. Duty received on Thread Lace. 1838 . . . .1,39212 Rate of duty 30 per Cent. 1839 .... 2,403 86 ,, 1840 .... 1,791 65 ,, 1841 .... 1,239 19 10 1842 .... 1,001 17 4 2,515 8 7 Pillow Lace. 3,517 511 Duty reduced in July, 184-', . to 12 per Cent. 1843 . . . 953 5 2 7,611 17 7 Pillow Lace. 8,565 2 9 Duty 12 per Cent. Recent Commercial Legislation. examination : that of articles of consumption, by which I mean such as are comprised in classes C and D, with reference to the effects of the late reductions upon protected interests. I have already shown how easily the revenue surrendered under these classes recovered itself, which, of course, could only be by increased importations, and it is not difficult to name many articles on which such increase has taken place : gloves, boots and shoes, damask and diaper linens, corks, toys, prints and drawings, India silks, tanned leather, and many more, in Class C ; and in Class D, animals, fish, lard, salt provisions, potatoes, onions, and some other vegetables. IV. But I own it appears to me impossible for any person who has been cognisant from the beginning of the discussions in and out of Parliament relating to the Act of 1842, who has noticed the fears and hopes with which in different quarters many of the new duties were regarded and, finally, who has examined the results of the change with any care to do otherwise than rest in the conclusion that both those hopes and fears were by many persons enormously exaggerated, and that, as a general (I by no means say an invariable) rule, British industry has much less to apprehend than was commonly, perhaps almost universally, sup- posed, from the effects of foreign competition in the domestic market. This, however, is a subject too important to be discussed with- out careful illustration ; and, in order to afford it, I shall have occasion to refer both to debates which took place in Parliament, and likewise to representations made, and I believe most honestly made in many cases, to the Government with reference to the certainty of the most destructive consequences if they should per- severe in the proposals which they had submitted to Parliament. Some parties obtained partial concessions which, forming my judgment at this time with the aid of the experimental results, I should say, had better in almost every instance have been with- held : some kicked and plunged vigorously, but in vain ; and some made up their minds to ruin with a decent composure. Many who resisted because they thought the sacrifice demanded of them too great and many more who thought it their duty, 44 Remarks upon under the distressed circumstances of the country, not to refuse it, however large must have been alike surprised to discover, by subsequent experience, in how numerous cases the mountain has simply, as of old, produced the mouse. There were, indeed, some rather sharp and stringent effects on prices caused by the legislation of 184*2; and particularly I would name the case of the Irish provision trade. But these were the exceptions. As a general rule they were gentle and insensible ; and in many cases where the very greatest and most boisterous alarm had existed, absolutely null. There is no worthy satisfac- tion in reverting simply to the circumstance that expectations which had been extensively entertained were very generally falsi- fied. But there is a most just pleasure attaching to the discovery that the power of British skill and labour are greater than we had believed them to be ; and this is the most important proposition established by the smallness of results which followed upon many very great reductions of duty. Nearly one hundred and fifty questions were discussed between the Government and the various interests which were, or believed themselves to be, affected by the changes proposed in the law ; and twenty- six divisions were taken in the House of Commons, many of which, however, were in favour of more sweeping pro- positions than those of the Government. But I will go to parti- culars. And first I will point out that where there has been an increase large enough to be worth naming in the import of an agricultural or manufactured product, it has still been in almost every instance confined within very moderate bounds. For example, from the first class. The duty on potatoes was reduced from 2s. to 2d. per cwt., although the Government was confidently assured by a deputation to the Board of Trade, on the 12th of April, 1842, that, with so small a protection, the cultivation of them in Yorkshire must be abandoned. The import rose from 1794 cwts., in 1840, to 99,062 cwts., or nearly 5000 tons, in the second year of the new law. But this quantity is little more than the crop of 600 acres of land; and constitutes but one-sixtieth part of the estimated Recent Commercial Legislation. consumption of the metropolis alone, perhaps one six-hundredth part of the consumption of the country. The duty on onions was reduced from 3s. to 6e?. The quantity increased from 14,500 bushels in 1840, to 34,900 in the second year of the new law. Now this quantity, I believe, is the yield of about 116 acres of land : whereas 1 have been informed that, in the county of Essex alone, eight or ten times that breadth is occupied in raising not onions, but onion-seed. Again, among manufactured articles. The importation of men's boots rose from 4800 pairs to 12,900 pairs, and shoes of the same description from 1 100 pairs to 3700 pairs. But if we assume that each male person in the metropolis and its vicinity wears out two pairs of boots or shoes annually, it will appear that the increase in the foreign supply of between 10,000 and 1 1,000 pairs can scarcely amount to more than one-hundredth part of the demand for that portion of the population of the country taken alone. In the case of women's boots and shoes there is an increase of about double the number of pairs, which might possibly supply about 2 per cent, of the corresponding demand. In another class of cases where the first proposition of the Go- vernment was regarded as utterly ruinous, and some modification of it took place in consequence of the apparent strength of the representations, or of the indisposition to bear hard upon a feeble class (for no such concession was made during the whole of the discussion in any case affecting a powerful interest), the result has very commonly been that the change eventually made has been practically a nullity. For instance, in the first print of the Resolutions of 1842, it was proposed to reduce the duty on starch from the prohibitory rate of 97. 10s. per cwt. to 5s. per cwt., about 20 per cent, on the value of the foreign article in bond. However it was subsequently agreed to substitute 1 Os. for 5s. ; and even a greater change than this was urged by members of Parliament inclined to free trade, on the ground of the enhancement of the cost of wheat (from which starch was usually made) in this country through the operation of the corn law. The duty of 10s. was represented by manufacturers of starch as a totally insufficient protection. Now mark the result. 46 Remarks upon In the first twelve months of the new law we find an experimental importation took place to the extent of 498 cwts. But in the second year it sank to 20 cwts., or a value of about 25/. The case of straw platting, again, is a remarkable one. In order, however, to estimate it justly, we must combine with it the entries of the hats or bonnets made of straw plat. These latter were charged by the dozen under the former law ; but I convert these into weight at 31 Ibs. per dozen : 1838. 1839.* 1840. Weight of straw-plat entered . . 34,662 Ibs. 22,340 Ibs. 13,034 Ibs. straw hats or bonnets . 1,171 Ibs. 1,241 Ibs. 2,307 Ibs. 35,793 Ibs. 23,531 Ibs. 15,341 Ibs. Thus the trade was falling off. The duty was very high 17*. per lb., or about 80 per cent, on the plat, and from 50 to 60 on the manufactured article : an anomalous relation between the duties on the material and on the article made up, which was very far from uncommon under the former law. It was proposed to reduce the duty on the plat to 5s. Numerous remonstrances were made ; and the Government so far receded as to fix it at 7*. 6rf. ; and that on hats or bonnets of straw was settled at 8s. Qd. per lb., instead of a rate equal probably to about 18s. 6d. per lb. In the face of these great reductions, the importations actually declined upon the change ; and in the second year they scarcely recovered the low scale of 1840, and did not reach a moiety of that of 1838, as will appear from the following figures : 1842-3. 1843-4. Weight of straw plat entered . . . 8,322 Ibs. 12,070 Ibs. of straw hats or bonnets . . . 4,081 Ibs. 3,546 Ibs. Total .... 12,403 Ibs. 15,616 Ibs. Without specifying other instances, I pass to another numerous class of cases those, namely, in which speculation was set to work by the change of the duty, and importation of the commodity immediately took a spring ; but in which a material decrease in the second year, as compared with the first, shows that the expecta- * See Tables of Revenue, Trade, &c., Part x., 1840. Recent Commercial Legislation. tions which had been raised had also been in various degrees dis- appointed. Thus, for example, we find the following entriies : 1. Among manufactured goods First Year. 1,919,000 pairs 33,000 yards 7,500/. at value 7,722 cwts. 25,000/. at value 3,700/. 710 cwts. 233,000 number 1,353/. value Gloves . Damasks and damask diaper Plain linens Spirit of turpentine Embroidery Manufactures of skin or fur Hard soap .... Dutch bricks Plain china Second Year. 1,795,000 pairs 21,000 yards 6,500/. at value 35 cwts. 7,500/. at value 1,800/. 536 cwts. 202,000 number 980/. value 2. Among articles of food First Year. 3,462 cwts. 7,677 764 206 6,188 Second Year. 989 cwts. 1,096 108 28 2,716 Beef, salted (foreign) . Pork, salted (foreign) . Salmon .... Bacon (foreign) . Hams (foreign) . Most of these were articles, with regard to which the very greatest apprehensions had been expressed. It is within my own recollection, that in the month of August, 1842, the people of a rural district of Scotland, thirty or forty miles from any focus of foreign trade, were much excited on the subject of some salt meat which had been exposed for sale at 3d. per lb., in conse- quence, as was professed, of the new tariff: the fact being that the change in duty on that article amounted only to the small sum of 4s. per cwt., and that this change did not take place until the 10th of October, two or three months after its miraculous results had been palmed upon the public, Nor was it an uncom- mon thing in the streets of London to see advertisements of goods purporting to be cheapened by the new tariff, with regard to which no change either was made or had ever been proposed. But the most remarkable example of this recession after a first experiment was in the case which of all others excited the greatest alarm and apprehension namely, the importation of live animals for food. Arguing in Parliament against the exaggerated appre- 48 Remarks upon hensions which were entertained with respect to the effects of that measure, I protested against an estimate, that had met my eye, according to which it was shown, that in the course of a few years there might be 300,000,000 pigs disposable for importation into England from a single country : but I, somewhat weakly, admitted the possibility that within a short time we might have from abroad as a maximum of addition to our supplies, 50,000 head of cattle annually. The importations of the first six months were Cattle ....... 4,076 Swine and hogs ...... 410* But the parties engaged in them apparently (as it is termed) burnt their fingers: for in the whole year 1843 there were only im- ported Cattle . 1,482 Swine and hogs ...... 361 There is, indeed, a revival in 1844, sufficient to save the results of the measure from becoming ridiculous. In that year we obtained from the whole world Cattle . 4,865 But of swine and hogs only . . . . 271 An argument, however, has been frequently advanced to the effect, that the foreign prices have acted powerfully in reducing British prices to their own level, although when they had reached that level no extended opening could remain for importation. My answer is two-fold : first, it is impossible that foreign prices could have exercised a depressing influence ' upon the immense market of England to any considerable extent say, for instance, Id. per Ib. without having held out such opportunities of profit by actual importations from abroad as must have led to very much more extensive operations than those which have actually taken place ; secondly, there are two modes in which price may be lowered either by addition to supply, or by subtraction from demand. An addition of 3000 head to supply will have no greater effect upon prices than a diminution of 3000 head in the demand. The new tariff is responsible for the addition of 3000 * Paper No. 43, Session 1845. Recent Commercial Legislation. head to the supply ; but commercial distress affecting immedi- ately, perhaps, four or five millions of the people, nearly all of whom were consumers of animal food is responsible for con- tracting the demand to an amount nearer 300,000 head than 3000. If fall of price took place, it appears to me more rational to ascribe it to the latter cause than to the former one. The result seems to be that there is no likelihood, for some considerable time at least, of our obtaining a supply of cattle from abroad at all sufficient to meet the steady increase of our population. Nor is this, in my view, an unsatisfactory result. On the contrary, what has taken place is highly cheering, for this reason, at least, that it shows this most important branch of agri- cultural industry in our own country to be pursued with an eco- nomy and skill which need not shrink from competition, and which, indeed, has now defied it ; and it may teach us not to regard, so much as we are apt to do, the low nominal prices which commodities may bear in some other countries, while, not- withstanding, it may be, and is often true, that, when quality is considered, the Englishman gets the cheapest article. I must quote, however, as a last class of illustrations, one or two cases of manufactured commodities, for the very striking manner in which they contrast the anticipations of persons be- wildered by their fears with the actual results of changes in duties upon imports. Amidst predictions of ruin, the duty on the candles termed stearine (a refined tallow) was reduced from 63s. 4d. to 23s. 4d. per cwt. The quantities entered were no more than 1000 Ibs. (of the value of perhaps 50/.) in the first year, and 2000 (or 1007. in value) for the second. The duty on beaver-hats was lowered from 10s. fid. each to 2s. 6e?. each. Foreign hats had been introduced in 1840 to the number of 240. In the first year of the new Act they were but 135, and in the second 191. The duty on cordage and on cable-yarn was reduced from 10s. 9