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 British Industries under Free Trade
 
 FREE TRADE LITERATURE. 
 
 The Life of Richard Cobden. By the Right Hon. John 
 
 MORLEY, M.A. (Oxford), Hon. LL.D. With Photogravure Portrait from the 
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 Richard Cobden and the Jubilee of Free Trade. By 
 
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 TWO VOLUMES OF ESSAYS. 
 
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 British Industries under Free Trade. Essays by Members 
 
 of leading English Firms. Edited bv Harold Cox, Secretary of the Cobden 
 Club. Linen, by Sir R. Lloyd Patterson ; WOOL, by Sir Swire Smith ; Cotton, 
 bv Elijah Helm; Grocery, by J. Innes Rogers; Alkali, by Alfred Mond ; 
 Coal, by D. A. Thomas, M.P. ; Tramp Shipping, by Walter Runciman, 
 M.P. ; Shipping Liners, by M. LI. Davies (of Messrs. Holt, of Liverpool) ; 
 Cutlery, by F. Callis ; Soap, by A. H. Scott ; Silk, by Matthew Blair ; 
 Iron and Steel, by Hugli Bell ; Tinplate, by Llewelyn Williams ; PAPER, 
 by Albert Spicer ; and other Essays. 
 
 Labour and Protection. Essays. Edited by H. W. Massingham. 
 
 Some Political Dangers of Protection, by John Biu-ns, M.P. ; Pro- 
 tection AS A Working Class Policy— (1) The General Case ; (2) Protection 
 and Wages, by J. A. Hobson; In the Days of Protection, by G. J. 
 Holvoake; IN the Days of Protection— How the Worker Lived; The 
 Workman's Cupboard, by T. Lough, M.P. ; The Co-operative Housewife, 
 by Mrs. Vaughan Nash; THE PEOPLE ON THE MARGIN, by B. Seebohm 
 Rowntrce ; PROTECTION AND THE STAPLE TRADES, by George N. Barnes, 
 Secretary of the Amalgamated Society of Engineers ; An Object LESSON 
 FROM Germany, by W. Harbutt Dawson. 
 
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 T. FISHER UNWIN, 11, PATERNOSTER BUILDINGS, LONIK)N, E.C.
 
 British Industries 
 
 un 
 
 der 
 
 Free Trade 
 
 ESSAYS BY EXPERTS 
 
 Edited by 
 
 HAROLD COX 
 
 Secretary of the Cobdcn Club 
 
 SECOND IMPRESSION 
 
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 t. fisher unwin 
 
 PATERNOSTER SQUARE 
 
 . •• ■ ■■1904, :; i ',' ' y\ "': - ^ • •'
 
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 '.6 ■ 
 
 PREFACE 
 
 THE object of the present volume is to supply 
 a detailed answer to the question whether 
 British industries have or have not flourished under 
 Free Trade. The volume is necessarily limited in 
 size, and the time allowed for its preparation was 
 ^ not long. It has therefore been impossible to deal 
 G with all the industries that might well have been 
 14^ here represented. But the ground covered is 
 ' sufficiently wide to give an indication of our 
 ^ national industry as a whole, and special care has 
 ' been taken to include those industries which are 
 ' often pointed to by Protectionists as awful examples 
 of the policy of free imports. The writers of the 
 5^:::following essays are not pedants who are content 
 to mutter exploded shibboleths. They are practical 
 business men, writing of things that they know of 
 their personal knowledge. They are concerned, not 
 ^ with the events of 1846, nor even with the prophecies 
 of Cobden, but with the actual business needs of
 
 vi PREFACE 
 
 to-day. Thus incidentally an answer is furnished 
 to the parrot cry that "conditions have changed 
 since 1846." Of course conditions have changed. 
 It would be strange indeed if fifty years of intense 
 industrial, scientific, and commercial activity had 
 produced no change in the world. But what 
 Protectionists have to prove is that the obvious 
 and wonderful changes in the condition of the 
 world have rendered less valid the arguments upon 
 which the case for Free Trade is based. Those 
 arguments were not the invention of the year 1846, 
 nor even of that great Englishman whose name will 
 always be identified with the repeal of the Corn 
 Laws. Exactly the same principles were expounded 
 by Adam Smith in 1776. They were accepted by 
 Pitt, who, but for the Great War, would probably 
 have succeeded in giving effect to them. They were 
 revived again in the famous Merchants' Petition of 
 1820, and adopted by Huskisson as the basis of the 
 reforms which he carried out in 1823 and subsequent 
 years. They were boldly proclaimed by Peel in 
 1842, in 1846, and in 1849. They were emphatically 
 endorsed by the House of Lords, neinine contra- 
 diceiite, in 1852. They were acted upon by 
 Gladstone in 1853 and in i860 ; by Sir Robert 
 Lowe in 1869; by Sir Stafford Northcote in 1874. 
 They were brilliantly defended by a Radical dema- 
 gogue in 1885,1 and soberly justified by a Tory 
 Chancellor of the Exchequer 2 in 1897. They 
 
 ' Mr. Joseph Chamberlain. * Sir Michael Hicks Beach.
 
 PREFACE vii 
 
 continued to command at any rate the lip reverence 
 of every English statesman down to the spring of 
 1903. It is therefore not to the year 1846 that the 
 Protectionists need trouble to hark back ; it will 
 suffice if they will deal with the year 1902, and 
 explain how the principles which they then avowed 
 became entirely false six months later. 
 
 What then are the principles which Adam Smith 
 taught, and which England some fifty years later 
 began cautiously to practice, and then after a fierce 
 political struggle finally adopted ? The main 
 principle, so far as the present controversy is con- 
 cerned, is this : That it is impossible to add to the 
 wealth of a nation by preventing the free importation 
 of foreign goods. This proposition would be self- 
 evident but for the fact that the use of money 
 blinds the average man to the realities of trade. 
 If trade were in appearance, what it is in reality, an 
 exchange of goods for goods, nobody would be so 
 insane as to question the advantage to a nation of 
 freely receiving all the good things that other 
 nations can be induced to send it. But trade has 
 for many centuries in all civilised countries 
 presented the appearance of an exchange of goods 
 against money, and the average man forgets that 
 money is merely a go-between ; nor does he 
 perceive that the exchange of goods for money 
 is only half of a transaction which must sub- 
 sequently be completed by the exchange of money 
 for goods. To realise this essential charac-
 
 viii PREFACE 
 
 teristic of money it is only necessary to try and 
 imagine what would happen if the persons who 
 sold goods were content to keep the money they 
 receive. It is clear that as soon as they had sold all 
 their existing stock they would get no more money, 
 and meanwhile they would be naked and starving 
 amid a pile of useless pieces of metal. 
 
 It seems almost infantile to have to remind the 
 reader of these obvious considerations, but such a 
 reminder is not altogether unnecessary when even 
 Cabinet ministers show their ignorance of the real 
 nature of trade. Whatever be the mechanism of 
 trade, whether it be the simple barter of the primi- 
 tive savage, or whether it be conducted with coins 
 of copper or of silver or of gold, or with bank- 
 notes, or with cheques, or with bills of exchange, 
 under all these conditions trade in its essence 
 always has been, and always must be, an exchange 
 of goods for goods, of one good thing for another 
 good thing. Furthermore, trade is always con- 
 ducted between individuals.^ Strictly speaking, 
 there is no such thing as trade between nations. 
 The individual Englishman trades with the in- 
 dividual Frenchman, the Frenchman with a China- 
 man, the Chinaman with a Yankee, the Yankee with 
 a Canadian, the Canadian with a Scot, the Scotch- 
 man with an Englishman. All these men are each 
 
 ■ In the comparatively rare cases where governments 
 engage in trade they act on the same principles as individual 
 trading firms.
 
 PREFACE ix 
 
 seeking their own profit in the exchanges they 
 make. They will find that profit better if left to 
 themselves than if their operations are subject to the 
 control of politicians and bureaucrats, who may be 
 corrupt, and who certainly will be ignorant. But 
 the national wealth is the sum total of the wealth 
 of the individuals composing the nation. It can 
 therefore only be diminished by any system of 
 trade regulation which deprives individuals of 
 the liberty to obtain profit where they can find 
 it best. 
 
 Of course wealth is not the only object of 
 national ambition. As Adam Smith long ago in- 
 sisted, Defence is greater than Opulence. But let 
 us be clear first about the question of wealth. Let us 
 be clear that Protection can only diminish national 
 wealth, and then we can proceed to consider how 
 far it may be desirable to submit to that diminution 
 for the sake of some other national object. The 
 trouble is that the modern Protectionist will seldom 
 define what are the objects which he hopes to attain 
 by a sacrifice of national wealth. Earlier Pro- 
 tectionists were more honest. The mercantilists of 
 the eighteenth century argued that a store of gold 
 and silver was necessary to a nation to serve as a 
 war chest, and they honestly believed that this chest 
 could best be filled by prohibiting the export of 
 coin and bullion, and by trying to force other 
 countries to pay in gold and silver for our goods. 
 Events have shown that they were wrong. Never
 
 X PREFACE 
 
 has the war chest of England been so full as it was 
 after fifty years of Free Trade. 
 
 Again, the Protectionists of the first half of the 
 nineteenth century argued that the existence of a 
 landed aristocracy was essential to the welfare of 
 the nation, and they honestly believed that the 
 aristocracy would perish if the rent of the land- 
 owner was not kept up by a tax upon the food of 
 the people. Here again events have shown that 
 they were wrong. The people, freed from a tax 
 upon their food, and freed from the blundering 
 interference of politicians with the business of 
 commerce, have multiplied their factories and ware- 
 houses, their offices and shops, and have multiplied 
 their houses and parks and pleasure gardens, to 
 such an extent that the rent of the soil of England 
 now maintains a landed aristocracy probably ten 
 times as wealthy as the aristocracy of fifty years ago. 
 
 Another favourite excuse for Protection, repeated 
 at intervals for nearly a century, is the risk to our 
 food supply in time of war. The simple answer is 
 that this risk must be taken, unless we are prepared 
 to reduce our population by at least 50 per cent. ; 
 for even when our population was half what it now 
 is our own soil did not provide us with sufficient 
 food. It is a curious way of promoting national 
 greatness to ask a nation of 42,000,000 people to 
 cut themselves down to 21,000,000 for fear that 
 their foreign food supply, which has never yet been 
 interrupted, might, under conditions, which have
 
 PREFACE xi 
 
 never yet been explained, suddenly cease. Yet even 
 if this happy despatch of more than twenty miUion 
 people had been completed, it would still be argu- 
 able that the remaining population would do more 
 wisely to take the remote and imaginary risk of a 
 war against the world, without allies and without 
 neutrals, rather than face the ever-present dangers 
 of an uncertain climate. 
 
 Another argument which seems greatly to comfort 
 the neo-Protectionist is derived from the fact that 
 other countries, with rare exceptions, have not yet 
 adopted Free Trade. That is a misfortune for the 
 countries that adhere to Protection, and in a lesser 
 degree it is a misfortune for us, because foreign 
 tariffs, especially when they are frequently altered, 
 add to the difHculties with which the British 
 manufacturer has to deal.^ But though foreign 
 protectionist tariffs are in some ways inconvenient 
 to us as well as to the countries that maintain 
 them, their existence in no way disproves the Free 
 Trade position, for that position rests upon argu- 
 ments which would remain true even if all the 
 world rejected them. 
 
 To-day we all believe that the earth moves. Was 
 
 that " dogma " any less true when mankind in the 
 
 mass rejected it, and when the Inquisition threatened 
 
 Galileo with death for daring to proclaim it ? If 
 
 we are to abandon our principles because other 
 
 ' On the other hand, when foreign Protection takes the form 
 of "dumping" goods below cost in this country we actually 
 gain by the folly of our neighbours.
 
 xii PREFACE 
 
 countries fail to follow our example, it is not Free 
 Trade alone that will have to go by the board. One 
 can readily imagine how a minister of the Balfourian 
 type, speaking in the eighteenth instead of in the 
 twentieth century, would have argued against con- 
 stitutional government because other countries 
 continued to submit to the despotism of absolute 
 monarchs, " Do you think that England alone 
 possesses a monopoly of political wisdom ? Are 
 other nations composed of fools ? " These are the 
 questions that an eighteenth century Balfour would 
 have asked, and he would have proceeded to urge 
 that though political freedom was an excellent thing, 
 it ceased to be valuable unless all the world possessed 
 it, and that therefore England should go back to 
 the despotism from which she was saved by the 
 Revolution of 1688. This is no fanciful illustration. 
 There is a very close connection between England's 
 political and England's commercial liberty. We 
 have led the way in one as in the other, because 
 liberty is a tradition of our race. We shook off 
 serfdom, centuries before other countries could rid 
 themselves of it ; we emancipated our country from 
 the domination of a foreign church as early as any 
 of our neighbours, and earlier than most ; we 
 established constitutional government a hundred 
 years in advance of any other country. It is 
 therefore in no way surprising that England should 
 still lead the world in commercial as in political, 
 religious, and civil freedom.
 
 PREFACE xiii 
 
 Lastly we come to an argument that within the 
 last few months has been loudly proclaimed by 
 the modern apostles of Protection as if it were an 
 entirely new discovery. It is in effect only the old 
 superstition of sixty years ago, that a system of 
 preferential tariffs is necessary to hold the Empire 
 together. Even Mr. Gladstone in his younger days 
 held that faith, and resisted the first efforts of Earl 
 Grey to get rid of the colonial preferences. But 
 Earl Grey was right. 
 
 The irritation caused by those preferences would 
 have made the continuance of the Empire impos- 
 sible. Their monstrous absurdity can be illustrated 
 by one fact : — The British Government, in order 
 to encourage the Canadian timber trade, imposed 
 a heavy duty on foreign timber, yet the Admiralty 
 stipulated in their contracts that no colonial timber 
 was to be used in British warships, because of its 
 inferior quality. When the trade of the nation 
 was hampered by regulations of this character it 
 is not surprising that prominent men of all political 
 parties — among them Mr. Disraeli — should have 
 questioned the wisdom of retaining a colonial 
 empire that cost so much and returned so little. 
 In a word, the Little England party was the distinct 
 creation of the system of colonial preferences. The 
 abolition of the last of these preferences in i860 
 left the ground clear for the building up of a 
 great Free Trade Empire. That ideal was not fully 
 realised because English statesmen held — in words
 
 xiv PREFACE 
 
 that the late Lord Farrer was fond of using — that 
 Freedom was greater than Free Trade. The self- 
 governing Colonies were left free to impose pro- 
 tective duties on British goods, although then, as 
 now, the Mother Country bore the cost of their 
 defence. They have freely exercised the freedom 
 accorded to them, and in many cases have built up 
 a high tariff wall against British goods in order to 
 foster an exotic colonial industry. By so doing 
 they have undoubtedly injured themselves, for they 
 have checked the development of their primary 
 industries, which needed no protection. Whether 
 England has greatly suffered by this colonial pro- 
 tection is more doubtful. The colonial market, 
 whether open or closed, has always been a relatively 
 unimportant one. In the five years ending 1859 
 our exports to British possessions averaged 31*5 per 
 cent, of our total export trade ; in the five years 
 ending 1899,^ the percentage was 32*9 per cent. 
 During the intervening forty years the Empire ex- 
 panded enormously both in area and in population, 
 yet the percentage of exports to British possessions 
 remained almost stationary. When it is remembered 
 that the most important of British possessions is 
 India, and that our trade with India is on a Free 
 Trade basis, it will be seen that there is very little 
 ground for the assumption that our colonial trade 
 
 ' This year is taken in preference to any later year because 
 the colonial trade in each of the years 1900, 1901, and 1902 
 was greatly affected by the South African War.
 
 PREFACE XV 
 
 could ever have become a substitute for our foreign 
 trade, even if absolute Free Trade had prevailed 
 between all parts of the Empire. It is significant 
 to note that our export trade to Canada, the greatest 
 of the self-governing Colonies, has never greatly 
 exceeded 3 per cent, of our total exports. 
 
 We may therefore console ourselves with the 
 knowledge that the injury done to the Mother 
 Country by colonial Protection has not after all 
 been very serious. On the other hand, the benefit 
 conferred upon the Empire by colonial liberty has 
 been enormous. The liberty granted to the Colonies 
 to work out their own salvation, even at the cost of 
 some incidental injury to the Mother Country that 
 defends them from foreign foes, has bred in them a 
 spirit of loyalty to the imperial tie that no other 
 system could have created. If we had insisted on 
 keeping their ports open to our trade, they would have 
 disbelieved in the sincerity of our motives, and would 
 have complained, in the usual protectionist jargon, 
 that we were making their shores a dumping ground 
 for our goods. The wisdom of our forbearance has 
 been proved by the success of our policy. Our 
 colonial fellow-subjects may insist on taxing our 
 goods, but they are willing to shed their blood in 
 our battles. It is barely a year ago that the men, 
 who are now shrieking for Protection to save the 
 Empire from instant dissolution, were pointing with 
 pride to an Empire greater and more united than 
 the world had ever seen before. That Empire is
 
 xvi PREFACE 
 
 broad based upon freedom. It can only be shattered 
 by any system of tariff manipulation which would 
 destroy the liberty now enjoyed by Colonies and 
 Mother Country alike, in order to substitute a 
 corrupting commercial bribe for the cementing 
 bond of affection. 
 
 H. C. 
 Gkay's Inn. 
 
 Oct., 1903.
 
 CONTENTS 
 
 PAGE 
 
 The Cotton Industry . . . . i 
 
 By Elijah Helm. 
 
 The Woollen Industry . . . .21 
 
 By Sir Swire Smith. 
 
 The Linen Industry . . . '39 
 
 By Sir R. Lloyd Patterson. 
 
 The Silk Trade . . . • ^5 
 
 By Matthew Blair (Chairman of the Incorporated 
 Weaving, Dyeing, and Printing College of Glasgow). 
 
 The Development of British Banking . . 85 
 
 By a Practical Banker. 
 
 Shipping Liners . . . . .111 
 
 By Maurice Llewelyn Davies (of Messrs. Alfred 
 Holt & Co.).
 
 xviii CONTENTS 
 
 PAGE 
 
 Tramp Shipping . . . . .127 
 
 By Walter Runciman, Jun., M.P. (of Messrs. 
 Walter Runciman & Co., of Newcastle and London, 
 Owners and Managers of the " Moor " steamers). 
 
 The Cutlery Trade of Sheffield . . 142 
 
 By Frederick Callis. 
 
 The Tinplate Trade . . . .163 
 
 By W. Llewelyn Williams, M.A., B.C.L. 
 
 Confectionery and Preserve-Making Industries 176 
 By Robert Just Boyd. 
 
 The Grocer's Industry .... 185 
 By J. iNNEs Rogers. 
 
 The Paper Trade . . . . .201 
 
 By Albert Spicer. 
 
 The Alkali Industry . . . ,214 
 
 By Alfred Mond (of Messrs. Brunner, Mond & Co.). 
 
 The Soap Industry . . . . .227 
 
 By Councillor A. H. ScOTT. 
 
 The Boot and Shoe Trade. With a Note on 
 
 THE Leather Trade .... 235 
 
 By John T. Day (Editor of the Shoe and Leather 
 Record).
 
 CONTENTS xix 
 
 PACK 
 
 Flour Milling Under Free Trade . . 253 
 
 By Andrew Law (of Crawford & Law, Glasgow). 
 
 The Iron and Steel Trade . . . 266 
 
 By Hugh Bell. 
 
 The Machinery and Engineering Trades . 294 
 
 By Arthur Wadham, A.LMech.E. (Editor of the 
 Machinery Market), 
 
 The Coal Trade ..... 348 
 By D. A. Thomas, M.A., M.P.
 
 THE COTTON INDUSTRY 
 
 By Elijah Helm 
 
 IF there be one British industry which is entitled 
 to receive more careful attention than all others, 
 in the course of the present " fiscal inquiry," it is 
 the cotton manufacture. That industry provides 
 the means of livelihood, directly and indirectly, for 
 vast multitudes of our people, and its greatly diver- 
 sified productions supply the most important class 
 of merchandise by which payment is made for the 
 food and other valuable forms of wealth brought 
 to this nation from beyond the seas. It is also, as 
 I shall presently show, the chief instrument by 
 which the protectionist policy of other countries is 
 largely overcome and made innocuous to us. 
 
 The entire value of the cotton manufactures of 
 every description produced in the United King- 
 dom is about ;^ioo,ooo,ooo per annum, of which 
 ;^29,ooo,ooo is retained for home consumption and 
 ;^29,ooo,ooo is exported to India and the Colonies, 
 leaving approximately ;/^42,ooo,ooo, representing the
 
 2 BRITISH INDUSTRIES 
 
 value of the cotton manufactures finding markets in 
 foreign countries. This last item constitutes about 
 one-sixth of the whole of the exports of British pro- 
 ductions sent from our ports in the course of a year 
 to all destinations. 
 
 Now, considering that the British cotton industry 
 is of the nature of an exotic, in that its principal 
 raw material is drawn from sources thousands of 
 miles distant from the seat of manufacture, and 
 considering also that the entrance of its products 
 into some of the wealthiest nations is impeded by 
 high customs duties, it is surely a proof of singular 
 vitality and efficiency that it should be able to sell 
 more than 70 per cent, of its manufactures in com- 
 petition with the rest of the world, and in defiance 
 of the barriers which so many countries interpose 
 against them. In comparison with this huge export 
 trade in cotton goods, that of every other nation falls 
 into insignificance. To what is this supremacy 
 due ? 
 
 It is due, no doubt, to various causes. Foremost 
 among them, however, is the fact that our Free 
 Trade system enables us to manufacture cotton 
 goods at a lower cost than is possible in any pro- 
 tectionist country. That the cost of production is 
 less in Great Britain than elsewhere can be shown 
 in detail by a comparison of the items entering into 
 it, in particular cases. But we need not follow so 
 tedious a process, since there is at hand a less com- 
 plicated, and perhaps a more convincing, proof of
 
 THE COTTON INDUSTRY 3 
 
 the competitive superiority of the British cotton 
 industry, the validity of which can be tested by any 
 one who is acquainted with, or has access to, the 
 pubhshed statistics of international trade. 
 
 Triangular Trade. 
 
 Take the case of France. She imports large 
 quantities of raw silk, and other products from 
 China, Japan, India, and Turkey. Yet the amount 
 of merchandise exported from France to these 
 countries in return is extremely small, and assuredly 
 she does not send them gold. How, then, does 
 France pay for these liberal imports from the regions 
 I have mentioned ? She pays for them indirectly, 
 not by means of her own productions, but by send- 
 ing her wine, her silk goods, her gloves, and her 
 artistic manufactures to Great Britain ; and Great 
 Britain settles the account by exporting her manu- 
 factures, chiefly cotton goods, to the countries in 
 question. Now, clearly, if France were able to 
 supply to them the things they chiefly need, viz., 
 cotton manufactures, at prices as low as they can be 
 obtained from England, she would not need to em- 
 ploy, as in fact she does, the cotton looms of Lanca- 
 shire in order to furnish the means of payment to 
 China, Japan, and Turkey, for the raw silk which 
 she receives from them. 
 
 Another striking example. The United States, 
 notwithstanding their wonderful variety of climate
 
 4 BRITISH INDUSTRIES 
 
 soil and other resources, import immense quantities 
 of tropical produce from China, Japan, India, Africa, 
 South America, and the West Indies. But their 
 direct exports to these regions fall short by several 
 millions sterling of the value of the imports thence 
 to the United States. Here again the chief means 
 employed to adjust the account is the export of 
 cotton goods of Great Britain. Other methods of 
 adjustment are, of course, adopted in addition. 
 Yet the remarkable conclusion remains that the 
 United States do not pay for more than a com- 
 paratively small portion of the merchandise they im- 
 port from these sources by sending them American 
 products, because they cannot produce the kinds 
 of goods which such countries want at prices as 
 low as those goods can be obtained from British 
 manufacturers. 
 
 These illustrations of the indirect or roundabout 
 methods of international trade are very instructive, 
 and any one may easily verify them by reference to 
 the official trade statistics of Great Britain, the 
 United States, and France. Others of like tenor 
 may be discovered by any student who may care to 
 investigate the currents of commerce between 
 country and country with a view to finding out 
 the ways in which international trade balances 
 are settled. But from the present point of view 
 the most important practical lesson which they 
 teach is this : that however successful the great 
 protectionist countries may be in lessening their
 
 THE COTTON INDUSTRY 5 
 
 imports of manufactures from Free-Trading Great 
 Britain, they are obliged after all, and mainly 
 because of their protectionist policy, to use — in- 
 directly, of course, and unintentionally — British 
 manufactures for the purpose of discharging the 
 debts which their necessities require them to con- 
 tract with other countries. The chief instrument 
 by which these debts are paid is British cotton 
 manufactures. 
 
 A New Competitor. 
 
 This fact is of the utmost importance in consider- 
 ing the question with which we are now confronted 
 whether or not the British nation should cast aside 
 the practice of purchasing without fiscal impedi- 
 ment the materials and accessories of its industries 
 at the lowest possible prices wherever in the world 
 they may be found. 
 
 But before proceeding further it is incumbent to 
 examine the very formidable competition which the 
 British cotton industry has met with during the last 
 ten years in the Southern States of the American 
 Union. According to the official census of 1879-80 
 there were 12,360 power looms in the cotton mills 
 of the Southern States. But in 1900-1 these had 
 increased to 122,902, and the number is now con- 
 siderably greater. Within the same interval the 
 number of spinning spindles grew from 561,360 to 
 5,819,835. At first the production of manufactured 
 goods was entirely consumed at home, but within
 
 6 BRITISH INDUSTRIES 
 
 the last fifteen — and particularly within the last ten 
 — years, the Southern mills have been making cotton 
 cloth for export, chiefly to China, in the northern 
 part of which — especially in Manchuria — they have 
 forced their way with little difficulty, even against 
 English and North American goods of like kind, in 
 almost constantly increasing quantity. These cloths 
 — called " drills " and " sheetings " — are, however, 
 only a small group amongst the coarser and heavier 
 kinds, and the Southern manufacturers have not 
 been able to compete either with those of the 
 North-eastern American States or of England in 
 respect of other descriptions. 
 
 The secret of their success is not proximity to the 
 source of cotton supply. The cost of transporting 
 raw cotton to the Northern mills, and to Lancashire, 
 which is about the same in both cases, is little 
 greater than that of conveying it to the manufac- 
 turing districts in North and South Carolina. The 
 secret lies mainly in the utilisation of a previously 
 neglected source of factory labour supply in the 
 Southern States. The emigration from North to 
 South, since the close of the Civil War, more than 
 thirty years ago, of many white settlers on the land 
 created a considerable population of small farmers 
 from which the labour force of the Southern 
 cotton mills is now drawn. The negro population 
 is not engaged in cotton mill operations. Hitherto 
 the workpeople thus tempted from the land to 
 the factory, have been content to work at very
 
 THE COTTON INDUSTRY 7 
 
 much lower rates of wages than those paid in 
 the Northern mills or in Lancashire. Moreover, 
 in the absence of State factory laws in the Southern 
 States, the hours of daily labour are inordinately 
 long, and therefore the fixed-charges item in the 
 cost of production has hitherto been exceedingly 
 low. The piece-rate wages in the South for 
 weaving a particular description of cloth are not 
 much more than one-fourth of those paid at Fall 
 River, Massachusetts, or at Blackburn, in Lanca- 
 shire. This example is a fair illustration of the 
 exceptional and temporary advantage which the 
 Southern manufacturers possess in respect of the 
 cost of labour. Again, the building of cotton mills 
 in the South has been artificially stimulated by free 
 grants of land, by exemption from taxes, and by 
 other expedients proceeding from local enthusiasm 
 and pride in the creation of new industries on 
 the spot. This again must be reckoned a passing 
 and adventitious benefit. 
 
 Special Circumstances of the Southern 
 
 States. 
 
 It is right to dwell upon this remarkable develop- 
 ment in the Southern States, because it may be 
 thought to conflict with the statement that the 
 cotton industry of the United Kingdom is the most 
 efficient of its kind in the world. Two things must 
 be observed, however. In the first place, the new
 
 8 BRITISH INDUSTRIES 
 
 competition is confined to a few coarse descriptions 
 of goods which are not extensively produced in 
 England. It concerns much more the cotton 
 manufacturers of the North American States, and 
 they, to judge from recent authentic reports, are not 
 afraid of the further increase of Southern competi- 
 tion. They have good reason. For, secondly, it is 
 inconceivable that rates of wages so greatly below 
 the standard current in the North can long prevail 
 in the Southern cotton mills. Moreover, there are 
 indications that the supply of cheap labour in these 
 mills is becoming exhausted, since the manufacturers 
 are now compelled to employ an astonishingly large 
 proportion of children, some of them of tender 
 years. It is impossible to believe that American 
 public opinion will long tolerate the absence of 
 factory laws in the South such as those which exist 
 in the North. Finally, the cotton trade-unions are 
 at work in the South, and their efforts, combined 
 with the other forces tending to equalise industrial 
 conditions as between North and South, must 
 assuredly result in the disappearance of the special 
 advantages in respect of the cost of labour which 
 have done so much to extend the cotton industry of 
 the South. 
 
 This competition of the American Southern cotton 
 mills with those of our own country is the only 
 serious instance of successful substitution of foreign 
 for British goods in recent years, and, as already 
 stated, it is confined to a class of coarse manufactures
 
 THE COTTON INDUSTRY 9 
 
 not now extensively made in this country. The 
 spinning mills of India have, no doubt, reduced to 
 very small dimensions the export of coarse English 
 cotton yarn to China and to India itself, but that is 
 not a modern innovation. In like manner the yarn 
 spun in the Japanese mills has made the competition 
 of English yarn in the B'ar-Eastern markets much 
 more difficult for our spinners. With these excep- 
 tions, however, the business of producing cotton 
 yarns and goods for export remains still in the 
 hands of British manufacturers and merchants. In 
 other countries the industry, however greatly it may 
 have increased within the last twenty-five or thirty 
 years, is still for the most part a home-market 
 industry, and so long as the advantages we possess 
 are retained, especially that of low cost of production 
 there is no ground at present visible to anticipate 
 that we shall lose the position we now hold of being 
 the main suppliers of cotton goods to markets outside 
 the sources of production. 
 
 Cheap Materials and Accessories. 
 
 It must, nevertheless, be acknowledged that at 
 times foreign competition with certain descriptions 
 of our own cotton manufactures is perceptibly keen, 
 especially when the home markets of the various 
 foreign countries are depressed, and unable to take 
 off the full home production. This fact is a plain 
 indication that the margin of adv^antage which we
 
 10 BRITISH INDUSTRIES 
 
 possess is not so great as to warrant any trifling with 
 it by increasing the cost of production. 
 
 We are thus brought round again to the question, 
 How would the abandonment of Free Trade affect 
 the British cotton industry ? It has been shown 
 that foreign nations which put high duties on 
 British manufactures are, in effect, compelled to 
 employ our cotton goods as a means of paying 
 for the produce which they import from third 
 countries, because cotton goods are the form of 
 payment which is chiefly preferred, and indeed in- 
 sisted upon. These protectionist countries partially 
 exclude British cotton goods from their own home 
 markets, but they cannot prevent our goods from 
 being used in order to pay for their imports, because 
 British cotton goods are cheaper than those which 
 these protectionist countries produce. 
 
 Why are they cheaper ? Partly, no doubt, 
 because the English cotton industry is excellently 
 organised ; partly also because the moist English 
 climate is favourable to the spinning and weaving 
 of cotton. But over and above these advantages — 
 and this consideration applies to British industry 
 generally — it is enabled to purchase at lower prices 
 than its competitors in protectionist countries the 
 materials and accessories required in the various 
 processes. Raw cotton is not the only material 
 consumed in the industry. Large quantities of 
 leather, dyeing and bleaching requisites, iron and 
 steel, oil, tallow, flour and other farinaceous sub-
 
 THE COTTON INDUSTRY ii 
 
 stances, besides many minor accessories, are required. 
 It may, perhaps, be thought that these are trifling 
 items in the cost of production. They are, it is 
 true, subordinate to that of the price of raw cotton, 
 but they are collectively by no means of small 
 importance. On the contrary, the advantage which 
 British cotton spinners and manufacturers enjoy 
 from being able to buy their machinery, their iron 
 and steel, their bleaching and colouring materials, 
 and, in short, all the requisites of their industry, at 
 lower prices than their rivals abroad, is often a 
 decisive advantage in practical competition. 
 
 It must, however, be parenthetically acknowledged 
 that in one respect the English cotton industry has 
 long been heavily handicapped by the anomalies of 
 our patent law. The subject is much too compli- 
 cated to be adequately dealt with in a paragraph. 
 It is, however, quite true that the industry has 
 suffered greatly within the last twenty-five years 
 from the fact that it has had to pay higher prices 
 for patented coal-tar colouring matters than its 
 competitors in any other country, and that this 
 disadvantage is directly traceable to the imperfec- 
 tions of British patent law. I refer to this subject 
 now, only for the purpose of strengthening the 
 argument that the cheapness of the accessory 
 materials of the industry is of the greatest impor- 
 tance in promoting its success. The excessively high 
 prices which British printers and dyers of textile 
 fabrics have been compelled to pay for certain
 
 12 BRITISH INDUSTRIES 
 
 colouring materials and other chemical products 
 required in their industry have been an appreciable 
 clog upon their progress, and they supply one of 
 the reasons for the occasional success of continental 
 producers in competing with us for the supply of 
 coloured textile fabrics in foreign markets. Such 
 incidents as this tend, however, to support the 
 general argument that to be able to obtain the 
 principal and accessory materials required in in- 
 dustrial operations at the lowest prices current in 
 any part of the world free from fiscal obstruction 
 is one of the main causes of the supremacy of the 
 British cotton industry. 
 
 But it may be answered : "No one is proposing 
 to tax the materials of industry, and especially of the 
 cotton industry, the maintenance of which is so 
 essential to the prosperity of the nation." That is 
 not quite accurate. Even the small duty on wheat 
 and other farinaceous substances which has recently 
 been removed would, if it had been continued, have 
 added perceptibly to the cost of production in the 
 cotton industry. I know one company — a very 
 important one — upon which it would have imposed 
 an additional expenditure of nearly ^4,000 per 
 annum. I do not think it necessary to discuss 
 the question of the incidence of the corn duty. 
 Owing to market fluctuations and other temporary 
 influences a new duty may not always lead at 
 once to a rise of price. But a tax upon any 
 material is an addition to the cost of production,
 
 THE COTTON INDUSTRY 13 
 
 and distribution, and after the ultimate adjustment 
 the consumer must pay it. In like manner a 
 lessening of the cost of production must sooner or 
 later reach the consumer, although it may be 
 detained on its way to him. 
 
 A Privilege to Selected Persons. 
 
 To come to the larger question. It is quite true 
 that Mr. Chamberlain and his supporters repudiate 
 the idea of taxing raw materials. But we have 
 been clearly told that they intend to tax food and 
 manufactured articles, and in so doing they must 
 abandon Free Trade. 
 
 Now what is the essential principle of Free Trade ? 
 It is this — that Parliament may impose a duty on 
 any imported commodity provided that the public 
 Treasury shall receive the whole of the benefit result- 
 ing from its imposition. No private person must 
 have a share in it. To violate this principle is to 
 give a privilege to selected individuals or classes at 
 the expense of the whole community. But such 
 privilege is not only inequitable and unjust, it is 
 also, as all experience goes to prove, economically 
 wasteful ; and once established, it is certain to 
 extend. 
 
 The inevitable tendency of Protection to spread 
 is abundantly demonstrated in the fiscal history of 
 all countries where it has become systematic. The 
 extension of a privilege bestowed upon one, or a 
 few industries, to many others, is justified by the
 
 14 BRITISH INDUSTRIES 
 
 sentiment of equality, which demands that when 
 the State has granted a privilege to one industry it 
 should not be denied to another. For this reason 
 Free Trade requires that whenever a customs duty 
 is put upon an imported commodity an equivalent 
 excise duty should be placed upon those home pro- 
 ductions which compete with it, or which may be 
 substituted for it. Only in this way can the public 
 Treasury be sure of receiving the whole of the 
 advantage resulting from the imposition of the 
 customs duty. 
 
 The bearing of these considerations upon the 
 general cost of industrial production is obvious 
 and weighty. The singular advantage which British 
 manufacturers have enjoyed during the last fifty 
 years over their foreign competitors is that they 
 have been able to purchase at lower prices all the 
 principal and accessory materials required in their 
 businesses. But, as we have already seen in the 
 case of the cotton industry, this advantage has 
 been of essential service in enabling us to compete 
 successfully in the world's markets, and to overcome 
 the obstacles placed in the way of our direct exports 
 to protectionist countries. These shut out, not 
 entirely, but in greater or less degree, our manu- 
 factures from their own markets, but the means 
 which they employ for this purpose have the effect 
 of so far raising their own cost of production that 
 they are compelled to hand over to us the business 
 of making goods to be used in paying for their
 
 THE COTTON INDUSTRY 15 
 
 imports from other parts of the world. This im- 
 portant, and perhaps unintended, consequence of 
 protectionist poHcy in foreign countries — the arti- 
 ficial enhancement of the cost of production — is 
 more far-reaching and extensive in its scope than 
 is commonly supposed. 
 
 Dumping. 
 
 We are told that imported raw materials are 
 not to be taxed under the proposed new fiscal 
 scheme. But what is a raw material ? Much 
 the largest proportion of the ;^ioo,ooo,ooo worth 
 of " manufactures " now imported duty free 
 annually into the United Kingdom is used in 
 British industries instrumentally for further pro- 
 duction. Probably not less than 80 per cent, of 
 such imports is thus consumed. It goes with- 
 out saying that such materials are sold to us at 
 very low prices, or they would not be imported ; 
 and the benefit thus accruing to our industries as a 
 whole is all the greater because of the prevalence of 
 systematic Protection amongst our manufacturing 
 competitors in other lands. Whenever they have a 
 surplus of any commodity which cannot be disposed 
 of at the high home prices resulting from Protection, 
 relief is obtained by exporting the surplus. 
 
 Under natural conditions, that is to say under a 
 Free Trade system, the weight of the excess would 
 tell equally upon home and export prices. But the 
 very object of Protection being to keep up the
 
 i6 BRITISH INDUSTRIES 
 
 home price, the surplus is sent abroad. And 
 since the United Kingdom offers the only great 
 and unobstructed market for anything good and 
 cheap, these surplus commodities are sent to our 
 ports, to the advantage of our industries, which 
 can use them as means of reducing the cost of 
 their final products. Examples of this kind abound 
 in many departments of manufacture, and they are 
 not absent from the cotton industry. Take the 
 extreme case of woven piece goods. If these can 
 be obtained at "dumping" prices from abroad 
 because of temporarily excessive production as 
 they come from the foreign loom, they furnish 
 cheap raw material for the British dyer, bleacher, 
 printer, or finisher. And even when they are 
 received at dumping prices in the finally finished 
 state, they become the raw material of the great 
 clothing industries, such as those of Leeds or 
 Manchester, which employ altogether thousands 
 of British workpeople. 
 
 The thought may perhaps occur to the critical 
 mind — "Yes, it is quite true that wherever these 
 dumped ' commodities can be thus utilised they are 
 industrially beneficial ; but they must injure the 
 home producers of like commodities at all events so 
 long as they are being imported." The answer is 
 that these producers also are advantaged by having 
 access to the cheapest markets for the materials 
 which they consume. The benefit is thus general, 
 and is highly favourable to the success of our
 
 THE COTTON INDUSTRY 17 
 
 industries as a whole. There is also the further 
 consideration that the temporary disadvantage of 
 having to meet the competition of cheap imported 
 commodities is not essentially different from that 
 resulting from excessive home production. If 
 manufacturer A. has accumulated a stock which he 
 cannot sell at current market rates, and wants to get 
 rid of it, he must " break the price " to the hurt 
 of his neighbour, manufacturer B., who is in the 
 same branch of business, but is under no such 
 necessity. In both cases the effect is the same, a 
 lowering of prices due to excessive supply. Both 
 cases alike are consequently to be treated as 
 incidents of competition involving, no doubt, 
 individual trouble and loss for the time being, but 
 not calling for heroic remedy in either of them. 
 
 The Foundation of our Success. 
 
 I hope I have succeeded in showing that the 
 British cotton industry, the greatest manufacturing 
 industry in this country, is largely dependent for 
 its success upon the Free Trade policy under which 
 it has made such wonderful progress during the last 
 half-century. It still holds its foremost place as a 
 producer for the markets, not only of this country, 
 but also of the whole world. Judged by partial 
 and misleading criteria, the progress of some foreign 
 cotton industries seems to have been much more 
 rapid than that of our own. They have outstripped 
 us, for example, in the rate at which their consump- 
 
 3
 
 i8 BRITISH INDUSTRIES 
 
 tion of raw cotton, as stated in weight, has grown 
 during the last thirty years. But that is a very 
 unsafe standard. The proportion of cotton used 
 per spindle in England, not the aggregate con- 
 sumption, has long been gradually lessening because 
 our mills have been producing finer and finer yarn 
 every year. The progress of mankind in wealth and 
 refinement has vastly increased the demand for 
 superior, more varied, and more tasteful cotton 
 fabrics, requiring for their production finer yarns. 
 For the spinning of these, and in a large degree for 
 the weaving and finishing of the superior fabrics, 
 our climate and the training and skill of our 
 managers and workpeople, as well as the industrial 
 and commercial organisation of the British cotton 
 trade, have proved themselves admirably adapted. 
 Of these we cannot be easily deprived. But there 
 are the further inestimable advantages resulting 
 from our unique fiscal system which it has been 
 the main object of this essay to justify. These 
 advantages are threatened by the agitation recently 
 sprung upon the country in the name of ''fiscal 
 reform." They may be lost, unless those who are 
 inclined to accept incontinently the representations 
 of the "reformers" insist upon submitting them to 
 careful and searching investigation. 
 
 Let no one be deceived by the half apologetic 
 phrases by which the new proposals are advocated. 
 We are told that it is not Protection, but only a 
 " modification " of Free Trade which is aimed at,
 
 THE COTTON INDUSTRY 19 
 
 as if it were possible to modify our fiscal system, 
 in the manner suggested, without instantly aban- 
 doning Free Trade. Protestations of this kind are 
 familiar enough to those who have made a study 
 of customs tariff history. 
 
 All sorts of plausible pretexts have been urged as 
 excuses in the beginning of high protectionist move- 
 ments. But the unfortunate and fatal fact is that 
 when once the system of privilege known as Pro- 
 tection has gained a foothold, it inevitably mounts 
 to formidable proportions, and cannot be eradicated 
 except under the pressure of some national disaster 
 such as the distressful famine which settled the fate 
 of the Corn Laws. To open and avowed Protec- 
 tionists this argument is rather welcome than 
 repellent. They rejoice in the persistent vitality 
 of Protection and in its inevitable tendency to 
 cover the whole field when the plant has been 
 allowed to take root. To them, therefore, it is not 
 addressed, but to those British citizens whose minds 
 are open, and who are prepared to weigh carefully 
 the evidence pro and con. before committing 
 themselves one way or the other upon the most 
 momentous national issue which has been presented 
 to the British people for many a generation. 
 
 The principle which it has been the main purpose 
 of this essay to demonstrate is obviously of much 
 wider application than is here given to it. If 
 unimpeded access to the cheapest sources of supply 
 for industrial materials is a vital factor in the main-
 
 20 BRITISH INDUSTRIES 
 
 tenance of the British cotton manufacture, it must 
 be important, if not essential, to the success of many 
 others of our industries. It is, indeed, the chief 
 foundation of the industrial prosperity of these 
 little islands in the northern corner of Europe. It 
 is a hidden foundation, in the sense that it needs 
 some thought in order to perceive its essential 
 importance to the economic welfare of our country. 
 But it is not the less real. The principle was clearly 
 set forth by Sir Robert Peel in a speech addressed 
 to the House of Commons on July 6, 1849, when 
 he pointed out that '' the best way to compete with 
 hostile tariffs is to encourage free imports," and that 
 the injury done to us by foreign tariffs can best be 
 combated " by buying that of which you stand in 
 need in the cheapest market." These words are 
 just as true to-day as when they were spoken.
 
 THE WOOLLEN INDUSTRY 
 
 By Sir Swire Smith 
 
 THE wool industry is the oldest of the textile 
 industries of Britain, and was introduced by 
 the Flemings, at or near Norwich, early in the 
 fourteenth century. For long years prior to that 
 time the country was an exporter of wool. "The 
 ribs of people throughout the world," wrote 
 Matthew Paris, " are kept warm by the fleeces of 
 English wool." So important did the woollen 
 industry become that at the close of the seventeenth 
 century it is stated that the production of wool 
 and its manufactures constituted the " most solid 
 foundation of the national prosperity and riches." 
 At this time Norwich was the largest city in the 
 kingdom next to London. To use Macaulay's 
 phrase, it was then " the chief seat of the chief 
 manufactures of the realm." At that time, of 
 course, the manufacture of wool was a hand 
 industry. The slow and tedious processes of 
 combing, carding, spinning, and weaving were 
 
 21
 
 22 BRITISH INDUSTRIES 
 
 conducted mainly in the dwellings of the operatives. 
 The yarns and pieces were dyed in small establish- 
 ments, and the distribution of the raw material 
 and the collection of the manufactured product 
 were carried on by means of pack-horses and 
 primitive waggons. Britain in those days was 
 hardly in advance of India and other Eastern 
 countries in its manufacturing development, and 
 our manufacturers periodically suffered terribly 
 from their competition, as our ships brought their 
 cotton and silk products to this country. 
 
 Early Inventors. 
 
 A complete change was effected by the inventions 
 of Hargreaves, Arkwright, and a few others, be- 
 ginning about 1770. These inventions, though 
 first applied to the spinning of cotton, were soon 
 adapted to wool. Naturally these early machines 
 were of a very primitive character, but they served. 
 In place of hand labour carried on in cottages, 
 small factories were started in which " gin-horses " 
 were introduced to propel the newly-invented 
 machinery. Next came water power, about 1790, 
 and at about the same date James Watt's steam 
 engine began to be successfully applied to the 
 machinery, and thus the factory system, so mar- 
 vellous in its influence upon the destinies of the 
 human race, was inaugurated. The power loom 
 was invented by the Rev. Dr. Cartwright in 1785. 
 For a time Norwich continued to be the acknow-
 
 THE WOOLLEN INDUSTRY 23 
 
 ledged wool centre, but the industry had taken root 
 in the West Riding of Yorkshire, and the earHest 
 factories were erected in that county. During the 
 transition from hand methods to machinery the 
 trade was placed in constant peril by strikes and 
 riots, which broke out on the introduction of every 
 mechanical improvement dispensing with hand 
 labour. These demonstrations were successfully 
 resisted in the north, but in Norwich there was a 
 refusal on the part of those most interested to 
 depart from the antiquated methods of the past, 
 although hard pressed by competition. For any 
 one in the beginning of the last century to attempt 
 to set up machinery in Norwich was to venture his 
 life. This resistance to improvement stripped the 
 illustrious city of its manufacturing prestige, and 
 many of the misguided and distressed artisans were 
 glad to accept employment in northern towns as 
 minders of the very machines whose admission to 
 their own city they had so blindly and resolutely 
 refused. 
 
 The next great step in the wool manufacture was 
 the invention of wool-combing machinery, of which 
 the germ was supplied by Dr. Cartwright in 1790 
 and perfected in a series of machines by Heilmann 
 in 1846, and during the next few years by Holden, 
 Lister, Donisthorpe, Noble, and others. All the 
 most important machines, with the exception of the 
 Jacquard fancy loom, by Jacquard, of Lyons, in 
 1801, and the combing machine by Heilmann, were
 
 24 BRITISH INDUSTRIES 
 
 of British invention and construction, and the main 
 improvements since those dates have been the 
 outcome of British ingenuity embodied into 
 practical shape by British machine makers. 
 
 But until the repeal of the Corn Laws the com- 
 mercial progress of the country was very slow, and 
 but imperfectly indicated its potential importance. 
 The poverty of the masses was appalling. Agri- 
 cultural labourers were in a chronic state of semi- 
 starvation ; factory operatives had hard work and 
 little pay ; among the manufacturers there were 
 periodical panics, over-production, and failure to 
 meet engagements, while the condition of the 
 masses in other countries was no better. The Free 
 Trade measures of 1846 opened up a new era for 
 Britain and the world. The policy of the Open 
 Door enabled us to offer cheap manufactures in 
 exchange for food and raw materials, and our ships 
 covering the seas acted like the magic carpet of the 
 " Arabian Nights " in conducting the great business 
 of international exchange between Britain and the 
 rest of the world. 
 
 The great Exhibition of 1851 was a revelation to 
 the manufacturing nations of our superiority in 
 engineering, textile machinery, and in general mecha- 
 nical equipment. It was said by the "croakers" 
 that we opened our workshops to the bandits of the 
 world, and invited them to despoil us of our 
 treasures. But nothing was sold that was not paid 
 for at a substantial price. The Exhibition, hov.'ever.
 
 THE WOOLLEN INDUSTRY 25 
 
 taught lessons to us as well as to our rivals. We 
 were superior in heavy cloths and in the general 
 fabrics for the million, but in the better goods, and 
 especially in silks, we were inferior in design, taste, 
 and colour. In the same way in the fine all-wool 
 merinos and cashmeres, the French exhibits were 
 marked by superior excellence of finish and quality, 
 which to a large extent they still retain. 
 
 It was not to be expected that other nations with 
 resources equal to our own, and with plenty of 
 cheaper labour, would be content to leave the field 
 of manufacturing entirely in our hands. Our 
 machine makers were as willing to sell their wares 
 as the machine users had been to sell theirs, and 
 soon there opened up a vast export of machines of 
 all kinds for the equipment of competing factories 
 in other countries. For more than twenty years 
 those who have followed the course of events have 
 seen that half the workpeople in this country have 
 been employed in forging weapons to be used by 
 competitors in other countries against the other 
 half. Even if we had desired to stop all this 
 development of manufacturing in other countries 
 I have never seen a suggestion as to how it could 
 be done. Even if we could have prevented the 
 sale of British machinery to our rivals, the parts 
 would easily have been obtained and copied by 
 foreign makers. Under Free Trade the wealth 
 of the country so increased that we were able 
 to supply to other countries a vast amount of
 
 26 BRITISH INDUSTRIES 
 
 capital for the building and equipment of railways, 
 factories, and all kinds of industrial undertakings. 
 We became the " universal provider " of all 
 machine-made goods and of everything pertaining 
 to mechanical production, and by distributing our 
 inventions and monopolies everywhere we "levelled 
 up " the enterprising nations of the world to our 
 standard, and in effect restored the practical 
 equality of equipment that had existed among them 
 one hundred and fifty years before. This is the 
 natural result of a policy which encouraged our 
 people to buy in the cheapest and sell in the dearest 
 market, and although it exposed the manufacturers 
 of Britain to the rivalry of those of other countries, 
 it resulted in the enrichment of the whole world, 
 and of this country most of all. It may be said that 
 for at least thirty years our industrial rivals in other 
 countries have possessed themselves of our material 
 advantages, and they have been untiring in their 
 efforts to turn them against us. 
 
 Better Education Abroad. 
 
 In one direction at least they have " outranged " 
 us. While we concentrated our attention on the 
 development of our machines they devoted their 
 energies to the educational equipment and training 
 of their men. They recognised what we had ignored, 
 that of all machines the human machine best paid 
 for development. " There is that scattereth and yet 
 increaseth, and there is that withholdeth more than is
 
 THE WOOLLEN INDUSTRY 27 
 
 meet, and it tendeth to poverty." Our continental 
 neighbours scattered their education broadcast, and 
 it brought them their chief increase in industrial 
 wealth ; we in this country withheld it, and it has 
 tended to our material as well as to our intellectual 
 poverty. None can tell the loss to this country 
 through our neglect of intellectual training. I un- 
 hesitatingly assert that in every important manufac- 
 turing industry in which we have been beaten by the 
 foreigner the evidence on inquiry has shown that 
 the cause has not been due to lower wages nor longer 
 hours, nor to any advantages in obtaining raw mate- 
 rials — least of all to their protective tariffs — but to 
 the superior education and technical training of our 
 rivals. While resisting, on the ground of poverty, 
 in this country the establishment of educational 
 facilities equal to those of our neighbours, we have 
 been paying for their technical schools by buying 
 the commodities that these schools were instrumental 
 in producing, I mention this fact because it is the 
 only protection of our rivals that has enabled them 
 to score against us ; they have surpassed us " in 
 putting their brains into their work." But having 
 in many instances surpassed us in the effective use 
 of our own machines, they then erected barriers in 
 the shape of protective tariffs with the object of 
 compelling their own people to support their own 
 manufacturers as against those of this country, and 
 I confess that the loss of important markets sus- 
 tained by British manufacturers has caused in many
 
 28 BRITISH INDUSTRIES 
 
 instances intense suffering and dislocation until 
 other trades or new markets could be found. This 
 periodical displacement has been going on for at 
 least twenty-five years, but such has been the enter- 
 prise and the perseverance of many of our manu- 
 facturers, that in most instances they have overcome 
 their difficulties, and literally as one door has 
 closed another has opened. Commenting on the 
 same difficulty of dealing with protective duties 
 which our wool manufacturers had to contend with 
 two hundred years ago even more than now, De 
 Foe (the author of " Robinson Crusoe ") remarks : 
 " Our manufacture " (from wool) " is like a flowing 
 tide, if it's bank't out in one place, it spreads by other 
 channels, at the same time, into so many different 
 parts of the world, and finds every day so many 
 outlets, that the obstruction is not felt ; but, like the 
 land to the sea, what it loses in one place it gains in 
 another." 
 
 The Success of ouk Policy. 
 
 The Fair Traders and Protectionists foretold 
 immediate ruin and disaster as the result of 
 allowing our trade to be assailed and not hitting 
 back, but their prophecies seem to be no nearer 
 fulfilment now than when they were made, over 
 twenty years ago. Employment is more regular 
 and is better paid now than it was then, food 
 and clothing are cheaper, and the people enjoy 
 greater comforts and more leisure than ever before.
 
 THE WOOLLEN IXDUvSTRY 29 
 
 We still command the best share of the neutral 
 markets, and while in general holding the best 
 branches of our home trade, we do the lion's share 
 of the import business with each of our largest 
 protected competitors. And in spite of the pes- 
 simists at home and the critics abroad who 
 disparage our position and foreshadow our coming 
 decay, among our best informed rivals in every 
 country the confession is universal that if the 
 products of Britain were allowed a free entry they 
 would invade every market in Europe and America 
 even against its own manufacturers. 
 
 It would be difficult to estimate the influence of 
 Britain in promoting the prosperity of our Colonies 
 and other countries by her manufacturing industries 
 and her policy of free imports. This applies to all 
 industries, but especially to wool. The first sample 
 of Australian wool was brought to this country as a 
 curiosity in 1808. It was not, however, till twenty 
 years after that the yearly import reached a million 
 pounds weight, but following the inventions of 
 combing machinery and the adoption of Free 
 Trade the consumption of our own domestic wool 
 and the import of colonial wool reached enormous 
 proportions, the production of wool being the chief 
 source of the enrichment of our Australian Colonies. 
 
 The annexed figures give a far better idea of the 
 growth of the British wool industry than can be ob- 
 tained from the statistics of the value of the exports 
 of manufactures. The raising of tariffs, especially
 
 30 
 
 BRITISH INDUSTRIES 
 
 those of the United States, have from time to time 
 seriously affected the exports from this country. 
 There have also been periods of inflation and 
 depression of prices, which have abnormally 
 affected values, so much so that for purposes of 
 comparison the setting of one period against 
 another is in some instances so misleading as to 
 be worthless. 
 
 Consumption' of Wool in the United Kingdom, 
 
 
 Estimated Yield 
 
 Imports of Foreign 
 
 
 
 
 of 
 
 and 
 
 Exports. 
 
 Consumption. 
 
 
 Domestic Wool. 
 
 Colonial Wool. 
 
 
 
 
 lbs. 
 
 lbs. 
 
 lbs. 
 
 lbs. 
 
 1800 
 
 96,000,000 
 
 9,000,000 
 
 — 
 
 105,000,000 
 
 1850 
 
 130,000,000 
 
 77,000,000 
 
 26,000,000 
 
 181,000,000 
 
 1870 
 
 1 50,000,000 
 
 266,000,000 
 
 101,000,000 
 
 364,000,000 
 
 1890 
 
 138,000,000 
 
 649,000,000 
 
 371.000,000 
 
 502,000,000 
 
 1900 
 
 141,000,000 
 
 587,000,000 
 
 221,000,000 
 
 576,000,000 
 
 1902 
 
 135,000,000 
 
 676,000,000 
 
 110,000,000 
 
 562,000,000 
 
 The Year 1872. 
 
 For example, it is a favourite device of some 
 of the Fair Traders to quote the statistics of the 
 export of woollen goods in the selected year 1872, 
 when they reached ^^39,000,000, against, say, 
 1900, when they were valued at -^25,000,000, as 
 showing the decline of the wool industry. These 
 figures certainly indicate without explanation an 
 alarming shrinkage. It happens, however, that 
 1872 was the year of the biggest boom ever known 
 in the woollen and worsted industry. The Franco- 
 German war was just over, and our two great 
 manufacturing rivals and customers were well-nigh
 
 THE WOOLLEN INDUSTRY 31 
 
 strangled and completely disorganised. There was 
 a tremendous demand for goods from all parts of 
 the world, and England was the best equipped for 
 supplying it. English wool reached the highest 
 price ever known — half a crown a pound — about 
 four times its value in 1900, when the lowest point 
 was about reached. Of course manufactured goods 
 and yarns followed the raw material, and to quote 
 these two years as representing the normal con- 
 ditions of the trade is a misrepresentation of the 
 facts. In 1872 the consumption of wool was the 
 largest on record up to that date, and amounted to 
 389,000,000 lbs. The inference would naturally be 
 that our export of goods having so seriously 
 diminished in 1900 our consumption of wool would 
 have diminished in a similar proportion. Yet in 
 1900 we consumed 576,000,000 lbs. — half as much 
 again as in 1872. This hardly spells ruin. 
 
 In 1872 we did an enormous export yarn trade, 
 especially with Germany ; it amounted to 41,800,000 
 lbs. But in 1900 this trade, instead of falling off, 
 had risen to 72,500,000 lbs. In the interval a new 
 industry had arisen, namely, the export of combed 
 tops, which in 1900 reached 28,000,000 lbs. There 
 was also a considerable increase in the home trade 
 for manufactured goods, but I am of opinion that 
 there has been a falling off in the weaving industry 
 of the Bradford district, the demand for labour at 
 better prices in other industries having taken away 
 many weavers. The married women are more and
 
 32 BRITISH INDUSTRIES 
 
 more required at home, and the men in the machine 
 shops, earninghigher wages, can afford to keep them 
 there. It is the natural and gratifying outcome of 
 our prosperity that the demand for labour in so 
 many directions is constantly attracting our opera- 
 tives from the lower paid to the more lucrative 
 industries. For many years past there has been a 
 great increase in the import of manufactured wool 
 goods and yarns, which, instead of indicating decay, 
 as is so often proclaimed by the protectionists, is an 
 evidence of advancing well-being on the part of our 
 people. Under perfect freedom of exchange these 
 imports would be merely incidents in the inter- 
 national division of labour in which the most 
 efficient country would make choice of the branch 
 of industry that pays best or is most suited to its 
 resources. Let me illustrate. I remember a great 
 outcry many years ago that Leeds was going to ruin : 
 it had lost the flax trade. The fact was that both 
 labour and capital in Leeds could do better in other 
 industries, and so the flax trade was allowed to find 
 a home in France and Belgium, where wages were 
 lower and the hours were less restricted by factory 
 legislation. 
 
 Scotch Weavers and Belgian Yarn. 
 
 Bitter complaints were made twenty years ago 
 of the downfall of the woollen spinning industry, 
 as was shown by the immense import of woollen 
 yarn from Belgium, and the Commissioners on
 
 THE WOOLLEN INDUSTRY 33 
 
 Technical Instruction at that time, in order to get 
 at the facts, visited the factories in which it was 
 produced, and those also in Glasgow and the south 
 of Scotland in which the yarn was woven. We 
 ascertained that about fifty years ago the Glasgow 
 manufacturers were almost wholly supplied with 
 woollen yarn from Yorkshire, but that in the course 
 of years the industry had practically been transferred 
 to Belgium. In fact, the Belgians started a new 
 industry. Among the wools imported in those days 
 to Liverpool were some from Buenos Ayres, which 
 were much infested with " burrs," the prickly seeds 
 of a plant that grew extensively on some of the 
 pastures. The English spinners, who were unable 
 to extract the burr, would have nothing to do with 
 the wool, which became greatly neglected, and was 
 offered at a much depreciated price. This wool, so 
 shunned by the British, was experimented upon by 
 the Belgians, who by chemical knowledge obtained 
 in their technical schools hit upon a process of 
 extracting the burr, thus making a yarn very much 
 cheaper for the quality than any offered by the 
 English or Scotch spinners. There was no British 
 yarn like it, and for a time it did not find favour. 
 But its cheapness made an opening for it, and 
 gradually it superseded the Yorkshire yarns in the 
 Scotch trade, and became so great an industry that 
 the sale of the wool was transferred from Liverpool 
 to Antwerp, where the sales have since been con- 
 ducted. We were told in the woollen districts of 
 
 4
 
 34 BRITISH INDUSTRIES 
 
 Yorkshire that the loss of this great trade in yarn had 
 been made up by something better, and the woollen 
 spinners of the south of Scotland confessed that 
 they were not seriously hurt by it, although at that 
 time the import had reached 14,000,000 lbs, a year, 
 employing about fifty spinning mills, with an average 
 of ten sets of carding engines in each. The Glasgow 
 manufacturers affirmed that the introduction of 
 Belgian yarn had been the salvation of the textile 
 industry of Glasgow. They said that it would be 
 simply impossible to spin the yarn in Scotland, there 
 being no labour available at the low price paid in 
 Belgium, and they further maintained that to stop 
 the import of Belgian yarn would practically compel 
 many of the manufacturers of Glasgow to establish 
 weaving plants in Belgium. Yet the import of this 
 yarn amounted in 1902 to 12,000,000 lbs., at a value of 
 over ;^i,ooo,ooo, and it is quoted by the protectionists 
 as one of the instances of the destruction of British 
 trade. 
 
 Who Does the Dumping ? 
 
 Then as regards the import of woven goods, it is 
 undoubtedly true that the demand for pleasanter 
 and more profitable work has attracted many weavers 
 from Yorkshire factories, while at the same time 
 British yarns have found their way more and more 
 to German mills, where at lower wages they have 
 been woven into most attractive goods, and dyed, 
 finished, and in many instances shipped to England.
 
 THE WOOLLEN INDUSTRY 35 
 
 A short time ago a German merchant in Bradford 
 informed me that one of his customers had sent him 
 some patterns of goods which he was shipping to 
 London made from Bradford yarns, of which he 
 was a large buyer, and the merchant had seen the 
 self-same goods displayed in the leading shop 
 windows of Bradford. Under the scheme of retalia- 
 tion suggested by Mr. Chamberlain probably the 
 first shot would be fired at Germany, and would be 
 aimed straight at the import of worsted goods, which 
 are said to be "flooding our markets." As a matter 
 of fact, however, the flooding is the other way, 
 for protected Germany bought from us in 1902 
 woollen goods and yarns valued at over ^^4,000,000, 
 and sold to us in the same year goods and yarns 
 valued at less than ^^2,000,000. To shut out of 
 our markets these manufactured goods from 
 Germany would act like a boomerang in shutting 
 out from Germany the British yarns from which 
 the goods are made. Had we not better " bear 
 the ills we have than fly to others that we know 
 not of " ? 
 
 This wonderful weapon of Protection not infre- 
 quently recoils on the protector. Several years ago 
 an industry which grew to large dimensions was 
 established in a continental country for the manu- 
 facture of " ready-made clothes," which were 
 exported to our Colonies and to all parts of the 
 world. The cloth was almost entirely imported 
 from England, and the patriots and domestic wool
 
 36 BRITISH INDUSTRIES 
 
 manufacturers prevailed on their Government to 
 foster the home production of the cloth by putting a 
 heavy tariff on the imported cloth from Britain. 
 The British manufacturers lost their market for a 
 time, but an opportunity was afforded for the estab- 
 lishment of the " ready-made clothes " industry in 
 this country, which in a few years absorbed con- 
 siderably more cloth than had been exported, and 
 practically took the trade away from the country 
 that had established it. Britain does not always 
 come off second best in her competition with the 
 protected foreigner. At any rate, in towns like 
 Bradford and Keighley, that have stood the full 
 brunt of the protective tariffs of the world, the 
 population has more than doubled in the last 
 thirty years, and the people never enjoyed such 
 regular employment and so much comfort and 
 leisure as now. 
 
 Canadian Corn and Australian Wool. 
 
 Undoubtedly the most serious question that has 
 arisen in connection with our manufacturing indus- 
 tries since the repeal of the Corn Laws is the scheme 
 of preferential tariffs between Britain and her 
 Colonies which has been thrown into the arena of 
 political discussion by the Colonial Secretary. As 
 yet the scheme is without form and void, except that 
 it contemplates giving a preference on the imports 
 of colonial products to this country by placing a sub- 
 stantial tariff on similar products from other coun-
 
 THE WOOLLEN INDUSTRY 37 
 
 tries. The Colonies are to compensate the Mother 
 Country, not by admitting her products free, as she 
 takes theirs, but by levying a lighter duty on her 
 manufactures than on those from foreign countries. 
 Now on this point there ought to be no mistake. It 
 is a matter of business, and not of Imperial Unity and 
 brotherhood, in which business does not enter. In 
 Canada there are distinctly two parties : there is the 
 party now in power which is especially interested in 
 developing the natural and agricultural resources of 
 the Dominion, and the party now in opposition that 
 favours the development of manufacturing industries 
 concurrently with agriculture. The manufacturers 
 are stoutly opposed to the reduction of duties on 
 any pretext. Their factories were established under 
 high protection with the deliberate intention of 
 shutting out such British goods as they could pro- 
 duce at home, and they affirm that any material 
 lowering of the duties will ruin their industries. 
 Just in proportion as this measure benefits the 
 manufacturers of the Mother Country it will be 
 represented as injuring those of Canada, and instead 
 of promoting Imperial Unity, it will make division 
 and cause ill-feeling ; and when the manufacturing 
 interests again get the upper hand in the Canadian 
 Parliament, which may come sooner than we 
 think, there will be no hesitation on their part to 
 restore to the manufacturers the protection that has 
 been taken from them, even though their action 
 may imperil the whole preferential scheme. Mr. 
 
 4G5S99
 
 38 BRITISH INDUSTRIES 
 
 Chamberlain has admitted that food in this country 
 will have to be taxed, but as yet he does not con- 
 sider it is feasible to tax raw materials. Our chief 
 import from Canada is food, which is to be protected 
 by a tax on foreign food ; while our chief import 
 from Australia is wool, which represents a higher 
 value than our food from Canada, and is not to be 
 protected. Is it likely, in the financial bargain for 
 colonial loyalty, that Australia will consent to the 
 protection of Canadian food while her own wool is 
 exposed to the open competition of the world ? As 
 to promoting unity, the probabilities are entirely in 
 the other direction, and jealousies between the 
 Colonies are sure to be aroused in proportion as one 
 Colony appears to be more favoured than another. 
 We may be certain that the Australian Colonies will 
 refuse to make any reduction in their duties on 
 manufactures that would injure their own nursed 
 industries, and such reduction, even if obtainable, 
 would never be accepted by our home manufac- 
 turers at the expense of any tampering with our free 
 import of wool from the rest of the world.
 
 THE LINEN INDUSTRY 
 
 By Sir R. Lloyd Patterson 
 
 THE earlier history of the Hnen trade before 
 the introduction of machinery does not enter 
 into the scope of the present article. Flax spin- 
 ning by machinery to any important extent, 
 especially wet spinning, commenced in the north 
 of Ireland in 1828, some little dry spinning having 
 previously existed there, as did dry spinning in 
 Dundee for some time, and wet spinning in 
 Leeds for a short time, previously. The trade 
 soon assumed important dimensions in the three 
 kingdoms : in England principally in Yorkshire 
 and Lancashire, but also in Cumberland, Dor- 
 setshire, and Somersetshire ; in Scotland princi- 
 pally in Fifeshire and Forfarshire, but also in the 
 south-west, Glasgow, Renfrewshire, and Ayrshire ; 
 in Ireland principally in the north-east, with Belfast 
 as a centre. By 1850 there were 326,000 spindles 
 in the North of Ireland ; and by 1853 this number 
 had increased to 500,000 spindles (contained in 80 
 mills) — this only twenty-live years after the introduc- 
 tion of the industry to Ulster. 
 
 39
 
 40 BRITISH INDUSTRIES 
 
 The 500,000 spindles of 1853 in Ireland showed 
 a nett increase at the end of the century of about 
 338,500, the total being then estimated at 838,582, a 
 moderate increase on balance for a period of forty- 
 seven years ; but some noteworthy fluctuations had 
 occurred in the meantime. 
 
 From the interesting and valuable reports of the 
 Flax Supply Association, I learn that the number 
 increased from the 500,000 spindles of 1853 till 
 1875, when the maximum of 924,817 spindles was 
 reached. Since then the tendency has been gene- 
 rally downwards, some upward movement or a 
 standstill for a year or two being occasionally 
 recorded, but the total nett decline during the last 
 twenty-five to twenty-seven years is only 86,235 
 spindles. 
 
 The size of the mills in former times as compared 
 with the present is worthy of remark. 
 
 Fifty years ago each separate spinner in the trade 
 had an average of 6,250 spindles ; each company or 
 firm now controls an average of 16,442 spindles. 
 
 In Scotland in the last thirty to thirty-five years 
 or so many concerns (I could name 20 or more) 
 have been stopped or broken up ; while a similar 
 fate has overtaken very many in England, the once 
 important fiax-spinning industry of Yorkshire being 
 now almost extinct. The linen-weaving industry of 
 Yorkshire, on the other hand, now supplied prin- 
 cipally by foreign yarns, has maintained its position 
 fairly well.
 
 THE LINEN INDUSTRY 
 
 41 
 
 Ireland Holds Her Owx. 
 
 Owing to certain advantages, Irish spinners have 
 hitherto had the best of it in this struggle for 
 existence, for, with the over-production that was 
 going on, it had become a question of the survival 
 of the fittest. Let us compare the figures for Ireland 
 with similar returns from the principal flax-spinning 
 countries in continental Europe, viz. : — 
 
 In Germany and Austria the maximum 
 was reached in 1874 with 741,214 spindles. 
 
 While in the last returns to which I 
 have had access this number was 
 reduced to ... ... 573,210 „ 
 
 A diminution of ... 
 in 27 years. 
 
 168,004 spindles. 
 
 In Belgium the maximum of 
 was reached also in 1874. 
 By 1900 this number had fallen to 
 
 A diminution of ... 
 
 320,000 spindles. 
 287,580 
 
 32,420 spindles. 
 
 In France the maximum of 
 
 was reached earlier— in 1867. 
 
 The year 1874, which was the highest in 
 the other continental countries men- 
 tioned, already showed a considerable 
 decline in France. This went on con- 
 tinuously till now (1902), when the 
 number has fallen to ... 
 
 A diminution of 
 
 750,000 spindles. 
 
 448,426 spindles. 
 
 301,574 spindles.
 
 42 BRITISH INDUSTRIES 
 
 We thus see that, while Ireland showed 
 
 a decrease in about 25 years to 1900 of 
 
 86,000 spindles, Austria and Germany 
 
 had decreased by 168,004 spindles. 
 
 Belgium do., do., do. ... 32,420 „ 
 
 And France, over a rather longer period, 
 
 had decreased by 301,574 „ 
 
 That is, a decrease in those countries of 501,998 spindles. 
 
 This is a significant commentary on what we so 
 often hear, that continental competition is killing 
 the Irish trade ; for, while the Irish spindles have 
 decreased about 9 per cent., those in the continental 
 countries named have decreased in about the same 
 time some 27J per cent., and in France alone about 
 40 per cent. 
 
 Italy has now some 65,000 spindles at work ; and 
 in Russia, fostered by high tariffs, the industry has 
 assumed important dimensions, the 83,000 spindles 
 of thirty years ago having increased to over 300,000 
 now. This will be further alluded to. 
 
 Measured as near as may be by decennial periods, 
 the number of spindles in Ireland is given in the 
 report already mentioned as follows : — 
 
 In 1828 wet spinning of flax by machinery commenced. 
 
 „ 1841 there were returned 250,000 spindles. 
 
 „ 1850 „ „ 326,008 
 
 » 1861 „ „ 592,981 
 
 ., 1871 „ „ 866,482 
 
 „ 1875 the maximum of 924,817 „ was reached. 
 
 „ 1 88 1 there were returned 879,242 „ 
 
 » 1891 „ „ 827,451 
 
 „ 1901 „ „ 839,498 „ 
 
 Of which latter number 10,700 were in a closed concern.
 
 THE LINEN INDUSTRY 43 
 
 (The writer regrets his inability to give similar 
 figures for England and Scotland.) 
 
 During the decade between 1850 and i860 there 
 were some disturbing causes. The outbreak of the 
 Russian war had at first an adverse effect on the 
 trade, owing to the interruption in the supplies of 
 Russian flax ; but by i860 trade had resumed its 
 normal conditions. The increase in spindles during 
 the period was large. The American war broke out 
 in 1861. Its effects at first were gravely adverse, 
 the United States being our large customers ; but 
 when cotton ran up in price from about 6d. to 
 about 2s. 6d. per lb., linen became the only substi- 
 tute for the almost unobtainable cotton goods ; and 
 this gave the linen industry such a stimulus that 
 from 1861 to 1868 the number of spindles in Ireland 
 had rapidly risen from 592,981 to 894,273, an increase 
 in seven years of 301,292 spindles, or rather over 
 50 per cent. The outbreak of the Franco-German 
 war in 1870 temporarily upset the trade after its 
 condition had again become normal ; but this did 
 not last long, and the restoration of peace ushered 
 in a period of great prosperity, till in 1875, as 
 already mentioned, the maximum number of spindles 
 was reached. From 1880 till 1890 business was 
 steady and on the whole fair to good ; but soon 
 after the latter year a period of depression set in 
 which, with some few brief intervals of prosperity, 
 has lasted almost ever since.
 
 44 BRITISH INDUSTRIES 
 
 The Flax Crop. 
 
 It is a well-known axiom in manufacturing that 
 to the continued, steady prosperity of any industry 
 an adequate and constant supply of the raw material 
 consumed in it is a matter of primary importance. 
 Owing to the general suitability of the soil and 
 climate of Ireland for the growth of flax, and the 
 large consumption of the fibre in the country, one 
 might suppose that home requirements would, for 
 the most part, be met by home produce ; but such, 
 unfortunately, is no longer the case — all the coarser 
 and also all the finer material required being im- 
 ported, the former from Russia and the latter from 
 Belgium — Ireland supplying latterly only a small por- 
 tion of her own requirements in the medium qualities. 
 
 The extent of land under the flax crop in Ireland 
 has varied greatly within the last fifty years. In 
 i860, the year before the outbreak of the American 
 war, the sowing amounted to 128,595 statute acres. 
 This figure showed a large annual increase till 1864, 
 when the maximum of 301,693 acres was reached. 
 It has been estimated that that acreage yielded 34*43 
 stones per acre, or a total of 64,506 tons, which, at 
 the average price of ;^58 4s. 3d. per ton, should 
 have produced a sum of ;£!^3, 754,250. Discouraged 
 by that (then) comparatively low price, ;^'8 per ton 
 less than the year before, the following year (1865) 
 showed a decrease in the sowing of 50,260 acres, 
 which, coupled with a diminished yield of only 
 25*14 stones per acre (a total crop of 39,561 tons),
 
 THE LIXEN INDUSTRY 
 
 45 
 
 and a continued brisk demand, raised the average 
 price of Irish flax to ;^8i 9s. per ton, an advance in 
 one year of over £2'}^ per ton, or fully 40 per cent., 
 which, with one exception (1868), when the maximum 
 average of £%2 12s. was reached, is the highest on 
 record. The year 1869 saw a return to normal 
 conditions with an average price of ;^58 iis. lod., a 
 fall of £2\ per ton. Thenceforward it will suffice 
 to mention the Irish flax sowing in decennial periods, 
 till we come to the last seven years. 
 
 Thus in 1870 there were 
 
 Do. 1880 do. 
 
 Do. 1890 do. 
 
 Do. i8q5 do. 
 
 Do. 1896 do. 
 
 Do. 1897 do. 
 
 Do. 1898 do. 
 
 Do. 1899 do. 
 
 Do. 1900 do. 
 
 Do. 1901 do. 
 
 Do. 1902 do. 
 
 Maximum 1864 do. 
 
 Acreage : 
 
 Yield in 
 
 Total 
 
 Statute 
 
 Stones 
 
 Yield. 
 
 Acres. 
 
 per Acre. 
 
 Tons. 
 
 194.893 
 
 2571 
 
 30,771 
 
 157,534 
 
 2489 
 
 24,508 
 
 96,871 
 
 3310 
 
 20,045 
 
 95,202 
 
 21-80 
 
 12,972 
 
 72,253 
 
 24-02 
 
 10,844 
 
 45,576 
 
 23-93 
 
 6,818 
 
 1 34,489 
 
 29-14 
 
 6,281 
 
 34,989 
 
 30-83 
 
 6,743 
 
 47,451 
 
 31-96 
 
 9,479 
 
 55,442 
 
 36-93 
 
 12,797 
 
 49,746 
 
 — 
 
 — 
 
 301,693 
 
 34-43 
 
 64,506 
 
 Average 
 Price. 
 
 54 17 
 
 6 
 
 4 
 I 
 
 43 16 8 
 39 16 10 
 
 42 13 9 
 46 II 
 
 52 4 
 60 2 
 
 52 6 
 
 56 18 
 4 
 
 55 17 
 50 14 
 
 58 
 
 In the present year (1903) the sowing amounts to 
 44,667 acres. 
 
 These figures, and those immediately preceding, 
 are very interesting and very instructive. They 
 show that the lowest average price on record was 
 touched in 1896 ; and the result is immediately 
 reflected in a decrease of 26,677 acres in the sowing
 
 46 BRITISH INDUSTRIES 
 
 of the next year (1897), when, most unfortunately, 
 the evil of a poor yield was superadded to that of 
 a wretched price. No wonder the long-suffering 
 Irish farmer was discouraged. And we find, in the 
 two following years, the smallest sowings on record, 
 both under 35,000 acres, with yields in both cases 
 of under 7,000 tons. 
 
 Over the last forty-three years the average price 
 paid by myself and my successors in business for 
 nearly 26,000 tons of Irish flax of a great variety of 
 qualities was nearly ;^58 per ton. The highest price 
 I ever paid, and that only once, was £i2S per ton. 
 
 These compare with a maximum of £82 12s. in 
 1868, and a minimum of £29 i"6s. lod. in 1896, a 
 difference between the maximum and minimum 
 averages of nearly £^;^ per ton. 
 
 Every one would welcome increased sowings of 
 flax in Ireland, but for various reasons, among them 
 the increasing scarcity of labour in the country, 
 there is no hope of the figures of former sowings 
 being ever seen again. Following the fall of ;^8 
 per ton in 1901 the sowing of 1902 showed a 
 decrease of nearly 6,000 acres ; and 1903 shows a 
 further decrease of 5,000 acres. Some Irish flax is 
 exported every year, as there are some purposes for 
 which it is the most suitable fibre in the world ; 
 and in the big sowings in the sixties and seventies 
 the quantity exported to England, Scotland, France, 
 and America was large. 
 
 The quantity of home-grown material left after
 
 THE LINEN INDUSTRY 47 
 
 deducting the now small exports must be supple- 
 mented each year by importing foreign supplies to 
 make up the total quantity required for consump- 
 tion. The imports of flax material into Ireland for 
 the last ten years average above 30,000 tons per 
 annum. Under better agricultural conditions a 
 large part of this imported flax might be replaced 
 by flax grown in Ireland. 
 
 The imports of flax, &c., into the United Kingdom 
 for the year 1902 are returned as follow : — 
 
 Flax. 
 
 
 Tow and Codilla. 
 
 Tons ... 58,159 
 
 • • • 
 
 15.452 
 
 Value ;^2,592,9i2 
 
 « • • 
 
 ;^35 1.478 
 
 Of the above imports of flax, 38,121 tons, value for 
 ;^i,4i4,58i, came from Russia ; 15,502 tons, value 
 for ;£987,277, from Belgium ; 3,241 tons, value for 
 ■^152,210, from Holland ; and the small remainder 
 from other countries not specified. The average 
 value of the above flax imports from Russia is thus 
 about ;^37 per ton, while those from Belgium average 
 about £6^ per ton. 
 
 The Effects of the American War. 
 
 The American war has already been mentioned, 
 but must be further alluded to as having had an 
 influence on the whole subsequent history of the 
 linen trade that no one could then have anticipated. 
 During the inflation of linen, caused by the extreme 
 scarcity and consequent famine prices of cotton,
 
 48 BRITISH INDUSTRIES 
 
 some rapid fortunes were made ; and there was a 
 strong desire on the part of many to participate in 
 so lucrative a business. That period, therefore, 
 witnessed large extensions to many existing con- 
 cerns and the erection and equipment of some 
 new ones, some of the smaller of which had but a 
 brief existence. But it also witnessed a willingness 
 on the part of many proprietors to sell their concerns, 
 the buyers being in most cases limited liability 
 companies formed for the purpose. Comparatively 
 few of the concerns that thus changed hands at that 
 time have proved satisfactory investments for their 
 shareholders ; and in the majority of cases — with 
 some few notable exceptions — many of them have 
 become, and seem likely to continue, non-dividend 
 paying. Some have gone into liquidation, while 
 others have been reconstructed or have readjusted 
 their capital accounts. The continued existence of 
 some of these concerns, which would have been 
 impossible were it not for the tenacity of life 
 imparted to them by the elasticity of credit attaching 
 to the limited liability system, is detrimental to their 
 better-off competitors, the impecunious producers 
 breaking prices, which others are virtually obliged 
 to follow, and the trade is thus deprived of a fair 
 return on the capital invested in it. In fact, credits 
 are too lax for the permanent good of the trade. 
 
 It was feared that the increase in machinery which 
 took place during the period of inflation, might 
 leave the industry saddled with an over-production
 
 THE LINEN INDUSTRY 49 
 
 when the textile trade of the world should have 
 resumed normal conditions ; but, on the other 
 hand, it was argued that the linen trade had got a 
 tremendous "fillip," part of the effects of which it 
 was hoped would be permanent ; besides which it 
 was not unreasonable to assume that the ordinary 
 growth in the use of an article like linen, which, in 
 its various fabrics, had for ages been regarded as one 
 of the first necessity for domestic purposes, personal 
 wear and table use, would soon overtake any surplus 
 production. 
 
 Less Demand for Linen. 
 
 Such expectations, however, were doomed to dis- 
 appointment ; and for various reasons, some plain 
 enough, others obscure, the linen trade of the world 
 has not been expansive of recent years — indeed, 
 decidedly the reverse ; but in Ireland the trade, as 
 compared with other countries, is more than hold- 
 ing its own. Quite recently, the spring and summer 
 of 1903, witnessed many welcome signs of general 
 revival, stimulated no doubt in part by the pro- 
 duction of attractive novelties in fabric and 
 colour. 
 
 The great competitors of linen are cotton and 
 wool, especially cotton. Wool only competes as 
 clothing ; the lighter fabrics that are now pro- 
 duced in it commend themselves to many on 
 account of the saving of expense and trouble in 
 frequent washings. Cotton is a much more serious 
 
 5
 
 50 BRITISH INDUSTRIES 
 
 competitor. Its cheapness, its superficial resemblance 
 to linen which the superior finish now imparted 
 to it has increased, and the much greater variety, 
 especially in colour, in which it has hitherto been 
 produced, are all so much to its advantage that, 
 while we regret, we need not be surprised at, the 
 larger share of public favour which it receives. 
 
 Changes of fashion are partly responsible for the 
 diminished consumption of some kinds of linen 
 fabrics. In my younger days no one calling him- 
 self a gentleman wore (in the North of Ireland at 
 least) anything but linen shirts : now but few do so. 
 Then linen ducks and drills were frequently worn as 
 summer trouserings: one never sees them now. 
 Then no ladies used anything but (linen) cambric 
 handkerchiefs ; while now cotton handkerchiefs, 
 plain and printed, are sold in enormous quantities, 
 both at home and abroad. Some important firms 
 in Belfast, who were formerly doing business in 
 linen and cambric handkerchiefs only, have turned 
 their attention in part, or in some cases even entirely, 
 to cotton. The diminution, almost cessation, of the 
 use of linen scarfs and hat bands at funerals must 
 account for a considerable total. 
 
 It has often struck me as strange the large profits 
 that retail drapers charge on linens of all descrip- 
 tions, as compared with cottons. Such a practice 
 must have a deterrent effect on the general use of 
 linens ; but there is no moral turpitude in it such as 
 there was in those frauds, so properly exposed in the
 
 THE LINEN INDUSTRY 51 
 
 prosecutions brought by the Linen Merchants' 
 Association against certain people for selling union, 
 and even all cotton goods, as " pure linen." 1 am 
 afraid, from the disclosures then made, that such 
 frauds are only too common. The public are 
 cheated, and the trade suffers from the disappoint- 
 ment caused by the unserviceable character of the 
 so-called linen. 
 
 New Outlets. 
 
 The Association within the last few months very 
 properly inaugurated a vigorous fresh campaign 
 against such frauds, and many prosecutions, followed 
 by convictions, have resulted. 
 
 To protect the public from fraud it has been 
 suggested that there should be some mark of identi- 
 fication on linen as there is now on plate, and I 
 do not see why there should not be such. A fine 
 damask table-cloth, for instance, is much more 
 valuable than a few silver spoons. 
 
 One sometimes hears the complaint from old 
 housekeepers that linen is not so durable as it used 
 to be. That may be so, but only to a limited 
 extent ; goods must now be bleached farther to 
 meet the inexorable public demand for pure white 
 linen ; but the real ground of the complaint is to be 
 found in the abuse which linen now receives at 
 most modern laundries, and the too free use of 
 chemicals in these establishments. 
 
 One new outlet for linen yarn which promises well
 
 52 BRITISH INDUSTRIES 
 
 has lately been found through the ingenuity of a 
 gentleman resident in Denmark. He was a sufferer 
 from rheumatism, and his physician advised him to 
 substitute linen for the woollen underwear he had 
 previously used ; so he commenced and finally 
 worked out the problem of adapting something in 
 the nature of a knitting machine to the peculiarities 
 of linen yarn, and the result is the production of a 
 new and extremely comfortable material for under- 
 wear (I speak from personal experience), which is 
 already favourably reported on by the medical 
 journals and by many leading medical men in 
 England and elsewhere. This new material is 
 known in the trade as Kneipp linen mesh underwear. 
 
 Several firms are now producing some very attrac- 
 tive novelties in fancy fabrics ; and the richness and 
 variety in make and colour seen in the dresses and 
 decorations at the '' all linen ball " at Belfast lately 
 were a revelation to many even in the trade. 
 
 New and beautiful designs in damasks charm and 
 delight the eye ; our damask manufacturers are fully 
 alive to the importance of continually putting some 
 new design before the public, while a leading damask 
 manufacturer lately told me that some quite old 
 designs are again coming into vogue, like Chippen- 
 dale or other old furniture. The damask depart- 
 ment of the trade thus keeps flourishing. 
 
 Continental Competition. 
 Prior to and about 1836, Irish yarns and linens
 
 THE LINEN INDUSTRY 53 
 
 were being sold in considerable quantities to France. 
 The business was of sufficient volume to encourage 
 a shipping agent to despatch a vessel direct to a 
 French port, and in December, 1836, the first cargo 
 of Belfast yarns and linens sailed for Dunkirk. The 
 project was successful, and it was so followed up 
 that in 1839 a steamer commenced plying once a 
 fortnight from Belfast to Havre, carrying yarns and 
 linens, while there were also occasional sailings to 
 Antwerp, Dunkirk, and Nantes. 
 
 It will thus be seen that the various linen manu- 
 facturing countries in continental Europe had been 
 large buyers of Irish yarn, and some of them good 
 customers for linens also. The enterprise of the 
 linen magnates at Lille, Ghent and Bielefeld, and in 
 Silesia and Bohemia, did not lag long behind that of 
 our own spinners, and mills sprang up in many 
 places. While business was very brisk, these 
 mills only partly supplied the home demand, and 
 recourse continued to be had to the United 
 Kingdom for considerable quantities of certain 
 kinds of yarn which we were able to produce better 
 and cheaper than the Continent. 
 
 As the continental consumption of linens dimin- 
 ished, the production of yarns in the mills there 
 became able to meet not only local requirements 
 in the kinds produced, but also to leave a surplus of 
 such over for export. These consisted for some 
 time chiefly of the medium and lower counts of linen 
 yarns, which their closer proximity to the Russian
 
 54 BRITISH INDUSTRIES 
 
 flax markets, the longer hours of labour, and the 
 lower wages prevailing there enabled them to sell at 
 prices with which the British spinner could not 
 compete. English spinners felt the pinch first, with 
 the result we have seen of the almost total extinction 
 of the industry there. Certain Scotch spinners felt 
 it next — especially those who were engaged in wet 
 spinning. In Ireland it was less severely felt, as the 
 figures already mentioned as to the comparatively 
 small decline in our spindles abundantly prove. 
 The results are very curious ; and the figures dis- 
 close a most remarkable change in the balance of 
 the trade ; in fact, a complete turning of the tables. 
 
 In i86i,the year the American war broke out, the 
 exports of linen yarn from the United Kingdom 
 were returned at 12,045 tons, of a declared value of 
 ;^i, 622,216. 
 
 In 1864, when the war was at its height, these 
 figures had risen to their maximum of 17,936 tons, 
 value for ^2,991,969, showing an increase in the 
 three years of 5,891 tons, nearly 50 per cent, in 
 quantity ; and of ;^i, 369,753, or about 84 per cent, 
 in value. By 1901 the exports had fallen to 5,791 
 tons, value for ;^8 24,900, a decline from the 1864 
 maximum of 12,145 ^o^^s in quantity and ;^2, 167,069 
 in value. The year 1902 shows a small increase of 
 exports of linen yarn, viz., 6,346 tons, of a declared 
 value of ;^842,2oo. 
 
 The average value per ton of the exports of linen 
 yarn for the three years mentioned is as follows : —
 
 THE LINEN INDUSTRY 55 
 
 1861, £133 ; 1864, ;^i67 ; 1901, ;^i42 los. This 
 is an interesting comparison, and it proves that 
 it is now the better quahties and finer counts of 
 Irish yarn that are exported ; as, notwithstanding 
 the extremely low prices lately current, the average 
 value of the 1901 exports is £g los. per ton higher than 
 that of 1 861, when prices were considerably higher. 
 
 A Boon to the Weavers. 
 
 The competition of imported yarns is more felt 
 now in Scotland than in Ireland, its effect in 
 England having had a good deal to do with the 
 virtual extinction of the spinning industry in the 
 latter country. The recent large increase of flax 
 spinning in Russia has been mentioned. Protected 
 by high — now quite prohibitive — tariffs, Russian 
 spinners defy all outside competition within the 
 country. Some French and Belgian spinners, to 
 evade the duty, erected mills in Russia in excess, 
 as is now apparent, of the country's requirements, 
 and Russian mills are now sending considerable 
 quantities of yarn into these countries. 
 
 Although it may be against Irish spinners, and 
 undoubtedly presses still more severely on those in 
 Scotland, one must admit that the importation of 
 these continental yarns has been of material service 
 to other departments of the trade, weaving, bleach- 
 ing, and finishing ; for, without those supplies of 
 moderate-priced yarns of kinds that our home 
 spinners could not produce so cheaply, one cannot
 
 56 
 
 BRITISH INDUSTRIES 
 
 see how certain hard-pressed sections of the manu- 
 facturing industry could have survived ; and, had 
 they gone, the advantage to labour, to the after pro- 
 cesses, and to the trade at large, would have been 
 lost too. While sympathising, therefore, with the 
 Scotch spinners, we feel that, so far as Ireland is 
 concerned, her manufacturing, bleaching, and finish- 
 ing departments benefit by these cheap foreign yarns. 
 It is only natural to expect that yarn prices would 
 show extreme fluctuations when the industry was 
 exposed to such disturbing influences. I shall briefly 
 illustrate this by quoting the prices (per bundle of 
 60,000 yards) of one standard number each of line 
 and tow yarn at the dates mentioned, viz. : — 
 
 
 
 
 8o's 
 
 line 
 
 25's tow 
 
 
 
 
 weft. 
 
 weft. 
 
 
 
 
 s. 
 
 d. 
 
 s. cl. 
 
 December, i860 
 
 before the American war. 
 
 
 4 
 
 3 
 
 6 3 
 
 August, 1864 
 
 height of „ „ 
 
 
 6 
 
 7i 
 
 10 4i 
 
 December, 1865 
 
 after its close. 
 
 
 6 
 
 I^ 
 
 8 
 
 1868 
 
 
 
 5 
 
 3 
 
 G loj 
 
 September, 1870 
 
 Franco- Prussian war. 
 
 
 3 
 
 4J 
 
 5 9 
 
 December, 1870 
 
 
 
 3 
 
 6 
 
 5 9 
 
 1871 
 
 war over. 
 
 
 5 
 
 H 
 
 6 9 
 
 1875 
 
 
 
 4 
 
 6 
 
 6 9 
 
 1880 
 
 
 
 4 
 
 
 
 5 6 
 
 1885 
 
 
 
 3 
 
 4i 
 
 5 li 
 
 1890 
 
 
 
 3 
 
 7i 
 
 4 5J 
 
 1894 
 
 
 
 2 
 
 lOj 
 
 4 4i 
 
 ,, 1895 
 
 ■ a period of great depression 
 
 3 
 
 
 
 4 9 
 
 1897 
 
 
 
 2 
 
 lOj 
 
 4 3 
 
 1900 
 
 
 
 4 
 
 
 
 5 3 
 
 Maximum, Augus 
 
 ^t, 1864 
 
 
 6 
 
 7i 
 
 10 4i 
 
 Minimum, 1894 ^ 
 
 nd 1897 
 
 
 2 
 
 lOj 
 
 4 3 
 
 Extreme fall fron 
 
 a maximum to minimum 
 
 
 3 
 
 9 
 
 6 I* 
 
 
 or 57 per 
 
 cent 
 
 . an 
 
 d 59 per cent.
 
 THE LIXEX INDUSTRY 57 
 
 The figures given show the extremes of the infla- 
 tion of the American war time and the depression 
 of some of the years in the last decade — 1890 to 
 1900 — when it is not too much to say that the trade 
 came through a most severe crisis, resulting in 
 disaster to some ; but from which the industry on 
 the whole emerged fairly well. 
 
 The manufacture of linen threads has long been 
 an important branch of the flax industry, giving 
 employment to a large number of operatives in 
 several extensive concerns in the three kingdoms. 
 
 The export branch of the thread business, how- 
 ever, is by no means what it was. High tariffs in 
 the United States put an end to that, the result 
 being that the principal makers of linen thread have 
 established their own thread works in the States, 
 importing their flax hackled, that is dressed, ready 
 for use from the parent works in this country. 
 If some method could be discovered to make linen 
 thread more elastic without impairing its unrivalled 
 strength, it would be invaluable to the trade. 
 
 Progress of the Weaving Branch. 
 
 Let us now look at the next process in the linen 
 industry — weaving. Within living memory that was 
 all done by manual labour. The power loom had 
 long since come to be of general application in the 
 cotton and woollen trades, and many and earnest 
 were the efforts to apply it to linen ; but serious
 
 58 BRITISH INDUSTRIES 
 
 difficulties were encountered, and had to be over- 
 come before the weaving of linen yarn by power 
 became a practical and commercial success. The 
 ivant of elasticity of flax yarn, notwithstanding its 
 greater strength as compared with cotton, had long 
 barred the way of the power-loom, which had not 
 the consideration, so to speak, the give and take of 
 the hand-loom weaver, for the rigidity of the linen 
 warps. Improved mechanical arrangements in the 
 looms, and the application of a newly-discovered 
 superior dressing for the warps, which had the 
 effect of making them softer and more elastic 
 without impairing their strength, finally prevailed, 
 and the power-loom came to stay, as a permanent 
 and most important factor in the Irish linen in- 
 dustry, some time in the early fifties. The report 
 already quoted from states that in 1850 there were 
 88 linen power-looms in Ireland. At the end of 
 1899 there were 32,245. 
 
 The first return in the report after 1850 is for the 
 year 1856, and the number of looms is given at 
 that time as 1,871. Since that period the progress 
 has been steadily and quite uninterruptedly up- 
 wards. 
 
 In three years, by 1859, the number of power- 
 looms had about doubled to 3,633. After the end 
 of the American war the number of looms, which, 
 before its outbreak, had stood at 4,933, had increased 
 in 1866 to 10,804. The increases since have been 
 rapid and constant till the last year.
 
 THE LINEN INDUSTRY 59 
 
 In 1871 the number is returned at 14,834 
 
 „ 1881 „ „ „ 21,779 
 
 „ 1890 „ „ „ 26,592 
 
 „ 1900 „ „ „ 32,245 
 
 „ 1902 „ „ „ 30-927 
 
 Of these looms a considerable, but unascertained, 
 number are employed on union goods. 
 
 The quantities and values of the linen exports 
 from the United Kingdom can be found by those 
 wanting such information more in detail in the 
 returns of the Board of Trade. For our present 
 purpose it may suffice if I quote the total declared 
 values of the exports of linen manufactures of all 
 kinds, including threads, for the following years : — 
 
 1850 
 
 ... ... ... ••■ ••• ••• 
 
 ;^3,947,682 
 
 i860 
 
 The year before the American war ... 
 
 4,804,803 
 
 I86I 
 
 The year it broke out 
 
 3.852,341 
 
 1865 
 
 When it was at its height 
 
 9,156,990 
 
 1870 
 
 A normal state of affairs 
 
 7.248,345 
 
 1880 
 
 
 5,836,019 
 
 1890 
 
 
 5,710,168 
 
 1900 
 
 
 5,224,594 
 
 I90I 
 
 
 5,020,499 
 
 1902 
 
 
 5.427.969 
 
 The last thirty years thus show a gradual decline, 
 except in 1902. The above figures include British 
 as well as Irish manufactures ; but they do not show 
 the value of the goods consumed in the United 
 Kingdom, which would reach a very considerable 
 total. I must also point out that the figures just 
 quoted deal with values only ; if quantities were 
 also considered, the decline in the volume of trade
 
 6o BRITISH INDUSTRIES 
 
 would not be nearly as great, as values considered 
 alone, would indicate, prices being now on a low 
 level. 
 
 Reduced Demand for Sails. 
 
 From the foregoing it will have been observed 
 that the coarse end of the trade has suffered more 
 from foreign competition than the finer ; but another 
 cause, entirely apart from the foreign bogey, has 
 militated severely against one former important 
 branch of the trade, especially in Scotland : we 
 mean the gradual displacing of sailing ships by 
 steamers, and the consequent diminution in the 
 consumption of sail canvas, the manufacture of 
 which was a very important branch of the flax 
 industry in Scotland, especially in Forfarshire, but 
 in other places also ; in the south-west of England, 
 especially Somersetshire ; in the Isle of Man, and to 
 a small extent in Ireland. 
 
 In reply to an inquiry, I am obligingly informed 
 by Mr. James A. M. Heyn that : — 
 
 Sailing Vessels. Steamers. 
 In 1852 there were on Lloyd's Register 10,241 156 
 
 While in 1902 the figures have altered to 2,689 ^'352 
 
 Showing a falling off of 7)552 — 
 
 These fifty years, therefore, have witnessed the 
 utter disappearance of three-fourths of the sailing 
 vessels, which prior to that carried on most of the 
 oversea and coasting trade of the country. The 
 change in the Roval Navy is even greater in pro-
 
 THE LINEN INDUSTRY 6i 
 
 portion. Fifty years ago steam was only beginning 
 to be introduced — and that, too, only as an auxiliary 
 — to full-rigged ships into the Navy. Some of us are 
 old enough to remember the splendid fleet of iirst- 
 class line of battleships and frigates sent out under 
 the command of Sir Charles Napier to the Baltic in 
 1854. Although most of these, but not all, were 
 provided with some moderate steam power, to be 
 used in emergencies, all were full-rigged ships. 
 Now there are practically no sailing vessels, except 
 for training purposes, in the Navy. No wonder 
 canvas-makers, except those with special trades, 
 have fallen on evil times ; but still the ships that 
 remain, the large fleet of yachts, and the require- 
 ments of tent-makers still account for a considerable 
 total yearly consumption of canvas, into the manu- 
 facture of which a large quantity of Irish hand- 
 scutched flax used formerly to go. 
 
 The Bleaching Industry. 
 
 Bleaching has always been an important part of 
 the linen industry, and owing to the admitted 
 superiority of the Irish bleach, a considerable 
 quantity of linen is sent from Belgium, France, 
 and Germany to be bleached here and returned 
 to those countries for sale. This excellence is 
 doubtless due to our humid, temperate climate. 
 Owing to the nature of the business bleach-greens 
 were first established, and must perforce remain, in 
 country districts.
 
 62 BRITISH INDUSTRIES 
 
 The sending of linen goods from France and 
 Belgium to be bleached in Ireland is very curious 
 when one considers that — 
 
 1. Ireland imports flax from those countries. 
 
 2. That flax is spun in Ireland into yarn, some 
 of which is sold back to France and Belgium. 
 
 3. There it is woven into linen, some of which is 
 sent back to Ireland to be bleached and finished ; 
 and then — 
 
 4. It goes back to the countries whence it came 
 for sale. 
 
 Some of the flax, therefore, in one form or another, 
 makes no less than four journeys, and some of the 
 yarn three journeys, before the finished goods find a 
 place in the merchant's warehouse. 
 
 The hours of labour in factories in the United 
 Kingdom are limited by statute to 55^^ per week ; 
 whilst in France, Belgium, Germany, and Austria 
 the hours, as I am informed, are 66 per week. I 
 understand France intends to come down, in two 
 steps of three hours each in 1903 and 1904, to 60 
 hours per week. 
 
 As the cost of flax-spinning plant is extremely 
 heavy, any reduction of the output is a serious 
 factor in increasing the cost of production. 
 
 Another difticulty with which the trade has been 
 confronted is the serious rise in foreign tariffs on 
 yarns and linens which has taken place since 1870. 
 The Customs Duties of the United States of America, 
 of France, and of Germany, the three most impor-
 
 THE LINEN INDUSTRY 63 
 
 tant customers for Irish yarns and linens, have been 
 increased by about 50 per cent. ; while Russia has 
 imposed duties so high as to be prohibitive to the 
 lower and medium grades which come into com- 
 petition with similar articles manufactured in that 
 country. 
 
 Prior to the Spanish-American war, which resulted 
 in the loss of Cuba to Spain, the Cuban tariff 
 discriminated very severely between goods pro- 
 duced in Spain for the Cuban market and those 
 going to Cuba from other countries, the result being 
 that, even before the war, Havana, a most impor- 
 tant market, was almost closed against Irish linens, 
 the trade, or part of it at least, going to Barcelona 
 and Saragossa. The result was most beneficial to 
 the manufacturers in those cities, who, protected 
 against all foreign competition in their own colony, 
 reaped a rapid and abundant golden harvest. To 
 supply the increased demand thus artificially created 
 the manufacturers in Spain had recourse to other 
 countries for the yarns they required, of which 
 Ireland supplied a fair quantity, so that a portion 
 of the trade with Cuba direct that was lost to the 
 Irish linen merchant and manufacturer came back, 
 indirectly, to the Irish spinner. 
 
 There can be no doubt but that the great en- 
 hancement of cost to the consumer caused by 
 the high duties militates against the natural grow'th 
 in the consumption of linen in the United States, 
 where there is no home production of linen goods.
 
 64 BRITISH INDUSTRIES 
 
 The duties charged in France, Belgium, Germany, 
 and Austria enabled those countries to establish and 
 maintain flax-spinning mills in a way that they could 
 not have done had the industry not been protected 
 there in its infancy. The markets of those countries 
 are therefore now to a large extent closed against 
 us ; but we are still able to meet them when we 
 meet on equal terms on neutral ground, unless in 
 some special articles, such as the yarns mentioned 
 earlier, where natural and other causes, such as 
 locality and hours of labour, come to their assistance.
 
 THE SILK TRADE 
 By Matthew Blair 
 
 {Chairman of the Incorporated Weaving^ Dyeing, and 
 Printing College of Glasgow) 
 
 PREVIOUS to the Cobden Treaty, which was 
 negotiated in i860, the silk trade was protected 
 from foreign competition by a duty of 15 per cent. 
 The consumer of course paid this enhanced price, 
 for unless the home manufacturer can get a higher 
 price under Protection than under Free Trade, he 
 has no motive to desire Protection. 
 
 Aided by this bonus the silk trade, which then 
 was mainly a hand-loom industry, increased greatly. 
 Capital was attracted to it, and, for a time, it was 
 very lucrative for the manufacturers. The work- 
 people, however, did not share in this abnormal 
 profit. They had no protection for their labour, 
 and had to accept the wages of competition. Periods 
 of depression were frequent, and relief works had 
 often to be started to keep the weavers from starva- 
 
 6 65
 
 66 BRITISH INDUSTRIES 
 
 tion. We have no experience of such things now. 
 Whatever advantage the period of Protection may 
 have been to the masters, it was too often a time of 
 suffering for the work-people. 
 
 This high Protection had an evil effect upon the 
 manufacturers themselves, and sadly unfitted them 
 for withstanding the coming storm. 
 
 The Cobden Treaty in i860 removed this Protec- 
 tive duty, and left the silk trade to fight its battle in 
 the open field. 
 
 The result was quickly disastrous to a large 
 number of firms. Spoiled by the previous high 
 Protection, they were not in a position to compete. 
 Many mills were closed, and in some districts silk 
 weaving entirely disappeared. The diminution of 
 silk throwing and weaving in Congleton and other 
 towns, which is undoubted, is being now pressed 
 upon public notice as a reason for going back to 
 some form of Protection. 
 
 A history like this naturally gave rise to the idea 
 that the silk trade could not exist in this country 
 unless under Protection. As this involved some 
 other industry paying for support of the silk trade, it 
 was a lamentable confession, and even a condemna- 
 tion of all who were engaged in such a business, but 
 it was not at all an unnatural idea for a manufac- 
 turer to hold, and it is still widely entertained. 
 
 Protection had brought the silk trade to this pass, 
 that it could not be carried on to the same extent as 
 in the past, unless one of two conditions were ful-
 
 THE SILK TRADE 67 
 
 filled — either the consumer must by monopoly be 
 compelled to pay whatever price might be required 
 to keep the silk trade highly profitable, not only for 
 those already engaged in it, but for all new-comers 
 who might be attracted to the business by the 
 abnormal profits. 
 
 Or, alternatively, a supply of workers must be got 
 who would accept wages as low as were current in 
 more backward countries, such as Italy. 
 
 The first condition would have involved, imme- 
 diately, the sacrifice of the French treaty of i860, 
 and would ultimately have involved a system of 
 bounties to British silk manufacturers, for by no 
 other means is it possible to maintain a high level of 
 profits when internal as well as external competition 
 is active. 
 
 The second condition — the low-priced labour — 
 was impossible, because the Free Trade policy had 
 created a great demand for labour in other indus- 
 tries, and had consequently sent up the price far 
 above the level in the protected countries of the 
 Continent. 
 
 This was the exact economic position, and the 
 only way out of it was by improved machinery and 
 advanced industrial methods. 
 
 Hypnotised by Protection. 
 
 That course was not taken. Many of the rich 
 throwsters and manufacturers retired from the 
 business. Others had not the necessary courage or
 
 68 BRITISH INDUSTRIES 
 
 capital to meet the competition. They lamented, 
 and still go on lamenting, the diminution of the 
 hand-loom weaving. They stuck to methods where 
 hand labour was a large part of the cost of produc- 
 tion, while progress lay in the direction of labour- 
 saving appliances. This is the way that America 
 succeeds, even with dear labour. As little as possible 
 of it is employed. The absence of inventions and 
 improvements in the thrown silk trade, compared 
 with other industries, is a significant feature. 
 
 In arranging a National Fiscal Policy, statesmen 
 have to look at the interests of the whole community, 
 and not at a limited section of it. A business may 
 be such that it could not be conducted in this 
 country, unless highly protected ; wine growing, for 
 example. But it would be inequitable for a Govern- 
 ment to compel a certain number of its subjects 
 (who pay taxes to be protected from injustice) to 
 give an exorbitant price for a special commodity, 
 merely to keep a certain number of men engaged in 
 the production of that article, and it would be all the 
 more so if it were an article of luxury. So long as 
 the manufacturers were thus protected, they would 
 never rouse themselves to find if, by improved 
 methods, they could do without being supported by 
 this drain on the pockets of the consumers. 
 
 In the same manner, the assertion frequently made, 
 that the Cobden Treaty was the sole cause of the 
 destruction of so large a part of the thrown silk 
 trade, overlooks altogether the other, and very
 
 THE SILK TRADE 69 
 
 potent, causes which were operating at that time. 
 We will endeavour to show that the thrown silk 
 trade did not read quickly enough the signs of the 
 times, else much of the dislocation might have been 
 avoided. Too often " the forgotten factor " proves 
 to be the most important, and in this case there were 
 many factors whose influence has not been suffi- 
 ciently considered. 
 
 Ruined Throwsters : Prosperous Spinners. 
 
 But, first of all, it must be remarked that the silk 
 trade which did suffer, was the thrown silk branch. ^ 
 No doubt at that time it was the most important 
 but it was not the whole silk trade of the country, 
 and it is quite erroneous to talk of the silk trade of 
 the country being ruined, when there is a large part 
 of it which has never suffered in the least. We 
 must look at the whole trade, and the subsidiary 
 occupations which it affects, and all the workers 
 engaged in it, and in this view, it will probably be 
 found, that there are more people employed, more 
 wages paid, and more money made in the silken 
 trade of the country now than at any previous 
 period. 
 
 For example, spun silk, which is now a large, and 
 has always been a profitable industry, was in i860 
 
 ' Thrown silk is produced from the long strands that 
 are drawn off direct from the cocoon. Spun silk is pro- 
 duced from the short, tangled strands that have to be 
 straightened before they can be used.
 
 70 BRITISH INDUSTRIES 
 
 only in its infancy. The Lister comb had not yet 
 entirely revolutionised that business. The manu- 
 facture of silk for sewing, embroidery, trimmings, 
 furniture and decorative purposes, was a consider- 
 able business. This secondary employment for silk 
 was previously limited by the high prices of Protec- 
 tion, and had a considerable extension, as soon as a 
 free market was declared. Fabrics of mixed silk and 
 wool or cotton, have also been a large trade. York- 
 shire and Scotland have taken up this branch, which 
 Cheshire appears to have lost. 
 
 Then there is the large and necessary element of 
 the distributors. It is the fashion to rail at the 
 merchant, as a vampire that sucks the blood of the 
 trade, and who is quite unfitted to take an impartial 
 view of the case. Ideas of that sort may be disre- 
 garded. The machinery of distribution is just as 
 necessary as the machinery of production. Com- 
 merce does not allow of the existence of any useless 
 people. When they are not wanted, they make no 
 money, and thus get a broad hint to clear out of the 
 way. As long as they do exist they are part of the 
 trade. Anything that increases their operations is 
 an increase of the trade in which they are engaged. 
 The merchants are merely the salesmen and buyers 
 of the producers and consumers. 
 
 Viewed as a whole, the silk trade of the country 
 has not decreased, but is larger to-day than ever it 
 was, and we may say also that it is more lucrative. 
 Its very existence and extension prove this. If the
 
 THE SILK TRADE 71 
 
 trade were not very profitable, the foreigners would 
 not be so eager to possess it. 
 
 Killed by Kindness. 
 
 Reference has already been made to the demorali- 
 sing influence of the high Protection that preceded 
 the treaty of i860. On this subject we quote a 
 remarkable passage from a paper on the silk trade, 
 written in 1887 by the late Mr. Thomas Dickins, 
 of Middleton, who was well informed on this 
 subject : — 
 
 " Many of us well remember the good old days, 
 so-called, when our manufacturers were being 
 enriched by the killing kindness of Protection. It 
 was natural to remain contented with such an easy 
 and pleasant way of gaining wealth. Warp and weft 
 had simply to be thrown together, and — the product 
 always realising a large profit — there was no apparent 
 reason for disturbing the crude system which existed. 
 The dark clouds, even then looming in the distance, 
 were not perceived through the misleading bright- 
 ness which surrounded the British silk manu- 
 facturer." 
 
 This is a significant statement. The manufac- 
 turers were spoiled by success, and had dropped into 
 crude methods. Many of them were rich, even too 
 rich. The Rothschilds were throwsters in those 
 days. It was a common opinion that a business 
 was not worth having, unless it allowed the throwster 
 to go a-hunting three days a week in the season.
 
 72 BRITISH INDUSTRIES 
 
 The present writer knew one of these fortunate 
 gentlemen. Needless to say that he is not now a 
 throwster. He retired in time, became a county 
 magnate, and goes a-hunting on the profits made by 
 his ancestors out of the past Protection. 
 
 It was not always want of money that prevented 
 the silk trade contending with the new conditions. 
 Neither was it ignorance, nor lack of ability. Very 
 often it was too high notions of the profits that the 
 trade should return. All this was begotten of the 
 previous high Protection. 
 
 The change from a system of Protection to Free 
 Trade is undoubtedly a step, which, for a time, pro- 
 duces great dislocation, and even suffering, to some 
 classes. Any industry that has been bolstered up by 
 a high Protective tariff stands in a peculiarly risky 
 position. The spur of competition is a- wanting, and 
 indifference to improvement and economy is the 
 natural result. But trade is too keenly cut now for 
 the old easy-going style to prosper. Machinery has 
 created new conditions. Business cannot now be 
 profitably conducted unless equipment is up to the 
 latest inventions, managed on a large scale, and with 
 the highest technical skill. Even then an abnor- 
 mally high rate of profit cannot be expected. 
 
 Small Unprogressive Firms. 
 
 The silk firms in existence in i860 were 
 numerous, and many of them not large. On the 
 average they were little prepared for the storm. The
 
 THE SILK TRADE 73 
 
 weaker ones were quickly weeded out. The larger 
 ones curtailed their production, and as the trade was 
 not taking off the silk, many of the wealthy throw- 
 sters retired from the business. 
 
 But those manufacturers who were in a large way, 
 with capital and modern ideas, although hard hit by 
 the Cobden Treaty, were not destroyed, and many 
 of them are still to the front. The trade, if not so 
 large as formerly, is founded on a far more secure 
 economic basis. The manufacturers also have the 
 honourable satisfaction of knowing that they are not 
 subsisting on a precarious "rate in aid," levied by 
 force of law, from their friends and neighbours the 
 consumers. 
 
 Another important matter that was overlooked by 
 the thrown silk trade in i860, was the complete 
 change in the character and wants of the buyers, 
 which arose as a consequence of the transfer of pro- 
 duction of textiles from hand labour to that of steam 
 power. 
 
 Machinery is employed solely because it produces 
 more goods at less cost per article than can be done 
 by hand. But machinery must be kept running, 
 and a market must be found for the product. This 
 extended market must of necessity be a less wealthy 
 one. Hence it is always the case that machine-made 
 goods must be of a cheap class. Cheap goods are 
 not durable, but the new class of customers who 
 came upon the market did not expect or desire them 
 to be so. To be new, fashionable, and cheap, are
 
 74 BRITISH INDUSTRIES 
 
 the recommendations to this class of buyers — a race 
 clearly produced by the vast extension of business, 
 and the increase of wages among the industrial 
 classes, which has been a consequence of our adop- 
 tion of a Free Trade policy. 
 
 The silk manufacturer of i860 hardly recognised 
 this fact. Silk had been a costly article. A dress 
 descended from generation to generation, and conse- 
 quently had to be of durable material. The silk 
 trade seemed for a long time to be under the belief 
 that this was the only kind of silk goods that should 
 be made. The foreigner did not make this mistake. 
 He found buyers in our market who cared nothing 
 for the silks as " worn by our grandmothers." 
 These buyers would not have such goods. They 
 entertained wholly different ideas. Possibly they 
 had more money than taste or thrift. They wanted 
 dress stuffs to be cheap and fashionable, and to be 
 frequently changed. The foreign manufacturer 
 wisely judged that his business was to supply what 
 the public wanted. The home manufacturers did 
 not bestir themselves to produce goods for this class 
 of people, and the merchants had to go abroad to 
 supply the demand or lose their trade, and thereby 
 diminish the whole silk trade of the country. 
 
 When weighted silks (which after all are only 
 goods having a particular finish) were put upon the 
 market, many of the silk manufacturers protested 
 that they would never make such goods. They 
 would stand on the old lines. This was not the way
 
 THE SILK TRADE 75 
 
 to appeal to the new class of buyers, who paid no 
 attention to it, but went on buying what they 
 wanted. 
 
 The silk-dyers also for a long time maintained 
 this mistaken view. They would not, or could not, 
 dye the weighted silks, till they drove the bulk of the 
 dyeing trade over to Crefeld, and have now a hard 
 struggle to get it back again. 
 
 Want of Technical Education. 
 
 Another great weakness of the silk trade at the 
 time of the Cobden Treaty, and which was also a 
 result of the previous Protection was the indifference 
 to all technical education. In this they were not 
 alone. Many other industries were equally blind to 
 the signs of the times, and suffered accordingly. 
 They were very slow to realise that the change from 
 hand labour to power production which was going 
 on in every trade had destroyed the apprenticeship 
 method of instruction. Under the factory system 
 the workshop was no longer the training school 
 for future manufacturers. Scientific education in 
 industrial methods was necessary if we would hold 
 our position in the world's race. 
 
 But not till the ribbon trade had practically left 
 Coventry, was any attempt made to establish a 
 Technical school, and for many years this was the 
 only institution of the kind in the country ; while 
 on the Continent great technical schools for silk and 
 silk-dyeing and finishing had been long established.
 
 76 BRITISH INDUSTRIES 
 
 There were also in America institutions of this class 
 which are not yet equalled in this country. 
 
 It is difficult to convince some old thrown silk 
 manufacturers or throwsters that they have any- 
 thing to learn. The writer was assured by one of 
 them that he had the very best machinery, in proof 
 of which statement he boasted that some of it had 
 been running for eighty years unchanged. This, 
 although an extreme case, is typical. An American 
 would have boasted that he had not a machine in 
 the place that had been running eighty weeks. He 
 does not believe in old machinery. Few improve- 
 ments on thrown silk machinery have been made 
 in this country. The " Grant Reel," which was a 
 great advantage, is an American invention, as is 
 also nearly all the quick-running and automatic 
 machinery now so much coming into use in many 
 industries. The thrown silk trade, as a trade, never 
 really wakened up to the necessity of technical 
 education. 
 
 Dear Labour a Sign of Prosperity. 
 
 The low price of labour on the Continent is con- 
 tinually quoted as the reason why the British silk 
 manufacturer finds it difficult to compete, and no 
 doubt this is perfectly true. 
 
 But this is a factor that all advancing countries 
 must take into account. An industry which can 
 only exist by a supply of poorly-paid labour is in a 
 position requiring reform. It is behind the age.
 
 THE SILK TRADE 77 
 
 Dear labour in our country is not a sign of decay, 
 but of prosperity. It shows that our workers can 
 find employment at better rates. We could not 
 bring down the price of labour, even if this were 
 absolutely necessary in order to save the silk 
 industry. The workers could not be found at the 
 low wages. The price of labour is regulated by the 
 demand for it, and not by the wishes of the silk 
 manufacturers. 
 
 But many instances might be quoted to show 
 that dear labour need not stand in the way of pro- 
 ducing goods cheaply. Muslins made by cheap 
 Indian labour were at one time imported. Our 
 workers could not have competed, even at starvation 
 wages. But the spinning jenny and the power loom 
 altered everything. Relative to the product, labour 
 is now much cheaper in Lancashire than it is in India, 
 and muslins are now exported to that country. 
 
 Advancing countries must avoid competing by 
 means of hand labour. The fact that it was mainly 
 a hand-loom industry was one of the difficulties of 
 the silk trade. The hand looms diminished rapidly, 
 and this is regretted. But why should it be re- 
 gretted ? Progress was involved in the change. 
 The hand-loom weaving was bound to go down, as 
 it did in other textile industries where the Cobden 
 Treaty did not affect it. 
 
 The future is with mechanical labour. Automatic 
 machinery is coming fast into use in all directions. 
 The manual labour upon any article will soon be a
 
 78 BRITISH INDUSTRIES 
 
 most infinitesimal element in its cost. Like the muslin 
 referred to, the trade will go to where the mecha- 
 nical production is most advanced. America is 
 showing this every day. Labour is scarce and dear 
 there, but the difference is more than made up 
 by the perfection of machinery. It is vain to wail 
 over the cheapness of foreign labour. That cheapness 
 will soon be of no importance. It is to the perfect- 
 ing of machinery that we must look for progress. 
 The silk trade, and every other trade, will prosper on 
 these lines, and on no others. 
 
 Placed in this weak position, the thrown silk 
 trade was unable to stand in open competition, and 
 gradually shrank in volume. Possibly had the 
 trade been wiser and more far-seeing, it need not 
 have succumbed, but the fact remains that it was 
 greatly reduced, and one of the main causes was the 
 weakness begotten of the benumbing influence of 
 Protection. 
 
 The wholesale houses being unable to supply the 
 growing demand for cheap and light goods, from 
 home producers, had to look abroad. This is the 
 real reason of the growth of the large silk mercers of 
 the West-end of London, who have given so much 
 employment to dyers, printers, and dressmakers. 
 The new class of buyers wanted fashionable and 
 cheap goods, and had money to buy them, and 
 would have wanted them and bought them, in 
 preference, even if there had been a tariff against 
 them. This is exemplified in America. Certain
 
 THE SILK TRADE 79 
 
 goods of foreign manufacture are the fashion there. 
 The buyers desire them, and continue to buy them, 
 in preference to goods of native production, even 
 although there is a high tariff. 
 
 This is why the import of foreign-made silk goods 
 into Britain became large and remains so still. No 
 doubt this is a loss to individual manufacturers, who 
 are not able or willing to compete, but it is not a 
 loss to the country. It is merely a displacement. 
 The market is there yet, and open to all home 
 producers, whenever they can place upon it an 
 article which the buyers wish to buy, at a competi- 
 tive price. 
 
 Industries Dependent on Imported Silk. 
 
 The large employment which imported silk goods 
 have given to various industries in this country must 
 not be overlooked, in considering the question of 
 the effect of freedom on the whole silk trade of 
 the country. The silk imported in the form of tram 
 and organzine has to be dyed and woven here, and 
 the large range of selection thus offered to the 
 manufacturers is willingly accepted — a proof that 
 it is an advantage to them. There are numerous 
 branches of silk manufacture and allied industries 
 which could not exist without imported material. 
 Silk-dyeing, for example, would be ruined in this 
 country unless the dyers were allowed freely to 
 purchase dye stuffs in Germany. In doing so they
 
 8o BRITISH INDUSTRIES 
 
 show that they are the most enlightened and consis- 
 tent Free Traders in the silk trade. The plush 
 and velvet trades also, depend largely on imported 
 yarns. 
 
 Many of the silk textiles imported, especially those 
 from Japan, are in the undyed state, and have 
 afforded great employment to dyers and printers, 
 and created a trade that did not exist before. 
 Many of these silk articles also are used in com- 
 bination with home-made goods, as trimmings, and 
 increase the sale of such textures. 
 
 The spun silk branch, as already mentioned, 
 has grown vigorously, and is now a large and pro- 
 fitable industry, able to hold its own against the 
 world. It can ship to America in the face of a 
 tariff of 35 per cent. 
 
 This great extension has taken place since the 
 Cobden Treaty. The industry, therefore, grew up 
 under conditions of freedom, and hence is founded 
 on a solid basis. Yet its progress is less due to Free 
 Trade than to causes that might equally have aided 
 the thrown silk trade had that industry been 
 sufficiently alert. It was the power of the inventor 
 that primarily made the spun silk trade prosperous, 
 notwithstanding the competition of cheap foreign 
 labour. 
 
 The Lister comb was not the only, but it was the 
 principal, agent. Invention and improvement have 
 been active in this branch to a degree unknown in 
 the thrown silk trade. By the change from " short "
 
 THE SILK TRADE 8r 
 
 to " long" spinning they have Hterally succeeded in 
 making "a silk purse out of a sow's ear." It is 
 always so. Enterprise and advancing ideas put 
 into a trade carry it over many an obstacle, and even 
 defy tariffs. Waiting and longing for the artificial 
 conditions of Protection is a pure waste of time. 
 
 There is no real reason why even the thrown silk 
 trade might not be largely extended under the 
 present conditions. The home market is free to us, 
 untrammelled by tariffs, and at our doors. It is a 
 large market, and a profitable one, as is proved by 
 the eagerness of the foreigners to possess it. The 
 trade, therefore, will do wisely to hold to a fiscal 
 system of freedom, and base its success on sound 
 economic lines, and not on the shaky foundation of 
 Protection. 
 
 At the same time it must be admitted that it is 
 very aggravating for the silk manufacturers, and for 
 all producers, that while we freely open our ports 
 to the whole world, other nations strive by heavy 
 tariffs to exclude our commerce from their shores. 
 Even when, in face of these obstacles, a trade begins 
 to grow up, they immediately make some new modi- 
 fications of their tariff with a view to strangle it. 
 
 All the time they are eager to increase their own 
 export trade, even to the extent of menacing us for 
 even thinking of following their restrictive example, 
 and are feverishly anxious to promote the policy of 
 " the open door " in every country but their own. 
 
 The gross selfishness and injustice of such treat- 
 
 7
 
 82 BRITISH INDUSTRIES 
 
 ment, to say nothing of the insolence sometimes 
 attending it, naturally stirs resentment, and it is no 
 wonder that men so abused should think of some 
 form of retaliation. 
 
 Arguments based on the imports of silk must 
 take into account the change of route occasioned 
 by the opening of the Suez Canal. 
 
 Prior to that event the bulk of the Oriental silk 
 for European consumption came round by the 
 Cape of Good Hope, and London became the 
 convenient entrepot, from whence the silk was 
 afterwards exported to the European countries 
 engaged in that industry. 
 
 Since the opening of the Suez Canal silk in- 
 tended for Central Europe naturally enters by the 
 ports of Trieste, Genoa, and Marseilles. The loss 
 of this entrepot trade is no doubt to be regretted, 
 but it was inevitable. It was not caused by the 
 Cobden Treaty, nor could any tariff alter it. 
 
 This natural change of route must not be over- 
 looked, else statistics of import become quite 
 misleading. 
 
 The Risks of a Tariff War. 
 
 Care must, however, be taken that resentment 
 does not obscure our vision of the consequences of 
 any tampering with economic law. Those who 
 think that prosperity can be created by any jugglery 
 of tariffs venture upon risky ground. 
 
 If we viewed international commerce as a war, it
 
 THE SILK TRADE 83 
 
 would no doubt be quite legitimate to use such a 
 weapon as retaliation to bring our opponents to a 
 more reasonable frame of mind. We will all be quite 
 ready to consider any proposal of this kind when it 
 is made, and when we can see what it involves. It 
 is at best a blind game, in which there is the greatest 
 danger that you may hit the wrong man. 
 
 In the meantime, until something practicable is 
 proposed, we may bear in mind that international 
 commerce, rightly understood, is not a war. The 
 true idea is that it is a mutual benefit. It is a 
 conflict in which both sides can win, and must win. 
 It is, like mercy, " twice bless'd — it blesseth him that 
 gives and him that takes." The loss comes in, not 
 in exchange, but in its being artificially hindered and 
 restricted. 
 
 We should not allow foreign nations to suppose 
 that they are conferring any special favour on us 
 by purchasing our goods. Nations as nations do 
 not trade. It is the merchants who do so, and 
 unless they see a chance of profit to both parties 
 they will not operate. All international transactions 
 are profitable to both parties, else they would never 
 take place. 
 
 Much unnecessary alarm is entertained about 
 amount of exports and imports. A large export 
 simply means that at that time the owners of these 
 goods on the one hand, and the would-be owners 
 on the other hand, find their mutual profit in making 
 the exchange. A small import equally means that
 
 84 BRITISH INDUSTRIES 
 
 the prices do not allow of a deal at that time. There 
 is no loss to lament about, and the so-called 
 " balance of trade " is mainly of interest to bankers, 
 to enable them to arrange the rate of exchange. 
 Every sale and purchase is "balanced" by the 
 payment of it. 
 
 The best attitude is that of ordinary commerce. 
 If foreign nations refuse to let their people buy 
 from us, they are at liberty to do so. It will be 
 their own loss. No merchant ever thinks that 
 retaliation is the way to bring back a customer who 
 chooses in the exercise of his undoubted right to 
 buy his goods elsewhere. Let him alone. When 
 he finds he can get a good bargain here, he will 
 come back of his own accord. 
 
 These heavy tariffs, whatever they mean, most 
 certainly prove that not one of these countries can 
 compete with us in the open market. They are 
 afraid of us. They plainly believe that our powers 
 of production are superior to theirs. Their tariffs 
 proclaim this fact to the whole world. 
 
 Our true policy is to hold for a free market and 
 to improve our methods. Let our success, whether 
 great or small, be founded on natural law, and it 
 will be enduring.
 
 THE DEVELOPMENT OF BRITISH 
 
 BANKING 
 
 By a Practical Banker 
 
 THE fundamental features of the development 
 of British Banking and of the London 
 Money Market during the last half-century are — 
 
 1. The increase of branch banks in London and 
 in the country generally. 
 
 2. The opening in London of branches of foreign 
 and colonial banks and the employment in London 
 of foreign money. 
 
 3. The development of the bill-broker. 
 
 The first point for consideration, namely, the 
 
 growth of branch banks, presents some interesting 
 
 features. The development of banking in London, 
 
 the suburbs, and the country has not taken the 
 
 form of the creation of altogether new banks, 
 
 specially adapted to the needs of each particular 
 
 locality, but has been brought about by the 
 
 opening up of new branches by the existing banks. 
 
 Indeed, the absence of any successful attempt for 
 
 85
 
 86 BRITISH INDUSTRIES 
 
 several years to establish new banks, either private 
 or joint stock, is so marked that one is forced to 
 the conclusion that the ordinary depositor will only 
 entrust his capital to institutions which have shown, 
 by some years of prosperous existence, that con- 
 fidence may be reposed in them. As to private 
 banks, the remark of the late Mr. Bagehot is pro- 
 bably true, that "men of first-rate wealth will not 
 found one, and men not of absolutely first-rate 
 wealth cannot." "A large bank," he adds, " always 
 tends to become larger, and a small bank to become 
 smaller." On the other hand, the joint-stock banks, 
 taking advantage of the facilities offered for the 
 obtaining of new capital by the system of limited 
 liability, have extended their operations on every 
 side. Indeed, so completely have the existing insti- 
 tutions responded to the calls for branches that 
 England as a whole may be said to be well-nigh 
 over-banked, while in the suburbs of London 
 the branches of two or three well-known banks 
 compete for the account of the solvent trader. 
 
 The Private Banker. 
 
 Side by side with this extension of branch 
 banking of the joint-stock banks may be noted 
 the steady disappearance of the private banker. 
 Old familiar names which for years, and, in some 
 cases, for more than a century, had been household 
 words in their respective localities, have passed 
 away for ever. The causes for this change are
 
 DEVELOPMENT OF BRITISH BANKING 87 
 
 various. In some instances the old private bank, 
 strong in its local associations and traditional 
 history, had really been mismanaged. Under no 
 obligation to publish accounts, it had made 
 advances which it could not call in ; in other 
 words, its resources were hopelessly " locked up." 
 In such cases it gladly sought absorption into a 
 neighbouring joint-stock institution, which would, 
 of course, insist on prompt repayment of all loans 
 which were good and leave the *' bad " ones at the 
 risk of the old firm. The private banker sold him- 
 self because he was "weak" and knew it. In other 
 instances the very reverse was the case. The old 
 bank, with assets sufficiently liquid, in full touch 
 with all local industries, respected and trusted 
 everywhere, was a tempting morsel for the joint- 
 stock institution to acquire. The directors of the 
 latter, whose shares are quoted, probably, on the 
 London Stock Exchange, assert, and that truth- 
 fully, that through that quotation they can give a 
 marketable value to their capital which the capital 
 of no private bank can hope to possess. They offer 
 tempting terms to the private banker. He rises to 
 the bait. He has worked hard and brought his bank 
 to a high state of excellence, but can he be sure 
 that his sons will exhibit the same sagacity and 
 earnestness which he has displayed ? He doubts 
 it, and so sells his business for several years' 
 purchase of the net profit, solacing himself and 
 reassuring his customers by accepting for a time
 
 88 BRITISH INDUSTRIES 
 
 a seat on the board of the purchasing bank. In 
 this case the private banker sells himself because 
 he is strong and solvent and gets a good price. 
 
 It is obviously too early at present to discuss the 
 consequences which may result from this super- 
 session of private bankers by branches of joint- 
 stock institutions. Whether the latter, working, as 
 they necessarily must, under rigid rules enjoined by 
 the board at the head office, and not necessarily 
 adapted to the needs of any particular district, can 
 understand local requirements and provide for 
 special needs as well as did the old private banker, 
 who, at his best, watched every local industry and 
 felt the pulse and knew the condition of every 
 borrower, remains to be seen. The opinion of 
 Lord Overstone, in his evidence before the Bank 
 Charter Committee of 1840, that "joint-stock banks 
 are deficient in everything requisite for the conduct 
 of banking business except extended responsibility," 
 has not been supported by experience, while the 
 author of it did not hesitate to sell his own bank 
 to a joint-stock institution. But for our present 
 purpose it is sufBcient to point out that this steady 
 development of branch banking by all banks is an 
 indication of, and indeed the outcome of, the 
 abounding wealth of the country, which demanded 
 greater banking facilities, and those facilities near 
 at hand.
 
 DEVELOPMENT OF BRITISH BANKING 89 
 
 Growth of Deposits. 
 
 For what all banks seek by opening branches 
 everywhere is to extend their resources. True, 
 wherever they go they have to lend, if the security 
 be good, but it is not the desire to lend which 
 makes them cover the country with branches. 
 They want deposits. Consider, now, what a bank 
 deposit is. In every country, however poor, but 
 especially in an old and wealthy country, every- 
 body, whether landowner, manufacturer, merchant, 
 or tradesman, keeps a certain part of his capital — 
 called by the old economists his "stock" — in a 
 fluid state, ready for immediate necessities. In a 
 country where "credit" is sparse and locomotion 
 difficult this free capital will be held in coined 
 money or bank notes if they are available and care- 
 fully hoarded. In a country where credit is fully 
 developed and access from hamlet or village to the 
 neighbouring town ready and safe the free capital 
 will form a deposit in the local bank. These 
 deposits, gathered from a thousand sources, from 
 a vast network of branches, agencies, and sub- 
 agencies of banks covering the United Kingdom, 
 are a most impressive example of the utilisation of 
 capital — that is, of wealth applied to reproductive 
 purposes. Such accumulations are only possible in 
 a country where wealth is widely diffused and 
 where social order and mutual confidence are 
 widely diffused too. With every extension of
 
 90 BRITISH INDUSTRIES 
 
 population new branch banks are established, fresh 
 accounts are opened, more deposits are received, 
 and another addition made to the available capital 
 of the nation. 
 
 It is probable that the savings of the working 
 classes do not, to their full extent, come within the 
 purview of banking machinery. In crowded centres 
 of population, either by means of penny banks or 
 kindred institutions, the artisan may have an 
 individual account, but his savings, so far as they 
 are lodged with the Post Office or Trustee Savings 
 Banks or with Benefit and Provident Societies or 
 Clubs, do not swell the banker's balances. They 
 pass into the hands of the National Debt Com- 
 missioners, and the working balance of the fund 
 itself forms part of the public deposits at the Bank 
 of England, and as a factor in the bank's resources is 
 an important adjunct to the Fund for Loanable Capital. 
 
 The relation of a banker's deposit to the capital 
 of the country is at once seen if it be remembered 
 that in the vast majority of instances a deposit 
 represents a margin of income beyond expendi- 
 ture, of assets beyond liabilities, of property 
 realised beyond debt actually due. 
 
 It is only of late years that the amount of these 
 deposits has been accurately ascertained. When 
 the bulk of banks were private firms and published 
 no accounts the desired information could only be 
 dimly estimated. The Returns of the Economist, 
 published last May, show —
 
 DEVELOPMENT OF BRITISH BANKING yi 
 
 Deposits. Capita! paid up 
 
 England and Wales _/.'702, 000,000 ;^io5,ooo,ooo 
 
 Scotland 107,000,000 17,000,000 
 
 Ireland 50,000,000 11,000,000 
 
 Total United Kingdom... ;^859,ooo,ooo ;£i33,ooo,ooo 
 
 Now, in 1875 the Select Committee on Banks of 
 Issue estimated the deposits at ^^350,000,000, so 
 that we arrive at an increase in 27 years of 
 145 per cent. It should be added that this total of 
 ^^859,000,000 takes no notice of the deposits in 
 the hands of colonial and foreign banks having 
 agencies in London, though, of course, some 
 proportion of their resources is at times employed 
 on the London market. 
 
 As to the machinery through which these deposits 
 have been gathered, the last issue of the Banking 
 Alnianac shows that at the present time there are 
 in the United Kingdom 6,592 bank offices, exclud- 
 ing 80 of foreign banks. In 1858 there were 
 only 2,008, an increase in 45 years of 228 per 
 cent. Moreover, between 1877 and 1891, 1,108 
 offices were opened in places where none had 
 previously existed. During the same period the 
 paid-up capital and reserves of the banks have 
 grown by ^50,000,000. 
 
 The Use of Cheques. 
 
 These innumerable bank accounts are operated 
 upon by cheque. In other words, the depositor 
 wishing to discharge a debt orders his banker.
 
 92 BRITISH INDUSTRIES 
 
 in writing, to pay the creditor the specified 
 sum. This order, called a cheque, is a negotiable 
 instrument, and passing from hand to hand, may 
 liquidate many debts. But of course it passes only 
 on the credit of the drawer, and with the consent of 
 the creditor. No one is compelled to take a cheque. 
 Yet in this country, so well established is credit that 
 the cheque is steadily supplanting other and older 
 modes of defraying debts. Just as, from the time 
 when banking became an admitted factor in the 
 commercial life of the country, the bank note 
 tended to supersede the use of coined money ; just 
 as the Bank of England note, endowed with the 
 unique characteristic of "legal tender," ousted the 
 ordinary bank note which had behind it only the 
 credit of the issuer — a quality the worth of which 
 could not be readily ascertained when banks did not 
 publish balance-sheets — so now the cheque is, for 
 home transactions, gradually taking the place of the 
 Bank of England note. 
 
 A few figures will serve to substantiate this asser- 
 tion. The average amount of notes in circulation 
 at any one time in the United Kingdom, including 
 not only Bank of England notes but the notes of 
 Scotch and Irish banks and of the few remaining 
 English country notes which still retain the right of 
 issue, varies from 44 to 46 millions sterling. As 
 long ago as 1856 the circulation reached from 
 36 to 39 millions, so that in 46 years the increase 
 has been about 8 millions. Turn now to cheques.
 
 DEVELOPMENT OF BRITISH BANKING 93 
 
 At the present time the amount paid yearly through 
 the Bankers' Clearing House amounts roughly to 
 ten thousand millions of pounds. But all cheques 
 do not pass through the London Clearing. There 
 are eight provincial clearing houses, which manipu- 
 late large numbers of cheques. Again, cheques 
 drawn on the Bank of England, or settled between 
 accounts of the same bank, or various branches of 
 one bank, or the various banks of one town, or paid 
 over the counter, must be allowed for, as well as all 
 Scotch and Irish cheques. Exact figures cannot be 
 obtained, but in the opinion of those best qualified 
 to judge the amount of cheques paid outside the 
 London Clearing is not less than the amount passed 
 through the House. Thus the cheques paid in the 
 United Kingdom reach twenty thousand millions of 
 pounds a year. Expressing this stupendous total as 
 a daily average, and purposely eliminating all special 
 days, such as Stock Exchange Settlements, &c., we 
 find that ordinary business transactions to the extent 
 of ;^52,ooo,ooo are settled daily in the United 
 Kingdom. In 1868 the corresponding total was 
 ;^i9,ooo,ooo. In a word, in 46 years the bank note 
 circulation has increased 22*3 per cent. ; in 34 years 
 the cheque circulation has increased i73'4 per cent. 
 Accustomed to this universality of the cheque, 
 and to the wide diffusion of solvency which it 
 indicates, an English banker learns with surprise 
 that nowadays in Paris authorised representatives 
 are despatched weekly from the Bank of France and
 
 94 BRITISH INDUSTRIES 
 
 other great F'rench banks to collect in notes and 
 coin the debts due to their respective establishments, 
 chiefly in the form of discounted bills. And at the 
 moment that these pages are passing through the 
 press an instance comes to hand showing that 
 in Germany at least the cheque and the credit 
 behind it have not secured the confidence accorded 
 to them in England. On September 3rd the Bank 
 of England suddenly raised the rate of discount 
 from 3 to 4 per cent. Nothing in the home trade, 
 or in the state of the foreign exchanges suggested 
 this precaution. It turned out that in Germany it is 
 the custom for interest on mortgages to be paid on 
 October ist in notes or coin. The Imperial Bank, 
 for reasons unknown to us, declined to provide the 
 gold, and the other German banks had therefore to 
 resort to the Bank of England, leaving the directors 
 of the latter institution no alternative but to raise 
 their rate. 
 
 Bills on London. 
 
 The cheque is of course an instrument mainly 
 for home transactions. For these purposes it has 
 not only reduced the circulation of bank notes, but 
 has to a considerable extent superseded Inland Bills 
 of Exchange. But for all the operations of inter- 
 national and foreign commerce or finance the bill 
 of exchange is the chief expedient. In what we 
 may call a primitive case of international trade, the 
 foreign importer, wishing to discharge his debt to
 
 DEVELOPMENT OF BRITISH BANKING 95 
 
 his correspondent here, will remit to him a bill of 
 exchange drawn on some trader in this country. 
 That bill he obtains from a foreign exporter who, 
 having sent goods here, draws upon the consignee 
 for their value. Thus the exporter abroad is paid 
 by the importer abroad, while the importer here 
 liquidates the debt due to the home exporter. 
 
 Now, it is obvious that this transfer of debts 
 cannot be carried out unless the "goodness" of the 
 bill by which the transfer is accomplished is un- 
 doubted. In the case just quoted what the foreign 
 buyer of the bill must be assured of is that the bill 
 will be honoured when due, and that, moreover, 
 there can be no mistake as to the currency in which 
 payment will be made. The bill must represent 
 undoubted credit and "good " money. But clearly 
 the credit of an individual trader or importer, how- 
 ever good, cannot be so good as that of great banks 
 and finance houses of world-wide reputation and 
 admitted wealth. Hence international commerce 
 tends more and more to be carried on by the inter- 
 vention of these great houses. In other words, the 
 importer will open for his correspondent a " credit " 
 on a London finance house or bank, and under this 
 credit the exporter will draw, thus getting a bill 
 which he will be able to sell at the best possible 
 price. 
 
 These bills on London constitute the chief agency 
 by which international trade is carried on. Remem- 
 ber that a bill on London gives an indefeasible title
 
 96 BRITISH INDUSTRIES 
 
 to the holder to obtain gold in London ; and 
 London is the chief market for gold in the world. 
 A bill on Paris may, so far as the credit of the parties 
 to it is concerned, be as well authenticated as a bill 
 on London, but if the holder wants by means of it 
 to obtain gold in Paris for export abroad, he finds 
 that he will have to pay the Bank of France a 
 premium for such gold. If, again, a merchant has a 
 bill on Berlin, and wishes to convert it into gold for 
 export, he finds himself confronted by difficulties. 
 His proposal is not liked, and he is given to under- 
 stand that his application, even if agreed to, must 
 not be repeated. In London there are no such 
 obstacles. The bill when paid passes to his credit. 
 He draws bank notes, and each note is an irre- 
 fragable promise to pay so many ounces of gold of 
 a given weight and fineness. In consequence every 
 foreign banker holds bills on London as his 
 favourite investment. They constitute, in fact, an 
 international currency. 
 
 Returning to our accumulation of bank deposits, 
 we note that this vast amount of capital collected 
 throughout the length and breadth of the kingdom 
 finds its way, after providing for local needs, into the 
 hands of the London banks, and thus forms the 
 great fund of loanable capital, the handling of 
 which constitutes the business of the London 
 Money Market.
 
 DEVELOPMENT OF BRITISH BANKING 97 
 
 The Bill Broker. 
 
 It must not be supposed that the operations 
 of the Money Market are confined exclusively 
 to the borrower who wants a loan or to the 
 merchant who wants to discount a bill and 
 the banker who is prepared to meet the want. 
 Between the two, steps in the bill-broker. He is 
 really a bill-merchant. It is his business to 
 ascertain and have at his fingers' ends the 
 standing and resources of every acceptor of a 
 bill. He must be ready at a moment's notice to 
 determine whether, out of hundreds of banks and 
 commercial houses, this or that one is accepting 
 more than is usual, and if so, whether there is 
 special reason for the excess. Of good bills he 
 cannot well have too many ; of bad bills he 
 willingly will have none. As a rule "inferior" 
 paper will not be found in his hands, but the bulk 
 of the bank and best trade bills reposes in his 
 portfolio ; and through his agency all hrst-rate bills 
 find their way to the London Market. 
 
 The bill-broker buys his bill from the merchant 
 and resells it, or borrows on it from the banker. 
 Thus the latter is aided by the interposition between 
 himself and the acceptor of the credit of the broker, 
 while the merchant, taking advantage of the com- 
 petition of the brokers, is enabled to sell his bill at 
 the finest rate. 
 
 It is not too much to say that the gradual 
 
 8
 
 98 BRITISH INDUSTRIES 
 
 development of the bill-broker in the London 
 Market during the last half century is a convinc- 
 ing proof of the success with which that market 
 has adapted itself to the necessities of a world- 
 wide commerce. The bill-broker is an exclusively 
 British institution. Abroad, the merchant must 
 discount with the banker or not at all, and so 
 loses the advantage which the competition of the 
 London bill-brokers secures to the holder of a 
 good bill. 
 
 Capital "Dumped" in London. 
 
 It will be readily understood that the resources 
 of the London Market are replenished from 
 many sources. Attracted by its advantages, the 
 Scotch banks some years ago opened branches in 
 London, and so " dumped down " supplies of 
 " cheap capital " which they accumulated in Scot- 
 land by means of their notes, of which they had 
 a monopoly. The London bankers grumbled 
 because tliey could not issue notes in Scotland, 
 but their complaint evoked no ready sympathy, 
 and the Scotch banks " worked their wicked will." 
 Later on German bankers, French bankers — the 
 whole banking world in fact — opened branches in 
 London so as to " dump down " their cheap capital 
 on the much-enduring London Market. 
 
 And so this great market has grown, and grows ! 
 Based, broad and strong, upon national credit, it 
 offers to the whole world its services. From all
 
 DEVELOPMENT OF BRITISH BANKING 99 
 
 it expects adequate security ; to all its message is, 
 "You may 'sojourn' but not 'abide.'" For the 
 trader it discounts his bill, or his " prompt," or 
 interposes a better credit than his own for his 
 imports from abroad ; for the promoter of a new 
 company or the issuer of a new loan it encashes 
 the "call," and in a score of ways helps on the 
 new enterprise, the last "adventure." It is em- 
 phatically a " good " market ; that is, one in which 
 any one who has the proper security to offer can, 
 except in extreme cases, always deal. But owing 
 to the immense variety of influences operating 
 upon it, it is a " sensitive " market. Every change 
 in international relations, in the supply and 
 demand of commodities, in the growth or decline 
 of credit, in the movements of labour and capital, 
 &c., will affect it. Like water in a closed tank, 
 if a pailful is taken out and another is not put in 
 the level of the whole is altered and the relations 
 of the constituent drops affected. Thus the 
 market value of loanable capital varies from day 
 to day, and at times from hour to hour. In the 
 ultimate resort the value of that capital, and 
 indeed the stability of the market itself, depends 
 upon what is in reality the pivot of the whole 
 banking and financial system of the United 
 Kingdom, viz., the adequacy of the reserve of gold 
 of the Bank of England. It is impossible to do 
 more than to refer to the subject in this paper, but 
 we may be allowed to remark that in our judgment
 
 100 BRITISH INDUSTRIES 
 
 the question whether that reserve is adequate to 
 sustain the enormous superstructure of credit 
 which has been erected on it, and which is daily 
 increasing, is one of vital importance. 
 
 It is a point worthy of notice that the London 
 Money Market is not localised in any one spot. 
 Ask for the Corn Market, or the Wool Market, or 
 the Insurance Market, or the Produce Market, or 
 the Stock Market, and you can be at once directed 
 to a particular building where the actual operations 
 of purchase and sale are carried on, and where the 
 brokers and others interested congregate daily. 
 There is no reason in the nature of things why, 
 similarly, there should not be a special building 
 where the representatives of all the great banks 
 and discount houses should meet, and where the 
 intending borrower should ascertain the day's 
 quotation for the capital he wishes to borrow. 
 But this is not the case. The actual locus in quo 
 of the London Money Market is the counting 
 houses of the great banks and discount houses, 
 with a final resort to the august precincts of the 
 Discount Office of the Bank of England. 
 
 No Signs of Decay. 
 
 It is obvious that the daily manipulation of this 
 fund of loanable capital brings the practical banker 
 and bill-broker into contact with almost every 
 development of commercial activity. It is a 
 necessity of his position that he should be able
 
 DEVELOPMENT OF BRITISH BANKING loi 
 
 to forecast the probable effects of all great 
 events, such as political or social changes as well 
 as the smaller trade variations which occur within 
 his particular district. He will quickly come to 
 make allowance for the exaggeration with which 
 nearly all men speak when their interests appear 
 to be threatened. He will be keenly alive to the 
 fact that in so complex a piece of machinery as 
 modern international commerce a perfect equi- 
 poise between supply and demand can hardly be 
 maintained for any length of time. The pheno- 
 mena of "glut" in a particular market is at times 
 inevitable ; and there is no difference of principle 
 between the " dumping down " on the Home 
 Market, at less than cost price, of surplus pig 
 iron manufactured abroad and the time-honoured 
 action of the retail draper who, having misinter- 
 preted the " demand " or lagged behind the 
 fashion, marks his goods at an "appalling sacrifice." 
 In all such cases the complaint of the producer 
 whose goods are for the moment undersold is 
 sure to be heard ; the fortunate purchaser of the 
 cheap commodity pockets his profit and maintains 
 a complacent silence. This and a score of other 
 phenomena which disturb the manufacturer or 
 producer are incidents inseparable from the con- 
 duct of business, and no other conclusion can 
 be drawn from them than that he is the wisest 
 trader who interprets demand most accurately. 
 Again, our practical banker, accustomed to observe
 
 102 BRITISH INDUSTRIES 
 
 the ebb and flow of trade and judge of each 
 application for advances on its merits, will learn 
 to distrust all general statements of impending 
 national calamity. He is told, for instance, that 
 for some time past the nation has been living 
 on its capital. Knowing that the " nation " 
 in its corporate capacity does not enter into 
 commerce, but that, at any given time, certain 
 merchants and manufacturers are buying and others 
 selling, he naturally inquires for the particular 
 persons whose balance-sheets have for years shown 
 a steady excess of liabilities or waste of assets. 
 He may find here and there instances of bad or 
 unprofitable trading, but nothing to justify the 
 assertion of general decay or continuous diminu- 
 tion of capital. 
 
 When, on the other hand, he turns to the indica- 
 tions of national progress as embodied in the 
 official returns, he finds that the returns of the 
 Bankers' Clearing House, of the Savings Banks 
 and Friendly Societies, of shipping, of pauperism, 
 and above all of the yield of the income tax, 
 furnish indubitable proofs of the steady growth of 
 capital w'ithin the nation. 
 
 Again, our practical banker or broker will not be 
 particularly disturbed about the alleged "ominous 
 excess of imports." Accustomed to observe, in the 
 special statistics which he can check, how difficult 
 is their interpretation, how frequently the obvious 
 is the untrue, he will probably apply a simpler test
 
 DEVELOPMENT OF BRITISH BAXKIXG T03 
 
 to the solution of the problem. He knows that 
 such a stupendous indebtedness, if it really existed, 
 would turn against us the exchange of many 
 centres. But the normal variations of the 
 Exchange Market are orderly and periodic, the 
 abnormal variations capable of immediate explana- 
 tion. And so our practical banker sleeps in peace, 
 confident that either the consignment of the 
 merchant or the operations of the arbitrageur will 
 liquidate any real debt, with but an occasional 
 resort to the Bullion Office of the Bank of 
 England. In this and in other instances where 
 the operations of commerce pass beyond the 
 counting-house to become the subject of letters 
 to the editor or of magazine articles, he will be 
 less apprehensive about the outcome of the par- 
 ticular operation referred to than about the use that 
 may be made of it by those " who have their own 
 axes to grind." 
 
 Free from Official Interference. 
 
 What, now, is the connection between the develop- 
 ment of banking and finance in the country and 
 Free Trade ? It may be admitted that the relation 
 between them may not, at first sight, be so intimately 
 discerned as in the case of certain great industries 
 whose growth is obviously associated with the 
 remission of taxes which hampered production. 
 But none the less if the genesis of the Fund 
 of Loanable Capital be what we have indicated,
 
 104 BRITISH INDUSTRIES 
 
 then every agency which has stimulated production, 
 everything that has made production profitable, 
 has resulted in the accumulation of capital, 
 and the loanable capital which bankers and 
 financiers wield is but a portion of the general 
 accumulation which, as we have explained, is 
 kept free and immediately available. It follows, no 
 doubt, that an ideal commerce would be free from 
 all fiscal restraints whatever. Every imposition of 
 a duty, every Custom House or Excise regulation, 
 every stamp on a bond or deed or cheque, however 
 inevitable for purposes of revenue each impost 
 may be, tends, as far as it goes, to impede business, 
 and so to hamper the exchange of commodities 
 and the profitable employment of capital. The 
 truth of this principle is attested by the continuous 
 policy of the British Government, which, while 
 demanding a toll of ten shillings per cent, on all 
 foreign bonds issued in this country, has never 
 thought of imposing any tax on the transfer of its 
 own debt. Indeed, the growing tendency of all 
 authorities — national, municipal, or otherwise — to 
 bear themselves the burden of fiscal imposts and 
 issue their securities "free of stamp duties" is an 
 unconscious tribute to the deep-seated desire for 
 a market unaffected by Government intervention. 
 The late Mr. Bagehot was proud of Great Britain 
 because it was the only country where the "grocer 
 was not afraid of the Exciseman " : so our prac- 
 tical banker will be proud of his market in propor-
 
 DEVELOPMENT OF BRITISH BANKING 105 
 
 tion as the daily current of the capital which 
 constitutes it is exempted from the " stamps " of 
 Somerset House and the tax of the " tariff 
 reformer." 
 
 On the other hand, he will not attribute 
 our existing prosperity to Free Trade only. So 
 far as that prosperity has affected his industry 
 — so far as it has meant larger deposits and 
 discounts, and more extended credit generally 
 — he would not fail to recognise the share which 
 other agencies have had in promoting it, notably 
 social order and the maintenance of the gold 
 standard. But nevertheless he will feel assured 
 that the more rapid accumulation and wider 
 diffusion of capital was coincident with the 
 advent of Free Trade, and distinctly traceable to 
 it. The repeal of the Navigation Laws, resulting 
 in the gigantic growth of our shipping, and making 
 us the carriers for three-fourths of the world's 
 traffic ; the policy of free imports giving us an 
 unmistakable advantage as regards cheap and 
 efficient productions in the universal competition ; 
 in other words, free ports and free markets — these 
 are the factors by which the accumulation of 
 capital has been mainly accomplished. 
 
 A Great Creditor Nation. 
 
 Surely, though slowly, we have become the great 
 creditor nation. We have invested enormous sums in 
 our Colonies and in foreign countries, and so receive
 
 io6 BRITISH INDUSTRIES 
 
 a yearly-increasing tribute in money or money's 
 worth. In some instances, as, e.g., in Argentina, 
 nearly the whole of the development of the 
 country has been due to British capital ; and our 
 capital has been invested prudently only so far as 
 it has been invested on the principle which is the 
 essence of Free Trade, that of ascertaining what 
 each country is best fitted to produce, and then 
 aiding in its production or transportation. 
 
 Moreover, in our dealings, whether by way of 
 investment or trade, we have hitherto escaped the 
 tyranny of the sophism of retaliation. We have 
 instinctively felt that the adoption of this policy 
 would in the case of raw materials result in our 
 purchases being made at a dearer rate and of an 
 inferior quality ; in the case of manufacturers it is 
 highly improbable that goods which require pro- 
 tection in the home market would successfully 
 compete with similar goods in a foreign market. 
 What, then, the London Money Market chiefly 
 desiderates is unfettered production and the steady 
 accumulation and diffusion of capital which results 
 therefrom. It wants abundance of bills, so long as 
 each bill represents commodities or other real con- 
 siderations. It realises that so long as the United 
 Kingdom is a free market for all sellers the capital 
 with which it deals will be profitably employed. 
 But to the extent to which free imports are stopped 
 the cost of production in this counti-y will be 
 enhanced and the power of the country to sell her
 
 DEVELOPMENT OF BRITISH BANKING 107 
 
 products in the face of hostile tariffs will be pro- 
 portionately impaired. Again, to the extent to 
 which we decline to admit the goods of foreign 
 countries we weaken their productive power, and 
 so render it more difficult for them to pay the 
 interest due to us in respect of our enormous in- 
 vestments of capital abroad. It is obviously illogical 
 and foolish to continue our lavish outlay of capital 
 abroad and then impede by fiscal restrictions the 
 influx of goods by which our interest is paid. The 
 tendency of all such restraints will be in the ultimate 
 resort to restrict the growth of the Loanable Capital 
 Fund. But there are other and worse consequences 
 than these. 
 
 The Tyranny of American Trusts. 
 
 One of the most dangerous elements in the 
 industrial and financial position of the United 
 States at the present time is the influence exerted 
 by gigantic Trusts, which are practically monopolies 
 of the most aggressive character. These Trusts are 
 lowering the tone of American commercial life to 
 an extent which we in England can hardly believe. 
 If not the logical outcome of Protection, they 
 certainly derive from it their chief profit. The aim 
 of the " Boss " is to capture the tariff, to manipulate 
 it for his own purposes. With this view he dis- 
 ciplines his retinue of voters. Congressmen, and 
 Senators. But, further, it is essential that he should 
 have a preponderating influence over his bankers.
 
 io8 BRITISH INDUSTRIES 
 
 so that at his bidding they shall carry his " under- 
 writing " and manage his " syndicates." He cares 
 not if the bank, in obeying his behests, finds itself 
 hopelessly " locked up " with its reputation impaired. 
 Dealing with this subject, a recent writer remarks : 
 " In England the banker looks after the trader, in 
 the States the trader finds it necessary to look after 
 the banker." 
 
 Now, from these baneful influences the British 
 banker has hitherto been free. In the handling 
 of his resources he has been loyal to the best tra- 
 ditions of British banking. He has ever recognised 
 that " he only is a banker who knows the difference 
 between a mortgage and a bill of exchange." Hence 
 the ready convertibility of his assets and the in- 
 considerable amount of his "bad debts." He 
 realises that sound banking has been associated 
 with Free Trade, and he deprecates the introduc- 
 tion of any system which readily lends itself to 
 unscrupulous trading and unsafe banking. 
 
 But further. Hitherto the British manufacturer 
 and merchant, though exposed to those vicissitudes 
 and changes which are inevitable in a world-wide 
 commerce, though worried often enough with the 
 tariff of other countries, have been exempted from 
 the additional trouble incidental to an elaborate 
 home tariff. And this home tariff must mean com- 
 mercial unrest and uncertainty. The introduction 
 of preferential or protective tariffs in a country 
 where duties have been imposed for revenue
 
 DEVELOPMENT OF BRITISH BANKING 109 
 
 purposes only will be like the letting out of water. 
 Every trade in turn — and never were trades so 
 organised as now — will clamour for its share of 
 fiscal protection. Each claim will be criticised by 
 eager competitors. Home interests will conflict 
 with colonial interests. The interests of one colony 
 will not be identical with those of another. Revision 
 will succeed revision, each one leaving its own 
 trace of jealousy and heartburning both at home 
 and abroad. Hitherto the foreigner, chagrined at 
 our constant acquisition of new countries, has 
 been silenced by the consideration that throughout 
 these areas he was as free to trade as we ourselves. 
 But with the disappearance of the "open door" 
 there will be nothing to mitigate his jealousy. 
 Moreover the phenomenon observable in all pro- 
 tectionist countries will be repeated here — that all 
 tariffs tend to increase. And why should they 
 not ? Why should a manufacturer trouble about 
 new inventions and more efficient plant when his 
 relative disadvantage can be compensated for by 
 levying increased duties on his competing foreign 
 rival. If Free Trade necessarily means alertness, 
 capacity, and enterprise, it follows that Protection 
 means the reverse. 
 
 Now, the arena of all these fiscal aspirations 
 and conflicts must be the floor of the House of 
 Commons. In other words, commerce becomes 
 indissolubly associated with politics — a union in- 
 jurious to both. Each interest or each group of
 
 no BRITISH INDUSTRIES 
 
 interests will have its journals, its constituencies, and 
 its members of Parliament pledged to advocate its 
 cause, and the lobbying of Washington will be 
 reproduced at St. Stephen's. A committee or con- 
 ference of Colonial and home representatives, how- 
 ever selected, will have to consider each fiscal 
 proposal, and to recommend it or not for adoption 
 into the Budget of the Chancellor of the Exchequer. 
 Such a condition of affairs cannot but hamper 
 business, disturb credit, embarrass enterprise, restrict 
 the scope and undermine the supremacy of the 
 London Money Market, and so tend to transfer its 
 business to other centres.
 
 SHIPPING LINERS 
 By Maurice Llewelyn Davies 
 
 {Of Messrs. Alfred Holt 6- Co.) 
 
 THE immense and steady growth of our 
 merchant navy is one of those phenomena 
 which by their very famiharity cease to be remarked 
 and to make their due impression. It has come to 
 be regarded as a matter of course that our tonnage 
 should be vastly increased year by year and that 
 fresh regular lines of communication should be 
 constantly established. Prosperity in a trade, like 
 health in the human system, does not draw atten- 
 tion to itself ; those engaged in it have no motive 
 for making it known that they are doing well, and 
 some motives to the contrary. On the other hand, 
 the smallest unfavourable fluctuation leads to an 
 outcry, and usually to a demand for some quack 
 remedy. 
 
 That no real check has to be recorded up to the 
 present time is sufficiently clear from the latest
 
 112 BRITISH INDUSTRIES 
 
 statistics, issued by the Board of Trade in August, 
 1903. These show the total tonnage of our mer- 
 cantile marine to be still steadily increasing, and 
 the following table, of the tonnage of British and 
 foreign merchant vessels (sailing and steam) which 
 have entered and cleared in the foreign trade at 
 ports in the United Kingdom, is typical of the scale 
 upon which expansion has taken place : — 
 
 British 
 Percentage 
 British. Foreign. of total. 
 
 1840 6,490,485 2,949,182 68-8 
 
 1850 9,442,544 5,062,520 65-1 
 
 i860 13,914,923 10,774,369 56-4 
 
 1870 25,072,180 11,568,002 68*4 
 
 1880 41,348,984 17,387,079 70-4 
 
 1890 53,973,112 20,310,757 727 
 
 1900 62,710,836 35,812,857 637 
 
 1902 64,902,907 34,969,812 65-0 
 
 Nor is there any substantial foundation for the 
 fear that foreign maritime enterprise is overtaking 
 us. In this connection the following extract from 
 the Report of the House of Commons Select Com- 
 mittee on Steamship Subsidies (1902) should be 
 weighed : — 
 
 " The Board of Trade belief is, stated with the 
 utmost confidence, that British shipping maintains 
 a flourishing position and creditably holds its own 
 in most places as compared with foreign shipping, 
 though it is unquestionably true that foreign tonnage 
 increases in proportion more rapidly because it 
 starts at a lower figure. It is easier to increase
 
 SHIPPING LINERS 113 
 
 from I to 2 than from 100 to 200. Between 1890 
 and 1902 the world's gross tonnage increased from 
 13,000,000 to 26,000,000, but while in that period 
 the British proportion of it has sunk from 63*4 to 
 52-8 per cent., British steam tonnage has in fact in- 
 creased in amount from 8 J millions to 13-^ millions. 
 The German proportion has risen from 7-2 to 10-2 
 per cent., but the actual increase is only from 
 928,000 to 2,600,000 tons. Thus, although our pro- 
 portion has sunk and the German proportion has 
 risen, it will be noticed that in amount our steam 
 tonnage has increased by 5,400,000 tons, while that 
 of Germany has only increased by 1,700,000 tons ; 
 in other words, that for every ton which Germany 
 has added, we have added rather more than three." 
 
 Liners and Ti^mps. 
 
 It should be noted that the above figures, and 
 such others as are available, relate to British 
 shipping as a whole, or discriminate only between 
 steamers and sailing ships or between ships of 
 different sizes. The scheme of this book, however, 
 provides for the treatment of shipping under two 
 heads, in accordance with the rough and familiar 
 distinction between " liners " and " tramps " ; that is 
 to say, vessels which sail with regularity more or 
 less complete in a single trade and vessels which 
 seek employment about the world wherever freights 
 tempt them. The latter class is dealt with in a 
 separate essay, while the former will be specially 
 
 9
 
 114 BRITISH INDUSTRIES 
 
 referred to here. The distinction, however, though 
 convenient, is by no means a scientific one. There 
 are many vessels on the border-line ; trades which 
 have required only occasional " tramp " tonnage 
 are constantly growing to the point of needing a 
 regular service. No figures exist which discriminate 
 between "tramps" and "liners," but it may pro- 
 bably be assumed that the general growth registered 
 appHes fairly equally to both sections. 
 
 Sailing ships, it may be observed in passing, 
 might be divided into the same two classes, though 
 the names are in practical usage confined to 
 steamers ; but the end of sailing ships, though not 
 so rapid, is as certain as that of stage coaches, and 
 though we may regret the disappearance of the fine 
 sailing vessels of former times and admit their value 
 as training schools for seamen, it would be a retro- 
 grade step to copy the French policy of attempting 
 by bounties or otherwise to retard the process of 
 their extinction. 
 
 Steamship " liners " vary considerably in size and 
 type, from the gigantic passenger steamers, often 
 carrying hardly any cargo, and naturally attracting 
 a very disproportionate share of such attention as 
 the general public gives to shipping, through boats 
 which combine in different proportions accom- 
 modation for cargo and passengers, to purely cargo 
 vessels which run with regularity in many trades. 
 All are familiar with the great Atlantic, Eastern, and 
 Australian lines ; but a glance at the advertisement
 
 SHIPPING LINERS 115 
 
 columns of a shipping paper will show how many 
 other trades throughout the world are served largely 
 or exclusively by British "liner" tonnage. Two 
 points should be noticed. First, that among the 
 routes occupied by British lines are not a few, 
 neither terminus of which is in the British Empire, 
 an instance being the important trade between the 
 United States and South America. Secondly, that 
 a certain proportion of lines run under foreign flags 
 are really British owned ; the motive being usually 
 the hope of securing some advantage or preference 
 which a patriotic impulse leads foreign Governments 
 or merchants to bestow upon vessels even nominally 
 national. 
 
 Shipping and Free Trade. 
 
 That British shipping has grown enormously 
 since the Free Trade era is undeniable, the only 
 point that can be disputed being how far post hoc 
 is also propter hoc. So far as regularly trading 
 vessels, or "liners," are concerned, nothing even 
 remotely comparable to the present state of affairs 
 existed before the institution of the Free Trade 
 system. There were fine sailing ships in regular 
 employment, such as the famous passenger vessels 
 from London to Bombay, Madras and Calcutta, 
 and the China tea clippers ; and there were a few 
 steamers on the Atlantic. It is often forgotten that 
 the United States then held the predominance in 
 the Atlantic shipping trade. This was lost, no
 
 ii6 BRITISH INDUSTRIES 
 
 doubt, principally through the change which led 
 to the construction of vessels of iron or steel instead 
 of wood, and through the troubles of the Civil 
 War ; but it may be remarked that the failure of 
 the Americans up to the present time, during peace 
 and since their steel industry was developed, even 
 to attempt to recover their share of the Atlantic 
 trade is to a large extent plainly traceable to their 
 protective fiscal policy. 
 
 Similarly our prosperity is undoubtedly to a 
 greater or less extent the result of our Free Trade 
 system, but it is a question upon which no dogmatic 
 statement can be made how far it is due to this 
 and how far to other causes, such as the application 
 of steam, the use of steel and iron, the opening of 
 the Suez Canal and other physical improvements, 
 and the general industrial advance. In this chapter 
 it is proposed to indicate certain points in the Free 
 Trade system which certainly have helped shipping 
 enterprise ; readers may judge for themselves 
 whether at all events a large share in our great 
 success may not be fairly attributed to the en- 
 lightened fiscal policy pursued during the last fifty 
 or sixty years. 
 
 The Dangers of Retaliation. 
 
 The features in the Free Trade system which 
 have proved beneficial to shipping may conveniently 
 be stated under four heads. 
 
 I. First and most important is the effect which
 
 SHIPPING LINERS 117 
 
 the general policy of free imports has had in vastly 
 swelling the volume of the country's oversea trade. 
 The removal of protective duties has allowed the 
 unrestricted inrush of foreign products, and these 
 have been paid for by corresponding exports. The 
 mercantile marine has thus doubly benefited. Goods 
 brought to, or exported from, British ports have 
 naturally tended to be carried in British vessels ; 
 the merchant navy being thus created, the enterprise 
 of shipowners looks further afield and the phe- 
 nomenon already noted follows, of the entire or 
 partial capture of trades between places neither of 
 which is in British territory. 
 
 That any tariff wall, or restriction of imports, 
 must, so far as it is effective, injure our carrying 
 trade by reducing the quantity of " inward " cargo 
 available, is obvious. It may be well to point out 
 that an export duty such as that now levied upon 
 coal has the same effect. It tends to handicap 
 British coal in its competition for foreign markets, 
 and thus to reduce the quantity exported and the 
 freights paid to shipping. This particular export 
 duty also penalises steam shipping in another 
 manner ; for though coal taken at home ports as 
 " bunkers " is exempted, the price of the British coal 
 bought at foreign ports for steamers' consumption 
 is undoubtedly raised by the amount of the duty. 
 
 The question whether a purely retaliatory or 
 " Fair Trade " policy would be likely in any way 
 to reduce the tariff barriers raised against us by
 
 ii8 BRITISH INDUSTRIES 
 
 foreign countries is rather beyond the scope of this 
 paper, but it should be pointed out that this country 
 is in a singularly weak position for carrying on 
 commercial warfare, not merely because our imports 
 are chiefly food and raw materials — which we cannot 
 tax without manifest danger — but still more because 
 our shipping would evidently be the first object of 
 attack. In this way, above all, an opponent might 
 inflict a deadly and perhaps irreparable blow at a 
 vital organ of our national life. All parties in- 
 terested in shipping should be foremost in striving 
 to maintain the most-favoured-nation system, so 
 that our ships may be secured against differential 
 dues in foreign ports. 
 
 Cheap Shipbuilding. 
 
 2. Secondly, it is quite impossible to overestimate 
 the advantage which British shipowners have derived 
 from the cheapness of vessels, due to the unrestricted 
 importation, and consequent low price, of materials. 
 Of these materials, iron and steel are the most 
 important, but there are innumerable other products 
 that go to the building of a ship, many of which 
 would be described as " manufactured goods " rather 
 than " raw materials " ; and cheap food for work- 
 men really comes under the same category. The 
 result has been a vast extension of shipbuilding, 
 to which active shipowning has been a natural 
 concomitant. 
 
 The tonnage of ships (sailing and steam) built in
 
 SHIPPING LINERS 119 
 
 the United Kingdom (excluding the Royal Navy), 
 has been as follows : — 
 
 Four Years' Average. 
 
 Tons. 
 
 1859-62 
 
 
 227,000 
 
 1869-72 
 
 
 412,000 
 
 1879-82 
 
 
 568,000 
 
 1889-92 
 
 
 815,000 
 
 I 899-1 902 
 
 
 954,000 
 
 How effectually our system results in the cheapen- 
 ing of vessels may be seen from the following facts. 
 An English steamship company in 1899 invited 
 tenders from four first-class British shipbuilding 
 firms and one German firm of similar standing 
 for a large cargo steamer, to be constructed accord- 
 ing to a detailed specification which was supplied 
 to all the builders alike. The German tender was 
 ;^i36,ooo ; the British tenders varied between 
 ;^i 23,000 and ^111,000. Inquiries made with a 
 similar object in the United States in 1901 showed 
 that an order could not be placed there unless at 
 about 50 per cent, above British prices. 
 
 3. Shipowners who remember the conditions 
 under which business was carried on before the 
 days of Free Trade speak with feeling of the 
 enormous relief which attended the disappearance 
 of the formalities and delays inevitable under a 
 tariff. Those who have most business experience 
 will be the least inclined to underrate the substantial 
 advantages which accrue to trade in general and to 
 shipping in particular from the simplification which
 
 I20 BRITISH INDUSTRIES 
 
 is the result of a short tariff list. The trouble, 
 delay, and expense, when many classes of goods 
 have to undergo the process of " bonding," con- 
 stitute an impediment to trade of real seriousness. 
 Nor must it be overlooked that a tariff on imports 
 would at once lead to a demand for a system of 
 drawbacks on exports in the manufacture of which 
 these taxed imports are used. 
 
 The Curse of Red Tape. 
 
 We have already had some taste of these difftcuities 
 in connection with the Sugar Duty and the (now 
 happily abolished) Corn Duty of 1902. The trade 
 in sugar and corn has been swathed about in endless 
 coils of red tape, and " drawbacks " have had to 
 be claimed on the multifarious products into which 
 sugar and cereals are made up. But it should be 
 noticed in particular that any preferential or dis- 
 criminating tariff would involve the resurrection of 
 the system of " Certificates of Origin " — a system 
 which used to lead, and would again lead, not 
 merely to infinite inconveniences, disputes and 
 delays, but to widespread evasion and fraud. 
 
 An experienced shipowner who remembers the 
 state of affairs in the era before Free Trade gives 
 (in a letter to the writer) the following vivid picture 
 of its disadvantages : " On half the things exported 
 drawbacks had to be claimed from the Custom 
 House as a consequence of our then 'excise ' laws, 
 which is merely another name for the duty on
 
 SHIPPING LINERS 121 
 
 manufactured articles. The waste of time and 
 money necessary to the system would now be 
 thought incredible, leading often to bribery of 
 officials as the lesser evil. No article on which 
 drawback was wanted could be put on board the 
 vessel until it had been weighed, measured, opened, 
 tested, or in some way inspected and certified by a 
 Custom House officer. The first question was, 
 where to find him. A man whose presence and 
 signature is necessary to a transaction does not 
 usually trouble himself much about it, and if it 
 happened (as it not unfrequently did happen) that 
 two people wanted him to come to two vessels 
 lying in docks a quarter of a mile apart, and the 
 time was 10 minutes to 3 p.m. (when his duties 
 ceased), a ' refresher ' of some sort by one or other, 
 if not by both, of the applicants for his presence 
 and signature was helpful : the signature would 
 satisfy one, and the presence the other, applicant. 
 And when all was done at the docks there was still 
 the needful work to be done in that horrid * Long 
 Room ' at the Custom House, where the principal 
 article dispensed by the swarm of officials was a 
 limitless supply of insolence from Jacks-in-office. 
 All Custom House work had to be squeezed in 
 between 8 a.m. and 3 p.m. The whole cost of this 
 dreadful system had to be paid for by some one. 
 From all duties on manufactured articles, from 
 Custom House Officials, from drawbacks, signatures, 
 and stamped papers, good Lord, deliver us."
 
 122 BRITISH INDUSTRIES 
 
 4. The fourth benefit which the adoption of Free 
 Trade principles has conferred upon the shipping 
 industry is perhaps in the nature of a blessing in 
 disguise. It consists in the discontinuance of well- 
 meant governmental attempts to stimulate artificially 
 the growth and prosperity of the trade. The Navi- 
 gation Laws, which had for a long period attempted 
 to restrict certain trades, principally the coasting 
 and colonial, to British vessels, while at the same 
 time compelling owners to carry a certain propor- 
 tion of British subjects in each crew, were repealed 
 in 1849 as a natural consequence of the Free Trade 
 policy which was then being put into force. These 
 laws were felt to be a part of the system of restriction 
 and monopoly from which the national commerce 
 was being freed with strikingly beneficial results ; 
 and in particular the restriction of colonial cargo 
 to British ships constituted a real grievance against 
 which the Colonies had long protested. Ship- 
 owners, though welcoming the removal of the 
 troublesome rule as to the composition of crews, 
 were somewhat alarmed at the withdrawal of their 
 monopoly, and especially at the prospect of the 
 admittance of foreign ships into the coasting trade ; 
 but the measure was rapidly justified by its results, 
 and not more than a minute percentage of the 
 coasting trade has ever fallen to foreign vessels. 
 
 Subsidies and Bounties. 
 Another natural corollary of the Free Trade
 
 SHIPPING LINERS 123 
 
 policy is, or should be, the abolition of bounties 
 and subsidies to shipping. How far this has really 
 been carried out in this country, even since the 
 Free Trade era, is somewhat doubtful. Payments 
 for carrying mails and retaining fees for naval 
 purposes are commonly described as subsidies ; 
 and undoubtedly, if strictly necessary and aimed at 
 these purposes solely, they cannot be regarded as 
 breaches of Free Trade principles. There is, how- 
 ever, a constant tendency for a protective element 
 to slip in ; the encouragement of trade is aimed at, 
 or the maintenance of a great and imposing 
 passenger line, an object which is easily veiled in 
 some vague and high-sounding phrase. ^ Any sum 
 paid beyond the strict competitive price at which 
 the necessary postal or naval services can be 
 obtained undoubtedly constitutes naked Protection. 
 A very glaring recent instance is the huge financial 
 subvention granted in 1903 to the Cunard Line, as 
 a result of a foolish scare consequent upon the sale 
 of certain steamers at high prices to an American 
 
 ' " I do not think you can say that we pay only for postal 
 services pure and simple. Q. For what other services is it 
 paid ? A. There is tlie advantage to the Government and the 
 Empire of having an absolutely fixed and regular service ; a 
 service upon which the Government as a body, and the 
 individuals composing the whole community, can rely for 
 moving themselves and their goods and chattels at any fixed 
 moment." — Evidence of Mr. Buxton Forman, Controller of 
 the Packet Services in the General Post Office, before the 
 House of Commons Select Committee on Steamship Sub- 
 sidies, 1 90 1.
 
 124 BRITISH INDUSTRIES 
 
 syndicate. This is complicated, as usual, with 
 naval considerations of dubious validity, but it is 
 not denied that the sum paid must in large part be 
 regarded as a trade subsidy, in other words a direct 
 contribution by the taxpayers to the funds of a 
 particular steamship company. 
 
 An Encouragement to Inefficiency. 
 
 Legislation in the direction of the re-enactment 
 of the Navigation Laws, though occasionally sug- 
 gested, is not really desired by the great body of 
 British shipowners, and the Select Committee of the 
 House of Commons on Steamship Subsidies, in 
 their Report (1902), truly stated that " Most ship- 
 owners, generally speaking, are opposed to sub- 
 sidies." It is worth while briefly summarising the 
 reasons for the opinion that a protective policy, 
 aiming at helping the industry by either method, is 
 really objectionable and impracticable. In the first 
 place, it is instinctively felt by shipowners that 
 Protection in whatever shape would be accompanied 
 by onerous conditions ; just as the Navigation Laws 
 involved restrictions upon the nationality of the 
 crews, so now attempts to exclude Asiatic seamen, 
 or to enforce the carrying of apprentices, perhaps 
 even to regulate rates of freight, would be probable 
 features of protective legislation, and would certainly 
 not be alien to its spirit. Again, business enterprise, 
 as in other trades, would be weakened by the 
 acceptance of assistance so obviously eleemosynary ;
 
 SHIPPING LINERS 125 
 
 British shipowners have no need of a crutch to 
 walk with. How little a liberal system of bounties 
 tends to brace and strengthen an industry is con- 
 spicuous from the present state of shipping in 
 France. Subsidies, as experience shows, tend to 
 check the advance of mechanical improvement and 
 experiment. I It is moreover impossible to subsidise 
 the whole of British shipping, and at the same time 
 grossly unfair to select particular lines for help, 
 especially wealthy passenger lines. Any such 
 measure only tends to make independent com- 
 
 ' "The system began about 1840, and some of the subsidies 
 granted put an end to independent lines just coming into 
 existence. Subsidies had thrown back the use of the screw 
 propeller ten or fifteen years. The Great Britain was built 
 in 1840, and though she was not perfect, she afforded a very 
 fair trial of the screw. After one or two more trials it would 
 almost have attained its present perfection ; but simultane- 
 ously the system of subsidies was started — and it was the 
 natural desire of all the holders of subsidies to pursue the safe, 
 and avoid experiments — and hence they clung to the paddle 
 wheel, knowing exactly what it might be relied on to do, and 
 that though an imperfect wasteful instrument, its performance 
 was accurately calculable. Subsidised lines in those days of 
 few steamers naturally formed public opinion, and the result 
 was that between 1840 and 1855 any one who used a screw 
 propeller in a vessel of importance was considered a hare- 
 brained experimentalist, not to be trusted. Subsidies could 
 also be sliown to have delayed the use of iron vessels many 
 years. People would not have the boldness to differ from the 
 great steamboat owners, who themselves would try nothing 
 new, and hence fleets worth millions sterling were built, their 
 designers and many of their owners well knowing that the 
 vessels were not of the best description." — Mr. Alfred Holt, 
 " Review of the Progress of Steam Shipping" (Proceedings 
 of the Institution of Civil Engineers, vol. 11, session 1877-78.)
 
 126 BRITISH INDUSTRIES 
 
 petition in the branch of trade to which it is applied 
 almost impossible, or at all events to handicap it 
 severely. Finally, it must not be forgotten that 
 subsidies and bounties, if given here, tend to 
 provoke imitative or retaliatory measures abroad. 
 It would not be difficult to show that this has 
 actually been their result in the past, and if the 
 United States Subsidy Bill, which had apparently 
 been abandoned, is revived, its supporters will un- 
 doubtedly be able to use the Cunard subsidy as 
 their strongest argument. It is earnestly to be 
 hoped in the interests of the industry as well as of 
 the nation that Great Britain, among the other 
 forms of Protection, will unhesitatingly reject any 
 policy, veiled or open, involving the endowmicnt of 
 the shipping trade at the expense of the community.
 
 TRAMP SHIPPING 
 By Walter Runciman, Jun., M.P. 
 
 {Of Messrs. Waller Runcunan & Co. of Newcastle and 
 London, Owners and Managers of the ^^ Moor" Steamers) 
 
 THE amazing growth of British shipping during 
 the past forty or fifty years is due not entirely 
 to physical conditions. Our Free Trade policy 
 removed the obstacles to rapid growth, tended to 
 develop efficiency, and has encouraged the most 
 abundant exchange of commodities. Every word 
 of that statement will be accepted by any one who 
 knows and understands the recent history and con- 
 ditions of our shipping trade. During the period 
 from 1880 to 1901, when British tonnage went up 
 over 3,000,000 tons, the tonnage of the merchant 
 navy of the total German Empire grew by only 
 900,000 net tons, namely, from 1,181,525 in i88o, 
 to 2,093,033 m 1901. 
 
 The following table shows the advance since 
 1850, and compares our figures with those for the 
 oversea gross tonnage of the Protectionist United 
 
 States of America. 
 
 127
 
 128 
 
 BRITISH INDUSTRIES 
 
 
 Under Free Trade. 
 
 Under Protection 
 
 
 British Net 
 
 U.S. Oversea 
 
 
 Tonnage. 
 
 Gross Tonnage. 
 
 1850 ... 
 
 - 3>565>i33 
 
 1,585.711 
 
 i860 ... 
 
 ... 4.658,687 ... 
 
 2,546,237 
 
 1870 ... 
 
 ... 5,690,789 
 
 1,516,800 
 
 1880 ... 
 
 - 6,574,513 
 
 1,532,810 
 
 i8go ... 
 
 - 7.978,538 
 
 946,695 
 
 1900 ... 
 
 ... 9,304,108 
 
 — 
 
 1901 ... 
 
 ... 9,608,420 
 
 889,129 
 
 If you stand on the Rock of Gibraltar and count 
 the steamers passing East and West, six out of ten 
 will be British. Watch the traffic up and down the 
 Bosphorus, and for every three foreign steamers 
 you will see seven British. Look up the records of 
 the Suez Canal, and you will find Great Britain 
 accounts for more of the total Canal traffic than do 
 Germany, France, Russia, and all the rest of the 
 world put together. Lloyd's Register states that 
 of the oversea tonnage of all the world, sail and 
 steam, the British flag is flown by nearly one 
 half, and in steamers alone by over one half. 
 The British gross steam tonnage last year amounted 
 to over 13,650,000 tons ; all the other countries of 
 the world combined could muster only 12,200,000. 
 This volume of tonnage is said to be no indication 
 of the prosperity of the British merchant shipping, 
 for foreign competition is more assiduous than ever, 
 and from the point of view of individual profits, 
 home competition has recently proved no less 
 damaging. 
 
 How are colonial preferential tariffs to diminish
 
 TRAMP SHIPPING 129 
 
 the number of either British or foreign competitors ? 
 Or how far can preferential tariffs increase the 
 volume of the world's trade ? Will the proposed 
 prohibition or taxation of steel, &c., produced by 
 German or American manufacturers help or hamper 
 British shipping ? Will British shipping run any 
 risks in the course of a long or short bout of tariff 
 retaliation ? These questions are regarded by the 
 Tramp from a point of view which is not as 
 restricted as that of the Liner. The Liners have 
 more or less secured themselves in the trades which 
 they cultivate. Some of them find the basis of 
 their business in mail contracts, for which the Post 
 Offices pay regular remuneration. Some depend on 
 mercantile manipulation and combination as well 
 as on cheap carriage for their security. They all 
 work to some extent in what are known as Con- 
 ferences (the vulgar have sometimes called them 
 Rings), and thus diminish competition, whether 
 British or foreign. They steam along regular 
 routes, and their attention is concentrated mainly 
 on the trade confined to these routes. Thus a Liner 
 trading exclusively to Canada will tell you that a 
 preference given to Canadian grain in England and 
 to English goods in Canada would, by increasing 
 the Canadian-English trafHc, be undoubtedly bene- 
 ficial. The extra cost of his new steamers caused 
 by the protection of the British iron-masters could 
 be ignored by him if his trade were sufficiently 
 enhanced ; nor could retaliation reach him on his 
 
 10
 
 130 BRITISH INDUSTRIES 
 
 route. And with slight modifications these remarks 
 are true of the West Indian, South African, and 
 Australasian lines. In his narrowest capacity it is no 
 business of the manager or owner of these lines to 
 inquire how far his prosperity thus encouraged 
 would mean disaster for other people. The nation, 
 however, must remember that what the colonial 
 lines would gain would be lost by the vessels de- 
 pending for employment on foreign cargoes. Until 
 the position of India is defined, we cannot tell the 
 effect of Mr. Chamberlain's proposals on the volume 
 of the Eastern trade. But the lines whose ports of 
 departure, ports of call and destinations are foreign, 
 could extract no benefit whatever from a colonial 
 preference ; an artificial rise in the price of steel, &c., 
 would handicap them ; and retaliation would place 
 them most in danger of attack. Yet even their 
 position is less risky than that of the Tramp, for 
 they have by combination and by monopoly of port 
 facilities secured themselves to some extent from out- 
 side attack, and they refrain from invading a foreign 
 competitors' business whenever by such abstinence 
 they can persuade the foreigner to leave them alone. 
 
 The Unprotected Tramp. 
 
 The Tramp, on the other hand, goes everywhere, 
 competes for everything against everybody, cuts into 
 any trade — British, foreign, or colonial — whenever 
 he can see a profit : and he is similarly subject to 
 attacks with no means of defence except his own
 
 TRAMP SHIPPING 131 
 
 efficiency. Such free competition on tlie whole 
 brings to the most capable shipowner, who works 
 the best and cheapest vessels, his just reward in 
 profits and uninterrupted employment. In this 
 incessant Tramp contest we are supreme : so 
 supreme indeed, that in carriage by Tramps we do 
 not only our own work, but we have also captured, 
 unaided by Government subsidy or privilege, the 
 business of nearly the whole world, colonial as well 
 as foreign. Few people realise that the British 
 Mercantile Marine is largely composed of Tramps. 
 Let any one go to Newcastle and Shields, to Sunder- 
 land, Hartlepool, Cardiff, or Middlesborough, and 
 he will find swarms of firms whose fleets are 
 composed of Tramps alone. They carry nothing 
 but cargo from year to year, very largely coals 
 outwards from the United Kingdom, and grain, 
 timber, cotton, and other bulk cargoes homewards. 
 Even in great Liner centres like Liverpool, London, 
 and the Clyde, Tramps may be counted by the 
 hundreds ; they include all kinds of vessels, from 
 the little packet which plies on the coast to the six, 
 eight, or ten thousand tonners which go further 
 afield. And their interests are not restricted merely 
 to the ports of registry, for of the ;^i 20,000,000 or 
 thereabouts of capital invested in these innumerable 
 vessels, an immense amount of it is owned by 
 shareholders in every part of the United Kingdom. 
 The Liners are so beautifully advertised in railway 
 stations, hotels, and shops, and obtain such ex-
 
 132 BRITISH INDUSTRIES 
 
 tensive attention from the newspapers, that the man 
 in the inland street imagines all British shipping 
 is to be found in the great Lines. Far from that, 
 the Liners number roughly 1,300 vessels, while the 
 Tramps approximate to some 7,000 steamers and 
 7,000 sailing ships. Herein lies our most marked 
 supremacy, which has been won by us in open com- 
 petition. The growth of this vast mercantile power 
 synchronises with the growth of our Free Trade 
 policy. The experience of the past fifty years has 
 proved that no protective country has been able to 
 create and develop a strong Tramp fleet. France 
 has failed in spite of expensive efforts ; Germany's 
 expansion has been peculiarly in Lines ; and the 
 American Tramp has almost disappeared. 
 
 Cheap Shipbuilding Essential. 
 
 The first essential condition to success in Tramp 
 business is cheap and good shipbuilding. Cheap 
 repairing ranks next in importance. Economy of 
 construction and economical management are the 
 deciding factors in the history of shipping of all 
 descriptions, but especially so of Tramps. One 
 need not wonder at the alarm with which shipping 
 traders look on the agitation in favour of Protection 
 for the British iron-masters. If a tariff wall is 
 to be raised round the country, the Steel Ring now 
 incipient would be uncurbed by outside competi- 
 tion, with the natural consequence of a rise in the 
 cost of shipbuilders' material and a further stimulus
 
 TRAMP SHIPPING 133 
 
 to higher prices for new vessels, which form the 
 raw material of shipping. Of course prices fluctuate 
 from natural trade causes, but these inflations would 
 be constant whether in good or bad times. The 
 shipowner would have to pay the difference, with 
 the result that to recoup himself freights must be 
 advanced, whereupon other maritime Powers might 
 capture some of the business which we by superior 
 economy now retain. This is what has happened 
 in the United States, where with all the advantages 
 of personal smartness and clever machinery, steamers 
 cost 30 per cent, more to build than in the United 
 Kingdom. That 30 per cent, has killed American 
 Tramp shipping. But even if the new Fiscal pro- 
 posals are to be restricted to the taxation of food, 
 Mr. Chamberlain assures the artisan that higher 
 wages are to follow. // higher wages follow, it is 
 clear that the proposals forecast an addition to the 
 shipbuilder's labour bill. Roughly 45 per cent, of 
 the price of new vessels goes in cost of shipbuilder's 
 and engineer's labour, 45 per cent, in cost of steel, 
 &c., and 10 per cent, in shipbuilder's profits. Simi- 
 larly repairing would become more expensive, and 
 in these two important items alone, even if in no 
 others, economical management would be danger- 
 ously handicapped. 
 
 How Tariffs Hamper Trade. 
 
 Nor can the Tramp owner contemplate without 
 dismay the very least shrinkage in international trade.
 
 134 BRITISH INDUSTRIES 
 
 He wishes to see international trade encouraged in 
 every legitimate way. Men with experience of the 
 world's commerce know how much tariffs hamper 
 trade, not in theory only, but in actual practice, and 
 the effect is reflex. The carriage of coal in par- 
 ticular from the United Kingdom is dependent on 
 abundant imports back again into this country or 
 into other near countries. For instance, were 
 Russian grain unwelcome in our ports, hundreds of 
 vessels would be deprived of homeward cargo from 
 the Mediterranean, and the outward coal voyages of 
 our vessels would become possible only at greatly 
 increased outward freights. The consequent rise in 
 outward freights would mean that English coal 
 could reach Italian, French, and Spanish ports only 
 if it could secure a greatly enhanced price ; where- 
 upon cheap American coal, which has long waited 
 for its opportunity, might secure a permanent 
 footing in our Mediterranean markets. Moreover, 
 the diversion of homeward cargoes would thus add 
 enormously to the cost of coal delivered at the great 
 coaling stations of Port Said, Malta, Algiers, and 
 Gibraltar ; and the price of bunkers taken by British 
 steamers would add another burden to the expenses 
 of the shipowner. Or again, consider how easily 
 Welsh coal might be displaced in the Argentine by 
 Virginian coal, the quality and cheapness of which 
 are aided by the fact that the distance to the 
 Argentine from the States is less than from Wales. 
 These advantages of the American coal exporter are
 
 TRAMP SHIPPING 135 
 
 neutralised at present by the fact that steamers 
 cannot afford to go out in such numbers from the 
 States at the same low freight which is sufficient to 
 remunerate them for carriage from England, for 
 vessels which carry coal from, say, Norfolk (Vir- 
 ginia) to Buenos Ayres cannot get a return cargo to 
 an equivalent extent homeward to the United States 
 owing to the States tariff wall against foreign 
 imports. In fact, instances of the dangers of a 
 diversion of trade routes are innumerable ; and the 
 shipping trade is at present passing through so 
 severe a depression that the least dislocation or 
 diminution of trade will do infinite harm. 
 
 The Canadian trade provides two more illustra- 
 tions. First, the transference of the Russian grain 
 trade to Canada would mean that many vessels now 
 being used in the Black Sea and Baltic would be 
 unable to secure a footing in the St. Lawrence. 
 Larger boats of a more suitable type would be 
 required for those waters. Second, the average 
 shipowner does not clamour for Canadian voyages, 
 for navigation in the St. Lawrence is dangerous, 
 and underwriters want 2 per cent to 3 per cent, 
 more premium on Quebec and Montreal traders 
 than on vessels in the general trades. These natural 
 disadvantages cannot be overcome, and would be 
 reluctantly exchanged by the shipowner for the 
 safety of the River Plate and Black Sea passages. 
 Some one has propounded the theory that to alter 
 the natural trend of our trade into colonial channels
 
 136 BRITISH INDUSTRIES 
 
 would be more profitable for the British shipowner 
 because colonial voyages are longer ; the British 
 consumer would, in fact, have to pay more to the 
 shipowner for the carriage of his food over greater 
 distances. Were this true, it would not lighten the 
 bills of our households. But the Australian trade is 
 unpopular with shipowners because of the action of 
 the local Governments, and the Canadian trade is 
 penalised by insurers. Mere length of voyage is not 
 worth consideration when the conditions under 
 which it has to be undertaken entail such greatly 
 increased expense. What a curious mind is neces- 
 sary to praise the economic policy which aims at 
 making our national food supplies come from the 
 most distant or most dangerous rather than from 
 the cheapest and most convenient sources ! 
 
 The Injustice of Subsidies. 
 
 All this may be granted by the Protectionist, but 
 he thinks it necessary to draft a memorandum of 
 " what he can get out of it." First of all he wants 
 subsidies similar to the subsidies of France and 
 Germany, and he made a great effort through last 
 year's Shipping Subsidy Committee to state his case 
 and procure a report in his favour. He was met by 
 the reply that to give subsidies to selected Lines 
 would be unfair to all the excluded Lines ; to 
 subsidise all Lines would be unfair to Tramps ; to 
 subsidise Tramps and Lines would be a financial 
 undertaking so vast as to be beyond the capacity of
 
 TRAMP SHIPPING 137 
 
 the Exchequer. The Committee might have added 
 that to subsidise shipping at all would have been 
 unfair to the taxpayer. 
 
 Then the shipowner urges that foreign shipping is 
 not hampered by Board of Trade restrictions, and it 
 competes against us in our owm ports at a great 
 advantage. That all vessels of whatever nationality 
 using our ports should have to submit to the same 
 Board of Trade regulations for safety of life and 
 property is a claim so just that no Government, 
 Free Trade or Protective, need hesitate to relieve 
 this British grievance. 
 
 The Coasting Trade. 
 
 Last of all, it is urged that France, Russia, 
 Spain, Portugal, and the United States have re- 
 served their coasting trades for vessels flying their 
 own flags, which means that a large portion of 
 foreign trade in which we once had an interest has 
 been closed against us, whilst our coasting and inter- 
 colonial trade is open to the vessels of all nations. 
 The result abroad has been that the coasting 
 freights paid by the foreign merchants have been 
 raised to some extent. The result at home has been 
 no artificial restriction of competition or raising of 
 freights, and the British shipowner has done his 
 work so much better and cheaper than his foreign 
 competitors that in our own coasting trade the 
 foreigner is almost unknown. Russia some time 
 ago restricted her Odessa-Vladivostock trade to
 
 138 BRITISH INDUSTRIES 
 
 Russian vessels, and America declared that New 
 York to San Francisco was to be considered a 
 coasting trip and accordingly preserved. In the 
 former case some injury was done to Tramps, and in 
 the latter a few vessels were displaced. But whether 
 the injury was large or small the fact remains that 
 British shipping suffered by these restrictions. 
 How are we to compel the Russian and American 
 to throw open trades which he has closed to all 
 except his own vessels ? It is said that reserving 
 our coasting trade would be the natural form of 
 retaliation. As retaliation it would be ridiculously 
 ineffective. Neither Russia nor America would care 
 one cent., for they have not a single vessel in our 
 coasting trade at present, and to say to them that by 
 way of punishment we would exclude their vessels 
 from our coasting trade until they reopened their 
 owai routes would induce them merely to smile at us. 
 We may conclude, therefore, that British shipping 
 has little or nothing to gain by reviving the 
 Navigation Laws for the home coasting trade. Nor 
 could the Colonies give us much by closing their 
 ports against the foreigner in the Intercolonial or 
 Imperial trades, for we do the bulk of their carrying 
 already. Nine per cent, of their colonial traffic is 
 done in foreign bottoms ; 91 per cent, in British. 
 Expressed differently, it is remarkable that of our 
 total carrying trade centred in the United Kingdom 
 only I J per cent, is done by the foreigner with our 
 possessions across the seas. That i^ per cent, is all
 
 TRAMP SHIPPING 139 
 
 that our Colonies have to give to British shipping 
 by prohibiting the foreigner. We could not ex- 
 ckide all foreigners ruthlessly from our inter- 
 Imperial trade, for let it be noted that France 
 (except with Algeria), Germany, Holland, Denmark, 
 Sweden and Norway, Belgium, Austria, and Italy, 
 permit our vessels to trade with their oversea 
 possessions. The only countries which prevent us 
 and all other foreigners from invading that trade 
 are the United States, Russia, and Spain. Their 
 share of our inter-Imperial trade is only 5 per cent. 
 of the total foreign tonnage thus engaged. In 
 other words, by dealing with this we should at the 
 outside be able to transfer only ^ per cent, of our 
 colonial trade ; 99!^ per cent, would remain where 
 it was — and that | per cent, represents of our total 
 trade in and out of the United Kingdom a paltry 
 j'gth per cent. For such a slender advantage (apart 
 from all other considerations) we should be reck- 
 less in risking any portion of our vast foreign trade. 
 We carry for Russian, German, Belgian, Dutch, 
 French, and American customers great masses of 
 merchandise. Last year the estimated British 
 tonnage entered and cleared with cargoes and in 
 ballast at ports in these countries in trade with 
 other foreign ports in 1901 was — 
 
 Russia (1900) 3,674,000 
 
 Germany 2,671,000 
 
 Belgium 4,504,000 
 
 Holland 2,730,000 
 
 France ■•. 7,253,000 
 
 United States 14,421,000
 
 140 BRITISH INDUSTRIES 
 
 It is impossible to obtain statistics which will give 
 us any accurate measure of the extent to which 
 purely foreign carrying is done by our merchant- 
 men, but one startling fact may be drawn from a 
 comparison of the tables showing the increase of 
 our exports and imports, and the tables showing the 
 increase of British tonnage. That fact is that we 
 have increased our tonnage in greater ratio than 
 we have increased the volume of our United 
 Kingdom out and home cargoes. The great 
 surplusage of this tonnage has therefore been 
 employed in purely foreign trade. Indeed, let any 
 one inquire from the innumerable shipping firms 
 in Cardiff, Hartlepool, the Tyne, Clyde, or Forth, 
 and he will find that among large Tramp steamers 
 about eight out of ten conclude their homeward 
 voyages at ports other than those within the British 
 Isles, and indeed there are scores of vessels hailing 
 from these ports which have not been in the United 
 Kingdom since they were built, or come home only 
 occasionally in order to complete the repairs 
 necessary for them to retain their Lloyd's classifi- 
 cation. 
 
 Of course we are so valuable to the foreign 
 merchant that his Government would be cautious in 
 prohibiting the entry of our vessels to his ports, but 
 we must face the fact that the tonnage at present 
 afloat is abundant beyond the world's immediate 
 requirements. A foreign Government might there- 
 fore find this a suitable time for an attack on our
 
 TRAMP SHIPPING 141 
 
 shipping. No other of our national industries is so 
 vuhierable and none so sensitive. Let it receive 
 one sweeping blow from a government engaged in 
 playing tricks with our national fiscal policy, and 
 its recovery would be slow. If once we enter on 
 a fiscal war with other states, shipping will be the 
 first to suffer. It is true that a purely hostile ton- 
 nage tax on British vessels or their exclusion from 
 foreign ports would be injurious to the hostile State 
 as well as to us. But what we have to think of is 
 the injury to ourselves, and that injury would spell 
 idleness for hundreds of our vessels and ruin for 
 their owners.
 
 THE 
 CUTLERY TRADE OF SHEFFIELD 
 
 By Frederick Callis 
 
 THERE are very few of the ancient industries 
 of Sheffield that have undergone more 
 sweeping changes under the reign of Free Trade 
 than the manufacture of goods inchided under the 
 head of " cutlery." Indeed, so entire has been the 
 transformation that points of comparison between 
 the condition of things to-day and what they were 
 a century ago are extremely difficult to find. The 
 last half-century has been one of progress— steady, 
 sustained progress — beneficial alike to manufacturers 
 and to workmen. This statement will no doubt 
 be canvassed, but it is nevertheless true and can 
 be supported by facts. Fortunes have been built 
 up of such proportions as were never dreamed of 
 by the Fathers. The workmen now carry on their 
 labours and spend their leisure amid surroundings 
 to which the proverbially " poor cutler " of a former 
 
 generation was an absolute stranger. 
 
 142
 
 THE CUTLERY TRADE OF SHEFFIELD 143 
 
 An Ancient Industry. 
 
 The cutlery trade of Sheffield has a most ancient 
 history, and it is as interesting as it is ancient. 
 When it was established is unknown, but it had 
 certainly taken deep root here in the days of 
 Elizabeth. The cutlers were then little better than 
 serfs, working under the most repressive of restric- 
 tions, and for the scantiest possible remuneration. 
 The selection of Sheffield as the seat of this branch 
 of trade was a very happy one, for it furnished 
 advantages such as few, if any other, places pos- 
 sessed — advantages that meant much more in years 
 gone by than they do even to-day. No fewer than 
 five streams flow down the valleys into Sheffield 
 from the hills and moors around, furnishing an 
 abundance of water power. And coal and iron and 
 stone are all within easy reach. Business began 
 with the manufacture of the ancient " thwytel," as 
 Chaucer called it, and passed on to the jack-knife, 
 the spring knife, and other improvements alike in 
 table and in spring cutlery. 
 
 A Century's Progress. 
 
 It is, however, during the last century, and more 
 especially the latter portion of it, that the most 
 remarkable developments have taken place, alike 
 in the manner in which the business is conducted, 
 in modes of manufacture, and in the conditions 
 of life of those engaged in the trade. A variety
 
 144 BRITISH INDUSTRIES 
 
 of causes have contributed to bring these changes 
 about. They are, the greater energy and enter- 
 prise of manufacturers and the increasing steadiness 
 and intelHgence of workmen ; the rehable use of 
 steam in place of the uncertainty of the old water 
 power ; the free adoption of machinery whereby 
 much heavy manual labour has been saved and 
 the output vastly increased ; the operation of the 
 Factory Acts, securing better sanitary surroundings 
 and, as a consequence, improved health and longer 
 lives. 
 
 It is extremely gratifying to be able to record that 
 under Free Trade both employer and employed have 
 prospered. There are cutlery manufacturers in the 
 city of Sheffield to-day who are wealthier beyond all 
 comparison than their ancestors. They live in an 
 altogether more affluent style, in palatial residences 
 situated in charmingly laid-out grounds. They 
 have their carriages, their hunters, their moors, and 
 other similar luxuries. Many of them have had 
 the best education the country can furnish, and 
 are men of culture and refinement. They know 
 little or nothing, by personal experience, of the 
 rough side of life with which their ancestors were 
 familiar. On the other hand, a hundred years ago 
 many of the leading cutlery manufacturers lived 
 in houses at the entrance to their works or close 
 by. They commenced work with their men at 
 five or six o'clock in the morning, and were at it 
 until eight or nine o'clock at night. Years ago,
 
 THE CUTLERY TRADE OF SHEFFIELD 145 
 
 when new premises were built in Norfolk Street 
 by Messrs. Joseph Rodgers and Sons, the modest 
 residences of the partners were placed on each side 
 of the entrance gates. Mr. Michael Hunter, the 
 founder of the firm of Hunter and Son, whose 
 grandson has just been elected to the high and 
 honourable office of Master of the Cutlers' Com- 
 pany of Hallamshire, in his earlier days lived at 
 his works in the Wicker ; and what was once his 
 "best room" was afterwards utilised as an office. 
 The older members of the trade are full of inte- 
 resting reminiscences of the modes of life of the 
 masters of their younger days ; how they used to 
 travel through the country in search of orders on 
 horseback with their samples and even goods in 
 panniers across the horse ; and the rush there was 
 to have their wares ready for the stage waggon as 
 it came lumbering through the town. 
 
 Growth of Huge Establishments. 
 
 Perhaps no stronger or more palpable proof of 
 the advantages of Free Trade could be furnished than 
 a walk through some of the cutlery establishments 
 of to-day. They are extensive beyond all comparison 
 with those of former days ; perfect in the arrange- 
 ment of departments ; and fitted up with the most 
 up-to-date machinery and other accessories. It is 
 only necessary to name such works as Messrs. 
 Joseph Rodgers and Sons, Messrs. Harrison Brothers 
 and Howson, Messrs. James Dixon and Sons, Messrs. 
 
 II
 
 146 BRITISH INDUSTRIES 
 
 Walker and Hall, Messrs. Mappin and Webb, and 
 several more — any one of which would swallow 
 up several of the factories of a bygone age. It 
 may be said that all these firms are silversmiths as 
 well as cutlers, and that they owe their prosperity as 
 much to the one industry as to the other. That 
 is no doubt perfectly true ; but it would be easy to 
 show that the causes which have led to the deve- 
 lopment of the cutlery branch have been equally 
 powerful in their operation on the silver and 
 plating branches. 
 
 A Manufacturer's Views. 
 
 An admirable illustration of what has been said 
 is furnished by the history of the firm of Messrs. 
 Harrison Brothers and Howson. Their business was 
 established over a century ago by Thomas Sansom 
 and Sons, and in 1847 it was purchased by Messrs. 
 J. W. Harrison, H. Harrison, and W. Howson. In 
 that year the cutlery trade was so depressed that the 
 workmen were glad to sweep the streets for a living. 
 A change came, and the new firm began to prosper. 
 Their premises in Norfolk Street were extended 
 again and again ; additional works were acquired in 
 another part of the City ; and still more accommo- 
 dation was needed. Some six years ago the firm 
 purchased property in Carver Street covering about 
 an acre of ground, and thereon they have erected 
 a thoroughly up to-date manufactory replete with 
 all modern appliances and conveniences. The
 
 THE CUTLERY TRADE OF SHEFFIELD 147 
 
 internal arrangements are as complete as skill and 
 long experience could suggest. A prominent feature 
 of the new works is the power-house with its engine 
 of 250 h.p. ; its powerful dynamos, and its motors 
 scattered through the place, furnishing alike force 
 and light. The firm employ about seven hundred 
 people. The progress made by this firm is typical of 
 that of others mentioned. 
 
 Mr. George Howson, the senior partner of the 
 firm, was asked what, in his opinion, had been the 
 effect of Free Trade upon the cutlery industry of 
 the City. He replied that the trade had more than 
 held its own in face of the high tariffs and keen 
 competition of other nations. There had been 
 progress in the output of high-class goods in the 
 last fifty years, but not by any means to the same 
 extent as in medium and common qualities. This 
 was probably to be attributed to the introduction 
 and free use of machinery which lent itself with 
 more satisfactory results to the production of the 
 lower than to the higher grade wares. Best table 
 cutlery is made now after very much the same 
 methods as it was a century ago, and there is little 
 probability of change, as it is not an article tiiat 
 lends itself to alteration. High-class steel is so 
 hard that attempts to manipulate it by machinery 
 break the tools, and heating it to make it work 
 easily would destroy its temper and reduce it to 
 common steel. For the production of medium 
 and common goods machinery is most valuable —
 
 148 BRITISH INDUSTRIES 
 
 indeed, a necessity of the times. While a forger 
 is making a handful of blades, a machine will turn 
 out a barrow full. 
 
 Coming to the position of the worker, Mr. 
 Howson compared it with what it was in 1847, 
 when his father commenced business, and stated 
 that not only in money wages, but also in the 
 conditions under which the workman does his 
 work, and indeed in all directions, there has been 
 distinct improvement. The introduction of the 
 emery wheel has relieved the cutler of much 
 exhausting labour. " Half a century ago you did 
 not see," remarked Mr. Howson, "a cutler wearing 
 a collar, and it was most unlikely that he had a 
 Sunday suit. I have heard my father speak of one 
 workman of his earlier days, an ivory cutler, who 
 was known as * Ivory Bob.' He was dubbed ' the 
 gentleman of the firm ' because he wore a collar 
 and a top-hat ! You may take it generally that the 
 workman now is twice as well off as were his 
 forefathers." Mr. Howson spoke most approvingly 
 of the working of the Factory Acts and of the 
 judicious manner in which they have been ad- 
 ministered in Sheffield. 
 
 A Chat with a Working Cutler. 
 
 These opinions of a prominent employer can be 
 amply confirmed by the recollections of the older 
 workmen. Take, for example, Walter Barnes, 
 an admirable type of the self-respecting working
 
 THE CUTLERY TRADE OF SHEFFIELD 149 
 
 cutler. His memory travels back to the days when 
 the position of workers in the cutlery trade was 
 totally different from what it is now. He remem- 
 bers very distinctly how his father was " chaffed " 
 for going to live in a house which was £10 a year. 
 That was in the days of the ;^io franchise, and his 
 father wanted a vote, and had to pay for it by an 
 increase in his rent bill. Now we have household 
 suffrage. 
 
 "In those days," said Mr. Barnes, "the cutler 
 was very poor, and in his poverty was often addicted 
 to drink. Not one in twenty had a second suit of 
 clothes, and the only change in his dress on a 
 Sunday was that he put on a clean apron ! All 
 that has been altered. Now in the homes of many 
 you will find the floor covered with oilcloth, a good 
 table and sofa, and even a piano — although perhaps 
 purchased on the hire system. Yes ; the position 
 of the cutler in my time has altogether changed. 
 He is a steadier man, earns higher wages, and he 
 has comforts and sources of enjoyment unknown 
 in former years. 
 
 " There was no School Board with its free educa- 
 tion in my young days," contmued Mr. Barnes ; 
 "and before I was ten years of age I started to 
 work. I had to leave home at a quarter-past five 
 in the morning and was kept at work until nine 
 o'clock at night. If I got off at four o'clock on 
 Saturday I felt as though I had secured a day's 
 holiday. Now we begin at half-past eight and stop
 
 ISO BRITISH INDUSTRIES 
 
 at six, and at twelve o'clock on Saturdays. The 
 cutler and all his surroundings have undergone a 
 complete change for the better," 
 
 A Master of the Old School. 
 
 Another master whose opinions it is interesting 
 to quote is Mr. Charles Ibbotson, one of the old 
 school of cutlery manufacturers, who was once a 
 workman himself. He can recall the days when 
 most of the common goods, and especially the well- 
 known Barlow Knife, of which enormous quantities 
 used to be sent to America, were made in the 
 surrounding villages — Stannington, Wadsley, Wor- 
 rall, Dungworth, and Hillsbro. Forgers, grinders, 
 cutlers in the employ of " Little Mesters " were 
 scattered all over the district. In many instances 
 the men had a bit of land attached to their house 
 or their shop and were able to eke out a living by 
 growing vegetables. There were no Factory Acts 
 in operation then, and when there was a big rush of 
 orders men and apprentices would work from four 
 or five o'clock in the morning until nine or ten at 
 night. The masters might have been seen rushing 
 round and offering bounties to men to work for 
 them. 
 
 " I used," said Mr. Ibbotson, "to work every day 
 in the week, never taking a holiday or going on the 
 drink, and my wages averaged a guinea a week 1 
 I used to make seven dozen Barlow Knives a day, 
 and was paid sixpence a dozen. By the way the
 
 THE CUTLERY TRADE OF SHEFFIELD 151 
 
 material is put into his hands a cutler can now 
 make eight dozen where I made six dozen. I 
 remember once when trade was bad and my master 
 had stocked all his money I went on working for 
 him on credit until he owed me £33. The ' Little 
 Mesters' at the end of the week used to bring the 
 goods down to Sheffield on donkeys to sell, and 
 when trade was good the merchants would meet 
 them on the road and bid against each other to get 
 the knives. Barlows were sometimes sold at iis. 
 per gross and at all prices up to 21s. per gross. If 
 you had met some of the 'Mesters' going home 
 you could have told by their appearance how 
 Barlows had gone. I need not say anything about 
 the masters, but with regard to the workmen their 
 position in my time has wonderfully improved, and 
 the improvement is going on. The cutler now has 
 thrown open to him parks and recreation grounds 
 and woods ; he has the use of free libraries for 
 himself and free education for his children ; and 
 lots of sources of enjoyment to which in my early 
 days we were entire strangers." 
 
 Views of a Prominent Labour Leader. 
 
 There are few men in a better position to form 
 an opinion of the cutlery trade of the present as 
 compared with the past than Mr. W. F. Wardley. 
 He is a member of the City Council, and a very 
 prominent worker in all movements for the advance- 
 ment of the people. For nearly thirty years he
 
 152 BRITISH INDUSTRIES 
 
 toiled as a table blade forger, and only left the 
 hammer and the anvil to take up the duties of 
 Secretary to the Table Blade Forgers and Strikers 
 Union. In this position he is brought into personal 
 contact with employers and employed alike through- 
 out the City. 
 
 '' I can remember well," he said, " hearing con- 
 versations between my father and the older members 
 of the trade of what they had passed through in the 
 ' good old days of protection.' There were then, as 
 there have been since, periods of good and bad 
 trade, but it was evident from what they said that 
 when bad trade did come the sufferings of the 
 people were very much worse and more widespread 
 than they would be now. 
 
 " And why ? Because all the necessaries of life 
 were so much dearer, and the little money obtain- 
 able from parish relief or any other source would go 
 practically no way in what it would purchase. A 
 man, his wife and family would want three stones of 
 flour a week, and this at 4s. 6d. per stone, as it was 
 in my father's younger days, would mean 13s. 6d. 
 per week. The price of flour to-day is is. 6d. per 
 stone, so you see the difference in the bread bill 
 alone. The fact is the poor could not obtain suffi- 
 cient money to buy all the bread they needed, leave 
 alone meat and other necessaries. The acute suffer- 
 ings of the poor cutler when trade was bad in those 
 days can hardly be realised by us. 
 
 " Of course, in some branches of the trade, such
 
 THE CUTLERY TRADE OF SHEFFIELD 153 
 
 as table blade forging, fewer men are employed 
 now ; but that is not because of any falling off in 
 the demand, but because of the wide introduction of 
 machinery. Many classes of goods are now made 
 by machinery that used to give employment to 
 a large army of hand forgers. They have found 
 other and better paying work. There can be no 
 doubt that the general condition of the working 
 cutler during the last half-century has decidedly 
 improved. He works under healthier, easier, and 
 less exhausting conditions altogether. To-day he 
 would not submit to some of the inconveniences 
 and annoyances which his forefathers thought be- 
 longed to their stand in life. For instance, an 
 apprentice in the old days recognised it as part of 
 his duty on a Saturday to break so much sand to 
 scatter over the floor of his master's house after 
 it had been washed, or fetch water from the wells 
 for use during the following week. I had to break 
 sand in my apprentice days. As far as his means 
 will allow, the cutler has moved upwards. He is 
 better educated ; his wife and family are belter 
 dressed, and he has a more comfortable home. 
 Many things he then regarded as a luxury, only 
 obtainable at intervals at the best, he now claims to 
 be a necessity, and gets them." 
 
 In reply to a question as to the tariffs put on our 
 goods by other nations, Mr. Wardley said : — 
 
 " The cutlery trade has no doubt been hampered 
 by foreign competition, but we must remember that
 
 154 BRITISH INDUSTRIES 
 
 that would be there whether we had Free Trade or 
 Protection. America, Germany, and France, who 
 used to be amongst our best customers, have become 
 manufacturers themselves, and are in a position to 
 supply their own markets, and would do so tariff or 
 no tariff. In my judgment, if it had not been for 
 Free Trade bringing in its train cheap food and 
 improved conditions of life all round, we should 
 have been very much harder hit than has now been 
 the case, for we should have lost some foreign 
 markets anyhow, and we should not have gained 
 the splendid round of markets which we now 
 possess. No ; we don't want, either by Protection 
 or any other system, to return to the state of things 
 that prevailed in our trade during the early part of 
 last century, and there is no fear of its coming to 
 pass. The country would not stand it." 
 
 The "Little Mester." 
 
 Under the reign of Free Trade that very ancient 
 institution the " Little Mester " is rapidly disappear- 
 ing, partly from the different way in which produc- 
 tion is carried on, and partly from the operation 
 of the Factory Acts. He made very cheap goods ; 
 his people worked often amid most insanitary sur- 
 roundings ; he was dependent upon the sale of his 
 output at the end of the week for the wherewithal to 
 pay even the poor wages he could afford ; and the 
 income of both employer and employed was of a 
 v^ery precarious character. The trade is being con-
 
 THE CUTLERY TRADE OF SHEFFIELD 155 
 
 centrated more and more in the hands of men of 
 capital, who own large, light, airy shops, who have 
 the most efficient up-to-date machinery, and who 
 have plenty of capital at command. While alluding 
 to the " Little Mester," with all respect for the part 
 he played and the work he did in the past, it has to 
 be admitted that he was a great obstacle to progress. 
 He would not be convinced that the markets of the 
 world were changing, and that what suited the 
 grandfather and father would not please the son and 
 grandson. The head of one large firm remarked, 
 " We spend considerable sums of money in sending 
 our travellers to the four quarters of the globe for 
 orders, and when we have received their reports and 
 samples of what was wanted, the ' Little Mester ' has 
 stood in the way of the suggestions being carried 
 out." There are many instances in which the 
 " Little Mester " is now being employed by a big 
 firm as ganger over a team of cutlers. They work 
 in a large shop, and by co-operation and subdivision 
 of labour, goods are produced in enormous quan- 
 tities at a minimum of cost. 
 
 Pen and Pocket Cutlery. 
 
 Although it has not been found possible to intro- 
 duce any very great variety of patterns in table 
 cutlery, there have been endless developments in 
 pen and pocket knives, and the introduction of new 
 designs is still going on. Up to the end of the 
 seventeenth century the spring cutlery, though good
 
 156 BRITISH INDUSTRIES 
 
 in quality, was extremely plain and sadly wanting in 
 finish. The trade entered upon a new era in 1820, 
 when what is known as the " Wharncliffe Knife " 
 was invented. Since then leading firms have 
 devoted unremitting attention to the production of 
 novelties and specialities, and such knives are made 
 to-day of the most costly material by the most 
 skilled of workmen. In addition to steel goods, 
 the cutlery trade of the present day embraces 
 the manufacture of silver or plated knives and 
 forks for fish, dessert, butter, &c., with handles 
 of pearl, ivory, and other costly material. By 
 stamping, chasing, etching, and similar processes, 
 the ornamentation of these goods has been brought 
 to great perfection, and the increased wealth of the 
 nation admits of a very large business being carried 
 on in all these productions. The trade no longer 
 has to depend on the wants or whims of a few 
 rich people, for these articles of comfort and luxury 
 are now to be seen on the tables of the many. 
 
 Scissors and Razors. 
 
 The branches of the cutlery trade devoted to the 
 manufacture of scissors and razors have passed 
 through a period of serious troubles, that were 
 largely of a preventable character. Instead of 
 recognising the necessity for change in methods 
 of production in face of growing competition of 
 foreign rivals, the men generally fought against it, 
 and trade was literally driven away. A prolonged
 
 THE CUTLERY TRADE OF SHEFFIELD 157 
 
 strike some thirty years ago in the scissor trade 
 let the Germans into our home and foreign markets, 
 and it was found impossible to drive them out. 
 By the tardy adoption of machinery which the 
 foreigner had long been using much of our trade 
 is being gradually won back. Another trouble was 
 caused by a change in fashions. The days are not 
 long past when there was a brisk demand for the 
 most expensive and elaborately worked scissors 
 Sheffield could produce; but they are not much 
 wanted now, either for the home or foreign markets. 
 Russia, for example, was once a good customer for 
 fine scissors, and bought largely at sixty shillings 
 per dozen ; now they want them at about six 
 shillings per dozen. The demand is for a useful, 
 rather than an ornamental, article at a moderate 
 price, and Sheffield manufacturers are endeavouring 
 to meet it. 
 
 Again, the development of the razor trade was 
 checked by the introduction of the German hollow- 
 ground razor. For a long time the Sheffield grinder 
 refused to take it up, and makers had to send their 
 blades to Germany to be ground. He has come 
 to a better frame of mind, and now hollow grinding 
 is done in Sheffield in as great perfection as can be 
 turned out on the Continent. The Sheffield-made 
 razor is regaining its position of supremacy not 
 only in our home market and Colonies, but in India, 
 South America, and elsewhere. Some houses still 
 do a good business in fine razors with America.
 
 158 BRITISH INDUSTRIES 
 
 Here again it has been of immense advantage to 
 have the world as a market rather than two or 
 three countries only, for the output by many firms 
 IS far in excess of anything possible in olden times. 
 
 Adoption of Machinery. 
 
 Reference has been made to the introduction of 
 machinery to the cutlery trade. This was not done 
 without much misgiving on the part of manu- 
 facturers and the keenest opposition from the 
 workers, who believed they saw in it the ruin of 
 the industry. It is scarcely half a century since 
 Mr. Michael Hunter put down a trip hammer for 
 forging blades, the work having hitherto been done 
 by hand. The men were so incensed at his action 
 that there was danger of his place being blown 
 up, and the manipulators of the new tool had to be 
 under police protection. Those were the days when 
 men's tools were " rattened," when houses and 
 works were blown up with gunpowder, and murders 
 were committed. The machine, however, had come 
 to stay, and developed into the steam hammer, the 
 automatic air hammer, and the spring hammer, 
 each introducing an improved system of forging 
 and cheapening production. Then came the 
 machine for " flying " blades, i.e., cutting them out 
 of the bar of steel ; and so extensive has this 
 mode of manufacture become that the supplying 
 of blades to the trade is a separate industry. As an 
 example, reference may be made to the manufactory
 
 THE CUTLERY TRADE OF SHEFFIELD 159 
 
 of Mr. Samuel Staniforth, of the Central Cutlery 
 Forge. His machinery includes forty hammers 
 and five pairs of eccentric rolls. His output is a 
 thousand gross of blades per week — more, probably, 
 than all the hand labour in Sheffield could produce. 
 This free use of machinery in turning out blades, 
 springs, scales, and other parts, has saved the 
 labour of large num.bers of workmen who are now 
 employed at other work, and at the same time it 
 has enabled our manufacturers to compete suc- 
 cessfully with foreign rivals in almost all the 
 markets of the world. 
 
 Satisfactory as the cutlery trade is, it might have 
 been even more prosperous if masters and men had 
 co-operated more heartily together. There is, how- 
 ever, much to be said for the men in the attitude 
 they often assumed. They were poorly paid ; 
 much of their time was often wasted in waiting for 
 work or in collecting the material to do it ; and 
 when employers suggested change of patterns or 
 the utilisation of machinery the men were exacting 
 in their demands, and consequently valuable im- 
 provements had to be abandoned or postponed. 
 It is the opinion of many that if the Sheffield 
 cutlery manufacturers had had to face the foreign 
 competition that has prevailed without the ad- 
 vantages of Free Trade neither they nor their 
 workpeople would be enjoying the measure of 
 prosperity that now prevails.
 
 i6o BRITISH INDUSTRIES 
 
 Hafting Material. 
 
 To attempt to tax either the imports or the 
 exports of the many varieties of material required 
 for the hafting of cutlery would mean ruin to the 
 trade. England has been the market of the world 
 for ivory, pearl, the horns of the stag, the elk, the 
 antelope, the rhinoceros, the walrus, the buffalo, 
 and the ox, as well as the leg bones of the ox and 
 the giraffe, and so on. 
 
 The principal of one of the leading firms who 
 supply the trade with hafting material, who was 
 consulted on this point, said he had no doubt 
 whatever that Free Trade had been of the utmost 
 benefit to Sheffield. Where they had partially lost 
 one market through high tariffs they had gained 
 others, and the output of cutlery now is something 
 enormous — far beyond anything previously known. 
 "Firms like ours," said he, "are in a position to 
 know, because our fingers are on the pulse of the 
 trade. There is more ivory and pearl and other 
 natural products cut up to-day than the outside 
 world has any conception of. Very considerable 
 quantities are used up locally, but still more of 
 some kinds go abroad in the form of handles and 
 scales. Some of the leading foreign cutlery manu- 
 facturers draw all their hafting material from here ; 
 and not only is a market thus found for much that 
 is unsaleable at home, but employment is furnished 
 for an army of people. It is, however, in the
 
 THE CUTLERY TRADE OF SHEFFIELD i6i 
 
 imitations of natural products that the increase is 
 seen — imitations of ivory, stag, tortoiseshell, and 
 the rest, so perfect that only an expert can detect 
 the difference between the real and the spurious. 
 Much of the best of these imitations comes from 
 America, Germany, and France, and their use is on 
 the increase. To attempt to interfere with the 
 freedom with which this trade has been carried on 
 would be most disastrous, and it cannot be believed 
 that any one would be so unwise as to do it." 
 
 A World-Wide Market. 
 
 Protectionists are never weary of calling atten- 
 tion to the marked falling off there has been in the 
 exports of cutlery to the United States, as the result 
 of the high prohibitive tariffs imposed by that 
 country. There was a time, well within the memory 
 of many, when the home and the American markets 
 purchased practically all the cutlery Sheffield could 
 produce. Having so restricted an area in which 
 to operate was sometimes attended by very dis- 
 astrous consequences. It occasionally happened 
 that the demand from across the Atlantic collapsed 
 entirely, and then workmen were reduced to the 
 severest straits, especially those whose employers 
 were not in a position to keep them going on stock. 
 For years Sheffield exported to the States over 
 ^200,000 worth of cutlery per year ; but in modern 
 times the Americans have established manufactories 
 of their own, and have fought hard to secure the 
 
 12
 
 i62 BRITISH INDUSTRIES 
 
 supplying of their own markets. In this they have 
 only been successful by imposing heavy duties on 
 Sheffield goods. America, however, is still the chief 
 market for the Barlow Knife, as well as for knives 
 for shoemakers, butchers, and other special lines 
 of trade. High-class goods also go over in con- 
 siderable quantities. 
 
 What is often described as the collapse of trade 
 with the United States has been a blessing in 
 disguise to many of the principal Sheffield manu- 
 facturers. As the door into America closed they 
 turned their attention in other directions, opened 
 up new and even more profitable markets, and to- 
 day there is scarcely a corner of the world which 
 they do not cover and into which their goods do 
 not go. They are being sent to all our Colonies 
 and Eastern possessions ; to China and Japan ; to 
 South America ; and, in spite of tariffs and compe- 
 tition, to every European market. It is beyond 
 dispute that the productions of reputable Sheffield 
 firms are in demand the world over, and that 
 demand is on the increase. One immense ad- 
 vantage of this change, all come about under Free 
 Trade, is that Sheffield is no longer dependent upon 
 one or two markets, subject to extremes of fluctu- 
 ations, but has the whole world to glean over for 
 orders, and experience has proved that if there is 
 little doing in one direction it is more than com- 
 pensated for by increased activity in another.
 
 THE TIN PLATE TRADE 
 
 By W. Llewelyn Williams, M.A., B.C.L. 
 
 THE recent history of the tinplate trade affords 
 a direct and interesting illustration not only of 
 the value of Free Trade but of the needlessness if not 
 the futility of a policy of retaliation. It shows that 
 trade, if left free and untrammelled, will find for 
 itself its natural channels, and that even if it is 
 deflected from its course by artificial barriers, it will 
 find for itself another channel which no Govern- 
 ment, however wise and paternal, and no individual, 
 however experienced and far-seeing, could have 
 made for it. In a word, the chequered history of 
 the British tinplate trade exemplifies the wisdom of 
 non-interference by the State with the fortunes even 
 of "a ruined industry." 
 
 It would not be to the purpose to give here any 
 elaborate history of the tinplate trade. Suffice it to 
 say that it began to assume considerable dimensions 
 in South Wales and Monmouthshire early in the 
 
 sixties. For some years the British manufacturer 
 
 163
 
 164 
 
 BRITISH INDUSTRIES 
 
 had no competitor in any other country, and 
 naturally the trade increased by leaps and bounds. 
 The extent of the output doubled every ten years, 
 till in the years 1887-90 the average yearly exports 
 amounted to 399,329 tons, of the value of ;^5,682,64i. 
 Of this enormous quantity the United States took as 
 much as 304,695 tons, of the value of £^f2']^,66'].^ 
 Three out of four of the British manufacturer's eggs 
 were in the American basket. The whole of our 
 exports to other countries only amounted to 94,634 
 tons, valued at ;^ 1,403,974. Seventy-six per cent, of 
 this valuable trade was thus with the United States. 
 
 ' The following figures, which were issued by the American 
 Iron and Steel Association, giving the amount of tinplate 
 imports by the United States since 1871, will show at a glance 
 how rapidly and one-sidedly the Welsh trade grew. 
 
 Imports of 
 
 Tinplate 
 
 INTO THE United States. 
 
 Year. 
 
 Gross Tons. 
 
 Year. 
 
 Gross Tons 
 
 I87I 
 
 82,969 
 
 1887 
 
 .. 283,836 
 
 1872 
 
 ^5,659 
 
 1888 
 
 298,238 
 
 1873 
 
 97,177 
 
 1889 
 
 330,311 
 
 1874 ... 
 
 79,778 
 
 1890 
 
 329,435 
 
 1875 ... 
 
 91,054 
 
 189I 
 
 .. 327,882 
 
 1876 
 
 89,946 
 
 1892 
 
 268,472 
 
 1877 ... 
 
 112,479 
 
 1893 
 
 253,155 
 
 1878 
 
 107,864 
 
 1894 
 
 215,068 
 
 1879 ... 
 
 154,250 
 
 1895 
 
 210,545 
 
 1880 
 
 158,049 
 
 1896 
 
 119,171 
 
 I88I 
 
 183,005 
 
 1897 
 
 83,851 
 
 1882 
 
 213,987 
 
 1898 
 
 66,775 
 
 1883 ... 
 
 221,233 
 
 1899 
 
 58,915 
 
 1884 
 
 216,181 
 
 1900 
 
 60,386 
 
 1885 ... 
 
 228,596 
 
 1901 
 
 77,395 
 
 1886 
 
 257,822 
 
 1902 
 
 60,115
 
 THE TIXPLATE TRADE 165 
 
 The English home market, in the meantime, had 
 been comparatively neglected. Enjoying a practical 
 monopoly of the world's markets our manufacturers 
 could afford to pick and choose, and they naturally 
 cultivated that market which ensured for them the 
 most speedy return and the largest margin of profit. 
 It was not to be expected that the shrewd com- 
 mercial men of the United States would stand idly 
 by without making an effort to capture for them- 
 selves this profitable industry. On October i, 1890, 
 the AIcKinley Tariff became operative, though the 
 section dealing with tinplate did not come into 
 operation till the first of July following. Up to that 
 time, the import duty on tinplates was only ;^4"6o 
 per ton. The new Tariff immediately raised it to 
 ;^io-i2 per ton — an ad valorem duty of over 
 70 per cent. In spite of the Tariff, however, the 
 Welsh export of tinplates to the United States did 
 not immediately cease. The American manu- 
 facturers were not able for a year or two to cope 
 with the home demand. They required time to 
 build their works, to establish their plant and 
 machinery, and to train their workmen. The 
 annual average of British tinplate exports to the 
 United States in the years 1887-90 was 304,695 
 tons, valued at ;^4,278,667. The annual average in 
 the years 1892-93 — after the McKinley Tariff had 
 been in operation for two years — was 267,040 tons, 
 valued at ^3,527,568. This decrease was not due 
 directly to the new Tariff. In the two years pre-
 
 i66 BRITISH INDUSTRIES 
 
 ceding the Tariff British manufacturers were 
 naturally eager to take every advantage of their 
 last opportunity to supply the American market. 
 They erected new mills — the number of mills 
 increased from 478 in 1889 to 519 in 1891 — they 
 worked more shifts, and they increased their output 
 by about 30,000 tons. Every box of tinplates that 
 could be finished in time was sent to New York 
 before July i, 1891. The " boom" was followed by 
 the inevitable " slump." 
 
 The Boom of 1891. 
 
 This flooding of the American market had two 
 results. In the first place, it made the year 1890-91 
 (and to a lesser degree the year 1889-90) the annus 
 niirabilis of the British tinplate trade.^ Protectionists 
 constantly institute comparisons between the trade 
 as it existed in 1891 and now. Such a comparison 
 is both unfair and misleading. The year 1891 was 
 exceptional even in the prosperous history of the 
 tinplate trade. It is impossible to find out exactly 
 what profits were earned by British producers in 
 that year. Most of the larger tinplate works are 
 
 ' The exports to the United States were slightly higher in 
 1888-9 than in 1889-90, and in 1889-90 than in 1890-1 ; but 
 the value was naturally higher in the latter year. In any 
 comparison of exports to the United States it would be fairer 
 to take the year 1887-8, when 298,238 tons — the highest 
 figure reached up to that time — were sent out. In the text, 
 however, I have accepted the Board of Trade figure of 
 304,695 tons as the annual average for the years 1887-90.
 
 THE TINPLATE TRADE 167 
 
 family concerns, and the secrets of such firms 
 are jealously guarded. With the affairs of one such 
 works the present writer is familiar, and in 1891 it 
 paid a dividend of 100 per cent, on its capital. 
 There is no reason to believe that other works were 
 less fortunate. The second result was that there 
 was for the next year or two a glut of tinplates in 
 the American market. So that by the time the 
 market had righted itself the new-born American 
 works were in a position to supply to a considerable 
 extent the home demand. 
 
 There exists no record to show the extent of 
 value of the British consumption of tinplates. It 
 has been roughly estimated that in 1889 only about 
 40,000 tons, or less than a tenth of the whole 
 output, were required for the home market. It has 
 already been pointed out that only a fourth of the 
 total exports went to other countries than the 
 United States. When therefore the McKinley 
 Tariff was passed the outlook appeared so gloomy 
 that several of the leading Welsh manufacturers, 
 despairing of ever making a living in this country, 
 transplanted their works to the United States. 
 Hundreds of the best workmen also emigrated, 
 though the Welsh workman is notoriously attached 
 to his home and his country. 
 
 By 1894 the American manufacturer had found 
 his feet, and was able to supply the home demand 
 without the aid of the McKinley Tariff. In 1892-93 
 the annual production of tinplates in the United
 
 i68 BRITISH INDUSTRIES 
 
 States was 36,993 tons. On August 28, 1894, ^^e 
 Wilson Tariff of ;^5*52 per ton took the place of 
 the McKinley Tariff of ;^io*i2 per ton. The 
 reduction in the duty did not diminish the 
 American output. On the contrary, it went up in 
 1895-96 to 137,014 tons, while the British exports 
 fell to 168,063 tons. Many of the British makers 
 gave way to despair. One of the largest manu- 
 facturers in South Wales told the present writer in 
 1896 that no one would ever again make money in 
 this country out of the tinplate trade, and in the 
 following year he showed the honesty of his con- 
 viction by selling all his interest in the industry in 
 which he had amassed a fortune — another instance 
 of the folly of founding a fiscal policy on gloomy 
 anticipations as to what may happen in the future. 
 
 Though the American production had grown to 
 such huge dimensions, on July 24, 1897, there was 
 still another change made in the tinplate tariff. By 
 the Dingley Tariff" of that date the import duty was 
 raised from ;^5"52 per ton to ;^6-9o per ton, at 
 which figure it still remains. It is perhaps not 
 without significance that the Dingley Tariff was 
 followed in December, 1898, by the formation of a 
 Tinplate Trust, called the American Tinplate Com- 
 pany, which is one of the subsidiary companies in 
 the great Steel Trust. The effect of the new tariff 
 was a further diminution of the British export, 
 which fell in 1898-1901 to the annual average of 
 65,687 tons, valued at ;^8o6,6oo, while the American
 
 THE TIN PLATE TRADE 169 
 
 production rose to 347,437 tons, and in 1902 to 
 366,000. 
 
 The Capture of New Markets. 
 
 So far the story is a melancholy one of disaster 
 and ruin caused to a once thriving industry by 
 hostile tariffs. The Welsh tinplate trade was 
 deliberately aimed at by the American Protectionists. 
 They had a unique opportunity, and they took full 
 advantage of it. Never was there before a British 
 industry which depended so largely on the American 
 market. Seventy-six per cent, of our tinplate 
 exports before the McKinley Tariff went to the 
 United States. It was easy for the American 
 Government to exclude us from its market, since 
 the American consumer was presumably willing to 
 pay the price. The policy succeeded ; a staggering 
 blow was delivered to the tinplate trade, from which 
 it seemed unlikely ever to recover. But the vitality 
 of free and unhampered trade in an enterprising and 
 business-like community is so great, that it is never 
 safe to despair of its existence even in the most 
 critical hour. Had the British trade been a pam- 
 pered and artificial growth, the spoilt darling of 
 protective tariffs, the loss of the American market 
 would have crushed it. But our manufacturers, 
 driven back upon their own enterprise and initiative, 
 soon found a way of readjusting their industry to 
 the new requirements. They discovered new 
 markets ; they developed the great home market
 
 I70 BRITISH INDUSTRIES 
 
 which, in their flourishing days, they had somewhat 
 neglected ; they improved their methods ; they 
 modernised their machinery. In 1889 the average 
 make per shift per mill was under thirty-six boxes. 
 In 1902 the average had risen to over forty boxes. 
 The result is, that while the 478 mills which were at 
 work in 1889 only produced something like thirteen 
 million and a half boxes of tinplates, the 397 mills 
 at work in 1902 produced nearly twelve million 
 boxes. The increased efticiency and economy pro- 
 duced by wholesome, if in some ways unfair 
 and irritating competition, has enabled the British 
 producer to triumph over his rivals in all the 
 neutral markets of the world. Whereas in 1887-90 
 our export of tinplates to all countries other 
 than America only amounted to 94,634 tons, last 
 year they reached the enormous total of 246,727 
 tons. In 1902 we exported 47,000 tons to Germany, 
 Holland, and Belgium, 31,000 tons to Russia, 23,000 
 tons to Canada, 19,000 tons to France, 19,000 tons 
 to Australia, and 17,000 tons to India. This foreign 
 trade is expanding year by year, and as the vast 
 population of China becomes more accessible to 
 western trade, the Welsh tinplate trade must receive 
 a fresh stimulus. Protection would not benefit the 
 tinplate trade in the least, for we are not threatened 
 with the competition of any country in our home 
 markets. In the neutral markets, where we have 
 beaten our only serious competitor out of the field, 
 a protective tariff would not help us, and with the
 
 THE TINPLATE TRADE 171 
 
 example of the United States before us, it is only 
 reasonable to infer that there would be a greater 
 wastefulness in production which in the result 
 would imperil our position in every market except 
 our own.' 
 
 Aided by Dumping. 
 
 It is somewhat curious, at first sight, that in spite 
 of hostile tariffs and the enormous increase in the 
 American production of tinplates, the United States 
 should still continue to be our best customer. Last 
 year it imported 65,142 tons, valued at ^887,432, 
 from us, and during the half-year ending June 30th 
 of this year, the trade and navigation returns show 
 that the value of tinplates exported to the United 
 States during that period was ;^384,ooo. Of course 
 the figures show a lamentable decrease from those 
 of the pre-tariff days, but the marvel is, that there 
 should remain any trade with the United States at 
 all. The explanation of this phenomenon throws 
 an interesting light on the value of non-interference 
 with trade. 
 
 • "Up to a certain period the domestic manufacturer was 
 subjected to a minimum amount of competition, by reason 
 of the exclusion from the home market, through legal barriers, 
 of the foreign producer. This naturally retarded the develop- 
 ment of technical and commercial skill on the part of American 
 manufacturers. . . . Foreign competition was facilitated by 
 the extravagant cost of manufacturing here. Protection 
 furnished such heavy profits at the start that the incentive 
 to economy of operation was in large measure removed." — 
 The New York Nation, August, 1903.
 
 172 BRITISH INDUSTRIES 
 
 It will be observed that our tinplate exports to 
 Russia amounted in 1902 to 31,000 tons. A great 
 part of this totally new trade has been caused by 
 the development of the oil industry in Southern 
 Russia. As already mentioned, the British manu- 
 facturer easily captured the Russian as well as all 
 other neutral markets for two or three sufficient 
 reasons. In the first place, knowing that he was 
 not protected in any artificial way from competition, 
 he was driven to adopt the most economical and 
 " up-to-date " methods of manufacture. In the next 
 place, Russia exports to us enormous quantities of 
 grain (last year its total value was ^^9,498,000, 
 or more than that of all the British possessions 
 put together), and lately of oil. Shipowners, being 
 assured of a profitable homeward cargo, are willing 
 to take a low outward freight — an advantage which 
 will be denied them if in the future we only import 
 grain from our Colonies. In the third place, the 
 overgrown American Steel Trust, as well as the 
 German manufacturers, occasionally " dump " down 
 in this country some of their surplus stock of steel 
 and iron, sometimes at less than cost price. A tin- 
 plate is a thin sheet of iron or steel, which is coated 
 with tin. Some of the larger works produce their 
 own steel, but the smaller works have to buy their 
 steel in the open market. When, therefore, steel is 
 "dumped" in this country, our tinplate manu- 
 facturers are able to secure the raw material of their 
 industry at a comparatively low rate. All these
 
 THE TINPLATE TRADE 173 
 
 causes have combined to secure for the British 
 manufacturers the practical monopoly of the neutral 
 markets, and among others that of Russia. 
 
 American Drawbacks. 
 
 Of recent years the Russian oil trade has become 
 an important industry, holding its own with the 
 Standard Oil Trust in the English market. This 
 fact has had an indirect effect on our tinplate 
 exports to the United States. In order to meet 
 more easily this new and formidable competitor, 
 the Standard Oil Trust required cheaper tin-cans. 
 The other great American industries, which export 
 tinned stuff to foreign countries, were in similar 
 case. The result was, that the United States 
 resorted to the method of " drawbacks," i.e., under 
 the law of 1897 it allows a " drawback," or rebate, 
 on the exportation of articles manufactured at home 
 from imported materials on which duties have been 
 paid, equal to 99 per cent, of such duties. In the 
 year ending June 30, 1900, the United States paid 
 about ;^i, 150,000 in "drawback" on some eighty 
 classes of imported materials, nearly one-third being 
 accounted for by the " drawback " on tinplates. In 
 a word, the American tinned goods industry — tinned 
 fruit, meat, fish, and oil — depends for its prosperity 
 to a considerable extent on the British tinplate 
 industry. The American producers, secure of an 
 enormous home market and exaggerated profits, are 
 not in a position to meet on equal terms the free
 
 174 BRITISH INDUSTRIES 
 
 and unfettered competition of British manufacturers. 
 In the autumn of 1902 the Standard Oil Trust 
 invited tenders for the supply of tinplates — '* oil 
 sizes " — for a year's consumption. In spite of the 
 one per cent, in favour of the American maker, and 
 of the freight, the British tender was accepted. It 
 is owing to the system of " drawbacks " that the 
 United States is still our best customer. Our exports 
 are practically confined to "drawback " plate. 
 
 Free Trade Efficiency. 
 
 The history of the British tinplate industry shows 
 how " a ruined industry " can be revived and 
 invigorated by the skill, courage, pertinacity, and 
 enterprise of business men. Few thought in 1891 
 that the industry could survive the deliberate efforts 
 of American Protectionists to crush it out of 
 existence. No threat of " retaliation " would have 
 served our turn. The United States could afford to 
 ignore our threats. The doom of the tinplate trade 
 seemed so imminent and inevitable that several of 
 the leading manufacturers abandoned it in despair. 
 Yet to-day the trade is in as flourishing a condition 
 as it has ever been. The returns for 1902 show that 
 we exported 311,869 tons as against an annual 
 average of 399,329 tons in 1887-90, but these figures 
 do not represent all the trade. It is estimated that 
 in the years 1887-90 we produced an annual average 
 of about 40,000 tons for home consumption, and that 
 that amount has been more than doubled in 1902.
 
 THE TIN PLATE TRADE 175 
 
 In fine, in spite of the apparently crushing blows 
 delivered to the trade by the American tariffs, the 
 output of tinplates to-day is almost as great as it was 
 in 1891, and is steadily increasing. The pluck and 
 enterprise of our manufacturers are being rewarded. 
 In 1897 for instance, a large steel and tinplate works 
 near Swansea was sold for ;^95,ooo. During the 
 following five years the profits earned amounted to 
 between ;i^7o,ooo and _^8o,ooo. Nor is this an 
 isolated or exceptional instance. The greatest 
 tribute to the skill of our manufacturers and to the 
 wholesome and stimulating effects of Free Trade lies 
 in the fact that, not only is our production of tin- 
 plates now almost as great as it was in the pre- 
 Tariff days, but that 24 per cent, of our tinplate 
 exports still go to the United States. This result 
 could not have been brought about by a policy of 
 Protection or retaliation : it is directly traceable to 
 our Free Trade policy.
 
 CONFECTIONERY AND PRESERVE- 
 MAKING INDUSTRIES 
 
 By Robert Just Boyd 
 
 THERE are certainly no industries in Great 
 Britain which have greater reason to be 
 thankful for a policy of free imports than those of 
 confectionery and jam-making, which depend upon 
 sugar for their raw material. Great Britain does 
 not, and indeed cannot, produce sugar, and in order 
 to have this commodity at a low price, free importa- 
 tion is essential. 
 
 It is indeed anomalous that Great Britain should 
 lead the world in these industries, but this state of 
 affairs has been brought about solely by her Free 
 Trade policy. Germany, Austria, Hungary and 
 France, all of whom produce sugar in large 
 quantities, have no confectionery and preserve- 
 making industries at all comparable with those 
 of the United Kingdom. Until recently Great 
 
 Britain has been the only country in the world 
 
 1713
 
 CONFECTIONERY 177 
 
 having an absolutely free importation of sugar. 
 By this we have obtained much benefit, even 
 from the protectionist policy of the sugar-producing 
 countries. 
 
 It is not necessary here to go into all the details 
 of the giving of bounties on the exportation and 
 production of sugar. It is sufficient to point out 
 that the competition to supply the only free market 
 of Great Britain with sugar became keener and 
 keener, and led to a gradual fall in price. British 
 capital and enterprise were at once attracted towards 
 this very cheap raw material, and goods were made 
 from it which are now to be found in every British 
 household. On the contrary, in the producing 
 countries, owing to their fiscal policy, sugar was so 
 dear that no sugar-using industries could thrive. 
 This is a striking instance of a free country re- 
 ceiving all the benefit of the enterprise of foreigners, 
 and shows clearly how the consumer in a pro- 
 tectionist country can be penalised to benefit those 
 who enjoy an open market. 
 
 The confectionery and jam-making industries in 
 Great Britain had very small beginnings. Early in 
 the nineteenth century the cost of producing sugar 
 was very high, and, in addition, all sugar was very 
 heavily taxed. Produced from the sugar-cane in the 
 West Indies and other tropical countries only, it 
 had to be brought here in the raw state and refined. 
 This was a costly and, at that time, a very primi- 
 tive process, and the finished article was inferior 
 
 13
 
 178 BRITISH INDUSTRIES 
 
 in quality, and quite unsuitable for the class of 
 goods at present manufactured. Indeed, it was not 
 until the introduction of beetroot sugar on the 
 Continent that good refined sugar came into general 
 use. The British refiner was content to turn out a 
 low-grade sugar known as "pieces." This sugar 
 was irregular in quality and inferior in colour, 
 and was quite unfitted to form the basis of any 
 further manufacturing industry of any considerable 
 dimensions. 
 
 With the introduction of foreign refined sugar 
 jam-making and similar industries became possible, 
 and would speedily have grown to large dimensions 
 but for the high duty on their necessary raw 
 material. About the year 1855, considerable, 
 though, when compared with to-day, very small 
 confectionery and preserve-making industries had 
 been established in this country, and a small 
 demand for British jams and confectionery had 
 been created abroad. But no drawback was then 
 given on exports, and the high duty made export 
 very difficult. 
 
 An Open Market Found. 
 
 At this time it occurred to Mr. Alexander Keiller, 
 a native of Dundee, that a large demand could be 
 created for export confectionery and jams if the 
 sugar duty could be circumvented. With acute 
 business intelligence, he looked for a free market, 
 and found the same in the Channel Islands. He
 
 CONFECTIONERY 179 
 
 promptly determined to secure the export trade of 
 the world by establishing factories in this, the only 
 free market. When established there, he found that 
 his ideal had been more than exceeded, and no 
 British or foreign firm could compete with his free 
 export of confectionery and similar goods. The 
 supremacy which he thus attained in the export 
 trade was never assailed with success, and until the 
 abolition of the sugar duty in Great Britain, his 
 exports practically ruled the world's market for this 
 class of goods. 
 
 In the year 1874 the sugar duty was abolished in 
 Great Britain, and sugar was placed upon the 
 free list. Development at once began, and many 
 firms sprang up whose names were destined to 
 become household words. Such well-known firms 
 as Crosse and Blackwell of London, Cadbury 
 Brothers of Birmingham, Fry and Sons of Bristol, 
 Clarke, Nickolls and Coombs, Ltd., of London, 
 Rowntree and Co., Ltd., of York, Batger and Co. 
 of London, and James Keiller and Son, Ltd., of 
 Dundee and London, began to make rapid strides 
 in the various branches of the trade. Each year in 
 succession found an increasing demand for their 
 goods. More and more hands were employed — 
 additional capital was invested with great benefit to 
 the country ; indeed, so large have these houses 
 become that they now represent many millions of 
 invested capital, and give employment to many 
 thousands of hands. A visit to any of their work
 
 t8o BRITISH INDUSTRIES 
 
 would show the great prosperity which their success 
 has brought to other trades in the country. Tins, 
 boxes, cases, bottles, and all the necessaries of these 
 trades have to be provided, and so great is the 
 demand that many manufacturers of these goods 
 cater solely for their requirements. 
 
 The prosperity of the jam-makers made fruit- 
 growing in the country a profitable pursuit, and this 
 branch of agriculture has prospered greatly. In 
 the same way the development of the cocoa and 
 chocolate trades here have enabled the West Indies 
 to largely extend their cultivation of the cocoa 
 bean, and the planters there have done exceedingly 
 well. 
 
 The Introduction of Machinery. 
 
 As the trade in confectionery and chocolate grew, 
 it became necessary to introduce machinery. In 
 the early days, the only confectionery which was 
 made consisted of boiled sugars which were com- 
 monly known as " Toffee " and " Barley Sugar." 
 These were made by boiling sugar on an open fire, 
 and the method of production was very primitive 
 and inefficient. One of the chief items in the cost 
 was of course labour, which, owing to the small 
 out-turn, was very large. It is doubtful whether, in 
 the early stages, more than a few hundredweights 
 were turned out per week, whereas to-day there are 
 many firms turning out hundreds of tons per week. 
 The methods of production were gradually improved
 
 CONFECTIONERY i8i 
 
 owing to the continually increasing demand for the 
 product. Mechanical genius and enterprise turned 
 out machinery which hitherto had been undreamt 
 of. The cost of labour in producing a ton of cheap 
 sweets to-day is, in many factories, about 20s. per 
 ton, whereas in the early days it must have been 
 very nearly ten times that amount. 
 
 The engineering trades in this country thus found 
 a large demand for confectionery machinery, and 
 many engineering firms now make a speciality of 
 this. To show the magnitude of this demand, it is 
 not an uncommon thing for one factory to have 
 over ;^5o,ooo worth of machinery. Electricity has 
 in many cases been introduced as motive power, 
 and an effort has always been made to keep abreast 
 of the times. The export trade has continually 
 increased, and, owing to our policy of free imports, 
 these trades have been able to circumvent the high 
 protective duties placed on their products by such 
 nations as the United States, Germany, and France. 
 
 British preserves are still largely bought in the 
 United States, in spite of a tariff amounting to 
 practically 40 per cent, of their value. German 
 sugar and fruit is re-exported to that country in 
 the shape of jam, in spite of a heavy tariff, whilst 
 France is a buyer of similar British products. Dutch 
 sugar is returned to Holland in the shape of British 
 confectionery, and in fact there is no country which 
 does not purchase some proportion of the export of 
 our factories.
 
 i82 BRITISH INDUSTRIES 
 
 This has been the prosperity of the past. Would 
 that the outlook of the future were equally favour- 
 able ! By the imposition of the sugar tax in 190 1 
 a severe blow was dealt at all trades using sugar 
 as a raw material. The sale of any food product 
 is necessarily curtailed by a considerable rise in 
 price, but in many cases it was very difficult to 
 place the burden on the consumer at all. 
 
 The Importance of the Penny. 
 
 It will be easily seen that the confectionery trade 
 is very much dependent on the purchasing power of 
 the penny. Thirty years ago the price of sugar was 
 so high that not more than i oz. of sweetstuff could 
 be purchased with that coin. Gradually this price 
 fell, and a larger amount could be purchased until, 
 prior to the imposition of the sugar tax in Great 
 Britain, ^ lb. of sweetmeats of comparatively good 
 quality could be purchased for that sum. No sooner 
 was the tax imposed than it became necessary for 
 all manufacturing confectioners to reconsider their 
 position. With a tax of ^d. per pound, and a pur- 
 chasing unit of id., it became very difficult for 
 prices to be raised to the consumer without a 
 complete alteration in the style of goods produced. 
 For instance, the consumer had been accustomed to 
 buy 4 oz. of common sweets for a penny, 2 oz. of a 
 better quality for a like sum, and i oz. of what may be 
 called fancy sweets for a penny. It thus became 
 necessary to make the penny piece of sweetmeat
 
 COXFECTIONERY 183 
 
 smaller, when goods were sold by the count, and to 
 reduce the quality of other classes of confectionery 
 when sold by weight, to meet this tax. 
 
 Fortunately the burden of the sugar tax was not 
 fully felt, owing to two causes. In the first place, 
 most manufacturers had anticipated it, and held 
 large stocks ; and secondly, the price gradually fell 
 until it became possible to revert to the old and 
 regular prices, when trade again began to revive. 
 
 The Brussels Convention. 
 
 A greater danger than the sugar tax was, however, 
 looming on the horizon. The sugar tax was not 
 protective, and was imposed to meet the urgent 
 wants of the National Exchequer. This cannot be 
 said of the Brussels Sugar Convention which has just 
 become operative. By this Convention the sugar 
 bounties, from which this country has derived so 
 much benefit in the shape of a cheap foodstuff and 
 raw material, are removed. The result is that the 
 price of sugar has already risen 3s. per hundredweight 
 from the lowest, and bids fair to become still dearer. 
 This in spite of the fact that visible and prospective 
 supplies of sugar were never greater than to-day. 
 
 The Brussels Sugar Convention was signed by 
 Great Britain in the interests of the West Indian 
 planters and the British sugar refiners, both of whom 
 are protected by it. The West Indies produces 
 roundly 250,000 tons of raw sugar per annum. The 
 sugar-using industries of Great Britain require over
 
 i84 BRITISH INDUSTRIES 
 
 400,000 tons of refined sugar yearly, so that, apart 
 from the great loss to the British consumer, it is 
 clear and evident that the major trading interests 
 have been sacrificed to the lesser. By this fatuous 
 step, which was so clearly denounced by Mr. Winston 
 Churchill in the House of Commons as a working 
 model of a much larger scheme of Protection, the 
 British Government secures for the foreign confec- 
 tioner the cheapest raw material, and at the same 
 time prohibits its use by his British competitor. 
 Moreover, the manufactured product, even when 
 bounty-fed, is admitted into this country, while the 
 bounty-fed raw material is absolutely prohibited. 
 Small wonder that the confectionery trades prefer 
 Free Trade to this game of protecting the foreigner 
 and penalising the Britisher. Unfortunately the 
 Convention remains in force for five years, and 
 its evil work cannot well be remedied. The sugar- 
 using industries are, therefore, unanimous in urging 
 that their grievances may be mitigated by the repeal 
 of the sugar tax, and trust that their raw material 
 will be placed on the free list in the ensuing Budget.
 
 THE GROCERS INDUSTRY 
 By J. Innes Rogers 
 
 THE general prosperity of a people is indicated 
 to a large degree by the consumption of 
 articles which are not the prime necessaries of life. 
 People satisfy the first cravings of hunger with 
 bread, and in northern climes with meat, before 
 they will buy other eatables. If, therefore, the use 
 of semi-necessaries, or luxuries, such as groceries, 
 is large, it is a proof that a nation is well off. In 
 the days of protection it may be truly said that the 
 grocer's shop was supported by the middle classes 
 and by the rich. Nowadays it is mainly kept up 
 by the working classes, to whom in the palmy days 
 of Protection even meat was practically unknown, 
 while in Lancashire the diet consisted of porridge. 
 The artisan now eats wheaten bread, meat, bacon, 
 butter, cheese, and sugar, and drinks as much tea 
 as he wants. Sixty or seventy years ago, not only 
 were groceries out of the reach of even the better 
 
 off workmen, but these commodities were the happy 
 
 1S5
 
 i86 
 
 BRITISH INDUSTRIES 
 
 hunting-ground of the protectionists. The East 
 India Company had a monopoly of Eastern produce 
 up to 1833. There were different duties on foreign 
 and on colonial goods, and those duties varied with 
 the distance of the producing market. All sorts of 
 other fiscal follies were rampant. These heavy 
 duties crippled the consumption of groceries, while 
 every approach to freedom extended it. 
 
 CONSUMPTION OF GROCERIES, ETC., IN THE UNITED 
 KINGDOM IN 1845 AND 1901. 
 
 
 Total Weight. 
 
 Weight per Head of 
 THE Population. 
 
 
 1845. 
 
 1901. 
 
 1845. 
 
 1901. 
 
 Cocoa lbs. 
 
 Coffee cwt. 
 
 Currants and Raisins 
 cwt. 
 
 2,589,000 
 266,000 
 
 514,000 
 
 49,800,000 
 283,000 
 
 1,515,000 
 
 c-09 
 1-23 
 
 2-07 
 
 19-58 
 nil 
 
 2-51 
 
 1-02 lbs. 
 0-76 „ 
 
 4'09 „ 
 
 Sugar, Raw ... cwt. 
 Refined ... cwt. 
 Molasses and 
 
 Glucose cwt. 
 
 4,856,624 
 6 
 
 627,532 
 
 11,938,000 
 21,075,000 
 
 3,202,000 
 
 32-18 „ 
 56-18 „ 
 
 9.00 „ 
 
 Total (Sugar, &c.) 
 
 5,484,162 
 
 36,215,000 
 
 22-09 
 
 97-36 lbs. 
 
 Rice cwt. 
 
 Tea lbs. 
 
 Tobacco ... lbs. 
 
 Wines gals. 
 
 Spirits gals. 
 
 1,000,000 
 44,193,000 
 
 26,162,000 
 
 6,736,000 
 27,778,000 
 
 4,240,000 
 255,824,000 
 
 78,400,000 
 
 15,202,000 
 45,210,000 
 
 4-4' 
 1-59 
 
 0-94 
 
 0-24 
 i-oi 
 
 11-43 lbs. 
 6-16 „ 
 
 1-89 „ 
 
 0-37 gals. 
 1-09 „ 
 
 ' The Statistical Abstract for 1845 gives this figure as 
 1-59 lbs. per head, which is obviously wrong.
 
 THE GROCER'S INDUSTRY 
 
 187 
 
 In connection with the preceding table it will 
 be interesting to compare the following : — 
 
 DECENNIAL PRICES OF TEA, COP^FEE, AND SUGAR, 
 
 Frotn the Year 1787 to 1897, 
 
 Taken from the Trade Circulars and other Quotation's 
 OF Joseph Travers & Sons, Limited, of 119, Cannon 
 Street, London, E.C. 
 
 
 
 
 
 
 Coffee, 
 Duty Paid. 
 
 Slg.\r, Duty Paid. 
 
 Year. 
 
 Tea in 
 
 BOND. 
 
 
 
 
 
 
 
 Roasted. 
 
 Raw. 
 
 Refined. 
 
 
 
 Per lb. 
 
 
 Per lb. 
 
 Per. 
 
 cwt. 
 
 Per 
 
 cwt. 
 
 
 s. 
 
 d. 
 
 s. 
 
 d. 
 
 s. d. s. d. 
 
 s. d. 
 
 s. d. 
 
 s. d. 
 
 s. d. 
 
 1787 
 
 I 
 
 94 
 
 14 
 
 
 
 2446 
 
 50 
 
 78 
 
 54 
 
 121 4 
 
 1797 
 
 2 
 
 3 
 
 IX 
 
 
 
 3 5 56 
 
 68 
 
 114 
 
 78 
 
 186 8 
 
 1807 
 
 2 
 
 10 
 
 18 
 
 
 
 4456 
 
 56 
 
 100 
 
 54 
 
 186 8 
 
 1817 
 
 5 
 
 I 
 
 14 
 
 
 
 I 10 34 
 
 81 
 
 100 
 
 75 
 
 185 
 
 1827 
 
 3 
 
 I 
 
 14 
 
 
 
 II 29 
 
 64 
 
 80 
 
 57 
 
 160 
 
 1837 
 
 2 
 
 
 8 
 
 
 
 I 3 2 I 
 
 54 
 
 71 
 
 43 
 
 no 
 
 1847 
 
 2 
 
 7 
 
 7 
 
 
 
 10 I 10 
 
 33 
 
 56 
 
 33 
 
 75 
 
 ^857 
 
 
 
 TO 
 
 4 
 
 6 
 
 I o| I 6 
 
 41 
 
 hi 
 
 40 
 
 70 
 
 1867 
 
 
 
 6^ 
 
 3 
 
 II 
 
 08 19 
 
 25 
 
 41 
 
 27 6 
 
 53 
 
 1877' 
 
 
 
 7 
 
 3 
 
 10 
 
 II 17^ 
 
 156 
 
 36 
 
 20 6 
 
 38 
 
 1887' 
 
 
 
 44 
 
 4 
 
 7 
 
 I 14 I 7 
 
 9 9 
 
 176 
 
 10 6 
 
 19 9 
 
 1897' 
 
 
 
 -i 
 
 2 
 
 10 
 
 7i I 8 
 
 8 
 
 17 
 
 8 
 
 16 6 
 
 June ] 
 
 
 
 
 
 
 
 
 
 
 30, • 
 
 
 
 3 
 
 2 
 
 6 
 
 74 I 8 
 
 11 3 
 
 15 9 
 
 10 
 
 18 6 
 
 1902^) 
 
 
 
 
 
 
 
 
 
 
 Sugar Duties were abolished in 1874, and reinstated in 1901. 
 
 The trade in groceries covers a great number 
 of commodities, and the foregoing table is neces- 
 sarily limited to the most important. The extra- 
 ordinary increase that has taken place in the trade 
 is mainly due to Free Trade, and is the best 
 testimony to its success that could be produced. 
 ' Sugar duty free. ^ Sugar dutiable.
 
 i88 BRITISH INDUSTRIES 
 
 No doubt other causes have helped, such as the 
 development of railways and steamboats, but it is 
 to be noted that similar progress in consumption 
 has not been made in protectionist countries, the 
 grocer in France, Germany, Italy, and Russia being 
 a far less important factor than he is here. The 
 consumption of sugar, for instance, is trivial on 
 the Continent compared with the consumption in 
 Great Britain. 
 
 At the present moment the lowest tea is dearer 
 than in 1897, but the other goods are all cheaper. 
 The tea duty was reduced to 6d. per pound in 1865, 
 and stands at that now, though it has been as low 
 as 4d. The average bonded value of tea thirty 
 years ago was is. 9d. per pound ; it is now only a 
 little over a third of that amount. 
 
 The goods named above are the chief groceries 
 used in 1845, but in addition to these it is to be 
 remembered that the grocer now sells an enormous 
 mass of things, in the aggregate perhaps as im- 
 portant as the list given. In 1845 he did not deal 
 in such minor necessaries or luxuries as jam, 
 biscuits, cakes, preserved fruits, canned salmon 
 and meats, or in the farinaceous and proprietary 
 foods now sold to so large an extent. Butter, 
 bacon, cheese, and eggs were bought on the 
 market by the public of the farmer. The spice 
 trade, now an important one, was then trivial. 
 In this way it may be said that the 1845 list of 
 groceries was then fairly exhaustive, while the
 
 THE GROCER'S INDUSTRY 189 
 
 general well-being of the public now not only 
 permits enormously larger purchases of the old 
 goods, but allows them to obtain from the same 
 source vast quantities of goods which no grocer in 
 the old times would have had a demand for, and 
 many of which did not exist. 
 
 This vast increase in the consumption of groceries 
 has necessarily led to an enormous development of 
 the industries that are engaged in manufacturing 
 the articles concerned, or in transporting them 
 from the manufacturer to the wholesale dealer and 
 thence to the retail grocer. A very large proportion 
 of the trafBc upon British railways and British 
 steamboats is derived from the carriage of groceries. 
 Finally, there is the industry of the grocer himself. 
 The additional demand for groceries has necessi- 
 tated an immense increase in the number and size 
 of grocers' shops and in the number of assistants 
 employed. Even in country villages the increased 
 demand for groceries has made itself felt, and men 
 who in the good old days of Protection would 
 have been starving as agricultural labourers are 
 now earning a good wage as grocers' assistants. 
 
 From these general considerations we may pass 
 on to deal with some of the more important items 
 in the grocer's business. 
 
 Tea. 
 
 Up to the year 1833 the trade was a monopoly of 
 the East India Company, through whom alone
 
 igo BRITISH INDUSTRIES 
 
 supplies were to be obtained, and who regulated 
 sales and qualities as it seemed best to them. The 
 old circulars of the wholesale houses are full of 
 disputes and difficulties with this great monopolist 
 interest. In 1833 the consumption was only 
 I lb. 4 oz, per head ; on the abolition of the 
 monopoly it at once began to rise, and continued 
 to do so till it reached 2 lbs. per head in 1852, when 
 the duty was 2s. 2^d. per lb. In 1853 and 1854 the 
 consumption was stimulated by reductions in duty, 
 but when an increased rate was imposed owing to 
 the Crimean War, the consumption at once fell off. 
 In 1865 the duty was reduced to 6d., and the con- 
 sumption rose to 3*29 lbs. per head. Subsequently 
 the duty fell to 4d., with the remarkable effect 
 of nearly doubling the consumption per head as 
 compared with thirty-eight years ago. The duty 
 was again raised to 6d. during the Boer War, 
 but in consequence of the great depression in the 
 bonded price of tea, owing to over-production, 
 the increased duty did not reduce the consump- 
 tion as it would have done if prices had been 
 normal. 
 
 One very remarkable development that has taken 
 place in tea since the removal of the old monopoly 
 is worth noting. W^ith no protection whatever, 
 British -grown tea from India and Ceylon has almost 
 driven China tea out of the market, though formerly 
 our entire supplies came from China. This is not 
 the result of any preferential tariff. India has com-
 
 THE GROCER'S INDUSTRY 191 
 
 plete free trade, and our tea duty is for revenue only. 
 Yet British capital has built up in our tropical pos- 
 sessions a vast and still growing industry, which 
 may yet supply the whole world with tea. Twenty- 
 five million pounds of English capital are invested 
 in this great enterprise which has already trans- 
 formed vast districts in India and Ceylon, and 
 furnished a striking illustration of what Free Trade 
 can do in the way of developing industries. A 
 further development of India and Ceylon trade is 
 now in rapid progress. Direct exports of tea are 
 being made from India and Ceylon to the United 
 States, to Russia, Canada, and to other tea- 
 consuming countries, though most of them are 
 strongly protectionist. Thus British capital, invested 
 under conditions of complete Free Trade in the 
 tropics, is engaged in supplying goods to protec- 
 tionist countries who will not take British manu- 
 factures direct. A triangular trade, not shown in 
 the Board of Trade returns, is thus established. We 
 first export capital, largely in the form of machinery, 
 to India and Ceylon. We plant the tea gardens, 
 and we draw the profit on the whole enterprise. In 
 addition, British ships earn freight by carrying the 
 tea. This is one of the indirect ways in which our 
 surplus of imports over exports is accounted for. 
 The tea itself, when it reaches England, represents 
 to a very large extent the interest due to some 
 Englishmen for the capital they have invested in 
 tea gardens, and the payments due to other English-
 
 192 BRITISH INDUSTRIES 
 
 men for carrying tea across the seas, not to England 
 only, but to all parts of the world. 
 
 COP^FEE. 
 
 Although our home coffee trade is not in so good 
 a condition as it might be, our imports still keep up 
 as we continue to do a large entrepot or re-export 
 trade in that commodity. London has indeed re- 
 mained an important distributing centre for coffee, 
 and this is a branch of trade which would be 
 severely hit if we were to have retaliatory or pre- 
 ferential tariffs. Continental powers would retaliate 
 by refusing to take colonial produce when re-shipped 
 from London. The decrease in the consumption of 
 coffee is believed to be largely due to the promis- 
 cuous and legalised use of chicory in this country. 
 It is also due to the fact that coffee is more trouble- 
 some to make than tea, and much more costly. 
 Taken together as a group, it will be seen that there 
 has been an immense growth under Free Trade 
 in the use of the warm stimulants, cocoa, coffee, 
 and tea. 
 
 There is no commodity which used to be ham- 
 pered by more protectionist nostrums than coffee. 
 During the early part of last century there were 
 separate duties on coffee coming from British- 
 American Colonies, from India, and from foreign 
 countries. These duties were crushing in amount. 
 In 1826 fresh complications were introduced, and 
 five separate rates of duty were established, according
 
 THE GROCER'S INDUSTRY 193 
 
 to origin, which it is needless now to give in detail. 
 It is only necessary to remark that an immense 
 preference was given to our Colonies. Yet in 1841, 
 in spite of this preference, 60 per cent, of our con- 
 sumption was of foreign origin. On the other 
 hand, in 1868, long after the equalisation of the 
 duties on foreign and colonial coffee, our propor- 
 tionate consumption of foreign fell to 18 per cent. 
 The attempt to help the Colonies by a preferential 
 tariff was, in fact, a complete failure, and they did 
 relatively much better when that preference was 
 abolished. 
 
 It is true that the proportion of the coffee im- 
 ported from British possessions has since largely 
 fallen off, but this is because the cultivation in 
 Ceylon, which was formerly one of our chief 
 sources of supply, has been practically abandoned 
 through the plants becoming a prey to fungoid 
 diseases. The enterprising planters of Ceylon, as 
 soon as they found coffee failing, at once took to 
 tea, with a success which all the world knows. 
 
 Sugar. 
 
 It was often said in the old bread-tax days that 
 corn and sugar went together as twin brethren 
 of Protection. Except during the generation of 
 complete freedom between 1874 and 1901, there were 
 incessant debates and agitations turning round the 
 sugar duties. It is said that in the space of forty years 
 there were forty changes, great and small, and often
 
 194 BRITISH INDUSTRIES 
 
 involving important principles. To revive these old 
 controversies would be tedious at the present day, 
 for most of them turn on points the very meaning 
 of which is unknown to the present generation. 
 At one time our Colonies had a monopoly of 
 the supply of sugar, at another there was a 
 differentiation between the East and West Indies, 
 and for long periods foreign sugar was subject to a 
 surcharge. Then, after the West Indian emancipa- 
 tion of slaves there was a distinction between slave 
 and free-grown sugar. Finally, all these distinctions 
 were swept away, and no difference was made in 
 favour of different places of origin. Unhappily, 
 even when this stage was reached our statesmen 
 were still not content to tax sugar as such, but they 
 must needs enter into the impossible task of levying 
 the duty ad valorem. They based their scale upon 
 the colour of the sugar, on the assumption that 
 colour was a test of value. But in a very short time 
 our imports were coloured to suit the Government 
 colour scale. The sugar was then bleached by our 
 home refiners, who thus obtained a bonus which 
 enabled them to defy all competition from abroad. 
 In this way a great protected industry grew up in 
 England and Scotland, and it took fourteen years of 
 agitation on the part of the home distributors to get 
 rid of the bonus which these protected manufacturers 
 were receiving at the cost of the nation. The result, 
 in fact, was only achieved when the sugar duties were 
 abolished by Sir S. Northcote in 1874. The twenty-
 
 THE GROCER'S INDUSTRY 195 
 
 seven years of absolutely free trade in sugar that 
 followed were attended with the most marvellous 
 results. The consumption of this valuable food in- 
 creased by leaps and bounds, and medical reports 
 bear testimony to the extraordinary benefit conferred 
 on the strength and physique of the generation that 
 grew up under free sugar. 
 
 It was not only improved nutrition that duty-free 
 sugar gave us, but also new and great industries. 
 The confectionery and allied industries — jam- 
 making, biscuit-making, and aerated-water-making 
 — have developed enormously under Free Trade. 
 These industries now employ about 117,000 work- 
 men, whereas the refiners only employ 2,400. The 
 refining industry, it should be noted, has not 
 fallen off at all, though the contrary is constantly 
 asserted. According to the statement prepared 
 by the refiners themselves for use by the British 
 delegates at the Brussels Convention the quantity 
 of sugar rehned in Great Britain increased from 
 591,000 tons in 1870 to 640,000 in 1901. Nor have 
 our Colonies been ruined, for their sugar exports, 
 which were 560,000 tons in 1887, had risen to 
 604,000 tons in 1901. In fact, in no other com- 
 modity have the transcendent merits of Free Trade, 
 in promoting commerce and industry and in re- 
 ducing the prime cost, been marked more than in 
 the case of sugars.
 
 196 BRITISH INDUSTRIES 
 
 Early History of Sugar Trade. 
 
 In the old days of colonial monopoly or prefer- 
 ence we gave our colonists an immense price for 
 their produce. For instance, the bonded value of 
 West Indian Sugar for very many years was about 
 25s. per cwt., but our planters can now produce the 
 same thing at 9s. per cwt., a reduction of nearly 
 two-thirds. The difference enriched the West Indies 
 and impoverished the Mother Country. 
 
 Apart from the question of the higher price which 
 a colonial monopoly always means, there is the 
 question of risk of capture in war from which 
 foreign goods are exempt. How great that risk 
 was in olden times may be seen from the following 
 extracts from trade circulars. In 1779 Messrs. 
 Smith, Nash, Kemble and Travers advised their 
 customers thus ; — 
 
 " Unfortunately we have just received intelligence 
 of the loss of Grenada, one of our principal Islands, 
 which has caused an advance on Raw Sugar of full 
 4/- per cwt., and as our other islands are likewise in 
 Danger, we don't see a prospect of Sugar being 
 lower, unless the two Fleets now coming Home, 
 should all arrive safe, but this in the present 
 Situation of affairs, is more than can be expected." 
 
 On the 30th March, 1782, the same firm wrote : — 
 
 " We think it necessary to inform you that in con- 
 sequence of the late Loss of more of our Islands, 
 Raw & Dry Sugars are advanced 6/- per cwt., Lump
 
 THE GROCER'S INDUSTRY 197 
 
 and Loves 9/-, and we have too much Reason to 
 apprehend they will yet be higher." 
 
 On seeking to account for the fiscal folly of our 
 statesmen in connection with sugar it will be found 
 that they have always committed the fundamental 
 fault of considering the producer instead of the 
 consumer. Unhappily they have continued to do 
 so up to the present time. The sugar duties were 
 reimposed to pay a part of the cost of the Boer 
 War, and in putting them on the Govern- 
 ment took advice from the refiners in this country 
 and the West Indian Committee, both protectionist 
 partisans. The result has been the imposition of 
 what is known as the polariscopic scale. This is not 
 only a costly and useless system, but it has been so 
 arranged as to give a small protection to the refiners. 
 They at first denied this fact, and then minimised it. 
 Finally, the Foreign Powers represented at the 
 Brussels Conference declined to agree to a conven- 
 tion unless this protection were stopped. The 
 obvious remedy was to abolish the polariscopic scale, 
 but our Government instead decided to continue this 
 erroneous system, and in order to stop the bounty to 
 our refiners agreed to make them work in bond. 
 Thus the British taxpayer has to pay not only for the 
 polariscopic examination of every parcel of sugar 
 coming into the country, but also for the examina- 
 tion of every parcel leaving the refinery. Our 
 statesmen have therefore even yet not learned 
 financial wisdom in regard to sugar, as is seen
 
 198 BRITISH INDUSTRIES 
 
 in a still more glaring way in the Brussels Con- 
 vention. 
 
 Sugar Bounties a Benefit to England. 
 
 I have purposely said nothing hitherto about the 
 continental sugar bounties which have agitated the 
 minds of our protectionists for so many years. 
 Originally, by accident and unintentionally, some of 
 the continental powers gave bounties to their beet- 
 sugar producers which to some degree, and tem- 
 porarily, stimulated this industry. Incidentally these 
 bounties had the effect of making it highly desirable 
 that the utmost technical and chemical skill should 
 be applied to sugar-making, instead of the primeval 
 methods still in vogue in most of our West Indian 
 plantations. The result was a rapid increase in the 
 production of sugar per acre. Owing to short-sighted 
 policy on the Continent, coupled with the necessity 
 for raising a great revenue for militarism, continental 
 nations were not allowed to consume their growing 
 sugar production at home, but were prevented from 
 doing so by crushing duties. The surplus had there- 
 fore to be exported to England, the only free market. 
 Improved manufacture, combined with competition, 
 brought down the price of sugar. This was really an 
 economic change with which bounties had little to 
 do. The result was that we were glutted with the 
 commodity called by Mr. Lowe *' the delight of 
 youth and the solace of age." German sugar 
 which sold at 5d. in Berlin shops was sold in
 
 THE GROCER'S INDUSTRY 199 
 
 London at i^d. per pound, and French sugar which 
 cost yd. in Paris was retailed at 2d. in London. 
 The sugar bounties, so far as they, and not science, 
 were the cause of cheap sugar, were an immense 
 benefit to England. They were on the whole bene- 
 ficial to our refiners as well, and the greatest fortune 
 known in that trade was made entirely during the 
 prevalence of bounties. This was because the 
 bounties given on raw and refined sugars were 
 practically the same, so that the German refiner 
 was no better off than our own refiners. A few 
 years ago, however, a change took place, and the 
 export bounties favoured the German refiners to a 
 fractional extent. This led to renewed and more 
 vigorous action on the part of our refiners. They 
 were actively assisted by the West Indians, whose in- 
 dustry was failing because they continued to practise 
 methods of manufacture three hundred years old, 
 and so obtained only 50 per cent, of the sugar in the 
 cane. The protectionist arguments against cheap 
 sugar were helped by the formation of a Trust or 
 Kartel to further raise the price of sugar to the 
 German consumer, in order that the German pro- 
 ducer might continue to compete at low prices here. 
 The story of the Kartel is too long to tell in the 
 limited space at command, but it is sufficient to say 
 that, like all these attempts at "dumping," it had 
 really fallen by its own weight before the conclu- 
 sion of the Brussels negotiations. 
 
 We have now boycotted cheap sugar, and by a
 
 200 BRITISH INDUSTRIES 
 
 solemn treaty we have agreed to exclude it from our 
 markets. In order to carry out this boycott we have 
 handed over to a permanent international Com- 
 mission at Brussels the control of all the intricate 
 details of the sugar industry. England is no 
 longer free to manage her own finances, but is 
 under the control of a junta of foreigners. Such 
 is Mr. Chamberlain's first triumph.
 
 THE PAPER TRADE 
 
 By Albert Spicer 
 
 ON the surface the paper trade appears to be 
 an industry that has greatly suffered by 
 foreign competition. Taking only the past ten 
 years we find that the imports of foreign paper of 
 different sorts increased in quantity from 86,000 
 tons in 1892 to 194,771 tons in 1902. The increase 
 in value in the same period was from ;^ 1,958,000 
 to ;^3,586,ooo. Protectionists, seizing upon these 
 figures, exclaim that our paper manufacturers are 
 being ruined by foreign competition. This super- 
 ficial argument is even strengthened when we turn 
 to the figures of our export trade, for whereas our 
 exports of paper of all sorts in 1892 was 44,000 tons, 
 in 1902 it was only 38,000 tons ; and this decline 
 in quantities was accompanied by a decline in 
 values from _^ 1,43 1,000 in 1892, to _^i, 12 1,000 in 
 1902. Thus on the one hand the importation of 
 foreign paper has very greatly increased, and on 
 
 the other hand the exportation of our own paper 
 
 201
 
 202 BRITISH INDUSTRIES 
 
 has slightly decreased. Surely here is a case of the 
 failure of Free Trade ! 
 
 Let us look a little farther. Even if we assume 
 for the moment that these figures tell the whole 
 story of the British paper industry, they still do not 
 prove the failure of Free Trade. We have to think 
 not merely of the makers of paper, but of the users 
 of paper. The increased importation of foreign 
 paper, by stimulating competition, has led to an 
 enormous increase in production and to a reduction 
 in the price. The prices to-day for nearly all sorts 
 of paper are, speaking broadly, less than half what 
 they were thirty-five years ago. As a consequence 
 there has been an enormous development in the 
 use of paper for all purposes. The growth in 
 the size of newspapers and the reduction in the 
 price of books have been rendered possible by 
 the cheapening of paper, which is the principal 
 raw material of the newspaper proprietor and 
 the book publisher. The cheapening of wall papers 
 has also been a great boon to the nation as a 
 whole, for though possibly some of the cheaper 
 wall papers now produced may not satisfy the 
 judgment of high-art critics, they give brightness 
 to thousands of modest homes whose owners a 
 generation ago would have had to be content with 
 bare walls. The cheapness of paper has also been 
 of solid advantage to every business house in the 
 kingdom, by diminishing the cost of account books 
 and other stationery. It has equally benefited
 
 THE PAPER TRADE 203 
 
 every wholesale or retail firm that uses paper for 
 packing. In addition, the increase in the production 
 here, together with the importation from abroad, 
 have been of distinct benefit for all labour. Paper, 
 though a manufactured article, is a raw material 
 for an innumerable number of articles, all of which 
 call for labour in their production. Cheap paper 
 is one of the factors in the printing trade. When 
 the duty was taken off paper in 1861, the total 
 number of persons employed in the printing and 
 book-binding trade in England and Wales was 
 46,576. In 1901 the number was 149,793. 
 
 The first effect of higher-priced papers would 
 be a reduction in the amount of printing, and conse- 
 quently a reduced demand for labour. When these 
 considerations are taken into account we begin to 
 realise that even were it true that our paper-makers 
 had been injured by Free Trade, yet a balance of 
 advantage has been reaped by the nation. 
 
 Paper-Makers not Injured. 
 
 Fortunately, however, we have ample evidence 
 that British paper-makers have not been injured by 
 Free Trade, but have profited by it. This evidence 
 is furnished by the figures showing the quantity of 
 raw materials imported for making paper. In 1892 
 we imported paper-making materials — namely, rags, 
 esparto, and wood pulp — to the amount of 453,000 
 tons. In 1902 this amount had risen to 743,000 tons. 
 As very little paper-making material is produced at
 
 204 BRITISH INDUSTRIES 
 
 home, and that little is used in conjunction with 
 imported material, these figures give a very accurate 
 indication of the expansion of the British paper- 
 making industry. They show that in spite of the 
 large increase in the importations of foreign paper, 
 and in spite of the decrease in the exportation 
 of British paper, the material worked up in British 
 mills increased in ten years by 64 per cent. In 
 face of this record there does not seem much reason 
 for complaint on the score of foreign competition. 
 
 It may be said that the number of paper-mills 
 in the country has decreased. This is true, but 
 it is only because small mills have been replaced 
 by large ones. The paper-mills of the past, prettily 
 situated on the banks of a small stream, and each 
 employing only one machine, have for the most 
 part disappeared. In their place has come the 
 large paper-mill containing several machines, and 
 so situated as to command good water, cheap 
 coal, and good railway communication. One of 
 these modern mills will turn out as much work as 
 half a dozen of the old mills. The disappearance 
 of the latter may be a matter of regret from an 
 aesthetic and romantic point of view, but industrially 
 their replacement by larger mills is a distinct gain. 
 Undoubtedly the change from the old type to the 
 new has been accompanied with hardship to in- 
 dividuals, but such individual hardships are an 
 inevitable consequence of all social or industrial 
 developments.
 
 THE PAPER TRADE 205 
 
 It may be argued, however, that British paper- 
 makers, although they are doing a larger business 
 than ever before, may yet be doing it at too low a 
 range of profit, or may perhaps even be losing 
 money. There may be cases where this is the 
 result, but on the other hand there are many 
 proofs that paper-makers are doing fairly well. 
 The wills of private paper-makers, the dividends 
 of paper-making companies, and the solid financial 
 reputation of private concerns and limited com- 
 panies engaged in paper-making, all offer abundant 
 evidence that in spite of foreign competition the 
 British paper trade, looked at from the manu- 
 facturer's standpoint, has not been altogether 
 unremunerative. 
 
 Untaxed Raw Materials. 
 
 What, then, is the reason of this position ? 
 How does it happen that the British paper-maker's 
 business increases and is profitable although he 
 is shut out of foreign markets and simultaneously 
 attacked in his own market by foreign rivals ? 
 What is the secret talisman which enables him to 
 defy this unfair competition ? Not only is the 
 foreign maker protected by a heavy tariff in his 
 favour, but his mill is often erected at or near the 
 very spots from which we draw our raw material. 
 He has an ample supply of cheap water pov/er, and 
 he is often favoured by artificially low freights. 
 And yet the British paper-makers still hold their
 
 2o6 BRITISH INDUSTRIES 
 
 own and expand their business. The sole reason is 
 that our Free Import system provides the British 
 manufacturer with all the materials and all the 
 machinery he requires at rock bottom cost. 
 
 On the other hand, the foreign manufacturer has 
 to buy a large number of the articles essential to 
 his business at prices enhanced by the protective 
 system which his paternal Government maintains, 
 in order to keep out the merchants and manu- 
 facturers of other countries. 
 
 An examination of the advertisements in the 
 trade journals that circulate among paper manu- 
 facturers, gives some insight into the enormous 
 value of our policy of free imports to British paper- 
 makers. The primary material of the paper-maker 
 is wood pulp. The advertisements show that the 
 producers of wood pulp in Scandinavia and the 
 United States are keenly competing with those of 
 Canada for the privilege of supplying British paper- 
 makers with raw material. To shut out the com- 
 petition of any of these enterprising producers of 
 pulp would certainly result in raising the price 
 of pulp, and so injure the British paper- maker in 
 his competition with foreign makers. 
 
 Another important material is esparto grass. The 
 best comes from Spain, lower grades come from 
 Algeria and Tripoli. Rags come from almost every 
 country in Europe, and the prices vary slightly 
 according to the place of origin, in consequence of 
 differences in quality.
 
 THE PAPER TRADE 207 
 
 Rosin, too, is a material largely used by paper- 
 makers ; and here also different qualities are 
 obtained from different countries. It is the system 
 of free imports that enables our manufacturers to 
 select exactly the quality they require for their 
 work. Paper-makers are, further, large users of soap, 
 so that if a duty were imposed upon soap in order 
 to benefit the soap-maker, the paper-maker would 
 suffer. Starch is another material largely used by 
 paper-makers, but a duty on corn involves a duty 
 on starch, so that it is absolutely impossible to 
 establish a system of preferential tariffs for the 
 benefit of colonial corn-growers without injuring 
 British paper-makers. Next we have glues and 
 gelatines. These are made out of hides and hoofs 
 and other animal products, but if a duty be imposed 
 on meat in order to benefit the colonial meat 
 producer, it must also be imposed on live cattle, 
 and if so there will be no possibility of preventing 
 part of the duty falling upon the hides and the 
 hoofs, and so injuring, first the British makers of 
 glue and gelatine, and secondly the paper-makers 
 who use these products as raw materials. Colours 
 of all kinds are also largely used in the paper 
 trade. Many of them are produced in England, 
 but others have to be obtained from abroad, 
 either because the quality is better or the price 
 lower. 
 
 It would be a grave injury to the British paper- 
 maker to be deprived of the liberty he now
 
 5o8 BRITISH INDUSTRIES 
 
 possesses of baying his colours where he can best 
 obtain just what he wants. Finally, we come to 
 the long list of chemicals and minerals used in the 
 paper trade, where, in many cases, foreign com- 
 petition enables the British paper-maker to buy at 
 very much lower prices than would be the result 
 if that market was closed, or reduced in value by 
 import duties. 
 
 Some of these materials are only produced 
 abroad, others are produced abroad as well as in 
 England ; and foreign producers show by their 
 willingness to pay for advertisements in British 
 trade papers how keen they are to supply our 
 wants. They would be less keen if a tax were laid 
 on the imports of foreign chemicals. Protectionists 
 may argue that as the foreign producer is so keen 
 for our market he would pay the tax himself. If 
 so, his costs would be increased, with the result 
 that some of the weaker foreign firms would be 
 driven out of the trade, and the stronger firms 
 would then be in a position to put up prices. The 
 evil day would only be postponed. Doubtless the 
 British alkali and bleach producer would be bene- 
 fited by a duty on alkali and bleaching powder ; but 
 what right has he to ask favours from the State at 
 the expense of the British paper-maker ? 
 
 Untaxed Machinery. 
 
 In addition to these various materials which 
 are essential to the maintenance of the industry
 
 THE PAPER TRADE 209 
 
 there is the not less important question of 
 machinery. As the advertisements already re- 
 ferred to clearly show, some of the machinery 
 used by British paper-makers is made abroad. It 
 may be that British machine-makers can produce 
 machinery as good or better than the foreign 
 machines. If so, there is nothing to prevent 
 them doing it. The British paper-maker only 
 wants the best he can get at a satisfactory price. 
 He has no special desire to deal with a German 
 rather than with a British maker. All he asks is 
 that he shall be free to go where he can get the 
 machine that will suit him best, either in the 
 matter of design or of quality or of price. But 
 if British paper-makers once assented to a policy 
 of Protection they would quickly lose this liberty. 
 Suppose a duty were imposed on foreign paper in 
 order to benefit British paper-makers, the engineer- 
 ing trade would at once demand that a correspond- 
 ing duty should be imposed on foreign machinery 
 in order to benefit British machine-makers. The 
 advantage of the paper-maker would then entirely 
 turn on the balance between these two duties, and 
 it is by no means certain that the paper duty 
 would be relatively the larger. Indeed, the con- 
 trary is the more probable. Any attempt to put 
 a duty on foreign paper would be resisted by 
 every newspaper in the kingdom and would be 
 resented by every large consumer of paper. The 
 Australian Commonwealth has been compelled by 
 
 15
 
 2IO BRITISH INDUSTRIES 
 
 popular opinion to leave paper, imported for news- 
 paper and many other purposes, on the free list. 
 Comparatively few people buy foreign machinery, 
 and there would be much less popular resistance 
 to a proposal to tax machinery than to a proposal to 
 tax paper. If, then, British paper-makers were to 
 advocate the principle of Protection in the hope 
 of securing some advantage for themselves, it is 
 more than probable that they would find that 
 they were left out in the cold while other more 
 powerful interests benefited at their expense. It 
 may indeed safely be said that there are few 
 industries in the country to whom the policy of 
 free imports is so essential as the paper-making 
 industry. 
 
 Increased Home Demand. 
 
 A point that still remains to be dealt with is the 
 question of the decline in our exports of paper. 
 Protectionists may ask how it happens that our 
 exports have declined if our paper-making industry 
 has otherwise flourished. The answer is twofold. 
 First, American and Canadian paper-makers did hit 
 our British paper-makers very hard in Australia a 
 few years ago in the papers used for newspapers. 
 America and Canada had advantages in raw material 
 and machinery, and were not slow to utilize 
 them. Secondly, British paper-makers, like other 
 British manufacturers, do not sell abroad at lower 
 prices than they can secure at home, and apart from
 
 THE PAPER TRADE 211 
 
 newspaper, during the last few years, paper-makers 
 from America and other countries have secured a 
 share of the paper trade in Australia which might 
 have come here had not makers in this country been 
 employed at better prices. 
 
 It should also be mentioned that the figures in 
 the Blue Books for paper do not tell the whole 
 story. Many articles largely composed of paper, 
 such as books, magazines, illustrated papers, &c., 
 are entered under other headings. 
 
 These facts furnish a very useful illustration of 
 the futility of Mr. Chamberlain's preferential scheme 
 so far as the paper trade is concerned. South 
 Africa and Australia are the only self-governing 
 Colonies that buy paper largely ; Canada produces 
 most of her own, is constantly increasing her out- 
 turn, and is competing successfully for Australian 
 and South African trade. It is extremely un- 
 likely that the newspaper proprietors in South 
 Africa and Australia would welcome a duty 
 on the raw material of their industry in order 
 to add to the profits of British makers. The 
 question, moreover, would at once arise whether 
 the Canadian paper-makers were to share in the 
 same preference. If not, the scheme could hardly 
 be called inter-imperial. But if the Canadians did 
 share, a very gross injustice would be done to the 
 British industry. At present that industry has one 
 solitary advantage — the advantage of being able to 
 buy all the materials it wants, including the food
 
 212 BRITISH INDUSTRIES 
 
 of its workpeople, in the cheapest market. The 
 essence of Mr. Chamberlain's scheme is a tax 
 on the food of British workpeople. That is the 
 price that the British paper manufacturer, or his 
 employees, would be asked to pay for such prefer- 
 ence in South Africa and Australia as the people of 
 those Colonies might be willing to give. But the 
 Canadian paper manufacturer will be asked to pay 
 no price at all. On the contrary, he may possibly 
 under a preferential scheme be able to buy some of 
 the materials and some of the machinery he uses a 
 trifle cheaper than he can buy them now. His 
 power of competing with the British manufacturer 
 will thus be distinctly increased, and yet he is to 
 get an imperial preference in Australian and South 
 African markets for which British paper-makers 
 alone would be asked to pay. To sum up, Canada 
 alone of all our Colonies possesses immense paper- 
 making potentialities, owing to her huge forests 
 and water-power. South Africa and Australia are 
 not likely ever to become great paper-making 
 countries. Their object is to buy their paper at as 
 low a price as possible, and they are as willing to 
 buy from America and Canada as from the Mother 
 Country. 
 
 Nor would the British paper industry in the long 
 run benefit by a duty on foreign paper, even if the 
 other trades in the country were willing for a 
 moment to submit to such a tax upon their 
 industries. The only way in which a duty on
 
 THE PAPER TRADE 213 
 
 foreign paper could benefit British paper-makers 
 would be by enabling them to charge higher prices 
 to the home consumer. 
 
 During a business experience of thirty-eight years, 
 a rise in price on only two occasions has revealed 
 the fact that the least rise in price tends inevitably 
 to lessen consumption ; so that higher prices would 
 suit the mannfacttirer at first, but not for any length 
 of time if a lessened consumption were the result. 
 To the consumer higher prices would be a distinct 
 loss from the beginning. The hardest blow, how- 
 ever, would be to the worker, as if the reduction in 
 quantity represented only the same percentage as 
 the import duty imposed, the loss of employment 
 brought about by the lessened quantity to be handled 
 in all the processes connected with paper from its 
 raw state to the finished article in the innumerable 
 shapes of which paper is the chief factor, would be 
 very severe. 
 
 Therefore, looking at the above facts, I believe it 
 will be found that any alteration in the Fiscal Policy 
 of this country, so far as relates to Free Imports of 
 raw Material of paper, and of Paper itself, will be a 
 disadvantage to every branch of the paper trade, as 
 well as to all users of paper.
 
 THE ALKALI INDUSTRY 
 By Alfred Mond 
 
 (0/ Messrs. Brunner, Mond & Co.) 
 
 THE manufacture of alkalies and bleaching 
 powder, the former of which includes the pro- 
 duction of soda ash, soda crystals, caustic soda, and 
 bicarbonate of soda, has long been one of the staple 
 industries of England ; in fact, although the first 
 manufacturing process on a large scale was invented 
 by the Frenchman Le Blanc, the industry was taken 
 up and developed in England in advance of all other 
 European countries. In this industry, as in the case 
 of many others, England had an early predominance 
 of manufacture, which was largely due to the 
 favourable conditions obtaining as regards raw 
 materials (which conditions still prevail, although not 
 to the same extent as formerly), also to her greater 
 freedom from disturbance due to war or political 
 upheavals, and to the fact that she possessed larger 
 
 resources both in the way of capital, skilled work- 
 
 214
 
 THE ALKALI INDUSTRY 215 
 
 men and energetic manufacturers than those of any 
 other European country. 
 
 It is as well to emphasise this point, as it is one 
 that must be taken very fully into consideration by 
 any one who wishes to learn why it is that English 
 industries were developed on so large a scale whilst 
 those on the Continent were still in their infancy. 
 These advantages have given England for a long 
 period a supremacy in manufacture which still exists, 
 though the improving conditions, educational, finan- 
 cial, and political, on the Continent of Europe, are 
 bound in time to considerably affect it. In com- 
 paring the development of any of our industries 
 under Free Trade with others under the regime of 
 Protection, the factors in industrial progress, which 
 are entirely independent of the fiscal policy of the 
 different countries, have to be taken into account 
 if we are to avoid arriving at fallacious conclusions. 
 The rise or decline of industries in any particular 
 country is not due purely to the fiscal policy of the 
 country in question. We have also to take into 
 consideration such important factors as the accu- 
 mulation of capital, the existence of skilled technical 
 managers, and of an industrial population, for these 
 are fundamental questions in the competition be- 
 tween manufacturers. 
 
 It is not altogether an easy matter to collect any 
 statistics on the development of the English alkali 
 trade of an absolutely reliable nature, and although 
 the few figures in this article have been compiled
 
 2i6 BRITISH INDUSTRIES 
 
 with as much accuracy as possible, they must, par- 
 ticularly as regards the earlier and historic portion, 
 be considered to some extent as estimates only. 
 
 In taking the production of alkalies in England, 
 commencing with the year 1850, the following table 
 gives the percentage increase or decrease of pro- 
 duction up to the year 1902 : — 
 
 
 
 Percenlag 
 
 e 
 
 
 Increase or Decrease. 
 
 1850 to 1863 ... 
 
 ... Increase 90*5 per cent 
 
 1864101868 ... 
 
 ,, 
 
 I0"0 
 
 It 
 
 1869 to 1873 ... 
 
 ... fj 
 
 13-6 
 
 )) 
 
 1874101878 ... 
 
 ... jf 
 
 20"0 
 
 }) 
 
 1879101883 ... 
 
 !> 
 
 43*3 
 
 ji 
 
 1884 to 1888 ... 
 
 ... „ 
 
 4-6 
 
 )> 
 
 1889101893 ... 
 
 ,, 
 
 IO-3 
 
 >> 
 
 1894 lo 1898 ... 
 
 . . . Decr( 
 
 2ase 6" I 
 
 )> 
 
 1902 
 
 ... ff 
 
 7-6 
 
 >' 
 
 These figures show a very large increase indeed 
 in the period 1850 to 1863, the kind of increase 
 which one would naturally expect in the earlier 
 stages of an industry, but which from the very nature 
 of things could not be expected to continue on the 
 same scale as the consumption became more normal. 
 Still, there is a steady increase up to the period 1894 
 to 1898, and the period of 1898 to 1902 shows a 
 slight decrease in production, though not to any 
 alarming extent ; in fact, on comparing the figures 
 of 1850 with the figures of 1902, one finds that the 
 total production has quadrupled during that period. 
 
 The American Trade. 
 The explanation of the decrease before mentioned
 
 THE ALKALI INDUSTRY 217 
 
 is recognised by any one connected with the trade 
 as due to the very large diminution of exports of 
 EngHsh alkalies to America. This result, due partly 
 to the increased duties on alkalies imposed in 1897, 
 but mainly to the rapid development of the manu- 
 facture of alkalies in America, was undoubtedly 
 one of the severest blows the English alkali trade 
 received during the many years of its existence. 
 There can be no doubt that the increase of the 
 then existing duty of 1894 to a higher figure in 
 1897 had an undoubted effect in diminishing the 
 exportation of English alkalies to the United 
 States, but long before that period alkalies were 
 being manufactured in America by the ammonia- 
 soda process in increasing quantity, and the de- 
 velopment of this industry, in a country which is 
 in every respect favourably situated for the produc- 
 tion of alkalies, was bound in time to largely affect 
 the demand for alkali from this country. The same 
 result to some extent has been brought about in 
 European countries such as France, Belgium, Ger- 
 many, Austria, and Russia, which is an illustration 
 of the fact that, given suitable conditions, industrial 
 countries of modern times naturally develop their 
 own resources, and supply themselves with products 
 which they had before almost exclusively imported 
 from this country. 
 
 To any one who gave consideration to the matter 
 it must have been obvious that this development 
 would take place. In fact, it would have been im-
 
 2i8 BRITISH INDUSTRIES 
 
 possible for a small country with a small population 
 like England to supply the industrial demands of the 
 modern civilised world entirely by itself. Yet many 
 people seem to look upon the development of indus- 
 tries in other countries as all loss to England, appa- 
 rently on the hypothesis that England could have 
 gone on supplying the whole of the manufactured 
 goods required by the world if other countries had 
 not taken to manufacturing themselves. This too 
 common hypothesis, that every other country's 
 industrial gain is necessarily our loss, is disproved 
 by the fact that in spite of the very large de- 
 velopment of the alkali industry on the Continent, 
 particularly in Germany, and in spite of the 
 enormous dimensions to which the industry has 
 attained in the United States of America, the 
 English production of alkali shows, if taken over 
 a considerable period, not a diminution, but an 
 increase. 
 
 It has become too common a habit when exam- 
 ining the history of our industries to gauge them 
 exclusively by the standard of the gross returns of 
 our exports to foreign markets ; indeed, most of 
 the figures which are being hurled about by the 
 controversialists on the fiscal question turn on the 
 export and import statistics of this country, as pub- 
 lished in the Board of Trade returns. These are 
 naturally easier to deal with than the statistics of the 
 home consumption which are more difficult to 
 ascertain, but in most industries are of much greater
 
 THE ALKALI INDUSTRY 219 
 
 importance. It is therefore of interest to show the 
 percentage increase of the consumption of alkalies 
 in the United Kingdom, and for this purpose the 
 average figures in consecutive periods of five years, 
 beginning with the year 1881, which is the earliest 
 date for which any reliable figures could be obtained 
 are inserted : — 
 
 
 Percentage increase. 
 
 1881 to 1885 .. 
 
 . ... 24-2 per cent. 
 
 1886 to 1890 .. 
 
 . ... 31"^ >, 
 
 1891 to 1895 .. 
 
 . ... 47 
 
 1895 to 1900 .. 
 
 . ... 19-8 „ 
 
 These figures, showing an increase of practically 
 100 per cent, in the consumption of alkalies in 
 our home markets, are an eloquent proof of the 
 increased capacity of the United Kingdom to 
 consume products which are almost of primary 
 importance. 
 
 The Bleaching Industry. 
 
 With regard to the production of bleaching 
 powder, this product, which is always classed 
 with alkalies, and is manufactured in conjunction 
 with them as far as the Leblanc process and 
 electrolysis is concerned, is of relatively much 
 smaller importance, as the total tonnage produced 
 is much less than that of the alkalies we have 
 already dealt with. The bleaching industry has 
 been very seriously affected by the revolution 
 caused in the paper trade by the introduction of 
 wood pulp, and more especially wood pulp bleached
 
 220 BRITISH INDUSTRIES 
 
 with sulphurous acid, which has very largely dimin- 
 ished the consumption of bleaching powder in 
 its most important outlet, viz., paper-making. As 
 a consequence of this change in the requirements 
 of the paper industry, the consumption of bleaching 
 powder has remained practically constant since 1881. 
 The following figures show the ups and downs 
 which have taken place in the United Kingdom's 
 consumption since 1881 : — 
 
 Percentage Increase 
 or Decrease. 
 
 1881 to 1885 Decrease 2*3 per cent. 
 
 1886101890 Increase I9"3 „ 
 
 1891 to 1895 Decrease 29*2 „ 
 
 1896101900 Increase 32-8 „ 
 
 The manufacture of bleaching powder by the old 
 Leblanc process has also been very seriously affected 
 by the newer methods of decomposition of alkaline 
 chlorides by electrolysis. This process found its 
 largest development in Germany, and English manu- 
 facturers were somewhat slow to avail themselves 
 of its benefits. As a natural consequence an appre- 
 ciable quantity of German bleaching powder was 
 imported even into the English home market. This 
 is practically the only case, under this head, 
 in which the English home market is suffering to 
 any extent from foreign competition. England 
 possesses great natural facilities in the supply of 
 cheap salt and fuel ; she possesses efficient labour, and 
 the development of gas producers and gas engines
 
 THE ALKALI INDUSTRY 221 
 
 is yielding still cheaper power. There appears no 
 reason why the British manufacturer, employing 
 the most modern methods, should not be able 
 perfectly well to hold his own against German 
 or other manufacturers of electrolytic bleaching 
 powder, not only in the home market, but even in 
 neutral markets. 
 
 Consumed by the Million. 
 
 The chief consumption of soda ash and caustic 
 soda is in the manufacture of such articles of 
 domestic consumption as soap, paper, and glass, 
 and in washing processes in the textile industries. 
 Bicarbonate of soda finds an outlet in the manufac- 
 ture of aerated waters, drugs, and many other 
 domestic purposes, such as for baking powder, &c. 
 Soda crystals find their general use for washing 
 purposes in the household and in laundries. From 
 this it will be seen that the alkalies form the basis 
 of commodities that are consumed by the million. 
 Consequently the increase of the consumption of 
 alkalies per head of the population is no bad index 
 of the nation's general prosperity. Judged by this 
 standard, England is still ahead of any other 
 country, our cousins in the United States not 
 excepted. 
 
 If it, therefore, be asked in what way our Free 
 Trade policy beneficially affects the English alkali 
 trade, the reply can be readily given that so far as 
 Free Trade has enhanced the general prosperity of
 
 222 BRITISH INDUSTRIES 
 
 the country and raised the purchasing power of the 
 mass of the population it has benefited the alkah 
 trade in the same way as every manufacture is 
 benefited by the prosperity of its customers. Any 
 alteration in our fiscal system which would restrict 
 the available balance of purchasing power now 
 devoted to the consumption of alkalies, or of 
 articles manufactured therefrom for domestic use, 
 would react on the volume of consumption, and 
 therefore diminish the most important market of all, 
 viz., the home market. 
 
 If it be asked in what way the British consumer, 
 who is after all the most important person, has 
 benefited as regards the alkali trade by our policy 
 of free imports, the reply would be that he has been 
 able to purchase, whether as a manufacturer of pro- 
 ducts in which alkalies are necessary and important 
 ingredients, or as domestic consumer, alkalies at 
 natural prices, and at prices taken on the whole 
 considerably below those at which consumers in 
 protected countries have been able to obtain them. 
 
 British f. Foreign Wages. 
 
 If it be asked what is the position of the British 
 workman in the alkali trade conducted under a Free 
 Trade policy instead of a protected one, the figures 
 published by Sir John Brunner in his letter to the 
 Times of July 14, 1903, based on actual comparative 
 data, show that —
 
 THE ALKALI INDUSTRY 223 
 
 " The average daily wage paid to the workmen 
 employed in the alkali trade is — 
 
 In Germany 78 per cent, of the English rate. 
 In France 77 „ „ „ 
 
 In Austria 56 ,, „ „ 
 
 In Hungary 43 „ „ „ 
 
 Sir John Brunner adds — 
 
 " To earn these wages in Germany, in France, in 
 Austria, and in Hungary, the men have to work 
 twelve hours a day, whilst in England the men 
 work only eight hours a day. We give our men a 
 week's holiday annually without stoppage of pay. 
 The German, therefore, has to work fifty-two weeks 
 twelve hours a day to get 78 per cent, of the wage 
 of the Englishman, working fifty-one weeks eight 
 hours a day ; and the others get less in the proportion 
 shown." 
 
 These figures prove conclusively that the British 
 workman does not receive any less wages than his 
 fellow-workman in protected countries on the 
 Continent, but actually works shorter hours with 
 better wages, and, thanks to the greater purchasing 
 power of the money, enjoys a larger measure of 
 comfort in his daily existence than his less favoured 
 though protected continental colleague. 
 
 It is impossible in the space allotted to enter into 
 as exhaustive a treatment of the subject in its relation 
 to the fiscal policy as might be thought desirable, 
 but the broad facts above outlined show with suffi- 
 cient clearness that neither the manufacturer nor
 
 224 BRITISH INDUSTRIES 
 
 the workman, nor the consumer in the alkali trade 
 has any reason to look forward to any improvement 
 in his position by a return to a protective system. 
 The imposition of taxes on food would certainly 
 not improve the position of any one of the three 
 classes. Such taxes would compel the working 
 population to divert more of their wages to the 
 purchase of food, and thus would lead to a reduc- 
 tion in the consumption of alkalies, to the injury of 
 manufacturer and workman as well as consumer. 
 
 The imposition of protective duties on so-called 
 manufactured articles, although it might not seriously 
 affect the alkali manufacturer directly, as he is not a 
 considerable purchaser of machinery manufactured 
 outside the country, might still handicap him in 
 those specialities which he obtains most advan- 
 tageously from abroad. A protective tariff would 
 also, by causing a general rise in price of com- 
 modities, make it more difficult for the alkali manu- 
 facturer to fight against foreign competition in 
 neutral markets, and even in the home trade. 
 
 Nothing to Galn by Protection. 
 
 Nor has preferential treatment any charm for the 
 alkali manufacturer, who is already in possession of 
 the colonial markets of our self-governing Colonies 
 to an almost exclusive extent, and although he, like 
 others, is naturally not unwilling to obtain pre- 
 ferential terms over his competitors in such markets, 
 and consequently better prices, he would certainly
 
 THE ALKALI INDUSTRY 225 
 
 not benefit if such preferential treatment meant the 
 imposition in his own country either of taxes on 
 food or on materials of such importance as timber 
 and similar products, of which he is a large 
 consumer. 
 
 The reduction of the heavy tariffs existing against 
 him in foreign countries would probably be of some 
 benefit to the English manufacturer in enabling him 
 to compete again in markets which he now finds 
 unremunerative and difficult of entry. It must, 
 however, be remembered that the home manufacture 
 of these products in these countries would, where 
 the cost of production is fairly equal to his own, 
 clearly not allow the English manufacturer to obtain 
 an advantage equal to that which is commonly 
 expected from the lowering of tariffs which now 
 exist against the English products. The protected 
 manufacturer, in so far as he is not prevented by 
 internal competition, certainly gets the larger part 
 of his tariff duty out of his customer, and thus 
 makes an additional profit beyond his legitimate 
 commercial profit. If the tariff were abolished, the 
 protected manufacturer would be bound to largely 
 reduce his prices, but he might still be able to 
 produce at a price which would enable him to 
 retain his home market against the competition of 
 the British manufacturer. 
 
 In conclusion, it would appear that the English 
 manufacturer of alkalies has little to gain and a 
 considerable amount to lose from experiments on 
 
 16
 
 226 BRITISH INDUSTRIES 
 
 our fiscal system. Under the existing system his 
 trade has certainly developed to a larger extent than 
 the founders of the industry would ever have 
 anticipated, and this extension has been coupled 
 with a large reduction in prices to the consumer 
 from the earlier days of the industry to the present 
 time, combined with higher wages and better con- 
 ditions both as regards the standard of comfort and 
 hours of labour of the workmen employed in the 
 industry. There is a very well-known proverb that 
 " it is a good thing to leave well alone," and the 
 alkali manufacturers will not be the only ones among 
 English industrials who will do wisely to accept 
 the wisdom of generations gone before.
 
 THE SOAP INDUSTRY 
 
 By Councillor A. H. Scott 
 
 THE soap manufacturing industry of the United 
 Kingdom has nothing to hope for, but much 
 to fear from, any system of preferential tariffs. 
 Countries which already possess the so-called 
 advantages of Protection, although favoured by 
 having the raw materials near to hand, have so far 
 failed to successfully compete in the markets of the 
 world with the British manufacturer. 
 
 There is no doubt that the American soap manu- 
 facturers are as well equipped and have men quite 
 as capable as our own at the head of their trade. 
 And besides this they produce in their own country 
 many raw materials required for the manufacture of 
 modern soaps which British makers have to pur- 
 chase from them. But although they have tried 
 for years to capture the world's trade in soap, 
 they have, with the exception of a few isolated 
 instances, where heavy advertising has secured them 
 
 problematical successes in Europe, so far only 
 
 227
 
 228 BRITISH INDUSTRIES 
 
 established a small regular export trade in ordinary 
 soaps in the West Indies, whilst all other markets 
 are practically supplied with soap made in Free 
 Trade England. 
 
 Why should this be the case if the American 
 soap trade were not " shackled in competition " with 
 England by the tariff ? 
 
 The British soap trade was not always what it 
 has become to-day under Free Trade. Formerly 
 an excise duty was levied on soap manufactured in 
 the United Kingdom (with the exception of Ireland) 
 of i^d. per lb. on hard soaps and id. per lb. on 
 soft soaps, with 5 per cent, additional in each case, 
 but this was abolished by Act 16 and 17 Vict., cap. 
 39, as from July 5, 1853. 
 
 The quantities of soap manufactured and the 
 amounts collected during the three years preceding 
 the abolition of the duty were as follows : — 
 
 Soap Charged with Excise Duty, 1850-52. 
 
 Hard Soap. 
 
 Cwt. Duty collected. 
 
 1850 1,652,796 ;^I,2 14,805 
 
 1851 1,662,255 1,221,757 
 
 1852 1,814,284 1,333498 
 
 Soft Soap. 
 
 Cwt. Duty Collected. 
 
 1850 172,300 £84,427 
 
 1851 169,882 83,242 
 
 1852 186,248 91,261 
 
 The Board of Trade returns during the same 
 period do not show the export of soap separately,
 
 THE SOAP INDUSTRY 229 
 
 but include candles as well. It is safe to assume 
 that at least two-fifths of the quantities exported 
 consisted of candles at that time. From the 
 date of the abolition of the excise duty the returns 
 are given for soap only, whilst up to the end of 
 1852 soap and candles are recorded together. The 
 following set of figures represent the Board of 
 Trade returns compiled in periods of ten years each, 
 and show quantities and values exported from 1833 
 to 1902 inclusive, the figures up to 1852 being for 
 soap and candles combined : — 
 
 Exports of Soap axd Caxdles, 1833-1852. 
 
 
 Cwt. 
 
 Value. 
 
 1833-42 
 
 i/)72,ii7 
 
 ;^3,377,i68 
 
 1843-52 
 
 1,448,434 
 
 2,710,042 
 
 Exports of Soap 
 
 OXLY, 1853- 
 
 -1902. 
 
 
 Cwt. 
 
 £ 
 
 1853-62 
 
 1,874,467 
 
 2,482,349 
 
 1863-72 
 
 1,831,157 
 
 2,435>77o 
 
 1873-82 
 
 3,082,265 
 
 3.644.367 
 
 1883-92 
 
 4»704o54 
 
 5,046,486 
 
 1893-1902 
 
 7,9776% 
 
 8,366,259 
 
 On the face of them these figures appear as if the 
 weights and the cash values were disproportionate. 
 But it must be remembered that in 1853 tallow 
 averaged from £^2 to £^'j per ton, whilst in recent 
 years the value came down to average from ;^2o to 
 ;^3o per ton, and in 1897 touched the lowest price, 
 viz., below ^^20 per ton. Other raw materials used 
 in the manufacture of soap also became cheaper
 
 230 BRITISH INDUSTRIES 
 
 in proportion, and as a consequence the sale price 
 of soap fell. 
 
 Taking the Board of Trade returns for the year 
 1852, we find that 1,814,284 cwt. of hard soap was 
 manufactured in the United Kingdom, out of which 
 65,000 cwt. was exported, leaving for home consump- 
 tion 1,750,284 cwt. which was consumed by an 
 aggregate population of, roughly speaking, 28,000,000 
 people. 
 
 Assuming for the sake of comparison that no 
 greater consumption per capita has since taken 
 place, the manufacture of soap for home con- 
 sumption for the last three census years should 
 stand as follows : — 
 
 Population. Quantity. 
 
 1883 36,cxx),cx)o 2,257,560 'cwt. 
 
 1890 38,000,000 2,413,380 „ 
 
 1902 42,000,000 2,643,820 „ 
 
 Or taking the year 1902, the soap manufactured for 
 home consumption and export in this one year only 
 shows : — 
 
 Home consumption 2,643,820 cwt. 
 
 Export 1,048,778 „ 
 
 Total 3,692,598 „ 
 
 which is equal to the exports of soap from 1833 to 
 1855, including candles, namely, for a period of 
 twenty years. 
 
 Surely these figures speak for themselves ! 
 
 The amount of soap imported into the United
 
 THE SOAP INDUSTRY 231 
 
 Kingdom is only a small percentage of the total 
 amount consumed. During 1900, the last year for 
 which Board of Trade returns are completed for 
 soap and soap powders, the amount imported 
 was : — 
 
 From Holland ... 
 ,, Belgium... 
 „ France ... 
 „ Italy ... 
 „ U.S.A. ... 
 „ Other .., 
 
 Cwt. 
 
 £ 
 
 4.271 
 
 9,421 
 
 1,310 
 
 3.756 
 
 23-531 
 
 27,765 
 
 21,012 
 
 20,843 
 
 35,077 
 
 176,270 
 
 5,493 
 
 5,716 
 
 Total from Foreign Countries 190,694 243,771 
 
 Total from British Possessions 539 574 
 
 Total 191,233 £244,345 
 
 These figures do not include cheaply made trans- 
 parent toilet soaps in which cheap alcohol is one of 
 the main ingredients. But the value of this par- 
 ticular class of soap is too insignificant to materially 
 affect the above figures. 
 
 For the same year the soap manufactured in the 
 United Kingdom for home consumption can be 
 safely estimated at 2,600,000 cwt., and the Board of 
 Trade returns show exports of 874,214 cwt., making 
 a total of 3,474,214 cwt. 
 
 Hence the imports during 1900 of 191,233 cwt. 
 are only equal to 7^ per cent, of the soap manu- 
 factured in the United Kingdom, or to 22 per cent, 
 of the soap exported from the United Kingdom.
 
 232 BRITISH INDUSTRIES 
 
 ~j 
 
 Raw Materials of the Industry. 
 
 The sources from which the materials for soap- 
 making in the United Kingdom are drawn are the 
 countries which produce and export either one or 
 more of the following materials : — 
 
 1. Tallow. 
 
 2. Palm oil. 
 
 3. Cotton seed or cotton seed oil. 
 
 4. Cocoanut oil or palm kernels or kernel oil. 
 
 5. Resin. 
 
 There are numbers of other fats and oils (not 
 hydro-carbons) which are now used for soap- 
 making, but the above range of materials still 
 remains the main supply for soap-making. 
 
 1. Tallow is supplied to this country by the 
 United States, the Argentine, Australia, and New 
 Zealand. Roughly, half the supply is from foreign 
 countries and half from British possessions. 
 
 2. Palm oil, the product from the fruit of Avoira 
 elceis and Elceis guianensis, is exclusively an export 
 from the West Coast and so-called South Coast of 
 Africa, and as such is outside any fiscal considera- 
 tion. 
 
 3. Cotton seed, as well as some of the cotton 
 seed oil, is a product of the United States of 
 America. The larger quantity of cotton seed 
 crushed in the United Kingdom at the present time, 
 however, comes from Egypt, and some small 
 quantity also comes from India
 
 THE SOAP INDUSTRY 233 
 
 4. Cocoanut oil is used, roughly speaking, in 
 three qualities, namely. Cochin oil, Ceylon oil 
 and copra oil. The first two speak for themselves 
 as regards their origin. Copra oil is manufactured 
 in the United Kingdom, but quantities are imported 
 from France (Marseilles), and Germany (Hamburg). 
 The same may be stated with regard to palm kernel 
 oil. Although this oil is produced from the im- 
 ported kernels to a certain extent in the United 
 Kingdom, a large quantity is imported from the 
 two ports mentioned above. 
 
 5. Resin, a product from the natural or induced 
 exudation of plants of the pine family, is not pro- 
 duced or manufactured in England, but is imported 
 from the United States or France into the United 
 Kingdom. There are smaller supplies from other 
 European countries, but they can scarcely be taken 
 into account. 
 
 The materials for soap-making so far dealt with 
 have not, as shown, affected our trade with British 
 Colonies. 
 
 The annexed returns show that — no matter through 
 what cause — the supply of Australian tallow has 
 been decreasing of recent years, while the supply of 
 South American, of equally suitable quality, is an 
 increasing one. The price is from £^ to ;^3 less 
 per ton. Argentina is willing to supply us at a 
 lower price and our Australian Colonies are not 
 satisfied with £^ to ;^3 per ton more, because they 
 live in a country affected by droughts.
 
 234 
 
 BRITISH INDUSTRIES 
 
 Imports of Tallow a\d Stearixe into the United 
 
 Kingdom. 
 
 Year. 
 
 From U.S.A. 
 
 From Argentina. 
 
 From Australasia. 
 
 
 Cwt. 
 
 Cwt. 
 
 Cwt. 
 
 1893.. 
 
 
 312,000 
 
 52,000 
 
 1,049,000 
 
 1894.. 
 
 
 182,000 
 
 69,000 
 
 1,425,000 
 
 1895.. 
 
 
 104,000 
 
 103,000 
 
 1,804,000 
 
 1896.. 
 
 
 411,000 
 
 130,000 
 
 1,309,000 
 
 1897.. 
 
 
 272,000 
 
 108,000 
 
 1,394,000 
 
 1898.. 
 
 
 572,000 
 
 164,000 
 
 1,060,000 
 
 1899.. 
 
 
 i 557>ooo 
 
 127,000 
 
 1,164,000 
 
 1900.. 
 
 
 : 571,000 
 
 178,000 
 
 1,216,000 
 
 I901.. 
 
 
 ; 404,000 
 
 204,000 
 
 985,000 
 
 1902.. 
 
 
 182,000 
 
 437,000 
 
 862,000 
 
 The whole question of materials resolves itself 
 into the fact that Joy tallow we are better served 
 by outsiders than by our Colonies. For palm and 
 other oils and resin we can only be unfavourably 
 affected by any protective tariff. Any interference 
 with the free imports of raw materials would 
 seriously handicap the soap-manufacturing industry 
 of this country, and if the duty were high, would 
 probably destroy the export trade.
 
 THE BOOT AND SHOE TRADE 
 
 WITH A NOTE ON THE LEATHER TRADE 
 
 By John T. Day 
 
 {Editor of the " Shoe and Leather Record ") 
 
 IN reviewing the progress of the boot and shoe 
 industry under Free Trade it is only necessary to 
 sketch very briefly the history of the trade prior to 
 the complete introduction of the factory system. In 
 1846 the industry was in much the same position as 
 the better class tailoring trade is in to-day. People 
 were measured for their boots, which were made by 
 hand, by or under the direction of the bootmaker 
 who took the measure. There were a few so-called 
 factories in Stafford and Northampton, and a few 
 more scattered about the country. But these were 
 not factories in the modern sense of the term. 
 They were shops where leather was cut up by hand 
 and given out to bootmakers working in tlieir own 
 
 homes, to makeup by hand. The whole family was 
 
 235
 
 236 BRITISH INDUSTRIES 
 
 usually employed, the women and girls closing the 
 uppers, and the men performing the harder and 
 more skilful work of joining the uppers to the soles 
 and heels. 
 
 The introduction of the sewing-machine modified 
 this system. The manufacturers bought sewing- 
 machines, and the women were taken into the 
 factories to make the uppers, but the main work was 
 still a home industry so far as the men were con- 
 cerned. 
 
 In the early sixties riveted boots were introduced. 
 These were made on heavy cast-iron lasts, which 
 could not be conveniently carried to and from 
 the workmen's homes, so factory accommodation 
 was enlarged, and with some difficulty sufficient 
 men were induced to leave their home workshops 
 and enter the factories. Almost at the same time a 
 sewing-machine was invented which would sew on 
 the soles of boots, and this was the beginning of the 
 revolution of the industry. More men had to go 
 into the factories, but a great deal of the labour was 
 still performed at home. The work known as the 
 " finishing " of both machine-sewn and riveted work 
 remained a home industry, and the old hand-sewn 
 system of bootmaking was also continued — and is 
 also continued so far as it has survived — as a home 
 employment. 
 
 The Introduction of Machinery. 
 The introduction of the sole-sewing machine not
 
 THE BOOT AND SHOE TRADE 237 
 
 only helped largely to transform a home industry 
 into a subdivided factory industry, but it had other 
 important consequences. (It was an American 
 machine known in the United States as the McKay 
 Sole-Sewer, and in this country as the Blake.) 
 While the patents existed no machines were ever 
 sold, but thousands of them were leased on both 
 sides of the Atlantic under a system whereby the 
 boot manufacturers put down a premium of about 
 ;^"ioo (the machine cost not more than ^30 to 
 build) and agreed to pay in addition a royalty equal 
 to about a penny a pair for every pair of boots sewn 
 upon it. 
 
 The profits to those exploiting the patent were 
 enormous, amounting literally to many millions of 
 dollars, most of which went to America. The result 
 was that every Yankee inventor began to turn his 
 attention to shoe machinery as the easiest way to 
 fame and fortune. And to this day, in America 
 universally, and in the United Kingdom partially, 
 the royalty system has been maintained in connec- 
 tion with shoe machinery. 
 
 The supply of machinery is a practical monopoly 
 in America, where the United Shoe Machinery 
 Company of Boston levy royalties estimated to 
 average five cents a pair on every pair of boots and 
 shoes made in the United States, their royalty 
 income amounting, it is said, to a million dollars a 
 month. 
 
 Now this development of shoe machinery m
 
 238 BRITISH INDUSTRIES 
 
 America had nothing to do with either Protection 
 or Free Trade, but it has had a considerable 
 influence upon the industry in this country. The 
 McKay or Blake machine, which made the money 
 which has attracted so many inventors' brains to 
 the shoe trade, was an invention which sprang out 
 of the necessities of the American Civil War. As 
 the men of the North were drafted into the army 
 skilled labour became dear, and boots and shoes, 
 articles of prime necessity in war time, could not be 
 made in the old way in sufficient quantities. The 
 McKay machine solved the difficulty by making a 
 boot in an entirely new and very simple way, which 
 might never have been discovered but for the 
 pressure of the war, but which, once discovered, 
 became of enormous permanent value. The thou- 
 sands of inventions which have since been given to 
 the trade are the outcome of the inventive talent 
 kindled by the fire of the first great success, and fed 
 in large measure by the money which it brought in. 
 For the owners of the McKay patent were as active 
 as their imitators in casting about for new 
 machinery to replace the old as their patents 
 expired. And the American manufacturer never 
 seemed to object to the royalty demanded for the 
 use of a new machine so long as it saved enough 
 labour to pay the royalty and show him a profit. 
 
 High Wages and Low Cost. 
 But on the two sides of the Atlantic very different
 
 THE BOOT AND SHOE TRADE 239 
 
 conditions prevailed. In America weekly wages 
 were quite double those ruling in the English shoe 
 trade. Many machines which were profitable to 
 use when they displaced labour at a shilling an 
 hour were hardly worth investing in when hand 
 labour cost but sixpence. And this was about the 
 relative position in the two countries at the time the 
 revolution of manufacturing methods was in its 
 most active phase. 
 
 Further, the British boot manufacturer has a 
 rooted prejudice against paying royalties. He 
 prefers to buy his machinery outright. Sometimes 
 the American owners refused to sell. At other 
 times they asked so big a price that few could afford 
 to scrap their old plant and lay down new. In a 
 brief sketch it is impossible to enter very far into 
 detail, though much of it would be both interesting 
 and instructive. It is enough to say that the play of 
 circumstances brought it to pass that by 1890, or 
 perhaps a little earlier, the factories of the Eastern 
 States were so much better equipped than ours that 
 the American boot manufacturer had the British 
 market at his mercy. 
 
 But he did not know it. 
 
 Until about 1894 (so far as the shoe trade is 
 concerned) the American manufacturer held very 
 strongly to the view that he was only able to keep 
 his domestic market to himself by maintaining a 
 high tariff. When it was imposed he was told that 
 it was for the purpose of keeping out the products
 
 240 BRITISH INDUSTRIES 
 
 of " the pauper labour of Europe." He was quite 
 curiously unaware that in the course of about thirty 
 years he had so improved his methods of manu- 
 facture that his productive labour was costing him 
 (in some cases) less per dozen by 50 per cent, than it 
 was costing the British shoe manufacturer for the 
 same work. And yet the American boot operative 
 was earning three pounds a week against thirty 
 shillings for a similar man in Leicester or North- 
 ampton. And in the case of female labour the 
 disparity was even more marked. 
 
 I give these figures broadly as the result of a most 
 careful personal investigation which I made in 1891, 
 when I visited the United States for the express 
 purpose of investigating labour costings in American 
 shoe factories. The whole of the details were 
 published at the time, and, I hope, helped forward 
 the much-needed work of shoe-factory reorganisa- 
 tion in this country. I may say that the result of 
 the investigation came to me as a great surprise. It 
 seemed impossible that such high weekly wages 
 should accord with such low piece-work costings. 
 I had heard the stories of the agents sent over here 
 to sell or lease American machinery, but I thought 
 them exaggerated. Finally I decided to examine 
 the facts on the spot, with the result stated, and I 
 now repeat with all seriousness that thirteen years 
 ago the American shoe manufacturer had the British 
 manufacturer at his mercv and did not know it.
 
 THE BOOT AND SHOE TRADE 241 
 
 The Trade Union Attitude. 
 
 To-day the opportunity has passed, for there are 
 many factories in England as well equipped as any 
 in America, and though trade union tyranny pre- 
 vents the machinery being run to its full capacity, 
 the chief losers are the men themselves. Their 
 weekly earnings are less than they need be, but 
 most smart manufacturers have been, by the aid of 
 machinery, able to reduce the labour cost per dozen 
 to somewhere about the American level. The men 
 seem to think that if they did more they would get 
 no more pay — which is a poor tribute to the power 
 of their union. They also appear to adopt an 
 altruistic attitude towards each other, one man 
 fearing to do too much lest he should either rob his 
 fellow-workman of employment or set him an 
 inconvenient pace. 
 
 No one objects to working men doing all they can 
 to improve their wages, but a man who deliberately 
 does less than a fair day's work is injuring himself 
 and injuring the whole community as well. If the 
 policy of shirking work were really beneficial to the 
 working classes, then no workman ought to do any 
 work at all. 
 
 Here it may be convenient to explain that at the 
 time of which I am writing (1891) productive wages 
 in an English shoe factory would average about 
 33J per cent, on the wholesale selling price of such 
 goods as were then in demand. 
 
 17
 
 242 BRITISH INDUSTRIES 
 
 A popular gentleman's boot was sold at about 8s., 
 and a ladies' at 6s. (factory prices). This would 
 mean that about 2s. 8d. and 2S. respectively would 
 be distributed in the productive wages of manufac- 
 ture. I have spoken of extreme cases in America 
 where I found a saving of 50 per cent, in wages. 
 This was in lower grade goods than are the subject 
 of the present illustration. The productive wages 
 paid in the best American factories on such boots as 
 I have instanced were at the time of my investi- 
 gations about IS. 9d. and is. 3d. respectively. This 
 meant that the American shoe manufacturer had an 
 advantage over his possible English competitor of 
 I id. per pair in one case and 9d. in the other. This 
 would have been more than enough to enable him 
 to swamp the market had he addressed himself 
 energetically to the task. 
 
 Tariffs and Inefficiency. 
 
 Surplus stocks of boots and shoes cannot, how- 
 ever, be easily dumped out of one market into 
 another. The styles and fittings that would suit 
 New York would not suit London, and what would 
 suit London would not suit Glasgow. The width 
 of the average foot in proportion to its length varies 
 in different countries and even in different parts of 
 the same country. A comfortable fit being the 
 essential thing, all orders are specially manufactured 
 for the market for which they are intended. Boot 
 manufacturers, therefore, are seldom the victims of
 
 THE BOOT AND SHOE TRADE 243 
 
 dumping except at the hands of a bankrupt fellow- 
 countryman. Still there was nothing to prevent the 
 American shoe manufacturer copying our lasts and 
 styles (which has since been done to a limited extent) 
 and utilising his cheap labour (as measured in 
 productive cost) for the purpose of underselling the 
 British shoe manufacturer in his own market. For 
 the latter did not have the protection of a tariff 
 behind which he could shelter his badly-equipped 
 factory and his lazy workmen. 
 
 Supposing we had had a tariff of, say a shilling a 
 pair on American boots and shoes, what would have 
 happened in the circumstances I have named ? 
 Obviously neither manufacturer nor workman 
 would have troubled to bestir himself to make the 
 much-needed changes that were necessary. We 
 should therefore have been protecting incompe- 
 tence. Under Free Trade the British industry had 
 to pull itself together, and in doing so it has not 
 only benefited itself, but it has benefited the entire 
 community. And incidentally it has been able to 
 increase its export trade, particularly during the past 
 three years, when the work of reorganising the 
 factories began to have its natural effect. To be 
 sure we have suffered some loss of trade by the 
 American invasion which was attempted so soon as 
 our friends on the other side realised the opening 
 which our years of lethargy had made for their 
 products. But as the following figures show, our 
 imports are trivial in comparison with our home
 
 Imports. 
 £ 
 
 Exports. 
 
 £ 
 
 686,000 
 
 1,136,000 
 
 626,000 
 
 1,276,000 
 
 677,000 
 
 .. 1,427,000 
 
 244 BRITISH INDUSTRIES 
 
 production, and are much smaller than our exports. 
 And we shall get the trade back again. Meanwhile 
 the imports acted as an object-lesson to our manu- 
 facturers and educated them more than anything 
 else could have done to the needs of the situation. 
 I believe the lesson was cheap at the price paid 
 for it. 
 
 Boots and Shoes. 
 
 Nine months 
 ended September, 
 
 1901 
 
 1902 
 
 1903 
 
 The imports in the above table are calculated 
 after deducting the re-exports, and consequently 
 represent our home consumption of foreign-made 
 boots and shoes. A little over half of these are 
 American, the rest being from France, Switzerland, 
 and Austria, with each of which countries we do a 
 limited trade, which has been going on without 
 much fluctuation for many years. The American 
 imports did not commence in earnest until 1895. 
 They grew rapidly until the period covered by the 
 table given, when they seemed to reach the stop- 
 point. Quite half of the American boots and shoes 
 now sold in this market are retailed by the manu- 
 facturers direct to the public. They took the shops 
 when it seemed easy to sell American goods in 
 England, and as it would involve considerable loss 
 to close them they may remain open for some time
 
 THE BOOT AND SHOE TRADE 245 
 
 yet, but under existing conditions the withdrawal of 
 American competition in the shoe trade of the 
 United Kingdom is only a question of time. 
 Already many of the American agents have returned 
 home and have given up the attempt to do an 
 ordinary wholesale business. And at least one has 
 abandoned his American agencies and is now 
 selling English goods. 
 
 The Home Market. 
 
 To see the figures of our imports and exports 
 in their proper perspective it is well to remember 
 that we have a population of 41,000,000 of people in 
 the United Kingdom, and they nearly all wear shoes 
 of sorts. If we put the annual outlay per head of the 
 population on footwear at ;^i we shall not be far out. 
 This estimate means that our home consumption 
 of boots and shoes amounts to the enormous value 
 of ;^4i, 000,000 per annum. Nearly all this great 
 trade is kept at home, the proportion of it accounted 
 for by imports being inconsiderable. In the boot 
 and shoe industry, as in many others, the part 
 played by our over-sea trade, either inwards or 
 outwards, is so small that it does not justify the 
 pother made about it. The public mind, however, 
 seems to be hypnotised by the contemplation of the 
 foreign trade of our own and other countries and 
 overlooks the much larger and more profitable 
 business at our own doors. 
 
 I have already written as to the average cost of
 
 246 BRITISH INDUSTRIES 
 
 productive labour in the modern manufacture of 
 boots and shoes, and shown how it has been 
 reduced by the adoption of improved methods 
 forced upon us by most salutary competition. It 
 may be worth glancing further at the benefit which 
 the public has thus derived from the reorganisation 
 of British boot factories. 
 
 A recent estimate issued on the authority of the 
 Federation of Boot Manufacturers Associations 
 places the annual consumption of boots and shoes 
 at 100,000,000 pairs. This is probably within the 
 mark. I estimate that the new machinery and im- 
 proved organisation adopted by British boot manu- 
 facturers within the past ten years have enabled them 
 to effect a saving averaging quite sixpence per pair. 
 The whole of this saving has had to be given to the 
 public, because the re-organisation of the factories 
 has expanded their productive capacity and induced 
 a very active state of competition. Indeed, at the 
 present moment the trade is paying the penalty of 
 its previous lethargy, and is suffering from a sharp 
 attack of over-production. The changes came 
 about so rapidly that the market has been glutted 
 and is likely to remain so until the normal growth 
 of demand has overtaken the increased capacity 
 for supply. In such circumstances it has been 
 impossible for manufacturers to keep for themselves 
 any of the advantages derived from their new 
 machinery. It follows, therefore, that the public 
 has reaped a benefit now equal to about ;^2,5oo,ooo
 
 THE BOOT AND SHOE TRADE 247 
 
 a year for improvements in manufacture which 
 would not have been adopted for many years under 
 a protective system. 
 
 Competition and Ep^ficiency. 
 
 But let me hasten to add that little, if any, of this 
 benefit has been conferred in the shape of reduced 
 prices. It has mainly taken the form of improvements 
 in the article produced. For example, ten years ago 
 the great middle-class trade was furnished with 
 a boot sewn on the Blake machine to which 
 allusion has already been made. To-day the same 
 class of trade is supplied with what is known as 
 Goodyear or machine-welted boots at approximately 
 the same price. This welted boot is made precisely 
 on the same principle as the old-fashioned hand- 
 sewn boot of thirty years ago, and which may still 
 be obtained of a few fashionable West-end boot- 
 makers by people who can afford to pay the price 
 it commands. Its exact equivalent made by 
 machinery is now within the reach of all, and it 
 has largely supplanted what is known as the 
 ordinary machine-sewn boot. In many other ways 
 too, improvements have been effected in the finish 
 and embellishment of the modern factory-made 
 boot, which is also of better design and fit than its 
 counterpart of only ten years ago. All these 
 advantages have been given to the public without 
 any extra charge, and it has been possible to give 
 them because of the adoption of the American
 
 248 BRITISH INDUSTRIES 
 
 system of manufacture, which in turn was the 
 outcome of direct American competition in the 
 boot market. This competition would have been 
 shut out by even a moderate tariff. 
 
 One further observation is worth making in this 
 connection. The workman has not suffered, by 
 the alteration of methods and the reduction of cost 
 of production I have described, any diminution 
 either of his individual earnings or in the total 
 amount paid in wages. Individual earnings are 
 better, and the money paid in wages has, if anything, 
 increased owing to the much greater elaboration of 
 detail and the substitution of the welted boot for 
 the old machine-sewn article. When manufacturers 
 used to calculate that productive wages should 
 average one-third of the factory selling price they 
 were figuring on a boot of simple construction. 
 Such a boot to-day need not involve for productive 
 wages more than 20 per cent, of the factory 
 selling price. But it is not largely made. Its 
 place has been taken by a more highly finished 
 and better article of a similar kind, or by a boot 
 made by the somewhat complicated welted process. 
 It thus remains that the old calculation of 33^ per 
 cent, for productive wages is generally adhered to 
 by manufacturers. There has been some hardship 
 experienced among the older men unable to learn 
 how to operate the new machines. Younger men 
 have had to be drafted into the factories and con- 
 siderable displacement of labour has been inevi-
 
 THE BOOT AND SHOE TRADE 249 
 
 table. But this was the price that had to be paid. 
 Regarded broadly, the position of the workman 
 has been improved by the reorganisation of the 
 factories. The most serious drawback has been 
 that in filling their factories with new machinery 
 manufacturers have been compelled to increase 
 their trade in order to get the best results from the 
 new appliances. This had led to an expansion 
 of productive capacity which will presently find 
 its proper level by the natural operation of the 
 laws of supply and demand. 
 
 NOTE ON THE LEATHER TRADE 
 
 The shoe and leather industries are so interwoven 
 that this chapter would be incomplete did it not 
 take note of the great changes which have taken 
 place in the leather trade during the period under 
 review. 
 
 When the Corn Laws were repealed tanning was 
 a scattered industry. Every important town and 
 many large villages, especially if they were near 
 to oak timber and a stream, boasted a tanyard. 
 These yards were in the hands of men who had 
 been born in the business, as their fathers had been 
 before them. Many of them ranked with the 
 country gentry, and they not infrequently had 
 considerable landed interests. Tanning was an 
 eminently respectable trade, as it implied the
 
 250 BRITISH INDUSTRIES 
 
 possession of either large capital or good credit, 
 on account of the length of time taken to turn the 
 hides into leather. Moreover, it was a leisurely 
 occupation which gave ample time for hunting, 
 fishing, shooting, and country sports. But it had 
 no attraction for the captains of industry who were 
 then emerging into the position of prominence and 
 usefulness they now enjoy. 
 
 One other fact it is well to remember in relation 
 to the tanning trade. Its basis rests upon the 
 utilisation of a by-product. Hides and skins 
 (except valuable furs) are not taken from the 
 animal until the animal is wanted for food. The 
 tanner is therefore in a position of comparative 
 helplessness as regards the supply of his chief raw 
 material. The local tanner had to rely upon local 
 hides, and when altered conditions diverted his 
 natural supply he was not the sort of man to 
 follow it. He just closed the yard and betook 
 himself to farming or some other congenial pursuit. 
 Many tanners, of course, obtained supplies of hides 
 from London factors to whom they consigned the 
 finished leather for sale in due season. But the 
 factor made the big money while the tanner was 
 satisfied with small profits coupled with the delights 
 of a country life. 
 
 Just one other fact worth noting is somewhat 
 curious. In a fairly extensive experience I have 
 neither met nor heard of a successful tanner whose 
 father before him was not also a tanner. It seems
 
 THE BOOT AND SHOE TRADE 2^1 
 
 3' 
 
 to be a sort of mystery business, and even under 
 modern conditions the hereditary tanner has a 
 strange advantage which I merely put on record 
 without attempting to explain. 
 
 A trade with such a history and such associations 
 was naturally not equipped as to its personnel to 
 grapple quickly and successfully with the changes 
 which have taken place during the past sixty years, 
 both as regards the source of supply of raw 
 materials and the markets in which the finished 
 products could be sold. In short, British tanners 
 have been for years remarkable for sleepiness, though 
 some of them have remained fairly wide awake 
 throughout and the rest show satisfactory signs of 
 awakening. Meanwhile they have undoubtedly 
 suffered more from the effects of foreign competi- 
 tion than their allies, the boot manufacturers. 
 
 One potent reason which helps to account for 
 the inroads made by American and continental 
 leather producers in the English leather market is 
 the fact that the distributing trade was until quite 
 recent years almost in the hands of merchants. 
 The tanner did not sell direct to the boot manu- 
 facturer. He was not in touch with the consumer, 
 and the merchant bought leather wherever it was 
 offered, and was usually very active in finding 
 bargains which happened to lie about in the markets 
 of the world to resell in competition with the 
 product of the British tanner. And it is almost 
 entirely due to the efforts of the middleman that
 
 252 BRITISH INDUSTRIES 
 
 so much foreign leather now finds a market in this 
 country. He has a special interest in pushing 
 foreign leather in the many cases where he can 
 obtain an exclusive agency for its sale. The boot 
 manufacturer can readily pass by the merchant 
 and deal with an English tanner direct. It is more 
 difficult when the leather is imported from an 
 unknown or "tied-up" source, so the merchant 
 prefers to push the foreign article. 
 
 Again, the English leather producer has been 
 until quite recent years exceedingly conservative 
 in his methods of tanning. His art was ancient, 
 and he thought it could not be improved upon. 
 Happily all this prejudice is breaking up. The 
 pressure of foreign competition has at last made 
 itself felt and the English tanner and leather manu- 
 facturer (the terms have a slightly different technical 
 meaning) is waking up, and will, I doubt not, assert 
 himself as the English boot manufacturer has done. 
 The tanner is, as a rule, a richer man than the manu- 
 facturer, and so it took more pressure to stir him 
 into action. The mere threat of effective American 
 competition in the shoe trade brought about a 
 veritable revolution. The English tanner is 
 estimated to have lost about a third of his 
 business before he woke up. 
 
 Could he have slumbered peacefully on the 
 sunny side of a tariff wall he would have been 
 asleep now.
 
 FLOUR MILLING UNDER FREE 
 
 TRADE 
 
 By Andrew Law 
 
 {Oj Crawford & Law, Glasgoiv) 
 
 ROUND the farm and the mill poetry and 
 sentiment have revolved during so many 
 ages tiiat the task of considering them in their 
 commonplace commercial aspect is a somewhat 
 thankless one. Yet when the poetry and sentiment 
 are evaporated, we see left two closely related and 
 mutually dependent industries subject to the 
 ordinary commercial conditions and limitations 
 which surround other industries. The development 
 of the second of these industries — the milling 
 industry — since the repeal of the Corn Laws will 
 be the better understood after a few observations on 
 farming during the same period. 
 
 Farming is a manufacture and the farmer is 
 a manufacturer, and his industry has been affected 
 by the same causes which have affected all other 
 
 253
 
 254 BRITISH INDUSTRIES 
 
 industries. Just as elaborate spinning and weaving 
 machinery have superseded the spinning-wheel and 
 the handloom and so added immeasurably to the 
 productive capacity of the individual factory opera- 
 tive, so have the application of scientific methods, 
 and especially modern tools and machinery, to 
 agriculture increased the productive capacity of the 
 farm operative. But while the number of looms in 
 a factory can be indefinitely multiplied, the agricul- 
 tural acreage is a fixed quantity ; consequently the 
 increase in the productive power of the individual 
 farm labourer led to a lessened demand for labourers, 
 while at the same time the growing industries of the 
 towns held out superior inducements in the form 
 of higher wages and greater opportunities for 
 advancement. And here, too, the development of 
 the railway system has had an enormous influence 
 in carrying to and from the farm with expedition 
 goods which under old conditions had to be con- 
 veyed by horse-power to and from the nearest 
 market town. Here, indeed, are to be found the 
 principal causes of the rural depopulation which is 
 usually attributed to one cause alone, viz., the repeal 
 of the Corn Laws. Undoubtedly the repeal of the 
 Corn Laws was one of a number of contributory 
 causes, but it was probably one of the least 
 important. The consolidation of small into large 
 holdings, the general use of light chemical manures, 
 involving little labour in their application, the 
 marketing of grain by sample and forwarding it by
 
 FLOUR MILLING UNDER FREE TRADE 255 
 
 rail without carting the stock to the nearest market 
 town, have all tended to the economy of labour. 
 Beyond all other causes, however, the introduction 
 and extending use of good tools, and especially of 
 scientific labour-saving machinery, have operated in 
 economising farm labour. Under the old system of 
 hand sowing and hand reaping so much labour was 
 wanted on the farm in seed-time and harvest that 
 the farmer, to make sure of having it at his command 
 when wanted, had to maintain a great many people 
 all the year round, who, having very little to do for 
 the greater part of the year, had to be content with 
 mere subsistence wages. The necessity for economy 
 in every direction, brought into operation by 
 declining grain prices, stimulated ingenuity, and 
 gradually farming tools and machinery were so 
 improved that, except in very unfavourable seasons, 
 the amount of farm labour wanted is not now 
 much greater in seed-time and harvest than at any 
 other season. 
 
 During the same period, however, the same causes 
 were operating in the other grain-growing countries, 
 and particularly, and even in a greater degree, in the 
 United States. It is well enough known that the 
 cost of carrying wheat from Chicago to Liverpool 
 is a mere fraction of what it was forty years ago, 
 but it seems to be overlooked that a greater reduction 
 still in the cost of conveyance from the Western 
 American farm has been brought about by the 
 development and extension of the American Western
 
 256 BRITISH INDUSTRIES 
 
 railway system. This has certainly during the same 
 period reduced the cost of conveyance from the 
 farm to Chicago even more than the reduction in 
 the freight from Chicago to Liverpool. But this 
 reduction in the cost of American wheat naturally 
 enough discouraged the growth of wheat in Great 
 Britain. Farmers found it more to their advantage 
 to apply their land to other purposes, and so we 
 find that while about the year 1846 our home 
 growth of wheat averaged about 16,000,000 quarters, 
 our imports of wheat and flour in that year were 
 returned at 2,405,000 quarters ; the figures for 1900 
 were 6,790,000 quarters and 23,390,000 quarters 
 respectively. 
 
 The importance of those figures when the question 
 of milling comes to be considered is obvious. They 
 point to a complete change in the localities in which 
 milling can be profitably conducted. From the 
 earliest times and till within the last fifty years the 
 art of milling made very little progress. The grain, 
 more or less freed from impurities, was ground 
 between millstones, and the bran, to which a good 
 deal of the most nutritious portion of the wheat 
 adhered, was sifted out. Mills were mostly of small 
 capacity, and were scattered all over the country, 
 most of them grinding local wheat which, if they 
 were near the seacoast, they might fortify with a 
 mixture of strong, dry foreign wheat. The gradual 
 decline in wheat prices and the increase in numbers 
 of the population made it more profitable for farmers
 
 FLOUR MILLING UNDER FREE TRADE 257 
 
 to produce meat and milk, and necessarily restricted 
 the growth of wheat. At the same time the develop- 
 ment of railways radiating from the great ports 
 tended to centralise the milling industry there, and 
 so step by step with the decline in country milling 
 came an expansion in milling at the great import 
 centres. 
 
 But along with this again came a complete 
 change in the milling system. The most important 
 element in this change was the substitution of steel 
 rolls, and the gradual reduction process, for the 
 ancient millstone process which reduced the wheat 
 to flour at one operation. This process originated 
 in Hungary about forty years ago, and, as operated 
 there, was and is a complex process. The 
 Americans adopted the Hungarian process about 
 thirty years ago, and while adhering to it in all 
 essential particulars, they greatly simplified and 
 adapted it to their own special conditions. Within 
 a few years thereafter the American millers began 
 exporting what was then known as " new process 
 flour," directing their attention mainly to the British 
 markets. The quality of this flour was so high in 
 proportion to the prices at which it was sold that it 
 was universally believed to be mere surplus stock 
 disposed of at a loss in order to permit of American 
 millers running their mills to full capacity and so 
 enabling them to make good profits out of their 
 home trade. Consequently British millers waited 
 confidently for the time when the flow of this 
 
 18
 
 258 BRITISH INDUSTRIES 
 
 imported flour would cease, meantime experimenting 
 tentatively and cautiously in the new process them- 
 selves. It came to be gradually known, however, 
 that there was money in " new process milling," and 
 that the American millers had really been making 
 large profits on their export sales. As soon as the 
 millers of Great Britain realised this they set to 
 work and remodelled their mills, and are now able 
 to compete on equal terms with millers in any part 
 of the world. 
 
 As a matter of fact flour milling is a highly profit- 
 able industry in the great wheat-importing centres 
 or wherever in the country there are sufficient and 
 regular supplies of home-grown wheat, provided the 
 mills are up to the modern standard. There is no 
 evidence whatever that Free Trade has done a 
 particle of injury to flour milling, although it has 
 certainly been one of a number of causes which 
 have changed the localities in which it is conducted. 
 
 On the other hand. Protection in itself could not 
 help it. The reason why many flour millers would 
 like a return to Protection is that in the adjustment 
 of the tariff as between imported wheat and flour 
 the ratio would probably be arranged so as to dis- 
 criminate against flour, and thus operate as a bounty 
 to them. The history of the recent short-lived corn 
 tax illustrates this point eftectively. Flour is not 
 the only production from wheat, nor do all kinds 
 of wheat produce the same percentage of flour. 
 When Sir Michael Hicks-Beach imposed the tax
 
 FLOUR MILLING UNDER FREE TRADE 259 
 
 of 3d. per cwt. on wheat he consulted the British 
 millers as to what would be the proper tax to place 
 on imported flour, and was advised by them that 5d. 
 per cwt. on flour was equal to 3d. per cwt. on 
 wheat. Now as 112 lbs. of ordinary average foreign 
 wheat will produce about 80 lbs. of flour and 30 lbs. 
 of by-products (known as offal and used for 
 cattle feed), the tax should have been rather more 
 than 3|d. on wheat if 5d. on imported flour was 
 taken as the starting-point. The ratio of 3d. and 
 5d. was avowedly adjusted to meet the case of dirty 
 wheat, and wheats of poor flour-producing capacity, 
 and so of course in using the clean, dry wheat of 
 high flour percentage usually imported it operated 
 as a bounty. But here again another point emerges. 
 The ratio of 3d. and 5d. ignored the offal and per- 
 mitted it to come in duty free, while it was raised in 
 selling value by the amount of the import duty 
 levied on other competing grains used for cattle 
 feed. When the corn tax was removed it was 
 stated that the millers, depending on its per- 
 manence, had spent a great deal of money in 
 enlarging their mills, and that its removal was a 
 great injustice to them. After the Corn Tax 
 was removed the Protectionists in the House of 
 Commons undoubtedly greatly exaggerated the 
 advantage the millers had enjoyed, which could 
 not really be shown to exceed 3s. per ton of 
 flour produced, but even this advantage certainly 
 enabled them to increase their production materially
 
 26o BRITISH INDUSTRIES 
 
 during the year the corn tax was in operation. 
 This, however, necessarily involved the production 
 of a larger quantity of offal, and as the home market 
 for this class of cattle food is not capable of great 
 expansion, an outlet had to be found for a larger 
 quantity than usual in the Baltic countries, par- 
 ticularly in Denmark. There is always a large 
 demand on Danish dairy estates for offals at low 
 prices, and the offal bought from Great Britain in 
 due time finds its way back in the form of Danish 
 butter and bacon. 
 
 The case of the English country miller remains 
 for consideration. The number and importance of 
 country mills necessarily declined with the reduc- 
 tion in the growth of wheat, and of those which 
 remain in the business many find their best line of 
 competition in fortifying their soft, sweet home 
 flour witli a mixture of strong imported flour. An 
 import duty on wheat to be of any benefit to them 
 would therefore require to be heavy enough to raise 
 prices to the level which would stimulate the home 
 growth. A protective duty which stopped short of 
 this, and at the same time discriminated against im- 
 ported flour, would tend to give the port millers 
 absolute control of the trade, and they would 
 naturally find it convenient to ship their offal in 
 large lines to the Continent at low prices, which 
 indeed is the practice already. 
 
 This naturally leads up to the so-called " dump- 
 ing " of American fliour in British markets ; and it
 
 FLOUR MILLING UNDER FREE TRADE 261 
 
 may be confidently stated that if dumping means 
 the systematic selling of goods at a loss, there is no 
 dumping of either American or British colonial 
 flour in Great Britain. Millers on the North 
 American Continent are working with the ordinary 
 object of making a profit. Some of them export 
 nothing, some of them cultivate part home and part 
 export trade, and some cultivate an export trade 
 almost exclusively. Before British millers modern- 
 ised their mills, and the margin of profit was large, 
 American flour was frequently consigned for sale 
 on arrival ; since the British millers improved their 
 mills, and so cut down the margin of profit on 
 Transatlantic flour, both American and Canadian 
 millers have made a practice of selling their flour 
 outright before shipping it, and the only kind of 
 dumping they do is the same kind of dumping 
 which British millers do with their offals, and which 
 indeed is the rule with all manufacturers, viz., they 
 sell their goods on a narrow margin of profit where 
 the order is large and the expense small, because 
 all the profit is net without deductions. 
 
 Neither is there any such thing as an American 
 Milling Trust. An attempt was indeed made five 
 years ago to organise a milling trust, but it quickly 
 ended in disaster. None of the conditions which 
 go to the successful formation of a trust exist in 
 the milling business as it is conducted in America. 
 
 The competition between British millers who im- 
 port wheat, and foreign and colonial millers who sell
 
 262 BRITISH INDUSTRIES 
 
 flour in British markets, is at present perfectly fair, 
 and their enterprise and the strenuous competition 
 of a free market have secured for the people of this 
 country a supply of bread which, relatively to its 
 high quality, is certainly the cheapest in the world. 
 How high Protection affects milling can be seen 
 in the case of France, which levies a duty of 12s. 2d. 
 per quarter of 480 lbs. on imported wheat. France 
 is nearly self-supporting in the matter of wheat 
 supplies, and yet this duty of 12s. 2d., acting as an 
 impassable barrier against imports until the price 
 rises to at least 12s. 2d. per quarter above the open 
 market level, was sufficient to keep the price of 
 wheat in France on an average of the last five years 
 9s. per quarter higher than the open market price. 
 But a fiscal system of this kind leads to great 
 instability in the level of prices, values rapidly 
 mounting to an import level in times of scarcity and 
 sometimes sinking to international parity in times 
 of abundance. Now and again, indeed (as for about 
 two months during the high-price year 1898), it is 
 necessary in deference to public opinion to suspend 
 the duty entirely. The French milling industry, 
 therefore, is by no means so prosperous as the 
 British industry, where the conditions are simple 
 and the level of prices comparatively stable. The 
 only section of the French people who have certainly 
 profited by the French protective duty are the 
 owners of corn-growing farms, and their position is 
 protected by the fact that the quantity of land suit-
 
 FLOUR MILLING UNDER FREE TRADE 263 
 
 able for corn-growing cannot be increased, and 
 therefore they have a secure monopoly. There is 
 no limit to the number of mills which can be built, 
 and France is notoriously over-provided with mills ; 
 but here again one of the usual results of high Pro- 
 tection discloses itself. To permit of French millers 
 doing an export trade the duty paid on imported 
 wheat is supposed to be refunded in the form of a 
 drawback on the equivalent production of flour, but 
 in practice the French millers contrive to extract from 
 the French people what amounts to a bounty on 
 their export sales. A certain production of fiour is 
 assumed, and the duty on the wheat is adjusted on 
 this assumed basis. In reality the wheat produces 
 more flour than the assumed quantity, with the result 
 that the miller makes a profit on the drawback. It 
 is therefore sometimes possible for the French 
 miller to import wheat from America and Russia, 
 mill it, and deliver the flour in Great Britain at a 
 lower price than that at which the same flour can 
 be manufactured when the wheat is imported direct 
 and ground in Great Britain. 
 
 If a protective duty should be imposed on wheat 
 and flour with a discrimination against imported 
 flour, the port millers of the United Kingdom would 
 in the first instance reap a direct benefit, but the 
 country millers could not reap any benefit at all 
 unless the duty increased the growth of English 
 wheat. On the other hand, it is probable that mill- 
 building in the ports would be overdone as in
 
 264 BRITISH INDUSTRIES 
 
 France, and the competition amongst the millers 
 themselves would speedily bring the margin of profit 
 down to the lowest point consistent with continued 
 existence. At the same time an unmanageable 
 quantity of offal would be produced for which the 
 port millers would find their best market in the 
 Scandinavian countries, principally Denmark and 
 Sweden, both of which countries admit mill offals, 
 duty free. The importance of this consideration 
 will be seen at once when it is stated that Sweden 
 and Denmark in the year 1900 imported 690,000 
 cwt. British mill offals ; in the year 1901, 923,600 
 cwt. ; and in 1902, 1,106,100 cwt. It is therefore 
 plain that any system of grain import duties which 
 favoured the port millers would necessarily have to 
 be accompanied by a protective duty on imported 
 continental dairy produce or by an exemption from 
 duty of coarse grains used by English farmers for 
 feeding cattle. 
 
 It is perhaps at this point that the bargaining 
 power which seems to be an inseparable feature of 
 the new Protection might come into operation. This 
 bargaining power, of course, has two sides. While 
 the Government is bargaining with Foreign Powers, 
 our protected industries, like protected industries in 
 all protectionist countries, would be bargaining with 
 the Government, and, of course, the richest and 
 most concentrated industries in such a contest 
 would have the best of it. British milling is not a 
 highly concentrated industry, and possibly when it
 
 FLOUR MILLING UNDER FREE TRADE 265 
 
 came to a question of bargaining it might get the 
 worst of it, and find its protection traded away for 
 the benefit of some more powerful industry. 
 
 In view of that serious possibility, British millers 
 may be advised to bear the ills they have, and under 
 which they manage to live and prosper, rather than 
 to agitate for a change which if effected might 
 eventually bring disaster in its train.
 
 THE IRON AND STEEL TRADE 
 By Hugh Bell 
 
 " T SOON found out the Person's House to 
 1 whom I was recommended, presented my 
 Letter from his Friend the Grandee in the Island, 
 and was received with much Kindness. This great 
 Lord, whose name was Mnnodi . . . was a Person 
 of the first Rank, and had been some years Governor 
 of Lagado. . . . The Sum of his discourse was to 
 this Effect. That about forty Years ago, certain 
 Persons went up to Lapnta, either upon Business or 
 Diversion, and after live Months' Continuance,'' 
 came back with a very httle Smattering in Mathe- 
 maticks, but full of Volatile Spirits acquired in that 
 airy Region. That these Persons upon their return 
 began to dislike the Management of every Thing 
 below, and fell into Schemes of putting all Arts, 
 Sciences, Languages and Mechanicks upon a new 
 Foot. To this End, they procured a Royal Patent 
 for erecting an Academy of PROJECTORS in 
 Lagado; and the Humour prevailed so strongly 
 
 ' Mr. Chamberlain was about three months in Africa. 
 
 366
 
 THE IRON AND STEEL TRADE 267 
 
 among the People, that there is not a Town of any 
 Consequence in the Kingdom without such an 
 Academy. In these Colleges, the Professors con- 
 trive new Rules and Methods of Agriculture and 
 Building, and new Instruments and Tools for all 
 Trades and Manufactures, whereby, as they under- 
 take, one Man shall do the Work of ten ; a Palace 
 may be built in a Week, of Materials so durable as 
 to last for ever, without repairing ; all the Fruits of 
 the Earth shall come to Maturity at whatever Season 
 we think fit to choose, and increase an hundred 
 Fold more than they do at present, with innumer- 
 able other happy Proposals. The only Incon- 
 venience is, that none of these Projects are yet 
 brought to Perfection, and in the meantime the 
 whole Country lies miserably waste, the Houses in 
 Ruins, and the People without Food or Clothes. 
 By all which, instead of being discouraged, they are 
 fifty times more violently bent upon prosecuting 
 their Schemes, driven equally on by Hope and 
 Despair. . . ." (A l^oyage to Lapiita, &c.) 
 
 If the strange enigma who walked among men 
 under the name of Jonathan Swift had lived in 
 London in 1903 instead of two centuries earlier, his 
 bitter humour could hardly have expressed more 
 incisively than is done in the passage I have quoted 
 his appreciation of the situation in which this 
 country now finds itself. Great Britain of to-day 
 resembles in all particulars the country which, in 
 the kingdom of Laputa, was under the control of
 
 268 BRITISH INDUSTRIES 
 
 Miinodi. " Neither do I remember," says Gulliver, 
 " ever to have seen a more delightful prospect." 
 Her wealth, measured in what way one pleases, is 
 enormous, and is growing. The condition of her 
 people has improved decade by decade, as is shown 
 by their expenditure, by their savings, by their vital 
 statistics, and in every other way in which well- 
 being can be estimated. Pauperism has diminished. 
 Incomes and wages are much larger than they were 
 thirty years ago. The very paupers themselves are 
 more than twice as well off as they were half a 
 century since. In 1854 the amount expended per 
 head in England and Wales was £6 2S. 2d. ; for the 
 quinquennium ending with 1899, ^^12 i8s. 5d. ; and 
 for 1902, -^14 8s. 4d. One feels ahnost compunction 
 at being obliged to add that the percentage had 
 fallen from 4-6 in 1854 to 2-6 in the quinquennium 
 1895-9, so that relatively only about 55 per cent, of 
 the proportion of 1854 take advantage of the greatly 
 improved conditions of to-day. These statements 
 are based on returns the truth of which is, I believe, 
 not questioned. But no observant man can move 
 about the country without being struck by the 
 immense improvements which have taken place. 
 Every town of importance is surrounded by suburbs 
 filled with comfortable houses, public parks abound, 
 schools, often almost palatial in appearance, are 
 scattered about at convenient intervals. Even the 
 great and thorny question of the housing of the 
 working classes appears to be solving itself, for,
 
 THE IRON AND STEEL TRADE 269 
 
 viewed as a whole, overcrowding tends to diminish. 
 In a word, no sign of material well-being is wanting. 
 These facts are not set down in any spirit of 
 supine optimism which ends in a " rest and be 
 thankful " sigh. But it is well, while every paper is 
 full of complaints about our trade and its future, to 
 call attention to signs of prosperity which those 
 who contrast our imports with our exports pass by 
 without notice. 
 
 It is with this condition of domestic well- 
 being that tariff reformers ask us to interfere. We 
 are forbidden to consider anything which shows 
 we are prosperous, and are invited to concentrate 
 our attention on circumstances which are held to 
 demonstrate our approaching ruin. Having reduced 
 us to a state of abject alarm for our future, our new 
 philosophers, like those of Laputa, would persuade 
 us to accept as a cure for a malady, of which we 
 deny the existence, a remedy which we say would 
 be of no avail even were the facts as they are 
 represented. 
 
 The grounds for our refusal can only be found 
 by examining with care the condition of the trades 
 for which our medicine-men propose their nostrums. 
 Among these trades the great iron industry stands 
 pre-eminent. It is noteworthy that all those who 
 favour the fiscal reforms with which, in terms 
 " changeful, vague, importunate and loud," we are 
 threatened, draw illustrations from this trade. On 
 the one hand they magnify, quite properly, its
 
 270 BRITISH INDUSTRIES 
 
 importance, while on the other they dwell on the 
 peril in which it is supposed to stand. Its rapid 
 growth and its present magnitude are held up to our 
 admiration, only to inspire terror at the prospect of 
 its imminent ruin. And having flattered our efforts 
 in the past, and alarmed us for our position in the 
 future, they leave us without any clear idea as to 
 what is to be done to avoid the disasters with which 
 we are menaced. Now it is interesting to observe 
 that for at least three centuries this trade has been 
 the chosen battle-ground of those who, for one 
 reason or another, considered it the function, and 
 indeed the duty, of the State to provide against evils 
 which it was thought would flow from the un- 
 regulated development of commerce and industry. 
 Mercantilism, with all its strange offshoots, was but 
 the outcome of the opinion that buying and selling 
 could not safely be left to the buyer and the seller, 
 but must be controlled by the wiser brains to whom 
 was entrusted the government of the world. A 
 sanction, higher than any mundane power, gave 
 authority to these interferences and the will of the 
 Almighty, as conveyed through a sovereign whose 
 divine title was accepted, was, in ultimate recourse, 
 adduced to silence all doubters. I justify this 
 statement by one example, where many might be 
 cited, when I point to the usury laws. " In former 
 times," says Blackstone, " many good and learned 
 men were opposed, from doubts about its legality 
 in/oro conscienticv, to any increase of money by way
 
 THE IROX AXD STEEL TRADE 371 
 
 of interest — an hostility which they grounded . . . 
 on the prohibition of it by the law of Moses among 
 the Jews. . . . Hence the school divines branded the 
 practice of taking interest, as being contrary to the 
 Divine law, both natural and revealed ; and the 
 canon law proscribed the taking of any, the least, 
 increase for the loan of money as a mortal sin." 
 
 When so wide a view of the function of the 
 government was taken it is not surprising that the 
 greater was assumed to include the less, and any 
 plausible ground of public policy, any suggestion of 
 moral advantage, was seized with avidity as justifying 
 interference. In the reign of Elizabeth, therefore, 
 we need not be astonished to learn that the preser- 
 vation of the timber trees of Kent and Sussex 
 warranted interference with the iron trade of those 
 counties. Two centuries later, the tanners of the 
 kingdom alarmed the legislature by averring that the 
 decay of the iron trade was making wood valueless, 
 and asserted that if something were not done coppices 
 would be grubbed up, and there would be neither 
 oak for shipbuilding nor bark for tanning. Dip 
 into the records of the iron trade where we will, we 
 may be sure to find the same story. Swedish iron 
 shall be prohibited admission to this country for the 
 benefit of one set of people, or shall be admitted for 
 the profit of another. The importation of iron from 
 the American colonies shall be encouraged lest the 
 manufacturers there " be forced to work it them- 
 selves, to the great decay and prejudice of the iron
 
 272 BRITISH INDUSTRIES 
 
 trade in this kingdom." (P'rom a Petition to the 
 House of Commons in 1736.) A century earlier, in 
 1637, Charles I., by proclamation, ordained that 
 pigs of iron made in England were to be marked by 
 his surveyors and that iron was not to be exported 
 without his license. In these days of coal-export 
 duties it is amusing to read Ralph Gardener's 
 Petition of 1655, praying for "a revival of the never- 
 to-be-forgotten statute of II Rich. II., cap. 7 (1388), 
 for a free trade to all, which voided all monopolies 
 and charters, as being the greatest grievance in a 
 commonwealth." He urged that this would not 
 only " make England equivalent to Venice, Holland, 
 and other free rich States, in riches, but preserve 
 timber, and reduce coals under 20s. the chalder all 
 the year at London," But most remarkable of all 
 is the pamphlet dated 1756, and entitled — 
 
 The 
 
 CASE 
 
 of the 
 
 IMPORTATION 
 
 of 
 
 BAR- IRON 
 
 from our own 
 
 COLONIES OF NORTH AMERICA; 
 
 Humbly recommended to the Conside- 
 ration of the present Parliament, by 
 the IRON MANUFACTURERS 
 of Great Britain,
 
 THE IRON AND STEEL TRADE 273 
 
 which is reprinted in the second volume of the 
 "Journal of the Iron and Steel Institute" for 1887. 
 Adam Smith's " Wealth of Nations " was published 
 in 1776. At the date of the pamphlet to which I 
 am referring he was thirty-three years of age. But 
 for these dates we might suppose the iron manu- 
 facturers of that day had got their political economy 
 from the founder of modern economics. I should 
 like to reprint the whole document, but the space at 
 my disposal forbids this. I must, however, set out 
 in full the " Preliminary Propositions " : — 
 
 " I. There cannot be a clearer Proposition 
 concerning Trade, than, That it is the Interest of 
 every Manufacturing Country to get as great a 
 Choice and Variety of raw Materials, and upon as 
 cheap Terms, as can possibly be procured. For an 
 Error in this respect, is fundamental, and hardly to 
 be corrected by any subsequent Care or Diligence. 
 Therefore the Legislature hath wisely ordained. 
 That though Wool, for Instance, grows in greater 
 Plenty in England than perhaps in any other 
 Country, yet the Wools of all Nations shall be 
 admitted into England Dnty-free; justly considering, 
 That we can never have too great a Choice and 
 Plenty of that necessary Material of extensive and 
 profitable Industry, or upon too cheap Terms. 
 
 "II. A second Proposiiion, not inferior either in 
 evidence or Importance is. That unless some Com- 
 modities are taken from other Countries by Way of 
 Barter in the Course of Trade, You can have but a 
 
 19
 
 274 BRITISH INDUSTRIES 
 
 small Vent for your own Manufactures ; it being 
 impossible for any Nation to make all their Pay- 
 ments 'in Gold and Silver, even if they abounded 
 with the richest Mines of those Metals. Nay, 
 though it were possible, it may be greatly ques- 
 tioned. Whether it is not more for the Interest of a 
 Manufacturing Nation to import sometimes raw 
 Materials by way of providing for the future 
 Industry of their People, than to be always im- 
 porting Gold and Silver ; which, when they come 
 to be unconnected with Labour and Industry, (as in 
 this Case they would soon be) have no other Effect, 
 than to introduce Laziness, Vanity and Extrava- 
 gance. And in the End Poverty. 
 
 "III. A third Proposition, by way of Preliminary, 
 is this. That Cheapness in regard to Price, and Good- 
 ness in regard to Quality, are the Support and Prop 
 of all Manufactures : And that it is impossible, in 
 the Nature of Things, for a Nation to preserve any 
 Manufacture, if they strike off, or suffer to be struck 
 off, these two grand Pillars, Cheapness and Good- 
 ness. They may indeed tamper for a While ; and 
 seem to do something, not unlike a Quack in 
 Physic, towards botching up a broken Constitution ; 
 but it will soon appear, that all they have been 
 doing, was only to make bad worse." 
 
 Our eighteenth century manufacturers proceed to 
 deal with the history of legislative interference with 
 their trade from 1751, when "Application was made 
 to Parliament for the Admission of Bar Iron Duty-
 
 THE IRON AND STEEL TRADE 275 
 
 free from our own colonies." They set out how 
 ..." after various Struggles, as is always the Case, 
 between Self Interest and the Public Good, the 
 contending Parties seemed to compromise the 
 Difference," and Bar Iron was to be imported Duty- 
 free into London. The conditions and limitations 
 of this permission were such that " in short as the 
 Case stands at present, this Iron cannot be used in 
 and about London and it shall not be permitted 
 to be carried to those Places where it may be 
 used. . . . The advocates of a free Trade were glad 
 of getting even so far . . . hoping, that when 
 the present Clamours had subsided, and Men's 
 Minds became more opened and enlarged by . . . 
 the natural Progress of Truth, a convenient Season 
 might be found for making this particular Indul- 
 gence . . . become a general Benefit to the whole 
 Kingdom." 
 
 The iron manufacturers next proceed to describe 
 " the Persons concerned in the Iron Trade " who 
 " are generally arranged into two Classes, The Iron 
 Masters and the Iron Manuf-acturers." The 
 former, they say, are few in number, but must 
 be " Men of Great Substance, great Capitals in 
 Trade, and capable of exerting a very dangerous 
 Influence when they find it their Interest to do so, 
 over Men of needy Circumstances and small 
 Capitals, dependent upon them." The Iron Manu- 
 facturers, on the other hand, "generally speaking and 
 by way of Comparison with the former, are but of
 
 276 BRITISH INDUSTRIES 
 
 middling Fortunes," but they add, " There is no sort 
 of Comparison, in a National View, between the 
 Importance of the one, and that of the other. And 
 yet the whole Contest in this affair lies between 
 these two sets of Men, The Iron-Masters on one 
 side, and the I ron-M aniifactnrers on the other : 
 Whereas besides all other Considerations, the Iron 
 Manufacturers are to the Iron-Masters in Number, 
 at least as Two Thousand to One." 
 
 The authors of the pamphlet next state eight 
 "Facts" in connection with the trade, (i) The 
 iron manufacture is increasing. (2) The last applica- 
 tion to Parliament has increased the price. (3) The 
 trade in Swedish and Russian iron is in few hands, 
 and may be made the subject of local duties in the 
 country of production. (4) These Governments are 
 already " stinting the making of Bar Iron within their 
 respective Dominions." (5) Charcoal is rising in price. 
 
 (6) American Bar Iron has some special qualities. 
 
 (7) American Pig Iron, owing to the carriage on it 
 and the cost of Charcoal, produces dear Bars. (8) 
 The growth of the iron trade adds to the revenues 
 of the Crown. " The Revenues of the Excise and 
 Post-Office, in particular, have been doubled, 
 trebled, quadrupled, and even sextupled, in the 
 Counties of Stafford and Warwick, since the first 
 settling of the Iron Manufacture in those Pro- 
 vinces." The writers next set out six " Reasons," 
 to justify the "present Application to Parliament." 
 I will not attempt to summarise these ; let it suffice
 
 THE IRON AND STEEL TRADE 277 
 
 that I should say they breathe the same spirit as the 
 Facts. They are followed by the statement of five 
 "Objections" and the " Answers " of the writers 
 to these. 1 quote Objection III : — 
 
 "If the Americans are suffered to import their 
 Iron Duty-free, all the English Furnaces and Forges 
 must stand still : Because We cannot pretend to sell 
 as cheap as they can : Our Woods likewise must be 
 grubbed up ; for it will not be worth the while to 
 preserve them : And the Country, which is already 
 too bare of Timber, will still be barer." And since 
 it refers to another commodity of which we hear a 
 great deal in these days, I also quote the third 
 answer to it : — 
 
 "Answer 3rd. Experience, which is the surest 
 Guide, hath plainly shewn, that Self-interest is a 
 very unfit Judge of future Effects, and of the Con- 
 sequences of Things of this Nature. The present 
 Cry is, * That if Bar-Iron from America was to be 
 admitted Duty-free, the Country would still grow 
 barer of Timber, because it would not be worth 
 while for the Land-Owners to suffer the Trees to 
 grow.' Suppose therefore that instead of Bar- Iron 
 you had said Wool, and that an Out-cry was to be 
 raised against the free Importation of Wool : ' For, 
 if Wool shall be admitted to come from other 
 Countries, especially from Ireland Duty-free, Alack- 
 a-day, what will become of Us ? Our Sheep-Walks 
 must all be destroyed ; not a Flock, not a single 
 Sheep will be left ; because it will not answer to
 
 278 BRITISH INDUSTRIES 
 
 rear or keep them : The Tenants must all break ; 
 the Landlords lose their Rents ; and the Govern- 
 ment its Taxes. These will be the consequences 
 of admitting the Importation of Wool Duty-free.' 
 Now, you must allow, that this Plea, were it made 
 (and most probabl}^ it ivas made) at the Time, when 
 it was debated. Whether it was right to admit foreign 
 Wools Duty-free : — I say, that this Plea is at least 
 as good and as reasonable as Yours. You must 
 acknowledge likewise, that the Proprietors of Sheep 
 Lands, and the Growers of Wool, are, in every 
 Sense, a much more considerable Body of Men 
 than the Iron Masters, and the Proprietors of a few 
 Wood-Lands : And vou must confess, because it is 
 in vain to deny it, that there is a much greater 
 Plausibility in the Argument for opposing the Im- 
 portation of Wool from our Neighbours in Flanders, 
 Germany, and Poland, especially from our next-door 
 neighbours, the Irish, (in all which countries Land 
 and Labour are uuidi cheaper than in England) than 
 it would be to oppose the Admission of Bar-Iron 
 coming from so distant a Country as North America, 
 where, if Land and Charcoal are cheaper, Labour 
 (the Principal Concern) is infinitely dearer. Yet, 
 notwithstanding the Plausibility of the Objection, 
 sure and long Experience hath made it to appear, 
 that the Admission of P'oreign Wool Duty-free, hath 
 been so far from preventing the Growth of English 
 Wool, that we have at this day more Sheep and 
 more Wool, the Product of Great Britain^ than ever
 
 THE IRON AND STEEL TRADE 279 
 
 we had in former Times." The answer ends with 
 the following sentence, which seems to be as true 
 and as applicable to-day as it was a century and 
 a half ago : " And if you are desirous of knowing 
 the Reason of this Fact, it is plainly this, — The free 
 Admission of Materials is the Cause of Labour ; 
 Labour is the Cause of Populousness ; and a 
 populous Country will always produce more Com- 
 modities, and have a readier Market for them, than 
 if it had been thinner peopled." 
 
 I have dwelt at some length on this pamphlet, 
 for it appears to me not only to contain the gist of 
 all our present discussion, but to be in itself a more 
 complete setting out of the case for protection in 
 the iron trade and the arguments against it than 
 I have found elsewhere in looking through the 
 earlier records of the trade. It has, moreover, a 
 further and larger interest. It shows once more 
 the falsity of the allegation that Free Trade is a 
 new doctrine invented some sixty years ago. All 
 the arguments to which we are accustomed are to 
 be found in the mouth of the Iron Manufacturers 
 of 1756. Can any one doubt that the course of 
 events was at that date tending more and more to 
 the development of commercial freedom ? It is a 
 commonplace to call Pitt a Free Trader. His ad- 
 ministration of the finances of the kingdom was 
 marked by the sound principle that the object of a 
 tax should be to obtain revenue with as little pres- 
 sure on the taxpayer as possible and with a single
 
 28o BRITISH INDUSTRIES 
 
 eye to that revenue and not to any other object. 
 The outbreak of war with France in 1793 put a stop 
 to all possibility of further progress in these direc- 
 tions. When peace was again established, a quarter 
 of a century later, England groaned under a burden 
 undertaken to preserve herself and Freedom from 
 annihilation. All hope of dealing with financial 
 reform on a large scale was postponed till she should 
 have recovered from the terrible exertions and sacri- 
 fices of the past struggle. But before another 
 quarter of a century had elapsed taxation had again 
 become the burning question of the day. By the 
 fourth decade of the nineteenth century the whole 
 politics of the country were dominated by the 
 question which, in 1846, found its solution in the 
 repeal of the Corn Laws. 
 
 It is the policy of which that repeal was but the 
 first-fruits which we are asked to reconsider. We 
 are to impose taxes not for revenue, but to secure 
 the goodwill of our fellow-subjects in the Colonies. 
 We are to tie our hands from buying where we 
 find it most convenient and profitable because the 
 statesmen tell us that our trade will be benefited 
 by going to this or that market for our goods. We 
 are to run the risk of imperilling a prosperity such 
 as I have indicated for the doubtful advantage of 
 postponing a ruin of which we deny the imminence. 
 We are called upon to imitate Germany, where the 
 working classes are protesting to the best of their 
 ability against that Brad IViicher (bread usury)
 
 THE IRON AND STEEL TRADE 281 
 
 from which we escaped sixty years ago, or America, 
 where Steel Trusts, with their shares at 80 per cent, 
 discount, are to ruin our iron industry. America 
 forsooth ! Let me quote some passages from the 
 letter of a private correspondent dated from 
 California in August of this year (1903) : — 
 
 " After living in this country for seventeen years, 
 under the domination of Protection, I think nothing 
 worse could happen to Great Britain than that the 
 people should be deluded into adopting such a 
 policy. I verily believe that here every department 
 in life, from Congress to State Legislature, from 
 State Legislature to Municipality, from Municipality 
 to Trade Union, and from Trade Union down to the 
 newsboy at the street corner, is demoralised by the 
 protective idea and by desire to get special advan- 
 tages for classes or localities at the expense of 
 the public. 
 
 " Of course you have recognised that in the 
 outcry of ' American invasion ' much that came 
 from this side of the water was bluff and boast. 
 For example, at the time the locomotive engine 
 builders here were supposed to be doing so much 
 in cutting into European and colonial trade they 
 were six months behind in their home orders, 
 and the railway companies here were so short of 
 locomotive power that they could not haul freight 
 in anything like a reasonable time. In consequence 
 thousands of boxes of oranges rotted in transit or 
 at the packing-houses where empty trucks were not 
 forthcoming.
 
 282 BRITISH INDUSTRIES 
 
 " From all accounts you have had great diffi- 
 culties with your Trade Unions, but I very much 
 doubt whether you have had to contend with any- 
 thing approaching the arbitrary and domineering 
 spirit that has been specially prevalent here during 
 the last six or nine months more particularly. 
 Nothing but the continuance of good harvests and 
 high prices for grain prevents the trade unions from 
 killing the goose." 
 
 I dare not go on, for my correspondent launches 
 into criticism of individuals which I do not feel 
 justified in printing, though, so far as my knowledge 
 goes, I entirely concur in them. If we are to 
 imitate America, shall we follow her example in 
 the treatment of her children in Southern cotton 
 mills as described in the book recently published 
 by Mrs. and Miss Van Vorst ? ^ 
 
 I myself see little or nothing that I wish to take 
 from the Great Republic. I do not desire to have a 
 crop of millionaires ; I do not wish for a population 
 striving for wealth at any cost ; I do not value a 
 political system which, unless all accounts are false, 
 encourages and promotes corruption. I would 
 rather see the iron trade of this country perish than 
 purchase its prosperity on the terms which protec- 
 tionists suggest. 
 
 What, then, is this trade of which we hear so 
 much ? I will not load my paper with figures 
 
 ' " The Woman who Toils." By Mrs. John Van Vorst and 
 Marie Van Vorst. (Grant Richards.)
 
 THE IROX AND STEEL TRADE 283 
 
 which are accessible to all. The general results 
 which I am about to state can be verified, by any- 
 one who desires to check them, from public docu- 
 ments easily obtainable. The total value of the 
 trade may be stated as amounting to between 
 ^^150,000,000 and ;^i6o,ooo,ooo a year. 1 include 
 both the home trade and the imports of iron 
 manufactures, which amount to about 10 per cent, 
 of the whole. I regard every article made chiefly 
 of iron as belonging to it. A needle and a ship 
 may be taken as the extremes of the trade. It 
 undergoes violent fluctuations from causes easily 
 explained, which would, however, take up too much 
 space to set out here. Subject to these fluctuations, 
 it has been uniformly progressive during the half- 
 century dealt with in the recently issued blue book 
 on "British and Foreign Trade and Industry" (Cd 
 1761). I might go back much further than 1854, 
 for, though its would-be protectors submitted it to 
 the repeated torments to which I have already 
 referred, it showed its vitality fully a century earlier. 
 As knowledge increased, the processes were revolu- 
 tionised again and again. The Catalan hearth, the 
 blast furnace, the puddling furnace, the Bessemer 
 converter, the open hearth furnace, represent suc- 
 cessive changes in the conditions of the industry, 
 each bringing great benefits to the consumer, but 
 causing, for the moment, great disturbances to the 
 trade. These disturbances have been met and 
 turned to ultimate advantage by the indomitable
 
 284 BRITISH INDUSTRIES 
 
 courage and perseverance of those engaged in the 
 industry. Is it surprising that, with such a history, 
 they shrink from a proposal to add the uncertainties 
 of fiscal legislation to their existing difficulties ? 
 When all is said, protection means that for some 
 advantage to be gained to the community I shall be 
 called upon to give up my right to buy where I 
 please and compelled to buy where the Govern- 
 ment wills. The State does not, and cannot, know 
 my needs as 1 know them. Yet it asks to dictate 
 to me how 1 shall satisfy them. I do not deny that, 
 on cause shown, I should give up my freedom, but 
 I do deny that any cause has been shown in the 
 present case. What risks are being run ? The 
 home trade is worth at least ;^ 130,000,000 a year. 
 It affords employment to over 1,000,000 men. The 
 general head "Metals" in the census of 1901 gives 
 1,174,200 as the number of males over ten years 
 employed in England and Wales, and iron is by 
 far the most important metal. But it gives employ- 
 ment to thousands of men on the railways and to 
 a very large proportion of the men engaged in 
 mining. In the census returns, "Conveyance" stands 
 for 1,249,200 and " Mines and Quarries " for 800,200. 
 The only other headings in the census of England 
 and Wales which exceed a million are "Agriculture," 
 with 1,071,000, and "Building" with 1,042,000. 
 "Textiles" employ 492,000 males over ten, but it is 
 only right to add that 663,200 women and girls 
 find employment in these industries, while " Dress"
 
 THE IROx\ AND STEEL TRADE 285 
 
 employs 414,600 males and 710,900 females, and 
 " Food, &c.," 774,300 males and 299,500 females. 
 Giving full weight to all these figures, I think I am 
 still entitled to claim for " Metals " the first place in 
 the industries of the Kingdom. It is a serious 
 matter to interfere with the well-being of so important 
 a section of the community. It may be improved ? 
 Yes, but it may be worsened, and it will be difficult, 
 in so complex a business, to say whether the im- 
 provement is caused by the change. " Daiis Ic doiitc 
 abstieiis-toi" we say to our tariff reformer. If he 
 persists, we ask what he proposes. Will he tax food ? 
 If he does, can it be doubted the price will rise ? 
 The recent development of the discussion appears 
 to recognise this as incontestable, and I need not 
 labour the point nor do more than refer to the 
 significant figures on pp. 120-6 of the return already 
 cited and the graphic representation of the figures 
 in the chart which follows. If the price of the 
 taxed article rises and wages rise, will the iron- 
 master be better equipped for meeting the com- 
 petition of the world ? If wages do not rise, 
 will his men regard the change with satisfaction ? 
 The interpretation put on some unguarded words 
 of Sir H. Campbell-Bannerman's are, 1 believe, far 
 from the truth. The majority of the labouring 
 classes in this country cannot be regarded as on the 
 verge of starvation. Fact after fact can be cited to 
 show that this is not any way near the truth. But 
 while I say this I do not deny that the position of
 
 286 BRITISH INDUSTRIES 
 
 the artisan needs the most earnest care from the 
 governors of the country. The future depends upon 
 our abihty to increase his efficiency. To place an 
 impost on the necessaries on healthy existence is 
 the last way to bring about this most desirable 
 result. 
 
 Shall we tax raw materials ? We must first 
 determine what we mean by the term. Spanish ore 
 is a raw material to some Cleveland ironmasters, 
 but it competes directly with those who use 
 Cleveland ironstone. Shall I and my associates, 
 shareholders and workmen, who produce an all- 
 British article, be put to a disadvantage as compared 
 with those who import, in the form of ore, about 
 twenty shillings worth of Spanish labour for every 
 ton of iron they make ? Pig iron from abroad 
 competes with us both. Is my neighbour, who 
 can obtain a contract by the purchase of, say, 
 Canadian pig iron brought here because my Cana- 
 dian fellow-taxpayer pays a bounty to the Canadian 
 ironmaster, to forego his advantage and discharge 
 his men ? And so on through the whole list. 
 Only the other day I was told of a man holding 
 shares in two large undertakings in the north of 
 England who was declaiming against " dumping." 
 His interlocutor, a director of both companies, put 
 to him this case : " I recently secured a contract 
 for one of your companies from the other for a 
 piece of work, and I was enabled to do it because I 
 bought foreign steel cheap. You got a dividend
 
 THE IRON AXD STEEL TRADE 287 
 
 owing to the profit I made on the contract, and you 
 were enabled to earn a dividend by means of the 
 cheap apparatus I purchased. Do you feel inclined 
 to give up both these profits ? " I was given to 
 understand that the answer was not suitable for 
 publication. 
 
 I myself have bought electrical machinery abroad. 
 It is hard to find a more highly finished product 
 than a dynamo. To me it was an implement of 
 production, practically a raw material. I used it to 
 produce my finished article. Is it proposed to 
 prevent me ? I no longer need to go to Belgium 
 for electrical machinery. British legislation had 
 hampered electrical enterprise in this country to 
 so great an extent that it was not the interest of the 
 British manufacturer to embark on the trade. The 
 difficulties are partially removed, and, at once, mobile 
 and adventurous capital fiows to this industry. 
 This is an example of the danger of the interference 
 of the legislature with trade, a danger which the 
 present suggestions will increase rather than 
 diminish. 
 
 Let it be borne in mind that the exports of the 
 iron trade last year were valued at ^^60,000,000, 
 As far as the discussion has gone these exports are 
 to be encouraged. Will they be promoted by being 
 made subject to any of the restrictions which are 
 proposed ? I guard myself against assuming that 
 the time may not come when fiscal reformers will 
 protest against such exports as the iron trade
 
 288 BRITISH INDUSTRIES 
 
 provides. Coal has long been regarded as an article 
 apart, requiring special treatment. But at least 
 70 per cent, of the value of coal is labour. If coal 
 needs special treatment, so does iron. A ton of 
 pig iron represents about two tons of coal, a ton of 
 steel not far from twice as much. In both cases 
 about 70 per cent, of the value is labour. Steel 
 made from Cleveland pig iron robs the country of 
 about four tons of ironstone and four tons of 
 coal, both equally irreplaceable. If I am wrong to 
 place the fuel in the hands of my competitor in the 
 trade of the world, why not also the steel? 
 
 That this question is not idle may be gathered 
 from Mr. Balfour's pamphlet on " Insular Free 
 Trade." In the table appended to it, machinery is 
 excluded from the value of British exports. No 
 doubt, by dint of excluding first one and then 
 another of our principal exports, it is possible to 
 arrive at the conclusion that we have none of 
 importance. This cannot be the reason why 
 Mr. Balfour excludes machinery as well as coal. 
 May it be found in the following considerations ? 
 In the golden age, now alas ! long passed, Britain 
 was the factory of the world. All important imple- 
 ments of production were to be bought from her. 
 With a want of wisdom which we now deplore, she 
 made haste to grow rich, and supplied to all comers 
 the produce of her factories and workshops. Ger- 
 many drew from her capital and machinery, and 
 established important industries. Dazzled by her
 
 THE IRON AND STEEL TRADE 289 
 
 own great and growing wealth, she failed to observe 
 that the wretched Teuton, seeking some employ- 
 ment for himself, was embarking on industries 
 which properly belonged to her, but which for the 
 moment she was too busy to take up. 
 
 To America she sent rails by the thousands of tons 
 and money to lay them down. The (I trust mythical) 
 anecdote of the colloquy between an American 
 railway magnate and a Welsh ironmaster is not so 
 irrelevant as it may seem. They discussed the 
 development of the American railways in the fifties. 
 Said the ironmaster, speaking of the rails : "They 
 were pretty poor stuff we sent you ! " " Yes," said 
 the railway magnate, "they were; but not worse 
 than the bonds we gave you for them." Not only 
 did America and Germany benefit by the Pactolian 
 stream which flowed from Great Britain, every 
 country was watered by the same fertilising flood. 
 Short-sighted mortals! Had Mr. Balfour been with 
 our ancestors he would have warned them of the fate 
 they were preparing for themselves and us. They 
 were in fact breeding up competitors who would 
 ruin them. Each cargo of rails made it more cer- 
 tain that the mineral resources of America would 
 become a danger to English trade. Had they been 
 wise they would have said : " Nothing shall leave 
 these shores which will add to the wealth or pro- 
 ductivity of the world. A steam engine may be used 
 to produce something we now produce, a rail may 
 convey to the coast something we now send to 
 
 20
 
 290 BRITISH INDUSTRIES 
 
 America." I do not know where to draw the hne — 
 "a bale of piece goods may clothe a man, who, 
 wretched being, will work and make something we 
 now make." At every port would have been 
 stationed a servant of the State to forbid the export 
 of that which might in the future militate against the 
 trade of the island. Insular Free Trade would have 
 been a misnomer, for, as they feared to send any- 
 thing out, they would have been unable to bring 
 anything in, and the Trade of the country would 
 have been Insular without being Free. 
 
 But the whole protectionist view depends on a 
 radical misconception of the conditions of trade. 
 In all the papers by fiscal reformers that I read, our 
 imports appear to be treated as an irresistible flood 
 which threatens to overwhelm us. No one seems 
 to realise that they come here because those for 
 whom they are destined have chosen to receive them. 
 They were bought by men who saw their way to 
 make a profit in the transaction. Let it be borne in 
 mind that out of 528 millions sterling imported in 
 1902 over 440 millions were food and raw materials, 
 and some 87 millions manufactures. We have seen 
 how difficult it is to draw a clear line between raw 
 materials and manufactured goods. Why should 
 we suppose that the importer of Spanish ore is 
 clever enough to make a profit, while the importer of 
 a Belgian dynamo is going to lose by the transac- 
 tion ? If it could be shown that, blind to his own 
 interest, he was losing, and that he and all the rest
 
 THE IRON AND STEEL TRADE 291 
 
 of the importers were in like case, something might 
 be said in favour of restraining him. But is there 
 any proof of this ? No sort of attempt has been 
 made to minimise the startling figures relating to 
 our prosperity and growing wealth. One last instance 
 of it I cannot refrain from adducing. Men travel by 
 railway for pleasure or profit. It is a sign of having 
 at least the railway fare loose in one's pocket. What 
 has happened with regard to railway travel ? In the 
 quinquennium 1855-9 the whole population travelled 
 4'8 times every year ; twenty years later (1875-9) the 
 whole population travelled 16*2 times every year ; 
 twenty years later again (1895-9) 25*5 times every 
 year ; and last year the whole population of nearly 
 42 millions travelled on the average more than 28 
 times by rail. There is no sign here of imminent 
 ruin or impending starvation. 
 
 I think I have shown that the fears expressed for 
 the trade are groundless, and that the remedy pro- 
 posed is not only unavailing, but inapplicable. 
 There remains only one matter with which I should 
 like briefly to deal. How shall we account for and 
 view the great development of industry in other 
 lands, and notably in America and in Germany ? I 
 have, in passing, pointed out how largely we are 
 responsible for both, and indicated how little reason 
 I see to regret what was done in the past. It 
 cannot have been difficult to foresee that as 
 population increased in both countries fresh sources 
 of employment would be sought. That Germany
 
 292 BRITISH INDUSTRIES 
 
 with her population of 57 millions should aspire to 
 a larger trade than Great Britain is not surprising ; 
 that the 121,377 square miles of these islands con- 
 taining 42 millions of people should think to stand, 
 in the matter of trade, permanently above the United 
 States of America, with over 3J million square miles 
 of territory and upwards of 80 millions of inhabitants, 
 only requires to be stated to be shown to be a 
 futile imagination. That we should continue to be 
 relatively the richest nation in the world is not so 
 absurd. We have an active and energetic people 
 desiring many things which cannot be produced at 
 home, but which foreign nations show no reluctance 
 to provide for us. We have an enormous power o-f 
 spending, for we possess an income larger than 
 almost any other body of men on the globe. That 
 we can be forced to buy what we do not want, 
 and compelled to use our capital resources for that 
 purpose, I cannot be brought to believe. There is 
 a long road to be travelled before the ;^i8 to ;^20 of 
 gross imports and exports per head of the popula- 
 tion in this country is equalled by the £'] to ;^8 per 
 head of Germany and France and the £^ to £(i per 
 head of the United States. While these countries 
 are adding to their wealth by their foreign trade we 
 shall not be failing to do likewise. It may be 
 difficult, or even impossible, to estimate the annual 
 increment of the wealth of Great Britain, but the 
 figures we possess point to a sum measured by 
 hundreds of millions sterling. All these things con-
 
 THE IRON AND STEEL TRADE 293 
 
 sidered, I look forward with every confidence to the 
 financial future of these islands. There are only 
 two provisos to this opinion. The first is that we 
 should steadily refuse to let our statesmen tamper 
 with our commerce ; and the second, that we should 
 neglect no means, by education, by legislation, by 
 any other methods devisable by the wit of man, to 
 make our people, of all classes, as efficient as their 
 competitors in other countries. 
 
 I have not dealt with one side of the great question 
 of the day ; I mean the Imperial as contradistin- 
 guished from the Insular side. This is not because 
 I undervalue its importance. On the contrary, I 
 feel it would be difficult to put too high the sacri- 
 fices I am prepared to make to uphold that great 
 free Empire which in my judgment embodies the 
 highest ideal of government. But I am profoundly 
 convinced that this ideal is not concerned with 
 pounds, shillings, and pence. It does not depend 
 on the cash nexus. It has its roots in no notions 
 of material welfare, but in a great unselfish senti- 
 ment of co-operation towards larger and nobler 
 ends which seek the establishment and maintenance 
 of justice, of progress and of freedom.
 
 THE MACHINERY AND ENGI- 
 NEERING TRADES 
 
 By Arthur Wadham, AJ. Mcch. E. 
 
 {Editor of the ** Machinery Market ") 
 
 IT is impossible to deny the fact that the 
 machinery and engineering industries have 
 developed and prospered enormously during the last 
 fifty years, i.e.y during the " Free Trade Era," as we 
 term it. The question which now engages attention 
 is this : To what is the prosperity of the last half- 
 century due ? Is it a mere coincidence of the 
 " Free Trade " movement ; the natural result, that is 
 to say, of increased inventive activity ? Or is the 
 advance in wealth and general comfort which has 
 taken place attributable in a greater or less degree 
 to the national policy inaugurated in 1846 ? 
 
 I leave to other and abler writers the task of deal- 
 ing with the social aspects of this most important 
 inquiry. The duty before me — which I undertake 
 
 with a certain amount of pleasure — is to trace the 
 
 294
 
 MACHINERY AND P:NGINEERING 295 
 
 effect of our Free Trade system upon the great 
 brancli of commerce which forms the subject of 
 this paper. 
 
 In order to do this with clearness it is necessary 
 that the history of the machinery and engineering 
 trades previous to the middle of last century should 
 be glanced at, and the position they occupied at 
 that time indicated with some amount of precision. 
 We shall in this way secure a proper standpoint 
 from which to compare past and present, and to 
 pursue our investigations. The next step will be 
 to examine the points at which the machinery and 
 engineering trades came into contact with, and were 
 influenced by, the operation of our Free Trade 
 policy. I venture to think it will be apparent to 
 every one who will carefully study the course of 
 events, both immediately after the adoption of our 
 present commercial system and since, that so far as 
 the industry I am dealing with is concerned, its 
 prosperity and constantly growing magnitude is 
 largely due, both directly and indirectly, to the 
 operation of " Free Trade." 
 
 What do we Mean by " Free Trade" ? 
 
 It is a waste of time to discuss any question 
 unless the terms we employ are clearly understood, 
 and therefore the phrase must, if possible, be 
 rescued from the vagueness and misapprehension 
 which surrounds it. For instance, we are frequently 
 told nowadays that our trade is " not free," or that
 
 296 BRITISH INDUSTRIES 
 
 we are the victims of " one-sided free trade," 
 because of the fact that we are hampered by the 
 prohibitive or restrictive tariffs of other countries. 
 
 In order to grasp the meaning of the term " Free 
 Trade" let us recall the principles upon which our 
 trade legislation was based in earlier times. Pro- 
 bably no better corrective to misunderstanding in 
 regard to this great question can be adopted than 
 that of examining the conditions under which our 
 commercial system was carried on previous to the 
 middle of last century. I venture to predict readers 
 will find themselves able, after such an inquiry, to 
 form an unhesitating judgment as to the wisdom 
 of the Fiscal Policy which this country has pursued 
 during the last fifty years. 
 
 Prohibitions and Restrictions. 
 
 The antithesis of " Free Trade " is " prohibited 
 or restricted trade." Our country has had 
 experience of both systems, and this provides 
 us with material upon which to form a 
 sound judgment. Writing in 1783, Adam Smith 
 records the practice of his day in a precise and 
 vivid manner. After referring to the duty of more 
 than 5s. per ton imposed on the exportation of 
 coal, he says : " The exportation, however, of the 
 Instruments of trade properly so called, is com- 
 monly restrained not by high duties, but by 
 absolute prohibitions. Thus, by the 7th and 8th 
 of William III., chap. 20, sect. 8, the exportation
 
 MACHINERY AND ENGINEERING 297 
 
 of frames or engines for knitting gloves or stock- 
 ings is prohibited under the penalty, not only 
 of the forfeiture of such frames or engines so 
 exported, or attempted to be exported, but of forty 
 pounds, one half to the king, the other to the 
 person who shall inform or sue for the same. In 
 the same manner by the 14th George III., chap. 71, 
 the exportation to foreign parts of any utensils made 
 use of in the cotton, linen, woollen and silk manu- 
 factures, is prohibited under the penalty, not only of 
 the forfeiture of such utensils, but of two hundred 
 pounds, to be paid by the person who shall offend 
 in this manner ; and likewise of two hundred 
 pounds, to be paid by the master of the ship who 
 shall knowingly suffer such utensils to be loaded on 
 board his ship." ^ 
 
 The motive of these and other regulations of a 
 similar character, as Adam Smith pointed out, was 
 " to extend our own manufactures, not by their own 
 improvement, but by the depression of those of all 
 our neighbours, and by putting an end as much as 
 possible to the troublesome competition of such 
 odious and disagreeable rivals." To such an extreme 
 was this policy pursued that it was made illegal 
 under stringent penalties for " any artificer of any 
 of the manufactures of Great Britain to go into any 
 foreign parts in order to practice or teach his trade." 
 By the 23rd George II., chap 13, the penalty against 
 any person enticing an artificer to go abroad for the 
 • Smith's " Wealth of Nations, " book iv. chap. viii.
 
 298 BRITISH INDUSTRIES 
 
 foregoing purpose was, " for the first offence, five 
 hundred pounds, and to twelve months' imprison- 
 ment, and until the fine shall be paid ; and for the 
 second offence one thousand pounds, two years' 
 imprisonment and until the fine shall be paid." The 
 artificer himself who ventured abroad in contraven- 
 tion of this law was outlawed. 
 
 This system of mercantile law lasted a long time, 
 and abundant opportunity was afforded to test and 
 prove its value. Statutes prohibiting the exporta- 
 tion of all metals (excepting lead and tin) can be 
 traced as far back as the reigns of Edward III., 
 Henry VIII., and Edward VI. The result of the 
 nation's experience of these restrictions was not 
 satisfactory, for we find that modifications of these 
 laws were made from time to time. Sometimes 
 these changes were reactionary, but on the whole 
 the tendency was in the direction of Free Trade. 
 
 Trade Restrictions Abolished. 
 
 Finally, in August, 1843, a clean sweep was made, 
 all prohibitions on the export of machinery being 
 thenceforward removed ^ by the Customs Duty Bill, 
 6 and 7 Victoria, cap. 84. The administration of 
 this law had previously been relaxed, for although 
 between the years 1825 and 1843 the exportation of 
 many kinds of machinery was still prohibited, it was 
 left to the Board of Trade to use its discretion, each 
 individual application from any person desirous of 
 • See " Porter's Progress of the Nations."
 
 MACHINERY AND ENGINEERING 299 
 
 shipping machinery being considered on its own 
 merits. 
 
 Three years later, viz., on June 26, 1846, the Corn 
 Importation Bill (introduced by Sir Robert Peel) 
 granting a free trade in corn, received the royal 
 assent. By this Act the duty on wheat was reduced 
 to 4s. when imported at or above 53s., until February 
 I, 1849, after which day the duty became is. per 
 quarter only on all kinds of grain imported into the 
 United Kingdom at any price. 
 
 This was followed in 1849 by another measure of 
 equal, if not greater, importance to the industries 
 of the country, viz., the repeal of the Navigation 
 Laws. This Act, which was passed after much 
 opposition, came into operation on January i, 1850. 
 Trade was henceforth " free," so far as our own 
 country was concerned, and the true significance of 
 the term is apparent. From that time the nation 
 started on a fresh career, released from the nar- 
 rowing and artificial bonds which hitherto had 
 retarded its commercial progress. 
 
 Before passing on I must briefly mention the 
 conditions under which the shipping trade was 
 carried on previous to the Act of 1849. Under 
 prior maritime laws the importation and exportation 
 of goods from or to Asia, Africa, or America was 
 restricted to English ships, of which the master and 
 three-fourths of the mariners were to be English. 
 Other countries retaliated, with the result that, 
 until a reciprocal treaty was made with the United
 
 300 BRITISH INDUSTRIES 
 
 States, British ships had to sail in ballast to 
 America when they went there to get a cargo, while 
 American ships came to Great Britain in ballast 
 when they wanted a British cargo. The consumer 
 in both countries accordingly paid double freight. 
 Our merchants also laboured under the disability 
 of having to pay whatever freight was demanded 
 by a limited number of shipowners and trade was 
 checked in consequence. 
 
 It is significant that these early restrictive Acts 
 were all introduced under the title " An Act for 
 the encouragement and increase of Shipping and 
 Navigation," but the credit of having brought about 
 the result aimed at must be given to the open- 
 handed policy pursued since 1849. British ship- 
 ping has increased from a tonnage of 3,360,935 
 in 185 1, employing 141,937 men, to 9,524,496, 
 employing 247,973 men. From the remarks of 
 a writer on the shipping industry in a book ^ 
 published in 1851, it appears that the repeal of 
 the Navigation Laws had an immediate beneficial 
 effect. 
 
 "The recent change," he says, "in the Navigation 
 Laws is producing important results in the com- 
 merce of England with foreign nations. British 
 shipping," it is added, " has already derived great 
 advantages from these enactments. There seems 
 every probability that as British shipping is now 
 fairly brought into competition with foreign, great 
 
 ' Knight's "Cyclopaedia of the Industry of all Nations."
 
 MACHINERY AND ENGINEERING 301 
 
 improvements will be made in shipbuilding ; indeed, 
 such improvements have already commenced." 
 
 We shall see presently that this had a very 
 important bearing on the future of machinery and 
 engineering. 
 
 Why the Protectionist System was Abolished. 
 
 It is said that the terrible experiences of the Irish 
 famine and the helplessness of the country to deal 
 with it owing to the inadequacy of our food supply, 
 provided the final argument which induced Sir 
 Robert Peel to amend the Corn Laws. But forces 
 had been at work for a quarter of a century 
 gradually, though surely, tending towards the eman- 
 cipation of trade from the antiquated methods and 
 barriers which cramped it. 
 
 The growth of population in the United Kingdom 
 from less than 17,000,000 in 1801 to more than 
 27,000,000 in 1841 had altered the conditions of the 
 country. Manufacturing operations had absorbed 
 the energies of a large proportion of the people, 
 and the agricultural resources of these islands 
 being insufficient for the needs of the country, our 
 food supply had, as a matter of sheer necessity, 
 to be supplemented from other sources. 
 
 " Should these food supplies be admitted duty 
 free, or should they be taxed ?" This was the 
 debatable question then, as it is now, with this 
 difference, that whereas sixty years ago the object of 
 the food protectionists was to maintain prices for
 
 302 BRITISH INDUSTRIES 
 
 the benefit of the agricultural industry in these 
 islands, the avowed purpose at the present time is 
 to do so for the advantage of Colonial growers. The 
 manufacturing and shipping trades had already 
 attained a preponderance in the country's interests, 
 and if they were to be successfully carried on in 
 face of foreign competition, it was essential that all 
 raw material, and food more especially — as the raw 
 material of labour — should be purchasable at the 
 lowest possible price. Dear food hampers manu- 
 facture, checks trade, and causes want. It had 
 brought about those results at the time of Queen 
 Victoria's accession to the throne, and the argument 
 in favour of cheap food ultimately won the day. 
 
 The inauguration and rapid development of the 
 Penny Post and of intercommunication generally, 
 the power of the Press and interchange of ideas 
 which had been rendered possible by the agency 
 of steam and machinery, were powerful factors in 
 winning the contest. 
 
 The issue was vast. The decision meant that 
 the future of Great Britain was to be that of a 
 great manufacturing and shipping nation, with 
 world-wide connections, instead of one which must, 
 sooner or later, find its limits within its own narrow 
 boundaries. 
 
 It is conceivable that this country might have 
 been able to supply its own food requirements fifty 
 years ago if it had possessed the ingenious and 
 powerful machines for ploughing, tilling, and reap-
 
 MACHINERY AND ENGINEERING 303 
 
 ing available now ; if also a better system of 
 agriculture had been in vogue ; and had land laws 
 been in existence encouraging the cultivation of 
 the soil to its full capacity. Those conditions, 
 however, did not obtain ; consequently we were 
 compelled to pay other countries to do work for 
 us which might have been done at home. 
 
 Whatever else may be done or left undone at the 
 present time, our wise course lies in remedying now 
 the deficiencies and mistakes of the past which 
 remain unrectified. It is undeniably true that the 
 more we can grow at competitive prices within our 
 own shores the more profitable our trade will be. 
 The produce of the soil and the efficiency of 
 labour together form the primary source of all 
 wealth. It is because the United States of America 
 possess a superabundance of natural products that 
 the fiscal problem in that country is of a different 
 character to our own. 
 
 Effect of Free Trade. 
 
 I now come more closely into touch with my 
 own portion of the subject. Foreign trade being 
 thrown open without let or hindrance, an active 
 exchange of our manufactures took place in return 
 for the corn and food products bought by us from 
 abroad. 
 
 The machinery and engineering trades of the 
 country were amongst the first to profit by the change. 
 The increase in the carrying trade, both by land and
 
 304 BRITISH INDUSTRIES 
 
 sea, entailed in bringing larger supplies of corn to the 
 English market from abroad/ provided additional 
 work for railways and shipping, and as a consequence 
 a growing demand sprang up for locomotives, marine 
 engines, and all the mechanical paraphernalia needed 
 for the handling and conveyance of merchandise. 
 This in turn gave birth to subsidiary manufacturing 
 trades, and stimulated existing businesses into greater 
 activity. The employment of steam power and 
 machinery thus rapidly increased, and, like a snow- 
 ball, the volume of trade grew bigger at every turn. 
 
 Implements and mechanical appliances were 
 needed by foreign nations for cultivating, harvest- 
 ing, and transporting the greater quantities of food 
 and raw materials produced to supply our require- 
 ments. An export trade in machinery followed as 
 
 ' The quantities of wheat and wheat flour imported into 
 Great Britain between the years 1825 and 1849 varied from 
 66,905 quarters to 4,835,280, or as other statistics give it, the 
 average from 1829 to 1849 was 1,771,067 quarters annually, 
 out of which Prussia supplied 435,791, United States of 
 America 242,094, Germany 232,034, and Russia 209,237 quarters. 
 It is interesting to observe that in 1849 the chief sources of 
 our wheat and wheat flour supply were from the following 
 countries (quantities stated in round numbers) : — 
 
 France ... ... ... ... ... 750,000 quarters. 
 
 United states of America ... ... ... 000,000 ,, 
 
 Russia ... ... ... ... ... 600,000 „ 
 
 Prussia ... ... ... ... ... 600,000 „ 
 
 The gross total of all kinds of grain ami meal imported in 
 1849 was 10,753,755 quarters, which included about 6,000,000 
 quarters of barley, oats, Indian corn, beans, and meal. This 
 trade has been one of continued growth, our imports for 1901 
 being about four-and-a-half times greater than fifty years ago.
 
 MACHINERY AND ENGINEERING 305 
 
 a matter of course, although it may be remarked 
 that its growth was slow at first, as will be seen 
 from the figures I shall presently quote. The sub- 
 stitution of machinery for hand labour has always 
 required time, owing to the conservative attachment 
 of human nature to old customs. 
 
 The prosperity of our machinery and engineer- 
 ing trades received an enormous impetus in other 
 ways, owing to the increased import of grain. 
 For instance, we may reckon that every additional 
 thousand quarters imported, provided cargo for 
 another vessel of the average tonnage of the time. 
 The demand for additional steamships and their 
 machinery, cranes and lifting tackle, plant for 
 haulage, and so on, all brought in orders to en- 
 gineering shops. The deepening and enlargement 
 of harbours to cope with the increasing traffic, and 
 the extension of travel for business and pleasure 
 purposes which followed, also brought fresh business 
 to the machinery trades. It may be added that 
 similar influences are still continually at work. 
 
 ExpoRTvS OF Machinery. 
 
 Our export trade in machinery (to which refer- 
 ence has just been made) shows an enormous ratio 
 of increase during the last fifty years. In 1850, 
 when this branch began to assume substantial 
 proportions, the declared value of our export 
 trade classified under the heading of " Machinery 
 and Millwork " was a little over one million pounds 
 
 21
 
 3o6 BRITISH INDUSTRIES 
 
 sterling. Last year (1902) the returns were roughly 
 19 millions. I give the figures at intervals of ten 
 years as follows : — 
 
 1850. 
 
 i860. 
 
 1870. 
 
 1880. 
 
 1890. 
 
 1900. 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 1,042,000 .. 
 
 . 1,231,000 . 
 
 . 5,966,000 . 
 
 . 9,264,000 . 
 
 . 16,413,000 . 
 
 . 19,622,000 
 
 These figures represent the value sent out of the 
 United Kingdom of locomotives and other steam 
 engines ; gas and oil motors ; agricultural, mining, 
 and textile machinery ; sewing machines ; and 
 general machinery not specially designated. " Im- 
 plements and Tools" come under another classifi- 
 cation in the official returns, and are not included 
 in these amounts. 
 
 The comparison of cash values is faulty as a 
 measure of the relative magnitude of this depart- 
 ment of trade at the beginning and end of the 
 period under survey. For instance, it may be 
 reckoned that the exports of 1850 would not exceed 
 ^^250,000 in value if turned out under present-day 
 systems of production. But ignoring this factor in 
 the account, the volume of our machinery exports 
 shows an increase of more than eighteen times in 
 cash value during Free Trade times. 
 
 The following figures for 1902 show where we 
 find our customers for these exports : — 
 
 Foreign countries 12,652,000 
 
 British East India 2,933,000 
 
 British South Africa 1,730,000 
 
 AustraUa and New Zealand 1,437,000 
 
 Total 
 
 ••^18,752,000
 
 MACHINERY AND ENGINEERING 307 
 
 (The amount is less than in 1900. This will 
 probably be accounted for by the disturbance to 
 trade caused by the war.) 
 
 It will be seen that two-thirds of this trade is 
 done with foreign countries, and it is exceedingly 
 important to observe that if any considerable 
 portion should be lost by the proposed change in 
 our fiscal policy we cannot look to our Colonies 
 for adequate compensation. 
 
 The next table shows the movement of this trade 
 during the last two decades, the value of machinery 
 exports to our Colonies and Dependencies being 
 given first, and next those to foreign countries : — 
 
 British East Indies 
 British South Africa 
 
 Australasia 
 
 Canada 
 
 • £ 
 
 1882. 
 
 £ 
 1,263,969 
 
 1,190,766 
 
 1892. 
 
 £ 
 ... 1,954,409 
 
 - 443,396 
 ... 888,315 
 ... 139,059 
 
 3.425,179 
 11.373.537 
 
 ;£i4,798,7i6 
 
 1902. 
 
 ... 2,933,076 
 ••• 1,730,058 
 ... 1,436,633 
 
 • • ■ ■ 
 
 Totals 
 
 Foreign countries... 
 
 Grand totals .. 
 
 2,454,735 
 9,507,925 
 
 11,962,660 
 
 6,099,767 
 12,652,045 
 
 £18,751,812 
 
 The exports to Canada have ceased to come into 
 the amount as a separate item. Both there and 
 in Australasia the policy is to make their own 
 machinery as far as possible. 
 
 The increase shown in the exports to foreign 
 countries is slow, but there is a decided advance in 
 spite of the substantial defection of Germany and 
 the United States as customers. The following will
 
 3o8 BRITISH INDUSTRIES 
 
 give an idea of the fluctuations of this trade with 
 the two last-named countries : — 
 
 1882. 1892. 1902. 
 
 £ £ £ 
 
 U.S.A 627,496 ... 1,051,856 ... 685,543 
 
 Germany 1,354-850 ••• 1.485,959 ••• 68,025' 
 
 In the course of the controversy now taking place 
 it has been contended that we ought to eliminate 
 the value of our machinery exports entirely from 
 computations of the foreign trade of the country on 
 the ground that they are the reverse of profitable. 
 Machinery (together with coals and ships) has been 
 described in this connection as "pernicious." 2 The 
 reason advanced for this dictum is that it stimulates 
 the competition of rivals. If it be right to regard 
 our machinery exports as a means of destroying 
 our country's commerce, obviously the proper 
 course to adopt is to revive without delay the 
 old statutes abolished sixty years ago (referred to 
 in the early portion of this paper), and once more 
 to prohibit them absolutely. Before taking so 
 reactionary a step it will surely be worth while, 
 however, to inquire what substance there is in 
 the argument. If the distinguished author referred 
 to had examined the point more thoroughly before 
 
 • These are the only figures given in last year's returns in 
 which Germany is specifically mentioned. The entry repre- 
 sents the value of steam engines only exported to that 
 country. Other exports to Germany are included under the 
 general heading, " Countries in Europe." 
 
 ' See Part x. " Economic Notes on Insular Free Trade," by 
 the Right Hon. A. J. Balfour, M.P.
 
 iMACHIXERY AND EiVGINEERIXG 309 
 
 committing himself so far as he has done, I am 
 convinced he would have adopted an absolutely 
 contrary view. Speaking broadly, it can be stated 
 as an antithetical proposition that our exports of 
 machinery have created the great bulk of our foreign 
 commerce, and are of far greater intrinsic value to 
 the nation than their immediate cash equivalent. 
 In order to justify this statement we need only 
 adopt the simple plan of inquiring, " What are the 
 machines exported ; what is their destination and 
 purpose ? " By way of example it will be found 
 that last year we sent abroad to various countries 
 locomotives to the value of ;^''2, 284,094. These 
 locomotives are employed in hauling traffic on 
 railways abroad. Another large portion of our 
 machinery exports consists of railway plant, or 
 machinery used either in the construction or for the 
 equipment of railways. But since railways open up 
 trade, by bringing buyers hitherto inaccessible to us 
 into contact with our markets, none of these locomo- 
 tives or machines can be denounced as " pernicious 
 exports." Take another class, namely, machinery 
 for the construction of docks, harbours, and irri- 
 gation works. The country has lately congratu- 
 lated itself upon having brought a large tract of 
 land within the area of cultivation in the fertile 
 portion of the Nile valley by the construction of 
 the Assouan dam. The machinery sent to Egypt 
 for excavating, lifting, and carrying the material, 
 as well as that for the sluices and other mechanical
 
 310 BRITISH INDUSTRIES 
 
 appliances required to work the dam, and without 
 which that magnificent work could not have been 
 accomplished, were all part and parcel of the so- 
 called '* pernicious " exports. Again, amongst the 
 machinery we send abroad are large quantities used 
 in sugar and cotton plantations, the purpose of 
 which is to cheapen the production of the raw 
 material. Oil-mill machinery, agricultural imple- 
 ments, and many other appliances, serve similar 
 ends. What would happen to our sugar, cotton, 
 and oil trades if we might not send this machinery 
 out of the country ? How would the gold-mining 
 industry of South Africa fare if it were deprived of 
 the machinery we have sent abroad for its use ? 
 The great trade in frozen meat and provisions 
 also, which has been so profitable both to the 
 Colonies and ourselves, owes its origin and mainte- 
 nance to the exportation of refrigerating machinery. 
 Almost the whole range of commerce could be 
 reviewed on similar lines, but I have surely said 
 enough to satisfy any inquiring mind that the 
 machinery we export not only provides pro- 
 fitable work in constructing it for a large number 
 of British engineering factories, but brings back, 
 as the result of its use abroad, a great wealth of 
 trade into this country. The question of textile 
 machinery admits of some qualification, and this 
 is probably what Mr. Balfour had in mind. Even 
 there, however, if space permitted, a case could be 
 presented in favour of these exports.
 
 MACHINERY AXD EXGINEERIXG 311 
 
 The Machineky and Engineering Trades 
 Before and After F'ree Trade Times. 
 
 It is perfectly true that the locomotive and the 
 marine engine were brought into existence before 
 the advent of Free Trade, and their united agency 
 has undoubtedly been the greatest factor of modern 
 times in developing the commerce of the world. 
 But there is something more to be said. 
 
 It is contended by some that our prosperity (out- 
 side that from our great national asset represented 
 by our coal resources) was entirely made " in the 
 early nineteenth century by the products of British 
 inventions applied to textile manufacture, prin- 
 cipally cotton, and in the middle of the nineteenth 
 century by the further products of British invention 
 (engineering and metallurgical) principally applied 
 to the manufacture of iron and steel." ^ 
 
 The writer whose remarks I have just quoted, 
 and those who take a similar view, miss an im- 
 portant point. They overlook the great impetus 
 which was given to the industries of the country 
 by the widening of our markets and the increased 
 foreign traffic which, as I have already pointed out, 
 took place as a direct result of the Free Trade 
 system. Locomotives and steamships are of little 
 use unless there is interchange of trade, and a policy 
 of restriction curtails their value. The truth, as 
 regards this part of the controversy, appears to be 
 ' Letter to editor of London daily paper, August 14, 1903.
 
 312 BRITISH INDUSTRIES 
 
 that the removal of commercial restrictions greatly 
 stimulated the machinery and engineering trades 
 (and other industries at the same time), but on the 
 other hand the benefits of Free Trade could not 
 have been realised without machinery and the in- 
 ventions of the engineer. 
 
 Glancing at the history of these trades, before 
 and after Free Trade times, we shall be able to see 
 how these two great influences, the one political and 
 the other mechanical, acted and reacted one on the 
 other, and together built up the national prosperity. 
 
 The machinery and engineering trades may be 
 said to date their commencement as a separate 
 industry from the birth of the railway system and 
 of the steamboat service, which events happened 
 almost simultaneously. The fortunes of these 
 three branches of industry are interdependent, and 
 the growth of the machinery trade can be most 
 effectively traced by following the development of 
 railways and steamships. In the early part of last 
 century the construction of machinery was notice- 
 able for its strength and substantiality, but in other 
 respects it can only be described as blacksmith's 
 work. An inspection of the wheels and other parts 
 of the valuable relic — " Locomotion No. i " — for 
 instance, affords interesting suggestions of the rough- 
 and-ready means employed by the mechanics of 
 those days. As the demand grew, and educated 
 minds gave their attention to this branch of work, 
 improvements rapidly multiplied, and by the time
 
 MACHINERY AND ENGINEERING 313 
 
 of the great Exhibition of 1851 the construction of 
 machinery had become established on scientific lines. 
 Railway engineering. — The first great event in the 
 history of this branch of engineering was the 
 opening of the Stockton and Darlington line, 
 which took place in September, 1825, i.e., twenty- 
 one years prior to the repeal of the Corn Laws. 
 This was the first railway in the world to convey 
 passenger traffic. The success of that line attracted 
 the attention of commercial men, and the further 
 success which followed the opening of the Liverpool 
 and Manchester Railway in 1830 formed the prelude 
 to a rapid extension of the new means of transit. 
 Evidence of the progress made by the machinery 
 trade may be gathered from a record of the time, 
 which mentions that at the ceremony of opening 
 the latter line on September 15, 1830, eight locomo- 
 tive engines made by Messrs. Stephenson at New- 
 castle started in succession drawing 28 carriages, 
 capable of carrying about 600 passengers. On the 
 following day one of the engines drew 130 pas- 
 sengers the 31 miles from Liverpool to Manchester 
 in I hour and 50 minutes, showing that an excellent 
 standard of workmanship and design had been 
 attained. The excitement induced by these accom- 
 plishments and the possibilities of money-making 
 opened up thereby led to a great deal of premature 
 speculation, eventuating in what is known as the 
 "railway mania" of 1835-7. ^^ correct this, certain 
 restrictions were introduced in the parliamentary
 
 314 BRITISH INDUSTRIES 
 
 session of 1837 ^o check the facility of obtaining 
 Railway Acts. Owing to this, and to the fact that so 
 many people had "burnt their fingers" by immature 
 investments, only five new lines were produced in 
 in the years 1838 and 1839. During the three years 
 1835-7, ^cts had been passed for no less than 50 
 new lines, aggregating upwards of 1,600 miles. 
 
 A fresh outburst of speculative activity occurred 
 in 1844. Parliamentary sanction was obtained in 
 that year for 26 new railways or extensions of 
 existing lines, totalling 797 miles and involving a 
 total capital of nearly .^'15,000,000. At the end of 
 1850, 6,621 miles of railway Hne had been con- 
 structed in the United Kingdom, 
 
 The recital of these brief historical reminiscences 
 enables the position of affairs to be indicated so far 
 as our railway system was concerned at the be- 
 ginning of the Free Trade Era. Is there any room 
 to question its prosperity since that time ? The 
 mileage in the United Kingdom is treble that of 
 50 years earlier, and the capital paid up has growai 
 from ^^240,270,745 in 1850 to ;^i, 176,001,890 in 
 1900. The following comparative figures will assist 
 in making the point clear : — 
 
 1850.' 
 
 Miles Average Receipts No. of Total Traffic 
 
 Open. per Mile. Passengers. Receipts. 
 
 6,621 £2,328 66,840,175 ;^i2,407,852 
 
 igoi.^ 
 22,078 i,"4.5ii 1,174.275,036 ;£99.595,434 
 
 Knight's "Cyclopaedia/' 1851. - Whittaker, 1903.
 
 MACHINERY AND ENGINEERING 315 
 
 The number of persons employed in working the 
 railways of the United Kingdom in 1901 was 575,834. 
 The extent to which railways give direct employ- 
 ment to the machinery and engineering trades 
 may be realised by glancing at the following 
 statement of rolling stock in use at the close of 
 1901, namely : — 
 
 21,714 locomotive engines ; 
 48,851 passengers' conveyances; 
 19,065 other vehicles attached to passenger trains ; 
 697,683 waggons for goods traffic ; 
 18,407 miscellaneous vehicles. 
 
 These figures speak for themselves. Indirectly, the 
 machinery and engineering trades profit in many 
 other ways from railway enterprise. This is obvious 
 when it is considered how much money is spent in 
 the purchase, not only of rolling stock, but also of 
 bridge-work, rails, and engineering plant of almost 
 every description for excavation, lifting, pumping, 
 building, and so on. 
 
 Marine engineering. — For the beginnings of this 
 we have to turn back to the year 181 3, when 
 a little boat named the Comet, of about twenty- 
 five tons, and worked by a 3-horse-power engine, 
 was started on the Firth of Clyde by Mr. 
 Henry Bell. This was the first steamboat for pas- 
 senger traffic permanently established in British 
 waters. In 181 8 Mr. David Napier directed his 
 attention to the improvement of steam navigation, 
 and we are indebted to him for introducing
 
 3i6 BRITISH INDUSTRIES 
 
 steam- vessels for deep-sea communication and 
 for the establishment of post-office steam-packets. 
 Amongst early historical vessels was the Rob 
 Roy, which plied between Greenock and Belfast, 
 about ninety tons burden, fitted with engines of 
 30 horse-power, built in 1818 by Mr. William 
 Denny, of Dumbarton. The s.s. Talbot (120 tons) 
 followed, built by Mr. Wood for Mr. Napier, and 
 fitted with two of Napier's engines, each of 30 horse- 
 power. This was the first steam vessel that plied 
 between Holyhead and Dublin. A line of steam- 
 ships was established about the same time between 
 Liverpool, Greenock, and Glasgow. Advances 
 continued to be made, and in 1838 the s.s. Sirhis 
 and s.s. Great Western made their successful passages 
 across the Atlantic. The former completed the 
 voyage from Cork to New York in nineteen days 
 (April 4th to April 23rd), and the latter from Bristol 
 to New York in fifteen days (April 8th to April 
 23rd). It is interesting to find that the s.s. Great 
 Western made seventy voyages across the Atlantic, 
 covering a total of 256,000 miles. The average 
 speed on the outward journeys was 9 J miles, and on 
 the homeward ii|- miles per hour. Her shortest 
 outward passage was 12 days 18 hours, and the 
 longest (in stormy weather) 22 days 6 hours. The 
 greatest number of passengers taken at once was 
 
 152. 
 
 Results which an industrial writer in 1845 de- 
 scribed as "mighty exploits" we now look back
 
 MACHINERY AND ENGINEERING 317 
 
 upon as mere preliminaries. The figures which 
 follow will indicate the developments which have 
 taken place in this department during Free Trade 
 times. 
 
 The steamships registered at all the ports in the 
 United Kingdom on December 31, 1850 (according 
 to Knight's " Cyclopaedia," published in 1851) 
 were : — 
 
 Vessels. Tons. 
 
 Steamships under 50 tons ... 520 ... 12,885 
 
 „ 50 tons and above 658 ... 154,327 
 
 Totals ... 1,178 ... 167,212 
 
 " Lloyds' Register of British and Foreign Shipping " 
 for 1902-3 gives the following recent figures : — 
 
 Vessels. Gross Tons. 
 Steamships 100 tons and up- 
 wards 7,358 ... 12,897,592 
 
 The total tonnage of both sailing and steam 
 vessels has increased during Free Trade times 
 from 3,360,935 to 14,431,672. (The latter figures do 
 not include shipping owned by the Colonies.) Our 
 gross tonnage was greater in 1902 than ever before, 
 and 53 per cent, of the world's steam tonnage 
 is owned by Greal Britain, notwithstanding the 
 strenuous efforts of Germany and other nations 
 to rival us. It need only be added that the marine 
 engineering branch of our machinery industries has 
 prospered in a similar ratio.
 
 3i8 BRITISH INDUSTRIES 
 
 Progress of Invention. — The progress of invention 
 is to a certain extent outside political influences 
 (the operation of the patent laws always excepted, 
 and I shall have something to say on this subject 
 later on), but it deserves to be pointed out that the 
 system of world-wide commerce directly resulting 
 from the fiscal policy adopted fifty years ago, has 
 provided engineers and inventors with an en- 
 larged experience without which they could not 
 have achieved an equal amount of success. It will 
 consequently be fair to admit that the Free Trade 
 system has had a material influence on the progress 
 of invention. 
 
 The last fifty years have witnessed the following 
 amongst other advances in marine engineering and 
 shipbuilding practice : The substitution of iron for 
 the hulls of vessels instead of wood — the s.s. Persia 
 in 1856 was the first Cunard iron paddle steamer — 
 and the displacement of iron by steel, the first 
 ocean steamer to be so built being the s.s. Roto- 
 fnohana in 1879. Screws have almost entirely 
 superseded paddles for propulsion, and twin 
 screws, which were first used on an ocean express 
 in 1888, are now very frequently adopted. The 
 invention of steam steering gear has rendered the 
 management of the vessels easy and has enabled 
 the size to be increased almost without limit. Great 
 relative economies in fuel consumption have been 
 effected by the introduction of compound, triple, 
 quadruple, or even quintuple cylinder condensing
 
 MACHINERY AND ENGINEERING 319 
 
 engines. These and other improvements in engine 
 and boiler construction have enabled power to be 
 obtained from modern machinery at the approximate 
 rate of one indicated horse-power for each pound 
 of coal burnt. In 1838 the consumption was 6^ lbs. 
 for each horse-power per hour.^ A striking result of 
 this inventive progress is that whereas the average 
 freight on corn imported into this country was 
 6s. 5d. per quarter in 1872, it was made possible 
 to reduce this to 3s. 6d. per quarter in 1900. The 
 turbine engine now coming into use for large 
 vessels, and which has given a speed of 36*58 1 
 knots, or nearly 42 statute miles an hour on 
 torpedo craft, and the water-tube boiler for marine 
 use, mark the latest phases of development in our 
 marine engineering practice. 
 
 Present Position. 
 
 The latest Offtcial Returns issued by the Chief 
 Inspector of Factories and Workshops (Supplement 
 to Annual Report for 1900 Cd 841) state that 
 404,412 persons were employed in factories manu- 
 facturing machines, engines, and electrical engineer- 
 ing appliances. Compared with the Returns for 1897 
 (three years previously) this shows an increase of 
 16,318 persons. Obviously the machinery trade is 
 growing. The official returns of our machinery 
 exports already quoted, bear further testimony to 
 
 • " Steamships and their Machinery," by J. W. C. Haldane, 
 P- 375-
 
 320 BRITISH INDUSTRIES 
 
 this, allowing for fluctuations of a special or 
 temporary character. On a careful reckoning I 
 suppose that the number of persons employed in 
 the machinery and engineering industry fifty years 
 ago would be somewhere about 20,000. From this 
 it would appear that under Free Trade conditions 
 employment has been provided for twenty times the 
 number of workers in this branch of trade. 
 
 In discussing any suggestions for changing our 
 fiscal policy, it is a matter of grave national concern 
 that the probable effect upon the machinery and 
 engineering trades and upon the large section of 
 our population dependent on them should have 
 special consideration. They rank as the greatest 
 of our manufacturing industries at the present time. 
 Their productions are unquestionably the most 
 important because every department of commerce 
 is dependent nowadays upon machinery for its 
 existence. Wage-earners are more extensively in- 
 terested in the prosperity of these trades than any 
 other, the textile industries not even excepted. For 
 whilst in 1890 there were 1,036,570 hands employed 
 in the whole of the textile trades of the United King- 
 dom (cotton, woollen, silk, shoddy, flax, &c.), of these 
 only 290,797 were "males above 18 years of age," 
 the remainder being women and children. In the 
 section of the machinery and engineering trades, 
 which finds employment for the 404,000 hands 
 referred to above, 342,000 were "males above 18 
 years of age," and they represent the most highly
 
 MACHINERY AND ENGINEERIXG 321 
 
 paid of the wage-earning classes. The number 
 mentioned is probably an under-estimate, because 
 some of those engaged in the manufacture of gas- 
 holders, boilers, ordnance, agricultural implements, 
 &c., might properly be included in the machinery 
 and engineering trades. 
 
 I have, however, taken the official figures as 
 they occur to represent the number belonging to 
 the trade under survey. Reckoning an average, 
 then, of ;^6o per annum for each of the 404,412 
 persons engaged in manufacturing machines, engines, 
 and electrical machinery, I estimate that over 
 ^^'24,000,000 is distributed annually in wages by 
 the machinery and engineering trades. On this 
 basis it may further be assumed that the total 
 annual turnover in this department of our commerce 
 is approximately ^^72,000,000. Of the wages item, 
 one-fourth — say, ;;^6,ooo,ooo per annum — must be 
 credited to our machinery export trade, and the 
 latter may be reckoned to provide constant employ- 
 ment for some 100,000 workmen of the better 
 class. A further relative idea of the importance 
 of the machinery and engineering trades will be 
 gathered from the statement that the Amalgamated 
 Society of Engineers numbers more than 95,000 
 members. This is greater than that of any other 
 factory trades union in this country. 
 
 Effect of Taxing Food. 
 
 I have elsewhere pointed out, in articles published 
 
 22
 
 322 BRITISH INDUSTRIES 
 
 in the Manchester Guardian (August 15 and 18, 
 1903), that a permanent increase in the cost of 
 food, such as has been foreshadowed, would either 
 reduce the purchasing power of the pound sterling 
 to something like i8s., or, if workpeople are to be 
 paid an increased wage of 2s. or 3s. per week, as has 
 been hinted, the consequence will be that the cost 
 of manufacturing machinery will be increased about 
 10 per cent, all round. To meet this, manufacturers 
 will be compelled to advance their prices to a 
 corresponding extent, and will thus be 10 per cent, 
 less able to compete against the United States, 
 Germany, and other countries than they are at 
 present. We shall certainly lose a portion of our 
 machinery export trade to foreign countries, as a 
 consequence, and no compensating increase can 
 be looked for from the Colonies. In both Canada 
 and Australia there are legislative enactments passed 
 or proposed, requiring that no patent shall be valid 
 within their borders unless the machinery or 
 speciality is manufactured in the Colony within 
 five years — a significant indication of their deter- 
 mination to cultivate a manufacturing trade of 
 their own. A certain effect of permanently in- 
 creasing the cost of manufacture will be to curtail 
 the demand for machinery, and to throw numbers 
 of skilled workers out of employment. The latter 
 will probably find their way to America and increase 
 the ranks of our competitors. Enterprise will be 
 checked, because more capital will be needed than
 
 MACHINERY AXD ENGINEERING 323 
 
 at present to start new factories and to replace 
 antiquated plant with what is newest and up to 
 date. We shall, in various ways, play directly into 
 the hands of our foreign rivals by diminishing the 
 advantage we at present possess in competing for 
 orders in neutral markets as well as at home. In 
 short, unless it can be shown with certainty that 
 our volume of trade can be maintained under 
 fresh fiscal conditions and an increased price 
 obtained for our machinery, the policy of taxing 
 food will result in wiping out or greatly diminish- 
 ing our manufacturers' profits and reducing wages. 
 
 Imports op^ Machinery. 
 
 One of the objections urged against our Free Trade 
 policy is that it permits, and to a certain extent 
 encourages, the importation of machinery from other 
 countries, thus diverting work (as is supposed) from 
 our factories to those of other nations. The value 
 of these imports last year was ;^'4,76o,65i — a large 
 item. The question has been asked whether here 
 is not a proper place for the imposition of some 
 restrictive tariff. To answer this in a business- 
 like manner it is necessary to examine these imports 
 carefully, in order to ascertain what the machinery 
 is and for what purpose it is bought. In this 
 way we shall get to the bottom of the matter, and 
 we shall find it much easier to come to a satisfactory 
 conclusion. 
 
 It will be found that under existing circumstances
 
 324 BRITISH INDUSTRIES 
 
 it is a decided advantage to our trade and also to 
 our machinery makers that these imports should 
 be freely permitted. What these circumstances are 
 and what steps should be taken to obviate the 
 necessity for continuing these imports are questions 
 which rightly demand ulterior consideration. The 
 point of paramount importance is that our industries 
 shall be equipped with the very best and most 
 efficient machinery to be had. If our competitors 
 in the United States of America or in Germany 
 possess a machine which will do better work or 
 turn out larger quantities at a cheaper cost, it is 
 manifestly better for us as a matter of business to 
 get hold of that same machine rather than allow 
 our rivals to retain the sole advantage of it. To 
 mention a specific example, our engineering trade 
 owes to the United States of America the system of 
 working with Milling machines. These tools have 
 revolutionised the practice of our machine shops, 
 enabling the work to be turned out much more 
 expeditiously and cheaply than could previously be 
 done. Had we discouraged the importation of 
 these tools and doggedly held to the old system of 
 doing everything by shapers, slotters, and planing 
 machines, we should simply have allowed American 
 engineers to beat us with ease in the production of 
 almost every kind of machinery, in spite of their 
 higher wages. 
 
 The "Turning and Boring mill" is another 
 instance of a similar kind. This machine gives
 
 MACHINERY AND ENGINEERING 325 
 
 an advantage of six to one as compared with the 
 ordinary self-acting surfacing lathe for doing certain 
 classes of work, and this also was originally an 
 importation from America. It is satisfactory to be 
 able to state from experience that when imported 
 machinery is found of sufficient merit to lead to a 
 continued demand for it, the trade is presently 
 taken up by our own makers. First-class Milling 
 machines and other tools (originally of American 
 design), including the Turning and Boring mill just 
 named, have been extensively and systematically 
 produced for many years past by British engineers, 
 with the advantage added to their utility that they 
 are constructed of better material and higher finish. 
 Their importation has practically ceased. It can 
 be confidently stated that under present condi- 
 tions it is impossible for foreign engineering firms 
 to compete successfully in our own market for any 
 length of time in any standard or competitive 
 item of machinery. In proof of this we can point 
 to the establishment in this country of the large 
 works of the Singer Manufacturing Company at 
 Kilbowie, near Glasgow; of the British Westinghouse 
 Electric and Manufacturing Company, Limited, at 
 Trafford Park, Manchester ; the British Thomson- 
 Houston Company, Limited, at Rugby ; and others 
 which could be mentioned. The works just named 
 give employment in the aggregate to thousands of 
 hands, and their introduction here from pioneer 
 establishments in the States has materially increased
 
 326 BRITISH INDUSTRIES 
 
 our industries, so that we are ultimately the gainers 
 all round by this import trade. The official figures 
 I quote elsewhere substantiate this, for notwith- 
 standing foreign imports the actual number of work- 
 people employed in our machinery and engineering 
 trades has increased during recent years. 
 
 The consideration of this matter can be pursued 
 further with advantage. Let us bear in mind that 
 we have no monopoly of inventive ability. By 
 keeping our markets open we induce inventors to 
 come to us at once with every invention of value, 
 and we promptly reap the benefit of experiments 
 which have been carried out in the United States of 
 America or other parts of the world under con- 
 ditions from which our makers are excluded. It 
 also pays us better to buy machinery from abroad 
 so long as it is in an experimental or transition stage 
 ! rather than invest capital in an immature trade. 
 I This remark leads to an explanation why a large 
 ' amount of electrical machinery and plant has been 
 imported into this country during the last few years. 
 The reason is that the demand for better and more 
 expeditious tramway facilities came upon our en- 
 gineers before they were prepared to supply suit- 
 able plant. American firms were in a position to 
 do this earlier than we were, because the laying 
 down of tramways in the United States proceeds at 
 a pace we know nothing of in this country, owing to 
 the extensive emigration and immigration which is 
 always going on there. What happens is this : when
 
 MACHINERY AND ENGINEERING 327 
 
 a new township or district is opened up, the first 
 operation of the land speculator is to lay down a 
 tram-line, instal the electric light, and start a news- 
 paper. He then advertises the place, and the popu- 
 lation generally arrives later. (I quote these facts 
 on the authority of an extensive land agent, whose 
 acquaintance I made when on a visit to the States.) 
 The constructors of these tram-lines were not 
 hampered by having to wait until a thoroughly 
 matured design of machinery was forthcoming, as 
 was the case in this country, so that American 
 engineers had no lack of opportunities for experi- 
 mental work. It is no disparagement to our 
 people, therefore, under the circumstances, that 
 they were not first in the field. The produc- 
 tion of electrical machinery is now a compara- 
 tively settled trade in consequence of tramway 
 and railway companies in this country electrifying 
 their lines to so great an extent, and our engineers 
 are rapidly adapting and increasing their works to 
 supply the growing demand. Orders which a short 
 time ago would have had to go out of the country 
 are now executed by British firms. Proof of this 
 satisfactory result is evidenced in the official returns, 
 which show that whereas in 1900 we imported 
 electrical goods from the United States of America 
 to the value of ^832,801, the amount in 1902 had 
 fallen to ^'159,601. 
 
 Much more might be said in connection with 
 this part of the subject. The advantages might
 
 328 BRITISH INDUSTRIES 
 
 be instanced which have accrued to our cycle 
 and motor industries through the importation of 
 special tools ; the benefit to the Press of the 
 country by the introduction of American fast print- 
 ing machinery ; the increase of cheap literature ; 
 the production of trade publications and business 
 catalogues in better style and at a lower cost, made 
 possible by availing ourselves of the improved print- 
 ing machinery sent into this country from abroad. 
 All these are points in favour of our Free Trade 
 system. It is scarcely necessary, however, for the 
 purpose of this paper to do more than make 
 passing mention of them. 
 
 Some direct evidence giving the reason why 
 certain classes of machinery are imported will be 
 in place here. The following extracts are taken 
 from communications I have recently received 
 from several well-known firms in this country 
 importing and selling American and German 
 machinery. In reply to questions, one of these 
 firms writes : — 
 
 " People in this country buy the American 
 machinery and tools which we handle not because 
 they are cheaper than English, but because they 
 really supply wants that are not met by machinery 
 and tools made in this country. As a general 
 rule, the American tools which we handle have 
 no competitive lines in this country — they do 
 work for which no machines are made by tool- 
 makers in this country. We may add that some
 
 MACHINERY AND ENGINEERING 329 
 
 articles which we handle are sold at a very much 
 lower price in this country than in the United 
 States." 
 
 Another firm says : — 
 
 " What enables us successfully to compete with 
 home manufacturers in machine tools is the 
 superiority of the machines we sell. The special 
 points of advantage consist of ease of handling, 
 account of output, specialised design, accuracy of 
 construction, and quality of finish. Our prices are 
 high now compared with similar English tools, but 
 first cost is a minor consideration when the equip- 
 ment for industrial competition is concerned. 
 Efficiency is the thing that must be studied, and in 
 machine tools, more than anything else, ' the best is 
 the cheapest in the end.' " 
 
 Reference has been made to the importation of 
 printing machinery, which, it may be remarked, 
 accounts for a considerable item in our ma- 
 chinery imports. In this department of engineer- 
 ing the German people occupy a very strong 
 position. Their success is undoubtedly due in a 
 substantial measure to the ingenuity and general 
 excellence of this class of machinery which they 
 turn out, including high capacity of output and 
 quality of work. Responding to questions on 
 this subject, a firm importing continental printing 
 machinery, writes : — 
 
 " The progress of printing, both as regards quality 
 and variety, came earlier both in America and
 
 330 BRITISH INDUSTRIES 
 
 Germany than in Great Britain, leading to the 
 demand for and supply of a class of printing 
 machines capable of producing varied and superior 
 work. Later on the example of the foreign printer 
 awakened the spirit of emulation in his British 
 confrere, who, finding no British-made machines 
 adapted for these new classes of letterpress work, 
 naturally welcomed the foreign production. Hence 
 German machinery is purchased by British printers 
 on account of its superiority, i.e., its adaptability for 
 the production of good present-day printing, which 
 requires machinery of greater capacity than in the 
 past — capacity for better inking, more powerful 
 impression, and an increase of labour-saving qualities 
 generally. Take, for instance, the Phoenix platen, 
 which has now been on the market for about 
 ten years. When first manufactured this machine 
 was a grand one, but scarcely a year has since 
 passed without some improvement having been 
 made in it, and it stands to-day as the most 
 practical platen-printing machine in the world. 
 For printing half-tone, three-colour, &c., for em- 
 bossing, for box-making, &c., no machine excels 
 it ; whereas the British platens remain very much 
 where they were thirty years ago, capable of printing 
 light formes of type work, but of little use for 
 the exacting varieties of printing now demanded. 
 The German machines are superior in strength and 
 adaptability, in finish, and in detail. They are 
 accurate and quiet in motion. They produce a
 
 MACHINERY AND ENGINEERING 331 
 
 larger quantity of good work. They do not com- 
 pete with other machines in point of cheapness, 
 ahhough they are reasonable in price, but on 
 account of their superiority." 
 
 These are fair points of competition, and our 
 true policy is to better them. To ask for a fiscal 
 system which should shut out this machinery from 
 our market would be childish. The genius of the 
 British people is assuredly against the adoption of 
 a poHcy which would be as futile and undignified 
 as that of the ostrich. 
 
 Notwithstanding these explanations, the growth 
 of the imports of foreign machinery is certainly 
 not to be regarded as a satisfactory feature. We 
 justly pride ourselves as a nation on our engineering 
 capabilities, and our true course is, when we discover 
 a weak point, to trace the cause and apply the 
 proper remedy. It is certain that " Protection," or 
 a restrictive tariff, will be no substitute for lack 
 of enterprise or inventiveness. 
 
 An Effect of the Engineering Strike. — The machinery 
 import trade increased very largely after the great 
 engineering strike of 1897. At that time, it will be 
 vividly remembered, a great many shops were practi- 
 cally shut up for about six months, and many British 
 firms being unable to execute orders, tools were 
 imported from America and Germany to supply 
 urgent requirements. Travellers were sent over 
 here from abroad in great numbers to reap the 
 unusual harvest. Sale-rooms were opened, and a
 
 332 
 
 BRITISH INDUSTRIES 
 
 connection was established which has not only 
 been held with a firm grip ever since, but has 
 been extended. It is worth while remarking that 
 if foreign tools had not been available, the dis- 
 turbance to our shipbuilding and other industries 
 would have been much more serious and the loss 
 to the trade of the country far greater than it was. 
 
 The following figures show the value of machinery, 
 &c., imported into Great Britain from the United 
 States and Germany respectively in alternate years 
 since our great engineering stoppage : — ' 
 
 U.S.A. 
 
 Machinery in general 
 Sewing machines ... 
 Electrical goods 3 ... 
 Implements and tools 3 
 Steam engines 3 
 Agricultural 3 
 
 Gentiany. 
 Machinery in general - . 
 Machinery and milhvorl 
 Electrical goods 3 ... 
 
 Total ... 
 
 1 89s. 
 
 1900. 
 
 1902. 
 
 £ 
 
 017,386 .. 
 
 . 2,261,624 •• 
 
 . 2,161,266 
 
 135,801 . 
 
 103,959 •• 
 
 180,022 
 
 — 
 
 . 832,801 .. 
 
 159,601 
 
 — 
 
 3^'4,353 •• 
 
 304,723 
 
 — ■ 
 
 — 
 
 374,972 
 
 — ■ 
 
 — 
 
 268,819 
 
 213,923 • 
 
 280,780 . 
 
 612,010 
 
 120,383 . 
 
 130,398 . 
 
 151,354 
 
 — 
 
 86,951 . 
 
 81,759 
 
 •••;f 2,487,493 ...^4,060,866 ...^4,294,526 
 
 Out of evil sometimes arises good. One effect 
 of the "invasion" has been the introduction into 
 this country of a number of ingenious and valu- 
 
 ' Tabic specially compiled from official sources for the 
 Manchester Guardian, August 18, 1903. 
 
 - These items are separated in this way in the returns, com- 
 mencing with the year 1898. The reason for the classifica- 
 tion adopted in the official returns is not clear. 
 
 3 These items are not shown separately in the returns until 
 recent years.
 
 MACHINERY AND ENGINEERING 333 
 
 able labour-saving tools, which has led our own 
 engineering firms to re-design some of their 
 machinery. The result is that we now have 
 more effective and better tools, of which the 
 industries of the country are reaping the benefit. 
 Some of these are known as "Anglo-American," 
 combining the ingenious devices of the American 
 type with the better finish and greater durability of 
 the British-made tool. 
 
 How ARE We to Meet Altered Conditions ? 
 
 When all has been said or written in substantia- 
 tion of the benefits conferred by Free Trade upon 
 our national commerce, I am sensible of the fact that 
 many persons will reply, " What you say is all very 
 well — Free Trade has no doubt served a good turn 
 in the past, but we have to consider the future, and 
 must deal with a new set of conditions that our 
 fathers knew nothing of. How are we to meet the 
 altered state of affairs, especially as regards foreign 
 competition ? " I venture to think the answer to 
 this question is, that seeing we cannot forcibly alter 
 the economic policy of other nations without en- 
 countering the risks of war — either military, naval, 
 or commercial war — our proper course is to 
 remedy the shortcomings that hamper us in 
 other directions. As a business man with thirty 
 years' experience in this particular branch I am 
 convinced that our machinery and engineering 
 trades will have nothing to fear for the future if
 
 334 BRITISH INDUSTRIES 
 
 we carry out the reforms within our reach. Let 
 us see what can be done in reducing national 
 expenditure and waste, lowering manufacturing 
 costs, increasing the efficiency of the worker, im- 
 proving the excellence and suitability of our goods, 
 and adopting better methods of selling and con- 
 ducting business generally. Is perfection reached 
 yet in these matters ? With possibilities of great 
 improvements in railway and transit matters, patent 
 laws, labour exchanges, technical and commercial 
 education, consular service, international postage, 
 and with scope for the further cultivation of 
 international comity, national sobriety, and con- 
 scientiousness, it is no time for us to stand still and 
 rail at the world because other nations will not 
 let us have all our own way. 
 
 Certainly, if the whole world had been content 
 to allow Great Britain to remain the sole manufac- 
 turing country, our trade would be very much greater 
 than it is. But our population and manufacturing 
 capacities are entirely inadequate to supply the 
 machinery and engineering plant needed all over 
 the globe, and it has therefore been inevitable that 
 other countries should manufacture on their own 
 account. Moreover, our makers have often failed 
 to supply the machinery and tools best suited to 
 the conditions of foreign countries, and have thus 
 indirectly fostered local trade. 
 
 When considering the difficulties we have to 
 encounter in fighting foreign tariffs, do not let
 
 MACHINERY AND ENGINEERING 335 
 
 us forget that our competitors also have their 
 troubles. Manufacturers and traders of the United 
 States of America have a serious and ominous 
 labour problem in front of them. They are also 
 fettered with higher wages and heavier living 
 expenses, longer inland transit distances, and 
 smaller shipping facilities. Some of these dis- 
 abilities we escape. In this connection it is 
 interesting to quote the remarks of Mr. George 
 N. Barnes, who visited the States last year as a 
 representative of the Amalgamated Society of 
 Engineers on the *'Mosely Industrial Commission." 
 In his report he makes the following comments 
 as the result of his inquiry into the state of the 
 engineering trades there : — 
 
 " I do not take a pessimistic view of the British 
 engineering industry, provided it is given a fair 
 chance. It is true that American exports of engines 
 and machinery have increased enormously during 
 the last few years, but it is also true that the exports 
 of similar British engineering products have also 
 increased, and that we still export nearly double the 
 value of the American exports in a given time 
 The figures taken together simply show that the 
 world's demand has increased, and that, not 
 unnaturally, that demand has largely gone to those 
 countries still in the first flush and bound of indus- 
 trial expansion. But qualitative considerations will 
 assert themselves, and from the point of view of 
 quality I feel quite sure that British goods have
 
 336 BRITISH INDUSTRIES 
 
 nothing to fear, provided that British designers are 
 encouraged. Moreover, it is reasonable to expect 
 that Americans will continue to an increasing extent 
 to develop a desire for leisure in which to enjoy 
 some of the pleasures and amenities of life, and to 
 attend to communal needs in regard to which they 
 are far behind us. The hours of labour have been 
 reduced by three per normal week during the last 
 three years, and I believe that the time is ripe for a 
 further reduction. Even employers told me that 
 they were quite willing to adopt shorter hours, and 
 all that Vk^as needed was a common agreement. 
 
 " Americans have, of course, natural and other 
 advantages over us. But, on the other hand, we 
 have social advantages over Americans in the form 
 of good roads, trained hands, and all the accumu- 
 lated accessories of civilisation which are relatively 
 lacking in newer communities. 
 
 ** Is there anything in American practice which 
 we might copy with advantage ? I believe there is. 
 I believe that, while retaining our own superior 
 characteristics of thoroughness, and while continuing 
 to have regard for certain standards of life and 
 conduct, we might, nevertheless, follow the lead of 
 the Americans in encouraging inventiveness and 
 initiative, in fully utilising machinery ; and, perhaps, 
 in organising industry on a larger, and therefore 
 cheaper, scale. If these things are done I have no 
 fear but that British engineering will hold its own, 
 without sacrifice of national or individual pride in
 
 MACHINERY AND ENGINEERING 337 
 
 good work, or of the general welfare of the 
 worker." 
 
 Amongst other points to which Mr. Barnes has 
 not alluded, and upon which the future success of 
 our engineering trade more or less depends, may 
 be named the extended adoption of standardising 
 parts ; Specialisation ; Systematic arrangement of 
 factories to save costs in handling and turning 
 out finished goods ; use of the metric system and 
 greater enterprise in the selling department. It is 
 satisfactory to be able to say that in nearly every 
 one of these matters there is a movement in the 
 right direction. Much money is being spent, and 
 valuable work is being quietly done in the way of 
 reorganising our engineering factories. The posi- 
 tion of our makers is growing stronger day by day 
 owing to this, and in the course of the next few 
 years very remarkable progress will be in evidence 
 as the result. 
 
 The Importance of the Patent Laws. 
 
 The greater inventive activity of the United States 
 of America is a frequent subject of remark, and 
 we shall do well to study the reasons for this. It 
 would be difficult to exaggerate the importance of 
 this point, for it can be laid down as a fixed 
 proposition that the nation which possesses the 
 most efficient labour-saving machines will, all other 
 things being equal, win the race in the long run. 
 " The prosperity of England," said the late Sir 
 
 23
 
 338 BRITISH INDUSTRIES 
 
 Joseph Whitworth (as did Adam Smith in effect 
 a century earlier), "depends not only on the pro- 
 duce of her soil and mines, but also greatly on 
 the number of self-acting machines she keeps at 
 work ; in proportion to the increase in the latter 
 (he adds) has been her increase in wealth and 
 power." 
 
 Free Trade has given us the advantages of cheap 
 food supplies and a comparatively low wage rate, 
 both of which are essential elements to our manu- 
 facturers' success. But we have sinned as a nation 
 by forgetting that there are other conditions neces- 
 sary to maintain our prosperity in competition with 
 the world at large. We have been flagrantly guilty 
 in the past of suppressing the inventive ability of 
 our people and neglecting the training of their 
 minds. Our Free Trade policy has never after all 
 been completely carried out, for to this day we 
 unduly tax our inventors instead of encouraging 
 them, and thus perpetuate the evils of Protection 
 in a matter of vital importance. So long as this 
 system is allowed to continue we must expect to 
 be as dependent upon America for improvements 
 as we are now. 
 
 The United States of America adopted the policy 
 a great many years ago of encouraging invention to 
 the utmost. In this respect they are the true Free 
 Traders, and the commercial progress they have 
 made, in spite of heavy protective duties and other 
 disadvantages, is largely traceable thereto. This
 
 MACHINERY AND ENGINEERING 339 
 
 policy was forced upon the American people owing 
 to their being handicapped by higher wages and 
 long distances of transit between mines, factories, 
 and consumers ; and it has done great things in 
 the way of compensating them for these drawbacks. 
 In the States inventors pay only $35 {£']) for 
 seventeen years' patent right, and at the same time, 
 so thorough a system of examination is provided 
 that an American patent is generally recognised as 
 a reliable legal property. 
 
 Until recent years our English patent laws were 
 based upon the mistaken notion that a patent was 
 a "monopoly" more or less of the same objec- 
 tionable character as the trading privileges granted 
 in the reign of Queen Elizabeth. Our statesmen 
 assumed that thev were therefore a danger to trade 
 which must only be permitted under the penalty of 
 a heavy tax. The amended patent law introduced 
 in 1852 went a considerable way towards recogni- 
 sing the right of an inventor to legal property in 
 his own ideas, but the " tax upon brains," as it 
 has been aptly termed, remained a heavy one, and 
 tended to restrict inventions to the very limited 
 number of people who could afford to pay the fees. 
 The total stamp duties payable under the Act of 
 1852 was £i'JS foi' fourteen years, £2<^ of which 
 had to be paid on the granting of the patent, ;^'5o at 
 the end of the third year, and ;^ioo at the end of 
 the seventh year. In 1883 an important reform in 
 the law was fortunately carried through Parliament.
 
 340 BRITISH INDUSTRIES 
 
 That we were making a very costly national 
 mistake in continuing such high restrictive taxes, 
 and that we were missing valuable opportunities 
 for the improvement of our industries, was im- 
 pressed upon the mind of the writer in 1879 by 
 a remark made to him in conversation with a 
 workman from the States. " How is it," the 
 latter was asked, " you are so inventive in the 
 States ? " " Well, you see," was the reply, " a 
 patent can be obtained so cheaply in America, 
 nearly everybody tries to invent something." This 
 remark suggested food for thought, and led the 
 writer to persistently urge the importance of the 
 subject upon the attention of engineers through 
 the technical press. Influential men in the 
 engineering profession took the matter up and 
 insistently demanded a reduction of the fees. As 
 Fulton says, in dealing with the history of patent 
 law, " this agitation gathered force as years went 
 on, and finally resulted in the passing of the Act 
 of 1883."^ 
 
 The writer had the satisfaction of knowing that 
 his efforts were of substantial assistance in securing 
 this reform. He was honoured by receiving from 
 Mr. Chamberlain, who was then President of the 
 Board of Trade (and who was instrumental in 
 carrying through the Act), a letter dated 8th 
 November 1880, conveying the first public intima- 
 
 ' "A Practical Treatise on Patents, Trade Marks, and 
 Designs." By David Fulton, A.M.Inst.C.E.
 
 MACHINERY AND ENGINEERING 341 
 
 tion that the Government intended to introduce a 
 Bill to amend the law. 
 
 As a result of alterations in the law the fees 
 for a British patent have been reduced to a total 
 of ;^95 for the full term of fourteen years. As 
 only £^ of this has now to be paid on obtaining 
 a complete patent, the relief is a substantial one, 
 especially as the remaining fees are spread fairly 
 evenly over the last eleven years. The ground of 
 complaint, however, still remains, that our patent 
 laws are too much of a rich man's privilege, 
 instead of being based on the principle that 
 inventive ideas are common to all, and that it is 
 to the interest of the State to remove every obstacle 
 to their production. A fee of £1 on application, 
 £1 on sealing the patent, and a small charge there- 
 after sufficient to cover the costs of the Patent 
 Office, should be all that is required. I would 
 further suggest that the Government should put 
 the whole matter through free of all other charges 
 to the applicant in every case of an accepted 
 patent. 
 
 It will be useful to refer here to a few figures 
 showing the operation of these laws. The total 
 number of patents sealed from the date of pass- 
 ing the Statute of Monopolies in 1623 down to 
 the Act of 1852 was 13,651. The greatest number 
 of applications for patents in any one year under 
 the operation of the last-named Act was 6,241 in 
 the year 1882. In 1884 the number had risen to
 
 342 BRITISH INDUSTRIES 
 
 17,110, showing that an immediate stimulus was 
 effected by the Act of 1883. In 1893 the number 
 had further increased to 25,107, and last year (1902) 
 the number was 28,976.1 By far the largest pro- 
 portion of these applications are for mechanical 
 improvements. In the United States of America 
 the number of applications was 52,000 in 1901, 
 of which 35,000 matured into patents. 
 
 Railway and Transit Disabilities. 
 
 Another matter which affects the prosperity of 
 our industries and handicaps them in competing 
 with foreign countries is our high prevailing rail- 
 way rates and costs of transit. Both in Germany 
 and the United States the railway mileage rates 
 are very much cheaper than in this country, and 
 we are behind them in this respect. Canal traffic 
 also has been to a great extent crippled by the 
 monopolising action of our railway companies. 
 We have the strange anomaly of seeing in this 
 country preferential railway rates given to the 
 produce of foreign countries, to the discourage- 
 ment of our own agricultural and other industries. 
 The question whether a system of State ownership 
 of railways should be adopted somewhat on the 
 lines of that in operation in Germany deserves 
 immediate attention. It is certain that a national 
 " transport policy " is a matter of urgency with us. 
 
 ' See Report for 1902 of the Comptroller-General of 
 Patents, &c.
 
 MACHINERY AND ENGINEERING 343 
 
 The Right Hon. George Wyndham indicated that 
 the subject is one which commended itself to his 
 judgment, and the proposal which a writer in the 
 Times has put forward with regard to this, is also 
 a step in the right direction. If such a policy 
 were carried out in a thorough and efficient way, 
 and a scheme of rates fixed for the benefit of the 
 country at large, instead of for a comparatively 
 small number of shareholders, our industrial posi- 
 tion would be enormously strengthened, and the 
 boon would be one of far-reaching importance, in 
 which all would share, the machinery and engineer- 
 ing trades no less than others. The time is now 
 ripe for something of this sort to be done. 
 
 The Future Outlook. 
 
 It is difficult to place any limit upon the demand 
 of the future for machinery and engineering plant. 
 The world at large is only beginning to appreciate 
 its value, and I am convinced therefore we shall 
 make a grievous error if we do not maintain our 
 policy of cultivating an unrestricted foreign trade 
 as well as pushing our colonial connection for all 
 it is worth. It does not seem to me unreasonable 
 to assume that our machinery export trade, if 
 properly cultivated, will reach the annual value of 
 ;^ioo,ooo,ooo within the next fifty years, instead of 
 about ;^20,ooo,ooo as at present. If we handicap 
 ourselves, however, with dearer food and higher
 
 344 BRITISH INDUSTRIES 
 
 manufacturing expenses, we shall risk our prospect 
 of expanding this trade. 
 
 Where, it will be asked, is this huge future trade 
 to come from ? The answer is, that great future 
 developments can be counted on with certainty. 
 They are already taking place. It may be safely 
 inferred that nothing short of a universal cataclysm 
 can prevent the ultimate covering of the vast Con- 
 tinents of Asia, Africa, and South America with a 
 network of railways equal at least in extent to that 
 of the United States and Europe, at the present 
 time. Can there be any doubt of this in face of the 
 constant increase in the world's population and the 
 rapid absorption of uncultivated territory by the 
 white man ? Amongst great schemes now in pro- 
 gress or projected, which will increase business for 
 the engineering trade, may be mentioned the com- 
 pletion of the Panama Canal ; the Cape to Cairo 
 Railway ; the Trans-Siberian Railway ; the Trans- 
 Continental Australian Railway ; and the Indo- 
 European Railway. Whether Great Britain supplies 
 the machinery and material or not for these 
 enterprises the benefit is certain to be felt by our 
 shipping trade, in which, thanks to our Free Trade 
 system, we are supreme. More and faster steamships 
 will be required to meet the growth of the world's 
 commerce, and the same experience of enlarging 
 harbours and docks to provide for the 20,000-ton 
 vessels of the future will be repeated, but on a larger 
 scale.
 
 MACHINERY AND ENGINEERING 345 
 
 Apropos of this part of the subject, I quote the 
 following from the presidential address of Sir David 
 Dale, delivered a few years ago before the Iron and 
 Steel Institute. I There is probably no man in the 
 country entitled to speak with greater authority on 
 business matters in this department of trade : — 
 
 " We cannot doubt that in the future, fields of 
 enterprise in the direction of railway construction 
 will be opened out enormously in excess of what 
 we have seen in the past. In 1892 the whole of 
 Asia possessed only the insignificant extent of 
 23,229 miles of railway, of which 17,768 were 
 in British India. This last figure, however, only 
 amounts to 1*1 miles per 100 square miles of area, 
 as against 167 in our own country, and 29*6 in 
 Belgium. 
 
 "In Africa only 7,212 miles of railway had as 
 yet been constructed, and to that continent many 
 eyes are turned in the hope and expectation that 
 the splendid energy and indomitable perseverance 
 shown by our fellow-countrymen on that great 
 undeveloped conthient will find their reward, not 
 only in opening out new markets for our manufac- 
 tures, but in bringing civilisation and enlightenment 
 into many of the dark places of the earth. 
 
 "In our Australasian Colonies there were as yet 
 
 only 12,685 miles of rail, amounting to but -3 
 
 of a mile to each 100 square miles of area. In 
 
 this part of the Empire we are told that ' many 
 
 ' "Journal of the Iron and Steel Institute," 1895.
 
 346 BRITISH INDUSTRIES 
 
 important schemes of development are at present 
 projected . . . and it is probable that large de- 
 velopments . . . will take place before long.' ^ 
 
 "The vast empire of China, which boasts an area 
 of nearly 4J millions of square miles, or nearly one- 
 twelfth of the land surface of the globe, and with 
 a population probably amounting to 300,000,000, 
 was at the date named content with the modest 
 quota of 124 miles; whereas in Japan, which until 
 comparatively recent years was almost as close and 
 unknown a land as her vast neighbour, the railway 
 mileage already amounted to 1,876." 
 
 In the comparatively short interval which has 
 elapsed since these remarks were made, much 
 has happened to justify the anticipations then put 
 forward. 
 
 At home, new schemes for electric railways and 
 tram-lines are rapidly coming forward, and a fresh 
 batch of ship canals seems likely to be a feature 
 of the near future. The motor industry with its 
 possibilities is also before us. These all directly 
 concern the engineering trade. The constant in- 
 crease of facilities for travel and business intercourse 
 can always be counted on as a potent factor in 
 extending trade. In this connection the develop- 
 ment of wireless telegraphy and the coming of the 
 universal Penny Post, may be referred to. It would 
 be easy to extend these remarks, and the theme is 
 tempting. The purpose of this paper will, however, 
 ' " British Iron Trade Report," 1893, p. 43.
 
 MACHINERY AND ENGINEERING 347 
 
 have been already answered if I have succeeded in 
 
 showing, as I have endeavoured to do, that not only 
 
 have the machinery and engineering trades prospered 
 
 under our Free Trade system, but that there is 
 
 ample scope for their future expansion and a 
 
 hopeful outlook for the future under existing fiscal 
 
 conditions. 
 
 Experieiitia docet !
 
 THE COAL TRADE ^ 
 
 By D. A. Thomas, M.A., M.R 
 
 FEW British industries, if any, have made greater 
 strides during" the past fifty years than has that 
 of the production of coal, and probably no one of 
 our leading industries has derived so much help from 
 the adoption by this country of a Free Trade policy. 
 But how much of the progress has been due to our 
 fiscal system, and how much should be attributed 
 to other stimulating causes, it is difficult, if not 
 impossible, to determine with any approach to 
 precision. I confess, for my own part, to be quite 
 unable to make even a reasonable guess, and cer- 
 tainly I cannot put forward anything that could 
 properly be described as a well-considered estimate. 
 Who shall say where the action and reaction of the 
 various stimulants begins and ends, or what weight 
 is to be apportioned, in each case, at any moment, 
 to the multitude of ever-changing factors in this 
 
 ' The statistics given in this chapter are taken from a paper 
 read by the author before the Royal Statistical Society on 
 May 19, 1903, entitled " The Growth and Direction of our 
 Foreign Trade in Coal during the last Half-century," The 
 reader who desires more detailed information on this subject 
 is referred to the issue of the Society's Journal for Sept., 1903. 
 
 34S
 
 THE COAL TRADE 
 
 349 
 
 complex problem ? I will therefore content my- 
 self with narrating the facts, and leave it to the 
 reader to make his own apportionment, to draw 
 his own conclusions as to the degree of influence 
 that has been exercised by fiscal policy on the 
 one hand, and by inventions and improved mecha- 
 nical and commercial methods on the other, in 
 producing the marvellous growth that has taken 
 place in the period under review. 
 
 A. — Statement showing the GrowtJi in the Production and Export 
 of Coat in and from the United Kingdom under Free Trade. 
 
 
 „ . 
 
 . 
 
 
 «, 
 
 T3 
 
 
 
 
 
 •-E 
 
 M oi 
 
 t-i 
 
 
 a 
 
 
 
 ^ 1 
 
 rt -^ 
 
 
 11 
 
 oi2 
 aT3 
 
 aJ 
 
 P 
 
 « 
 
 Export of Coal, Co 
 
 and Patent Fuel 
 
 including Bunker 
 
 0. . 
 X a 
 
 = 1 
 
 MO 
 
 «^; 
 lU 
 
 1 
 
 Remaining for Ho 
 Consumption. 
 
 Consumption per h 
 of Population. 
 
 Total Value of al 
 Exports. 
 
 Value of Coal Expo 
 and Coal Bunkers 
 
 Percentage of Co 
 Value to that of To 
 lixports. 
 
 
 In 
 
 In 
 
 Per 
 
 In 
 
 
 In 
 
 In 
 
 Per 
 
 
 million 
 
 million 
 
 cent. 
 
 million 
 
 In tons. 
 
 million 
 
 million 
 
 cent. 
 
 
 tons. 
 
 tons. 
 
 
 tons. 
 
 
 £^- 
 
 ;£'s- 
 
 
 1850 
 
 56-0' 
 
 3-8^ 
 
 6-8 
 
 52-2 
 
 I -91 
 
 71-4 
 
 1-4 
 
 2-0 
 
 i860 
 
 80 -o 
 
 8-4^ 
 
 10-5 
 
 71-6 
 
 2-49 
 
 i35-« 
 
 3-7 
 
 2-7 
 
 1870 
 
 iio'4 
 
 14-1== 
 
 12-8 
 
 96-3 
 
 3-II 
 
 199-6 
 
 6-7 
 
 3-4 
 
 1880 
 
 147-0 
 
 23-9 
 
 10-3 
 
 123-I 
 
 3-50 
 
 223-0 
 
 10-8 
 
 4-8 
 
 1890 
 
 181 -6 
 
 .38-7 
 
 21-3 
 
 142-9 
 
 3-81 
 
 263-5 
 
 23-9 
 
 9-0 
 
 lyoo 
 
 225-2 
 
 5«-4 
 
 25-9 
 
 166-8 
 
 4-08 
 
 291-2 
 
 4«-3 
 
 i6-6 
 
 From this statementit will be seen that our annual 
 production of coal has quadrupled in the past fifty 
 years, while the export, including coal shipped for 
 the use of steamers engaged in the foreign trade, has 
 
 ■ Estimated. - Including estimated quantity of bunker coal. 
 3 Bunker coal is estimated at the same average value per ton 
 as exported coal.
 
 350 BRITISH INDUSTRIES 
 
 grown fifteenfold. In value the export has increased 
 from 2 per cent, in 1850, when the duty on coal was 
 completely removed, until its reimposition a couple 
 of years ago, to over 16 per cent, of our total exports 
 in 1900.1 It will further be noted that the quantity 
 of coal remaining for home consumption more than 
 doubled per head of the population during the 
 period, and that the proportion of coal exported to 
 the total production advanced from about 7 to over 
 25 per cent. 
 
 Coal in Other Countries. 
 But it is idle to suppose — and I write as a con- 
 vinced Free Trader — that the case for or against 
 any economic system can be regarded as proved by 
 the mere concurrence or absence of industrial 
 progress with the particular system, and in con- 
 sidering the benefit which to my mind has followed 
 from the adoption of our present fiscal policy, in 
 the special trade with which this essay deals, one 
 cannot ignore the fact that a considerable per- 
 centage growth occurred in the output of coal in 
 the United Kingdom in the first half of the 
 nineteenth century, before the era of Free Trade, 
 while under a high Protectionist regime, both the 
 United States and Germany have in recent years 
 made a greater actual increase in coal production 
 than has this country. 
 
 ' In April, 1901, an export duty to the amount of is. per ton 
 was reimposed, but from August 14, 1850, to April 19, 1901, 
 no export duty was levied upon coal.
 
 THE COAL TRADE 
 
 351 
 
 The increase in the production of coal in various 
 countries in recent years is shown in the follow- 
 ing table : — 
 
 B. — Statement showing ilic Groxvlli in tlic World's Production oj 
 Coal during the past Three Decades. 
 
 
 Average Annual Increase 
 
 of Coal Production, 
 
 Short Tons of 2,000 lbs. 
 
 (ooo's omitted.) 
 
 Actual 
 Total 
 
 Percentage Rate of 
 
 Increase in Coal 
 
 Production. 
 
 
 
 
 Quantity 
 in 
 
 
 
 
 
 From From 
 
 From 
 
 
 tST3 
 
 
 
 1870 
 
 to 
 
 1880. 
 
 1880 
 
 to 
 
 1890. 
 
 1890 
 
 to 
 
 1900. 
 
 11,191 
 
 1900. 
 
 9 a 6 
 94 
 
 ^ " ° 
 
 OS'S 
 121 
 
 Betwe 
 
 1890 a 
 
 1900 
 
 United States 
 
 3,468 
 
 8,623 
 
 269,683 
 
 71 
 
 Great Britain 
 
 4,092 
 
 3,880 
 
 4,879 
 
 252,203 
 
 33 
 
 24 
 
 24 
 
 Germany ' 
 
 2,769 
 
 3,322 
 
 6,641 
 
 164,805 
 
 74 
 
 51 
 
 67 
 
 France 
 
 682 
 
 741 
 
 806 
 
 36,812 
 
 47 
 
 35 
 
 28 
 
 Austria- Hungary '... 
 
 711 
 
 1,401 
 
 I,26t) 
 
 43,011 
 
 77 
 
 86 
 
 42 
 
 Belgium 
 
 352 
 
 384 
 
 340 
 
 25,856 
 
 23 
 
 21 
 
 15 
 
 Russia 
 
 
 283 
 
 306 
 
 1,117 
 
 17.799 
 
 385 
 
 85 
 
 168 
 
 Japan 
 
 
 
 2922 
 
 526 
 
 8,187 
 
 — 
 
 — 
 
 180 
 
 Spain 
 
 
 
 — 
 
 1,336 2 
 
 134 
 
 2,947 
 
 — 
 
 — 
 
 120 
 
 Italy 3 .. 
 
 
 9 
 
 26 
 
 II 
 
 530 
 
 137 
 
 170 
 
 27 
 
 India 
 
 
 1,0002 
 
 144 
 
 244 
 
 6,853 
 
 — 
 
 144 
 
 189 
 
 Canada .. 
 
 
 1.425 - 
 
 143 
 
 312 
 
 5.322 
 
 — 
 
 119 
 
 71 
 
 New South Wales... 
 
 67 
 
 179 
 
 274 
 
 6,168 
 
 69 
 
 109 
 
 80 
 
 New Zealand 
 
 3362 
 
 38 
 
 51 
 
 1,225 
 
 
 142 
 
 72 
 
 Queensland 
 
 4 
 
 31 
 
 18 
 
 557 
 
 160 
 
 483 
 
 ^l 
 
 Other countries 4 ... 
 
 176 
 
 389 
 
 422 
 
 4,082 
 
 ~ 
 
 121 
 
 8 
 
 The\ 
 
 vorld ... 
 
 12,611 
 
 19,896 
 
 28,235 
 
 846,040 
 
 53 
 
 55 
 
 51 
 
 These figures have been deduced from a table prepared bj' 
 the Bureau of Statistics of the United States Treasury. They 
 show that, great as has been the growth of the production in 
 the United Kingdom during the past generation, that of the 
 world at large has been more than twice as rapid. 
 
 ' Including lignite. The increase in coal alone in the ten 
 years ending 1900 was 56 per cent, in Germany and 25 per 
 cent, in Austria-Hungary. 
 
 " The total production in 1890, and not the increase over 
 the decade. ^ Mostly lignite. 
 
 * The Transvaal output, though below half a million in iqoo, 
 amounted to 2,136,000 in 1898, and has now again come up to 
 its old rate prior to the war.
 
 352 BRITISH INDUSTRIES 
 
 Let me say frankly that in my opinion 
 natural forces, such as (i) the possession of 
 abundant supplies of raw material, and more 
 especially easy access to cheap fuel, (2) climate 
 and (3) geographical position, exercise an immea- 
 surably greater influence on the prosperity or 
 otherwise of a country and on its foreign trade 
 than any fiscal policy which man may vainly 
 devise. All that Free Traders may fairly claim is 
 that the system they advocate enables the country 
 that adopts it to make, from the economic point of 
 view, the best of its position, to emphasise any 
 natural advantages it may possess, and to modify 
 the effect of disadvantages. When Free Traders 
 go beyond this and attribute the prosperity 
 and progress which Great Britain has enjoyed 
 and made during recent years entirely to our 
 fiscal system, they imnecessarily lay themselves 
 open to attack, and thereby weaken their case. 
 Fiscal policy plays a subordinate part. The 
 importance given to it in economic discussion 
 arises from the fact that it is practically the 
 only influence we can control. We can modify 
 geographical conditions to a small extent by im- 
 proved communication, but we cannot change the 
 relative position of the United States, Canada, and 
 the Mother Country any more than we can produce 
 coal in Ireland, Sweden, or Italy. A Protectionist 
 tariff is an attempt to forge weapons to fight con- 
 ditions imposed by nature. A country so lavishly
 
 THE COAL TRADE 353 
 
 endowed as is the United States with all that 
 goes to make for material prosperity, could not 
 fail to advance under any fiscal system when once 
 her boundless resources came to be exploited. 
 More than a generation ago Free Traders like 
 Jevons foretold her rapid progress, and predicted 
 that she would prove a formidable rival to Great 
 Britain in the markets of the world. Germany, 
 though less abundantly endowed, has great coalfields, 
 and stimulated by the inventions and industrial 
 developments of the past generation, and by the 
 sacrifices large sections of her people have been ready 
 to make for what they seem to have considered to 
 be for the common good — she likewise has rapidly 
 advanced. 
 
 The Importance of Cheap Fuel. 
 
 Of the natural forces I have indicated, the posses- 
 sion of cheap fuel is the most potent, and is in 
 itself alone, in my judgment, a far more powerful 
 factor in industrial progress than Free Trade or any 
 possible fiscal system that can be devised. Abundant 
 supplies of cheap coal are essential to any country 
 aiming at commercial predominance, and under 
 modern industrial conditions, the best index and 
 measure of the material progress and prosperity of 
 a nation is its consumption of coal. The following 
 table will enable us to apply this test to the principal 
 countries of the world : — 
 
 24
 
 354 
 
 BRITISH INDUSTRIES 
 
 C, — Slaiemcnt ' showing Quantity of Coal Remaining for Home 
 Consumption per Head of tite Population in the Principal 
 Foreign Countries in 1890 and 1900. 
 
 
 United 
 Kingdom. 
 
 United 
 States. 
 
 Belgium. 
 
 German 
 Empire. 
 
 France. 
 
 1890 
 
 1900 
 
 Increase 
 
 3-87 
 4-14 
 
 0-27 
 
 2'27 
 3-13 
 
 0-86 
 
 2'68 
 
 2-95 
 0-27 
 
 1-30 
 177 
 
 0-47 
 
 o'9i 
 ri9 
 0-28 
 
 1890 
 1900 
 Increase 
 
 Sweden. 
 
 Austrian 
 Empire. 
 
 Spain. 
 
 Russian 
 Empire. 
 
 Italy. 
 
 0-36 
 
 0-66 
 0-30 
 
 0-31 
 0*40 
 
 009 
 
 o*i6 
 0-25 
 009 
 
 0-07 
 0-I5 
 
 008 
 
 o'i4 
 
 o'lS 
 001 
 
 Japan. 
 
 0'04 
 0"09 
 
 005 
 
 D. — Similar Statement ^ in respect 
 Colonies and Possessions. 
 
 to the Principal British 
 
 
 British 
 India. 
 
 Canada. 
 
 New South 
 Wales. 
 
 Victoria. 
 
 South 
 
 Australia (ex 
 
 Northern 
 
 Territorj'). 
 
 1890 
 
 1900 
 
 Increase 
 
 0"0I 
 0'02 
 
 001 
 
 I '04 
 1-50 
 
 046 
 
 ri3 
 1-58 
 0-45 
 
 0*63 
 
 o'69 
 006 
 
 0-47 
 I-I4 
 
 0-67 
 
 
 Tasmania. 
 
 New 
 
 Zealand. 
 
 Cape of 
 Good Hope. 
 
 Natal. 
 
 Queensland. 
 
 1890 
 
 1900 
 
 Increase 
 
 o'54 
 0-62 
 
 008 
 
 1-07 
 
 1-43 
 0-36 
 
 0-22 
 
 0-15 
 
 0-22 
 
 007 
 
 072 
 I '04 
 
 0-82 
 
 ' Metric tons of 2,204 ^^^- Exclusive of lignite, except in 
 case of Russia and United States. 
 =* Tons of 2,240 lbs.
 
 THE COAL TRADE 355 
 
 It will be seen that though the United States and 
 Germany both show greater increase than the 
 United Kingdom during the past ten years in the 
 per capita consumption of coal, they are still 
 behind us, Germany very much so. In other 
 words, while it must be admitted that our two 
 most formidable rivals have gained on us in the 
 industrial race during the past decade, we have the 
 satisfaction of knowing that they are yet far from 
 having caught us up. 
 
 Coal Prices and Other Prices. 
 
 There are, however, several considerations to 
 which attention should be drawn if coal consump- 
 tion be taken as the index of prosperity, and which 
 must, I think, tend to qualify our satisfaction to 
 some degree. One is that though the per capita 
 quantity of coal retained in the United Kingdom 
 for home consumption has more than doubled in 
 the last fifty years, the rate of increase during the 
 period shows an almost continuous and, in recent 
 years, heavy decline, and whereas between 1850 
 and i860 the average annual percentage rate of 
 growth (geometric) was 27, between 1890 and 
 1900 it had declined to 07, or less than i per 
 cent, per annum. Another important fact is the 
 marked tendency of coal prices in this country to 
 increase relatively to the prices of commodities 
 generally.
 
 356 
 
 BRITISH INDUSTRIES 
 
 E. — Table showing the Percentage Flncinaiions in the Average 
 Price of Exported Coal and of Commodities generally, as 
 derived from Mr. Sauerbeck's Index Numbers ; also in the 
 Average Prices of Exports and Imports, Exclusive of Coal. 
 In each case the Average Price in the Period 1886-90 is 
 taken as 100. 
 
 Quinquennial Periods ... 
 
 1851-55- 
 
 1856-60. 
 
 1861-65. 
 
 1866-70. 
 
 1871-75- 
 
 Coal 
 
 Sauerbeck (45 articles) 
 
 Exports (52 articles)' 
 
 Imports (88 articles)^ 
 
 887 
 128-5 
 132-5 
 
 97-1 
 139-6 
 145-0 
 1 36- 1 
 
 96-6 
 144-7 
 145-5 
 138-1 
 
 103-3 
 141-0 
 
 136-3 
 134-3 
 
 i8i-S 
 147-6 
 
 145-0 
 134-1 
 
 Quinquennial Periods ... 
 
 1876-80. 
 
 1881-85. 
 
 1886-90. 
 
 1891-95. 
 
 1896-1900. 
 
 Coal 
 
 Sauerbeck (45 articles) 
 
 Exports (52 articles)' 
 
 Imports (88 articles)^ 
 
 IOO-6 
 120-7 
 
 125-4 
 120-6 
 
 95-3 
 "37 
 1113 
 112-8 
 
 100 
 100 
 100 
 100 
 
 1 10-6 
 94-9 
 95-9 
 917 
 
 115-2 
 94-0 
 97-0 
 87-9 
 
 The index price of coal is derived from the 
 declared value of exports. The index numbers of 
 the exports are the simple arithmetic averages of 
 the index numbers of fifty-two principal exported 
 articles, the annual average prices of which are 
 given in the statistical abstract continuously over 
 the period, and similarly of eighty-eight articles in 
 the case of imports. The very abnormal price of 
 fuel during the coal famine of the early seventies 
 makes any comparison involving that period mis- 
 leading, but comparing the index numbers of 
 
 ' 1851-55 the average is of thirty-six articles, 1856-60 of 
 thirty-nine articles, and from 1861 to 1875 of forty-four 
 articles. 
 
 " 1856-60 the average is of eighty-three articles.
 
 THE COAL TRADE 357 
 
 1866-70 with those of 1896-1900 it will be seen 
 that whereas coal has advanced from a price repre- 
 sented by 103 to 115, prices of commodities generally 
 have, according to Mr. Sauerbeck's index numbers, 
 on the contrary, fallen in the same period from 141 
 to 94. That is to say, during the past generation, 
 while coal has advanced in price about 15^ per 
 cent., prices all round have fallen about 33I per 
 cent., or, speaking broadly, the price of coal rela- 
 tively to the prices of commodities in general has 
 increased by 50 per cent. If it be correct that 
 cheap fuel is the most potent factor making for 
 industrial supremacy, it will hardly be necessary 
 to point out the bearing this fact has on our 
 commercial position or to insist upon the weight 
 that must be given to it in any discussion on our 
 export trade in recent years. 
 
 Cheapness of American Coal. 
 
 There is yet a third and even more important 
 point which must not be overlooked in any con- 
 sideration of fiscal policy and our ability to cope 
 with foreign competition in neutral markets. The 
 most cursory examination of international trade 
 statistics shows that it is the competition of the 
 United States, and not that of the other European 
 countries, which we may have reason seriously to 
 fear in the near future. It is the United States 
 which is cutting into our foreign trade, but it 
 is for Protectionists to explain how their fiscal
 
 358 BRITISH INDUSTRIES 
 
 nostrums will provide a remedy, and how a system 
 which must tend to raise the cost of production, 
 and whose avowed purpose is to raise the price 
 of what a country produces in order to protect 
 the home manufacturer, will enable that country 
 to supply such produce on more favourable terms 
 in neutral markets — on more favourable terms, 
 be it remembered, than other countries which 
 produce more cheaply, for unless they produced 
 more cheaply there would clearly be no necessity 
 for a protective tariff against their produce. I am 
 not here taking account of the Dumping Bogey, 
 which I confess has no terrors for me. Our 
 exports to the protective States of Europe, and 
 notably to Germany, have grown greatly during 
 the last decade of the century just closed, even 
 when coal is excluded. Our exports to the 
 European continent from 1886-1890 and 1896- 
 1900 have grown far more rapidly than those 
 to our Colonies and possessions. In the interval 
 the former increased by 25 per cent., while the 
 latter increased by 57 per cent. only. In the same 
 period, while the value of our exports, excluding 
 that of coal to Germany, grew by 39*2 per cent., 
 the value of similar exports to Canada fell 16^ 
 per cent. It is in our exports to the United 
 States that the principal decline has occurred, a 
 decline so considerable as to almost counterbalance 
 the increase in other directions. The most im- 
 portant change in the industrial situation, however.
 
 THE COAL TRADE 
 
 359 
 
 which I think deserves attention with a view to 
 ascertaining how far it is responsible for the in- 
 creasing ability of the United States not only to 
 supply her own needs, formerly supplied by us, but 
 to supplant us to some extent on neutral ground, 
 is the reduction in the cost of production of Ameri- 
 can coal. The following figures show that not only 
 has the average price of bituminous coal fallen in 
 the States to half of what it was thirty years ago, but 
 that, relatively to the price of British coal, this 
 decline is even more pronounced. 
 
 F. 
 
 Quinquennial 
 Period. 
 
 Averaj^e declared 
 
 Value at Export of 
 
 British coals. 
 
 Average Price of 
 
 Anthracite ' Coal in 
 
 Philadelphia. 
 
 Average Price of 
 Bituminous (Cum- 
 berland) 2 Coal in 
 Baltimore. 
 
 1851-55 • 
 
 
 8-38 
 
 i6-'83 
 
 15-623 
 
 1856-60. 
 
 
 917 
 
 i5"04 
 
 1571 
 
 1861-65 • 
 
 
 911 
 
 24-87 
 
 2304 
 
 1866-70 . 
 
 
 978 
 
 1979 
 
 2 1 -08 
 
 1871-75 • 
 
 
 1594 
 
 17-83 
 
 19-36 
 
 1876-80 . 
 
 
 952 
 
 14*08 
 
 13-67 
 
 1881-85 . 
 
 
 900 
 
 18-50 
 
 12-42 
 
 1886-90. 
 
 
 9'44 
 
 16-85 
 
 II'I2 
 
 1891-95 . 
 
 
 10-45 
 
 15-92 
 
 979 
 
 1896-19OO 
 
 IO-88 
 
 15-083 
 
 8-254 
 
 ' Schuylkill Whitcash lump coal at Philadelpliia — prices 
 furnished by the American Iron and Steel Association for 
 shipments beyond the Delaware Capes. Converted at 4s. 2d. 
 the dollar. 
 
 '^ Prices from Savvard's Coal Trade Annual. 
 
 3 Average of the three years 1853, 1854, and 1855. 
 
 * Prices for 1900, estimated.
 
 36o BRITISH INDUSTRIES 
 
 The output of American bituminous coal has 
 increased nearly fivefold since 1880, and of the 
 total production of 260 million tons of coal in the 
 States in 1901, 201 millions were bituminous and 
 60 millions anthracite. The average quantity of 
 coal produced per person employed in 1891 was 
 539 tons in the United States, as against 278 tons in 
 this country, or nearly double the quantity. In 
 1889, the earliest year for which a comparison can 
 be made, the respective outputs in the States and 
 the United Kingdom per person employed were 427 
 and 315. When we consider how steam power 
 multiplies the efficiency of labour and how its appli- 
 cation to industry enables commodities to be pro- 
 duced under much higher wage rates at far lower 
 cost, the decline in American coal prices is surely 
 enough in itself without any reference to fiscal 
 theories to account for the manifestly stronger 
 position the United States holds to-day in the inter- 
 national struggle for industrial supremacy than she 
 held a generation ago. The MacKmley Tariff may 
 have been largely instrumental in protecting the 
 profits of American manufacturers, but it appears to 
 me that the true explanation of the increasing com- 
 petitive capacity of the States in oversea trade is 
 the fact that she has been able to reduce the cost of 
 the initial motive power of industry by one half. 
 
 Increasing Demand for Coal. 
 My present purpose, however, is to indicate the
 
 THE COAL TRADE 361 
 
 progress made by the great coal industry of this 
 country during the past fifty years. Any attempt to 
 enter exhaustively into the merits of the case of 
 Free Trade versus Protection would obviously be 
 out of the question within the limits of the space at 
 my disposal. I will therefore content myself with 
 dealing with the question of fiscal policy in relation 
 to our export trade in coal, but even that branch of 
 the subject, I fear, can only be discussed in a very 
 perfunctory manner. In regard to the growth of 
 the home demand, I will only say that it naturally 
 follows the course of trade generally, expanding as 
 trade expands and contracting when it contracts. 
 Consequently every British industry that has bene- 
 fited by Free Trade has in turn helped the develop- 
 ment of the coal trade. 
 
 Coal enters as an element into the production of 
 well-nigh every manufactured article, consequently 
 every useful invention, every industrial improve- 
 ment, every new want created, any fiscal system 
 that increases the effective demand for manufac- 
 tured commodities, furnishes an added impetus to 
 the production of coal. Space will not permit, or I 
 would show from past experience how even im- 
 provements in the direction of economising the 
 consumption of fuel by extending its sphere of 
 usefulness have been accompanied by an increased 
 demand for coal. Wherever it is practicable to 
 substitute steam power for horse power or manual 
 labour it will be so substituted. A unit of power
 
 362 
 
 BRITISH INDUSTRIES 
 
 produced even by the highest priced coal is incom- 
 parably cheaper than — only, indeed, an insignificant 
 fraction of the cost — a similar unit produced by 
 horse or manual labour, and this notwithstanding 
 the fact that the useful effect obtained by any given 
 quantity of coal is barely a tithe of its theoretical 
 efficiency, owing to the loss that occurs in convert- 
 ing the heat of coal into its mechanical equivalent. 
 
 But to return to the Export Trade, let me estab- 
 lish, if I can, beyond doubt or question the ever- 
 growing importance of the part coal has played in 
 the value of British exports, and of how much more 
 consequence the export trade in coal is to this 
 country than it is to any of our industrial rivals. 
 
 British Exports. 
 
 G. — Exports from the United Kingdom, Inclusive and Exclusive 
 of Coal, in Millions Sterling and per capita in £. 
 
 Quinquennial Periods 
 
 Total exports ' 
 
 Coal, coke, and patent fuel 
 Total, exclusive of coal, &c, 
 Per capita (ex coal) 
 
 1896-1900. 1891-95. 
 
 249-1 
 
 22'3 
 226-8 
 
 5-61 
 
 227-0 
 16-6 
 
 210-4 
 5-46 
 
 1886-90. 1881-85. 1876-80. 
 
 236-3 
 13-0 
 
 223-3 
 6-05 
 
 232-3 
 10-5 
 
 221-8 
 
 6-23 
 
 201 4 
 7-9 
 
 193-5 
 5-71 
 
 Quinquennial Periods .. 
 
 Total exports 
 
 Coal, coke, and patent fuel 
 Total, exclusive of coal, &c. 
 Per capita (ex coa.\) 
 
 1871-75- 
 
 1866-70. 
 
 1861-65. 
 
 1856-60. 
 
 239-5 
 
 187-8 
 
 144-4 
 
 124-2 
 
 10-5 
 
 5-4 
 
 4-0 
 
 3-1 
 
 22Q-0 
 
 182-4 
 
 140-4 
 
 i2ri 
 
 7-13 
 
 5-96 
 
 4-78 
 
 4-26 
 
 1851-55- 
 
 88-9 
 
 1-8 
 
 87-1 
 
 314 
 
 ' Including parcels post, but exclusive of ships and ships' 
 machinery, which were not given in Board of Trade returns 
 prior to 1899, ^"d of which therefore no comparison with 
 previous years can be made.
 
 THE COAL TRADE 
 
 363 
 
 The World's Export of Coal. 
 
 H. — Statement showing the Sliipments of Coal from the Principal 
 Coal-Exporting Countries in 1885, 1890, 1895, and 1900, in 
 Tons of 2,240 lbs. (ooo's omitted). 
 
 Year. 
 
 1885.. 
 1890.. 
 
 1895.. 
 1900.. 
 
 United 
 Kingdom. 
 
 30,766 
 38,660 
 42,909 
 58,405 
 
 Germany. 
 
 United 
 States. 
 
 9,515 
 10,156 
 12,650 
 17,732 
 
 1,272 
 
 2,075 
 3,682 
 
 7,9173 
 
 Belgium. 
 
 5,103 
 5,820 
 
 5,893 
 6,817 
 
 Japan. 
 
 593 
 1,239 
 1,875 
 3,350 
 
 New South 
 Wales. 
 
 800' 
 
 834^ 
 1,129' 
 1,600 = 
 
 Year. 
 
 1885. 
 1890. 
 
 1895. 
 1900. 
 
 Canada. France, 
 
 428 
 
 639 
 992 
 
 1,465 
 
 677 
 
 1,135 
 1,140 
 1,182 
 
 Austria- 
 
 British 
 
 Other 
 
 Hungary. 
 
 India. 
 
 Countries. 
 
 670 
 
 I 
 
 75' 
 
 662 
 
 27 
 
 170 
 
 747 
 
 81 
 
 260 
 
 1,060 
 
 543 
 
 360 
 
 Total, 
 
 Exclusive of 
 
 United Kingdom 
 
 19,134 
 22,757 
 28,449 
 42,026 
 
 These figures show that though the aggregate 
 coal export of other countries has increased more 
 rapidly during the past ten years than has that of 
 Great Britain, the latter export was nevertheless at 
 the close of the century not only considerably 
 greater than that of the total of the rest of the 
 world, but also that the actual as distinct from the 
 proportionate increase during the past fifteen years 
 has been greater. It should be observed that the 
 bulk of the coal exported by other countries is a 
 land export to contiguous states — much of which 
 
 ' Estimated. 
 
 ' In addition there was a large quantity exported to other 
 Colonics forming the Commonwealth, which in 1900 amounted 
 to 1,769,000 tons. 
 
 3 From United States statistical tables.
 
 364 BRITISH INDUSTRIES 
 
 is in the nature of an exchange, such as that be- 
 tween Canada and the United States, and between 
 France and Germany — and which cannot be said to 
 come into direct competition with the sea-borne 
 coal of Great Britain. For instance, of the fifteen 
 milHon tons exported from Germany in 1900, 
 fourteen million was by land ; while, of the 
 5,400,000 tons of bituminous (out of a total 
 export of 6,971,000) exported from the United 
 States in the fiscal year 1902, over 61 per cent, 
 went to the Provinces of Quebec, Ontario, and 
 Manitoba, and 10 per cent, to Mexico. If only 
 the sea-borne trade in coal of the world be 
 taken, that of Great Britain constitutes probably 
 not far, if anything, short of 85 per cent, of the 
 total. In this oversea trade Japan comes second 
 and New South Wales third, the competition of 
 the latter in neutral markets being far more pre- 
 judicial to us at the present time than that of either 
 the United States or Germany. 
 
 Coal as Cargo. 
 
 But important as is the part played by coal in 
 our foreign trade in respect to value, it is of far 
 greater importance in respect to weight. From 
 some very interesting statistics supplied by Mr. 
 Williamson to the Chamber of Shipping, and sup- 
 plemented in a recent letter to the press, it appears 
 that the weight of our coal exports constituted, in 
 1900, 88 per cent., or nearly nine-tenths of the total
 
 THE COAL TRADE 
 
 3^5 
 
 weight of all our exports, and, notwithstanding the 
 growth in the importation of heavy and bulky articles 
 such as corn, wood, sugar, and iron ore, during the 
 past fifty or sixty years, the increase in the export 
 of coal has been so large that, whereas in 1850 the 
 tonnage of vessels entering with cargo w^as in 
 excess of that of vessels clearing with cargo by 
 31^ per cent., or, if we go back to 1840, by nearly 
 25 per cent., by 1900 this excess had been con- 
 verted into a deficiency of over 17 per cent., while 
 the percentage of tonnage entering with cargo to 
 that entering with cargo or in ballast declined 
 from 88*1 to 73*5, and the proportion of that 
 similarly clearing increased from 70*9 to 88*6. 
 
 I. -^Statement showing in respect to tJie United Kingdom at 
 different Periods the Net Registered Tonnage, Sail and 
 Steam, Britisti and Foreign, (i) Entered witli Cargo; (2) 
 Cleared with Cargo ; (3) the Percentage Entered with Cargo 
 of that Entered with Cargo and in Ballast ; (4) the Per- 
 centage Cleared with Cargo of that Cleared with Cargo and 
 in Ballast ; (5) the Percentage Entered of that Cleared in 
 both cases with Caygo only, and also (6) the Weight of 
 Exports, and (7) of Imports, as furnished by Mr. William- 
 son to the Chamber of Shipping ; (8) the Percentage of the 
 Weight of Export to that of Import ; (9) the Weight of 
 Exports, Exclusive of Coal ; and (10) the Percentage of such 
 Exports to the Total Imports. 
 
 
 (I-) 
 
 (2-) 
 
 (3-) 
 
 (4.) 
 
 (5.) 
 
 (6.) 
 
 (7-) 
 
 (8.) 
 
 (9.) 
 
 (10.) 
 
 
 Tons.' 
 
 Tons.' 
 
 
 
 
 Tons.' 
 
 Tons.' 
 
 
 Tons.' 
 
 
 1840 
 
 4.105 
 
 3.393 
 
 88-1 
 
 709 
 
 124-3 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 '850 
 
 6,114 
 
 5.907 
 
 86-1 
 
 83-8 
 
 103-5 
 
 — 
 
 — 
 
 — 
 
 — 
 
 — 
 
 i860 
 
 10,055 
 
 10,783 
 
 82-6 
 
 88-8 
 
 93-3 
 
 — 
 
 — 
 
 
 — 
 
 — 
 
 1870 
 
 14,911 
 
 16,714 
 
 82-8 
 
 90-2 
 
 89-2 
 
 15.891' 
 
 12,776* 
 
 124 
 
 3,000= 
 
 24i 
 
 1880 
 
 23.993 
 
 25,686 
 
 82-5 
 
 867 
 
 90-3 
 
 30,944 
 
 24.359 
 
 127 
 
 7.315 
 
 30 
 
 iSqo 
 
 28,979 
 
 33.857 
 
 78-7 
 
 90-4 
 
 856 
 
 46,752 
 
 29.793 
 
 157 
 
 8.525 
 
 28i 
 
 xgoo 
 
 36,186 
 
 43.642 
 
 73-5 
 
 88-6 
 
 82-9 
 
 65.585 
 
 40,916 
 
 160 
 
 7.734 
 
 19 
 
 000' s omitted. 
 
 In 1869.
 
 366 BRITISH INDUSTRIES 
 
 Had it not been for this great expansion in our 
 export of coal, the bulk of vessels bringing us raw 
 material for our manufactories and food for our 
 people would have had to return without cargo and 
 in ballast, for the weight of our exports, exclusive 
 of coal, has for the last thirty years at any rate only 
 been from 25 to 30 per cent, that of our imports. 
 Indeed, it is difficult to conceive how our foreign 
 trade could have reached the stage of development 
 at which it has arrived had it not been for our 
 export of coal, apart from all consideration of how 
 far manufacturing supremacy is due to coal as the 
 originating source. The homeward run only would 
 have earned freight, and imports of raw material 
 and food would have had to pay the expenses «of 
 the double journey. May I on this point quote 
 from the very interesting American Treasury De- 
 partment Report on the Coal Trade of the United 
 States ? " It must be said that in this respect (i.e., 
 the combined cost of producing and shipping the 
 coal to the foreign port) Great Britain possesses a 
 great advantage over this country, and whereas 
 the weight and bulk of articles exported from 
 this country are much larger than the weight 
 and bulk of imports to this country, exactly the 
 opposite is true in the case of Great Britain. Since 
 there is no reason to expect in the near future a 
 reversal in that relation, the advantage of the British 
 shipper of coal over his American competitor under 
 normal conditions becomes quite patent. Even
 
 THE COAL TRADE 367 
 
 with the present excess of exports numerous 
 vessels arrive in ballast at American ports ; the 
 addition of coal exports would merely add to this 
 number." 
 
 I estimate that the total freight earned by vessels 
 in conveying the forty-four million tons of coal 
 exported in 1900 was not far, if anything, short of 
 twenty million sterling. Including the cost of 
 bunkers, and if we assume that two-thirds of this 
 coal was exported in British bottoms, then some- 
 thing like sixty million sterling of our imports were 
 paid for by coal and its carriage. 
 
 Coal means Labour. 
 
 It may be said that in exporting coal we are 
 sending out of the country a form of capital that 
 cannot be replaced and which is limited in quantity. 
 That the depletion of our coal supplies is a very 
 grave matter I fully recognise, but it is equally 
 serious from whatever cause it arises, and for every 
 ton of coal exported four tons are consumed at 
 home, consequently any restriction of export could 
 only be a very partial remedy, and would at most 
 only postpone the evil day for a comparatively short 
 time. Moreover, as I have already pointed out, coal 
 enters into the production of every manufactured 
 article, and therefore the export of such commodities 
 indirectly involves the export of coal. For instance, 
 every ton of pig iron requires the consumption of
 
 368 BRITISH INDUSTRIES 
 
 something like two tons in its production, and its 
 shipment abroad virtually means, therefore, the ex- 
 port of two tons of coal, while the export of a ton 
 of wrought iron or steel means considerably more. 
 Consequently if any restriction is placed on the 
 export of coal on the ground that we are shipping 
 abroad capital that cannot be replaced, logically we 
 must place a corresponding restriction on the export 
 of every manufactured article into the production 
 of which coal enters. "Ah, but," I hear the Pro- 
 tectionist say, "coal is a raw material and assists 
 the foreigner to compete with us in our own 
 manufactures." Coal, I contend, is the finished 
 article of one of the most important — in some 
 respects the most important — industries in the 
 kingdom. Our export trade alone gives employ- 
 ment at the present time to something like 200,000 
 colliery workmen, to say nothing of the railway 
 men, tippers, trimmers, and others who are engaged 
 in conveying it from colliery to port and putting it 
 on board ship. In the case of Welsh coal not far 
 short of 80 per cent, of its cost at the pit's mouth 
 is made up of wages. Here is the average cost of 
 the various items forming the expense of the pro- 
 duction of a ton of large coal, worked out in per- 
 centages of the actual total cost at pit's mouth, in 
 the case of the output of three steam coal collieries 
 in South Wales for the undermentioned years ; the 
 first a year of low, and the second of high 
 wages : —
 
 THE COAL TRADE 
 
 369 
 
 
 1897. 
 
 1900. 
 
 Wages 
 
 77-98 
 
 12-67 
 
 6-64 
 
 2-57 
 0-14 
 
 8172 
 
 11-87 
 
 Stores and materials 
 
 Royalties 
 
 4-38 
 1-84 
 0-19 
 
 Rents, rates, &c 
 
 Incidentals 
 
 
 
 lOOOO 
 
 1 0000 
 
 Possibly a Northumberland, Durham, Scotch, or 
 Yorkshire cost would show a lower percentage for 
 the item of labour, but in every case wages would 
 be by far the biggest item and would certainly con- 
 stitute over 50 per cent, of the total, and the cost 
 of stores and materials is mainly made up in the 
 last resort of the wages of labour. 
 
 For the use of British Ships. 
 
 In further reply to my Protectionist friend I 
 .would point out that this finished article of the coal 
 industry is largely exported for the use of British 
 subjects abroad, and that it is chiefly shipped as the 
 raw material of another great industry, namely, that 
 of shipping, in which the United Kingdom is far 
 and away the biggest shareholder, owning as she 
 does in her own name more than half the whole 
 tonnage of the world. Very little of the coal 
 exported from this country is sent abroad for manu- 
 facturing purposes. The new form of the monthly 
 Board of Trade returns enables us to tell precisely 
 the purposes for which our coal is exported. 
 
 25
 
 370 BRITISH INDUSTRIES 
 
 The figures for the first three months of this year 
 show that of the 14,500,000 tons of coal, coke, and 
 patent fuel shipped, inclusive of bunkers, nearly 
 12,000,000, or 82 per cent., was steam coal or patent 
 fuel, 1,394,000, or over 9I per cent., was gas coal, a 
 little over 2 per cent, anthracite, mainly for domestic 
 use, 2'2 to meet household requirements, and, for all 
 other purposes, about 3J per cent., the latter includ- 
 ing coke. 
 
 Jevons has shown conclusively that it is a com- 
 mercial impossibility for this or any other country 
 to secure or maintain a manufacturing supremacy 
 on coal drawn from far distant fields. The quantity 
 of coal we send abroad for other than steam-raising 
 purposes does not amount to 4 per cent, of our 
 exports. If anything further were needed to show 
 how groundless is the alarm of those who fear that 
 in coal we are exporting the raw material to enable 
 foreign manufacturers to compete with us in home 
 or in neutral markets, it is only necessary to point 
 to the fact that of those who may be considered our 
 industrial rivals, the United States in 1900 took from 
 us less than i per cent. (0*03) of the quantity of coal 
 she consumed, Germany 6-14 per cent., France 16-42 
 per cent., Russia 12*90 per cent., Belgium 6*04 per 
 cent., Japan 1-99 per cent., and Austria-Hungary I'oS 
 per cent. True, Spain took 41-57 and Italy 93*56 per 
 cent, of the coal they consumed, but by no stretch 
 of the imagination can either country be regarded 
 as a serious industrial rival of Great Britain. The
 
 THE COAL TRADE 371 
 
 great bulk of our export is for the use of steamships, 
 and it is within the mark to say that over half of our 
 exports are for navigation purposes, and further that 
 more than half the coal exported is for British con- 
 sumption abroad. 
 
 The Carriers of the World. 
 
 We are the carriers of the world. It is payment 
 for this service of carriage — a service not traceable 
 in the value of our exports — that, as every one who 
 has given any intelligent consideration to the subject 
 knows, goes a long way to explain the excess in 
 British imports. And this service is rendered possible, 
 at all events is greatly assisted, by the export of coal. 
 Anything that limits international commerce must 
 obviously contract the demand for shipping, and 
 consequently for coal for the use of steamers. The 
 very aim of the Protectionist is to make his own 
 country self-supporting and independent of the 
 produce of other countries, in other words to limit 
 the international exchange of commodities. Why 
 should we buy from others what we can produce 
 ourselves ? is his constant cry. Unless, therefore, he 
 can show that so great an increased home consump- 
 tion of coal will result from Protection as to 
 counterbalance the loss resulting from his policy 
 to our export and bunker trade, such a system 
 cannot fail to be prejudicial to the local trades as a 
 whole. I do not for a moment believe that he can 
 show any such result. And if he could in so far as
 
 372 BRITISH INDUSTRIES 
 
 the United Kingdom is concerned, it must neces- 
 sarily mean a change that would spell ruin and 
 devastation to South Wales, Northumberland and 
 Durham, and other coal exporting districts, involving 
 directly the livelihood of a million people and in- 
 directly the welfare of as many more. That may 
 be a good argument as against the Protectionist 
 pure and simple, but it will not satisfy the advocate 
 of a preferential tariff favouring our Colonies, for 
 he will naturally contend that his policy would not 
 restrict oversea trade but merely change its direc- 
 tion. The reply of the Free Trader, whether engaged 
 in coal production or not, is that it cannot fail under 
 any circumstances to limit oversea traffic. In the 
 first place, even assuming that all the favourable 
 results which the Preferentialists predict would 
 follow, they will necessarily take time, and will in- 
 volve a temporary sacrifice by the Mother Country. 
 
 Destination of British Coal. 
 
 In the next place those engaged in the production 
 of coal for export have another objection to prefe- 
 rential treatment for the Colonies which, though it 
 may be selfish and not based entirely on economic 
 doctrine, is to them a very solid and practical one. 
 The more speedily and complete the ideal of a self- 
 supporting Empire is realised the worse it will be 
 for the export coal trade of this country. The 
 Colonies take an insignificant and diminishing 
 fraction of our coal exports. On the other hand
 
 
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 2 fJ
 
 374 BRITISH INDUSTRIES 
 
 they are among our chief competitors in some of 
 the far distant markets. Canada took in the year 
 ending June 30, 1901, over five milHon tons of coal 
 (anthracite and bituminous) from the United States, 
 but practically none from us. British Columbia is 
 our chief competitor in San Francisco and the 
 West Coast of North America. Australia has 
 ceased to take coal from us, and is our only com- 
 petitor on the West Coast of South America. 
 
 Australia and India are, with the exception of 
 Japan, our chief competitors at Singapore and in the 
 East. India now takes very little coal from us, and 
 has made serious inroads into our trade to Ceylon, 
 while in South Africa it is only colonial coal whose 
 competition we have to meet. The table on the 
 preceding page shows where our coal goes, and 
 the relative commercial importance of the different 
 markets. 
 
 Our exports to the five foreign groups have 
 grown from 26 million tons in 1890 to 42 million 
 tons in 1900, while our exports to the remaining 
 five fell from 2,600,000 to 1,600,000 during the 
 same interval, though the supplies from other 
 sources for these latter markets may be roughly 
 estimated to have grown during the ten years from 
 2^ million to 7^ million tons. The demand that 
 remains to us in markets east of the Suez Canal 
 is of a special character, and for the better class 
 of steam coal for war vessels and mail steamers. 
 The Tyne ports, which shipped 134,000 tons to
 
 THE COAL TRADE 375 
 
 Ceylon and the Far East in 1880, only shipped 
 2,000 in 1900, mainly owing to increased colonial 
 competition. 
 
 Three-fourths of the coal shown as having gone 
 to the American and Canadian market in 1902 was 
 to supply the deficiency created by the great strike 
 in the States, and must be regarded as abnormal. 
 It is a curious fact — one, I think, that could hardly 
 have been foreseen — that the substitution of steam 
 for sail, and the great reduction in the cost of 
 steam power appear to have favoured our competi- 
 tors in distant coal markets rather than ourselves. 
 Table K. shows that 85 per cent, of our coal exports 
 now go to European markets. Altogether 42,041,000 
 tons were shipped to foreign countries and only 
 2,857,000 tons to British Colonies and possessions. 
 That is to say, foreign countries find the market 
 for over 93 per cent, of our exports of coal. In 
 other words, for every 16 tons shipped abroad our 
 Colonies only take one. 
 
 This shows how little our coal exports are in- 
 debted to the colonial trade, and how greatly they 
 would suffer if trade were artificially diverted from 
 its present direction to that aimed at by the Prefer- 
 entialist. The bulk of our exports and imports at 
 present require British coal in their conveyance, 
 and that would not be so with the trade with 
 our Colonies. Shipments from Australia would be 
 carried largely by Australian coal, and from Canada 
 often by American, or possibly Canadian, coal. A
 
 376 BRITISH INDUSTRIES 
 
 cargo of wheat coming now from Russia or the 
 Danube is conveyed by a steamer that consumes 
 British coal on the outward and homeward journey. 
 But the steamship carrying a cargo of wheat from 
 the Colonies would in many cases only require 
 British coal on the outward voyage. For our export 
 trade in coal, therefore, I cannot help thinking that 
 preferential trade with the Colonies would prove 
 even more prejudicial than Protection pure and 
 simple. 
 
 If under natural conditions our oversea trade 
 became diverted to the Colonies, those engaged in 
 the coal industry of this country would have no fair 
 ground of complaint however much their interests 
 might suffer, but it is a little unreasonable to expect 
 them to enthusiastically support an artificial system 
 which, if carried into effect, can hardly fail to do 
 them grave injury. 
 
 UNWIN BROTHERS, LIMITED, THE GRESHAM PRESS, WOKIXG AND LONDON.
 
 LAND NATIONALIZATION: 
 
 An Examination of Various Aspects of 
 
 the Land Problem, including the 
 
 Question of the Taxation of 
 
 Land Values, 
 
 By HAROLD COX. 
 
 METHUEN & CO. 2/6.
 
 T. FISHER UNWIN, Publisher, 
 
 For Politicians and Students of Politics, 
 
 THE REFORMER'S BOOKSHELF. 
 
 Large crown ivo, cloth, 3s. 6d. each. 
 
 1. The English Peasant: His Past and Present. By 
 
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 2. The Labour Movement. By L. T. Hobhouse, M.A. 
 
 Preface by R. B. Haldane, M.P. 
 
 3 & 4. Sixty Years of an Agitator's Life : Geo. Jacob 
 Holyoake's Autobiography. 2 vols. 
 
 5 & 6. Bamford's Passages in the Life of a Radical. 
 Edited, and with an Introduction, by Henry Dunckley 
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 9 & 10. The Eicononiic Interpretation of History : Lec- 
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 Edition. 2 vols. 
 
 II & 12. The Industrial and Commercial History of 
 England. By Prof. Thorold Rogers. 2 vols. 
 
 13. Nihilism as it is. Being Stepniak's Pamphlet Trans- 
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 Selected from the Writings of William White, with a 
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 McCarthy, M.P. 
 
 18. A Village Politician. The Life Story of John Buckley. 
 Edited by J. C. Buckmaster. With an Introduction by the 
 Right Hon. A. J. Mundella, M.P. 
 
 19 & 20. Taxes on Knowledge: The Story of their Origin and 
 Repeal. By Collet Dobson Collet. With an Introduc- 
 tion by George Jacob Holyoake. 2 vols. 
 
 21 & 22. Life of Richard Cobden. By John Morley. z vols. 
 
 23. Cobden (Richard) and the Jubilee of Free Trade. 
 By P. Leroy-Beaulieu, Henry Dunckley (" Verax "), Dr. 
 Theodor Barth, the Right Hon. Leonard Courtney, 
 M.P., and the Right Hon. Charles Villiers, M.P. With 
 Introduction by Richard Gowing, Secretary of the Cobden 
 Club. Crown 8vo, cloth, uniform in style with the Jubilee 
 Edition of " Richard Cobden." 
 
 zi, Paternoster Buildings, London, E.G. ^
 
 T. nSHER UNWIN, PuDllsher, 
 
 BUILDERS OF GREATER 
 BRITAIN 
 
 CDITEO BT 
 
 H. F. WILSON 
 
 d Set of 10 Vo/umts, laci wiih Photogravurt Frontispu<4^ 
 and Map, largt crown 8tv., ciotk, Bs. tack. 
 
 Tha ccmplstion o( the Sixtieth year of tlie Qoeen's reign will be the oocasioo of mocb 
 retrospect and renew, in the course of which the great men who, luder the auspices of Her 
 Majesty and her predecessors, have helped to make the British Empire what it is to-day, 
 will natmallv be brought to mind. Hence the idea of the present series. These biofrapbiea, 
 ooncise but mil, popular bnt authoritative, have been designed with the view of giving ia 
 each case an adequate pictnre of the builder in relation to bis wotk. 
 
 The series will be under the general editorship of Mr. H. F. Wilson formerly Fellow 
 of Trinity CoUeee, Cambridge, and now private secretary to the Right Hon. J. Chamberlain 
 at the Colonial Oflfice. Each volume will be placed in competent hands, and will contain 
 the best portrai! obtainable of its subject, and a map showing his special contribution to 
 the Imperial edifice. The fiist to appear will bo a Life of Sir Walter Ralegh, by Major 
 Hume, the learned author of " The Year after the A.nnad«.' Others in contemplation will 
 deal with the Cabots, the quarter-centenary of whose sailing from Bristol is has recently been 
 celebrated in that city, as well as in Canada and Newfoundland ; Sir Thomas Maitland, the 
 " King Tom " of the Mediterranean ; Rajah Brooke, Sk Stamfonl Raffles, Loid CUv*. 
 Edwmid Qlbbon Wakefield, Zacheuy Macaolay, &&, &c. 
 
 The Series has taken for its motto the Mibonie prayer r— 
 
 ** C9ou ]?9o of C9t frM sra«< t<Cbti Suifft >p f9<* q|riffann<«t 
 Empire io a gforiout anb enSiafife 9ei09t9. ^\i% a({ 9e« 
 Qoss^ter 3«fan2>a afiou< %*»^ ttai ma in fQia fe{icifU»** 
 
 I. SIR WALTER RALEQH. By Martin A, S. Hume, Author 
 
 of " The Courtships of Queen Elizabeth," Ac. 
 
 a. 5IR THOMAS MAITLAND; the Mastery of the Mediterranean. 
 By Walter Frewen Lord. 
 
 3. JOHN CABOT AND HIS SONS; the Discovery of North 
 
 America. By C Raymond Beazlty, M.A. 
 
 4. EDWARD aiBBON WAKEFIELD; th« Colonisation of South 
 
 Australia and New Zealand. By R. Garnett, C.B., L.L.D. 
 
 5. LORD CLIVE; the Foundation of British Rule in India. By Sii 
 
 A. J. Arbothnot, K.C.S.I., CLE. 
 RAJAH BROOKE; the Englishman as Ruler of an Eastern 
 
 State. By Sir Spenskr St. John, G.C.M.G 
 ADMIRAL PHILIP; the Founding of New South Wales. By 
 
 Louis Beckk and Walter Jeffery. 
 
 SIR STAMFORD RAFFLES; England in the Far East. By 
 
 the Editor. 
 
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